Co-operation (Further Amendment) Act 1987 (NSW)
CO-OPERATION (FURTHER AMENDMENT) ACT 1987
No. 118
NEW SOUTH WALES
TABLE OF PROVISIONS
1. Short title
2. Commencement
3. Amendment of Act No. 1, 1924
4. Amendment of Act No. 106, 1986
5. Amendment of Act No. 19, 1987
SCHEDULE 1—AMENDMENTS TO THE CO-OPERATION ACT 1923
CO-OPERATION (FURTHER AMENDMENT) ACT 1987 No. 118
NEW SOUTH WALES
Act No. 118, 1987
| An Act to amend the Co-operation Act 1923 to make further provision with | respect to the rights and obligations of members of co-operative societies; |
| and for other purposes. [Assented to 16 June 1987] |
Co-operation (Further Amendment) 1987
BE it enacted by the Queen's Most Excellent Majesty, by and with the advice and consent of the Legislative Council and Legislative Assembly of New South Wales in Parliament assembled, and by the authority of the same, as follows:
Short title
1. This Act may be cited as the "Co-operation (Further Amendment)
Act 1987".
Commencement
2. (1) Except as provided by subsections (2) and (3), this Act shall
commence on the date of assent to this Act.
(2) The provisions of Schedule 1 shall commence on such day or days as may be appointed by the Governor and notified by proclamation published in the Gazette.
(3) Section 3, in its application to a provision of Schedule 1, shall
commence on the day on which the provision commences.
Amendment of Act No. 1, 1924
3. The Co-operation Act 1923 is amended in the manner set forth in
Schedule 1.
Amendment of Act No. 106, 1986
4. The Co-operation (Amendment) Act 1986 is amended—
| (a) | by omitting items (2), (9) (b), (13) (c), (13) (d), (20), (23), (26), (31) (a), (33) (a), (33) (d), (33) (0, (37), (38) (b), (38) (c), (41) (a), (41) (c) and (42) from Schedule 1; |
| (b) by omitting clauses 1-4 and 12 from Schedule 3. |
Amendment of Act No. 19, 1987
5. The Co-operation (Amendment) Act 1987 is amended—
(a) by omitting item (7) (a) and (b) from Schedule 1;
| (b) | by omitting from item (3) in Schedule 2 the words "(within the meaning of section 5c)". |
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Co-operation (Further Amendment) 1987
SCHEDULE 1
(Sec. 3)
AMENDMENTS TO THE CO-OPERATION ACT 1923
(1) Section 5 (Interpretation)—
(a)
Section 5, definition of "Primary object"— Omit the definition, insert instead:
"Primary object" is defined by section 80B.
(b) Section 5, definition of "Subsidiary corporation" and "subsidiary society"— Omit the definition of "Subsidiary corporation", insert instead:
"Subsidiary corporation" and "subsidiary society" are defined
by section 5B.
(2) Sections 5A, 5B—
After section 5, insert:
Co-operative principles:
5A. (1) In this Act, a reference to co-operative principles is a
reference to the principles adopted by the International Co-
operative Alliance, being the following principles:
Voluntary association and open membership:
Membership of a co-operative society shall be voluntary and
available without artificial restriction or any social, political,racial or religious discrimination to all persons who can make
of membership. use of its services and are willing to accept the responsibilities Democratic control: Co-operative societies are democratic organisations. Their affairs shall be administered by persons elected or appointed in a manner agreed by the members and accountable to them. Members of primary societies should enjoy equal rights of voting (one member, one vote) and participation in decisions affecting their societies. In other than primary societies the administration should be conducted on a democratic basis in a suitable form.
•Co-operation (Further Amendment) 1987
SCHEDULE 1—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
Limited interest on capital:
Share capital shall only receive a strictly limited rate of
interest, if any.
Equitable division of surplus:
The economic results arising out of the operations of the society belong to the members of that society and shall be distributed in such a manner as would avoid one member gaining at the expense of others.
This may be done by decision of the members as follows:
(i) by provision for development of the business of the co- operative;
(ii) by provision of common services; or
(iii) by distribution among the members in proportion to their transactions with the society.
Co-operative education:
All co-operative societies shall make provision for the education of their members, officers, and employees and of the general public, in the principles and techniques of co-operation, both economic and democratic.
Co-operation among co-operatives:
All co-operative organisations, in order to best serve the interests of their members and communities shall actively co- operate in every practical way with other co-operatives at local, national and international levels.
(2) Any requirement in this Act that a society function in
accordance with co-operative principles shall not be construed—
(a)
as requiring the society to function in accordance with all of the principles set out in subsection (1); or
(b)
as authorising the society to contravene any other provision of this Act or of its rules.
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(3) The Governor may, by order published in the Gazette, amend the principles set out in subsection (1) so as to cause those principles to be the co-operative principles adopted from time to time by the International Co-operative Alliance.
