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CO-OPERATIVES BILL 1992
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
The objects of this Bill are to remove certain co-operative societies from the
operation of the Co-operation Act 1923 ("the 1923 Act") and to provide for their
regulation, and the establishment of similar societies, under a new Act. The 1923 Act
will continue to deal with co-operative housing societies, Starr-Bowkett Societies,
non-terminating building societies and several existing societies specified in Schedule 2
to that Act. Under the new Act co-operative societies will be known simply as
co-operatives.
The new Act provides for the following:
the formation and incorporation of co-operatives (including associations of
co-operatives and federations of associations) and the registration of foreign
co-operatives;
the legal capacity, status and powers of co-operatives;
membership (including becoming a member, the rights and liabilities of members
and disputes involving members);
rules (including their alteration and the prescription of a set of "model rules");
requiring members to be "active";
shares (including the issue of shares, disclosure of beneficial and non-beneficial
interests in shares, transfer procedure and the repurchase of shares);
voting (including the rights of members to vote, the manner
which resolutions
are passed and the holding of meetings);
management and administration of co-operatives (including the board of
directors, the duties and liabilities of directors and officers, the keeping and
auditing of accounts, and registers, records and returns);
the power of co-operatives to raise money (including by the issue of CCU's
(co-operative capital units)) and the registration of charges over property, the
disposal of surpluses and the regulation of major transactions;
· restrictions on the acquisition of share and voting interests in co-operatives;
· amalgamations, transfers of engagements, transfers of incorporation, winding up,
official management, appointment of an administrator, arrangements and
reconstructions;
· supervision and inspection of co-operatives and the holding of inquiries into
co-operatives;
· administrative arrangements (including the powers of the Registrar and the
Co-operatives Council).
The new Act is divided into Parts and Divisions as follows:
PART 1--PRELIMINARY
The Part deals with preliminary matters including a statement of objects of the
proposed Act and the definition of relevant terms.
A number of co-operative principles are set out and explained relating to:
voluntary association and open membership
democratic control
limited interest on capital
equitable division of surplus
co-operative education
co-operation among co-operatives.
PART 2--FORMATION OF CO-OPERATIVES
Division l--Incorporation of co-operatives
The Division provides for the Registrar to register a co-operative on application
being made after a formation meeting is held at which rules for the proposed
co-operative are approved and the first directors elected. A disclosure statement
submitted and approved by the Registrar prior to the meeting must be presented to the
meeting. The Registrar may register the co-operative or refer an application for
registration to the Co-operatives Council.
A certificate of incorporation is issued on registration.
An offence is created of taking money for the allotment of a share or interest in a
proposed co-operative before registration (maximum penalty: 10 penalty units).
Division 2--Associations of co-operatives and federations of associations
An association of co-operatives having 2 or more co-operatives as members may be
registered. If the association has 50 or more members, a body which is incorporated
under any other law (whether or not of the State) may be admitted as a member if it
functions in accordance with co-operative principles. A federation of associations may
be registered.
Division 3--Foreign co-operatives
The legal personality of a foreign co-operative within the State is recognised (in
particular its power to hold land within the State is recognised).
A foreign co-operative is required to be registered under the proposed Act and to
comply with certain conditions if it solicits within the State for members, provides
certain services to members resident in the State or carries on business in the State.
Division 4--Company becoming co-operative
The Division enables a company under the Corporations Law to be registered as a
co-operative if it will function in accordance with co-operative principles.
PART 3--LEGAL CAPACITY, POWERS ETC.
Division 1--General powers
The Division sets out the general powers which a co-operative has as a body
corporate.
Division 2--Doctrine of ultra vires abolished
A co-operative has the legal capacity of a natural person and its powers are not
limited by any restrictions contained in its rules. However, although a restriction
contained in the rules does not invalidate any act of a co-operative, contravention of the
rules is relevant in various proceedings (for example for offences against the Act, for the
obtaining of various orders against a co-operative relating to oppressive conduct of
affairs by the co-operative or for the winding up of the co-operative).
Division 3--Persons having dealings with co-operatives
The Division lists the matters which a person having dealings with a co-operative or
with a person purporting to have acquired property from a co-operative is entitled to
assume regardless of assertions to the contrary. These include that the co-operative's
rules and the Act have been complied with, its officers duly appointed and its officers
and agents authorised to exercise appropriate powers. A person is not entitled to make
such an assumption if the person knows, or should know, that the assumption is
incorrect.
