Today’s question relates to some interesting legal issues arising from Western Australia. On the page ‘about’ I say:
… This is not a place for providing specific legal advice, so I won’t be able to answer questions that are based on actual events, such as “we responded to a job and now someone wants to sue me, what should I do”. For those jobs you (or more importantly, the service of which you are a member) needs to get legal advice from a practising lawyer. I also won’t comment on questions about service decisions, so questions like “My service has just issued a directive/policy/item of PPE and I think it is illegal, what do you think?” won’t be answered. Finally I won’t get into inter-personal issues “A fellow member said this, is it defamatory or can we kick them out of the service?” Having said that I want to hear as many things as possible because if I know the issues that are affecting the members I can do more productive and useful work in trying to find answers. If your concern clearly falls in the above categories then understand I may not be able to give an answer, but remember there is no harm in asking and if I think I shouldn’t answer a question or comment on an issue, I’ll say that.
Today’s question sails very close to that line, perhaps over that line but it’s too interesting to ignore.
To answer this question I set out the facts as I understand them, rather than as my correspondent wrote them, taking steps to de-identify the brigade, people and council as much as possible. The gist of the question is that a particular fire brigade in Western Australia is incorporated under the Associations Incorporation Act 2015 (WA). Section 42(1) of that Act says:
A member of the management committee of an incorporated association who has a material personal interest in a matter being considered at a management committee meeting must, as soon as the member becomes aware of the interest, disclose the nature and extent of the interest to the management committee.
The Bush Fires Act 1954 (WA) s 41(1) says:
For the purpose of carrying out normal brigade activities a local government may, in accordance with its local laws made for the purpose, establish and maintain one or more bush fire brigades and may, in accordance with those local laws, equip each bush fire brigade so established with appliances, equipment and apparatus.
Under the Local Government Act 1995 (WA) s 3.5:
A local government may make local laws under this Act prescribing all matters that are required or permitted to be prescribed by a local law, or are necessary or convenient to be so prescribed, for it to perform any of its functions under this Act.
Section 3.7 says:
A local law made under this Act is inoperative to the extent that it is inconsistent with this Act or any other written law.
The relevant council has passed a Bush Fire Brigades Local Law that says, inter alia:
A brigade member shall disclose to the bush fire brigade or the Committee any financial interest (whether direct or indirect) he or she may have in any matter being considered by the bush fire brigade or the Committee, as appropriate.
The problem is that a member of the brigade (not a committee member) failed to declare a pecuniary interest in a motion presented to the brigade’s monthly meeting. The brigade wanted to impose a censure in accordance with the local law. The member argued that the local law was inconsistent with the Associations Incorporation Act 2015 (WA) as that Act only required members of a management committee to disclose a financial interest. By virtue of the Local Government Act 1995 (WA) s 3.7 if the local law was inconsistent with the Associations Incorporation Act, then it was inoperative and the member was not under any obligation to make the disclosure.
The matter was subject to appeals first to an appeal committee and then to the local government who all agreed that the local law did apply, that the member had done the wrong thing and was appropriately censured. Advice from the Department of Commerce, however, took the contrary view and accepted there was an inconsistency and therefore the local law had no application.
I’m asked to comment on that conclusion and whether the fact that at the time the decision was made the relevant law was the Associations Incorporation Act 1987 (WA). With respect to the application of the 1987 or 2015 Act that will make no difference. Section 21 of the 1987 Act was in substantially the same terms as s 42(1) of the 2015 Act so if the local law is inconsistent with the 2015 Act it was also inconsistent with the 1987 Act.
But was it inconsistent? On one view it was not. Section 109 of the Australian Constitution provides that where a valid law of the Commonwealth is inconsistent with a valid law of a state, then the Commonwealth law prevails. The Australian Law Reform Commission said, in their report For Your Information: Australian Privacy Law and Practice (ALRC Report 108) at [3.3]:
This provision may operate in two ways: it may directly invalidate state law where it is impossible to obey both the state law and the federal law; or it may indirectly invalidate state law where the Australian Parliament’s legislative intent is to ‘cover the field’ in relation to a particular matter.
