Central Staff Collective Incorporated

[2022] NZHC 1470

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-000108

[2022] NZHC 1470

UNDER	the Declaratory Judgments Act 1908 and the Incorporated Societies Act 1908
IN THE MATTER	of an application by THE CENTRAL STAFF COLLECTIVE INCORPORATED

Hearing:	On the papers
Counsel:	A M Hutton for the Applicant
Judgment:	22 June 2022

JUDGMENT OF NATION J

Introduction

[1]    The applicant, the Central Staff Collective Incorporated (the Collective), is an incorporated society formed to represent the employees of Fulton Hogan Ltd. Through a statement of claim, the Collective seeks declarations under the Declaratory Judgments Act 1908 declaring that the reference to “Fulton Hogan (Central) Limited” in a previous iteration of the Collective’s rules is to be interpreted as a reference to “Fulton Hogan Limited”, and that the amendments made to the rules registered on 2 November 2011 were validly registered.

[2]    The Collective also filed a without notice application for directions as to service.

Re The Central Staff Collective Inc [2022] NZHC 1470 (22 June 2022)

Background

[3]    The Collective was first registered on 28 June 2001 under the Incorporated Societies Act 1908 as “the Fulton Hogan Central Collective Incorporated”. The genesis of the Collective was prior to this date. Employees of Fulton Hogan formed a union and their own collective when negotiating with their employer in Christchurch. The intention was to be able to levy employees so, in the event of industrial action, the employees would not be unfairly disadvantaged. The Collective was formally registered as a union under the Employment Relations Act 2000 on 6 July 2001. The Collective’s name was changed to “the Central Staff Collective Incorporated” on 10 July 2001.

[4]Rule 4.1 of the Collective’s rules originally read:

Any new or current employee of Fulton Hogan Central Limited may apply to join the Collective by writing to the Secretary of the Collective at any time[.]

[5]    Fulton Hogan Central Ltd was a limited liability company incorporated under the Companies Act 1955. It was removed from the Companies Register on 31 March 1995. At that time, the Fulton Hogan group of companies was undergoing a reorganisation. A number of companies, including Fulton Hogan Central Ltd, were amalgamated into Fulton Hogan Holdings Ltd, now Fulton Hogan Ltd on 31 March 1995.

[6]    Therefore, at the time the Collective was registered, there was no company operating under the name “Fulton Hogan Central Limited”. The members of the Collective carried on as if the rules referred to Fulton Hogan Ltd, their employer. The issue of the rules referring to Fulton Hogan Central Ltd then came to light. There were concerns that under the rules people could only become members if they were employees of a non-existent company. As a result, the Collective’s members voted to change the rules. One of the changes was to amend r 4.1 to read:

Any new or current employee of Fulton Hogan Limited whose place of employment with the Company is within the Central Otago and, Southern Lakes and West Coast Regions may apply to joint join the Collective by writing to the Secretary of the Collective at any time[.]

[Emphasis in original]

[7]    The other changes included: changing the registered address of the Collective; new provisions for the termination of membership, nomination of committee members, and voting methods; and amending rules about who presides over meetings when the chairperson is missing, filling casual vacancies on the executive, the notice required for meetings and alterations to rules; and the numbering of rules. These changes were registered on 2 November 2011.

[8]    However, there remains a concern that if the members of the Collective who voted to change the rules were not validly members, the vote to change the rules would not have been valid.

[9]    With those concerns, Collective, through their solicitor, filed the application in this Court to declare:

(a)        that the reference to “Fulton Hogan (Central) Limited” in the first iteration of the rules is and was to be interpreted as including “Fulton Hogan Limited”; and

(b)        that the amendments made to the rules registered on 2 November 2011 were validly registered.

[10]   Section 21(3) of the Incorporated Societies Act 1908 provides that the registration of the amendments is conclusive evidence that all conditions precedent to making the amendments have been fulfilled. However, s 21(3A) provides that, notwithstanding s 21(3), upon application by any member of the society, the court may declare the amendments void if it is satisfied that any condition precedent has not been fulfilled. The executive of the Collective seeks these declarations to validate the Collective’s past actions and so they can change the rules to make the rules flexible enough to accommodate the company employing the members changing its name or structure.

