A NFP’s Guide to Challenging Member Information Requests & Protecting Privacy

Introduction

Not-for-profit organisations, including charities and incorporated associations, have a core obligation to be accountable to their members, which often includes providing access to information. However, this duty of transparency must be balanced against the organisation’s legal responsibility to protect the privacy of its members, staff, and clients under legislation such as the Privacy Act 1988 (Cth).

This guide provides essential information for the boards and committees of any not-for-profit association on how to identify and lawfully refuse improper information requests. It offers a tactical overview of the legal grounds for refusal, how to respond effectively to minimise legal risk, and the steps involved when a decision is challenged in court.

Understanding a Member’s Right to Information & NFP’s Accountability

ACNC Governance Standard 2 & Your Accountability Obligation

For registered charities, Australian Charities and Not-for-profits Commission (ACNC) Governance Standard 2 establishes a core duty of accountability to members. This standard is built on the principle that a charity’s members are effectively its ‘owners’ and are therefore entitled to understand how the organisation is using its resources and progressing towards its charitable purpose.

To comply with this standard, your organisation must take reasonable steps to be transparent with its members. This obligation involves keeping them informed about key aspects of the charity, including its:

• Activities and operations
• Financial position and health
• Progress in achieving its mission

The standard also requires that members have adequate opportunities to ask questions and raise concerns about the charity’s governance. This ensures that the organisation is managed in a responsible and answerable manner, reinforcing the accountability of its leadership to the membership base.

How Your Association’s Constitution Defines Access Rights

For an incorporated association or a company limited by guarantee, the right of a member to access information is not an automatic or unlimited statutory entitlement. Instead, the specific rights to inspect the books and documents of the organisation are primarily defined by its own constitution or rules.

Under the Associations Incorporation Act 2009 (NSW), an association’s constitution is required to address the matter of inspection of its books and documents by members. This means the organisation’s own governing document sets the boundaries for what information members can access.

Similarly, for a company limited by guarantee, the Corporations Act 2001 (Cth) does not provide a general right for members to inspect all books and records; this right must be granted by the company’s constitution.

Therefore, your organisation’s constitution is the key document that dictates the scope of a member’s access to information. It can specify which records are open for inspection and may also outline circumstances where access can be legitimately refused, such as for:

• Confidential matters
• Commercial considerations
• Legal issues

Identifying Suspicious Information Requests from Your Members

What is a Fishing Expedition

A “fishing expedition” is a broad and unfocused request for documents from a member who may be trying to uncover evidence to support a potential lawsuit. Rather than being a genuine attempt to hold the organisation accountable, these requests aim to find any information that could form the basis of a legal claim.

This process bears similarity to the legal concept of preliminary discovery, where a person who may have a cause of action can seek documents to help them decide whether to commence proceedings.

In the context of a not-for-profit organisation, a fishing expedition occurs when a member makes a speculative demand for information without a clear and legitimate purpose related to the association’s affairs.

Signs of an Improper Purpose or Hostile Request

It is important for your not-for-profit organisation to recognise the signs of a request made for an improper purpose. Such requests are often not genuinely aimed at seeking transparency but instead have an ulterior motive.

Key indicators of a hostile or improper request can include:

Indicator	Description
Excessively broad scope	The request is vague and demands a large volume of documents without specifying a clear reason or connection to a legitimate concern.
Irrelevant information	The member is asking for information that is not directly related to the affairs of the association, such as internal staff communications or sensitive client data.
Misuse of information	The member intends to use the information for a purpose unrelated to the association’s activities, such as commercial advertising, political campaigning, or to advance a personal grievance.

Your Legal Grounds for Refusing an Information Request

Protecting Personal Privacy & Confidential Information

A primary legal basis for refusing a member’s information request is your organisation’s duty to protect the personal information of others. Under the Privacy Act 1988 (Cth), Australian Privacy Principle (APP) 11.1 requires your not-for-profit organisation to take reasonable steps to protect personal information from unauthorised disclosure.

This obligation extends to the personal and sensitive details of other members, staff, clients, and donors.

Beyond statutory privacy obligations, your association’s constitution can provide further grounds for refusal. Many constitutions, including the model constitution for NSW incorporated associations, empower the committee to deny access to certain categories of information. These often include records relating to:

• Confidential matters
• Personal or employment details
• Commercial-in-confidence information
• Legal advice or proceedings

When a Request is Prejudicial to the Association’s Interests

An association’s constitution may also permit the committee to refuse an information request if disclosing the documents could be harmful to the organisation. This allows the committee to act in the best interests of the association by withholding potentially prejudicial information.

This power enables the governing body to assess the potential impact of a disclosure and refuse access where it reasonably believes the release of information could harm the organisation’s:

• Operations
• Reputation
• Strategic objectives

Limits Under the Corporations Act & Associations Incorporation Act

For a company limited by guarantee, the Corporations Act 2001 (Cth) does not provide members with a general right to inspect all of the company’s books and records. Access rights are typically limited to specific documents, such as:

• The register of members
• Minutes of general meetings

These limitations apply unless the organisation’s constitution explicitly grants broader inspection rights.

Similarly, for an incorporated association in New South Wales, the right of inspection is governed by its constitution. The Associations Incorporation Act 2009 (NSW) mandates that an association’s constitution must address the rules for members inspecting its books and documents. This means the scope of access is defined by the organisation itself, not by an overarching statutory entitlement to all information.

