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To View Asset LEGAL AND CONSTITUTIONAL COMMITTEE A REPORT TO PARLIAMENT ON THE PUBLIC LIABILITY OF VOLUNTARY ORGANISATIONS Ordered to be printed No. 50 EXTRACTED FROM THE MINUTES OF THE PROCEEDINGS OF THE LEGISLATIVE COUNCIL TUESDAY 15 NOVEMBER 1988 7 LEGAL AND CONSTITUTIONAL COMMITTEE - The Honourable Evan Walker mov.ed, by leave, That the Honourables Joan Coxsedge, D.M. Evans, W.A. Landeryou, R.J. Long, J. Mclean and G.A. Sgro be members of the Legal and Constitutional Committee. Question - put and resolved in the affirmative. EXTRACTED FROM THE VOTES AND PROCEEDINGS OF THE LEGISLATIVE ASSEMBLY THURSDAY 3 NOVEMBER 1988 11 LEGAL AND CONSTITUTIONAL COMMITTEE - Motion made, by leave, and question proposed - ••• (Mr. Fordham). Question - That Mr Jasper, Mr Lea, Mr Perton, Mr Thomson, Mrs Toner* and Mr Smith (Glen Waverley) be appointed members of the Legal and Constitutional Committee- put and agreed to. * Resigned 28 February 1989 ********************* iii LEGAL AND CONSTITUTIONAL COMMITTEE MEMBERS The Honourable D.M. Evans, MLC (Chairman) The Honourable Joan Coxsedge, MLC (Deputy Chair) Mr. K.S. Jasper, MP The Honourable W.A. Landeryou, MLC Mr. D.J. Lea, MP The Honourable R.J. Long, MLC The Honourable Jean McLean, MLC Mr. V.J. Perton, MP The Honourable G.A. Sgro, MLC Mr. E.R. Smith, MP Mr. K.J. Thomson, MP STAFF Mr. Spencer Zifcak, Director of Research Mr. Marcus Bromley, Secretary Mr. Andreas van Eerten, Assistant Secretary Ms. Gail Furness, Research Officer Ms. Pauline Ireland, Research Officer Ms. Anne Mullins, Research Officer Miss Sorrel D'Silva, Word Processor Operator Mrs. Jennifer Hutchinson, Stenographer ******************* V INTRODUCTION BY HON. DAVID EVANS, MLC CHAIRMAN LEGAL AND CONSTITUTIONAL COMMITTEE When the very existence of a valued section of our community is under threat, it is essential that action be taken. In Victoria, it has become clear that voluntary organisations were reassessing their work in light of the fear that they were not adequately protected against potential legal claims arising from their activities. The significance of this issue for volunteers has been clearly shown in the enormous response by the community to the Legal and Constitutional Committee's inquiry into Public Liability of Voluntary Organisations. The Committee has greatly appreciated this interest and trusts that its Report, which reflects the law as at July 19&&, will alleviate many of the problems currently experienced by voluntary groups. As Chairman, I would like to extend my thanks to the Subcommittee of the previous Legal and Constitutional Committee chaired by the Hon. L.S. Lieberman, MP, which devoted many hours to the hearing and examining of evidence during this inquiry. The present Committee found this background work to be immensely helpful. In addition, the Committee wishes to place on record its appreciation of the valuable work performed by the staff of the Committee and, most particularly, by its Research Officer Gail Furness who researched and drafted this Report. vii TABLE OF CONTENTS Page No. INTRODUCTION vii SUMMARY OF RECOMMENDATIONS XV CHAPTER 1 - INTRODUCTION 1.1 Terms of Reference 1.2 Background to the Inquiry 2 1.3 Public Consultation 3 1.4 Conduct and focus of the inquiry 4 1.5 Evidence 6 1.6 Submissions 6 1.7 Acknow 1edgements 6 1.8 For mat of Report 6 CHAPTER 2 - DEFINITIONS 8 2.1 Introduction 8 2.2 "Voluntary Organisations" 8 2.3 Damages Claims 11 2.3.1 Negligence 11 2.3.2 Damages 15 2.4 Public Liability Insurance 15 2.5 Conclusion 16 CHAPTER 3 - UNINCORPORATED ASSOCIATIONS 17 3.1 Introduction 17 3.2 Suing and being sued 17 3.3 Personal Liability 18 ix Page No. 3.4 Right of indemnity 20 3.5 Contracts 21 3.6 Property 21 3.7 Comments 22 RECOMMENDATION I 24 3.8 Conclusion 25 CHAPTER 4 - INCORPORATION 26 4.1 Introduction 26 4.2 Companies (Victoria} Code 28 4.3 Co-operation Act 1981 29 4.4 Hospitals and Charities Act 1958 30 4.5 Associations Incorporation Act 1981 31 4.5.1 Background 31 4.5.2 Eligibility for Incorporation 32 4.5.3 Process of Incorporation 33 4.5.4 Effects of Incorporation 34 4.5.5 Management of the Incorporated Association 35 4.5.6 Statutory Obligations following Incorporation 37 4.5.7 Dissolution 38 4.5.8 Other Matters 39 4.6 Lifting the Corporate Veil 40 4.7 Other methods of conferring the benefits of Incorporation 41 4.7.1 Automatic Incorporation 41 RECOMMENDATION 2 43 4.7.2 Compulsory Incorporation 43 RECOMMENDATION 3 46 X Page No. CHAPTER 5 -INCORPORATION- SUBMISSIONS AND PROPOSALS 47 5.1 Introductior. 