[11]   In a memorandum supporting the application, the Collective’s solicitor referred to both the Incorporated Societies Act 1908 and the Incorporated Societies Act 2022. The latter statute however has not yet fully come into force. Only one section is in force, it relates to the power to make regulations. The solicitor referred, in her

submissions, to s 35 of the Incorporated Societies Act 2022 in seeking validation of the rule changes. I have considered the application in terms of the Declaratory Judgments Act because s 35 refers to the court’s ability to change the constitution of an incorporated society. However, as to that, the 2022 Act is not yet in force.

[12]   On 17 May 2021, Associate Judge Paulsen issued a minute with directions as to how members or former members of the Collective were to be given notice of the proceedings. I am satisfied, from affidavits sworn by the secretary/treasurer of the Collective, that those directions have been complied with and members or former members have been given notice of the proceedings.

[13]   The Collective currently has approximately 150 members who are employed throughout Otago. Current members of the Collective work in three physical offices in Otago, being in Cromwell, Frankton and Ranfurly. Notices of the proceedings have been placed in the offices in Cromwell, Frankton and Ranfurly, and in the lunchroom in Alexandra. Notices have also been placed in the Southland Times, the Otago Daily Times and the News Central Otago. The proceedings were discussed at the annual general meeting and a copy of the notice was emailed to each member when arranging that meeting.

[14]   No such person has given notice of their wish to be heard in the proceedings. It is thus appropriate to deal with the Collective’s application on the papers.

The declarations

[15]   Under s 3 of the Declaratory Judgments Act, the Court has the power to determine any question as to the construction or validity of any memorandum, articles of association or instrument prescribing the powers of a body corporate where any person has done or desires to do any act where the validity or effect of which depends on the construction or validity of that instrument or where the person is in any other manner interested in the construction or validity of that instrument.1 This is clearly the case here.

1      Section 10 of the Incorporated Societies Act 1908 provides that incorporated societies are bodies corporate upon incorporation.

[16]   This Court has previously dealt with a similar issue that arose through the change to Fulton Hogan Ltd’s company structure. The Fulton Hogan (Canterbury) Collective Benevolent Organisation incorrectly referred to “Fulton Hogan (Canterbury) Limited” in their rules. The Registrar of Friendly Societies took the view that this meant they had no members, as that company did not exist. Their application to dissolve the society was therefore declined.

[17]   French J in Re: The Fulton Hogan (Canterbury) Collective Benevolent Organisation Registry No 43-846 issued a declaration under the Declaratory Judgments Act that reference in the society’s rules to “Fulton Hogan (Canterbury) Limited” could be interpreted as “Fulton Hogan Limited” for the purposes of enabling the members of the society to vote upon its dissolution and disposal of its assets.2 Her Honour in that case said, applying the principles in Social Tonics Association of New Zealand Inc v Manukau City Council:3

[18]    In interpreting the rules, the Court is entitled to look at the factual matrix and should adopt a commonsense purposive approach that gives meaning to the rules. The parties cannot be taken to have intended a nullity.

[19]    In my view, the reference to Fulton Hogan (Canterbury) Limited was clearly intended to be a reference to that company or its successors, in other words it was a reference to the relevant employing entity.

[18]      I agree with her Honour and the same can be said of the case here. There will accordingly be a declaration to this effect.

[19]      The second declaration sought is that the rules registered on 2 November 2011 were validly registered. Given the interpretation of “Fulton Hogan (Central) Limited” as meaning a reference to that company or its successors, including Fulton Hogan Ltd, the members who voted on the rules were validly members of the Collective at that time. This declaration will also therefore be granted.

2      Re: The Fulton Hogan (Canterbury) Collective Benevolent Organisation Registry No 43-846 HC Christchurch CIV-2009-409-2745, 13 July 2010.

3      Re: The Fulton Hogan (Canterbury) Collective Benevolent Organisation Registry No 43-846, above n 2, citing Social Tonics Association of New Zealand Inc v Manukau City Council HC Auckland CIV-2007-404-5613, 20 December 2007.

Conclusion

[20]Declarations are made to the effect that:

(a)        the words “Fulton Hogan (Central) Limited” as they appeared in r 4.1 of the rules of the Central Staff Collective Incorporated are to be interpreted as including “Fulton Hogan Limited”; and

(b)        the amended rules registered on 2 November 2011 were not invalidly registered due to members being employees of Fulton Hogan Limited and not Fulton Hogan (Central) Limited.

[21]There are no issues as to costs.

Solicitors:

Trollope & Co., Christchurch.