Western Australian Bills Western Australian Bills[Index] [Search] [Download] [Related Items] [Help]
This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
DRAFT BILL FOR PUBLIC COMMENT
The Government proposes to provide a legislative
framework for the formation, registration and
management of co-operatives and for related
purposes.
This draft Bill has been prepared for public
comment but it does not necessarily represent the
Government's settled position.
Co-operatives Bill 2006
CONTENTS
Part 1 -- Preliminary
Division 1 -- Introductory
1. Short title 2
2. Commencement 2
3. Objects of this Act 2
4. Terms used in this Act 3
Division 2 -- Qualified privilege
5. Qualified privilege 8
Division 3 -- The co-operative principles
6. Co-operative principles 8
7. Interpretation to promote co-operative principles 10
Division 4 -- Application of Corporations Act
to co-operatives
8. Definitions 10
160--1 page i
Co-operatives Bill 2006
Contents
9. Excluded matter 11
10. Applying the Corporations legislation to
co-operatives 13
11. Modifications to applied provisions 14
Part 2 -- Formation
Division 1 -- Types of co-operatives
12. Types of co-operatives 15
13. Trading co-operatives 15
14. Non-trading co-operatives 15
Division 2 -- Formation meeting
15. Formation meeting 16
Division 3 -- Approval of disclosure statement
and rules
16. Approval of disclosure statement 17
17. Approval of rules 19
Division 4 -- Registration of proposed
co-operative
18. Application for registration of proposed
co-operative 20
19. Registration of co-operative 22
20. Incorporation and certificate of registration 22
Division 5 -- Registration of an existing
corporation
21. Existing corporation can be registered 23
22. Formation meeting and transitional provision 23
23. Application for registration 24
24. Requirements for registration 25
25. Transitional provision 26
26. Certificate of registration 26
27. Effect of registration 26
Division 6 -- Conversion of co-operative
28. Conversion of co-operative 27
Division 7 -- Reviews
29. Appeal against refusal to approve disclosure
statement 27
30. Appeal against refusal to approve draft rules 27
31. Appeal against refusal to register 27
page ii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
32. Supreme Court's powers on appeal 28
Division 8 -- General
33. Acceptance of money by proposed co-operative 28
34. Issue of duplicate certificate 28
Part 3 -- Legal capacity and powers
Division 1 -- General powers
35. Effect of incorporation 29
36. Power to form companies and enter into joint
ventures 29
Division 2 -- Doctrine of ultra vires abolished
37. Interpretation 29
38. Doctrine of ultra vires abolished 30
39. Legal capacity 30
40. Restrictions on co-operatives in rules 31
41. Results of contravention of restriction in rules 32
Division 3 -- Persons having dealings with
co-operatives
42. Assumptions entitled to be made 33
43. Assumptions 33
44. Person who knows or ought to know is not entitled
to make assumptions 34
45. Lodgment of documents not to constitute
constructive knowledge 35
46. Effect of fraud 35
Division 4 -- Authentication and execution of
documents and confirmation of contracts
47. Common seal 36
48. Official seal 36
49. Authentication need not be under seal 36
50. Co-operative may authorise person to execute deed 36
51. Execution under seal 37
52. Contractual formalities 37
53. Other requirements as to consent or sanction not
affected 38
Division 5 -- Pre-registration contracts
54. Contracts before registration 38
page iii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
55. Person may be released from liability but is not
entitled to indemnity 39
56. This Division replaces other rights and liabilities 40
Part 4 -- Membership
Division 1 -- General
57. Becoming a member 41
58. Members of co-operative group 41
59. Qualification for membership and transitional
provision 42
60. Membership may be joint 42
61. Members under 18 years of age 43
62. Representatives of corporations 43
63. Notification of shareholders and shareholdings 43
64. Circumstances in which membership ceases -- all
co-operatives 44
65. Additional circumstances in which membership
ceases --co-operatives with share capital 45
66. Carrying on business with too few members 45
Division 2 -- Rights and liabilities of members
67. Rights of membership not exercisable until
registered etc. 46
68. Liability of members to co-operative 46
69. Co-operative to make information available to
person intending to become a member 47
70. Entry fees and regular subscriptions 47
71. Members etc. may be required to deal with
co-operative 48
72. Fines payable by members 49
73. Charge and set off of co-operative 49
74. Repayment of shares on expulsion 50
Division 3 -- Death of member
75. Meaning of "interest" 51
76. Transfer of share or interest on death of member 52
77. Transfer of small shareholdings and interests on
death 52
78. Value of shares and interests 53
79. Co-operative protected 53
page iv
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
Division 4 -- Disputes involving members
80. Grievance procedure 53
81. Application to Supreme Court 54
Division 5 -- Oppressive conduct of affairs
82. Interpretation 54
83. Application of Division 55
84. Who may apply for court order 55
85. Orders that the Supreme Court may make 55
86. Basis on which Supreme Court makes orders 56
87. Winding up need not be ordered if oppressed
members prejudiced 57
88. Application of winding up provisions 57
89. Changes to rules 57
90. Copy of order to be lodged with Registrar 58
Division 6 -- Proceedings on behalf of a
co-operative by members and others
91. Bringing, or intervening in, proceedings on behalf
of a co-operative 58
92. Applying for and granting leave 59
93. Substitution of another person for the person
granted leave 59
94. Effect of ratification by members 60
95. Leave to discontinue, compromise or settle
proceedings brought, or intervened in, with leave 61
96. General powers of the Supreme Court 61
97. Power of Supreme Court to make costs order 62
Part 5 -- Rules
98. Effect of rules 63
99. Content of rules 63
100. Purchase and inspection of copy of rules 64
101. False copies of rules 64
102. Model rules 64
103. Rules can only be altered in accordance with this
Act 65
104. Approval of alteration of rules 65
105. Alteration by special resolution 66
106. Alteration by resolution of board 66
107. Alteration does not take effect until registered 67
page v
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
108. Appeal against refusal to approve alteration 67
109. Appeal against refusal to register 67
110. Supreme Court's powers on appeal 67
Part 6 -- Active membership
Division 1 -- Definitions
111. Meaning of "active membership resolution" 68
112. What is active membership 68
113. What are active membership provisions and
resolutions 68
Division 2 -- Rules to contain active
membership provisions
114. Number of primary activities required 69
115. Rules to contain active membership provisions 69
116. Factors and considerations for determining primary
activities etc. 69
117. Active membership provisions -- trading
co-operatives 70
118. Regular subscription -- active membership of
non-trading co-operative 70
Division 3 -- Active membership resolutions
119. Notice of meeting 71
120. Eligibility to vote on active membership resolution 71
121. Eligibility of directors to vote on proposal at board
meeting 72
122. Other entitlements of members not affected 72
Division 4 -- Cancellation of membership of
inactive or missing members
123. Cancellation of membership of inactive or missing
member and transitional provision 72
124. Share to be forfeited if membership cancelled 73
125. Failure to cancel membership -- offence by
director 74
126. Deferral of forfeiture by board 74
127. Cancellation of membership prohibited in certain
circumstances 75
128. Notice of intention to cancel membership 75
129. Order of Supreme Court against cancellation 76
page vi
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
130. Repayment of amounts due because of cancelled
membership 76
131. Interest on deposits, debentures and co-operative
capital units 78
132. Repayment of deposits, and redemption of
debentures and co-operative capital units 79
133. Register of cancelled memberships 80
Division 5 -- Entitlements of former members
of trading co-operatives
134. Application of Division 80
135. Former shareholders to be taken to be shareholders
for certain purposes 80
136. Entitlements of former shareholders on mergers
etc. 81
137. Set off of amounts repaid etc. on forfeited shares 82
138. Entitlement to distribution from reserves 83
139. Regulations may exempt co-operatives from
provisions 84
Part 7 -- Shares
Division 1 -- Nature of share
140. Nature of share in co-operative 85
Division 2 -- Disclosure
141. Disclosure to intending shareholders in trading
co-operative 85
142. Content of disclosure statement to intending
shareholders 86
143. Exemptions for disclosure statements 87
Division 3 -- Issues of shares
144. Shares -- general 87
145. Application of Corporations Act for particular
share subscriptions 88
146. Minimum paid up amount 88
147. Shares not to be issued at a discount 89
148. Issue of shares at a premium 89
149. Joint ownership of shares 90
150. Members may be required to take up additional
shares 90
151. Bonus share issues 91
page vii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
152. Restrictions on bonus shares 91
153. Notice about bonus shares 92
Division 4 -- Beneficial and non-beneficial
interest in shares
154. Direction to disclose 93
155. Disclosure by member of relevant interests and
instructions 93
156. Registration as trustee etc. on death of owner of
shares 94
157. Registration as administrator of estate on
incapacity of shareholder 95
158. Registration as Official Trustee in Bankruptcy 95
159. Liabilities of person registered as trustee or
administrator 96
160. Notice of trusts in register of members 96
161. No notice of trust except as provided by this
Division 96
Division 5 -- Sale or transfer of shares
162. Sale or transfer of shares 96
163. Transfer on death of member 97
164. Restriction on total shareholding 97
165. Transfer not effective until registered 98
166. Non-members become members on registration 98
Division 6 -- Repurchase of shares
167. Purchase and repayment of shares 98
168. Deposit, debentures or co-operative capital units
instead of payment when share repurchased 99
169. Cancellation of shares 101
Part 8 -- Voting and meetings
Division 1 -- Voting entitlements
170. Application of Part to voting 102
171. Voting 102
172. Voting by proxy 102
173. Inactive members not entitled to vote and
transitional provision 103
174. Control of the right to vote 103
175. Effect of disposal of shares on voting rights 103
page viii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
176. Effect of relevant share and voting interests on
voting rights 104
177. Rights of representatives 104
178. Other rights and duties of members not affected by
ineligibility to vote 104
179. Vote of disentitled member to be disregarded 104
Division 2 -- Resolutions
180. Decisions to be by ordinary resolution 105
181. Ordinary resolutions 105
182. Special resolutions 105
183. How majority obtained is ascertained 106
184. Declaration of passing of special resolution 106
185. Effect of special resolution 106
186. Lodgment of special resolution 106
187. Decision of Registrar on application to register
special resolution 107
Division 3 -- Resolution by circulated document
188. Application of Division 3 108
189. Resolution by circulation of document -- fewer
than 50 members 108
Division 4 -- Postal ballots
190. Postal ballots 109
191. Special postal ballots 110
192. When a special postal ballot required 111
193. Holding of postal ballot on requisition and
transitional provision 111
194. Expenses involved in postal ballots on requisition 112
Division 5 -- Meetings
195. Annual general meetings 113
196. Special general meetings 113
197. Notice of meetings 113
198. Quorum at meetings 114
199. Decision at meetings 114
200. Calling of general meeting on requisition and
transitional provision 114
201. Minutes 116
page ix
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
Part 9 -- Management and
administration of co-operatives
Division 1 -- The Board
202. Board of directors 117
203. Election of directors 117
204. Qualification of directors 118
205. Disqualified persons 119
206. Meeting of the board of directors 121
207. Transaction of business outside meetings 122
208. Deputy directors 122
209. Delegation by board 123
210. Removal from and vacation of office 123
Division 2 -- Secretary
211. Secretary 124
Division 3 -- Duties and liabilities of directors,
officers and employees
212. Meaning of "officer" 124
213. Officers must act honestly 125
214. Standard of care and diligence required 126
215. Improper use of information or position 126
216. Recovery of damages by co-operative 127
217. Other duties and liabilities not affected 127
218. Application of Corporations Act concerning
indemnities and insurance for officers and auditors 127
219. Application of Corporations Act provisions
concerning officers of co-operatives 128
Division 4 -- Restrictions on directors and
officers
220. Directors' remuneration 128
221. Certain financial accommodation to officers
prohibited 129
222. Financial accommodation to directors and
associates 129
223. Restriction on directors of certain co-operatives
selling land to co-operative 132
224. Management contracts 132
page x
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
Division 5 -- Declaration of interests
225. Declaration of interest 133
226. Declarations to be recorded in minutes 135
227. Division does not affect other laws or rules 135
228. Certain interests need not be declared 135
Division 6 -- Financial reports and audit
229. Meaning of "control" and "entity" 136
230. Requirements for financial records and financial
reports 136
231. Power of Registrar to grant exemptions 138
232. Disclosure by directors 138
233. Protection of auditors etc. 138
234. Financial year 139
Division 7 -- Registers, records and returns
235. Registers to be kept by co-operatives 139
236. Location of registers 140
237. Inspection of registers etc. 141
238. Use of information on registers 142
239. Notice of appointment etc. of directors and officers 143
240. Annual report to be lodged with Registrar 144
241. List of members to be provided at request of
Registrar 145
242. Special return to be given at request of Registrar 145
Division 8 -- Name and registered office
243. Name to include certain matter 145
244. Use of abbreviations 146
245. Name to appear on business documents etc. 146
246. Change of name of co-operative 147
247. Restriction on use of word "co-operative" or
similar words 148
248. Registered office of co-operative 148
Part 10 -- Funds and property
Division 1 -- Power to raise money
249. Meaning of obtaining financial accommodation 149
250. Fund raising to be in accordance with Act and
regulations 149
251. Limits on deposit taking 149
page xi
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
252. Members etc. not required to see to application of
money 149
253. Registrar's directions about fundraising 150
254. Subordinated debt 150
255. Application of Corporations Act to issues of
debentures 151
256. Application of Corporations to particular issues of
debentures 152
257. Disclosure statement 153
258. Approval of board for transfer of debentures 153
259. Application of Corporations Act -- reissue of
redeemed debentures 154
260. Compulsory loan by member to co-operative 154
261. Interest payable on compulsory loan 155
Division 2 -- Co-operative capital units
262. General nature of co-operative capital units 156
263. Priority of CCU's on winding up 157
264. Financial accommodation provisions apply to issue
of CCUs 157
265. CCUs to be issued to non-members 158
266. Minimum requirements for rules concerning CCUs 158
267. CCUs not to be issued unless terms of issue
approved by Registrar 158
268. Directors' duties concerning CCUs 159
269. Redemption of CCUs 160
270. Capital redemption reserve 160
271. Issue of shares in substitution for redemption 161
Division 3 -- Charges
272. Registration of charges 161
Division 4 -- Receivers and other controllers of
property of co-operatives
273. Receivers and other controllers of property of
co-operatives 161
Division 5 -- Disposal of surplus from activities
274. Retention of surplus for benefit of co-operative 162
275. Application for charitable purposes or members'
purposes 162
276. Distribution of surplus or reserves to members 162
277. Application of surplus to other persons 163
page xii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
Division 6 -- Acquisition and disposal of assets
278. Acquisition and disposal of assets 164
Part 11 -- Restrictions on the
acquisition of interests
in co-operatives
Division 1 -- Restrictions on share and voting
interests
279. Application of Part 166
280. Notice required to be given of voting interest 166
281. Notice required to be given of substantial share
interest 166
282. Requirements for notices 167
283. Maximum permissible level of share interest 167
284. Transitional provision 168
285. Shares to be forfeited to remedy contravention 168
286. Powers of board in response to suspected
contravention 169
287. Powers of Supreme Court in relation to
contravention 169
288. Co-operative to notify Registrar of interest over
20% 170
289. Co-operative to keep register 171
290. Unlisted companies to provide list of shareholders
etc. 171
291. Excess share interest not to affect loan liability 172
292. Extent of operation of Division 172
293. Registrar may grant exemption from Division 172
Division 2 -- Restrictions on certain share
offers
294. Share offers to which Division applies 173
295. Requirements to be satisfied before offer can be
made 173
296. Some offers totally prohibited if they discriminate 173
297. Offers to be submitted to board first 174
298. Announcements of proposed takeovers concerning
proposed company 174
299. Additional disclosure requirements for offers
involving conversion to company 176
page xiii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
300. Consequences of prohibited offer 176
301. Registrar may grant exemptions 177
Part 12 -- Merger, transfer of
engagements, winding up
Division 1 -- Mergers and transfers of
engagements
302. Application of Division 178
303. Mergers and transfers of engagements of local
co-operatives 178
304. Requirements before application can be made 178
305. Disclosure statement required 178
306. Making an application 180
307. Approval of merger 180
308. Approval of transfer of engagements 181
309. Transfer of engagements by direction of Registrar 181
Division 2 -- Transfer of incorporation
310. Application for transfer 182
311. Requirements before application can be made 183
312. Meaning of "new body" and "transfer" 183
313. New body ceases to be registered as co-operative 184
314. Transfer not to impose greater liability etc. 184
315. Effect of new certificate of registration 184
316. New body must give copy of new certificate of
registration or incorporation to Registrar 185
317. New body is a continuation of the co-operative 185
Division 3 -- Winding up and deregistration
318. Methods of winding up 185
319. Winding up on Registrar's certificate 185
320. Method of deregistration 186
321. Application of Corporations Act to winding up and
deregistration 186
322. Restrictions on voluntary winding up 188
323. Start of members' voluntary winding up 188
324. Distribution of surplus -- non-trading
co-operatives 188
325. Liquidator -- vacancy may be filled by Registrar 189
326. Review of liquidator's remuneration 189
page xiv
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
327. Liability of member to contribute in a winding up
where shares forfeited etc. 189
Division 4 -- Administration of co-operative --
application of Corporations Act
328. Application of Corporations Act to administration
of co-operative 190
Division 5 -- Appointment of administrator
329. Appointment of administrator 191
330. Effect of appointment of administrator 191
331. Revocation of appointment 192
332. Expenses of administration 193
333. Liabilities arising from administration 193
334. Additional powers of Registrar 194
335. Stay of proceedings 195
336. Administrator to report to Registrar 195
Division 6 -- Effect of merger etc. on property,
liabilities etc.
337. How this Division applies to a merger 195
338. How this Division applies to a transfer of
engagements 196
339. How this Division applies to a transfer of
incorporation 196
340. Effect of merger etc. on property, liabilities etc. 196
Division 7 -- Miscellaneous
341. Grounds for winding up, transfer of engagements,
appointment of administrator 198
342. Application of Corporations Act for insolvent
co-operatives 199
Part 13 -- Arrangements and
reconstructions
Division 1 -- General requirements
343. Requirements for binding compromise or
arrangement 200
344. Supreme Court ordered meeting of creditors 201
345. Registrar to be given notice and opportunity to
make submissions 201
346. Results of 2 or more meetings 202
page xv
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
347. Persons disqualified from administering
compromise etc. 202
348. Application of Schedule 4 to person appointed 203
349. Application of Corporations Act to person
appointed 203
350. Copy of order to be attached to rules 203
351. Directors to arrange for reports 204
352. Power of Supreme Court to restrain further
proceedings 204
353. Supreme Court need not approve compromise or
arrangement takeovers 205
Division 2 -- Explanatory statements
354. Explanatory statement required to accompany
notice of meeting etc. 205
355. Requirements for explanatory statement 207
356. Contravention of Division -- offence by
co-operative 207
Division 3 -- Facilitating reconstructions and
mergers
357. Provisions for facilitating reconstructions and
mergers 208
Division 4 -- Acquisition of shares of dissenting
shareholders
358. Definitions 210
359. Schemes and contracts to which Division applies 210
360. Acquisition of shares pursuant to notice to
dissenting shareholder 210
361. Restrictions when excluded shares exceed 10% 211
362. Remaining shareholders may require acquisition 212
363. Transfer of shares pursuant to compulsory
acquisition 213
364. Disposal of consideration for shares compulsorily
acquired 214
Division 5 -- Miscellaneous
365. Notification of appointment of scheme manager 215
366. Power of Supreme Court to require reports 215
367. Effect of out-of-jurisdiction compromise or
arrangement 216
page xvi
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
368. Jurisdiction to be exercised in harmony with
Corporations Act jurisdiction 216
369. Registrar may appear etc. 216
Part 14 -- Mutual recognition
Division 1 -- Introductory
370. Definitions 217
371. What constitutes carrying on business 217
372. Co-operatives law 218
373. Excluded matter 219
Division 2 -- Mutual recognition of foreign
co-operatives
374. Operation of foreign co-operatives in this State 220
375. Authorisation to carry on business 221
376. Registration under Companies (Co-operative)
Act 1943 221
377. Notification to Registrar 221
378. Authorisation notices for participating
co-operatives 223
379. Authorisation notices for non-participating
co-operatives 223
380. Name of foreign co-operative 223
381. When foreign co-operative not authorised to carry
on business 224
382. Withdrawal of authority to carry on business 224
383. Appeals 225
384. Application of Act and regulations to foreign
co-operatives 226
Division 3 -- General
385. Name and place of origin to appear on business
and other documents 226
386. Supply of information to participating Registrars 227
387. Registrar to be notified of changes 227
388. Cessation of business 227
389. Functions conferred on Registrar under
co-operatives law 228
Division 4 -- Winding up of foreign
co-operatives in this State
390. Winding up to relate to State activities 228
page xvii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
391. Supreme Court may order winding up 229
392. Application of Corporations Act to winding up of
foreign co-operatives 229
393. Outstanding property of foreign co-operative 230
Division 5 -- Mergers and transfers of
engagements
394. Definitions 231
395. Authority for merger or transfer of engagements 231
396. Requirements before application can be made 231
397. Disclosure statement required 233
398. Making an application 234
399. Approval of merger 235
400. Approval of transfer of engagements 236
401. Effect of merger or transfer of engagements 237
402. Division applies instead of certain other provisions
of this Act 239
Part 15 -- Supervision and protection
of co-operatives
Division 1 -- Supervision and protection
403. Definitions 240
404. "Co-operative" includes subsidiaries, foreign
co-operatives and co-operative ventures 240
405. Appointment of inspectors 241
406. Registrar and investigators have functions of
inspectors 241
407. Inspector's identity card 241
408. Production or display of inspector's identity card 242
409. Powers of inspector 242
410. Inspector's appointment conditions 242
411. Entry of place 243
412. Consent to entry 243
413. Inspectors may require certain persons to appear,
answer questions and produce documents 244
414. Powers of inspectors on place entered 245
415. Functions of inspectors in relation to relevant
documents 246
416. Protection from incrimination 246
417. Warrants 247
page xviii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
418. Warrants -- applications made other than in
person 248
419. Entry with warrant 249
420. General powers after entering places 250
421. Power to seize evidence 251
422. Receipt for seized things 251
423. Return of seized things 252
424. Power to require name and address 252
425. False or misleading statements 253
426. Power to require production of documents 253
427. False or misleading documents 254
428. Obstruction of inspectors 254
429. Copies or extracts of records to be admitted in
evidence 255
430. Privilege 255
Division 2 -- Inquiries
431. Definitions 256
432. Appointment of investigators 257
433. Powers of investigators 258
434. Examination of involved person 259
435. Privilege 259
436. Offences by involved person 260
437. Offences relating to documents 261
438. Record of examination 261
439. Report of investigator 262
440. Proceedings following inquiry 263
441. Admission of investigator's report as evidence 263
442. Costs of inquiry 264
Division 3 -- Prevention of fraud etc.
443. Falsification of records 265
444. Fraud or misappropriation 265
445. Offering or paying commission 265
446. Accepting commission 266
447. False statements in loan application etc. 266
Division 4 -- Miscellaneous powers of the
Registrar
448. Application for special meeting or inquiry 267
449. Holding of special meeting 267
450. Expenses of special meeting or inquiry 268
page xix
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
451. Power to hold special inquiry into co-operative 268
452. Special meeting following inquiry 268
453. Information and evidence 268
454. Extension or abridgment of time 269
455. Power of Registrar to intervene in proceedings 269
Part 16 -- Administration of this Act
Division 1 -- The Registrar
456. Registrar of Co-operatives 270
457. Deputy Registrar and other staff 270
458. Delegation by Registrar 270
459. Registers to be kept by Registrar 271
460. Keeping of registers 271
461. Disposal of records by Registrar 271
462. Inspection of registers 272
463. Approvals by Registrar 273
464. Lodgment of documents 273
465. Way of lodging 273
466. Power of Registrar to refuse to register or reject
documents 274
Division 2 -- Protection from liability
467. Particular persons protected from liability 274
Division 3 -- Evidence
468. Certificate of registration 275
469. Certificate evidence 275
470. Records kept by co-operatives 276
471. Minutes 276
472. Official certificates 277
473. The Registrar and proceedings 277
474. Rules 277
475. Registers 277
Division 4 -- Enforceable undertakings
476. Undertakings following contravention of, or failure
to comply with, this Act 278
477. Register of undertakings 278
478. Enforcement orders 279
Part 17 -- Offences and proceedings
479. Offences by officers of co-operatives 281
page xx
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
480. Notice to be given of conviction for offence 281
481. Secrecy 281
482. False or misleading statements 284
483. Further offence for continuing failure to do
required act 285
484. Civil remedies 286
485. Injunctions 286
486. Proceedings for offences etc. 288
Part 18 -- General
487. Co-operative ceasing to exist 289
488. Service of documents on co-operative 289
489. Service on member of co-operative 290
490. Reciprocal arrangements 290
491. Translations of documents 291
492. Exemptions may be on conditions 291
493. Approval of forms 291
494. Regulation making power 291
495. Companies (Co-operative) Act 1943 repealed 292
496. Co-operative and Provident Societies Act 1903
repealed 292
497. Transitional and savings provisions 292
498. Consequential amendments 292
Schedule 1 -- Matters for which rules
must make provision
1. Requirements for all co-operatives 293
2. Additional matters -- co-operatives with share
capital 294
3. Additional matters -- non-trading co-operatives 295
Schedule 2 -- Relevant interests,
associates, related bodies
Division 1 -- Relevant interests
1. Terminology used in this Schedule 296
2. Basic rules -- relevant interests 296
3. Control of corporation having power in relation to
a share 296
page xxi
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
4. Control of 20% of voting power in corporation
having power in relation to a share 297
5. Deemed relevant interest in advance of
performance of agreement that will give rise to a
relevant interest 297
6. Control of corporation having a relevant interest by
virtue of clause 5 298
7. Matters not affecting application of Division 298
8. Corporation may have a relevant interest in its own
shares 299
9. Exclusions -- money lenders 299
10. Exclusions -- certain trustees 299
11. Exclusions -- instructions to securities dealer to
dispose of share 300
12. Exclusions -- honorary proxies 300
13. Exclusions -- holders of prescribed offices 300
14. Prescribed exclusions 300
15. Effect of Schedule 300
16. Relevant interest -- corporation other than
co-operative 301
Division 2 -- Associates
17. Effect of Part 301
18. Associates of a corporation 301
19. Matters relating to voting rights 301
20. General 302
21. Exclusions 303
Division 3 -- Related corporations
22. Related corporations 303
Schedule 3 -- Registration etc. of
charges
Division 1 -- Preliminary
1. Interpretation 304
2. Application to charges referred to in clause 17 305
3. Lodgment of documents 305
Division 2 -- Registration
Subdivision 1 -- Charges
4. To which charges does Schedule apply? 305
page xxii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
5. Excluded charges 306
6. Personal chattels 307
7. Book debts 307
8. Crops or stock 308
9. Deposit of documents of title 308
10. Charges on land or fixtures on land 308
11. What if other property is also charged? 308
12. Effect of failure to lodge or give notice or
document 308
Subdivision 2 -- Notice of charge
13. Lodgment of notice of charge and copy of
instrument, and transitional provision 309
14. Series of debentures 310
15. Operation of priority provisions in respect of issue
of debentures 310
16. Discounts 311
17. Acquisition of property subject to charge 311
Subdivision 3 -- Registration
18. Register of Co-operative Charges 312
19. Registration of documents relating to charge 312
20. Provisional registration if stamp duty not paid 313
21. Provisional registration if required particulars not
supplied 314
22. Effect of provisional registration 316
23. What if 2 or more charges relate to the same
property? 316
24. Registration of assignment or variation of charge 316
25. Standard time for the purposes of this Subdivision 317
Subdivision 4 -- Certain charges void against
liquidator or administrator
26. Definitions 317
27. Certain charges void against liquidator or
administrator 317
28. Certain varied charges void against liquidator or
administrator 319
29. Supreme Court may extend required period 319
30. Certain later charges void 320
31. Effect of provisions on purchaser in good faith 320
page xxiii
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
Subdivision 5 -- Certain charges in favour of
persons void
32. Definitions 321
33. Charges in favour of certain persons void in certain
cases 322
34. Supreme Court may give leave for enforcement of
charge 322
35. Certain transactions excluded 323
Subdivision 6 -- Assignment, variation or
satisfaction of charges
36. Assignment and variation of charges 323
37. Satisfaction of, and release of property from,
charges 324
Subdivision 7 -- General
38. Lodgment of notices 325
39. Lodgment offences 325
40. Co-operative to keep documents relating to charges 326
41. Co-operative to keep register, and transitional
provision 326
42. Certificates 327
43. Power of Supreme Court to rectify register of
charges 328
44. Registrar may exempt from compliance with
certain requirements of Division 329
Division 3 -- Order of priority
Subdivision 1 -- General
45. Definitions 329
46. Priorities of charges 330
Subdivision 2 -- Priority rules
47. General priority rules in relation to registered
charges 331
48. General priority rule in relation to unregistered
charges 332
49. Special priority rules 332
page xxiv
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
Schedule 4 -- Receivers, and other
controllers, of property of
co-operatives
1. Interpretation 335
2. Application of Schedule 336
3. Persons not to act as receivers 337
4. Supreme Court may declare whether controller is
validly acting 337
5. Liability of controller 338
6. Liability of controller under pre-existing
agreement about property used by co-operative 339
7. Powers of receiver 340
8. Controller's duty of care in exercising power of
sale 343
9. Supreme Court may authorise managing controller
to dispose of property despite prior charge 343
10. Receiver's power to carry on co-operative's
business during winding up 344
11. Controller's duties in relation to financial
institution accounts and financial records 345
12. Managing controller to report within 2 months
about co-operative's affairs 346
13. Reports by receiver 347
14. Supervision of controller 348
15. Controller may apply to Supreme Court 349
16. Power of Supreme Court to fix receiver's
remuneration 349
17. Controller has qualified privilege in certain cases 350
18. Notification of matters relating to controller 351
19. Statement that receiver appointed or other
controller acting 352
20. Officers to report to controller about co-operative's
affairs 352
21. Controller may require reports 354
22. Controller may inspect records 355
23. Lodging controller's accounts 356
24. Payment of certain debts, out of property subject to
floating charge, in priority to claims under charge 358
25. Enforcement of controller's duty to make returns 359
page xxv
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
26. Supreme Court may remove controller for
misconduct 360
27. Supreme Court may remove redundant controller 360
28. Effect of clauses 26 and 27 361
Schedule 5 -- Applied co-operatives
provisions
1. Provisions applicable to participating co-operatives 362
2. Provisions applicable to non-participating
co-operatives 362
Schedule 6 -- Modifications to
Corporations Act
1. Modifications to winding up provisions 364
Schedule 7 -- Transitional and
savings provisions
Division 1 -- Preliminary
1. Terms used in this Schedule 366
2. Interpretation Act 1984 not affected 366
3. Transitional regulations 366
Division 2 -- Prohibition on registration under
former Act
4. Prohibition on registration under Companies
(Co-operative) Act 1943 or Co-operative and
Provident Societies Act 1903 367
Division 3 -- Transfer to incorporation under
this Act
5. Co-operative companies and registered societies to
register under this Act 368
6. Decision of Registrar to register co-operative
company or registered society 369
Division 4 -- General transitional provisions
7. Special resolutions, applications to the Court and
court orders 369
8. Inspections or inquiry 370
9. Acquisition of shares of shareholders dissenting
from scheme or contract approved by majority 370
page xxvi
[Draft Bill for public comment]
Co-operatives Bill 2006
Contents
10. Transitional provisions about active members 371
Division 5 -- Pending incorporation,
reconstruction or winding up
11. Pending incorporation 371
12. Pending reconstruction 372
13. Pending wind up 372
Schedule 8 -- Consequential
amendments and repeal
Division 1 -- Consequential amendments
commencing on registration of
Co-operative Bulk Handling Limited
1. Grain Marketing Act 2002 amended 374
2. Local Government Act 1995 amended 374
Division 2 -- Consequential amendments
commencing on commencement of this
Act
3. Civil Judgments Enforcement Act 2004 amended 375
4. Criminal Property Confiscation Act 2000 amended 375
5. Equal Opportunity Act 1984 amended 376
6. Taxi Act 1994 amended 376
7. Western Australian Treasury Corporation
Act 1986 amended 377
Division 3 -- Consequential amendments
commencing on repeal of former Acts
8. Civil Judgments Enforcement Act 2004 amended 377
9. Criminal Property Confiscation Act 2000 amended 377
10. Equal Opportunity Act 1984 amended 378
11. Housing Loan Guarantee Act 1957 amended 378
12. Local Government Act 1995 amended 378
13. Taxi Act 1994 amended 379
14. Western Australian Treasury Corporation
Act 1986 amended 379
Defined Terms
page xxvii
[Draft Bill for public comment]
Western Australia
LEGISLATIVE ASSEMBLY
Co-operatives Bill 2006
A draft for public comment of
A Bill for
An Act to provide a legislative framework for the formation,
registration and management of co-operatives and for related
purposes.
The Parliament of Western Australia enacts as follows:
page 1
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 1 Preliminary
Division 1 Introductory
s. 1
Part 1 -- Preliminary
Division 1 -- Introductory
1. Short title
This is the Co-operatives Act 2006.
5 2. Commencement
(1) This Act, other than sections 495 and 496, and Schedule 8
Divisions 1 and 3, comes into operation on a day fixed by
proclamation.
(2) Sections 495 and 496, and Schedule 8 Division 3, come into
10 operation on the last day of the period of 2 years after the day
fixed under subsection (1).
(3) Schedule 8 Division 1 comes into operation on the day that
Co-operative Bulk Handling Limited becomes registered under
this Act.
15 3. Objects of this Act
The objects of this Act are to --
(a) enable the formation, registration and operation of
co-operatives; and
(b) promote co-operative philosophy, principles, practices
20 and objectives; and
(c) protect the interests of co-operatives, their members and
the public in the operations and activities of
co-operatives; and
(d) ensure that the directors of co-operatives are accountable
25 for their actions and decisions to the members of
co-operatives; and
(e) encourage and facilitate self-management by
co-operatives at all levels; and
page 2
[Draft Bill for public comment]
Co-operatives Bill 2006
Preliminary Part 1
Introductory Division 1
s. 4
(f) encourage the development, integration and
strengthening of co-operatives at local, regional,
national and international levels by supporting and
fostering State and national peak organisations and
5 co-operative instrumentalities.
4. Terms used in this Act
(1) In this Act --
"active member" has the meaning given to that term in
section 112;
10 "active membership provision" has the meaning given to that
term in section 113;
"agreement" means an agreement, arrangement or
understanding --
(a)whether formal or informal or partly formal and
15 partly informal; and
(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;
20 "alter", in relation to the rules of a co-operative, includes to add
to, substitute or rescind;
"associate" has the meaning given to that term in Schedule 2
Division 2;
"board" means the board of directors of a co-operative and in
25 circumstances where a person or committee is exercising a
power of the board delegated under the rules of a
co-operative, includes that person or committee;
"co-operative" means a body registered under this Act as a
co-operative;
30 "co-operative capital unit" has the meaning given to that term
in section 262(1);
page 3
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 1 Preliminary
Division 1 Introductory
s. 4
"co-operative group" means a co-operative that has a
membership as described in section 58;
"corporation" has the meaning given to that term in the
Corporations Act;
5 "Corporations Act" means the Commonwealth Corporations
Act 2001;
"debenture" means a document issued by a co-operative that
evidences or acknowledges indebtedness of the
co-operative in respect of money that is or may be
10 deposited with or lent to the co-operative, whether
constituting a charge on property of the co-operative or not,
and includes a unit of a debenture, except that it does not
include --
(a) a cheque, order for the payment of money or bill of
15 exchange; or
(b) a promissory note having a face value of not less than
$50 000; or
(c) any other document of a class that is prescribed by
the regulations as exempt from this definition;
20 "deed of arrangement" means a deed of company arrangement
in force under the Corporations Act Part 5.3A as that Part
applies under this Act or a deed of that type as varied and
in force from time to time;
"deposit taking co-operative" means a co-operative that is
25 permitted under section 251 to accept money on deposit;
"financial records" includes the following --
(a) invoices, receipts, orders for the payment of money,
bills of exchange, cheques, promissory notes and
vouchers;
30 (b) documents of prime entry;
page 4
[Draft Bill for public comment]
Co-operatives Bill 2006
Preliminary Part 1
Introductory Division 1
s. 4
(c) working papers and other documents needed to
explain --
(i) the methods by which financial statements are
made up; and
5 (ii) adjustments to be made in preparing financial
statements;
"financial report" means an annual financial report or a
half-year financial report prepared under the Corporations
Act Chapter 2M;
10 "financial services business" has the meaning given to that
term in the Corporations Act section 761A;
"financial services licensee" has the meaning given to that
term in the Corporations Act section 761A;
"financial statements" means annual financial statements
15 under the Corporations Act section 295 or half-year
financial statements under applying under the Corporations
Act section 303;
"foreign co-operative" means a corporation that is registered,
incorporated or formed under, or subject to, a law in force
20 outside this State, including outside Australia, that
regulates co-operatives or organisations having attributes
the same as or similar to co-operatives except that it does
not include --
(a) a body incorporated under the Corporations Act or
25 under another law of the Commonwealth; or
(b) an authorised deposit-taking institution as defined in
the Commonwealth Banking Act 1959 section 5;
"inspector" means a person appointed as an inspector under
Part 15;
30 "model rules" means the model rules prescribed by the
regulations under section 102;
"mortgage" includes lien, charge or other security over
property;
page 5
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 1 Preliminary
Division 1 Introductory
s. 4
"non-trading co-operative" means a co-operative as described
in section 14;
"officer", of a co-operative, means --
(a) a director, secretary or employee of the co-operative;
5 or
(b) a person who is concerned, or takes part, in the
management of the co-operative, whether or not as a
director; or
(c) a receiver and manager, appointed under a power
10 contained in an instrument, of property of the
co-operative; or
(d) an administrator of a deed of arrangement executed
by the co-operative; or
(e) a liquidator or provisional liquidator appointed in a
15 voluntary winding up of the co-operative; or
(f) an administrator of the co-operative appointed
under --
(i) the Corporations Act Part 5.3A as applying
under this Act; or
20 (ii) Part 12 Division 5 of this Act;
or
(g) a trustee or other person administering a compromise
or arrangement made between the co-operative and
another person;
25 "primary activity", of a co-operative, means an activity stated
in the rules of the co-operative to be a primary activity of
the co-operative;
"principal executive officer", of a co-operative or a subsidiary
of a co-operative, means the principal executive officer of
30 the co-operative or subsidiary for the time being, by
whatever name called, and whether or not that officer is a
director or the secretary;
page 6
[Draft Bill for public comment]
Co-operatives Bill 2006
Preliminary Part 1
Introductory Division 1
s. 4
"records" includes books, financial records, financial
statements, minutes, registers, deeds, writings, documents
and other sources of information compiled, recorded or
stored in written form or on microfilm, or by electronic
5 process, or in any other manner or by any other means;
"Registrar" means the Registrar of Co-operatives under
section 456;
"related corporation" has the meaning given to that term in
Schedule 2 Division 3;
10 "relevant interest" in --
(a) a right to vote has the meaning given to that term in
Schedule 2 Division 1 clause 2(1); and
(b) a share has the meaning given to that term in
Schedule 2 Division 1 clause 2(2);
15 "rules", of a co-operative, means the rules of the co-operative
for the time being applying under this Act;
"seal", of a co-operative, means the common seal or official
seal of the co-operative;
"share" means share in the share capital of a co-operative;
20 "subsidiary" has the meaning given to that term in the
Corporations Act;
"surplus", in relation to a co-operative, means the excess of
income over expenditure after making proper allowance for
taxation expense, for depreciation in value of the property
25 of the co-operative and for future contingencies;
"trading co-operative" means a co-operative as described in
section 13;
"transfer day", for a particular transferred co-operative, means
the day on which that co-operative became registered under
30 this Act;
"transferred co-operative" means a co-operative that
immediately before the commencement of this Act was
registered as a co-operative company under the Companies
page 7
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 1 Preliminary
Division 2 Qualified privilege
s. 5
(Co-operative) Act 1943 or as a registered society under the
Co-operative and Provident Societies Act 1903.
(2) A reference in this Act to the Corporations Act or a provision of
the Corporations Act applying under this Act (or a part of this
5 Act) is a reference to that Act or provision to the extent that it is
declared to apply to a matter for the purposes of the
Corporations (Ancillary Provisions) Act 2001 Part 3 as a law of
this State.
Division 2 -- Qualified privilege
10 5. Qualified privilege
(1) If this Act provides that a person has qualified privilege for an
act, matter or thing, the person, in relation to the act, matter or
thing --
(a) has qualified privilege in proceedings for defamation;
15 and
(b) is not, in the absence of malice on the person's part,
liable 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
20 improper motive.
(3) Neither this section nor a provision of this Act that provides 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 a defendant in proceedings, or an action, for
25 defamation.
Division 3 -- The co-operative principles
6. Co-operative principles
The co-operative principles are the principles set out in the
following Table.
page 8
[Draft Bill for public comment]
Co-operatives Bill 2006
Preliminary Part 1
The co-operative principles Division 3
s. 6
Table of co-operative principles
Principle
1. Voluntary and open membership
A co-operative is a voluntary organisation, open to all
persons able to use its services and willing to accept the
responsibilities of membership, without gender, social,
racial, political or religious discrimination.
2. Democratic member control
A co-operative is a democratic organisation controlled by its
members, who actively participate in setting policies and
making decisions. Members serving as elected
representatives are accountable to the membership. In
co-operatives other than co-operative groups members have
equal voting rights (one member, one vote). Co-operative
groups are organised in a democratic manner.
3. Member economic participation
Members contribute equitably to, and democratically control,
the capital of their co-operative. Usually, at least part of that
capital is the common property of the co-operative. Usually,
members receive limited compensation, if any, for capital
subscribed as a condition of membership. Members of a
co-operative allocate surplus to be used for any or all of the
purposes of --
(a) developing the co-operative, possibly by setting up
reserves, at least part of which are indivisible; and
(b) benefiting members in proportion to their
transactions with the co-operative; and
(c) supporting other activities approved by the
membership.
4. Autonomy and independence
A co-operative is an autonomous, self-help organisation
controlled by its members. If a co-operative enters into
agreements with other organisations, including governments,
or raises capital from external sources, it does so on terms
that ensure democratic control by its members and maintain
its autonomy.
page 9
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 7
Principle
5. Education, training and information
A co-operative provides education and training for its
members, elected representatives, managers and employees
so they can contribute effectively to the development of the
co-operative. A co-operative informs the general public,
particularly young people and opinion leaders, about the
nature and benefits of co-operatives.
6. Co-operation among co-operatives
Co-operatives serve their members most effectively and
strengthen the co-operative movement by working together
through local, national, regional and international structures.
7. Concern for the community
Co-operatives, while focusing on member needs, work for
the sustainable development of their communities through
policies accepted by their members.
7. Interpretation to promote co-operative principles
In the interpretation of a provision of this Act, a construction
that would promote co-operative principles is to be preferred to
a construction that would not promote co-operative principles.
5 Division 4 -- Application of Corporations Act to co-operatives
8. Definitions
In this Division --
"company" has the meaning given to that term in the
Corporations Act section 9;
10 "Corporations legislation" means the Corporations legislation
to which the Corporations Act Part 1.1A applies;
"excluded Corporations legislation provision" means any
provision of the Corporations legislation that does not
apply to co-operatives as a law of the Commonwealth.
page 10
[Draft Bill for public comment]
Co-operatives Bill 2006
Preliminary Part 1
Application of Corporations Act to co-operatives Division 4
s. 9
9. Excluded matter
(1) A co-operative is declared to be an excluded matter for the
purposes of the Corporations Act section 5F in relation to the
whole of the Corporations legislation other than to the extent
5 specified in subsection (2).
(2) Subsection (1) does not exclude the application of the following
provisions of the Corporations legislation to co-operatives to the
extent that the provisions would otherwise be applicable to
them --
10 (a) provisions relating to a matter that the regulations
provide is not to be excluded from the operation of the
Corporations legislation;
(b) provisions relating to the role of a co-operative in the
formation of a company;
15 (c) provisions relating to the registration of a co-operative
as a company under the Corporations Act Chapter 5B;
(d) provisions relating to substantial shareholdings, by or
involving a co-operative, in a company;
(e) provisions conferring or imposing functions on a
20 co-operative as a member, or former member, of a
corporation;
(f) provisions relating to dealings by a co-operative in
financial products of a corporation, other than financial
products of the co-operative itself;
25 (g) provisions conferring or imposing functions on a
co-operative in its dealings with a corporation, not being
dealings in financial products of the co-operative;
(h) provisions relating to financial products of a
co-operative, other than shares in, co-operative capital
30 units in, debentures of or deposits with a co-operative;
(i) provisions relating to financial markets and participants
in financial markets;
page 11
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 9
(j) provisions relating to financial services licensees whose
licence covers dealing in, or providing advice about,
financial products;
(k) provisions relating to carrying on a financial services
5 business;
(l) provisions relating to financial statements, and audits of
financial statements, of financial services licensees
whose licence covers dealing in, or providing advice
about, financial products;
10 (m) provisions relating to clients of financial services
licensees whose licence covers dealing in, or providing
advice about, financial products;
(n) provisions relating to registers of interests in financial
products.
15 (3) To remove doubt it is declared that subsection (1) does not
operate to exclude the operation of the following provisions of
the Corporations Act, except in relation to shares in,
co-operative capital units in, debentures of, or deposits with, a
co-operative --
20 (a) Part 1.2A;
(b) Chapter 2L;
(c) Chapter 6CA;
(d) Chapter 6D;
(e) Part 7.10.
25 (4) If a co-operative is directed by an order of the Supreme Court
under section 85(i) to become registered as a company under the
Corporations Act, the provisions referred to in subsection (2)(c)
apply to the extent necessary for the co-operative to be
registered as a company under Chapter 5B of that Act.
page 12
[Draft Bill for public comment]
Co-operatives Bill 2006
Preliminary Part 1
Application of Corporations Act to co-operatives Division 4
s. 10
10. Applying the Corporations legislation to co-operatives
(1) The regulations may declare a matter relating to co-operatives to
be an applied Corporations legislation matter for the purposes of
the Corporations (Ancillary Provisions) Act 2001 Part 3 in
5 relation to any excluded Corporations legislation provision or
provisions, with any modifications that are specified in the
declaration.
(2) Without limiting subsection (1), any such regulations may --
(a) specify modifications to the definitions and other
10 interpretative provisions of the Corporations legislation
relevant to any excluded Corporations legislation
provision that is the subject of the declaration; and
(b) provide for ASIC to exercise a function under any
excluded Corporations legislation provision that is the
15 subject of the declaration, but only if --
(i) ASIC is to exercise the function under an
agreement referred to in section 11(8) or (9A)(b)
of the ASIC Act; and
(ii) ASIC is authorised to exercise that function
20 under section 11 of the ASIC Act;
and
(c) specify that a reference to ASIC in an excluded
Corporations legislation provision that is the subject of
the declaration is to be a reference to another person;
25 and
(d) identify an excluded Corporations legislation provision
to which the declaration relates by reference to the
provision as in force at a particular time; and
(e) specify a court (other than the Supreme Court) to
30 exercise a function conferred on a court or the Court by
an excluded Corporations legislation provision to which
the declaration relates.
page 13
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 11
(3) Words and expressions used in this section and also in the
Corporations (Ancillary Provisions) Act 2001 Part 3 have the
same meanings in this section as they have in that Part.
11. Modifications to applied provisions
5 (1) If a provision of this Act or the regulations declares a matter to
be an applied Corporations legislation matter for the purposes of
the Corporations (Ancillary Provisions) Act 2001 Part 3 (the
"declaratory provision") in relation to any provisions of the
Corporations legislation (the "applied provisions"), the
10 declaratory provision is taken to specify the following
modifications --
(a) a reference in the applied provisions to articles or a
memorandum of association or a constitution or
replaceable rules is to be read as a reference to rules;
15 (b) a cross-reference in the applied provisions to another
provision of the Corporations Act is, if that
cross-reference is not appropriate (because for example
the provision cross-referred to is not among the applied
provisions), to be read as a cross-reference to the
20 equivalent provision of this Act;
(c) a reference in the applied provisions to the Gazette is to
be read as a reference to the Western Australian
Government Gazette;
(d) a reference in the applied provisions to the
25 Commonwealth is to be read as a reference to this State;
(e) any of the applied provisions that are not relevant to
co-operatives or that are incapable of application to
co-operatives are to be ignored;
(f) modifications prescribed under a regulation under
30 subsection (2).
(2) The regulations may prescribe the modifications that are
necessary or desirable for the effective operation of the applied
provisions.
page 14
[Draft Bill for public comment]
Co-operatives Bill 2006
Formation Part 2
Types of co-operatives Division 1
s. 12
Part 2 -- Formation
Division 1 -- Types of co-operatives
12. Types of co-operatives
(1) A body may be registered under this Act as a co-operative.
5 (2) A co-operative may be either --
(a) a trading co-operative; or
(b) a non-trading co-operative.
13. Trading co-operatives
(1) A trading co-operative must have a share capital.
10 (2) A trading co-operative is a co-operative whose rules allow it to
give returns or distributions on surplus or share capital.
(3) A trading co-operative must have a membership of --
(a) for a co-operative group, 2 or more co-operatives; and
(b) for any other trading co-operative --
15 (i) if a lesser number than 5 is prescribed by the
regulations, at least that number of active
members; or
(ii) otherwise, 5 or more active members.
14. Non-trading co-operatives
20 (1) A non-trading co-operative is a co-operative whose rules
prohibit it from giving returns or distributions on surplus or
share capital to members, other than the nominal value of
shares, if any, at winding up.
(2) A non-trading co-operative may or may not have a share capital.
25 (3) A non-trading co-operative must have a membership of --
(a) for a co-operative group, 2 or more co-operatives; and
page 15
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 2 Formation
Division 2 Formation meeting
s. 15
(b) for any other non-trading co-operative --
(i) if a lesser number than 5 is prescribed by the
regulations, at least that number of active
members; or
5 (ii) otherwise, 5 or more active members.
Division 2 -- Formation meeting
15. Formation meeting
(1) Before a proposed co-operative, other than an existing
corporation, can be registered, a formation meeting must be held
10 in accordance with this section.
(2) At the formation meeting --
(a) a person must act as chairman, and a person must be
specified to act as secretary; and
(b) in the case of a proposed trading co-operative, a
15 disclosure statement approved under section 16 must be
presented to the meeting; and
(c) the proposed rules of the co-operative approved under
section 17 in respect of the proposed co-operative, must
be agreed to by two-thirds of the prospective members
20 attending the meeting; and
(d) the prospective members attending the meeting must
sign the application for membership; and
(e) the prospective members attending the meeting must
elect the first directors of the proposed co-operative in
25 accordance with the proposed rules; and
(f) the prospective members attending the meeting must
authorise a person --
(i) to apply to the Registrar for registration of the
proposed co-operative; and
30 (ii) to do anything necessary to have the proposed
co-operative registered.
page 16
[Draft Bill for public comment]
Co-operatives Bill 2006
Formation Part 2
Approval of disclosure statement and rules Division 3
s. 16
(3) The formation meeting must be held by --
(a) for a co-operative group, not less than 2 suitably
qualified co-operatives; and
(b) for any other co-operative, not less than 5 persons, or if
5 a lesser number than 5 is prescribed by the regulations,
not less than the prescribed number of persons, suitably
qualified to be members of the proposed co-operative.
(4) For the purposes of subsection (3), a person or a co-operative is
suitably qualified to be a member if --
10 (a) there are reasonable grounds to believe the person or
co-operative will be an active member of the proposed
co-operative; and
(b) for an individual, the person has attained the age of 18;
and
15 (c) the person satisfies any other requirements for
membership set out in the proposed rules.
(5) Each co-operative forming a proposed co-operative group may
be represented at the formation meeting by one person.
Division 3 -- Approval of disclosure statement and rules
20 16. Approval of disclosure statement
(1) A draft disclosure statement of a proposed trading co-operative
must be submitted to the Registrar at least 28 days (or a shorter
period the Registrar may allow in a particular case) before the
formation meeting is due to be held.
25 (2) The draft disclosure statement submitted under subsection (1)
must be accompanied by a written statement specifying the date
on which the formation meeting is due to be held.
(3) The disclosure statement must contain the information
necessary to ensure that prospective members are adequately
30 informed of the nature and extent of a person's financial
page 17
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 2 Formation
Division 3 Approval of disclosure statement and rules
s. 16
involvement or liability as a member of the co-operative
including so far as applicable --
(a) the estimated costs of formation; and
(b) the active membership provisions of the proposed
5 co-operative; and
(c) the rights and liabilities attaching to shares in the
proposed co-operative; and
(d) the capital required for the co-operative at the time of
formation; and
10 (e) the projected income and expenditure of the
co-operative for its first year of operation; and
(f) information about any contracts required to be entered
into by the co-operative; and
(g) any other information that the Registrar directs.
15 (4) The disclosure statement must not include a statement
purporting to be made by an expert or to be based on a
statement made by an expert unless --
(a) the expert has given, and has not withdrawn, the
expert's written consent to the submission of the
20 disclosure statement with the statement included in the
form and context in which it is included; and
(b) there appears in the disclosure statement a statement that
the expert has given, and has not withdrawn, the
expert's consent.
25 (5) The Registrar may --
(a) approve the draft statement as submitted; or
(b) amend the draft statement, or require a stated
amendment of the draft, and then approve the amended
statement; or
30 (c) approve a different statement to that submitted; or
(d) refuse to approve the statement; or
page 18
[Draft Bill for public comment]
Co-operatives Bill 2006
Formation Part 2
Approval of disclosure statement and rules Division 3
s. 17
(e) require the person submitting the disclosure statement to
give the Registrar any additional information the
Registrar reasonably requires, and then act under
paragraph (a), (b), (c) or (d).
5 (6) The Registrar may approve a disclosure statement with or
without conditions.
(7) Subject to subsection (8), the Registrar approves of a disclosure
statement by giving written notice of the approval of the
statement to the person who submitted the draft statement to the
10 Registrar.
(8) The Registrar is taken to have approved the disclosure statement
as submitted to the Registrar unless at least 5 days before the
date specified in the written statement submitted under
subsection (2), the Registrar gives written notice to the person
15 who submitted the draft statement that the Registrar --
(a) has approved an amended or different disclosure
statement; or
(b) is still considering the matter; or
(c) refuses to approve the disclosure statement.
20 17. Approval of rules
(1) A draft of the rules proposed for the co-operative (including
active membership provisions in accordance with Part 6) must
be submitted to the Registrar at least 35 days (or a shorter
period the Registrar may allow in a particular case) before the
25 formation meeting is due to be held.
(2) The draft rules submitted under subsection (1) must be
accompanied by a written statement specifying the date on
which the formation meeting is due to be held.
(3) The proposed rules must --
30 (a) be in accordance with section 99; and
(b) be in a form that may reasonably be approved; and
page 19
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 2 Formation
Division 4 Registration of proposed co-operative
s. 18
(c) if the rules contain any alterations of the model rules, be
accompanied by a statement setting out the alterations
and the reasons for the alterations.
(4) If the proposed rules do not make provision for each matter
5 included in the model rules, the Registrar may approve the
relevant provisions of the model rules as rules of the
co-operative.
(5) The Registrar may --
(a) approve the proposed rules as submitted; or
10 (b) approve different proposed rules to those submitted; or
(c) refuse to approve the proposed rules.
(6) Subject to subsection (7), the Registrar approves proposed rules
by giving written notice of that approval to the person who
submitted the proposed rules to the Registrar.
15 (7) The Registrar is taken to have approved the proposed rules as
submitted to the Registrar unless at least 5 days before the date
specified in the written statement submitted under
subsection (2), the Registrar gives written notice to the person
who submitted the proposed rules that the Registrar --
20 (a) has approved different proposed rules to those
submitted; or
(b) is still considering the matter; or
(c) refuses to approve the proposed rules.
Division 4 -- Registration of proposed co-operative
25 18. Application for registration of proposed co-operative
(1) An application for registration as a co-operative, other than an
application by a corporation under Division 5, must --
(a) be made in the form approved by the Registrar; and
(b) be accompanied by the fee prescribed by the regulations;
30 and
page 20
[Draft Bill for public comment]
Co-operatives Bill 2006
Formation Part 2
Registration of proposed co-operative Division 4
s. 18
(c) be signed by --
(i) for a co-operative group, at least 2 directors
elected at the formation meeting; and
(ii) for any other proposed co-operative, at least 5, or
5 if a lesser number than 5 is prescribed under a
regulation, at least the prescribed number of,
suitably qualified members, including 2 directors
elected at the formation meeting;
and
10 (d) be accompanied by --
(i) a copy of the proposed rules, certified in writing
by the chairman and secretary for the formation
meeting to have been agreed to at the formation
meeting in accordance with section 15(2)(c); and
15 (ii) in the case of a proposed trading co-operative, a
copy of the disclosure statement, certified in
writing by the chairman and secretary for the
formation meeting to have been presented to that
meeting as required by section 15(2)(b); and
20 (iii) a statement listing the name, address, occupation
and place and date of birth of each person elected
at the formation meeting in accordance with
section 15(2)(e) to be a director of the proposed
co-operative and containing a certificate signed
25 by the chairman and secretary verifying that
those persons were elected; and
(iv) a certificate signed by the chairman and secretary
verifying that a specified person is the person
authorised under section 15(2)(f); and
30 (v) any other particulars that the Registrar may
require.