Subsidiary corporations
5B. (1) For the purposes of this Act, a corporation or society shall be deemed to be a subsidiary of a society if the society—
(a)
controls the composition of the board of directors of the corporation or society;
(b)
is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the corporation or society; or
(c)
holds more than one-half of the issued share capital of the corporation or society (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
(2) Without limiting by implication the circumstances in which the composition of a corporation's or society's board of directors is to be taken to be controlled by a society, the composition of a corporation's or society's board of directors shall be taken to be controlled by a society if the society, by the exercise of some power exercisable whether with or without the consent or
concurrence of any other person by the society, can appoint or
remove all or a majority of the directors, and, for the purposes of
this section, the society shall be deemed to have power to make
such an appointment if—
(a)
a person cannot be appointed as a director without the exercise in that person's favour by the society of such a power; or
(b)
a person's appointment as a director follows necessarily from that person's being a director or other officer of the society.
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(3) In determining whether a corporation or society is a subsidiary of a society (in this section referred to as "the society concerned")—
(a) any shares held or power exercisable by the society concerned in a fiduciary capacity shall be treated as not held or exercisable by it; (b) subject to paragraphs (c) and (d), any shares held or power exercisable— (i) by any person as a nominee for the society concerned (except where the society is concerned only in a fiduciary capacity); or
(ii) by, or by a nominee for, a subsidiary of the society, not being a subsidiary that is concerned only in a fiduciary capacity,
shall be treated as held or exercisable by the society;
(c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the corporation or society, or of a trust deed for securing any issue of any such debentures, shall be disregarded; and (d) any shares held or power exercisable by, or by a nominee for, the society concerned (not being held or exercisable as
exercisable by the society if the shares are held or the mentioned in paragraph (c)) shall be treated as not held or power is exercisable only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money.
(4) In this section—
"corporation" has the meaning ascribed to that expression by the Companies (New South Wales) Code, and includes a society.
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(3) Section 38 (Liability and membership)—
Section 38 (7)—
After section 38 (6), insert:(7) A person is not qualified to be admitted to membership of a society (except a building society or an association the majority of the component societies of which are building societies) unless there are reasonable grounds for believing that the person will be an active member of the society.
(4) Section 46 (Members)—
(a) Section 46 (7AA)— Omit the subsection, insert instead:
(7AA) A person is not entitled to represent a body corporate if the person has been appointed to represent another body corporate and that appointment is still in force.
(b) Section 46 ( 7 D ) — After section 46 (7c), insert: (7D) A person is not entitled to exercise, under a power of attorney, the power of a member to vote if the person has that power in respect of another member under another power of
attorney.
(5) Section 47 (Shares)—
(a) Section 47 (11), (1 1A)— After section 47 (10), insert: (11) Where a person holds shares in a society in contravention of subsection (10), the board of the society shall declare to be forfeited sufficient of those shares to remedy the contravention, being—
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(b)
in the absence of such a nomination—those shares which have been held by the person for the shortest time,
and any such declaration shall have effect according to its tenor.
(11 A) Sections 80x and 80Y (repayment of and interest on amounts due in respect of forfeited shares) apply to and in respect of shares forfeited under subsection (11) in the same manner as they apply to and in respect of shares forfeited under Division 4 of Part IIIA.
(b) Section 47 (17)-(22)—
Omit section 47 (17) and (18), insert instead:(17) A share in a society cannot be sold or transferred except—
(a)
in accordance with section 58 or 59 on the death of a member;
(b)
to a person appointed to administer the estate of a shareholder under a law relating to the administration of the estates of persons who, through mental or physical infirmity, are incapable of managing their affairs; or
(c)
with the consent of the board, to a person who is qualified to be admitted to membership of the society under section 38 (7) (active membership).
(18) The board of a society (except a non-terminating building society or a society mentioned in the Second Schedule) shall not consent to the sale or transfer of shares if the sale or transfer would cause the nominal value of all shares sold or transferred since the commencement of the current financial year of the society to exceed the appropriate proportion of the nominal value of the issued share capital of the society as at that commencement. (19) The appropriate proportion of the nominal value of issued share capital is—
(a)
one-fifth or such other proportion as may be prescribed by the regulations; or
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(b) if the rules of the society provide for a lesser proportion, that lesser proportion.
(20) Subsection (18) does not prevent the board from consenting to a sale or transfer—
(a) if the Minister approves, on the recommendation of the Advisory Council, either generally or in a particular case; or (b) in such circumstances as may be prescribed by the regulations.
(21) A person who sells or transfers, or disposes of the beneficial interest in, his or her shares in a society or who agrees to do any of those things shall, within 14 days, give notice in writing to the society of the fact.
(22) A person shall within 14 days after commencing to hold shares in a society as trustee for, or otherwise on behalf of or on account of, a person give notice in writing to the society giving details of the shareholding.
(6) Section 64—
Omit the section, insert instead:
Property—power to acquire and dispose of
64. (1) This section does not apply to a non-terminating building society.