Division 4--Special powers of co-operatives
A co-operative may, with the approval of the Minister administering the Pharmacy
Act 1964, carry on the business of a pharmacist in not more than one open shop and
may engage in exclusive dealing in certain circumstances.
Division 5--Restrictions on powers
The Corporations Law does not apply to co-operatives, associations and federations
of associations except as provided by the proposed Act or by regulations under it. Some
provisions of the Corporations Law that will apply are specified in the Division.
Division 6--authentication and execution of documents and confirmation of
contracts
The Division sets out formal matters relating to the execution of contracts and other
documents by co-operatives and use of common or official seals.
Division 7--Ratification of contracts made before formation of co-operative
A contract which is executed by a person in the name of a co-operative that does not
exist or as agent or trustee for a proposed co-operative is referred to as a
pre-incorporation contract. Such a contract may be ratified by the co-operative when it is
formed provided it is done within a reasonable time after the contract was entered into.
The Division provides for the rights and liabilities of parties to such a contract when
ratification occurs and in the event that the contract is not ratified, and deals with other
matters relating to such contracts.
PART 4--MEMBERSHIP
Division 1--General
The persons who signed the application for registration of a co-operative become
members on its registration. Other persons (including bodies corporate if allowed by the
co-operative's rules) may become members as provided by those rules. Membership of
associations and federations is also dealt with.
Other matters dealt with by the Division include representation of corporate members
and circumstances in which a person's membership ceases.
If a co-operative carries on business for more than 1 month with fewer than the
minimum number of members allowed, each director of the co-operative who knew of
that fact is guilty of an offence.
Division 2--Rights and liabilities of members
A member of a co-operative is not, as a member, personally liable to creditors of the
co-operative or to the co-operative itself (except for amounts unpaid on shares held by
the member and for fees and charges payable in accordance with the co-operative's
rules).
The rules may require a member to have specified dealings with the co-operative and
to enter into a contract for that purpose with the co-operative (for example, to sell
products through or to the co-operative or to obtain supplies or services through or from
the co-operative).
A co-operative may impose a fine on a member for infringement of the rules of the
co-operative. The amount of the fine is not to exceed the maximum amount specified in
the rules.
A co-operative has a charge on the share or interest in the capital, credit balance,
dividends etc. of a member or past member in respect of debts due to the co-operative
by the member.
A member who is expelled from a co-operative is to be repaid the amount paid up on
shares held by the member (that amount is reduced in cases where the balance sheet of
the co-operative discloses a loss or deficiency).
Division 3--Death of member
The board of a co-operative is to transfer shares or interests of a deceased member in
the co-operative in accordance with the Division.
Division 4--Disputes involving members
Disputes between a member or past member and a co-operative are to be determined
in accordance with the rules of the co-operative. However, any party to the dispute may
refer the matter to the Registrar after any necessary arbitration required by the rules has
taken place. The Registrar or another person appointed by the Registrar may hear the
dispute, otherwise the matter is to be dealt with in accordance with the rules.
Determinations or orders made in accordance with the Division are binding on the
parties and without appeal and may be enforced in the District Court.
The Division does not extend to disputes as to the construction or effect of mortgages
or contracts (other than a contract contained in the rules of a co-operative).
Division 5--Oppressive conduct of affairs
The Division provides a procedure whereby the Registrar or a member of a
co-operative may apply to the Supreme Court for an order because the affairs of the
co-operative are being conducted in a manner that is oppressive or unfairly prejudicial to
or discriminatory against certain members or that is contrary to the interests of the
members as a whole. The Court has a wide choice of orders which it can make
including, for example, that the Registrar appoint an administrator of the co-operative or
that the co-operative be wound up.
PART 5--RULES
The rules of a co-operative constitute a contract between the co-operative and each
member, between the co-operative and each director, the co-operative and the principal
executive officer and secretary and between a member and each other member. Each of
those persons is required to observe the rules.
The rules are to contain certain specified matters and regulations may be made
prescribing model rules which will automatically apply and other model rules which
may be adopted by a co-operative.
The Part sets out the procedure for altering rules.
PART 6--ACTIVE MEMBERSHIP REQUIREMENTS
Division l--Definitions etc.
The Division explains certain concepts used in this Part.
A primary activity of a co-operative is an activity specified as such in the rules of the
co-operative.
