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WESTERN AUSTRALIA
FRIENDLY SOCIETIES
(WESTERN AUSTRALIA) BILL 1998
ARRANGEMENT
Page
PART 1 -- PRELIMINARY
1. Short title 2
2. Commencement 2
3. Definitions 2
4. Crown to be bound 3
PART 2 -- FRIENDLY SOCIETIES (WESTERN AUSTRALIA)
CODE
5. Friendly Societies (Western Australia) Code enacted 4
6. Interpretation of expressions in the Friendly Societies
(Western Australia) Code and the Friendly Societies
(Western Australia) Regulations 4
No. 137 -- 1
Friendly Societies (Western Australia)
Bill 1998
PART 3 -- CONFERRAL OF FUNCTIONS AND POWERS
7. Conferral of functions and powers on AFIC 5
8. Conferral of functions and powers on Tribunal 5
9. State supervisory authority 5
PART 4 -- FRIENDLY SOCIETIES (WESTERN AUSTRALIA)
REGULATIONS
10. Definition 6
11. General regulation-making power for the Code 6
12. Savings and transitional regulations for Code 6
PART 5 -- LEVIES, FEES AND OTHER AMOUNTS
13. Fees 8
14. Levies 8
15. Fees, fines and penalties 8
PART 6 -- MISCELLANEOUS
16. Crimes 9
PART 7 -- CONSEQUENTIAL AMENDMENTS
17. Repeal of Friendly Societies Act 1894 10
18. Co-operative and Provident Societies Act 1903
amended 10
19. Equal Opportunity Act 1984 amended 11
20. Financial Institutions (Western Australia) Act 1992
amended 11
21. Housing Loan Guarantee Act 1957 amended 12
22. Pharmacy Act 1964 amended 12
23. Stamp Act 1921 amended 13
24. Western Australian Financial Institutions Authority
Act 1992 amended 13
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Friendly Societies (Western Australia)
Bill 1998
APPENDIX
FRIENDLY SOCIETIES (WESTERN AUSTRALIA) CODE
PART 1 -- PRELIMINARY
Division 1 -- Introductory
1. Citation 17
2. Commencement 17
Division 2 -- Interpretation
3. Definitions 17
4. Associate 23
5. Director 24
6. Holding body corporate 25
7. Holding society 25
8. Making a decision 25
9. Officer 26
10. Related body corporate 26
11. Subsidiary 26
12. Qualified privilege 28
13. Carrying on business: otherwise than for profit 28
14. Businesses of a particular kind 29
15. Carrying on a business: alone or together with others 29
16. Interpretation generally 29
Division 3 -- Operation of Friendly Societies Legislation
17. Extraterritorial operation of legislation 29
Division 4 -- Application and Adoption of Corporations Law
18. Definitions 29
19. Corporations Law applying under its own force 29
20. Corporations Law adopted under a regulation 31
21. Adopted provisions of Corporations Law 31
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PART 2 -- FUNCTIONS AND POWERS OF SSA
Division 1 -- General
22. Functions of SSA 32
23. General powers 32
24. SSA to comply with standards 33
25. Application of variation under standards 33
26. SSA to keep Minister informed 33
27. Inspection of documents at public office 33
28. Power of SSA to reject documents 34
29. Extension or abridgment of time 34
Division 2 -- Specific Powers
Subdivision 1 -- Services corporations
30. Services corporation 35
Subdivision 2 -- Enforcement powers
31. Obtaining information 36
32. Obtaining evidence 37
33. Inspectors 39
34. Inspector to produce identity card 39
35. Entry and search -- monitoring compliance 39
36. Entry and search -- evidence of offences 40
37. General powers of inspector in relation to places 42
38. Monitoring warrants 42
39. Offence related warrants 43
40. Offence related warrant may be granted by telephone 44
41. Obstruction of inspectors 45
42. False or misleading statements 46
Subdivision 3 -- Special meeting and inquiry
43. Special meeting and inquiry 46
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Subdivision 4 -- Special power of intervention
44. Intervention by SSA 48
Subdivision 5 -- Power to suspend operations of society
45. Power to suspend operations 50
Subdivision 6 -- Administrators
46. Appointment of administrator 51
47. Additional powers of SSA 53
48. Stay of proceedings 54
49. Administrator to report to SSA 54
Subdivision 7 -- Levies
50. Supervision Fund 55
51. Supervision levy 55
52. Consultation 56
53. Failure to make payment an offence 56
Subdivision 8 -- Control of advertising
54. Restriction on initial advertisements 56
55. Power to control advertising 57
PART 3 -- SOCIETIES
Division 1 -- Objects
56. Primary objects 58
57. Objects of society must include primary objects 58
58. Dominant activities 58
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Bill 1998
Division 2 -- Formation and Registration
59. Formation of societies 59
60. Registration 60
61. Certificate of incorporation 62
62. Effect of incorporation 62
63. Powers of societies 62
64. Prohibition on issuing debenture 63
65. Restriction on reinsurance arrangements 64
66. Restriction on acting as trustee 64
67. Control of certain financial arrangements 64
68. Control of foreign currency transactions 64
Division 3 -- Rules
Subdivision 1 -- General
69. Rules 65
70. Copies of rules 65
71. Society and members to be bound by rules 65
Subdivision 2 -- Amendment of rules
72. Amendment of rules by special resolution 65
73. Amendment of rules by board of directors 66
74. Registration of amendment of rules 66
75. Power of SSA to require modification of rules 67
Subdivision 3 -- Societies conducting health benefit funds
76. Definitions 68
77. Health benefit fund rules 68
78. Registered society to give notice of rule changes 68
Division 4 -- Standards
79. Societies to comply with standards 68
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Division 5 -- Membership
80. Members 69
81. Members who are minors 69
82. Joint members 70
83. Corporate membership 71
84. Cessation of membership 71
85. Expulsion of member 71
86. Limitation of liability of members 72
Division 6 -- Name and Office
87. Name 72
88. Abbreviations of society's name 73
89. Change of name does not affect identity 73
90. Use of ``friendly society'' 73
91. Unregistered society not to carry on business 74
92. Publication of name 75
93. Common seal 76
94. Society may have duplicate common seal 76
95. Registered office 76
PART 4A -- BENEFIT FUNDS
Division 1 -- Provision of Benefits and Establishment
of Benefit Funds
96. Provision of benefits 77
97. Establishment of benefit fund 77
98. Approval to establish benefit fund 77
Division 2 -- Management of Benefit Funds
99. Assets of benefit funds 78
100. Payments to benefit funds 78
101. Application of benefit fund assets 79
102. Mortgaging assets of benefit fund 79
103. Investment of benefit funds 79
104. Payment of money into account 79
105. Funds inward clearing account 80
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106. Funds outward clearing account 80
107. Transfer of an asset between funds 81
108. Distribution of surplus in benefit fund 82
109. Fair value of assets 82
Division 3 -- Restructure of Benefit Funds
110. Definitions 82
111. Approval of restructure of benefit funds 82
112. Rules 85
113. Lodgement of information with SSA 85
114. When a restructure takes effect 85
115. Effect of restructure 85
116. Notification of members 86
Division 4 -- Termination of Benefit Funds
117. Application of Division 87
118. Approval of termination proposal 87
119. Distribution of assets of benefit fund 89
120. Notification of members 89
121. Rules 90
122. Lodgement of information with SSA 90
123. When termination takes effect 91
Division 5 -- Assignment of Benefits
124. Assignment of benefits 91
125. Payment to nominee of deceased member 92
PART 4B -- OFFERING AND MARKETING OF BENEFITS
Division 1 -- Application and Interpretation
126. Definitions 93
127. Benefits advisory business 94
128. Application of this Part 94
129. Actuarial advice 94
130. Representatives 94
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131. Involvement in contraventions 95
132. Conduct 96
133. References to doing acts 97
134. Misleading representation 97
Division 2 -- Disclosure Documents and Application Forms
135. Disclosure document to be lodged 97
136. Application form 98
137. Form of disclosure document and date of issue 98
138. Disclosure of interests 99
139. Liability in respect of disclosure document and
interests 99
140. Content of disclosure document 99
141. Conditions requiring waiver of requirements void 100
142. Obligation to notify society of false etc. statements 100
143. Correction of false or misleading statements etc. by a
supplementary or replacement disclosure document 101
144. Changes or new matters requiring the issue of a
supplementary or replacement disclosure document 101
145. General provisions about supplementary disclosure
documents 102
146. General provisions about replacement disclosure
documents 103
147. Consequences of lodging a supplementary disclosure
document 103
148. Consequences of lodging a replacement disclosure
document 104
149. Application made on out of date application form 105
150. Inclusion of documents in disclosure documents by
reference 107
151. Disclosure document referring to information set out
in current application form 107
152. Certain notices etc. not to be published 108
153. Certain reports referring to disclosure documents not
to be published 109
154. Evidentiary provisions etc. 111
155. Documents to be kept 112
156. Expert's consent to issue of disclosure document
containing statement by the expert 112
157. Direction not to accept contributions 112
158. Exemptions and modifications 114
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Division 3 -- Prohibited Conduct and Civil Liability
159. Statement in a disclosure document 114
160. Misleading or deceptive conduct 115
161. Mis-statements and omissions in disclosure
documents 115
162. Civil liability for contravention of this Division or
Division 2 116
163. Civil liability for false or misleading statement in, or
omission from, a disclosure document 116
164. No liability to person with knowledge of relevant
matter 117
165. Non-consenting directors not liable 117
166. Directors not liable where they have reasonable
grounds for believing disclosure document to be
correct 118
167. Liability of experts, auditors etc. 120
168. Liability of persons named in disclosure document 121
169. No liability for mistake etc. if reasonable precautions
taken 122
170. Indemnity 123
Division 4 -- Regulation of Industry Participants
Subdivision 1 -- Conduct in relation to benefits
171. Dealing 123
172. Advising 124
Subdivision 2 -- Agreements with unlicensed persons
173. Certain persons not clients 125
174. Agreements with unlicensed persons 126
175. Client may give notice of rescission 126
176. Effect of notice under section 175 127
177. Client may apply to Court for partial rescission 127
178. Court may make consequential orders 128
179. Agreement unenforceable against client 128
180. Non-licensee not entitled to recover commission 129
181. Onus of establishing non-application of section 179
or 180 129
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182. Client may recover commission paid to non-licensee 129
183. Remedies under this Subdivision 129
Subdivision 3 -- Representatives
184. Proper authority from society 130
185. Representatives of dealers 130
186. Representatives of investment advisers 130
187. Representatives of societies 131
188. Body corporate not to act as representative 131
189. Defence 131
190. Banned person not to act as representative 132
191. Society to keep register of holders of proper
authorities 132
192. Society to notify SSA of location and contents of
register 133
193. Inspection and copying of register 134
194. SSA may require production of authority 135
195. SSA may give society information about
representative 135
196. Holder of authority may be required to return it 137
Subdivision 3A -- Exemptions and modifications relating to
representatives
196A. Exemptions and modifications under Subdivision 3 137
Subdivision 4 -- Liability of principals for representatives' conduct
197. Conduct engaged in as a representative 138
198. Liability where identity of principal unknown 138
199. Liability of principals where act done in reliance on
representative's conduct 139
200. Presumptions about certain matters 140
201. No contracting out of liability for representative's
conduct 141
202. Effect of Subdivision 142
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Subdivision 5 -- Excluding persons from dealing with benefits
203. Power to make banning order 142
204. Nature of banning order 143
205. Exceptions to banning order 143
206. Variation or revocation of banning order on
application 144
207. Revocation of banning order in certain cases 144
208. Effect and publication of orders under this
Subdivision 145
209. Contravention of banning order 145
210. Opportunity for hearing 145
211. Disqualification by the Court 146
Subdivision 6 -- Recommendations about benefits
212. Definition of adviser 146
213. Recommendation made by partner or officer 147
214. Client to be told if adviser's interests may influence
recommendation 147
215. Defences to alleged breach of section 214 (2) 148
216. Adviser must have reasonable basis for
recommendation 149
217. Adviser who breaches this Subdivision liable to
compensate client 150
218. Qualified privilege for adviser when complying with
this Subdivision 151
PART 5 -- SHARES AND CHARGES
Division 1 -- Shares Generally
219. Share capital 152
220. Classes of shares, rights etc. 152
221. Determination of share capital 152
222. Liability of shareholders 152
223. Board to approve sale or transfer unless rules provide
otherwise 152
224. Restriction on application of capital 152
225. Power to make certain payments 154
226. Validation of shares improperly issued 154
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Division 2 -- Permanent Shares
227. Issue of permanent shares 155
228. Issue of preference shares 155
229. Rights of holders of preference shares to be set out in
rules 155
230. Cancellation of permanent shares 156
231. Dividends in relation to permanent shares 156
232. Requirements for issue of permanent shares 157
233. Allotment of permanent shares otherwise than for
cash 158
234. Power to exempt in relation to non-cash consideration 159
235. Differences in calls, reserve liability etc. 159
236. Calls and effect of non-compliance with calls on
permanent shares 159
237. Sale of permanent shares forfeited for non-payment
of call 160
238. Prohibition of allotment unless minimum subscription
received 160
239. Return as to allotments 162
240. Issue of permanent shares at premium 163
241. Special resolution for reduction of permanent share
capital 164
242. Society financing dealings in its permanent shares
etc. 167
243. Exceptions 168
244. Consequences of society financing dealings in its
permanent shares etc. 172
245. Prohibition on subsidiary acquiring permanent shares
of holding society 175
246. Options over permanent shares 176
Division 3 -- Redeemable Preference Shares
247. Application of certain provisions of this Code to
redeemable preference shares 176
248. Issue of redeemable preference shares 177
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Division 4 -- Shareholding Restrictions
Subdivision 1 -- Interpretative provisions
249. Application of Division 178
250. Extraterritorial operation of Division 178
251. What constitutes an ``entitlement'' to shares 178
252. What constitutes a ``relevant interest'' in shares 178
253. Meaning of ``associate'' 181
254. Meaning of voting power or right to vote 183
255. Inadvertence or mistake 183
Subdivision 2 -- Maximum shareholdings
256. Maximum permissible shareholding 183
257. Consequences of exceeding maximum permissible
shareholding 184
258. Exceptions 184
Subdivision 3 -- Substantial shareholdings
259. Substantial shareholding and substantial
shareholders 184
Subdivision 4 -- Power to obtain information
260. Power to obtain information 185
Subdivision 5 -- Enforcement
261. Court orders -- substantial shareholdings 186
262. Power of SSA to exempt etc. from Division 186
Division 5 -- Issue of Shares
263. Issuing of shares at a discount prohibited 187
264. Issuing of shares as partly paid up etc. 187
265. Power of SSA to exempt etc. from Division 187
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Division 6 -- Title to and Transfer of Shares
266. Restricted application of this Division 188
267. Document of title to be evidence of title 188
268. Loss or destruction of documents 189
269. Instrument of transfer 190
270. Registration of transfer at request of transferor 191
271. Notice of refusal to register transfer 192
272. Remedy for refusal to register transfer or
transmission 192
273. Certification of transfers 192
274. Duties of society in relation to issue of certificates 193
275. Exemption 194
Division 7 -- Registration of Charges
276. Registration of charges 195
277. Directions by AFIC and SSA 195
278. SSA approval of charges necessary in certain
circumstances 196
PART 6 -- MANAGEMENT
Division 1 -- Interpretation
279. Definition 197
280. When one entity controls another 197
Division 2 -- Directors and Officers
281. Board of directors 197
282. Meetings of directors 198
283. Minutes 198
284. Number of directors 198
285. Election of directors 198
286. Employee directors 199
287. Alternate directors 199
288. Chairperson 200
289. Qualifications of directors 200
290. Vacation of office 201
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291. Removal of directors 201
292. Declaration of interest 202
293. General duty to make disclosure 205
294. Certain financial accommodation to officers
prohibited 206
295. Financial accommodation to directors and associates 206
296. Director's remuneration 208
297. Management contracts 208
298. Duties of directors and officers 209
299. Prohibition on transfer of money 211
300. Unlawfully acting as director 213
Division 3 -- Meetings of Members of a Society
301. Annual general meeting 213
302. Special general meeting 214
303. Quorum 214
304. Notice of meeting 214
305. Voting 215
306. Proxy votes 216
307. Special resolutions of societies 217
308. Minutes 218
Division 4 -- Meetings of Members of a Benefit Fund
309. Application of Division 218
310. Quorum 218
311. Notice of meeting 219
312. Voting 219
313. Proxy votes 220
314. Special resolutions of benefit funds 220
315. Minutes 221
Division 5 -- Registers and Inspection
316. Registers 221
317. Register of directors etc. 222
318. Register of members to be kept 224
319. Registers of members 225
320. Register of holders of permanent shares 225
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321. Power of Court to rectify register of holders of
permanent shares 227
322. Register of options 227
323. Inspection of rules and other documents 228
324. Location of registers on computers 229
325. Form and evidentiary value of registers 230
Division 6 -- Accounts
326. Financial year 231
327. Financial years of groups 232
328. Accounting records to be kept 232
329. Inspection of accounting records 233
330. Profit and loss accounts and balance sheets 233
331. Group accounts 234
332. Audit 234
333. Directors to ascertain certain matters 235
334. Requirements applying to accounts and group
accounts 235
335. Directors' statement 236
336. Directors' reports 237
337. Directors of holding society must obtain information
from entities controlled by the society 243
338. Accounts and reports to be laid before annual general
meeting 245
339. Contravention of Division 245
Division 7 -- Audit
340. Qualifications of auditors 246
341. Appointment of auditors 249
342. Nomination of auditors 252
343. Removal and resignation of auditors 252
344. Effect of winding up on office of auditor 254
345. Fees and expenses of auditors 254
346. Auditor's report 254
347. Powers and duties of auditor 257
348. Final audit on merger, etc. 259
349. Auditors and entities controlled by societies 260
350. Obstruction of auditor 261
351. Qualified privilege 261
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Division 8 -- Actuaries
352. Appointment of actuaries 262
353. Cessation of appointment 263
354. Notification of appointment etc. 263
355. Powers of actuary 264
356. Actuary's obligation to report to SSA 265
357. Qualified privilege of actuary 266
358. Actuarial investigations 266
359. Additional actuarial investigations 267
Division 9 -- Returns and Relief
360. Returns 267
361. Relief from requirements as to accounts, audit and
actuaries 268
PART 7 -- MERGERS OF SOCIETIES AND TRANSFERS OF
ENGAGEMENTS
Division 1 -- Preliminary
362. Definitions 270
363. Application of Part 270
Division 2 -- Mergers and Transfers of Engagements
between Societies
364. Application for registration of merger or transfer 270
365. SSA may register merged society 271
366. Certificate of confirmation (voluntary transfer) 272
367. SSA may direct a transfer of engagements between
societies 273
368. SSA may modify rules to facilitate transfer of
engagements 274
369. Society to comply with direction 274
370. Certificate of confirmation (transfer by direction) 275
371. Who receives the certificate of confirmation 275
372. When transfer of engagements takes effect 275
373. Cancellation of registration after total transfer 275
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374. Effect of merger 275
375. Effect of transfer of engagements 276
Division 3 -- Mergers and Transfers of Engagements Involving
Foreign Societies
376. Definitions in Division 3 277
377. Proposal for merger or transfer of engagements 278
378. SSA may register merged society 279
379. Certificate of confirmation for total transfer 280
380. Certificate of confirmation for partial transfer 281
381. When transfer of engagements takes effect 282
382. Effect of merger 283
383. Effect of transfer of engagements 283
384. Surrender of certificate of incorporation 284
385. Section number not used 284
PART 8 -- CONVERSIONS TO COMPANIES AND
INCORPORATED ASSOCIATIONS
Division 1 -- Conversion to Company
386. Society may convert to company 285
387. Proposal to convert by society to be approved by
members 285
388. SSA may direct as to percentage 286
389. Application by society to SSA for approval of proposal 287
390. Conversion of society to company 288
391. Surrender of certificate of incorporation and
cancellation of registration of society 288
392. Certificate of SSA 289
Division 2 -- Conversion to Incorporated Association
393. Society without benefit fund may convert to
incorporated association 289
394. Proposal to convert to be approved by members or
society's board 289
395. Application by society to SSA for approval of proposal 290
396. Conversion of society to incorporated association 291
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397. Surrender of certificate of incorporation and
cancellation of registration of society 292
398. Certificate of SSA 292
PART 9 -- EXTERNAL ADMINISTRATION
399. Arrangements and reconstructions 293
400. Receivers and other controllers of property of
societies 293
401. Winding-up 293
402. Winding-up on certificate of SSA 293
403. Application of Corporations Law to winding-up 295
404. Voluntary winding-up 295
405. Vacancy in office of liquidator on voluntary winding-
up 295
406. Remuneration of liquidator on voluntary winding-up 296
407. Priority on winding-up 296
408. Determination of amounts to be treated as liabilities 297
409. Cancellation of registration 297
PART 10 -- SPECIAL INVESTIGATIONS
410. Definition 298
411. Appointment of investigators 298
412. Investigation of affairs of related body corporate 299
413. Powers of investigators 299
414. Examination of officers 300
415. Self-incrimination 301
416. Privileged communications 301
417. Failure of officer to comply with requirement of
investigator 302
418. Recording of examination 302
419. Delegation of powers by investigator 303
420. Report of investigator 303
421. Proceedings following investigation 304
422. Admission of investigator's report in evidence 305
423. Expenses of investigation 305
424. Offences 307
425. Defence 307
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Friendly Societies (Western Australia)
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PART 11 -- FOREIGN SOCIETIES
426. Definitions 308
427. Registration 308
428. Agents 310
429. Section number not used 310
430. Liability of agent 310
431. Service on agent 310
432. Application of Code to foreign societies 311
433. SSA to be notified of certain changes 311
434. Section number not used 311
435. Cessation of business 311
436. Society proposing to register as foreign society 311
437. SSA to provide certain documents 312
PART 12 -- ASSOCIATIONS
438. Formation of associations 313
439. Objects of associations 313
440. Registration 313
441. Certificate of incorporation 314
442. Effect of incorporation 314
443. Membership 315
444. Share capital 315
445. Meetings 315
446. Application of Code to associations 315
PART 13 -- REVIEW OF DECISIONS
447. Reviewable decisions 316
448. Application for review of decisions 316
449. Application of AFIC Code 317
450. SSA to review certain decisions 317
PART 14 -- MISCELLANEOUS
Division 1 -- Evidence
451. Certificates etc. 319
452. Rules 319
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453. Registers 319
454. Minutes 320
455. Entries 320
Division 2 -- Offences
456. Defaults by societies 320
457. Restrictions on powers 321
458. Offences by officers 321
459. Incurring debts not likely to be paid 325
460. Powers of Court 325
461. Inducement to be appointed as liquidator 326
462. Falsification of records 327
463. Frauds by officers 327
464. False or misleading information 327
465. Power to examine defaulting officers 328
466. Power of Court to assess damages against certain
persons 330
467. False copies of rules 331
468. Fraud or misappropriation 331
469. Commissions 332
470. Officers and other persons in default 332
Division 3 -- Proceedings
471. Proceedings for offences 332
472. Reciprocity in relation of offences 332
473. Continuing offences 333
474. Injunctions 333
475. Penalty notices 335
476. Power to grant relief 337
Division 4 -- Other matters
477. Secrecy 338
478. Powers about money of members who have died 340
479. Limitation of doctrine of ultra vires 340
480. Abolition of doctrine of constructive notice 341
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PART 15 -- TRANSITIONAL
481. Continuing societies 342
482. Application for certificate of incorporation 342
483. Benefit funds 342
484. Rules 342
485. Subsidiaries 343
486. Directors 343
487. Annual general meeting 343
488. Special resolutions 343
489. Registers 343
489A. Accounts 344
490. Winding-up 344
491. Documents 344
492. Operation of Part 4B 344
493. Interstate society carrying on business in this State 345
SCHEDULE A
MISCELLANEOUS PROVISIONS RELATING TO
INTERPRETATION
PART 1 -- PRELIMINARY
1. Displacement of Schedule by contrary intention 346
PART 2 -- GENERAL
2. Code or Act includes statutory instruments under
Code or Act 346
3. Code to be construed not to exceed legislative power
of Legislature 346
4. Every section to be a substantive enactment 346
5. Material that is, and is not, part of Code 347
6. References to particular Acts 347
7. References taken to be included in Act or Code
citation etc. 347
8. References to commencement of AFIC Code 348
9. Interpretation best achieving Code's purpose 348
10. Use of extrinsic material in interpretation 349
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11. Effect of change of drafting practice and use of
examples 350
12. Compliance with forms 351
PART 3 -- TERMS AND REFERENCES
13. Definitions 351
14. Provisions relating to defined terms and gender and
number 356
15. Meaning of ``may'' and ``must'' 357
16. Words and expressions used in statutory instruments 357
17. Effect of express references to bodies corporate and
individuals 357
18. References to Minister 357
19. Production of records kept in computers etc. 358
20. Application of offence provisions to bodies corporate 359
21. References to this State to be implied 359
22. References to officers and holders of offices 359
23. Reference to certain provisions of this Code 359
24. Words that form part of provision 360
25. Reference to provisions of a Code or an Act is
inclusive 360
PART 4 -- FUNCTIONS AND POWERS
26. Performance of statutory functions 361
27. Power to make instrument or decision includes power
to amend or repeal 361
28. Matters for which statutory instruments may make
provision 361
29. Presumption of validity and power to make 363
30. Appointments may be made by name or office 363
31. Acting appointments 363
32. Powers of appointment imply certain incidental
powers 364
33. Delegation of powers 365
34. Exercise of power between enactment and
commencement 366
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PART 5 -- DISTANCE, TIME AND AGE
35. Matters relating to distance, time and age 369
PART 6 -- SERVICE OF DOCUMENTS
36. Service of documents 369
37. Meaning of service by post 370
38. Time of provision of Code ceasing to have effect 370
PART 7 -- EFFECT OF REPEAL, AMENDMENT OR
EXPIRATION
39. Repealed or amended provision of Code not revived 371
40. Saving of operation of repealed provision of Code 371
41. Continuance of repealed provisions 371
42. Code and amending Acts to be read as one 371
PART 8 -- OFFENCES UNDER CODE
43. Penalty at end of provision 372
44. Penalty other than at end of provision 372
45. Indictable offences and summary offences 372
46. Double jeopardy 373
47. Aiding and abetting, attempts etc. 373
PART 9 -- INSTRUMENTS UNDER CODE
48. Schedule applies to statutory instruments 374
NOTES
COMPARATIVE TABLE OF PROVISIONS OF FRIENDLY
SOCIETIES CODE AND FINANCIAL INSTITUTIONS CODE
xxv
WESTERN AUSTRALIA
LEGISLATIVE ASSEMBLY
FRIENDLY SOCIETIES
(WESTERN AUSTRALIA) BILL 1998
A BILL FOR
AN ACT to provide for the formation, registration,
management and regulation of friendly societies, to
repeal the Friendly Societies Act 1894 and to make
consequential amendments to other Acts, and for
other purposes.
The Parliament of Western Australia enacts as follows:
1
Friendly Societies (Western Australia)
cl. 1 Bill 1998
PART 1 -- PRELIMINARY
Short title
1. This Act may be cited as the Friendly Societies (Western
Australia) Act 1998.
5 Commencement
2. This Act comes into operation on such day as is, or days as
are respectively, fixed by proclamation.
Definitions
3. (1) In this Act unless the contrary intention appears --
10 ``AFIC'' means the Australian Financial Institutions
Commission established by the AFIC Act;
``AFIC Act'' means the Australian Financial Institutions
Commission Act 1992 of Queensland;
``friendly societies legislation of Western Australia''
15 means --
(a) this Act;
(b) the Friendly Societies (Western Australia) Code;
(c) the Friendly Societies (Western Australia)
Regulations;
20 (d) the AFIC (Western Australia) Code, the AFIC
(Western Australia) Regulations, the Financial
Institutions (Western Australia) Code and the
Financial Institutions (Western Australia)
Regulations as applying to the Code and
25 Regulations referred to in paragraphs (b) and (c);
2
Friendly Societies (Western Australia)
Bill 1998 cl. 4
``Friendly Societies (Western Australia) Code'' means
the Code set out in the Appendix;
``Friendly Societies (Western Australia) Regulations''
means the Regulations in force for the time being
5 under Part 4 of this Act;
``Ministerial Council'' means the Ministerial Council
established under the financial institutions agreement
within the meaning of the Financial Institutions
(Western Australia) Act 1992;
10 (2) Words and expressions used in the Friendly Societies
(Western Australia) Code and this Act have the same respective
meanings in this Act as they have in that Code.
(3) Subsection (2) does not apply to the extent that the
content or subject matter otherwise indicates or requires.
15 Crown to be bound
4. (1) This Act binds the Crown in right of Western Australia
and, so far as the legislative power of Parliament permits, the
Crown in all its capacities.
(2) Nothing in this section permits the Crown in any of its
20 capacities to be prosecuted for an offence.
3
Friendly Societies (Western Australia)
cl. 5 Bill 1998
PART 2 -- FRIENDLY SOCIETIES (WESTERN
AUSTRALIA) CODE
Friendly Societies (Western Australia) Code enacted
5. The Friendly Societies (Western Australia) Code has
5 effect.
Interpretation of expressions in the Friendly Societies
(Western Australia) Code and the Friendly Societies
(Western Australia) Regulations
6. (1) In the Friendly Societies (Western Australia) Code and
10 the Friendly Societies (Western Australia) Regulations --
``continuing society'' means a friendly society to which
the Friendly Societies Act 1894 applied immediately
before the commencement of this section;
``Legislature of this State'' means the Legislature of
15 Western Australia;
``pharmacy law of this State'' means the Pharmacy
Act 1964;
``the Code'' or ``this Code'' means the Friendly Societies
(Western Australia) Code;
20 ``the previous law'' means the Friendly Societies Act 1894.
(2) The Corporations (Western Australia) Act 1990 and the
applicable provisions of Western Australia within the meaning of
that Act, are prescribed for the purpose of section 19 (4) of the
Friendly Societies (Western Australia) Code.
4
Friendly Societies (Western Australia)
Bill 1998 cl. 7
PART 3 -- CONFERRAL OF FUNCTIONS AND POWERS
Conferral of functions and powers on AFIC
7. AFIC has the functions and powers conferred or expressed to
be conferred on it by or under the friendly societies legislation of
5 Western Australia.
Conferral of functions and powers on Tribunal
8. The Australian Financial Institutions Appeals Tribunal
established under the AFIC Act has the functions and powers
conferred or expressed to be conferred on it by or under the
10 friendly societies legislation of Western Australia.
State supervisory authority
9. The Western Australian Financial Institutions Authority
established by the Western Australian Financial Institutions
Authority Act 1992 is the State supervisory authority for Western
15 Australia.
5
Friendly Societies (Western Australia)
cl. 10 Bill 1998
PART 4 -- FRIENDLY SOCIETIES (WESTERN
AUSTRALIA) REGULATIONS
Definition
10. In this Part --
5 ``the Code'' means the Code set out in the Appendix, as in
force for the time being.
General regulation-making power for the Code
11. (1) The Governor may make regulations prescribing all
matters that are required or permitted by this Act or the Code to
10 be prescribed or are necessary or convenient for giving effect to
the purposes of this Act or the Code.
(2) A regulation under this Part may only be made on the
recommendation of the Ministerial Council.
(3) A regulation under this Part may create an offence
15 punishable by a penalty not exceeding $5 000.
Savings and transitional regulations for Code
12. (1) A regulation under this Part may make provision of a
savings or transitional nature consequent on the enactment of
the Code or a provision of the Code.
20 (2) If the regulation so provides, it has effect despite any
provision of this Act or the Code.
(3) A provision of a regulation made under this section may,
if the regulation so provides, take effect from the day this Act
receives the Royal Assent or from a later day.
6
Friendly Societies (Western Australia)
Bill 1998 cl. 12
(4) To the extent to which a provision takes effect from a day
earlier than the day of the regulation's publication in the Gazette,
the provision does not operate to the disadvantage of a person
(other than the State or a State authority) by --
5 (a) decreasing the person's rights; or
(b) imposing liabilities on the person.
7
Friendly Societies (Western Australia)
cl. 13 Bill 1998
PART 5 -- LEVIES, FEES AND OTHER AMOUNTS
Fees
13. This section imposes the fees that the Friendly Societies
(Western Australia) Regulations or the AFIC (Western Australia)
5 Regulations prescribe, except to the extent that they are taxes.
Levies
14. (1) Except to the extent that they are taxes, this section
imposes --
(a) the levy payable under sections 119 and 120 of the
10 AFIC (Western Australia) Code by a society; and
(b) the supervision levy payable under section 51 of the
Friendly Societies (Western Australia) Code by a
society.
(2) An expression has in subsection (1) the meaning it would
15 have if this section were in the AFIC (Western Australia) Code or
the Friendly Societies (Western Australia) Code, as the case
requires.
Fees, fines and penalties
15. All fees, fines, penalties and other money which, under or
20 by virtue of the friendly societies legislation of Western Australia
are authorized or directed to be imposed on any person and are
not, under that legislation, fees, levies or other amounts payable
to a specified person are to be paid to the Treasurer of the State
and credited to the Consolidated Fund.
8
Friendly Societies (Western Australia)
Bill 1998 cl. 16
PART 6 -- MISCELLANEOUS
Crimes
16. An offence under the Friendly Societies (Western Australia)
Code that is punishable by imprisonment for a period exceeding 2
5 years is a crime.
9
Friendly Societies (Western Australia)
cl. 17 Bill 1998
PART 7 -- CONSEQUENTIAL AMENDMENTS
Repeal of Friendly Societies Act 1894
17. The Friendly Societies Act 1894 is repealed.
Co-operative and Provident Societies Act 1903 amended
5 18. The Co-operative and Provident Societies Act 1903* is
amended --
(a) in section 2 by deleting the definition of ``The
Registrar'' and substituting the following definition --
``
10 ``The Registrar'' means the person appointed
under and subject to Part 3 of the Public
Sector Management Act 1994 to the office of
Registrar of Co-operative and Financial
Institutions.
15 '';
(b) in the Fourth Schedule --
(i) by deleting ``of Friendly Societies'' in both places
where it occurs; and
(ii) by deleting ``Friendly Societies Office, Perth'' in
20 both places where it occurs and substituting in
each place the following --
``
Registry of Co-operative and Financial
Institutions, Perth
25 ''.
[* Reprinted as authorized 30 September 1969.
For subsequent amendments see 1997 Index to
Legislation of Western Australia, Table 1, p. 52.]
10
Friendly Societies (Western Australia)
Bill 1998 cl. 19
Equal Opportunity Act 1984 amended
19. The Equal Opportunity Act 1984* is amended --
(a) in section 35N (1) (c) by deleting ``Friendly Societies
Act 1894'' and substituting the following --
5 `` Friendly Societies (Western Australia) Code 1998 '';
(b) in section 66ZS (1) (a) (iii) by deleting ``Friendly
Societies Act 1894'' and substituting the following --
`` Friendly Societies (Western Australia) Code 1998 '';
and
10 (c) in section 69 (1) (b) (iii) by deleting ``Friendly Societies
Act 1894'' and substituting the following --
`` Friendly Societies (Western Australia) Code 1998 ''.
[* Reprinted as at 16 April 1996.
For subsequent amendments see 1997 Index to Legislation of
15 Western Australia, Table 1, pp. 76-7.]
Financial Institutions (Western Australia) Act 1992
amended
20. The Financial Institutions (Western Australia) Act 1992* is
amended --
20 (a) in section 7 (1) by inserting in the appropriate
alphabetical position the following definition --
``
``Friendly Societies Code'' means the Friendly
Societies (Western Australia) Code set out
25 in the Appendix to the Friendly Societies
(Western Australia) Act 1998;
'';
and
11
Friendly Societies (Western Australia)
cl. 21 Bill 1998
(b) in section 10 (1) by inserting in the appropriate
alphabetical position the following definition --
``
``Friendly Societies Code'' means the Friendly
5 Societies (Western Australia) Code set out
in the Appendix to the Friendly Societies
(Western Australia) Act 1998;
''.
[* Act No. 30 of 1992.
10 For subsequent amendments see 1997 Index to Legislation of
Western Australia, Table 1, p. 85.]
Housing Loan Guarantee Act 1957 amended
21. Section 5 of the Housing Loan Guarantee Act 1957* is
amended by deleting ``Friendly Societies Act 1894'' and
15 substituting the following --
`` Friendly Societies (Western Australia) Code 1998 ''.
[* Reprinted as authorized 20 May 1974.