(2) A society may, in accordance with this Act—
(a)
acquire by lease, purchase, donation, devise, bequest or otherwise any real or personal property for any objects of the society; and
(b) sell or lease any such real or personal property.
(3) The acquisition by a society of real or personal property primarily or mainly required for business or office accommodation of the society or of the society and other societies is an acquisition of real or personal property for the objects of the society.
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SCHEDULE X—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(4) A sale or lease of the undertaking, or any part of the undertaking, as a going concern, of a society (other than a co- operative housing society, a non-terminating building society or a society mentioned in the Second Schedule) shall be invalid unless—
(a) at a postal ballot of the members held in the prescribed manner and in accordance with section 79A at least three- quarters of the formal votes cast are in favour; (b) the Minister, after consideration of the matter by the Advisory Council under section 79B, approves of the sale or lease; and (c) the rules of the society contain active membership provisions or steps have been taken, as required by the Advisory Council, to determine the preferences of active members.
(5) The Minister may, by order in writing, exempt a society from compliance with all or specified provisions of this section and section 79A.
(7) Section 70 (Registration of society as company)—
(a) Section 70 (l)-(Ic)—
Omit section 70 (1) and (1A), insert instead:(1) A co-operative housing society may by special resolution
determine that the society shall apply to be registered as a
company under the Companies (New South Wales) Code. (1A) A non-terminating building society or a society mentioned in the Second Schedule, other than a society prohibited from doing so by its rules, may apply to be registered as a company under the Companies (New South Wales) Code if—
(a)
details of the proposed application have first been submitted to the registrar; and
(b)
the provisions of Division 6 of Part III of the Permanent Building Societies Act 1967 have been complied with in respect of the proposal.
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(1 B) Any other society may apply to be registered as a company under the Companies (New South Wales) Code if—
(a) at a postal ballot of the members held in the prescribed manner and in accordance with section 79A at least three- quarters of the formal votes cast are in favour; (b) the Minister, after consideration of the matter by the Advisory Council under section 79B, approves of the application being made; and (c) the rules of the society contain active membership provisions or steps have been taken, as required by the Advisory Council, to determine the preferences of active members.
(lc) The Minister may, by order in writing, exempt a society from compliance with all or specified provisions of subsection (1B) and section 79A.
(b)
Section 70 (7) (a)— Omit the paragraph.
(c)
Section 70 (7) (b) (ii)— Omit the subparagraph, insert instead:
(ii) a copy of any special resolution required under this section, verified by the registrar, and a copy of any approval of the Minister required under this section, concerning the application;
(8) Sections 79A, 7 9 B —
After section 79, insert:
Special postal ballots
79A. (1) This section applies to a postal ballot held by a society for the purposes of section 64, 70 or 92.
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SCHEDULE X—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(2) The society shall send to each of its members, along with any other material required in connection with the postal ballot, a statement concerning—
(a) the financial position of the society;
(b)
the interests of the directors of the society in the proposal with which the ballot is concerned, including any interests of the directors in another organisation concerned in the proposal;
(c)
any compensation or consideration to be paid to officers or members of the society in connection with the proposal; and
(d) such other matters as the registrar directs.
(3) The contents of the statement must have been approved by the registrar.
(4) If the registrar so requires, the statement shall be
accompanied by a report made by an independent personapproved by the registrar concerning such matters as the registrar
directs. (5) On the declaration by the returning officer of the result of the ballot, the secretary of the society shall make an entry in the minute book of the society showing—
(a) the number of formal votes cast in favour of the proposal;
(b) the number of formal votes cast against the proposal; and
(c) the number of informal votes cast.
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(6) If at least three-quarters of the formal votes cast are in favour of the proposal, the secretary shall, within 10 days after the declaration of the result, file with the registrar a copy signed by the secretary of the entry so made.
Approval of the Minister etc.—ss. 64, 70, 92
79B. (1) This section applies to action by a society for which, under section 64, 70 or 92, the approval of the Minister is required, given after consideration of the matter by the Advisory Council.
(2) The Advisory Council shall consider a proposed action to which this section applies and for that purpose, without limiting its power to consider other matters, may consider—
(a)
the interests of members or a class of members of the society concerned;
(b) the interests of members of societies generally; and
(c) the interests of co-operation.
(3) The Advisory Council shall, after considering proposed action to which this section applies—
(a)
recommend to the Minister that the transaction be approved; or
(b) refuse to make such a recommendation to the Minister.
(4) If the Advisory Council refuses to make a recommendation
to the Minister—
(a) it shall give notice to the Minister and to the society concerned accordingly; and (b) the society concerned may, within 14 days of receipt of the notice, make representations to the Minister concerning the matter.
(5) If the Advisory Council does not make a decision in respect of the proposed action within a reasonable time, the Minister may consider the matter.
