# Associations Incorporation Act 1981 (Victoria)/Part IV

PART IV—EFFECTS OF INCORPORATION

## 14 Interpretation

(1) On and from the date specified in a certificate of incorporation of an association granted under this Act, but subject to this Act and the rules of the incorporated association—
(a) in the case of a certificate granted under section 7, the persons who were the members of the association immediately before that date;
(b) in the case of a certificate granted under section 10, the persons who were the members of the company, society, association, institution or body immediately before that date; and
(c) in the case of a certificate granted under section 31, the persons who were the members of either of the incorporated associations that made the application under that section immediately before that date—
together with such other persons as from time to time become members of the incorporated association, are an incorporated association by the name set out in the certificate.
(2) An incorporated association has perpetual succession, may have a common seal, has power to acquire or hold (whether on trust or absolutely) and dispose of property and is capable of suing and being sued.

## 14A Rights of members under rules

(1) The rules of an incorporated association constitute the terms of a contract between the incorporated association and its members for the time being.
(2) The Magistrates' Court may, on the application of an incorporated association, or a member of an incorporated association, make an order—
(a) giving directions for the performance and observance of the rules of the incorporated association by any person who is under an obligation to perform or observe those rules; or
(b) declaring and enforcing the rights or obligations of members of the incorporated association between themselves or the rights or obligations of the incorporated association and any member between themselves.
(3) An order may be made under this section whether or not a right of a proprietary nature is involved and whether or not the applicant has an interest in the property of the incorporated association.
(4) The Magistrates' Court may refuse to make an order on the application or may make an order for costs against a party, whether successful or not, if it is of opinion that—
(a) the issue raised in the application is trivial;
(b) having regard to the importance of the issue, the nature of the incorporated association, any other available method of resolving the issue, the costs involved, lapse of time, acquiescence or any other relevant circumstance, it was unreasonable to make the application; or
(c) the unreasonable or improper conduct of a party has been responsible for the making of the application, or has added to the cost of the proceedings.

## 14B Grievance procedure

(1) The rules of an incorporated association must set out a grievance procedure for dealing with any dispute under the rules between—
(a) a member and another member; or
(b) a member and the incorporated association.
(2) A member may appoint any person to act on behalf of the member in the grievance procedure.
(3) The grievance procedure must allow for natural justice to be applied.

## 15 Rights and liabilities of members

(1) Except as otherwise provided by this Act or the rules of an incorporated association, a member of the committee, the public officer or a member of the incorporated association shall not, by reason only of his being such a member or officer, be liable to contribute towards the payment of the debts and liabilities of the incorporated association or the costs, charges and expenses of the winding up of the incorporated association.
(2) Except where otherwise expressly provided by this Act or by its rules, membership of an incorporated association shall not be deemed to confer upon members any right, title or interest, whether legal or equitable, in the property of the incorporated association.

## 16 Powers of incorporated association

(1) An incorporated association may, unless its statement of purposes or rules otherwise provide—
(a) invest and deal with moneys of the incorporated association not immediately required in such manner as is from time to time thought fit;
(b) raise or borrow money upon such terms and in such manner as it thinks fit;
(c) secure the repayment of moneys so raised or borrowed or the payment of a debt or liability of the incorporated association by giving mortgages, charges or securities upon or over all or any of the property of the incorporated association; and
(d) do all such other things as are incidental or conducive to the attainment of the purposes and the exercise of the powers of the incorporated association.
(2) Subject to subsection (3), an incorporated association may, unless its statement of purposes or rules otherwise provide—
(a) act as trustee; and s. 16
(b) accept and hold upon trust real and personal property.
(3) Notwithstanding subsection (2), an incorporated association does not have power as trustee of a trust to do any act or thing that, if done by the incorporated association otherwise than as trustee, would contravene the provisions of this Act or the statement of purposes or the rules of the incorporated association.
(4) The public officer of an incorporated association shall, within fourteen days after the incorporated association becomes a trustee of a trust, lodge with the Registrar particulars of the trust and a copy of any deed or other instrument creating or embodying that trust.

