This page provides general information on dispute resolution for incorporated associations.

The Associations Incorporation Act 1984 is aimed at non-commercial organisations, particularly community service and sporting clubs, with the intention being to facilitate their operation rather than to control their behaviour. The management of an association is in the hands of a management committee, which is responsible for the administration of the affairs of the association (including the handling of internal disputes) in accordance with the Act and the rules of the association.

The Act does not provide the Registry of Co-operatives & Associations with the authority to intervene in matters relating to the internal administration of an association, including disputes that may arise between a member and the association. Nor does the Act provide the Registrar with the authority to determine the facts of any internal dispute.

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The Registry does not have the authority under the Act to investigate or to intervene in any of the following matters:

• Disputes relating to a breach of the association’s rules.
  The rules of an association bind the association and its members in the same way as a contract and each member agrees to observe all of the provisions of the rules. Where a member believes the association has breached the rules, the matter should be taken up with the association in the first instance.
• Disputes between a member and another member OR a member and the association.
  For example, disputes relating to the suspension or expulsion of members of the association.
• Disputes relating to the internal operations and management of an association.
  For example, disputes relating to the types of activities or services provided by the association. However, the Registry may deal with a complaint if the dispute involves a breach of the Act (see below for matters in which the Registry can intervene).
• Disputes involving the conduct of a general meeting or the process by which members of the committee are elected.
  The Registry does not have the authority to determine the validity or otherwise of a general meeting or of an election result.
• The validity of the appointment or of the removal of a public officer.
  Disputes relating to the appointment and removal of a public officer are often the result of broader issues relating to disputed election results and the validity of meetings. In the normal course of events, the Registry does not have the authority under the Act to make a formal determination as to whether the appointment or removal of a public officer was validly undertaken (see the 'Public officer' information sheet for information regarding the appointment, removal and duties of the public officer of an incorporated association).

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The Registry may deal with complaints that amount to a breach of the provisions of the Act or the Associations Regulation 1999. These may relate to:

• an association continuing to operate while it is insolvent or unable to pay its debts (section 38)
• breach of the prohibition on trading or securing pecuniary gain for members (sections 4 and 66)
• failure to conduct annual general meetings within six months after the end of the association’s financial year (section 26)
• failure to submit a statement regarding the financial accounts of the association to members at the annual general meeting (sections 26 and 27)
• failure to ensure proper accounting and other records are kept by the association (sections 21 and 28)
• an association acting with intent to defraud creditors or for any other fraudulent purpose (section 38)
• failure to comply with the association’s reporting requirements under the Act with regard to changes in details of the public officer of the association (sections 23 and 25), and
• a person knowingly making a false or misleading statement in a document lodged under the Act or submitted to a meeting of members (section 68).

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If a dispute arises between a member and an association attempts should be made to resolve the dispute directly between the parties. The dispute resolution mechanism within the rules adopted by the association should be utilised as appropriate.

If the association’s rules do not include a dispute resolution mechanism, the effect of section 19(3) of the Act is that the ‘Resolution of internal disputes’ rule in the model rules (model rule 10) is deemed to be included in the rules of the incorporated association. Model rule 10 provides disputes between members of the association, in their capacity as members, and disputes between members and the association, are to be referred to a community justice centre for mediation in accordance with the Community Justice Centres Act 1983.

If the matter remains unresolved after the disputes resolution provision in the rules has been utilised, members may wish to seek independent legal advice or to use professional mediation (Alternate Dispute Resolution). Whilst this method is not free, it does offer a fast and relatively inexpensive alternative to formal court action.

These services can be obtained via such bodies as the Australian Commercial Dispute Centre on 02 9267 1000 or a lawyer engaged in Alternate Dispute Resolution. For information regarding lawyers who offer Alternate Dispute Resolution services, contact the NSW Law Society’s Referrals Division on 02 9926 0333.

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Law Access provides a legal advice and referral service. Law Access can be contacted on 1300 888 529. In limited circumstances, advice also may be available from your local Community Legal Centre. Alternatively, you may wish to seek advice from a legal practitioner.

The Office of Fair Trading does not provide legal advice to associations or to individual members of an association in relation to internal disputes or in relation to the interpretation of rules of the association.