For subsequent amendments see 1997 Index to
Legislation of Western Australia, Table 1, p. 109.]
20 Pharmacy Act 1964 amended
22. The Pharmacy Act 1964* is amended --
(a) in section 23 (1) by deleting ``Friendly Societies
Act 1894'' and substituting the following --
`` Friendly Societies (Western Australia) Code 1998 '';
25 (b) in section 36 (1) (b) by deleting ``Friendly Societies
Act 1894'' and substituting the following --
`` Friendly Societies (Western Australia) Code 1998 '';
and
12
Friendly Societies (Western Australia)
Bill 1998 cl. 23
(c) in section 36B (3) (b) by deleting ``Friendly Societies
Act 1894'' and substituting the following --
`` Friendly Societies (Western Australia) Code 1998 ''.
[* Reprinted as authorized 18 April 1983.
5 For subsequent amendments see 1997 Index to Legislation of
Western Australia, Table 1, pp. 178-9]
Stamp Act 1921 amended
23. The Third Schedule to the Stamp Act 1921* is amended in
item (4) (a) by deleting ``Friendly Societies Act 1894'' and
10 substituting the following --
`` Friendly Societies (Western Australia) Code 1998 ''.
[* Reprinted as at 23 January 1996.
For subsequent amendments see 1997 Index to
Legislation of Western Australia, Table 1, pp. 217-20.]
15 Western Australian Financial Institutions Authority
Act 1992 amended
24. The Western Australian Financial Institutions Authority
Act 1992* is amended --
(a) in section 3 by inserting in the appropriate
20 alphabetical positions the following definitions --
``
``Friendly Societies (Western Australia)
Code'' means the Code set out in the
Appendix to the Friendly Societies (Western
25 Australia) Act 1998;
``friendly societies legislation of Western
Australia'' has meaning given to that
expression by the Friendly Societies
(Western Australia) Act 1998;
30 '';
13
Friendly Societies (Western Australia)
cl. 24 Bill 1998
(b) by repealing section 4 and substituting the following
section --
``
Interpretation
5 4. Unless the contrary intention appears,
words and expressions used in this Act that are
defined in --
(a) the scheme legislation of Western
Australia; or
10 (b) the friendly societies legislation of
Western Australia,
have the respective meanings given by those
definitions.
'';
15 (c) in section 6 by inserting after ``Australia'' the
following --
``
, the friendly societies legislation of Western
Australia
20 '';
(d) in section 7 (2) by inserting after ``Australia'' the
following --
``
and the friendly societies legislation of Western
25 Australia
'';
(e) in section 9 by inserting after ``Australia'' the
following --
``
30 , the friendly societies legislation of Western
Australia
'';
14
Friendly Societies (Western Australia)
Bill 1998 cl. 24
(f) in section 45 (4) by deleting ``or the scheme
legislation'' and substituting the following --
`` , the scheme legislation of Western Australia or
5 the friendly societies legislation
'';
(g) in section 45 (5) by deleting ``or the scheme
legislation'' and substituting the following --
``
10 , the scheme legislation of Western Australia or
the friendly societies legislation
'';
(h) in section 50 (2) --
(i) by deleting ``or'' after paragraph (a);
15 (ii) in paragraph (b) by deleting ``Subdivision,'' and
substituting the following --
`` Subdivision; or ''; and
(iii) by inserting after paragraph (b) the following
paragraph --
20 ``
(c) a supervision levy under Part 5 of the
Friendly Societies (Western Australia)
Act 1998,
'';
25 (i) in section 51 by inserting after subsection (2) the
following subsection --
``
(2a) The powers under section 51 of the
Friendly Societies (Western Australia) Code are
30 not to be delegated.
'';
and
15
Friendly Societies (Western Australia)
cl. 24 Bill 1998
(j) in section 52 by inserting after ``legislation'' the
following --
``
or the friendly societies legislation of Western
5 Australia
''.
[* Act No. 29 of 1992.]
16
Friendly Societies (Western Australia)
Bill 1998 App.
APPENDIX
[Section 5]
FRIENDLY SOCIETIES (WESTERN AUSTRALIA) CODE
PART 1 -- PRELIMINARY
5 Division 1 -- Introductory
Citation
1. This Code may be cited as the Friendly Societies (Western
Australia) Code.
NOTE: The sections of this Code have been numbered to
10 correspond with the numbering in the Friendly Societies
Code set out in Schedule 1 to the Friendly Societies
(Victoria) Act 1996 which is in force in other States.
Commencement
2. This Code comes into operation as provided in section 2 of the
15 Friendly Societies (Western Australia) Act 1998.
Division 2 -- Interpretation
Definitions
3. In this Code --
``accounting records'' include --
20 (a) invoices, receipts, orders for the payment of money,
bills of exchange, cheques, promissory notes, vouchers
and other documents of prime entry; and
(b) documents and records that record such entries; and
(c) such working papers and other documents as are
25 necessary to explain the methods and calculations by
which accounts are made up;
``accounting standard'' has the meaning given by section 9 of
the Corporations Law;
17
Friendly Societies (Western Australia)
App. Bill 1998
``accounts'' means profit and loss accounts and balance sheets,
and includes statements, reports and notes (other than a
directors' report) attached to or intended to be read with
any of those accounts or balance sheets;
5 ``advertisement'' includes matter that is not in writing but
because of the form or context in which it appears conveys
a message;
``affairs'', in relation to a body corporate, has the meaning given
by section 53 of the Corporations Law;
10 ``AFIC'' means the Australian Financial Institutions Commission;
``AFIC Code'' means the Code set out in section 21 of the
Australian Financial Institutions Commission Act 1992 of
Queensland;
``applicable accounting standard'' means an accounting
15 standard as applying under section 334;
``Appeals Tribunal'' means the Australian Financial Institutions
Appeals Tribunal established under the Australian
Financial Institutions Commission Act 1992 of Queensland;
``association'' means a body registered as an association under
20 Part 12;
``bank'' means --
(a) a bank as defined by section 5 of the Banking
Act 1959 of the Commonwealth; or
(b) a bank constituted under a law of a State;
25 ``benefit'', in relation to a society, means an interest in a benefit
fund of the society in accordance with the rules of the
society relating to that fund;
``benefit fund'' in relation to a society, means a fund established
by the society in accordance with Part 4A;
30 ``board'', in relation to a society, means the board of directors of
the society;
``body'' includes an entity;
18
Friendly Societies (Western Australia)
Bill 1998 App.
``body corporate'' means any body corporate whether formed or
incorporated within or outside this State, but does not
include --
(a) a body corporate that is incorporated within Australia
5 or an external Territory and is a public authority or
an instrumentality or agency of the Crown; or
(b) a corporation sole;
``borrow'' means to obtain financial accommodation;
``building society'' means a building society within the meaning
10 of the Financial Institutions (Western Australia) Code or a
law of another State that corresponds to that Code;
``certificate of confirmation'' has the meaning given by
section 362;
``company'' means a company incorporated, or taken to be
15 incorporated, under the Corporations Law;
``consolidated accounts'', in relation to a society, means all of
the following --
(a) a consolidated profit and loss account that section 331
requires to be made out in relation to a financial year
20 of the society;
(b) a consolidated balance sheet that section 331 requires
to be made out in relation to the financial year of the
society;
(c) statements, reports and notes (other than a directors'
25 report) attached to, or intended to be read with, that
consolidated profit and loss account or consolidated
balance sheet;
``Court'' means the Supreme Court or a Supreme Court Judge of
this State;
30 ``credit union'' means a credit union within the meaning of the
Financial Institutions (Western Australia) Code or a law of
another State that corresponds to that Code;
``debenture'' has the meaning given by section 9 of the
Corporations Law;
35 ``director'' has the meaning given by section 5;
``disclosure document'' means a document lodged with the SSA
under Part 4B and that complies, or ought to comply, with
the requirement for disclosure documents under that Part;
19
Friendly Societies (Western Australia)
App. Bill 1998
``economic entity'' means an economic entity for the purposes of
Part 3.6 of the Corporations Law;
``employee'', in relation to the SSA, includes --
(a) an officer of the SSA; and
5 (b) a person whose services are made available to the
SSA; and
(c) a person engaged by the SSA on a contract for
services;
``entity'' means an entity for the purposes of Part 3.6 of the
10 Corporations Law, and includes a society;
``executive officer'', in relation to a society or entity, means a
person (by whatever name called) who is concerned, or
takes part, in the management of the society or entity;
``expert'', in relation to a matter, means an independent person
15 whose profession or reputation gives authority to a
statement made by the person in relation to the matter;
``Financial Institutions Code'' means the Code set out in
section 30 of the Financial Institutions (Queensland)
Act 1992 of Queensland;
20 ``financial institutions scheme'' means the scheme established
and implemented by the financial institutions agreement
and the financial institutions legislation within the
meaning of the AFIC Code;
``foreign society'' means a body registered as a foreign society
25 under Part 11;
``friendly societies legislation'' means --
(a) the friendly societies legislation of Western Australia,
namely --
(i) the Friendly Societies (Western Australia)
30 Act 1998 and the Friendly Societies (Western
Australia) Code set out in the Appendix to the
Act; and
(ii) regulations made under that Act; and
20
Friendly Societies (Western Australia)
Bill 1998 App.
(b) the friendly societies legislation of Victoria,
namely --
(i) the Friendly Societies (Victoria) Act 1996 of
Victoria and the Friendly Societies Code set out
5 in Schedule 1 to the Act; and
(ii) regulations made under that Act; and
(c) the friendly societies legislation of the other
participating States, namely --
(i) the Acts and regulations of the other
10 participating States that apply, complement or
otherwise give effect to any part of the friendly
societies legislation of Victoria; and
(ii) the friendly societies legislation of Victoria as
applying in those States; and
15 (d) the financial institutions legislation within the
meaning of the AFIC Code so far as it applies or is
otherwise relevant to the legislation mentioned in
paragraph (a), (b) or (c);
``fund'', in relation to a society, means --
20 (a) a benefit fund of the society; or
(b) the management fund of the society;
``group'' means an economic entity of which a society is a part;
``group accounts'', in relation to a holding society, means a set
of consolidated accounts for the group in relation to which
25 the society is the holding society;
``holding body corporate'' has the meaning given by section 6;
``holding society'' has the meaning given by section 7;
``inspector'' means a person authorized under section 33;
``issue'' includes circulate, distribute and disseminate;
30 ``management fund'', in relation to a society, means the fund of
the society consisting of the assets and liabilities of the
society that do not form part of a benefit fund of the society;
``member'' --
(a) in relation to a society, means a person who is a
35 member of the society under Division 5 of Part 3; and
21
Friendly Societies (Western Australia)
App. Bill 1998
(b) in relation to a benefit fund of a society, means a
person entitled to a benefit from that fund in
accordance with the rules of the society;
``national business names register'' has the meaning given by
5 the Corporations Law;
``officer'' has the meaning given by section 9;
``participating State'' means --
(a) Western Australia;
(b) Victoria
10 (c) any other State in which there is in force a law
corresponding to Part 2 of the Friendly Societies
(Victoria) Act 1996 of Victoria;
``permanent share'', in relation to a society, means a share in
the society other than a redeemable preference share;
15 ``profit or loss'' means --
(a) in relation to an entity, the profit or loss resulting
from operations of the entity; and
(b) in relation to 2 or more entities or an economic entity
constituted by 2 or more entities, the profit or loss
20 resulting from the operations of those entities;
``publish'' --
(a) in relation to a notice under Part 4B, means publish
by any means, including in a newspaper or periodical,
by broadcasting or televising or in a cinematograph
25 film; and
(b) in any case, includes issue;
``redeemable preference share'' means a preference share in a
society that is, or at the society's option is, liable to be
redeemed;
30 ``registered company auditor'' means a person registered as an
auditor, or taken to be registered as an auditor, under Part
9.2 of the Corporations Law;
``relevant agreement'' means an agreement, arrangement or
understanding --
35 (a) whether formal or informal or partly formal and
partly informal;
22
Friendly Societies (Western Australia)
Bill 1998 App.
(b) whether written or oral or partly written and partly
oral; and
(c) whether or not having legal or equitable force and
whether or not based on legal or equitable rights;
5 ``rules'', in relation to a society, means rules of the society under
this Code as in force from time to time;
``securities'' has the meaning given by section 92 of the
Corporations Law;
``services corporation'' means a body corporate declared to be a
10 services corporation under section 30;
``share'' means a share in the share capital of a body corporate;
``society'' means a body registered under this Code as a society;
``SSA'', in relation to a State, means the person or body declared
by the friendly societies legislation of the State to be the
15 State supervisory authority for the State;
``standard'' means a standard in force under section 28 of the
AFIC Code;
``State'' means a State or Territory;
``subsidiary'' has the meaning given by section 11;
20 ``transferee society'' has the meaning given by section 362;
``transferor society'' has the meaning given by section 362.
Associate
4. (1) For the purposes of this Code, except Division 4 of Part 5 and
section 295, a person is an ``associate'' of another, or is associated with
25 another, if --
(a) they are partners; or
(b) one is a spouse, parent or child of the other; or
(c) they are both trustees or beneficiaries of the same trust, or
one is a trustee and the other is a beneficiary of the same
30 trust; or
(d) one is a body corporate or other entity (whether inside or
outside Australia) and the other is a director or member of
the governing body of the body or entity; or
23
Friendly Societies (Western Australia)
App. Bill 1998
(e) one is a body corporate or other entity (whether inside or
outside Australia) and the other is a person who has a legal
or equitable interest in 5% or more of the share capital of
the body or entity; or
5 (f) they are related bodies corporate within the meaning of
section 10; or
(g) a relationship of a prescribed kind exists between them; or
(h) a chain of relationships can be traced between them under
any one or more of the above paragraphs.
10 (2) For the purposes of Part 4B, a person is an ``associate'' of
another, or is associated with another, if --
(a) the person is such an associate, or is so associated, under
subsection (1); or
(b) the other person is a director of a body corporate of which
15 the first-mentioned person is also a director and which
carries on a business of dealing in benefits.
Director
5. (1) Subject to subsection (2), for the purposes of this Code,
``director'', in relation to a body corporate, includes a reference to --
20 (a) a person occupying or acting in the position of director of
the body, by whatever name called and whether or not
validly appointed to occupy, or duly authorized to act in,
the position; and
(b) a person in accordance with whose directions or instructions
25 the directors of the body corporate are accustomed to act;
and
(c) in the case of a body corporate incorporated outside
Australia --
(i) a member of the body's board; and
30 (ii) a person occupying or acting in the position of
member of the body's board, by whatever name called
and whether or not validly appointed to occupy, or
duly authorized to act in, the position; and
(iii) a person in accordance with whose directions or
35 instructions the members of the body's board are
accustomed to act.
24
Friendly Societies (Western Australia)
Bill 1998 App.
(2) A person is not to be regarded as a person in accordance with
whose directions or instructions --
(a) a body corporate's directors; or
(b) the members of the board of a body corporate incorporated
5 outside Australia,
are accustomed to act merely because the directors or members act on
advice given by the person in the proper performance of the functions
attaching to --
(c) the person's professional capacity; or
10 (d) the person's business relationship with the directors, the
members of the board or the body.
Holding body corporate
6. A reference in this Code to the holding body corporate of another
body corporate is a reference to a body corporate of which the other
15 body corporate is a subsidiary.
Holding society
7. A society is a holding society in respect of a financial year of the
society if the society controls another entity during all or part of the
financial year.
20 Making a decision
8. A reference in this Code to the making of a decision includes a
reference to --
(a) making, suspending, revoking or refusing to make an order
or determination; or
25 (b) giving, suspending, revoking or refusing to give a
certificate, direction, approval, consent or permission; or
(c) issuing, suspending, revoking or refusing to issue a licence,
authority or other instrument; or
(d) imposing a condition or restriction; or
30 (e) making a declaration, demand or requirement; or
(f) retaining, or refusing to deliver up, an article; or
(g) doing or refusing to do anything else.
25
Friendly Societies (Western Australia)
App. Bill 1998
Officer
9. (1) Subject to subsection (2), for the purposes of this Code,
``officer'', in relation to a body corporate or entity, includes --
(a) a director, secretary, executive officer or employee of the
5 body or entity; and
(b) a receiver and manager, appointed under a power contained
in an instrument, of property of the body or entity; and
(c) a liquidator of the body or entity appointed in a voluntary
winding-up of the body or entity; and
10 (d) a trustee or other person administering a compromise or
arrangement made between the body or entity and other
persons.
(2) None of the following is an officer of the body corporate or
entity --
15 (a) a receiver who is not also a manager;
(b) a receiver and manager appointed by a court;
(c) a liquidator appointed by a court.
Related body corporate
10. If a body corporate is --
20 (a) the holding body corporate of another body corporate; or
(b) a subsidiary of another body corporate; or
(c) a subsidiary of the holding body corporate of another body
corporate,
the first body corporate and the other body corporate are related to each
25 other.
Subsidiary
11. (1) Subject to subsection (5), a body corporate is a subsidiary of
a society if --
(a) the society --
30 (i) controls the composition of the body corporate's board
of directors; or
26
Friendly Societies (Western Australia)
Bill 1998 App.
(ii) is in a position to cast, or control the casting of, more
than 50% of the maximum number of votes that
might be cast at a general meeting of the body
corporate; or
5 (iii) holds more than 50% of the issued share capital of
the body corporate (other than 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); or
10 (b) the body corporate is a subsidiary of a body corporate that
is a subsidiary of the society (including a body corporate
that is a subsidiary of the society by another application of
this paragraph).
(2) The composition of a body corporate's board of directors is
15 controlled by a society if the society can appoint or remove all or a
majority of the directors by the exercise of a power exercisable with or
without the consent or concurrence of another person.
(3) For the purposes of subsection (2), a society is taken to have
power to make an appointment of directors if --
20 (a) a person cannot be appointed as director without the
exercise of such a power by the society in the person's
favour; or
(b) a person's appointment as a director follows necessarily
from the person being a director or other officer of the
25 society.
(4) Subsection (2) does not limit by implication the circumstances
in which the composition of a body corporate's board of directors is
taken to be controlled by a society.
(5) In determining whether a body corporate is a subsidiary of a
30 society --
(a) any shares held or power exercisable by the society in a
fiduciary capacity must be treated as not held or
exercisable by it; and
(b) subject to paragraphs (c) and (d), any shares held or power
35 exercisable --
(i) by any person as a nominee for the society; or
(ii) by, or by a nominee for, a subsidiary of the society
(other than a subsidiary that is concerned only in a
fiduciary capacity),
40 must be treated as held or exercisable by the society; and
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(c) any shares held or power exercisable by a person under a
debenture, or a trust deed for securing the issue of
debentures, must be disregarded; and
(d) any shares held or power exercisable by, or by a nominee
5 for, the society or a subsidiary of a society merely by way of
security given for the purposes of a transaction entered into
in the ordinary course of business in connection with
providing financial accommodation must be disregarded.
(6) If it is relevant to determine for the purposes of this Code
10 whether a body corporate is a subsidiary of another body corporate that
is not a society and subsection (1) does not apply, the first body
corporate is a subsidiary of the other body corporate if it would be such
a subsidiary under the Corporations Law.
Qualified privilege
15 12. (1) Where this Code provides that a person has qualified
privilege in respect of an act, matter or thing, the person, in respect of
that act, matter or thing --
(a) has qualified privilege in proceedings for defamation; or
(b) is not, in the absence of malice on the person's part, liable
20 to an action for defamation at the suit of a person.
(2) In subsection (1) --
``malice'' includes ill-will to the person concerned or any other
improper motive.
(3) Neither this section nor a provision of this Code that provides
25 as mentioned in subsection (1) limits or affects any right, privilege or
immunity that a person has, apart from this section or such a provision,
as defendant in proceedings, or an action, for defamation.
Carrying on business: otherwise than for profit
13. A reference in this Code to a person carrying on business,
30 carrying on a business, or carrying on a business of a particular kind,
includes a reference to the person carrying on business, carrying on a
business, or carrying on a business of that kind, as the case may be --
(a) in any case, otherwise than for profit; or
(b) in the case of a body corporate, otherwise than for the profit
35 of the members or corporators of the body.
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Businesses of a particular kind
14. A reference in this Code to a business of a particular kind
includes a reference to a business of that kind that is part of, or is
carried on in conjunction with, any other business.
5 Carrying on a business: alone or together with others
15. A reference in this Code to a person carrying on a business, or a
business of a particular kind, is a reference to the person carrying on a
business, or a business of that kind, whether alone or together with any
other person or persons.
10 Interpretation generally
16. Schedule A contains miscellaneous provisions relating to the
interpretation of this Code.
Division 3 -- Operation of Friendly Societies Legislation
Extraterritorial operation of legislation
15 17. The friendly societies legislation applies --
(a) throughout Australia; and
(b) both within and outside Australia.
Division 4 -- Application and Adoption of Corporations Law
Definitions
20 18. In this Division --
``Corporations Law'' includes the Corporations Regulations.
Corporations Law applying under its own force
19. (1) The provisions of the Corporations Law (other than the
provisions of the Corporations Law mentioned in subsection (2)) are
25 excluded from applying under their own force to and with respect to
societies.
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(2) However, the following provisions of the Corporations Law are
not excluded from applying under their own force --
(a) provisions applying to, or about, the following --
(i) bodies;
5 (ii) bodies corporate;
(iii) disclosing entities;
(iv) eligible bodies;
(v) persons;
(vi) securities, including securities of a particular type;
10 (vii) securities, including securities of a particular type of
a body corporate;
(b) provisions applying to or about bodies or bodies corporate
included in the official list of a securities exchange
(including provisions of Chapter 6 applying to or about a
15 company as defined for that Chapter);
(c) Part 7.11;
(d) Part 7.12;
(e) provisions --
(i) about the interpretation of a provision mentioned in
20 paragraphs (a) to (d) (``non-excluded Corporations
Law provision''), including a provision defining a
word used in the non-excluded Corporations Law
provision; or
(ii) vesting power in the Australian Securities
25 Commission, but only to the extent that they vest
power for the purposes of a non-excluded
Corporations Law provision; or
(iii) empowering a court to make an order (including an
order curing a procedural irregularity), but only to
30 the extent that they empower the court to make an
order for the purposes of a non-excluded Corporations
Law provision; or
(iv) otherwise about the administration of a non-excluded
Corporations Law provision.
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(3) Subsection (2) does not apply provisions of the Corporations
Law that would not otherwise apply to societies or the securities of
societies.
(4) Subsections (1) to (3) have effect despite any law of this State
5 prescribed for the purposes of this subsection.
(5) The expressions used in subsection (2) (a), (b) and (e) have the
meanings given by the Corporations Law.
(6) Subsections (1) to (3) are not intended to affect the operation,
as intended under the Corporations Law, of a provision of the
10 Corporations Law expressly excluding a provision of the Corporations
Law from having application to societies.
Corporations Law adopted under a regulation
20. (1) A regulation may adopt, with or without modification, a
provision of the Corporations Law for application to societies or the
15 securities of societies.
(2) However, a regulation may not adopt a provision of the
Corporations Law to the extent that the provision as adopted would be
inconsistent with a provision of the friendly societies legislation.
(3) A regulation made as permitted by this section may create an
20 offence with a maximum penalty of not more than the maximum
penalty for the equivalent offence under the Corporations Law.
Adopted provisions of Corporations Law
21. (1) This section applies if a provision of the Corporations Law
(the ``adopted provision'') is adopted for application to societies or the
25 securities of societies with or without modification, under a provision
(the ``adopting provision'') of this Code (including a regulation
permitted by section 20).
(2) Unless the adopting provision otherwise provides, definitions
and other interpretation provisions of the Corporations Law relevant to
30 the adopted provision are taken also to be adopted.
(3) ``Gazette'' and ``Minister'' in an adopted provision has the
meaning given in this Code.
(4) Neither the adopting provision nor the adopted provision gives
power to the Australian Securities Commission to administer the
35 adopted provision for this Code.
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PART 2 -- FUNCTIONS AND POWERS OF SSA
Division 1 -- General
Functions of SSA
22. The functions of the SSA under this Code are to --
5 (a) register, supervise and regulate societies; and
(b) supervise and enforce compliance by societies with this
Code and with standards; and
(c) ensure that an effective and efficient system of prudential
supervision is applied to societies; and
10 (d) protect the interests of members of societies; and
(e) facilitate or direct the transfer of engagements of, or the
conversion or merger of, societies; and
(f) otherwise undertake the administration and enforcement of
the financial institutions scheme so far as it relates to
15 societies; and
(g) provide information and statistics to AFIC relating to --
(i) societies; and
(ii) the operation, administration and enforcement of the
financial institutions scheme so far as it relates to
20 societies; and
(h) advise, and make recommendations to, AFIC; and
(i) carry out such other functions as are conferred on it by or
under the friendly societies legislation.
General powers
25 23. (1) The SSA has power to do all things necessary or convenient
to be done for, or in connection with, the performance of its functions
under this Code.
(2) Without limiting subsection (1), the SSA has such powers as
are conferred on it by or under the friendly societies legislation.
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SSA to comply with standards
24. In performing its functions, and exercising its powers, the SSA
must comply with all applicable standards.
Application of variation under standards
5 25. (1) If a standard provides that the operation of the standard in
relation to a particular society may be varied by a SSA by temporarily
changing a requirement of the standard, the SSA may temporarily
change the requirement as allowed under the standard.
(2) Subsection (1) does not limit section 23.
10 SSA to keep Minister informed
26. (1) The SSA must keep the Minister informed of --
(a) the operations of the SSA in relation to this Code; and
(b) the operation, administration and enforcement of this Code.
(2) The SSA must give the Minister such reports and information
15 in relation to those matters as the Minister requires.
Inspection of documents at public office
27. (1) The SSA must keep registers of documents and rules of
societies at its public office.
(2) A person may, on payment of the prescribed fee --
20 (a) inspect at the public office of the SSA during ordinary
business hours of the SSA at the office --
(i) the rules of a society; and
(ii) any other document of a prescribed class lodged with,
created by or otherwise held by the SSA; and
25 (b) obtain from the SSA --
(i) a certified copy of the certificate of incorporation of a
society and a certified copy of, or of part of, the rules
of a society; or
(ii) a certified copy of, or extract from, another document
30 that the person is entitled to inspect under paragraph
(a).
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Power of SSA to reject documents
28. (1) If the SSA is of opinion that a document submitted to the
SSA --
(a) contains matter contrary to law; or
5 (b) contains matter that, in a material particular, is false or
misleading in the form or context in which it is included; or
(c) because of an omission or misdescription, has not been duly
completed; or
(d) does not comply with the requirements of this Code; or
10 (e) contains an error, alteration or erasure,
the SSA may refuse to register, or may reject, the document and may
request --
(f) that the document be appropriately amended or completed
and resubmitted; or
15 (g) that a fresh document be submitted in its place; or
(h) if the document has not been duly completed, that a
supplementary document be submitted.
(2) The SSA may require a person who submits a document to the
SSA to also produce another document, or to give any information, that
20 the SSA considers necessary in order to form an opinion whether it
should refuse to register or should reject the document.
Extension or abridgment of time
29. (1) The SSA may, on receipt of written application by a society
accompanied by the prescribed fee or of its own initiative, extend or
25 abridge the time within which anything is required to be done under
this Code or the society's rules.
(2) An application under subsection (1) may be made to the SSA
even though the time sought to be extended has ended.
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Division 2 -- Specific Powers
Subdivision 1 -- Services corporations
Services corporation
30. (1) The SSA may, by Gazette notice, declare a body corporate,
5 that provides or proposes to provide financial or other services to
societies to enable them to further their objects, to be a services
corporation.
(2) Subject to this section, a society may subscribe for or otherwise
acquire shares in a services corporation.
10 (3) A society must not, without the written approval of the SSA,
apply funds in excess of the prescribed amount or an amount calculated
as prescribed, whichever is greater, in subscribing for or otherwise
acquiring shares in any one services corporation.
Maximum penalty: $25 000.
15 (4) On an application for approval under subsection (3), the SSA
may --
(a) give the approval; or
(b) refuse to give the approval.
(5) The SSA may --
20 (a) subject an approval to conditions; and
(b) at any time vary or revoke a condition imposed on an
approval.
(6) If a condition (including a prescribed condition) to which an
approval is subject has been contravened, the SSA may revoke the
25 approval.
(7) The SSA must not --
(a) refuse to give an approval; or
(b) subject an approval to conditions,
without first giving the society an opportunity to make written
30 submissions to it in relation to the matter.
(8) The SSA must not --
(a) vary a condition imposed on an approval; or
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(b) revoke an approval,
without first giving the society an opportunity to be heard or, if the
society prefers, an opportunity to make written submissions to it in
relation to the matter.
5 (9) The variation or revocation of a condition imposed on an
approval or the revocation of an approval takes effect on --
(a) the day that written notice is given to the society; or
(b) a day specified in that notice,
whichever is later.
10 (10) A society must not contravene any condition imposed on an
approval.
Maximum penalty: $25 000.
(11) The application by a society of funds in contravention of
subsection (3) is not invalid as regards a person transacting business
15 with the society unless the person --
(a) has actual knowledge of the contravention at the time when
the funds were applied; or
(b) has a connection or relationship with the society that is
such that the person should have known of the
20 contravention.
Subdivision 2 -- Enforcement powers
Obtaining information
31. (1) The SSA may, if it is reasonably necessary for the purposes
of its functions under the friendly societies legislation, by written notice
25 given to a society, or a body corporate related to a society, require the
society, or body corporate --
(a) to give to it, within a reasonable period and in a reasonable
way specified in the notice, specified information and
reports; and
30 (b) to give to it, at the reasonable times and in a reasonable
way specified in the notice, periodic reports on specific
matters; and
(c) to notify it, within the reasonable time and in a reasonable
way specified in the notice, if --
35 (i) a specified event or change of circumstances happens;
or
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(ii) the society or body corporate becomes aware that a
specified event or change of circumstances is likely to
happen.
(2) The SSA may, if it is reasonably necessary for the purposes of
5 its functions under the friendly societies legislation, by written notice
given to a services corporation, or a body corporate related to a services
corporation, require the services corporation or body corporate to give to
it, within a reasonable time and in a reasonable way specified in the
notice, specified information.
10 (3) A society, body corporate or services corporation that, without
reasonable excuse, fails to comply with a requirement under
subsection (1) or (2) to the extent that it is capable of doing so commits
an offence.
Maximum penalty: $25 000.
15 (4) It is not a reasonable excuse for a society, or body corporate or
services corporation to fail to comply with a requirement under
subsection (1) or (2) that complying with the requirement might tend to
incriminate the society, body corporate or services corporation.
(5) The fact that information or a report or notification was given
20 by a society, body corporate or services corporation under subsection (1)
or (2) is not admissible in evidence against the society, body corporate
or services corporation in a criminal proceeding (other than a
proceeding in relation to the falsity of the information, report or
notification) if --
25 (a) the society, body corporate or services corporation, before
giving the information, report or notification (the ``relevant
action'') claimed that the relevant action might tend to
incriminate the society, body corporate or services
corporation; and
30 (b) the relevant action might in fact tend to incriminate the
society, body corporate or services corporation.
Obtaining evidence
32. (1) The SSA may, if it is reasonably necessary for the purposes
of the friendly societies legislation, by written notice given to a person,
35 require the person --
(a) to attend before an employee of the SSA authorized for the
purpose, at a reasonable time and place specified in the
notice, and then and there answer questions; and
(b) to produce to an employee of the SSA authorized for the
40 purpose, at a reasonable time and place specified in the
notice, documents in the custody or under the control of the
person.
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(2) An employee before whom a person attends under subsection
(1) (a) may require answers to be verified or given on oath or
affirmation, and either orally or in writing, and for that purpose the
employee may administer an oath or affirmation.
5 (3) An employee to whom documents are produced under
subsection (1) --
(a) may keep the documents for 60 days or, if a prosecution for
an offence against the friendly societies legislation of which
the document may afford evidence is instituted within that
10 period, until the completion of the proceeding for the offence
and of any appeal in relation to the proceeding; and
(b) while the employee has possession of the document, may
take extracts from and make copies of the document, but
must allow the document to be inspected at any reasonable
15 time by a person who would be entitled to inspect it if it
were not in the employee's possession.
(4) The regulations must prescribe scales of allowances and
expenses to be allowed to persons required to attend under this section.
(5) The SSA may authorize an employee for the purpose of
20 subsection (1) (a) only if the person has, in the SSA's opinion, the
appropriate expertise for the purpose (whether because of training or
otherwise).
(6) A person who, without reasonable excuse, fails to comply with
a requirement under subsection (1) to the extent that the person is
25 capable of doing so commits an offence.
Maximum penalty: $25 000.
(7) It is not a reasonable excuse for a person to fail to comply with
a requirement under subsection (1) that complying with the
requirement might tend to incriminate the person.
30 (8) An answer given by a person under subsection (1) is not
admissible against the person in a criminal proceeding (other than a
proceeding in relation to the falsity of the answer) if --
(a) the person, before giving the answer, claimed that giving
the answer might tend to incriminate the person; and
35 (b) the answer might in fact tend to incriminate the person.
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(9) The fact that a document was produced by a person under
subsection (1) is not admissible in evidence against the person in a
criminal proceeding (other than a proceeding in relation to the falsity of
the document) if --
5 (a) the person, before producing the document, claimed that
producing the document might tend to incriminate the
person; and
(b) producing the document might in fact tend to incriminate
the person.
10 Inspectors
33. (1) The SSA may authorize a person, or a class of persons, to
exercise all or any of the powers conferred by this Code on an inspector.
(2) The SSA may cause an identity card to be issued to an
inspector.
15 (3) The identity card must --
(a) contain a recent photograph of the inspector; and
(b) be in a form approved by the SSA.
(4) A person who ceases to be an inspector must, as soon as
practicable, return his or her identity card to the SSA.
20 Maximum penalty: $5 000.
Inspector to produce identity card
34. An inspector is not entitled to exercise powers under this Division
in relation to another person unless the inspector first produces the
inspector's identity card for inspection by the person.
25 Entry and search -- monitoring compliance
35. (1) An inspector may, for the purpose of finding out whether
the requirements of this Code are being complied with --
(a) enter any place; and
(b) exercise the powers set out in section 37.
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(2) An inspector must not enter a place, or exercise a power under
subsection (1), unless --
(a) the place is premises occupied by a society or services
corporation, or a body corporate related to a society or
5 services corporation and the entry is made when the
premises are open for conduct of business or otherwise open
for entry; or
(b) the place is premises occupied by a banker or liquidator of a
society, or a body corporate related to a society, and the
10 entry is made when the premises are open for conduct of
business or otherwise open for entry; or
(c) the place is premises that are not occupied for residential
purposes, the inspector believes on reasonable grounds that
accounting records or other prescribed documents of, or any
15 auditor's or actuary's working papers relating to, a society,
or a body corporate related to a society, are kept or are to
be found on the premises and the entry is made when the
premises are open for conduct of business or otherwise open
for entry; or
20 (d) the occupier of the place consents to the entry or exercise of
the power; or
(e) a warrant under section 38 authorizes the entry or exercise
of the power.
Entry and search -- evidence of offences
25 36. (1) Subject to subsection (3), if an inspector has reasonable
grounds for suspecting that there is in a place a particular thing (``the
evidence'') that may afford evidence of the commission of an offence
against this Code, the inspector may --
(a) enter the place; and
30 (b) exercise the powers set out in section 37.
(2) If an inspector enters the place and finds the evidence, the
following provisions have effect --
(a) the inspector may seize the evidence;
(b) the inspector may keep the evidence for 60 days or, if a
35 prosecution for an offence against this Code in the
commission of which the evidence may have been used or
otherwise involved is instituted within that period, until the
completion of the proceeding for the offence and of any
appeal in relation to the proceeding;
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Friendly Societies (Western Australia)
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(c) if the evidence is a document, while the inspector has
possession of the document, the inspector may take extracts
from and make copies of the document, but must allow the
document to be inspected at any reasonable time by a
5 person who would be entitled to inspect it if it were not in
the inspector's possession.
(3) An inspector must not enter the place or exercise a power
under subsection (1) unless --
(a) the occupier of the place consents to the entry or exercise of
10 the power; or
(b) a warrant under section 39 that was issued in relation to
the evidence authorizes the entry or exercise of the power.