(2) The application must be lodged with the Registrar within
2 months after closure of the formation meeting for the
page 21
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 2 Formation
Division 4 Registration of proposed co-operative
s. 19
proposed co-operative or within the extended period that the
Registrar may allow.
19. Registration of co-operative
(1) When an application is made under this Division for registration
5 of a proposed co-operative, the Registrar must register the
co-operative and its rules if satisfied that the requirements
referred to in subsection (2) have been met.
(2) The requirements for registration of a co-operative under this
Division are that --
10 (a) the proposed rules of the proposed co-operative must be
those approved by the Registrar under section 17; and
(b) the requirements of this Act must have been complied
with in relation to the proposed co-operative and
compliance must be likely to continue; and
15 (c) the proposed co-operative must be designed to function
in accordance with the co-operative principles or, if it is
not designed to function entirely in accordance with the
co-operative principles, the Registrar must be satisfied
that there are special reasons why the co-operative
20 should be registered under this Act; and
(d) there must be no reasonable cause for refusing
registration of the proposed co-operative.
(3) If the Registrar is not satisfied that the requirements for
registration of the co-operative have been met the Registrar may
25 refuse to register the co-operative and its rules.
(4) The Registrar must give to the applicant written notice of the
refusal and the reasons for the refusal.
20. Incorporation and certificate of registration
(1) The incorporation of the co-operative takes effect on the
30 registration of the co-operative.
page 22
[Draft Bill for public comment]
Co-operatives Bill 2006
Formation Part 2
Registration of an existing corporation Division 5
s. 21
(2) On the registration of the co-operative, the Registrar must issue
a certificate of registration.
Division 5 -- Registration of an existing corporation
21. Existing corporation can be registered
5 A corporation may apply to the Registrar to be registered as a
co-operative under this Act, if the corporation is --
(a) incorporated or registered or deemed to be registered
under the Corporations Act; or
(b) incorporated or registered under any other Act relating
10 to the incorporation or registration of bodies corporate.
22. Formation meeting and transitional provision
(1) Before applying for registration as a co-operative, a corporation
must pass a special resolution in accordance with its articles of
association or rules approving of --
15 (a) the proposed registration; and
(b) any alterations of its existing memorandum and articles
of association or rules necessary to enable the
corporation to comply with this Act.
(2) At the meeting to pass the special resolution --
20 (a) the proposed rules of the proposed co-operative
approved under section 17, and including active
membership provisions in accordance with Part 6, must
also be passed by special resolution; and
(b) in the case of a proposed trading co-operative, a
25 disclosure statement approved under section 16 must be
presented to the meeting.
(3) For a corporation that on registration under this Division will be
a transferred co-operative, the requirement to pass a special
resolution approving the proposed registration and the proposed
page 23
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 2 Formation
Division 5 Registration of an existing corporation
s. 23
rules is satisfied if the resolution complies with
section 182(1)(a) and (3).
23. Application for registration
An application for registration must be --
5 (a) in the form approved by the Registrar; and
(b) accompanied by the fee prescribed by the regulations;
and
(c) accompanied by --
(i) a written declaration signed by the directors or
10 the committee of management of the corporation
stating that at a meeting of the directors or
committee they formed the opinion that the
corporation will be able to pay its debts as they
fall due; and
15 (ii) a report in the form approved by the Registrar as
to the affairs of the corporation and showing its
assets and liabilities, made up to the latest
practicable date before the application; and
(iii) a copy of the memorandum and articles of
20 association or rules of the corporation in force at
the date of the application; and
(iv) 2 copies of the proposed rules of the
co-operative, certified in writing by the directors
or the committee of management to have been
25 approved under section 22(2) by special
resolution; and
(v) in the case of a proposed trading co-operative, a
copy of the disclosure statement presented to the
meeting held under section 22, certified in
30 writing by the directors or committee of
management of the corporation to have been
presented to that meeting; and
page 24
[Draft Bill for public comment]
Co-operatives Bill 2006
Formation Part 2
Registration of an existing corporation Division 5
s. 24
(vi) a list containing the name, address, occupation
and place and date of birth of each director; and
(vii) evidence to the satisfaction of the Registrar of
the incorporation of the existing corporation; and
5 (viii) any other particulars that the Registrar may
require.
24. Requirements for registration
(1) When an application is made for registration as a co-operative
under this Division, the Registrar must register the corporation
10 as a co-operative under this Act and register its rules under this
Act if the Registrar is satisfied that the requirements for
registration of the co-operative have been met.
(2) The requirements for registration as a co-operative under this
Division are as follows --
15 (a) the proposed rules of the proposed co-operative must be
the proposed rules approved by the Registrar under
section 17;
(b) the requirements of this Act must have been complied
with in relation to the proposed co-operative and
20 compliance must be likely to continue;
(c) there must be no reasonable cause for refusing
registration of the proposed co-operative.
(3) If the Registrar is not satisfied that the requirements for
registration of the co-operative have been met, the Registrar
25 may refuse to register the co-operative and its rules and must
give to the applicant written notice of the refusal and the reasons
for the refusal.
(4) If the Registrar has decided under this section to register a
corporation under this Act, the corporation must notify the
30 authority responsible for registering the corporation under the
law under which it was previously registered of that decision.
page 25
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 2 Formation
Division 5 Registration of an existing corporation
s. 25
(5) Despite anything to the contrary in this Division, the registration
of a corporation as a co-operative does not take effect until the
corporation ceases to be registered under the law under which it
was previously registered.
5 (6) The corporation must notify the Registrar in writing within
7 days after ceasing to be registered under that other law.
25. Transitional provision
(1) This section applies to a corporation that, on registration under
this Division, will be a transferred co-operative.
10 (2) Section 24(4) to (6) does not apply to the corporation.
(3) If the Registrar decides to register the corporation, the Registrar
must ensure that the corporation ceases to be registered under
the old Act.
26. Certificate of registration
15 (1) On the registration of a corporation as a co-operative, the
Registrar must --
(a) issue a certificate of registration to the corporation; and
(b) publish notice of the issue of the certificate in the
Gazette.
20 (2) The corporate name of a corporation registered as a co-operative
is the name approved by the Registrar, as specified in the
certificate of registration issued by the Registrar.
27. Effect of registration
(1) The corporation is taken to be incorporated under this Act on its
25 registration.
(2) Except as expressly provided in this Act, the registration and
incorporation of the corporation as a co-operative does not
prejudice any right of a member in respect of any shares held at
the time of registration and incorporation.
page 26
[Draft Bill for public comment]
Co-operatives Bill 2006
Formation Part 2
Conversion of co-operative Division 6
s. 28
(3) The change of registration and incorporation does not affect the
identity of the corporation which is taken to be the same body
after registration as a co-operative as it was before and no act,
matter or thing is affected by the change.
5 Division 6 -- Conversion of co-operative
28. Conversion of co-operative
(1) A co-operative may, by alteration of its rules, convert from --
(a) a co-operative with share capital to a co-operative
without share capital or vice versa; or
10 (b) a trading co-operative to a non-trading co-operative or
vice versa.
(2) An alteration of the rules for the conversion of a co-operative
must be approved by special resolution passed by means of a
special postal ballot.
15 Division 7 -- Reviews
29. Appeal against refusal to approve disclosure statement
The person who submitted a draft disclosure statement to the
Registrar under this Act may appeal to the Supreme Court
against a failure of the Registrar to approve the statement.
20 30. Appeal against refusal to approve draft rules
The person who submitted draft rules to the Registrar under this
Act may appeal to the Supreme Court against a failure of the
Registrar to approve the rules.
31. Appeal against refusal to register
25 The applicant for registration of a proposed co-operative under
this Part may appeal to the Supreme Court against a failure of
the Registrar to register the co-operative.
page 27
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 2 Formation
Division 8 General
s. 32
32. Supreme Court's powers on appeal
The Supreme Court may make any order it considers
appropriate to dispose of an appeal under this Division.
Division 8 -- General
5 33. Acceptance of money by proposed co-operative
(1) A proposed co-operative that, or a person on a proposed
co-operative's behalf who, accepts money for the proposed
co-operative before the proposed co-operative is registered must
hold that money on trust until the co-operative is registered.
10 (2) If a co-operative is not registered within the period of 3 months
after the acceptance of money under subsection (1), the
proposed co-operative or the person who accepted the money on
its behalf must refund the money to the person who paid it.
Penalty: a fine of $6 000.
15 34. Issue of duplicate certificate
The Registrar must issue a duplicate certificate of registration
if --
(a) the Registrar is satisfied that the original certificate is
lost or destroyed; and
20 (b) the fee prescribed by the regulations is paid.
page 28
[Draft Bill for public comment]
Co-operatives Bill 2006
Legal capacity and powers Part 3
General powers Division 1
s. 35
Part 3 -- Legal capacity and powers
Division 1 -- General powers
35. Effect of incorporation
As a corporation, a co-operative --
5 (a) has perpetual succession; and
(b) has a common seal; and
(c) may sue and be sued in its corporate name; and
(d) subject to this Act, is capable of taking, purchasing,
leasing, holding, selling and disposing of real and
10 personal property; and
(e) may do and suffer all acts and things that corporations
may by law do and suffer and that are necessary or
expedient.
36. Power to form companies and enter into joint ventures
15 Without limiting any other provision of this Act, a co-operative
has power --
(a) to form or participate in the formation of a corporation
or unit trust; and
(b) to acquire interests in and sell or otherwise dispose of
20 interests in corporations, unit trusts and joint ventures;
and
(c) to form or enter into a partnership, joint venture or other
association with other persons or bodies.
Division 2 -- Doctrine of ultra vires abolished
25 37. Interpretation
In this Division --
(a) a reference to the doing of an act by a co-operative
includes a reference to the making of an agreement by
page 29
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 3 Legal capacity and powers
Division 2 Doctrine of ultra vires abolished
s. 38
the co-operative and a reference to a transfer of property
to or by the co-operative; and
(b) a reference to legal capacity includes a reference to
powers.
5 38. Doctrine of ultra vires abolished
(1) The objects of this Division are --
(a) to provide that the doctrine of ultra vires does not apply
to co-operatives; and
(b) without affecting the validity of a co-operative's
10 dealings with others, to ensure that the co-operative's
officers and members give effect to the provisions of the
co-operative's rules relating to the primary activities or
powers of the co-operative.
(2) This Division is to be construed and have effect in accordance
15 with subsection (1).
39. Legal capacity
(1) A co-operative has, both within and outside this State, the legal
capacity of a natural person.
(2) Without limiting subsection (1), a co-operative has, both within
20 and outside this State, power --
(a) to issue and allot fully or partly paid shares in the
co-operative; and
(b) to issue debentures of, and co-operative capital units in,
the co-operative; and
25 (c) to distribute any of the property of the co-operative
among the members, in kind or otherwise; and
(d) to give security by charging uncalled capital; and
(e) to grant a charge on property of the co-operative; and
page 30
[Draft Bill for public comment]
Co-operatives Bill 2006
Legal capacity and powers Part 3
Doctrine of ultra vires abolished Division 2
s. 40
(f) to procure the co-operative to be registered or
recognised as a corporation in any place outside this
State; and
(g) to do any other act that it is authorised to do by any
5 other law, including a law of a place outside this State.
(3) Subsections (1) and (2) have effect in relation to a
co-operative --
(a) subject to this Act but despite section 40(2); and
(b) if the co-operative's rules contain an express or implied
10 restriction on, or an express or implied prohibition of,
the exercise by the co-operative of any of its powers,
despite that restriction or prohibition; and
(c) if the rules of the co-operative contain a provision
stating the objects of the co-operative, despite that fact.
15 (4) The fact that the doing of an act by a co-operative would not be,
or is not, in its best interests does not affect its legal capacity to
do the act.
40. Restrictions on co-operatives in rules
(1) A co-operative's rules may contain an express restriction on, or
20 an express prohibition of, the exercise by the co-operative of a
power of the co-operative.
(2) A co-operative contravenes this section if --
(a) it exercises a power contrary to an express restriction on,
or an express prohibition of, the exercise of that power,
25 being a restriction or prohibition contained in the
co-operative's rules; or
(b) the rules of the co-operative contain a provision stating
the objects of the co-operative and the co-operative does
an act otherwise than in pursuance of those objects.
30 (3) An officer of a co-operative who is involved in a contravention
by the co-operative of this section also contravenes this section.
page 31
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 3 Legal capacity and powers
Division 2 Doctrine of ultra vires abolished
s. 41
(4) A person who contravenes this section is not guilty of an
offence.
41. Results of contravention of restriction in rules
(1) The exercise of a power or the doing of an act in contravention
5 of section 40 is not invalid merely because of the contravention.
(2) An act of an officer of a co-operative is not invalid merely
because, by doing the act, the officer contravenes section 40.
(3) The fact that the exercise of a power or the doing of an act
contravenes or would contravene section 40 may be asserted or
10 relied on only in --
(a) a prosecution of a person for an offence against this Act;
or
(b) an application for an order under Part 4 Division 5; or
(c) an application for an injunction under section 485 to
15 restrain the co-operative from entering into an
agreement; or
(d) proceedings, other than an application for an injunction,
by the co-operative, or by a member of the co-operative,
against the present or former officers of the
20 co-operative; or
(e) an application by the Registrar or by a member of the
co-operative for the winding up of the co-operative.
(4) If, but for subsection (3), a court would have power under
section 485 to grant, on the application of a person, an
25 injunction restraining a co-operative or an officer of a
co-operative from engaging in particular conduct constituting a
contravention of section 40, the court may, on the application of
that person, order the co-operative or the officer to pay damages
to that person or any other person.
page 32
[Draft Bill for public comment]
Co-operatives Bill 2006
Legal capacity and powers Part 3
Persons having dealings with co-operatives Division 3
s. 42
Division 3 -- Persons having dealings with co-operatives
42. Assumptions entitled to be made
(1) A person is entitled to make the assumptions in section 43 in
relation to --
5 (a) dealings with a co-operative; and
(b) dealings with a person who has, or purports to have,
directly or indirectly acquired title to property from a
co-operative.
(2) If a person is entitled to assume a matter, the co-operative or
10 anyone referred to in subsection (1)(b) is not entitled to assert in
proceedings in relation to the dealings that the matter is
incorrect.
43. Assumptions
(1) A person may assume that the co-operative's rules have been
15 complied with.
(2) A person may assume that anyone who appears, from
information provided by the co-operative that is available to the
public from the Registrar, to be a director or officer of the
co-operative --
20 (a) has been properly appointed; and
(b) has authority to exercise the powers and perform the
duties customarily exercised or performed by a director
or officer of a similar co-operative.
(3) A person may assume that anyone who is held out by the
25 co-operative to be an officer or agent of the co-operative --
(a) has been properly appointed; and
(b) has authority to exercise the powers and to perform the
duties customarily exercised or performed by that kind
of officer or agent of a similar co-operative.
page 33
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 3 Legal capacity and powers
Division 3 Persons having dealings with co-operatives
s. 44
(4) A person may assume that anyone who is, or may be assumed to
be, an officer or agent of the co-operative who has authority to
issue a document or a certified copy of a document on its behalf
also has authority to warrant that the document is genuine or is a
5 true copy.
(5) A person may assume that a document has been properly
executed by the co-operative if it is signed by 2 people, one of
whom is, or may be assumed to be, a director of the
co-operative, and the other is, or may be assumed to be, a
10 director or officer of the co-operative.
(6) A person may assume that a document has been sealed by the
co-operative if it bears what appears to be an impression of the
co-operative's seal and the sealing of the document appears to
be witnessed by 2 people, one of whom is, or may be assumed
15 to be, a director of the co-operative, and the other is, or may be
assumed to be, a director or officer of the co-operative.
(7) A person may assume that the officers and agents of the
co-operative properly perform their duties to the co-operative.
44. Person who knows or ought to know is not entitled to make
20 assumptions
This Division does not entitle a person to make an assumption,
and does not prevent an assertion being made in relation to an
assumption if --
(a) the person has actual knowledge that the assumption is
25 not correct; or
(b) the person's connection or relationship with the
co-operative is such that the person ought to know that
the assumption is not correct.
page 34
[Draft Bill for public comment]
Co-operatives Bill 2006
Legal capacity and powers Part 3
Persons having dealings with co-operatives Division 3
s. 45
45. Lodgment of documents not to constitute constructive
knowledge
(1) A person is not considered to have knowledge of a
co-operative's rules, any of the contents of a co-operative's
5 rules, a document, the contents of a document, or any
particulars, merely because of either or both of the following --
(a) the rules, the document or the particulars have been
lodged with the Registrar;
(b) the rules, the document or the particulars are referred to
10 in any other document that has been lodged with the
Registrar, or lodged with a person under a previous law
corresponding to a provision of this Act.
(2) Subsection (1) does not apply in relation to a document, or in
relation to the contents of a document, that has been lodged
15 under Part 10 Division 3 to the extent that the document relates
to a charge that is registrable under that Division or law.
(3) Despite subsection (1), a member of a co-operative is taken to
have knowledge of the rules of the co-operative.
46. Effect of fraud
20 (1) A person's entitlement under this Division to make an
assumption is not affected merely by the fact that a person --
(a) has acted or is acting fraudulently in relation to the
dealing or acquisition or purported acquisition of title to
property to which the assumption relates; or
25 (b) has forged a document that appears to have been sealed
on behalf of a co-operative.
(2) A person is not entitled to make an assumption if the person has
actual knowledge of the fraudulent action or forgery referred to
in subsection (1).
page 35
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 3 Legal capacity and powers
Division 4 Authentication and execution of documents and confirmation
of contracts
s. 47
Division 4 -- Authentication and execution of documents and
confirmation of contracts
47. Common seal
A document or proceeding requiring authentication by a
5 co-operative may be authenticated under the common seal of the
co-operative.
48. Official seal
(1) A co-operative may, if authorised by its rules, have, for use in
place of its common seal outside the State where its common
10 seal is kept, one or more official seals, each of which must be a
facsimile of the common seal of the co-operative with the
addition on its face of the name of every place where it is to be
used.
(2) The person affixing an official seal must, in writing signed by
15 the person, certify on the document to which it is affixed the
date on which and the place at which it is affixed.
(3) A document sealed with an official seal is taken to be sealed
with the common seal of the co-operative.
49. Authentication need not be under seal
20 A document or proceeding requiring authentication by a
co-operative may be authenticated by the signature of two
people, one of whom is a director of the co-operative and one of
whom is a director or the secretary of the co-operative and need
not be authenticated under the seal of the co-operative.
25 50. Co-operative may authorise person to execute deed
(1) A co-operative may, by writing under its common seal,
empower a person, either generally or in relation to a specified
matter, as its agent or attorney ("authorised attorney") to
execute deeds on its behalf.
page 36
[Draft Bill for public comment]
Co-operatives Bill 2006
Legal capacity and powers Part 3
Authentication and execution of documents and confirmation Division 4
of contracts
s. 51
(2) A deed signed by an authorised attorney on behalf of the
co-operative and under the seal of the attorney, or under the
appropriate official seal of the co-operative, binds the
co-operative and has effect as if it were under the common seal
5 of the co-operative.
(3) The authority of an authorised attorney, as between the
co-operative and a person dealing with the attorney, continues
during the period, if any, specified in the instrument conferring
the authority or, if no period is specified, until notice of the
10 revocation or termination of the authority of the attorney has
been given to the person dealing with the attorney.
51. Execution under seal
A contract or other document executed, or purporting to have
been executed, under the seal of a co-operative is not invalid
15 merely because a person attesting the affixing of the seal was in
any way, whether directly or indirectly, interested in the
contract or other document or in the matter to which the contract
or other document relates.
52. Contractual formalities
20 (1) So far as concerns the formalities of making, varying or
discharging a contract, a person acting under the express or
implied authority of a co-operative may make, vary or discharge
a contract in the name of, or on behalf of, the co-operative as if
that contract were made, varied or discharged by a natural
25 person.
(2) The making, varying or discharging of a contract under
subsection (1) is effectual in law and binds the co-operative and
other parties to the contract.
(3) This section does not prevent a co-operative from making,
30 varying or discharging a contract under its seal.
page 37
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 3 Legal capacity and powers
Division 5 Pre-registration contracts
s. 53
53. Other requirements as to consent or sanction not affected
This Division does not affect the operation of a law that requires
some consent or sanction to be obtained, or some procedure to
be complied with, in relation to the making, varying or
5 discharging of a contract.
Division 5 -- Pre-registration contracts
54. Contracts before registration
(1) If a person enters into, or purports to enter into, a contract on
behalf of, or for the benefit of, a proposed co-operative, the
10 co-operative becomes bound by the contract and entitled to its
benefit if the co-operative, or a co-operative that is reasonably
identifiable with it, is registered and ratifies the contract --
(a) within a reasonable period after the contract is entered
into; or
15 (b) within any period agreed to by the parties to the
contract.
(2) The person is released from any liability under the
pre-registration contract if the co-operative enters into another
contract in substitution for it --
20 (a) within a reasonable period after the pre-registration
contract is entered into; or
(b) within any period agreed to by the parties to the
pre-registration contract.
(3) The person is liable to pay damages to each other party to the
25 pre-registration contract if the co-operative is not registered, or
the co-operative is registered but does not ratify the contract or
enter into a substitute for it --
(a) within a reasonable period after the contract is entered
into; or
30 (b) within the period agreed to by the parties to the contract.
page 38
[Draft Bill for public comment]
Co-operatives Bill 2006
Legal capacity and powers Part 3
Pre-registration contracts Division 5
s. 55
(4) The maximum amount of damages the person is liable to pay to
a party is the amount the co-operative would be liable to pay to
the party if the co-operative had been registered and had ratified
the contract and then completely failed to perform it.
5 (5) If proceedings are brought to recover damages under
subsection (3) because the co-operative is registered but does
not ratify the pre-registration contract or enter into a substitute
for it, the court may do anything that it thinks just in the
circumstances, including ordering the co-operative --
10 (a) to pay all or part of the damages that the person is liable
to pay; or
(b) to transfer property that the co-operative received
because of the contract to a party to the contract; or
(c) to pay an amount to a party to the contract.
15 (6) If the co-operative ratifies the pre-registration contract but fails
to perform all or part of it, the court may order the person to pay
all or part of the damages that the co-operative is ordered to pay.
55. Person may be released from liability but is not entitled to
indemnity
20 (1) Any of the parties to the pre-registration contract may release
the person who entered into, or purported to enter into, the
contract from any liability in relation to that contract.
(2) The release must be in writing.
(3) The party giving the release is not entitled to recover damages
25 under section 54 from the person.
(4) Despite any rule of law or equity, the person does not have a
right of indemnity against the co-operative in respect of the
person's liability under this Division even if the person was
acting, or purporting to act, as trustee for the co-operative.
page 39
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 3 Legal capacity and powers
Division 5 Pre-registration contracts
s. 56
56. This Division replaces other rights and liabilities
This Division replaces any rights or liabilities anyone would
otherwise have in relation to the pre-registration contract.
page 40
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
General Division 1
s. 57
Part 4 -- Membership
Division 1 -- General
57. Becoming a member
(1) On the registration of a co-operative, the persons who signed the
5 application for registration become members of the
co-operative.
(2) Other persons may be admitted as members of the co-operative
as provided by its rules.
(3) A person under 18 years of age may be admitted as a member of
10 the co-operative unless the rules of the co-operative provide
otherwise.
(4) A corporation is not, merely because it is a corporation,
disqualified from being a member of a co-operative unless the
co-operative's rules provide that corporations are disqualified
15 from being members.
(5) If 2 or more co-operatives merge, the members of the merged
co-operative are --
(a) the members of the merging co-operatives; and
(b) other persons admitted as members of the merged
20 co-operative in accordance with its rules.
58. Members of co-operative group
(1) The members of a co-operative group are --
(a) the co-operatives by which the co-operative group is
formed; and
25 (b) any other co-operative, admitted to membership in
accordance with the rules of the co-operative group; and
(c) any other corporation or other body admitted to
membership in accordance with subsection (2).
page 41
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 1 General
s. 59
(2) A corporation or other body, not being a co-operative, may be
admitted to membership of the co-operative group if --
(a) it is incorporated or registered under any other law,
whether or not a law of this State; and
5 (b) in the opinion of the board of the co-operative group, it
is designed to function in accordance with co-operative
principles; and
(c) it is eligible to be admitted to membership in accordance
with the rules of the co-operative group.
10 59. Qualification for membership and transitional provision
(1) Subject to subsection (3), a person is not qualified to be
admitted to membership of a co-operative unless --
(a) there are reasonable grounds for believing that the
person will be an active member of the co-operative;
15 and
(b) the person is otherwise eligible under the rules of the
co-operative.
(2) The rules of a co-operative must contain provisions that --
(a) impose a duty on all persons who become members to
20 be active members; and
(b) explain the consequences of failing to be or ceasing to
be an active member.
(3) A person who was a member of a corporation immediately
before that corporation became a transferred co-operative is
25 qualified to be admitted to membership of the co-operative
despite the absence of reasonable grounds for believing that the
person will be an active member of the co-operative.
60. Membership may be joint
Membership of a co-operative may be individual and, unless the
30 rules of the co-operative provide otherwise, may be joint.
page 42
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
General Division 1
s. 61
61. Members under 18 years of age
(1) A member of a co-operative is not entitled to avoid any
obligation or liability as a member under any contract, deed or
other document entered into as a member on any ground
5 relating to minority.
(2) A person under 18 years of age is not competent to hold an
office in a co-operative.
(3) A member of a co-operative who is under 18 years of age is not
entitled to vote.
10 (4) This section applies only to natural persons.
62. Representatives of corporations
(1) If a corporation is a member of a co-operative, it may by
instrument served on the co-operative appoint a person to
represent it in relation to its membership.
15 (2) The power to appoint a representative is subject to any
restriction imposed by the rules of the co-operative as to the
entitlement of a person to represent a corporation.
(3) A person is not qualified to be appointed the representative of a
company that is not a listed corporation (within the meaning of
20 the Corporations Act) unless the person is an officer, member or
employee of the company.
63. Notification of shareholders and shareholdings
On the request of the board of directors of the co-operative, a
corporation that is a member of the co-operative must make
25 available for inspection by the board of directors of the
co-operative --
(a) a list of the names of all the shareholders of the
corporation and the number of shares held by each
shareholder; or
page 43
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 1 General
s. 64
(b) in the case of a corporation without share capital, a list
of the members of the corporation.
Penalty: a fine of $2 000.
64. Circumstances in which membership ceases -- all
5 co-operatives
(1) A person ceases to be a member of a co-operative in each of
the following circumstances and as otherwise provided by
this Act --
(a) if the member's membership is cancelled under Part 6;
10 (b) if the member is expelled or resigns in accordance with
the rules of the co-operative;
(c) if --
(i) the member becomes bankrupt; or
(ii) the member's property becomes subject to
15 control under the law relating to bankruptcy,
unless provision is made to the contrary in the rules of
the co-operative;
(d) on death;
(e) if the contract of membership is rescinded on the ground
20 of misrepresentation or mistake;
(f) in the case of a member that is a corporation, if the body
is deregistered.
(2) On the death of a member, the member's estate remains liable
under section 68 as the member until the member's personal
25 representative or some other person is registered in the
member's place.
page 44
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
General Division 1
s. 65
65. Additional circumstances in which membership ceases --
co-operatives with share capital
In the case of a co-operative that has a share capital, in addition
to the circumstances in section 64, a member ceases to be a
5 member in each of the following circumstances --
(a) the member's total share is transferred to another person
in accordance with the rules of the co-operative, and the
transferee is registered as holder in the member's place;
(b) the member's total share is forfeited in accordance with
10 this Act or the rules of the co-operative;
(c) the member's total share is sold by the co-operative
under a power conferred by the rules of the co-operative,
and the purchaser is registered as holder in the
member's place;
15 (d) the member's total share is purchased by the
co-operative in accordance with this Act;
(e) the amount paid up on the member's shares is repaid to
the member in accordance with the rules of the
co-operative.
20 66. Carrying on business with too few members
(1) A person who is a director of a co-operative commits an offence
if the person knowingly allows the co-operative to continue to
carry on business with fewer than the minimum number of
members for more than 28 days after the number of members
25 falls below the minimum number.
Penalty: a fine of $2 000.
(2) Each person who is found guilty of an offence under
subsection (1) is also liable to satisfy all obligations of the
co-operative incurred after the 28 days referred to in
30 subsection (1), and may be sued without any other member
being joined in the action.
page 45
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 2 Rights and liabilities of members
s. 67
(3) The minimum number of members allowed is --
(a) for a co-operative group, 2; or
(b) for any other co-operative, 5, or if a lesser number is
prescribed by the regulations, the prescribed number.
5 (4) The Registrar may, by written notice, extend and further extend
in a particular case the period of 28 days referred to in
subsection (1).
(5) An application for an extension must be made --
(a) in a form approved by the Registrar; and
10 (b) before the period to be extended ends.
Division 2 -- Rights and liabilities of members
67. Rights of membership not exercisable until registered etc.
(1) A member of a co-operative is not entitled to exercise any rights
of membership until --
15 (a) the member's name appears as a member in the register
of members, directors and shares referred to in
section 235(1)(a); and
(b) the member has made a payment to the co-operative for
membership or acquired a share or interest that is
20 provided for in the rules of the co-operative.
(2) The board of a co-operative must ensure that the name of a
person admitted to membership is recorded as a member in the
register of members, directors and shares within 28 days after
the person is admitted to membership.
25 Penalty: a fine of $2 000.
68. Liability of members to co-operative
(1) A member of a co-operative is not, as a member, under any
personal liability to the co-operative, except as provided by this
section.
page 46
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Rights and liabilities of members Division 2
s. 69
(2) A member of a co-operative with a share capital is liable to the
co-operative for the amount, if any, unpaid on the shares held by
the member together with any charges payable by the member
to the co-operative as required by the rules of the co-operative.
5 (3) A member of a co-operative without a share capital is liable to
the co-operative for any charges payable by the member to the
co-operative as required by the rules of the co-operative.
69. Co-operative to make information available to person
intending to become a member
10 (1) The board of a co-operative must give written notice to each
person intending to become a member of the co-operative that
the person may request to either inspect at the co-operative's
nearest office, or be sent --
(a) a consolidated copy of the rules of the co-operative; and
15 (b) a copy of all special resolutions applicable to the
member passed by the members of the co-operative,
except special resolutions providing for an alteration of
the rules of the co-operative; and
(c) a copy of the last annual report of the co-operative under
20 section 240.
(2) If a person who has received notice under this section makes a
request referred to in subsection (1), the co-operative must
comply with that request.
70. Entry fees and regular subscriptions
25 (1) The rules of a co-operative may --
(a) require the payment by members of entry fees and
regular subscriptions; and
(b) provide for the repayment of those fees and
subscriptions on a person ceasing to be a member.
page 47
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 2 Rights and liabilities of members
s. 71
(2) The calculation of the amount of a particular member's regular
subscription may be based on the amount of business the
member does with the co-operative.
(3) A co-operative must give a person intending to become a
5 member written notice of entry fees or regular subscriptions
payable by the member to the co-operative.
(4) A person who becomes a member of a co-operative is not liable
to pay entry fees or regular subscriptions except --
(a) those fees or subscriptions of which the person was
10 given written notice before becoming a member; and
(b) any regular subscriptions that may be imposed by any
subsequent alteration of the rules and of which the
member has been given notice.
71. Members etc. may be required to deal with co-operative
15 (1) The rules of a co-operative may contain provisions that require
a member to have specified dealings with the co-operative for a
fixed period and to enter into a contract for that purpose.
(2) A co-operative may, if authorised by its rules, make a contract
with a member containing provisions that require the member to
20 have specified dealings with the co-operative for a fixed period.
(3) In particular, the provisions of the rules or a contract may
require a member --
(a) to sell products through or to the co-operative; or
(b) to obtain supplies or services through or from the
25 co-operative; or
(c) to pay to the co-operative a stated amount as liquidated
damages for any failure to comply with a requirement
authorised by this section.
(4) An amount required to be paid to the co-operative as liquidated
30 damages is, for the purposes of section 73, a debt payable by the
member to the co-operative.
page 48
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Rights and liabilities of members Division 2
s. 72
(5) A contract authorised by this section is binding on the
co-operative and all other parties even though but for this Act
the contract would be invalid as being in restraint of trade.
(6) Rules authorised by this section are authorised even though, but
5 for this section, the rules might be invalid as being in restraint of
trade.
72. Fines payable by members
(1) A co-operative may impose a fine on a member for an
infringement of the rules of the co-operative if the rules of the
10 co-operative so provide.
(2) A fine imposed under subsection (1) must not exceed the
maximum fine fixed by the rules in accordance with section 99.
(3) A fine must not be imposed unless --
(a) notice of intention to impose the fine and the reason for
15 it has been given to the member; and
(b) the member has been given a reasonable opportunity to
appear before the board in person (with or without
witnesses), or to send to the board a written statement to
show cause why the fine should not be imposed.
20 (4) The co-operative may set off the whole or any part of the fine
against an amount payable to the member for produce delivered
by the member to the co-operative, but no part of the fine is to
be set off against any advance that, in accordance with the rules
of the co-operative, is payable to the member from the
25 co-operative, for produce so delivered.
73. Charge and set off of co-operative
(1) A co-operative has, in relation to a debt payable by a member or
former member to the co-operative, a charge on each of the
following --
30 (a) the share or interest in the capital and the credit balance
and deposits of the member or former member;
page 49
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 2 Rights and liabilities of members
s. 74
(b) any rebate, bonus, dividend or interest payable to the
member or former member;
(c) any entry fees and regular subscriptions required to be
repaid to a member when the member ceases to be a
5 member.
(2) The co-operative may set off any amount paid on account of
that share or other thing, or any amount credited or payable to
the member or former member, in or towards payment of the
debt.
10 (3) The charge created by this section may be enforced by the
appropriation by the co-operative of the thing that is subject to
the charge, but only after at least 7 days notice has been given to
the member or former member.
(4) Any share in respect of which capital has been so appropriated
15 must be cancelled.
74. Repayment of shares on expulsion
(1) When a member is expelled from a co-operative under its rules,
the co-operative must, within one year after the day of
expulsion --
20 (a) repay to the former member an amount (the "repayable
amount") made up of the amount paid up on the shares
held by the member at the day of expulsion, less any
amount owed by the member to the co-operative at the
day of expulsion under the rules of the co-operative or
25 any contract or otherwise; or
(b) apply the repayable amount under subsection (2) if --
(i) the board considers repayment would adversely
affect the financial position of the co-operative;
or
30 (ii) the board and the former member agree.
page 50
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Death of member Division 3
s. 75
(2) The repayable amount may be applied in one of the following
ways --
(a) the co-operative may appropriate the amount as a
donation to the co-operative, but only if the former
5 member consents in writing to the donation;
(b) if the co-operative is a deposit taking co-operative, the
co-operative may apply the amount as a deposit by the
former member with the co-operative, subject to the
requirements of section 131 as to interest on the deposit;
10 (c) the co-operative may issue debentures or co-operative
capital units to the former member in satisfaction of the
amount.
(3) If the balance sheet of the co-operative last issued before the
expulsion of a member of the co-operative disclosed a loss or
15 deficiency, the paid up value of the member's shares may, for
the purposes of calculating the repayable amount, be reduced as
described in subsection (4).
(4) The paid up value of the member's shares may be reduced by an
amount that bears to the amount of the loss or deficiency so
20 disclosed the same proportion as the number of shares held by
the member bore to the total number of shares held by all
members of the co-operative as at the date of expulsion of the
member.
(5) Shares for which capital has been repaid under subsection (1)(a)
25 or applied under subsection (1)(b) must be cancelled.
Division 3 -- Death of member
75. Meaning of "interest"
In this Division --
"interest", of a deceased member in a co-operative, includes --
30 (a) the member's membership; and
(b) any credit balance due to the member; and
page 51
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 3 Death of member
s. 76
(c) any loan from or to or deposit with the co-operative;
and
(d) any surplus arising on the sale by the co-operative as
mortgagee of any property mortgaged by the
5 deceased to the co-operative;
"transfer", of an interest, includes the payment of money.
76. Transfer of share or interest on death of member
Subject to section 163, on the death of a member, the board
must transfer the deceased member's share or interest in the
10 co-operative to --
(a) the personal representative of the deceased member; or
(b) the person that the deceased's personal representative
specifies in an application made to the co-operative
within 3 months after the death of the member.
15 77. Transfer of small shareholdings and interests on death
(1) If the total value of a deceased member's shares or interest in a
co-operative is less than $10 000 (or such other amount as may
be prescribed), the board may, on the basis of such evidence as
it considers sufficient, transfer the shares or interest in
20 accordance with whichever of the following paragraphs is
appropriate --
(a) if the member or person dies testate, to the person who
appears to the board to be entitled to the shares or
interest under the will of the deceased member or
25 person;
(b) if the member or person dies intestate, to any person
who appears to the board to be entitled to obtain a grant
of administration of the estate of the deceased and that
person must then hold the shares or interest on the same
30 trusts as if he or she had obtained that grant.
page 52
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Disputes involving members Division 4
s. 78
(2) A transfer must not be made under this section after evidence
has been produced to the co-operative of the grant of letters of
administration of the estate, or probate of the will, of the
deceased member.
5 78. Value of shares and interests
The value of the shares or interest of a deceased member must
be determined for the purposes of this Division in accordance
with the rules of the co-operative.
79. Co-operative protected
10 Any transfer of property made by the board of a co-operative in
accordance with this Division is valid and effectual against any
demand made on the co-operative by any other person.
Division 4 -- Disputes involving members
80. Grievance procedure
15 (1) The rules of a co-operative must set out a grievance procedure
for dealing with any dispute under the rules --
(a) between a member and another member; and
(b) between a member and the co-operative.
(2) A member may appoint any person to act on behalf of the
20 member in the grievance procedure.
(3) The grievance procedure must allow for natural justice to be
applied.
(4) In this section and section 81 --
"member" includes any person who was a member not more
25 than 6 months before the dispute occurred.
page 53
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 5 Oppressive conduct of affairs
s. 81
81. Application to Supreme Court
(1) The Supreme Court may, on the application of a member of a
co-operative, or a co-operative, make an order declaring and
enforcing --
5 (a) the rights or obligations of members of the co-operative
between themselves; or
(b) the rights or obligations of the co-operative and any
member between themselves.
(2) An order may be made under this section whether or not a right
10 of a proprietary nature is involved and whether or not the
applicant has an interest in the property of the co-operative.
(3) The Supreme Court may refuse to make an order on the
application or may make an order for costs against a party,
whether successful or not, if the Court is of the opinion that --
15 (a) the issue raised in the application is trivial; or
(b) having regard to the importance of the issue, the nature
of the co-operative, any other available method of
resolving the issue, the costs involved, lapse of time,
acquiescence or any other relevant circumstance, it was
20 unreasonable to make the application; or
(c) the unreasonable or improper conduct of a party --
(i) has been responsible for the making of the
application; or
(ii) has added to the cost of the proceedings.
25 Division 5 -- Oppressive conduct of affairs
82. Interpretation
In this Division, a reference to a member of a co-operative
includes, in the case of a co-operative that has a share capital, a
reference to a person to whom a share in the co-operative has
30 been transmitted by will or by operation of law.
page 54
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Oppressive conduct of affairs Division 5
s. 83
83. Application of Division
This Division does not apply in respect of anything done under
Part 6.
84. Who may apply for court order
5 The following persons may apply to the Supreme Court for an
order under this Division --
(a) the Registrar;
(b) a member who believes that the affairs of the
co-operative are being conducted in a way that is --
10 (i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member; or
(ii) contrary to the interests of the members as a
whole;
(c) a member who believes that an act or omission, or a
15 proposed act or omission, by or on behalf of the
co-operative, or a resolution, or a proposed resolution,
of members, was or would be --
(i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member; or
20 (ii) contrary to the interests of the members as a
whole.
85. Orders that the Supreme Court may make
On application under this Division, the Supreme Court may
make any order that it considers appropriate including (without
25 being limited to) one or more of the following orders --
(a) an order that the Registrar appoint an administrator of
the co-operative;
(b) an order that the co-operative be wound up;
(c) an order for regulating the conduct of affairs of the
30 co-operative in the future;
page 55
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 5 Oppressive conduct of affairs
s. 86
(d) an order for the repayment of the member's shares in
accordance with the provisions of this Act for repayment
of share capital;
(e) an order for the purchase of the shares of any member
5 by the co-operative and for the reduction accordingly of
the co-operative's capital;
(f) an order directing the co-operative to institute,
prosecute, defend or discontinue specified proceedings,
or authorising a member or members of the co-operative
10 to institute, prosecute, defend or discontinue specified
proceedings in the name and on behalf of the
co-operative;
(g) an order appointing a receiver or a receiver and manager
of property of the co-operative;
15 (h) an order restraining a person from engaging in specified
conduct or from doing a specified act or thing;
(i) an order directing a co-operative to become registered as
a company under the Corporations Act;
(j) an order requiring a person to do a specified act or thing;
20 (k) an order as to costs.
86. Basis on which Supreme Court makes orders
The Supreme Court may make an order under this Division if it
considers that --
(a) the affairs of a co-operative are being conducted in a
25 way that is --
(i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member (the
"oppressed member"), whether or not in the
capacity of a member; or
30 (ii) contrary to the interests of the members as a
whole;
or
page 56
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Oppressive conduct of affairs Division 5
s. 87
(b) an act or omission, or a proposed act or omission, by or
on behalf of a co-operative, or a resolution, or a
proposed resolution, of members of a co-operative, was
or would be --
5 (i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member (the
"oppressed member") whether or not in the
capacity of a member; or
(ii) contrary to the interests of the members as a
10 whole.
87. Winding up need not be ordered if oppressed members
prejudiced
The Supreme Court need not make an order under this Division
for the winding up of a co-operative if the Court considers that
15 the winding up of the co-operative would unfairly prejudice an
oppressed member.
88. Application of winding up provisions
If an order that a co-operative be wound up is made under this
Division, the provisions of this Act relating to the winding up of
20 co-operatives apply, with any changes that are necessary, as if
the order had been made on an application filed in the Supreme
Court by the co-operative.
89. Changes to rules
(1) If an order under this Division makes an alteration to the rules
25 of a co-operative --
(a) the alteration has effect as if it had been properly made
by special resolution of the co-operative; and
(b) the co-operative must not (despite any other provisions
of this Act) without the leave of the Supreme Court
30 make any further alteration to the rules inconsistent with
the provisions of the order.
page 57
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 90
(2) On receiving a copy of an order altering the rules of a
co-operative the Registrar must register the alteration.
90. Copy of order to be lodged with Registrar
An applicant for an order under this Division must lodge an
5 office copy of the order with the Registrar within 14 days after
it is made.
Penalty: a fine of $1 000.
Division 6 -- Proceedings on behalf of a co-operative by
members and others
10 91. Bringing, or intervening in, proceedings on behalf of a
co-operative
(1) A person may bring proceedings on behalf of a co-operative, or
intervene in proceedings to which a co-operative is a party for
the purpose of taking responsibility on behalf of the
15 co-operative for those proceedings, or for a particular step in
those proceedings, (for example, compromising or settling
them), if --
(a) the person is --
(i) a member, former member, or person entitled to
20 be registered as a member, of the co-operative or
of a related corporation; or
(ii) an officer or former officer of the co-operative;
or
(iii) the Registrar;
25 and
(b) the person is acting with leave granted under section 92.
(2) Proceedings brought on behalf of a co-operative may be brought
in the co-operative's name.
page 58
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Proceedings on behalf of a co-operative by members and Division 6
others
s. 92
92. Applying for and granting leave
(1) A person referred to in section 91(1)(a) may apply to the
Supreme Court for leave to bring, or to intervene in,
proceedings.
5 (2) The Supreme Court may grant the application if it is satisfied
that --
(a) it is probable that the co-operative will not itself bring
the proceedings, or properly take responsibility for
them, or for a step in them; and
10 (b) the applicant is acting in good faith; and
(c) it is in the best interests of the co-operative that the
applicant be granted leave; and
(d) if the applicant is applying for leave to bring
proceedings, there is a serious question to be tried; and
15 (e) either --
(i) at least 14 days before making the application,
the applicant gave written notice to the
co-operative of the intention to apply for leave
and of the reasons for applying; or
20 (ii) it is appropriate to grant leave even if
subparagraph (i) is not satisfied.
93. Substitution of another person for the person granted leave
(1) Any of the following persons may apply to the Supreme Court
for an order that they be substituted for a person to whom leave
25 has been granted under section 92 --
(a) a member, former member, or person entitled to be
registered as a member, of the co-operative or a related
corporation;
(b) an officer, or former officer, of the co-operative;
30 (c) the Registrar.
page 59
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 94
(2) The application may be made whether or not the other person
has already brought the proceedings or made the intervention.
(3) The Supreme Court may make the order if it is satisfied that --
(a) the applicant is acting in good faith; and
5 (b) in all the circumstances, it is appropriate to make the
order.
(4) An order substituting one person for another person has the
effect that --
(a) the grant of leave is taken to have been made in favour
10 of the substituted person; and
(b) if the other person has already brought the proceedings
or intervened, the substituted person is taken to have
brought those proceedings or to have made that
intervention.
15 94. Effect of ratification by members
(1) A ratification or approval of conduct by members of a
co-operative --
(a) does not prevent a person from bringing or intervening
in proceedings with leave under section 92 or from
20 applying for leave under that section; and
(b) does not have the effect that proceedings brought or
intervened in with leave under section 92 must be
decided in favour of the defendant, or that an application
for leave under that section must be refused.
25 (2) The Supreme Court may take into account a ratification or an
approval of the conduct by members of a co-operative in
deciding what order or judgment (including as to damages) to
make in proceedings brought or intervened in with leave under
section 92 or in relation to an application for leave under that
30 section.
page 60
[Draft Bill for public comment]
Co-operatives Bill 2006
Membership Part 4
Proceedings on behalf of a co-operative by members and Division 6
others
s. 95
(3) In taking a ratification or approval into account under
subsection (2), the Supreme Court may have regard to --
(a) how well-informed about the conduct the members were
when deciding whether to ratify or approve that conduct;
5 and
(b) whether the members who ratified or approved the
conduct were acting for proper purposes.
95. Leave to discontinue, compromise or settle proceedings
brought, or intervened in, with leave
10 Proceedings brought or intervened in with leave must not be
discontinued, compromised or settled without the leave of the
Supreme Court.
96. General powers of the Supreme Court
(1) The Supreme Court may make any order, and give any
15 direction, that it thinks just in relation to proceedings brought or
intervened in with leave, or in relation to an application for
leave, including --
(a) interim orders; and
(b) directions about the conduct of the proceedings,
20 including requiring mediation; and
(c) an order directing the co-operative, or an officer of the
co-operative, to do, or not to do, any act; and
(d) an order appointing an independent person to
investigate, and report to the Supreme Court, on --
25 (i) the financial affairs of the co-operative; or
(ii) the facts or circumstances that gave rise to that
cause of action the subject of the proceedings; or
(iii) the costs incurred in the proceedings and the
person granted leave.
30 (2) A person appointed by the Supreme Court under
subsection (1)(d) is entitled, on giving reasonable notice to the
page 61
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 97
co-operative, to inspect and make copies of any books of the
co-operative for any purpose connected with their appointment.
97. Power of Supreme Court to make costs order
At any time, the Supreme Court may, in relation to proceedings
5 brought or intervened in with leave under section 92 or an
application for leave under that section, make any orders it
thinks just about the costs of the person who applied for or was
granted leave, of the co-operative or of any other party to the
proceedings or application, including an order requiring
10 indemnification for costs.
page 62
[Draft Bill for public comment]
Co-operatives Bill 2006
Rules Part 5
s. 98
Part 5 -- Rules
98. Effect of rules
(1) The rules of a co-operative have the effect of a contract under
seal --
5 (a) between the co-operative and each member; and
(b) between the co-operative and each director, the principal
executive officer and the secretary of the co-operative;
and
(c) between a member and each other member.
10 (2) Under the contract, each of those persons agrees to observe and
perform the provisions of the rules as in force for the time being
so far as those provisions apply to that person.
99. Content of rules
(1) The rules of a co-operative must state or otherwise make
15 provision for the matters specified in Schedule 1.
(2) The rules must be divided into paragraphs numbered
consecutively.
(3) The rules may state the objects of the co-operative.
(4) The rules may incorporate any provision of the model rules.
20 (5) The rules may provide for the co-operative to impose a fine,
payable to the co-operative, on a member for an infringement of
the rules.
(6) If the rules provide for the imposition of a fine, the rules must
specify the maximum fine that may be imposed on a member.
25 (7) The maximum fine fixed by the rules must not be more than an
amount prescribed by the regulations as the maximum fine.
(8) The rules may contain other provisions not inconsistent with
this Act.
page 63
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 5 Rules
s. 100
100. Purchase and inspection of copy of rules
(1) A member is entitled to obtain from a co-operative a copy of its
rules on payment of the amount required by the rules of the
co-operative or, if the rules do not prescribe an amount, on
5 payment of $5.
(2) The amount required by the rules must not be more than the fee
prescribed by the regulations for obtaining a copy of the rules
from the Registrar.
(3) A person is entitled to obtain from the Registrar a copy of the
10 rules of a co-operative on payment of the fee prescribed by the
regulations.
101. False copies of rules
(1) A person who gives to a member of a co-operative or to a
person intending or applying to become a member of a
15 co-operative a copy of any rules or any alterations of rules,
other than those which have been duly registered, representing
that they are binding on the members of the co-operative is
guilty of an offence.
Penalty: a fine of $1 000.
20 (2) A person who alters any of the rules of a co-operative after they
have been registered and circulates them representing that they
have been duly registered when they have not been is guilty of
an offence.
Penalty: a fine of $1 000.
25 102. Model rules
(1) The regulations may prescribe model rules.
(2) The model rules may make provision for any matter for which
the rules of a co-operative may make provision.
(3) If the model rules provide for a matter and the rules of a
30 co-operative of the class to which the model rules apply do not
page 64
[Draft Bill for public comment]
Co-operatives Bill 2006
Rules Part 5
s. 103
provide for that matter, the provision of the model rules relating
to that matter is to be taken to be included in the rules of the
co-operative.
103. Rules can only be altered in accordance with this Act
5 The rules of a co-operative cannot be altered except in
accordance with this Act.
104. Approval of alteration of rules
(1) A proposed alteration of the rules of a co-operative must be
approved by the Registrar before the resolution altering the rules
10 is passed by the co-operative or the board of the co-operative.
(2) A draft of the proposed alteration must be submitted to the
Registrar at least 21 days (or a shorter period the Registrar may
allow in a particular case) before --
(a) the notice of the proposed special resolution altering the
15 rules is due to be given to the members by the
co-operative; or
(b) the resolution is due to be passed by the board of the
co-operative.
(3) The proposed alteration submitted under subsection (2) must be
20 accompanied by a written statement specifying the date on
which the notice is due to be given to members or the resolution
is due to be passed by the board, as the case may be.
(4) The proposed alteration must --
(a) be in accordance with section 99; and
25 (b) be in a form that may reasonably be approved; and
(c) be accompanied by a statement setting out the reasons
for the alteration.
(5) The Registrar may --
(a) approve the proposed alteration as submitted; or
page 65
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 5 Rules
s. 105
(b) approve a different alteration to that submitted; or
(c) refuse to approve the proposed alteration.
(6) Subject to subsection (7), the Registrar approves a proposed
alteration by giving written notice of the approval to the
5 co-operative.
(7) The Registrar is taken to have approved a proposed alteration as
submitted to the Registrar unless at least 5 days before the date
specified in the written statement submitted under
subsection (3), the Registrar gives written notice to the
10 co-operative that the Registrar --
(a) has approved a different alteration to that submitted; or
(b) has refused to approve the proposed alteration; or
(c) is still considering the matter.
105. Alteration by special resolution
15 The rules of a co-operative must be altered by special resolution
unless this Act provides otherwise.
106. Alteration by resolution of board
(1) The rules of a co-operative may be altered by a resolution
passed by the board if the alteration does no more than give
20 effect to a requirement, restriction or prohibition imposed under
the authority of this Act.
(2) If the rules of a co-operative are altered under this section, the
co-operative must cause the alteration to be notified in writing
to its members as soon as practicable after the alteration takes
25 effect and in any event not later than the day when notice is
given to the members of the next annual general meeting of the
co-operative after the alteration takes effect.
page 66
[Draft Bill for public comment]
Co-operatives Bill 2006
Rules Part 5
s. 107
107. Alteration does not take effect until registered
(1) An alteration of the rules of a co-operative does not take effect
unless and until it is registered by the Registrar.
(2) An application for registration of an alteration must --
5 (a) be made in a form approved by the Registrar; and
(b) be made within 28 days, or a shorter or longer period
prescribed by the regulations, after the resolution to alter
the rules is passed; and
(c) be accompanied by a consolidated copy of the rules of
10 the co-operative, including the alteration.
(3) The Registrar must register the alteration unless --
(a) the Registrar is satisfied that the alteration is contrary to
this Act; or
(b) the Registrar has other reasonable cause to refuse to
15 register the alteration.
(4) A certificate of registration of an alteration of the rules of a
co-operative given by the Registrar is, in favour of any person
advancing money to the co-operative on the faith of the
certificate or in favour of any guarantor of that advance,
20 evidence that the alteration in the rules was properly made.
108. Appeal against refusal to approve alteration
A co-operative may appeal to the Supreme Court against a
failure of the Registrar to approve an alteration of its rules.
109. Appeal against refusal to register
25 A co-operative may appeal to the Supreme Court against a
failure of the Registrar to register an alteration of its rules.
110. Supreme Court's powers on appeal
The Supreme Court may make any order it considers
appropriate to dispose of an appeal under section 108 or 109.
page 67
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 1 Definitions
s. 111
Part 6 -- Active membership
Division 1 -- Definitions
111. Meaning of "active membership resolution"
In this Part --
5 "active membership resolution" has the meaning given in
section 113(2).
112. What is active membership
For the purposes of this Act, a member of a co-operative is an
active member of the co-operative if the member --
10 (a) uses or supports an activity of, or maintains a
relationship or an arrangement with, the co-operative,
for carrying on a primary activity of the co-operative, in
the way and to the extent that the rules of the
co-operative provide is sufficient to establish active
15 membership; or
(b) maintains any other relationship or arrangement with the
co-operative for carrying on a primary activity of the
co-operative that the regulations provide is sufficient to
establish active membership.
20 113. What are active membership provisions and resolutions
(1) Active membership provisions in the rules of a co-operative are
provisions in the rules that state --
(a) which of the activities of the co-operative are the
primary activities of the co-operative; and
25 (b) the way in which and the extent to which a member of
the co-operative must use or support an activity of, or
maintain a relationship or an arrangement with, the
co-operative for carrying on a primary activity of the
co-operative, in order to establish active membership of
30 the co-operative.
page 68
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Rules to contain active membership provisions Division 2
s. 114
(2) An active membership resolution is a resolution that would, if
given effect to, make or amend active membership provisions in
the rules of a co-operative.
Division 2 -- Rules to contain active membership provisions
5 114. Number of primary activities required
A co-operative must have at least one primary activity.
115. Rules to contain active membership provisions
The board of a co-operative must ensure that the rules of the
co-operative contain active membership provisions in
10 accordance with this Part.
116. Factors and considerations for determining primary
activities etc.
(1) The board of a co-operative must ensure that the relevant factors
and considerations are taken into account in deciding --
15 (a) which of the activities of a co-operative are its primary
activities; and
(b) the way and extent to which a member is required to use
or support an activity of, or maintain a relationship or an
arrangement with, a co-operative, for carrying on a
20 primary activity of the co-operative, in order to establish
active membership of the co-operative.
(2) The relevant factors and considerations are --
(a) the primary activity or, if more than one, the primary
activities taken together must form the basic purpose for
25 which the co-operative exists and a significant
contribution to the business of the co-operative; and
(b) the way and extent of the required utilisation, support,
relationship or arrangement should be reasonable when
considered in relation to the activities of the
30 co-operative as a whole; and
page 69
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 2 Rules to contain active membership provisions
s. 117
(c) any other factors and considerations that are prescribed
by the regulations.
(3) The regulations may --
(a) provide for the matters to be taken into account in
5 deciding whether an activity makes a significant
contribution to the business of the co-operative; and
(b) specify minimum percentages of turnover, minimum
amounts of income or minimum amounts of business
necessary to constitute that significant contribution.
10 (4) Nothing in this section limits the right of active members other
than the board of the co-operative to propose an active
membership resolution.
117. Active membership provisions -- trading co-operatives
The only active membership provisions that are permitted to be
15 contained in the rules of a trading co-operative are --
(a) provisions requiring a member to use an activity of the
co-operative for carrying on a primary activity specified
in the provisions to establish active membership; and
(b) any other active membership provisions that the
20 Registrar may approve.
118. Regular subscription -- active membership of non-trading
co-operative
(1) Active membership provisions for a non-trading co-operative
may provide that the payment of a regular subscription by a
25 member of the co-operative, to be applied to a primary activity
of the co-operative, is sufficient to establish active membership
of the co-operative.
(2) A member of a co-operative who would, on payment of the
subscription, be an active member of a co-operative is taken to
30 be an active member until the subscription is payable.
page 70
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Active membership resolutions Division 3
s. 119
Division 3 -- Active membership resolutions
119. Notice of meeting
(1) At least 21 days notice must be given to members of a
co-operative of a meeting at which an active membership
5 resolution is to be proposed.