If we apply a similar test to the question of whether the Associations Incorporation Act 2015 (WA) s 42(1) is inconsistent with the relevant local law, the answer has to be ‘no’. First it is possible to comply with them both. A member who discloses a pecuniary interest in accordance with the local law is not doing something prohibited, nor are they failing to do something that is required, by the State Act. Secondly the State Act and the local law are not in the same ‘field’. The State Act is governing the conduct of members of the management committee and is written for all incorporated associations. It is not trying to govern the conduct of members who are not members of the management committee. That might be a matter for members of the management committee who can write local rules for their association (s 21) that bind all members. Equally it may be a matter for the local government through the passage of local laws.
The effect of incorporation
But herein lies a bigger issue. As noted the Bush Fires Act allows local governments to establish a bush fire brigade. The relevant local law makes reference to the local government establishing the Brigade and that the rules, set out in the local law, ‘govern the operation of a bush fire brigade’. The rules are set out in schedule 1 and deal with the sort of matters you would expect in the rules of an association. They do not say that the brigade is a separate legal entity nor do they provide for incorporation.
The Associations Incorporation Act 2015 (WA) also provides for club rules and says that the committee can write rules (s 21) that meet prescribed requirements (s 22). An association may adopt the model rules set out in the Act and regulations and if they fail to make their own rules, they are deemed to have adopted the model rules (s 29). The process of incorporation creates a separate legal entity that can sue and be sued (Associations Incorporation Act 2015 (WA) s 13). A local government is also a legal entity that can sue and be sued (Local Government Act 1995 (WA) s 2.5). So if someone wanted to sue the brigade, who do they sue – the local government or the incorporated entity?
This begs the question of who took steps to incorporate the brigade, and why? If the council established the brigade, but the members then took steps to incorporate it, they created a new separate legal entity. Arguably the incorporated entity is not the brigade established by council – it is a separate legal entity and the local fire brigade laws have no application to that entity. An incorporated association must make its own rules or adopt the model rules. If that is correct then the application of the local law to the incorporated entity would be inconsistent with the State Act. To put that simply, the State Act says the rules have to be made in accordance with s 21 or the model rules apply, and the local law saying ‘these rules apply’ is inconsistent with those provisions in the State Act. My correspondent says that the member involved argued that ‘as we are an incorporated body our meetings are governed by the Association Incorporations Act making the Local Law irrelevant’ – I think that’s correct.
I know where this confusion comes from. It is based in history when brigades were created by community members and operated on their own but over time they’ve been incorporated into government, either local government in WA, state government as in NSW or statutory authorities as in Victoria. But they are no longer independent agencies (see How autonomous are NSW Rural Fire Brigades? (February 25, 2015); see also RFS brigades entering into a contract (March 1, 2015)). A fire brigade in WA is meant to be operated by the local government. By establishing a separate legal entity there is an inconsistency as the management of the incorporated entity is governed by the Associations Incorporation Act, not the Bush Fires Act or the Local Government Act. The attempt by a local government to impose rules via a local law is inconsistent with the rule making provisions of the Associations Incorporation Act and therefore inoperative.
It is my view that the local laws created by the council are inconsistent with the Associations Incorporation Act 2015 (WA). It is not that rule 7.4 as set out in the schedule of the local law is inconsistent with s 42(1) of the Associations Incorporation Act 2015 (WA), rather it is that the application of the local laws, at all, to an incorporated brigade are inconsistent with Associations Incorporation Act 2015 (WA).
The bigger question is ‘does the act of incorporation mean that the incorporated association is not the brigade created by the local government and governed by the Bush Fires Act 1954 (WA)?’ Answering that question is not within the power of this blog but it would be the more important question for the council to answer.