(4) If, while searching the place under subsection (1) under a
warrant under section 39 --
15 (a) an inspector finds a thing that the inspector believes, on
reasonable grounds, to be --
(i) a thing (other than the evidence) that will afford
evidence of the commission of the offence mentioned
in subsection (1); or
20 (ii) a thing that will afford evidence of the commission of
another offence against this Code; and
(b) the inspector believes, on reasonable grounds, that it is
necessary to seize the thing to prevent --
(i) its concealment, loss or destruction; or
25 (ii) its use in committing, continuing or repeating the
offence mentioned in subsection (1) or another
offence, as the case may be,
subsection (2) applies to the thing as if it were the evidence.
(5) An inspector who seizes or damages anything under this
30 section must give written notice of particulars of the thing or damage.
(6) The notice must be given to --
(a) if anything is seized, the person from whom the thing was
seized; or
(b) if damage is caused to anything, the person who appears to
35 the inspector to be the owner.
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General powers of inspector in relation to places
37. (1) The powers an inspector may exercise under section
35 (1) (b) or 36 (1) (b) in relation to a place are as follows --
(a) to search any part of the place;
5 (b) to inspect, examine or photograph anything in the place;
(c) to take extracts from, and make copies of, any documents in
the place;
(d) to take into the place such equipment and materials as the
inspector requires for the purpose of exercising any powers
10 in relation to the place;
(e) to require the occupier or any person in the place to give to
the inspector reasonable assistance in relation to the
exercise of an inspector's powers mentioned in paragraphs
(a) to (d).
15 (2) A person must not, without reasonable excuse, fail to comply
with a requirement under subsection (1) (e).
Maximum penalty: $5 000.
(3) It is not a reasonable excuse for a person to fail to comply with
a requirement under subsection (1) (e) on the ground of the privilege
20 against self-incrimination.
(4) If, under a requirement under subsection (1) (e), a person is
required to answer a question or produce a document, the contents of
the answer, or the fact of production of the document, is not admissible
in evidence against the person in a criminal proceeding (other than a
25 proceeding in relation to the falsity of the answer or document).
(5) For the purposes of the application of subsection (4) to the
production of a document, the contents of the document are to be
disregarded.
Monitoring warrants
30 38. (1) An inspector may apply to a magistrate for a warrant under
this section in relation to a particular place.
(2) Subject to subsection (3), the magistrate may issue the warrant
if the magistrate is satisfied, by information on oath, that it is
reasonably necessary that the inspector should have access to the place
35 for the purpose of finding out whether the requirements of this Code
are being complied with.
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(3) If the magistrate requires further information concerning the
grounds on which the issue of the warrant is being sought, the
magistrate must not issue the warrant unless the inspector or another
person has given the information to the magistrate in the form (either
5 orally or by affidavit) that the magistrate requires.
(4) The warrant must --
(a) authorize the inspector, with such assistance and by such
force as is necessary and reasonable --
(i) to enter the place; and
10 (ii) to exercise the powers set out in section 37; and
(b) state whether the entry is authorized to be made at any
time of the day or night or during specified hours of the day
or night; and
(c) specify the day (not more than 6 months after the issue of
15 the warrant) on which the warrant ceases to have effect;
and
(d) state the purpose for which the warrant is issued.
Offence related warrants
39. (1) An inspector may apply to a magistrate for a warrant under
20 this section in relation to a particular place.
(2) Subject to subsection (3), the magistrate may issue the warrant
if the magistrate is satisfied, by information on oath, that there are
reasonable grounds for suspecting that there is, or there may be within
the next 72 hours, in the place a particular thing (``the evidence'') that
25 may afford evidence of the commission of an offence against this Code.
(3) If the magistrate requires further information concerning the
grounds on which the issue of the warrant is being sought, the
magistrate must not issue the warrant unless the inspector or another
person has given the information to the magistrate in the form (either
30 orally or by affidavit) that the magistrate requires.
(4) The warrant must --
(a) authorize the inspector, with such assistance and by such
force as is necessary and reasonable --
(i) to enter the place; and
35 (ii) to exercise the powers set out in section 37; and
(iii) to seize the evidence; and
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(b) state whether the entry is authorized to be made at any
time of the day or night or during specified hours of the day
or night; and
(c) specify the day (not more than 7 days after the issue of the
5 warrant) on which the warrant ceases to have effect; and
(d) state the purposes for which the warrant is issued.
Offence related warrant may be granted by telephone
40. (1) If, because of urgent circumstances, an inspector considers
it necessary to do so, the inspector may, under this section, apply by
10 telephone for a warrant under section 39.
(2) Before applying for the warrant, the inspector must prepare
information of the kind mentioned in section 39 (2) that sets out the
grounds on which the issue of the warrant is sought.
(3) If it is necessary to do so, the inspector may apply for the
15 warrant before the information has been sworn.
(4) If the magistrate is satisfied --
(a) after having considered the terms of the information; and
(b) after having received such further information (if any) as
the magistrate requires concerning the grounds on which
20 the issue of the warrant is being sought,
that there are reasonable grounds for issuing the warrant, the
magistrate may, under section 39, complete and sign such a warrant as
the magistrate would issue under that section if the application had
been made under that section.
25 (5) If the magistrate completes and signs the warrant --
(a) the magistrate must --
(i) tell the inspector what the terms of the warrant are;
and
(ii) tell the inspector the date on which and the time at
30 which the warrant was signed; and
(iii) record on the warrant the reasons for granting the
warrant; and
(b) the inspector must --
(i) complete a form of warrant in the same terms as the
35 warrant completed and signed by the magistrate; and
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(ii) write on the form of warrant the name of the
magistrate and the date on which and the time at
which the magistrate signed the warrant.
(6) The inspector must also, not later than the day after the day of
5 expiry or execution of the warrant (whichever is the earlier), send to the
magistrate --
(a) the form of warrant completed by the inspector; and
(b) the information mentioned in subsection (2), which must
have been duly sworn.
10 (7) When the magistrate receives the documents mentioned in
subsection (6), the magistrate must --
(a) attach them to the warrant that the magistrate completed
and signed; and
(b) deal with them in the way in which the magistrate would
15 have dealt with the information if the application for the
warrant had been made under section 39.
(8) A form of warrant duly completed by the inspector under
subsection (5) is authority for any entry, search, seizure or other
exercise of a power that the warrant signed by the magistrate
20 authorizes.
(9) If --
(a) it is material for a court to be satisfied that an entry,
search, seizure or other exercise of power was authorized by
this section; and
25 (b) the warrant completed and signed by the magistrate
authorizing the exercise of power is not produced in
evidence,
the court must assume, unless the contrary is proved, that the exercise
of power was not authorized by such a warrant.
30 Obstruction of inspectors
41. A person must not, without reasonable excuse, assault, obstruct,
hinder or resist an inspector in the exercise of a power under this Code.
Maximum penalty: $50 000 or imprisonment for 7 years, or both.
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False or misleading statements
42. (1) In this section --
``relevant person'' means a person exercising powers under this
Code, and includes an inspector.
5 (2) A person must not --
(a) make a statement to the SSA or a relevant person that the
person knows is false or misleading in a material
particular; or
(b) omit from a statement made to the SSA or a relevant
10 person anything without which the statement is, to the
person's knowledge, misleading in a material particular; or
(c) give to the SSA or a relevant person a document containing
information that the person knows is false, misleading or
incomplete in a material particular without, at the same
15 time --
(i) indicating that the document is false, misleading or
incomplete and the respect in which it is false,
misleading or incomplete; and
(ii) giving correct information if the person has, or can
20 reasonably obtain, the correct information.
Maximum penalty: $100 000 or imprisonment for 15 years,
or both.
Subdivision 3 -- Special meeting and inquiry
Special meeting and inquiry
25 43. (1) The SSA, on the written application of a majority of the
directors, or not less than 10% of the members of a society or not less
than 10% of the members of a benefit fund of a society (as the case
requires) or on its own initiative --
(a) may call a special meeting of the society or of the members
30 of the benefit fund; or
(b) may hold an inquiry into affairs (including the working and
financial conditions) of the society or the benefit fund.
(2) The SSA, on its own initiative, may hold an inquiry into affairs
(including the working and financial conditions) of --
35 (a) a body corporate related to a society; or
(b) a services corporation.
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(3) An application under subsection (1) must be supported by such
evidence as the SSA directs for the purpose of showing that the
applicants have good reason for requiring the meeting or inquiry and
that the application is made without malicious motive.
5 (4) Notice of the application must be given to the society if the
SSA directs.
(5) Security for the expenses of a meeting or inquiry must be
given --
(a) if the meeting is called or inquiry is held on an application
10 under subsection (1), by the applicants; or
(b) in any other case, by such persons and in such way as the
SSA directs.
(6) The SSA may --
(a) direct the time and place the meeting or inquiry is to be
15 held; and
(b) direct what matters are to be discussed or determined; and
(c) despite the rules of the society, give notice to members of
the holding of the meeting or inquiry as it considers
appropriate.
20 (7) The SSA may, by written notice, direct the directors and such
other persons as it requires to attend the meeting or inquiry.
(8) A person to whom a direction is given under subsection (7)
must not, without reasonable excuse, fail to comply with the direction.
Maximum penalty: $100 000 or imprisonment for 15 years,
25 or both.
(9) A meeting held under this section has all the powers of a
meeting called under the rules of a society and has power to appoint a
person to preside at the meeting, despite any rule of the society to the
contrary.
30 (10) The SSA, or any person nominated by it, may attend and
address a meeting held under this section.
(11) All expenses of and incidental to the meeting or inquiry may
be defrayed --
(a) if the meeting is called or inquiry is held under
35 subsection (1) --
(i) by the applicants, or any officer or member, or former
officer or member of the society; or
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(ii) by the society out of the management fund of the
society or, with the prior written approval of the SSA,
out of a benefit fund of the society,
in such proportions as may be agreed between the SSA and
5 those persons; or
(b) if the inquiry is held under subsection (2) --
(i) in the case of a related body corporate, out of the
funds of the society to which the body corporate is
related; or
10 (ii) in the case of a services corporation, out of the funds
of the services corporation or, if the society has shares
in the services corporation, out of the management
fund of the society,
in such proportions as the SSA directs,
15 and may be recovered as a debt in a court having jurisdiction for the
recovery of debts up to the amount concerned.
(12) In default of agreement under subsection (11) (a), the
expenses must be defrayed by such persons, and in such proportions, as
the Court, on the application of the SSA, directs.
20 Subdivision 4 -- Special power of intervention
Intervention by SSA
44. (1) If the SSA is of the opinion that --
(a) a society has contravened the friendly societies legislation
and, after being given written notice of the contravention by
25 the SSA, has allowed the contravention to continue or has
again contravened the legislation; or
(b) the management fund of a society has an accumulated
deficit; or
(c) the affairs of a society or a fund of a society are being
30 managed or conducted in an improper or financially
unsound way,
the SSA may, by written notice given to the society, place it under
direction.
(2) The SSA may, by written notice given to the society, revoke the
35 notice.
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(3) While the society is under direction, the SSA may do all things
that it considers necessary to ensure that the principal objects of the
friendly societies scheme for friendly societies established by the
friendly societies legislation are achieved in relation to the society.
5 (4) Without limiting subsection (3), the SSA may,
(a) order an audit of the affairs of the society or a fund of the
society by an auditor chosen by the SSA at the expense of
the society; or
(b) order an actuarial investigation of the affairs of the society
10 or a fund of the society by an actuary chosen by the SSA at
the expense of the society; or
(c) direct the society to change any practices that in the SSA's
opinion are undesirable or unsound; or
(d) direct the society to cease or limit the raising of funds or
15 the exercise of other powers; or
(e) remove a director, or all the directors, of the society from
office and appoint another director or other directors; or
(f) remove any auditor of the society from office and appoint
another auditor; or
20 (g) remove the actuary of the society from office and appoint
another actuary; or
(h) give any other directions as to the way in which the affairs
of the society are to be conducted or not conducted.
(5) If the society --
25 (a) fails, without reasonable excuse, to comply with a direction
given or requirement made under this section to the extent
that the society is capable of doing so; or
(b) without reasonable excuse, obstructs, hinders or resists the
exercise of the SSA's powers under this section,
30 the society and any officer of the society who is in default each commit
an offence.
Maximum penalty: $100 000 or imprisonment for 15 years,
or both.
(6) A director, auditor or actuary appointed under this section
35 holds office for such term as the SSA directs.
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Subdivision 5 -- Power to suspend operations of society
Power to suspend operations
45. (1) If the SSA considers that it is necessary to do so --
(a) in the interests of members, or persons who may become
5 members, of a society; or
(b) because a society has failed to comply with a standard,
the SSA may, by written notice given to the society, direct the society
not to do any of the following --
(c) borrow any amount;
10 (d) accept any new member;
(e) without the approval of the SSA, accept any contribution or
pay to a member any benefit or otherwise dispose of or deal
with the assets of the society or a fund of the society;
(f) accept any payment on account of share capital except calls
15 that fell due before the notice was given;
(g) repay any amount paid on shares;
(h) repay any money on loan;
(i) pay or transfer an amount to any person, or create an
obligation to do so.
20 (2) A notice under subsection (1) continues in force until it expires,
or is withdrawn by the SSA.
(3) The SSA may, by a further written notice given to the
society --
(a) extend the period for which a notice under subsection (1) is
25 to have force; or
(b) amend the terms of the notice; or
(c) withdraw the notice.
(4) If a society fails to comply with a notice under this section, the
society and any officer of the society who is in default each commit an
30 offence.
Maximum penalty: $100 000 or imprisonment for 15 years,
or both.
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(5) Subsection (4) does not apply if the failure to comply happens
with the written permission of the SSA.
Subdivision 6 -- Administrators
Appointment of administrator
5 46. (1) The SSA may, by written notice, appoint an administrator
to conduct the affairs of a society and may, by written notice, revoke
the appointment.
(2) A notice of appointment must specify --
(a) the date of appointment; and
10 (b) the appointee's name; and
(c) the appointee's business address.
(3) If the appointee's name or business address changes, the
appointee must immediately give written notice of the change to the
SSA.
15 (4) The SSA must not appoint an administrator unless --
(a) the SSA is of the opinion that --
(i) the society has contravened the friendly societies
legislation or the society's rules and, after being given
written notice of the contravention by the SSA, has
20 allowed the contravention to continue or has again
contravened the legislation or rules; or
(ii) the management fund of the society has an
accumulated deficit; or
(iii) the affairs of the society or a fund of the society are
25 being managed or conducted in an improper or
financially unsound way; or
(b) after making such inquiries in relation to the society as the
SSA considers appropriate, the SSA is satisfied that it is in
the interest of members or creditors that the society's
30 affairs be conducted by an administrator; or
(c) the SSA has certified that any of the events mentioned in
section 402 (1) (a), (b), (c) or (g) has happened.
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(5) On the appointment of an administrator of a society --
(a) the directors of the society cease to hold office; and
(b) all contracts of employment with, or for provision of
administrative or secretarial services to, the society are
5 terminated; and
(c) the administrator may terminate any contract for provision
of other services to the society.
(6) An administrator of a society has the powers and functions of
the board of the society, including the board's powers of delegation.
10 (7) A director of a society must not be appointed or elected while
the administrator is in office except in the circumstances mentioned in
subsection (11).
(8) An administrator holds office until the administrator's
appointment is revoked.
15 (9) Immediately on the revocation of an administrator's
appointment, the administrator must prepare and submit a report to
the SSA showing how the administration was carried out, and for that
purpose an administrator has access to the society's records and
documents.
20 (10) On providing the report and accounting fully in relation to the
administration of the society to the satisfaction of the SSA, the
administrator is released from any further duty to account in relation to
the administration of the society other than on account of fraud,
dishonesty, negligence or wilful failure to comply with the friendly
25 societies legislation.
(11) Before revoking an administrator's appointment, the SSA
must --
(a) appoint another administrator; or
(b) appoint a liquidator; or
30 (c) ensure that directors have been elected under the society's
rules at a meeting called by the administrator under the
rules; or
(d) appoint directors of the society.
(12) Directors elected or appointed under subsection (11) --
35 (a) take office on the revocation of the administrator's
appointment; and
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(b) in the case of directors appointed under subsection (11) (d),
hold office, subject to section 47, until the society's next
annual general meeting.
(13) The expenses of an administrator in conducting a society's
5 affairs are payable --
(a) from the management fund of the society; or
(b) from a benefit fund of the society in accordance with the
prior written approval of the SSA; or
(c) partly from the management fund and partly from a benefit
10 fund in accordance with the prior written approval of the
SSA.
(14) The expenses of conducting a society's affairs include --
(a) if the administrator is not an employee of the SSA,
remuneration of the administrator at a rate approved by
15 the SSA; or
(b) if the administrator is an employee of the SSA, the amount
that the SSA certifies should be paid to it as repayment of
the administrator's remuneration.
(15) An amount certified under subsection (14) (b) is a debt due to
20 the SSA and may be sued for and recovered in a court having
jurisdiction for the recovery of debts up to the amount concerned.
(16) An administrator has, in relation to the expenses specified in
subsection (13), the same priority on the winding-up of a society as the
liquidator of the society has.
25 (17) If a society incurs any loss because of any fraud, dishonesty,
negligence or wilful failure to comply with the friendly societies
legislation or the society's rules by an administrator, the administrator
is personally liable for the loss.
(18) An administrator is not liable for any loss that is not a loss to
30 which subsection (17) applies but must account for the loss in a report
given under this section.
Additional powers of SSA
47. (1) If the SSA appoints directors of a society under
section 46 (11) (d), the SSA may, by written notice given to the society,
35 specify --
(a) a time during which this section is to apply in relation to
the society; and
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(b) the terms and conditions on which all or any of the
directors hold office; and
(c) the rules that are to be the society's rules.
(2) While this section applies to a society, the SSA may --
5 (a) from time to time remove and appoint directors; and
(b) from time to time vary, revoke or specify new terms and
conditions in place of all or any of the terms and conditions
specified under subsection (1); and
(c) amend all or any of the rules specified under subsection (1).
10 (3) The SSA may, by written notice given to the society, extend the
time for which this section is to apply in relation to a society.
(4) A rule specified by the SSA under this section as a rule of the
society --
(a) is not to be amended or revoked except in the way set out
15 in this section; and
(b) if it is inconsistent with any other rule of the society,
prevails over the other rule, and the other rule is to the
extent of the inconsistency invalid; and
(c) has the same evidentiary value as is by this Code accorded
20 to the society's rules and to copies of them.
Stay of proceedings
48. (1) If the SSA appoints an administrator to conduct a society's
affairs, a person must not begin or continue any proceeding in a court
against the society until the administrator's appointment is revoked
25 except with the leave of the Court and, if the Court grants leave, in
accordance with any terms and conditions that the Court imposes.
(2) A person intending to apply for leave of the Court under
subsection (1) must give to the SSA not less than 10 days' notice of
intention to apply.
30 (3) On the hearing of an application under subsection (1), the SSA
may be represented and may oppose the granting of the application.
Administrator to report to SSA
49. On the receipt of a request from the SSA, the administrator of a
society must, without delay, prepare and give to the SSA a report
35 showing how the administration is being carried out.
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Subdivision 7 -- Levies
Supervision Fund
50. The SSA must pay into the Supervision Fund established under
section 94 of the Financial Institutions Code all amounts received as
5 supervision levy under this Division.
Supervision levy
51. (1) The SSA may determine that an amount is to be paid to it
by societies as a supervision levy.
(2) The amount of the levy may be fixed by the SSA as --
10 (a) a specified amount; or
(b) a specified percentage of an amount to be determined, on a
specified day, by reference to specified factors relating to
societies (including, for example, factors such as paid-up
capital, reserves, obligations and debts and total assets
15 including assets of each fund of the society); or
(c) both a specified amount and such a specified percentage.
(3) If the levy is fixed, wholly or partly, as mentioned in
subsection (2) (b), the SSA may include in the determination directions
as to the way in which the levy is to be determined.
20 (4) The SSA may --
(a) fix the amount of the levy differently for different societies;
and
(b) determine that the levy is not payable by specified societies.
(5) The SSA may, in the determination, require the levy to be paid
25 in one amount by a specified time or permit the levy to be paid by
specified instalments.
(6) If the SSA permits the levy to be paid by instalments, it may,
in the determination, allow a discount for payment in one amount by a
specified time or require payment of an additional amount or
30 percentage, by way of interest, in the instalments.
(7) The SSA may, in the determination, require the payment of
amounts, by way of late payment charge, interest or both, in relation to
amounts of levy that are not paid as required by the determination.
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Friendly Societies (Western Australia)
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(8) The SSA may include in the determination directions as to the
way in which amounts of late payment charge and interest are to be
determined.
(9) Amounts of levy are, when they are due and payable, debts due
5 and payable by the society concerned to the SSA, and may be sued for
and recovered in a court having jurisdiction for the recovery of debts up
to the amount concerned.
(10) The SSA may, on the application of a society, vary --
(a) an amount of levy payable by the society; or
10 (b) the time within which an amount of levy is payable by the
society.
(11) An amount paid by a society as levy is treated as an expense
in the accounts of the society.
(12) In subsections (9), (10) and (11) --
15 ``levy'' includes late payment charge and interest in relation to
levy.
Consultation
52. In determining the amount to be paid as supervision levy under
section 51, the SSA may, where it is appropriate and practicable to do
20 so, consult with industry bodies and societies.
Failure to make payment an offence
53. If a society defaults in making any payment required to be made
under section 51, the society and any officer of the society who is in
default each commit an offence.
25 Maximum penalty: $25 000.
Subdivision 8 -- Control of advertising
Restriction on initial advertisements
54. (1) A person who does not have the written permission of the
SSA to do so, must not issue, or cause to be issued, an advertisement
30 relating to --
(a) a proposed society or proposed benefit fund of a society or
proposed society; or
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(b) a body corporate that proposes to become a foreign society.
Maximum penalty: $100 000 or imprisonment for 15 years,
or both.
(2) The permission granted by the SSA under subsection (1)
5 applies for the purposes of this section only and must not be construed
as permission in respect of any other matter or thing for which
permission under this Code is required.
Power to control advertising
55. (1) The SSA may, by written notice given to a society or foreign
10 society, direct it --
(a) not to issue an advertisement; or
(b) not to issue an advertisement of a specified kind; or
(c) not to issue an advertisement that is substantially in the
same form as an advertisement that has been issued before;
15 or
(d) to include in an advertisement of a specified kind, or in an
invitation to invest in the society, information relating to
the society or foreign society that is required by the SSA to
be included.
20 (2) Directions under subsection (1) may be varied or revoked by
further written notice given to the society, or foreign society, by the
SSA.
(3) A society or foreign society that fails to comply with a direction
under this section commits an offence.
25 Maximum penalty: $75 000.
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PART 3 -- SOCIETIES
Division 1 -- Objects
Primary objects
56. For the purposes of this Code, primary objects, in relation to a
5 society, are such of the following as are specified in the rules of the
society as objects of the society --
(a) to provide health and welfare benefits, services and
facilities for members or their dependants, including but
not limited to hospital, medical, dental, pharmaceutical,
10 optical, physiotherapy and speech therapy benefits, services
and facilities;
(b) to provide benefits, services and facilities for the relief and
maintenance of members or their dependants in the case of
birth, death, sickness, disability, accident, retirement, old
15 age and unemployment;
(c) to provide benefits, services and facilities for the education
of members or their dependants;
(d) to provide financial and investment benefits, services and
facilities for members or their dependants including, but
20 not limited to, benefits, services and facilities relating to
annuities, life insurance and superannuation;
(e) to sell or supply medical requisites and therapeutic goods
and dispense or sell medicines to members of the public.
Objects of society must include primary objects
25 57. The objects of a society must include one or more of the objects
referred to in section 56.
Dominant activities
58. The dominant activities of a society must be within the scope of
the primary objects of the society.
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Division 2 -- Formation and Registration
Formation of societies
59. (1) A body proposed to be a society may be formed by any 25 or
more adults.
5 (2) A proposed society may be formed only if there has been a
meeting for the purpose of forming the society at which there were
present 25 or more adults.
(3) At the formation meeting, there must be presented --
(a) a written statement showing --
10 (i) the primary objects and other objects of the society;
and
(ii) the reasons for believing that an application for
registration of the society should be granted; and
(iii) the reasons for believing that, if registered, the
15 society will be able to carry out its objects
successfully; and
(b) a copy of the proposed rules of the society.
(4) If, at the formation meeting or any subsequent or adjourned
meeting, 25 or more adults, after considering the statement and the
20 rules, approve the rules (with or without amendment), and sign an
application for membership and shares (if any), they may proceed to
elect the first directors of the society under the rules as so approved.
(5) An application for shares in a proposed society, made before
the registration of the society, may not be withdrawn, and a person who
25 makes such an application is, on the registration of the society, liable to
pay the society --
(a) the value of the shares for which the person applied; or
(b) the value of the minimum number of shares for which a
member is entitled to subscribe,
30 whichever is greater.
(6) The expenses of, and incidental to, the formation of the society
may be paid out of the capital or income of the society.
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(7) A person must not, before a society is registered --
(a) issue an invitation to acquire an interest in the proposed
society or to contribute to a benefit fund of the proposed
society; or
5 (b) take an amount in consideration of the allotment of a share,
or the acquisition of an interest in, the proposed society or
take a contribution to a benefit fund of the proposed society.
(8) A person who contravenes subsection (7) commits an offence
and is liable on conviction to a maximum penalty of $100 000 or
10 imprisonment for 15 years, or both.
Registration
60. (1) A proposed society formed under this Part may apply to the
SSA, in accordance with the regulations, to be registered under this
Code as a society.
15 (2) An application for registration must --
(a) be made within 2 months after the meeting at which the
first directors of the society were elected; and
(b) be accompanied by --
(i) a statutory declaration by the person presiding at
20 that meeting and a person elected as a director at
that meeting stating that the requirements of section
59 have been complied with; and
(ii) a copy of the statement presented to the meeting,
signed by the person presiding and a director; and
25 (iii) 2 copies of the proposed rules of the society, certified
by the person presiding and a director to be the rules
approved at the meeting; and
(iv) a list containing the full name, date and place of
birth, residential address and business occupation of
30 each director; and
(v) a list containing the full name, address and
occupation of each of 25 or more adults who attended
the meeting and applied for membership; and
(vi) written estimates of all income and expenditure and
35 capital flows over each of the first 3 years of
operation of the society; and
(vii) the prescribed fee; and
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(c) be accompanied by such evidence as the SSA requires --
(i) that the society is eligible for registration; and
(ii) that the society, if registered, will be able to comply
with the friendly societies legislation and all
5 applicable standards; and
(iii) that the dominant activities of the society, if
registered, will be within the scope of at least one of
the primary objects specified in section 56;
(iv) that the society, if registered, will be able to carry out
10 its objects successfully; and
(v) that the society, if registered, will operate at least one
benefit fund.
(3) The SSA may, for the purposes of this section, accept a
statutory declaration as sufficient evidence of matters mentioned in the
15 declaration.
(4) If the SSA is satisfied that the society is eligible for
registration, the SSA must register the society and its proposed rules.
(5) A society is eligible for registration only if --
(a) the society's application for registration complies with this
20 Code; and
(b) the proposed rules of the society comply with this Code and
the standards; and
(c) there are reasonable grounds for believing that the society
will, within a reasonable time after registration, if
25 registered --
(i) be able to comply with the friendly societies
legislation and all applicable standards; and
(ii) have, as its dominant activities, activities that are
within the scope of the primary objects of the society;
30 and
(iii) be able to carry out its objects successfully; and
(iv) unless exempted by the SSA, operate at least one
benefit fund; and
(d) there is no good reason why the society and its rules should
35 not be registered.
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(6) The SSA may, by written notice given to the society, exempt a
society from complying with the requirement to operate at least one
benefit fund.
Certificate of incorporation
5 61. (1) On registering a society, the SSA must issue to the society a
certificate of incorporation.
(2) A certificate of incorporation issued to a society is conclusive
evidence that all requirements of this Code in relation to registration
and matters precedent or incidental to registration have been complied
10 with.
Effect of incorporation
62. On the issue of a certificate of incorporation to a society, the
society is a body corporate with perpetual succession and --
(a) has the legal capacity of a natural person; and
15 (b) may acquire, hold and dispose of real and personal
property; and
(c) has a common seal; and
(d) may sue and be sued in its corporate name.
Powers of societies
20 63. (1) Without limiting section 62, but subject to the friendly
societies legislation and the society's rules, a society may --
(a) acquire shares in an association by purchase or otherwise;
(b) hold a subsidiary but only if approved by the SSA;
(c) obtain registration as a foreign society under the friendly
25 societies legislation of another participating State;
(d) carry on a pharmacy practice and employ a pharmacist who
is registered under the pharmacy law of this State;
(e) do anything else that it is authorized to do by the friendly
societies legislation or the society's rules.
30 (2) The powers of a subsidiary formed or acquired by a society are
not limited by the society's objects or limitations on the society's
powers.
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(3) Except as permitted by the standards, a society must not carry
on business outside Australia.
(4) In this section --
``carry on business'' means --
5 (a) establish or use an office for receiving amounts in
consideration of the acquisition of an interest in a
society or contributions to a benefit fund of a society;
or
(b) advertise in relation to raising share capital or invite
10 contributions to a benefit fund of a society,
but does not include --
(c) maintain an account at a bank, building society or
credit union; or
(d) create evidence of a debt or create a charge on
15 property; or
(e) secure or collect any debts or enforce rights in respect
of such debts; or
(f) conduct an isolated transaction that is completed
within a period of 31 days, not being one of a number
20 of similar transactions repeated from time to time; or
(g) invest funds or hold property; or
(h) continue to provide benefits to, and accept
contributions from, a member who, at the time of
applying to contribute to a benefit fund, was resident
25 in Australia and has subsequently moved to a place
outside Australia; or
(i) continue to receive amounts in consideration of an
interest in a society from a member who, at the time
of acquiring the interest, was resident in Australia
30 and has subsequently moved to a place outside
Australia.
Prohibition on issuing debenture
64. A society must not issue debentures.
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Restriction on reinsurance arrangements
65. A society must not enter into a reinsurance arrangement unless
the society's actuary has given the society written advice as to the
likely consequences of the proposed arrangement.
5 Restriction on acting as trustee
66. A society must not act as a trustee or representative for the
purpose of an approved deed in relation to the issue of prescribed
interests under Part 7.12 of the Corporations Law.
Control of certain financial arrangements
10 67. Except as permitted by the standards, a society must not enter
into an arrangement --
(a) establishing rights and obligations to receive or deliver
property the value of which, or to receive or make a
payment in an amount which, or the value of which --
15 (i) depends on, or is derived from, the value or price at a
particular future time or during a particular future
period of particular property, rights or liabilities; or
(ii) depends on, or is derived by reference to, a particular
rate, index or other factor at a particular future time
20 or during a particular future period; or
(b) specified in the standards to be a prohibited financial
arrangement for the purposes of this section.
Maximum penalty: $75 000.
Control of foreign currency transactions
25 68. Except as permitted by the standards, a society must not --
(a) invest any of its assets in foreign currency; or
(b) carry out any of its activities in foreign currency.
Maximum penalty: $75 000.
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Division 3 -- Rules
Subdivision 1 -- General
Rules
69. (1) The rules of a society must set out --
5 (a) the primary objects of the society; and
(b) any other objects of the society.
(2) The rules of a society must provide for the matters specified in
the standards.
(3) Subject to subsection (4), the rules of a society may also
10 provide for any matter that is necessary, expedient or desirable for the
society's objects.
(4) If there is any inconsistency between a rule of a society and
the friendly societies legislation or a standard, the friendly societies
legislation or standard prevails and the rule is invalid to the extent of
15 the inconsistency.
Copies of rules
70. A society must give a copy of its rules, or part of its rules, to a
member or proposed member who requests it and has paid the fee (if
any) payable under the society's rules.
20 Maximum penalty: $5 000.
Society and members to be bound by rules
71. The rules of a society have effect as a contract between its
members, and between each member and the society.
Subdivision 2 -- Amendment of rules
25 Amendment of rules by special resolution
72. Subject to sections 73 and 75, the rules of a society may be
amended only if the amendment has been approved by special
resolution of the members under section 307.
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Amendment of rules by board of directors
73. (1) A society's rules may be amended by a resolution of its
board --
(a) if the amendment is authorized or required by or under any
5 Act or law or the standards; or
(b) if the SSA is satisfied that approval of the amendment by
the members of the society is not necessary and amendment
by a resolution of the board is appropriate; or
(c) to correct a patent error.
10 (2) The society must give to its members, not later than the day on
which notice is given of the next general meeting of the society, a
written notice setting out the text or a summary of an amendment of
the society's rules under this section.
Maximum penalty: $5 000.
15 (3) The notice may, with the prior written approval of the SSA, be
given by advertisement published in a newspaper circulating
generally --
(a) in the area of the State in which the society operates; and
(b) if the society operates in another State, or other States, in
20 the other State or States.
(4) The SSA may require a society that has amended its rules
under this section to obtain approval of the amendment by the members
of the society.
Registration of amendment of rules
25 74. (1) If the SSA is satisfied --
(a) that an amendment of the rules of a society would not
cause the society's dominant activities to cease to be within
its primary objects; and
(b) that the rules, as proposed to be amended, would comply
30 with the friendly societies legislation; and
(c) that there is no good reason why the amendment should not
be registered,
the SSA must register the amendment.
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(2) The amendment takes effect when it is registered.
(3) The rules of the society must be read subject to any registered
amendment.
Power of SSA to require modification of rules
5 75. (1) If, in the SSA's opinion, the rules of a society should be
amended --
(a) to comply with the friendly societies legislation; or
(b) to give effect to a standard,
the SSA may, by written notice given to the society, require it, within a
10 reasonable period specified in the notice, to amend its rules in a way
specified in the notice or otherwise in a way approved by the SSA.
(2) If the society fails to amend its rules as required by the notice,
the SSA may amend the society's rules by notation on the registered
copy of the rules.
15 (3) The SSA must immediately give written notice to a society
of --
(a) an amendment of the society's rules made under this
section; and
(b) the day on which the amendment takes effect.
20 (4) The society must give to its members, not later than the day on
which notice is given of the next general meeting of the society, a
written notice setting out the text of each amendment of the rules of
the society taking effect under this section.
Maximum penalty: $5 000.
25 (5) The notice may, with the prior written approval of the SSA, be
given by advertisement published in a newspaper circulating
generally --
(a) in the area of the State in which the society operates; and
(b) if the society operates in another State, or other States, in
30 the other State or States.
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Subdivision 3 -- Societies conducting health benefit funds
Definitions
76. In this Subdivision --
``Commonwealth Act'' means the National Health Act 1953 of
5 the Commonwealth;
``registered society'' means a society that is registered under
Part VI of the Commonwealth Act.
Health benefit fund rules
77. (1) The rules of a registered society include the terms,
10 conditions, directions and Council's rules (within the meaning of the
Commonwealth Act) that apply to the society as a registered
organisation under Part VI of the Commonwealth Act.
(2) Except as provided in section 78, this Code does not apply to
the rules referred to in subsection (1).
15 Registered society to give notice of rule changes
78. If an amendment of the rules of a registered society is made
under this Code --
(a) where, under section 78 of the Commonwealth Act, the
society receives acknowledgement of its notification of the
20 amendment, the society must, within 7 days after that
receipt give written notice to the SSA of the date on which
the amendment takes effect;
(b) where, under section 78 of the Commonwealth Act, the
Commonwealth Minister declares that the amendment is
25 not to be taken to have come into operation, the society
must, within 7 days after the declaration is made, give
written notice of the declaration to the SSA.
Division 4 -- Standards
Societies to comply with standards
30 79. A society must comply with all applicable standards.
Maximum penalty: $25 000.
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Division 5 -- Membership
Members
80. (1) A person is a member of a society if the person --
(a) signs the application for membership on the formation of
5 the society and has not ceased to be a member; or
(b) is entitled to a benefit from a benefit fund of the society; or
(c) holds a share in the society; or
(d) is admitted to membership under the society's rules and
has not ceased to be a member.
10 (2) The members of a merged society are the persons who, on the
day of the merger, are members of a society that is a party to the
merger, and any other persons who are admitted to membership under
the merged society's rules.
(3) The members of a society to which another society has
15 transferred the whole of its engagements include the persons who,
immediately before the transfer took effect, were members of the
transferor society.
(4) The members of a society to which another society has
transferred part of its engagements include the persons who,
20 immediately before the transfer took effect, were members of the
transferor society and are specified, for the purposes of this subsection,
in an agreement between the societies.
(5) A person may exercise the rights of membership of a society
only if the person has complied with any requirements for membership
25 under the society's rules, including, for example --
(a) the payment of an amount;
(b) the acquisition of shares or interests.
Members who are minors
81. (1) Subject to a society's rules, a minor may be a member of the
30 society or a benefit fund of the society.
