Timeshare Resort clubs could be unincorporated associations (UA)
The consumer will appreciate unincorporated association is a legal nobody.
A person has a responsibility and as such you can hold him/her to account.
Persons are natural (human being) and unnatural persons like Limited companies.
UA are not a people therefore any liability passes directly to committee members/ Club group.
The entire committee is personally liable.
An interesting case and authority was established in the following case and is well worth repeating in short.
You (the committee member) are liable for the debts of the club. It is irreverent whether you attended the meeting, the mere fact that you are member of the force which renders deeds on others in club; make you joint and severable liable.
You might take consolation from the peddlers that you’re insured or the club is insured. Well take note. The insurance company will be facing a substantial claim, the distribution could be tremendous. Do you honestly think they want to get involved when the damages will be in there millions and they can avoid the debt by holding you out to dry?
Do you think they will stand by and support this behaviour, are you told they will?
You consumers who dangle from this problem need advice and fast because a new day in timeshare is coming and committee personal liability are just around the corner.
The decision in the unreported case of Davies v Barnes Webster & Sons Ltd serves as an important reminder of the liability of committee members of unincorporated associations.
Barnes Webster & Sons Ltd, a company of builders, had been contracted to carry out works for a club. Mr Davies was a member of the club committee.
A contract, was signed by the club’s treasurer and witnessed by Mr Davies, provided for payment by the club of an agreed sum plus other sums which might become payable under the contract.
The building work was completed and the agreed sum paid by the club.
However, an additional £147,000 (for agreed variations to the contract) was not paid by the club. This created a claim by the builder and an alleged indebtedness on behalf of the club.
Therefore, liability established, remedy follows as normal. Timeshare consumers at this stage ought to know that in disputes you can use leverage vehicles. A claimant has options when actioning a recovery.
Assuming that you the claimant have a debt above a certain level and that debt is incontestable (in the eyes of a court) you can issue a statutory demand against the creditor saying I am owed in excess of £xxxxx that being the case the defendant is either un able or unwilling to discharge his debts if and when due.
That being the case the claimant seeks the sanction of insolvency/bankruptcy.
In this unreported case the builder did just that.
Barnes Webster & Sons Ltd served a statutory demand on Mr Davies in respect of the additional sum. Mr. Davies applied to have the statutory demand set aside on the basis that he was not personally liable for the debt. (the claim was not in issue, the court was being asked to settle a distinct issue which others had danced around. That issue is, was the committee personally responsible for club debts)
The court held that, on the face of it, a club member of an unincorporated association is not personally liable for the acts of those who entered into contracts on behalf of the association.
Instead, liability is to be determined on who had authority under the rules of the club.
In this particular instance, it was the management committee who had been entrusted with the affairs of the rugby club and, without evidence to the contrary, the court inferred that the club’s treasurer was acting on the authority of the committee when entering into the building contract.
As a result, the members of the club’s committee were personally liable under the contract and the builder had the right to seek payment from Mr Davies as a member of the committee.
The court did have some sympathy for Mr Davies however and granted him extra time to arrange for payment of the debt before the builder was entitled to commence bankruptcy proceedings against him.
It may come as a surprise to many committee members of unincorporated clubs that they could be held personally liable for their club’s debts.
Whilst they will be only too aware that by accepting office they are expected to invest time and effort into helping to run their club, it is unlikely that they will appreciate the extent to which they are also accepting personal responsibility for meeting any debts which the club is unable to pay.
To the committee members I say, I am not against you. The TCA is acting as the guide at the precipice. We say; you don’t want to go down in the abyss-Turn back. If you don’t and you press on, you’re on your own, in this matter.
We all meet that sign post and we all have admit to ourselves maybe we are or were wrong, maybe we need to think.
Well this week is dedicated to that getting you to think about what you are doing what you are liable for.
Ask yourselves why you are doing this, does it feel right. Don’t do it to your fellow’s timeshare brothers and sister.
Remember there is always a big pride before a big fall.
Last modified: 15th February 2016