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E.A. & Branches, Opinion 2020 

'Stuff ' just keeps dissappearing on Facebook and Forums!
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Page 13 (This page)
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CONTENT -PAGE 13 

-UNDERSTANDING EQUESTRIAN AUSTRALIA AND THE STATE BRANCHES GOVERNANCES 

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Pre December 23 2021

EQUESTRIAN AUSTRALIA AND THE STATE BRANCHES GOVERNANCES 

ARE ALL UNDER THE CORPORATIONS ACT LEGISLATION - A PROBLEM FOR ALL MEMBERS OF COMPANIES LIMITED BY GUARANTEE - ALL SPORTS

IT’S TIME FOR SPORT AUSTRALIA AND ASIC TO STEP UP FOR COMPANIES LIMITED BY GUARANTEE:  STOP WASTING PUBLIC FUNDING ON SPORTING ORGANISATIONS THAT DO NOT COMPLY WITH THE CORPORATIONS ACT AND DO THE WRONG THING BY THEIR MEMBERS

ASIC administers Australia’s Corporations Act, an act that is unsuitable for Sporting Organisations who are usually companies limited by guarantee with ASIC having no responsibility or oversight for compliance. Lot’s of words, but maximum difficulty in fitting a square peg (sporting organisation) into a round hole (Corporations Act). Let alone try to complain about a Sporting Organisation (Company Limited by Guarantee) or remedy multiple infringements of the act. Essentially it appears that Companies Limited By Guarantee are on their own when members have disputes with the Board or need any action on infringements under the Corporations Act.

 

COSTLY SCARE TACTICS

So, State Branches and E.A. have successfully long pulled out the 'lawyers' card when members complain or seek to rectify issues with their organisation. The 'lawyer" manoeuvre tends to scare off members owing to the personal expenditure that would be required to use lawyers while their organisation has access to company funds to fight their own members. 

This website has listed many of the causal factors that FINALLY provoked Sport Australia to act allegedly bringing Equestrian Australia to the point of voluntary administration; specifically, the removal of government funding for High-Performance by Sport Australia.  Why were the endemic E.A. issues permitted to go on for 13+ years? Why didn’t Sport Australia act sooner? 

Compliance with the Corporations Act – Voluntary Administration, has resulted in virtually no reform and a massive waste of money. Again, because of the Corporations Act and the effects of an old Constitution

 

 

WHERE IS ASIC IN STOPPING THE BREACHES OF THE CORPORATIONS ACT BY COMPANIES LIMITED BY GUARANTEE?

It's not just E.A. that has suffered under the Corporations Act, this lack of oversight applies to all companies limited by guarantee.  The Corporations Act mode as it exists for companies limited by guarantee has proven time and time again that it is not appropriate for sporting organisations. Surely the ASIC can come up with an act, disputes resolution process and governance model that is tailored for sporting organisations and is fit for purpose rather than try to make a ‘silk purse out of a sow’s ear’. The Act doesn't work because the members can't afford it and are afraid to make it work. Leaving it to the members to fight their own organisations is not fair to members of these organisations.

ASIC ITSELF PROVIDES NO PROTECTION FOR THE MEMBERS OF COMPANIES LIMITED BY GUARANTEE

We had the opportunity under the 445D of the Corporations Act to contest the insertion of Clause 40 in the Constitution, Korda Mentha were asked to do so. They didn't

ASIC has absolved themselves for the responsibility for pursuing breaches of the Corporations Act by Companies Limited by Guarantee - it's up to the members

ASIC Information Sheet 215 - Companies Limited by Guarantee- Disputes About Members Rights

 

 

“ASIC  & “COMPANY MISCONDUCT” for other Companies other than Companies Limited by Guarantee

see Information Sheet 151 ASIC's approach to enforcement (INFO 151)

BUT - This is does not apply to Companies Limited by Guarantee

Justice Connect- Using Mediation - Companies Limited by Guarantee

 

IS THERE AN OPTION TO PURSUE ABOLISHING CLAUSE 40 VIA ACCC?

Possibly for State Branches - check your Branches' regulator

https://www.accc.gov.au/

ACCC -unconscionable conduct and consumer protection provisions 

SPORT AUSTRALIA - REQUIREMENT FOR INDIVIDUAL CORPORATISATION

The Federal Government is throwing money at Sporting Organisations that are mismanaged and are not working for the benefit of their members, instead, vast sums are used by organisations to fight their own members.

