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This publication has been adapted from an article published by Bruce Gotterson in the April edition of Club Life magazine. 

 

I’ve been writing Club Law articles for over 15 years and there has never been a tougher time for Clubs. Now is a time to look after yourself, your family, your employees and your community

From our perspective we have been receiving a number of enquiries since the shutdown about a variety of issues such as the postponement of AGM’s and board elections, the impact of the shutdown on contracts and holding board meetings using technology.

The Registered Clubs Act requires boards to hold a meeting each month. Given the present circumstances, there may be directors who are unwilling or unable to attend board meetings at the club.

The Corporations Act allows board meetings to be called or held using any technology which is consented to by all directors. In a practical sense, all directors on the board could consent to directors of the club attending board meetings by using technology for example by phone hook-up or by Skype or Zoom.

The CEO can seek a standing consent from directors so that the consent applies to all board meetings. This consent remains in place until such time as it is withdrawn by a director. A director can only withdraw their consent within a reasonable period of time before the meeting.

If one or more directors do not consent (or withdraw their consent) to directors attending board meetings using technology, then board meetings cannot be conducted using technology.

Strictly speaking there is no restriction on a director withdrawing his consent to holding a meeting by technology.

However, these are unprecedented times. In times of social isolation a face to face meeting increases the risk of the spread of COVID-19. This is of particular concern for many club directors who may be older and at a higher risk factor.

At law all directors must act in good faith and for a proper purpose.

In some circumstances, a director may legitimately hold a view that certain decisions are so important that they require directors to attend in person and that such a decision should be delayed until a face to face meeting is practical.

Of course, it may not be possible to delay such meetings. In our view, a director who deliberately withdrew his consent to stop an older director who was self-isolating from participating in a board meeting would not be acting in good faith.

The ability for clubs to call and hold board meetings using technology automatically applies under the Corporations Act. That is, clubs can call and hold board meetings using technology with the consent of all directors irrespective of whether or not the constitution of the club includes a provision specifically allowing this to occur.

Of course, I and the rest of the team at Pigotts will be there if you need legal advice. But I’ll also be there if you just want a chat. My number is 0405 153 651. Send me a text, give me a call. It doesn’t need to be for legal work. We also send out a free newsletter with legal updates to our clients and other clubs. If you don’t get it – let me know.

This publication is produced by Pigott Stinson. It is intended to provide general information only. The contents of this publication do not constitute legal advice and should not be relied upon as legal advice. Formal legal advice should be sought from us in respect of the matters set out in this publication. Liability limited by a scheme approved under Professional Standards Legislation.