How to Draft a Legally Defensible Response to a Request

Formally Responding to the Member’s Request

When refusing an information request, your organisation should provide a formal response in writing. This approach serves two important purposes:

• It maintains a clear record of your communication with the member
• It helps minimise potential conflict through professional communication

It is essential to maintain a polite and professional tone while being firm and clear in the decision to deny access to the requested documents. This balance ensures respectful communication while standing firm on your organisation’s position.

The Importance of Citing Your Constitution & the Law

A legally defensible refusal must clearly state the specific grounds for the decision. Simply denying a request without justification can expose your not-for-profit organisation to a legal challenge.

By referencing the relevant legal and constitutional provisions, you demonstrate that your decision is based on established rules and obligations, not an arbitrary choice. This foundation strengthens your position and reduces the risk of successful challenges.

Your response should cite the specific authority you are relying on, which may include:

Authority to Cite	Application & Rationale
Your association’s constitution	Under the Associations Incorporation Act 2009 (NSW), the constitution must address member inspection rules. If your constitution permits refusal for certain records (e.g., confidential, personal, commercial, or legal matters), the specific clause should be cited.
The Privacy Act 1988 (Cth)	Your organisation has a legal duty under Australian Privacy Principle (APP) 11 to protect personal information from unauthorised disclosure. This provides a strong legal basis for refusing requests for the personal details of other members, staff, or clients.

The Litigation Pathway When a Member Challenges Your Refusal

What is a Court Application for Discovery

If a member of your not-for-profit organisation disputes a refusal to provide documents, they cannot force access automatically. Instead, they must commence a formal legal process by applying to a court, such as the NSW Supreme Court, for an order for discovery.

This application is governed by court rules, and access is not an automatic entitlement. Under court procedures, discovery is generally not ordered unless it is necessary for resolving the real issues in the dispute.

The court retains discretion and will only compel your association to produce documents if the member can justify their request according to legal standards.

How a Not-for-Profit Lawyer Can Defend Your Association in Court

Engaging specialist not-for-profit lawyers is crucial when your organisation’s refusal is challenged in court, highlighting why legal support is essential for Australian not-for-profits. These legal professionals can:

• Represent your association
• Prepare a defence
• Argue against the member’s application for discovery

A lawyer can defend your decision by arguing that the requested documents should not be produced on several grounds. Key arguments include:

Legal Argument	Details
The documents are privileged	Legal advice and other related communications may be protected by legal professional privilege, preventing their disclosure in court proceedings.
The information is confidential	The organisation’s constitution may provide grounds to protect confidential, personal, or commercial-in-confidence information from inspection.
The request is a “fishing expedition”	A lawyer can demonstrate that the member’s request is an improper, speculative attempt to find evidence for a potential lawsuit rather than a genuine inquiry.

Balancing Transparency & Risk for Your Not-for-Profit Board

A Board’s Guide to Managing Hostile Member Requests

To effectively manage hostile or improper information requests, the board of a not-for-profit organisation should establish clear and consistent internal processes, a key part of strengthening your charity board processes for better not-for-profit compliance. These procedures help maintain a balance between accountability to members and the protection of the association’s interests and the privacy of individuals.

Key strategies for your board to consider include:

Strategy	Description
Maintain clear internal policies	Establish well-defined policies, based on the constitution, that outline rules for member access to information, including which documents are available and the legitimate grounds for refusal.
Document all communications	Keep a thorough record of all information requests and the association’s formal responses to create a clear audit trail for potential challenges.
Require a stated purpose	For requests concerning the register of members, the constitution may permit requiring a statutory declaration affirming the information is sought for a purpose related to the association’s affairs.
Seek prompt legal advice	Consult specialist not-for-profit lawyers if a request appears hostile or improper to help assess the request and formulate a legally defensible response.

Proactively Reviewing Your Association’s Constitution & Policies

An organisation’s constitution is the primary document governing a member’s right to access information. Regularly reviewing and updating this document is a critical governance practice for any not-for-profit, and a key way to ensure your charity is accountable enough as per ACNC guidelines.

Every incorporated association should periodically review its constitution to ensure it remains suitable for the organisation’s current operations and reflects members’ expectations of privacy. This review process allows the board to proactively strengthen its governance framework.

When reviewing your constitution, consider the following important elements:

Constitutional Element	Recommendation & Purpose
Clearly define access rights	Ensure clauses addressing the inspection of books and documents by members are specific and unambiguous to comply with the Associations Incorporation Act 2009 (NSW) and avoid confusion.
Include explicit grounds for refusal	Incorporate clauses permitting the committee to refuse access to certain records, such as those relating to confidential, personal, commercial, or legal matters.
Protect against prejudice	Empower the committee to deny a request if disclosing the information could be prejudicial to the interests of the association, safeguarding the organisation’s operations and reputation.

Conclusion

Not-for-profit organisations must balance their accountability to members with their legal duty to protect privacy by lawfully refusing improper information requests. Understanding the constitutional and legal grounds for refusal, how to respond effectively, and the litigation process is essential for any charity or incorporated association.

For specialised advice on managing hostile member requests and strengthening your organisation’s governance framework, contact our expert not-for-profit lawyers at LawBridge. Our team provides the trusted expertise needed to defend your association’s interests while upholding your legal obligations.

Frequently Asked Questions