## 17 Ultra vires transactions

(1) No act of an incorporated association (including the entering into of an agreement by the incorporated association), and no conveyance or transfer of property to or by an incorporated association is invalid by reason only of the fact that the incorporated association was without capacity or power to do the act or to execute or take the conveyance or transfer.
(2) Any such lack of capacity or power may be asserted or relied upon only in—
(a) proceedings against the incorporated association by a member of the incorporated association to restrain the doing of any act or acts or the conveyance or transfer of any property to or by the incorporated association;
(b) proceedings by the incorporated association, or by a member of the incorporated association, against the present or a former public officer of the association; or
(c) an application by the Registrar to wind up the incorporated association.
(3) If the unauthorized act, conveyance or transfer sought to be restrained in any proceedings under paragraph (a) of subsection (2) is being, or is to be, performed or made pursuant to any contract to which the incorporated association is a party, the court in which the proceedings are brought may, if all the parties to the contract are parties to the proceedings and if the court deems it to be just and equitable, set aside and restrain the performance of the contract and may allow to the incorporated association or to the other parties to the contract (as the case requires) compensation for the loss or damage sustained by either of them that may result from the action of the court in setting aside and restraining the performance of the contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained.

## 18 Disposal of trust property

(1) In any case where property is held by an incorporated association upon trust and the trust has come wholly or partly to an end then, notwithstanding that the deed or other instrument creating or embodying the trust or the rules of the incorporated association do not contain any power to dispose of the property or forbid the disposal of the property, the public officer of the incorporated association may, with the authority of the committee of the incorporated association, apply to the Minister for authority to dispose of the whole or part of the property.
(2) Where an application is made under subsection (1), the Minister may, in any case in which he thinks it proper so to do, by writing under his hand—
(a) authorize the disposal of the property or part of the property specified by him; and
(b) direct the manner in which the proceeds arising from the disposal of the property or part shall be dealt with.
(3) Upon the grant and in pursuance of the authority or direction of the Minister under subsection (2), it shall be lawful for an incorporated association to dispose of property or part of property, free from any trusts and to deal with the proceeds arising from the disposal.

## 19 Confirmation of contracts and authentication and execution of documents

(1) In so far as the formalities of making, varying or discharging a contract are concerned, a person acting under the express or implied authority of an incorporated association may make, vary or discharge a contract in the name of or on behalf of the incorporated association in the same manner as if that contract were made, varied or discharged by a natural person.
(2) The making, variation or discharging of a contract in accordance with subsection (1) is effectual in law and binds the incorporated association and other parties to the contract.
(3) A contract or other document executed or purporting to have been executed under the common seal of an incorporated association is not invalid by reason only that a person attesting the affixing of the common seal was in any way, whether directly or indirectly, interested in that contract or other document or in the matter to which that contract or other document relates.
(4) This section does not prevent an incorporated association from making, varying or discharging a contract under its common seal.
(5) This section does not affect the operation of a law that requires some consent or sanction to be obtained, or some procedure to be complied with, in relation to the making, variation or discharge of a contract.
(6) A document or proceeding requiring authentication by an incorporated association may be authenticated by the signature of the public officer of the incorporated association and need not be authenticated under the common seal of the incorporated association.
(7) An incorporated association may, by writing under its common seal, empower a person, either generally or in respect of a specified matter or specified matters, as its agent or attorney to execute deeds on its behalf, and a deed signed by such an agent or attorney on behalf of the incorporated association and under his seal binds the incorporated association and has the same effect as if it were under the common seal of the incorporated association.
(8) The authority of an agent or attorney empowered pursuant to subsection (7), as between the incorporated association and a person dealing with him continues during the period (if any) mentioned in the instrument conferring the authority or, if no period is so mentioned, until notice of the revocation or termination of his authority has been given to the person dealing with him.