(2) The notice must, in addition to the other matters required under
this Act to be stated --
(a) state whether the member is eligible to vote on the
resolution; and
10 (b) contain the full text of the proposed resolution; and
(c) contain a copy of section 123.
(3) If the notice to a member states that he or she is not eligible to
vote on a resolution, the member may, after endeavouring to
settle the matter with the co-operative, apply to the Registrar for
15 a determination as to the member's eligibility.
(4) The Registrar may determine the matter, on the information
available to the Registrar, by direction in writing to the
co-operative and the member.
(5) The Registrar's determination as to eligibility has effect but
20 only if given before the meeting concerned is due to be held.
120. Eligibility to vote on active membership resolution
The only members of a co-operative who are eligible to vote on
an active membership resolution when the rules do not contain
active membership provisions are the members who would be
25 active members if the resolution had already taken effect.
page 71
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 121
121. Eligibility of directors to vote on proposal at board meeting
If the board of a co-operative is meeting to consider a proposal
to submit an active membership resolution to a meeting of the
co-operative --
5 (a) subject to paragraph (b), a director is only eligible to
vote on the proposal if he or she would be eligible to
vote on the resolution at the meeting of the co-operative;
or
(b) if 2 directors or less, whether or not they are present at
10 the meeting of the board, would be eligible to vote on
the resolution at the meeting of the co-operative, all the
directors are eligible to vote on that proposal at the
meeting of the board.
122. Other entitlements of members not affected
15 A provision of this Division that renders a member of a
co-operative ineligible to vote on a resolution does not affect
any other right, entitlement, obligation or duty of the member as
a member.
Division 4 -- Cancellation of membership of inactive or
20 missing members
123. Cancellation of membership of inactive or missing member
and transitional provision
(1) In this section --
"required period", in relation to a co-operative, means --
25 (a) 3 years; or
(b) a shorter period if specified in the rules of the
co-operative.
page 72
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 124
(2) Unless this subsection does not apply because of subsection (3),
the board of a co-operative must declare the membership of a
member cancelled if --
(a) the whereabouts of the member are not presently known
5 to the co-operative and have not been known to the
co-operative for at least the required period before that
time; or
(b) the member is not presently an active member of the
co-operative and has not been an active member of the
10 co-operative at any time during the required period
immediately before that time.
(3) Subsection (2) applies to a member only if he or she was a
member of the co-operative throughout the required period.
(4) Subsection (2)(b) does not apply to a transferred co-operative
15 until a period of 3 years has passed since the co-operative was
registered under this Act.
(5) Whether a member was an active member at a particular time in
the past is to be decided by reference to the active membership
provisions in force at that time.
20 (6) The board's declaration under this section has the effect of
cancelling the membership concerned.
(7) A person may apply to the Supreme Court for an order under
section 129 in relation to the cancellation of the person's
membership under this section.
25 124. Share to be forfeited if membership cancelled
(1) If a co-operative has a share capital, the board of the
co-operative must declare the shares of a member to be forfeited
at the same time as the member's membership is cancelled
under section 123.
page 73
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 125
(2) The board's declaration has the effect of forfeiting the shares
concerned.
(3) Nothing in this section affects the operation of section 130.
125. Failure to cancel membership -- offence by director
5 If the board of a co-operative fails to cancel the membership of
a member as required by this Part, a director of the co-operative
who did not use all due diligence to prevent the failure commits
an offence.
Penalty: a fine of $2 000.
10 126. Deferral of forfeiture by board
(1) The board of a co-operative may by resolution defer
cancellation of a member's membership for a period of up to
12 months (the "deferral period") --
(a) if the board has reasonable grounds to believe that a
15 member has ceased to be an active member because of
unusual circumstances that prevent the member
fulfilling his or her active membership obligations; or
(b) if --
(i) the board thinks that during the deferral period
20 an active membership resolution may be put to
the members of the co-operative; and
(ii) the effect of the resolution would be relevant to
the question of whether the member is an active
member.
25 (2) The board of the co-operative must review the resolution to
defer within the deferral period to determine if a further
resolution should be made under subsection (1).
page 74
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 127
127. Cancellation of membership prohibited in certain
circumstances
Unless the regulations otherwise provide, the board of a
co-operative must not declare the membership of a member to
5 be cancelled under this Part --
(a) if the co-operative is insolvent; or
(b) if the co-operative is under administration under the
Corporations Act Part 5.3A as applying under this Act;
or
10 (c) if a compromise or an arrangement is being
administered in relation to the co-operative; or
(d) if the co-operative is in the course of being wound-up;
or
(e) if an appointment of a receiver, whether or not a receiver
15 and manager, of any property of the co-operative is in
force; or
(f) if the co-operative has, for the purposes of being
registered as a company under the Corporations Act,
lodged with the Registrar a copy of the entry made in
20 the minute book of the co-operative under section 190;
or
(g) in other circumstances as may be prescribed by the
regulations.
128. Notice of intention to cancel membership
25 (1) Unless subsection (2) applies, the board of a co-operative must
ensure that not less than 28 days notice of its intention to
declare the membership of a member to be cancelled is given to
the member.
(2) Notice is not required to be given under this section if --
30 (a) the member's whereabouts are unknown to the
co-operative; and
page 75
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 129
(b) the amount required to be repaid to the member in
relation to the cancelled membership, whether because
of the cancellation of shares or otherwise, does not
exceed the amount prescribed by the regulations, or if an
5 amount is not prescribed, $50.
129. Order of Supreme Court against cancellation
(1) If the Supreme Court is satisfied that the cancellation of a
member's membership under section 123 was or would be
unreasonable, the Court may by order direct that the
10 membership should not have been cancelled or should not be
cancelled.
(2) While an order is in force under this section --
(a) the membership concerned is not required to be
cancelled and any shareholding of the member is not
15 required to be forfeited; and
(b) the person whose membership was cancelled is entitled
to be reinstated as a member of the co-operative with all
the rights and entitlements, including any shareholding,
attaching to or arising from the former membership.
20 (3) Reinstatement of a member under this section is to be effected
in accordance with the directions of the Supreme Court.
130. Repayment of amounts due because of cancelled
membership
(1) If the membership of a member of a co-operative is cancelled
25 under this Part, the co-operative must, within 12 months after
the date of cancellation --
(a) repay to the former member an amount (the "repayable
amount") made up of the amount paid up on the shares
forfeited by the member at the time of cancellation less
30 any amount owed by the member to the co-operative at
that time under the rules of the co-operative or any
contract or otherwise; or
page 76
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 130
(b) apply the repayable amount under subsection (2) if --
(i) the board considers that repayment would
adversely affect the financial position of the
co-operative; or
5 (ii) the board and the former member agree;
or
(c) in the case of a transferred co-operative the rules of
which state how to calculate the amount owing to a
former member at the time of cancellation of
10 membership, repay to the former member an amount in
accordance with those rules.
(2) The repayable amount may be applied in one of the following
ways --
(a) if the co-operative is a deposit-taking co-operative, the
15 co-operative may apply the amount as a deposit by the
former member with the co-operative, subject to the
requirements of section 131 as to interest on the deposit;
(b) the co-operative may issue debentures or co-operative
capital units to the former member in satisfaction of the
20 amount;
(c) the co-operative may appropriate the amount as a
donation to the co-operative, but only if the former
member consents in writing to the donation.
(3) If the balance sheet of the co-operative last issued before the
25 cancellation of a member's membership disclosed a loss or
deficiency, the paid up value of the member's shares may, for
the purposes of calculating the repayable amount, be reduced as
described in subsection (4).
(4) The paid up value of the member's shares may be reduced by an
30 amount that bears to the amount of the loss or deficiency so
disclosed the same proportion as the number of shares held by
the member bore to the total number of shares held by all
members of the co-operative at the time of cancellation.
page 77
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 131
(5) If the former member is subsequently readmitted to
membership, any amount held by the co-operative under this
section must, if the member so requests, be applied towards the
cost of admission to membership, including any subscription for
5 share capital.
(6) If --
(a) the co-operative cannot, after taking all reasonable
action, find the former member; and
(b) the amount otherwise required to be paid under this
10 section is less than the amount prescribed by the
regulations, or if an amount is not prescribed, $50,
the co-operative may retain that amount.
131. Interest on deposits, debentures and co-operative capital
units
15 (1) This section applies when --
(a) the amount payable to a former member under
section 74 or 130 is applied as a deposit with the
co-operative; or
(b) the co-operative allots or issues debentures or
20 co-operative capital units to the former member in
satisfaction of that amount.
(2) The deposit, debenture or co-operative capital unit bears interest
during any period --
(a) in the case of a co-operative with share capital --
25 (i) at the rate, or if there is more than one rate, at the
higher or highest rate, of dividend payable for
that period on the share capital of the
co-operative; or
(ii) if the rate of dividend payable for that period has
30 not been determined, at the rate, or the higher or
highest rate, payable for the immediately
page 78
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 132
preceding period for which a rate has been
decided; or
(iii) if a rate of dividend has never been determined
in relation to the share capital of the
5 co-operative, at the rate that the board of the
co-operative considers reasonable;
or
(b) in the case of a co-operative without share capital, at the
rate that the board of the co-operative considers
10 reasonable; or
(c) if the rules provide for a rate to be payable that is higher
than the rate applicable under paragraph (a) or (b), at
that higher rate.
(3) A former member may agree to the rate of interest being less
15 than that which would otherwise be payable under this section
and may agree to no interest being paid.
(4) The following provisions of the Corporations Act, as applied by
section 255 of this Act, do not apply to an allotment or issue of
debentures under this section --
20 (a) Chapter 2L;
(b) Chapter 6D.
132. Repayment of deposits, and redemption of debentures and
co-operative capital units
(1) A deposit, debenture or co-operative capital unit to which an
25 amount payable to a former member is applied under this
Division or section 74(2) is to be repaid or redeemed, as the
case may be, as soon as repayment or redemption would not, in
the opinion of the board, adversely affect the financial position
of the co-operative.
30 (2) The deposit, debenture or co-operative capital unit must in any
case be repaid or redeemed within 10 years, or within any
page 79
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 5 Entitlements of former members of trading co-operatives
s. 133
shorter period that the rules of the co-operative may require,
after cancellation of the member's membership.
133. Register of cancelled memberships
A co-operative must keep a register stating the particulars, as
5 prescribed by the regulations, of persons whose membership has
been cancelled under this Part.
Division 5 -- Entitlements of former members of
trading co-operatives
134. Application of Division
10 This Division only applies to trading co-operatives.
135. Former shareholders to be taken to be shareholders for
certain purposes
(1) Even though a person's shares in a co-operative have been
forfeited under this Part, the person is to be taken to be the
15 holder of shares in the co-operative (the same in all respects as
those that were forfeited) for the following purposes --
(a) the entitlements of a shareholder in relation to the
purchase of shares in the co-operative pursuant to an
offer described in section 294(a), (b) or (c) or the
20 purchase of all the shares in the co-operative, if the offer
or purchase occurs within 2 years after the person's
shares were forfeited;
(b) the entitlement of a shareholder when the co-operative
becomes registered as a company if the relevant special
25 resolution under section 311 is passed within 2 years
after the person's shares were forfeited;
(c) the entitlement of a shareholder to a distribution of
surplus in a winding up of the co-operative that
commences within 2 years after the person's shares were
30 forfeited.
page 80
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Entitlements of former members of trading co-operatives Division 5
s. 136
(2) Subsection (1)(a) does not apply to --
(a) an offer described in section 294(a) or (c) that is made
by another co-operative; or
(b) the purchase of all the shares in the co-operative by
5 another co-operative.
(3) Subsection (1)(c) does not apply if the winding up is for the
purposes of a merger under Part 12 Division 1.
(4) For the removal of doubt, it is declared that the entitlement
under subsection (1)(a) of a person whose shares have been
10 forfeited does not include an entitlement to vote on any matter.
(5) This section does not apply to a forfeited shareholding in a
co-operative if section 136 operates to require that forfeited
shareholding to be regarded as a forfeited shareholding in
another co-operative.
15 136. Entitlements of former shareholders on mergers etc.
(1) This section applies when a person's shares in a co-operative
(the "original co-operative") are forfeited under this Part and
within 2 years after that forfeiture --
(a) the original co-operative becomes a subsidiary of
20 another co-operative (the "new co-operative"); or
(b) another co-operative (the "new co-operative") is
created as a result of a merger under Part 12 Division 1
involving the original co-operative; or
(c) the engagements of the original co-operative are
25 transferred to another co-operative (the "new
co-operative") under Part 12 Division 1.
(2) A person referred to in subsection (1) is, for the purposes of the
operation of section 135, and the further operation of this
section, taken to have held shares in the new co-operative and as
30 having had those shares in the new co-operative forfeited under
this Part when the person's shares in the original co-operative
were forfeited.
page 81
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 5 Entitlements of former members of trading co-operatives
s. 137
(3) The extent of the forfeited shareholding in the new co-operative
is determined as follows --
(a) if the entitlement of active members of the original
co-operative in the circumstances concerned is solely an
5 entitlement to be allotted shares in the new co-operative,
the forfeited shareholding in the new co-operative is the
shareholding to which the person would have been
entitled had the person's shares in the original
co-operative not been forfeited;
10 (b) in any other case, the forfeited shareholding in the new
co-operative is the shareholding that is the same in all
respects as the forfeited shareholding in the original
co-operative.
(4) The determination under subsection (3)(a) of the person's
15 shareholding in the new co-operative must be made --
(a) solely on the basis of the person's shareholding in the
original co-operative when the shares were forfeited or,
in a further operation of this section in respect of the
person, when the person was first to be regarded as
20 having a forfeited shareholding in the original
co-operative; and
(b) without regard to any additional shareholding in the
original co-operative to which the person would have
become entitled had the shares not been forfeited,
25 whether as a result of any bonus share issue or
otherwise.
137. Set off of amounts repaid etc. on forfeited shares
(1) If a person has an entitlement because of the operation of
section 136, the entitlement operates to end any liability of the
30 co-operative --
(a) to repay to the person under section 130 any amount for
the forfeited shares concerned; or
page 82
[Draft Bill for public comment]
Co-operatives Bill 2006
Active membership Part 6
Entitlements of former members of trading co-operatives Division 5
s. 138
(b) in respect of a deposit held by the co-operative, or
debentures allotted or issued to the person, or
co-operative capital units issued under section 130 for
the forfeited shares concerned, except a liability to pay
5 interest that is payable but unpaid.
(2) If an amount has been repaid to a person under section 130
or 132, the amount repaid is to be set off against any entitlement
of the person under section 135 for the forfeited shares
concerned.
10 (3) If the amount repaid cannot be set off against the entitlement
because the entitlement is not, or is only partly, an entitlement
to money, the entitlement is lost unless the person pays to the
co-operative the amount repaid to the person and does so within
the period required under subsection (4).
15 (4) If the circumstances referred to in subsection (3) arise, the
co-operative concerned must --
(a) give written notice of the matter by post to the person
concerned at the person's address last known to the
co-operative, specifying a period of not less than
20 28 days after the notice is given during which any
amount repaid must be paid to the co-operative; and
(b) publish a general notice to that effect in a newspaper
circulating generally in the district in which the
registered office of the co-operative is situated.
25 138. Entitlement to distribution from reserves
A person whose membership of a co-operative has been
cancelled under this Part is taken to still be a member for the
purposes of any distribution from reserves of the co-operative
that takes place within 2 years after the person's membership
30 was cancelled.
page 83
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 6 Active membership
Division 5 Entitlements of former members of trading co-operatives
s. 139
139. Regulations may exempt co-operatives from provisions
The regulations may exempt a co-operative from a provision of
this Division.
page 84
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Nature of share Division 1
s. 140
Part 7 -- Shares
Division 1 -- Nature of share
140. Nature of share in co-operative
(1) A share or other interest in a co-operative --
5 (a) is personal property; and
(b) is transferable or transmissible as provided by this Act
and the rules of the co-operative; and
(c) is, subject to the rules of the co-operative, capable of
devolution by will or by operation of law.
10 (2) Subject to subsection (1) --
(a) the laws applying to ownership of and dealing with
personal property apply to a share or other interest of a
member in a co-operative as they apply to other
property; and
15 (b) equitable interests in respect of a share or other interest
of a member in a co-operative may be created, dealt with
and enforced as in the case of other personal property.
Division 2 -- Disclosure
141. Disclosure to intending shareholders in trading co-operative
20 (1) The board of a trading co-operative must give a person who
intends to acquire shares in the co-operative and is not already a
shareholder in the co-operative a current disclosure statement
that --
(a) has been approved by the Registrar under section 16(5);
25 or
(b) complies with section 142 and has been lodged by the
co-operative with the Registrar.
page 85
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 2 Disclosure
s. 142
(2) The disclosure statement must be given before the person
becomes bound to acquire the shares.
(3) The disclosure statement is in addition to any information
required to be provided to the person under Part 4.
5 (4) A disclosure statement is current until whichever of the
following happens first after the statement is prepared --
(a) a change in the rights or liabilities attaching to any class
of share in the co-operative;
(b) a significant change in the financial position or
10 prospects of the co-operative;
(c) any of the next financial, director's or auditor's reports
required to be prepared under section 230 become
available.
(5) If a disclosure statement stops being a current disclosure
15 statement because of a change referred to in subsection (4)(a)
or (b), the co-operative must, within 14 days after the change --
(a) give the Registrar written notice that the disclosure
statement is no longer current because of a change
referred to in subsection (4)(a) or (b), as the case may
20 be; or
(b) file a current disclosure statement with the Registrar that
complies with section 142.
142. Content of disclosure statement to intending shareholders
(1) A disclosure statement given to a person under section 141(1)
25 must contain --
(a) a statement of the rights and liabilities attaching to
shares; and
(b) a statement that the person may request to either inspect
at the co-operative's nearest office, or be sent --
30 (i) the last annual report of the co-operative under
section 240(2); and
page 86
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Issues of shares Division 3
s. 143
(ii) any other relevant information about the
financial position and prospects of the
co-operative if there has been a significant
change since the date of the last annual report;
5 and
(c) any other information the Registrar directs.
(2) If a person who has received a disclosure statement makes a
request under subsection (1)(b), the co-operative must comply
with that request.
10 143. Exemptions for disclosure statements
(1) The Registrar may, by order published in the Gazette, exempt
the board of a trading co-operative, or the boards of a class of
trading co-operatives from a requirement under section 141
or 142.
15 (2) An exemption under subsection (1) may be given only if the
Registrar is satisfied that compliance with the requirement
would be inappropriate in the circumstances or would impose an
unreasonable burden.
Division 3 -- Issues of shares
20 144. Shares -- general
(1) The share capital of a co-operative varies in amount according
to the nominal value of shares from time to time subscribed.
(2) Shares are to be of a fixed amount which is to be specified in
the rules of the co-operative.
25 (3) A co-operative may have more than one class of shares
provided the shareholding and the rights of shareholders comply
with the co-operative principles.
(4) Subject to this Part and Part 4, shares must not be issued to a
non-member.
page 87
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 3 Issues of shares
s. 145
145. Application of Corporations Act for particular share
subscriptions
(1) If subsection (2) applies to shares of a co-operative, the shares
are declared to be applied Corporations legislation matters for
5 the Corporations (Ancillary Provisions) Act 2001 Part 3 in
relation to the Corporations Act sections 716(2), 722, 723(2),
724(1)(a) and (2)(a) and 734, subject to the following
modifications --
(a) the provisions apply as if a co-operative were a
10 company;
(b) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
(c) a reference in the provisions to a disclosure document is
to be read as a reference to a disclosure statement, of
15 any type, under this Act;
(d) a reference in the provisions to securities is to be read as
a reference to shares;
(e) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
20 that are prescribed by the regulations.
(2) Shares in a co-operative are subject to the declaration under
subsection (1) if --
(a) the shares are offered to persons who are not
shareholders in the co-operative; or
25 (b) the invitation is made to persons who are not
shareholders in the co-operative.
146. Minimum paid up amount
(1) A share in a co-operative other than a transferred co-operative
must not be allotted unless at least 10% of the nominal value of
30 the share has been paid.
page 88
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Issues of shares Division 3
s. 147
(2) Any balance unpaid for shares at the time of allotment must be
paid in a way specified in the rules of the co-operative or
permitted by this Act.
(3) This section does not apply to a bonus share issued under
5 section 151 or 276.
147. Shares not to be issued at a discount
A co-operative must not issue shares at a discount.
148. Issue of shares at a premium
(1) A trading co-operative may issue shares at a premium.
10 (2) A premium may be in the form of cash or other valuable
consideration.
(3) If a trading co-operative issues shares for which it receives a
premium, an amount equal to the total amount or value of the
premiums on the shares must be transferred to a share premium
15 account.
(4) The share premium account is to be treated as paid-up share
capital of the trading co-operative and may be applied in any
one or more of the following ways --
(a) in paying up unissued shares to be issued to members of
20 the co-operative as fully paid bonus shares;
(b) in paying up, in whole or in part, the balance unpaid on
shares previously issued to members of the co-operative;
(c) in the payment of dividends, if those dividends are
satisfied by the issue of shares to members of the
25 co-operative;
(d) in writing off the expenses incurred in establishing the
co-operative;
(e) in providing for the premium payable on redemption of
shares, debentures or co-operative capital units.
page 89
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 3 Issues of shares
s. 149
149. Joint ownership of shares
A share may be held by 2 or more persons jointly, unless the
rules of the co-operative provide otherwise.
150. Members may be required to take up additional shares
5 (1) If authorised by the rules of the co-operative, the board of a
trading co-operative may require a member to take up or
subscribe for additional shares under a proposal approved by a
special resolution of the co-operative.
(2) The board of a trading co-operative may deduct amounts in
10 payment for additional shares from money payable to members
for dealings with the co-operative, under a proposal approved
by a special resolution of the co-operative.
(3) A proposal to require a member to take up or subscribe for
additional shares must --
15 (a) be accompanied by a disclosure statement, approved by
the Registrar, that explains the purpose for which the
funds raised by the issue of the additional shares are to
be used; and
(b) clearly show the total number of additional shares to be
20 issued and the basis on which the shares are to be
apportioned among members; and
(c) be accompanied by a statement informing the member
that the member may inform the board by notice on or
before the date specified in the statement, being a date
25 before the passing of the special resolution, that the
member resigns on the passing of the special resolution.
(4) A proposal to deduct amounts in payment for additional shares
from amounts payable to members for dealings with the trading
co-operative must clearly show --
30 (a) the basis on which the deductions are to be made; and
(b) the time and way of making those deductions.
page 90
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Issues of shares Division 3
s. 151
(5) A proposal approved under this section is binding on --
(a) all members of the trading co-operative at the date of the
passing of the special resolution, other than a member
who has given a notice of resignation in accordance with
5 subsection (3)(c); and
(b) all persons who become members of the trading
co-operative after that date and before the total number
of shares to be issued under the proposal has been
issued.
10 (6) Sections 16 (except subsection (3)) and 29 apply to the approval
of a disclosure statement under this section with any necessary
changes and in particular as if any reference in section 16 to a
formation meeting were a reference to the special resolution.
(7) This section does not apply to the issue of bonus shares to a
15 member under section 276(2).
151. Bonus share issues
(1) In addition to section 276(2) the rules of a trading co-operative
may authorise the issue of bonus shares to members of the
co-operative if the assets of the co-operative --
20 (a) have been sold at a profit; or
(b) have been revalued at a greater value than that disclosed
before the revaluation in the books of the co-operative.
(2) This section does not apply if the assets were acquired for resale
at a profit.
25 152. Restrictions on bonus shares
Bonus shares issued under section 151 may be issued in
accordance with the rules of the co-operative, subject to the
following restrictions --
(a) each issue must have been approved by a special
30 resolution of the co-operative;
page 91
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 3 Issues of shares
s. 153
(b) they are to be issued as fully paid up shares with no
payment required to be made by a member of the
co-operative to whom they are issued;
(c) they are to be issued only for shares of the same class of
5 shares that are fully paid up as at the date of issue of the
bonus shares;
(d) the total nominal value of bonus shares issued by a
co-operative in any one year must not be more than
20%, or another percentage prescribed by the
10 regulations, of the nominal value of the issued share
capital of the co-operative immediately before the date
of issue of the bonus shares.
153. Notice about bonus shares
Notice of the meeting or postal ballot at which a resolution is to
15 be proposed as a special resolution for the purpose of approving
a bonus share issue must be accompanied by --
(a) a statement of the value of the assets concerned as
disclosed in the books of the co-operative before the sale
or revaluation; and
20 (b) if the issue arises from, or partly from, a sale of assets, a
statement of the price for which the assets were sold;
and
(c) if the issue arises from, or partly from, a revaluation of
assets, a certificate of value of the assets, being a
25 certificate given in relation to a valuation made not more
than 12 months before the date of the notice by a person
prescribed by the regulations or a person having
qualifications prescribed by the regulations; and
(d) particulars of acquisitions of shares in the co-operative
30 made within the 3 years immediately preceding the date
of the notice by or on behalf of each of its directors and
his or her spouse and the father, mother, children,
page 92
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Beneficial and non-beneficial interest in shares Division 4
s. 154
brothers and sisters of each such director and spouse;
and
(e) a certificate signed by 2 directors of the co-operative
stating that to the best of their knowledge and belief the
5 issue of bonus shares would not be imprudent and that
no circumstances are known to them as to why the issue
should not take place.
Division 4 -- Beneficial and non-beneficial interest in shares
154. Direction to disclose
10 The board of a co-operative may direct a person to disclose
matters as described in section 155 if the person is --
(a) a member of the co-operative; or
(b) a person named in a disclosure made in response to a
previous direction under this section as having a relevant
15 interest in, or having given instructions about, shares in
the co-operative.
155. Disclosure by member of relevant interests and instructions
(1) A person given a direction under section 154 must, unless
subsection (2) applies, disclose to the board --
20 (a) full details of the person's relevant interest in the shares
of the co-operative (the "relevant shares") and of the
circumstances that gave rise to the interest; and
(b) the name and address of each other person who has a
relevant interest in the relevant shares together with full
25 details of --
(i) the nature and extent of the interest; and
(ii) the circumstances that gave rise to the other
person's interest;
and
page 93
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 4 Beneficial and non-beneficial interest in shares
s. 156
(c) the name and address of each person who has given the
person instructions about --
(i) the acquisition or disposal of the shares; or
(ii) the exercise of any voting or other rights attached
5 to the shares; or
(iii) any other matter relating to the shares,
together with full details of those instructions, including
the date or dates on which they were given.
Penalty: a fine of $3 000.
10 (2) A matter referred to in subsection (1)(b) or (c) need only be
disclosed to the extent to which the matter is ascertainable by
the person required to make the disclosure.
(3) The disclosure must be made within the period of 5 days after
the person is given the direction, unless within that period the
15 person applies in writing to the Registrar for an exemption from
compliance with the direction.
(4) The Registrar may, in writing, exempt a person from complying
with a direction if the Registrar believes the direction is
unjustified.
20 (5) If the Registrar refuses to give an exemption under
subsection (4), the disclosure required by the direction must be
made within the period of 5 days after the person receives
written notice of that refusal.
(6) A board that receives information from a person acting on a
25 direction given to the person by the board must pay to the
person the fee, if any, prescribed by the regulations.
156. Registration as trustee etc. on death of owner of shares
(1) A trustee, executor or administrator of the estate of a dead
person who was the registered holder of a share in a
30 co-operative may be registered as the holder of the share as
trustee, executor or administrator of that estate.
page 94
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Beneficial and non-beneficial interest in shares Division 4
s. 157
(2) A trustee, executor or administrator of the estate of a dead
person who was entitled in equity to a share in a co-operative
may, with the consent of the co-operative and of the registered
holder of the share, be registered as the holder of the share as
5 trustee, executor or administrator of that estate.
157. Registration as administrator of estate on incapacity of
shareholder
(1) This section applies to a person (the "appointed person") who
is appointed under a law of a State or Territory relating to the
10 administration of the estates of persons who, through mental or
physical infirmity, are incapable of managing their affairs, to
administer the estate of another person (the "incapable
person").
(2) If the incapable person is the registered holder of a share in a
15 co-operative, the appointed person may be registered as the
holder of that share as administrator of the estate of the
incapable person.
(3) If the incapable person is entitled in equity to a share in a
co-operative, the appointed person may, with the consent of the
20 co-operative and of the registered holder of that share, be
registered as the holder of the share as administrator of the
estate of the incapable person.
158. Registration as Official Trustee in Bankruptcy
(1) This section applies when a share in a co-operative that is the
25 property of a bankrupt vests by force of the Commonwealth
Bankruptcy Act 1966 in the Official Trustee in Bankruptcy.
(2) If the bankrupt is the registered holder of the share, the Official
Trustee may be registered as the holder of the share as the
Official Trustee in Bankruptcy.
30 (3) If the bankrupt is entitled in equity to the share, the Official
Trustee may, with the consent of the co-operative and of the
page 95
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 5 Sale or transfer of shares
s. 159
registered holder of the share, be registered as the holder of the
share as the Official Trustee in Bankruptcy.
159. Liabilities of person registered as trustee or administrator
(1) A person registered under section 156, 157 or 158 is, while so
5 registered, subject to the same liabilities in relation to the share
as those to which the person would have been subject if the
share had remained, or had been, registered in the name of the
dead person, the incapable person or the bankrupt.
(2) The person registered is subject to no other liabilities in relation
10 to the share.
160. Notice of trusts in register of members
Shares held by a trustee under a particular trust may, with the
consent of the co-operative, be marked in the register of
members, directors and shares referred to in section 235(1)(a) in
15 a way that identifies the shares as being held under the trust.
161. No notice of trust except as provided by this Division
Except as provided in this Division --
(a) no notice of a trust, whether express, implied or
constructive, is to be entered on a register or be
20 receivable by the Registrar; and
(b) no liabilities are affected by anything done under this
Division; and
(c) nothing done under this Division affects a co-operative
with notice of a trust.
25 Division 5 -- Sale or transfer of shares
162. Sale or transfer of shares
(1) A share in a co-operative cannot be sold or transferred except --
(a) in accordance with Part 4 Division 3 and section 163, on
the death of a member; or
page 96
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Sale or transfer of shares Division 5
s. 163
(b) to a person appointed to administer the estate of a
shareholder under a law relating to the administration of
the estates of persons who, through mental or physical
infirmity, are incapable of managing their affairs; or
5 (c) with the consent of the board, to any person if there are
reasonable grounds for believing that the person will be
an active member of the co-operative.
(2) A share in a co-operative cannot be sold or transferred except in
accordance with the rules of the co-operative.
10 163. Transfer on death of member
(1) On the death of a member, the member's share in the
co-operative cannot be transferred to a person other than an
administrator or executor except with the consent of the board
of the co-operative.
15 (2) The board may only give its consent under subsection (1) if
there are reasonable grounds for believing that the person will
be an active member of the co-operative.
164. Restriction on total shareholding
The board of a non-trading co-operative must not consent under
20 section 162(1)(c) to the sale or transfer of a share if, as a result
of the sale or transfer, the nominal value of the shares held by
the purchaser or transferee would --
(a) in the case of a non-trading co-operative, be more
than --
25 (i) 20% of the nominal value of the share capital of
the co-operative; or
(ii) if another percentage is specified in the rules of
the co-operative, that other percentage of the
nominal value of the share capital of the
30 co-operative;
or
page 97
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 6 Repurchase of shares
s. 165
(b) in the case of a trading co-operative, be more than the
maximum permissible level of share interest applying
under section 283.
165. Transfer not effective until registered
5 A transferor of a share remains the holder of the share until the
transferee is noted as the holder of the share in the register of
members, directors and shares referred to in section 235(1)(a).
166. Non-members become members on registration
Where a share in a co-operative is transferred to a non-member
10 under this Part or Part 4, the transferee becomes a member of
the co-operative on the transferee being noted as a member in
the register of members, directors and shares referred to in
section 235(1)(a).
Division 6 -- Repurchase of shares
15 167. Purchase and repayment of shares
(1) The rules of a co-operative may authorise the co-operative to --
(a) purchase any share of a member in the co-operative at
the request of the member; and
(b) repay to a member, with the member's consent, all or
20 any part of the amount paid up on any share held by the
member when the amount repaid is not required for the
activities of the co-operative.
(2) The amount paid by a co-operative under this section in
purchasing shares or repaying an amount paid up on shares, or
25 both, in any financial year of the co-operative must not be more
than the total of --
(a) 5% of the nominal value of the issued share capital of
the co-operative immediately before the start of that
financial year; and
page 98
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Repurchase of shares Division 6
s. 168
(b) the amount of any additional share capital of the
co-operative subscribed for during that year.
(3) The members of a co-operative may by special resolution
exempt a co-operative from the operation of subsection (2) in
5 relation to a particular financial year, either unconditionally or
on conditions.
(4) The amount paid for a share when it is repurchased may be an
amount decided by the board that is less than the nominal value
of the share but only --
10 (a) if the records of the co-operative disclose that the
amount paid is the net shareholder's equity per share in
the undertaking of the co-operative; or
(b) in accordance with the rules of the co-operative.
(5) This section does not apply if the member has resigned or has
15 been expelled from the co-operative or the member's
membership has been otherwise cancelled.
168. Deposit, debentures or co-operative capital units instead of
payment when share repurchased
(1) If a co-operative repurchases a share of a member, the
20 co-operative may instead of paying the purchase price to the
member --
(a) in the case of a deposit-taking co-operative, apply the
amount as an interest bearing deposit by the member
with the co-operative; or
25 (b) allot or issue debentures or co-operative capital units of
the co-operative to the member in satisfaction of the
amount.
(2) Subsection (1) applies only if --
(a) the board considers that payment of the repurchase price
30 would adversely affect the financial position of the
co-operative; or
page 99
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 7 Shares
Division 6 Repurchase of shares
s. 168
(b) the board and the member so agree.
(3) The deposit, debenture or co-operative capital unit bears interest
during any period --
(a) in the case of a co-operative with share capital --
5 (i) at the rate (or, if there is more than one rate, at
the higher or highest rate) of dividend payable
for that period on the share capital of the
co-operative; or
(ii) if the rate of dividend payable for that period has
10 not been decided, at the rate (or the higher or
highest rate) payable for the immediately
preceding period for which a rate has been
decided; or
(iii) if a rate of dividend has never been decided for
15 the share capital of the co-operative, at the rate
that the board of the co-operative considers
reasonable;
or
(b) in the case of a co-operative without share capital, at the
20 rate that the board of the co-operative considers
reasonable; or
(c) if the rules provide for a rate to be payable that is higher
than the rate applicable under paragraph (a) or (b), at the
higher rate.
25 (4) The deposit, debenture or co-operative capital unit must be
repaid to the member or redeemed, as the case may be, as soon
as repayment or redemption would not, in the opinion of the
board, adversely affect the financial position of the
co-operative.
30 (5) The deposit, debenture or co-operative capital unit must in any
case be repaid or redeemed within 10 years (or within any
shorter period that the rules of the co-operative require) after the
repurchase of the shares concerned.
page 100
[Draft Bill for public comment]
Co-operatives Bill 2006
Shares Part 7
Repurchase of shares Division 6
s. 169
169. Cancellation of shares
A co-operative must cancel any share purchased by or forfeited
to the co-operative in accordance with this Act or the rules of
the co-operative.
page 101
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 1 Voting entitlements
s. 170
Part 8 -- Voting and meetings
Division 1 -- Voting entitlements
170. Application of Part to voting
The provisions of this Part applying to voting apply to voting on
5 all resolutions.
171. Voting
(1) The right to vote attaches to membership and not shareholding.
(2) Except as provided in subsections (3) and (4), each member has
only one vote at a meeting of the co-operative.
10 (3) If its rules so provide, a member of a co-operative group may
have the number of votes up to 5 at a general meeting that is
specified in the rules.
(4) If the rules so provide, the chairman has a second vote at a
board meeting or general meeting.
15 (5) In the case of joint membership --
(a) the joint members have only one vote between them;
and
(b) that vote may be exercised, subject to the grant of a
proxy or power of attorney, only by the joint member
20 determined in accordance with the rules.
172. Voting by proxy
(1) If the rules so provide, voting may be by proxy at a general
meeting.
(2) The instrument of proxy may state the way in which a proxy is
25 to vote on a particular resolution.
(3) The proxy must vote in the way authorised by an instrument of
proxy referred to in subsection (2).
page 102
[Draft Bill for public comment]
Co-operatives Bill 2006
Voting and meetings Part 8
Voting entitlements Division 1
s. 173
(4) The rules of a co-operative may limit the number of persons for
which a person may act as a proxy on the same question.
(5) A person cannot exercise more than one proxy vote during a
vote on the same question unless the vote is conducted by poll
5 demanded under section 199.
173. Inactive members not entitled to vote and transitional
provision
(1) A member cannot vote if the member is not an active member
of the co-operative.
10 (2) Subsection (1) does not apply in relation to a transferred
co-operative during the 3 year period beginning on the transfer
day.
174. Control of the right to vote
(1) A person must not directly or indirectly control the exercise of
15 the right to vote of a member.
Penalty: a fine of $12 000.
(2) If a person controls the exercise of the right to vote of a member
at a meeting of a co-operative --
(a) the vote of the member is invalid; and
20 (b) if the person is a member, the vote of the person is
invalid.
(3) Nothing in this section prevents the exercise of a vote by means
of a proxy or power of attorney.
175. Effect of disposal of shares on voting rights
25 A member of a co-operative cannot vote if the member has sold
or transferred, or disposed of the beneficial interest in, the
member's shares, or has agreed to do so.
page 103
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 1 Voting entitlements
s. 176
176. Effect of relevant share and voting interests on voting rights
(1) A member of a co-operative cannot vote if another person,
whether or not a member of the co-operative, has a relevant
interest in any share held by the member or in the right to vote
5 of the member.
(2) A member who cannot vote because of this section may apply to
the Registrar to review the matter.
(3) The Registrar may order that the member may vote if the
Registrar is satisfied in the circumstances of the case that loss of
10 the right to vote would be unjust or unreasonable, and the order
of the Registrar has effect accordingly.
177. Rights of representatives
A person appointed under this Act to represent a member of a
co-operative --
15 (a) is entitled to receive notice of all meetings in the same
way as the member represented; and
(b) is entitled to exercise the same rights to vote as the
member represented; and
(c) is eligible to be elected to the board of the co-operative
20 if the member represented holds the qualifications
required for holding office as a director.
178. Other rights and duties of members not affected by
ineligibility to vote
A provision of this Act that disentitles a member of a
25 co-operative to vote, either generally or in relation to a
particular matter, does not affect any other right, entitlement,
obligation or duty of the member as a member.
179. Vote of disentitled member to be disregarded
Any vote cast by or on behalf of a member of a co-operative
30 when not entitled to vote must be disregarded.
page 104
[Draft Bill for public comment]
Co-operatives Bill 2006
Voting and meetings Part 8
Resolutions Division 2
s. 180
Division 2 -- Resolutions
180. Decisions to be by ordinary resolution
Unless this Act or the rules of the co-operative provide
otherwise, every question for decision by a co-operative must be
5 decided by ordinary resolution.
181. Ordinary resolutions
An ordinary resolution is a resolution of a co-operative that is
passed by a simple majority at a general meeting of the
co-operative or in a postal ballot of members.
10 182. Special resolutions
(1) A special resolution is a resolution of a co-operative that is
passed --
(a) by a two-thirds majority at a general meeting of
members; or
15 (b) by a two-thirds majority in a postal ballot, other than a
special postal ballot, of members; or
(c) by a three-quarters majority in a special postal ballot of
members.
(2) A special resolution may be passed by a postal ballot only if the
20 rules of the co-operative allow, or this Act requires, the special
resolution to be passed by postal ballot, including a special
postal ballot.
(3) A resolution is not taken to have been passed as a special
resolution unless not less than 21 days notice has been given to
25 the members of the co-operative stating --
(a) the intention to propose the special resolution; and
(b) the reasons for proposing the special resolution; and
(c) the effect of the special resolution being passed.
page 105
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 2 Resolutions
s. 183
183. How majority obtained is ascertained
(1) A resolution is passed by a particular majority at a meeting if
that majority of the members of the co-operative who, being
entitled to do so, vote in person or, if proxies are allowed, by
5 proxy at the meeting vote in favour of the resolution.
(2) A resolution is passed by a particular majority in a postal ballot
if that majority of the members of the co-operative who, being
entitled to do so, cast formal votes in the postal ballot vote in
favour of the resolution.
10 184. Declaration of passing of special resolution
(1) At a meeting of a co-operative for the purpose of passing a
special resolution, a declaration by the chairman of the meeting
that the resolution has been passed as a special resolution is
evidence of that fact.
15 (2) A declaration by the returning officer for a postal ballot to pass
a special resolution that the resolution has been passed as a
special resolution is evidence of that fact.
(3) Subsection (1) does not apply if a poll is taken at the meeting of
the co-operative.
20 185. Effect of special resolution
(1) Subject to subsection (2), a special resolution has effect from
the date that it is passed.
(2) A special resolution relating to anything for which a special
resolution is required to be passed by special postal ballot has
25 no effect until it is registered under section 187(1).
186. Lodgment of special resolution
(1) A co-operative must lodge 2 copies of each special resolution
passed by the co-operative with the Registrar in accordance with
this section for registration.
page 106
[Draft Bill for public comment]
Co-operatives Bill 2006
Voting and meetings Part 8
Resolutions Division 2
s. 187
(2) The copies must --
(a) be lodged within 28 days after the passing of a special
resolution or a longer period allowed by the Registrar;
and
5 (b) be signed by a director and the secretary of the
co-operative; and
(c) be accompanied by the lodgment fee prescribed by the
regulations.
(3) A co-operative and an officer of the co-operative must not
10 knowingly fail to lodge the required copies under this section.
Penalty: a fine of $2 000.
(4) This section and section 187 do not apply to a special resolution
altering the rules of a co-operative.
187. Decision of Registrar on application to register special
15 resolution
(1) If the Registrar is satisfied that the co-operative has complied
with this Act, and that a special resolution is not contrary to this
Act, the Registrar must register the special resolution.
(2) If the Registrar considers that the effect of a special resolution
20 lodged for registration would be in contravention of this Act or
any other law, the Registrar --
(a) may refuse to register the special resolution; and
(b) must give written notice to the co-operative that the
special resolution --
25 (i) in the case of a special resolution referred to in
section 185(2), has no effect; and
(ii) in any other case, has no effect as from the date
that it was passed.
(3) A certificate of registration of a special resolution given by the
30 Registrar is, in favour of any person advancing money to the
page 107
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 3 Resolution by circulated document
s. 188
co-operative on the faith of the certificate or in favour of any
guarantor of that advance, evidence that the resolution was
properly passed.
Division 3 -- Resolution by circulated document
5 188. Application of Division 3
(1) Subject to subsection (2), this Division applies to a resolution of
a co-operative, including a resolution appointing an officer or
auditor or approving of or agreeing to any act, matter or thing,
if --
10 (a) the co-operative has fewer than 50 members; and
(b) the resolution is required or permitted under this Act or
the rules of the co-operative to be passed at a general
meeting of the co-operative.
(2) This Division does not apply to a resolution of a co-operative --
15 (a) of which more than 14 days notice is required to be
given under this Act; or
(b) that is required to be passed by a majority other than a
simple majority.
189. Resolution by circulation of document -- fewer than
20 50 members
(1) If all the members of a co-operative have signed a document
that sets out the terms of a resolution and contains a statement
that they are in favour of the resolution, the resolution is taken
to have been passed at a general meeting of the co-operative.
25 (2) The meeting is taken to have been held --
(a) if all the members signed the document on the one day,
on that day and at the time the document was signed by
the last member to sign; or
page 108
[Draft Bill for public comment]
Co-operatives Bill 2006
Voting and meetings Part 8
Postal ballots Division 4
s. 190
(b) if the members signed the document on different days,
on the day, and at the time, the document was signed by
the last member to sign.
(3) The document need not exist as a single document, but may
5 exist in the form of 2 or more documents in identical terms.
(4) The document is taken to constitute a minute of the general
meeting.
(5) Anything attached to the document and signed by the members
signing the document is taken to have been laid before the
10 co-operative at the general meeting.
(6) The document is signed by all members of a co-operative only if
the document is signed by each person who was a member of
the co-operative at the time the document was signed by the last
member to sign.
15 (7) Nothing in this section affects or limits any rule of law about the
effectiveness of the assent of a member of a co-operative given
to a document, or to an act, matter or thing, otherwise than at a
general meeting of the co-operative.
Division 4 -- Postal ballots
20 190. Postal ballots
(1) A postal ballot may be held as provided by the rules of a
co-operative and must be conducted in accordance with the
regulations.
(2) On the declaration by the returning officer of the result of the
25 ballot, the secretary of the co-operative must make an entry in
the minute book of the co-operative showing --
(a) the number of formal votes cast in favour of the
proposal concerned; and
(b) the number of formal votes cast against the proposal;
30 and
page 109
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 4 Postal ballots
s. 191
(c) the number of informal votes cast.
191. Special postal ballots
(1) A special postal ballot is a postal ballot that is conducted as
required by this section.
5 (2) The ballot must not be held less than 21 days after notice of the
ballot is given to members so as to enable sufficient time for a
meeting to discuss the proposal that is the subject of the ballot
to be convened and held (whether by the board or on the
requisition of members).
10 (3) The co-operative must send to each member, along with any
other material required to be sent in connection with the postal
ballot, a disclosure statement approved by the Registrar and
containing information about --
(a) the financial position of the co-operative; and
15 (b) the interests of the directors of the co-operative in the
proposal with which the ballot is concerned, including
any interests of the directors in another organisation
concerned in the proposal; and
(c) any compensation or consideration to be paid to officers
20 or members of the co-operative in connection with the
proposal; and
(d) any other matters as the Registrar directs.
(4) If required by the Registrar, the disclosure statement is to be
accompanied by a report, made by an independent person
25 approved by the Registrar, about any matters that the Registrar
directs.
(5) Sections 16 (except subsection (3)) and 29 apply to the approval
of a disclosure statement under this section with any necessary
changes and in particular as if any reference in section 16 to a
30 formation meeting were a reference to the notice of the special
postal ballot.
page 110
[Draft Bill for public comment]
Co-operatives Bill 2006
Voting and meetings Part 8
Postal ballots Division 4
s. 192
192. When a special postal ballot required
In addition to any requirement of this Act, the rules of a
co-operative must require a special postal ballot to be conducted
for the purpose of passing a special resolution in relation to any
5 of the following matters relating to the co-operative --
(a) conversion of --
(i) a share capital co-operative to a non-share capital
co-operative or vice versa; or
(ii) a trading co-operative to a non-trading
10 co-operative or vice versa;
(b) transfer of incorporation;
(c) an acquisition or disposal of assets referred to in
section 278;
(d) the maximum permissible level of share interest in the
15 co-operative;
(e) takeover;
(f) merger;
(g) transfer of engagements;
(h) members' voluntary winding up.
20 193. Holding of postal ballot on requisition and transitional
provision
(1) The board of a co-operative must conduct a postal ballot,
including a special postal ballot, for the passing of a special
resolution on the written requisition of such number of members
25 who together are able to cast at least 20%, or any lesser
percentage specified in the rules of the co-operative, of the total
number of votes able to be cast at a meeting of the co-operative.
(2) Subject to subsection (3), a member is not entitled to be a
requisitioning member unless the member is an active member.
page 111
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 4 Postal ballots
s. 194
(3) Subsection (2) does not apply in relation to a transferred
co-operative during the 3 year period beginning on the transfer
day.
(4) The following provisions apply to a requisition for a postal
5 ballot --
(a) it must state --
(i) the proposed special resolution to be voted on;
and
(ii) the reasons for the making of the special
10 resolution; and
(iii) the effect of the special resolution being passed;
(b) it must be signed by the requisitioning members, and
may consist of several documents in like form each
signed by one or more of the requisitioning members;
15 (c) it must be served on the co-operative by being lodged at
the registered office of the co-operative.
(5) The postal ballot must be conducted as soon as practicable and
in any case must be conducted within 2 months after the
requisition is served.
20 (6) If the special resolution for which the requisitioned postal ballot
is conducted is not passed, the co-operative may recover the
expenses of the postal ballot from the members who
requisitioned the postal ballot as a debt due to the co-operative.
194. Expenses involved in postal ballots on requisition
25 (1) All reasonable expenses incurred by a co-operative in and in
connection with preparing for and holding a special postal ballot
are to be considered to constitute the "expenses of the postal
ballot" for the purposes of section 193(6).
page 112
[Draft Bill for public comment]
Co-operatives Bill 2006
Voting and meetings Part 8
Meetings Division 5
s. 195
(2) Those expenses include (but are not limited to) the following
expenses --
(a) the cost of obtaining expert advice, including legal and
financial advice, and of commissioning expert reports;
5 (b) costs attributable to the use of staff of the co-operative
in connection with preparing for and holding the ballot;
(c) the cost of producing, printing and posting the ballot
papers and other material associated with the ballot.
Division 5 -- Meetings
10 195. Annual general meetings
(1) In the case of a co-operative registered under Part 2 Division 4,
the first annual general meeting of the co-operative must be held
within 18 months after registration under this Act.
(2) In the case of a co-operative registered under Part 2 Division 5,
15 the first annual general meeting of the co-operative must be held
within 18 months after the last annual general meeting held by
that co-operative before it was registered under this Act.
(3) The second or any later annual general meeting of a
co-operative must be held within --
20 (a) 5 months after the close of the financial year of the
co-operative; or
(b) a further time that may be allowed by the Registrar or is
prescribed by the regulations.
196. Special general meetings
25 A special general meeting of a co-operative may be called at
any time by the board of the co-operative.
197. Notice of meetings
The board must give each member at least 14 days notice of
each general meeting.
page 113
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 5 Meetings
s. 198
198. Quorum at meetings
(1) The quorum for a meeting of a co-operative must be specified in
the rules.
(2) An item of business must not be transacted at a meeting of a
5 co-operative unless a quorum of members entitled to vote is
present during the transaction of that item.
199. Decision at meetings
(1) Unless subsection (4) requires it to be determined by a poll, a
question for decision at a general meeting is to be determined by
10 a show of hands.
(2) A proxy may exercise only one vote on a question determined
by a show of hands.
(3) A proxy may exercise more than one vote on a question
determined by a poll.
15 (4) A question is to be determined by a poll if --
(a) 5 members, present in person at the meeting or
represented at the meeting by a proxy, demand the poll;
or
(b) the chairman directs that the question will be determined
20 by poll.
(5) In the case of an equality of votes, whether on a show of hands
or on a poll, the chairman of the meeting at which the show of
hands takes place or at which the poll is demanded may exercise
a second or casting vote if the rules so provide.
25 200. Calling of general meeting on requisition and transitional
provision
(1) The board of a co-operative must convene a general meeting of
the co-operative on the written requisition of such number of
members who together are able to cast at least 20% (or any
30 lesser percentage specified in the rules of the co-operative) of
page 114
[Draft Bill for public comment]
Co-operatives Bill 2006
Voting and meetings Part 8
Meetings Division 5
s. 200
the total number of votes able to be cast at a meeting of the
co-operative.
(2) Unless subsection (3) applies, a member is not entitled to be a
requisitioning member unless the member is an active member.
5 (3) Subsection (2) does not apply in relation to a transferred
co-operative during the 3 year period beginning on the transfer
day.
(4) The following provisions apply to a requisition for a general
meeting --
10 (a) it must state the objects of the meeting;
(b) it must be signed by the requisitioning members, and
may consist of several documents in like form each
signed by one or more of the requisitioning members;
(c) it must be served on the co-operative by being lodged at
15 the registered office of the co-operative.
(5) The meeting must be called and held as soon as practicable and
in any case must be held within 2 months after the requisition is
served.
(6) If the board does not call a meeting within 21 days after a
20 requisition is served, the following provisions apply --
(a) the requisitioning members, or any of them representing
at least half their total voting rights, may call the
meeting in the same way as nearly as possible as
meetings are called by the board;
25 (b) for that purpose they may request the co-operative to
supply a written statement setting out the names and
addresses of the persons entitled when the requisition
was served to receive notice of general meetings of the
co-operative;
30 (c) the board must send the requested statement to the
requisitioning members within 7 days after the request
for the statement is made;
page 115
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 8 Voting and meetings
Division 5 Meetings
s. 201
(d) the meeting called by the requisitioning members must
be held not later than 3 months after the requisition is
served;
(e) any reasonable expenses incurred by the requisitioning
5 members because of the board's failure to call the
meeting must be paid by the co-operative;
(f) any amount required to be paid by the co-operative
under paragraph (e) must be retained by the co-operative
out of any money due from the co-operative by way of
10 fees or other remuneration in respect of their services to
such of the directors as were in default.
201. Minutes
(1) Minutes of --
(a) each general meeting; and
15 (b) each meeting of the board; and
(c) each meeting of a committee to which the board's
functions have been delegated under section 209(1),
must be entered in the appropriate records within 28 days after
the meeting and confirmed at, and signed by the chairman of,
20 the next meeting.
(2) The minutes of each general meeting must be available for
inspection by members.
(3) The rules may provide that the minutes of board meetings and
committee meetings be available for inspection by members.
25 (4) Minutes must be kept in the English language.
page 116
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
The Board Division 1
s. 202
Part 9 -- Management and administration
of co-operatives
Division 1 -- The Board
202. Board of directors
5 (1) Subject to this Act and the rules of the co-operative, the
business of a co-operative is to be managed by a board of
directors.
(2) The board of directors may exercise all the powers of the
co-operative that are not, by this Act or the rules of the
10 co-operative, required to be exercised by the co-operative in a
general meeting.
(3) The acts of a director are valid despite any defect that may
afterwards be discovered in his or her appointment or
qualification.
15 203. Election of directors
(1) Except as provided in subsections (2), (3) and (4), the directors
of a co-operative are to be elected in the manner specified in the
rules of the co-operative.
(2) The first directors of --
20 (a) a co-operative formed under this Act are to be elected at
its formation meeting; and
(b) a co-operative that was a corporation incorporated under
another Act are to be the directors in office at the date of
registration under this Act.
25 (3) If authorised by the rules of the co-operative, a board of
directors may appoint a person to fill a casual vacancy in the
office of a director until the next annual general meeting.
page 117
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 1 The Board
s. 204
(4) A resolution passed at a general meeting of a co-operative
electing 2 or more directors is void unless --
(a) the meeting previously resolved that the nominations for
election could be voted on together; and
5 (b) no votes were cast against that previous resolution.
(5) Subsection (4) does not affect --
(a) a resolution to appoint directors by an amendment to the
co-operative's rules; or
(b) a ballot or poll to elect 2 or more directors if the ballot
10 or poll does not require members voting for one
candidate to vote for another candidate.
(6) For the purposes of subsection (5), a ballot or poll does not
require a member to vote for a candidate merely because the
member is required to express a preference among individual
15 candidates in order to cast a valid vote.
(7) A nomination for election or appointment to the office of a
director must give details of the qualifications and experience of
the person nominated.
(8) Unless this Act or the rules of a co-operative provides
20 otherwise, a director is eligible for re-election at the end of his
or her term of office.
204. Qualification of directors
(1) In this section --
"member director" means a director who is a person qualified
25 to be a director under subsection (2)(a).
(2) A person is not qualified to be a director of a co-operative
unless the person is --
(a) a member of the co-operative or a representative of a
corporation that is a member of the co-operative; or
page 118
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
The Board Division 1
s. 205
(b) an employee of the co-operative or a person qualified as
provided by the rules.
(3) The majority of directors must be member directors.
(4) Subsection (2) does not prevent the rules of a co-operative
5 requiring that a greater number of directors than a majority must
be member directors.
205. Disqualified persons
(1) A person must not act as a director or directly or indirectly take
part in or be concerned with the management of a co-operative
10 if the person --
(a) is the auditor of the co-operative or a partner, employee
or employer of the auditor; or
(b) has been convicted, whether before or after the
commencement of this section, within or outside this
15 State --
(i) on indictment of an offence relating to the
promotion, formation or management of a
corporation; or
(ii) of an offence involving fraud or dishonesty
20 punishable on conviction by imprisonment for
not less than 3 months; or
(iii) of an offence under the Corporations Act
section 184, 344, 590, 592, 670A or 728; or
(iv) of an offence under a provision of a previous law
25 of this State or of another State or Territory, with
which any of the provisions referred to in
subparagraph (iii) corresponds,
within 5 years after the conviction or, if sentenced to
imprisonment, after the person's release from prison,
30 except with the leave of the Supreme Court.
Penalty: a fine of $24 000 and imprisonment for 2 years.
page 119
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 1 The Board
s. 205
(2) A person must not act as a director or directly or indirectly take
part in or be concerned with the management of a co-operative
if the person --
(a) has been convicted of an offence under this Act, within
5 5 years after the conviction, except with leave of the
Supreme Court; or
(b) is disqualified from managing corporations under the
Corporations Act Part 2D.6; or
(c) is an insolvent under administration, as defined in the
10 Corporations Act section 9.
Penalty: a fine of $24 000 and imprisonment for 2 years.
(3) In proceedings for an offence against subsection (1), a
certificate by an authority prescribed by the regulations stating
that a person was released from prison on a specified date, is
15 evidence that the person was released from prison on that date.
(4) A person who intends to apply for leave of the Supreme Court
must give the Registrar at least 21 days notice of the person's
intention.
(5) The Supreme Court may grant leave subject to any condition or
20 limitation it considers appropriate.
(6) A person must comply with any condition or limitation subject
to which leave is granted.