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AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(6) The Minister shall approve or refuse to approve the proposed action and for that purpose shall have regard to, but shall not be bound by, any recommendation of the Advisory Council.
(7) Without limiting the Minister's power to refuse approval of the proposed action, the Minister may refuse approval if of the opinion that the proposed action—
(a)
would adversely affect a significant number of the members of the society;
(b)
in the case of action under section 64, would adversely affect the efficiency, viability or profitability of the society;
(c)
in the case of action under section 70 or 92, would adversely affect the efficiency, viability or profitability of any other society engaged in an activity in which the society is engaged; or
(d) would not be in the public interest.
(9) Part I I IA—
After Part III, insert:
PART IIIA
ACTIVE MEMBERSHIP
DIVISION 1—Interpretation etc.
Application of Part to societies 80A. (1) This Part does not apply to a building society or to
an association the majority of the component societies of which
are building societies.
(2) References in this Part to a society shall be construed
accordingly.
Primary objects—interpretation
80B. (1) A chief primary object of a society is an object of the
society which is specified in the rules of the society as a chief
primary object of the society.
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(2) A primary object of a society is an object of the society which is specified in the rules of the society as a chief primary object or a primary object of the society.
Active membership—interpretation
80c. For the purposes of this Act, a member of a society is an active member of the society if the member—
(a)
utilises or supports an activity of, or maintains a relationship or an arrangement with, the society, in connection with the carrying on of a primary object of the society, in the manner and to the extent which the rules of the society provide is sufficient to establish active membership; or
(b)
maintains such other relationship or arrangement with the society in connection with the carrying on of a primary object of the society as the regulations provide is sufficient to establish active membership.
Active membership provisions and resolutions—interpretation
80D. (1) Active membership provisions in the rules of a society are provisions in the rules which specify—
(a) which of the objects of the society are the primary objects of the society; and (b) the manner in which and the extent to which a member
of the society is required to utilise or support an activity of, or maintain a relationship or an arrangement with, the society, in connection with the carrying on of a primary object of the society, in order to establish active membership of the society.
(2) An active membership resolution is a resolution which would, if given effect to, make active membership provisions in the rules of a society.
(3) If an active membership resolution concerns a proposed chief primary object of the society it must not be concerned with any other object.
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AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(4) An active membership resolution may be passed only by a
special resolution.
DIVISION 2—Active membership provisions
Number of primary objects
80E. (1) A society must have at least 1 chief primary object.
(2) A society registered under this Act before the commencement of this section must have at least 1 chief primary object until its rules contain active membership provisions concerned with a primary object other than a chief primary object.
Rules to contain active membership provisions
80F. (1) The board of a society shall ensure that the rules of the society contain active membership provisions in accordance with this Part.
(2) The board shall comply with that requirement as soon as practicable after the commencement of this section and in any case within 12 months after that commencement.
(3) The period within which the requirement must be complied
with may be extended for a particular society by order in
writing—
(a) by the registrar, for a further period of up to 3 months or (after consultation with the Advisory Council) up to 2 years; or (b) by the Minister, for such further period as the Minister determines after consultation with the Advisory Council.
(4) The registrar shall not grant an extension unless satisfied that it would not be reasonably practicable for the society to determine for how long before the commencement of this section a member has not been an active member of the society.
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(5) An alteration of the rules of a society effected for the purposes of this section is not an alteration which may be effected by a resolution passed by the board under section 83 (3).
Ministerial orders as to active membership provisions
80G. (1) The Minister may by order published in the Gazette
specify factors and considerations to be taken into account in
determining—
(a) which of the objects of a society are its chief primary objects; (b) which of the objects of a society are its other primary objects; and (c) the manner and extent to which a member is required to utilise or suppprt an activity of, or maintain a relationship with, a society, in cpnnection with the carrying on of a primary object of the society, to establish active membership of the society.
(2) Factors and considerations may be specified so as to apply to societies generally, to a specified class of societies or to a specified individual society.
(3) The directors of a society shall ensure that any such factors and considerations are taken into account accordingly.
Regular subscription—active membership 80H. (1) Active membership provisions may include provision that the payment of a regular subscription by a member of the society, to be applied in connection with a primary object of the society, is sufficient to establish active membership of the society.
(2) A member of a society who would, on payment of such a subscription, be an active member of a society shall be deemed to be an active member until—
(a) the subscription is due and payable; or
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AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(b)
the expiration of the period of 12 months after the commencement of this section,
whichever is earlier.
Active membership provisions—supply or purchase of goods or produce
80i. (1) This section applies to a society if the primary objects of the society include the supply to or purchase from the society by its members of goods or produce.
