$500,000 settlement for members of Fremantle RSL Club (Wyola)

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The Commissioner for Consumer Protection has secured a $500,000 payout for members of Fremantle RSL Wyola Club, in settlement of legal action taken concerning the sale of a property belonging to the incorporated association.

The settlement follows mediation between the Commissioner, and Wyola Club Manager Mr Phil Douglas and his wife Ms Linda Jane Lyons, who bought the Bannister Street property in 2009 for $482,559. 

The couple have until 26 December 2012 to pay the additional half a million dollars, and the Commissioner has lodged a caveat over the property until the money is paid. The settlement was accepted on the basis of no wrongdoing by the defendants, Mr Douglas and Ms Lyons. It means that the club will receive $982,559 for the 2009 sale.  

The case began in the Supreme Court in 2010 when Consumer Protection alleged that Mr Douglas and Ms Lyons had contravened the Fair Trading Act 1987 arising from the exercise by Mr Douglas of a clause in a lease from 1992 which permitted Mr Douglas to purchase the property at well-below its market value.

The Commissioner sought that the property concerned be transferred back to the Wyola Club or, in the alternative, damages paid to the club by Mr Douglas and Ms Lyons.

Commissioner for Consumer Protection Anne Driscoll is pleased with the outcome considering the complex circumstances of the case.

“This represents the largest settlement by Consumer Protection in a single transaction and is an example of stepping into the shoes of a club's members to protect their rights under the Fair Trading Act. Without such action, a settlement would have been unlikely,” Ms Driscoll said.

“Whilst Consumer Protection was determined to take action, this case is a reminder of the need for members and the committee of management to be attentive in running their association and mindful of the relevant rules.”

If you are part of an incorporated association in Western Australia and not sure of legal obligations and member rights, Consumer Protection has expert staff able to answer questions. Call 1300 30 40 74. Alternatively log on to www.commerce.wa.gov.au/associations.

Background:

The Commissioner for Consumer Protection commenced the action Commissioner for Consumer Protection v Douglas & Lyons in the Supreme Court in 2010.

The Commissioner’s action alleged contraventions of the Fair Trading Act 1987 arising from the first defendant/Mr Douglas’ exercise of a clause contained in a lease which was granted to Mr Douglas by the Fremantle RSL ‘WYOLA’ Club Inc., in 1992, and pursuant to which Douglas exercised a right to purchase the property in 2009. The lease would have expired on 31 December 2012.

Mr Douglas had been involved in the administration of the club since the early 90’s. The clause enabled Mr Douglas to purchase a property owned by the club for $482,559, substantially less than its market value.

The Commissioner commenced proceedings seeking the return of the property to the club, which was experiencing financial difficulties.

The property was independently valued at $1.78 million in 2010, including improvements which Mr Douglas had made to the property in1993-1995.

On 26 June 2012 the Commissioner and the defendants settled the Supreme Court action without any admission of wrongdoing on the part  of the defendants, with the defendants agreeing to pay to the club on or before 26 December 2012 $500,000 (in addition to the purchase price of $472,000).

The Commissioner has lodged a caveat over the property pending the payment of the settlement sum by the defendants.
 

END OF RELEASE

 

Media Contact:

Alina Cavanagh  9282 0679 or 0423-846397  alina.cavanagh@commerce.wa.gov.au

 

 

Consumer Protection
Media release
17 Jul 2012

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