Penalty: a fine of $24 000 and imprisonment for 2 years.
(7) On the application of the Registrar the Supreme Court may
25 revoke its leave.
(8) Subject to this section, a co-operative is declared to be an
applied Corporations legislation matter for the purposes of the
Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
to the provisions of the Corporations Act Part 2D.6, subject to
30 the following modifications --
(a) a reference in the provisions to a corporation is to be
read as a reference to a co-operative;
page 120
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
The Board Division 1
s. 206
(b) a reference in the provisions to a company is to be read
as a reference to a co-operative;
(c) a reference in the provisions to ASIC is to read as a
reference to the Registrar;
5 (d) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
206. Meeting of the board of directors
(1) In this section --
10 "member director" has the meaning given to that term in
section 204(1);
"independent director" means a director who is an employee
of the co-operative or a person qualified as provided by the
rules.
15 (2) Meetings of the board of directors must be held at least once
every 3 months and may be held as often as may be necessary.
(3) A meeting of the board of directors may be called by a director
giving notice individually to every other director.
(4) The board of directors may hold meetings, or allow directors to
20 take part in its meetings by telephone, video link, or another
form of communication that allows reasonably
contemporaneous and continuous communication between the
directors taking part in the meeting.
(5) A quorum of a meeting of the board of directors is 50% of the
25 number of directors or a greater number of directors specified in
the rules of the co-operative.
(6) For a quorum, the member directors must outnumber the
independent directors by at least one, or, if a greater number is
stated in the rules of the co-operative, the greater number.
page 121
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 1 The Board
s. 207
(7) The chairman of the board may be elected either by the board or
at a general meeting of the co-operative, and is to be elected,
hold office, and retire, and may be removed from office, as
provided by the rules of the co-operative.
5 207. Transaction of business outside meetings
(1) The board of a co-operative may, if it considers appropriate,
transact any of its business by the circulation of papers among
all of the directors of the board.
(2) A resolution in writing approved in writing by a majority of the
10 directors of the board is taken to be a decision of the board.
(3) Separate copies of a resolution of the board may be signed by
the directors if the wording of the resolution and approval is
identical in each copy.
(4) For the purpose of approving a resolution under this section, the
15 chairman of the board and each director have the same voting
rights as they have at an ordinary meeting of the board.
(5) The resolution is approved when the last director required for
the majority signs.
(6) A resolution of a board must be recorded in the minutes of the
20 meetings of the board within 28 days after the resolution is
approved.
(7) Papers may be circulated among directors of the board for the
purposes of this section by facsimile or other transmission of the
information in the papers concerned.
25 208. Deputy directors
The rules of a co-operative may provide for a deputy director to
be appointed to act in the place of a director who is absent from
a meeting of the board.
page 122
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
The Board Division 1
s. 209
209. Delegation by board
(1) If authorised by the rules of a co-operative, the board of the
co-operative may, by resolution, delegate the board's powers,
other than this power of delegation, specified in the resolution
5 to --
(a) a director; or
(b) a committee of 2 or more directors; or
(c) a committee of members of the co-operative; or
(d) a committee of members of the co-operative and other
10 persons if members form the majority of persons on the
committee.
(2) The co-operative or the board may, by resolution, revoke wholly
or in part a delegation under this section.
(3) A function, the exercise of which has been delegated under this
15 section, may be exercised from time to time in accordance with
the terms of the delegation while the delegation remains
unrevoked.
(4) A delegation under this section may be made subject to
conditions or limitations as to the exercise of any of the
20 functions delegated, or as to time or circumstance.
(5) Despite any delegation under this section, the board may
continue to exercise all or any of the functions delegated.
210. Removal from and vacation of office
(1) The directors hold office and must retire, and may be removed
25 from office, as provided by the rules of the co-operative.
(2) A director vacates office in the circumstances, if any, provided
in the rules of the co-operative and in any of the following
cases --
(a) if the director is disqualified from being a director as
30 provided by section 205;
page 123
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 2 Secretary
s. 211
(b) if the director absents himself or herself from
3 consecutive ordinary meetings of the board without its
leave;
(c) if the director resigns the office of director by written
5 notice given by the director to the co-operative;
(d) if the director is removed from office by special
resolution of the co-operative;
(e) if the person ceases to hold the qualification by reason
of which the person was qualified to be a director;
10 (f) if an administrator of the co-operative's affairs is
appointed under Part 12 Division 5.
Division 2 -- Secretary
211. Secretary
(1) A co-operative must have a secretary.
15 (2) The board of the co-operative is to appoint the secretary.
(3) The board may appoint a person to act as the secretary during
the absence or incapacity of the secretary.
(4) A person is not qualified to be appointed as, or to act as, the
secretary unless the person is an adult who ordinarily lives in
20 Australia.
Division 3 -- Duties and liabilities of directors, officers
and employees
212. Meaning of "officer"
In this Division --
25 "officer" of a co-operative means --
(a) a director or secretary of the co-operative; or
page 124
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Duties and liabilities of directors, officers and employees Division 3
s. 213
(b) a person who is concerned, or takes part, in the
management of the co-operative, whether or not as a
director; or
(c) a receiver, or receiver and manager, of property of
5 the co-operative, or another authorised person who
enters into possession or assumes control of property
of the co-operative for the purpose of enforcing a
charge; or
(d) an administrator of a deed of arrangement executed
10 by the co-operative; or
(e) a liquidator or provisional liquidator appointed in a
voluntary winding up of the co-operative; or
(f) an administrator of the co-operative appointed under
the Corporations Act Part 5.3A as applying under
15 this Act; or
(g) a trustee or other person administering a compromise
or arrangement made between the co-operative and
another person or other persons.
213. Officers must act honestly
20 An officer of a co-operative must at all times act honestly in the
exercise of his or her powers and the discharge of the duties of
his or her office, both in the State and elsewhere.
Penalty:
(a) for a contravention committed with intent to deceive
25 or defraud the co-operative, members or creditors of
the co-operative or creditors of another person or for
another fraudulent purpose, a fine of $24 000 and
imprisonment for 2 years; or
(b) in another case, a fine of $6 000.
page 125
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 3 Duties and liabilities of directors, officers and employees
s. 214
214. Standard of care and diligence required
(1) In the exercise of his or her powers and the discharge of his or
her functions, an officer of a co-operative must exercise the
degree of care and diligence that a reasonable person in a like
5 position in a co-operative would exercise in the co-operative's
circumstances.
Penalty: a fine of $2 000.
(2) An officer is not liable to be convicted for a contravention of
this section if the co-operative has resolved by ordinary
10 resolution to forgive the contravention.
215. Improper use of information or position
(1) An officer or employee or former officer or employee of a
co-operative or a member of a committee referred to in
section 209(1) must not make improper use of information
15 acquired by reason of his or her position as an officer or
employee or member to gain, directly or indirectly, an
advantage for himself or herself or for any other person or to
cause detriment to the co-operative.
(2) An officer or employee of a co-operative or a member of a
20 committee referred to in section 209(1) must not make improper
use of his or her position as an officer or employee or member,
to gain, directly or indirectly, an advantage for himself or
herself or for any other person or to cause detriment to the
co-operative.
25 Penalty:
(a) for a contravention committed with intent to deceive
or defraud the co-operative, members or creditors of
the co-operative or creditors of another person or for
another fraudulent purpose, a fine of $24 000 and
30 imprisonment for 2 years; or
(b) in any other case, a penalty not exceeding a fine of
$6 000.
page 126
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Duties and liabilities of directors, officers and employees Division 3
s. 216
216. Recovery of damages by co-operative
(1) If a person contravenes a provision of this Division in relation to
a co-operative, the co-operative may, whether or not the person
has been convicted of an offence for that contravention, recover
5 an amount from the person as a debt payable to the
co-operative.
(2) The amount that the co-operative is entitled to recover from the
person is --
(a) if the person or another person made a profit as a result
10 of the contravention, an amount equal to that profit; and
(b) if the co-operative has suffered loss or damage as a
result of the contravention, an amount equal to that loss
or damage.
217. Other duties and liabilities not affected
15 This Division has effect in addition to, and does not limit, a law
relating to the duty or liability of a person because of the
person's office or employment in relation to a co-operative and
does not prevent the institution of any civil proceeding for a
breach of a duty or for a liability of that type.
20 218. Application of Corporations Act concerning indemnities and
insurance for officers and auditors
A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
(Ancillary Provisions) Act 2001 Part 3 in relation to the
25 Corporations Act sections 199A, (except 199A(2)(b)), 199B
and 199C, subject to the following modifications --
(a) a reference in the sections to a company is to be read as
a reference to a co-operative;
(b) a reference in the sections to ASIC is to be read as a
30 reference to the Registrar;
page 127
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 4 Restrictions on directors and officers
s. 219
(c) a reference to section 182 is to be read as a reference to
sections 213 and 214 of this Act;
(d) a reference to section 183 is to be read as a reference to
section 215 of this Act;
5 (e) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
219. Application of Corporations Act provisions concerning
officers of co-operatives
10 A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
(Ancillary Provisions) Act 2001 Part 3 in relation to the
Corporations Act sections 344, 589 to 598 and 1307, subject to
the following modifications --
15 (a) in section 344, "a company, registered scheme or
disclosing entity" is to be read as "a co-operative";
(b) a reference in the sections, other than section 344, to a
company is to be read as a reference to a co-operative;
(c) a reference in the sections to ASIC is to be read as a
20 reference to the Registrar;
(d) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
Division 4 -- Restrictions on directors and officers
25 220. Directors' remuneration
A director of a co-operative must not receive remuneration for
services as a director other than fees, concessions and other
benefits that are approved at a general meeting of the
co-operative.
30 Penalty: a fine of $24 000 or imprisonment for 2 years.
page 128
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Restrictions on directors and officers Division 4
s. 221
221. Certain financial accommodation to officers prohibited
(1) An officer of a co-operative who is not a director of the
co-operative must not obtain financial accommodation from the
co-operative other than --
5 (a) with the approval of a majority of the directors; or
(b) under a scheme about providing financial
accommodation to officers that has been approved by a
majority of the directors.
Penalty: a fine of $24 000 or imprisonment for 2 years.
10 (2) For the purposes of this section, financial accommodation is
taken to be obtained by an officer of a co-operative if it is
obtained by --
(a) a proprietary company in which the officer is a
shareholder or director; or
15 (b) a trust of which the officer is a trustee or beneficiary; or
(c) a trust of which a corporation is trustee if the officer is a
director or other officer of the corporation.
(3) A co-operative must not give financial accommodation to an
officer of the co-operative if --
20 (a) by giving the financial accommodation, the officer
would contravene this section; and
(b) the co-operative knows or should reasonably know of
the contravention.
Penalty: a fine of $50 000.
25 222. Financial accommodation to directors and associates
(1) In this section --
"associate" of a director means --
(a) the director's spouse; or
page 129
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 4 Restrictions on directors and officers
s. 222
(b) a person when acting in the capacity of trustee of a
trust under which --
(i) the director or director's spouse has a
beneficial interest; or
5 (ii) a corporation mentioned in paragraph (c) has
a beneficial interest;
or
(c) a corporation if --
(i) the director or director's spouse has a material
10 interest in shares in the corporation; and
(ii) the nominal value of the shares is not less than
10% of the nominal value of the issued share
capital of the corporation.
(2) For the purposes of this section, a person has a "material
15 interest" in a share in a corporation if --
(a) the person has power to withdraw the share capital
subscribed for the share or to exercise control over the
withdrawal of the share capital; or
(b) the person has power to dispose of or to exercise control
20 over the disposal of the share; or
(c) the person has power to exercise or to control the
exercise of any right to vote conferred on the holder of
the share.
(3) A co-operative must not provide financial accommodation to a
25 director, or to a person the co-operative knows or should
reasonably know is an associate of a director, unless --
(a) the accommodation is --
(i) approved under subsection (4); or
(ii) given under a scheme approved under
30 subsection (4); or
(iii) provided on terms no more favourable to the
director or associate than the terms on which it is
page 130
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Restrictions on directors and officers Division 4
s. 222
reasonable to expect the co-operative would give
if dealing with the director or associate at arm's
length in the same circumstances;
and
5 (b) the directors have approved the accommodation, at a
meeting of the board at which a quorum was present, by
a majority of at least two-thirds of the directors present
and voting on the matter.
Penalty: a fine of $50 000.
10 (4) For the purposes of subsection (3)(a)(i) and (ii), financial
accommodation or a scheme is approved if --
(a) it is approved by a resolution passed at a general
meeting; and
(b) the full details of the accommodation or scheme were
15 made available to members at least 21 days before the
meeting.
(5) A director or an associate of a director must not obtain financial
accommodation given in contravention of subsection (3).
Penalty: a fine of $24 000 or imprisonment for 2 years.
20 (6) For the purposes of this section, a concessional rate of interest
for a borrower from a co-operative is a normal term only if the
borrower is entitled to the concession by being a member of a
class of borrowers from the co-operative specified in its rules as
being entitled to the concession.
25 (7) If a director of a co-operative or an associate of a director
accepts in payment of a debt owed by a member of the
co-operative to the director or associate, any proceeds of
financial accommodation provided to the member by the
co-operative, this section has effect as if the financial
30 accommodation has been provided to the director or associate.
page 131
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 4 Restrictions on directors and officers
s. 223
(8) In this section, a reference to --
(a) the provision of financial accommodation to a director
or an associate of a director; or
(b) the obtaining of financial accommodation by a director
5 or an associate of a director; or
(c) a debt owed to a director or an associate of a director,
includes a reference to a provision of financial accommodation
to, or an obtaining of financial accommodation by, the director
or associate, or a debt owed to the director or associate, jointly
10 with another person.
223. Restriction on directors of certain co-operatives selling land
to co-operative
A director of a co-operative the primary activity of which is or
includes the acquisition of land in order to settle or retain people
15 on the land, must not sell land to the co-operative except under a
special resolution of the co-operative.
Penalty: a fine of $24 000 or imprisonment for 2 years.
224. Management contracts
(1) In this section --
20 "management contract" means a contract or other
arrangement under which --
(a) a person who is not an officer of the co-operative
agrees to perform the whole, or a substantial part, of
the functions of the co-operative, whether under the
25 control of the co-operative or not; or
(b) a co-operative agrees to perform the whole or a
substantial part of its functions --
(i) in a particular way; or
(ii) in accordance with the directions of any
30 person; or
page 132
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Declaration of interests Division 5
s. 225
(iii) subject to specified restrictions or conditions.
(2) A co-operative must not enter into a management contract
unless that contract has first been approved by special
resolution.
5 (3) A management contract entered into in contravention of
subsection (2) is void.
Division 5 -- Declaration of interests
225. Declaration of interest
(1) A director of a co-operative who is or becomes in any way
10 (whether directly or indirectly) interested in a contract, or
proposed contract with the co-operative must declare the nature
and extent of the interest to the board of directors under this
section.
Penalty: a fine of $24 000 and imprisonment for 2 years.
15 (2) In the case of a proposed contract, the declaration must be
made --
(a) at the meeting of the board at which the question of
entering into the contract is first considered; or
(b) if the director was not at that time interested in the
20 proposed contract, at the next meeting of the board held
after the director becomes interested in the proposed
contract.
(3) If a director becomes interested in a contract with the
co-operative after it is made, the declaration must be made
25 at the next meeting of the board held after the director
becomes interested in the contract.
(4) For the purposes of this section, a general written notice given
to the board by a director to the effect that the director --
(a) is a member of a specified entity; and
page 133
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 5 Declaration of interests
s. 225
(b) is to be regarded as interested in any contract that may,
after the giving of the notice, be made with the entity,
is a sufficient declaration.
(5) A director of a co-operative who holds an office or has an
5 interest in property whereby, whether directly or indirectly,
duties or interests might be created that could conflict with the
director's duties or interests as director must, under
subsection (6), declare at a meeting of the board of directors the
fact and the nature, character and extent of the conflict.
10 Penalty: a fine of $24 000 and imprisonment for 2 years.
(6) A declaration required by subsection (5) in relation to holding
an office or having an interest must be made by a person --
(a) if the person holds the office or has the interest when he
or she becomes a director, at the first meeting of the
15 board held after --
(i) the person becomes a director; or
(ii) the relevant facts as to holding the office or
having the interest come to the person's
knowledge,
20 whichever is the later; or
(b) if the person starts to hold the office or acquires the
interest after the person becomes a director, at the first
meeting of the board held after the relevant facts as to
holding the office or having the interest come to the
25 person's knowledge.
(7) If a director has made a declaration under this section, then
unless the board determines otherwise, the director must not --
(a) be present during any deliberation of the board in
relation to the matter; or
30 (b) take part in any decision of the board in relation to the
matter.
page 134
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Declaration of interests Division 5
s. 226
(8) For the purposes of the making of a determination of the board
under subsection (7) in relation to a director who has made a
declaration under this section, the director must not --
(a) be present during any deliberation of the board for the
5 purpose of making the determination; or
(b) take part in the making by the board of the
determination.
226. Declarations to be recorded in minutes
Every declaration under this Division is to be recorded in the
10 minutes of the meeting at which it was made.
227. Division does not affect other laws or rules
Except as provided in section 228, this Division is in addition
to, and does not limit, the operation of a law or a provision in
the rules of the co-operative restricting a director from having
15 an interest in contracts with the co-operative or from holding
offices or possessing properties involving duties or interests in
conflict with his or her duties or interests as director.
228. Certain interests need not be declared
The interest in a contract or proposed contract that a director is
20 required by this Division to declare does not include an interest
in --
(a) a contract or proposed contract for a purchase of goods
and services by the director from the co-operative; or
(b) a lease of land to the director by the co-operative; or
25 (c) a contract or proposed contract for the sale of
agricultural products or livestock by the director to the
co-operative; or
(d) a contract or proposed contract that, under the rules of
the co-operative, may be made between the co-operative
30 and a member; or
page 135
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 6 Financial reports and audit
s. 229
(e) a contract or proposed contract of a class of contracts
prescribed by the regulations,
but only if the contract is made in good faith, in the ordinary
course of the business of the co-operative, and on the terms that
5 are usual and proper in similar dealings between the
co-operative and its members.
Division 6 -- Financial reports and audit
229. Meaning of "control" and "entity"
In this Division --
10 "control" has the same meaning in relation to a co-operative
that it has under the Corporations Act in relation to a
corporation;
"entity" has the same meaning in relation to a co-operative that
it has under the Corporations Act in relation to a
15 corporation.
230. Requirements for financial records and financial reports
(1) A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
(Ancillary Provisions) Act 2001 Part 3 in relation to the
20 provisions of the Corporations Act Part 2F.3, sections 249K and
249V and Chapter 2M, subject to the following
modifications --
(a) a reference in the provisions to a company or to a public
company is to be read as a reference to a co-operative;
25 (b) a reference in the provisions to the Court is to be read as
a reference to the Supreme Court;
(c) a reference in the provisions to "prescribed" is to be read
as a reference to "approved by the Registrar";
(d) a reference in the provisions to ASIC is to be read as a
30 reference to the Registrar;
page 136
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Financial reports and audit Division 6
s. 230
(e) an offence created in relation to the provisions is the
offence set out in subsection (2);
(f) any penalty for the offence referred to in paragraph (e) is
the penalty set out in subsection (2);
5 (g) a reference in sections 247A and 300(14) and (15) to the
Corporations Act section 237 is to be read as a reference
to section 92 of this Act;
(h) a reference in section 300(8) to the Corporations Act
section 199A(2) or (3) is to be read as a reference to
10 section 218 of this Act;
(i) the provisions apply as if sections 247D, 291, 292(2),
293, 294, 296(1) (second sentence), 298(3), 300(12) and
(13), 301(2), 315(2) to (4), 323D(1) and (2), 323DA,
325 and 327(1A) and Part 2M.1, Part 2M.4 Division 2,
15 Part 2M.5 and Part 2M.6 of the Corporations Act were
omitted;
(j) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
20 (2) A co-operative must --
(a) keep financial records and prepare financial reports as
required under this Act; and
(b) ensure that the financial reports are audited in
accordance with this Act.
25 Penalty: a fine of $2 000.
(3) Without limiting the matters for which regulations under this
section may make provision, the regulations may make
provision for or in relation to the following --
(a) requiring the submission of financial reports to the
30 Australian Accounting Standards Board;
page 137
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 6 Financial reports and audit
s. 231
(b) requiring the adoption by a co-operative of the same
financial year for each entity that the co-operative
controls.
231. Power of Registrar to grant exemptions
5 The Registrar may, by order published in the Gazette,
exempt --
(a) a co-operative; or
(b) a person or firm proposed to be appointed as an auditor
of a co-operative; or
10 (c) a director or auditor of a co-operative,
from compliance with a provision of a regulation made for the
purpose of this Part or with a provision of the Corporations Act
as that Act applies under section 230.
232. Disclosure by directors
15 The directors of a co-operative must make the disclosures about
the affairs of the co-operative and of any entity that the
co-operative controls that are required by the regulations.
Penalty: a fine of $2 000.
233. Protection of auditors etc.
20 (1) An auditor of a co-operative has qualified privilege in relation
to --
(a) a statement that the auditor makes, orally or in writing,
in the course of his or her duties as auditor; or
(b) the giving of notice, or the sending of copies of financial
25 reports or other reports, to the Registrar under this Act.
(2) A person has qualified privilege in relation to --
(a) the publishing of a document prepared by an auditor in
the course of the auditor's duties and required by or
page 138
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Registers, records and returns Division 7
s. 234
under this Act to be lodged with the Registrar, whether
or not the document has been lodged; or
(b) the publishing of a statement made by an auditor
referred to in subsection (1).
5 (3) This section does not limit or affect a right, privilege or
immunity that an auditor or other person has, apart from this
section, as defendant in proceedings for defamation.
234. Financial year
(1) The financial year of a co-operative is to end on the day in each
10 year that is provided for by the rules of the co-operative.
(2) In the case of a co-operative registered under Part 2 Division 4,
the first financial year of the co-operative may extend from the
date of its registration to a date not more than 18 months after
registration.
15 (3) In the case of a co-operative registered under Part 2 Division 5,
the first financial year of the co-operative is to be a period not
extending beyond a date that is 18 months after the end of the
co-operative's last financial year before the co-operative
registered under this Act.
20 (4) On an alteration of the rules of a co-operative altering its
financial year, the alteration may provide either that the
financial year current at the date of alteration is to be extended
for a period not exceeding 6 months or that the financial year
next following the financial year that is so current is to be a
25 period exceeding 12 months but not exceeding 18 months.
Division 7 -- Registers, records and returns
235. Registers to be kept by co-operatives
(1) A co-operative must keep the following registers in accordance
with this section --
30 (a) a register of members, directors and shares, if any;
page 139
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 7 Registers, records and returns
s. 236
(b) a register of loans to, securities given by, debentures and
co-operative capital units issued by and deposits
received by the co-operative;
(c) a register of names of persons who have given loans or
5 deposits to, or who hold securities given by, or who hold
debentures or co-operative capital units issued by the
co-operative;
(d) a register of loans made by or guaranteed by the
co-operative, and of any securities taken by the
10 co-operative;
(e) a register of holders of co-operative capital units, in
accordance with section 262(4);
(f) a co-operative register of charges, in accordance with
Schedule 3 clause 41;
15 (g) a register of memberships cancelled under Part 6, in
accordance with section 133;
(h) a register of notifiable interests, in accordance with
section 289;
(i) a register of undertakings, in accordance with
20 section 477(1);
(j) other registers prescribed by the regulations.
Penalty: a fine of $2 000.
(2) The registers must be kept in the way, and contain the
particulars, specified by this Act or prescribed by the
25 regulations.
236. Location of registers
(1) A register kept under this Division must be kept at --
(a) the co-operative's registered office; or
(b) an office at the co-operative's principal place of
30 business; or
page 140
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Registers, records and returns Division 7
s. 237
(c) an office, whether of the co-operative or of someone
else, where the work involved in maintaining the
register is done; or
(d) another office approved by the Registrar.
5 (2) The office must be in this State.
(3) The co-operative must lodge with the Registrar a notice of the
address at which the register is kept within 28 days after the
register is --
(a) established at an office that is not the co-operative's
10 registered office; or
(b) moved from one office to another.
237. Inspection of registers etc.
(1) A co-operative must have at the office where the registers are
kept and available during all reasonable hours for inspection by
15 a member free of charge the following --
(a) a copy of this Act and the regulations;
(b) a copy of the rules of the co-operative and any order
under section 350;
(c) a copy of the minutes of each general meeting of the
20 co-operative;
(d) a copy of the last annual report of the co-operative under
section 240;
(e) the register of directors, members and shares;
(f) the register of names of persons who have given loans or
25 deposits to or hold securities, debentures or co-operative
capital units given or issued by the co-operative;
(g) other registers prescribed by the regulations.
(2) If a register is not kept on a computer, the person inspects the
register itself.
page 141
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 7 Registers, records and returns
s. 238
(3) If the register is kept on a computer, the person inspects a hard
copy of the information on the register unless the person and the
co-operative agree that the person can access the information by
computer.
5 (4) A member is entitled to make a copy of entries in a register
specified in subsection (1) and to do so free of charge unless the
rules of the co-operative require a fee to be paid, in which case
on payment of the required fee.
(5) The fee required by the rules must not be more than the fee
10 prescribed for a copy of any entry in the register.
(6) A co-operative must --
(a) permit a member to inspect a document or make a copy
of a document that the member is entitled to inspect or
make under this section; and
15 (b) give the member all reasonable assistance to inspect the
document or make the copy.
Penalty: a fine of $2 000.
(7) A co-operative must have at the place where the registers are
kept and available during all reasonable hours for inspection by
20 any person such documents in relation to the co-operative as are
prescribed.
Penalty: a fine of $2 000.
238. Use of information on registers
(1) A person must not --
25 (a) use information about a person obtained from a register
kept under this Division to contact or send material to
the person; or
page 142
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Registers, records and returns Division 7
s. 239
(b) disclose information of that kind knowing that the
information is likely to be used to contact or send
material to the person,
unless that use or disclosure of the information is --
5 (c) relevant to the holding of the directorship, membership,
shares, loans, securities, debentures, co-operative capital
units or deposits concerned or the exercise of the rights
attaching to them; or
(d) approved by the board; or
10 (e) necessary to comply with a requirement of this Act.
(2) A person who contravenes subsection (1) is liable to
compensate anyone else who suffers loss or damage because of
the contravention.
(3) A person who makes a profit from a contravention of
15 subsection (1) owes a debt to the co-operative.
(4) The amount of the debt is the amount of the profit.
239. Notice of appointment etc. of directors and officers
(1) A co-operative must give notice to the Registrar in accordance
with this section of the appointment of a person as a director,
20 principal executive officer or secretary of the co-operative or a
subsidiary of the co-operative, and of the cessation of the
appointment.
(2) The notice must --
(a) be in the form approved by the Registrar; and
25 (b) be given within 28 days after the appointment or
cessation of appointment; and
(c) state the particulars, prescribed by the regulations, of the
appointment or cessation of appointment.
Penalty: a fine of $2 000.
page 143
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 7 Registers, records and returns
s. 240
240. Annual report to be lodged with Registrar
(1) For the purposes of subsection (2) the required period is --
(a) 28 days after the annual general meeting of the
co-operative; or
5 (b) if the annual general meeting of the co-operative is not
held within the period stated in section 195(3)(a),
28 days after the end of that period.
(2) A co-operative must lodge with the Registrar, within the
required period in each year, an annual report containing the
10 following --
(a) a notice in the form approved by the Registrar listing the
secretary, the directors and the principal executive
officers of the co-operative and of each subsidiary of the
co-operative, as at the date that the annual report is
15 lodged with the Registrar;
(b) if the co-operative is required under section 230 to
prepare a financial report for its most recently ended
financial year, a copy of the financial report;
(c) a copy of the financial statements of each subsidiary of
20 the co-operative in relation to the most recently ended
financial year of the subsidiary, or a copy of the
consolidated financial statements for all subsidiaries of
the co-operative in relation to the most recently ended
financial year of the subsidiaries;
25 (d) a copy of any report by the auditors or directors of the
co-operative or subsidiary --
(i) prepared under section 230(2); or
(ii) on a financial report referred to in paragraph (b)
or a financial statement referred to in
30 paragraph (c);
(e) other particulars prescribed by the regulations.
Penalty: a fine of $2 000.
page 144
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Name and registered office Division 8
s. 241
241. List of members to be provided at request of Registrar
A co-operative must, at the written request of the Registrar,
send to the Registrar, within the time and in the way that the
Registrar specifies, a full list of the members of the co-operative
5 and of each subsidiary of the co-operative, together with the
particulars with regard to those members that the Registrar
specifies in the request.
Penalty: a fine of $2 000.
242. Special return to be given at request of Registrar
10 (1) The Registrar may, by direction in writing, require a
co-operative to give to the Registrar a special return in the form,
within the time, and relating to the subject matter, specified by
the Registrar.
(2) The co-operative must comply with a direction under
15 subsection (1).
Penalty: a fine of $2 000.
Division 8 -- Name and registered office
243. Name to include certain matter
(1) The name of a co-operative may consist of words, numbers or a
20 combination of both.
(2) The name of a co-operative must include the word
"Co-operative" or "Cooperative" or the abbreviation "Co-op".
(3) The word "Limited" or the abbreviation "Ltd" must be the last
word of the name.
25 (4) A corporation that is formed or incorporated under an Act other
than this Act must not register under the other Act by a name
that includes the word "Co-operative" or "Cooperative" or the
abbreviation "Co-op".
Penalty: a fine of $2 000.
page 145
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 8 Name and registered office
s. 244
(5) The Registrar must not register as the name of a co-operative a
name that contains anything a regulation declares is an
unsuitable name, unless the Minister is satisfied the name is
suitable for registration in the circumstances of a particular case.
5 (6) Subsection (4) does not apply to a corporation that is allowed
under another Act to use the word "Co-operative" or
"Cooperative" or the abbreviation "Co-op" in its name.
244. Use of abbreviations
A description of a co-operative is not inadequate or incorrect
10 merely because of one or more of the following --
(a) the use of the abbreviation "Co-op" instead of the word
"Co-operative" or "Cooperative" in the co-operative's
name;
(b) the use of the abbreviation "Ltd" instead of the word
15 "Limited" in the co-operative's name;
(c) the use of the symbol "&" instead of the word "and" in
the co-operative's name;
(d) the use of any of those words instead of the
corresponding abbreviation or symbol in the
20 co-operative's name;
(e) the use of any abbreviation or elaboration of the name of
the co-operative that is approved in a particular case or
for a particular purpose by the Registrar in writing.
245. Name to appear on business documents etc.
25 (1) A co-operative must ensure its name appears in legible
characters on its seal, and in any of the following documents
issued, signed or endorsed by or on behalf of the
co-operative --
(a) a bill of exchange, promissory note, cheque or other
30 negotiable instrument;
(b) a receipt or letter of credit issued by the co-operative;
page 146
[Draft Bill for public comment]
Co-operatives Bill 2006
Management and administration of co-operatives Part 9
Name and registered office Division 8
s. 246
(c) a document of a class prescribed by the regulations.
Penalty: a fine of $2 000.
(2) An officer of a co-operative or a person on its behalf must
not --
5 (a) use a seal of the co-operative; or
(b) sign or authorise to be signed on behalf of the
co-operative any document referred to in subsection (1),
in or on which the co-operative's name does not appear in
legible characters.
10 Penalty: a fine of $2 000.
(3) A director of a co-operative who knowingly authorises or
permits a contravention of this section is guilty of an offence.
Penalty: a fine of $2 000.
246. Change of name of co-operative
15 (1) A co-operative may by special resolution change its name to a
name approved by the Registrar.
(2) A change of name must be advertised as prescribed by the
regulations.
(3) A change of name does not take effect until --
20 (a) the Registrar has noted the change on the certificate of
registration of the co-operative; or
(b) the certificate of registration is surrendered to the
Registrar and a replacement certificate of registration is
issued in the new name.
25 (4) A change of name by a co-operative does not affect --
(a) the identity of the co-operative; or
(b) the exercise of a right, or the enforcement of an
obligation, by or against the co-operative or a person; or
page 147
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 9 Management and administration of co-operatives
Division 8 Name and registered office
s. 247
(c) the continuation of legal proceedings by or against the
co-operative.
(5) Legal proceedings that might have been continued or started by
or against the co-operative in its former name may be continued
5 or started by or against the co-operative in its new name.
(6) The Registrar may refuse to approve a change of name if the
Registrar thinks the new name is unsuitable.
(7) The Registrar may direct a co-operative to change its name if
the Registrar considers the name is likely to be confused with
10 the name of a corporation or a registered business name.
247. Restriction on use of word "co-operative" or similar words
(1) A person other than a co-operative must not trade, or carry on
business, under a name or title containing the word
"Co-operative" or "Cooperative" or the abbreviation "Co-op" or
15 words importing a similar meaning.
Penalty: a fine of $2 000.
(2) Subsection (1) does not apply to a corporation referred to in
section 243(6).
248. Registered office of co-operative
20 (1) A co-operative must have a registered office.
Penalty: a fine of $2 000.
(2) A co-operative must, at the premises of its registered office,
publicly and conspicuously display a notice stating the name of
the co-operative and identifying the premises as its registered
25 office.
Penalty: a fine of $2 000.
(3) Within 28 days after changing the address of its registered
office, a co-operative must give the Registrar written notice of
the new address.
30 Penalty: a fine of $2 000.
page 148
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Power to raise money Division 1
s. 249
Part 10 -- Funds and property
Division 1 -- Power to raise money
249. Meaning of obtaining financial accommodation
A reference in this Division to the obtaining of financial
5 accommodation includes a reference to the obtaining of credit
and the borrowing or raising of money by any means.
250. Fund raising to be in accordance with Act and regulations
The regulations may impose requirements and restrictions on
the obtaining of financial accommodation, and the giving of
10 security in order to obtain financial accommodation, by a
co-operative.
251. Limits on deposit taking
A co-operative must not accept money on deposit unless --
(a) the co-operative is authorised by its rules to accept
15 money on deposit and was authorised by its rules
immediately before the commencement of this section to
accept money on deposit; or
(b) the co-operative was a deposit-taking corporation
immediately before it became a co-operative and it is
20 authorised by its rules to accept money on deposit; or
(c) in the case of a merged co-operative, one or more of the
co-operatives involved in the merger was a
deposit-taking co-operative immediately before the
registration of the merged co-operative and the merged
25 co-operative is authorised by its rules to accept money
on deposit.
252. Members etc. not required to see to application of money
A member or other person from whom a co-operative obtains
financial accommodation is not required to see to its application
page 149
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 1 Power to raise money
s. 253
and is not affected or prejudiced by the fact that in obtaining
that financial accommodation, the co-operative contravened a
provision of this Act or the rules of the co-operative.
253. Registrar's directions about fundraising
5 (1) The Registrar may, if the Registrar considers it is in the interests
of a co-operative's members, by written notice served on a
co-operative, give a direction to the co-operative as to the way
in which it is to exercise its functions in connection with the
activities of the co-operative in obtaining financial
10 accommodation.
(2) A direction under subsection (1) may make provision for any
one or more of the following matters --
(a) requiring the co-operative to stop obtaining financial
accommodation or to stop obtaining financial
15 accommodation in a particular way;
(b) requiring the co-operative to repay in accordance with
the direction all or part of financial accommodation
obtained;
(c) requiring the co-operative to re-finance in a specified
20 way financial accommodation repaid in accordance with
the Registrar's direction;
(d) the way in which the co-operative is permitted to invest
or use the proceeds of financial accommodation it
obtains.
25 (3) Within 28 days of receiving a direction, a co-operative may
apply to the Supreme Court for a review of that decision.
254. Subordinated debt
(1) In this section --
"subordinated debt" means debt incurred under an agreement
30 under which, in the event of the winding up of the
page 150
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Power to raise money Division 1
s. 255
co-operative, a claim of the creditor against the
co-operative in relation to the debt is to rank in priority --
(a) equally with the claim of another creditor who is a
party to a similar agreement; and
5 (b) except as provided by paragraph (a), after the claims
of another creditor of the co-operative and before the
claims of members to repayment of share capital in
the co-operative.
(2) A co-operative may incur subordinated debt.
10 (3) An agreement under which subordinated debt is incurred has
effect despite the provisions of the Corporations Act Part 5.6
Division 6, as applied under Part 12 Division 3 of this Act.
255. Application of Corporations Act to issues of debentures
(1) Subject to subsection (2), the debentures of a co-operative are
15 declared to be applied Corporations legislation matters for the
purposes of the Corporations (Ancillary Provisions) Act 2001
Part 3 in relation to the provisions of Part 1.2A, Chapter 2L,
Chapter 6CA, Chapter 6D and Part 7.10 of the Corporations
Act, subject to the following modifications --
20 (a) the provisions apply as if a co-operative were a
company;
(b) a reference in the provisions to a corporation includes a
reference to a co-operative;
(c) a reference in the provisions to ASIC is to be read as a
25 reference to the Registrar;
(d) any other changes, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
page 151
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 1 Power to raise money
s. 256
(2) The provisions of the Corporations Act applying to the
debentures of a co-operative by this section do not apply to the
following --
(a) a loan to which section 260 applies;
5 (b) an issue of debentures of a co-operative that is made --
(i) solely to members; or
(ii) solely to members and employees of the
co-operative; or
(iii) to a person who on becoming an inactive
10 member of the co-operative has had his or her
share capital converted to debt.
(3) Words used in this section that are not defined in this Act have
the same meanings as in the Corporations Act.
256. Application of Corporations to particular issues of
15 debentures
An issue of debentures to which section 257 applies is declared
to be an applied Corporations legislation matter for the
Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
to the Corporations Act, sections 722 and 734, subject to the
20 following modifications --
(a) the provisions apply as if a co-operative were a
company;
(b) a reference in the provisions to a disclosure document is
to be read as a reference to a disclosure statement under
25 section 257;
(c) a reference in the provisions to securities is to be read as
a reference to debentures;
(d) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
30 (e) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3 that
are prescribed under the regulations.
page 152
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Power to raise money Division 1
s. 257
257. Disclosure statement
(1) This section applies to the issue of debentures of a co-operative
if the issue is made --
(a) solely to members; or
5 (b) solely to members and employees of the co-operative.
(2) Before issuing to a person debentures to which this section
applies, a co-operative must give the person a disclosure
statement, approved by the Registrar, and containing the
information that is reasonably necessary to enable a person to
10 make an informed assessment of the financial prospects of the
co-operative, including --
(a) the purpose for which the money raised by the
co-operative by the issue of debentures is to be used;
and
15 (b) the rights and liabilities attaching to the debentures; and
(c) the financial position of the co-operative; and
(d) the interests of the directors of the co-operative in the
issue of the debentures; and
(e) compensation or consideration to be paid to officers or
20 members of the co-operative in connection with the
issue of debentures; and
(f) other matters that the Registrar directs.
(3) Sections 16 (except subsection (3)) and 29 apply to the approval
of a disclosure statement under this section with any necessary
25 changes and, in particular, as if a reference in section 16 to a
formation meeting were a reference to the issue of debentures.
258. Approval of board for transfer of debentures
A debenture of a co-operative cannot be sold or transferred
except with the consent of the board and in accordance with the
30 rules of the co-operative.
page 153
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 1 Power to raise money
s. 259
259. Application of Corporations Act -- reissue of redeemed
debentures
Debentures issued by a co-operative to any of its members or
employees are declared to be applied Corporations legislation
5 matters for the purposes of the Corporations (Ancillary
Provisions) Act 2001 Part 3 in relation to the Corporations Act
section 124(1)(b) or 563AAA as if a co-operative were a
company.
260. Compulsory loan by member to co-operative
10 (1) If authorised by the rules of the co-operative, the co-operative
may require its members to lend money, with or without
security, to the co-operative, in accordance with a proposal
approved by special resolution of the co-operative.
(2) The proposal must not require a loan to be for a term of more
15 than 7 years or another term prescribed by the regulations.
(3) The proposal must --
(a) be accompanied by a disclosure statement, approved by
the Registrar, that explains the purpose for which the
money raised by the co-operative under the proposal is
20 to be used, and includes any other information that the
Registrar directs; and
(b) show the total amount of the loan to be raised by the
co-operative and the basis on which the money required
to be lent by each member is to be calculated; and
25 (c) be accompanied by a statement informing the member
that the member may inform the board by notice on or
before the date specified in the statement, being a date
before the passing of the special resolution, that the
member resigns on the passing of the special resolution.
30 (4) If the proposal allows, the board of the co-operative may, under
the terms of the proposal, deduct the money required to be lent
by a member to the co-operative from money payable from the
page 154
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Power to raise money Division 1
s. 261
co-operative to the member for his or her dealings with the
co-operative.
(5) A proposal to deduct money referred to in subsection (4) must,
in addition to meeting the requirements of subsection (3),
5 show --
(a) the basis on which the money is to be deducted; and
(b) the time and way of making the deductions.
(6) When approved the proposal is binding on --
(a) all members of the co-operative at the date of passing of
10 the special resolution, other than a member who has
given a notice of resignation in accordance with
subsection (3)(c); and
(b) all persons who become members of the co-operative
after that date and before the total amount of the loan to
15 be raised under the proposal has been raised.
(7) Sections 16 (except subsection (3)) and 29 apply to the approval
of a disclosure statement under this section with any necessary
changes and in particular as if a reference in section 16 to a
formation meeting were a reference to the special resolution.
20 261. Interest payable on compulsory loan
(1) The rate of interest payable by a co-operative on a loan under
section 260 during a period is --
(a) in the case of a co-operative with share capital --
(i) the rate (or if there is more than one rate, the
25 higher or highest rate) of dividend payable for
the period on the share capital of the
co-operative; or
(ii) if the rate of dividend payable for the period has
not been determined, the rate (or the higher or
30 highest rate) of dividend payable for the
page 155
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 2 Co-operative capital units
s. 262
immediately preceding period for which a rate
has been determined; or
(iii) if a rate of dividend has never been determined
for the share capital of the co-operative, the rate
5 that the board of the co-operative considers
reasonable;
or
(b) in the case of a co-operative without share capital, the
rate that the board of the co-operative considers
10 reasonable; or
(c) if the rules provide for a rate to be payable that is higher
than the rate applicable under paragraph (a) or (b), that
higher rate.
(2) A member may agree to the rate of interest being less than the
15 rate that would otherwise be payable under this section and may
agree to no interest being paid.
Division 2 -- Co-operative capital units
262. General nature of co-operative capital units
(1) A co-operative capital unit ("CCU") is an interest issued by a
20 co-operative conferring an interest in the capital, but not the
share capital, of the co-operative.
(2) A CCU --
(a) is personal property; and
(b) is transferable or transmissible as provided by this Act
25 and the rules of the co-operative, subject to the terms of
issue of the CCU; and
(c) is, subject to the rules of the co-operative, capable of
devolution by will or by operation of law.
page 156
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Co-operative capital units Division 2
s. 263
(3) Subject to subsection (2) --
(a) the laws applicable to ownership of and dealing with
personal property apply to a CCU as they apply to other
property; and
5 (b) equitable interests in respect of a CCU may be created,
dealt with and enforced as in the case of other personal
property.
(4) A transferor of a CCU remains the holder of the CCU until the
transfer is registered and the name of the transferee, and the
10 details of the transferee's CCU holding, are entered in the
register of CCU holders referred to in section 235(1).
(5) Despite any rule of law or equity to the contrary, a condition
subject to which a CCU is issued is not invalid merely because
the CCU is, by the condition, made irredeemable or redeemable
15 only on the happening of a contingency however remote or at
the end of a period however long.
263. Priority of CCU's on winding up
(1) On a winding up of a co-operative, a debt owed to a person as
the holder or former holder of a CCU issued by the co-operative
20 is to rank for priority of payment in accordance with the terms
of issue of the CCU.
(2) Such a debt may rank as a secured debt if it is secured but if it is
unsecured may not rank in priority to other unsecured debts.
(3) It may rank equally with or behind unsecured debts and, if the
25 debt ranks behind unsecured debts, may rank in priority to,
equally with or behind debts due to contributories.
264. Financial accommodation provisions apply to issue of CCUs
(1) The issuing of CCUs is to be considered to be the obtaining of
financial accommodation and accordingly Part 10 Division 1
30 applies to the issue of CCUs.
page 157
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 2 Co-operative capital units
s. 265
(2) For the purposes of that Division, a CCU is to be considered to
be a debenture.
265. CCUs to be issued to non-members
CCUs may be issued to a person whether or not the person is a
5 member of the co-operative.
266. Minimum requirements for rules concerning CCUs
The rules of a co-operative that permit the co-operative to issue
CCUs must contain provision to the effect of the following
provisions and must not contain provisions that are inconsistent
10 with the following provisions --
(a) each holder of a CCU is entitled to one vote only at a
meeting of the holders of CCUs;
(b) the rights of the holders of CCUs may be varied only in
the way and to the extent provided by their terms of
15 issue and only with the consent of at least 75% of the
holders of CCUs given in writing at a meeting;
(c) the holder of a CCU has, in the person's capacity as a
holder of a CCU, none of the rights or entitlements of a
member of the co-operative;
20 (d) the holder of a CCU is entitled to receive notice of all
meetings of the co-operative and all other documents in
the same manner as the holder of a debenture of the
co-operative.
267. CCUs not to be issued unless terms of issue approved by
25 Registrar
(1) A co-operative is not to issue CCUs unless --
(a) the terms of issue have been approved by a special
resolution of the co-operative; and
(b) the issue is made pursuant to an offer accompanied by a
30 copy of a statement approved by the Registrar under
subsection (3); and
page 158
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Co-operative capital units Division 2
s. 268
(c) the Registrar approves of the terms of the issue under
subsection (4).
(2) The terms of issue must include, but is not limited to including,
the following information --
5 (a) details of entitlement to repayment of capital;
(b) details of entitlement to participate in surplus assets and
profits;
(c) details of entitlement to interest on capital, including
whether interest is cumulative or non-cumulative;
10 (d) details of how capital and interest on capital are to rank
for priority of payment on a winding up;
(e) whether there is a limit on the total holding of CCUs
that may be acquired by persons who are not members
of the co-operative and, if there is a limit, what the
15 limit is.
(3) The statement approved by the Registrar for the purposes of the
issue is to set out the terms of the issue, the rights of the holders
of CCUs, the terms of redemption and the manner of
transferability of CCUs.
20 (4) The Registrar is not to approve the terms of issue unless
satisfied that they will not result in a failure to comply with
co-operative principles and are not contrary to the rules of the
co-operative or this Act.
268. Directors' duties concerning CCUs
25 In discharging their duties, it is proper for the directors of a
co-operative to take into account that the holders of CCUs, in
their capacity as holders of CCUs, have none of the rights and
entitlements of, and are not entitled to be regarded as, members
of the co-operative.
page 159
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 2 Co-operative capital units
s. 269
269. Redemption of CCUs
(1) The redemption of CCUs is not to be considered to be a
reduction in the share capital of the co-operative.
(2) A co-operative may redeem CCUs but only on the terms and in
5 the way that is provided by the terms of their issue and only if
they are fully paid up.
(3) CCUs may not be redeemed except out of --
(a) profits that would otherwise be available for dividends;
or
10 (b) the proceeds of a fresh issue of shares, or an approved
issue of CCUs, made for the purpose of the redemption.
(4) An issue of CCU's is an approved issue for the purposes of
subsection (3) if there is the same entitlement to priority of
payment of capital and dividend in relation to shares in the
15 co-operative as there was for the redeemed CCUs.
(5) Any premium payable on redemption is to be provided for out
of profits or out of the share premium account or an account
created for that purpose.
270. Capital redemption reserve
20 (1) This section applies if CCUs are redeemed out of profits that
would otherwise be available for dividends.
(2) Out of profits that would otherwise have been available for
dividends there is to be transferred to a reserve called the capital
redemption reserve a sum equal to the nominal amount of the
25 CCUs redeemed.
(3) The provisions of this Act relating to the reduction of share
capital of a co-operative apply as if the capital redemption
reserve were paid-up share capital of the co-operative.
page 160
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Charges Division 3
s. 271
(4) The capital redemption reserve may be applied in paying up
unissued shares of the co-operative to be issued to members of
the co-operative as fully-paid bonus shares.
271. Issue of shares in substitution for redemption
5 (1) If a co-operative has redeemed or is about to redeem CCUs held
by an active member of the co-operative, it may --
(a) issue shares to the member up to the sum of the nominal
value of the CCUs redeemed or to be redeemed, as if
those CCUs had never been issued; or
10 (b) pay up amounts unpaid on shares held by the member up
to the sum of the nominal value of the CCUs redeemed
or to be redeemed, as if those CCUs had never been
issued.
(2) This section applies only if the terms of issue of the CCUs
15 provide for the conversion of CCUs held by an active member
of the co-operative into shares of the co-operative.
Division 3 -- Charges
272. Registration of charges
Schedule 3 has effect but does not apply to --
20 (a) a mortgage, charge or encumbrance that is over specific
land and is registered under the Transfer of Land
Act 1893; or
(b) a mortgage, charge or encumbrance registered under the
Mining Act 1978.
25 Division 4 -- Receivers and other controllers of property
of co-operatives
273. Receivers and other controllers of property of co-operatives
Schedule 4 has effect.
page 161
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 5 Disposal of surplus from activities
s. 274
Division 5 -- Disposal of surplus from activities
274. Retention of surplus for benefit of co-operative
The board of a co-operative may resolve to retain all or part of
the surplus arising in a year from the business of the
5 co-operative to be applied for the benefit of the co-operative.
275. Application for charitable purposes or members' purposes
(1) The rules of a co-operative may authorise the co-operative to
apply a part of the surplus arising in a year from the business of
the co-operative for a charitable purpose.
10 (2) The rules of a trading co-operative may authorise the
co-operative to apply a part of the surplus arising in a year from
the business of the co-operative towards supporting an activity
approved by the co-operative.
(3) The rules must limit the amount that may be applied under
15 subsection (1) or (2) to a specified proportion of the surplus.
(4) A co-operative may apply part of the surplus for a purpose and
to the extent authorised by rules under subsection (1) or (2).
276. Distribution of surplus or reserves to members
(1) In this section --
20 "limited dividend" means a dividend that is not more than the
amount prescribed by the regulations.
(2) The rules of a trading co-operative may authorise a co-operative
to apply a part of the surplus arising in any year from the
business of the co-operative or a part of the reserves of the
25 co-operative by --
(a) distribution to members as a rebate in proportion to the
value of business done by each member with the
co-operative or to profits earned by the co-operative on
business done by each member with the co-operative; or
page 162
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Disposal of surplus from activities Division 5
s. 277
(b) the issue of bonus shares to members in proportion to
the value of business done by each member with the
co-operative, to profits earned by the co-operative on
business done by each member with the co-operative or
5 to shares held by the member; or
(c) the issue to members of a limited dividend in proportion
to shares held by the member.
(3) The amount of a rebate or dividend payable to a member under
subsection (2)(a) or (c) may, with the consent of the member, be
10 applied --
(a) in payment for the issue to the member of bonus shares;
or
(b) as a loan to the co-operative.
277. Application of surplus to other persons
15 (1) If authorised by its rules, a part of the surplus arising in a year
from the business of a trading co-operative may be credited to a
person who is not a member, but is qualified to be a member, by
way of rebate in proportion to the value of business done by the
person with the co-operative or to the profit earned by the
20 co-operative on business done by the person with the
co-operative, if --
(a) the person was a member when the business was done
and the membership has lapsed; or
(b) the person has applied for membership since the
25 business was done.
(2) Nothing in this section precludes the payment of a bonus to an
employee in accordance with the terms of his or her
employment.
page 163
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 10 Funds and property
Division 6 Acquisition and disposal of assets
s. 278
Division 6 -- Acquisition and disposal of assets
278. Acquisition and disposal of assets
(1) In this section --
"undertaking", of a co-operative, means all the assets of the
5 co-operative.
(2) Unless otherwise provided by the rules, a co-operative must not
do any of the following things except as approved by special
resolution by means of a special postal ballot --
(a) sell, or lease as a going concern --
10 (i) the undertaking of the co-operative; or
(ii) a part of that undertaking that relates to its
primary activities and the value of which
represents the percentage prescribed by the
regulations or more of the total value of the
15 undertaking;
(b) acquire from or dispose of to a director or employee of
the co-operative, or a relative, within the meaning of the
Corporations Act, of a director or employee of the
co-operative or of the spouse of a director or employee
20 of the co-operative, property the value of which
represents the percentage prescribed by the regulations,
or more, of the total value of all the assets of the
co-operative that relate to its primary activities;
(c) acquire an asset the value of which represents the
25 percentage prescribed by the regulations, or more, of the
total value of the assets of the co-operative, if the
acquisition would result in the co-operative starting to
carry on an activity that is not one of its primary
activities;
30 (d) dispose of an asset, if the disposal would result in the
co-operative ceasing to carry on a primary activity of the
co-operative, or in the ability of the co-operative to carry
page 164
[Draft Bill for public comment]
Co-operatives Bill 2006
Funds and property Part 10
Acquisition and disposal of assets Division 6
s. 278
on a primary activity of the co-operative being
substantially impaired.
Penalty: a fine of $6 000.
(3) If a co-operative contravenes this section, each person who is a
5 member of the board of the co-operative is taken to have
committed an offence unless the person satisfies the court that
he or she used all due diligence to prevent the contravention by
the co-operative.
Penalty: a fine of $6 000.
10 (4) The Registrar may, by order published in the Gazette, exempt a
co-operative from compliance with a provision of this section
and section 191 in relation to any matter to which this section
applies.
page 165
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 279
Part 11 -- Restrictions on the acquisition of interests
in co-operatives
Division 1 -- Restrictions on share and voting interests
279. Application of Part
5 This Part applies to trading co-operatives.
280. Notice required to be given of voting interest
(1) A person, whether or not a member of the co-operative, must
give notice to a co-operative within 5 business days after
becoming aware that the person has a relevant interest in the
10 right to vote of a member of the co-operative.
Penalty: a fine of $2 000.
(2) A person, whether or not a member of the co-operative, who has
ceased to have a relevant interest in the right to vote of a
member of a co-operative must give notice to the co-operative
15 within 5 business days after becoming aware of the fact.
Penalty: a fine of $2 000.
(3) Section 176 provides for the effect of a person having a relevant
interest in the right to vote of a member of a co-operative.
281. Notice required to be given of substantial share interest
20 (1) A person must give notice to a co-operative within 5 business
days after becoming aware that the person has a substantial
share interest in the co-operative.
Penalty: a fine of $2 000.
(2) A person who has a substantial share interest in a co-operative
25 must give notice to the co-operative within 5 business days after
becoming aware that a substantial change has occurred in the
share interest.
Penalty: a fine of $2 000.
page 166
[Draft Bill for public comment]
Co-operatives Bill 2006
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 282
(3) A person who has ceased to have a substantial share interest in a
co-operative must give notice to the co-operative within
5 business days after becoming aware that the person has ceased
to have the interest.
5 Penalty: a fine of $2 000.
(4) A person has a "substantial share interest" in a co-operative if
the nominal value of the shares in the co-operative in which the
person has a relevant interest represents 5% or more of the
nominal value of the issued share capital of the co-operative.
10 (5) A "substantial change" takes place in a person's share interest
in a co-operative if there is an increase or decrease in the
number of shares in the co-operative in which the person has a
relevant interest and the increase or decrease represents at least
1% of the nominal value of the issued share capital of the
15 co-operative.
282. Requirements for notices
A notice required under this Division must --
(a) be in the form approved by the Registrar; and
(b) state the particulars, prescribed by the regulations, of the
20 interest or change being notified.
283. Maximum permissible level of share interest
(1) A person must not have a relevant interest in shares of a
co-operative the nominal value of which is more than 20% of
the nominal value of the issued share capital of the co-operative.
25 (2) The Registrar, by order published in the Gazette, may specify a
maximum greater than 20% as the maximum permissible level
of share interest for the purposes of subsection (1) for a
particular co-operative.
(3) Unless an order under subsection (2) is in force, a co-operative,
30 by its rules, may specify a maximum less than 20% as the
page 167
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 284
maximum permissible level of share interest for the purposes of
subsection (1) for that co-operative.
(4) The maximum permissible level of share interest applying under
this section may be increased for a particular person by special
5 resolution of the co-operative concerned passed by a special
postal ballot.
(5) A resolution under subsection (4) does not have effect unless --
(a) it is approved by the Registrar; or
(b) the person concerned is another co-operative.
10 (6) The Registrar's approval of the resolution may be given on
conditions.
284. Transitional provision
(1) This section applies to a member of a transferred co-operative
whose relevant interest in the shares of that co-operative
15 immediately before the transfer day was more than the
maximum permissible level of share interest for the purposes of
section 283(1).
(2) The maximum permissible level of share interest for the
purposes of section 283(1) for the member is the level of the
20 member's relevant interest in the shares immediately before the
transfer day.
(3) In relation to a particular co-operative, this section ceases to
operate 6 months after the transfer day.
285. Shares to be forfeited to remedy contravention
25 (1) If a person has a relevant interest in a share of a co-operative in
contravention of this Division, the board of the co-operative
must declare to be forfeited enough of the shares in which the
person has a relevant interest to remedy the contravention.
page 168
[Draft Bill for public comment]
Co-operatives Bill 2006
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 286
(2) The shares to be forfeited are --
(a) the shares nominated by the person for the purpose; or
(b) in the absence of such a nomination, the shares in which
the person has had a relevant interest for the shortest
5 time.
(3) A declaration of the board that shares are forfeited operates to
forfeit the shares concerned.
