Open to Interpretation

There is an old saying that rules are to be obeyed by the foolish and are guidelines for the wise. There are many in various walks of life in Western Australia, Australia and the world who live by this code. Yet rules, regulations, etcetera are there for a purpose, to give structure and understanding. It is important in many areas that everyone has access to the rules, understands them and obeys them. If this does not happen anarchy prevails.

We have on this site highlighted the fact that Football West failed to hold an Annual General Meeting in 2015 and again in 2016.

Section 250N of the Corporations Act 2001 under which Football West must comply states:

“Public company must hold AGM
(1) A public company must hold an annual general meeting ( AGM ) within 18 months after its registration.

(2) A public company must hold an AGM at least once in each calendar year and within 5 months after the end of its financial year.”

This would appear to be fairly straightforward. However word has reached Not the Footy Show that Football West believe that they do not have to hold an AGM until the required five months after the end of their Financial year. Their Financial year it was reported in February 2016, at the late AGM for 2015, would now end on October 31. For the record it was admitted that this AGM was late, as Football West applied for, even though they were not entitled to, and received an extension from ASIC, who advised them that the AGM had to be held before the end of February.

Where the powers that be may be confused is the use of the word “and” in section 2. If it had said “or,” rather than “and,” then they may have an argument. It does not say “or” so that implies that there is no choice on the issue. Having spoken to ASIC for clarification they stated that the AGM must be held in the calendar year, and if the financial year ends in that calendar year then they can delay reporting the financial figures until the five months are up. If as happens now, the five month period falls outside of the calendar year then the AGM must be held in the calendar year and another meeting called to present the Financial report. There is no grey area, it is apparently black and white.

Section 317 – “Consideration of Reports at AGM” of the Corporations Act is again very clear on this matter. The key point being made in Note 1 as reproduced below:

Consideration of reports at AGM
(1) The directors of a public company that is required to hold an AGM must lay before the AGM:

(a) the financial report; and

(b) the directors’ report; and

(c) the auditor’s report;

for the last financial year that ended before the AGM.

Note 1: If the company’s first AGM is held before the end of its first financial year, there will be no reports to lay before the meeting.

What is hard to fathom is how the Board can make such a mistake. The Board is made up of experienced business men, several with accounting experience, one whose company used to audit Football West’s accounts each year, so there should be no excuse for such an error to occur. One telephone call to ASIC is all it requires and they will explain the situation in very clear and concise terms.

The only time an AGM – there is a reason it is called an Annual Meeting – can be held outside of the calendar year is after its first AGM. Subsequent AGMs of the company must take place in each succeeding calendar year. However, no longer than 18 months should elapse between the date of one AGM and that of the next.

However the 18-month rule cannot be used to authorise the non-holding of an AGM during any whole calendar year which intervenes. What this means is where a company holds its AGM on say the 10th November 2009, it is not permissible for it to take advantage of the 18-month rule and defer the holding of any AGM in 2010. Such an idea being formed on the basis that 18 months from 10 November 2009 runs to 9 May 2011. It has been written that “the obligation to hold an AGM in each calendar year ‘trumps’ the 18-month rule, with the result that the company’s next AGM must be held sometime within the calendar year 2010.”

Where an AGM is not held as required by the Corporation Act, an offence has been committed both by the company and by any of its officers who authorised or permitted the default. In some countries where there has been a failure by the company to convene an AGM, this opens the door for any member of the company to apply to call a General meeting.

The only documents lodged with ASIC since the Financial Report of 2015 on the 23rd of February 2016 are two documents for the “Change to Company Details Appointment or Cessation of A (484E) Company Officeholder” which were lodged on January the 3rd 2017 and the 7th of February 2017. Interestingly the new Website for Football West no longer lists the Board members and when they were appointed, and neither is there a notification for members of these changes.

So with no application for an extension to hold the AGM after the end of 2016 where does that leave the meeting which we hear is scheduled for March?

With this failure to understand and adhere to the laws of the land written in the Corporations Act under which Football West is legally bound is it any wonder that the organisation made a mess of the promotion and relegation between the State League and the National Premier Leagues last season? Maybe that lack of understanding is also why the rules for the coming season are not going to be finalised before the first match of the 2017 NPL season.

Or maybe as was proven in 2016 rules, regulations and laws are simply guidelines for some, and to be abided by by others?