An active member of a co-operative is one who maintains, with respect to the
carrying on of a primary activity of the co-operative, a relationship or arrangement with
the co-operative in a manner and to an extent provided by the rules or regulations as
sufficient to establish active membership.
Division 2--Rules to contain active membership provisions
A co-operative must have at least one primary activity and must include active
membership provisions in its rules. The Co-operatives Council can alter the rules of a
Division 3--Active membership resolutions
A proposed active membership resolution must be approved by the Registrar before
being passed at a meeting of a co-operative. An appeal may be made against refusal of
the Registrar to approve. Members must be given at least 21 days' notice of the proposal
and meeting.
Division 4--Cancellation of membership etc. of inactive members
The board of a co-operative is required to cancel the membership of a person whose
whereabouts have been unknown to the co-operative for 2 years or who is not an active
member and has not been an active member for 2 years. Shares in a co-operative held by
a member are to be declared forfeited at the same time that membership is cancelled.
The Co-operatives Council may override a decision to cancel membership if it thinks
the decision unreasonable.
The Division specifies certain circumstances in which membership cannot be
cancelled (for example, if the co-operative is under official management). It also
requires notice of cancellation to be given and provides for the repayment of amounts
due to a person whose membership is cancelled.
A register of members whose membership has been cancelled is to be kept by a
co-operative.
Division 5--Entitlements of former members
The Division applies to co-operatives with a share capital.
Circumstances are specified in which a person whose shares have been forfeited is to
continue to be treated as a shareholder. Those circumstances include the winding up or
merger of the co-operative within 5 years of the forfeiture of the shares. The Division
deals with the entitlements of such persons in those circumstances.
PART 7--SHARES
Division l--Preliminary
A co-operative is required to have a share capital unless it is not carried on for the
pecuniary gain of its members, in which case it need not have a share capital. The
Division allows a co-operative without a share capital to convert to one with a share
capital and one with a share capital to convert to one without a share capital.
Shares in a co-operative are personal property, are transferable and are capable of
devolution by will or operation of law subject to the rules of the co-operative.
Division 2--Issue of shares
The share capital will vary according to the nominal value of shares from time to
time subscribed. Shares are to be of a fixed amount specified in the rules and to be of
one class all ranking equally.
A member of a co-operative must subscribe for a minimum number of shares as
specified in the rules. No share (other than certain bonus shares) is to be allotted unless
one-tenth of the nominal value of the share has been paid up. No shares are to be issued
at a discount. Shares may be issued at a premium.
Shares may be held by 2 or more persons jointly if the rules allow.
The Division also deals with the payment of dividends on shares, the issue of shares
to active members for which the consideration is real or personal property, requirements
by a co-operative that members take up additional shares and the issue of bonus shares,
Division 3--Beneficial and non-beneficial interests in shares
The Division deals with transfer of shares held non-beneficially and the giving of
notice where a person changes from holding shares beneficially to non-beneficially or
from holding non-beneficially to beneficially. The register of members of a co-operative
is to indicate for each member the shares held beneficially and those held
non-beneficially.
Provision is made for registration of a trustee, executor or administrator of an estate
as the holder of shares in the case of death, incapacity or bankruptcy of the original
shareholder.
A co-operative may allow the register to be marked in a way which shows which
shares are held on trust.
Division 4--Sale etc. of shares
Transfers of shares in a co-operative are allowed only in accordance with the
Division (on death, incapacity, bankruptcy or with the consent of the board of the
co-operative to a person who will be an active member). A transfer does not take effect
until registered.
Division 5--Repurchase etc. of shares
A co-operative may subject to certain restrictions repurchase shares from a member
on request and may repay, with the member's consent, amounts paid up on shares if the
amounts are not needed by the co-operative for its activities.
Shares repurchased or forfeited are to be cancelled.
PART 8--VOTING
Division l--Voting entitlements
Each member of a co-operative has one vote only. The right to vote is personal to the
member and is not attached to or conferred by any share in the co-operative. Joint
members have only one vote between them.
The rules of a co-operative may not restrict the voting rights of members except as
provided by the proposed Act. The Division specifies various cases in which voting
rights may be restricted.
The Division places restrictions on the voting rights of a member who holds shares in
which another person has a relevant interest.
Proxy voting at meetings is permissible only if allowed by the rules.