(4) On forfeiture of the shares, section 300(1)(b) ceases to apply in
relation to the contravention.
10 (5) Sections 130 to 132 apply to shares forfeited under this section
as if the shares had been forfeited under Part 6.
286. Powers of board in response to suspected contravention
(1) If the board of a co-operative is satisfied on reasonable grounds
that a person has contravened section 283 in relation to the
15 co-operative, the board may do either or both of the
following --
(a) refuse to register a share transfer involving the person;
(b) suspend a stated right or entitlement that a person has as
a member of the co-operative or attaching to any shares
20 of the co-operative in which the person has a relevant
interest.
(2) The board may request a person who it suspects has a relevant
interest in shares of the co-operative to give specified
information to the board about the interest.
25 (3) A failure by a person to comply with a request under
subsection (2) is a reasonable ground for being satisfied that the
person has contravened section 283.
287. Powers of Supreme Court in relation to contravention
(1) If a person has contravened section 283 in relation to a
30 co-operative, the Supreme Court may, on the application of the
page 169
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 288
co-operative or the Registrar, make any order it considers
appropriate.
(2) Without limiting subsection (1), an order may include --
(a) a remedial order; and
5 (b) for the purpose of securing compliance with any other
order made under this section, an order directing the
co-operative or any other person to do or refrain from
doing a specified act.
(3) An order may be made whether or not the contravention
10 continues.
(4) Proof to the satisfaction of the Supreme Court at the hearing of
an application that --
(a) a person has a relevant interest in a share of a
co-operative because an associate of the person has a
15 relevant interest in a share; and
(b) the associate became entitled to the relevant interest
within 6 months before the application was filed with
the Supreme Court,
is evidence that the associate was an associate of the person
20 from the time the person first had the relevant interest until the
date of the hearing.
288. Co-operative to notify Registrar of interest over 20%
(1) A co-operative must notify the Registrar in writing within
14 days after the board becomes aware that --
25 (a) a particular person has a relevant interest in shares of the
co-operative the nominal value of which is more than
20% of the nominal value of the issued share capital of
the co-operative; or
(b) there has been a change in the number of shares in
30 which that person holds a relevant interest.
page 170
[Draft Bill for public comment]
Co-operatives Bill 2006
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 289
(2) The notification must give details of the relevant interest
concerned or of the change concerned.
289. Co-operative to keep register
(1) A co-operative must keep a register of notifiable interests.
5 (2) The co-operative must enter in the register in alphabetical order
the names of persons from whom the co-operative has received
notice under this Division together with the information
contained in the notice.
(3) The register must be open for inspection --
10 (a) by a member in accordance with section 237; and
(b) by any other person on payment of the fee (if any) that
the co-operative may require, being not more than the
maximum fee prescribed by the regulations.
290. Unlisted companies to provide list of shareholders etc.
15 (1) This section applies to a company, within the meaning of the
Corporations Act, that is not a listed corporation, within the
meaning of that Act.
(2) A company to which this section applies that is a member of a
co-operative must give to the co-operative a list showing --
20 (a) the name of each member of the company as at the end
of the financial year of the company and the number of
shares in the company held by each member; and
(b) the name of each person who has a relevant interest,
within the meaning of the Corporations Act, in a share
25 of the company together with details of the interest; and
(c) the name of each person who is an associate, within the
meaning of the Corporations Act, of the company.
(3) A list under subsection (2) must be given within 28 days after a
written request for the list is made to the company by the
30 co-operative or the Registrar.
page 171
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 291
(4) The details to be shown on the list are the details as at the date
specified in the request.
(5) The Registrar may make a request under subsection (3) if the
Registrar is of the opinion that the company is or may be
5 involved in a suspected contravention of a provision of this
Division.
291. Excess share interest not to affect loan liability
(1) This section applies if a co-operative has made a loan to a
member and the member had or has a relevant interest in shares
10 of the co-operative in contravention of this Division.
(2) Until the amount lent to the member has been repaid to the
co-operative, with any interest payable, the member is liable to
make to the co-operative the payments that the member would
be liable to make if all the shares concerned were lawfully held
15 by the member.
(3) Security for the repayment of the loan is not affected by a
contravention of this Division.
292. Extent of operation of Division
This Division --
20 (a) applies to all natural persons, whether resident in this
State or in Australia or not and whether Australian
citizens or not, and to all bodies, whether incorporated
or not, and whether carrying on business in this State or
in Australia or not; and
25 (b) extends to acts done or omitted to be done outside this
State, whether in Australia or not.
293. Registrar may grant exemption from Division
The Registrar may, by order published in the Gazette, exempt a
person from the operation of this Division.
page 172
[Draft Bill for public comment]
Co-operatives Bill 2006
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 294
Division 2 -- Restrictions on certain share offers
294. Share offers to which Division applies
This Division applies to the following offers to purchase shares
in a co-operative --
5 (a) an offer made as part of a proposal for, or that is
conditional on, the sale of the undertaking or part of the
undertaking, as a going concern, of the co-operative;
(b) an offer made as part of a proposal for, or that is
conditional on, the registration of the co-operative as a
10 company under the Corporations Act;
(c) an offer made as part of a proposal for, or that is
conditional on, the winding up of the co-operative;
(d) an offer that would result in a contravention of
section 283 were the offeror to be registered,
15 immediately after the offer is made, as the holder of the
shares that are the subject of the offer.
295. Requirements to be satisfied before offer can be made
A person must not make an offer to which this Division applies
unless the making of the offer has been approved --
20 (a) by special resolution by means of a special postal ballot;
and
(b) by the Registrar.
296. Some offers totally prohibited if they discriminate
An offer referred to in section 294(a) to (d) must not
25 discriminate between members who are active members and
members who are not active members.
page 173
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 2 Restrictions on certain share offers
s. 297
297. Offers to be submitted to board first
(1) Any proposal to make an offer to which this Division applies
must in the first instance be submitted to the board of the
co-operative.
5 (2) The board may decline to put a proposed offer to a special
postal ballot unless arrangements satisfactory to the board have
been made for payment to the co-operative of the expenses
involved in holding the ballot.
(3) The board may require payment in advance under
10 subsection (2).
(4) A requisition for a special postal ballot for the purposes of this
Division cannot be served unless and until the board has had a
reasonable opportunity to consider the proposed offer
concerned.
15 (5) For the purposes of subsection (4), a period of 28 days is a
reasonable opportunity for considering a proposed offer but the
Registrar may extend that period in a particular case, whether
before or after the end of the 28 days, by written notice to the
co-operative.
20 298. Announcements of proposed takeovers concerning
proposed company
(1) This section applies to an offer to purchase shares in a
co-operative made as part of a proposal for, or that is
conditional on, the registration of the co-operative as a company
25 (the "proposed company") under the Corporations Act.
(2) A person must not make a public announcement to the effect
that the person proposes, or that the person and another person
or other persons together propose, to make takeover offers, or to
cause a takeover announcement to be made, in relation to the
30 proposed company if --
(a) the person knows that the announcement is false or is
recklessly indifferent as to whether it is true or false; or
page 174
[Draft Bill for public comment]
Co-operatives Bill 2006
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 298
(b) the person has no reasonable grounds for believing that
the person, or the person and the other person or
persons, will be able to perform obligations arising
under the scheme or announcement or under the
5 Corporations Act in relation to the scheme or
announcement if a substantial proportion of the offers or
the offers made under the announcement are accepted.
Penalty: a fine of $20 000 or imprisonment for 5 years.
(3) If a person makes a public announcement to the effect that the
10 person proposes, or that the person and another person or other
persons together propose, to make a takeover bid in relation to
the proposed company, the person must proceed to make a
takeover bid in relation to shares in the company in accordance
with the public announcement within 2 months after the day on
15 which the company is incorporated.
Penalty: a fine of $10 000 or imprisonment for 2 years.
(4) A person is not liable to be convicted of more than one offence
under subsection (3) for any one public announcement.
(5) A person who contravenes this section, whether or not the
20 person is convicted of an offence for the contravention, is liable
to pay compensation to a person who suffered loss as a result of
entering into a share transaction in reliance on the public
announcement concerned.
(6) The amount of that compensation is the difference between the
25 price of the shares at which the transaction was entered into and
the price of the shares at which the transaction would have been
likely to have been entered into if the person had not made the
public announcement.
(7) A person does not contravene subsection (3) and is not liable to
30 pay compensation for the contravention if it is proved that the
person could not reasonably have been expected to make the
takeover bid concerned --
(a) as a result of circumstances that existed when the public
announcement was made but of which the person had no
page 175
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 2 Restrictions on certain share offers
s. 299
knowledge and could not reasonably have been expected
to have knowledge; or
(b) as a result of a change in circumstances after the
announcement was made, other than a change in
5 circumstances caused directly or indirectly by the
person.
(8) Expressions used in this section have the same meanings as in
the Corporations Law section 746 as applying on
12 March 2000.
10 299. Additional disclosure requirements for offers involving
conversion to company
If an offer is part of a proposal for, or is conditional on, the
registration of the co-operative as a company under the
Corporations Act, the disclosure statement required to be sent to
15 members for the purposes of the special postal ballot relating to
the offer must contain the following additional information --
(a) full particulars of any proposal by which a director will
acquire a relevant interest in a share of the company to
be formed;
20 (b) other information that is material to the making of a
decision by a member whether or not to agree to the
making of the offer, being information that is within the
knowledge of the directors and has not previously been
disclosed to the members;
25 (c) other information that the Registrar directs.
300. Consequences of prohibited offer
(1) If a person makes an offer to purchase shares in a co-operative
in contravention of this Division --
(a) the person cannot be registered as the holder of the
30 shares concerned; and
page 176
[Draft Bill for public comment]
Co-operatives Bill 2006
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 301
(b) if the transfer of the shares is registered, the person
cannot vote at a meeting of, or in a postal ballot
conducted by, the co-operative.
(2) A vote cast by or for a member when the member cannot vote
5 because of this section must be disregarded.
301. Registrar may grant exemptions
The Registrar may, by order published in the Gazette, exempt a
person or co-operative from compliance with a provision of this
Division and section 191 in relation to a matter to which this
10 Division applies.
page 177
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 1 Mergers and transfers of engagements
s. 302
Part 12 -- Merger, transfer of engagements,
winding up
Division 1 -- Mergers and transfers of engagements
302. Application of Division
5 This Division does not apply to a merger or transfer of
engagements to which Part 14 applies.
303. Mergers and transfers of engagements of local co-operatives
Any 2 or more co-operatives may consolidate all or any of their
assets, liabilities and undertakings by way of merger or transfer
10 of engagements approved under this Division.
304. Requirements before application can be made
(1) Before co-operatives can apply for approval under this Division
of a merger or transfer of engagements, the proposed merger or
transfer must have been approved by each of the co-operatives
15 by --
(a) a special resolution passed by means of a special postal
ballot; or
(b) if permitted by subsection (2), a resolution of the board
of the co-operative.
20 (2) The proposed merger or transfer of engagements may be
approved by resolution of the board of a co-operative if the
Registrar consents to that procedure applying in the particular
case.
305. Disclosure statement required
25 (1) A special resolution by which members of a co-operative
approve a merger or transfer of engagements is not effective for
the purposes of this Division unless this section has been
complied with.
page 178
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Mergers and transfers of engagements Division 1
s. 305
(2) Each co-operative must send to each of its members a disclosure
statement approved by the Registrar stating --
(a) the financial position of each co-operative concerned in
the proposed merger or transfer of engagements as
5 shown in financial statements that have been prepared as
at a date that is not more than 6 months before the date
of the statement; and
(b) any interest that any officer of each co-operative has in
the proposed merger or transfer of engagements; and
10 (c) any compensation or other consideration proposed to be
paid, or any other incentive proposed to be given, to any
officer or member of each co-operative in relation to the
proposed merger or transfer of engagements; and
(d) whether the proposal is a merger or transfer of
15 engagements and the reason for the merger or transfer of
engagements; and
(e) in the case of a transfer of engagements, whether it is a
total or partial transfer of engagements; and
(f) other information that the Registrar directs.
20 (3) The disclosure statement must be sent to the members of each
co-operative so that it will, in the ordinary course of post, reach
each member who is entitled to vote on the special resolution
not later than 21 days before the day on or before which the
ballot papers must be returned by members voting in the special
25 postal ballot.
(4) The Registrar may, by order published in the Gazette, exempt a
co-operative from complying with this section.
(5) The Registrar may approve a disclosure statement on any
conditions he or she considers appropriate.
page 179
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 1 Mergers and transfers of engagements
s. 306
306. Making an application
(1) An application for approval of a merger or transfer of
engagements under this Division must be made to the Registrar
in the way and form required by the Registrar.
5 (2) An application for approval of a merger must be accompanied
by 2 copies of the proposed rules of the merged co-operative
and any other particulars required by the Registrar.
307. Approval of merger
(1) The Registrar must approve a merger pursuant to an application
10 under this Division if satisfied that --
(a) this Division has been complied with in relation to the
application; and
(b) the proposed rules of the merged co-operative are
consistent with this Act and may reasonably be
15 approved; and
(c) the certificates of registration of the co-operatives have
been surrendered to the Registrar; and
(d) there is no good reason why the merged co-operative
and its rules should not be registered.
20 (2) On approving an application for merger, the Registrar must --
(a) cancel the registration of the co-operatives involved in
the merger; and
(b) register the merged co-operative and its rules; and
(c) issue to the merged co-operative a certificate of
25 registration under this Act.
(3) A merger takes effect on the issue of the certificate of
registration for the merged co-operative.
page 180
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Mergers and transfers of engagements Division 1
s. 308
308. Approval of transfer of engagements
(1) The Registrar must approve a transfer of engagements pursuant
to an application under this Division if satisfied that --
(a) this Division has been complied with in relation to the
5 application; and
(b) the rules or proposed rules of the transferee co-operative
are adequate; and
(c) in the case of a total transfer of engagements from a
co-operative, the certificate of registration of the
10 co-operative has been surrendered to the Registrar; and
(d) there is no good reason why the transfer of engagements
should not take effect.
(2) A transfer of engagements takes effect on the day specified in
the approval of the Registrar.
15 309. Transfer of engagements by direction of Registrar
(1) The Registrar may, with the approval of the Minister, direct a
co-operative --
(a) to transfer its engagements to a co-operative approved
by the Registrar; and
20 (b) within a period specified by the Registrar when giving
the direction or a further period allowed by the
Registrar, to enter into an agreement approved by the
Registrar to give effect to the transfer of engagements
directed.
25 (2) The Registrar must not give such a direction to a co-operative
unless the necessary grounds exist for the giving of the
direction, as referred to in section 341(2).
(3) The transfer of engagements must make provision, in a way
approved by the Registrar, for the members of the transferor
30 co-operative who wish to do so to become members of the
transferee co-operative.
page 181
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 2 Transfer of incorporation
s. 310
(4) If a co-operative fails to comply with a direction under this
section, the Registrar may elect to treat the failure as the
necessary grounds --
(a) for winding up the co-operative on a certificate of the
5 Registrar; or
(b) for appointing an administrator of the co-operative.
(5) The Registrar must notify the co-operative of the Registrar's
decision under subsection (4).
(6) The Registrar may revoke a direction under this section at any
10 time up until the co-operative has agreed pursuant to the
direction to transfer its engagements.
(7) A transfer of engagements directed under this section takes
effect on a day notified by the Registrar in the Gazette.
(8) An officer of a co-operative must not --
15 (a) fail to take all reasonable steps to secure compliance by
the co-operative with a direction given under this
section; or
(b) by a wilful act or omission be the cause of a failure by
the co-operative to comply with a direction.
20 Penalty: a fine of $2 000.
Division 2 -- Transfer of incorporation
310. Application for transfer
(1) A co-operative, if approved under this Division, may apply to
become registered or incorporated as one of the following
25 corporations --
(a) a company under the Corporations Act;
(b) an incorporated association under the Associations
Incorporation Act 1987;
(c) a corporation that is incorporated, registered or
30 otherwise established under a law that is a law of a place
page 182
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Transfer of incorporation Division 2
s. 311
outside this State and that is prescribed by the
regulations.
(2) For the purposes of subsection (1)(a), an application is to be
made in accordance with the Corporations Act section 601BC
5 for registration as a company under Part 5B of that Act.
(3) For the purposes of the Corporations Act section 601BC(8)(d), a
co-operative is authorised by this Act to transfer its
incorporation.
311. Requirements before application can be made
10 (1) Before an application is made under section 307, the
co-operative must, by special resolution passed by means of a
special postal ballot --
(a) approve the proposed application; and
(b) determine under what name the co-operative is to apply
15 to be incorporated or registered; and
(c) adopt a memorandum or articles of association or
constitution or replaceable rules or rules that may be
necessary or considered desirable.
(2) The name applied for need not be the same as that of the
20 co-operative and must not include the word "co-operative" or
"cooperative" or another word importing a similar meaning.
(3) The regulations may provide that a co-operative is exempt from
compliance with a provision of this section and section 191 in
relation to a matter to which this section applies.
25 312. Meaning of "new body" and "transfer"
The registration or incorporation of a co-operative as a
corporation as a result of an application under this Division is
referred to in this Division as its "transfer" and the corporation
concerned is referred to in this Division as the "new body".
page 183
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 2 Transfer of incorporation
s. 313
313. New body ceases to be registered as co-operative
On the transfer of a co-operative under this Division, it ceases to
be registered as a co-operative under this Act.
314. Transfer not to impose greater liability etc.
5 (1) The memorandum or articles of association or constitution or
replaceable rules or rules adopted for the purposes of the
transfer must not be such as to --
(a) impose on the members of the new body who were
members of the co-operative at the date of transfer any
10 greater or different liability to contribute to the assets of
the new body than the liability to which they were
subject as members of the co-operative; or
(b) deprive a member of the new body of preferential rights
to dividend or capital to which the member was entitled
15 as a member of the co-operative at the date of transfer.
(2) The transfer must result in all persons who were members of the
co-operative at the date of transfer becoming members of the
new body.
(3) In the case of a transfer of a co-operative that has a share capital
20 to a new body that has a share capital, the transfer must result in
every member of the co-operative at the date of transfer who
held shares in the co-operative being the holder of shares in the
capital of the new body equal in number and nominal value to
the shares held by the member as a member of the co-operative.
25 315. Effect of new certificate of registration
A certificate of registration or incorporation as the new body
issued by the appropriate officer under the law applicable to the
new body is evidence that all the requirements of this Division
about registration or incorporation have been complied with.
page 184
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Winding up and deregistration Division 3
s. 316
316. New body must give copy of new certificate of registration
or incorporation to Registrar
On the transfer of a co-operative under this Division, the new
body must immediately give the Registrar a copy of its new
5 certificate of registration or incorporation.
Penalty: a fine of $1 000.
317. New body is a continuation of the co-operative
(1) When a co-operative transfers to a new body, the corporation
constituted by the new body is taken to be the same entity as the
10 corporation constituted by the co-operative.
(2) Without limiting subsection (1), Division 6 applies to a transfer
under this Division.
Division 3 -- Winding up and deregistration
318. Methods of winding up
15 (1) A co-operative may be wound up voluntarily or by the Supreme
Court or on a certificate of the Registrar.
(2) In the case of a winding up voluntarily or by the Supreme Court,
the co-operative may be wound up in the same way and in the
same circumstances as a company under the Corporations Act
20 may be wound up.
319. Winding up on Registrar's certificate
(1) A co-operative may be wound up on a certificate of the
Registrar only if the necessary grounds for taking the action
exist, as referred to in section 341.
25 (2) A winding up on a certificate of the Registrar starts when the
Registrar gives the certificate to the co-operative.
page 185
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 3 Winding up and deregistration
s. 320
(3) On the giving of a certificate, the Registrar may appoint a
person to be the liquidator of the co-operative.
(4) The liquidator need not be a registered liquidator under the
Corporations Act.
5 (5) The liquidator must, within 10 days after appointment, give
notice of his or her appointment in the Gazette.
(6) The liquidator must give the security prescribed by the
regulations and is entitled to receive the fees fixed by the
Registrar.
10 (7) Any vacancy occurring in the office of liquidator is to be filled
by a person appointed by the Registrar.
320. Method of deregistration
A co-operative may be deregistered in the same way and in the
same circumstances as a company under the Corporations Act
15 may be deregistered.
321. Application of Corporations Act to winding up and
deregistration
The winding up or deregistration of a co-operative, and a
deregistered co-operative, are declared to be applied
20 Corporations legislation matters for the purposes of the
Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
to the provisions of the Corporations Act Parts 5.4, 5.4A, 5.4B,
5.5, 5.6, 5.7 and 5A.1, subject to the following modifications --
(a) a reference in the provisions to a special resolution or an
25 extraordinary resolution is to be read as a reference to a
special resolution within the meaning of this Act;
(b) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
page 186
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Winding up and deregistration Division 3
s. 321
(c) section 513B is to be considered to be amended by
inserting after paragraph (d) --
"
(da) if the winding up is on the certificate of the
5 Registrar -- on the date that the certificate is
given; or
";
(d) section 516 is to be considered to be amended by
inserting after "past member" --
10 "
together with any charges payable by him or her to the
co-operative in accordance with the rules
";
(e) a reference in the provisions to a registered liquidator is
15 to be read as including a reference to a person approved
or appointed by the Registrar as a liquidator of a
co-operative;
(f) a reference in the provisions to the Corporations Act
Part 2F.1 is to be read as a reference to Part 4 Division 5
20 of this Act;
(g) for the purposes of the application of the provisions to a
winding up on the certificate of the Registrar, the
winding up is taken to be a voluntary winding up, but
the Corporations Act section 490 does not apply;
25 (h) the provisions are to be read subject to sections 68
and 327 of this Act for the purposes of determining the
liability of members and former members to contribute
on a winding up of a co-operative;
(i) any other modifications, within the meaning of the
30 Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
page 187
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 3 Winding up and deregistration
s. 322
322. Restrictions on voluntary winding up
(1) A co-operative may be wound up voluntarily only --
(a) by a creditors' voluntary winding up; or
(b) if a special resolution is passed by means of a special
5 postal ballot in favour of voluntary winding up.
(2) A regulation may exempt a co-operative from compliance with
a provision of this section or section 191.
(3) When a special postal ballot referred to in subsection (1)(b) is
held, the members may, by means of the same ballot, by simple
10 majority --
(a) appoint one or more liquidators to wind-up the affairs
and distribute the assets of the co-operative; and
(b) fix the remuneration to be paid to the liquidator.
323. Start of members' voluntary winding up
15 A members' voluntary winding up of a co-operative starts when
the result of the special postal ballot is noted in the minute book
by the secretary of the co-operative.
324. Distribution of surplus -- non-trading co-operatives
(1) In this section --
20 "surplus property" means property of the co-operative that
remains after satisfaction of the debts and liabilities of the
co-operative and the costs, charges and expenses of the
winding up.
(2) On a winding up of a non-trading co-operative, the surplus
25 property of the co-operative must be distributed as required by
the rules of the co-operative.
(3) The rules of a non-trading co-operative must make provision for
the way in which the surplus property of the co-operative is to
be distributed in a winding up.
page 188
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Winding up and deregistration Division 3
s. 325
325. Liquidator -- vacancy may be filled by Registrar
If a co-operative is being wound up voluntarily and a vacancy
occurs in the office of liquidator that in the opinion of the
Registrar is unlikely to be filled in the way provided by the
5 Corporations Act, as applied by this Division, the Registrar may
appoint a person to be liquidator.
326. Review of liquidator's remuneration
A member or creditor of a co-operative or the liquidator may at
any time before the completion of the winding up of the
10 co-operative apply to the Supreme Court to review the amount
of the remuneration of the liquidator.
327. Liability of member to contribute in a winding up where
shares forfeited etc.
(1) If a person's membership of a co-operative is cancelled under
15 Part 6 within 2 years before the start of the winding up of the
co-operative, the person is liable on the winding up to contribute
to the property of the co-operative the nominal value of any
shares forfeited in connection with that cancellation, being their
nominal value immediately before cancellation.
20 (2) If under section 167 a co-operative --
(a) purchases a share of a member in the co-operative; or
(b) repays to a member the whole or any part of the amount
paid up on a share held by a member,
within 2 years before the start of the winding up of the
25 co-operative, the member or former member is liable on the
winding up to contribute to the property of the co-operative the
amount paid by the co-operative to the member or former
member in respect of the purchase or repayment together with
any amount unpaid on the shares immediately before the
30 purchase or repayment.
page 189
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 4 Administration of co-operative -- application of Corporations
Act
s. 328
(3) If a person contributes to the property of a co-operative under a
liability under this section, the amount contributed is, for the
purposes of the winding up, to be treated as having been paid up
by the person on shares of the co-operative.
5 (4) The liability of a member or former member of a co-operative
under this section is in addition to any other liability of the
member or former member to contribute to the property of the
co-operative on a winding up of the co-operative.
Division 4 -- Administration of co-operative -- application of
10 Corporations Act
328. Application of Corporations Act to administration of
co-operative
A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
15 (Ancillary Provisions) Act 2001 Part 3 in relation to the
provisions of the Corporations Act Part 5.3A and Part 5.9
Division 3, subject to the following modifications --
(a) the provisions are to be read as if a co-operative were a
company;
20 (b) a reference in the provisions to the Corporations Act
sections 128 and 129 is to be read as a reference to
sections 42 to 44, and section 46 of this Act;
(c) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
25 (d) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
page 190
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Appointment of administrator Division 5
s. 329
Division 5 -- Appointment of administrator
329. Appointment of administrator
(1) The Registrar may, by written notice, appoint an administrator
to conduct the affairs of a co-operative.
5 (2) A notice of appointment must state --
(a) the date of appointment; and
(b) the appointee's name; and
(c) the appointee's business address.
(3) If the appointee's name or business address changes, the
10 appointee must immediately give written notice of the change to
the Registrar.
(4) The Registrar must not appoint an administrator unless the
necessary grounds for taking the action exist, as referred to in
section 341(2).
15 330. Effect of appointment of administrator
(1) On the appointment of an administrator of a co-operative --
(a) the directors of the co-operative cease to hold office; and
(b) all contracts of employment with the co-operative are
terminated; and
20 (c) all contracts for the provision of secretarial or
administrative services for the co-operative are
terminated; and
(d) the administrator may terminate any contract for
providing other services to the co-operative.
25 (2) An administrator of a co-operative has the functions of the
board of the co-operative, including the board's powers of
delegation.
page 191
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 5 Appointment of administrator
s. 331
(3) A director of a co-operative must not be appointed or elected
while the administrator is in office except as provided by this
Division.
331. Revocation of appointment
5 (1) An administrator holds office until the administrator's
appointment is revoked.
(2) The Registrar may, by written notice, revoke the appointment of
an administrator.
(3) When a liquidator of a co-operative is appointed, the
10 appointment of any administrator of the co-operative is
automatically revoked.
(4) Immediately on the revocation of an administrator's
appointment, the administrator must prepare and submit a report
to the Registrar showing how the administration was carried
15 out, and for that purpose an administrator has access to the
co-operative's records.
(5) On giving the report and accounting fully for the administration
of the co-operative to the satisfaction of the Registrar, the
administrator is released from any further duty to account for
20 the administration of the co-operative other than on account of
fraud, dishonesty, negligence or wilful failure to comply with
this Act.
(6) Before revoking the appointment of an administrator of a
co-operative, the Registrar must --
25 (a) appoint another administrator; or
(b) appoint a liquidator; or
(c) ensure that directors of the co-operative have been
elected in accordance with the rules of the co-operative
at a meeting called by the administrator in accordance
30 with those rules; or
(d) appoint directors of the co-operative.
page 192
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Appointment of administrator Division 5
s. 332
(7) Directors elected or appointed under subsection (6) --
(a) take office on revocation of the administrator's
appointment; and
(b) in the case of directors appointed under subsection (6),
5 hold office until the next annual general meeting of the
co-operative after the revocation of that appointment.
332. Expenses of administration
(1) The expenses of and incidental to the conduct of a
co-operative's affairs by an administrator are payable from the
10 co-operative's funds.
(2) The expenses of conducting a co-operative's affairs include --
(a) if the administrator is not an officer or employee of the
public service, remuneration of the administrator at a
rate approved by the Registrar; or
15 (b) if the administrator is an officer or employee of the
public service, the amount that the Registrar certifies
should be paid to the State as repayment of the
administrator's remuneration.
(3) An amount certified under subsection (2)(b) may be recovered
20 in a court of competent jurisdiction as a debt payable to the
State.
(4) An administrator has, in relation to the expenses referred to in
subsection (1), the same priority on the winding up of a
co-operative as the liquidator of the co-operative has.
25 333. Liabilities arising from administration
(1) If a co-operative incurs loss because of fraud, dishonesty,
negligence or wilful failure to comply with this Act or the rules
of the co-operative by an administrator, the administrator is
liable for the loss.
page 193
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 5 Appointment of administrator
s. 334
(2) An administrator is not liable for loss that is not a loss to which
subsection (1) applies but must account for the loss in a report
given under section 331.
334. Additional powers of Registrar
5 (1) If the Registrar appoints directors of a co-operative under
section 331, the Registrar may, by written notice given to the
co-operative, specify --
(a) a time during which this section is to apply in relation to
the co-operative; and
10 (b) the terms on which all or any of the directors hold
office; and
(c) the rules that are to be the co-operative's rules.
(2) While this section applies to a co-operative, the Registrar
may --
15 (a) remove and appoint directors; and
(b) vary, revoke or state new terms in place of all or any of
the terms specified under subsection (1); and
(c) amend all or any of the rules specified under
subsection (1).
20 (3) The Registrar may, by written notice given to the co-operative,
extend the time for which this section is to apply to a
co-operative.
(4) A rule specified by the Registrar under this section to be a rule
of a co-operative --
25 (a) must not be altered except in the way set out in this
section; and
(b) if it is inconsistent with another rule of the co-operative,
prevails over the other rule, and the other rule is to the
extent of the inconsistency inoperative; and
30 (c) has the same evidentiary value as is by this Act accorded
to the co-operative's rules and to copies of them.
page 194
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Effect of merger etc. on property, liabilities etc. Division 6
s. 335
335. Stay of proceedings
(1) If the Registrar appoints an administrator to conduct a
co-operative's affairs, a person must not begin or continue
proceedings in a court against the co-operative until the
5 administrator's appointment is revoked except with the leave of
the Supreme Court and, if the Supreme Court grants leave, in
accordance with any terms that the Supreme Court imposes.
(2) A person intending to apply for leave of the Supreme Court
under subsection (1) must give the Registrar at least 10 days
10 notice of intention to apply.
(3) On the hearing of an application under subsection (1), the
Registrar may be represented and may oppose the application.
336. Administrator to report to Registrar
On the receipt of a request from the Registrar, the administrator
15 of a co-operative must, without delay, prepare and give to the
Registrar a report showing how the administration is being
carried out.
Division 6 -- Effect of merger etc. on property, liabilities etc.
337. How this Division applies to a merger
20 (1) This Division applies to a merger of co-operatives under this
Part.
(2) In the application of this Division to a merger --
"new body" means the co-operative that results from the
merger;
25 "original body" means each co-operative that is a party to the
merger;
"relevant day" means the day on which the merged
co-operative is registered under this Act.
page 195
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 6 Effect of merger etc. on property, liabilities etc.
s. 338
338. How this Division applies to a transfer of engagements
(1) This Division applies to a transfer of the engagements of a
co-operative to another co-operative under Division 1.
(2) In the application of this Division to a transfer of
5 engagements --
"new body" means the co-operative to which the engagements
are transferred;
"original body" means the co-operative that transfers its
engagements;
10 "relevant day" means the day on which the transfer of
engagements takes effect.
339. How this Division applies to a transfer of incorporation
(1) This Division applies to a transfer of incorporation under
Division 2.
15 (2) In the application of this Division to such a transfer --
"new body" means the corporation that results from the
transfer;
"original body" means the co-operative that transfers its
incorporation;
20 "relevant day" means the day on which the transfer takes
effect.
340. Effect of merger etc. on property, liabilities etc.
(1) In this section --
"assets" means any legal or equitable estate or interest (whether
25 present or future and whether vested or contingent) in real
or personal property of any description (including money),
and includes securities, choses in action and documents;
"instrument" means an instrument (other than this Act) which
creates, modifies or extinguishes rights or liabilities (or
30 would do so if lodged, filed or registered in accordance
page 196
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Effect of merger etc. on property, liabilities etc. Division 6
s. 340
with any law), and includes any judgment, order and
process of a court;
"liabilities" means liabilities, debts and obligations (whether
present or future and whether vested or contingent).
5 (2) On and from the relevant day for an event to which this
Division applies --
(a) the assets of the original body vest in the new body
without the need for a conveyance, transfer, assignment
or assurance; and
10 (b) the rights and liabilities of the original body become the
rights and liabilities of the new body; and
(c) all proceedings by or against the original body that are
pending immediately before the relevant day are taken
to be proceedings pending by or against the new body;
15 and
(d) an act, matter or thing done or omitted to be done by, to
or in relation to the original body before the relevant day
is, to the extent to which that act, matter or thing has any
force or effect, taken to have been done or omitted by, to
20 or in relation to the new body; and
(e) a reference in an instrument or document of any kind to
the original body is to be read as, or as including, a
reference to the new body.
(3) The operation of this section must not be regarded --
25 (a) as a breach of contract or confidence or otherwise as a
civil wrong; or
(b) as a breach of any contractual provision prohibiting,
restricting or regulating the assignment or transfer of
assets, rights or liabilities; or
30 (c) as giving rise to a remedy by a party to an instrument, or
as causing or permitting the termination of an
instrument, because of a change in the beneficial or legal
ownership of an asset, right or liability.
page 197
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 12 Merger, transfer of engagements, winding up
Division 7 Miscellaneous
s. 341
Division 7 -- Miscellaneous
341. Grounds for winding up, transfer of engagements,
appointment of administrator
(1) This section applies to the following actions --
5 (a) a direction by the Registrar to a co-operative to transfer
its engagements under section 309;
(b) the appointment of an administrator of a co-operative
under Division 5;
(c) the winding up of a co-operative on a certificate of the
10 Registrar under section 319.
(2) The necessary grounds for taking action to which this section
applies exist if the Registrar certifies that --
(a) the number of members is reduced to less than the
minimum number of persons allowed under section 66;
15 or
(b) the co-operative has not commenced business within
one year of registration or has suspended business for
more than 6 months; or
(c) the registration of the co-operative has been obtained by
20 mistake or fraud; or
(d) the co-operative exists for an illegal purpose; or
(e) the co-operative has wilfully, and after notice from the
Registrar, violated the provisions of this Act or of the
rules of the co-operative; or
25 (f) the board of the co-operative has, after notice from the
Registrar, failed to ensure that the rules of the
co-operative contain active membership provisions in
accordance with Part 6; or
(g) there are, and have been, for one month immediately
30 before the date of the Registrar's certificate, insufficient
directors of the co-operative to form a quorum in
accordance with the rules of the co-operative; or
page 198
[Draft Bill for public comment]
Co-operatives Bill 2006
Merger, transfer of engagements, winding up Part 12
Miscellaneous Division 7
s. 342
(h) after an inquiry under this Act into the affairs of a
co-operative or the working and financial condition of a
co-operative, that in the interests of members or
creditors of the co-operative or the public the action
5 concerned should be taken.
(3) Alternatively, the necessary grounds for winding up a
co-operative on a certificate of the Registrar exist if the
Registrar certifies that --
(a) the period, if any, fixed for the duration of the
10 co-operative by its rules has ended; or
(b) an event, to be specified in the certificate, has occurred
on the occurrence of which the regulations or the rules
provide that the co-operative is to be wound up.
(4) The Registrar must not certify under this section as to any
15 matter unless the matter has been proved to the Registrar's
satisfaction.
342. Application of Corporations Act for insolvent co-operatives
A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
20 (Ancillary Provisions) Act 2001 Part 3 in relation to the
provisions of the Corporations Act Part 5.7B, subject to the
following modifications --
(a) the provisions are to be read as if a co-operative were a
company;
25 (b) a reference in the provisions to a provision of the
Corporations Act sections 286 to 290, as applied under
section 230 of this Act, is to be read with any
modifications prescribed by the regulations;
(c) any other modifications, within the meaning of the
30 Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
page 199
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 343
Part 13 -- Arrangements and reconstructions
Division 1 -- General requirements
343. Requirements for binding compromise or arrangement
(1) A compromise or arrangement is binding only if it is approved
5 by order of the Supreme Court after having been agreed to --
(a) if the compromise or arrangement is between the
co-operative and any of its creditors, at a court ordered
meeting by a majority in number of the creditors
concerned who are present and voting (in person or by
10 proxy), being a majority whose debts or claims against
the co-operative amount to at least 75% of the total of
the debts and claims of all those creditors who are
present and voting (in person or by proxy); or
(b) if the compromise or arrangement is between the
15 co-operative and any of its members, by the members
concerned, by special resolution passed by means of a
special postal ballot.
(2) The court ordered meeting referred to in subsection (1)(a) is a
meeting called in accordance with an order of the Supreme
20 Court under this Part.
(3) The Supreme Court may grant its approval to a compromise or
arrangement subject to the alterations or conditions it considers
appropriate.
(4) An order of the Supreme Court approving a compromise or
25 arrangement does not have effect until an office copy of the
order is lodged with the Registrar.
(5) On the copy being lodged, the order takes effect from the date
of lodgment or an earlier date the Supreme Court specifies in
the order.
page 200
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
General requirements Division 1
s. 344
344. Supreme Court ordered meeting of creditors
(1) In this section --
"appropriate person" , in relation to an application for an
order, means --
5 (a) the co operative; or
(b) a member of the co operative; or
(c) one of the creditors concerned; or
(d) in the case of a co-operative being wound up, the
liquidator.
10 (2) If a compromise or arrangement is proposed between a
co-operative and any of its creditors, the Supreme Court may on
application by an appropriate person order a meeting or
meetings of the creditors concerned.
(3) The meeting must be convened in the way and be held in the
15 place or places, in this State or elsewhere, that the Supreme
Court directs.
(4) In considering whether to make an order for a meeting to be
held in another jurisdiction, the Supreme Court may have regard
to where creditors concerned reside.
20 345. Registrar to be given notice and opportunity to make
submissions
(1) The Supreme Court may, on the application of an appropriate
person as defined in section 344(1), make an order under this
Division approving a compromise or arrangement if the Court is
25 satisfied that --
(a) at least 14 days notice of the hearing of the application
for the order, or a shorter period of notice the Court or
the Registrar permits, has been given to the Registrar;
and
page 201
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 346
(b) the Registrar has had a reasonable opportunity to
examine --
(i) the terms of that compromise or arrangement;
and
5 (ii) the explanatory statement to be sent to creditors
or members under section 354,
and make submissions to the Court.
346. Results of 2 or more meetings
If the Supreme Court orders 2 or more meetings of creditors to
10 be held in relation to a proposed compromise or arrangement --
(a) the meetings are taken to form a single meeting; and
(b) the votes in favour of the proposed compromise or
arrangement cast at each of the meetings are to be
added; and
15 (c) the votes against the proposed compromise or
arrangement cast at each of the meetings are to be
added.
347. Persons disqualified from administering compromise etc.
(1) Except with the leave of the Supreme Court, a person must not
20 be appointed to administer, and must not administer, a
compromise or arrangement approved under this Act between a
co-operative and any of its creditors or members, whether by the
terms of the compromise or arrangement or under a power given
by the terms of a compromise or arrangement, if the person --
25 (a) is a mortgagee of property of the co-operative; or
(b) is an auditor or an officer of the co-operative; or
(c) is an officer of a corporation that is a mortgagee of
property of the co-operative; or
(d) is not a registered liquidator under the Corporations Act
30 unless the person is a corporation authorised by or under
page 202
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
General requirements Division 1
s. 348
a law of this State to administer the compromise or
arrangement concerned; or
(e) is an officer of a corporation related to the co-operative;
or
5 (f) unless the Registrar directs in writing that this paragraph
does not apply in relation to the person in relation to the
co-operative, has at any time within the last 12 months
been an officer or promoter of the co-operative or of a
related corporation of the co-operative.
10 348. Application of Schedule 4 to person appointed
Schedule 4 clauses 16, 18(2) and (4), 19, 23 and 25 apply to a
person appointed to administer a compromise or arrangement as
if the appointment were an appointment of the person as a
receiver and manager of property of the co-operative and as if a
15 reference to a receiver were a reference to that person.
349. Application of Corporations Act to person appointed
A person appointed to administer a compromise or arrangement
is declared to be an applied Corporations legislation matter for
the purposes of the Corporations (Ancillary Provisions)
20 Act 2001 Part 3 in relation to the Corporations Act section 536
as if --
(a) the appointment were an appointment as a liquidator of
the co-operative; and
(b) a reference in the section to a liquidator were a reference
25 to that person; and
(c) a reference in that section to ASIC were a reference to
the Registrar.
350. Copy of order to be attached to rules
(1) A co-operative must ensure that a copy of an order of the
30 Supreme Court approving a compromise or arrangement is
page 203
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 351
attached to each copy of the rules of the co-operative issued
after the order is made.
Penalty: a fine of $2 000.
(2) The Supreme Court may, by order, exempt a co-operative from
5 compliance with this section or determine the period during
which the co-operative must comply.
351. Directors to arrange for reports
(1) When a compromise or arrangement (whether or not for the
purposes of or in connection with a scheme for the
10 reconstruction of a co-operative or the merger of any 2 or more
co-operatives) has been proposed, the directors of the
co-operative must --
(a) if a meeting of the members of the co-operative by
resolution so directs, instruct the accountants or
15 solicitors or both named in the resolution to report on
the proposals and send their report or reports to the
directors as soon as practicable; and
(b) make any report or reports so obtained available at the
registered office of the co-operative for inspection by
20 the members and creditors of the co-operative at least
7 days before the day of the meeting ordered by the
Supreme Court or the holding of the special postal
ballot, as appropriate.
(2) If this section is not complied with, each director of the
25 co-operative commits an offence.
Penalty: a fine of $2 000.
352. Power of Supreme Court to restrain further proceedings
(1) If a proposed compromise or arrangement is between a
co-operative and any of its creditors and no order has been made
30 or resolution passed for the winding up of the co-operative, the
Supreme Court may restrain further proceedings in an action or
page 204
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
Explanatory statements Division 2
s. 353
other civil proceeding against the co-operative except by leave
of the Supreme Court and subject to such terms as the Supreme
Court imposes.
(2) The Supreme Court's power under this section is in addition to
5 any of its other powers and must not be exercised except on
application by the co-operative or of any creditor or member of
the co-operative.
353. Supreme Court need not approve compromise or
arrangement takeovers
10 (1) The Supreme Court need not approve a compromise or
arrangement unless --
(a) it is satisfied that the compromise or arrangement has
not been proposed for the purpose of enabling any
person to avoid the operation of any of the provisions of
15 Part 11 Division 2; and
(b) there is produced to the Supreme Court a statement in
writing by the Registrar stating that the Registrar has no
objection to the compromise or arrangement.
(2) The Supreme Court need not approve a compromise or
20 arrangement merely because a statement by the Registrar stating
that the Registrar has no objection to the compromise or
arrangement has been produced to the Supreme Court.
Division 2 -- Explanatory statements
354. Explanatory statement required to accompany notice of
25 meeting etc.
(1) An explanatory statement must accompany every notice --
(a) that is sent to a creditor of a co-operative calling a court
ordered meeting to obtain agreement to a compromise or
arrangement; or
page 205
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 2 Explanatory statements
s. 354
(b) that is sent to a member of a co-operative for the
purpose of the conduct of the special postal ballot to
obtain agreement to the compromise or arrangement.
(2) In every notice of a meeting referred to in subsection (1) that is
5 given by advertisement there must be included either a copy of
the explanatory statement or notification of the place at which
and the way in which creditors entitled to attend the meeting
may obtain copies of the explanatory statement.
(3) The explanatory statement must --
10 (a) explain the effect of the compromise or arrangement
and, in particular, state --
(i) material interests of the directors, whether as
directors, members or creditors of the
co-operative or otherwise; and
15 (ii) the effect on those interests of the compromise or
arrangement in so far as that effect is different
from the effect on the like interests of other
persons;
and
20 (b) set out --
(i) the information prescribed by the regulations;
and
(ii) other information that is material to the making
of a decision by a creditor or member whether or
25 not to agree to the compromise or arrangement,
is within the knowledge of the directors and has
not previously been disclosed to the creditors or
members.
(4) Subsection (1)(a) does not apply in the case of a creditor whose
30 debt does not exceed $200 unless the Supreme Court orders
otherwise.
page 206
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
Explanatory statements Division 2
s. 355
(5) The notice calling the meeting that is sent to a creditor referred
to in subsection (1)(a) must specify a place at which a copy of
the explanatory statement can be obtained on request.
(6) The co-operative must comply with a request under
5 subsection (5) as soon as practicable.
355. Requirements for explanatory statement
(1) An explanatory statement must be as approved by the Registrar.
(2) If the compromise or arrangement affects the rights of debenture
holders, the explanatory statement must specify --
10 (a) any material interests of the trustees for the debenture
holders, whether as such trustees, as members or
creditors of the co-operative or otherwise; and
(b) the effect on those interests of the compromise or
arrangement to the extent that that effect is different
15 from the effect on the like interests of other persons.
(3) If a notice given by advertisement includes a notification that
copies of the explanatory statement can be obtained in a
particular way, the co-operative must give a copy of the
statement free of charge to each creditor or member entitled to
20 attend the meeting or vote in the ballot who applies for it in that
way.
(4) Each person who is a director or trustee for debenture holders
must give notice to the co-operative of such matters relating to
the person as are required to be included in the explanatory
25 statement.
356. Contravention of Division -- offence by co-operative
(1) If a provision of this Division is contravened, the co-operative
concerned and any other person involved in the contravention
commits an offence.
30 Penalty: a fine of $2 000.
page 207
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 3 Facilitating reconstructions and mergers
s. 357
(2) It is a defence to a prosecution for an offence under
subsection (1) if it is proved that the contravention was due to
the failure of a person, other than the defendant, who is a
director of the co-operative or a trustee for debenture holders of
5 the co-operative, to supply for the purposes of the explanatory
statement particulars of the person's interests.
Division 3 -- Facilitating reconstructions and mergers
357. Provisions for facilitating reconstructions and mergers
(1) In this section --
10 "co-operative" includes a foreign co-operative;
"liabilities" includes duties of any description, including duties
that are of a personal character or are incapable under the
general law of being assigned or performed vicariously;
"property" includes rights and powers of any description,
15 including rights and powers that are of a personal character
and are incapable under the general law of being assigned
or performed vicariously.
(2) This section applies if an application is made to the Supreme
Court under this Part for the approval of a compromise or
20 arrangement and it is shown to the Court that --
(a) the compromise or arrangement has been proposed for
the purposes of a scheme for the reconstruction of a
co-operative or the merger of a co-operative with
another co-operative or with another corporation; and
25 (b) under the scheme all or part of the undertaking or of the
property of a co-operative concerned in the scheme (the
"transferor") is to be transferred to another corporation
(the "transferee") and the transferee is not a company
within the meaning of the Corporations Act.
page 208
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
Facilitating reconstructions and mergers Division 3
s. 357
(3) If this section applies, the Supreme Court may, either by the
order approving the compromise or arrangement or by a later
order provide for any one or more of the following --
(a) the transfer to the transferee of all or part of the
5 undertaking and the property or liabilities of the
transferor;
(b) the allotting or appropriation by the transferee of shares,
debentures, co-operative capital units, policies or other
interests in the transferee that, under the compromise or
10 arrangement, are to be allotted or appropriated by the
transferee to or for a person;
(c) the continuation by or against the transferee of legal
proceedings pending by or against the transferor;
(d) the deregistration, without winding up, of the transferor;
15 (e) the provision to be made for any persons who, within
the time and in the way the Court directs, dissent from
the compromise or arrangement;
(f) the transfer or allotment of any interest in property to a
person concerned in the compromise or arrangement;
20 (g) the incidental, consequential and supplemental matters
necessary to ensure that the reconstruction or merger is
fully and effectively carried out.
(4) If an order made under this section provides for the transfer of
property or liabilities, then, by virtue of the order --
25 (a) the property is transferred to and vests in the transferee
free, in the case of a particular property if the order so
directs, from a charge that is under the compromise or
arrangement to cease to have effect; and
(b) the liabilities are transferred to and become the liabilities
30 of the transferee.
(5) If an order is made under this section, each body to which the
order relates must, within 14 days after the making of the order,
lodge with the Registrar an office copy of the order.
page 209
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 4 Acquisition of shares of dissenting shareholders
s. 358
Division 4 -- Acquisition of shares of dissenting shareholders
358. Definitions
In this Division --
"dissenting shareholder", in relation to a scheme or contract,
5 means a shareholder who has not assented to the scheme or
contract or who has failed to transfer the shareholder's
shares under the scheme or contract;
"excluded shares", in relation to a scheme or contract
involving a transfer to a person of shares in a class of
10 shares in a co-operative, means shares in the class that,
when the offer relating to the scheme or contract is made,
are held by --
(a) in any case, the person or a nominee of the person; or
(b) if the person is a corporation, a subsidiary of the
15 body.
359. Schemes and contracts to which Division applies
(1) This Division applies to a scheme or contract involving a
transfer of shares in a co-operative (the "transferor") to a
person (the "transferee") that has, within 4 months after the
20 making of the offer relating to the scheme or contract by the
transferee, been approved by the holders of at least 90% in
nominal value of all the shares (other than excluded shares) to
which the offer relates.
(2) This Division does not apply to a scheme or contract arising out
25 of the making of an offer to which Part 11 Division 2 applies.
360. Acquisition of shares pursuant to notice to dissenting
shareholder
(1) The transferee under the scheme or contract may, within
2 months after the offer is approved, give notice as prescribed
30 by the regulations (a "compulsory acquisition notice") to a
page 210
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
Acquisition of shares of dissenting shareholders Division 4
s. 361
dissenting shareholder that the transferee wishes to acquire the
shares held by that shareholder.
(2) If a compulsory acquisition notice is given, the dissenting
shareholder may, by written notice given to the transferee
5 within one month after the day on which the compulsory
acquisition notice was given, ask for a statement in writing of
the names and addresses of all other dissenting shareholders as
shown in the register of members and the transferee must give
that statement.
10 (3) Having given the compulsory acquisition notice, the transferee
is, unless the Supreme Court orders to the contrary, entitled and
bound to acquire the shares of the dissenting shareholder on the
terms on which, under the scheme or contract, the shares of the
approving shareholders are to be transferred to the transferee.
15 (4) The Supreme Court may give an order to the contrary only on
the application of the dissenting shareholder made within the
later of 28 days after the compulsory acquisition notice was
given or within 14 days after a statement asked for under
subsection (2) was given.
20 (5) If alternative terms are offered to the approving shareholders --
(a) the dissenting shareholder is entitled to elect which of
those terms are preferred but must make the election
within the time allowed for making an application to the
Supreme Court under subsection (4); and
25 (b) if the dissenting shareholder fails to make the election
within the time, the transferee may, unless the Supreme
Court orders otherwise, decide which of the terms is to
apply to the acquisition of the shares of the dissenting
shareholder.
30 361. Restrictions when excluded shares exceed 10%
If the nominal value of excluded shares is more than 10% of the
total nominal value of all the shares, including excluded shares,
page 211
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 4 Acquisition of shares of dissenting shareholders
s. 362
to be transferred under the scheme or contract, section 360 does
not apply unless --
(a) the transferee offers the same terms to all holders of the
shares, other than excluded shares, to be transferred
5 under the scheme or contract; and
(b) the holders who approve the scheme or contract together
hold at least 90% in nominal value of the shares (other
than excluded shares) to be transferred under the scheme
or contract and are also at least 75% in number of the
10 holders of those shares, with joint owners of shares
being counted as one person.
362. Remaining shareholders may require acquisition
(1) If, under a scheme or contract to which this Division applies, the
transferee becomes beneficially entitled to shares in the
15 transferor that, together with other shares in the transferor to
which the transferee or a corporation related to the transferee is
beneficially entitled, comprise or include 90% in nominal value
of the shares to which the offer relates, then --
(a) the transferee must, within 28 days after becoming
20 beneficially entitled to the shares, give notice of the fact
as prescribed by the regulations to the holders of the
remaining shares concerned who, when the notice was
given, had not assented to the scheme or contract or
been given a compulsory acquisition notice by the
25 transferee under this Division; and
(b) the holder referred to in paragraph (a) may, within
3 months after being given that notice, by notice to the
transferee require the transferee to acquire the holder's
share and, if alternative terms were offered to the
30 approving shareholders, elect which of those terms the
holder will accept.
page 212
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
Acquisition of shares of dissenting shareholders Division 4
s. 363
(2) If a shareholder gives notice under this section with respect to
the shareholder's shares, the transferee is entitled and bound to
acquire those shares --
(a) on the terms on which under the scheme or contract the
5 shares of the approving shareholders were transferred to
the transferee and, if alternative terms were offered to
those shareholders, on the terms for which the
shareholder has elected, or, if no election is made, for
whichever of the terms the transferee determines; or
10 (b) on such other terms as are agreed or as the Supreme
Court, on the application of the transferee or of the
shareholder, considers appropriate to order.
363. Transfer of shares pursuant to compulsory acquisition
(1) A transferee who has given a compulsory acquisition notice
15 must --
(a) send a copy of the notice to the transferor together with
an instrument of transfer for the shares that the
transferee is entitled to acquire under this Division and
that is executed, on the shareholder's behalf, by a person
20 appointed by the transferee and, on the transferee's own
behalf, by the transferee; and
(b) pay, allot or transfer to the transferor the consideration
for the shares.
(2) The transferee must do so within 14 days after whichever of the
25 following happens last --
(a) the period of 28 days after the day on which the
compulsory acquisition notice was given expires;
(b) the period of 14 days after a statement of the names and
addresses of dissenting shareholders is supplied under
30 this Division expires;
(c) if an application has been made to the Supreme Court by
a dissenting shareholder, the application is disposed of.
page 213
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 4 Acquisition of shares of dissenting shareholders
s. 364
(3) When the transferee has complied with this section, the
transferor must register the transferee as the holder of the
shares.
(4) This section does not apply if the Supreme Court on the
5 application of the dissenting shareholder orders to the contrary.
364. Disposal of consideration for shares compulsorily acquired
(1) Amounts received by the transferor under this Division must be
paid into a financial institution account established for the
purpose of depositing those amounts, and the amounts, and any
10 other consideration received, are to be held by the transferor in
trust for the persons entitled to the shares in relation to which
the amounts and other consideration were received.
(2) If an amount or other property received by the transferor under
this Division has been held in trust by the transferor for a person
15 for at least 2 years, the transferor must pay the amount or
transfer the consideration, and any accretions to it and any
property that may become substituted for it or for part of it, to
the Registrar.
(3) Anything paid or transferred to the Registrar under
20 subsection (2) is declared to be applied Corporations legislation
matter for the purposes of the Corporations (Ancillary
Provisions) Act 2001 Part 3 in relation to the provisions of the
Corporations Act Part 9.7, subject to the following
modifications --
25 (a) a reference in the provisions to unclaimed property is to
be read as a reference to the thing paid or transferred to
the Registrar under subsection (2);
(b) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
30 (c) a reference in the provisions to the Commonwealth is to
be read as a reference to this State;
page 214
[Draft Bill for public comment]
Co-operatives Bill 2006
Arrangements and reconstructions Part 13
Miscellaneous Division 5
s. 365
(d) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
(4) The transferor must comply with subsection (2) before the end
5 of 10 years after the day on which the amount was paid, or the
consideration was allotted or transferred, to the transferor.
Division 5 -- Miscellaneous
365. Notification of appointment of scheme manager
Within 14 days after being appointed to administer a
10 compromise or arrangement approved under this Part, a person
must lodge with the Registrar a written notice of the
appointment.
Penalty: a fine of $1 000.
366. Power of Supreme Court to require reports
15 When an application is made to the Supreme Court under this
Part in relation to a proposed compromise or arrangement, the
Supreme Court may --
(a) before making an order on the application, require the
Registrar or another person to give to the Court a report
20 as to --
(i) the terms of the compromise or arrangement or
of the scheme for, or in relation to, which the
compromise or arrangement has been proposed;
and
25 (ii) the conduct of the officers of the body or bodies
concerned; and
(iii) any other matters that, in the opinion of the
Registrar or that person, ought to be brought to
the attention of the Court;
30 and
page 215
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 13 Arrangements and reconstructions
Division 5 Miscellaneous
s. 367
(b) in deciding the application, have regard to anything
contained in the report; and
(c) make any order as to the payment of the costs of
preparing and giving the report as the Court considers
5 appropriate.
367. Effect of out-of-jurisdiction compromise or arrangement
(1) A compromise or arrangement that is binding on any creditors
of a foreign co-operative because of a provision of the law of
another State or a Territory that corresponds to this Part is also
10 binding on the creditors of the foreign co-operative whose debts
are recoverable by action in a court of this State.
(2) If a court of another State or a Territory makes an order under a
provision of the law of that State or Territory that is prescribed
by the regulations as corresponding to a provision of this Part,
15 the order is taken to have been made by the Supreme Court of
Western Australia under the corresponding provision of this Act
and has effect and may be enforced accordingly.
368. Jurisdiction to be exercised in harmony with Corporations
Act jurisdiction
20 The jurisdiction of the Supreme Court under this Part is
intended to complement the Supreme Court's jurisdiction under
the Corporations Act, as applied under this Act, and should be
exercised in harmony with that jurisdiction.