(2) A member of a society who is a minor cannot hold office in a
society and cannot vote at a meeting of the society or of members of a
benefit fund of the society.
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(3) A person who has not reached 16 may, with the written
consent of a parent or a person who stands in the place of a parent --
(a) apply for membership of a benefit fund of a society; or
(b) take an assignment of such benefits.
5 (4) A person who has reached 16 but has not reached 18 has the
same capacity to exercise rights or powers in relation to benefits to
which he or she is entitled as a person who has reached 18.
Joint members
82. (1) Two or more persons may be joint members of a society or a
10 benefit fund of a society if the society's rules so provide.
(2) If a society or a benefit fund of a society has joint members,
the following provisions apply --
(a) in the case of a society, the register of members of the
society must indicate that a person is a joint member of the
15 society;
(b) in the case of a benefit fund of a society, the register of
members of the benefit fund must indicate that a person is
a joint member of the benefit fund;
(c) the joint members are entitled to choose the order in which
20 they are named in a register of members, but failing any
such choice the society may enter the names in the order it
considers appropriate;
(d) the joint member who is named first in a register of
members is the primary joint member;
25 (e) subject to the society's rules, but without affecting the right
of a member to obtain a copy of the balance sheet from the
society on demand, a notice or other document may be
given or sent only to the primary joint member;
(f) for the purpose of determining --
30 (i) who is qualified to vote on a resolution at a meeting
of the society or of a benefit fund of the society; and
(ii) the number or proportion of members required to give
effect to any provision of the friendly societies
legislation or the society's rules,
35 membership is taken to be solely that of the primary joint member.
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Corporate membership
83. (1) Subject to a society's rules, a body corporate may be a
member of the society or a benefit fund of the society.
(2) A body corporate that is a member of a society or a benefit
5 fund of a society may, by written notice given to the society, appoint an
individual to represent it --
(a) in the case of a body corporate that is a member of a
society, at meetings of members of the society; or
(b) in the case of a body corporate that is a member of a benefit
10 fund of a society, at meetings of the benefit fund.
(3) A person appointed under subsection (2) --
(a) is entitled --
(i) to receive notice of all meetings that the body
corporate is entitled to receive; and
15 (ii) to exercise on behalf of the body corporate the same
voting rights as the body corporate could, if it were a
natural person, exercise as a member of the society;
and
(b) is eligible to be elected as a director of the society if --
20 (i) the body corporate holds the qualifications required
for holding office as a director (other than
qualifications about age and being an individual); and
(ii) a person has not been appointed as liquidator of the
body corporate.
25 Cessation of membership
84. A person ceases to be a member of a society or a benefit fund of a
society as provided by the society's rules.
Expulsion of member
85. A member of a society may be expelled, or have the member's
30 membership rescinded, under the society's rules.
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Limitation of liability of members
86. Subject to the friendly societies legislation, a member of a society
is not liable, because of the membership, to contribute towards the
payment of the debts and liabilities of the society or the costs, charges
5 and expenses of a winding-up of the society.
Division 6 -- Name and Office
Name
87. (1) The registered name of a society is its name as specified in
the society's rules for the time being registered under this Code.
10 (2) The SSA may register a proposed society's rules, or an
amendment of rules affecting a society's name, only if AFIC has
reserved the name for the proposed society or society under Part 6A of
the AFIC Code.
(3) If the SSA registers an amendment of the rules of a society
15 changing the name of the society, the SSA may, on application by the
society accompanied by the prescribed fee, amend its certificate of
incorporation or issue a new certificate.
(4) A society must publish a change of its name as directed by the
SSA.
20 Maximum penalty: $5 000.
(5) )
(6) ) See note to section 1.
(7) )
(8) A society must not use a name other than --
25 (a) its registered name; or
(b) a name approved for its use under Part 6A of the AFIC
Code.
(9) A society does not contravene subsection (8) by using a name
in a way mentioned in section 88.
30 (10) See note to section 1.
(11) A society that contravenes subsection (8) commits an offence
and is liable on conviction to a maximum penalty of $75 000.
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Abbreviations of society's name
88. (1) A description of a society is not inadequate or incorrect
merely because the society's name is given using --
(a) the abbreviation ``Ltd.'' for the word ``Limited''; or
5 (b) the abbreviation ``Aust.'' for the word ``Australian''; or
(c) the abbreviation ``No.'' for the word ``Number''; or
(d) the symbol ``&'' for the word ``and''; or
(e) any of those words instead of the corresponding
abbreviation or symbol.
10 (2) In this section --
``name'' of a society means --
(a) its registered name; or
(b) a name approved for its use under Part 6A of the
AFIC Code.
15 Change of name does not affect identity
89. (1) A change of name of a society does not --
(a) affect the identity of the society; or
(b) affect a right or obligation of the society or of a member or
other person; or
20 (c) render defective legal proceedings by or against the society.
(2) A legal proceeding that might have been continued or started
by or against the society by its former name may be continued or
started by or against it by its new name.
Use of ``friendly society''
25 90. (1) Subject to this section --
(a) a person or body, other than a society, foreign society or
services corporation, must not carry on business, under a
name or title of which the words ``friendly society'', or any
other words, abbreviations or symbols with a similar
30 meaning, form part; and
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(b) a person or body, other than a society or foreign society,
must not hold out that its business is that of a society.
(2) A person or body may apply to the SSA for exemption from
subsection (1).
5 (3) The SSA may, by written notice given to the person or body,
grant an exemption for such time and on such conditions as the SSA
determines.
(4) The SSA may, at any time --
(a) revoke an exemption; or
10 (b) vary or revoke a condition of an exemption.
(5) A person who contravenes subsection (1) or a condition of an
exemption under subsection (3), and every director or other person
having the control and management of an incorporated or
unincorporated body contravening the subsection or condition, commits
15 an offence.
Maximum penalty: $100 000 or imprisonment for 15 years, or
both.
(6) This section does not apply to an unregistered society within
the meaning of section 91.
20 Unregistered society not to carry on business
91. (1) An unregistered society must not carry on business in this
State.
(2) An unregistered society may apply to the SSA for an exemption
from subsection (1).
25 (3) The SSA may, by written notice given to the unregistered
society, grant an exemption for such time and on such conditions as the
SSA determines.
(4) The SSA may, at any time --
(a) revoke an exemption; or
30 (b) vary or revoke a condition of an exemption.
(5) An unregistered society that contravenes subsection (1) or a
condition of an exemption under subsection (3), and every other person
having the control and management of the society contravening the
subsection, commits an offence.
35 Maximum penalty: $100 000 or imprisonment for 15 years, or
both.
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(6) In this section --
``unregistered society'' means a body registered as a friendly
society in a participating State but not registered as a
5 foreign society in this State.
Publication of name
92. (1) Except as otherwise provided in this section, a society must
set out its registered name in legible letters on every public document
(within the meaning of subsection (7)) of the society.
10 (2) A society must ensure that its registered name or a name
approved in relation to the society under Part 6A of the AFIC Code is
used on any advertisement published, or authorized to be published, by
the society.
(3) A society must ensure that its registered name and the words
15 ``Registered Office'' are displayed in a conspicuous place and in legible
letters on the outside of its registered office.
(4) A society must ensure that its registered name is displayed in
a conspicuous place and in legible letters on the outside of every other
office or place in which its business is carried on.
20 (5) A society that contravenes this section commits an offence and
is liable on conviction to a penalty of $25 000.
(6) Nothing in this section prohibits a society from using, in
addition to its registered name, a name approved in relation to the
society under Part 6A of the AFIC Code.
25 (7) For the purpose of subsection (1) --
``public document'' means --
(a) an instrument of, or purporting to be signed, issued
or published by or on behalf of, the society that --
(i) when signed, issued or published, is intended to
30 be lodged or is required by or under this Code
to be lodged; or
(ii) is signed, issued or published under or for the
purposes of this Code or any other law of the
Commonwealth or of a State; or
35 (b) an instrument of, or purporting to be signed or issued
by or on behalf of, the society that is signed or issued
in the course of, or for the purposes of, a particular
transaction or dealing; or
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(c) without limiting paragraph (a) or (b), a business
letter, statement of account, invoice, receipt, order for
goods or services, or official notice of, or purporting to
be signed or issued by or on behalf of, the society.
5 Common seal
93. (1) A society must ensure its registered name appears in legible
letters on its common seal.
(2) An officer of a society, or any person acting on its behalf, must
not use any seal, purporting to be the common seal of the society, on
10 which its registered name does not appear in legible letters.
Maximum penalty: $25 000.
Society may have duplicate common seal
94. A society may, if authorized by its rules, have a duplicate
common seal, which must be a facsimile of the common seal of the
15 society with the addition on its face of the words ``Share Seal'' or
``Document Seal'' and a document of title referring to or relating to
shares of the society sealed with that duplicate seal is taken to be
sealed with the common seal of the society.
Registered office
20 95. (1) A society must have a registered office in this State.
(2) The first registered office of a society is the address that
appears in the society's rules at the time of registration.
(3) A society must give written notice of any proposed change of
address to the SSA.
25 Maximum penalty: $5 000.
(4) At the end of the day of registration by the SSA of the new
address or at the end of such later day as the society specifies in the
notice, the new address becomes the registered office of the society.
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PART 4A -- BENEFIT FUNDS
Division 1 -- Provision of Benefits and Establishment
of Benefit Funds
Provision of benefits
5 96. (1) A society must not pay, or provide for the payment of,
amounts to which a member of the society or any other person may be,
or become, entitled because of contributions, or payments made to the
society (whether by that member or person or by another person) unless
the society --
10 (a) maintains a benefit fund for the receipt of such
contributions and payments; and
(b) pays those amounts as benefits from the benefit fund.
(2) Subsection (1) does not apply to amounts payable by a
society --
15 (a) in respect of shares in the society; or
(b) as trustee for a superannuation entity within the meaning
of the Superannuation Industry (Supervision) Act 1993 of
the Commonwealth.
Establishment of benefit fund
20 97. (1) A society may, under its rules, establish a benefit fund in
accordance with this Code and the standards.
(2) A benefit fund of the society is established when the rules of
the society providing for the benefit fund are registered by the SSA.
Approval to establish benefit fund
25 98. (1) The SSA must not register rules providing for a benefit fund
of a society unless the SSA has approved the establishment of the
benefit fund.
(2) A society that proposes to establish a benefit fund must apply
in writing to the SSA for approval to establish the benefit fund.
30 (3) An application under subsection (2) must be accompanied by a
copy of the rules the society proposes to make in relation to the
proposed benefit fund.
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(4) If the SSA receives an application under this section and is
satisfied that --
(a) the proposed rules of the society are in accordance with the
standards applicable to the proposed benefit fund; and
5 (b) the establishment of the proposed benefit fund is in
accordance with the standards; and
(c) there is no good reason why the proposed rules should not
be registered,
the SSA must, in writing given to the society, approve the application.
10 Division 2 -- Management of Benefit Funds
Assets of benefit funds
99. (1) A society must keep the assets of each benefit fund distinct
and separate from the assets of any other benefit fund and from any
other assets of the society, except as otherwise provided or permitted
15 under this Code.
(2) Except as provided in subsection (3), a society must maintain a
separate account at a bank, building society or credit union for each
benefit fund.
(3) A society may maintain a single account at a bank, building
20 society or credit union for 2 or more benefit funds if permitted to do so
by this Code or the standards.
(4) Nothing in this Code constitutes a society or a director of a
society a trustee of the assets of a benefit fund of the society.
Payments to benefit funds
25 100. A society must credit to each benefit fund, in accordance with
this Division --
(a) all contributions received by or on behalf of the society in
respect of the benefit fund; and
(b) all income from investment of assets of the benefit fund and
30 the proceeds of disposal of any such investment; and
(c) any other amounts received by or on behalf of the society in
respect of the benefit fund.
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Application of benefit fund assets
101. (1) A society must not, directly or indirectly, apply or deal
with assets of a benefit fund otherwise than in accordance with this
Code.
5 (2) The assets of a benefit fund may only be applied --
(a) for the purposes of paying any benefit payable to a person
entitled to a benefit from the benefit fund; or
(b) as otherwise permitted by this Code or the society's rules.
Mortgaging assets of benefit fund
10 102. (1) A society must not mortgage or otherwise charge or
encumber an asset of a benefit fund.
(2) If a society's rules and the standards so permit, the society
may, despite subsection (1), mortgage or otherwise charge or encumber
an asset of a benefit fund for the advantage of the benefit fund in
15 accordance with those rules and standards.
Investment of benefit funds
103. (1) A society must not invest assets of a benefit fund
otherwise than in accordance with this Code, the society's rules and the
standards.
20 (2) If the rules of the society and the standards so provide, a
society may, in accordance with this Code, the rules and the standards,
invest assets of 2 or more of its benefit funds in a combined investment.
(3) A society, in investing assets of a benefit fund, must exercise
the care, diligence and skill that a prudent person, whose profession,
25 business or employment is or includes investing assets on behalf of
other persons, would exercise in managing the affairs of other persons.
Payment of money into account
104. A society must, as soon as practicable after it receives any
money for a benefit fund, pay the money --
30 (a) into an account maintained for the benefit fund under
section 99; or
(b) into a funds inward clearing account established under
section 105.
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Funds inward clearing account
105. (1) A society may open at a bank, building society or credit
union an account to be known as a funds inward clearing account.
(2) If, under section 104, money received for a benefit fund is paid
5 into the funds inward clearing account kept by a society, the society
must ensure that the money is paid out of that account and into an
account maintained under section 99 for the benefit fund as soon as
practicable.
(3) If money of a benefit fund is paid into a funds inward clearing
10 account --
(a) the money is money of that benefit fund while it is held in
that account; and
(b) interest earned on the money while held in that account,
less account fees and taxes, belongs to the benefit fund in
15 like proportion to the entitlement of the benefit fund to the
money in that account.
Funds outward clearing account
106. (1) A society may open at a bank, building society or credit
union an account to be known as a funds outward clearing account.
20 (2) If a society withdraws an amount from an account maintained
under section 99 for a benefit fund and does not pay the amount
forthwith to the person entitled to that amount or apply the amount in
accordance with section 101 (2), the society must --
(a) pay the amount into the funds outward clearing account
25 forthwith; and
(b) pay the amount from the funds outward clearing account to
the person as soon as practicable.
(3) If an amount in a funds outward clearing account has not been
paid to the person entitled to it within 3 months after the amount was
30 paid into the account, the amount must, at the expiration of that
period, be paid back to the account from which it was withdrawn.
(4) If money of a benefit fund is paid into a funds outward clearing
account --
(a) the money is money of the benefit fund while it is held in
35 that account; and
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(b) interest earned on the money while held in that account,
less account fees and taxes, belongs to the benefit fund in
like proportion to the entitlement of the benefit fund to the
money in that account.
5 Transfer of an asset between funds
107. (1) A society must not, except in accordance with subsection
(2), transfer an asset --
(a) from one benefit fund of the society to another benefit fund
of the society; or
10 (b) from a benefit fund of the society to the management fund
of the society.
(2) A society may transfer an asset from a benefit fund (the
``transferor fund'') to another benefit fund or the management fund
(the ``transferee fund'') if --
15 (a) the society transfers from the transferee fund to the
transferor fund an amount equal to the fair value of the
asset determined in accordance with section 109; and
(b) in the case of a transfer referred to in subsection (1) (a), the
transfer is fair and reasonable in all the circumstances for
20 the members of the transferor fund and the transferee fund;
(c) in the case of a transfer referred to in subsection (1) (b), the
transfer is fair and reasonable in all the circumstances for
the members of the society.
(3) This section does not apply to --
25 (a) a transfer of assets in accordance with a restructure of one
or more benefit funds under Division 3; or
(b) the distribution of assets in accordance with section 119 on
termination of a benefit fund; or
(c) anything that a liquidator is required to do by or under this
30 Code or any other law of this or any other State or of the
Commonwealth; or
(d) any application of assets of a benefit fund permitted by this
Code or the standards.
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Distribution of surplus in benefit fund
108. (1) If the actuary of a society advises the society that there is
a surplus in a benefit fund, the society, subject to this Code, the rules of
the society and the standards --
5 (a) if the rules of the society so provide, may pay, apply or
allocate all or part of the surplus to the members of the
benefit fund; or
(b) if the rules of the society so provide, may transfer all or
part of the surplus to another benefit fund of the society; or
10 (c) if the rules of the society so provide, may transfer all or
part of the surplus to the management fund of the society.
(2) For the purposes of subsection (1), if any part of a surplus in a
benefit fund comprises an asset other than money, the value of the
asset is the fair value of the asset determined in accordance with
15 section 109.
Fair value of assets
109. For the purpose of sections 107 and 108, the fair value of an
asset is the price a person could reasonably be expected to pay for the
asset on a sale in which the seller and buyer were dealing with each
20 other at arm's length.
Division 3 -- Restructure of Benefit Funds
Definitions
110. In this Division --
``existing fund'' means a benefit fund existing before a
25 restructure under this Division takes effect, other than a
benefit fund of a society that has commenced to be wound
up under Part 9;
``new fund'' means a benefit fund that is or is to be established
under Division 1 for the purposes of a restructure under
30 this Division.
Approval of restructure of benefit funds
111. (1) A society may restructure one or more of its benefit funds
in accordance with this Division by doing any of the following --
(a) transferring the whole or part of one or more existing funds
35 to another existing fund; or
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(b) transferring the whole or part of one or more existing funds
to a new fund.
(2) A society that proposes to restructure one or more of its
existing funds must lodge with the SSA for approval a restructure
5 statement in accordance with subsection (3).
(3) Except so far as the SSA otherwise determines in relation to a
society, a restructure statement must specify --
(a) the name of each existing fund that is to be involved in the
restructure, any proposed change in the name of any such
10 existing fund and the proposed name of any new fund;
(b) the date on which it is proposed that the restructure will
take effect;
(c) the reasons for the proposed restructure;
(d) the effect of the proposed restructure on the interests of the
15 members of each existing fund that is to be involved in the
restructure;
(e) the assets and undertakings of, and liabilities referable to,
each existing fund that is to be involved in the restructure
that will become assets and undertakings of and liabilities
20 referable to another such existing fund or a new fund;
(f) the category or categories of members of each existing fund
that, under the restructure, will become members of
another existing fund or of a new fund;
(g) any interest that any officer of the society has in the
25 proposed restructure;
(h) any compensation or other consideration proposed to be
paid, or any other incentive proposed to be given, to any
officer or member of the society in relation to the proposed
restructure;
30 (i) if applicable, an estimate of the rate of any bonuses payable
from each existing fund up to the date on which it is
proposed that the restructure will take effect;
(j) in the case of a transfer of part of an existing fund, details
of any reserves that the society proposes to retain in the
35 existing fund in accordance with the recommendations of
the society's actuary;
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(k) the financial position of each existing fund that is to be
involved in the restructure as at a date that is not more
than 6 months before the date of the restructure statement;
(l) such other information as the SSA requires.
5 (4) Except in so far as the SSA otherwise determines in relation to
a society, the restructure statement must be accompanied by --
(a) a certificate signed by the society's actuary certifying that,
having regard to all matters relevant to the proposed
restructure, the actuary considers that the restructure
10 would be in the interests of the members of each existing
fund that is to be involved in the restructure;
(b) a copy of the proposed amendment of the society's rules to
recognize the restructure;
(c) a copy of the notice proposed to be issued by the society to
15 notify members of each such existing fund of the
restructure.
(5) A restructure statement must be signed by the directors of the
society and must include a certificate that, having regard to all matters
relevant to the proposed restructure, the directors consider that the
20 restructure would be in the interests of the members of each existing
fund that is to be involved in the restructure.
(6) The SSA may approve a restructure statement if the SSA is
satisfied that --
(a) the society has complied with the requirements of this
25 section;
(b) there is no good reason why the restructure should not be
approved.
(7) If the SSA approves the restructure statement, the proposed
restructure in accordance with the statement must be approved, in
30 relation to each existing fund that is involved in the restructure, by --
(a) a special resolution of the members of the existing fund; or
(b) if the SSA so determines, a resolution of the society's board.
(8) A society, at least 21 days before a meeting of members of an
existing fund to approve a special resolution under subsection (7) (a),
35 must give personally or by post to each member of the fund a copy of
the restructure statement approved by the SSA, or a summary of that
statement approved by the SSA, together with a notice of the meeting
and the proposed special resolution.
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Rules
112. If a proposed restructure is approved in accordance with section
111 (7), the society's board must, by a resolution, amend the society's
rules to the extent necessary to recognize the restructure of an existing
5 fund in accordance with this Division.
Lodgement of information with SSA
113. (1) A society must lodge with the SSA within one month after
a proposed restructure is approved in accordance with section
111 (7) --
10 (a) a copy of the resolutions made under sections 111 (7) and
112; and
(b) an application to register the amendment of the society's
rules to establish a new fund (if any) and to recognize the
restructure of each existing fund involved in the
15 restructure.
(2) A society must lodge with the SSA within 3 months, or such
other period as the SSA determines, after a restructure takes effect --
(a) audited accounts, or accounts in a form approved by the
SSA, for each existing fund involved in the restructure up
20 to the date that the restructure takes effect; and
(b) such other information as the SSA may require.
(3) The accounts in subsection (2) must include, if applicable --
(a) details of any bonuses paid by the society from the fund
and of any reserves retained by the society in the fund
25 during the period to which the accounts relate; and
(b) a statement of the manner in which the units of the fund
were converted to units of another existing fund or of a new
fund.
When a restructure takes effect
30 114. A restructure takes effect on the day on which the SSA registers
the amendment of the rules on an application under section 113 (1).
Effect of restructure
115. (1) This section applies on a restructure under this Division
taking effect.
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(2) If the whole or part of an existing fund is transferred to
another existing fund or to a new fund under this Division --
(a) a member of the existing fund who is in a category specified
in the restructure statement approved by the SSA under
5 this Division becomes a member of the other existing fund
or of the new fund; and
(b) the assets and undertakings of and liabilities referable to
the existing fund become, to the extent specified in the
restructure statement approved by the SSA under this
10 Division, assets and undertakings of and liabilities
referable to the other existing fund or the new fund.
Notification of members
116. (1) A society must, within one month after a restructure
taking effect, give written notice of the restructure to each member of a
15 benefit fund affected by the restructure.
(2) Except so far as the SSA otherwise determines in relation to a
society, a notice under subsection (1) must include --
(a) the name of each existing fund affected by the restructure,
any change in the name of any such existing fund and the
20 name of any new fund;
(b) a statement, in relation to each such existing fund, whether
the restructure affects the whole or part of the fund;
(c) the reasons for the restructure;
(d) details of the restructure;
25 (e) a summary of how the restructure affects the interests of
members of each such existing fund;
(f) details of the amendment of the rules to establish a new
fund (if any) and recognize the restructure of an existing
fund.
30 (3) The SSA may grant an exemption from any of the
requirements of this section, subject to any conditions it considers
appropriate.
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Division 4 -- Termination of Benefit Funds
Application of Division
117. A society, other than a society that has commenced to be wound-
up under Part 9, may terminate a benefit fund in accordance with this
5 Division.
Approval of termination proposal
118. (1) A society that proposes to terminate a benefit fund in
accordance with this Division must lodge with the SSA for approval a
termination statement in accordance with this section.
10 (2) Except so far as the SSA otherwise determines in relation to a
society, a termination statement must specify --
(a) the name of the benefit fund proposed to be terminated;
(b) the date on which it is proposed that the termination will
take effect;
15 (c) the reasons for the proposed termination;
(d) the manner in which the society proposes to distribute the
assets of the benefit fund;
(e) the effect of the proposed termination on the interests of
the members of the benefit fund;
20 (f) any interest that any officer of the society has in the
proposed termination;
(g) any compensation or other consideration proposed to be
paid, or any other incentive proposed to be given, to any
officer or member of the society in relation to the proposed
25 termination;
(h) the financial position of the benefit fund as at a date that is
not more than 6 months before the date of the termination
statement;
(i) such other information as the SSA may require.
30 (3) Except in so far as the SSA otherwise determines in relation to
a society, a termination statement must be accompanied by --
(a) a certificate signed by the society's actuary certifying that,
having regard to all matters relevant to the proposed
termination of the benefit fund, the actuary considers that
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the termination would be in the interests of the members of
the fund;
(b) a copy of the proposed amendment of the society's rules to
recognize the termination of the benefit fund;
5 (c) a copy of the notice proposed to be issued by the society to
notify members of the benefit fund of the termination of the
benefit fund.
(4) A termination statement must be signed by the directors of the
society and must include a certificate that, having regard to all matters
10 relevant to the proposed termination, the directors consider that the
termination would be in the interests of the members of the benefit
fund.
(5) The SSA may approve a termination statement if the SSA is
satisfied that --
15 (a) the society has complied with the requirements of this
section;
(b) there is no good reason why the termination should not be
approved.
(6) If the SSA approves the termination statement, the proposed
20 termination in accordance with the statement must be approved by --
(a) a special resolution of the members of the benefit fund; or
(b) if the SSA so determines, a resolution of the society's board.
(7) A society, at least 21 days before a meeting of members of a
benefit fund to approve a special resolution under subsection (6) (a),
25 must give personally or by post to each member of the fund a copy of
the termination statement approved by the SSA, or a summary of that
statement approved by the SSA, together with a notice of the meeting
and the proposed special resolution.
(8) If the proposed termination is approved in accordance with
30 subsection (6) --
(a) the society must cease to accept new members and any
contributions from existing members in respect of the
benefit fund; and
(b) the society must distribute the assets of the benefit fund in
35 accordance with section 119.
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Distribution of assets of benefit fund
119. (1) If the termination of a benefit fund is approved under
section 118 (6), the assets of the benefit fund must be distributed in
accordance with this section within 12 months after that approval.
5 (2) The assets of a benefit fund must first be applied in accordance
with section 101 (2).
(3) If any assets remain after the application of subsection (2), the
assets must be applied as follows --
(a) first --
10 (i) where the rules of the society provide for the
application of assets on the termination of the benefit
fund, in accordance with the rules;
(ii) where the rules of the society do not provide for the
application of assets on the termination of the benefit
15 fund, in satisfaction of any entitlements of members
of the fund as determined by the society's actuary;
(b) secondly, if any assets remain after the application of
paragraph (a), by way of transfer to the management fund
of the society.
20 (4) For the purpose of making a fair and reasonable determination
of the entitlements to be paid under subsection (3) (a) (ii), a society's
actuary must take into account all the circumstances of the benefit
fund, including --
(a) the rules and standards applicable to the benefit fund; and
25 (b) the history, performance and financial position of the
benefit fund during its existence, whether before or after
the coming into operation of this Code.
Notification of members
120. (1) A society must, not later than the date of distribution of
30 the assets of a benefit fund under section 119, give written notice of the
termination of the benefit fund to each member of the fund.
(2) Except so far as the SSA otherwise determines in relation to a
society, a notice under subsection (1) must include --
(a) the name of the benefit fund that is being terminated;
35 (b) the reasons for the termination of the benefit fund;
(c) details of the termination of the benefit fund;
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(d) a summary of how the termination affects the interests of
members of the fund;
(e) details of the proposed amendment of the rules to recognize
the termination of the benefit fund.
5 (3) The SSA may grant an exemption from any of the
requirements under this section, subject to any conditions it considers
appropriate.
Rules
121. After a society has distributed the assets of a benefit fund in
10 accordance with section 119, the society's board must, by a resolution,
amend the society's rules to the extent necessary to recognize the
termination of the benefit fund in accordance with this Division.
Lodgement of information with SSA
122. (1) A society must lodge with the SSA within one month after
15 the assets of the benefit fund have been distributed in accordance with
section 119 --
(a) a copy of the resolutions made under sections 118 (6) and
121; and
(b) an application to register the amendment of the society's
20 rules to recognize the termination.
(2) A society must lodge with the SSA within 3 months, or such
other period as the SSA determines, after the termination takes
effect --
(a) audited accounts or accounts in a form approved by the
25 SSA for the terminated benefit fund up to the date on
which the termination takes effect;
(b) such other information as the SSA may require.
(3) The accounts in subsection (2) must include, if applicable --
(a) a statement of the distribution of the assets of the benefit
30 fund;
(b) details of any bonuses paid by the society from the benefit
fund during the period to which the accounts relate.
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When termination takes effect
123. A termination of a benefit fund takes effect on the day on which
the SSA registers the amendment of the rules on an application under
section 122.
5 Division 5 -- Assignment of Benefits
Assignment of benefits
124. (1) An assignment of an entitlement to benefits in a benefit
fund of a society may only be made in accordance with this section.
(2) An assignment must be made by memorandum of assignment
10 in the form prescribed by the society's rules and signed by the assignor
and the assignee.
(3) An assignment is not valid until it is registered in accordance
with this section by the society.
(4) The assignor must serve on the society 2 signed copies of the
15 memorandum of assignment and must pay any fee prescribed by the
society's rules.
(5) The society must register the memorandum, and an officer of
the society who is authorized to do so must insert the date of
registration in both copies of the memorandum, sign them, and send
20 one copy to the assignee.
(6) A copy of the memorandum that is signed and dated in
accordance with this section is --
(a) conclusive evidence of the registration of the assignment
and of the date of registration; and
25 (b) as between the society and any person claiming an
entitlement to benefits, conclusive evidence that the
assignee was at the time of registration absolutely entitled
to the benefits, free from all interests (except any lien or
charge that the society has in respect of the benefits), and
30 was legally entitled to receive those benefits and give a
discharge in respect of them.
(7) Except as provided in subsection (8), the assignee under a
registered memorandum --
(a) has all the powers of the assignor in respect of the benefits;
35 and
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(b) is subject to all the liabilities of the assignor in respect of
the benefits; and
(c) may sue in relation to the benefits in the assignee's own
name.
5 (8) The assignee is not, by the operation of this section, admitted
as a member of the society, and the assignor is not deprived of
membership, unless the rules of the society so provide.
(9) The receipt of the assignee is a discharge to the society for all
money paid by the society in respect of the benefits.
10 (10) A discharge, surrender of or security over the benefits that is
given to the society by the assignee is valid in spite of the existence of
any interest of any other person.
(11) The society taking a discharge, surrender or security --
(a) need not inquire into the circumstances of the assignment
15 or the consideration of it; and
(b) is not affected by express, implied or constructive notice of
the existence of any interest of any other person in the
benefits.
Payment to nominee of deceased member
20 125. (1) A member of a society who is at least 16 years old may
nominate a person to whom any benefits from a benefit fund of the
society payable on the death of the member are to be paid.
(2) A member of a society may not nominate an officer of that
society unless the officer is a dependant of the member.
25 (3) A nomination has no effect unless it is --
(a) in writing and signed by the member; and
(b) served on the society.
(4) A nomination may be revoked or varied in the same way that
it is made and is revoked on the death of the nominee.
30 (5) The society, on receiving evidence of the death of the member,
must pay to the nominee any benefits that are payable on that death.
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PART 4B -- OFFERING AND MARKETING OF BENEFITS
Division 1 -- Application and Interpretation
Definitions
126. In this Part --
5 ``application period'', in relation to a disclosure document
issued by a society relating to the provision of benefits,
means --
(a) if, under the terms of the disclosure document,
applications for contributions to a benefit fund must
10 be made before a particular time (which may, for
example, be a specified time or a time to be
determined by the society, but which must not be
more than 12 months after the issue of the disclosure
document or such longer period as the SSA allows),
15 the period starting when the disclosure document is
issued and ending at that time; or
(b) in any other case, the period of 12 months starting
when the disclosure document is issued;
``exempt person'' means a person who is an exempt dealer or an
20 exempt investment adviser under section 68 of the
Corporations Law, and any person who is acting as a
representative of the exempt dealer or exempt investment
adviser in connection with the business of dealing in
benefits or the benefits advisory business;
25 ``licensed adviser'' means a person who holds an investment
advisers licence granted under Part 7.3 of the Corporations
Law;
``licensed dealer'' means a person who holds a dealers licence
granted under Part 7.3 of the Corporations Law;
30 ``proper authority'' --
(a) of a licensed dealer is a proper authority granted
under Division 3 of Part 7.3 of the Corporations Law;
(b) of a licensed adviser is a proper authority granted
under Division 3 of Part 7.3 of the Corporations Law;
35 (c) of a society is a proper authority granted by the
society under Subdivision 3 of Division 4 of this Part.
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Benefits advisory business
127. A reference in this Part to a benefits advisory business, in
relation to a person, is a reference to --
(a) a business of advising other persons about benefits; or
5 (b) a business in the course of which the person publishes
reports relating to benefits.
Application of this Part
128. This Part applies to benefits from a benefit fund, other than --
(a) a benefit fund that is a health benefits fund under the
10 National Health Act 1953 of the Commonwealth; or
(b) a benefit fund that is a superannuation entity within the
meaning of the Superannuation Industry (Supervision)
Act 1993 of the Commonwealth.
Actuarial advice
15 129. A society must not provide benefits of a kind specified in the
standards as requiring actuarial advice unless the society's actuary has
given the society written advice about --
(a) the proposed terms and conditions on which benefits of that
kind are to be provided; and
20 (b) in the case of benefits with a surrender value, the proposed
basis on which the surrender value is to be determined; and
(c) if the benefits are to be calculated by reference to units, the
proposed means by which the unit values are to be
determined; and
25 (d) any other matters about which the standards require a
society to obtain actuarial advice before providing benefits
of that kind.
Representatives
130. (1) Subject to subsection (2), a person is a representative of
30 another person if the first-mentioned person --
(a) is employed by; or
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(b) acts for or by arrangement with,
the other person in connection with a business of dealing in benefits or
a benefits advisory business carried on by the other person.
(2) Except for the purposes of section 184 (b), a person who holds a
5 proper authority from another person is a representative of the other
person.
(3) Subject to subsection (4), a person does an act, or engages in
conduct, as a representative of another person if the first-mentioned
person does the act or engages in the conduct --
10 (a) in connection with a business of dealing in benefits or a
benefits advisory business carried on by the other person;
and
(b) while the first-mentioned person is a representative of the
other person; and
15 (c) as employee or agent of, or otherwise on behalf of, on
account of, or for the benefit of, the other person; and
(d) otherwise than in the course of work of a kind ordinarily
done by accountants, clerks or cashiers.
(4) Except for the purposes of Subdivision 4 of Division 4, a person
20 who holds himself or herself out to be a representative of another
person does an act as a representative of the other person.
Involvement in contraventions
131. Subject to section 163, a person is involved in a contravention if
the person --
25 (a) has aided, abetted, counselled or procured the
contravention; or
(b) has induced, whether by threats or promises or otherwise,
the contravention; or
(c) has been in any way, by act or omission, directly or
30 indirectly, knowingly concerned in, or party to, the
contravention; or
(d) has conspired with others to effect the contravention.
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Conduct
132. (1) A reference in this Part to engaging in conduct is a
reference to doing or refusing to do any act, including the making of, or
the giving effect to a provision of, an agreement.
5 (2) A reference in this Part to conduct, when that expression is
used as a noun otherwise than as mentioned in subsection (1), is a
reference to the doing of, or the refusing to do, any act, including the
making of, or the giving effect to a provision of, an agreement.
(3) Where, in a proceeding under this Part in respect of conduct
10 engaged in by a body corporate, it is necessary to establish the state of
mind of the body, it is sufficient to show that a director, servant or
agent of the body, being a director, servant or agent by whom the
conduct was engaged in within the scope of the person's actual or
apparent authority, had that state of mind.
15 (4) Conduct engaged in on behalf of a body corporate --
(a) by a director, servant or agent of the body within the scope
of the person's actual or apparent authority; or
(b) by any other person at the direction or with the consent or
agreement (whether express or implied) of a director,
20 servant or agent of the body, where the giving of the
direction, consent or agreement is within the scope of the
actual or apparent authority of the director, servant or
agent,
is deemed to have been engaged in also by the body corporate.
25 (5) Where, in a proceeding under this Part in respect of conduct
engaged in by a person other than a body corporate, it is necessary to
establish the state of mind of the person, it is sufficient to show that a
servant or agent of the person, being a servant or agent by whom the
conduct was engaged in within the scope of the servant's or agent's
30 actual or apparent authority, had that state of mind.
(6) Conduct engaged in on behalf of a person other than a body
corporate --
(a) by a servant or agent of the person within the scope of the
actual or apparent authority of the servant or agent; or
35 (b) by any other person at the direction or with the consent or
agreement (whether express or implied) of a servant or
agent of the first-mentioned person, where the giving of the
direction, consent or agreement is within the scope of the
actual or apparent authority of the servant or agent,
40 is deemed to have been engaged in also by the first-mentioned person.
