You are using a version of the website built for webcrawlers and people whose devices cannot use javascript. Some functionality may not be available.
Contents (2009 - 7)
Skip contents
Associations Incorporation Act 2009 No 7
Current version for 1 September 2016 to date (accessed 25 March 2017 at 08:44)
Part 6
Part 6 External administration and winding up
Division 1 External administration on grounds of insolvency
54   Appointment of administrator—Corporations legislation
(cf Co-operatives Act 1992, sections 332 and 332A)
(1)  An association is declared to be an applied Corporations legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 in relation to the provisions of Part 5.3A and Division 3 of Part 5.9 of the Corporations Act 2001 of the Commonwealth, subject to the following modifications:
(a)  those provisions are to be read as if an association and its committee were, respectively, a company and its board,
(b)  those provisions are to be read as including the provisions of subsections (2) and (3),
(c)  a reference in those provisions to sections 128 and 129 of the Corporations Act 2001 of the Commonwealth is to be read as a reference to sections 23 and 24 of this Act,
(d)  a reference in those provisions to an administrator appointed under a provision of Part 5.3A is to be read as including a reference to an administrator appointed by the Secretary under this section,
(e)  a reference in those provisions to ASIC is to be read as a reference to the Secretary,
(f)  such other modifications (within the meaning of Part 3 of the Corporations (Ancillary Provisions) Act 2001) as may be prescribed by the regulations.
(2)  Without limiting subsection (1), the Secretary may appoint a person as an administrator for the purposes of the provisions of Part 5.3A of the Corporations Act 2001 of the Commonwealth (as applying under this section) if of the opinion that the association is, or is likely to become, insolvent.
(3)  A person appointed under subsection (2) may, but need not, be a registered liquidator within the meaning of the Corporations Act 2001 of the Commonwealth.
Division 2 External administration on grounds other than insolvency
55   Appointment of administrator by Secretary
The Secretary may appoint an administrator to administer an association’s affairs if:
(a)  the association has persistently failed to comply with the requirements of this Act or the regulations, and
(b)  having regard to those circumstances, the Secretary is satisfied that it is in the interests of the association’s members or creditors for an administrator to be appointed.
56   Effect of appointment of administrator
(cf Co-operatives Act 1992, section 334)
(1)  On the appointment of an administrator for an association:
(a)  the committee members and the public officer cease to hold office, and
(b)  the administrator may terminate any contract of employment with the association or any contract for the provision of secretarial, administrative or other services to the association.
(2)  An administrator for an association has the functions of the association’s committee and the functions of the association’s public officer.
57   Revocation of appointment
(cf Co-operatives Act 1992, section 335)
(1)  An administrator holds office until the administrator’s appointment is revoked or the administrator dies.
(2)  When a liquidator of an association is appointed, the appointment of any administrator of the association is automatically revoked.
(3)  Immediately on the revocation of an administrator’s appointment, the administrator must prepare and submit a report to the Secretary showing how the administration was carried out, and for that purpose an administrator has access to the association’s records and documents.
(4)  On providing the report and accounting fully in relation to the administration of the association to the satisfaction of the Secretary, the administrator is released from any further duty to account in relation to the administration of the association otherwise than on account of fraud, dishonesty, negligence or wilful failure to comply with this Act or the regulations.
(5)  Before revoking the appointment of an administrator of an association, the Secretary:
(a)  must appoint another administrator, or
(b)  must ensure that committee members and the public officer have been elected in accordance with the association’s constitution at a meeting convened by the administrator in accordance with the constitution, or
(c)  must appoint committee members and a public officer for the association.
(6)  Committee members elected or appointed under subsection (5):
(a)  take office on revocation of the administrator’s appointment, and
(b)  if appointed, hold office until the next annual general meeting of the association after the revocation of that appointment.
(7)  The public officer of an association appointed under subsection (5) (c) takes office on revocation of the administrator’s appointment.
