As a general statement, the obligations imposed on directors of companies limited by guarantee apply equally to committee members of incorporated associations.

There is little authority in the application of common law duties of directors to situations involving incorporated associations.  In principle however, the positions are very similar and it seems the committee members and associations would have the same obligations of those of a director of a company.

Conclusion
There is still some degree of uncertainty as to where the "line in the sand" will be drawn for personal liability of directors and office holders of not for profit sporting organisations.  However, it is becoming increasingly clear that in a more litigious society issues involving the potential liability of office holders are more likely to be tested in the Courts.  In those circumstances the potential for personal liability of directors and office holders is likely to increase.

To combat this directors and office holders must;

• ensure that they are aware of what is going on in their club or organisation and that they are not holding office just to "fill the numbers";
• ensure that they carefully consider any document which they are asked to sign in their capacity as an officeholder;

• ensure their club or organisation has put in place procedures or protocols which will ensure compliance with statutory requirements, limit risk and ensure that proper reporting is made to directors and office holders;

• insist, that a condition of them remaining as a director or office holder of an organisation, is that the organisation takes out directors and office holders liability insurance.

Mark Lyons, Jones King Lawyers - Member of The Sport Management Network
Phone:  07 3225 0010
Fax: 07 3225 0099
email: mark.lyons@jonesking.com.au

Winter 1999

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