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(7) A reference in this section to the state of mind of a person
includes a reference to the knowledge, intention, opinion, belief or
purpose of the person and the person's reasons for the person's
intention, opinion, belief or purpose.
5 References to doing acts
133. In this Part, unless the contrary intention appears, a reference
to doing any act or thing includes a reference to causing, permitting or
authorizing the act or thing to be done.
Misleading representation
10 134. (1) When a person makes a representation with respect to any
future matter (including the doing of, or the refusing to do, any act) and
the person does not have reasonable grounds for making the
representation, the representation is to be taken to be misleading.
(2) For the purposes of the application of subsection (1) in relation
15 to a proceeding concerning a representation made by a person with
respect to any future matter, the person is, unless the person adduces
evidence to the contrary, deemed not to have had reasonable grounds
for making the representation.
(3) Subsection (1) is deemed not to limit by implication the
20 meaning of a reference to a misleading representation, a representation
that is misleading in a material particular or conduct that is misleading
or is likely or liable to mislead.
Division 2 -- Disclosure Documents and Application Forms
Disclosure document to be lodged
25 135. (1) A person must not issue, or cause to be issued, an
invitation to contribute, or accept a contribution, to a benefit fund of a
society unless a disclosure document relating to that benefit fund and
that complies with this Division has been lodged with the SSA within
the last preceding 12 months.
30 (2) A person must not issue, or cause to be issued, an invitation to
contribute, or accept a contribution, to a benefit fund of a foreign
society unless a disclosure document relating to that benefit fund and
that complies with the corresponding Division to this Division in the
friendly societies legislation of the participating State in which the
35 foreign society is incorporated has been lodged, within the last
preceding 12 months, with the SSA of that participating State.
Penalty applying to this section: $20 000 or imprisonment for 5
years or both.
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Application form
136. A person must not issue a form of application for benefits or for
making contributions to a benefit fund of a society unless --
(a) the form is attached to a disclosure document; and
5 (b) a copy of the form and disclosure document have been
lodged with the SSA.
Maximum penalty: $20 000 or imprisonment for 5 years or both.
Form of disclosure document and date of issue
137. (1) A disclosure document --
10 (a) must be printed in type of a size not less than the type
known as 8 point unless the standards otherwise provide;
(b) must be dated;
(c) must be signed by each director of the society and by each
person named in the document as a proposed director of the
15 society or by a person authorized in writing by the director
or proposed director to sign on his or her behalf;
(d) must contain a statement that an arrangement for the
provision of a benefit to which the document relates will not
be entered into later than 12 months after the date of issue
20 of the document;
(e) must contain any other information required by the
standards to be included in the document;
(f) must comply with any requirements of the standards
applicable to disclosure documents.
25 (2) The date of issue of a disclosure document is the date inserted
in it under subsection (1) (b), unless the contrary is proved.
(3) Each copy of a disclosure document --
(a) must state that the document has been lodged with the
SSA of the State in which the society, or foreign society, is
30 registered as a society;
(b) must specify the date of lodgment;
(c) must state that the SSA with which it is lodged takes no
responsibility as to the contents of the document.
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Disclosure of interests
138. A disclosure document must specify the nature and extent of any
interest that a director or proposed director of a society or an expert has
in respect of --
5 (a) the assets of the benefit fund to which the document
relates;
(b) benefits of the kind to which the document relates and in
respect of which an entitlement, other than an entitlement
available on the same terms and conditions to other
10 members of the benefit fund, is available.
Liability in respect of disclosure document and interests
139. (1) If a requirement of section 137 or 138 is contravened, a
director or other person responsible for, or involved in the preparation
of, the disclosure document does not incur any liability by reason of the
15 contravention if it is proved that --
(a) as regards any matter omitted, the person had no
knowledge of the matter; or
(b) the contravention arose from an honest mistake on the part
of the person concerning the facts; or
20 (c) the contravention was --
(i) in respect of matter that, in the opinion of the court
dealing with the case, was immaterial; or
(ii) otherwise such as, in the opinion of the court, having
regard to all the circumstances of the case, ought
25 reasonably to be excused.
(2) If there is a failure to include in a disclosure document a
statement with respect to matters referred to in section 138, a director
or other person does not have any liability in respect of the failure
unless it is proved that the director or other person had knowledge of
30 the matters not included.
(3) Nothing in this section limits or diminishes any liability that a
person might incur under any rule of law or any enactment or under
this Code apart from this section.
Content of disclosure document
35 140. (1) A disclosure document must contain such information as
persons and their professional advisers would reasonably require, and
reasonably expect to find in the document, for the purpose of making an
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informed assessment of benefits of the kind to which the document
relates including --
(a) the assets and liabilities, financial position, profits and
losses, and prospects of, or referable to, the benefit fund
5 from which the benefits would derive;
(b) the rights attaching to the benefits to which the disclosure
document relates.
(2) In determining what information is required to be included in
a disclosure document, regard must be had to --
10 (a) the nature of the benefits and the society;
(b) the kinds of persons likely to consider applying to
contribute to the benefit fund from which the benefits
would derive;
(c) the fact that certain matters may reasonably be expected to
15 be known to professional advisers of any kind whom those
persons may reasonably be expected to consult;
(d) whether the persons to whom the invitation is to be issued
are members of the society and, if they are, the extent to
which relevant information has previously been given to
20 them by the society;
(e) any information known to the persons to whom the
invitation is to be issued or their professional advisers
under any Act of the Commonwealth or a State.
Conditions requiring waiver of requirements void
25 141. A condition is void if it --
(a) requires or binds a person applying to contribute to a
benefit fund to waive compliance with any requirement of
section 137, 138, 139 or 140; or
(b) purports to affect that person with notice of any contract,
30 document or matter not specifically referred to in the
disclosure document.
Obligation to notify society of false etc. statements
142. (1) If a disclosure document has been lodged and a person
(other than the society) who --
35 (a) is referred to in section 163 (2); or
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(b) authorized or caused the issue of the disclosure document,
becomes aware of a relevant matter during the application period in
relation to the disclosure document, the person must, as soon as
practicable after becoming so aware, give the society written notice of
5 the matter.
Maximum penalty: $5 000 or imprisonment for 12 months, or both.
(2) In subsection (1) --
``relevant matter'' in relation to a disclosure document
means --
10 (a) a material statement in the disclosure document that
is false or misleading; or
(b) a material omission from the disclosure document; or
(c) a significant change affecting a matter included in
the disclosure document; or
15 (d) a significant new matter about which information
would have been required by this Division to be
included in the disclosure document if the matter had
arisen when the disclosure document was prepared.
Correction of false or misleading statements etc. by a
20 supplementary or replacement disclosure document
143. (1) This section applies if a disclosure document has been
lodged and the society becomes aware, during the application period in
relation to the disclosure document, that the disclosure document is
deficient because --
25 (a) it contains a material statement that is false or misleading;
or
(b) there is a material omission from the disclosure document.
(2) As soon as practicable after becoming so aware, the society
must lodge a supplementary disclosure document or a replacement
30 disclosure document that corrects the deficiency and that complies with
whichever of sections 145 and 146 applies.
Maximum penalty: $20 000 or imprisonment for 5 years, or both.
Changes or new matters requiring the issue of a supplementary
or replacement disclosure document
35 144. (1) This section applies if a disclosure document has been
lodged and the society becomes aware, during the application period in
relation to the disclosure document, that --
(a) there has been a significant change affecting a matter
included in the disclosure document; or
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(b) a significant new matter has arisen the inclusion in the
disclosure document of information about which would have
been required by this Division if the matter had arisen
when the disclosure document was prepared.
5 (2) As soon as practicable after becoming so aware, the society
must lodge a supplementary or a replacement disclosure document that
contains particulars of the change or new matter and that complies
with whichever of sections 145 and 146 applies.
Maximum penalty: $20 000 or imprisonment for 5 years, or both.
10 General provisions about supplementary disclosure documents
145. (1) A supplementary disclosure document is a document the
purpose of which is to do either or both of the following in relation to a
disclosure document (the ``original disclosure document'') --
(a) correct a deficiency in the disclosure document;
15 (b) provide particulars about something that has occurred since
the disclosure document was prepared.
(2) On each page of a supplementary disclosure document there
must be a clear statement in bold type that states that the document is
a supplementary disclosure document that is to be read in conjunction
20 with --
(a) the original disclosure document; and
(b) if other supplementary disclosure documents have already
been issued in relation to the original disclosure document,
those supplementary disclosure documents.
25 (3) The statement must clearly identify --
(a) the original disclosure document; and
(b) if subsection (2) (b) applies, the supplementary disclosure
documents to which that subsection refers.
(4) Unless the context otherwise requires, a reference to a
30 disclosure document in any of the provisions referred to in the following
provisions includes a reference to a supplementary disclosure
document --
(a) sections 159, 160 and 161;
(b) sections 163 to 170;
35 (c) sections 137 (1) (a), (b) and (c), (2) and (3) and 139;
(d) sections 142, 150, 155, 156 and 157.
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(5) In this section --
``deficiency'', in relation to a disclosure document, includes, but
is not limited to --
(a) a material statement in the disclosure document that
5 is false or misleading; or
(b) a material omission from the disclosure document.
General provisions about replacement disclosure documents
146. (1) A replacement disclosure document is a document the
purpose of which is to replace a disclosure document (the ``original
10 disclosure document'') and which may also do either or both of the
following --
(a) correct a deficiency in the original disclosure document;
(b) provide particulars about something that has occurred since
the original disclosure document was prepared.
15 (2) On each page of a replacement disclosure document there must
be a clear statement in bold type that identifies the original disclosure
document and states that the document is a replacement disclosure
document that replaces the original disclosure document.
(3) Subject to subsection (2), a replacement disclosure document
20 must have the same wording as the original disclosure document,
except to the extent that it --
(a) corrects a deficiency in the original disclosure document; or
(b) provides particulars about something that has occurred
since the original disclosure document was issued.
25 (4) In this section --
``deficiency'' in relation to a disclosure document, includes, but
is not limited to --
(a) a material statement in the disclosure document that
is false or misleading; or
30 (b) a material omission from the disclosure document.
Consequences of lodging a supplementary disclosure document
147. (1) This section applies if a supplementary disclosure
document has been lodged.
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(2) Subject to subsection (4), for the purposes of this Code, the
information in the supplementary disclosure document is taken, except
in relation to things that happened before it was lodged, to be included
in the original disclosure document.
5 (3) Every copy of the original disclosure document issued after
lodgment of the supplementary disclosure document must be attached
to, or accompanied by, a copy of the supplementary disclosure
document.
Maximum penalty: $20 000 or imprisonment for 5 years, or both.
10 (4) If subsection (3) is contravened in relation to a copy of the
original disclosure document, subsection (2) does not apply for the
purposes of an action under section 162 in relation to that copy.
(5) In this section --
``original disclosure document'' means the disclosure
15 document identified in the supplementary disclosure
document as required by section 145 (3) (a).
Consequences of lodging a replacement disclosure document
148. (1) This section applies if a replacement disclosure document
has been lodged.
20 (2) A copy of the original disclosure document must not be issued
after lodgment of the replacement disclosure document.
Maximum penalty: $20 000 or imprisonment for 5 years, or both.
(3) The replacement disclosure document is a disclosure document
in its own right for the purposes of this Code, but it is taken to have
25 been issued when the original disclosure document was issued.
(4) The parts of the replacement disclosure document that are the
same as the original disclosure document are taken to comply with the
requirements of this Division, but only to the extent to which those
parts of the original disclosure document in fact complied with those
30 requirements.
(5) In this section --
``original disclosure document'' means the disclosure
document identified in the replacement disclosure document
as required by section 146 (2).
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Application made on out of date application form
149. (1) For the purposes of this section, an application form is
current unless --
(a) since the form was issued, a supplementary disclosure
5 document or a replacement disclosure document that
relates to the disclosure document to which the form relates
has been issued; or
(b) because of section 151 (2), the form is no longer current for
the purposes of section 151.
10 (2) This section applies if --
(a) a person applies to contribute to a benefit fund of a society
pursuant to a disclosure document (the ``original
disclosure document'') during the application period in
relation to the disclosure document; and
15 (b) the application form used to make the application is not
current when it is received by the society.
(3) As soon as practicable after receiving the application, the
society must give the person a written notice --
(a) that advises the person that the application form used was
20 not current; and
(b) that states which of options 1 and 2 specified in subsections
(4) and (5) the society is going to follow, and explains that
option; and
(c) that is accompanied by --
25 (i) if a replacement disclosure document has been issued,
a copy of the most recently issued replacement
disclosure document, a copy of each issued
supplementary disclosure document (if any) that
relates to it, and a current application form that
30 relates to it; or
(ii) if sub-paragraph (i) does not apply, a copy of each
supplementary disclosure document (if any) that
relates to the original disclosure document and that
was issued after the application form was issued, and
35 a current application form that relates to the original
disclosure document.
(4) Option 1 requires the society --
(a) to treat the application as having been withdrawn; and
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(b) at the same time as it gives the person the notice, or as
soon as practicable afterwards, to pay to the person, in
accordance with the requirements (if any) of the
standards --
5 (i) any money the person has paid to the society on
account of the provision of the benefits; and
(ii) any interest that has accrued in respect of that
money.
(5) Option 2 requires the society --
10 (a) at the same time as it gives the person the notice, or as
soon as practicable afterwards, to provide the benefits to
the person pursuant to the application and pay any money
received into the relevant benefit fund; and
(b) if, since the application form used to make the application
15 was issued, a material adverse change (as defined in
subsection (6)) has occurred in relation to the provision of
benefits, to give the person a reasonable opportunity to
surrender the benefits and obtain a payment as mentioned
in paragraph (c); and
20 (c) if paragraph (b) applies and the person takes advantage of
that opportunity and surrenders the benefits, to pay to the
person, in accordance with the requirements (if any) of the
standards --
(i) any money the person has paid to the society on
25 account of the provision of the benefits; and
(ii) any interest that has accrued in respect of that
money.
(6) For the purposes of subsection (5), a material adverse change
occurs in relation to the provision of benefits if a change occurs, or a
30 new matter arises, that is likely to have a material adverse effect on
the ability of the society to meet the obligations to provide the benefits.
(7) The society must act in accordance with the option specified in
the notice.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
35 (8) In this section --
``application form'' means a form of application to contribute to
a benefit fund;
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``disclosure document to which the form relates'', in relation
to an application form that has been issued, means the
disclosure document to which the form is or was attached.
Inclusion of documents in disclosure documents by reference
5 150. (1) For the purposes of this Code, other than sections 137, 138
and 139, a disclosure document is taken to include a document, or part
of a document, as the case requires, if the disclosure document --
(a) refers to a document lodged under this Code or a
corresponding previous law, being a document in existence
10 at or before the lodgment of the disclosure document; and
(b) includes a summary of the document or of a part of it; and
(c) includes a statement to the effect that the society will
provide a copy of the document, or of the part, as the case
requires, free of charge, to a person who asks for it during
15 the application period in relation to the disclosure
document.
(2) The society must comply with a statement included in the
disclosure document in accordance with subsection (1) (c).
Disclosure document referring to information set out in current
20 application form
151. (1) This section applies if --
(a) a disclosure document has been lodged; and
(b) the disclosure document states that specified information
(the ``incorporated information'') is to be set out in an
25 application form; and
(c) a copy of such a form (the ``relevant form'') has also been
lodged.
(2) For the purposes of this section, the relevant form is current
from the time when the copy was lodged until the next time (if any)
30 when a copy of a form of the kind referred to in subsection (1) (b) is
lodged.
(3) Subject to subsection (5), for the purposes of this Code, the
incorporated information, as set out in the relevant form, is taken to be
included in the disclosure document while the relevant form is current.
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(4) Each copy of the disclosure document that is issued while the
relevant form is current must have attached to it the relevant form or a
copy of it.
Maximum penalty: $20 000 or imprisonment for 5 years, or both.
5 (5) If subsection (4) is contravened in relation to a copy of the
disclosure document, subsection (3) does not apply for the purposes of
an action under section 162 in relation to that copy.
(6) Unless the context otherwise requires, a reference to a
disclosure document in any of the provisions referred to in the following
10 provisions includes a reference to the relevant form while it is or was
current --
(a) sections 159, 160 and 161;
(b) sections 163 to 170;
(c) sections 137 (1) (a) and (b) and (2) and 139 (1);
15 (d) sections 142, 150, 155, 156 and 157.
(7) The relevant form, or a copy of it, must not be issued when the
relevant form is no longer current.
Maximum penalty applying to subsection (7): $20 000 or
imprisonment for 5 years, or both.
20 Certain notices etc. not to be published
152. (1) In this section --
``notice'' does not include a disclosure document that has been
lodged or a report, statement or notice the publication of
which is permitted under section 153.
25 (2) Nothing in this Part prohibits the publishing of a notice
that --
(a) is published by the person who issued the disclosure
document concerned, or by a licensed adviser or licensed
dealer or an exempt person within the meaning of section
30 126; and
(b) states that a disclosure document has been lodged; and
(c) specifies the date of the disclosure document; and
(d) states where a copy of the disclosure document can be
obtained; and
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(e) states that benefits to which the disclosure document
relates will be provided only on receipt of a form of
application referred to in and attached to a copy of the
disclosure document.
5 (3) Except as provided by subsection (2), a person must not
publish a notice that --
(a) invites any person to apply to contribute to a benefit fund;
(b) refers or calls attention, whether directly or indirectly --
(i) to a disclosure document relating to a benefit fund; or
10 (ii) to an invitation or proposed invitation to apply to
contribute to a benefit fund; or
(iii) to another notice that refers or calls attention to a
disclosure document relating to a benefit fund or an
invitation or proposed invitation to apply to
15 contribute to a benefit fund, not being a notice
referred to in subsection (2).
Maximum penalty applying to subsection (3): $2 500 or
imprisonment for 6 months, or both.
Certain reports referring to disclosure documents not to be
20 published
153. (1) In this section, unless the contrary intention appears --
``report'' includes a statement or notice, whether or not in
writing, but does not include a notice the publication of
which is permitted under section 152.
25 (2) Nothing in this Part prohibits the publishing of --
(a) a report by a society or any of its officers or agents that --
(i) is required by law; or
(ii) is permitted by the SSA; or
(b) a report that is a news report (whether or not with other
30 comment), or is genuine comment, published by a person in
a newspaper or periodical or by broadcasting or televising
relating to --
(i) a disclosure document that has been lodged or
information contained in such a disclosure document;
35 or
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(ii) a report referred to in paragraph (a) --
if none of the following --
(iii) that person;
(iv) an agent or employee of that person;
5 (v) where the report or comment is published in a
newspaper or periodical, the publisher of the
newspaper or periodical; or
(vi) where the report or comment is published by
broadcasting or televising, the licensee of the
10 broadcasting or television station by which it is
published,
receives or is entitled to receive any consideration or other
advantage from a person who has an interest in the success
of the invitation to which the report or comment relates as
15 an inducement to publish, or as the result of the publication
of, the report or comment; or
(c) a report where the report is not published --
(i) by or on behalf of a society to which the report relates
or, whether directly or indirectly, at the instigation of,
20 or by arrangement with, the society or its directors;
or
(ii) by or on behalf of a person who has an interest in the
success of the invitation to which the report relates,
and the person publishing the report does not receive and is
25 not entitled to receive any consideration or other advantage
from the society or any of its directors, or from a person
mentioned in sub-paragraph (ii), as an inducement to
publish, or as the result of the publication of, the report.
(3) Except as provided by subsection (2), a person who is aware
30 that a disclosure document --
(a) is in the course of preparation by or on behalf of a society;
or
(b) has been issued by or on behalf of a society,
must not publish a report that is reasonably likely to induce persons to
35 apply to contribute to a benefit fund of the kind to which the disclosure
document relates.
Maximum penalty applying to subsection (3): $2 500 or
imprisonment for 6 months, or both.
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Evidentiary provisions etc.
154. (1) In this section --
``notice'' means a notice within the meaning of section 152;
``report'' means a report within the meaning of section 153.
5 (2) A person who publishes a notice or report relating to a society
after receiving a certificate that --
(a) specifies the names of 2 directors of the society and is
signed by those directors; and
(b) is to the effect that, because of sections 152 (2) or 153 (2),
10 sections 152 (3) or 153 (3), as the case requires, do not
apply to the notice or report,
does not contravene subsection 152 (3) or 153 (3), as the case requires.
(3) Where a notice or report to which a certificate under subsection
(2) relates is published, each director who signed that certificate, for the
15 purposes of sections 152 and 153, is deemed to have published the
notice or report.
(4) A person who publishes a notice or report to which a certificate
under subsection (2) relates must, if the SSA requires the person to do
so, deliver the certificate to the SSA as soon as practicable.
20 Maximum penalty: $1 000 or imprisonment for 3 months, or both.
(5) In proceedings for a contravention of section 152 or 153 a
certificate relating to a notice or report that purports to be a certificate
under this section is evidence, unless evidence to the contrary is
adduced, that --
25 (a) when the certificate was issued, the persons named in the
certificate as directors of the society were the directors; and
(b) the signatures in the certificate purporting to be the
signatures of the directors are those signatures; and
(c) the publication of the notice was authorized by those
30 directors.
(6) Nothing in section 152 or 153 or this section limits or
diminishes the liability that a person may incur, otherwise than under
section 152 or 153 or this section, under any rule of law or under any
other enactment.
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Documents to be kept
155. A society that has lodged, or caused to be lodged, a disclosure
document with the SSA must cause --
(a) a true copy, verified by a statement in writing, of any
5 consent required by section 156 to the issue of the
disclosure document; and
(b) a true copy, verified by a statement in writing, of every
material contract referred to in the disclosure document or,
in the case of such a contract that is not reduced to writing,
10 a memorandum, verified by a statement in writing, giving
full particulars of the contract,
to be deposited, within 7 days after lodgment of the disclosure
document, at the registered office of the society and must keep each
such copy for a period of at least 12 months after the lodgment of the
15 disclosure document for inspection by any person without charge.
Expert's consent to issue of disclosure document containing
statement by the expert
156. A person must not issue a disclosure document that includes a
statement purporting to be made by an expert or to be based on a
20 statement made by an expert unless --
(a) the expert has given, and has not, before lodgment of the
disclosure document, withdrawn, the expert's written
consent to the issue of the disclosure document with the
statement included in the form and context in which it is
25 included; and
(b) there appears in the disclosure document a statement that
the expert has given, and has not withdrawn, the expert's
consent.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
30 Direction not to accept contributions
157. (1) Where it appears to the SSA with which a disclosure
document is lodged that any of the circumstances referred to in
subsection (2) exist in respect of the disclosure document, the SSA may,
by order in writing served on the person by whom the disclosure
35 document was lodged, direct the society not to --
(a) issue an invitation to contribute to the benefit fund to
which the disclosure document relates;
(b) accept a contribution to that benefit fund.
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(2) The circumstances are --
(a) the disclosure document contravenes in a substantial
respect any of the requirements of this Division;
(b) the disclosure document contains a statement, promise,
5 estimate or forecast that is false, misleading or deceptive;
(c) the disclosure document contains a material
misrepresentation.
(3) Subject to this section, the SSA must not make an order under
subsection (1) unless the SSA has held a hearing and given a
10 reasonable opportunity to any interested persons to make oral or
written submissions to the SSA on the question whether such an order
should be made.
(4) If the SSA considers that any delay in making an order under
subsection (1) pending the holding of a hearing would be prejudicial to
15 the public interest, the SSA may make an interim order or interim
orders under that subsection without holding a hearing.
(5) Subject to subsection (6), an interim order, unless sooner
revoked, has effect until the end of 21 days after the day on which it is
made.
20 (6) At any time during the hearing, the SSA may make an interim
order under subsection (1) that is expressed to have effect until the SSA
makes a final order after the conclusion of the hearing or until the
interim order is revoked, whichever first happens.
(7) While an order is in force under this section --
25 (a) this Division applies as if the disclosure document had not
been lodged; and
(b) a person is not entitled to lodge a further disclosure
document in relation to the relevant benefit fund, other
than a supplementary disclosure document or a
30 replacement disclosure document.
(8) If, while an order is in force under this section, the SSA
becomes satisfied that, whether because of the lodgment of a
supplementary disclosure document or replacement disclosure document
or otherwise, the circumstances that resulted in the making of the order
35 no longer exist, the SSA may, by further order in writing, revoke the
first-mentioned order.
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Exemptions and modifications
158. (1) The SSA with which a disclosure document is lodged or,
but for this section, would have been lodged, may, subject to and in
accordance with the standards, by writing, exempt a particular person
5 or persons or a particular class of persons, either generally or as
otherwise provided in the exemption, and either unconditionally or
subject to such conditions (if any) as are specified in the exemption,
from compliance with all or any of the provisions of --
(a) this Division;
10 (b) See note to section 1.
(2) Without limiting the generality of subsection (1), an exemption
under that subsection may relate to particular benefits or to a
particular class of benefits.
(3) A person must not contravene a condition to which an
15 exemption under subsection (1) is subject.
(4) Where a person has contravened a condition to which an
exemption under subsection (1) is subject, the Court may, on the
application of the SSA, order the person to comply with the condition.
(5) The SSA may, subject to and in accordance with the standards,
20 by writing, declare that this Division has effect in its application to a
particular person or persons, or a particular class of persons, either
generally or as otherwise provided in the declaration as if a specific
provision or provisions of this Division were omitted, modified or varied
in a manner specified in the declaration, and, where such a declaration
25 is made, this Division has effect accordingly.
(6) Without limiting the generality of subsection (5), a declaration
under that subsection may relate to particular benefits or a particular
class of benefits.
(7) The SSA must cause to be published in the Gazette a statement
30 to the effect that an exemption has been granted or a declaration made
under this section in relation to a particular class of persons or a
particular class of benefit funds.
Division 3 -- Prohibited Conduct and Civil Liability
Statement in a disclosure document
35 159. For the purposes of this Division, a statement is taken to be in a
disclosure document if it is --
(a) contained in a report or memorandum that appears on the
face of the disclosure document; or
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(b) contained in a report or memorandum that is issued with
the disclosure document with the consent or knowledge of a
person who authorized or caused the issue of the disclosure
document; or
5 (c) incorporated by reference in the disclosure document,
whether the reference occurs in the disclosure document or
in any other document.
Misleading or deceptive conduct
160. (1) A person must not engage in conduct that is misleading or
10 deceptive or is likely to mislead or deceive, being conduct in or in
connection with --
(a) any dealing in benefits; or
(b) without limiting the generality of paragraph (a), any
disclosure document issued, or notice published, in relation
15 to benefits.
(2) A person who contravenes this section is not guilty of an
offence.
(3) Nothing in this Division or Division 2 is to be taken as limiting
by implication the generality of subsection (2).
20 Mis-statements and omissions in disclosure documents
161. (1) A person must not authorize or cause the issue of a
disclosure document in relation to benefits if --
(a) the disclosure document has been, or is required to be,
lodged under Division 2; and
25 (b) either --
(i) a material statement in the disclosure document is
false or misleading; or
(ii) there is a material omission from the disclosure
document.
30 Maximum penalty: $20 000 or imprisonment for 5 years, or both.
(2) It is a defence to a prosecution for a contravention of
subsection (1) if it is proved --
(a) that the defendant, after making such inquiries (if any) as
were reasonable, had reasonable grounds to believe, and did
35 until the time of the issue of the disclosure document
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believe, that the statement was true and not misleading or
the omission was not material; or
(b) where there was an omission from the disclosure document,
that the omission was inadvertent.
5 (3) A person does not contravene this section merely because the
person gave a consent required by this Part to the inclusion in the
disclosure document of a statement purporting to be made by the
person as an expert.
Civil liability for contravention of this Division or Division 2
10 162. (1) Subject to the following sections of this Division, a person
who suffers loss or damage by conduct of another person that was
engaged in in contravention of a provision of this Division or Division 2
may recover the amount of the loss or damage by action against that
other person or against any person involved in the contravention,
15 whether or not that other person or any person involved in the
contravention has been convicted of an offence in respect of the
contravention.
(2) An action under subsection (1) may be begun at any time
within 6 years after the day on which the cause of action arose.
20 (3) This Division does not affect any liability that a person has
under any other law.
(4) In a proceeding under this Division in relation to a
contravention of this Division or Division 2 committed by the
publication of an advertisement, it is a defence if it is proved that the
25 defendant is a person whose business it is to publish or arrange for the
publication of advertisements and that the person received the
advertisement for publication in the ordinary course of business and did
not know and had no reason to suspect that its publication would
amount to a contravention of a provision of this Division or Division 2.
30 Civil liability for false or misleading statement in, or omission
from, a disclosure document
163. (1) This section applies for the purposes of an action under
section 162 in respect of conduct being the issue of a disclosure
document in relation to benefits --
35 (a) in which there is a material statement that is false or
misleading; or
(b) from which there is a material omission.
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(2) The reference in section 162 (1) to any person involved in the
contravention includes a reference to all or any of the following
persons --
(a) the society;
5 (b) a person who was a director of the society at the time of the
issue of the disclosure document;
(c) a person who authorized or caused himself or herself to be
named, and is named, in the disclosure document as a
director of the society or as having agreed to become a
10 director of the society either immediately or after an
interval of time;
(d) if the disclosure document includes a statement that
purports to be, or to be based on, a statement made by an
expert and the expert gave consent under section 156 to the
15 issue of the disclosure document, that expert;
(e) a person named, with the consent of the person, in the
disclosure document as an auditor, actuary, banker or
solicitor of the society or for or in relation to benefits or
proposed benefits;
20 (f) a person named, with the consent of the person, in the
disclosure document as having performed or performing any
function in a professional, advisory or other capacity not
mentioned in paragraph (d) or (e) for the society or for or in
relation to benefits or proposed benefits.
25 No liability to person with knowledge of relevant matter
164. A person referred to in section 163 (2), or a person who
authorized or caused the issue of the disclosure document, is not liable
in an action under section 162 to a person who suffered loss or damage
as a result of a false or misleading statement in, or an omission from,
30 the disclosure document if it is proved that, when the last-mentioned
person applied for benefits to which the disclosure document relates,
that person knew that the statement was false or misleading or was
aware of the omitted matter.
Non-consenting directors not liable
35 165. (1) A person referred to in section 163 (2) (b) or (c) is not, in
the circumstances set out in this section, liable in an action under
section 162 to a person who suffered loss or damage as a result of a
false or misleading statement in, or an omission from, the disclosure
document.
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(2) If the person is a person referred to in section 163 (2) (c), the
person is not liable if it is proved that, having consented to become a
director of the society, the person withdrew the consent before the issue
of the disclosure document, and that it was issued without the person's
5 authority or consent.
(3) The person is not liable if it is proved that the disclosure
document was issued without the person's knowledge or consent and --
(a) as soon as practicable after the person became aware of the
issue of the disclosure document, the person gave
10 reasonable public notice that it was issued without the
person's knowledge; or
(b) as soon as practicable after the disclosure document was
issued, the person gave reasonable public notice that the
disclosure document was issued without the person's
15 consent,
as the case requires.
(4) The person is not liable if it is proved that, after the issue of
the disclosure document and before receiving any contributions in
relation to benefits under the disclosure document, the person, on
20 becoming aware of any false or misleading statement in, or omission
from, the disclosure document, withdrew the person's consent to the
issue of the disclosure document and gave reasonable public notice of
the withdrawal and of the reason for the withdrawal.
Directors not liable where they have reasonable grounds for
25 believing disclosure document to be correct
166. (1) A person referred to in section 163 (2) (b) or (c) is not, in
the circumstances set out in this section, liable in an action under
section 162 to a person who suffered loss or damage as a result of --
(a) a false or misleading statement (in this section called the
30 ``defective statement'') in the disclosure document; or
(b) an omission from a statement (in this section also called the
``defective statement'') in the disclosure document.
(2) If the defective statement --
(a) purports to be, or to be based on, a statement made by an
35 expert; or
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(b) is contained in what purports to be a copy of, or extract
from, a report or valuation of an expert,
the person is not liable if it is proved that --
(c) the defective statement fairly represented the statement
5 referred to in paragraph (a), or the purported copy or
extract was a correct and fair copy of, or extract from, the
report or valuation, as the case requires; and
(d) the person, after making such inquiries (if any) as were
reasonable, had reasonable grounds to believe, and did
10 believe until the time of the provision of the benefits, that
the person who made the statement referred to in
paragraph (a), or who made the report or valuation, as the
case requires --
(i) was competent to make it; and
15 (ii) had given the consent required by section 156 to the
issue of the disclosure document; and
(iii) had not withdrawn that consent.
(3) If the defective statement --
(a) purports to be a statement made by an official person; or
20 (b) is contained in what purports to be a copy of, or extract
from, a public official document,
the person is not liable if it is proved that the defective statement fairly
represented the statement referred to in paragraph (a), or that the
purported copy or extract was a correct and fair copy of, or extract from,
25 the document, as the case requires.
(4) If none of subsections (2) (a) and (b) and (3) (a) and (b) applies
in relation to the defective statement, the person is not liable if it is
proved that he or she, after making such inquiries (if any) as were
reasonable, had reasonable grounds to believe, and did believe until the
30 time of the issue of the benefits --
(a) if subsection (1) (a) applies, that the defective statement
was true and not misleading; or
(b) if subsection (1) (b) applies, that there were no material
omissions from the defective statement.
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Liability of experts, auditors etc.
167. (1) A person referred to in section 163 (2) (d), (e) or (f) is liable
in an action under section 162 only in respect of --
(a) a false or misleading statement in the disclosure document
5 purporting to be made by the person as a person referred to
in section 163 (2) (d), (e) or (f), or to be based on a
statement made by the person as a person referred to in
section 163 (2) (d), (e) or (f); or
(b) in the case of a person referred to in section 163 (2) (d), an
10 omission of any material matter from a statement in the
disclosure document purporting to be made by the person as
a person referred to in section 163 (2) (d) or to be based on
a statement made by the person as such a person; or
(c) in the case of a person referred to in section 163 (2) (e) or
15 (f), an omission from the disclosure document of any
material matter for which the person is responsible in the
person's capacity or purported capacity as a person referred
to in section 163 (2) (e) or (f).
(2) A person referred to in section 163 (2) (d) is not liable in an
20 action under section 162 in respect of a false or misleading statement
in, or an omission from, the disclosure document if it is proved --
(a) that, having given consent under section 156 to the issue of
the disclosure document, the person withdrew it in writing
before the disclosure document was lodged;
25 (b) that, after the disclosure document was lodged and before
the provision of any benefits under the disclosure document,
the person, on becoming aware of the false or misleading
statement, or of the omission, as the case requires,
withdrew the person's consent in writing and gave
30 reasonable public notice of the withdrawal and of the
reasons for the withdrawal; or
(c) that the person was competent to make the statement and,
after making such inquiries (if any) as were reasonable, had
reasonable ground to believe, and did until the time of the
35 provision of any benefits believe, that --
(i) if the action is in respect of a false or misleading
statement, the statement was true and not
misleading; or
(ii) if the action is in respect of an omission from a
40 statement, there were no material omissions from the
statement.
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(3) A person referred to in section 163 (2) (e) or (f) is not liable in
an action under section 162 in respect of a false or misleading
statement in, or an omission from, the disclosure document if it is
proved --
5 (a) that, after the disclosure document was lodged and before
the provision of any benefits under the disclosure document
the person, on becoming aware of the false or misleading
statement or of the omission, as the case requires, withdrew
the person's consent in writing and gave reasonable public
10 notice of the withdrawal and of the reasons for the
withdrawal; or
(b) in the case of a statement, that the person was competent
to make the statement and, after making such inquiries (if
any) as were reasonable, had reasonable grounds to believe,
15 and did until the time of the provision of any benefits
believe, that the statement was true and not misleading; or
(c) in the case of an omission, that the person, after making
such inquiries (if any) as were reasonable, had reasonable
grounds to believe, and did until the time of the provision of
20 any benefits believe, that there were no omissions from the
disclosure document of material matters for which the
person was responsible in the person's capacity as a person
referred to in section 163 (2) (e) or (f) as the case requires,
and that the person was competent to act in that capacity.
25 Liability of persons named in disclosure document
168. (1) A person referred to in section 163 (2) (e) or (f) who is
named in part only of the disclosure document is not liable in an action
under section 162 in respect of a false or misleading statement in, or an
omission from, the disclosure document if it is proved that --
30 (a) the statement was not included in, or the matter was not
omitted from, that part of the disclosure document; or
(b) in the case of a statement, the statement was not included
in, or substantially in, the form and context that the person
had agreed to.