58   Expenses of administration
(cf Co-operatives Act 1992, section 336)
(1)  The expenses of and incidental to the conduct of an association’s affairs by an administrator are payable from the association’s funds.
(2)  The expenses of conducting an association’s affairs include:
(a)  if the administrator is a public servant, such amount as the Secretary may certify as being the Crown’s costs in relation to the administrator’s remuneration, or
(b)  if the administrator is not a public servant, such amount as the Secretary may approve in relation to the administrator’s remuneration.
(3)  An amount certified under subsection (2) (a) may be recovered in a court of competent jurisdiction as a debt due to the Crown.
(4)  An administrator has, in relation to the expenses specified in subsection (1), the same priority on the winding up of an association as the liquidator of the association has.
59   Liabilities arising from administration
(cf Co-operatives Act 1992, section 337)
(1)  An administrator is liable for any loss incurred by the association because of any fraud, dishonesty, negligence or wilful failure by the administrator to comply with this Act, the regulations or the association’s constitution.
(2)  An administrator is not liable for any other loss, but must account for the loss in a report given under section 57.
60   Stay of proceedings
(cf Co-operatives Act 1992, section 337B)
(1)  If the Secretary appoints an administrator to conduct an association’s affairs, a person must not begin or continue any legal proceedings against the association until the administrator’s appointment is revoked except with the leave of the Supreme Court and, if the Court grants leave, in accordance with any terms and conditions that the Court imposes.
(2)  A person intending to apply for the leave of the Supreme Court under subsection (1) must give the Secretary not less than 10 days’ notice of intention to apply.
(3)  On the hearing of an application under subsection (1), the Secretary may be represented and may oppose the granting of the application.
61   Administrator to report to Secretary
(cf Co-operatives Act 1992, section 337C)
On the receipt of a request from the Secretary, the administrator for an association must, without delay, prepare and give to the Secretary a report showing how the administration is being carried out.
Division 3 Winding up
61A   Winding up on Secretary’s certificate
(cf Co-operatives National Law (NSW), section 443)
(1)  An association may be wound up on a certificate of the Secretary if:
(a)  the association ceases operations, or
(b)  the association ceases to have 5 or more members, or
(c)  the association’s committee has not been able to form a quorum for 2 months, or
(d)  the Secretary is satisfied that there is a significant public interest in winding up the association or that not winding up the association may place public funds at risk.
(2)  Before giving a certificate, the Secretary:
(a)  must give notice of the proposed certificate to be given to the association stating the ground or grounds referred to in subsection (1) that the Secretary believes exist, and
(b)  must give the association and its members at least 28 days within which to make submissions to the Secretary with respect to the proposed certificate, and
(c)  must give due consideration to any submissions that are made within that period.
(3)  A notice to be given to an association under subsection (2) must be sent:
(a)  by post addressed to the association at the association’s official address, or
(b)  if the Secretary suspects that the association’s official address is no longer in use:
(i)  by post addressed to the association at another address that appears to the Secretary to be an address that is used by the association, or
(ii)  by email addressed to the association at an email address that appears to the Secretary to be an email address that is used by the association.
(4)  A winding up on a certificate of the Secretary starts when the certificate is given.
(5)  On the giving of a certificate, the Secretary may appoint a person to be the liquidator of the association.
(6)  The liquidator must, within 10 days after appointment, give notice of his or her appointment in the manner prescribed by the regulations (if any).
(7)  A vacancy occurring in the office of liquidator is to be filled by a person appointed by the Secretary.
(8)  The Secretary may fix:
(a)  the security to be given by a liquidator, and
(b)  the fees payable to a liquidator.
62   Voluntary winding up
An association may be wound up voluntarily if the association so resolves by special resolution.