47 5.2 Eligible associations 48 RECOMMENDATION 4 51 5.3 Process of Incorporation 51 5.3.1 Fees 51 RECOMMENDATION 5 52 ~12Focms ~ RECOMMENDATION 6 53 5.4 Rules 53 5.4.1 The minimum content of the Rules 55 RECOMMENDATION 7 56 5.4.2 Model Rules 56 RECOMMENDATION 8 56 RECOMMENDATION 9 57 5.5 Statement of Purposes 57 RECOMMENDATION 10 58 5.6 Dispute Resolution Mechanism 58 RECOMMENDATION 11 59 5.7 Short term Incorporation 59 5.7 .1 Period of Operation 61 5.7 .2 Procr~ss of Incorporation 62 5.7 .3 Dissolution 63 RECOMMENDATION 12 63 RECOMMENDATION 13 64 xi Page No. RECOMMENDATION 14 64 5.8 Branches 65 RECOMMENDATION 15 66 5.9 Management and Finances 66 5. 9.1 Public Officers 66 RECOMMENDATION 16 68 5.9.2 Annual Return 68 5.10 Pre-incorporation contracts 69 RECOMMENDATION 17 70 RECOMMENDATION 18 70 5.11 Dissolution of associations 70 5.11.1 Method of dissolution 70 RECOMMENDATION 19 70 5.11.2 Distribution of surplus assets 71 RECOMMENDATION 20 72 5.12 Victorian associations operating interstate 73 RECOMMENDATION 21 75 5.13 Publicity 75 RECOMMENDATION 22 76 5.14 Review 77 RECOMMENDATION 23 77 RECOMMENDATION 24 78 5.15 Conclusion 78 xii Page No. CHAPTER 6 - OTHER PROTECTIVE MECHANISMS 79 6.1 IntroductioJ:~ 79 6.2 Immunity 79 RECOMMENDATION 2.5 82 6.3 Disclaimers 82 6.4 Ceilings on Claims 84 RECOMMENDATION 26 87 6 •.5 Other Matters 87 CHAPTER 7 - AVAILABILITY OF PUBLIC LIABILITY INSURANCE 89 7.1 What is a Public Liability Insurance Policy? 89 7.2 The need for Public Liability Insurance 90 7.3 Availability 90 7.3.1 Cost 92 7.3.2 Terms of the Policy 95 7.3.3 How to obtain Public Liability Insurance 99 7.4 Conclusion 107 CHAPTER 8 - INSURANCE PROPOSALS 109 8.1 Introduction 109 8.2 Single Insurance Scheme 109 8.2.1 No fault compensation 109 RECOMMENDATION 27 112 8.2.2 One Policy 113 8.3 Group Plans 114 8.3.1 Role of State Government 115 RECOMMENDATION 28 116 xiii Page No. RECOMMENDATION 29 118 8.3.2 Role of Local Government 118 RECOMMENDATION 30 119 8.3.3 State associations 119 8.3.4 Conclusion 120 8.4 Compulsory Insurance 120 RECOMMENDATION 31 123 8.5 Publicity 123 RECOMMENDATION 32 124 CHAPTER 9 - CONCLUSION 125 APPENDIX 1 127 APPENDIX 11 130 APPENDIX ID 137 APPENDIX IV 140 APPENDIX V 142 APPENDIX VI 156 APPENDIX VII 161 APPENDIX VID 163 LIST OF REPORTS TABLED 167 xiv SUMMARY OF RECOMMENDATIONS RECOMMENDATION I (p.24) The Comm.~ttee recommends that the committee members of unincorporated associations be granted a right of indemnity against the associations' property and funds with respect to any judgement entered against the committee members where the plaintifrs cause of action is such that the association would have been liable as principal if it had been an incorporated bcxty. The Committee further recommends that the Attorney-General determine the most appropriate form in which this recommendation is to take effect. RECOMMENDATION 2 (p.4 3) The Committee recommends that automatic incorporation of voluntary organisations not be introduced. RECOMMENDATION 3 (p.46) The Committee recommends that voluntary organisations not be compelled to incorporate. RECOMMENDATION 4 (p.51) The Committee recommends that transactions with the public which are intended to provide financial support to the association in a manner which is directly related to its objects shall not be deemed to be trading for the purpose of the Act. Whether these transactions are ancillary or the principal purpose of the group should be irrelevant. XV RECOMMENDATION 5 (p.52) The Committee recommends that the present fees remain unchanged save that it recommends that those groups which choose to adopt the model rules pay the reduced incorporation fee of $50. This fee should be indexed on the same basis as the other fees charged. RECOMMENDATION 6 (p.53) The Committee recommends that the application for the incorporation of associations and the accompanying declaration be redrafted into one form, and that the requirement that the declaration be sworn be removed. It further recommends that all forms be reviewed by the Office of Incorporated Associations to ensure they are framed in the simplest manner. RECOMMENDATION 7 (p.56) The Committee recommends that the Schedule and s.6(a)(i) of the Associations Incorporation Act 1981 be repealed, and further, that s..54(2)(c) be modified accordingly. RECOMMENDATION 8 (p.56) The Committee recommends that the model rules be re-drafted in non sexist language and simplified with reference to the matters contained in paragraph 5.4.2. RECOMMENDATION 9 (p.57) The Committee recommends that peak organisations in the community be urged to examine the needs of associated groups and draft and circulate appropriate rules for their use. xvi RECOMMENDATION 10 (p.58) The Committee recommends that an association's statement of purposes be included in the application form and therefore not be required to be stated on a separate form.
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