(2) The only active membership provisions which may be contained in the rules of a society to which this section applies are—
(a) provisions requiring a member to utilise an activity of the society in connection with the carrying on of a primary object specified in the provisions to establish active membership; and (b) such other active membership provisions as the Minister may approve after consultation with the Advisory Council. A reference in this section, and in any active membership provisions of the rules of a society, to the supply to or purchase
(3)
from a society by a member of goods or produce includes a reference to— (a)
the supply to or purchase from a corporation constituted by an Act for the purpose of the marketing of goods or produce if the corporation in turn supplies to or purchases from the society; and
(b)
the existence of a relationship or arrangement between the member and the society which is prescribed by the regulations as being sufficient to establish the relationship of supplier or purchaser.
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DIVISION 3—Active membership resolution
Prior approval of active membership resolutions
80J. (1) An active membership resolution cannot be proposed at a meeting of a society unless—
(a) before the meeting, the registrar has approved in writing of the terms of the proposed resolution; or (b) the active membership provisions which would result from the proposed resolution fall within parameters approved of in writing by the registrar before the meeting.
(2) Before giving an approval under this section, the registrar may require additional information from the proposers of the resolution for the purpose of deciding whether or not to approve of the resolution.
Appeal against refusal of approval
80K. (1) If the registrar refuses to approve of a proposed active membership resolution on the basis that the resolution would not result in active membership provisions which are appropriate for the society concerned or which would result in unreasonable active membership provisions—
(a) the registrar shall inform the society in writing of the
reasons for the refusal; and (b) the Advisory Council shall, at the request of the society, review the registrar's decision to refuse approval.
(2) After its review, the Advisory Council may recommend to the registrar that the registrar approve of the proposed resolution and the registrar shall comply with such a recommendation.
Notice of meeting
80L. (1) At least 21 days' written notice shall be given to
members of a society of a meeting at which an active membership
resolution is to be proposed.
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(2) The notice shall, in addition1 to trie other matters required
to be specified—
(a)
specify whether the member is eligible to vote on the resolution;
(b) specify the full text of tne pffcfpdsed resolution; and
(c) contain a copy of section" #0Q (forfeiture of shares of inactive members). (3) If the notice to a member States that he or she is not eligible to vote on a resolution, the member may, after endeavouring to settle the matter with the society, apply to the registrar for a determination as to the member's eligibility.
(4) The registrar may determine the matter, on the information available to the registrar, by direction in writing to the society and the member.
(5) The registrar's determination as to eligibility has effect but
only if given before the meeting concerned is due to be held.
Eligibility to vote on active membership resolutions
80M. (1) The only members of a society who are eligible to vote on an active membership resolution when the rules of the
society contain active membership provisions are those members
who at the time of the vote are active members of the society. (2) The only members of a society who are eligible to vote on an active membership resolution when the rules of the society do not contain active membership provisions are—
(a)
if the resolution concerns a chief primary object—those members who at the tirh'e of the vote would (if the resolution were given effect to) be active members of the society in relation to that chief primary object; or
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(b)
if the resolution does not concern a chief primary object— those members who at the time of the vote would be active members of the society if any active membership resolution concerning a chief primary object already passed at the meeting had taken effect as soon as it was passed.
Eligibility of directors to vote at board meetings
80N. At a meeting of the board of a society, a director is not
eligible to vote on a proposal to submit an active membership
resolution to a meeting of the society unless—
(a)
the director will be eligible to vote on the resolution at a meeting of the society; or
(b)
less than 2 directors of the society (whether or not they are present at the meeting of the board) will be eligible to vote on the resolution at a meeting of the society.
Consideration of active membership resolutions
80o. (1) At a meeting of a society, proposed active membership resolutions shall be considered in the following order:
(a) a resolution proposed by the board shall be considered
before any other resolution; (b) subject to paragraph (a), a resolution shall be considered before another resolution proposed after it for consideration at the meeting.
(2) If a proposed active membership resolution which concerns a proposed or current chief primary object of the society is passed at a meeting of the society, any other proposed active membership resolution for consideration at the meeting fails if—
(a)
it concerns a proposed or current chief primary object of the society; and
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(b)
it would make provision which would conflict or overlap with provision to be made by the resolution already passed.
Other entitlements etc. of members
80P. A provision of this Division which renders a member of a society ineligible to vote on a resolution does not affect any other right, entitlement, obligation or duty of the member as a member.
DIVISION 4—Forfeiture of shares etc.—inactive members
Forfeiture of shares
80Q. (1) The board of a society with limited liability shall declare to be forfeited the shares of a member if—
(a)
the whereabouts of the member are not presently known to the society and have not been known to the society for a continuous period of at least 2 years before that time; or
(b)
the member is not presently an active member of the society and has not been an active member of the society at any time during the past 2 years immediately before that time.
(2) This section applies to a member only if he or she was a
member of the society throughout the 2 year period in question.
(3) The question of whether a member was an active member at a particular time in the past shall be determined as if the active
membership provisions concerned had been in force at that time.
(4) The board's declaration under this section has the effect of forfeiting the shares concerned.
Order of Minister against forfeiture 80R. (1) The Minister may, if satisfied in a particular case after consultation with the Advisory Council that the forfeiture of shares under this section was or would be unreasonable, direct by order in writing that the shares should not have been forfeited or should not be forfeited.