Other cases in which voting is restricted include certain circumstances where the
member owes money to the co-operative, where the member is not an active member,
where the member has transferred or sold the beneficial interest in shares of the
co-operative held by the member or where the member has a power of attorney for more
than one member of the co-operative.
Division 2--Resolutions
The Division deals with how decisions are to be made by a co-operative (that is, by
ordinary or special resolution) and explains what is meant by an ordinary or special
resolution.
Provision is made for the holding of postal ballots in certain circumstances.
Notice must be circulated of proposed resolutions on requisition by at least 10
members or of members who together can cast at least 5% of the votes able to be cast at
a meeting. Certain restrictions are imposed to safeguard against the abuse of this
provision.
Division 3--Meetings
The Division relates to the holding of meetings, quorum for meetings, procedure at
meetings and minutes of meetings of co-operatives.
PART 9--MANAGEMENT AND ADMINISTRATION OF CO-OPERATIVES
Division l--The Board
The business and operations of a co-operative are to be managed by a board of
directors who are to be elected in accordance with the rules of the co-operative.
A director (other than a director of an association or federation) has to be an active
member, or hold qualifications in accordance with the rules or, in specified
circumstances, may be an employee even though not a member. A director of an
association or federation has to be a member of a component co-operative of the
association or of a component co-operative of an association which is a member of the
federation or be otherwise qualified by the rules to be a director.
The Division also deals with meetings of the board, transaction of business, filling of
vacancies on the board, delegations by the board, removal of directors from the board
and vacation of office by directors.
The Minister may appoint a director of a co-operative which is indebted to the Crown
in respect of a loan or grant of money.
Division 2--Duties and liabilities of directors, officers and employees
The duties and responsibilities of officers of co-operatives are set out in the Division.
A co-operative must maintain insurance against loss or fraud arising from actions of
officers and employees.
Division 3--Restrictions on directors and officers
Directors are to be paid only such fees as are approved at a general meeting of the
co-operative (and that amount must not exceed the maximum amount set by the rules of
the co-operative). Certain persons are not to hold the position of director (for example
persons who are insolvent or have been convicted of certain offences within the past 5
years).
A co-operative is not to make a loan to or give a guarantee to or provide security in
connection with a loan to a director or a person associated in a specified way with a
director.
A director of a co-operative with the primary activity of acquiring land to settle or
retain people on the land must not sell land to the co-operative except in accordance
with a special resolution of the co-operative.
Division 4--Directors' interests in contracts etc.
The Division requires the discIosure by directors of certain interests in contracts or
proposed contracts involving the co-operative. Interests which a director has which
might create a conflict of interest situation are to be declared at meetings of the directors
and recorded in the minutes.
It is an offence for a director to contravene the Division (maximum penalty: 50
penalty units or imprisonment for 2 years, or both).
A director must not vote on any matter in which the director has a pecuniary interest.
Division 5--Accounts and audit
A requirement is imposed for the keeping and auditing of accounts and records by
co-operatives in accordance with the regulations. The Registrar may exempt a
co-operative from any of those requirements.
Auditors have qualified privilege in proceedings for defamation in respect of
statements made, and notices and other documents sent to the Registrar, in the c o m e of
the auditing of a co-operative.
The rules of a co-operative will provide for the financial year of the co-operative.
Division 6--Registers, records and returns
Registers are to be kept by co-operatives indicating the members, directors and
shares, loans to or from the co-operative, fixed assets of the co-operative and other
specified matters. Any member or creditor can inspect the accounts of the co-operative
and subsidiaries of the co-operative and rules and records of the co-operative.
Division 7--Name and registered office
The Division specifies requirements with respect to the name and use of the name of
a co-operative and gives the procedure for changing the name. The name must include
the words "Co-operative" and "Limited" or abbreviations of those words.
A co-operative must have a registered office the address of which is specified in the
rules.
PART 10--FUNDS, PROPERTY ETC.
Division 1--Power to raise money etc.
A co-operative may obtain financial accommodation (which includes the raising or
borrowing of money by any means) or give security for the repayment of money only as
provided by its rules and in accordance with the regulations.
The Registrar may give a co-operative directions as to the obtaining, repayment and
refinancing of financial accommodation.
Division 2--Co-operative Capital Units (CCU's)
A CCU is an interest issued by a Co-operative conferring an interest in the capital
(but not the share capital) of the co-operative and providing for certain entitlements such
as repayment of capital, participation in surplus assets and profits, interest on capital and
priority of payment of capital and dividend in relation to shares of the co-operative.