35 (2) For the purposes of subsection (1), a person referred to in
section 163 (2) (e) or (f) shall not be taken to be named in part only of
the disclosure document unless the disclosure document includes an
express statement that the person was involved only in the preparation
of that part.
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(3) A person who has authorized or caused the issue of part only of
a disclosure document is not liable in an action under section 162 in
respect of a false or misleading statement in, or an omission from, the
disclosure document if it is proved that --
5 (a) the statement was not included in, or the matter was not
omitted from, that part of the disclosure document; or
(b) in the case of a statement, the statement was not included
in, or substantially in, the form and context that the person
had agreed to.
10 (4) For the purposes of subsection (3), a person is not taken to
have authorized or caused the issue of part only of a disclosure
document unless the disclosure document includes an express statement
that the person authorized or caused the issue of that part only.
No liability for mistake etc. if reasonable precautions taken
15 169. (1) The society or a person who authorized or caused the issue
of the disclosure document is not liable in an action under section 162 if
it is proved that the false or misleading statement or the omission --
(a) was due to a reasonable mistake; or
(b) was due to reasonable reliance on information supplied by
20 another person; or
(c) was due to the act or default of another person, to an
accident or to some other cause beyond the defendant's
control,
and, in a case to which paragraph (c) applies, that the defendant took
25 reasonable precautions and exercised due diligence to ensure that all
statements to be included in the disclosure document were true and not
misleading and that there were no material omissions from the
disclosure document.
(2) In subsection (1) (b) and (c) --
30 ``another person'' does not include a person who, when the
disclosure document was issued, was --
(a) a servant or agent of the defendant; or
(b) if the defendant was the society or another body
corporate, a director, servant or agent of the
35 defendant.
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Indemnity
170. Where --
(a) a disclosure document in relation to benefits contains the
name of a person as a director of the society, or as having
5 agreed to become a director, and that person has not
consented to become a director, or has withdrawn the
consent before the issue of the disclosure document, and
has not authorized or consented to the issue of the
disclosure document; or
10 (b) the consent of a person is required under section 156 to the
issue of the disclosure document and the person either has
not given that consent or has withdrawn it before the issue
of the disclosure document,
the directors of the society, except any without whose knowledge or
15 consent the disclosure document was issued, and any other person who
authorized or caused the issue of the disclosure document are jointly
and severally liable to indemnify the person so named or whose consent
was so required against all damages, costs and expenses to which the
person may be made liable --
20 (c) because of the person's name being so contained in the
disclosure document;
(d) because of the inclusion in the disclosure document of a
statement purporting to be made by the person as an
expert; or
25 (e) in defending any action or other legal proceeding brought
against the person because of the person's name being so
contained in the disclosure document or the inclusion in the
disclosure document of such a statement.
Division 4 -- Regulation of Industry Participants
30 Subdivision 1 -- Conduct in relation to benefits
Dealing
171. (1) A person must not carry on a business of dealing in
benefits, or hold out that the person carries on such a business, unless
the person is --
35 (a) a society; or
(b) a licensed dealer; or
(c) an exempt person.
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(2) For the purpose of determining --
(a) whether a person carries on, or holds himself, herself or
itself out as carrying on, a business of dealing in benefits;
and
5 (b) whether or not a person deals in benefits,
an act done on behalf of, or as a representative of, a society, a licensed
dealer or an exempt person is to be disregarded.
Advising
172. (1) A person must not carry on a benefits advisory business, or
10 hold out that the person carries on such a business, unless the person
is --
(a) a society; or
(b) a licensed dealer; or
(c) a licensed adviser; or
15 (d) an exempt person.
(2) The following subsections apply for the purposes of
determining --
(a) whether a person carries on a benefits advisory business;
and
20 (b) whether a person holds himself, herself, or itself out to be
carrying on such a business.
(3) If the person is a body corporate authorized by a law of a State
to take in its own name a grant of probate of the will, or a grant of
letters of administration of the estate, of a dead person, an act done by
25 the first-mentioned person is to be disregarded.
(4) If the person is a solicitor, an accountant or actuary in public
practice as such, an act that the person does is to be disregarded if it is
merely incidental to the practice of his or her profession.
(5) The fact that the person advises other persons about benefits
30 or publishes reports relating to benefits, in some or all of the following
circumstances is to be disregarded --
(a) in a newspaper or periodical --
(i) of which the person is the proprietor or publisher;
and
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(ii) that is generally available to the public otherwise
than only on subscription;
(b) in the course of, or by means of, transmissions that --
(i) the person makes by means of an information service;
5 or
(ii) are made by means of an information service that the
person owns, operates or makes available,
and are generally available to the public;
(c) in sound recordings, video recordings, or data recordings,
10 that the person makes generally available to the public in
either or both of the following ways --
(i) by supplying copies of them to the public; or
(ii) by causing the sound recordings to be heard by, the
video recordings to be seen and heard by, or the
15 contents of the data recordings to be displayed or
reproduced for, the public, as the case requires.
(6) Subsection (5) does not apply in relation to a newspaper or
periodical, or transmissions, sound recordings, video recordings or data
recordings, as the case requires, whose sole or principal purpose is to
20 advise other persons about benefits or to publish reports relating to
benefits.
(7) The fact that the person holds himself, herself or itself out as
advising other persons, or publishing reports relating to benefits, as
mentioned in subsection (5), is to be disregarded.
25 (8) An act that the person does as a representative of a society, a
licensed dealer, a licensed adviser or an exempt person is to be
disregarded.
Subdivision 2 -- Agreements with unlicensed persons
Certain persons not clients
30 173. A reference in this Subdivision to a client does not include a
reference to a person who is --
(a) a licensed dealer; or
(b) a licensed adviser; or
(c) one of 2 or more persons who together constitute a licensed
35 dealer or a licensed adviser.
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Agreements with unlicensed persons
174. (1) Sections 175 to 183 apply where, during a period when a
person (in this Subdivision called the ``non-licensee'') is unlicensed,
the non-licensee and a client of the non-licensee enter into an
5 agreement that --
(a) constitutes, or relates to, a dealing or proposed dealing in
benefits; or
(b) relates to advising the client about benefits, or giving the
client reports relating to benefits.
10 (2) Sections 175 to 183 apply to an agreement mentioned in
subsection (1) whether or not anyone else is a party to the agreement.
(3) A person is unlicensed during a period when the person --
(a) in contravention of section 171, carries on, or holds out that
the person carries on, a business of dealing in benefits; or
15 (b) in contravention of section 172, carries on a benefits
advisory business or holds out that the person carries on
such a business.
Client may give notice of rescission
175. (1) Subject to this section, the client may, whether before or
20 after completion of the agreement, give to the non-licensee a written
notice stating that the client wishes to rescind the agreement.
(2) The client may only give a notice under this section within a
reasonable period after becoming aware of the facts entitling the client
to give the notice.
25 (3) The client is not entitled to give a notice under this section if
the client engages in conduct by engaging in which the client would, if
the entitlement so to give a notice were a right to rescind the
agreement for misrepresentation by the non-licensee, be taken to have
affirmed the agreement.
30 (4) The client is not entitled to give a notice under this section if,
within a reasonable period before the agreement was entered into, the
non-licensee informed the client (whether or not in writing) that the
non-licensee was unlicensed.
(5) If, at a time when a securities licence (as defined in subsection
35 (8)) held by the non-licensee was suspended, the non-licensee informed
the client that the licence was suspended, the non-licensee is to be
taken for the purposes of subsection (4) to have informed the client at
that time that the non-licensee was unlicensed.
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(6) Nothing in subsections (2), (3) and (4) limits the generality of
any of the others.
(7) Subject to this section, the client may give a notice under this
section whether or not --
5 (a) the notice will result under section 176 in rescission of the
agreement; or
(b) the Court will, if the notice so results, be empowered to
make a particular order, or any order at all, under section
178.
10 (8) In this section --
``securities licence'' means an investment advisers licence
granted under Part 7.3 of the Corporations Law or a
dealers licence granted under that Part.
Effect of notice under section 175
15 176. A notice given under section 175 rescinds the agreement unless
rescission of the agreement would prejudice a right, or an estate in
property, acquired by a person (other than the non-licensee) in good
faith, for valuable consideration and without notice of the facts entitling
the client to give the notice.
20 Client may apply to Court for partial rescission
177. (1) If the client gives a notice under section 175 but the notice
does not rescind the agreement because rescission of it would prejudice
a right or estate of the kind referred to in section 176, the client may,
within a reasonable period after giving the notice, apply to the Court
25 for an order under subsection (4) of this section.
(2) The Court may extend the period for making an application
under subsection (1).
(3) If an application is made under subsection (1), the Court may
make such orders expressed to have effect until the determination of
30 the application as it would have power to make if the notice had
rescinded the agreement under section 176 and the application were for
orders under section 178.
(4) On an application under subsection (1), the Court may make
an order --
35 (a) varying the agreement in such a way as to put the client in
the same position, as nearly as can be done without
prejudicing such a right or estate acquired before the order
is made, as if the agreement had not been entered into; and
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(b) declaring the agreement to have had effect as so varied at
and after the time when it was originally made.
(5) If the Court makes an order under subsection (4), the
agreement is to be taken for the purposes of section 178 to have been
5 rescinded under section 176.
(6) An order under subsection (4) does not affect the application of
section 180 or 182 in relation to the agreement as originally made or as
varied by the order.
Court may make consequential orders
10 178. (1) Subject to subsection (2), on rescission of the agreement
under section 176, the Court, on the application of the client or the non-
licensee, may make such orders as it would have power to make if the
client had duly rescinded the agreement for misrepresentation by the
non-licensee.
15 (2) The Court is not empowered to make a particular order under
subsection (1) if the order would prejudice a right, or an estate in
property, acquired by a person (other than the non-licensee) in good
faith, for valuable consideration and without notice of the facts entitling
the client to give the notice.
20 Agreement unenforceable against client
179. (1) This section --
(a) applies while both of the following are the case --
(i) the client is entitled to give a notice under section
175;
25 (ii) a notice so given will result under section 176 in
rescission of the agreement; and
(b) applies after the agreement is rescinded under section 176,
but does not otherwise apply.
(2) The non-licensee is not entitled, as against the client --
30 (a) to enforce the agreement, whether directly or indirectly; or
(b) to rely on the agreement, whether directly or indirectly and
whether by way of defence or otherwise.
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Non-licensee not entitled to recover commission
180. (1) Without limiting the generality of section 179, this
section --
(a) applies while the client is entitled to give a notice under
5 section 175; and
(b) applies after the client so gives a notice, even if the notice
does not result under section 176 in rescission of the
agreement,
but does not otherwise apply.
10 (2) The non-licensee is not entitled to recover by any means
(including, for example, set-off or a claim on a quantum meruit) any
brokerage, commission or other fee for which the client would, but for
this section, have been liable to the non-licensee under or in connection
with the agreement.
15 Onus of establishing non-application of section 179 or 180
181. For the purposes of determining, in a proceeding in a court,
whether or not the non-licensee is, or was at a particular time, entitled
as mentioned in section 179 (2) or 180 (2), it must be presumed, unless
the contrary is proved, that section 179 or 180, as the case requires,
20 applies, or applied at that time, as the case requires.
Client may recover commission paid to non-licensee
182. (1) Without limiting the generality of section 178, if the client
gives a notice under section 175, the client may, even if the notice does
not result under section 176 in rescission of the agreement, recover
25 from the non-licensee as a debt the amount of any brokerage,
commission or other fee that the client has paid to the non-licensee
under or in connection with the agreement.
(2) The SSA may, if it considers that it is in the public interest to
do so, bring an action under subsection (1) in the name of, and for the
30 benefit of, the client.
Remedies under this Subdivision
183. The client's rights under this Subdivision are additional to, and
do not prejudice, any right or remedy of the client.
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Subdivision 3 -- Representatives
Proper authority from society
184. A reference, in relation to a person (in this section called the
``representative'') to a proper authority from a society registered
5 under this Code or the Code of a participating State (in this section
called the ``principal'') is a reference to a document in the prescribed
form or a copy of the society's certificate of incorporation on which are
endorsed --
(a) a statement --
10 (i) stating that the representative is employed by, or acts
for or by arrangement with, the principal; and
(ii) signed by the principal; and
(b) in relation to each person (if any), other than the principal,
of whom the representative is a representative, a statement
15 that --
(i) sets out the name of the person; and
(ii) states that the representative is employed by, or acts
for or by arrangement with, that person; and
(iii) states that the person consents to the representative
20 being employed by, or acting for or by arrangement
with, the principal; and
(iv) is signed by the person.
Representatives of dealers
185. A person must not, in relation to benefits, do an act as a
25 representative of a licensed dealer unless the person holds a proper
authority from the dealer.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
Representatives of investment advisers
186. A person must not, in relation to benefits, do an act as a
30 representative of a licensed adviser unless the person holds a proper
authority from the licensed adviser.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
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Representatives of societies
187. A person must not, in relation to benefits, do an act as a
representative of a society unless the person holds a proper authority
from the society.
5 Maximum penalty: $2 500 or imprisonment for 6 months, or both.
Body corporate not to act as representative
188. A body corporate must not do an act as a representative of a
dealer, an investment adviser or a society.
Maximum penalty: $5 000 or imprisonment for 12 months, or both.
10 Defence
189. (1) A person does not contravene section 171, 172, 185, 186 or
187 by an act done by that person as a representative of another person
if --
(a) but for the other person ceasing to be a society or for the
15 revocation or suspension of a securities licence held by the
other person, the act would not have been such a
contravention;
(b) when he or she did the act, the first-mentioned person --
(i) believed in good faith that the other person was a
20 society or held the securities licence, as the case
requires; and
(ii) was unaware of the cessation, revocation or
suspension.
(2) A person does not contravene section 171, 172, 185, 186 or 187
25 by an act done by that person as a representative of another person if
the person holds what he or she believes in good faith to be a proper
authority from that other person, and in all the circumstances it was
reasonable for the first-mentioned person to so believe.
(3) In this section --
30 ``securities licence'' means an investment advisers licence
granted under Part 7.3 of the Corporations Law or a
dealers licence granted under that Part.
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Banned person not to act as representative
190. A person must not do an act as a representative of a society, a
licensed dealer or a licensed adviser if the person is the subject of a
banning order made by the Australian Securities Commission under
5 section 829 of the Corporations Law.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
Society to keep register of holders of proper authorities
191. (1) A society must establish a register of the persons who hold
proper authorities from the society and must keep it in accordance with
10 this section.
(2) The register must be in writing or in such other form as the
SSA approves.
(3) The register must contain, in relation to each person (if any)
who holds a proper authority from the society --
15 (a) a copy of the proper authority;
(b) the person's name;
(c) the person's current residential address;
(d) unless the person's current business address is the same as
the society's, the person's current business address; and
20 (e) any other prescribed information.
(4) A copy of a proper authority of a person from the society that
subsection (3) provides for the register to contain must be included in
the register within 2 business days after the person begins to hold that
proper authority.
25 (5) Information that subsection (3) provides for the register to
contain in relation to a person must be entered in the register within
2 business days after --
(a) the person begins to hold a proper authority from the
society; or
30 (b) the society receives the information,
whichever happens later.
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(6) Within 2 business days after a person ceases to hold a proper
authority from the society, the society must --
(a) in any case --
(i) include, in a part of the register separate from the
5 part in which copies of proper authorities are
included under subsection (4); and
(ii) remove from the last-mentioned part,
the copy of the proper authority that was included in the
last-mentioned part; and
10 (b) unless, at the end of those 2 business days, the person
again holds a proper authority from the society --
(i) enter, in a part of the register separate from the part
in which information is entered under subsection (5);
and
15 (ii) remove from the last-mentioned part,
the information that has been entered in the last-mentioned
part in relation to the person.
(7) Information that has been entered under subsection (6) (b) in a
separate part of the register is deemed for the purposes of subsections
20 (3) and (5) not to be contained or entered in the register.
(8) Where a society that subsection (1) requires to establish a
register already keeps one under this section or a corresponding
previous law, the society need not establish a new register but must
keep the existing one in accordance with this section.
25 Society to notify SSA of location and contents of register
192. (1) In this section --
``register'', in relation to a society, means a register that the
society keeps for the purposes of section 191.
(2) Within 14 days after establishing a register, the society must
30 lodge with the SSA written notice of where the register is kept.
(3) As soon as practicable after changing the place where a
register is kept, the society must lodge with the SSA written notice of
the new place where the register is kept.
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(4) Within 2 business days after the day on which a person begins
to hold a particular proper authority from a society, the society must,
whether or not the person has previously held a proper authority from
the society, lodge with the SSA --
5 (a) a copy of the first-mentioned proper authority; and
(b) a written notice stating that the person began to hold that
proper authority on that day.
(5) The society must lodge with the SSA a written notice, within
the period provided by subsection (6) --
10 (a) setting out the information that the register is required to
contain by section 191 (3) (b), (c), (d) or (e); and
(b) stating that the information has been, or is to be, entered in
the register.
(6) A notice under subsection (5) must be lodged with the SSA
15 within the period within which subsection 191 (5) requires the
information to be entered in the register.
(7) Within 2 business days after a person ceases to hold a proper
authority from a society, the society must, unless at the end of those 2
business days the person again holds a proper authority from the
20 society, lodge with the SSA a written notice stating that the person has
ceased to hold such a proper authority.
Inspection and copying of register
193. (1) In this section --
``register'' in relation to a society, means a register that the
25 society keeps for the purposes of section 191.
(2) A society must ensure that a register is open for inspection
without charge.
(3) Where a person requests a society in writing to give to the
person a copy of the whole, or of a specified part, of a register, the
30 society must comply with the request within 2 business days after --
(a) if the society's rules require the person to pay for the copy,
an amount (if any) prescribed by the society's rules,
receiving the amount from the person; or
(b) in any other case, receiving the request.
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SSA may require production of authority
194. (1) Where the SSA has reason to believe that a person --
(a) holds a proper authority from a society; or
(b) has done an act as a representative of another person,
5 then, whether or not the SSA knows who the society or other person is,
it may require the first-mentioned person to produce any proper
authority or purported proper authority from the society that the first-
mentioned person holds.
(2) A person must not, without reasonable excuse, refuse or fail to
10 comply with a requirement under this section.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
SSA may give society information about representative
195. (1) Where the SSA believes on reasonable grounds that --
(a) a person (in this section called the ``holder'') holds, or will
15 hold, a proper authority from a society;
(b) having regard to that fact, the SSA should give to the
society particular information that the SSA has about the
person; and
(c) the information is true,
20 the SSA may give the information to the society.
(2) Where the SSA gives information under subsection (1), the SSA
or an officer of the SSA may, for a purpose connected with --
(a) the SSA making a decision about what action (if any) to
take in relation to the holder, having regard to, or to
25 matters including, the information; or
(b) the SSA taking action pursuant to such a decision,
or for 2 or more such purposes, and for no other purpose, give to
another person, make use of, or make a record of, some or all of the
information.
30 (3) A person to whom information has been given, in accordance
with subsection (2) or this subsection, for a purpose or purposes may,
for that purpose or one or more of those purposes, and for no other
purpose, give to another person, make use of, or make a record of, that
information.
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(4) Subject to subsections (2) and (3), a person must not give to
another person, make use of, or make a record of, information given by
the SSA under subsection (1).
Maximum penalty: $5 000 or imprisonment for 12 months, or both.
5 (5) A person has qualified privilege in respect of an act done by
the person as permitted by subsection (2) or (3).
(6) A person to whom information is given in accordance with this
section must not --
(a) give any of the information to a court; or
10 (b) produce in a court a document that sets out some or all of
the information,
except --
(c) for a purpose connected with --
(i) the society making a decision about what action (if
15 any) to take in relation to the holder, having regard
to, or to matters including, some or all of the
information; or
(ii) the society taking action pursuant to such a decision;
or
20 (iii) proving in a proceeding in that court that particular
action taken by the society in relation to the holder
was so taken pursuant to such a decision,
or for 2 or more such purposes, and for no other purpose; or
(d) in a proceeding in that court, in so far as the proceeding
25 relates to an alleged contravention of this section; or
(e) in a proceeding in respect of an ancillary offence relating to
an offence against this section; or
(f) in a proceeding in respect of the giving to a court of false
information being or including some or all of the first-
30 mentioned information.
(7) A reference in this section to a person taking action in relation
to another person is a reference to the first-mentioned person --
(a) taking action by way of making, terminating or varying the
terms and conditions of a relevant agreement; or
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(b) otherwise taking action in relation to a relevant agreement,
in so far as the relevant agreement relates to the other person being
employed by, or acting for or by arrangement with, the first-mentioned
person in connection with a business of dealing in benefits or a benefits
5 advisory business carried on by the first-mentioned person.
Holder of authority may be required to return it
196. (1) Where a person holds a proper authority from a society but
is neither employed by, nor authorized to act for or by arrangement
with, the society, the society may, by writing given to the person,
10 require the person to give the proper authority to the society within a
specified period of not less than 2 business days.
(2) A person must not, without reasonable excuse, refuse or fail to
comply with a requirement made of the person in accordance with
subsection (1).
15 Subdivision 3A -- Exemptions and modifications relating to
representatives
Exemptions and modifications under Subdivision 3
196A. (1) The SSA may, subject to and in accordance with the
standards, by writing, exempt a particular person or persons, or a
20 particular class of persons, either generally or as otherwise provided in
the exemption, and either unconditionally or subject to conditions (if
any) as are specified in the exemption, from compliance with all or any
of the provisions of Subdivision 3.
(2) Without limiting the generality of subsection (1), an exemption
25 under that subsection may relate to particular benefits or to a
particular class of benefits.
(3) A person must not contravene a condition to which an
exemption under subsection (1) is subject.
(4) Where a person has contravened a condition to which an
30 exemption under subsection (1) is subject, the Court may, on the
application of the SSA, order the person to comply with the condition.
(5) The SSA may, subject to and in accordance with the standards,
by writing, declare that Subdivision 3 has effect in its application to a
particular person or persons, or a particular class of persons, either
35 generally or as otherwise provided in the declaration as if a specific
provision or provisions of that Subdivision were omitted, modified or
varied in a manner specified in the declaration, and, where such a
declaration is made, that Subdivision has effect accordingly.
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(6) Without limiting the generality of subsection (5), a declaration
under that subsection may relate to particular benefits or to a
particular class of benefits.
(7) The SSA must cause to be published in the Gazette a statement
5 to the effect that an exemption has been granted or a declaration made
under this Subdivision in relation to a particular class of persons or a
particular class of benefit funds.
Subdivision 4 -- Liability of principals for representatives' conduct
Conduct engaged in as a representative
10 197. Where a person engages in conduct in relation to benefits as a
representative of another person (in this section called the
``principal''), then, as between the principal and a third person (other
than the SSA), the principal is liable in respect of that conduct in the
same manner, and to the same extent, as if the principal had engaged
15 in it.
Liability where identity of principal unknown
198. (1) This section applies for the purposes of a proceeding in a
court where --
(a) whether within or outside this State, a person (in this
20 section called the ``representative'') engages in particular
conduct in relation to benefits while the person is a
representative of 2 or more persons (in this section called
the ``indemnifying principals''); and
(b) it is proved for the purposes of the proceeding that the
25 representative engaged in the conduct as a representative
of some person (in this section called the ``unknown
principal'') but it is not proved for those purposes who the
unknown principal is.
(2) If only one of the indemnifying principals is a party to the
30 proceeding, he, she or it is liable in respect of that conduct as if he, she
or it were the unknown principal.
(3) If 2 or more of the indemnifying principals are parties to the
proceeding, each of those 2 or more is liable in respect of that conduct
as if he, she or it were the unknown principal.
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Liability of principals where act done in reliance on
representative's conduct
199. (1) This section applies where --
(a) at a time when a person (in this section called the
5 ``representative'') is a representative of only one person
(in this section called the ``indemnifying principal'') or of
2 or more persons (in this section called the ``indemnifying
principals''), the representative, whether within or outside
this State --
10 (i) engages in particular conduct in relation to benefits;
(ii) proposes, or represents that the representative
proposes, to engage in particular conduct in relation
to benefits;
(b) another person (in this section called the ``client'') does, or
15 omits to do, a particular act, whether within or outside this
State, because the client believes at a particular time in
good faith that the representative engaged in, or proposes
to engage in, as the case requires, that conduct --
(i) on behalf of some person (in this section called the
20 ``assumed principal'') whether or not identified, or
identifiable, at that time by the client; and
(ii) in connection with a business dealing in benefits or a
benefits advisory business carried on by the assumed
principal; and
25 (c) it is reasonable to expect that a person in the client's
circumstances would so believe and would do, or omit to do,
as the case requires, that act because of that belief,
whether or not that conduct is or would be within the scope of the
representative's employment by, or authority from, any person.
30 (2) If --
(a) subsection (1) (a) (i) applies; or
(b) subsection (1) (a) (ii) applies and the representative engages
in that conduct,
then, for the purposes of a proceeding in a court --
35 (c) as between the indemnifying principal and the client or a
person claiming through the client, the indemnifying
principal is liable; or
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(d) as between any of the indemnifying principals and the
client or a person claiming through the client, each of the
indemnifying principals is liable,
as the case requires, in respect of that conduct in the same manner,
5 and to the same extent, as if he, she or it had engaged in it.
(3) Without limiting the generality of subsection (2), the
indemnifying principal, or each of the indemnifying principals, as the
case requires, is liable to pay damages to the client in respect of any
loss or damage that the client suffers as a result of doing, or omitting to
10 do, as the case requires, the act referred to in subsection (1) (b).
(4) Subsection (3) does not apply unless --
(a) the conduct was engaged in, the proposed conduct would
have been engaged in, or the representation was made, in
this State; or
15 (b) the act referred to in subsection (1) (b) was done, or would
have been done, as the case requires, in this State; or
(c) some or all of the loss or damage was suffered in this State.
(5) If --
(a) there are 2 or more indemnifying principals;
20 (b) 2 or more of them are parties (in this subsection called the
``indemnifying parties'') to a proceeding in a court;
(c) it is proved for the purposes of the proceeding --
(i) that the representative engaged in that conduct as a
representative of some person; and
25 (ii) who that person is; and
(d) that person is among the indemnifying parties,
subsections (2) and (3) do not apply, for the purposes of the proceeding,
in relation to the indemnifying parties other than that person.
Presumptions about certain matters
30 200. (1) Where it is proved, for the purposes of a proceeding in a
court, that a person (in this subsection called the ``representative'')
engaged in particular conduct in relation to benefits, whether within or
outside this State, while the person was a representative of --
(a) only one person (in this subsection called the
35 ``indemnifying principal''); or
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(b) 2 or more persons (in this subsection called the
``indemnifying principals''),
then, unless the contrary is proved for the purposes of the proceeding, it
must be presumed for those purposes that the representative engaged
5 in the conduct as a representative of --
(c) the indemnifying principal; or
(d) as a representative of some person among the indemnifying
principals,
as the case requires.
10 (2) Where, for the purposes of establishing in a proceeding in a
court that section 199 applies, it is proved that a person did, or omitted
to do, a particular act because the person believed at a particular time
in good faith that certain matters were the case, then, unless the
contrary is proved for those purposes, it must be presumed for those
15 purposes that it is reasonable to expect that a person in the first-
mentioned person's circumstances would so believe and would do, or
omit to do, as the case requires, that act because of that belief.
No contracting out of liability for representative's conduct
201. (1) For the purposes of this section, a liability of a person --
20 (a) in respect of conduct in relation to benefits engaged in by
another person as a representative of the first-mentioned
person; or
(b) arising under section 199 because another person has
engaged in, proposed to engage in, or represented that the
25 other person proposed to engage in, particular conduct in
relation to benefits,
is a liability of the first-mentioned person in respect of the other person.
(2) Subject to this section, an agreement is void in so far as it
purports to exclude, restrict or otherwise affect a liability of a person in
30 respect of another person, or to provide for a person to be indemnified
in respect of a liability of the person in respect of another person.
(3) Subsection (2) does not apply in relation to an agreement in so
far as it --
(a) is a contract of insurance;
35 (b) provides for a representative of a person to indemnify the
person in respect of a liability of the person in respect of
the representative; or
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(c) provides for a licensed adviser, licensed dealer or society
from whom a person holds a proper authority to indemnify
another such adviser, dealer or society in respect of a
liability of the other authorized person in respect of the
5 person.
(4) A person must not make, offer to make, or invite another
person to offer to make, in relation to a liability of the first-mentioned
person in respect of a person, an agreement that is or would be void, in
whole or in part, by virtue of subsection (2).
10 Effect of Subdivision
202. (1) Where 2 or more persons are liable under this Subdivision
in respect of the same conduct or the same loss or damage, they are so
liable jointly and severally.
(2) Nothing in section 197, 198 or 199 --
15 (a) affects a liability arising otherwise than by virtue of this
Subdivision; or
(b) notwithstanding paragraph (a) of this subsection, entitles a
person to be compensated twice in respect of the same loss
or damage; or
20 (c) makes a person guilty of an offence.
Subdivision 5 -- Excluding persons from dealing with benefits
Power to make banning order
203. Subject to section 210, the SSA may make a banning order
against a person --
25 (a) if the person is a natural person and the person --
(i) becomes an insolvent under administration; or
(ii) is convicted of serious fraud within the meaning of
section 9 of the Corporations Law; or
(iii) becomes incapable, through mental or physical
30 incapacity, of managing his or her affairs;
(b) if the person is a body corporate and the person --
(i) ceases to carry on business; or
(ii) becomes an externally administered body corporate;
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(c) if the person contravenes a provision of Chapter 6 or
Chapter 7 of the Corporations Law or of this Part;
(d) if the SSA has reason to believe that the person (in the case
of a natural person) or an officer of the person (in the case
5 of a body corporate) is not of good fame and character; or
(e) if the SSA has reason to believe that the person has not, or
will not, perform efficiently, honestly and fairly the duties
of a licensed dealer, a licensed adviser or the holder of a
proper authority from a licensed dealer, a licensed adviser
10 or a society, as the case requires, in relation to the conduct
of a business of dealing in benefits or a benefits advisory
business.
Nature of banning order
204. (1) Where this Subdivision empowers the SSA to make a
15 banning order against a person, the SSA may, by written order,
prohibit the person, permanently or for a specified period, from doing
an act in connection with the conduct of a business of dealing in
benefits or a benefits advisory business.
(2) The SSA must not vary or revoke a banning order except under
20 section 205, 206 or 207.
Exceptions to banning order
205. (1) An order made against a person under section 204 (1) may
include a provision that permits the person, subject to such conditions
(if any) as are specified, to do, or to do in specified circumstances,
25 specified acts that the order would otherwise prohibit the person from
doing.
(2) Subject to section 210 the SSA may, at any time, by written
order, vary a banning order against a person --
(a) by adding a provision that permits the person as mentioned
30 in subsection (1);
(b) by varying such a provision in relation to conditions,
circumstances or acts specified in the provision;
(c) by omitting such a provision and substituting another such
provision; or
35 (d) by omitting such a provision.
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Variation or revocation of banning order on application
206. (1) Subject to section 207 and 210, this section has effect
where a person applies to the SSA to vary or revoke a banning order
relating to the person.
5 (2) If --
(a) the person is not an insolvent under administration or an
externally administered body corporate; and
(b) the SSA has no reason to believe that the person, or an
officer of the person, is not of good fame and character; and
10 (c) the SSA has no reason to believe that the person will not
perform efficiently, honestly and fairly the duties of a
licensed dealer, a licensed adviser or the holder of a proper
authority from a licensed dealer, a licensed adviser or a
society, as the case requires,
15 the SSA must by written order --
(d) if paragraph (c) applies, vary the banning order so that it
no longer prohibits the person from doing an act in
connection with the conduct of a business of dealing in
benefits or a benefits advisory business;
20 (e) in any other case, revoke the banning order.
(3) Otherwise, the SSA must refuse the application.
(4) In determining whether or not it has reason to believe as
mentioned in subsection (2) (b) or (c), the SSA must have regard to any
conviction of any relevant person, during the 10 years ending on the
25 day of the application, of serious fraud within the meaning of section 9
of the Corporations Law.
(5) Nothing in subsection (4) limits the matters to which the SSA
may have regard --
(a) in deciding the application; or
30 (b) in connection with performing or exercising any other
function or power under this Part.
Revocation of banning order in certain cases
207. Where --
(a) section 206 requires the SSA to vary a banning order so
35 that it no longer has a particular operation; and
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(b) the order has no other operation,
the SSA must, by written order, instead revoke the banning order.
Effect and publication of orders under this Subdivision
208. (1) An order by the SSA under this Subdivision takes effect
5 when served on the person to whom the order relates.
(2) As soon as practicable on or after the day on which an order by
the SSA under this Subdivision takes effect, the SSA must publish in
the Gazette a notice that sets out a copy of --
(a) if the order is made under section 204 or revokes a banning
10 order, the first-mentioned order; or
(b) if the order varies a banning order, the banning order as in
force immediately after the first-mentioned order takes
effect,
and states that the first-mentioned order, or the banning order as so in
15 force, as the case requires, took effect on that day.
(3) Where --
(a) but for this subsection, subsection (2) would require
publication of a notice setting out a copy of a banning order
as in force at a particular time;
20 (b) the banning order as so in force includes a provision that
permits a person as mentioned in section 205 (1); and
(c) in the SSA's opinion, the notice would be unreasonably long
if it set out a copy of the whole of that provision,
the notice may, instead of setting out a copy of that provision, set out a
25 summary of the provision's effect.
Contravention of banning order
209. A person must not contravene a banning order relating to the
person.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
30 Opportunity for hearing
210. (1) The SSA must not --
(a) make, otherwise than by virtue of section 203 (a), (b) or (c),
an order under section 204 against a person;
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(b) make under section 205 (2) an order varying a banning
order against a person; or
(c) refuse an application by a person under section 206,
unless the SSA complies with subsection (2) of this section.
5 (2) The SSA must give the person an opportunity --
(a) to appear at a hearing before the SSA that takes place in
private; and
(b) to make submissions and give evidence to the SSA in
relation to the matter.
10 Disqualification by the Court
211. (1) Where the SSA makes under section 204 against a person
an order that is to operate otherwise than only for a specified period,
the SSA may apply to the Court for an order or orders under this
section in relation to the person.
15 (2) On an application under subsection (1), the Court may make
one or more of the following --
(a) an order prohibiting the person, permanently or for a
specified period, from doing an act in connection with the
conduct of a business of dealing in benefits or a benefits
20 advisory business;
(b) such other order as it thinks fit,
or may refuse the application.
(3) The Court may revoke or vary an order in force under
subsection (2).
25 Subdivision 6 -- Recommendations about benefits
Definition of adviser
212. In this Subdivision --
``adviser'' means --
(a) a licensed dealer;
30 (b) a licensed adviser;
(c) a person holding a proper authority from a licensed
dealer, a licensed adviser or a society.
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Recommendation made by partner or officer
213. For the purposes of this Subdivision (other than section 216) --
(a) a recommendation made by a partner is deemed to have
been made by each partner in the partnership; and
5 (b) a recommendation made by a director, executive officer or
secretary of a body corporate is deemed to have also been
made by the body corporate.
Client to be told if adviser's interests may influence
recommendation
10 214. (1) This section applies where an adviser makes a
recommendation with respect to benefits, whether express or implied, to
a person (in this section called the ``client'') who may reasonably be
expected to rely on it.
(2) The adviser must --
15 (a) if the recommendation is made orally, when making the
recommendation, disclose to the client orally; or
(b) if the recommendation is made in writing, set out in that
writing, in such a way as to be no less legible than the
other material in that writing,
20 particulars of --
(c) any commission or fee, or any other benefit or advantage,
whether pecuniary or not and whether direct or indirect,
that the adviser or an associate of the adviser (other than a
society) has received, or will or may receive, in connection
25 with the making of the recommendation or an application
by the client for benefits or a contribution by the client to a
benefit fund, as a result of the recommendation; and
(d) any other pecuniary or other interest, whether direct or
indirect, of the adviser or an associate of the adviser, (other
30 than a society) that may reasonably be expected to be
capable of influencing the adviser in making the
recommendation.
Maximum penalty: $2 500 or imprisonment for 6 months, or both.
(3) Subsection (2) does not apply in relation to a commission or fee
35 that the adviser has received, or will or may receive, from the client.
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(4) If, by making the recommendation, the adviser does an act as a
representative of another person (other than a society), then --
(a) without limiting the generality of section 4 (2), the other
person is an associate for the purposes of subsection (2) of
5 this section; and
(b) subsection (2) does not apply in relation to a commission or
fee that the other person has received, or will or may
receive, from the client.