Sport Australia allegedly required EA (and other Peak Sporting Bodies) to separate the Peak Body (E.A.) from the State Branches. Each Body was then incorporated in its own right  under the Corporations Act,  adopting a corporate structure with each State Branch having their own constitutions. This was a condition of retaining government funding and completely changed Equestrian governance from the old 'Federation Model' , where individual members has a direct line to their management.

The multi corporate model does not work for peak sporting organisations and their State Branches because this structure isolates the grass roots members from their peak body by creating layers of bureaucracy that insulates the Peak Body board from listening, or being required to implement the wishes of their grass roots members.

 

This structure also relies on the individual Branches listening to their members wishes and implementing and/or conveying them to the Peak Body. The outcome of E.A. in Voluntary Administration in 2020-2021 saw the State Branches actively pitted against their own members in resisting a completely un-encumbered 1 vote 1 member. A clear demonstration of how the State Branches were 'listening' to their members.

The in-fighting between EA, the State bodies and their members that has been a feature of E.A .over the years became particularly noxious when the remaining E.A. board decided to enter voluntary administration.

We witnessed State Bodies, grass roots members, elite sportspeople, the peak body and ‘other creditors’ all pitted against each-other. The creditors and Sport Australia held the majority vote at the creditors meeting and the sports people (grass roots members)  held the least voting entitlements.

Clearly the creditors need to be financially protected, however the primary purpose of a sporting organisation and its continuance is to support the sportspeople, without their support there is no organisation. Was this an example of the State Branches complying with their own constitutions statement of purpose?

The Corporations Act  l has proven time and time again that it is not appropriate for sporting organisations. Surely the ASIC can come up with an act, disputes resolution process and governance model that is tailored for sporting organisations and is fit for purpose rather than try to make a ‘silk purse out of a sow’s ear’. The Act doesn't work because the members can't court battles when mediation doesn't work.

 

The governments investment in elite sporting bodies should be targeted at organisations that demonstrate good governance : making Sporting Bodies more efficient, define consequences that are enforceable, where sporting administrators don't turn on their members. Where is the impartial auditing process to assess these organisations? - No where.

Equestrian Australia and the State Branches have a history of ignoring their own constitution and the Corporations Act when it suits them, or compliance if it suits their ends.  See the Fasher Rebelion - November 2018 

See also EA Code of Conduct for Administrators, Directors and Officers - and ask yourself have the E.A. Boards complied?

 

 

E.A. DURING VOLUNTARY ADMINISTRATION

Corporations Act - clauses relevant to E.A. while under Voluntary Administration also failed to protect members; despite containing clauses that could have been used to stop the 'Veto' clause, but weren't pursued.  So reform is up to the individual members, who now at least have a vote on most E.A. issues, this was essentially the main very costly achievement for E.A. while under Voluntary Administration. The individual members will need to drive reform, probably funded by themselves. 

 

HISTORIC: ‘Equinect’– E.A. Board Conduct - Directors Interest 

 

I do not understand why the EA Administrators did not report the EA ‘Equinect issue’ to ASIC.  I would have thought that a company board that awarded a board member’s company a contract without any external tender, worth in the realm of 1 million $ plus, and resulted in nothing being delivered; was illegal under the Corporations Act? This warrants official investigation.

 

I call on ASIC to do so and investigate why the Administrators did not report this issue to ASIC.Err except ASIC won't investigate issues regarding companies limited by guarantee.

The Corporation Act’s loose wording of declaring director’s interest then permitting ‘full steam ahead’ needs to be reviewed and tightened as it appears to be a ‘nothing’ requirement with no consequences for abuse; there were no repercussions for EA.

See also clause 2.10 Sport Au Mandatory Sports Governance Principles 

I apply this same criticism to the ENSW actions regarding the Sydney International Equestrian Centre Arena Resurfacing inquiry

 

THE CORPORATIONS ACT AND AN OLD E.A. CONSTITUTION ENSURED STATUS QUO:

 OLD CONSTITUTION  = DOCA PROBLEM = THOSE THAT CREATED THE PROBLEMS ARE STILL IN CONTROL -

 REFORM DOOMED TO FAIL DURING E.A. VOLUNTARY ADMINISTRATION

The State Branches didn’t require lawyers to tell them that they had a ‘second bite of the cherry’ via the wording of the Deed of Company Arrangement; I quote:. “will call a special general meeting of the members of the Company to consider a resolution to amend the constitution of the Company…etc.”