, 2 3 • i Act No. 118
Co-operation (Further Amendment) 1987
SCHEDULE I—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(2) While such an order is in force—
(a) the shares concerned are not required to be forfeited; and
(b) the person who was the holder of any forfeited shares concerned is entitled to be reinstated as a member of the society with all the rights and entitlements attaching to or arising from the former membership.
(3) Reinstatement of a member under this section shall be effected in accordance with the directions of the Minister.
Deferral of forfeiture by board
80s. The board of a society is entitled to defer forfeiture of a member's shares for up to one year (or such other period as may be prescribed) if—
(a) the board thinks that during that period an active membership resolution may be put to the members of the society; and (b) the effect of the resolution would be relevant to the question of whether the member is an active member.
Special provisions—knowledge of societies before commencement of provisions
80T. (1) The registrar may by order in writing direct that a society is not required tQ forfeit the shares of a member—
(a)
on the ground specified in section 80Q (1) (a)—if the
registrar is satisfied that it is not reasonably practicable for the society to determine for how long before the commencement of this section a member's whereabouts have not been known to the society; or
(b)
on the ground specified in section 80Q (1) (b)—if the registrar is satisfied that it is not reasonably practicable for the society to determine for how long before the commencement of this section a member has not been an active member of the society.
Co-operation (Further Amendment) 1987
SCHEDULE 1—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(2) Any such direction has effect for the period specified by the registrar which—
(a)
shall not be longer than 3 months except after consultation with the Advisory Council; and
(b) in any case shall not be longer than 2 years.
Forfeiture prohibited in certain circumstances
80u. Unless the regulations otherwise provide, the board of a society shall not declare shares of a member to be forfeited under this section—
(a) if the society is under official management;
(b)
if a compromise or an arrangement is being administered in respect of the society;
(c) if the society is in the course of being wound-up;
(d)
if an appointment of a receiver of any property of the society is in force;
(e)
if the society has, for the purposes of being registered as a company under the Companies (New South Wales) Code, filed with the registrar a copy of the entry made in the minute book of the society under section 79A (5); or
(f) in such other circumstances as may be prescribed.
Notice of intention to forfeit shares 80v. (1) The board of a society shall ensure that not less than one month's notice of its intention to declare the shares of a member to be forfeited is given to the member—
(a) by notice in writing sent to the member by post; or
(b)
where the member's whereabouts are unknown to the society, by notice published in a newspaper circulating in the district in which the registered office of the society is situated.
25 Act No. 118
Co-operation (Further Amendment) 1987
SCHEDULE {—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(2) No notice is required to be given under this section where the member's whereabouts are unknown to the society and the amount subscribed in respect of the shares to be forfeited does not exceed $50.
Failure to forfeit shares—offence by directors
80w. If the board of a society fails to declare the shares of a member to be forfeited as required by this Division, a director of the society who did not use all due diligence to prevent that failure is guilty of an offence and liable to a penalty not exceeding $1,000.
Repayment of amounts due in respect of forfeited shares
80x. (1) If the shares of a member of a society are forfeited under this Division, the society shall, within 12 months after the date of forfeiture—
(a)
repay to the former member the amount paid up in respect of the forfeited shares; or
(b)
if the board is of the ^pinion that repayment would adversely affect the financial position of the society—apply that amount as a deposit by the former member with the society or allot debentures of the society to the former member in satisfaction of that amount.
(2) If the former member is subsequently readmitted to shall, at the request of the member, be applied towards the cost
membership, any amount held by the society under this section
of subscription for share capital. Interest on and repayment of deposits and debentures 80Y. (1) A deposit or debenture to which an amount due to a former member in respect of forfeited shares is transferred under this Division bears interest during any period—
(a)
at the rate (or, where there is more than one rate, at the higher or highest rate) of dividend payable in respect of that period on the share capital of the society; or
Co-operation (Further Amendment) 1987
SCHEDULE 1—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(b) where the rate of dividend payable in respect of that period has not been determined—at the rate (or the higher or highest rate) payable in respect of the immediately preceding period for which a rate has been determined.
(2) Such a deposit or debenture shall be repaid to the former member as soon as repayment would not, in the opinion of the board, adversely affect the financial position of the society.
(3) Such a deposit or debenture shall in any case be repaid within 10 years (or within such shorter period as the rules of the society may require) after forfeiture of the member's shares.
(4) The Advisory Council may extend the period for repayment under subsection (3) if satisfied that repayment of the amount within that period would cause the society financial hardship.
(5) An extension of a period by the Advisory Council shall be for such period as it considers reasonable and may be given subject to conditions.
(6) The period for repayment is extended accordingly, so long
as the society complies with any conditions to which the extension
is subject.Eligibility to vote—active membership
80z. (1) A member of a society is not entitled to vote at a meeting of the society unless he or she is an active member of the society.
