Membership win for Sanctuary Cove club
THE private Sanctuary Cove Golf and Country Club, from which hordes of members have bailed, has scored some redemption.
A ruling that in 2017 effectively gave shareholders the right to toss in their memberships and stop paying annual fees of $6000 or more has been overturned.
It’s somewhat of a moral victory and doesn’t mean the shareholders don’t have an escape route when it comes to fees.
That’s because in the wake of the 2017 Queensland Civil and Administrative Tribunal ruling the club brought in what it termed a voluntary forfeiture policy.
Equity holders could hand in their shares if they paid $1.
There was a rush for the door which saw 250 or so members leave.
The club’s forfeiture action ostensibly was motivated in large part by the anguish being caused to members who were struggling to pay fees, couldn’t play golf for health reasons or just wanted out.
Shares they’d paid more than $20,000 for had become virtually worthless – some members were paying thousands of dollars to get rid of them – but they still were obliged to pay their annual fees.
In the middle of this member anguish came a QCAT ruling that effectively meant shareholders could resign as members of the Golf and Country Club, even if they couldn’t sell their shares in the company that owned the Cove’s two courses.
The club didn’t take the ruling lying down and lodged an appeal.
Now, in golfing parlance, it’s scored an ace.
The appeal has succeeded and things are back to square one for equity members – if they want to stop paying fees, they have to find either someone willing to take over their shares or forfeit those shares. There’s no risk that, on the back of the win, the forfeiture policy will be axed.
It stays, despite the QCAT win, says the club.
The appeal success comes after a rather difficult period for the club that started when it went to QCAT claiming more than $17,000 in fees from member Rob Machon.
The trip to QCAT backfired for the club. QCAT decided members could resign as members of the golf club, even if they couldn’t sell their shares.
Three months later it emerged that the club’s members, who were paying around $6500 a year, had been told that by 2023 their club would be in financial distress. That grim news emerged in a report by KPMG, which had been called in by an obviously worried board a year earlier to investigate the membership model.
The upshot was a decision to sell club assets and resort owner Mulpha stepped forward to pay the club $8 million for the resort’s Country Club building and three blocks of land.
Meanwhile, the money picture is not so bright for the man at the centre of the QCAT actions, Rob Machon.
The original QCAT ruling gave the golf club a partial win, saying it was entitled to $5332 in Machon membership fees and charges for the 2015 year but not for subsequent years. Now the justice hearing the club’s appeal has decided that not only can equity members not resign, but that the Machon debt to the club is $11,496.
The club, armed with the new QCAT ruling, is setting out to recover unpaid fees from members who, in the words of president Mick McDonald, followed the ‘erroneous advice supplied by Mr Machon’.