The illogical logic:

Under the (old) E.A. Constitution - who were the members of the Company?

The State Branches

Under the (old) E.A. Constitution - Who could vote for changes to the Constitution?

The State Branches

Under the NEW E.A. Constitution , who can vote on E.A. Motions?

All the members

BUT - Who has the right to Veto a majority vote on n E.A. Constitutional change:

2 State Branches ( even though their members have already voted and the motion was carrie

The end result of the Voluntary  Administration Process – The Company (E.A.) continues trading with minimal changes to governance, except that now the State Branch Members are considered members of E.A. with voting rights. There rights do not represent 1 vote 1 member as Clause 40 of the new E.A. constitution provides the State Branches with veto rights on constitutional changes.

And this was legal under the Corporations Act- apparently. 

COULD THE ADMINISTRATORS HAVE CHALLENGED THE BRANCHES INSISTENCE ON CLAUSE 40? YES. Clause 445D Corporations Act

There was a petition that asked them to do this, they didn't. 

After September 15 2020, who are the Members now?

The six State Branches and all their individual members.

So, won't this result in better governance?

No, because this would require individuals to lodge, fight and fund any legal costs resulting from their claims that the board has infringed the Corporations Act.

The Minister for Sport -->Sport Australia  holds the Government purse strings regarding Peak National Sporting Organisations

Sport Australia - Way too little, way too late!

Equestrian members (Equestrian Australia via their State Branches) have been told for years that the structure of EA was a mandatory requirement made by Sport Australia so that they could qualify for funding, without S.A. oversight and timely consequences this was essentially planning to fail.

EA’s structure has not changed for over a decade; did Sport Australia make any changes to their mandatory governance model over this time that EA did not ‘allegedly’ adopt?

Did Sport Australia make it mandatory for peak sporting organisations to update and refine their structure and governance as weaknesses arose? Clearly no. Why has Sport Australia returned the government funding to E.A. despite no significant reform and individual member dissatisfaction with more turbulence threatening.

Did Sport Australia conduct checks or independent surveillance of E.A. (or the other organisations they oversee). Simply reading the organisations annual report is not doing due diligence or showing any fiscal responsibility with public funds! Didn’t anyone read the newspapers? If they did, they did nothing.

Sport Australia held the purse string yet appears to have had a delayed and cursory role in overseeing or checking on the various ‘peak sporting bodies’ that receive tax-payers money. Perhaps they read EA’s glowing yearly reports (written by EA) and simply said, all is well there. Well it wasn’t and hasn’t been for over a decade. Surely part of Sport Australia’s role should have been/ must be to check that the sporting organisations that they administer funding to are performing their roles properly? Where was Sport Australia’s ‘fiscal responsibility’ when allocating government funding?

I call on Sport Australia to institute a system of rolling ‘spot checks’ and deep investigations into the various Sporting Bodies that come under their umbrella and to action their fiscal responsibility to Australian taxpayers and sportspeople that has been sorely lacking.

The various Sport Australia publications give the tax payers and sports people the impression that their requirements for governance are structured ,monitored and have implied consequences for non-compliance. I see no evidence that this has ever been the case, certainly not in the case of Equestrian Australia.

MANDATORY SPORTS GOVERNANCE PRINCIPLES

This website evidences E.A.’s multiple infringements of Sport Australia’s requirements – it appears that there have been no consequences (up until March 2020) for any of these infringements, the money still flowed.

Here are some of the Sport Australia Documents, read them for yourself and compare their requirements against E.A’s performance :

 

Via the trickle down effect, the funding received by E.A.is applied to services etc. administered by the State Branches; so whilst Sport Australia is only involved with Peak Bodies they should be carefully monitoring E.A.'s State Branches. Therefore there is no point only addressing E.A., the State Branches must also be reformed.