The issuing of CCU's is treated as the obtaining of financial accommodation.
CCU's can be issued to non-members.
A co-operative must not issue CCU's unless approved by the Registrar and by special
resolution.
The Division also deals with the redemption of CCU's.
Division 3--Charges
The Division gives effect to Schedule 3 which deals with the registration of charges
other than mortgages, charges or encumbrances which are over specific land and
registered under other laws or which are over specific leases, claims or tenements under
mining law.
The Division also gives effect to Schedule 4 which contains provisions relating to
receivers and managers.
Division 4--Disposal of surplus from activities
The Division enables the rules of a co-operative to authorise the application of part of
the surplus of a co-operative towards charitable or community advancement purposes or
for promoting co-operative principles.
The rules may authorise part of a surplus to be paid as dividends, bonuses or rebates.
Division 5--Prudential standards etc.
The Division empowers the making of regulations in respect of prudential operating
standards for co-operatives.
The Division also requires specified major transactions to be approved by special
resolution by means of a special postal ballot. These transactions relate to the sale or
lease of a co-operative's undertaking, acquisition from or disposal of property to a
director or employee or business associate of such a person or acquisition or disposal of
property which affects the activities which a co-operative carries on.
PART 11--RESTRICTIONS ON THE ACQUISITION OF INTERESTS IN
CO-OPERATIVES
Division l--Restrictions on share and voting interests
The Division sets out requirements relating to relevant interests in the voting rights
or shares of members.
Notice must be given of the acquisition of a relevant interest and when a relevant
interest ceases. Notice must be given of the acquisition of a substantial share interest
(5%) in a co-operative and when the substantial share interest changes by more than 1%
or ceases.
A relevant interest is not to exceed 20% of the nominal value of the issued share
capital of the co-operative. The Co-operatives Council may increase the maximum
percentage in a particular case or approve of a special resolution by special postal ballot
increasing that maximum percentage.
The Division deals with the action to be taken in the event of a contravention of the
maximum percentage allowed for relevant interests.
Division 2--Restrictions on certain share offers
The Division places restrictions on offers to purchase shares in a co-operative:
as part of a proposal for, or conditional on, the sale of the undertaking or part of
the undertaking of the co-operative as a going concern;
as part of a proposal for, or conditional on, registration of a co-operative as a
company under the Corporations Law;
as part of a proposal for, or conditional on, the winding up of a co-operative;
that would result in the offeror exceeding the maximum permissible level of
share interest in a co-operative;
that would result in the offeror holding a substantial share interest in a
co-operative.
PART 12--AMALGAMATION, TRANSFER OF ENGAGEMENTS,
WINDING UP ETC.
Division 1--Amalgamation
The Division enables, and provides the procedure for, the amalgamation of 2 or more
local co-operatives or 2 or more local and foreign co-operatives.
Division 2--Transfer of engagements
The Division enables, and provides the procedure for, the transfer of engagements of
one co-operative to another co-operative.
The Registrar may direct such a transfer to take place if certain circumstances exist.
In such a case, a co-operative the subject of the direction may make representations to
the Co-operatives Council.
Division 3--Transfer of incorporation
A Co-operative may apply to become registered or incorporated as a company under
the Corporations Law, an incorporated association, a society under the Permanent
Building Societies Act 1967, a credit union, a friendly society or a body that is
incorporated, registered or established under a prescribed law of another jurisdiction.
A co-operative ceases to be registered as such on becoming incorporated or registered
under some other law, but the new body established is to be treated as a continuation of
the co-operative.
Division 4--Winding up
A co-operative may be wound up voluntarily, by the Court or on a certificate of the
Registrar.
Relevant provisions of the Corporations Law apply with necessary modifications.
A voluntary winding up must be by a creditors' voluntary winding up or by special
resolution by means of special postal ballot.
In the case of a winding up of a co-operative with no share capital, the surplus
property is to be distributed as provided by the rules.
Persons whose membership is cancelled within 2 years before the winding up of a
co-operative are liable to contribute the nominal value of shares forfeited due to the
cancellation.
Division 5--Official management
Relevant provisions of the Corporations Law are applied with necessary
modifications to co-operatives.
Division 6--Appointment of administrator
The Registrar may appoint an administrator to conduct the affairs of a co-operative
but only with the approval of the Co-operatives Council and only if certain
circumstances exist.