Open to Interpretation
Tagged on:                                                 

6 thoughts on “Open to Interpretation

  • February 15, 2017 at 11:36 am

    I share your optimism Ashley but in respect to the responsibilities that need to be put in place for Zone Reps and Standing Committees, as pertinent and important as they clearly are, it would be asking a great deal of time and effort from people who are all simply volunteers carrying out these roles/duties in their spare time. I genuinely don’t know what the solution is here because like you, I see them as hugely important cogs in the overall scheme of things but sadly what we currently have is a Governing body (FW) who has, quite literally no respect or time for these entities and sadly the problems compounded by having people within these positions as zone reps and standing committee members that are only in it for their own interests or simply making up the numbers and wasting everyone’s time.

    In respect to your correspondence with your Victorian counterpart. I have travelled to Melbourne for many years and whenever I get the time to watch a local NPL game I have found that whilst the standard is certainly better the crowd numbers are generally not greatly or significantly better. Yes the big ticket games such as South Melb v Knights, Heidelberg, Oakleigh attract a few thousand the rest of the fixtures are generally poorly attended. It also needs to be said that the players leaving Perth to play in Victoria are NOT leaving because of the state of the game here but because they wish to ply their trade at a slightly higher level, in a lovely big city such as Melbourne and for a few notes more (although nowhere near as the rumours that abound). Let’s be honest here….

  • February 14, 2017 at 4:54 pm

    I do not understand this either Petrisor. I know that many feared repercussions with the former CEO but surely now he has been gone six months things are different?

    I too am frustrated that no one does anything but then again when you do complain to the various departments in government they do not seem too interested. As one person said to me, Football West are small fry they only want to catch big business breaking the law.

    I agree Now is the time to make a stand before a ball is kicked in the NPL season, but no club has the courage or let’s be honest the conviction to do what is best for the game in the long term. They are only interested in their own short term.

    When a few of these find their current levels of debt have risen to a level where they have to close their doors probably only then will they start screaming. It will be too late.

  • February 14, 2017 at 4:49 pm

    I agree with a great deal of what you say. I think there are a number of people to blame. First we have to start at the top, the FFA. The FFA should make it a requirement that every board member attended an Australian Institute of Company Directors course in order to understand their responsibilities and also liabilities as a board member. The Chair should be responsible for ensuring that the elected Board members and appointed Board members attend such a course as soon as possible after they are elected.

    Then there would be no excuse for such things happening as everyone would understand the legal position and where they stand.

    Then the “Members” The standing committees and Zone Reps, and I believe we are improving in this regard, however we have lost a lot of good people along the way, need to have a strong Chair who is not a lap dog for Football West who cannot be won over with free tickets to the Gold medal night etc. There needs to be a code of conduct set up for the Members. For example they need to keep minutes of their meetings. They need to declare if any club or Football West has given them free entry or free tickets etc. They must be above reproach, all gifts must be listed and recorded. They must report to each club they represent at least once a month and communicate with 24 hours after every Standing Committee meeting. The standing committees also need to liaise amongst each other and link up nationally to see if other states have similar issues. If they do then as a united group across the country they can raise issues.

    Currently there is nob structure or accountability. Until that is restored or implemented I fear for the game moving forward, not just in WA but across the nation.

    I had a call from a club in Melbourne this week saying that they thought things were bad over there but they would never let things get as bad as they have over here. The person concerned said that it was obvious why the best players were heading East.

  • February 14, 2017 at 10:25 am

    Standing Committees complain about the way FW run the game you say ?

    I and many, many others would beg to differ……

  • February 13, 2017 at 8:42 am

    So who’s to blame Ashley. The repeat offender or the toothless Government agency that proudly states their primary objective is to “Enforce company and financial services laws to protect consumers, investors and creditors” yes that’s right, it actually says “enforces”.

    It’s a shame that whilst you were in contact with them (ASIC) you didn’t asked this upstanding agency of their rules and regulations regarding a company’s financials being audited by the company of one of their own serving board member no less. Hmm, I believe the term ‘conflict of interest’ springs to mind.

    I regularly ‘audit’ my own work here and I can happily inform you as I do my Managers that the work I carry out is completely in order and of the highest standard. Pats on the back for me and how’s about a pay rise whilst we’re at it ?

    At the end of the day the administration/governing of the local game was and still remains an overwhelming embarrassment but until people are made accountable for these breaches, well, business as usual for FW…………

  • February 11, 2017 at 10:27 am

    I don’t understand how no one of the clubs or individuals question FW or ASIC about this blatant disregard of the law . Many clubs , Standing Commitees , lovers of football, complain about the way FW run the game yet no one takes any action ! There are many business people running the clubs , many Lawyers to , but instead of being united for the good of the game , they fight against each other . The season is here now , and all is forgotten ! Wake up PERTH !

Leave a Reply

Your email address will not be published. Required fields are marked *