 

I would have thought that 13million in government funding to E.A. over 4 years would fit somewhere in the complaints category for Sport Australia to make a complaint re E.A. to ASIC / Aus Sport 

 

SPORT AUSTRALIA REQUIREMENT FOR FUNDING TO BE RETURNED - EA TO DEMONSTRATE GOOD GOVERNANCE

I now refer to my letter August 7th, 2020 Ref No: MC20-025927 to the Minister for Sport: RESPONSE by Chief Executive Officer Sport Australia, Robert Dalton:

“The ASC wants to see its funding to EA restored and is committed to revisiting its position when the sport demonstrates that it is being governed by a stable and transparent national body that looks after the interests and safety of all equestrian participants.”

AOC, SA, ASC – “Demonstrate” (good governance) is a verb, it implies on-going, consistent positive performance and an absence of conflict:

EA is starting their new chapter with maximum conflict and division, they have already had an negative report in international media -  I ask the AOC, Sport Australia and the Australian Sport Commission how they can see this process and outcome as applied to EA  as delivering the possibility of good governance and stability? I implore Sport Australia to require the ‘demonstrate’  element of the reply above applied to EA on-going.

 

Demonstrate is an action, a verb; logically it should take time. So far, the ‘demonstration’ has been a big fail.

 

Administration has been a costly process for an allegedly fiscally challenged organisation, it has further fractured the equestrian community and has essentially delivered almost nothing materially to the grass roots members and demonstrated how State Branches have acted against their members wishes to retain Branch power.

WHAT ABOUT THE E.A. AND BRANCHS' CONSTITUTIONS ? 

 

This website provides evidence of multiple failures by E.A. and the State Branches to adhere to their own constitutions, almost no one said anything and nothing happened to remedy this.


Theoretically, if the branches had acted on their members input, EA would never have got to this point. The Vic Branch actively denied that they had any right to present Branch Members input to EA . Equestrian Victoria didn’t even let my motions directing E.V. in the matter of E.A. in 2012 go to the AGM vote. I know because I proposed them back in Equinect times and I received their answer i.e. Members of E.V. have no pathway via the E.V. Branch to direct E.V. in E.A. matters. But isn't this one of the purposes of having State Branches was?

 

In theory the current constitutions (E.A. and individual State Branches, via the 2 yearly meetings of Branch representatives meeting with E.A.) should have permitted Branch members input, it has been how it has been interpreted (by EA and Branch lawyers at the behest of both parties) that has got us to this point.

The current E.A. and State Branches constitutions are loose and unspecific regarding actioning grass roots members input. Constitutional lack of any timely consequences for boards failures, other than to call a special general meeting and have a vote of no confidence in the board/ has a history of not being implemented by grass roots members for the reasons outlined on this page.

The State Branches (Except E. Victoria ) are actually Associations, the Corporations Act is the legislation that they operate under, however their regulatory bodies are located in each state and are consumer related .

HISTORIC

E.A. even appointed 3 directors to their own Board who were ineligible!

A SUCCESSFUL FUTURE FOR EQUESTRIAN SPORT IN AUSTRALIA IS IN THE BALANCE

INELIGIBLE BOARD MEMBERS APPOINTED TO E.A. + MANY OTHER ISSUES

Sydney Morning Herald – Roy Masters , September 8th 2017

 

Adherence to their Constitutions' Conflict of Interest clause is a joke and no-one seems to care. e.g. Equinect, SIEC Tender.

Again it's left to the individual members to fund and pursue rectifications.

Megga failure to address the Purpose of the Association :  no-one cares!

THE STATE GOVERNMENTS & CONSUMER ORGANISATIONS 

NEED TO STEP-UP  RE. THE STATE BRANCHES

The State Branches all receive federal government funding distributed via E.A. from the Sport Australia funding. The State Branches also receive funding from their various State Governments. It’s time that these State Governments look at the governance of sporting bodies they fund and require these organisations to clean up their acts; to act democratically and represent grass roots members with a specific proportion of the funding returning to the members, not to the administrations ’slush fund’ (miscellaneous) or to cover legal action and advice working against their individual members. 

The State Branches, except E.V. are associations and their regulatory bodies are the consumer protection organisations in their respective states.

2022 - HIGH PROFILE FEI RIDER , MAREE TOMKINSON QUITS AUSTRALIA -HER VIEWS OF E.A. FAILURES

These issues continued on pages  14 -15

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EQUINECT
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MISCONDUCT
DOCA_OPTIONS
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