Page 2618 - Week 07 - Tuesday, 28 June 2011
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difference is that “club” has been substituted for “corporation”. I emphasise straightaway that, in principle, this section is probably sound. The problem which we have with this section, however, is the way in which it will be administered by the commission. In particular, the directors of clubs in the ACT need details about what is not acceptable conduct and what processes will be followed by the commission in responding to any unacceptable behaviour.
We were told in our briefing that there should be no concerns with the proposal, as it mirrored the provisions in the Corporations Law, and that, given the arrangements which exist between the commission and ASIC, there should be no particular issue with such matters as a director being subject to action by both the commission and ASIC for the same alleged offence.
The concerns which the opposition have, however, essentially go to the matters of process and the related uncertainty about how this section would be administered. There is no definition of what would comprise a breach of the act. There is no guidance to show directors what the commission will consider to be acceptable behaviour and what might be unacceptable behaviour.
Further, while it is suggested that precedents established by ASIC could apply in this situation, in reality that is unlikely to be the case as clubs operating in the ACT are quite different from corporations. And indeed, there are no precedents, as far as we understand, within ASIC for actions which would be directly relevant to the directors of clubs in the ACT. Further, there is no indication of the process which would be followed by the commission in following through any allegation of a breach of section 148A. I could add to these comments but I think the basis of our opposition to this section is clear.
As I noted a moment ago, this section is probably quite reasonable. Indeed, in my discussions with ClubsACT, their view was that it is also probably a reasonable section. The problem is that this section of and by itself is not sufficient to provide any certainty to ACT clubs and, in particular, to the directors of ACT clubs about how the section could or would be applied.
Indeed, I would go so far as to suggest that the approach to the drafting of section 148A demonstrates that the government has not thought through all the implications which could arise with this section. I think that is disappointing. I am particularly concerned about the way in which this section could affect smaller clubs in the ACT and that is the smaller clubs which may be most at risk of breaching section 148A, with less resources at their disposal compared to the larger clubs.
Not only is there a potential for allegations of breaches but there is then the concomitant need to commit very limited resources in a small club to responding to any allegations, to identifying evidence relating to the breach, to preparing a defence against the allegations, to going through the process of dealing with the allegations and to responding to any actions which may result from the findings on the allegations. Particularly for the smaller clubs, the commitment of scarce resources to dealing with an allegation from the commission has the potential to be a major impost, in terms of both time and funds—and all of this in an environment where there are already severe
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