369. Registrar may appear etc.
25 In any proceedings before the Supreme Court under this Part,
the Registrar is entitled to appear and be heard, either in person
or by the Registrar's properly appointed representative.
page 216
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Introductory Division 1
s. 370
Part 14 -- Mutual recognition
Division 1 -- Introductory
370. Definitions
In this Part --
5 "authorisation notice" means a written notice issued by the
Registrar under this Part to a foreign co-operative stating
that the co-operative is authorised to carry on business in
this State;
"co-operatives law" means a law of another State that, under
10 section 372(1), is certified to be a co-operatives law for the
purposes of this Part;
"non-participating co-operative" means a foreign
co-operative other than a participating co-operative;
"participating co-operative" means a foreign co-operative that
15 is registered, incorporated or formed under, or subject to, a
co-operatives law;
"participating registrar" means a person exercising the
functions of a registrar under a co-operatives law;
"participating State" means any State in which a co-operatives
20 law is in force;
"State" includes the Australian Capital Territory and the
Northern Territory.
371. What constitutes carrying on business
(1) For the purposes of this Part, a foreign co-operative carries on
25 business in this State if it --
(a) solicits for members in this State; or
(b) seeks share capital in this State, takes deposits in this
State or offers other securities in the co-operative in this
State; or
30 (c) provides any goods or services within this State.
page 217
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 1 Introductory
s. 372
(2) A foreign co-operative is not to be regarded as carrying on
business in this State merely because in this State it --
(a) is or becomes a party to an action or suit or arbitration
proceeding; or
5 (b) effects settlement of an action, suit or proceeding or of a
claim or dispute; or
(c) holds meetings of its directors or members or carries on
other activities concerning its internal affairs; or
(d) maintains an account with an authorised deposit taking
10 institution; or
(e) effects a sale through an independent contractor; or
(f) solicits or procures an offer that becomes a binding
contract only if the offer is accepted outside this State;
or
15 (g) creates evidence of a debt or creates a charge on real or
personal property; or
(h) secures or collects any of its debts or enforces its rights
in regard to any securities relating to the debts; or
(i) conducts an isolated transaction that is completed within
20 a period of 31 days not being one of a number of similar
transactions repeated from time to time.
372. Co-operatives law
(1) A law of another State is a co-operatives law for the purposes of
this Part if the Minister certifies in writing that the law
25 substantially corresponds to the provisions of this Act, including
this Part.
(2) The Minister must notify the Minister administering a
co-operatives law in another State when the law is certified
to be a co-operatives law under this Division.
page 218
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Introductory Division 1
s. 373
373. Excluded matter
(1) A foreign co-operative authorised under this Part to carry on
business in this State is declared to be an excluded matter for
the purposes of the Corporations Act section 5F in relation to
5 the whole of the Corporations legislation other than to the extent
specified in this section.
(2) Subsection (1) does not exclude the application of the following
provisions of the Corporations legislation to foreign
co-operatives to the extent that those provisions would
10 otherwise be applicable to them --
(a) provisions relating to a matter that the regulations
provide is not to be excluded from the operations of the
Corporations Act;
(b) provisions relating to the role of a co-operative in the
15 formation of a company;
(c) provisions relating to substantial holdings of shares, by
or involving a co-operative, in a company;
(d) provisions conferring or imposing functions on a
co-operative as a member, or former member, of a
20 corporation;
(e) provisions relating to dealings by a co-operative in
financial products of a corporation, other than financial
products of the co-operative itself;
(f) provisions conferring or imposing functions on a
25 co-operative in its dealings with a corporation, not being
dealings in financial products of the co-operative;
(g) provisions relating to financial products of a
co-operative, other than shares in, co-operative capital
units in, debentures of or deposits with a co-operative;
30 (h) provisions relating to financial markets and participants
in financial markets;
(i) provisions relating to financial services licensees whose
licence covers dealing in, or providing advice about,
financial products;
page 219
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 2 Mutual recognition of foreign co-operatives
s. 374
(j) provisions relating to carrying on a financial services
business;
(k) provisions relating to financial statements, and audits of
financial statements, of financial services licensees
5 whose licence covers dealing in, or providing advice
about, financial products;
(l) provisions relating to clients of financial services
licensees whose licence covers dealing in, or providing
advice about, financial products;
10 (m) provisions relating to registers of interests in financial
products;
(n) provisions relating to powers of a Court to cure
procedural irregularities and to make other orders.
(3) To remove doubt it is declared that subsection (1) does not
15 operate to exclude the operations of the following provisions of
the Corporations Act except in relation to shares in, CCUs
issued by, debentures of or deposits with a foreign
co-operative --
(a) Part 1.2A;
20 (b) Chapter 2L;
(c) Chapter 6CA;
(d) Chapter 6D;
(e) Part 7.10.
Division 2 -- Mutual recognition of foreign co-operatives
25 374. Operation of foreign co-operatives in this State
A foreign co-operative must not carry on business in this State
as a co-operative unless it is authorised under this Part to carry
on business in this State.
Penalty: a fine of $24 000.
page 220
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mutual recognition of foreign co-operatives Division 2
s. 375
375. Authorisation to carry on business
(1) A participating co-operative is, by this Act, authorised to carry
on business in this State after notifying the Registrar in
accordance with section 377 that the participating co-operative
5 intends to carry on business in this State.
(2) The authorisation of a participating co-operative is subject to the
same conditions or restrictions that apply to the carrying on of
its business under its registration in the participating State.
(3) A non-participating co-operative is, by this Act, authorised to
10 carry on business in this State if the Registrar issues an
authorisation notice to the co-operative.
376. Registration under Companies (Co-operative) Act 1943
A company, as defined in the Companies (Co-operative)
Act 1943 section 328(1), that is registered under Part XI of that
15 Act immediately before the commencement of section 374 is
taken to be a foreign co-operative authorised under this Part of
this Act to carry on business in this State, and the Companies
(Co-operative) Act 1943 ceases to apply to that company.
377. Notification to Registrar
20 (1) A foreign co-operative that proposes to carry on business in this
State must lodge with the Registrar a written notice in the form
approved by the Registrar.
(2) The notice must be accompanied by the following --
(a) a statement signed by 2 directors, or a director and the
25 secretary of the co-operative, as to the following
matters --
(i) that the co-operative is able to pay its debts as
and when they become due and payable;
(ii) that the co-operative complies and will continue
30 to comply with the provisions of applicable laws
of another State or other place under which the
page 221
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 2 Mutual recognition of foreign co-operatives
s. 377
co-operative is registered, incorporated or
formed;
(iii) that no legal proceedings have been commenced
or are pending against the co-operative in respect
5 of a failure to comply, in its capacity as a
co-operative, with a law of another State or any
other place in which the co-operative carries on
business under which the co-operative is
registered, incorporated, formed or authorised to
10 carry on business;
(iv) the full name and address of each person who is
to act as agent of the co-operative in this State;
(v) the address of the proposed principal office of
the co-operative in this State, if any;
15 (vi) the name under which the co-operative proposes
to carry on business in this State;
(b) a copy of the certificate of registration, incorporation or
formation of the co-operative and particulars of any
condition or restriction to which the registration,
20 incorporation or formation is subject;
(c) any other documents or information that the Registrar
may require or that are prescribed by the regulations;
(d) the fee prescribed by the regulations.
(3) In the case of a non-participating co-operative, the notice must
25 also be accompanied by the following --
(a) a copy of the current rules of the co-operative;
(b) a copy of the latest financial report, directors' report and
auditor's report for the co-operative;
(c) the full name, date of birth and address of each director
30 of the co-operative;
(d) details of the proposed business activities to be carried
on in this State;
page 222
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mutual recognition of foreign co-operatives Division 2
s. 378
(e) details of any changes required to be registered under
this Act.
378. Authorisation notices for participating co-operatives
(1) The Registrar must, on a notice and accompanying documents
5 being lodged in accordance with section 377 by a participating
co-operative, issue to the co-operative a written notice stating
that the co-operative is authorised to carry on business in this
State.
(2) A failure to issue a notice to a participating co-operative under
10 this section does not affect the authority of the co-operative to
carry on business in this State.
379. Authorisation notices for non-participating co-operatives
The Registrar may issue to a non-participating co-operative a
written notice stating that the co-operative is authorised to carry
15 on business in this State if a notice and accompanying
documents are lodged by the co-operative in accordance with
section 377 and the Registrar is satisfied that the rules of the
co-operative --
(a) comply with co-operative principles; and
20 (b) include acceptable active membership provisions; and
(c) provide procedures acceptable to the Registrar for
disclosure of information; and
(d) provide that a member has one vote only; and
(e) make adequate provision for the duties of directors; and
25 (f) provide for acceptable accounting standards for the
co-operative.
380. Name of foreign co-operative
A foreign co-operative that is authorised to carry on business in
this State must do so under a name that is not likely to be
page 223
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 2 Mutual recognition of foreign co-operatives
s. 381
confused with the name of a corporation or a registered business
name.
381. When foreign co-operative not authorised to carry on
business
5 A foreign co-operative ceases to be authorised to carry on
business in this State if --
(a) it is deregistered or otherwise ceases to exist as a
co-operative under the laws of the place in which it is
registered, incorporated or formed; or
10 (b) its authority to carry on business in this State is
withdrawn under section 382; or
(c) the Registrar notifies it under section 388(3) that it is not
authorised to carry on business in this State; or
(d) in the case of a non-participating co-operative, the
15 Registrar decides not to issue an authorisation notice to
the co-operative.
382. Withdrawal of authority to carry on business
(1) The Registrar may give written notice to a foreign co-operative
requiring it to show cause (a "show cause notice"), within the
20 period specified in the notice, why its authority to carry on
business in this State should not be withdrawn on any one or
more of the following grounds --
(a) that the name under which the co-operative carries on
business or proposes to carry on business in this State
25 does not comply with this Division;
(b) that any of the statements, documents or information
notified or lodged by the co-operative under this
Division are materially false or misleading;
(c) that the circumstances of the co-operative have
30 materially changed since the date the notice under
section 377 was lodged by the co-operative;
page 224
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mutual recognition of foreign co-operatives Division 2
s. 383
(d) that the co-operative has, after notice from the Registrar,
failed to comply with provisions of this Act applicable
to the co-operative or provisions of the rules of the
co-operative.
5 (2) A show cause notice may be given if the Registrar considers
that there are reasonable grounds to do so.
(3) The show cause notice must specify the period, being at least
14 days, within which it must be complied with.
(4) The foreign co-operative may, within the period specified in the
10 show cause notice, make oral or written submissions to the
Registrar and provide evidence with respect to any of the
matters to which the notice relates.
(5) The Registrar must consider any submissions made, or evidence
adduced, in compliance with subsection (4) and may, if the
15 Registrar is satisfied that any of the grounds referred to in
subsection (1) has been established in relation to the foreign
co-operative, give the co-operative a written notice withdrawing
its authority to carry on business in this State.
(6) The Registrar may withdraw a show cause notice or other notice
20 given under this section.
383. Appeals
A foreign co-operative may appeal to the Supreme Court against
the following decisions --
(a) a decision not to issue an authorisation notice to the
25 co-operative;
(b) a decision of the Registrar to give written notice to the
co-operative that it is not authorised to carry on business
in this State.
page 225
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 3 General
s. 384
384. Application of Act and regulations to foreign co-operatives
The provisions of this Act specified in --
(a) Schedule 5; and
(b) the regulations,
5 apply, with all necessary modifications and any modifications
prescribed by the regulations, to a foreign co-operative that is
authorised to carry on business in this State under this Part.
Division 3 -- General
385. Name and place of origin to appear on business and other
10 documents
(1) The name and place of origin of a foreign co-operative must
appear in legible characters on its seal, and on any of the
following documents issued, signed or endorsed by or on behalf
of the co-operative --
15 (a) a bill of exchange, promissory note, cheque or other
negotiable instrument;
(b) a receipt or letter of credit issued by the co-operative;
(c) a document of a class prescribed by the regulations.
(2) If subsection (1) is contravened, the co-operative is guilty of an
20 offence.
Penalty: a fine of $2 000.
(3) An officer of a foreign co-operative or a person on its behalf
must not --
(a) use a seal of the co-operative; or
25 (b) sign or authorise to be signed on behalf of the
co-operative any document referred to in subsection (1),
in or on which the co-operative's name does not appear in
legible characters.
Penalty: a fine of $2 000.
page 226
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
General Division 3
s. 386
(4) A director of a foreign co-operative who knowingly authorises
or permits a contravention of this section is guilty of an offence.
Penalty: a fine of $2 000.
386. Supply of information to participating Registrars
5 The Registrar must, if requested to do so by a participating
Registrar, supply free of charge to the participating Registrar
information, or copies of public documents, held by the
Registrar relating to a co-operative, including a foreign
co-operative.
10 387. Registrar to be notified of changes
A foreign co-operative must lodge with the Registrar particulars
of any change in the information provided by the co-operative
under section 377, other than section 377(3)(e), within 28 days
of the change.
15 Penalty: a fine of $2 000.
388. Cessation of business
(1) A foreign co-operative authorised to carry on business under
this Part must, within 7 days of ceasing to carry on business in
this State as a co-operative, give the Registrar written notice of
20 that fact.
Penalty: a fine of $6 000.
(2) On notifying the Registrar that it has ceased to carry on business
as a co-operative in this State, a foreign co-operative is no
longer required to comply with this Part, other than Division 4,
25 and must not carry on business in this State as a co-operative.
(3) Unless the Registrar has been given written notice that the
foreign co-operative will resume carrying on business in this
State as a co-operative, the Registrar must, 12 months after
receiving the notice under subsection (1), notify the
page 227
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 4 Winding up of foreign co-operatives in this State
s. 389
co-operative that it is not authorised to carry on business in this
State.
(4) If a foreign co-operative which has given notice under
subsection (1) --
5 (a) gives written notice to the Registrar that it will resume
carrying on business as a co-operative in this State; and
(b) has not received notice from the Registrar that it is not
authorised to carry on business in this State,
the co-operative has authority to carry on business in this State
10 and must comply with this Part.
389. Functions conferred on Registrar under co-operatives law
The Registrar may exercise any function conferred on the
registrar by or under a co-operatives law.
Division 4 -- Winding up of foreign co-operatives in this State
15 390. Winding up to relate to State activities
(1) This Division applies to the winding up of the affairs of a
foreign co-operative in or in relation to this State.
(2) A foreign co-operative may be wound up under this Division
even though it has been wound up or deregistered or has
20 otherwise ceased to exist as a co-operative under or because of
the laws of the place in which it is registered, incorporated or
formed.
(3) This Division has effect in addition to, and not in derogation of,
any other provisions of this Act or any other law with respect to
25 the winding up of co-operatives.
page 228
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Winding up of foreign co-operatives in this State Division 4
s. 391
391. Supreme Court may order winding up
(1) The Supreme Court may order the winding up of a foreign
co-operative if --
(a) the Registrar has, as a result of an inquiry conducted
5 under Part 15 Division 2 or 4, stated that it is in the
interest of the public, of the members, or of the
creditors, that the co-operative be wound up; or
(b) the co-operative's authority to carry on business in this
State has been withdrawn under this Act; or
10 (c) the co-operative has been deregistered or has ceased to
exist as a co-operative in the place in which it was
registered, incorporated or formed or has ceased to carry
on business in that place.
(2) The Registrar may apply to the Supreme Court for the winding
15 up of a foreign co-operative on any of the grounds referred to in
subsection (1).
(3) The Registrar must, as soon as possible after making an
application under this section, give a copy of the application to
the foreign co-operative the subject of the application.
20 392. Application of Corporations Act to winding up of foreign
co-operatives
(1) The winding up or deregistration or withdrawal of an authority
to carry on business in this State of a foreign co-operative is
declared to be an applied Corporations legislation matter for the
25 purposes of the Corporations (Ancillary Provisions) Act 2001
Part 3 in relation to the Corporations Act Parts 5.4B and 5.6 and
section 601AE.
(2) The Corporations Act Parts 5.4B and 5.6 are applied subject to
the modifications set out in Schedule 6.
page 229
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 4 Winding up of foreign co-operatives in this State
s. 393
(3) The Corporations Act section 601AE applies to property that
vests in the Registrar under section 393 as if the property were
vested in the Registrar under section 601AD(2) of that Act.
(4) The fact that a foreign co-operative has been deregistered or has
5 ceased to exist as a co-operative in the place in which it was
registered, incorporated or formed does not affect the liability of
a member or former member as a contributory on a winding up
under this Division.
393. Outstanding property of foreign co-operative
10 (1) This section applies if, after the winding up of a foreign
co-operative in this State, outstanding property of the body
remains in this State.
(2) The estate and interest in the property, at law or in equity, of the
body or its liquidator at that time, together with all claims, rights
15 and remedies that the co-operative or its liquidator then had in
respect of the property, vests by force of this section in --
(a) if the co-operative was registered, formed or
incorporated in Australia or an external Territory, the
person entitled to the property under the law of the place
20 in which the co-operative was registered, formed or
incorporated; or
(b) in any other case, the Registrar.
(3) If any claim, right or remedy of a liquidator may under this
Division be made, exercised or availed of only with the
25 approval or concurrence of the Supreme Court or some other
person, the Registrar may, for the purposes of this section,
make, exercise or avail himself or herself of the claim, right or
remedy without the approval or concurrence.
page 230
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mergers and transfers of engagements Division 5
s. 394
Division 5 -- Mergers and transfers of engagements
394. Definitions
In this Division --
"appropriate Registrar" in relation to a proposed merger or
5 transfer of engagements means --
(a) the State Registrar, if the merger is to result in a State
co-operative or the transfer is to a State co-operative;
or
(b) the participating Registrar, if the merger is to result in
10 a co-operative under the co-operatives law of the
participating State concerned or the transfer is to such
a co-operative;
"State co-operative" means a co-operative registered in this
State, other than a foreign co-operative;
15 "State Registrar" means the Registrar of this State.
395. Authority for merger or transfer of engagements
(1) A State co-operative and a participating co-operative may
consolidate all or any of their assets, liabilities and undertakings
by way of merger or transfer of engagements approved under
20 this Division.
(2) A State co-operative and a non-participating co-operative may
consolidate all or any of their assets, liabilities and undertakings
by way of merger or transfer of engagements approved under
this Division if --
25 (a) the merger is to result in a State co-operative; or
(b) the transfer is to a State co-operative.
396. Requirements before application can be made
(1) Before a State co-operative and a participating co-operative can
apply for approval under this Division of a merger or transfer of
page 231
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 5 Mergers and transfers of engagements
s. 396
engagements, the proposed merger or transfer must have been
approved by each of the co-operatives by --
(a) a special resolution passed by special postal ballot; or
(b) if permitted by subsection (3), by a special resolution, or
5 by a resolution of the board, of the co-operative.
(2) Before a State co-operative and a non-participating co-operative
can apply for approval under this Division of a merger or
transfer of engagements, the proposed merger or transfer of
engagements --
10 (a) must have been approved --
(i) in the case of the non-participating co-operative,
by a special resolution of the co-operative; and
(ii) in the case of the State co-operative, by a special
resolution passed by special postal ballot;
15 or
(b) if permitted by subsection (3), must have been
approved --
(i) in the case of the non-participating co-operative,
by a resolution of the board of the co-operative;
20 and
(ii) in the case of the State co-operative, by a special
resolution, or by a resolution of the board, of the
co-operative.
(3) The proposed merger or transfer of engagements may be
25 approved by special resolution, or by a resolution of the board,
of the co-operative if --
(a) the State Registrar consents to that procedure applying
in the particular case; and
(b) in the case of a merger or transfer affecting a
30 participating co-operative, the participating Registrar
also consents to that procedure applying in the particular
case.
page 232
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mergers and transfers of engagements Division 5
s. 397
(4) A consent referred to in subsection (3) may be granted subject
to conditions, including a condition that a disclosure statement
be provided to members or directors.
(5) A co-operative that contravenes a condition of a consent is
5 taken not to have been given consent.
397. Disclosure statement required
(1) A special resolution of a State co-operative or foreign
co-operative is not effective for the purposes of this Division
unless this section has been complied with.
10 (2) Section 191 does not apply where a special resolution by means
of special postal ballot is required under this Division.
(3) Each co-operative must send to each of its members a disclosure
statement approved by the appropriate Registrar specifying --
(a) the financial position of the State co-operative and the
15 foreign co-operative as shown in financial statements
that have been prepared as at a date that is not more than
6 months before the date of the statement; and
(b) any interest that any officer of the State co-operative or
the foreign co-operative has in the proposed merger or
20 transfer of engagements; and
(c) any compensation or other consideration proposed to be
paid, or any other incentive proposed to be given, to any
officer or member of the State co-operative or foreign
co-operative in relation to the proposed merger or
25 transfer of engagements; and
(d) whether the proposal is a merger or transfer of
engagements and the reason for the merger or transfer of
engagements; and
(e) in the case of a transfer of engagements -- whether it is
30 a total or partial transfer of engagements; and
(f) in the case of a merger, whether the merged co-operative
will result in a State co-operative or a co-operative
page 233
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 5 Mergers and transfers of engagements
s. 398
under the co-operatives law of the participating State
concerned; and
(g) any other information that the Registrar directs.
(4) The disclosure statement must be sent to the members of the
5 State co-operative or foreign co-operative so that it will in the
ordinary course of post reach each member who is entitled to
vote on the special resolution not later than --
(a) if the resolution is to be decided at a meeting, 21 days
before the date of the meeting; or
10 (b) if the resolution is to be decided by a postal ballot,
21 days before the day on or before which the ballot
papers must be returned by members voting in the
ballot.
(5) The appropriate Registrar may exempt the State co-operative or
15 foreign co-operative from complying with this section.
(6) The appropriate Registrar may grant an exemption, or approve a
disclosure statement, subject to any conditions the Registrar
considers appropriate.
398. Making an application
20 (1) An application for approval of a merger or transfer of
engagements under this Division must be made to the State
Registrar and, if the merger or transfer affects a participating
co-operative, to the Registrar for the participating State
concerned in the way and form required by the Registrar
25 concerned.
(2) An application for approval of a merger must be accompanied
by --
(a) 2 copies of the proposed rules of the merged
co-operative; and
page 234
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mergers and transfers of engagements Division 5
s. 399
(b) in the case of a non-participating co-operative, details of
voting on the special resolution, if any, of the
co-operative; and
(c) any other information required by the Registrar to whom
5 the application is made.
399. Approval of merger
(1) If the State Registrar is the appropriate Registrar, he or she must
approve a merger pursuant to an application under this Division
if satisfied that --
10 (a) this Division has been complied with in relation to the
application; and
(b) the proposed rules of the merged co-operative are
adequate; and
(c) the certificate of registration of the State co-operative
15 has been surrendered to the State Registrar; and
(d) in the case of a merger with a participating co-operative,
the certificate of registration of the participating
co-operative has been surrendered to the Registrar for
the participating State concerned; and
20 (e) in the case of a merger with a non-participating
co-operative, the merged co-operative will comply with
this Act; and
(f) there is no good reason why the merged co-operative
and its rules should not be registered.
25 (2) If the State Registrar is not the appropriate Registrar, he or she
must approve a merger pursuant to an application under this
Division if satisfied that the merger has been approved under
the provision of the co-operatives law of the participating State
that corresponds with subsection (1).
page 235
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 5 Mergers and transfers of engagements
s. 400
(3) On approving an application for merger, the State Registrar
must --
(a) cancel the registration of the State co-operative involved
in the merger; and
5 (b) if the merger is to result in a State co-operative, register
the merged co-operative and its rules and issue to it a
certificate of registration under this Act.
(4) A merger takes effect on the issue of the certificate of
registration for the merged co-operative, whether under this Act
10 or under the co-operatives law of the participating State
concerned.
400. Approval of transfer of engagements
(1) If the State Registrar is the appropriate Registrar, he or she must
approve a transfer of engagements pursuant to an application
15 under this Division if satisfied that --
(a) this Division has been complied with in relation to the
application; and
(b) the rules or proposed rules of the transferee co-operative
are adequate; and
20 (c) in the case of a total transfer of engagements from a
participating co-operative, the certificate of registration
of the participating co-operative has been surrendered to
the participating Registrar; and
(d) in the case of a total transfer of engagements from a
25 non-participating co-operative, the certificate of
registration of the non-participating co-operative has
been surrendered to the State Registrar; and
(e) in the case of a transfer of engagements by a
non-participating co-operative, the transferee
30 co-operative will comply with this Act; and
(f) there is no good reason why the transfer of engagements
should not take effect.
page 236
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mergers and transfers of engagements Division 5
s. 401
(2) If the State Registrar is not the appropriate Registrar, he or she
must approve a transfer of engagements pursuant to an
application under this Division if satisfied that the transfer has
been approved under the provision of the co-operatives law of
5 the participating State that corresponds with subsection (1).
(3) A transfer of engagements takes effect on the day specified in
the approval of the State Registrar.
401. Effect of merger or transfer of engagements
(1) In this section --
10 "assets" means any legal or equitable estate or interest (whether
present or future and whether vested or contingent) in real
or personal property of any description (including money)
and includes securities, choses in action and documents;
"instrument" means an instrument (other than this Act) that
15 creates, modifies, or extinguishes rights or liabilities (or
would do so if lodged, filed or registered in accordance
with any law) and includes any judgment, order and
process of a court;
"liabilities" means liabilities, debts and obligations (whether
20 present or future and whether vested or contingent);
"original co-operative" means --
(a) in the case of a transfer of engagements, the
transferor co-operative; or
(b) in the case of a merger, each of the co-operatives that
25 are merging;
"successor co-operative" means --
(a) in the case of a transfer of engagements, the
transferee co-operative; or
(b) in the case of a merger, the co-operative formed by
30 the merger.
page 237
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 14 Mutual recognition
Division 5 Mergers and transfers of engagements
s. 401
(2) When a merger or transfer of engagements takes effect under
this Division (the "transition day"), the following provisions
apply to the extent necessary to give effect to the merger or
transfer --
5 (a) persons who were members of the original co-operative
immediately before the transition day are members of
the successor co-operative in accordance with its rules;
(b) the assets of the original co-operative vest in the
successor co-operative without the need for any
10 conveyance, transfer, assignment or assurance;
(c) the rights and liabilities of the original co-operative
become the rights and liabilities of the successor
co-operative;
(d) all proceedings by or against the original co-operative
15 that are pending immediately before the transition day
are taken to be proceedings pending by or against the
successor co-operative;
(e) any act, matter or thing done or omitted to be done by,
to or in respect of the original co-operative before the
20 transition day is (to the extent to which that act, matter
or thing has any force or effect) to be taken to have been
done or omitted by, to or in respect of the successor
co-operative;
(f) a reference in an instrument or in any document of any
25 kind to the original body is to be read as, or as including,
a reference to the new body.
(3) The operation of this section is not to be regarded --
(a) as a breach of contract or confidence or otherwise as a
civil wrong; or
30 (b) as a breach of any contractual provision prohibiting,
restricting or regulating the assignment or transfer of
assets, rights or liabilities; or
page 238
[Draft Bill for public comment]
Co-operatives Bill 2006
Mutual recognition Part 14
Mergers and transfers of engagements Division 5
s. 402
(c) as giving rise to any remedy by a party to an instrument,
or as causing or permitting the termination of any
instrument, because of a change in the beneficial or legal
ownership of any asset, right or liability.
5 402. Division applies instead of certain other provisions of
this Act
(1) This Division applies instead of Part 12 Division 1, in relation
to the merger of a State co-operative with a foreign
co-operative.
10 (2) This Division applies instead of Part 12 Division 1, in relation
to a transfer of engagements between a State co-operative and a
foreign co-operative.
page 239
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 403
Part 15 -- Supervision and protection of co-operatives
Division 1 -- Supervision and protection
403. Definitions
In this Part --
5 "co-operative venture" means --
(a) any corporation or unit trust formed by a co-operative
or in the formation of which a co-operative
participated; or
(b) any partnership, joint venture or association of
10 persons or bodies formed or entered into by a
co-operative;
"place" includes all or part of a structure, building, aircraft,
vehicle, vessel and place, whether built on or not;
"relevant documents" means records or other documents that
15 relate to the promotion, formation, membership, control,
transactions, dealings, business or property of a
co-operative.
404. "Co-operative" includes subsidiaries, foreign co-operatives
and co-operative ventures
20 A reference in this Part to a co-operative includes a reference to
each of the following --
(a) a foreign co-operative;
(b) a subsidiary of a co-operative or foreign co-operative;
(c) a co-operative venture;
25 (d) a co-operative or foreign co-operative, or a subsidiary of
either, or a co-operative venture, that is in the course of
being wound up or has been deregistered.
page 240
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 405
405. Appointment of inspectors
The Registrar may appoint a person as an inspector under this
Act if --
(a) the chief executive officer considers the person has the
5 necessary expertise or experience to be an inspector; or
(b) the person has satisfactorily finished training approved
by the chief executive officer.
406. Registrar and investigators have functions of inspectors
The Registrar, and any investigator exercising functions under
10 Division 2, have and may exercise all the functions of an
inspector and for that purpose are to be considered to be
inspectors.
407. Inspector's identity card
(1) The Registrar must give each inspector an identity card.
15 (2) The identity card must --
(a) contain a recent photo of the person; and
(b) be signed by the person; and
(c) identify the person as an inspector.
(3) A person who stops being an inspector must return the person's
20 identity card to the Registrar as soon as possible, but within
21 days, after the person stops being an inspector, unless the
person has a reasonable excuse.
Penalty: a fine of $2 000.
(4) This section does not prevent the giving of a single identity card
25 to a person for this and other Acts or for other purposes.
page 241
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 408
408. Production or display of inspector's identity card
(1) An inspector may exercise a power in relation to someone only
if --
(a) the inspector first produces the inspector's identity card
5 for the other person's inspection; or
(b) the inspector has the inspector's identity card displayed
so it is clearly visible to the other person.
(2) However, if for any reason it is not practicable to comply with
subsection (1) before exercising the power, the inspector must
10 produce the identity card for inspection by the person at the first
reasonable opportunity.
409. Powers of inspector
(1) An inspector must act in accordance with the directions of the
Registrar.
15 (2) The powers of an inspector may be limited --
(a) under a regulation; or
(b) under a condition of appointment; or
(c) by written notice given by the Registrar to the inspector.
410. Inspector's appointment conditions
20 (1) An inspector holds office on the conditions stated in the
instrument of appointment.
(2) An inspector --
(a) if the appointment provides for a term of appointment,
stops holding office at the end of the term; and
25 (b) if the conditions of appointment provide, stops holding
office when the inspector stops holding another office
stated in the appointment conditions (the "main
office"); and
page 242
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 411
(c) may resign by signed notice of resignation given to the
Registrar.
(3) However, an inspector may not resign from the office under this
Act (the "secondary office") if a term of employment to the
5 main office requires the person to hold the secondary office.
411. Entry of place
(1) An inspector may enter a place if --
(a) its occupier consents to the entry; or
(b) the entry is authorised by a warrant; or
10 (c) it is a place on which the affairs or activities of a
co-operative are managed or conducted.
(2) An inspector, without the occupier's consent or a warrant, may
enter the land around the place to ask its occupier for consent to
enter the place.
15 412. Consent to entry
(1) This section applies if an inspector intends to ask an occupier of
a place to consent to the inspector or another inspector entering
the place.
(2) Before asking for the consent, the inspector must inform the
20 occupier --
(a) of the purpose of the entry; and
(b) that the occupier is not required to consent.
(3) If the consent is given, the inspector may ask the occupier to
sign an acknowledgment of the consent.
25 (4) The acknowledgment must state --
(a) that the occupier was informed --
(i) of the purpose of the entry; and
(ii) that the occupier is not required to consent;
page 243
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 413
and
(b) that the occupier gives an inspector consent to enter the
place and exercise powers under this Act; and
(c) the time and date the consent was given.
5 (5) If the occupier signs an acknowledgment of consent, the
inspector must immediately give a copy to the occupier.
(6) Subsection (7) applies to a court if --
(a) a question arises, in a proceeding in or before the court,
as to whether the occupier of a place consented to an
10 inspector entering the place under this Act; and
(b) an acknowledgment under this section is not produced in
evidence for the entry; and
(c) it is not proved the occupier consented to the entry.
(7) The court may presume the occupier did not consent.
15 413. Inspectors may require certain persons to appear, answer
questions and produce documents
(1) An inspector may by notice in the form prescribed by the
regulations --
(a) require a co-operative to produce to the inspector at a
20 time and place specified in the notice specified relevant
documents relating to the co-operative; or
(b) require a person who is involved in the activities of a
co-operative to produce to the inspector at a time and
place specified in the notice specified relevant
25 documents relating to the co-operative; or
(c) require a person who is involved in the activities of a
co-operative --
(i) to attend before the inspector at a time and place
specified in the notice; and
page 244
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 414
(ii) to answer any questions put to the person by the
inspector relating to the promotion, formation,
membership, control, transactions, dealings,
business or property of the co-operative.
5 (2) A person is to be considered to be involved in the activities of a
co-operative if the person --
(a) is or has been an officer or employee of, or an agent,
financial institution, solicitor, auditor or other person
acting in any capacity for the co-operative; or
10 (b) has relevant documents relating to the co-operative in
the person's possession or control; or
(c) was a party to the creation of relevant documents
relating to the co-operative.
(3) A person is not subject to any liability as a result of complying
15 with a requirement made or purportedly made under this
section.
414. Powers of inspectors on place entered
An inspector has the following powers on a place that the
inspector is authorised to enter --
20 (a) power to search for evidence of a contravention of this
Act;
(b) power to search for relevant documents and to require a
person on the place to produce to the inspector relevant
documents in the person's custody or under the person's
25 control;
(c) power to require a person on the place who is apparently
involved in the management or conduct of the affairs or
activities of a co-operative to answer questions or
provide information;
30 (d) power to exercise the functions of an inspector under
section 415 in relation to relevant documents found on
the place or produced to the inspector.
page 245
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 415
415. Functions of inspectors in relation to relevant documents
(1) An inspector has the following powers in relation to a relevant
document found by an inspector on a place entered by the
inspector or produced to the inspector pursuant to a requirement
5 made under this Division --
(a) power to take possession of the document or secure it
against interference;
(b) power to make copies, or take extracts from, the
document;
10 (c) power to require a person who was party to the creation
of the document to make a statement giving any
explanation that the person is able to provide as to any
matter relating to the creation of the document or the
matters to which the document relates;
15 (d) power to retain possession of the document for the
period necessary to enable the document to be inspected,
and copies of, or extracts from, the document to be made
or taken.
(2) While an inspector retains possession of a document, the
20 inspector must permit a person who would be entitled to inspect
the document were it not in the possession of the inspector to
inspect the document at a reasonable time and make a copy of,
or take extracts from, the document.
(3) If an inspector takes possession of or secures against
25 interference a relevant document and a person has a lien on the
document, the inspector's actions do not prejudice the lien.
416. Protection from incrimination
(1) A person is not excused from making a statement under a
requirement under this Division on the ground that the statement
30 might tend to incriminate the person.
(2) If the person claims before making a statement that the
statement might tend to incriminate him or her, the statement is
page 246
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 417
not admissible in evidence against him or her in criminal
proceedings other than proceedings under this Division.
(3) Except as provided by subsection (2), a statement made by a
person in compliance with a requirement under this Division
5 may be used in evidence in any criminal or civil proceedings
against the person.
417. Warrants
(1) An inspector may apply to a magistrate for a warrant to enter a
place.
10 (2) The application must be sworn and state the grounds on which
the warrant is sought.
(3) The magistrate may refuse to consider the application until the
inspector gives the magistrate all the information the magistrate
requires about the application in the way the magistrate
15 requires.
(4) The magistrate may issue the warrant only if satisfied there are
reasonable grounds for suspecting --
(a) there is a particular thing or activity that may provide
evidence of an offence against this Act; and
20 (b) that thing or activity is at the place, or may be at the
place, within the next 7 days.
(5) The warrant must state --
(a) that the inspector may, with reasonable and necessary
help and force, enter the place and exercise the
25 inspector's powers under this Act; and
(b) the offence for which the warrant was issued; and
(c) any evidence that may be seized under the warrant; and
(d) the hours when the place may be entered; and
(e) the date, within 7 days after the warrant's issue, when
30 the warrant ends.
page 247
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 418
418. Warrants -- applications made other than in person
(1) An inspector may apply for a warrant by phone, fax, radio or
another form of communication if the inspector considers it
necessary because of --
5 (a) urgent circumstances; or
(b) other special circumstances, including, for example, the
inspector's remote location.
(2) Before applying for the warrant under subsection (1), the
inspector must prepare an application stating the grounds on
10 which the warrant is sought.
(3) The inspector may apply for the warrant before the application
is sworn.
(4) After issuing the warrant, the magistrate must immediately fax a
copy to the inspector if it is reasonably practicable to fax a copy.
15 (5) If it is not reasonably practicable to fax a copy to the
inspector --
(a) the magistrate must --
(i) tell the inspector what the terms of the warrant
are; and
20 (ii) tell the inspector the date and time the warrant
was issued;
and
(b) the inspector must complete a form of warrant (the
"warrant form") and write on it --
25 (i) the magistrate's name; and
(ii) the date and time the magistrate issued the
warrant; and
(iii) the warrant's terms.
page 248
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 419
(6) The facsimile warrant, or the warrant form properly completed
by the inspector, authorises the entry and the exercise of the
other powers stated by the warrant issued by the magistrate.
(7) The inspector must, at the first reasonable opportunity, send the
5 magistrate --
(a) the sworn application; and
(b) if the inspector completed a warrant form, the completed
warrant form.
(8) On receiving the documents, the magistrate must attach them to
10 the warrant.
(9) Subsection (10) applies to a court if --
(a) a question arises, in a proceeding in or before the court,
whether a power exercised by an inspector was
authorised by a warrant issued under this section; and
15 (b) the warrant is not produced in evidence.
(10) The court may presume the exercise of the power was not
authorised by a warrant issued under this section, unless the
contrary is proved.
419. Entry with warrant
20 (1) Before executing a search warrant, the inspector named in the
warrant or a person assisting the inspector must announce that
the inspector is authorised by the warrant to enter the place and
give any person at the place an opportunity to allow entry to the
premises.
25 (2) The inspector or a person assisting the inspector need not
comply with subsection (1) if the inspector believes on
reasonable grounds that immediate entry to the premises is
required to ensure the effective execution of the search warrant
is not frustrated.
page 249
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 420
(3) If an occupier or another person who apparently represents the
occupier is present at a place when a search warrant is being
executed, the inspector must --
(a) identify himself or herself to the person by producing
5 his or her identity card for inspection by the person; and
(b) give to the person a copy of the execution copy of the
warrant.
420. General powers after entering places
(1) This section applies to an inspector who enters a place under
10 this Part.
(2) For monitoring or enforcing compliance with this Act, the
inspector may --
(a) search any part of the place; and
(b) examine, inspect, photograph or film anything on the
15 place; and
(c) copy a document on the place; and
(d) take into or onto the place any persons, equipment and
materials the inspector reasonably requires for
exercising a power under this Part; and
20 (e) require a person in the place to give the inspector
reasonable help to exercise the powers mentioned in
paragraphs (a) and (d).
(3) A person required to give reasonable help under
subsection (2)(e) must comply with the requirement, unless the
25 person has a reasonable excuse.
Penalty: a fine of $12 000 or imprisonment for one year.
(4) If the help is required to be given to an inspector by --
(a) answering a question; or
page 250
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 421
(b) producing a document, other than a document required
to be kept under this Act,
it is a reasonable excuse for the person to fail to answer the
question, or produce the document, if complying with the
5 requirement might tend to incriminate the person.
421. Power to seize evidence
(1) An inspector who enters a place under this Part other than under
a warrant may seize a thing in the place if --
(a) the inspector reasonably believes the thing is evidence
10 of an offence against this Act; and
(b) seizure of the thing is consistent with the purpose of
entry as told to the occupier.
(2) An inspector who enters a place under this Part under a warrant
may seize the evidence for which the warrant was issued.
15 (3) An inspector may also seize a thing in a place referred to in
subsection (1) or (2) if the inspector believes --
(a) the thing is evidence of an offence against this Act; and
(b) the seizure is necessary to prevent the thing being
hidden, lost or destroyed or used to continue or repeat
20 the offence.
422. Receipt for seized things
(1) As soon as possible after an inspector seizes a thing, the
inspector must give a receipt for it to the person from whom it
was seized.
25 (2) However, if it is not practicable to comply with subsection (1),
the inspector must leave the receipt at the place of seizure, in a
reasonably secure way and in a conspicuous position.
(3) The receipt must describe generally each thing seized and its
condition.
page 251
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 423
423. Return of seized things
(1) An inspector must return a seized thing to its owner at the end
of --
(a) 6 months; or
5 (b) if proceedings for an offence involving it are started
within the 6 months, the proceedings and any appeal
from the proceedings.
(2) Despite subsection (1), the inspector must return the seized
thing to the person immediately the inspector stops being
10 satisfied its retention as evidence is necessary.
424. Power to require name and address
(1) This section applies if --
(a) an inspector finds a person committing an offence
against this Act; or
15 (b) an inspector finds a person in circumstances that lead, or
has information that leads, the inspector to reasonably
suspect the person has just committed an offence against
this Act.
(2) The inspector may require the person to state the person's name
20 and address.
(3) When making the requirement the inspector must warn the
person it is an offence to fail to state the person's name or
address, unless the person has a reasonable excuse.
(4) The inspector may require the person to give evidence of the
25 correctness of the stated name or address if the inspector
reasonably suspects the stated name or address is false.
(5) A person must comply with a requirement under subsection (2)
or (4), unless the person has a reasonable excuse.
Penalty: a fine of $12 000 or imprisonment for one year.
page 252
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 425
(6) A person does not commit an offence against subsection (5)
if --
(a) the person was required to state the person's name and
address by an inspector who suspected the person had
5 committed an offence against this Act; and
(b) the person is not proved to have committed the offence.
425. False or misleading statements
(1) A person must not state anything to an inspector the person
knows is false or misleading in a material particular.
10 Penalty: a fine of $12 000 or imprisonment for one year.
(2) It is enough for a complaint for an offence against
subsection (1) to state the statement was false or misleading to
the person's knowledge without stating which.
426. Power to require production of documents
15 (1) An inspector may require a person to produce to the inspector,
for inspection, a document this Act requires the person to hold
or keep.
(2) The person must produce the document, unless the person has a
reasonable excuse for not producing it.
20 Penalty: a fine of $12 000 or imprisonment for one year.
(3) The inspector may keep a document that is produced --
(a) to take an extract from the document; or
(b) to make a copy of it.
(4) The inspector must return the document to the person as soon as
25 practicable after taking the extract or making the copy.
page 253
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 1 Supervision and protection
s. 427
427. False or misleading documents
(1) A person must not give to the Registrar or an inspector a
document containing information the person knows is false or
misleading in a material particular.
5 Penalty: a fine of $12 000 or imprisonment for one year.
(2) Subsection (1) does not apply to a person who, when giving the
document --
(a) tells the Registrar or inspector, to the best of the
person's ability, how it is false, misleading or
10 incomplete; and
(b) if the person has, or can reasonably get, the correct
information, gives the correct information to the
Registrar or inspector.
(3) It is enough for a complaint against a person for an offence
15 against subsection (1) to state the document was false,
misleading or incomplete to the person's knowledge without
stating which.
428. Obstruction of inspectors
(1) In this section --
20 "obstruct" includes hinder and attempt to obstruct.
(2) A person must not obstruct an inspector, or a person helping an
inspector, in the exercise of a power under this Act, unless the
person has a reasonable excuse.
Penalty: a fine of $12 000 or imprisonment for one year.
25 (3) If a person obstructs an inspector in the exercise of a power
under this Act and the inspector decides to exercise the power,
the inspector must warn the person.
(4) In warning the person, the inspector must tell the person --
(a) it is an offence to obstruct the inspector, unless the
30 person has a reasonable excuse; and
page 254
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Supervision and protection Division 1
s. 429
(b) the inspector considers the person's conduct is an
obstruction.
429. Copies or extracts of records to be admitted in evidence
(1) Subject to this section, in any legal proceedings, whether under
5 this Act or otherwise, a copy of or extract from a record relating
to affairs of a co-operative is admissible in evidence as if it were
the original record or the relevant part of the original record.
(2) A copy of or extract from a record is not admissible in evidence
under subsection (1) unless it is proved that the copy or extract
10 is a true copy of the record or of the relevant part of the record.
(3) For the purposes of subsection (2), evidence that a copy of or
extract from a record is a true copy of the record or of a part of
the record may be given either orally or by an affidavit or
statutory declaration by a person who has compared the copy or
15 extract with the record or the relevant part of the record.
430. Privilege
(1) A legal practitioner is entitled to refuse to comply with a
requirement under section 413 or 415 relating to a relevant
document if --
20 (a) the document contains a privileged communication
made by or on behalf of or to the legal practitioner in his
or her capacity as a legal practitioner; or
(b) the legal practitioner is not able to comply with the
requirement without disclosing a privileged
25 communication made by or on behalf of or to the legal
practitioner in his or her capacity as a legal practitioner.
(2) The legal practitioner is not entitled to refuse to comply with the
requirement to the extent that he or she is able to comply with it
without disclosing the privileged communication.
30 (3) The legal practitioner is also not entitled to refuse to comply
with the requirement if the person by or on behalf of whom the
page 255
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 2 Inquiries
s. 431
communication was made or (if the person is under
administration under the Corporations Act Part 5.3A as applying
under this Act, or in the course of being wound up) the
administrator or the liquidator agrees to the legal practitioner
5 complying with the requirement.
(4) If the legal practitioner refuses to comply with the requirement,
he or she must immediately give in writing to the Registrar --
(a) the name and address of the person to whom or by or on
behalf of whom the communication was made, if known
10 to the legal practitioner; and
(b) enough particulars to identify the document containing
the communication, if the communication was made in
writing.
Penalty: a fine of $6 000.
15 Division 2 -- Inquiries
431. Definitions
In this Division --
"affairs", of a co-operative, includes --
(a) the promotion, formation, membership, control,
20 transactions, dealings, business and property of the
co-operative; and
(b) loans made to the co-operative; and
(c) matters that are concerned with identifying people
who are, or have been, financially interested in the
25 success or failure, or apparent success or failure, of
the co-operative or who are, or have been, able to
control or influence materially the policies of the
co-operative; and
(d) the circumstances in which a person placed, withdrew
30 or disposed of funds with, or loans to, the
co-operative;
page 256
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Inquiries Division 2
s. 432
"costs", of an inquiry under this Division, includes --
(a) the expenses of, and incidental to, the inquiry; and
(b) the expenses payable by the Registrar in proceedings
instituted by the Registrar under this Division in the
5 name of the co-operative the subject of the inquiry;
and
(c) the part of the remuneration of an officer or employee
of the State as the Minister decides is attributable to
matters connected with the inquiry;
10 "investigator" means a person appointed under section 432;
"involved person", in relation to an inquiry into the affairs of a
co-operative, means --
(a) an officer of the co-operative; or
(b) a person who acts, or has at any time acted, as
15 financial institution, solicitor, auditor or actuary, or in
another capacity, for the co-operative; or
(c) a person who has, or at any time had, in his or her
possession any property of the co-operative; or
(d) a person who is indebted to the co-operative; or
20 (e) a person who is capable of giving information
relating to the affairs of the co-operative; or
(f) a person whom an investigator believes on reasonable
grounds to be a person referred to in paragraphs (a)
to (e).
25 432. Appointment of investigators
(1) In this section --
"chief executive officer" means the chief executive officer of
the department of the Public Service principally assisting
the Minister in the administration of this Act.
30 (2) The chief executive officer may appoint a person or persons to
hold an inquiry into the affairs of a co-operative if the chief
page 257
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 2 Inquiries
s. 433
executive officer considers that it is desirable to do so for the
protection, or otherwise in the interests, of the public or of the
members or creditors of the co-operative.
(3) The chief executive officer may vary the terms and conditions
5 of appointment of an investigator if the investigator agrees to
the variation.
(4) In the course of an inquiry into the affairs of a co-operative, an
investigator may inquire into the affairs of a subsidiary of the
co-operative that, if the subsidiary were the co-operative, would
10 be affairs of the co-operative.
(5) An inquiry into the affairs of a subsidiary of a co-operative may
be conducted as if the subsidiary were the co-operative.
433. Powers of investigators
(1) An investigator inquiring into the affairs of a co-operative may,
15 by giving an involved person a notice in a form approved by the
Registrar, require the person --
(a) to produce any document of which the person has
custody or control and that relates to those affairs; or
(b) to give the investigator all reasonable help with the
20 inquiry; or
(c) to appear before the investigator for examination on oath
or affirmation.
(2) An investigator may administer an oath or affirmation to an
involved person given a notice under subsection (1).
25 (3) An investigator may take possession of a document produced by
an involved person under subsection (1) and may retain it for
the period that the investigator decides is necessary for the
inquiry.
(4) While an investigator retains possession of a document, the
30 investigator must permit a person who would be entitled to
inspect the document were it not in the possession of the
page 258
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Inquiries Division 2
s. 434
investigator to inspect the document at any reasonable time and
make a copy of, or take extracts from, the document.
434. Examination of involved person
(1) A legal practitioner acting for an involved person --
5 (a) may attend an examination of the involved person by an
investigator; and
(b) may, to the extent that the investigator permits, address
the investigator and examine the involved person.
(2) An involved person is not excused from answering a question
10 asked by the investigator even if seeking to be excused on the
ground of possible self incrimination.
(3) If an involved person answers a question of an investigator after
having claimed possible self incrimination by doing so, neither
the question nor the answer is admissible in evidence in any
15 criminal proceedings other than --
(a) proceedings under section 436 for giving a false or
misleading answer to the question; or
(b) proceedings on a charge of perjury in respect of the
answer.
20 (4) An involved person who attends for examination by an
investigator is entitled to be paid the allowance and the
expenses prescribed by the regulations.
435. Privilege
(1) An involved person who is a legal practitioner is entitled to
25 refuse to produce a document to an investigator if the document
contains a privileged communication made by or on behalf of or
to the legal practitioner in his or her capacity as a legal
practitioner.
(2) The legal practitioner is not entitled to refuse to produce the
30 document if the person by or on behalf of whom the
page 259
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 2 Inquiries
s. 436
communication was made or, if the person is under
administration under the Corporations Act Part 5.3A as applying
under this Act, or in the course of being wound up, the
administrator or the liquidator agrees to the legal practitioner
5 producing the document.
(3) If the legal practitioner refuses to comply with the requirement
to produce a document, he or she must immediately give in
writing to the investigator --
(a) the name and address of the person to whom or by or on
10 behalf of whom the communication was made, if known
to the legal practitioner; and
(b) enough particulars to identify the document.
Penalty: a fine of $6 000.
436. Offences by involved person
15 (1) An involved person must not --
(a) fail to comply with a lawful requirement of an
investigator without showing reasonable cause for the
failure; or
(b) give an investigator information knowing the
20 information to be false or misleading in a material
particular; or
(c) when appearing before an investigator --
(i) make a statement knowing the statement to be
false or misleading in a material particular; or
25 (ii) fail to be sworn or to make an affirmation.
Penalty: a fine of $24 000 and imprisonment for 2 years.
(2) If an investigator considers that a failure by a person to comply
with a requirement of the investigator is an offence under
subsection (1)(a), the investigator may certify the failure to the
30 Supreme Court and the Court may then --
(a) order the involved person to comply with the
requirement of the investigator within a stated period; or
page 260
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Inquiries Division 2
s. 437
(b) instead of, or in addition to, making that order, punish
the involved person as for a contempt of the Court if
satisfied that there was no lawful excuse for the failure
to comply with the requirement of the investigator.
5 437. Offences relating to documents
If an inquiry into the affairs of a co-operative is being held
under this Division, a person who --
(a) conceals, destroys, mutilates or alters a document
relating to the co-operative; or
10 (b) sends, or causes to be sent, out of the State a document
or other property that belongs to, or is under the control
of, the co-operative,
commits an offence unless it is established that the person
charged did not intend to defeat, delay or obstruct the inquiry.
15 Penalty: a fine of $12 000 and imprisonment for one year.
438. Record of examination
(1) Except as provided by section 434, a record of an examination
may be used in proceedings against the person examined, but
this does not preclude the admission of other written or oral
20 evidence.
(2) A person examined is, on written application made to the
investigator, entitled to a free copy of the record of examination.
(3) The Registrar may provide a legal practitioner with a copy of a
record of examination made by an investigator if the Registrar is
25 satisfied that the legal practitioner is conducting, or is in good
faith contemplating, legal proceedings in respect of affairs of
the co-operative to which the record relates.
(4) A legal practitioner must not --
(a) use a copy of a record of examination otherwise than for
30 the preparation for, institution of, or conduct of, legal
proceedings; or
page 261
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 2 Inquiries
s. 439
(b) publish or communicate the record or any part of it for
any other purpose.
Penalty: a fine of $6 000.
439. Report of investigator
5 (1) An investigator may, and if directed by the Registrar to do so
must, make interim reports to the Registrar on any inquiry being
held by the investigator.
(2) As soon as practicable after the end of an inquiry, the
investigator must report to the Registrar --
10 (a) the opinion of the investigator in relation to the affairs of
the co-operative the subject of the inquiry; and
(b) the findings on which the opinion is based.
(3) An investigator's report may include a recommendation as to
whether --
15 (a) a direction should be made under section 442(3); or
(b) an application should be made under section 442(4)
or (5); or
(c) a direction and an application should both be made.
(4) A report by an investigator may be accompanied by any
20 document of which the investigator has taken possession after
being produced under this Division, in which case the
Registrar --
(a) may retain the document for the period that the Registrar
considers necessary in order to decide whether legal
25 proceedings should be instituted as a result of the
inquiry; and
(b) may retain the document for the further period that the
Registrar considers to be necessary to enable legal
proceedings to be instituted and prosecuted; and
30 (c) may permit the use of the document for legal
proceedings instituted as a result of the inquiry; and
page 262
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Inquiries Division 2
s. 440
(d) must permit inspection of the document by a person who
would be entitled to inspect it if it were returned to its
former custody; and
(e) may permit inspection of the document by another
5 person while it is in the possession of the Registrar but
only if the Registrar considers that the person has an
interest in the inquiry and, because of that interest,
refusal of the inspection would be unjust.
440. Proceedings following inquiry
10 (1) If legal proceedings are to be, or have been, instituted by the
Registrar as a result of an inquiry under this Division, the
Registrar may, by written notice, require a person who, in
relation to the inquiry, was an involved person to give all
assistance in connection with the proceedings as the person is
15 reasonably able to give.
(2) The Supreme Court may, on the application of the Registrar,
order a person to comply with an order under subsection (1) if
the person has failed to do so.
(3) If the Registrar considers that, as a result of an inquiry under
20 this Division, legal proceedings should, in the public interest, be
instituted by a co-operative for the recovery of --
(a) damages for fraud or other misconduct in connection
with the affairs of the co-operative; or
(b) property of the co-operative,
25 the Registrar may institute and prosecute the proceedings in the
name of the co-operative.
441. Admission of investigator's report as evidence
(1) A document certified by the Registrar as being a copy of a
report of an inquiry under this Division is admissible as
30 evidence of any findings made by the investigator.
page 263
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 2 Inquiries
s. 442
(2) Subsection (1) does not authorise the admission of evidence that
is inadmissible under section 434.
442. Costs of inquiry
(1) The costs of an inquiry under this Division are to be paid out of
5 money appropriated by Parliament.
(2) At the direction of the Minister, the Registrar must act under
one or more of subsections (3), (4) and (5).
(3) The Registrar may, by written notice given to a co-operative,
direct the co-operative to pay to the State all or part of the costs
10 of an inquiry under this Division into the affairs of the
co-operative.
(4) If proceedings are instituted by the Registrar under section 440
in the name of a co-operative, the Supreme Court may, in the
course of the proceedings and on the application of the
15 Registrar, order that all or part of the costs of the inquiry that
led to the proceedings be paid to the State by a specified party to
the proceedings.
(5) If a person is convicted of an offence in proceedings certified by
the Registrar to be the result of an inquiry into the affairs of a
20 co-operative, the Supreme Court may, on the application of the
Registrar made at the time of the conviction or not more than
14 days later, order the convicted person to pay to the State all
or part of the costs of the inquiry.
(6) A direction or an order under this section must state --
25 (a) the amount to be paid; and
(b) the time or times for payment; and
(c) the manner of payment.
(7) An amount that has not been paid by a person in accordance
with a direction or an order under this section is recoverable
30 from the person by the Registrar as a debt payable to the State.
page 264
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Prevention of fraud etc. Division 3
s. 443
Division 3 -- Prevention of fraud etc.
443. Falsification of records
A person must not make, order or allow to be made an entry or
erasure in, or any omission from --
5 (a) a record of a co-operative or a subsidiary of a
co-operative; or
(b) a record required to be sent, kept or delivered under this
Act,
with intent to falsify them or it, or to evade any of the
10 provisions of this Act.
Penalty: a fine of $6 000.
444. Fraud or misappropriation
(1) A person must not --
(a) by false representation or imposition, obtain possession
15 of any property of a co-operative; or
(b) having property of a co-operative in his or her
possession, withhold or misapply it or wilfully apply
part of it to purposes other than purposes authorised by
the rules of the co-operative or this Act.
20 Penalty: a fine of $6 000.
(2) A person who is found guilty of an offence under subsection (1)
must, if ordered to do so by the court, deliver up all the property
and repay all money improperly applied.
