This is the seventh of a series of legal updates that Kott Gunning is producing throughout 2016 on the key features and reforms under the new Associations Incorporation Act 2015 (WA) (Act).
This instalment deals with Statutory Management of an incorporated association.
Under the Act there is now a new process available to the Commissioner to appoint what is known as a Statutory Manager. The purpose of this process is to provide for an independent person to step into the shoes of the Management Committee in circumstances where there is or may be dysfunction within the association.
Application by Commissioner
The Commissioner may apply to SAT for the appointment of a Statutory Manager to administer the affairs of an association. A copy of the application must be given to the association which becomes a party to the application.
SAT may appoint Statutory Manager
SAT may appoint a Statutory Manager if it is of the opinion that:
- the association is not functioning effectively in accordance with its objects; and
- the appointment is likely to improve the functioning of the association and will be in the best interests of the association.
Effect of appointment of Statutory Manager
Upon appointment of a Statutory Manager:
- the Management Committee are suspended from office; and
- the Statutory manager has the functions and powers of the Management Committee.
Variation and Revocation of order
SAT may on application by the Commissioner, the association or the Statutory Manager vary or revoke any order appointing a statutory manager.
Duration of Appointment
An appointment of a Statutory Manager continues in force until it is revoked by:
- SAT, upon an application under section 112; or
- a voluntary administrator is appointed; or
- a liquidator is appointed to wind up the association; or
- the incorporation is cancelled under sections 99 or 106; or
- the Commissioner cancels the association under Part 10.
Pre-requisites to Revocation
Before revoking the appointment SAT must:
- appoint another Statutory Manager; or
- be satisfied that the suspended management committee are able to continue; or
- that members of a Management Committee have been elected in accordance with the rules at a meeting convened by the Statutory Manager; or
- be satisfied that the Commissioner has appointed members to the Management Committee.
Statutory Manger to report to Commissioner
A Statutory Manger must report to the Commissioner on the affairs of the association as directed by the Commissioner. A failure to do so carries a penalty of a fine of $10,000.
After the revocation of a Statutory Manger's appointment, the person who held the office must prepare a final report to the Commissioner as soon as possible and provide a copy to the association. A failure to do so carries a penalty of a fine of $10,000.
Expenses of Statutory Management
The expenses of a Statutory Manager are determined in accordance with the provisions of section 116. If the statutory manager is a person appointed or employed under the Public Sector Management Act 1994 then the Commissioner will certify the remuneration to be paid. Otherwise the SAT will certify the remuneration to be paid.
The certified remuneration is recoverable from the association by the Commissioner in a court of competent jurisdiction as debt due to the State.
Protection from Liability
Generally speaking a Statutory Manager will not be liable for losses of the association incurred during any period of appointment unless:
- there is some fraud or dishonesty; or
- negligence; or
- wilful failure to comply with the Act or the rules of the association.
Proceedings against Association stayed
After the appointment of a Statutory Manager a person cannot continue or commence proceedings against the association until the appointment is revoked unless the person has leave from the Supreme Court.
A person intending to apply for leave must give the Commissioner not less than 10 days' notice of the intention.
A failure to give the notice to the Commissioner carries a penalty of a fine of $5,000.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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