## 20 Ratification of contracts made before incorporation of association

(1) In this section—
(a) a reference to a non-existent incorporated association purporting to enter into a contract shall be construed as a reference to—
    (i) a person executing a contract in the name of an incorporated association, where no such incorporated association exists; or
    (ii) a person purporting to enter into a contract as agent or trustee for a proposed incorporated association;
(b) a reference to a person who purports to execute a contract on behalf of a non-existent incorporated association shall be construed as a reference to a person who executes a contract or purports to enter into a contract as mentioned in subparagraph (i) or (ii) of paragraph (a); (c) a reference, in relation to the purported entry into a contract by a non-existent incorporated association, to the incorporation of the association shall be construed as a reference to—
    (i) where a person has executed a contract in the name of an incorporated association and no such incorporated association exists—the incorporation of an association that, having regard to all the circumstances, is reasonably identifiable with the incorporated association in the name of which the person executed the contract; or
    (ii) where a person has purported to enter into a contract as agent or trustee for a proposed incorporated association—the incorporation of an association that, having regard to all the circumstances, is reasonably identifiable with the proposed incorporated association.
(2) Where—
(a) a non-existent incorporated association purports to enter into a contract; and
(b) the association is incorporated within a reasonable time after the contract is purported to be entered into the incorporated association may, within a reasonable time after it is incorporated, ratify the contract.
(3) Where an incorporated association ratifies a contract as provided by subsection (2), the incorporated association is bound by, and entitled to the benefit of, that contract as if the association had been incorporated before the contract was entered into and had been party to that contract.
(4) Where a non-existent incorporated association purports to enter into a contract and—
(a) the association is not incorporated within a reasonable time after the contract is purported to be entered into; or
(b) the association is incorporated within such a reasonable time but does not ratify the contract within a reasonable time after the association is incorporated— the other party or each of the other parties to the contract may, subject to subsections (6) and (9), recover from the person or any one or more of the persons who purported to execute the contract on behalf of the non-existent incorporated association an amount of damages equivalent to the amount of damages for which that party could have obtained a judgment against the incorporated association if—
(c) where the association has not been incorporated as mentioned in paragraph (a)—the association had been incorporated and had ratified the contract as provided by subsection (2); or
(d) where the association has been incorporated as mentioned in paragraph (b)—the incorporated association had ratified the contract as provided by subsection (2)—
and the contract had been discharged by reason of a breach of the contract constituted by the refusal or failure of the incorporated association to perform any obligations under the contract.
(5) Where—
(a) proceedings are brought to recover damages under subsection (4) in relation to a contract purported to be entered into by a non-existent incorporated association; and
(b) the association has been incorporated— the court in which the proceedings are brought may, if it thinks it just and equitable to do so, make either or both of the following orders—
(c) an order directing the incorporated association to transfer or pay to any party to the contract who is named in the order, any property, or an amount not exceeding the value of any benefit, received by the incorporated association as a result of the contract;
(d) an order that the incorporated association pay the whole or a specified portion of any damages that, in those proceedings, the defendant has been, or is, found liable to pay.
(6) Where, in proceedings to recover damages under subsection (4) in relation to a contract purported to be entered into by a non-existent incorporated association, the court in which the proceedings are brought makes an order under paragraph (c) of subsection (5), the court may refuse to award any damages in the proceedings or may award an amount of damages that is less than the amount that the court would have awarded if the order had not been made.
(7) Where—
(a) a non-existent incorporated association purports to enter into a contract;
(b) the association is incorporated and ratifies the contract as provided by subsection (2);
(c) the contract is discharged by a breach of the contract constituted by a refusal or failure of the incorporated association to perform all or any of its obligations under the contract; and
(d) the other party or any one or more of the other parties to the contract brings or bring proceedings against the incorporated association for damages for breach of the contract—
the court in which the proceedings are brought may, subject to subsection (9), if it thinks it just and equitable to do so, order the person or any one or more of the persons who purported to execute the contract on behalf of the incorporated association to pay to the person or persons by whom the proceedings are brought the whole or a specified portion of any damages that the incorporated association has been, or is, found liable to pay to the person or persons by whom the proceedings are brought.
(8) Where a person purports, whether alone or together with another person or other persons, to execute a contract on behalf of a non-existent incorporated association, the other party to the contract, or any of the other parties to the contract, may, by writing signed by that party, consent to the first-mentioned person being exempted from any liability in relation to the contract.
(9) Where a person has, as provided by subsection (8), consented to another person being exempted from liability in relation to a contract that the other person purported to execute on behalf of a non-existent incorporated association—
(a) notwithstanding subsection (4), that first-mentioned person is not entitled to recover damages from that other person in relation to that contract; and
(b) a court shall not, in proceedings under subsection (7), order that other person to pay to the first-mentioned person any damages, or any proportion of the damages, that the incorporated association has been, or may be, found liable to pay to that first-mentioned person.
(10) If—
(a) a non-existent incorporated association purports to enter into a contract;
(b) the association is incorporated; and
(c) the incorporated association and the other party or other parties to the contract enter into a contract in substitution for the first-mentioned contract— any liabilities to which the person who purported to execute the first-mentioned contract on behalf of the non-existent incorporated association is subject under this section in relation to the first mentioned contract (including liabilities under an order made by a court under this section) are, by force of this subsection, deemed to be discharged.
(11) Any rights or liabilities of a person under this section (including rights or liabilities under an order made by a court under this section) in relation to a contract are in substitution for any rights that the person would have, or any liabilities to which the person would be subject, as the case may be, apart from this section, in relation to the contract.
(12) Where—
(a) a person purports to enter into a contract as trustee for a proposed incorporated association; and
(b) the association is incorporated within a reasonable time after the person purports to enter into the contract but does not ratify the contract within a reasonable time after the association is incorporated— then, notwithstanding any rule of law or equity, the trustee does not have any right of indemnity against the incorporated association in respect of the contract.
(13) For the purposes of this section, a contract may be ratified by an incorporated association in the same manner as a contract may be made by an incorporated association under section 19 and the provisions of section 19 have effect as if—
(a) the references in that section to making a contract were references to ratifying a contract; and
(b) the reference in subsection (3) of that section to a contract executed, or purporting to have been executed, under the common seal of an incorporated association were a reference to a contract ratified, or purporting to have been ratified, under the common seal of an incorporated association.