Penalty: a fine of $6 000.
25 445. Offering or paying commission
A person must not offer or pay a commission, fee or reward,
whether pecuniary or otherwise, to an officer of a co-operative
in relation to a transaction or proposed transaction between the
person and the co-operative.
30 Penalty: a fine of $6 000.
page 265
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 3 Prevention of fraud etc.
s. 446
446. Accepting commission
(1) An officer of a co-operative must not accept a commission, fee
or reward, whether pecuniary or otherwise, from a person in
relation to a transaction or proposed transaction between the
5 person and the co-operative.
Penalty: a fine of $6 000.
(2) An officer of a co-operative who commits an offence under
subsection (1) is liable to make good to the co-operative double
the value or amount of the commission, fee or reward.
10 447. False statements in loan application etc.
(1) A person must not in or in relation to an application, request or
demand for money made to or of a co-operative --
(a) give information or make a statement to the co-operative
or an officer, employee or agent of the co-operative
15 knowing it to be false or misleading in a material
particular; or
(b) proffer to the co-operative or an officer, employee or
agent of the co-operative any information or statement
provided by another person knowing it to be false or
20 misleading in a material particular.
Penalty: a fine of $6 000.
(2) If a person is found guilty of an offence under subsection (1), a
co-operative from which money has been obtained by the
person in relation to the commission of the offence may
25 exercise all rights under a mortgage or other security given to it
by the person to secure the repayment of money that it could
exercise if there were a breach of a covenant or of a term of a
contract by which the security was given.
(3) The co-operative may exercise the rights whether the mortgage
30 or other security was executed by the person alone or by the
person and another person or other persons.
page 266
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Miscellaneous powers of the Registrar Division 4
s. 448
Division 4 -- Miscellaneous powers of the Registrar
448. Application for special meeting or inquiry
(1) The Registrar must, on the application of a majority of the
members of the board or of not less than one third in number of
5 the members of a co-operative --
(a) call a special meeting of the co-operative; or
(b) hold, or appoint an inspector to hold, an inquiry into the
affairs of the co-operative or of a subsidiary of the
co-operative.
10 (2) An application must be supported by the evidence that the
Registrar 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.
(3) Notice of the application must be given to the co-operative as
15 the Registrar directs.
(4) The applicants must give security for the expenses of the
meeting or inquiry as the Registrar directs.
449. Holding of special meeting
(1) The Registrar may direct the time and place at which a special
20 meeting of a co-operative under this Division is to be held and
the matters that are to be discussed and decided at the meeting.
(2) The Registrar must give such notice to members of the holding
of the special meeting as the Registrar considers appropriate,
despite any provision in the co-operative's rules as to the giving
25 of notice.
(3) The special meeting has all the powers of a meeting called in
accordance with the rules of the co-operative and has power to
appoint its own chairman, despite a rule of the co-operative to
the contrary.
page 267
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 15 Supervision and protection of co-operatives
Division 4 Miscellaneous powers of the Registrar
s. 450
(4) The Registrar or another person nominated by the Registrar may
attend and address the meeting.
450. Expenses of special meeting or inquiry
The expenses of and incidental to a special meeting called or an
5 inquiry held under this Division, including under section 451,
must be defrayed in the proportions the Registrar directs --
(a) by the applicants, if any; or
(b) out of the funds of the co-operative to which the meeting
or inquiry related or whose subsidiary was the subject of
10 the inquiry; or
(c) by any officer, member, former officer or former
member of the co-operative.
451. Power to hold special inquiry into co-operative
The Registrar may without an application hold, or appoint an
15 inspector to hold, an inquiry into the working and financial
condition of a co-operative or a subsidiary of a co-operative.
452. Special meeting following inquiry
(1) On completion of any inquiry under this Division, the Registrar
may call a special meeting of the co-operative.
20 (2) Sections 449 and 450 apply to such a meeting.
453. Information and evidence
(1) On an application for registration of a co-operative or
registration or approval of a rule or document under this Act,
the Registrar may require from the applicant information and
25 evidence as may be reasonable in order to show that the
application should be granted.
(2) The Registrar may require from any co-operative such
information and evidence as may be reasonable in order to show
page 268
[Draft Bill for public comment]
Co-operatives Bill 2006
Supervision and protection of co-operatives Part 15
Miscellaneous powers of the Registrar Division 4
s. 454
that the co-operative is genuinely carrying on business in
accordance with the provisions of this Act.
(3) The Registrar may require from a co-operative evidence as the
Registrar considers appropriate of all matters required to be
5 done and of the entries in any document required to be given to
the Registrar under this Act.
454. Extension or abridgment of time
(1) The Registrar may grant an extension of, or may abridge, a time
for doing anything required to be done by a co-operative by this
10 Act, or the rules of a co-operative on the terms, if any, as the
Registrar decides.
(2) The Registrar may grant an extension of time even if the time
for doing the thing has expired.
455. Power of Registrar to intervene in proceedings
15 (1) The Registrar may intervene in proceedings relating to a matter
arising under this Act.
(2) When the Registrar intervenes in proceedings, the Registrar is
taken to be a party to the proceedings and, subject to this Act,
has all the rights, duties and liabilities of a party to the
20 proceedings.
(3) The Registrar may appear and be represented in any
proceedings in which the Registrar wishes to intervene under
this section --
(a) by a person to whom the Registrar has delegated the
25 Registrar's functions under this Act or the functions
relating to a matter to which the proceedings relate; or
(b) by an employee of the public service who is engaged in
the administration of this Act; or
(c) by a legal practitioner.
page 269
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 16 Administration of this Act
Division 1 The Registrar
s. 456
Part 16 -- Administration of this Act
Division 1 -- The Registrar
456. Registrar of Co-operatives
The Commissioner as defined in the Consumer Affairs Act 1971
5 section 4(1) is the Registrar of Co-operatives for the purposes of
this Act.
457. Deputy Registrar and other staff
(1) There are to be appointed under the Public Sector Management
Act 1994 a deputy registrar and the assistant registrars necessary
10 for this Act.
(2) The deputy registrar or an assistant registrar may exercise any
of the functions conferred on the Registrar, except the power of
delegation under section 458.
458. Delegation by Registrar
15 (1) The Registrar may delegate to a person any power or duty of the
Registrar under another provision of this Act.
(2) The delegation must be in writing signed by the Registrar.
(3) The delegation may expressly authorise the delegate to further
delegate the power or duty.
20 (4) A person exercising or performing a power or duty that has been
delegated to the person under or as authorised under this
section, is to be taken to do so in accordance with the terms of
the delegation unless the contrary is shown.
(5) Nothing in this section limits the ability of the Registrar to
25 perform a function through an officer or agent.
page 270
[Draft Bill for public comment]
Co-operatives Bill 2006
Administration of this Act Part 16
The Registrar Division 1
s. 459
459. Registers to be kept by Registrar
(1) The Registrar is to keep --
(a) a register of co-operatives; and
(b) a register of foreign co-operatives,
5 in addition to the Register of Co-operative Charges established
under Schedule 3 clause 18, and the register of undertakings
referred to in section 477.
(2) The Registrar must record in a register documents, relating to an
entity or thing or proposed entity mentioned in subsection (1),
10 that are specified by the Registrar by order published in the
Gazette and anything else required by this Act to be recorded in
the Register.
460. Keeping of registers
(1) The Registrar must keep, in addition to the registers referred to
15 in section 459, any other registers that the Registrar considers
necessary or desirable for the purposes of this Act.
(2) Subject to section 459(2), a register must be kept in the form
and contain the particulars that the Registrar thinks fit.
(3) Subject to section 461, any document lodged with, furnished to
20 or registered by the Registrar under this Act must be kept in the
office of the Registrar.
461. Disposal of records by Registrar
(1) Subject to the State Records Act 2000, the Registrar may, if the
Registrar considers that it is no longer necessary or desirable to
25 retain them, destroy or dispose of any of the following --
(a) an annual return or balance sheet lodged more than
7 years ago;
(b) a document creating or evidencing a charge, or the
complete or partial satisfaction of a charge, if a
page 271
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 16 Administration of this Act
Division 1 The Registrar
s. 462
memorandum of satisfaction of the charge was
registered more than 7 years ago;
(c) a document, other than the rules or a document affecting
the rules of a co-operative, that was lodged, given or
5 registered more than 15 years ago;
(d) a document lodged, given or registered in relation to a
co-operative that was dissolved or ceased to be
registered more than 15 years ago;
(e) a document of which a transparency or electronic image
10 is incorporated in the register kept by the Registrar or is
otherwise kept in the office of the Registrar.
462. Inspection of registers
(1) A person may --
(a) inspect the registers kept by the Registrar, on payment
15 of the fee, if any, prescribed by the regulations; and
(b) inspect documents kept by the Registrar relating to a
co-operative and prescribed by the regulations, on
payment of the fee, if any, prescribed by the regulations;
and
20 (c) obtain an extract from a register inspected under
paragraph (a), on payment of the fee prescribed by the
regulations; and
(d) obtain a certified copy of a document that the person
may inspect under paragraph (b), on payment of the fee
25 prescribed by the regulations; and
(e) obtain a copy of a document that the person may inspect
under paragraph (b), on payment of the fee prescribed
by the regulations.
(2) If a reproduction of a document or an extract of information
30 contained in a document and recorded in a register is produced
for inspection, a person is not entitled under subsection (1) to
require the production of the original of that document.
page 272
[Draft Bill for public comment]
Co-operatives Bill 2006
Administration of this Act Part 16
The Registrar Division 1
s. 463
463. Approvals by Registrar
(1) This section applies to a provision of this Act that imposes a
requirement for the Registrar's approval of any action or thing.
(2) The Registrar may indicate in writing to an applicant for such an
5 approval that the approval is taken to have been granted at the
end of a specified period unless the Registrar informs the
applicant in writing within that period that the approval has not
been granted or is still being considered.
464. Lodgment of documents
10 A document is not lodged under this Act unless --
(a) all information required to be provided in or with the
document is provided; and
(b) the fee, if any, prescribed by the regulations has been
paid.
15 465. Way of lodging
(1) Subject to section 464, it is sufficient compliance with a
requirement under this Act that a document be lodged with the
Registrar if the Registrar receives a copy of the document by
facsimile or electronic transmission.
20 (2) If the Registrar receives from a person a copy of a document
under subsection (1), the Registrar may require that person to
produce and lodge the original within the time specified by the
Registrar.
(3) If the person does not comply with a requirement of the
25 Registrar within the specified time, the person is to be taken not
to have lodged the document.
page 273
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 16 Administration of this Act
Division 2 Protection from liability
s. 466
466. Power of Registrar to refuse to register or reject documents
(1) The Registrar may refuse to register or may reject a document
submitted to the Registrar if the Registrar considers that the
document --
5 (a) contains matter contrary to law; or
(b) contains matter, that in a material particular, is false or
misleading in the form or context in which it is included;
or
(c) by reason of an omission or misdescription, has not been
10 duly completed; or
(d) does not comply with the requirements of this Act; or
(e) contains any error, alteration or erasure; or
(f) if submitted in electronic form, is not readily accessible
by the Registrar so as to be useable by the Registrar.
15 (2) If the Registrar refuses to register or rejects a document under
subsection (1), the Registrar may request --
(a) that the document be appropriately amended; or
(b) that a fresh document be submitted in its place; or
(c) if the document has not been duly completed, that a
20 supplementary document in the form approved by the
Registrar be submitted.
Division 2 -- Protection from liability
467. Particular persons protected from liability
(1) An action in tort does not lie against a person for anything that
25 the person has done, in good faith, in the performance or
purported performance of a function under this Act.
(2) The Registrar and the Crown are also relieved of any liability
that either of them might otherwise have had for a person
having done anything as described in subsection (1).
page 274
[Draft Bill for public comment]
Co-operatives Bill 2006
Administration of this Act Part 16
Evidence Division 3
s. 468
(3) The protection given by this section applies even though the
thing done as described in subsection (1) may have been
capable of being done whether or not this Act had been enacted.
(4) In this section, a reference to the doing of anything includes a
5 reference to an omission to do anything.
Division 3 -- Evidence
468. Certificate of registration
(1) A certificate of registration of a co-operative issued under this
Act is evidence that the co-operative is incorporated under this
10 Act and that all the requirements of this Act in relation to
registration have been complied with.
(2) This section does not affect a provision of this Act for the
winding up or deregistration of the co-operative or the
cancellation of its registration.
15 469. Certificate evidence
(1) If a function under this Act is conferred or imposed on the
Registrar as a consequence of something being done or omitted
to be done within a specified period, the Registrar may
certify --
20 (a) that the thing had or had not been done within that
period; or
(b) that the thing had or had not been done by a specified
date.
(2) The Registrar may issue a certificate stating that a requirement
25 of this Act specified in the certificate --
(a) had, or had not, been complied with at a date or within a
period specified in the certificate; or
(b) had been complied with at a date specified in the
certificate but not before that date.
page 275
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 16 Administration of this Act
Division 3 Evidence
s. 470
(3) The Registrar may issue a certificate stating that on a date
specified in the certificate a body specified in the certificate was
not or had ceased to be registered as a co-operative under this
Act.
5 (4) A certificate given by the Registrar under this section is
evidence of the matters stated in the certificate.
470. Records kept by co-operatives
(1) A record kept by a co-operative under a requirement of this Act
is admissible in evidence in any proceedings and is evidence of
10 any matter stated or recorded in the record.
(2) A document purporting to be a record kept by a co-operative is,
unless the contrary is proved, taken to be a record kept by the
co-operative under a requirement of this Act.
(3) A copy of an entry in a record regularly kept by a co-operative
15 in the course of its business is, if verified by statutory
declaration of the secretary to be a true copy of the entry, to be
received in evidence in any case where and to the same extent
as the original entry itself is admissible.
471. Minutes
20 (1) Every entry in the minutes purporting to be a minute of the
business transacted at a meeting of a co-operative or of the
board, and purporting to have been signed by the chairman at a
subsequent meeting, is evidence that the business recorded in
the minute was transacted at the meeting and that the meeting
25 was properly convened and held.
(2) An entry in the minutes of a meeting of a co-operative to the
effect that a resolution was carried or carried unanimously, or
was lost, is evidence of the fact without proof of the number or
proportion of votes recorded for or against the resolution.
page 276
[Draft Bill for public comment]
Co-operatives Bill 2006
Administration of this Act Part 16
Evidence Division 3
s. 472
472. Official certificates
(1) A certificate of registration given by the Registrar must be
received in evidence as if it were the original certificate.
(2) A certificate of registration or other official document relating
5 to a co-operative signed by or bearing the seal of the Registrar is
to be received in evidence without further proof.
(3) A copy of rules certified by the Registrar to be a true copy of
the rules of a co-operative is evidence of the registered rules of
the co-operative.
10 473. The Registrar and proceedings
(1) Judicial notice must be taken of the signature or the facsimile of
the signature, by whatever process it is produced, and seal of
any person who holds or has held the office of Registrar, if the
signature or facsimile signature or seal purports to be attached
15 to a certificate or other official document.
(2) This section extends to a copy of the rules of a co-operative
certified by the Registrar to be a true copy of its registered rules.
(3) In any proceedings, no proof is required, until evidence is given
to the contrary, of the appointment of the Registrar or a former
20 Registrar.
474. Rules
A printed copy of the rules of a co-operative verified by
statutory declaration of the secretary of the co-operative to be a
true copy of its registered rules is, in any proceedings, evidence
25 of the rules.
475. Registers
The register of directors, members and shares kept by a
co-operative as required by section 235(1)(a) is evidence of the
page 277
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 16 Administration of this Act
Division 4 Enforceable undertakings
s. 476
particulars directed or authorised by or under this Act to be
inserted in the register.
Division 4 -- Enforceable undertakings
476. Undertakings following contravention of, or failure to
5 comply with, this Act
(1) Where it appears to the Registrar that a person has engaged in
conduct that constitutes a contravention of or a failure to
comply with a provision of this Act, the Registrar may request
the person to execute, within the period of time specified by the
10 Registrar, a written undertaking in terms approved by the
Registrar under which the person gives undertakings as to --
(a) discontinuing the conduct; or
(b) complying with the Act in the future; or
(c) taking action to rectify the consequences of the
15 contravention or failure to comply.
(2) With the consent of the Registrar, the person may withdraw or
vary the undertaking at any time.
(3) The Registrar must not start, and must discontinue, legal
proceedings against a person for conduct that is the subject of an
20 undertaking that has been given by the person, that has been
approved by the Registrar and that the person is complying
with.
477. Register of undertakings
(1) The Registrar must keep a register of undertakings in
25 accordance with this Act.
(2) If a person gives an undertaking under section 476, the Registrar
must register that document in the register of undertakings.
page 278
[Draft Bill for public comment]
Co-operatives Bill 2006
Administration of this Act Part 16
Enforceable undertakings Division 4
s. 478
478. Enforcement orders
(1) The Registrar must not make an application under this section if
the Registrar has started legal proceedings against the person for
conduct that is the subject of the undertaking to which the
5 application relates.
(2) Where a person fails to comply with a request to give an
undertaking under section 476, the Supreme Court may, on the
application of the Registrar and on being satisfied that there
were grounds for the request, order the person --
10 (a) to act in a manner that would have been required; or
(b) to refrain from acting in a manner that would have been
prohibited,
by the undertaking if it had been given, and the person must
comply with the order.
15 Penalty: a fine of $10 000.
(3) Where, on the application of the Registrar, the Supreme Court is
satisfied that a person has failed to observe a term of an
undertaking given by the person under section 476, the Court
may make an order under subsection (4) against the person.
20 (4) The Supreme Court may order the person --
(a) to comply with the term of the undertaking within a time
specified in the order; or
(b) to pay to the State an amount up to the amount of any
financial benefit that the person has obtained directly or
25 indirectly and that is reasonably attributable to the
failure to observe the term of the undertaking; or
(c) to compensate any other person who has suffered loss,
injury or damage as a result of the failure to observe the
term of the undertaking; or
30 (d) to take any other action the Court considers appropriate.
page 279
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 16 Administration of this Act
Division 4 Enforceable undertakings
s. 478
(5) If --
(a) a failure on which an application under subsection (1)
or (2) is based is a failure by a corporation; and
(b) the Supreme Court is satisfied that a person, who at the
5 time of the failure was a director of the corporation or a
person concerned in its management, knowingly
authorised or permitted the failure by the corporation,
the Court may order the person to take the action required to
cause the corporation to observe the undertaking, and the person
10 must comply with the order.
Penalty: a fine of $10 000.
(6) An order under this section may be made subject to such
conditions as the Supreme Court sees fit.
(7) The Supreme Court may, on the application of the Registrar,
15 vary or discharge that order.
page 280
[Draft Bill for public comment]
Co-operatives Bill 2006
Offences and proceedings Part 17
s. 479
Part 17 -- Offences and proceedings
479. Offences by officers of co-operatives
(1) If a co-operative contravenes a provision of this Act --
(a) any person who is a director of the co-operative or
5 concerned in its management is taken to have
contravened the same provision if the person knowingly
authorised or permitted the contravention; and
(b) any other officer of the co-operative who by a wilful act
or omission is the cause of the contravention is taken to
10 have contravened the same provision.
(2) A person may be proceeded against and convicted under a
provision pursuant to subsection (1) whether or not the
co-operative has been proceeded against or convicted under that
provision.
15 (3) This section does not affect any liability imposed on a
co-operative for an offence committed by the co-operative
against this Act.
480. Notice to be given of conviction for offence
If a co-operative or an officer of a co-operative is convicted of
20 an offence against a provision of this Act, the co-operative
must, within 28 days after the conviction is recorded, give to
each member of the co-operative notice of --
(a) the conviction; and
(b) any penalty imposed; and
25 (c) the nature of the offence.
481. Secrecy
(1) In this section --
"divulge", in relation to information, means --
(a) to communicate the information orally; or
page 281
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 17 Offences and proceedings
s. 481
(b)to make available a document containing the
information; or
(c) to make available anything from which, by electronic
process or otherwise, the information may be
5 obtained; or
(d) to communicate the information in any other manner;
"repealed Act" means the Companies (Co-operative) Act 1943
or the Co-operative and Provident Societies Act 1903.
(2) A person who is, or at any time was, engaged in the
10 administration of this Act or a repealed Act must not, except as
provided by this section, record, make use of or divulge
information obtained in the course of the administration.
Penalty: a fine of $6 000.
(3) Subsection (2) does not apply to --
15 (a) the recording, making use of or divulging of information
in the course of the administration of this Act; or
(b) the recording or making use of information for the
purpose of divulging it as permitted by subsection (4)
or (5); or
20 (c) the divulging of information as permitted by
subsection (4).
(4) Information may be divulged --
(a) for the purposes of criminal proceedings; or
(b) for the purposes of any proceedings under this Act or of
25 an inquiry authorised by an Act; or
(c) with the consent of the person to whom the information
relates; or
(d) under section 386; or
(e) under a reciprocal arrangement under section 490.
page 282
[Draft Bill for public comment]
Co-operatives Bill 2006
Offences and proceedings Part 17
s. 481
(5) Information may be divulged to --
(a) the Minister; or
(b) the Treasurer; or
(c) the Commissioner of State Revenue; or
5 (d) the Auditor General; or
(e) the Commissioner of Taxation, a Second Commissioner
of Taxation or a Deputy Commissioner of Taxation
holding office under a law of the Commonwealth; or
(f) the Australian Securities and Investments Commission;
10 or
(g) the person who, under a law of another State, or of a
Territory, administers a law of the State or Territory that
relates to taxation or the imposition of a duty; or
(h) the Corruption and Crime Commission if the Registrar
15 has received a written request, under the Corruption and
Crime Commission Act 2003 for the information; or
(i) a person seeking information under an arrangement
under section 386 or 490; or
(j) a police officer exercising functions as a police officer;
20 or
(k) a person nominated by a person referred to in
paragraphs (a) to (g); or
(l) any person, to whom, in the opinion of the Registrar, it
is in the public interest that the information be divulged.
25 (6) For the purposes of this section, a person is, or was, engaged in
the administration of this Act or a repealed Act if the person
exercises, or at any time exercised, a function as --
(a) the Registrar holding office under this Act or a repealed
Act; or
30 (b) an inspector appointed under this Act or a repealed Act;
or
(c) an investigator appointed under this Act; or
page 283
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 17 Offences and proceedings
s. 482
(d) a person appointed or employed for the purposes of this
Act or a repealed Act.
482. False or misleading statements
(1) A person must not, in a document required for the purposes of
5 this Act or lodged with the Registrar make, or authorise the
making of, a statement knowing it to be false or misleading in a
material particular.
Penalty: a fine of $12 000.
(2) A person must not, from a document required for the purposes
10 of this Act or lodged with the Registrar omit, or authorise the
omission of, anything knowing that the omission makes the
document false or misleading in a material particular.
Penalty: a fine of $12 000.
(3) A person who, in a document required for the purposes of this
15 Act or lodged with the Registrar makes, or authorises the
making of, a statement that is false or misleading in a material
particular commits an offence unless it is proved that the person
had taken reasonable precautions aimed at avoiding the making
or authorising of false or misleading statements in such a
20 document.
Penalty: a fine of $6 000.
(4) If an omission makes a document required for the purposes of
this Act or lodged with the Registrar misleading in a material
respect, a person who made or authorised the omission commits
25 an offence unless it is proved that the person had taken
reasonable precautions aimed at avoiding the making or
authorising of omissions that would make such a document false
or misleading.
Penalty: a fine of $6 000.
page 284
[Draft Bill for public comment]
Co-operatives Bill 2006
Offences and proceedings Part 17
s. 483
483. Further offence for continuing failure to do required act
(1) If a provision of this Act requires an act to be done, the
obligation to do the act continues until the act is done --
(a) even if a person has been convicted of an offence in
5 relation to the failure to do the act; and
(b) even if the provision required the act to be done within a
particular period or before a particular time and that
period has ended or that time has passed.
(2) If a person is convicted of an offence (a "primary conviction")
10 for a failure to do the act, whether it is the first or a second or
subsequent offence in relation to the failure, and the failure to
do the act continues after the time of the conviction, the person
commits a further offence for that continuing failure.
(3) That further offence is constituted by the failure to do the act
15 during the period (the "further offence period") that begins
with the primary conviction and ends when proceedings for the
further offence are commenced or the act concerned is done,
whichever happens first.
(4) Proceedings for the further offence are taken to have been
20 commenced on the day on which the information for the further
offence is laid or on an earlier day specified in the information
for that purpose.
(5) The penalty for the further offence is determined using the
following formula --
25 AxB=C
where --
A is 50 per centum (50%) of the amount specified in this Act to
be the monetary penalty for the initial offence;
B is the number of days in the further offence period; and
30 C is the maximum penalty for the further offence.
page 285
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 17 Offences and proceedings
s. 484
484. Civil remedies
(1) If a co-operative, in making, guaranteeing or raising any loan or
receiving any deposit, contravenes this Act or a rule of the
co-operative, the civil rights and liabilities of the co-operative or
5 any other person in respect of the recovery of the loan or deposit
are not affected or prejudiced by the contravention, but the
money becomes immediately payable.
(2) The same remedies may be had for the recovery of the loan or
deposit and for the enforcement of any security for it as if there
10 had not been a contravention of this Act or of the rules of the
co-operative.
485. Injunctions
(1) This section applies to conduct that constituted, constitutes or
would constitute --
15 (a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to
contravene this Act; or
(d) inducing or attempting to induce, whether by threats,
20 promises or otherwise, a person to contravene this Act;
or
(e) being in any way, directly or indirectly, knowingly
concerned in, or party to, the contravention by a person
of this Act; or
25 (f) conspiring with others to contravene this Act.
(2) On the application of --
(a) the Registrar; or
(b) a person whose interests are affected by conduct
engaged in by another person,
30 the Supreme Court, if satisfied that conduct is conduct to which
this section applies, may grant an injunction, on the terms the
page 286
[Draft Bill for public comment]
Co-operatives Bill 2006
Offences and proceedings Part 17
s. 485
Court considers appropriate, restraining a person from engaging
in the conduct and, if the Court considers it appropriate,
requiring that other person to do any act or thing.
(3) If the Supreme Court considers it appropriate, the Court may
5 grant an interim injunction pending a decision on the
application.
(4) The Supreme Court may discharge or vary an injunction granted
under this section.
(5) The power of the Supreme Court to grant an injunction
10 restraining a person from engaging in conduct may be
exercised --
(a) whether or not it appears to the Court that the person
intends to engage again, or to continue to engage, in the
conduct; and
15 (b) whether or not the person has previously engaged in the
conduct; and
(c) whether or not there is an imminent danger of
substantial damage to another person if the first
mentioned person engages in the conduct.
20 (6) The power of the Supreme Court to grant an injunction
requiring a person to do an act or thing may be exercised --
(a) whether or not it appears to the Court that the person
intends to refuse or fail again, or to continue to refuse or
fail, to do that act or thing; and
25 (b) whether or not the person has previously refused or
failed to do that act or thing; and
(c) whether or not there is an imminent danger of
substantial damage to any person if the first mentioned
person refuses or fails to do that act or thing.
30 (7) If the Supreme Court has power under this section to grant an
injunction restraining a person from engaging in particular
conduct, or requiring a person to do a particular act or thing, the
page 287
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 17 Offences and proceedings
s. 486
Court may, either in addition to or in substitution for the grant
of the injunction, order that person to pay damages to any other
person.
486. Proceedings for offences etc.
5 (1) Proceedings for an offence under this Act may be instituted
within 3 years after the alleged commission of the offence.
(2) Proceedings for an offence may be instituted by the Registrar or
any aggrieved person.
(3) Proceedings for the recovery of any fine or penalty imposed by
10 the rules of a co-operative may be instituted only by the
co-operative.
page 288
[Draft Bill for public comment]
Co-operatives Bill 2006
General Part 18
s. 487
Part 18 -- General
487. Co-operative ceasing to exist
(1) As soon as practicable after a co-operative ceases to exist, other
than on the deregistration of the co-operative under section 320,
5 the Registrar must deregister the co-operative by registering the
cessation and cancelling the registration of the co-operative.
(2) The Registrar may remove from the register the name of a
co-operative that has been deregistered or otherwise ceased to
exist.
10 (3) A co-operative that has transferred its engagements to another
co-operative is taken to have ceased to exist.
488. Service of documents on co-operative
(1) A document may be served on a co-operative by post or by
leaving it at the registered office of the co-operative with a
15 person who appears to be aged 16 or more.
(2) A document may be served on a foreign co-operative --
(a) by post; or
(b) by leaving it with a person who appears to be aged 16 or
more and is at a place where the foreign co-operative
20 carries on business in this State; or
(c) by leaving it at the registered office in this State of the
foreign co-operative registered under Part 14.
(3) For the purpose of serving a document under this section by
post, the document is properly addressed if --
25 (a) in the case of a co-operative, it is addressed to the
registered office of the co-operative; or
(b) in the case of a foreign co-operative, it is addressed to a
place in this State where the foreign co-operative carries
on business or to the registered office of the foreign
page 289
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 18 General
s. 489
co-operative in its place of registration, incorporation or
formation.
(4) This section does not affect the operation of any provision of a
law or of the rules of a court authorising a document to be
5 served on a co-operative or a foreign co-operative in another
way.
489. Service on member of co-operative
(1) A notice required under this Act to be given to a member of a
co-operative must be in writing.
10 (2) A notice or other document required under this Act to be given
to a member of a co-operative may be given --
(a) personally; or
(b) by post; or
(c) by publishing the notice in a newspaper circulating
15 generally in this State or in the area served by the
co-operative, if --
(i) the co-operative is a non-trading co-operative; or
(ii) the member's whereabouts are unknown to the
co-operative; or
20 (iii) the Registrar permits notice to be given to
members of the co-operative in that way.
490. Reciprocal arrangements
(1) If a reciprocal arrangement with another State or a Territory is
in force, the Registrar --
25 (a) may, at the request of the appropriate official of the
State or Territory, give the official information or
documents relating to a co-operative; and
(b) may ask the appropriate official of the State or Territory
to give the Registrar documents or information relating
page 290
[Draft Bill for public comment]
Co-operatives Bill 2006
General Part 18
s. 491
to an organisation that, under the arrangement, is an
organisation corresponding to a co-operative.
(2) A reciprocal arrangement with another State or a Territory is an
arrangement made between the Minister and a representative of
5 the government of the other State or the Territory under which it
is agreed --
(a) that the Registrar will comply with a request referred to
in subsection (1)(a); and
(b) that a request made by the Registrar to an official
10 designated in the arrangement as the appropriate official
for the purposes of subsection (1)(b) will be complied
with.
491. Translations of documents
A requirement imposed under this Act to give or lodge a
15 document or make a document available for inspection is, in the
case of a document that is not in the English language, taken to
include a requirement that a translation of the document be
given, lodged or made available for inspection at the same time.
492. Exemptions may be on conditions
20 An exemption under section 143(1), 231, 278(4), 293, 301
or 305(4) may be given on conditions.
493. Approval of forms
The Registrar may approve forms for use under this Act.
494. Regulation making power
25 (1) The Governor may make regulations prescribing all matters that
are required or permitted by this Act to be prescribed or are
necessary or convenient to be prescribed for giving effect to the
purposes of this Act.
page 291
[Draft Bill for public comment]
Co-operatives Bill 2006
Part 18 General
s. 495
(2) Without limiting subsection (1), regulations may be made for or
in relation to the following --
(a) the making of applications for the exercise of a function
by the Registrar;
5 (b) the way documents are lodged with the Registrar,
including electronic lodgment and lodgment by
facsimile;
(c) fees to be paid in relation to the administration of this
Act including --
10 (i) fees for lodgment of any documents under this
Act; and
(ii) additional fees for late lodgment of any
documents under this Act.
(3) A regulation may create an offence punishable by a penalty of a
15 fine not exceeding $2 000.
495. Companies (Co-operative) Act 1943 repealed
The Companies (Co-operative) Act 1943 is repealed.
496. Co-operative and Provident Societies Act 1903 repealed
The Co-operative and Provident Societies Act 1903 is repealed.
20 497. Transitional and savings provisions
Schedule 7 sets out transitional and savings provisions that
operate in addition to other transitional and savings provisions
in this Act.
498. Consequential amendments
25 Schedule 8 sets out consequential amendments.
page 292
[Draft Bill for public comment]
Co-operatives Bill 2006
Matters for which rules must make provision Schedule 1
cl. 1
Schedule 1 -- Matters for which rules must make provision
[s. 99]
1. Requirements for all co-operatives
The rules of all co-operatives must set out or make provision for each
5 of the following --
(a) the name of the co-operative;
(b) active membership provisions (within the meaning of Part 6);
(c) the mode and conditions of admission to membership, and the
payment to be made or the share or interest to be acquired
10 before rights of membership are exercised;
(d) the rights and liabilities of members, of the estates of
deceased members, and of representatives of members under
bankruptcy or mental incapacity;
(e) the circumstances in which members may be expelled or
15 suspended, and the rights and liabilities of expelled and
suspended members;
(f) the circumstances in which membership ceases;
(g) the charges or subscriptions that are payable by a member to
the co-operative;
20 (h) the circumstances in which fines and forfeitures may be
imposed on members of the co-operative, and the amount of
the fines (being not more than the maximum amount
prescribed by the regulations);
(i) the grievance procedures for settling disputes under the rules
25 between the co-operative and any of its members as defined
in section 80(4), or between a member and another member;
(j) the restrictions, if any, on the powers of the co-operative and
the board;
(k) the number of directors, the qualification of directors, the way
30 of electing, remunerating and removing directors and filling a
vacancy, the period for which directors are to hold office,
whether directors are to retire by rotation or otherwise, and
the holding of annual elections;
(l) the quorum for, and the procedure at, meetings of the board;
page 293
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 1 Matters for which rules must make provision
cl. 2
(m) the design, custody and use of the seal of the co-operative;
(n) the manner in which the funds of the co-operative are to be
managed, and in particular the mode of drawing and signing
cheques, drafts, bills of exchange, promissory notes, and
5 other negotiable instruments for and on behalf of the
co-operative;
(o) the custody of securities belonging to the co-operative;
(p) the way in which debentures are to be transferred;
(q) the date on which the financial year of the co-operative ends;
10 (r) the auditing of the financial reports of the co-operative, and
the appointing of the auditor;
(s) the way in which a loss that results from the transactions of
the co-operative is to be dealt with;
(t) the procedure for calling general and special meetings, the
15 requisite notices of meetings, and the quorum for meetings, of
the co-operative;
(u) the procedure at meetings of the co-operative, including the
rights of members in voting at meetings, the manner of
voting, and the majority necessary for carrying resolutions;
20 (v) the method of conducting postal ballots, including special
postal ballots, and the sending and lodgment of information
and votes by facsimile or electronic means;
(w) the way of altering the rules;
(x) the way in which the co-operative may be wound up;
25 (y) a matter prescribed by the regulations for the purposes of this
clause;
(z) a matter that the co-operative considers needs to be provided
for in the rules.
2. Additional matters -- co-operatives with share capital
30 In addition to the matters specified in clause 1, the rules of a
co-operative with a share capital must set out or make provision for
each of the following --
(a) the nominal value of each share in the co-operative;
page 294
[Draft Bill for public comment]
Co-operatives Bill 2006
Matters for which rules must make provision Schedule 1
cl. 3
(b) the amount of the contingent liability, if any, attaching to
shares;
(c) the terms on which shares, not including bonus shares but
including shares, if any, with a contingent liability attached to
5 them, are to be issued;
(d) the periodic subscriptions by which or the way in which
shares are to be paid for;
(e) in the case of a trading co-operative, the manner in which a
surplus may be distributed;
10 (f) the allocation of a deficiency on the winding up of a
co-operative;
(g) the forfeiture of shares on expulsion or on failure to pay a
subscription or call, the extent to which members whose
shares have been forfeited are to remain liable for an amount
15 still unpaid for them, and the sale or cancellation of forfeited
shares;
(h) the way in which shares are to be transferred;
(i) a matter prescribed by the regulations.
3. Additional matters -- non-trading co-operatives
20 In addition to the matters specified in clauses 1 and 2, the rules of a
non-trading co-operative must provide --
(a) that there must be no return or distribution on surplus or share
capital to members other than the nominal value of shares, if
any, at winding up; and
25 (b) for the way of distribution of the surplus property at winding
up.
page 295
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 2 Relevant interests, associates, related bodies
Division 1 Relevant interests
cl. 1
Schedule 2 -- Relevant interests, associates, related bodies
[s. 4(1)]
Division 1 -- Relevant interests
1. Terminology used in this Schedule
5 (1) This clause applies for the purposes of this Division.
(2) Power to vote in relation to a right to vote is power to exercise, or to
control the exercise of, the right to vote.
(3) A reference to power to dispose of a share includes a reference to
power to exercise control over the disposal of the share.
10 (4) A reference to power or control includes a reference to power or
control that is direct or indirect or is, or can be, exercised as a result
of, by means of, in breach of, or by revocation of, trusts, agreements
and practices, or any of them, whether or not they are enforceable.
(5) Power to vote in relation to a right to vote, or power to dispose of a
15 share, that is exercisable by 2 or more persons jointly is taken to be
exercisable by either or any of those persons.
(6) A reference to a controlling interest includes a reference to an interest
that gives control.
2. Basic rules -- relevant interests
20 (1) A person who has power to vote in relation to a right to vote has a
relevant interest in the right to vote.
(2) A person who has power to dispose of a share has a relevant interest
in the share.
3. Control of corporation having power in relation to a share
25 If a corporation has, or is by this Division taken to have --
(a) power to vote in relation to a right to vote; or
page 296
[Draft Bill for public comment]
Co-operatives Bill 2006
Relevant interests, associates, related bodies Schedule 2
Relevant interests Division 1
cl. 4
(b) power to dispose of a share,
a person is taken for the purposes of this Division to have in relation
to the right to vote or the share the same power as the corporation has,
or is taken to have, if --
5 (c) the corporation is, or its directors are, accustomed or under an
obligation, whether formal or informal, to act in accordance
with the directions, instructions or wishes of the person in
relation to the exercise of the power referred to in
paragraph (a) or (b); or
10 (d) the person has a controlling interest in the corporation.
4. Control of 20% of voting power in corporation having power in
relation to a share
If a corporation or an associate of a corporation has, or is by this
Division (other than this clause) taken to have --
15 (a) power to vote in respect of a right to vote; or
(b) power to dispose of a share,
a person is taken for the purposes of this Division to have in relation
to the right to vote or the share the same power as the corporation or
associate has, or is taken to have, if --
20 (c) the person has; or
(d) an associate of the person has; or
(e) associates of the person together have; or
(f) the person and an associate or associates of the person
together have,
25 power to vote in relation to the right to vote attached to not less than
20% of the voting shares in the corporation.
5. Deemed relevant interest in advance of performance of agreement
that will give rise to a relevant interest
If a person --
30 (a) has entered into an agreement with another person in relation
to an issued share or right to vote in which the other person
has a relevant interest; or
page 297
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 2 Relevant interests, associates, related bodies
Division 1 Relevant interests
cl. 6
(b) has a right enforceable against another person in relation to
an issued share or right to vote in which the other person has
a relevant interest, whether the right is enforceable presently
or in the future and whether or not on the fulfilment of a
5 condition; or
(c) has an option granted by another person, or has granted to
another person an option, with respect to an issued share or
right to vote in which the other person has a relevant interest,
and, on performance of the agreement, enforcement of the right, or
10 exercise of the option, the first mentioned person would have a
relevant interest in the share or right to vote, the first mentioned
person is taken for the purposes of this Division to have that relevant
interest in the share or right to vote.
6. Control of corporation having a relevant interest by virtue of
15 clause 5
If a corporation is by clause 5 taken to have a relevant interest in a
share in or right to vote at meetings of a co-operative, a person is
taken for the purposes of this Division to have a relevant interest in
the share or right to vote if --
20 (a) the corporation is, or its directors are, accustomed or under an
obligation, whether formal or informal, to act in accordance
with the directions, instructions or wishes of the person in
relation to the exercise of power to vote in relation to that
right to vote or power to dispose of those shares; or
25 (b) the person has a controlling interest in the corporation; or
(c) the person has power to vote in relation to the right to vote
attached to not less than 20% of the voting shares in the
corporation.
7. Matters not affecting application of Division
30 (1) It is immaterial for the purposes of this Division whether or not power
to vote in relation to a right to vote, or power to dispose of a share --
(a) is express or implied or formal or informal; or
(b) is exercisable by a person alone or jointly with any other
person or persons; or
page 298
[Draft Bill for public comment]
Co-operatives Bill 2006
Relevant interests, associates, related bodies Schedule 2
Relevant interests Division 1
cl. 8
(c) cannot be related to a particular share; or
(d) is, or can be made, subject to restraint or restriction.
(2) A relevant interest in a share or right to vote is not to be disregarded
merely because of --
5 (a) its remoteness; or
(b) how it arose.
8. Corporation may have a relevant interest in its own shares
A corporation may, by virtue of this Division, be considered to have a
relevant interest in a share in or right to vote arising from membership
10 of the corporation itself.
9. Exclusions -- money lenders
A relevant interest of a person in a share or right to vote is to be
disregarded if the person's ordinary business includes lending money
and the person has authority to exercise powers as the holder of the
15 relevant interest only because of a security given for the purposes of a
transaction entered into in the ordinary course of business in
connection with lending money, other than a transaction entered into
with an associate of the person.
10. Exclusions -- certain trustees
20 A relevant interest of a person in a share or right to vote is to be
disregarded if --
(a) the share or right is subject to a trust; and
(b) the person has the relevant interest as a trustee of the trust;
and
25 (c) either --
(i) a beneficiary under the trust is by clause 5 taken to
have a relevant interest in the share or right because
the beneficiary has a presently enforceable and
unconditional right referred to in clause 5(b); or
30 (ii) the person is a bare trustee.
page 299
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 2 Relevant interests, associates, related bodies
Division 1 Relevant interests
cl. 11
11. Exclusions -- instructions to securities dealer to dispose of share
A relevant interest of a person in a share or right to vote is to be
disregarded if --
(a) the person's ordinary business includes dealing in securities;
5 and
(b) the person has authority to exercise powers as the holder of
the relevant interest only because of instructions given to the
person, by or on behalf of another person, to dispose of the
share on the other person's behalf in the ordinary course of
10 that business.
12. Exclusions -- honorary proxies
A relevant interest of a person in a share or right to vote is to be
disregarded if the person has it only because of having been
appointed, otherwise than for valuable consideration given by the
15 person or an associate of the person, to vote as a proxy or
representative at a meeting of members, or of a class of members, of a
corporation.
13. Exclusions -- holders of prescribed offices
A relevant interest of a person in a share or right to vote is to be
20 disregarded if the person has it because of holding an office
prescribed by the regulations.
14. Prescribed exclusions
The regulations may provide that a relevant interest in a share is, in
specified circumstances and subject to specified conditions, if any, to
25 be disregarded for the purposes of a provision of this Act.
15. Effect of Schedule
(1) Nothing in this Schedule limits the generality of anything else in it.
(2) A person does not have a relevant interest in a share of a co-operative
or right to vote in respect of a co-operative except as provided in this
30 Schedule.
page 300
[Draft Bill for public comment]
Co-operatives Bill 2006
Relevant interests, associates, related bodies Schedule 2
Associates Division 2
cl. 16
16. Relevant interest -- corporation other than co-operative
A reference in this Act to a relevant interest in a share of a corporation
other than a co-operative or a right to vote in relation to a corporation
other than a co-operative is to be construed in accordance with the
5 Corporations Act.
Division 2 -- Associates
17. Effect of Part
A person is not an associate of another person except as provided by
this Division.
10 18. Associates of a corporation
The associates of a corporation include the following --
(a) a director or secretary of the body;
(b) a related corporation;
(c) a director or secretary of a related corporation.
15 19. Matters relating to voting rights
(1) If a reference to an associate of a person relates to --
(a) the extent of power to exercise, or to control the exercise of,
the voting power attached to voting shares in or arising from
membership of a corporation; or
20 (b) the person's entitlement to shares in a corporation; or
(c) an offer to purchase shares to which Part 11 Division 2
applies,
the reference includes a reference to another person with whom the
person has, or proposes to enter into, an agreement referred to in
25 subclause (2).
(2) Subclause (1) applies to an agreement --
(a) because of which one of the persons referred to in
subclause (1) has or will have power, even if it is in any way
qualified --
30 (i) to exercise; or
page 301
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 2 Relevant interests, associates, related bodies
Division 2 Associates
cl. 20
(ii) to control, directly or indirectly, the exercise of; or
(iii) to influence substantially the exercise of,
any voting power attached to shares in the corporation; or
(b) for the purpose of controlling or influencing --
5 (i) the composition of the corporation's board; or
(ii) the conduct of affairs of the corporation;
or
(c) under which one of those persons --
(i) will or may acquire; or
10 (ii) may be required by the other to acquire,
shares in the corporation in which the other has a relevant
interest; or
(d) under which one of those persons may be required to dispose
of shares in the corporation in accordance with the other's
15 directions.
(3) Subclause (1) applies despite any other effect the agreement may
have.
(4) In relation to a matter relating to shares in a corporation, a person may
be an associate of the corporation and the corporation may be an
20 associate of a person.
20. General
(1) A reference to an associate of a person includes a reference to --
(a) another person in concert with whom the person is acting or
proposes to act; or
25 (b) another person who, under the regulations, is, for the
purposes of the provision in which the reference occurs, an
associate of the person; or
(c) another person with whom the person is or proposes to
become associated, whether formally or informally, in any
30 other way,
in relation to the matter to which the reference relates.
page 302
[Draft Bill for public comment]
Co-operatives Bill 2006
Relevant interests, associates, related bodies Schedule 2
Related corporations Division 3
cl. 21
(2) If a person has entered, or proposes to enter, into a transaction, or has
done, or proposes to do, any act or thing, in order to become
associated with another person as mentioned in an applicable
provision of this Division, a reference to an associate of the person
5 includes a reference to that other person.
21. Exclusions
A person is not an associate of another person by virtue of clause 19
or 20(1), or by virtue of clause 20(2) as it applies in relation to
clause 19 or 20(1), merely because --
10 (a) one gives advice to the other, or acts on the other's behalf, in
the proper performance of the functions attaching to a
professional capacity or a business relationship; or
(b) one, a client, gives specific instructions to the other, whose
ordinary business includes dealing in securities, to acquire
15 shares on the client's behalf in the ordinary course of that
business; or
(c) one has made, or proposes to make, to the other an offer to
which Part 11 Division 2 applies, in relation to shares held by
the other; or
20 (d) one has appointed the other, otherwise than for valuable
consideration given by the other or by an associate of the
other, to vote as a proxy or representative at a meeting of
members, or of a class of members, of a corporation.
Division 3 -- Related corporations
25 22. Related corporations
For the purposes of this Act, a corporation is to be taken to be related
to --
(a) another corporation that is its subsidiary; and
(b) another corporation of which it is a subsidiary; and
30 (c) another corporation if both it and that other corporation are
subsidiaries of the same corporation.
page 303
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 1 Preliminary
cl. 1
Schedule 3 -- Registration etc. of charges
[s. 272]
Division 1 -- Preliminary
1. Interpretation
5 In this Division --
"co-operative" includes a foreign co-operative registered under
Part 14;
"document of title" means a document --
(a) used in the ordinary course of business as proof of
10 possession or control, or of the right to possession or
control, of property other than land; or
(b) authorising or purporting to authorise, whether by
endorsement or delivery, the possessor of the document to
transfer or receive property other than land,
15 and includes --
(c) a bill of lading; and
(d) a warrant or order for the delivery of goods; and
(e) a document that is, or evidences title to, a marketable
security;
20 "marketable security" has the meaning given to that term in the
Corporations Act;
"present liability", in relation to a charge, means a liability that has
arisen, being a liability the extent or amount of which is fixed or
capable of being ascertained, whether or not the liability is
25 immediately due to be met;
"property", in relation to a co-operative, means property within this
State held by the co-operative, whether or not as trustee;
"prospective liability", in relation to a charge, means any liability
that may arise in the future, or any other liability, but does not
30 include a present liability;
"Register of Co-operative Charges" means the register referred to
in clause 18;
page 304
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 2
"registrable charge" means a charge in relation to which, by virtue
of clause 4, the provisions of this Schedule mentioned in
clause 4(1) apply.
2. Application to charges referred to in clause 17
5 (1) A charge referred to in clause 17 is, until the charge is registered, to
be treated for the purposes of this Schedule as if it were not a
registrable charge but, when the charge is registered, it has the priority
accorded to a registered charge as from the time of registration.
(2) The registration of a charge referred to in clause 17 does not prejudice
10 any priority that would have been accorded to the charge under any
other law, whether or not a law of a place in Australia, if the charge
had not been registered.
3. Lodgment of documents
For the purposes of this Schedule, a notice or other document is taken
15 to be lodged when it is received at the office of the Registrar by an
officer authorised to receive it.
Division 2 -- Registration
Subdivision 1 -- Charges
4. To which charges does Schedule apply?
20 (1) Subject to this Division, the provisions of this Schedule relating to the
giving of notice in relation to the registration of, and the priorities of,
charges --
(a) apply in relation to the charges referred to in subclause (2)
(whether legal or equitable) on property of a co-operative;
25 and
(b) do not apply in relation to other charges.
(2) Subclause (1) applies to the following charges --
(a) a floating charge on the whole or a part of the property,
business or undertaking of the co-operative;
30 (b) a charge on uncalled share capital or uncalled share
premiums;
page 305
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 5
(c) a charge on a call, whether in respect of share capital or share
premiums, made but not paid;
(d) a charge on a personal chattel, including a personal chattel
that is unascertained or is to be acquired in the future, but not
5 including a ship registered in an official register kept under a
law of a place in Australia relating to title to ships;
(e) a charge on goodwill, on a patent or licence under a patent,
on a trade mark or service mark or a licence to use a trade
mark or service mark, on a copyright or a licence under a
10 copyright or on a registered design or a licence to use a
registered design;
(f) a charge on a book debt;
(g) a charge on a marketable security, not being --
(i) a charge created in whole or in part by the deposit of
15 a document of title to the marketable security; or
(ii) a mortgage under which the marketable security is
registered in the name of the chargee or a person
nominated by the chargee;
(h) a lien or charge on a crop, a lien or charge on wool or a stock
20 mortgage;
(i) a charge on a negotiable instrument other than a marketable
security.
5. Excluded charges
The provisions of this Schedule mentioned in clause 4(1) do not apply
25 in relation to --
(a) a charge, or a lien over property, arising by operation of law;
or
(b) a pledge of a personal chattel or of a marketable security; or
(c) a charge created in relation to a negotiable instrument or a
30 document of title to goods, being a charge by way of pledge,
deposit, letter of hypothecation or trust receipt; or
(d) a transfer of goods in the ordinary course of the practice of
any profession or the carrying on of any trade or business; or
page 306
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 6
(e) a dealing, in the ordinary course of the practice of any
profession or the carrying on of any trade or business, in
relation to goods outside Australia.
6. Personal chattels
5 The reference in clause 4(2)(d) to a charge on a personal chattel is a
reference to a charge on any article capable of complete transfer by
delivery, whether at the time of the creation of the charge or at some
later time, and includes a reference to a charge on a fixture or a
growing crop that is charged separately from the land to which it is
10 affixed or on which it is growing, but does not include a reference to a
charge on --
(a) a document evidencing title to land; or
(b) a chattel interest in land; or
(c) a marketable security; or
15 (d) a document evidencing a thing in action; or
(e) stock or produce on a farm or land that because of a covenant
or agreement ought not to be removed from the farm or land
where the stock or produce is at the time of the creation of the
charge.
20 7. Book debts
The reference in clause 4(2)(f) to a charge on a book debt --
(a) is a reference to a charge on a debt payable or to become
payable to the co-operative at some future time on account of
or in connection with a profession, trade or business carried
25 on by the co-operative, whether entered in a book or not; and
(b) includes a reference to a charge on a future debt of the same
nature although not incurred or owing at the time of the
creation of the charge,
but does not include a reference to a charge on a marketable security,
30 on a negotiable instrument or on a debt owing in relation to a
mortgage, charge or lease of land.
page 307
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 8
8. Crops or stock
The reference in clause 4(2)(h) to a lien or charge on a crop, a lien or
charge on wool or a stock mortgage includes a reference to a security,
however described, that is registrable under a law, prescribed by the
5 regulations, of a State or Territory.
9. Deposit of documents of title
For the purposes of this Division, a co-operative is taken to have
deposited a document of title to property with another person (the
"chargee") in a case where the document of title is not in the
10 possession of the co-operative if --
(a) the person who holds the document of title acknowledges in
writing that the person holds the document of title on behalf
of the chargee; or
(b) a government, an authority or a corporation that proposes to
15 issue a document of title in relation to the property agrees, in
writing, to deliver the document of title, when issued, to the
chargee.
10. Charges on land or fixtures on land
(1) The provisions of this Schedule mentioned in clause 4(1) do not apply
20 in relation to a charge on land.
(2) The provisions of this Schedule mentioned in clause 4(1) do not apply
in relation to a charge on fixtures given by a charge on the land to
which they are affixed.
11. What if other property is also charged?
25 For the purposes of this Division, a charge is taken to be a charge on
property of a kind to which a particular paragraph of clause 4(2)
applies even though the instrument of charge also charges other
property of the co-operative, including other property that is of a kind
to which none of the paragraphs of that subclause applies.
30 12. Effect of failure to lodge or give notice or document
A charge on property of a co-operative is not invalid merely because
of the failure to lodge with the Registrar, or give to the co-operative or
page 308
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 13
another person, a notice or other document that is required by this
Division to be so lodged or given.
Subdivision 2 -- Notice of charge
13. Lodgment of notice of charge and copy of instrument, and
5 transitional provision
(1) If a co-operative creates a charge, the co-operative must ensure that
there is lodged with the Registrar within 45 days after the creation of
the charge, a notice in the form approved by the Registrar setting out
the following particulars --
10 (a) the name of the co-operative and the date of the creation of
the charge;
(b) whether the charge is a fixed charge, a floating charge or both
a fixed and floating charge;
(c) if the charge is a floating charge, whether there is any
15 provision in the resolution or instrument creating or
evidencing the charge that prohibits or restricts the creation of
subsequent charges;
(d) a short description of the liability, whether present or
prospective secured by the charge;
20 (e) a short description of the property charged;
(f) whether the charge is created or evidenced by a resolution, by
an instrument or by a deposit or other conduct;
(g) if the charge is constituted by the issue of a debenture or
debentures, the name of the trustee, if any, for debenture
25 holders;
(h) if the charge is not constituted by the issue of a debenture or
debentures or there is no trustee for debenture holders, the
name of the chargee;
(i) any other information that is prescribed by the regulations.
30 (2) On becoming registered under this Act, a transferred co-operative that
owns property over which a registrable charge exists must, in relation
to each such charge, immediately, and at the same time for each
charge, lodge with the Registrar a notice under subclause (1).
page 309
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 14
(3) If, under a resolution or resolutions passed by the co-operative, the
co-operative issues a series of debentures constituting a charge to the
benefit of which all the holders of debentures in the series are entitled
in equal priority, and the charge is evidenced only by the resolution or
5 resolutions and the debentures, the notice under subclause (1) must be
accompanied by --
(a) a copy of the resolution or of each of the resolutions verified
by a statement in writing to be a true copy; and
(b) a copy of the first debenture issued in the series and a
10 statement in writing verifying the execution of that first
debenture.
(4) If, in a case to which subclause (3) does not apply, the charge created
by the co-operative was created or evidenced by an instrument or
instruments, the notice under subclause (1) must be accompanied
15 by --
(a) the instrument or each of the instruments; or
(b) a copy of the instrument or of each of the instruments verified
by a statement in writing to be a true copy, and a statement in
writing verifying the execution of the instrument or of each of
20 the instruments.
14. Series of debentures
In a case to which clause 13(3) applies --
(a) the charge is, for the purposes of clause 13, taken to be
created when the first debenture in the series of debentures is
25 issued; and
(b) if, after the issue of the first debenture in the series, the
co-operative passes a further resolution authorising the issue
of debentures in the series, the co-operative must ensure that
a copy of that resolution, verified by a statement in writing to
30 be a true copy of that resolution, is lodged within 45 days
after the passing of that resolution.
15. Operation of priority provisions in respect of issue of debentures
If a notice relating to an instrument creating a charge has been lodged
under clause 13(1), being a charge in relation to an issue of several
page 310
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 16
debentures the holders of which are entitled under the instrument in
equal priority to the benefit of the charge, clauses 46 to 49 have effect
as if any charges constituted by the debentures were registered at the
time when the charge to which the notice relates was registered.
5 16. Discounts
(1) If a payment or discount has been made or allowed, either directly or
indirectly, by a co-operative to a person in consideration of the
person --
(a) subscribing or agreeing to subscribe, whether absolutely or
10 conditionally, for debentures; or
(b) procuring or agreeing to procure subscriptions, whether
absolute or conditional, for debentures,
the notice required to be lodged under clause 13(1) must include
particulars as to the amount or rate per cent of the payment or
15 discount.
(2) If a co-operative issues debentures as security for a debt of the
co-operative, the co-operative is not taken, for the purposes of
subclause (1), to have allowed a discount in respect of the debentures.