The Registrar may revoke the appointment of an administrator and must do so at the
direction of the Co-operatives Council (such a direction may be made on the application
of a majority of directors who ceased to hold office on the appointment).
The expenses of administration are payable out of the co-operative's funds.
Division 7--Effect of amalgamation etc. on property, liabilities etc.
The Division applies to amalgamation of co-operatives, transfer of engagements of
co-operatives and transfer of incorporation of a co-operative and operates to vest
property and transfer rights and liabilities of the original or transferring co-operative to
the new or "transferee" co-operative.
Division 8--Miscellaneous
This Division sets out the grounds on which the Registrar may take action for the
winding up of a co-operative, the transfer of engagements of a co-operative or the
appointment of an administrator for a co-operative.
Those grounds include that the co-operative is carrying on business with too few
members or has not commenced to carry on business within 1 year of registration, that
registration was obtained by mistake or fraud, that the co-operative exists for an illegal
purpose or that certain breaches of the Act have occurred.
PART 13--ARRANGEMENTS A N D RECONSTRUCTIONS
Division 1--General requirements
The Supreme Court may, on application by a member of a co-operative or a creditor,
order a meeting of creditors concerned in a proposed compromise or arrangement.
For a compromise or arrangement to be binding it must be approved by order of the
Court and agreed to by a majority of creditors (whose claims amount to at least 75% of
the claims Concerned) present at a Court ordered meeting or, if the arrangement is
between members and the co-operative, agreed to by the members Concerned by special
resolution.
The Registrar may make submissions and the Court may not make an order unless
the Registrar has no objections. The Court is not to make an order if the compromise or
arrangement has been proposed to avoid the provisions of Division 2 of Part 11
(Restrictions on certain share offers).
Certain provisions of the Corporations Law are applied and the Division contains
other provisions dealing with the procedure relevant to and the administration of a
compromise or arrangement.
Division 2--Explanatory statements
The Division requires explanatory statements to accompany notices sent to creditors
convening a meeting ordered by the Supreme Court for a compromise or arrangement or
to members for the purpose of a special postal ballot for a compromise or arrangement.
Advertisements of such meetings must contain an explanatory statement or details of
how creditors can obtain copies of the statement.
Requirements as to the content of explanatory statements are specified in the
Division.
The Court is given a range of orders which it may make in the case of a compromise
or mangement connected with the reconstruction or amalgamation of a co-operative.
Division 3--Acquisition of shares of dissenting shareholders
The Division applies to a scheme or contract involving a transfer of shares in a
co-operative to a person if the scheme or contract has, within 4 months of the offer, been
approved by the holders of at least 90% of the nominal value of the shares concerned.
The procedure for acquiring the shares of dissenting shareholders is set out in the
Division.
Division 4--Miscellaneous
Miscellaneous matters are dealt with including notification to the Registrar of the
appointment of a person to administer a compromise or arrangement, the power of the
Supreme Court to order reports before making a decision on a compromise or
arrangement and the effect of a compromise or arrangement binding on creditors of a
foreign co-operative.
PART 14--SUPERVISION AND PROTECTION OF CO-OPERATIVES
Division 1--Supervision and inspection
The Division deals with the appointment and powers of inspectors. Their powers
include requiring the production of documents and requiring persons to appear and
answer questions and power to enter premises.
Division 2--Inquiries
The Registrar may, with the Minister's consent, appoint one or more persons to
conduct an inquiry into the affairs of a co-operative for the protection of the public or of
members or creditors.
Investigators may require the production of documents and may examine a person on
oath. They have all the powers and functions of inspectors and are to be regarded as
inspectors.
Interim reports of an inquiry may be required by the Registrar and an investigator
must report to the Registrar at the end of an inquiry.
The costs of an inquiry are to be paid out of money appropriated by Parliament.
However, the Registrar may order a co-operative to pay the costs or, if legal proceedings
are taken by the Registrar as a result of the inquiry, the court may order a party to the
proceedings or a person convicted in the proceedings to pay the costs.
Division 3--Prevention of fraud etc.
The Division creates offences for:
falslfying accounts or other records of a co-operative;
fraudulently obtaining or misappropriating property of a co-operative;
offering or paying a commission or fee to an officer of a co-operative in
connection with a transaction with the co-operative;
accepting such a commission or fee;
making false statements in connection with an application for a loan from a
co-operative.
