Introduction
Last Monday, August 29, I indicated in a letter to SN captioned ‘Nothing illegal about unincorporated bodies operating by the rules’ that I would be reviewing in today’s column the court’s decision in the case brought by the Secretary of the Berbice Cricket Board against the Guyana Cricket Board. The Chief Justice gave the parties short shrift on the grounds that all the parties were legal non-entities and that the court was not the proper forum or avenue for any relief or redress involving the Guyana Cricket Board or any of its three county boards which make up its membership. In my letter I expressed the need to dispel the myth or fear created by Mr Claude Raphael who had attributed to the Chief Justice a statement that the boards were illegal. I am glad to say that the Chief Justice at no point in his judgment described the boards as illegal as claimed by Mr Raphael.
Judgement
Having said that, it is necessary to state that there was in substance as much jurisprudence and law as there were policy and politics in the judgment. Maybe given the continuing saga of the rival boards and factions that have been fighting for control of cricket in Guyana, the Chief Justice was left with no choice but to tell the parties that they have no place in the court-house. But the judgment went beyond issues of locus and into discussions on what were described as matters “of national and general public interest.” For a jurist that is a slippery slope and on page 9, for example, the Chief Justice ventured that because there exists a Ministry of Culture, Youth and Sport responsible for sports in general, “the State has assumed executive responsibility for the welfare, promotion and proper administration of sports in Guyana.”
What the Chief Justice found was that the members of the Guyana Cricket Board were themselves unincorporated entities and therefore incapable of suing and being sued in their own names. Flowing from the non-legal status of the GCB the Chief Justice ruled that the court could not recognise the election of office bearers within that association. He noted that the position would have been different if the membership of the GCB had comprised of persons. In the view of the Chief Justice it “is difficult to see how those member associations could have sent delegates to vote at the GCB elections since their members were not persons but rather legally non-existent persons.”
In the circumstances the Chief Justice noted that while a legislative structure for the administration is desirable there is need for the intervention of the Minister of Sport to “impose his executive will in the national interest.” That solution appears to have been music to the ears of the President who within two days of the judgment moved to impose executive management of cricket in Guyana. This should be contrasted with the reactions in relation to recommendations coming out of the courts on constitutionally important issues such as the television case in Linden or the payment of damages to the teen who was tortured at the Leonora Police Station.
Unincorporated associations
Now what really is the position of unincorporated associations whether in Guyana and in other common law countries? This question was extensively considered in a report done by the Scottish Law Commission from which this column has extensively drawn. This column’s interest in the topic is a recognition of the large number of unincorporated entities in Guyana with two principal characteristics:
(i) as the name suggests, the association is not a body corporate which is incorporated under the Companies Acts or otherwise;
(ii) the association exists for a purpose other than the making of profit for its members, thus distinguishing it from a partnership or joint venture.
Because of these characteristics, unincorporated entities, together with charities are sometimes collectively referred to as the “Third Sector.” Unlike companies, statutory bodies and friendly societies, the law relating to unincorporated associations rests upon common law with the most striking feature being the absence of legal personality accorded to associations and clubs which do not choose to establish themselves as companies or as some other form of incorporated body.
Set out below are the principal problems encountered by unincorporated associations and which persons connected with these bodies need to familiarize themselves:
They have no capacity to enter into contracts. Contractual responsibilities must be undertaken by individual office-bearers or, possibly individual association members.
This restriction extends beyond contracts with third parties but also to contract with one of its own members. They cannot be held liable for wrongful acts committed by their representatives while acting on behalf of the association. Liability rests upon the individual personally responsible for the loss sustained, but it is not clear whether liability – possibly beyond the value of the association’s funds – also rests upon office-bearers or the whole association membership.
A member cannot sue for damages for injury sustained as a consequence of a wrongful act committed by an office-bearer or fellow member while acting on behalf of the association. This, it has repeatedly been asserted, would be tantamount to the injured member suing himself.
They cannot own property. Title must instead be taken in the name of individual members or office-bearers as trustees, necessitating further transfers when such members or office-bearers die or cease to participate in the association’s activities.
This does not however make them illegal. Indeed many laws proceed upon the (strictly false) assumption that an unincorporated association has some form of existence in law. The Companies Act for example requires foreign unincorporated entities seeking to do business in Guyana to register as an external company. The Corporation Tax Act, the Income tax Act, the National Insurance Act and employment legislation all deal with these associations as if they were legal persons.
Absence of recommendations
One of my disappointments in the ruling by the Chief Justice was the absence of any recommendations on addressing the unsatisfactory state on unincorporated associations. Admittedly the boards which had been before him had their attorneys to advise them but could the Chief Justice not have suggested how the vacuum in the law relating to unincorporated associations should be addressed? Or is it that he does not believe that the Third Sector is a matter of national interest and as Mr Claude Raphael demonstrated, the CJ’s ruling has been misunderstood and/or miscommunicated by members of the community. What makes it more unfortunate is that this was not the first time that the cricket boards were coming before the courts. Was cricket of any less national interest then that the court did not feel compelled to make the kind of sweeping recommendation that it made in the current case? While it is true that cricket should not have been thrown into this legal vacuum without any lifeline, the same acknowledgment should have been given to the boards which continue to play an important role in the national sport.
In venturing as it did on policy and executive matters the court gave the government complete latitude in deciding on how long it will control cricket, the terms of reference of whatever body is considered appropriate and the inclusion or exclusion of identified interested parties. Having given its decision in the matter would the court be concerned with the consequences of its decision or has it washed its hands of the matter? The landscape in Guyana is occupied by many temporary bodies, notably GuySuCo’s interim Board which the Minister of Agriculture has assessed as incapable of managing the corporation’s most important asset, and the various extended local government bodies which – for whatever reason – are not doing an impressive job.
Guyana law provides various legal forms, including incorporation by way of an Act of Parliament, that might not have been inappropriate in the case of cricket and perhaps other national sports bodies. Then there is the Companies Act under which even one person can incorporate a company, which should be contrasted with the Friendly Societies Act which requires a minimum of seven persons. What reduces the efficacy of the Companies Act in terms of the not-for-profit organization is that the form of company most appropriate for such organizations – the company limited by guarantee – was abolished when the 1991 Act came into force in 1995, and which despite pleas from the Third Sector has not been substituted. This column can do no better than repeat the call not only for the restoration of the company limited by guarantee, but also for a Charities Act. It is instructive that the England and Wales Cricket Board is incorporated as a company limited by guarantee. The partnership form is inappropriate unless the partnership is a for profit arrangement. Of course, the partnership is, like the unincorporated association, without a legal personality of its own but must register under the Business Name (Registrations) Act.
Conclusion
The cricket boards would need to consult on regularizing their own legal status and that of their members. Whatever they do, however, it is clear that the law relating to unincorporated associations generally is not satisfactory and the various arms of the state should join in bringing forward recommendations so as not to leave the law in its present state. An obvious solution is to confer legal personality on unincorporated associations under defined circumstances. What are these conditions? Here is a wrapped-up recommendation which I have copied from the Scots.
The main conditions for attribution of separate legal personality should be that a body has adopted a constitutive document which includes the following matters:
(a) the name of the body;
(b) the purpose for which it exists;
(c) the criteria for membership;
(d) procedures for election or appointment of those managing the body (including office-bearers, if any);
(e) powers and duties of office-bearers (if any);
(f) distribution of the assets of the body in the event of dissolution; and
(g) procedure for amendment of the constitutive