Osborne v First Credit Union - [2017] NZHC 2806

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA
TE WHANGANUI-Ā-TARA ROHE

CIV-2016-485-989 [2017] NZHC 2806

IN THE MATTER
of an appeal under s 151 of the Friendly

Societies and Credit Unions Act 1982

BETWEEN

WYN OSBORNE, CRAIG GOLD AND BRUCE BHIKHU BHANA AS TRUSTEES, FOR THE TIME BEING, OF THE NEW ZEALAND ASSOCIATION OF CREDIT UNIONS Appellants

AND

FIRST CREDIT UNION Intervener

Hearing: 16 October 2017

Counsel:

D J Friar and B J Ward for Appellants
D M Hughes and J V R James for Intervener
H B Rennie QC for Registrar of Friendly Societies and Credit
Unions, assisting the Court

Judgment:

16 November 2017

JUDGMENT OF THOMAS J

Table of contents

Introduction ............................................................................................................. [1] Background.............................................................................................................. [5] Member and business services ............................................................................ [12] The Rules ............................................................................................................... [15] Evidence ................................................................................................................. [17]
Benefits to members from provision of services to associates and
third parties ......................................................................................................... [24] NZACU Rules ...................................................................................................... [32] Proposed legislative change................................................................................ [34] Complaints to the Registrar ................................................................................ [35]

RE NEW ZEALAND ASSOCIATION OF CREDIT UNIONS [2017] NZHC 2806 [16 November 2017]

Can NZACU provide “business” services to anybody other than
its members? .......................................................................................................... [38]
Objects and powers ............................................................................................. [45] Section 143 .......................................................................................................... [54] The meaning of “incidental” .............................................................................. [76] Conclusion .......................................................................................................... [82] Result ...................................................................................................................... [84]

Introduction

[1] Since 1994, the New Zealand Association of Credit Unions (NZACU)1 has had its rules (the Rules) approved by the Registrar of Friendly Societies and Credit Unions (the Registrar) allowing it to provide services to associate members and, since 2003, to third parties.2

[2] The Registrar’s approval of the Rules is required pursuant to the Friendly Societies and Credit Unions Act 1982 (the Act).3 Following complaints made by two of its (now former) members, Westforce Credit Union (Westforce) and First Credit Union (FCU), the Registrar determined by decision dated 18 November 2016 (the Decision) that the Rules allowing associate members to purchase NZACU business services, and allowing NZACU to provide them, were inconsistent with the Act and
therefore invalid. An associate member is an organisation which, in the opinion of the Board of NZACU, shares a community of interest with the aims and aspirations of the credit union group.4

[3] NZACU has appealed the Decision.5 The Registrar, while not a respondent, has filed a notice of appearance and a report to the Court. Westforce was given leave to file an appeal, but subsequently abandoned it. It filed evidence in this appeal confirming it disagrees with the Decision but was not represented at the hearing. FCU was given leave to intervene.6 It filed affidavit evidence and was represented at
the hearing.

1      Originally called the New Zealand Credit Union League, later the New Zealand Association of
Credit Unions and currently trades as Co-op Money NZ.
2      New Zealand Association of Credit Unions Rules 2003, r 6.1(o).
3      Section 146.
4      New Zealand Association of Credit Unions Rules1994, r 6.1; and New Zealand Association of
Credit Unions Rules 2012, r 20.3(a).
5      Section 151.
6      Bleakley v…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Osborne v First Credit Union and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2017] NZHC 2806
Decision Date: 16 November 2017

CaseChat Overview and Summary

Osborne v First Credit Union involved an appeal by the New Zealand Association of Credit Unions (NZACU) against a decision by the Registrar of Friendly Societies and Credit Unions, which found that NZACU's rules allowing it to provide business services to associate members and third parties were inconsistent with the Friendly Societies and Credit Unions Act 1982. The central issue was whether the Registrar was correct in deciding that the rules were inconsistent with the Act and therefore invalid. The appeal was heard in the High Court of New Zealand, Wellington Registry.

The court examined whether the Registrar's interpretation of the Act was correct, particularly focusing on Section 143, which outlines the objects of an association, and Section 101(2), which specifies that an association has no power to do anything not directly in pursuance of its objects or incidental to them, and authorised by its rules or the Act. The court concluded that the Registrar's decision was flawed as it misinterpreted the Act by treating the objects listed in Section 143(4) as exclusive rather than supplementary. The court held that NZACU could provide services to associate members and third parties if doing so was directly in pursuance of its objects or incidental to them, as per Section 101(2).

The court also addressed the interpretation of "incidental" powers, noting that a liberal approach should be taken when determining what can be considered incidental to the express powers. The court found that the provision of business services to associates was within NZACU's powers if it promoted the interests of its members or was incidental to its objects.

The court concluded that the Registrar's decision was incorrect, and the appeal was allowed. The Decision was reversed, and the rules allowing NZACU to provide business services to associate members and third parties were upheld. Costs were reserved for later determination.

Orders