27 Act No. 118
Co-operation (Further Amendment) 1987
SCHEDULE X—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(2) This section does not operate until the rules of the society contain active membership provisions.
Register of forfeited shares
80AA. A society shall keep a register, in the prescribed form,
specifying the prescribed particulars of shareholders whose shares
have been forfeited under this Division.
Unclaimed Money Act 1982
80AB. The Unclaimed Money Act 1982 does not operate to require money to be paid to the Treasurer under section 6 of that Act before the money is required to be repaid to a former member of a society under this Division.
(10) Section 82 (Rules)—
Section 82 ( l ) (d l )— After section 82 (1) (d), insert:
(d 1) active membership provisions (within the meaning of Part III A) except in the case of a building society or an association the majority of the component societies of which are building societies;
(11) Section 84 (Board of directors)—
(a) Section 84 (7) (b) (i)— After "that society", insert "(being a member whose shares are not required to be forfeited under Part IIIA—active membership)".
Co-operation (Further Amendment) 1987
SCHEDULE {—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(b) Section 84 (11) (e)—
After section 84 (11) (d), insert:
(e)
if the shares of the director are required to be forfeited under Part IIIA (active membership);
(c) Section 84 ( 1 4 ) - ( 1 4 B ) — Omit section 84 (14), insert instead:
(14) A casual vacancy on the board of a society (other than a building society), being a vacancy under subsection (11), shall be filled by election by the members held—
(a) at a general meeting of the society;
(b) by means of a postal ballot; or
(c) in the manner specified in the rules of the society for the ordinary election of directors.
(14A) If at any time the number of directors of a society (other
than a building society) is the same as or less than the number of
directors required to constitute a quorum of the board—
(a) the board may appoint sufficient directors so that the number of directors is one more than a quorum; and (b) for the purpose only of enabling the board to make such an appointment, the number of directors required to constitute a quorum shall be the number of directors at
that time.
(14B) A casual vacancy on the board of a building society shall be filled as prescribed by the rules of the society.
(12) Section 85 (Meetings of the society)—
Section 85 (4)—
After section 85 (3), insert:(4) At any meeting of the society, a member whose shares are required to be forfeited under Part IIIA (active membership) is not entitled to be present.
29 Act No. 118
Co-operation (Further Amendment) 1987
SCHEDULE 1— continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(13) Section 86 (Votes of members)—
(a) Section 86 (3)-(7)—
Omit the subsections, insert instead:(3) If a merriber of a society has a relevant interest (as defined for the purposes of section 47B) in any shares held by another member or other rnembers of the society, of the member and the other member or q|Ther members only one shall have a vote.
(4) Of those merribers, the one who has the vote is—
(a) the member nominated by those members for the purpose; or (b) in the absence of such a nomination, the member whose name appears first in the register of members.
(5) A member who is thereby not entitled to vote may apply to the Advisory Council for a review of the matter.
(6) The Advisory Council may order that the member is entitled to vote if it is satisfied in the circumstances of the case that loss of the right to vote would be unjust or unreasonable.
(7) The order of the Advisory Council has effect accordingly.
(b) Section 86 (8A), (8B)—
After section 86 (8), insert: (8A) If the sha/es of a member «re required to be forfeited under Part IIIA (jctive membership), the member is not entitled to vote and any vote cast by or on behalf of the member when not entitled to vole shall be disregarded.
(8B) If a member has sold or transferred, or disposed of the beneficial interest in, his or her shares, or agreed to do any of those things, the member is not entitled to vote and any vote cast by or on behalf of the member when not entitled to vote shall be disregarded.
Co-operation (Further Amendment) 1987
SCHEDULE 1—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(14) Section 92 (Winding-up)—
(a) Section 92 (3) (gl)—
After section 92 (3) (g), insert:(gl) that the board of the society has, after notice from the registrar, failed to ensure that the rules of the society contain active membership provisions in accordance with Part IIIA;
(b) Section 92 (7)-(7AB)— Omit section 92 (7), insert instead: (7) If a society is not a co-operative housing society, a non- terminating building society or a society mentioned in the Second Schedule, it may be wound-up voluntarily only by a creditors' voluntary winding-up or if—
(a) at a postal ballot of the members held in the prescribed manner and in accordance with section 79A at least three- quarters of the formal votes cast are in favour; (b) the Minister, after consideration of the matter by the Advisory Council under section 79B, approves of the voluntary winding-up of the society; and (c) the rules of the society contain active membership provisions or steps have been taken, as required by the Advisory Council, to determine the preferences of active
members.
(7AA) The Minister may, by order in writing, exempt a society
or class of societies from compliance with all or specified
provisions of subsection (7) and section 79A.
(7AB) A voluntary winding-up of a society pursuant to any such postal ballot shall be deemed to commence at the time the secretary of the society makes the entry in the minute book of the society under section 79A (6).
