Amendments to the Registered Clubs Act have come into force (as of June 2004). The legislation forces club directors and management to disclose business dealings to members with the view to improving business practice standards in Clubs.

A manager must be appointed for each actual premises, the secretary is not present and must be a 'natural person' - this is designed to stop commercial operators being appointed.

Any board member or top executive who acquires an interest in a hotel must disclose that interest in writing to the secretary within 14 days of the acquisition. (A top executive is a person who is one of the five highest paid employees of the club at each separate premises of the club).

Any board member or top executive who receives a gift with a value in excess of $500 from an affiliated body must disclose that gift in writing to the secretary within 14 days.

Each director and employee must annually declare any gifts valued in total of $500 or more, which are received by a person or an organisation that is party to a contract with the club. The secretary must keep a register of all gifts.

A club must disclose:

• Any loans of more than $1,000 made to an employee of the club,
• Bands of Remuneration of top executives in excess of $100,000 per annum,
• The name and remuneration of any employee of the club who - the club is aware - is a close relative of a board member or top executive,
• Details of any amount of $30,000 or more paid to a consultant, including the nature of the services provided,
• Details of any settlement made with a member of the board or an employee as a result of a legal dispute, unless prevented by a confidentiality clause, and,
• Details of any legal fees paid by the club on behalf of a member of the board or an employee.

A club must not enter into a contract with the secretary of the club, a manager or any close relative, in which any of these people have a controlling interest.

A club cannot enter into an employment contract with a top executive unless the proposed contract has been approved by the board.

A club cannot dispose any land (disposal includes a licence, lease, option and easement) unless:

• The disposal has previously been approved by a majority vote at a general meeting of ordinary members of the club,
• The disposal is by way of public auction or open tender conducted by an independent real estate agent or auctioneer, and,
• In the case of a sale of land, the club has first obtained a valuation from an independent registered real estate valuer.

This has potentially broad ranging implications for clubs and developers who purchase land from clubs. For example, the Director of Liquor and Gaming has the power to apply to the Supreme Court. If the Court is satisfied that the disposal of land has not been to benefit members. The Court can order the transfer of land back to the club and may make the club pay damages. Complications may arise where the club, for a variety of reasons, does not have the money to repay or meet any damages claim.

These requirements impose significant ongoing compliance and disclosure obligations on cub directors and management. We have over 40 years experience in servicing the club industry and can help your club put systems in place to minimise the burden of these requirements.

What is a `dine or drink' restaurant?

The Licensing Court permits this type of restaurant to have up to 30 per cent of its seating used by patrons who wish to drink without purchasing a meal. While the primary purpose of the restaurant is to serve meals to members of the public for consumption in the restaurant, a dine-or-drink' licence gives the restaurant greater flexibility.

My licensee has left. What should I do?

An application to transfer the licence must be made to the Licensing Court within 28 days. If the application is not made within 28 days liquor trading is not permitted until an application is approved by the Court. Penalties of $5,500 per day apply for unauthorised trading. In addition, police can also confiscate liquor stock.

FURTHER INFORMATION 

This Information Outline is provided courtesy of Matthews Folbigg who are experienced in this area of law. They are located at Level 7 The Barrington, 10-14 Smith Street, Parramatta NSW 2124 or call them on (02) 9635-7966 if you would like more information on this legal topic, or you wish to obtain formal advice regarding your situation.

MatthewsFolbigg is a large commercial law firm based in Parramatta, New South Wales. The firm has Accredited Specialists in Business Law, Property, Immigration, Family Law and Personal Injury. MatthewsFolbigg has specialist groups advising clients in corporate structures, intellectual property, and information technology plus franchising, estate planning and insolvency work.