63   Winding up by Supreme Court
(1)  The Supreme Court may order the winding up of an association if:
(a)  the association has by special resolution resolved that it be wound up by the Court, or
(b)  the association does not commence its operations within one year after the date of its registration under this Act or suspends its operations for a whole year, or
(c)  the association is insolvent, or
(d)  the association has conducted its affairs (including its affairs as trustee of any trust) so as to provide pecuniary gain for its members, or
(e)  the association has engaged in activities inconsistent with its objects, or
(f)  the committee of the association has acted in affairs of the association in the interests of the committee or the committee members rather than in accordance with its objects, or in any other manner whatever that appears to the Court to be unfair or unjust to the association’s members, or
(g)  the association would, if not registered under this Act, not be eligible to be so registered, or
(h)  the Secretary has, pursuant to section 73, directed the association to apply for cancellation of its registration and the association has failed to do so within the time fixed by the direction, or
(i)  the Court is of the opinion that it is just and equitable that the association be wound up.
(2)  An application to the Supreme Court for the winding up of an association may be made by the association, by a member or creditor of the association or by the Secretary.
64   Modifications to text of applied Corporations Act 2001 of the Commonwealth
(1)  The winding up of an association is declared to be an applied Corporations legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 in relation to Parts 5.5 and 5.6 of the Corporations Act 2001 of the Commonwealth, subject to:
(a)  the modifications referred to in subsection (2), and
(b)  such other modifications (within the meaning of Part 3 of the Corporations (Ancillary Provisions) Act 2001) as may be prescribed by the regulations.
(2)  The following modifications to the text of the Corporations Act 2001 of the Commonwealth apply for the purposes of subsection (1):
(a)  a reference to a company or body is to be read as a reference to an association,
(b)  a reference to the directors of a company is to be read as a reference to the committee members of an association,
(c)  a reference to ASIC is to be read as a reference to the Secretary,
(d)  a reference to a company’s principal place of business is to be read as a reference to an association’s official address,
(e)  the reference to 5 years in section 1316 of that Act is taken to be a reference to 3 years,
(f)  for the purposes of the application of the provisions to a winding up on the certificate of the Secretary, the winding up is to be considered to be a voluntary winding up (but section 490 of the Corporations Act 2001 of the Commonwealth does not apply).
65   Distribution of surplus property
(1)  In this section, a reference to the surplus property of an association is a reference to that property of the association remaining after satisfaction of the debts and liabilities of the association and the costs, charges and expenses of the winding up of the association.
(2)  In a winding up of an association, the surplus property of the association is to be distributed in accordance with a special resolution of the association.
(3)  Any such distribution of surplus property:
(a)  must be approved by the Secretary, and
(b)  is not to be made to or for the benefit of:
(i)  any member or former member of the association, or
(ii)  any person to be held on trust for any member or former member of the association,
unless the member or former member is an association (whether incorporated or unincorporated) whose constitution, at the time of the distribution, prohibits the distribution of property to its members, and
(c)  is subject to any trust affecting that property or any part of it.
(4)  Surplus property or any part of it that consists of property supplied by a government department or public authority, including any unexpended portion of a grant, must be returned to the department or authority that supplied it or to a body nominated by the department or authority.
(5)  A person aggrieved by the operation of this section in relation to an association’s surplus property may apply to the Supreme Court for an order as to its disposal.
(6)  The Supreme Court may deal with such an application by making such orders as it thinks fit with respect to the disposal of the association’s surplus property.
66   Appeal
(1)  A person aggrieved by any act, omission or decision of an association’s liquidator or provisional liquidator may appeal to the Supreme Court in respect of the act, omission or decision.
(2)  The Supreme Court may deal with such an appeal by confirming, reversing or modifying the act or decision, or remedying the omission, as the case may be, and by making such other orders as it thinks fit.
Division 4 Offences relating to incurring of debts or fraudulent conduct
67   Definitions
(1)  This Division applies to an association:
(a)  that is insolvent, or
(b)  that is being, or has been, wound up, or
(c)  whose registration has been cancelled under Division 1 or 2 of Part 7.