(5) For the purposes of section 4 (2), the making of
10 recommendations with respect to benefits, whether express or implied,
is the matter to which a reference to an associate in subsection (2) of
this section relates.
(6) Despite section 4 (2) and subsection (5) of this section, a person
(in this subsection called the ``alleged associate'') is not an associate
15 for the purposes of subsection (2) of this section merely because of
being --
(a) a partner of the adviser otherwise than because of carrying
on a business of dealing in benefits in partnership with the
adviser; or
20 (b) a director of a body corporate of which the adviser is also a
director, whether or not the body carries on a business of
dealing in benefits,
unless the adviser and the alleged associate act jointly, or otherwise act
together, or under an arrangement between them, in relation to making
25 recommendations, whether express or implied, with respect to benefits.
Defences to alleged breach of section 214 (2)
215. (1) Where --
(a) a person --
(i) when making a recommendation orally, fails to
30 disclose; or
(ii) when making a recommendation in writing, fails to
set out in that writing,
as required by section 214 (2), particulars of a matter; and
(b) it is proved that the person was not, and could not
35 reasonably be expected to have been, aware of that matter
when making the recommendation,
the failure is not a contravention of section 214 (2).
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(2) Where --
(a) an adviser --
(i) when making a recommendation orally, fails to
disclose; or
5 (ii) when making a recommendation in writing, fails to
set out in that writing,
as required by section 214 (2), particulars of a matter;
(b) in the case of a person holding a proper authority from a
licensed dealer, a licensed adviser or a society, by making
10 the recommendation, the representative does an act as a
representative of the licensed dealer, licensed adviser or a
society;
(c) it is proved that the licensed dealer, licensed adviser or
society, had in operation, throughout a period beginning
15 before the decision to make the recommendation was made
and ending after the recommendation was made,
arrangements to ensure that --
(i) the natural person who made the decision knew
nothing about that matter before the end of that
20 period; and
(ii) no advice with respect to the making of the
recommendation was given to the person by anyone
who knew anything about that matter; and
(d) it is also proved that --
25 (i) the person in fact knew nothing about that matter
before the end of that period; and
(ii) no such advice was so given,
the failure is not a contravention of section 214 (2).
(3) Neither of subsections (1) and (2) limits the generality of the
30 other.
Adviser must have reasonable basis for recommendation
216. (1) An adviser who --
(a) makes a recommendation, whether express or implied, with
respect to benefits to a person who may reasonably be
35 expected to rely on it; and
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(b) does not have a reasonable basis for making the
recommendation to the person,
contravenes this section.
(2) For the purposes of subsection (1), an adviser does not have a
5 reasonable basis for making a recommendation to a person unless --
(a) in order to ascertain that the recommendation is
appropriate having regard to the information the adviser
has about the person's investment objectives, financial
situation and particular needs, the adviser has given such
10 consideration to, and conducted such investigation of, the
subject matter of the recommendation as is reasonable in
all the circumstances; and
(b) the recommendation is based on that consideration and
investigation.
15 (3) An adviser who contravenes subsection (1) is not guilty of an
offence.
Adviser who breaches this Subdivision liable to compensate
client
217. (1) This section applies where --
20 (a) an adviser contravenes section 214 or 216 in relation to a
recommendation (whether express or implied) with respect
to benefits to a person (in this section called the ``client'');
(b) the client, in reliance on the recommendation, does, or
omits to do, a particular act;
25 (c) it is reasonable, having regard to the recommendation and
all other relevant circumstances, for the client to do, or omit
to do, as the case requires, that act in reliance on the
recommendation; and
(d) the client suffers loss or damage as a result of that act or
30 omission.
(2) Subject to subsections (3) and (4), the adviser is liable to pay
damages to the client in respect of that loss or damage.
(3) In the case of a contravention of section 214, the adviser is not
so liable if it is proved that a reasonable person in the client's
35 circumstances could be expected to have done, or omitted to do, as the
case requires, that act in reliance on the recommendation even if the
adviser had complied with that section in relation to the
recommendation.
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(4) In the case of a contravention of section 216, the adviser is not
so liable if it is proved that the recommendation was, in all the
circumstances, appropriate having regard to the information that, when
making the recommendation, the adviser had about the client's
5 investment objectives, financial situation and particular needs.
Qualified privilege for adviser when complying with this
Subdivision
218. An adviser who --
(a) makes a recommendation in relation to benefits to a person
10 who may reasonably be expected to rely on it; and
(b) in so making the recommendation, contravenes neither of
sections 214 (2) and 216 (1),
has qualified privilege in respect of a statement the adviser makes to
the person, whether orally or in writing, in the course of, or in
15 connection with, so making the recommendation.
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PART 5 -- SHARES AND CHARGES
Division 1 -- Shares Generally
Share capital
219. A society may issue permanent shares or redeemable preference
5 shares in accordance with this Part.
Classes of shares, rights etc.
220. (1) The rules of a society may provide for the division of the
society's share capital into classes of shares.
(2) All shares in a class of shares must have the same nominal
10 value.
(3) The rights attaching and terms and conditions of issue
applying to a class of shares are as provided in the society's rules or
determined by the board under the rules, but no such rules may be
registered unless the provisions in relation to those rights, terms and
15 conditions comply with the requirements of this Code and are, in the
SSA's opinion, otherwise appropriate.
Determination of share capital
221. The amount of the share capital of a society is the aggregate of
the nominal values of the shares that have been issued by the society.
20 Liability of shareholders
222. The liability of a shareholder in a society in relation to a share
is limited to the amount (if any) unpaid in relation to the share.
Board to approve sale or transfer unless rules provide
otherwise
25 223. Unless a society's rules otherwise provide, a share in the society
may be transferred only with the consent of the society.
Restriction on application of capital
224. (1) Except as provided by section 225, a society must not
apply any of its shares or capital money either directly or indirectly
30 in --
(a) making a payment to a person in consideration of the
person's subscribing or agreeing to subscribe (whether
absolutely or conditionally); or
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(b) procuring or agreeing to procure subscriptions (whether
absolute or conditional),
for any permanent shares in the society (whether the shares are or the
money is so applied by being added to the purchase price of property
5 acquired by the society or to the contract price of work to be executed
for the society or the money is paid out of the nominal purchase price or
contract price or otherwise).
(2) If a society contravenes subsection (1), any officer of the society
who is in default commits an offence.
10 Maximum penalty: $25 000.
(3) If --
(a) a person is convicted of an offence against subsection (2) in
relation to a society; and
(b) the court by which the person is convicted is satisfied that
15 the society has suffered loss or damage because of the act
that constituted the offence,
the court may, in addition to imposing a penalty, order the convicted
person to pay a specified amount of compensation to the society.
(4) The order may be enforced as if it were a judgment of that
20 court.
(5) If a contravention of subsection (1) takes place and --
(a) a person (other than the society concerned) who was, at the
time of the contravention, aware of the matters constituting
the contravention, made a profit because of the
25 contravention, the society may (whether or not the person
or another person has been convicted of an offence against
subsection (2) in relation to the contravention) recover the
profit from the person as a debt due to the society by action
in a court having jurisdiction for the recovery of debts up to
30 the amount concerned; and
(b) the society concerned has suffered loss or damage because
of the contravention, the society may recover the loss or
damage from a person who is in default (whether or not the
person or another person has been convicted of an offence
35 against subsection (2) in relation to the contravention) as a
debt due to the society by action in a court having
jurisdiction for the recovery of debts up to the amount
concerned.
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Power to make certain payments
225. (1) Subject to subsection (2), a society may make a payment
by way of brokerage or commission to a person in consideration of --
(a) the person's subscribing or agreeing to subscribe (whether
5 absolutely or conditionally) for shares in the society; or
(b) procuring or agreeing to procure subscriptions (whether
absolute or conditional) for shares in the society,
only if --
(c) the payment is not prohibited by the society's rules; and
10 (d) the amount of the proposed payment, or the rate at which
the payment is proposed to be made, is disclosed in a
prospectus issued in relation to the shares or, if there is no
such prospectus, in a statement lodged with the SSA before
the society becomes liable to make the payment; and
15 (e) the number of shares for which persons have agreed, for a
payment by way of brokerage or commission, to subscribe
absolutely is set out in the prospectus or statement.
(2) The total amount of payments by a society by way of brokerage
or commission for shares must not be more than the lesser of the
20 following amounts --
(a) 10% of the total amount payable on allotment of the shares;
(b) if the society's rules specify an amount, or a rate for
calculating an amount, for the purpose, the amount
specified or calculated in accordance with the specified rate.
25 (3) A vendor to, promoter of, or person who receives payment in
money or shares from, a society may apply any part of the money or
shares in making a payment that would, if it were made directly by the
society, be lawful under this section.
Validation of shares improperly issued
30 226. (1) If a society has purported to issue shares and --
(a) the creation or issue of the shares is invalid under this
Code or the society's rules or for any other reason; or
(b) the terms of the purported issue are inconsistent with or
are not authorized by this Code or the rules,
35 the Court may, on application made by the society, a holder or
mortgagee of any of the shares, or a creditor of the society, and, on
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being satisfied that in all the circumstances it is just and equitable to
do so, make an order under this section.
(2) An order under this section may --
(a) validate the purported issue of the shares; or
5 (b) confirm the terms of the purported issue of the shares; or
(c) do both those things.
(3) On an office copy of an order made under this section being
lodged with the SSA, the shares to which the order relates are taken to
have been validly issued on the terms of the issue of the shares.
10 Division 2 -- Permanent Shares
Issue of permanent shares
227. (1) Permanent shares in a society may be issued as fully paid-
up shares or shares to be paid for by periodical or other subscription or
at call.
15 (2) If the rules of a society provide for the issue of permanent
shares of different classes, the rules must provide that each class of
permanent shares ranks equally with the other classes of permanent
shares in relation to the return of capital and any distribution of
surplus assets and profits in the winding-up of the society.
20 Issue of preference shares
228. (1) Without limiting section 220, a society may issue
preference shares as a class of permanent shares.
(2) The SSA may, by Gazette notice, declare that specified
preference shares issued by a society are a class of permanent shares.
25 (3) A declaration has effect for the purposes of the application of
this Code to the shares to which the declaration relates.
Rights of holders of preference shares to be set out in rules
229. A society must not allot a preference share, or convert an issued
share into a preference share, unless its rules set out the rights of the
30 holder of the share in relation to --
(a) repayment of capital; and
(b) participation in surplus assets and profits; and
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(c) cumulative or non-cumulative dividends; and
(d) voting; and
(e) priority of payment of capital and dividend,
in relation to other shares or other classes of preference shares.
5 Cancellation of permanent shares
230. (1) Subject to section 237, issued or unissued permanent
shares in a society may not be cancelled by the society except --
(a) under its rules and with the approval of the SSA; or
(b) under a provision of this Code other than this section.
10 (2) If the SSA gives approval to the cancellation of permanent
shares in a society, the SSA may attach conditions to the approval and
may, on non-compliance with a condition of the approval, revoke the
approval.
(3) Without limiting subsection (2), the SSA may impose
15 conditions on the cancellation of permanent shares in a society to the
effect of the permitted buy-back procedures set out in Division 4B of
Part 2.4 of the Corporations Law as if --
(a) a reference in that Division to a company were a reference
to the society; and
20 (b) a permitted buy-back in accordance with that Division were
the procedure leading to cancellation of the permanent
shares under subsection (1).
(4) Subject to subsection (5), a society must not cancel a
permanent share if the result of taking such action would be that the
25 society fails to satisfy, or is in breach of, a standard.
(5) Despite any other provision of this Code, a society must cancel
any permanent share that is forfeited to the society under this Code or
its rules and is not required by this Code to be sold.
Dividends in relation to permanent shares
30 231. (1) In this section --
``dividend'' includes a payment by way of bonus share issue.
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(2) A society may, if authorized by its rules and the board so
determines, in relation to a particular class of permanent shares,
distribute profits by way of dividends or bonus shares (whether fully or
partly paid-up) to the holders of the permanent shares.
5 (3) Dividends or bonus share issues in relation to permanent
shares may vary in value proportionately according to the extent to
which each permanent share in relation to which the payment or issue
is made is paid up.
(4) A society commits an offence if dividends are paid otherwise
10 than --
(a) out of profits of the management fund of the society; or
(b) out of a share premium account maintained by the society
under this Division.
Maximum penalty: $75 000.
15 (5) If dividends are paid in contravention of subsection (4), the
creditors of the society are entitled to recover from any officer of the
society who knowingly caused or permitted the payment to be made the
amount of the debts owed by the society to those creditors respectively
to the extent that the dividends so paid have exceeded profits.
20 (6) If the whole amount is recovered from one officer, that officer
may recover contribution from any other officer similarly liable.
(7) A liability imposed on an officer under this section is
extinguished on the person's death.
Requirements for issue of permanent shares
25 232. (1) A society must not issue permanent shares unless
expressly authorized by its rules.
(2) If a society proposes to adopt rules that authorize the issue of
permanent shares, the society must first submit the rules to the SSA
for approval under this section.
30 (3) The SSA may approve rules for the issue by a society of
permanent shares if the SSA is satisfied that --
(a) the rules make appropriate provision for the reasonable
apportionment of reserves and profits of the society among
different classes of members or shareholders; and
35 (b) there would be, on winding-up of the society, a reasonable
apportionment of reserves and profits among different
classes of members or shareholders.
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(4) A society, in issuing permanent shares in accordance with its
rules, must comply with this Code and the standards.
Allotment of permanent shares otherwise than for cash
233. (1) For the purposes of this section, the issue of permanent
5 shares under a dividend reinvestment plan, or the issue of bonus shares
paid for out of the share premium account under section 240, is not an
issue of permanent shares otherwise than in consideration of payment
in cash.
(2) A society must not allot permanent shares as fully or partly
10 paid-up otherwise than in consideration of payment in cash unless the
society has obtained a report from an expert, signed by the expert and
stating --
(a) what, in the expert's opinion, is the money value, at the
time of the signing of the report, of the consideration given
15 in relation to the shares; and
(b) whether or not, in the expert's opinion, the consideration is
fair and reasonable as at that time and the reasons for the
opinion; and
(c) particulars of any relationship that the expert has with the
20 society or an associate of the society; and
(d) particulars of any pecuniary or other interest that the
expert has that could reasonably be regarded as being
capable of affecting the expert's ability to give an unbiased
report; and
25 (e) particulars of any fee or pecuniary or other benefit, whether
direct or indirect, that the expert has received, or will or
may receive, for or in connection with the making of the
report.
(3) A copy of a report under subsection (2) must be lodged with the
30 SSA by the society not less than 7 days before the shares are allotted.
(4) The society must, if it has obtained the opinions of more than
one expert for the purposes of this section, attach to any report that is
dealt with under subsection (3) a statement setting out, in relation to
each of the experts (other than the one who signed the report) --
35 (a) the name of the expert; and
(b) particulars of the opinion (if any) expressed by the expert
on the matters on which an expert's opinion is required for
the purposes of this section.
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(5) A society that contravenes this section commits an offence and
is liable on conviction to a maximum penalty of $25 000.
Power to exempt in relation to non-cash consideration
234. (1) The SSA may, by written notice, exempt a society,
5 conditionally or unconditionally, from a requirement of section 233.
(2) The SSA may, on non-compliance with a condition of an
exemption under this section, by written notice, revoke the exemption.
Differences in calls, reserve liability etc.
235. (1) A society may, if authorized by its rules --
10 (a) make arrangements on the issue of permanent shares for
varying the amounts and times of payment of calls as
among shareholders; and
(b) accept from a shareholder the whole or a part of the
amount remaining unpaid on any permanent shares
15 although no part of that amount has been called-up.
(2) A society may, by special resolution, determine that any
proportion of its permanent share capital that has not been already
called-up is not capable of being called-up except in the event and for
the purposes of the society being wound-up, but the resolution does not
20 prejudice any rights acquired by a person before the passing of the
resolution.
Calls and effect of non-compliance with calls on permanent
shares
236. (1) Calls on permanent shares in a society must be so made
25 that they are payable not less than 14 days from the day on which the
call is made, and no subsequent call may be made within 7 days from
the day on which the call was made immediately before it is payable.
(2) When a call is made, notice of the amount of the call, of the
day when it is payable and of the place for payment must, not less than
30 7 days before the day, be sent by post to the holder of shares on which
the call is made.
(3) If a call on a share is not paid on or before the day for its
payment, the shareholder is not entitled --
(a) to any dividend declared on the share after the day for
35 payment and before the day the call is paid; or
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(b) while the call remains unpaid, to a vote for the share in
any meeting of members of the society.
(4) If a call on a share is unpaid at the end of 14 days after the
day for its payment, the share may be forfeited by resolution of the
5 board.
Sale of permanent shares forfeited for non-payment of call
237. (1) Permanent shares forfeited to a society for non-payment of
a call must be offered for sale not more than 6 weeks after their
forfeiture --
10 (a) by auction; or
(b) on a stock market lawfully operated by a stock exchange
(within the meaning of paragraph (c) of the definition of
``stock exchange'' in section 9 of the Corporations Law).
(2) The rules of a society must provide for --
15 (a) the procedure to be followed in the conduct of the auction;
and
(b) the application of the proceeds of sale of the forfeited
shares.
Prohibition of allotment unless minimum subscription received
20 238. (1) A society must not make an allotment of permanent shares
in the society that have been offered for subscription or in relation to
which an invitation to subscribe has been issued unless --
(a) the minimum subscription (if any) has been subscribed; and
(b) the sum payable on application for the subscribed shares
25 has been received by the society.
(2) For the purposes of subsection (1), if a society has received a
cheque or payment order for the sum payable on application for an
allotment of shares in the society, the sum is not taken to have been
received by the society until the cheque is paid by the bank on which it
30 is drawn or payment is made in accordance with the order.
(3) In ascertaining for the purposes of subsection (1) whether the
minimum subscription has been subscribed in relation to an allotment
of shares, an amount equal to the sum of --
(a) the nominal value of each share; and
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(b) if the share is, or is to be, issued at a premium, the amount
of the premium payable on each share,
less any amount payable otherwise than in cash is taken to have been
subscribed in relation to each share for the allotment of which an
5 application has been made.
(4) If the conditions mentioned in subsection (1) have not been
satisfied within 4 months after the issue of the prospectus, the society
must repay, under this section, all money received from applicants for
shares.
10 (5) If a society is liable, under subsection (4), to repay money
received from applicants for shares --
(a) the money must be repaid without interest within 7 days
after the society becomes liable; and
(b) if the money is not repaid within the period --
15 (i) the directors of the society are, subject to subsection
(6), jointly and severally liable to repay the money
with interest at the prescribed rate calculated from
the end of the period; and
(ii) each director of the society commits an offence for
20 which the director is liable on conviction to a
maximum penalty of $5 000.
(6) A director of a society is not liable under subsection (5) (b) (i),
and does not commit an offence against subsection (5) (b) (ii), if it is
proved that the default in the repayment of the money was not due to
25 any misconduct or negligence on the director's part.
(7) An allotment made by a society to an applicant in
contravention of this section is voidable at the option of the applicant
and is voidable even if the society is being wound-up.
(8) An option mentioned in subsection (7) is exercisable by written
30 notice served on the society within one month after the date of the
allotment.
(9) A director of a society who knowingly contravenes, or permits
or authorizes the contravention of, any of the provisions of this section
(other than subsection (5)) commits an offence and is liable, in addition
35 to the penalty for the offence, to compensate the society and any person
to whom an allotment has been made in contravention of this section
respectively for any loss, damages or expenses that the society or the
person has sustained or incurred because of the allotment.
Maximum penalty: $5 000.
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(10) A proceeding for the recovery of compensation under
subsection (9) must be started within 2 years after the date of the
allotment.
(11) Any condition requiring or binding an applicant for shares to
5 waive compliance with any requirement of this section, or purporting to
do so, is void.
Return as to allotments
239. (1) If a society makes an allotment of its permanent shares,
the society must, within one month after the allotment is made, lodge
10 with the SSA a return, in accordance with the regulations, stating --
(a) the number and nominal values of the shares comprised in
the allotment; and
(b) the amount (if any) paid or due and payable on the
allotment of each share; and
15 (c) if the capital of the society is divided into shares of
different classes, the class of shares to which each share
comprised in the allotment belongs; and
(d) subject to subsection (3), the full name, or the surname and
at least one given name and initials, and the address of
20 each of the allottees and the number and class of shares
allotted to the person.
(2) A society that --
(a) has more than 500 members; and
(b) keeps its register of holders of permanent shares at a place
25 within 25 kilometres of an office of the SSA; and
(c) provides at that office reasonable accommodation and
facilities for persons to inspect and take copies of its
register of holders of permanent shares,
is not required to comply with the provisions of this Part and of the
30 regulations made for the purposes of this Part in so far as they relate to
the inclusion in the annual return of a list of members and particulars
of shares.
(3) The particulars mentioned in subsection (1) (d) need not be
included in a return in relation to shares that have been allotted in
35 consideration of the payment of money.
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(4) If shares in a society are allotted as fully or partly paid-up
otherwise than in consideration of the payment of money and the
allotment is made under a written contract, the society must lodge with
the return the contract evidencing the entitlement of the allottee or a
5 certified copy of any such contract.
(5) If a certified copy of a contract is lodged under subsection (4),
the original contract duly stamped must be produced at the same time
to the SSA.
(6) If shares in a society are allotted as fully or partly paid-up
10 otherwise than in consideration of the payment of money and the
allotment is made --
(a) under a contract not reduced to writing; or
(b) under the society's rules; or
(c) in satisfaction of a dividend declared in favour of, but not
15 payable in cash to, the shareholders; or
(d) under the application of money held by the society in an
account or reserve in paying up or partly paying up
unissued shares to which the shareholders have become
entitled,
20 the society must lodge with the return a statement containing such
particulars as are prescribed.
(7) For the purposes of this section, any shares in a society applied
for prior to the registration of the society are taken to have been
allotted on the date of registration of the society.
25 Issue of permanent shares at premium
240. (1) If a society issues permanent shares for which a premium
is received by the society (whether in money or in the form of other
valuable consideration) the aggregate amount or value of the premiums
on the permanent shares must be transferred to an account called the
30 ``share premium account'', and the provisions of this Part relating to the
reduction of the share capital of a society apply, subject to this section,
as if the share premium account were paid-up share capital of the
society.
(2) The share premium account may be applied --
35 (a) in paying-up shares to be issued to members of the society
as fully paid bonus shares; or
(b) in paying-up, in whole or in part, the balance unpaid on
shares previously issued to members of the society; or
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(c) in the payment of dividends, if those dividends are satisfied
by the issue of shares to members of the society; or
(d) in writing-off the preliminary expenses of the society; or
(e) in writing-off the expenses of, or the payment made in
5 relation to, any issue of shares in the society; or
(f) in providing for the premium payable on redemption of
redeemable preference shares.
Special resolution for reduction of permanent share capital
241. (1) Subject to confirmation by the Court, a society may, if
10 authorized by its rules, by special resolution reduce its permanent
share capital in any way and, in particular, may do all or any of the
following --
(a) extinguish or reduce the liability on any of its permanent
shares in relation to share capital not paid-up;
15 (b) cancel any paid-up share capital that is lost or is not
represented by available assets;
(c) pay off any paid-up share capital that is in excess of the
society's needs.
(2) If the proposed reduction of permanent share capital involves
20 either diminution of liability in relation to unpaid share capital or the
payment to any shareholder of any paid-up share capital, and in any
other case if the Court so directs --
(a) every creditor of the society who, at the date fixed by the
Court, is entitled to any debt or claim that, if that date
25 were the date of starting the winding-up of the society,
would be admissible in evidence against the society, is
entitled to object to the reduction; and
(b) the Court, unless satisfied on affidavit that there are no
such creditors, must settle a list of the names of creditors
30 entitled to object and, for that purpose, must ascertain as
far as possible, without requiring an application from any
creditor, the names of those creditors and the nature and
amount of their debts or claims, and may publish notices
fixing a final day on or before which creditors whose names
35 are not entered on the list may claim to be so entered; and
(c) if a creditor whose name is entered on the list, and whose
debt has not been discharged or whose claim has not been
determined, does not consent to the reduction, the Court
may dispense with the consent of the creditor on the society
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securing payment of the creditor's debt or claim by
appropriating as the Court directs --
(i) if the society admits the full amount of the debt or
claim or, though not admitting it, is willing to provide
5 for it, the full amount of the debt or claim; or
(ii) if the society does not admit and is not willing to
provide for the full amount of the debt or claim or if
the amount is contingent or not ascertained, an
amount fixed by the Court after inquiry and
10 adjudication of the kind required where a society is
wound-up by the Court.
(3) The Court may, having regard to any special circumstances of
a case, direct that all or any of the provisions of subsection (2) do not
apply in relation to creditors included in a particular class of creditors.
15 (4) The Court may, if satisfied that in relation to each creditor
who under subsection (2) is entitled to object --
(a) the creditor's consent to the reduction has been obtained; or
(b) the creditor's debt has been discharged or secured; or
(c) the creditor's claim has been determined or has been
20 secured,
make an order confirming the reduction on such terms and conditions
as it considers appropriate.
(5) A society must not act on a resolution for the reduction of
permanent share capital before application is made to the SSA for
25 registration of the resolution and an office copy of the order of the Court
is lodged with the SSA, but a resolution may specify an earlier date
(not earlier than the date of the resolution) as the date from which the
reduction of capital is to have effect.
(6) A certificate of the SSA stating that the resolution and an
30 office copy of the order made under subsection (4) have been registered
by the SSA is conclusive evidence that all the requirements of this Code
relating to the reduction of permanent share capital have been complied
with in relation to the society.
(7) A shareholder or former shareholder in a society is not liable,
35 in relation to any share in the society, to any call or contribution of
more than the difference (if any) between the amount of the share as
fixed by an order made under subsection (4) and the amount paid, or
the reduced amount (if any) that is taken to have been paid, on the
share.
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(8) Despite any other provision of this Code, if the name of a
creditor who is entitled under subsection (2) to object to a reduction is,
because of the creditor's ignorance of the proceeding for reduction or of
its nature and effect in relation to the creditor's claim, not entered on
5 the list of creditors and, after the reduction, the society is unable,
within the meaning of the provisions relating to winding-up by the
Court, to pay the amount of the creditor's debt or claim --
(a) every person who was a shareholder of the society at the
date of the registration of the copy of the order for
10 reduction is liable to contribute for the payment of the debt
or claim an amount not more than the amount that the
person would have been liable to contribute if the society
had started to be wound-up on the day before that date;
and
15 (b) if the society is wound-up, the Court, on the application of
any such creditor and proof of the creditor's ignorance of
the proceeding for reduction or of its nature and effect in
relation to the creditor's claim, may settle accordingly a list
of the names of persons liable to contribute because of
20 paragraph (a) and make and enforce calls and orders on the
contributories whose names are included in the list as if
they were ordinary contributories in a winding-up,
but nothing in this subsection affects the rights of the contributories
among themselves.
25 (9) An officer of a society who --
(a) knowingly conceals the name of a creditor entitled to object
to a reduction in the permanent share capital of the society;
or
(b) knowingly misrepresents the nature or amount of the debt
30 or claim of any creditor of the society,
commits an offence.
Maximum penalty: $5 000.
(10) The granting, under the rules of a society, of a lease, licence
or other right to occupy or use land or a building, or a part of land or a
35 building, in favour of a shareholder of the society by force of the
person's membership does not constitute a reduction of the permanent
share capital of the society.
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Society financing dealings in its permanent shares etc.
242. (1) Except as otherwise expressly provided by this Code, a
society must not --
(a) whether directly or indirectly, give any financial assistance
5 for the purpose of, or in connection with --
(i) the acquisition by a person, whether before, or at the
same time as, the giving of financial assistance, of
permanent shares in the society; or
(ii) the proposed acquisition by a person of permanent
10 shares in the society; or
(b) whether directly or indirectly, in any way, acquire
permanent shares in the society; or
(c) whether directly or indirectly, in any way, lend money on
the security of permanent shares in the society.
15 (2) A reference in this section to the giving of financial assistance
includes a reference to the giving of financial assistance by means of
the making of a loan, the giving of a guarantee, the providing of
security, the releasing of an obligation or the forgiving of a debt or
otherwise.
20 (3) For the purposes of this section, a society is taken to have
given financial assistance for the purpose of an acquisition or proposed
acquisition (the ``relevant purpose'') if --
(a) the society gave the financial assistance for purposes that
included the relevant purpose; and
25 (b) the relevant purpose was a substantial purpose of the
giving of the financial assistance.
(4) For the purposes of this section, a society is taken to have
given financial assistance in connection with an acquisition or proposed
acquisition if, when the financial assistance was given to a person, the
30 society was aware that the financial assistance would financially
assist --
(a) the acquisition by a person of permanent shares in the
society; or
(b) if permanent shares in the society had already been
35 acquired, the payment by a person of any unpaid amount of
the subscription payable for the permanent shares or any
premium payable in relation to the permanent shares, or
the payment of any calls on the permanent shares.
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(5) If a society contravenes subsection (1), any officer of the society
who is in default commits an offence.
Maximum penalty: $5 000.
(6) If --
5 (a) a person is convicted of an offence against subsection (5);
and
(b) the court by which the person is convicted is satisfied that
the society or another person has suffered loss or damage
because of the contravention that constituted the offence,
10 the court may, in addition to imposing a penalty, order the convicted
person to pay compensation to the society or other person of an amount
specified by the court.
(7) The order may be enforced as if it were a judgment of that
court.
15 (8) The power of a court under section 476 to relieve a person to
whom that section applies from a liability mentioned in that section
extends to relieving a person against whom an order may be made
under subsection (6) from the liability to have such an order made
against the person.
20 (9) In this section, a reference to an acquisition or proposed
acquisition of shares is a reference to any acquisition or proposed
acquisition, whether by way of purchase, subscription or otherwise.
Exceptions
243. (1) Section 242 (1) does not prohibit --
25 (a) the payment of a dividend by a society in good faith and in
the ordinary course of commercial dealing; or
(b) a payment made by a society under a reduction of capital in
accordance with this Part; or
(c) the discharge by a society of a liability of the society that
30 was incurred in good faith as a result of a transaction
entered into on ordinary commercial terms; or
(d) an acquisition by a society of an interest (other than a legal
interest) in fully paid permanent shares in the society if no
consideration is provided by the society, or by any related
35 body corporate, for the acquisition; or
(e) the purchase by a society of permanent shares in the
society under an order of a court; or
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(f) the creation or acquisition, in good faith and in the ordinary
course of commercial dealing, by a society of a lien on
permanent shares in the society (other than fully paid
permanent shares) for any amount payable to the society in
5 relation to the permanent shares; or
(g) the entering into, in good faith and in the ordinary course
of commercial dealing, of an agreement by a society with a
subscriber for permanent shares in the society permitting
the subscriber to make payments for the permanent shares
10 (including payments in relation to any premium) by
instalments.
(2) Subsection (1) does not --
(a) imply that a particular act of a society would, but for that
subsection, be prohibited by section 242 (1); or
15 (b) limit the operation of any rule of law permitting the giving
of financial assistance by a society, the acquisition of
permanent shares by a society or the lending of money by a
society on the security of permanent shares.
(3) Section 242 (1) does not prohibit --
20 (a) the making of a loan, the giving of a guarantee or the
providing of security by a society in the ordinary course of
business if the loan that is made by the society, or in
relation to which the guarantee or security is given or
provided, is made on ordinary commercial terms as to the
25 rate of interest, the terms of repayment of principal and
payment of interest, the security to be provided and
otherwise; or
(b) the giving by a society of financial assistance to acquire
fully paid permanent shares in the society, if --
30 (i) the assistance is given under a scheme approved --
(I) if the scheme is conducted only for employees of
the society, by the society at a general meeting;
or
(II) in any other case, by the SSA in accordance
35 with a standard; and
(ii) the permanent shares are to be held by or for the
benefit of a person taking part in the scheme.
(4) Section 242 (1) does not prohibit the giving by a society of
financial assistance for the purpose of, or in connection with, an
40 acquisition or proposed acquisition by a person of permanent shares in
the society if --
(a) the society does so under a special resolution passed by the
society; and
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(b) the notice of the proposed special resolution given to
members of the society sets out --
(i) particulars of the financial assistance proposed to be
given and the reasons for the proposal to give that
5 assistance; and
(ii) the effect that the giving of the financial assistance
would have on the financial position of the society
and any group for which the society is the holding
society,
10 and is accompanied by a copy of a statement made under a resolution of
the directors, setting out the names of any directors who voted against
the resolution and the reasons why they so voted, and signed by not
fewer than 2 directors, stating whether, in the opinion of the directors
who voted in favour of the resolution, after taking into account the
15 financial position of the society (including future liabilities and
contingent liabilities), the giving of the financial assistance would be
likely to prejudice materially the interests of the creditors or members
of the society or any class of those creditors or members; and
(c) not later than the day after the day when the notice
20 mentioned in paragraph (b) is given to members of the
society, there is lodged with the SSA, a copy of that notice
and a copy of the statement that accompanied the notice;
and
(d) within 21 days after the general meeting of the society at
25 which the special resolution is passed a notice --
(i) setting out the terms of the special resolution; and
(ii) stating that any persons specified in subsection (6)
may, within the period specified in that subsection,
make an application to the Court opposing the giving
30 of the financial assistance,
is published, in each State in which the society is carrying
on business in a newspaper circulating generally in the
State; and
(e) no application opposing the giving of the financial
35 assistance is made within the period specified in subsection
(6) or, if such an application is made, the application is
withdrawn or the Court approves the giving of the financial
assistance.
(5) If, on application to the Court by a society, the Court is
40 satisfied that subsection (4) has been substantially complied with by the
society in relation to proposed financial assistance of the kind
mentioned in that subsection, the Court may, by order, declare that the
subsection has been complied with in relation to the proposed financial
assistance.
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(6) If a special resolution is passed by a society, an application to
the Court opposing the giving of the financial assistance to which the
special resolution relates may be made, within the period of 21 days
after the publication of the notice mentioned in subsection (4) (d) by --
5 (a) a member or creditor of the society; or
(b) a member or creditor of a subsidiary of the society; or
(c) the SSA.
(7) On an application under subsection (6), the Court --
(a) is to, in determining what orders to make in relation to the
10 application, have regard to the rights and interests of the
members of the society or of any class of them as well as to
the rights and interests of the creditors of the society or of
any class of them; and
(b) may not make an order approving the giving of the
15 financial assistance unless the Court is satisfied that --
(i) the society has disclosed to the members of the
society all material matters relating to the proposed
financial assistance; and
(ii) the proposed financial assistance would not, after
20 taking into account the financial position of the
society (including any future or contingent liabilities),
be likely to prejudice materially the interests of the
creditors or members of the society or of any class of
those creditors or members; and
25 (c) may do all or any of the following --
(i) make an order for the purchase by the society of the
interests of dissentient members of the society;
(ii) adjourn the proceeding in order that an arrangement
may be made to the satisfaction of the Court for the
30 purchase (otherwise than by the society or by a
subsidiary of the society) of the interests of
dissentient members;
(iii) give such ancillary or consequential directions and
make such ancillary or consequential orders as it
35 considers appropriate;
(iv) make an order disapproving the giving of the
financial assistance or, subject to this section, an
order approving the giving of the financial assistance.
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(8) If the Court makes an order under this section in relation to a
society, the society must, within 14 days after the making of the order,
lodge with the SSA an office copy of the order.
(9) The passing of a special resolution by a society relating to
5 financial assistance, and the approval by the Court of the giving of the
financial assistance, do not relieve a director of the society of any duty
to the society under this Code or otherwise (whether or not of a
fiduciary nature) in connection with the giving of the financial
assistance.
10 (10) In this section, a reference to an acquisition or proposed
acquisition of shares is a reference to any acquisition or proposed
acquisition whether by way of purchase, subscription or otherwise.
Consequences of society financing dealings in its permanent
shares etc.
15 244. (1) Except as provided by this section --
(a) the validity of a contract or transaction is not affected by a
contravention of section 242 (1) (a); and
(b) the validity of a contract or transaction is not affected by a
contravention of section 242 (1) (b) unless the contract or
20 transaction effects the acquisition that constitutes the
contravention; and
(c) the validity of a contract or transaction is not affected by a
contravention of section 242 (1) (c) unless the contract or
transaction effects the loan that constitutes the
25 contravention.