(c) Section 92 (7A)—
Omit "subsection (7)", insert instead "section 79A".31 Act No. 118
Co-operation (Further Amendment) 1987
SCHEDULE 1—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(d) Section 92 (7B)—
Omit "subsection (7) (c)", insert instead "section 79A (6)".
| (15) Section | 9 3 A — |
After section 92c, insert:
Liability of member to contribute in a winding-up where shares forfeited etc.
93A. (1) If a person ceases to be a member of a society within 2 years before the commencement of the winding-up of the society because the person's shares were cancelled under Part IIIA (active membership), the person is liable on the winding-up to contribute to the property of the society the nominal value of the cancelled shares immediately before their cancellation.
(2) If under section 52 a society (other than a building society)—
(a) purchases any share of a member in the society; or
(b)
repays to a member the whole or any part of the amount paid up on any share held by a member,
within 2 years before the commencement of the winding-up of the society, the member or former member is liable on the winding- up to contribute to the property of the society the amount which was paid by the society to the member or former member in respect of the purchase or repayment together with any amount
unpaid on those shares immediately before the purchase or
repayment.
(3) If, pursuant to a liability under subsection (1) or (2), a person contributes to the property of a society on a winding-up of the society, the amount contributed shall, for the purposes of the winding-up, be treated as having been paid up by the person on shares of the society.
(4) The liability of a member or former member of a society under this section is in addition to any other liability of the member or former member to contribute to the property of the society on a winding-up of the society.
Co-operation (Further Amendment) 1987
SCHEDULE I—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(16) Section 123A—
After section 123, insert:
Savings and transitional provisions—amending Acts
123A. The Fifth Schedule has effect.
(17) Fifth Schedule-
After the Fourth Schedule, insert:
FIFTH SCHEDULE
(Sec. 123A)
SAVINGS AND TRANSITIONAL PROVISIONS
Co-operation (Further Amendment) Act 1987
Representation of body corporate members
1. Section 46 (7AA), as repealed and re-enacted by the Co-operation (Further Amendment) Act 1987—
(a)
applies in respect of an appointment to represent a body corporate even if the appointment was made before that repeal and re-enactment; and
(b)
does not prevent a person appointed to represent a non-terminating building society or a society mentioned in the Second Schedule from representing that society so long as the appointment was made before the commencement of the Co-operation and Other Acts (Amendment) Act 1973.
Registration as a company 2. (I) On and from 12 May 1987, a society cannot apply to be registered as a company under the Companies (New South Wales) Code unless it complies with the provisions of section 70 of this Act as amended by the Co-operation (Further Amendment) Act 1987.
(2) For the purposes of the application of section 70 to a society, the amendments effected by the Co-operation (Further Amendment) Act 1987 shall be deemed to have commenced on 12 May 1987.
(3) This clause applies to a society even if before 12 May 1987 the society determined by special resolution that the society shall apply to be registered as a company under the Companies (New South Wales) Code.
33 Act No. 118
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SCHEDULE l—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
*
Regulations—special postal ballots
3. A regulation in force for the purposes of section 64, 70 or 92 immediately before the commencement of this clause shall, on that commencement, be deemed to have been made under this Act as amended by the Co-operation (Further Amendment) Act 1987.
Qualifications for memberships—likelihood of active membership
4. Section 38 (7) does not apply to a society until the rules of the society
contain active membership provisions in accordance with Part IIIA.
Entitlement to more than one vote
5. If, immediately before the commencement of Schedule 1 (13) to the Co- operation (Further Amendment) Act 1987, a member of a society was entitled to more than one vote, that entitlement of the member continues (notwithstanding the amendment of section 86 by that Act) until—
(a) 12 months after the commencement of this clause; or
(b) the rules of the society first contain active membership provisions,
whichever is sooner.
Liability on winding-up6. Section 93A (2) does not apply to a member if the purchase of the share of the member or the repayment of an amount paid up on the share of the member occurred before the commencement of that subsection.
Regulations
7. (1) The Governor may make regulations containing other provisions of
a savings or transitional nature consequent on the enactment of the Co-
operation (Further Amendment) Act 1987. (2) A provision made under subclause (1) may take effect as from the date of assent to that Act or a later date. (3) To the extent to which a provision referred to in subclause (1) takes effect from a date that is earlier than the date of its publication in the Gazette, the provision does not operate so as—
(a)
to affect, in a manner prejudicial to any person (other than the State or an authority of the State), the rights of that person existing before the date of its publication in the Gazette; or
(b)
to impose liabilities on any person (other than the State or an authority of the State) in respect of anything done or omitted to be done before the date of its publication in the Gazette.
Co-operation (Further Amendment) 1987
SCHEDULE {—continued
AMENDMENTS TO THE CO-OPERATION ACT 1923—continued
(4) A provision made under subclause (1) shall, if the regulations expressly so provide, have effect notwithstanding the other clauses of this Schedule.
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