The NSW Registered Clubs Act 1976 has a quaint provision – s 41 – providing that an insolvency appointee such as a liquidator or administrator must be someone either appointed by NSW’s own Supreme Court or first approved by the Authority. This refers to the Independent Liquor and Gaming Authority set up under the Gaming and Liquor Administration Act 2007 .
This prior vetting has created problems at times and there have been calls for the law to be repealed: NSW Registered Clubs – insolvency law change required – Murrays Legal.
There is no evident reason for the requirements, which does not have any parallel in other states’ laws.
The law was seen at the time of its introduction in 1976 as “clumsily drafted”, with a call being made to at least remove the term “full member” as being an “unfortunate term” with the potential to cause “embarrassment”.[1] It was retained and remains. Also, among the list of insolvency appointees, the role of official manager appears, despite its repeal over 30 years ago.
The Act was proposed to be amended by the Registered Clubs Amendment Bill 2022, but that Bill has been withdrawn. The law is still wrong with reference remaining to “official manager”.
The main change proposed to s 41 is to retain the state’s own Supreme Court in its role but to allow the Federal Court to appoint a person to a club operating through a co-operative. The amendment proposed was to insert these replacement words:
“(a) for a registered club that is a company—appointed to act in that capacity by the Supreme Court, or (b) for a registered club that is a co-operative—appointed to act in that capacity by the Federal Court of Australia, or (c) for a registered club that is a company or co-operative, approved to act in that capacity by the Authority”.
If and when the Bill is returned, it might usefully be improved, and an explanation given as to why NSW clubs need to have their insolvency appointees vetted.
Perhaps the answer is that it is the state of NSW and its level of regulation in this area that we are talking about.
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[1] Parliamentary debate 11 March 1976 at 11.55am.
2 Responses
It’s. NSWCA decision, but I’ve never understood how the clubs act could fetter the Corps Act: they’re ordinary companies albeit limited by guarantee. The s 109 issue seems straightforward.
Peter, it’s never been tested and I agree s 109 looms large.
Michael