There’s a cautionary reminder for committee members of clubs and other incorporated associations in the recent Court decision in Davies v Barnes Webster & Sons Limited.
Mr Davies was the president and a member of the management committee of a club. The club wanted some building work done, and entered into a contract with Barnes Webster for that work. The contract was signed by the club’s treasurer on the committee’s authority. In due course, the club failed to pay the money due under the contract.Imagine Mr Davies’ shock when a statutory demand was served on him as a first step to making him personally bankrupt! He applied to the Court to have the demand set aside, but the Court, although having some broad sympathy towards him, was having none of it. Whilst the Court agreed to give him some extra time to organise payment, it decided that his personal liability stood.
In our experience, members of club committees are often shocked to discover that they may be personally liable for their club’s debts. A case, perhaps, of not understanding what they’re getting into when standing for election.