## 21 Purposes and rules

(1) The purposes of an incorporated association are the purposes stated in the statement of purposes that accompanied the application for its incorporation under this Act as altered by the incorporated association from time to time in accordance with this Part.
(2) The rules of an incorporated association are—
(a) where the application for the incorporation of the association was accompanied by a copy of rules that complied with section 6—those rules as altered by the incorporated association from time to time in accordance with this Part; and
(b) in any other case, the model rules, so far as applicable and as altered from time to time by the incorporated association in accordance with this Part.
(3) Where, in relation to any matter in relation to which the model rules make provision but the rules of the incorporated association do not make provision, the provision of the model rules shall, in relation to that matter, be deemed to be included in the rules of the incorporated association.
(4) A purpose or rule of an incorporated association is of no effect if it is inconsistent with this Act or contrary to law.

## 22 Alteration of rules

(1) Subject to section 51, an incorporated association may, by special resolution, alter its statement of purposes or its rules.
(2) An alteration of the statement of purposes or the rules of an incorporated association does not take effect unless and until it is approved by the Registrar.
(3) An application for the approval of an alteration must—
(a) be made by the public officer; and
(b) be made in a form approved by the Registrar; and
(c) be accompanied by the prescribed fee; and
(d) be made within 28 days after the alteration was passed by special resolution; and
(e) give notice of the special resolution and set out particulars of the alteration; and
(f) be accompanied by a declaration signed by at least 2 members of the committee of the incorporated association to the effect that the special resolution was passed in accordance with the Act; and
(g) in the case of an alteration of the rules, be accompanied by a consolidated copy of the rules of the incorporated association, including the alteration.
(4) The Registrar must approve that alteration unless the Registrar is satisfied that the alteration is contrary to this Act or the regulations.

## 22A Rules to be made available to members

An incorporated association must make a copy of its rules available for inspection at any reasonable time by a member at the request of that member.

## Footnotes

* ↑ S. 14(2) amended by No. 8/2003 s. 7(b).
* ↑ S. 14A inserted by No. 10236 s. 5.
* ↑ S. 14A(2) amended by No. 57/1997 s. 10.
* ↑ S. 14A(4) amended by No. 57/1997 s. 10.
* ↑ S. 14B inserted by No. 57/1997 s. 11.
* ↑ S. 15(1) amended by No. 57/1997 s. 12.
* ↑ S. 16(4) amended by Nos 10236 s. 8(1)(i), 57/1997 s. 13.
* ↑ S. 18(1) amended by No. 46/1998 s. 7(Sch. 1) (as amended by No. 12/1999 s. 3(Sch. 1 item 4)).
* ↑ S. 18(2) amended by No. 46/1998 s. 7(Sch. 1) (as amended by No. 12/1999 s. 3(Sch. 1 item 4)).
* ↑ S. 18(3) amended by No. 46/1998 s. 7(Sch. 1) (as amended by No. 12/1999 s. 3(Sch. 1 item 4)).
* ↑ S. 22(1) amended by No. 10236 s. 7(2)(b).
* ↑ S. 22(2) substituted by No. 57/1997 s. 14.
* ↑ S. 22(3) substituted by No. 57/1997 s. 14.
* ↑ S. 22(4) substituted by No. 57/1997 s. 14.
* ↑ S. 22A inserted by No. 57/1997 s. 15.