The Registrar must call a special meeting of a co-operative or arrange for an inquiry
into the affairs of a co-operative on application by a majority of the board of the
co-operative or not less than one-third of its members. The application must be
supported by evidence showing good reasons for holding the meeting or inquiry.
The Registrar, without any application, may arrange for an inquiry into the working
and financial condition of a co-operative.
The Registrar also has power to require information in connection with applications
to the Registrar and other matters and may extend or abridge the time allowed for a
co-operative to take any action required under the Act or its rules.
PART 15--ADMINISTRATION OF THIS ACT
Division 1--The Registrar
The Division sets out the Registrar's functions.
Division 2--The Council
The Division constitutes a Co-operatives Council consisting of 9 members appointed
by the Minister. Four of those members are to be appointed from persons nominated by
co-operatives.
The Registrar is entitled to attend and preside at meetings of the Council or may
appoint some other person to do so as the Registrar's nominee.
The Minister or the Minister's nominee may attend meetings of the Council.
The functions of the Council are set out in the Division. They include encouraging
the development and integration of the co-operative sector and advising the Minister on
matters relating to the co-operative sector.
The Council may delegate any of its functions to the Registrar.
An appeal to the Supreme Court is provided against decisions of the Council.
Division 3--Evidence
The Division provides for certain documents and records kept or issued in
accordance with the Act to be evidence of certain matters.
PART 16--OFFENCES AND PROCEEDINGS
A director of a co-operative who knowingly authorises or permits a contravention of
the Act or regulations is guilty of an offence and an officer of a co-operative who by
wilful act or omission causes such a contravention is guilty of an offence.
Notice of the conviction of a person for such an offence must be given by the
co-operative concerned to its members.
Persons involved in the administration of the Act must not divulge information
obtained in the course of that administration otherwise than in specified circumstances.
A person commits an offence by making false or misleading statements in documents
required for the purposes of the Act or lodged with the Registrar.
If a co-operative contravenes the Act or its rules in making, guaranteeing or raising a
loan or receiving a deposit, no civil rights or liabilities of the co-operative or any person
are affected but the money becomes immediately repayable.
The Part also provides for continuing offences and for proceedings for offences.
PART 17--GENERAL
The Part deals with general matters in connection with the administration of the Act
including:
· application of Corporations Law;
· exemptions from stamp duty;
· inspection and service of documents;
· the granting of injunctions by the Supreme Court on application by the Registrar;
· the making of regulations by the Govexnor-in-Council.
SCHEDULE 1--MATTERS FOR WHICH RULES MAY MAKE PROVISION
The Schedule sets out the matters for which the rules of a co-operative must make
provision.
SCHEDULE 2--RELEVANT INTERESTS, ASSOCIATES, RELATED
BODIES
The Schedule defines the expressions "relevant interest", "associate", and "related
body" for the purposes of the Act.
SCHEDULE 3--REGISTRATION ETC. OF CHARGES
The Schedule deals with the procedure for registering charges and the effect of
registration.
SCHEDULE 4--RECEIVERS AND MANAGERS
The Schedule places restrictions on the persons who can be appointed as receivers or
managers of co-operatives and sets out the functions, powers and liabilities of receivers
and managers.
SCHEDULE 5--MEMBERS AND PROCEDURE OF THE COUNCIL
The Schedule provides for the term of office of members of the Co-operatives
Council, allows the Minister to appoint deputies of members, deals with vacation of
office of members and filling of vacancies, requires disclosure of pecuniary interests of
members and enables the Minister to determine allowances for members.
The procedure for meetings of the Council is dealt with including the quorum for
meetings, the presiding member at meetings, voting at meetings and the appointment of
committees.
SCHEDULE 6--SAVINGS AND TRANSITIONAL PROVISIONS
The Schedule provides for co-operative societies registered under the Co-operation
Act 1923 to be treated as being registered under the new Act. The following societies
will remain under the operation of the 1923 Act:
· co-operative housing societies
· Starr-Bowkett Societies
· non-terminating building societies
· existing societies specified in the Second Schedule to the 1923 Act.
The Advisory Council constituted under the 1923 Act is dissolved.
SCHEDULE 7--AMENDMENT OF OTHER ACTS
The Schedule makes consequential amendments to the following Acts:
· Associations Incorporation Act 1984
*
Tax Management Act 1956
· Search Warrants Act 1985.