Law Update 2006

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Law Update 2006
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Professional Development for CPNS Alumni Guest

• Prof Myles McGregor-Lowndes
• Centre of Philanthropy and Nonprofit Studies
• 27 October 2006
• QUT

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Issues
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• Incorporated Associations Reform
• Some Recent Cases
• Central Bayside
• The Deputy Commissioner of Taxation v George Dow
  Taylor Dick

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Reform of Incorporated Associations Act
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• Office of Fair Trading released consultation
  document
• CPNS Video Seminar of Issues
• https//olt.qut.edu.au/BUS/BS39
• Legislative timing - two Bills in 2007
• Press Release on two issues

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Press Release 21 June 2006

• Audited Financial Reports
• Tiered reporting and auditing
• Public Liability
• Mandatory Insurance to go

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Major Issues
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• Should large organisations be moved to other
  forms of incorporation?
• Should the Act provide automatic adoption of
  latest model rules?
• Should management committee members have
  specified duties, conflict of interest bans
  personal liability for insolvent trading?
• Should children vote?
• Should a magistrate or consumer tribunal be given
  power to resolve internal disputes?

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Central Bayside Division of General Practice Ltd
v Commissioner of State Revenue 2006 HCA 43
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• All five judges of the High Court arrived at the
  conclusion that Central Bayside was a charitable
  body.
• Gleeson CJ, Heydon and Crennan JJ all agreed that
  the funding agreements did not take independence
  away from Central Bayside. It could decide
  whether to accept or reject the funding, as
  Central Bayside had an independently formed board
  which made its own decisions. Just because a
  charity has the same goals as government, does
  not mean without more, that it is not independent
  of government.

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• Justice Kirby while reaching the same result,
  reached it after an interesting review of the
  place of the definition of charity in modern
  Australian society. He noted that, For judges,
  no longer subject to the authority of Imperial or
  English courts, to maintain obedience to
  conceptions of "charity" and "charitable bodies",
  expressed in such different times, seems, on the
  face of things, an irrational surrender to the
  pull of history over contemporary understandings
  of language used in a modern Australian statute.
  However, Justice Kirby did not seek to overturn
  the current judicial definition of charity in the
  end.

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The Deputy Commissioner of Taxation v George Dow
Taylor Dick No. 128 of 2004

• The Northern Spirit Football Club 2000 Pty Ltd
  failed to remit to the ATO, PAYG taxes.
  (141,295.19 )
• The defence under- that for some good reason the
  person did not take part in the management of the
  company - was not successful.
• failed to make any independent investigation as
  to the ATO notices and their satisfaction.

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s 1318 of the Corporations Act

• The ITAA 1936 is not a code which displaces the
  specific provision of s 1318.
• Friedrichs case was similar but, there was more
  in this case
• only directorship ever held
• clearly appointed for soccer knowledge, not
  business skills
• clearly conned by Gelonesi who worked in a
  senior position in Deloittes and went bankrupt
  owing 23m
• had resigned as a director and couldnt have done
  anything about the ATO notice about PAYG arrears
• even if complied with the ITAA section, there
  would have been no different outcome for the ATO
• received no remuneration for services
• Mr Dick is a man who has by any measure made an
  outstanding, selfless contribution to the
  community through his services to soccer. He has
  been recognised by the awarding of the Order of
  Australia. To ignore such service would be
  curmudgeonly in the extreme. (P 17)
• (Curmudgeon an avaricious churlish fellow a
  miser, a niggard (1577)

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ATO Material
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• ATO web http//www.ato.gov.au
• Register for e mail tax bulletins
• Tax basics for non-profit organisations (nat
  7966)
• Income tax guide for non-profit organisations
  (nat 7967)
• GiftPack for deductible gift recipients donors
  (nat 3132)
• ATO Non-Profit Centre Publications 02 6216 2657
• ATO Non-profit info-line 1300 130 248
• ATO Tax from Tax 13 28 60

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Contact
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• Professor Myles McGregor-Lowndes OAM
• Director
• Centre of Philanthropy and Nonprofit Studies
• QUT
• GPO Box 2434
• Brisbane
• Telephone [phone] or 07 3864 2936
• Fax [phone]
• Web site http//cpns.bus.qut.edu.au