SA Incorporated association - $$ claim by ex-chair

[PeterB]

New to a small sport club committee. Ex-chairman/treasurer has demanded reimbursement of expenses over the course of many years = $70K +. No paper trail. No contracts. No receipts. No annual financial statements. No relevant minutes. Has intimated legal action if not addressed by new committee.

While this all seems a nonsense, what's the most sensible way for a very small club to address this? Club has no assets and next to no funds as it's digging itself out of the mire (see above). Cheers, P.

 

[Rod]

What is driving this claim? Has he been forced out of the club he enjoys?

Has the debt ever been shown on the association's financial records in the past?

First off, any claim older than 6 years is not actionable. And under no circumstances acknowledge anything that may construed as acceptance of the debt.

Secondly, unless he can produce minutes/correspondence/witness saying the club agreed to pay expenses then he has no claim.

Thirdly, as past treasurer and chairman he has responsibility for ensuring the financial records are correct. He should probably be suing himself.

Fourthly, there is a QLD case Robson & Ors v Commissioner of Taxation [2015] QSC 76 that says there is no personal liability for committee members if trading while insolvent. Not sure how this applies in SA but worth considering if the matter gets as far as a court, which is most unlikely.

Methinks this is not about money. Can the matter be resolved without money being a factor?

 

[PeterB]

Thanks, Rod. The ex-chair/treasurer resigned in writing after a new constitution was adopted, and new committee members joined. He would claim to have been forced out. He clearly had lost confidence of members and parents.

No debt is shown in any financial record as financial records are 1) a mess 2) non-existant. There is no correspondence of the club to pay expenses (I agree with the sentiment that he should be suing himself). The club has minutes from previous committee meetings but no details of any payment of expenses and the ex-chair never signed them.

I'll check out the Robson case.

I would suggest this is more about ego than money otherwise there would have been a paper trail.

Thanks for the tips. Appreciate it.

 

[Tim W]

New to a small sport club committee. Ex-chairman/treasurer has demanded reimbursement of expenses over the course of many years = $70K +. No paper trail. No contracts. No receipts. No annual financial statements.

First up, appoint one only Committee member to have carriage of this issue.
Pass a resolution that the only Committee member who will talk to him is <whoever>.
If willing and able, then Vice Presidents can be good for this kind of thing,
because they don't have any other specific responsibilities, and can still refer back to the President and/or Committee if they need to.
That way, when he contacts the other Committee members, they can decline to talk to him, with comfort and a clear conscience.

Second, the Committee should pass a resolution to the effect of:

"The Committee will not consider* expense claims from any member that are not reasonably able to be supported with records."

Has intimated legal action if not addressed by new committee.

Legal action about what?
Actions, omissions, poor decisions, and compliance failures, on his watch?
Refusal to pay unsupported claims of money?
Perhaps he's threatening to defame individuals. He does so at his own legal risk.

Have a lawyer and an accountant go through the books and records.
Then, if all the ducks are in fact in order, then you're reply to any threats of legal action
might reasonably be

"Well, go on then."​

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* "Consider" does not mean "pay"