Western Australian Current Acts

ASSOCIATIONS INCORPORATION ACT 2015 - SECT 127

127 .         Duties of management committee members with respect to incurring of debt

        (1)         If an incorporated association incurs a debt and —

            (a)         the association is insolvent at the time the debt is incurred or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt; and

            (b)         immediately before the debt is incurred —

                  (i)         there are reasonable grounds to expect that the association is insolvent; or

                  (ii)         there are reasonable grounds to expect that, if the association incurs the debt, the association will become insolvent,

                any person who was a member of the management committee of the association at the time the debt was incurred commits an offence.

        Penalty: a fine of $5 000.

        (2)         In any proceedings against a person under subsection (1) it is a defence if the accused proves that, at the time the debt was incurred, the accused had reasonable grounds to expect, and did expect, that the incorporated association was solvent at that time and would remain solvent even if it incurred that debt and any other debts that it incurred at that time.

        (3)         Without limiting subsection (2), in any proceedings against a person under subsection (1) it is a defence if the accused proves that, at the time the debt was incurred, the accused —

            (a)         had reasonable grounds to believe and did believe —

                  (i)         that a competent and reliable person (the other person ) was responsible for providing to the accused adequate information about whether the association was solvent; and

                  (ii)         that the other person was fulfilling that responsibility;

                and

            (b)         expected, on the basis of information provided to the accused by the other person, that the incorporated association was solvent at that time and would remain solvent even if it incurred that debt and any other debts that it incurred at that time.

        (4)         In any proceedings against a person under subsection (1) it is a defence if the accused proves that, at the time the debt was incurred, because of illness or for some other good reason, the accused did not take part at that time in the management of the incorporated association.

        (5)         In any proceedings against a person under subsection (1) it is a defence if the accused proves that the accused took all reasonable steps to prevent the incorporated association incurring the debt.

        (6)         In determining whether a defence under subsection (5) has been proved, the matters to which regard must be had include, but are not limited to the following —

            (a)         any action the accused took with a view to appointing an administrator of the incorporated association;

            (b)         when that action was taken;

            (c)         the results of that action.