(2)  In this Division, appropriate officer means:
(a)  in relation to an association that has been or is being wound up, the liquidator, or
(b)  in relation to an association whose registration has been cancelled by the Secretary or that is insolvent, the Secretary.
(3)  For the purposes of this section, an association is taken to be insolvent if, and only if, execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the association is returned unsatisfied in whole or in part.
68   Incurring of debts in respect of association to which this Division applies
(1)  If an association incurs a debt and:
(a)  immediately before the debt is incurred:
(i)  there are reasonable grounds for believing that the association is or will become insolvent, or
(ii)  there are reasonable grounds to expect that, if the association incurs the debt, the association will become insolvent, and
(b)  the association is or becomes an association to which this Division applies,
any person who was a committee member of the association at the time the debt was incurred is guilty of an offence.
Maximum penalty: 50 penalty units or imprisonment for 1 year, or both.
(2)  The association and any person who was a committee member of the association at the time the debt was incurred are jointly and severally liable for the payment of the debt.
(3)  In any proceedings against a person under subsection (1), it is a defence if the defendant proves:
(a)  that the debt was incurred without the defendant’s express or implied authority or consent, or
(b)  that, at the time the debt was incurred, the defendant did not have reasonable grounds:
(i)  to believe that the association was insolvent, or
(ii)  to expect that, if the association incurred that debt, it would become insolvent.
(4)  If subsection (2) renders a person or persons liable to pay a debt incurred by an association, the payment by that person or either or any of those persons of the whole or any part of the debt does not render the association liable to the person or persons concerned in respect of the amount so paid.
69   Fraudulent conduct in respect of association to which this Division applies
If:
(a)  an association does any act (including the entering into of a contract or transaction) with intent to defraud any person or for any other fraudulent purpose, and
(b)  the association is or becomes an association to which this Division applies,
any person who was knowingly concerned in the doing of the act with that intent or for that purpose is guilty of an offence.
Maximum penalty: 100 penalty units or imprisonment for 2 years, or both.
70   Powers of Supreme Court
(1)  If a person (the offender) is convicted of an offence under section 68 (1) in respect of the incurring of a debt, the Supreme Court, on the application of:
(a)  the Secretary, or
(b)  the person to whom the debt is payable (the creditor),
may declare that the offender is personally responsible, without any limitation of liability, for payment to the creditor of the amount of the debt or such part of it as the Court thinks fit.
(2)  If a person (the offender) is convicted of an offence under section 69, the Supreme Court, on the application of:
(a)  the Secretary, or
(b)  the appropriate officer, or
(c)  a member or creditor of the association authorised by the Secretary to make such an application,
may declare that the offender is personally responsible, without any limitation of liability, for payment to the association of the amount required to satisfy so much of the debts of the association as the Court thinks fit.
(3)  If the Supreme Court makes a declaration under subsection (1), it may make such further orders as it thinks fit for the purpose of giving effect to that declaration.
(4)  In particular, the Supreme Court may order that the offender’s liability is a charge on:
(a)  a debt or obligation due from the association to the creditor, or
(b)  a right or interest under a charge on any property of the association held by or vested in the offender or a person on behalf of the offender, or a person claiming as assignee from or through the offender or a person acting on behalf of the offender.
(5)  The Supreme Court may, from time to time, make such further order as it thinks fit for the purpose of enforcing a charge imposed under subsection (4).
(6)  For the purpose of subsection (4) (b), assignee includes a person to whom or in whose favour, by the direction of the offender:
(a)  the debt, obligation or charge was created, issued or transferred, or
(b)  the interest was created,
but does not include an assignee for valuable consideration given in good faith and without actual knowledge of any of the matters on which the conviction or declaration was made.
71   Certain rights not affected
Nothing in this Division affects any rights of a person to indemnity, subrogation or contribution.