Would George Schuyler have accepted RNZYS in the America's Cup?
by Richard Gladwell on 25 Sep 2007
Royal New Zealand Yacht Squadron, established in 1859 and a six time competitor in the America’s Cup over a 20 year period. Sail-World.com/NZ
Parties associated with the Defence of the 33rd America’s Cup, continue to push out claims that the Royal New Zealand Yacht Squadron was not a bona fide challenger, for the period of its three Challenges from 1987 to 1995, and two Defences for the America’s Cup.
So far, the Squadron’s legitimacy as a Challenger and Defender has been called into question by the Societe Nautique de Geneve, the Arbitration Panel for the 33rd America’s Cup, and in an affidavit sworn by Alinghi General Counsel, Hamish Ross, who is also a member of RNZYS.
The latest claim is contained in a paragraph of the affidavit filed by Ross in support of submission by Societe Nautique de Geneve to the New York Supreme Court. This affidavit is part of its response to the motions filed by Golden Gate Yacht Club querying the legitimacy of the present Challenger of Record, Club Nautique Espanol de Vela.
In his affidavit, Ross asserts at paragraph 45:
'RNZYS first challenged for the 1987 Cup and its challenge was accepted by the then trustee Royal Perth Yacht Club of Western Australia Incorporated. RNZYS challenged twice more, for the 1992 America’s Cup and the 1995 America’s Cup, and its challenges were accepted by the then trustee San Diego Yacht Club, despite not ever being incorporated.
'Attached hereto (as Ex. V) is a copy of the Certificate of Incorporation for RNZYS, dated February 28, 2003, and obtained from the Registrar of Companies New Zealand. RNZYS won the America’s Cup in 1995 and was the Defender/trustee in 2000 and in 2003. It was not 'incorporated, patented, or licensed by the legislature, admiralty, or other executive department,' as required by the Deed, until after it had lost the America’s Cup to SNG and ceased to be the trustee.'
Ross is referring to the fact that from the period of its inception in 1859 until 2003, the Royal New Zealand Yacht Squadron was not registered in New Zealand under the Incorporated Societies Act (1908). However under the constitution of Yachting New Zealand, such incorporation is specifically not required for yacht clubs of the Squadron’s vintage.
The argument being advanced by the parties associated with Defender and the Arbitration Panel is designed give credence to the action of Societe Nautique de Geneve in accepting the Challenge of Club Nautico Espanol de Vela, which parties associated with the Golden Gate Yacht Club have claimed to be illegitimate in terms of the Deed of Gift of the America’s Cup.
The legitimacy of the Club Nautico Espanol de Vela is at the heart of the arguments made to the New York Supreme Court by Golden Gate YC. The argument being made in response is that there is precedence, and effectively that two wrongs make a right.
The RNZYS first responded, in an earlier story in Sail-World, to the claims, made in an interview by Hamish Ross. RNZYS Commodore John Crawford responded to the comments:
'Under New Zealand law, becoming 'incorporated' is simply a means of limiting individual Club Members’ liability. The Royal New Zealand Yacht Squadron has operated as a legal entity since 1859 and has had H.R.H. The Duke of Edinburgh as its Patron since 1986.
'The Royal New Zealand Yacht Squadron was granted a warrant to fly the Blue Ensign by the British Admiralty in 1902 and has subsequently been awarded a warrant to fly the New Zealand Blue Ensign by H.R.H Queen Elizabeth.'
It subsequently transpired that Royal New Zealand Yacht Squadron was not listed on the New Zealand Register of Incorporated Societies until 2003. However this is not unusual as many clubs had been in existence prior to the 1908 Act, and took a long time to realise the benefit of limited liability conferred by the Act. It is still not compulsory, in New Zealand to be an Incorporated Society - to operate as a yacht, or any other, club.
The Oxford Dictionary of Law gives a definition of Incorporation which is more applicable internationally to yacht clubs, where it defines Incorporation as 'The formation of an association that has corporate personality ie a personality distinct from those of its members.'
It also follows that regulations and legal process covering incorporation will vary from country to country, and what is the practice in Spain, will be different in New Zealand.
Research by Sail-World has revealed that while many New Zealand organisations are registered under the Incorporated Societies Act, it is not compulsory. Given that the Yacht Squadron has been successfully operating for 50 years, before the Act was introduced, there was obviously no pressing need voluntarily register and undertake the compliance requirements, since the organisation had been operating quite successfully without it.
As Crawford pointed out the main advantage of incorporation is to limit the liability of members, if this limitation is not in place then all members are liable for the actions the Squadron, and in many eyes this is a stronger level of commercial backing.
The statement that 'RNZYS was not 'incorporated, patented, or licensed by the legislature, admiralty, or other executive department,' as required by the Deed' contained in the affidavit, but also a consistent theme in submissions made by parties associated with the Defender and Arbitration Panel, is not correct.
Royal New Zealand Yacht Squadron clearly was incorporated in terms of the Oxford Dictionary definition of Incorporation from its inception in 1859. It also fits with the definition of a Club by the same authority which is 'An association regulated by rules that bind its members according to the laws of contract.'
Further RNZYS is a long standing member of Yachting New Zealand, and is the largest club within that federation of NZ clubs. As the New Zealand national authority affiliated to the International Sailing Federation (ISAF), YNZ is the only body entitled to 'licence', by affiliation, yacht clubs in New Zealand for the purposes of yacht racing and organisation of sailing regattas and events that may use the ISAF Racing Rules of Sailing.
Writing in the Royal New Zealand Yacht Squadron club magazine 'Breeze' in September/October 1999, Hamish Ross commented that RNZYS was one of 32 yacht clubs in the United Kingdom, Australia and New Zealand having a warrant for members to fly a Blue Ensign. 'The Admiralty practice of issuing warrants to yacht clubs arose early in the nineteenth century shortly after the first yacht clubs were formed to encourage sailing' says Ross in the Breeze article.
Ross notes that the right was given by the British Admiralty to the Squadron’s members in 1902. The warrants, of which Ross has one, are signed by the Second Sea Lord of the British Admiralty.
Although there is no formal means of licencing yacht clubs by the British Admiralty, the nearest document seems to be 'The Navy List' which is published by the Royal Navy, which does list the yacht clubs entitled to fly the White, Blue and defaced Blue and Red Ensign. RNZYS is listed in that document, along with two other New Zealand Clubs and former Cup holder Royal Perth Yacht Club, and current Challenger, Royal Thames YC.
The granting of the Royal Warrant in 1902 enabled the Squadron to change its name from the New Zealand Yacht Squadron to the Royal New Zealand Yacht Squadron. The ability of the Flag Officers to fly the White Ensign and the Members to fly the Blue Ensign was a byproduct of the granting of the Warrant.
In its decision of 7 September 2007, the Arbitration Panel, appointed by America’s Cup Management on behalf of Societe Nautique de Geneve, repeated Ross’s assertion to support its confirmation of Club Nautico Espanol de Vela at paragraph 108:
'RNZYS challenged for the America’s Cup for the 26th Match held in 198
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