Ok but that then means promotion/relegation turns into a subjective assessment... somebodies opinion as to whether you warrant inclusion or not. I dont see how you can run a competition that way. You're exposed to calls of hypocrisy, corruption and skull duggery.
It's simple. KEPP THE PROCESS OBJECTIVE! Then everybody knows what the rules are and can work to the criteria set in stone. If Mosman had a bad year because they all went to Europe... fine. You can tell us all about it from Div 2. Forrest won the colts? Good, that bodes well for their future, but they finished lower on the Club Champs table.
But besides all of that, there is no way... either objectively OR subjectively that Pats gets demoted. There isn't a single reason that could be justified.