Springwood Sports Club is facing one of the toughest tests in its 78-year history after being placed in voluntary administration last Tuesday, March 17.
Caught in a bitter legal battle with the company that built its new clubhouse, the club still remains open for business and is continuing to accept new members. It is approaching the pointy end of a two-year legal battle in the District Court with Reed Construction Australia Pty Ltd - currently in liquidation - the company that built its modern premises in 2009.
The court battle centres on an outstanding debt to Reed of $851,594 and a cross claim by the club over defects in the building, evaluated at $1,271,902.
The matter briefly went before the court on March 16 when a stay order on the claim and cross claim was due to expire.
Last weekend the club confirmed on its website that Greg Russell of Russell Corporate Advisory was appointed administrator, stating that "as members are aware, significant costs have been incurred and the club was required to lodge substantial funds with the court".
"Please continue to support the club during this period as it is 'business as usual'."
In an earlier notice to members, posted on the club's website on March 9, chief executive officer Sue Ball confirmed "the ongoing litigation has placed considerable strain on our financial position and cash flow for the previous two years.
"For the first six months of this year the cost is in the region of $220,000, which is a considerable amount for a small club like SSC to fund from our cash flow.
"The board of directors and management have worked vigorously in the background with our lawyers to obtain the best possible outcome for the club as we strongly believe that this matter should be pursued to obtain recompense for the defects."
According to the club's 2014 financial report, lower trading figures followed the October 2013 bushfires and litigation with Reed resulted in unbudgeted expenditure.
Last year the club recorded an operating loss of $412,099 compared to a profit of $59,764 the year before.
Notably, income from gaming, bar trading and catering fell by between 7.6 per cent and 10.7 per cent, while legal fees increased by $174,000.
The 2014 annual report also revealed the club's service to the community as the main evacuation centre after the 2013 bushfires was "a significant financial burden" for which it had not been fully reimbursed by the NSW government.
The Gazette approached Russell Corporate Advisory for comment but did not receive a response at the time of going to press.
The club's next hearing at the District Court in Sydney is on March 31.