(2) If a society makes or performs a contract, or engages in a
transaction, that would, but for subsection (1), be invalid because --
(a) the contract was made or performed, or the transaction was
engaged in, in contravention of section 242; or
30 (b) the contract or transaction is related to a contract that was
made or performed, or to a transaction that was engaged in,
in contravention of that section,
the first contract or transaction is, subject to this section, voidable at
the option of the society by written notice given to each of the other
35 parties to the contract or transaction.
(3) The Court may, on the application of a member, officer or
creditor of a society, by order, authorize the person to give a notice
under subsection (2) in the name of the society.
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(4) If --
(a) a society makes or performs a contract, or engages in a
transaction; and
(b) the contract is made or performed, or the transaction is
5 engaged in, in contravention of section 242 or the contract
or transaction is related to a contract that was made or
performed, or to a transaction that was engaged in, in
contravention of the section; and
(c) the Court is satisfied, on the application of the society or of
10 another person, that the society or that other person has
suffered, or is likely to suffer, loss or damage because of --
(i) the making or performance of the contract or the
engaging in of the transaction; or
(ii) the making or performance of a related contract or
15 the engaging in of a related transaction; or
(iii) the contract or transaction being void because of
section 242 or having become void, or becoming void,
under this section; or
(iv) a related contract or transaction being void because of
20 section 242 or having become void, or becoming void,
under this section,
the Court may make such orders as it considers just and equitable
(including, for example, any of the orders mentioned in subsection (5))
against a party to the contract or transaction or to the related contract
25 or transaction, or against the society or against any person who aided,
abetted, counselled or procured, or was, by act or omission, in any way,
directly or indirectly, knowingly concerned in or party to the
contravention.
(5) The orders that may be made under subsection (4) include --
30 (a) an order directing a person to refund money or return
property to the society or another person; and
(b) an order directing a person to pay to the society or another
person a specified amount not more than the amount of the
loss or damage suffered by the society or other person; and
35 (c) an order directing a person to indemnify the society or
another person against any loss or damage that the society
or other person may suffer because of the contract or
transaction or because of the contract or transaction being
or having become void.
40 (6) If a certificate signed by at least 2 directors, or by a director
and a secretary, of a society stating that the requirements of
section 243 (4) have been complied with in relation to the proposed
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giving by the society of financial assistance for the purpose of an
acquisition or proposed acquisition by a person of permanent shares in
the society is given to a person --
(a) the person to whom the certificate is given is not under any
5 liability to have an order made against the person under
subsection (4) because of any contract made or performed,
or any transaction engaged in, by the person in reliance on
the certificate; and
(b) any such contract or transaction is not invalid, and is not
10 voidable under subsection (2), because the contract is made
or performed, or the transaction is engaged in, in
contravention of section 242 or is related to a contract that
was made or performed, or to a transaction that was
engaged in, in contravention of the section.
15 (7) Subsection (6) does not apply in relation to a person to whom a
certificate is given under that subsection in relation to a contract or
transaction if the Court, on application by the society concerned or
another person who has suffered, or is likely to suffer, loss or damage
because of the making or performance of the contract or the engaging in
20 of the transaction, or the making or performance of a related contract or
the engaging in of a related transaction, by order, declares that it is
satisfied that the person to whom the certificate was given became
aware before the contract was made or the transaction was engaged in
that the requirements of section 243 (4) had not been complied with in
25 relation to the financial assistance to which the certificate related.
(8) For the purpose of subsection (7), a person is, in the absence of
evidence to the contrary, taken to have been aware at a particular time
of any matter of which an employee or agent of the person having
duties or acting on behalf of the person in relation to the relevant
30 contract or transaction was aware at the time.
(9) In a proceeding, a document purporting to be a certificate given
under subsection (6) is, in the absence of evidence to the contrary,
taken to be such a certificate and to have been duly given.
(10) A person who has possession of a certificate given under
35 subsection (6) is, in the absence of evidence to the contrary, taken to be
the person to whom the certificate was given.
(11) If a person signs a certificate stating that the requirements of
section 243 (4) have been complied with in relation to the proposed
giving by a society of financial assistance and any of those requirements
40 had not been complied with in relation to the proposed giving of that
assistance at the time when the certificate was signed by that person,
the person commits an offence.
Maximum penalty: $25 000.
(12) If a society makes a contract or engages in a transaction
45 under which it gives financial assistance as mentioned in
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section 242 (1) (a) or lends money as mentioned in section 242 (1) (c),
any contract or transaction made or engaged in because of, or by means
of, or in relation to, the financial assistance or money is to be taken, for
the purposes of this section, to be related to the first contract or
5 transaction.
(13) The power of a court under section 476 to relieve a person to
whom that section applies from a liability mentioned in that section
extends to relieving a person against whom an order may be made
under subsection (4) from the liability to have such an order made
10 against the person.
(14) Any rights or liabilities of a person under this section
(including rights or liabilities under an order made by the Court under
this section) are in addition to and not in derogation of any rights or
liabilities of that person apart from this section but, if there would be
15 any inconsistency between the rights and liabilities of a person under
this section or under an order made by the Court under this section and
the rights and liabilities of the person apart from this section, the
provisions of this section or of the order made by the Court prevail.
Prohibition on subsidiary acquiring permanent shares of
20 holding society
245. (1) A body corporate must not be a holder of permanent
shares of a society that is its holding society, and any allotment or
transfer of permanent shares in a society to its subsidiary is void.
(2) This section does not prevent a subsidiary from continuing to
25 be a holder of permanent shares of its holding society if, at the time
when it becomes a subsidiary of the holding society, it already holds
permanent shares in the holding society, but the subsidiary must,
within one year or such longer period as the Court may allow after
becoming the subsidiary of its holding society, dispose of all of its
30 shares in the holding society.
(3) Subsections (1) and (2) apply in relation to a nominee of a body
corporate that is a subsidiary as if references in this section to that
body corporate included references to a nominee for it.
(4) Subsection (1) does not apply if --
35 (a) the subsidiary is concerned as personal representative; or
(b) the subsidiary is concerned as a trustee and --
(i) the holding society or a subsidiary of the holding
society is not beneficially interested under the trust;
or
40 (ii) the holding society or a subsidiary of the holding
society is beneficially interested under the trust only
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by way of a security given for the purposes of a
transaction entered into in the ordinary course of
business in connection with the lending of money,
other than a transaction entered into with an
5 associate of the holding society or a subsidiary of the
holding society.
Options over permanent shares
246. An option granted by a society that enables a person to take up
permanent shares in the society after the end of 5 years from the date
10 on which the option was granted is void.
Division 3 -- Redeemable Preference Shares
Application of certain provisions of this Code to redeemable
preference shares
247. (1) The following provisions apply to redeemable preference
15 shares to which this Division relates with all necessary modifications
and any prescribed modifications --
(a) section 227 (2);
(b) section 229;
(c) section 231;
20 (d) section 232;
(e) section 238;
(f) section 239;
(g) section 240;
(h) section 242;
25 (i) section 243;
(j) section 244;
(k) section 245;
(l) section 246;
(m) section 320;
30 (n) section 321;
(o) section 322.
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(2) Without limiting subsection (1), those provisions apply to
redeemable preference shares as if those shares were permanent shares
of the society that are preference shares.
Issue of redeemable preference shares
5 248. (1) Subject to this section, a society that has permanent share
capital may, if authorized by its rules, issue redeemable preference
shares.
(2) The society must not redeem the shares --
(a) except on such terms, and in such way, as are provided by
10 the society's rules; and
(b) except out of profits that would otherwise be available for
dividends or out of the proceeds of a fresh issue of
permanent shares or redeemable preference shares made
for the purposes of the redemption.
15 (3) The premium (if any) payable on redemption is to be provided
for out of profits of the management fund of the society or out of the
share premium account.
(4) If redeemable preference shares are redeemed otherwise than
out of the proceeds of a fresh issue of permanent shares there must, out
20 of profits that would otherwise have been available for dividends, be
transferred to a reserve called the ``capital redemption reserve'' the
nominal amount of the shares redeemed, and section 241 applies as if
the capital redemption reserve were paid-up permanent share capital of
the society.
25 (5) If, under this section, a society has redeemed or is about to
redeem preference shares, it may issue permanent shares or new
redeemable preference shares up to the sum of the nominal values of
the shares redeemed or to be redeemed as if those preference shares
had never been issued.
30 (6) The capital redemption reserve may be applied in paying up
unissued permanent shares or redeemable preference shares of the
society to be issued to members of the society as fully-paid bonus
shares.
(7) If a society redeems any redeemable preference shares, it must,
35 within 14 days after so doing, lodge with the SSA a notice in accordance
with the regulations relating to the shares redeemed.
(8) Shares are taken to have been redeemed even if a cheque given
in payment of the amount payable on redemption of the shares has not
been presented for payment.
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(9) If a society contravenes this section, the society commits an
offence.
Maximum penalty: $5 000.
Division 4 -- Shareholding Restrictions
5 Subdivision 1 -- Interpretative provisions
Application of Division
249. This Division applies to shares issued by a society under this
Code.
Extraterritorial operation of Division
10 250. Without limiting the generality of section 17 --
(a) the obligation to comply with this Division extends to all
individuals, whether or not resident in this State or in
Australia and whether or not Australian citizens, and to all
bodies, whether or not incorporated or carrying on business
15 in this State or in Australia; and
(b) this Division extends to acts done or omitted to be done
outside this State, whether or not in Australia.
What constitutes an ``entitlement'' to shares
251. For the purposes of this Division, the shares in a society to
20 which a person (including the society or any society) is entitled
include --
(a) shares in which the person has a relevant interest; and
(b) except if the person is a nominee body corporate in relation
to which a certificate by the SSA is in force under
25 section 253 (4), shares in which a person who is an
associate of the person has a relevant interest.
What constitutes a ``relevant interest'' in shares
252. (1) For the purposes of this Division, a person has a
``relevant interest'' in a share in a society if --
30 (a) the person or an associate of the person has power to
dispose of or to exercise control over the disposal of the
share; or
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(b) the person or an associate of the person has power to
exercise or to control the exercise of any right to vote
conferred on the holder of the share.
(2) It is immaterial for the purposes of this section whether a
5 power that a person has --
(a) is express or implied or formal or informal; or
(b) is exercisable alone or jointly with other persons; or
(c) cannot be related to a particular share; or
(d) is, or is capable of being, exercised, subject to restraint or
10 restriction,
and any such power exercisable jointly with other persons is taken to be
exercisable by any of the persons.
(3) A reference in this section to power or control includes a
reference to power or control that --
15 (a) is direct or indirect; or
(b) is, or is capable of being, exercised because of, or by means
of, or in breach of, or by revocation of, trusts, agreements,
arrangements, understandings and practices, or any of
them (whether or not they are enforceable),
20 and a reference in this section to a controlling interest includes a
reference to such an interest as gives control.
(4) Without limiting subsections (1) to (3), if a body corporate has,
or is by force of this section taken to have, a power and --
(a) the body corporate is, or its directors are, accustomed or
25 under an obligation, whether formal or informal, to act in
accordance with the directions, instructions or wishes of a
person in relation to the exercise of the power; or
(b) a person has a controlling interest in the body corporate,
the person is, for the purposes of this section, taken to have the same
30 power in relation to that share as the body corporate has or is taken to
have.
(5) If a body corporate has, or is by force of this section (other than
this subsection) taken to have, a power, a person (the ``relevant
person'') is, for the purposes of this section, taken to have the same
35 power in relation to that share as the body corporate has, or is taken to
have, if --
(a) the relevant person has; or
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(b) a person associated with the relevant person has; or
(c) persons associated with the relevant person together have;
or
(d) the relevant person and a person or persons associated with
5 the relevant person together have,
the power to exercise, or to control the exercise of, the voting power
attached to not less than 10% or such other proportion as may be
prescribed, of the voting shares in the body corporate.
(6) If a person --
10 (a) has entered into an agreement in relation to an issued
share; or
(b) has a right relating to an issued share, whether the right is
enforceable presently or in the future and whether or not on
the fulfilment of a condition; or
15 (c) has an option in relation to an issued share,
and, on performance of the agreement, enforcement of the right or
exercise of the option, the person would have a relevant interest in the
share, the person is, for the purposes of this section, taken to have that
relevant interest in the share.
20 (7) For the purposes of this section, if a body corporate is, under
subsection (6), taken to have a relevant interest in a share and --
(a) the body corporate or its directors are accustomed or under
an obligation, whether formal or informal, to act in
accordance with the directions, instructions or wishes of a
25 person in relation to the exercise of, or the control of the
exercise of, any right to vote conferred on the holder of the
share, or in relation to the disposal of, or the exercise of
control over the disposal of, that share; or
(b) a person has a controlling interest in the body corporate; or
30 (c) a person has power to exercise, or to control the exercise of,
the voting power attached to not less than 10%, or such
other proportion as may be prescribed, of the voting shares
in the body corporate,
the person is taken to have a relevant interest in that share.
35 (8) A body corporate may be taken, for the purposes of this
Division, to have a relevant interest in a share in the body corporate
itself.
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(9) A relevant interest in a share is not to be disregarded only
because of --
(a) its remoteness; or
(b) the way in which it arose.
5 (10) A director of a society is not taken to have a relevant interest
in a share in the society merely because the board is entitled to
withhold consent to a transfer of the share.
(11) A regulation may provide that relevant interests in shares in
societies are, in such circumstances and subject to such conditions (if
10 any) as are specified in the regulation, to be disregarded for the
purposes of this section.
Meaning of ``associate''
253. (1) A reference in this Division to an associate of a person is a
reference to --
15 (a) if the person is a body corporate --
(i) a director or secretary of the body corporate; or
(ii) a body corporate that is related to that person; or
(iii) a director or secretary of such a related body
corporate; or
20 (b) if the matter to which the reference relates is shares in a
body corporate (including, in a case where the first person
is a body corporate, the first person), a person (the
``relevant associate'') that is the body corporate or
another person with whom the first person has, or proposes
25 to enter into, an agreement, arrangement, understanding or
undertaking, whether formal or informal and whether
express or implied --
(i) because of which the relevant associate, or the first
person, may exercise, may directly or indirectly
30 control the exercise of, or may substantially influence
the exercise of, any voting power in the body
corporate; or
(ii) with a view to controlling or influencing the
composition of the board of directors, or the conduct
35 of affairs, of the body corporate; or
(iii) under which the relevant associate may acquire from
the first person, or the first person may acquire from
the relevant associate, shares in the body corporate;
or
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(iv) under which the relevant associate, or the first
person, may be required to dispose of shares in the
body corporate in accordance with the directions of
the first person or the relevant associate, as the case
5 may be; or
(c) a person in concert with whom the first person is acting, or
proposes to act, in relation to the matter to which the
reference relates; or
(d) a person with whom the first person is, by force of the
10 regulations, taken to be associated in relation to the matter
to which the reference relates; or
(e) a person with whom the first person is, or proposes to
become, associated whether formally or informally, in
another way in relation to the matter to which the
15 reference relates; or
(f) if the first person has entered into, or proposes to enter
into, a transaction, or has done or proposes to do, another
thing, with a view to becoming associated with a person as
mentioned in paragraphs (b) to (e), the last person.
20 (2) A person is not taken to be an associate of another person
under subsection (1) (b) to (f) merely because --
(a) one of the persons gives advice to, or acts on behalf of, the
other person in the proper performance of the functions
attaching to the person's professional capacity or the
25 person's business relationship with the other person; or
(b) without limiting paragraph (a), if the ordinary business of
one of those persons includes dealing in securities, specific
instructions are given to the person by or on behalf of the
other person to acquire shares on behalf of the other person
30 in the ordinary course of the business.
(3) For the purposes of subsection (1) (b), it is immaterial that the
power of a person to exercise, control the exercise of, or influence the
exercise of, voting power is in any way qualified.
(4) The SSA may issue to a nominee body corporate a certificate
35 declaring the nominee body corporate to be an approved nominee body
corporate for the purposes of section 251 and may, at any time, by
written notice given to the nominee body corporate, revoke the
certificate.
(5) The SSA may issue to a person a certificate declaring that
40 specified shares in which the person has a relevant interest are to be
disregarded for the purposes of ascertaining the shares to which
another person specified in the certificate is entitled and may, at any
time, by written notice given to the first person, revoke the certificate.
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Meaning of voting power or right to vote
254. For the purposes of this Division, a reference to voting power or
a right to vote attached to a share in a body corporate is, if the body
corporate is a society, to be read as a reference to the right to vote
5 conferred on the holder of a share in the society.
Inadvertence or mistake
255. In determining, for the purposes of a provision of this Division,
whether or not a person's contravention of such a provision was due to
the person's inadvertence or mistake or to the person not being aware
10 of a relevant fact or happening, a person's ignorance of, or a mistake on
the person's part concerning, a matter of law is to be disregarded.
Subdivision 2 -- Maximum shareholdings
Maximum permissible shareholding
256. (1) For the purposes of this Subdivision, a person has more
15 than the maximum permissible shareholding in a society if the person
has an entitlement --
(a) if a society has issued one class of either permanent shares
or redeemable preference shares, to permanent shares or
redeemable preference shares in the society, as the case
20 may be, of more than 10%, or such other percentage as may
be prescribed, of the nominal value of all permanent shares
or redeemable preference shares issued by the society; or
(b) if a society has issued one class of permanent shares and
one class of redeemable preference shares --
25 (i) to permanent shares in the society of more than 10%,
or such other percentage as may be prescribed, of the
nominal value of all permanent shares issued by the
society; or
(ii) to redeemable preference shares in the society of
30 more than 10%, or such other percentage as may be
prescribed, of the nominal value of all redeemable
preference shares issued by the society; or
(c) if a society has issued more than one class of permanent
shares or more than one class of redeemable preference
35 shares, to shares in any class of shares of the society of
more than 10%, or such other percentage as may be
prescribed, of the nominal value of all shares of that class
issued by the society.
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(2) A percentage applicable under subsection (1) may be varied in
its application to a particular society by being decreased by the rules of
the society.
Consequences of exceeding maximum permissible shareholding
5 257. (1) If a person has more than the maximum permissible
shareholding in a society, the society must forfeit and sell the excess
shares.
(2) Section 237 applies to the offering and sale of shares forfeited
as if the shares had been forfeited for non-payment of a call.
10 (3) If a person has more than the maximum permissible
shareholding in a society and a society is required to forfeit and sell the
excess shares, the person is not entitled to a vote in any meeting of
members of the society until the excess shares are forfeited and sold.
Exceptions
15 258. Section 257 does not apply to a person --
(a) who acquired the relevant interests concerned in accordance
with an approval given under Part 7; or
(b) who has the relevant interests concerned because of a share
issue and the relevant interests represent a proportion of
20 the issued shares of the society concerned that is no more
than the proportion which the person had before the share
issue; or
(c) if the person had, before acquiring the excess shares,
reported the proposal to acquire them to the SSA and
25 obtained approval under section 262 and the total nominal
value of the shares held by the person is not more than the
limit approved under that section in relation to the person.
Subdivision 3 -- Substantial shareholdings
Substantial shareholding and substantial shareholders
30 259. (1) Part 6.7 of the Corporations Law applies to a society with
all necessary modifications and any prescribed modifications.
(2) Without limiting subsection (1), the provisions of Part 6.7 of
the Corporations Law are to be applied as if --
(a) a reference to a company were a reference to a society; and
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(b) a reference to the Commission were a reference to the SSA;
and
(c) a reference to a shareholder were a reference to a member;
and
5 (d) a reference to a voting share were a reference to a share;
and
(e) the expressions ``entitlement'', ``relevant interest'' and
``associate'' had the meanings given in this Division rather
than the meaning given in that Law.
10 (3) The purpose of subsections (1) and (2) is to apply Part 6.7 of
the Corporations Law in its modified form to a society whether or not
the society is a listed company under Chapter 6 of the Corporations
Law.
(4) However, the application of Part 6.7 of the Corporations Law
15 under subsections (1) and (2) is in addition to, and not in substitution
for, the application of that Part under its own force.
Subdivision 4 -- Power to obtain information
Power to obtain information
260. (1) Part 6.8 of the Corporations Law applies to a society with
20 all necessary modifications and any prescribed modifications.
(2) Without limiting subsection (1), the provisions of Part 6.8 of
the Corporations Law are to be applied as if --
(a) a reference to a company were a reference to a society; and
(b) a reference to the Commission were a reference to the SSA;
25 and
(c) the expressions ``entitlement'', ``relevant interest'' and
``associate'' had the meanings given in this Division rather
than the meaning given in that Law.
(3) The purpose of subsections (1) and (2) is to apply Part 6.8 of
30 the Corporations Law in its modified form to a society whether or not
the society is a listed company under Chapter 6 of the Corporations
Law.
(4) However, the application of Part 6.8 of the Corporations Law
under subsections (1) and (2) is in addition to, and not in substitution
35 for, the application of that Part under its own force.
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Subdivision 5 -- Enforcement
Court orders -- substantial shareholdings
261. (1) For the purposes of this Part, sections 741 to 744 of the
Corporations Law apply to a society with all necessary modifications
5 and any prescribed modifications.
(2) Without limiting subsection (1), those sections of the
Corporations Law are to be applied as if --
(a) a reference to a company were a reference to a society; and
(b) a reference to the Commission were a reference to the SSA.
10 Power of SSA to exempt etc. from Division
262. (1) The SSA may, subject to the standards, by written notice
given to a person, exempt the person, subject to such conditions (if any)
as are specified in the notice, from compliance with all or any of the
provisions of this Division or any regulation made for the purpose of
15 this Division.
(2) A person must not contravene a condition to which an
exemption is subject.
Maximum penalty: $25 000.
(3) If a person has contravened a condition to which an exemption
20 is subject, the Court may, on application of the SSA, order the person to
comply with the condition.
(4) The SSA may, subject to the standards, by written notice,
declare that a provision of this Division or a regulation made for the
purposes of this Division, has effect in its application to a particular
25 person or particular persons --
(a) in a particular case; or
(b) in relation to particular shares, or shares included in a
particular class of shares,
as if the provision or regulation were omitted or modified or varied in a
30 way specified in the notice and, if such a declaration is made, the
provision or regulation has effect accordingly.
(5) The SSA must cause a notification of the making of an
exemption or declaration to be published in the Gazette, but failure of
the SSA to do so does not affect the validity of the exemption or
35 declaration.
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(6) A notification mentioned in subsection (5) must name --
(a) the persons to whom the exemption or declaration relates;
and
(b) the provisions to which the exemption or declaration
5 relates; and
(c) if the exemption or declaration relates to a particular
society or class of society, the society or class.
Division 5 -- Issue of Shares
Issuing of shares at a discount prohibited
10 263. A society must not issue --
(a) permanent shares at a discount; or
(b) redeemable preference shares at a discount unless they are
of a prescribed class.
Issuing of shares as partly paid up etc.
15 264. (1) A society must not issue redeemable preference shares as
partly paid up.
(2) A society must not issue redeemable preference shares
otherwise than in consideration of the payment of cash.
Power of SSA to exempt etc. from Division
20 265. (1) The SSA may, by written notice given to a person, exempt
the person, subject to such conditions (if any) as are specified in the
notice, from compliance with a regulation made for the purposes of this
Division.
(2) An exemption may relate to any particular shares or to shares
25 included in a class of shares.
(3) A person must not contravene a condition to which an
exemption is subject.
Maximum penalty: $25 000.
(4) If a person has contravened a condition to which an exemption
30 is subject, the Court may, on application of the SSA, order the person to
comply with the condition.
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(5) The SSA may, by written notice, declare that a regulation
made for the purposes of or under this Division, has effect in its
application to or in relation to a particular person or particular
persons --
5 (a) in a particular case; or
(b) in relation to particular shares or shares included in a
particular class of shares,
as if the regulation were omitted or modified or varied in a way
specified in the notice and, if such a declaration is made, the regulation
10 has effect accordingly.
(6) The SSA must cause a copy of an exemption or declaration to
be published in the Gazette, but failure of the SSA to do so does not
affect the validity of the exemption or declaration.
Division 6 -- Title to and Transfer of Shares
15 Restricted application of this Division
266. This Division does not apply to the extent that its application
would be inconsistent with the application under its own force of
Division 3 of Part 7.13 of the Corporations Law.
Document of title to be evidence of title
20 267. (1) A document of title issued by a society specifying any
shares held by a member of a society is evidence of the member's title
to the shares.
(2) A document of title must be under the common seal of the
society and must state --
25 (a) the name of the society; and
(b) the class of the shares; and
(c) if appropriate, the nominal value of the shares and the
extent to which the shares are paid up.
(3) Failure to comply with this section does not affect the rights of
30 a holder of shares in a society.
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Loss or destruction of documents
268. (1) Subject to subsection (2), where a document of title to
shares is lost or destroyed, the society must, on application by the
owner of the shares issue a duplicate document of title to the owner --
5 (a) if the society requires the payment of an amount of not
more than the prescribed amount, within 21 days after the
payment is received by the society or within such longer
period as the SSA approves; or
(b) in any other case, within 21 days after the application is
10 made or within such longer period as the SSA approves.
(2) The application must be accompanied by --
(a) a written statement that the document of title has been lost
or destroyed, and has not been pledged, sold or otherwise
disposed of and, if lost, that proper searches have been
15 made; and
(b) a written undertaking that if it is found or received by the
owner it will be returned to the society.
(3) The directors of a society may, before accepting an application
for the issue of a duplicate document of title, require the applicant
20 to --
(a) cause an advertisement to be inserted in a newspaper
circulating in a place specified by the directors stating that
the document of title has been lost or destroyed and that
the owner intends, after the expiration of 14 days after the
25 publication of the advertisement, to apply to the society for
a duplicate document of title; or
(b) give a bond for an amount equal to at least the current
market value of the shares indemnifying the society against
loss following the production of the original document of
30 title; or
(c) do both those things.
(4) If --
(a) a document of title to shares is cancelled under the SCH
certificate cancellation provisions; and
35 (b) having regard to the provisions, the document of title
should not have been cancelled,
this section applies to the document of title as though it were destroyed
on its cancellation.
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(5) For the purpose of subsection (4) --
``SCH certificate cancellation provisions'' has the meaning
given by section 9 of the Corporations Law.
Instrument of transfer
5 269. (1) Despite anything in its rules or in a deed relating to
permanent shares, a society must not register a transfer of permanent
shares unless an instrument of transfer has been delivered to the
society.
(2) The instrument of transfer must --
10 (a) be in writing in any usual or common form or in any other
form that the directors of the society approve; and
(b) be executed by or on behalf of both the transferor and the
transferee.
(3) Subsection (1) does not prejudice the power of the society to
15 register as the holder of shares a person to whom the right to those
shares has devolved by will or by operation of law.
(4) A transfer of shares of a deceased holder made by the holder's
personal representative is, although the personal representative is not
registered as the holder of those shares, as valid as it would be if the
20 personal representative had been so registered at the time of the
execution of the instrument of transfer.
(5) If the personal representative of a deceased holder duly
constituted as such under the law in force in another participating
State --
25 (a) executes an instrument of transfer of shares of the deceased
holder to the personal representative or to another person;
and
(b) delivers the instrument to the society, together with a
written statement to the effect that, to the best of the
30 personal representative's knowledge, information and belief,
no grant of representation of the estate of the deceased
holder has been applied for or made in this State and no
application for such a grant will be made, being a
statement made within 3 months immediately before the
35 date of delivery of the statement to the society,
the society must register the transfer and pay to the personal
representative any dividends or other money accrued in relation to the
shares up to the time of the execution of the instrument, but this
subsection does not operate so as to require the society to do anything
40 that it would not have been required to do if the personal
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representative were the personal representative of the deceased holder
duly constituted under the law of this State.
(6) A transfer or payment made under subsection (5) and a receipt
or acknowledgment of that payment is, for all purposes, as valid and
5 effectual as it would be if the personal representative were the personal
representative of the deceased holder duly constituted under the law of
this State.
(7) For the purposes of this section, an application by a personal
representative of a deceased person for registration as the holder of
10 shares in place of the deceased person is taken to be an instrument of
transfer effecting a transfer of those shares to the personal
representative.
(8) The production to a society of a document that is, under the
law of this State or under the law in force in another participating
15 State, sufficient evidence of a grant of probate of the will, or letters of
administration of the estate, of a deceased person must be accepted by
the society, despite anything in its rules or in a deed relating to its
shares, as sufficient evidence of that grant.
Registration of transfer at request of transferor
20 270. (1) On the written request of the transferor of a permanent
share issued by a society, the society must enter in the appropriate
register the name of the transferee in the same way and subject to the
same conditions as it would if the application for the entry were made
by the transferee.
25 (2) On the written request of the transferor of a permanent share
issued by a society, the society must, by written notice, require the
person having the possession, custody or control of any documents
evidencing title to the share or the instrument of transfer affecting any
such share or both such documents and instrument to deliver the
30 documents or instrument to the registered office of the society within a
specified period (not less than 7 and not more than 28 days after the
date of the notice) to have the documents cancelled or rectified and the
transfer registered or otherwise dealt with.
(3) If a person refuses or neglects to comply with a notice given
35 under subsection (2), the transferor may apply to the Court to issue a
summons for the person to appear before the Court and show cause why
the documents or instrument mentioned in the notice should not be
delivered up or produced as required by the notice.
(4) On the appearance of a person so summoned, the Court may
40 examine the person on oath or affirmation and receive other evidence
or, if the person does not appear after being duly served with the
summons, the Court may receive evidence in the person's absence and,
in either case, the Court may order the person to deliver up the
documents or instrument mentioned in the notice to the society on such
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terms or conditions as the Court considers appropriate, and the costs of
the summons and of proceedings on the summons are in the discretion
of the Court.
(5) Lists of documents called in under this section and not brought
5 in must be displayed in a conspicuous place at the registered office of
the society and must be advertised in the Gazette and in such
newspapers and at such times as the society considers appropriate.
Notice of refusal to register transfer
271. If a society refuses to register a transfer of permanent shares
10 issued by the society, it must, within 2 months after the date on which
the transfer was lodged with it, send to the transferee notice of the
refusal.
Remedy for refusal to register transfer or transmission
272. (1) If a society fails to register, or the board of a society fails
15 to give its approval to, a transfer or transmission of permanent shares
issued by the society, the transferee or transmittee may apply to the
Court for an order under this section.
(2) If the Court is satisfied that the failure was without just cause,
the Court may --
20 (a) order that the transfer or transmission be registered; or
(b) make such other order as it considers proper, including an
order providing for the purchase of the shares by a specified
member of the society or by the society.
Certification of transfers
25 273. (1) The certification by a society of an instrument of transfer
of permanent shares issued by the society is taken to be a
representation by the society to any person acting on the faith of the
certification that there have been produced to the society such
documents as on the face of them show title to those shares in the
30 transferor named in the instrument of transfer but is not taken to be a
representation that the transferor has any title to those shares.
(2) If a person acts on the faith of a false certification by a society
made negligently, the society is under the same liability to the person
as if the certification had been made fraudulently.
35 (3) If a certification is expressed to be limited to 42 days or any
longer period from the date of certification, the society and its officers
are not, in the absence of fraud, liable in relation to the registration of
any transfer of permanent shares comprised in the certification after
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the end of that period or any extension of that period given by the
society if the instrument of transfer has not, within that period, been
lodged with the society for registration.
(4) For the purposes of this section --
5 (a) an instrument of transfer is taken to be certificated if it
bears the words ``document lodged'' or words to similar
effect; and
(b) the certification of an instrument of transfer is taken to be
made by a society if --
10 (i) the person issuing the instrument is a person
authorized to issue certificated instruments of
transfer on behalf of the society; and
(ii) the certification is signed by a person authorized to
certificate transfers on behalf of the society or by an
15 officer of the society or of a corporation so authorized;
and
(c) a certification that purports to be authenticated by a
person's signature or initials (whether or not handwritten)
is to be taken to be signed by the person unless it is shown
20 that the signature or initials was not or were not placed
there by the person and was not or were not placed there
by any other person authorized to use the signature or
initials for the purpose of certificating transfers on behalf of
the society.
25 Duties of society in relation to issue of certificates
274. (1) Within 2 months after the issue to a person of permanent
shares of a society, the society must --
(a) complete and have ready for delivery to the person all the
appropriate documents in connection with the shares unless
30 the conditions of the issue otherwise provide; and
(b) unless otherwise instructed by the person, send or deliver
the completed documents to the person or, if the person has
instructed the society in writing to send them to a
nominated person, to the nominated person.
35 (2) Within one month after a transfer of permanent shares is
lodged with a society (other than a transfer that the society is for any
reason entitled to refuse to register and does not register), the society
must --
(a) complete and have ready for delivery to the transferee all
40 the appropriate documents in connection with the transfer;
and
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(b) unless otherwise instructed by the transferee, send or
deliver the completed documents to the transferee or, if the
transferee has instructed the society in writing to send
them to a nominated person, to the nominated person.
5 (3) If a society on which a notice has been served requiring the
society to make good any default in complying with the provisions of
this section fails to make good the default within 10 days after the
service of the notice, the Court may, on the application of the person
entitled to take delivery of the documents, make an order directing the
10 society and any officer of the society to make good the default within a
specified time.
(4) An order under subsection (3) may provide that all costs of and
incidental to the application are to be borne by the society or by any
officer of the society in default in such proportions as the Court
15 considers appropriate.
Exemption
275. (1) The power of the SSA to grant an exemption or make a
declaration under this section may be exercised in relation to shares or
a class of shares only if the SSA is satisfied that --
20 (a) if the exemption were granted or the declaration were
made, the interests of the holders of the shares or of shares
in the class would continue to have adequate protection;
and
(b) the granting of the exemption or the making of the
25 declaration would make transfer of the shares, or shares in
the class, more efficient.
(2) The SSA may, by written notice, exempt particular shares, or a
particular class of shares, either generally or as otherwise provided in
the exemption, and either unconditionally or subject to such conditions
30 (if any) as are specified in the exemption, from the operation of all or
any of the provisions of --
(a) this Division; and
(b) a regulation made for the purposes of this Division.
(3) A person must not contravene a condition to which an
35 exemption under subsection (2) is subject.
Maximum penalty: $25 000.
(4) If a person has contravened a condition to which an exemption
is subject, the Court may, on the application of the SSA, order the
person to comply with the condition.
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(5) The SSA may, by written notice, declare that a provision of
this Division or a regulation made for the purposes of this Division has
effect in its application to particular shares, or a particular class of
shares, either generally or otherwise as provided in the declaration, as
5 if the provision or regulation were omitted or modified or varied in a
way specified in the declaration and, if such declaration is made, the
provision or regulation has effect accordingly.
(6) The SSA must cause a copy of an exemption or declaration to
be published in the Gazette, but failure of the SSA to do so does not
10 affect the validity of the exemption or declaration.
Division 7 -- Registration of Charges
Registration of charges
276. (1) Subject to this Division, Part 3.5 of the Corporations Law
applies to a society with all necessary modifications and any prescribed
15 modifications.
(2) Without limiting subsection (1), the provisions of Part 3.5 of
the Corporations Law are to be applied as if --
(a) a reference to a company were a reference to a society; and
(b) a reference to the Commission were a reference to the SSA.
20 Directions by AFIC and SSA
277. (1) AFIC may, from time to time, issue directions to societies
in relation to standards, principles, practices and procedures to be
observed in or in connection with the creation and registration of
charges and may, from time to time, amend, vary or cancel a direction
25 so issued.
(2) The SSA may, from time to time, issue directions, not
inconsistent with directions issued by AFIC under subsection (1), in
relation to the matters mentioned in that subsection and may, from
time to time, amend, vary or cancel a direction so issued by the SSA.
30 (3) A provision of a direction issued under this section may --
(a) apply generally or be limited in its application by reference
to specified exceptions or factors; or
(b) apply differently according to different factors of a specified
kind; or
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(c) authorize any matter or thing to be from time to time
determined, applied or regulated by any specified person,
group of persons or body; or
(d) do any combination of those things.
5 (4) A regulation may make provision with respect to the creation
and registration of charges and, in particular, a regulation may be
made with respect to the following --
(a) the issue of directions by AFIC or SSA under this section;
(b) the enforcement of directions issued under this section.
10 SSA approval of charges necessary in certain circumstances
278. (1) The prior approval of the SSA to the creation of a charge
on the property of a society is required except in prescribed
circumstances.
(2) The SSA may decline to register a charge that has been
15 created without the prior approval of the SSA.
(3) In determining whether or not to approve or whether to
register a charge, the SSA must have regard to the effects that the
charge may have on compliance by the society with the standards.
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PART 6 -- MANAGEMENT
Division 1 -- Interpretation
Definition
279. In Division 2 of this Part --
5 ``employee'', in relation to a society, includes a person, or an