17. Acquisition of property subject to charge
20 (1) If a co-operative acquires property that is subject to a charge, being a
charge that would have been registrable when it was created if it had
been created by a co-operative, the co-operative must, within 45 days
after the acquisition of the property --
(a) ensure that there is lodged with the Registrar a notice in the
25 form approved by the Registrar in relation to the charge,
setting out --
(i) the name of the co-operative; and
(ii) the date on which the property was so acquired; and
(iii) any other particulars required by clause 13(1);
30 and
(b) give to the chargee notice that it has acquired the property
and the date on which it was so acquired.
page 311
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 18
(2) If the charge referred to in subclause (1) was created or evidenced as
referred to in clause 13(3), the notice under subclause (1)(a) must be
accompanied by --
(a) a copy of the resolution or of each of the resolutions referred
5 to in clause 13(3) verified by a statement in writing to be a
true copy; and
(b) a copy of the first debenture issued in the series referred to in
clause 13(3) verified by a statement in writing to be a true
copy.
10 (3) If the charge referred to in subclause (1) was created or evidenced by
an instrument or instruments (otherwise than as mentioned in
clause 13(3)), the notice under subclause (1)(a) must be accompanied
by --
(a) the instrument or each of the instruments; or
15 (b) a copy of the instrument or of each of the instruments verified
by a statement in writing to be a true copy.
Subdivision 3 -- Registration
18. Register of Co-operative Charges
The Registrar must keep a register to be known as the Register of
20 Co-operative Charges.
19. Registration of documents relating to charge
(1) If a notice is lodged with the Registrar in accordance with Division 2,
the Registrar must as soon as practicable cause to be entered in the
Register of Co-operative Charges the time and date when the notice
25 was lodged and the following particulars in relation to the charge --
(a) if the charge is a charge created by the co-operative, the date
of its creation;
(b) if the charge was a charge existing on property acquired by
the co-operative, the date on which the property was so
30 acquired;
(c) a short description of the liability, whether present or future,
secured by the charge;
(d) a short description of the property charged;
page 312
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 20
(e) the name of the trustee for debenture holders or, if there is no
such trustee, the name of the chargee.
(2) Subclause (1) only applies if the notice contains the required
particulars and is accompanied by the required documents.
5 (3) Subclause (1) applies whether the notice is lodged during or after the
period within which the notice is required to be lodged.
(4) Subject to this Division, if particulars in respect of a charge are
entered in the Register of Co-operative Charges in accordance with
subclause (1), the charge is taken to be registered, and to have been
10 registered from and including the time and date entered in the register
under that subclause.
(5) The Registrar may enter in the Register of Co-operative Charges, in
addition to the particulars expressly required by this Division to be
entered, other particulars in relation to a charge that the Registrar
15 considers appropriate.
20. Provisional registration if stamp duty not paid
(1) If --
(a) a notice in relation to a charge on property of a co-operative
is lodged under Subdivision 2; and
20 (b) the notice is not accompanied by a certificate to the effect that
all documents accompanying the notice have been properly
stamped under the Stamp Act 1921,
the Registrar must cause to be entered in the Register of Co-operative
Charges the time and date when the notice was lodged and the
25 particulars referred to in clause 19(1)(a) to (e), but must cause the
word "provisional" to be entered in the register next to the entry
specifying that time and date.
(2) Subclause (1) applies whether the notice was lodged during or after
the period within which the notice was required to be lodged.
page 313
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 21
(3) The Registrar must delete the word "provisional" entered in the
register under subclause (1) from an entry relating to a charge if a
certificate to the effect set out in subclause (1)(b) has been produced
to the Registrar --
5 (a) within a period of 28 days; or
(b) within such longer period as is prescribed by the regulations
after the notice was lodged; or
(c) within such further period as the Registrar, if the Registrar
considers it to be appropriate in a particular case, allows.
10 (4) The Registrar must delete from the Register of Co-operative Charges
all the particulars that were entered in relation to a charge if --
(a) the word "provisional" is entered in the register under
subclause (1) in relation to an entry relating to the charge; and
(b) a certificate to the effect set out in subclause (1)(b) is not
15 produced within the period, or the further period, referred to
in subclause (3).
21. Provisional registration if required particulars not supplied
(1) In this clause --
"defective notice" means a document that --
20 (a) purports to be a notice in respect of a charge on property
of a co-operative for the purposes of Subdivision 2; and
(b) contains the name of the co-operative concerned and the
particulars referred to in clause 13(1)(g) or (h), as the case
requires,
25 but does not contain some or all of the other particulars that are
required to be included in the notice or is otherwise defective.
(2) If a defective notice in respect of a charge on property is lodged with
the Registrar under clause 19, the Minister must cause to be entered in
the Register of Co-operative Charges --
30 (a) the time and date when the document was lodged; and
(b) the particulars referred to in clause 19(1)(a) to (e) that are
ascertainable; and
page 314
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 21
(c) the word "provisional" next to the entry specifying the time
and date.
(3) If a defective notice in relation to a charge is lodged under clause 19,
the Registrar must, by written notice to the person who lodged the
5 defective notice, direct the person to lodge, on or before the day
specified in the notice, a notice in relation to the charge that complies
with the requirements of Subdivision 2.
(4) Subclauses (2) and (3) apply whether the defective notice was lodged
during or after the period within which the notice was required to be
10 lodged.
(5) The giving by the Registrar of a direction to the person under
subclause (3) does not affect any liability that the co-operative may
have incurred or may incur by reason of a contravention of
Subdivision 2.
15 (6) If the Registrar gives a direction to a person under subclause (3) in
relation to a charge and the direction is complied with on or before the
day specified in the notice containing the direction, the Registrar
must --
(a) delete from the Register of Co-operative Charges the word
20 "provisional" that was inserted pursuant to subclause (2); and
(b) cause to be entered in the register in relation to the charge any
particulars referred to in clause 19(1) that have not previously
been entered.
(7) If the Registrar gives a direction to a person under subclause (3) in
25 relation to a charge and the direction is not complied with on or
before the day specified in the notice, the Registrar must delete from
the Register of Co-operative Charges all the particulars that were
entered in relation to the charge.
(8) If the Registrar gives a direction to a person under subclause (3) in
30 relation to a charge and the direction is complied with after the day
specified in the notice, the Registrar must cause to be entered in the
Register of Co-operative Charges in relation to the charge --
(a) the time at which and day on which the direction was
complied with; and
35 (b) the particulars referred to in clause 19(1)(a) to (e).
page 315
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 22
22. Effect of provisional registration
(1) Subject to this clause, if the word "provisional" is entered in the
Register of Co-operative Charges next to an entry specifying a time
and day in relation to a charge, the charge is taken not to have been
5 registered.
(2) If the word "provisional" is deleted from the Register of Co-operative
Charges pursuant to clause 20 or 21(6), the charge is taken to be
registered and to have been registered from and including the time
and day specified in the register under clause 20 or 21(2).
10 (3) If the particulars in relation to the charge are deleted from the Register
of Co-operative Charges pursuant to clause 21(7) and those
particulars and a time and day are subsequently entered in the register
in relation to the charge under clause 21(8) the charge is taken to be
registered from and including that last-mentioned time and day.
15 23. What if 2 or more charges relate to the same property?
(1) If, under clause 17, a co-operative lodges notices relating to 2 or more
charges on the same property acquired by the co-operative, being
charges that are not already registered under this Subdivision, the time
and day that is to be entered in the Register of Co-operative Charges
20 in relation to each of those charges are the time and day when the first
notice was lodged.
(2) If, under subclause (1), the time and day that are entered in the
Register of Co-operative Charges are the same in relation to 2 or more
charges on property acquired by a co-operative, those charges are to
25 have, as between themselves, the respective priorities that they would
have had if they had not been registered under this Subdivision.
24. Registration of assignment or variation of charge
(1) If a notice is lodged under clause 36, the Registrar must as soon as
practicable cause to be entered in the Register of Co-operative
30 Charges the time and day when the notice was lodged and the
particulars set out in the notice.
(2) Subclause (1) applies whether the notice was lodged during or after
the period within which the notice was required to be lodged.
page 316
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 25
25. Standard time for the purposes of this Subdivision
(1) The Registrar may, by order published in the Gazette, declare a
specified standard time to be the standard time for the purposes of this
Subdivision.
5 (2) If an order is in force under subclause (1), a reference in this
Subdivision to entering the time when a particular event happened is a
reference to entering that time as expressed in terms of the standard
time specified in the order.
Subdivision 4 -- Certain charges void against liquidator or administrator
10 26. Definitions
In this Division --
"critical day", in relation to a co-operative, means --
(a) if the co-operative is being wound up, the day when the
winding up began; or
15 (b) if the co-operative is under administration, the relevant
day in relation to the administration; or
(c) if the co-operative has executed a deed of arrangement,
the relevant day in relation to the administration that
ended when the deed was executed;
20 "relevant day" , in relation to the administration of a co-operative,
means --
(a) if, when the administration began, a winding up of the
co-operative was in progress, the day on which the
winding up is taken because of the Corporations Act
25 Part 5.6 Division 1A as applying under this Act to have
begun; or
(b) otherwise, the day on which the administration began.
27. Certain charges void against liquidator or administrator
(1) Subject to this Subdivision, if --
30 (a) an order is made, or a resolution is passed, for the winding up
of a co-operative; or
page 317
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 27
(b) the Registrar gives a certificate under section 319 for the
winding up of the co-operative; or
(c) an administrator of a co-operative is appointed under the
Corporations Act Part 5.3A as applying under this Act; or
5 (d) a co-operative executes a deed of arrangement,
a registrable charge on property of the co-operative is void as a
security on that property as against the liquidator, the administrator of
the co-operative, or the deed's administrator, as the case may be.
(2) A charge is not void under subclause (1) if --
10 (a) a notice about the charge was lodged under clause 13 or 17,
as the case requires --
(i) within the relevant period; or
(ii) at least 6 months before the critical day;
or
15 (b) the period within which a notice about the charge, other than
a notice under clause 36, is required to be lodged, being the
period specified in the relevant clause or that period as
extended by the Supreme Court under clause 29, has not
ended at the start of the critical day and the notice is lodged
20 before the end of that period; or
(c) in the case of a charge to which clause 17 applies, the period
of 45 days after the chargee becomes aware that the property
charged has been acquired by a co-operative has not ended at
the start of the critical day and the notice is lodged before the
25 end of that period.
(3) The reference in subclause (2)(a) to the relevant period is to be read as
a reference to --
(a) in the case of a charge to which clause 13 applies, the period
of 45 days specified in that clause, or that period as extended
30 by the Supreme Court under clause 29; or
(b) in the case of a charge to which clause 17 applies, the period
of 45 days after the chargee becomes aware that the property
has been acquired by a co-operative.
page 318
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 28
28. Certain varied charges void against liquidator or administrator
(1) Subject to this Subdivision, if, after there has been a variation in the
terms of a registrable charge on property of a co-operative having the
effect of increasing the amount of the debt or increasing the liabilities,
5 whether present or prospective, secured by the charge --
(a) an order is made, or a resolution is passed, for the winding up
of the co-operative; or
(b) an administrator of a co-operative is appointed under the
Corporations Act Part 5.3A as applying under this Act; or
10 (c) a co-operative executes a deed of arrangement,
the registrable charge is void as a security on the property to the
extent that it secures the amount of the increase in the debt or liability.
(2) A charge is not void under subclause (1) if --
(a) a notice about the variation was lodged under clause 36 --
15 (i) within the period of 45 days specified in clause 36(2)
or that period as extended by the Supreme Court
under clause 29; or
(ii) within 6 months before the critical day;
or
20 (b) the period of 45 days specified in clause 36(2), or that period
as extended by the Supreme Court under clause 29, has not
ended at the start of the critical day and the notice is lodged
before the end of the period.
29. Supreme Court may extend required period
25 If the Supreme Court is satisfied that --
(a) the failure to lodge a notice of a charge, or of a variation in
the terms of a charge, as required by a provision of this
Schedule --
(i) was accidental or due to inadvertence or some other
30 sufficient cause; or
(ii) is not of a nature to prejudice the position of creditors
or shareholders;
or
page 319
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 30
(b) on other grounds it is just and equitable to grant relief,
the Court may, on the application of the co-operative or a person
interested and on such terms and conditions the Court considers just
and expedient, by order, extend the period for the further period
5 specified in the order.
30. Certain later charges void
(1) Subject to subclause (3), if --
(a) a registrable charge (the "later charge") is created before the
end of 45 days after the creation of an unregistered registrable
10 charge (the "earlier charge"); and
(b) the later charge relates to all or any of the property to which
the earlier charge related; and
(c) the later charge is given as a security for the same liability as
is secured by the earlier charge or any part of that liability,
15 the later charge, to the extent to which it is a security for the same
liability or part thereof, and so far as it relates to the property
comprised in the earlier charge, is void as a security on that property
as against a liquidator or administrator of the co-operative, or an
administrator of a deed of arrangement executed by the co-operative.
20 (2) Subclause (1) applies even if a notice of the later charge was lodged
under clause 13 within the period mentioned in clause 27(2)(a).
(3) Subclause (1) does not apply if it is proved to the satisfaction of the
Supreme Court that the later charge was given in good faith for the
purpose of correcting some material error in the earlier charge or
25 under other proper circumstances and not for the purposes of avoiding
or evading the provisions of this Subdivision.
31. Effect of provisions on purchaser in good faith
(1) Nothing in clause 27(1) or (2) or 28 operates to affect the title of a
person to property purchased for value from a chargee or from a
30 receiver appointed by a chargee in the exercise of powers conferred
by the charge or implied by law if the person purchased the property
in good faith and without notice of --
(a) the filing of an application for an order for the winding up of
the co-operative; or
page 320
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 32
(b) the passing of the necessary resolution for the voluntary
winding up of the co-operative; or
(c) an administrator of the co-operative being appointed under
the Corporations Act Part 5.3A as applying under this Act; or
5 (d) the co-operative executing a deed of arrangement.
(2) The onus of proving that a person purchased property in good faith
and without notice of any of the matters referred to in
subclause (1)(a), (b), (c) and (d) is on the person asserting that the
property was so purchased.
10 Subdivision 5 -- Certain charges in favour of persons void
32. Definitions
In this Division --
"chargee", in relation to a charge, means --
(a) in any case, the holder, or all or any of the holders, of the
15 charge; or
(b)in the case of a charge that is an agreement to give or
execute a charge in favour of a person or persons, whether
on demand or otherwise, the person, or all or any of those
persons;
20 "officer", of a foreign co-operative, includes a local agent of the
foreign co-operative;
"receiver" includes a receiver and manager;
"relevant person", in relation to a charge created by a co-operative,
means --
25 (a) a person who is at the time when the charge is created, or
who has been at any time during the period of 6 months
ending at that time, an officer of the co-operative; or
(b) a person associated, in relation to the creation of the
charge, with a person of a kind referred to in
30 paragraph (a).
page 321
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 33
33. Charges in favour of certain persons void in certain cases
(1) If --
(a) a co-operative creates a charge on property of the
co-operative in favour of a person who is, or in favour of
5 persons at least one of whom is, a relevant person in relation
to the charge; and
(b) within 6 months after the creation of the charge, the chargee
purports to take a step in the enforcement of the charge
without the Supreme Court having, under clause 34, given
10 leave for the charge to be enforced,
the charge, and any powers purported to be conferred by an
instrument creating or evidencing the charge, are, and are taken
always to have been, void.
(2) Without limiting the generality of subclause (1), a person who --
15 (a) appoints a receiver of property of a co-operative under
powers conferred by an instrument creating or evidencing a
charge created by the co-operative; or
(b) whether directly or by an agent, enters into possession or
assumes control of property of a co-operative for the purposes
20 of enforcing a charge created by the co-operative,
is to be taken, for the purposes of subclause (1), to take a step in the
enforcement of the charge.
34. Supreme Court may give leave for enforcement of charge
On application by the chargee under a charge, the Supreme Court may
25 give leave for the charge to be enforced, if the Court is satisfied
that --
(a) immediately after the creation of the charge, the co-operative
that created the charge was solvent; and
(b) in all the circumstances of the case, it is just and equitable for
30 the Court to do so.
page 322
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 35
35. Certain transactions excluded
(1) Nothing in clause 33 affects a debt, liability or obligation of a
co-operative that would, if that clause had not been enacted, have
been secured by a charge created by the co-operative.
5 (2) Nothing in clause 33 operates to affect the title of a person to
property, other than the charge concerned or an interest in the charge
concerned, purchased for value from a chargee under a charge, from
an agent of a chargee under a charge, or from a receiver appointed by
a chargee under a charge in the exercise of powers conferred by the
10 charge or implied by law, if that person purchased the property in
good faith and without notice that the charge was created in favour of
a person who is, or in favour of persons at least one of whom is, as the
case may be, a relevant person in relation to the charge.
(3) The onus of proving that a person purchased property in good faith
15 and without notice that a charge was created as referred to in
subclause (2) is on the person asserting that the property was so
purchased.
Subdivision 6 -- Assignment, variation or satisfaction of charges
36. Assignment and variation of charges
20 (1) If, after a registrable charge on property of a co-operative has been
created, a person other than the original chargee becomes the holder
of the charge, the person who becomes the holder of the charge must,
within 45 days after becoming the holder of the charge --
(a) lodge a notice with the Registrar stating that the person has
25 become the holder of the charge; and
(b) give the co-operative a copy of the notice.
(2) If, after a registrable charge on property of a co-operative has been
created, there is a variation in the terms of the charge having the effect
of --
30 (a) increasing the amount of the debt or increasing the liabilities,
whether present or prospective, secured by the charge; or
page 323
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 37
(b) prohibiting or restricting the creation of subsequent charges
on the property,
the co-operative must, within 45 days after the variation occurs,
ensure that there is lodged with the Registrar a notice setting out
5 particulars of the variation and accompanied by the instrument, if any,
effecting the variation or a certified copy of that instrument.
(3) If a charge created by a co-operative secures a debt of an unspecified
amount or secures a debt of a specified amount and further advances,
a payment or advance made by the chargee to the co-operative in
10 accordance with the terms of the charge is not to be taken, for the
purposes of subclause (2), to be a variation in the terms of the charge
having the effect of increasing the amount of the charge or the
liabilities, whether present or prospective, secured by the charge.
(4) A reference in this clause to the chargee in relation to a charge is, if
15 the charge is constituted by a debenture or debentures and there is a
trustee for debenture holders, to be construed as a reference to the
trustee for debenture holders.
(5) Nothing in clause 13 requires the lodgment of a notice under that
clause in relation to a charge merely because of the fact that the terms
20 of the charge are varied only in a manner mentioned in this clause.
37. Satisfaction of, and release of property from, charges
(1) If, in relation to a charge registered under this Division --
(a) the debt or other liability, the payment or discharge of which
was secured by the charge, has been paid or discharged in
25 whole or in part; or
(b) the property charged or part of the property is released from
the charge,
the person who was the holder of the charge at the time when the debt
or other liability was so paid or discharged or the property or part of
30 the property was released must, within 14 days after receipt of a
request in writing made by the co-operative on whose property the
charge exists, give to the co-operative a memorandum in the form
approved by the Registrar acknowledging that the debt or other
liability has been paid or discharged in whole or in part or that the
page 324
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 38
property or part of it is no longer subject to the charge, as the case
may be.
(2) The co-operative may lodge the memorandum with the Registrar and,
on the memorandum being lodged, the Registrar must enter in the
5 Register of Co-operative Charges particulars of the matters stated in
the memorandum.
(3) The reference in subclause (1) to the person who was the holder of a
charge at the time when the debt or other liability was so paid or
discharged or the property or part of the property was released is, if
10 the charge was constituted by a debenture or debentures and there was
a trustee for debenture holders, to be construed as a reference to the
person who was, at that time, the trustee of debenture holders.
Subdivision 7 -- General
38. Lodgment of notices
15 (1) If a notice about a charge on property of a co-operative is required to
be lodged under clause 13, 17 or 36(2), the notice may be lodged by
the co-operative or by an interested person.
(2) If a document required by this Division other than clause 36(1) to be
lodged with the Registrar is lodged by a person other than the
20 co-operative concerned, that person --
(a) must, within 7 days after the lodgment of the document, give
to the co-operative a copy of the document; and
(b) is entitled to recover from the co-operative the amount of any
fees properly paid by the person on lodgment of the
25 document.
39. Lodgment offences
(1) If clause 13, 17 or 36(2) is contravened in relation to a registrable
charge on property of a co-operative, the co-operative and an officer
of the co-operative who is knowingly concerned in or a party to the
30 contravention commits an offence.
Penalty: a fine of $1 000.
page 325
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 40
(2) If a person who becomes the holder of a registrable charge fails to
comply with clause 36(1), the person and, if the person is a
corporation, an officer of the corporation who is in default, each
contravene this subclause.
5 40. Co-operative to keep documents relating to charges
A co-operative must, at the place where the co-operative register of
charges referred to in clause 41 is kept, keep a copy of --
(a) every document relating to a charge on property of the
co-operative that is lodged with the Registrar under this
10 Division; and
(b) every document given to the co-operative under this Division.
Penalty: a fine of $1 000.
41. Co-operative to keep register, and transitional provision
(1) A co-operative must keep a co-operative register of charges.
15 (2) On the creation of a charge, whether registrable or not, on property of
the co-operative, or on the acquisition of property subject to a charge,
whether registrable or not, the co-operative must as soon as
practicable enter in the co-operative register of charges particulars of
the charge, giving in relation to each charge --
20 (a) if the charge is a charge created by the co-operative, the date
of its creation or, if the charge was a charge existing on
property acquired by the co-operative, the date on which the
property was so acquired; and
(b) a short description of the liability, whether present or
25 prospective, secured by the charge; and
(c) a short description of the property charged; and
(d) the name of the trustee for debenture holders or, if there is no
such trustee, the name of the chargee; and
(e) the name of the person whom the co-operative believes to be
30 the holder of the charge.
(3) In the case of a transferred co-operative previously registered
under the Companies (Co-operative) Act 1943, the register kept
by the co-operative under section 96 of that Act is to be
page 326
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Registration Division 2
cl. 42
considered to be part of the register kept by the co-operative
under subclause (2).
(4) A co-operative register of charges kept by a co-operative pursuant to
subclause (1) must be open for inspection --
5 (a) by a creditor or member of the co-operative, without
payment; and
(b) by another person, on payment for each inspection of the
amount, not exceeding the amount prescribed by the
regulations, the co-operative requires or, if the co-operative
10 does not require the payment of an amount, without charge.
(5) A person may request a co-operative to furnish the person with a copy
of the co-operative register of charges or any part of the register.
(6) If a person makes a request under subclause (5), the co-operative must
send the copy to that person --
15 (a) if the co-operative requires payment of an amount not more
than the amount prescribed by the regulations, within 21 days
after payment of the amount is received by the co-operative
or within a longer period approved by the Registrar; or
(b) in a case to which paragraph (a) does not apply, within
20 21 days after the request is made or within such longer period
as the Registrar approves.
(7) If default is made in complying with any provision of this clause, the
co-operative commits an offence.
Penalty: a fine of $1 000.
25 42. Certificates
(1) If particulars of a charge are entered in the Register of Co-operative
Charges in accordance with this Division, the Registrar must, on
request by any person, issue to that person a certificate --
(a) setting out those particulars; and
30 (b) stating the time and day when a notice in respect of the
charge containing those particulars was lodged with the
Registrar; and
page 327
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 2 Registration
cl. 43
(c) if the word "provisional" appears in the Register of
Co-operative Charges next to the reference to the time and
day, stating that fact.
(2) A certificate issued under subclause (1) is evidence of the matters
5 stated in the certificate.
(3) If particulars of a charge are entered in the register of charges in
accordance with this Division, and the word "provisional" does not
appear in the register next to the reference to the time and day when a
notice about the charge was lodged, the Registrar must, on request by
10 any person, issue to that person a certificate stating that particulars of
the charge are entered in the register in accordance with this Division.
(4) A certificate issued under subclause (3) is evidence that the
requirements of this Division as to registration, other than the
requirements relating to the period after the creation of the charge
15 within which notice in respect of the charge is required to be lodged,
have been complied with.
43. Power of Supreme Court to rectify register of charges
If the Supreme Court is satisfied --
(a) that a particular with respect to a registrable charge on
20 property of a co-operative has been omitted from, or
misstated in, the register of charges or a memorandum
referred to in clause 37; and
(b) that the omission or misstatement --
(i) was accidental or due to inadvertence or to some
25 other sufficient cause; or
(ii) is not of a nature to prejudice the position of creditors
or shareholders; or
(iii) on other grounds it is just and equitable to grant
relief,
30 the Court may, on the application of the co-operative or a person
interested and on terms and conditions that the Court considers just
and expedient, order that the omission or misstatement be rectified.
page 328
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Order of priority Division 3
cl. 44
44. Registrar may exempt from compliance with certain
requirements of Division
(1) The Registrar may, by order published in the Gazette, exempt a
person from compliance with the requirements of clause 13, 17 or 36
5 relating to --
(a) the particulars to be contained in a notice under the relevant
clause; or
(b) the documents, other than the notice, to be lodged under the
relevant clause; or
10 (c) the verification of a document required to be lodged under the
relevant clause.
(2) A person who is exempted under this clause from compliance with a
requirement of clause 13, 17 or 36 must not contravene the condition.
(3) If a person has contravened a condition to which an exemption under
15 this clause is subject, the Supreme Court may, on the application of
the Registrar, order the person to comply with the condition.
Division 3 -- Order of priority
Subdivision 1 -- General
45. Definitions
20 (1) In this Division --
"priority time", in relation to a registered charge, means --
(a) except as provided by paragraph (b) or (c), the time and
date appearing in the Register of Co-operative Charges in
relation to the charge, being a time and day entered in the
25 register pursuant to Division 2 Subdivision 3; or
(b) if a notice has been lodged under clause 17 in relation to a
charge on property, being a charge that, at the time when
the notice was lodged, was already registered under
Division 2, the earlier or earliest time and day appearing in
30 the Register of Co-operative Charges in relation to the
charge, being a time and day entered in the register
pursuant to clause 17; or
page 329
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 3 Order of priority
cl. 46
(c) to the extent that the charge has effect as varied by a
variation, notice of which was required to be lodged under
clause 36(2), the time and day entered in the Register of
Co-operative Charges in relation to the charge pursuant to
5 clause 24;
"prior registered charge", in relation to another registered charge,
means a charge the priority time of which is earlier than the
priority time of the other charge;
"registered charge" means a charge that is registered under
10 Division 2;
"subsequent registered charge", in relation to another registered
charge, means a charge the priority time of which is later than
the priority time of the other registered charge;
"unregistered charge" means a charge that is not registered under
15 Division 2 but does not include a charge that is not a registrable
charge.
(2) A reference in this Division to a person having notice of a charge
includes a reference to a person having constructive notice of the
charge.
20 (3) If, by virtue of the definition of "priority time" in subclause (1), a
registered charge has 2 or more priority times each of which relates to
a particular liability secured by the charge, each of the liabilities is,
for the purposes of this Division, taken to be secured by a separate
registered charge, the priority time of which is the priority time of the
25 first mentioned registered charge that relates to the liability
concerned.
46. Priorities of charges
(1) Subject to this clause, Subdivision 2 has effect on the priorities, in
relation to each other, of registrable charges on the property of a
30 co-operative.
(2) The application, in relation to particular registrable charges, of the
order of priorities of charges set out in Subdivision 2, is subject to --
(a) any consent (express or implied) that varies the priorities in
relation to each other of the charges, being a consent given by
35 the holder of one of those charges and being a charge that
page 330
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Order of priority Division 3
cl. 47
would otherwise be entitled to priority over the other charge;
and
(b) any agreement between the chargees that affects the priorities
in relation to each other of the charges in relation to which
5 those persons are the chargees.
(3) The holder of a registered charge, being a floating charge, on property
of a co-operative is taken, for the purposes of subclause (2), to have
consented to the charge being postponed to a subsequent registered
charge, being a fixed charge that is created before the floating charge
10 becomes fixed, on any of the property unless --
(a) the creation of the subsequent registered charge contravened
a provision of the instrument or resolution creating or
evidencing the floating charge; and
(b) a notice about the floating charge indicating the existence of
15 the provision referred to in paragraph (a) was lodged with the
Registrar under clause 13, 17 or 36 before the creation of the
subsequent registered charge.
(4) If a charge relates to property of a kind to which a particular
paragraph of clause 4(1) applies and also relates to other property,
20 Subdivision 2 applies so as to affect the priority of the charge only in
so far as it relates to the first mentioned property and does not affect
the priority of the charge in so far as it relates to the other property.
Subdivision 2 -- Priority rules
47. General priority rules in relation to registered charges
25 (1) A registered charge on property of a co-operative has priority over --
(a) a subsequent registered charge on the property, unless the
subsequent registered charge was created before the creation
of the prior registered charge and the chargee in relation to
the subsequent registered charge proves that the chargee in
30 relation to the prior registered charge had notice of the
subsequent registered charge at the time when the prior
registered charge was created; and
(b) an unregistered charge on the property created before the
creation of the registered charge, unless the chargee in
35 relation to the unregistered charge proves that the chargee in
page 331
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 3 Order of priority
cl. 48
relation to the registered charge had notice of the unregistered
charge at the time when the registered charge was created;
and
(c) an unregistered charge on the property created after the
5 creation of the registered charge.
(2) A registered charge on property of a co-operative is postponed to --
(a) a subsequent registered charge on the property, if the
subsequent registered charge was created before the creation
of the prior registered charge and the chargee in relation to
10 the subsequent registered charge proves that the chargee in
relation to the prior registered charge had notice of the
subsequent registered charge at the time when the prior
registered charge was created; and
(b) an unregistered charge on the property created before the
15 creation of the registered charge, where the chargee in
relation to the unregistered charge proves that the chargee in
relation to the registered charge had notice of the unregistered
charge at the time when the registered charge was created.
48. General priority rule in relation to unregistered charges
20 An unregistered charge on property of a co-operative has priority
over --
(a) a registered charge on the property that was created after the
creation of the unregistered charge and does not have priority
over the unregistered charge under clause 47(1); and
25 (b) another unregistered charge on the property created after the
first mentioned unregistered charge.
49. Special priority rules
(1) Except as provided by this clause, priority given by this Division to a
charge over another charge does not extend to a liability that, at the
30 priority time in relation to the first mentioned charge, is not a present
liability.
(2) If a registered charge on property of a co-operative secures --
(a) a present liability and a prospective liability of an unspecified
amount; or
page 332
[Draft Bill for public comment]
Co-operatives Bill 2006
Registration etc. of charges Schedule 3
Order of priority Division 3
cl. 49
(b) a prospective liability of an unspecified amount,
priority given by this Division to the charge over another charge of
which the chargee in relation to the first mentioned charge does not
have actual knowledge extends to the prospective liability, whether
5 the prospective liability became a present liability before or after the
registration of the first mentioned charge.
(3) If a registered charge on property of a co-operative secures --
(a) a present liability and a prospective liability up to a specified
maximum amount; or
10 (b) a prospective liability up to a specified maximum amount,
and the notice lodged under clause 13 or 17 about the charge sets out
the nature of the prospective liability and the amount specified, then
priority given by this Division to the charge over another charge
extends to a prospective liability secured by the first mentioned
15 charge to the extent of the maximum amount specified.
(4) Subclause (3) applies whether the prospective liability became a
present liability before or after the registration of the first mentioned
charge and despite the fact that the chargee in relation to the first
mentioned charge had actual knowledge of the other charge at the
20 time when the prospective liability became a present liability.
(5) Subclause (6) applies if --
(a) a registered charge on property of a co-operative secures --
(i) a present liability and a prospective liability up to a
specified maximum amount; or
25 (ii) a prospective liability up to a specified maximum
amount,
but the notice lodged under clause 13 or 17 about the charge
does not set out the nature of the prospective liability or the
maximum amount specified; or
30 (b) a registered charge on property of a co-operative secures a
prospective liability of an unspecified amount.
(6) In relation to a charge referred to in subclause (5) --
(a) priority given by this Division to the charge over another
charge of which the chargee in relation to the first mentioned
page 333
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 3 Registration etc. of charges
Division 3 Order of priority
cl. 49
charge has actual knowledge extends to a prospective liability
secured by the first mentioned charge that had become a
present liability at the time when the chargee in relation to the
first mentioned charge first obtained actual knowledge of the
5 other charge; and
(b) priority given by this Division to the charge over another
charge of which the chargee in relation to the first mentioned
charge has actual knowledge extends to a prospective liability
secured by the first mentioned charge that became a present
10 liability, as the result of the making of an advance, after the
time when the chargee in relation to the first mentioned
charge first obtained actual knowledge of the other charge if,
at that time, the terms of the first mentioned charge required
the chargee in relation to the charge to make the advance after
15 that time.
(7) Subclause (6)(b) extends to the prospective liability whether the
advance was made before or after the registration of the first
mentioned charge and despite the fact that the chargee in relation to
the first mentioned charge had actual knowledge of the other charge at
20 the time when the advance was made.
page 334
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 1
Schedule 4 -- Receivers, and other controllers, of property
of co-operatives
[s. 273]
1. Interpretation
5 In this Schedule --
"administrator", in relation to a deed of arrangement, means an
administrator of the deed appointed under the Corporations Act
Part 5.3A, as applying under this Act;
"control day", in relation to a controller of property of a
10 co-operative, means --
(a) unless paragraph (b) applies --
(i) in the case of a receiver, or receiver and manager,
of the property, the day when the receiver, or
receiver and manager, was appointed; or
15 (ii) in the case of another person who is in possession,
or has control, of the property for the purpose of
enforcing a charge, the day when the person
entered into possession, or took control, of
property of the co-operative for the purpose of
20 enforcing the charge;
or
(b) if the controller became a controller of property of the
co-operative --
(i) to act with an existing controller of the property;
25 or
(ii) in place of a controller of the property who has
died or ceased to be a controller of the property,
the day that is, because of any other application or
applications of this definition, the control day in relation
30 to the controller referred to in subparagraph (i) or (ii);
"controller", of property of a co-operative, means --
(a) a receiver, or receiver and manager, of the property; or
page 335
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 2
(b) anyone else who, whether or not as agent for the
co-operative, is in possession, or has control, of the
property for the purpose of enforcing a charge;
"co-operative" includes a foreign co-operative registered under
5 Part 14;
"daily newspaper" means a newspaper that is ordinarily published
on each day that is a business day in the place where the
newspaper is published, whether or not the newspaper is
ordinarily published on other days;
10 "managing controller", of property of a co-operative, means --
(a) a receiver and manager of the property; or
(b) another controller of the property who has functions or
powers in relation to managing the co-operative;
"national newspaper" means a daily newspaper that circulates
15 generally in each State and Territory;
"officer", of a foreign co-operative, includes a local agent of the
foreign co-operative;
"property", of a co-operative, means property --
(a) in the case of a co-operative that is not a foreign
20 co-operative, within or outside Australia; or
(b) in the case of a co-operative that is a foreign co-operative,
within Australia or an external Territory;
"receiver", of property of a co-operative, includes a receiver and
manager.
25 2. Application of Schedule
Except in so far as the contrary intention appears, this Schedule
applies in relation to a receiver of property of a co-operative who is
appointed after the commencement of this Schedule, even if the
appointment arose out of a transaction entered into, or an act or thing
30 done, before that commencement.
page 336
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 3
3. Persons not to act as receivers
(1) A person is not qualified to be appointed, and must not act, as receiver
of property of a co-operative if the person --
(a) is a mortgagee of property of the co-operative; or
5 (b) is an auditor or an officer of the co-operative; or
(c) is an officer of a corporation that is a mortgagee of property
of the co-operative; or
(d) is not a registered liquidator under the Corporations Act; or
(e) is an officer of a corporation related to the co-operative; or
10 (f) has at any time within the last 12 months been an officer or
promoter of the co-operative or of a related corporation,
unless the Registrar directs in writing that this paragraph does
not apply in relation to the person in relation to the
co-operative.
15 (2) In subclause (1) --
"officer", in relation to a corporation, does not include a receiver,
appointed under an instrument whether before or after the
commencement of this clause, of property of the body.
(3) Subclause (1)(d) does not apply in relation to a corporation authorised
20 by or under a law of the Commonwealth, of a State or of a Territory to
act as receiver of property of the co-operative.
(4) Nothing in this clause prevents a person from acting as receiver of
property of a co-operative under an appointment validly made before
the commencement of this clause.
25 4. Supreme Court may declare whether controller is validly acting
(1) If there is doubt, on a specific ground, about --
(a) whether a purported appointment of a person, after the
commencement of this clause, as receiver of property of a
co-operative is valid; or
page 337
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 5
(b) whether a person who has entered into possession, or
assumed control, of property of a co-operative after the
commencement of this clause did so validly under the terms
of a charge on that property,
5 the person, the co-operative or any of the co-operative's creditors may
apply to the Supreme Court for an order under subclause (2).
(2) On an application, the Supreme Court may make an order declaring
whether or not --
(a) the purported appointment was valid; or
10 (b) the person entered into possession, or assumed control,
validly under the terms of the charge,
as the case may be, on the ground specified in the application or on
some other ground.
5. Liability of controller
15 (1) A receiver, or another authorised person, who, whether as agent for
the co-operative or not, enters into possession or assumes control of a
property of a co-operative for the purpose of enforcing a charge is,
despite an agreement to the contrary, but without prejudice to the
person's rights against the co-operative or another person, liable for
20 debts incurred by the person in the course of the receivership,
possession or control for services rendered, goods purchased or
property hired, leased, used or occupied.
(2) Subclause (1) does not constitute the person entitled to the charge a
mortgagee in possession.
25 (3) If --
(a) a person (the "controller") enters into possession or assumes
control of property of a co-operative; and
(b) the controller purports to have been properly appointed as a
receiver of that property under a power contained in an
30 instrument, but has not been properly appointed; and
page 338
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 6
(c) civil proceedings in a federal court or a court of a State or
Territory arise out of an act alleged to have been done by the
controller,
the court may, if it is satisfied that the controller believed on
5 reasonable grounds that the controller had been properly appointed,
order that --
(d) the controller be relieved in whole or in part of a liability that
the controller has incurred but would not have incurred if the
controller had been properly appointed; and
10 (e) a person who purported to appoint the controller as receiver
be liable for an act, matter or thing in so far as the controller
has been relieved under paragraph (d) of liability for that act,
matter or thing.
6. Liability of controller under pre-existing agreement about
15 property used by co-operative
(1) This clause applies if --
(a) under an agreement made before the control day in relation to
a controller of property of a co-operative, the co-operative
continues after that day to use or occupy, or to be in
20 possession of, property (the "third party property") of
which someone else is the owner or lessor; and
(b) the controller is controller of the third party property.
(2) Subject to subclauses (4) and (7), the controller is liable for the
portion of the rent or other amounts payable by the co-operative under
25 the agreement that is attributable to a period --
(a) that begins more than 7 days after the control day; and
(b) throughout which --
(i) the co-operative continues to use or occupy, or to be
in possession of, the third party property; and
30 (ii) the controller is controller of the third party property.
(3) Within 7 days after the control day, the controller may give to the
owner or lessor a notice that specifies the third party property and
states that the controller does not propose to exercise rights in relation
page 339
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 7
to the property as controller of the property, whether on behalf of the
co-operative or anyone else.
(4) Despite subclause (2), the controller is not liable for the portion of the
rent or other amounts payable by the co-operative under the
5 agreement as is attributable to a period during which a notice under
subclause (3) is in force, but the notice does not affect a liability of
the co-operative.
(5) A notice under subclause (3) ceases to have effect if --
(a) the controller revokes it by writing given to the owner or
10 lessor; or
(b) the controller exercises, or purports to exercise, a right in
relation to the third party property as controller of the
property, whether on behalf of the co operative or another
person.
15 (6) For the purposes of subclause (5), the controller does not exercise, or
purport to exercise, a right referred to in subclause (5)(b) merely
because the controller continues to be in possession, or to have
control, of the third party property, unless the controller --
(a) also uses the property; or
20 (b) asserts a right, as against the owner or lessor, to continue.
(7) Subclause (2) does not apply to the extent that the Supreme Court, by
order, excuses the controller from liability, but an order does not
affect a liability of the co-operative.
(8) The controller is not taken because of subclause (2) --
25 (a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned
in subclause (2).
7. Powers of receiver
(1) Subject to this clause, a receiver of property of a co-operative has
30 power to do, in Australia and elsewhere, all things necessary or
convenient to be done for or in relation to, or as incidental to, the
attainment of the objectives for which the receiver was appointed.
page 340
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 7
(2) Without limiting subclause (1), but subject to any provision of the
court order by which, or the instrument under which, the receiver was
appointed, being a provision that limits the receiver's powers in any
way, a receiver of property of a co-operative has, in addition to any
5 powers conferred by the order or instrument, as the case may be, or by
any other law, power, for the purpose of attaining the objectives for
which the receiver was appointed --
(a) to enter into possession and take control of property of the
co-operative in accordance with the terms of the order or
10 instrument; and
(b) to lease, let on hire or dispose of property of the co-operative;
and
(c) to grant options over property of the co-operative on
conditions that the receiver considers appropriate; and
15 (d) to borrow money on the security of property of the
co-operative; and
(e) to insure property of the co-operative; and
(f) to repair, renew or enlarge property of the co-operative; and
(g) to convert property of the co-operative into money; and
20 (h) to carry on a business of the co-operative; and
(i) to take on lease or on hire, or to acquire, property necessary
or convenient in connection with the carrying on of a
business of the co-operative; and
(j) to execute a document, bring or defend proceedings or do any
25 other act or thing in the name of and on behalf of the
co-operative; and
(k) to draw, accept, make and endorse a bill of exchange or
promissory note; and
(l) to use a seal of the co-operative; and
30 (m) to engage or discharge employees on behalf of the
co-operative; and
(n) to appoint a solicitor, accountant or other professionally
qualified person to assist the receiver; and
page 341
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 7
(o) to appoint an agent to do any business that the receiver is
unable to do, or that it is unreasonable to expect the receiver
to do, in person; and
(p) if a debt or liability is owed to the co operative, to prove the
5 debt or liability in a bankruptcy, insolvency or winding up
and, in that connection, to receive dividends and to assent to a
proposal for a composition or a scheme of arrangement; and
(q) if the receiver was appointed under an instrument that created
a charge on uncalled capital or uncalled premiums of the
10 co-operative --
(i) in the name of the co-operative, to make a call for
money unpaid on shares in the co operative, whether
on account of the nominal value of the shares or by
way of premium; or
15 (ii) on the giving of an adequate indemnity to a liquidator
of the co-operative, in the name of the liquidator, to
make a call for money unpaid on account of the
nominal value of shares in the co-operative;
and
20 (r) to enforce payment of a call that is due and unpaid, whether
the calls were made by the receiver or otherwise; and
(s) to make or defend an application for the winding up of the
co-operative; and
(t) to refer to arbitration a question affecting the co-operative.
25 (3) The conferring by this clause on a receiver of powers in relation to
property of a co-operative does not affect the rights in relation to that
property of any other person other than the co-operative.
(4) In this clause, a reference, in relation to a receiver, to property of a
co-operative is, unless the contrary intention appears, a reference to
30 the property of the co-operative in relation to which the receiver was
appointed.
page 342
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 8
8. Controller's duty of care in exercising power of sale
(1) In exercising a power of sale in respect of property of a co-operative,
a controller must take all reasonable care to sell the property for --
(a) if, when it is sold, it has a market value, not less than the
5 market value; or
(b) otherwise, the best price that is reasonably obtainable, having
regard to the circumstances existing when the property is
sold.
(2) Nothing in subclause (1) limits anything in Part 9 Division 3.
10 9. Supreme Court may authorise managing controller to dispose of
property despite prior charge
(1) On the application of a managing controller of property of a
co-operative, the Supreme Court may by order authorise the controller
to sell, or to dispose of in some other specified way, specified
15 property of the co-operative, even though it is subject to a charge (the
"prior charge") that has priority over a charge (the "controller's
charge") on the property that the controller is enforcing.
(2) The Supreme Court may make an order if satisfied that --
(a) apart from the existence of the prior charge, the controller
20 would have power to sell, or to dispose of, the property; and
(b) the controller has taken all reasonable steps to obtain the
consent of the holder of the prior charge to the sale or
disposal, but has not obtained the consent; and
(c) sale or disposal of the property under the order is in the best
25 interests of the co-operative's creditors and of the
co-operative; and
(d) sale or disposal of the property under the order will not
unreasonably prejudice the rights or interests of the holder of
the prior charge.
30 (3) The Supreme Court may have regard to the need to protect adequately
the rights and interests of the holder of the prior charge.
page 343
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 10
(4) If the property would be sold or disposed of together with other
property that is subject to the controller's charge, the Supreme Court
may have regard to --
(a) the amount, if any, by which it is reasonable to expect that the
5 net proceeds of selling or disposing of the other property
otherwise than together with the first mentioned property
would be less than so much of the net proceeds of selling or
disposing of all the property together as would be attributable
to that other property; and
10 (b) the amount, if any, by which it is reasonable to expect that the
net proceeds of selling or disposing of the first mentioned
property otherwise than together with the other property
would be greater than so much of the net proceeds of selling
or disposing of all the property together as would be
15 attributable to the first mentioned property.
(5) Nothing in subclause (3) or (4) limits the matters to which the
Supreme Court may have regard for the purposes of subclause (2).
(6) An order may be made subject to conditions.
10. Receiver's power to carry on co-operative's business during
20 winding up
(1) A receiver of property of a co-operative that is being wound up
may --
(a) with the written approval of the co-operative's liquidator or
with the approval of the Supreme Court, carry on the
25 co-operative's business either generally or as otherwise
specified in the approval; and
(b) do whatever is necessarily incidental to carrying on the
business under paragraph (a).
(2) Subclause (1) does not --
30 (a) affect a power that the receiver has otherwise than under that
subclause; or
(b) empower the receiver to do an act that the receiver would not
have power to do if the co-operative were not being wound
up.
page 344
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 11
(3) A receiver of property of a co-operative who carries on the
co-operative's business under subclause (1) does so --
(a) as agent for the co-operative; and
(b) in his or her capacity as receiver of property of the
5 co-operative.
(4) The consequences of subclause (3) include, but are not limited to, the
following --
(a) for the purposes of clause 5(1), a debt that the receiver incurs
in carrying on the business as mentioned in subclause (3) of
10 this clause is incurred in the course of the receivership;
(b) a debt or liability that the receiver incurs in so carrying on the
business is not a cost, charge or expense of the winding up.
11. Controller's duties in relation to financial institution accounts
and financial records
15 (1) A controller of property of a co-operative must --
(a) open and maintain an account with a financial institution,
bearing --
(i) the controller's name; and
(ii) in the case of a receiver of the property, the title
20 "receiver"; and
(iii) otherwise, the title "controller"; and
(iv) the co-operative's name;
and
(b) within 3 business days after money of the co-operative comes
25 under the control of the controller, pay the money into an
account referred to in paragraph (a); and
(c) ensure that no account that the controller maintains contains
money other than money of the co-operative that comes under
the control of the controller; and
30 (d) keep the financial records that correctly record and explain all
transactions that the controller enters into as the controller.
(2) A director, creditor or member of a co-operative may, unless the
Supreme Court otherwise orders, personally or by an agent, inspect
page 345
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 12
records kept by a controller of property of the co-operative for the
purposes of subclause (1)(d).
12. Managing controller to report within 2 months about
co-operative's affairs
5 (1) A managing controller of property of a co-operative must prepare a
report about the co-operative's affairs that is in the form approved by
the Registrar and is made up to a day not later than 28 days before the
day when it is prepared.
(2) The managing controller must prepare the report and lodge it with the
10 Registrar within 2 months after the control day.
(3) As soon as practicable, and in any event within 14 days, after lodging
the report with the Registrar, the managing controller must cause to be
published in a national newspaper, or in each State and Territory in a
daily newspaper that circulates generally in that State or Territory, a
15 notice stating --
(a) that the report has been prepared; and
(b) that a person can, on paying the fee prescribed by the
regulations, inspect the report at specified offices of the
Registrar.
20 (4) If, in the managing controller's opinion, it would seriously
prejudice --
(a) the co-operative's interests; or
(b) the achievement of the objectives for which the controller
was appointed, or entered into possession or assumed control
25 of property of the co-operative, as the case requires,
if particular information that the controller would otherwise include in
the report were made available to the public, the controller need not
include the information in the report.
(5) If the managing controller omits information from the report as
30 permitted by subclause (4), the controller must include instead a
notice --
(a) stating that certain information has been omitted from the
report; and
page 346
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 13
(b) summarising what the information is about, but without
disclosing the information itself.
13. Reports by receiver
(1) If it appears to the receiver of property of a co-operative that --
5 (a) a past or present officer, or a member, of the co-operative
may have been guilty of an offence under a law of the
Commonwealth or of a State or Territory in relation to the
co-operative; or
(b) a person who has taken part in the formation, promotion,
10 administration, management or winding up of the
co-operative --
(i) may have misapplied or retained, or may have
become liable or accountable for, money or property,
whether the property is within or outside Australia, of
15 the co-operative; or
(ii) may have been guilty of negligence, default, breach
of duty or breach of trust in relation to the
co-operative,
the receiver must --
20 (c) lodge with the Registrar as soon as practicable a report about
the matter; and
(d) give to the Registrar the information, and access to and
facilities for inspecting and taking copies of any documents,
as the Registrar requires.
25 (2) The receiver may also lodge further reports specifying any other
matter that, in the receiver's opinion, it is desirable to bring to the
notice of the Registrar.
(3) If it appears to the Supreme Court --
(a) that a past or present officer, or a member, of a co-operative
30 in relation to property of which a receiver has been appointed
has been guilty of an offence under a law referred to in
subclause (1)(a) in relation to the co-operative; or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of a co-operative
page 347
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 14
in relation to property of which a receiver has been appointed
has engaged in conduct referred to in subclause (1)(b) in
relation to the co-operative,
and that the receiver has not lodged a report with the Registrar about
5 the matter, the Court may, on the application of a person interested in
the appointment of the receiver or of its initiative, direct the receiver
to lodge the report.
14. Supervision of controller
(1) If --
10 (a) it appears to the Supreme Court or to the Registrar that a
controller of property of a co-operative has not faithfully
performed, or is not faithfully performing, the controller's
functions or has not observed, or is not observing, a
requirement of --
15 (i) in the case of a receiver, the order by which, or the
instrument under which, the receiver was appointed;
or
(ii) otherwise, an instrument under which the controller
entered into possession, or took control, of the
20 property; or
(iii) in any case, the Supreme Court; or
(iv) in any case, this Act or the rules of court;
or
(b) a person complains to the Supreme Court or to the Registrar
25 about an act or omission of a controller of property of a
co-operative in connection with performing or exercising any
of the controller's functions and powers,
the Supreme Court or the Registrar, as the case may be, may inquire
into the matter and, if the Court or the Registrar inquires under this
30 subclause, the Supreme Court may take the action that it considers
appropriate.
page 348
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 15
(2) The Registrar may report to the Supreme Court any matter that in the
Registrar's opinion is a misfeasance, neglect or omission on the part
of a controller of property of a co-operative and the Court may --
(a) order the controller to make good any loss that the estate of
5 the co-operative has sustained because of the misfeasance,
neglect or omission; and
(b) make any other order that it considers appropriate.
(3) The Supreme Court may at any time --
(a) require a controller of property of a co-operative to answer
10 questions about the performance or exercise of any of the
controller's functions and powers as controller; or
(b) examine a person about the performance or exercise by the
controller of any of the controller's functions and powers as
controller; or
15 (c) direct an investigation to be made of the controller's books.
15. Controller may apply to Supreme Court
(1) A controller of property of a co-operative may apply to the Supreme
Court for directions in relation to any matter arising in relation to the
performance or exercise of any of the controller's functions and
20 powers as controller.
(2) In the case of a receiver of property of a co-operative, subclause (1)
applies only if the receiver was appointed under a power contained in
an instrument.
16. Power of Supreme Court to fix receiver's remuneration
25 (1) The Supreme Court may by order fix the amount to be paid by way of
remuneration to a person who, under a power contained in an
instrument, has been appointed as receiver of property of a
co-operative.
(2) The power of the Supreme Court to make an order under this
30 clause --
(a) extends to fixing the remuneration for a period before the
making of the order or the application for the order; and
page 349
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 17
(b) is exercisable even if the receiver has died, or ceased to act,
before the making of the order or the application for the
order; and
(c) if the receiver has been paid or has retained for the receiver's
5 remuneration for any period before the making of the order
any amount in excess of that fixed for the period, extends to
requiring the receiver or the receiver's personal
representatives to account for the excess or the part of the
excess that is specified in the order.
10 (3) The power conferred by subclause (2)(c) must not be exercised in
relation to a period before the making of the application for the order
unless, in the opinion of the Supreme Court, there are special
circumstances that make it appropriate for the power to be exercised.
(4) The Supreme Court may from time to time vary or amend an order
15 under this clause.
(5) An order under this clause may be made, varied or amended on the
application of --
(a) a liquidator of the co-operative; or
(b) an administrator of the co-operative; or
20 (c) an administrator of a deed of arrangement executed by the
co-operative; or
(d) the Registrar.
(6) An order under this clause may be varied or amended on the
application of the receiver concerned.
25 (7) An order under this clause may be made, varied or amended only as
provided in subclauses (5) and (6).
17. Controller has qualified privilege in certain cases
A controller of property of a co-operative has qualified privilege in
relation to --
30 (a) a matter contained in a report that the controller lodges under
clause 12 or 13; or
(b) a comment that the controller makes under clause 20(2)(c).
page 350
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 18
18. Notification of matters relating to controller
(1) A person who obtains an order for the appointment of a receiver of
property of a co-operative, or who appoints such a receiver under a
power contained in an instrument, must --
5 (a) within 7 days after obtaining the order or making the
appointment, lodge notice that the order has been obtained, or
that the appointment has been made, as the case requires; and
(b) within 21 days after obtaining the order or making the
appointment, cause notice that the order has been obtained, or
10 that the appointment has been made, as the case requires, to
be published in the Gazette.
(2) A person who appoints another person to enter into possession, or
take control, of property of a co-operative, whether or not as agent for
the co-operative, for the purpose of enforcing a charge otherwise than
15 as receiver of that property must --
(a) within 7 days after making the appointment, lodge notice of
the appointment with the Registrar; and
(b) within 21 days after making the appointment, cause notice of
the appointment to be published in the Gazette.
20 (3) A person who enters into possession, or takes control, as mentioned in
subclause (2) must --
(a) within 7 days after entering into possession or taking control,
lodge notice with the Registrar that the person has done so;
and
25 (b) within 21 days after entering into possession or taking
control, cause to be published in the Gazette notice that the
person has done so,
unless another person --
(c) appointed the first mentioned person to enter into possession
30 or take control; and
(d) complies with subclause (2) in relation to the appointment.
(4) Within 14 days after becoming a controller of property of a
co-operative, a person must lodge with the Registrar notice, in the
form approved by the Registrar, of the address of the person's office.
page 351
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 19
(5) A controller of property of a co-operative must, within 14 days after a
change in the situation of the controller's office, lodge with the
Registrar notice, in the form approved by the Registrar, of the change.
(6) A person who ceases to be a controller of property of a co-operative
5 must --
(a) within 7 days after ceasing to be a controller, lodge with the
Registrar notice that the person has ceased; and
(b) within 21 days after ceasing to be a controller, cause notice
that the person has ceased to be published in the Gazette.
10 19. Statement that receiver appointed or other controller acting
(1) If a receiver of property, whether within or outside this State or within
or outside Australia, of a co-operative has been appointed, the
co-operative must set out, in every public document, and in every
eligible negotiable instrument, of the co-operative, after the name of
15 the co-operative where it first appears, a statement that a receiver, or a
receiver and manager, as the case requires, has been appointed.
(2) If a controller, other than a receiver, controls the property, whether
within or outside Australia, of a co-operative, the co-operative must
set out, in every public document, and in every negotiable instrument,
20 of the co-operative, after the co-operative's name where it first
appears, a statement that a controller is acting.
20. Officers to report to controller about co-operative's affairs
(1) In this clause --
"reporting officer", in relation to a co-operative and in relation to
25 property of which a person is controller, means a person who
was on the control day --
(a) in the case of a co-operative other than a foreign
co-operative, a director or secretary of the co-operative; or
(b) in the case of a foreign co-operative, a local agent of the
30 foreign co-operative.
page 352
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 20
(2) If a person becomes a controller of property of a co-operative --
(a) the person must serve on the co-operative, as soon as
practicable, notice that the person is a controller of property
of the co-operative; and
5 (b) within 14 days after the co-operative receives the notice, the
reporting officers must make out and submit to the person a
report, in the form approved by the Registrar, about the
affairs of the co-operative as at the control day; and
(c) the person must, within 28 days after receipt of the report --
10 (i) lodge with the Registrar a copy of the report and a
notice setting out any comments the person considers
appropriate to make relating to the report or, if the
person does not consider it appropriate to comment, a
notice stating that the person does not consider it
15 appropriate to comment; and
(ii) send to the co-operative a copy of the notice lodged
in accordance with subparagraph (i);
and
(d) the person must, within 28 days after receipt of the report, if
20 the person became a controller of the property --
(i) because of an appointment as receiver of the property
that was made by or on behalf of the holder of
debentures of the co-operative; or
(ii) by entering into possession, or taking control, of the
25 property for the purpose of enforcing a charge
securing such debentures,
and there are trustees for the holders of the debentures, send
to those trustees a copy of the report and a copy of the notice
lodged under paragraph (c)(i).
30 (3) If notice has been served on a co-operative under subclause (2)(a), the
reporting officers may apply to the controller or to the Supreme Court
to extend the period within which the report is to be submitted and --
(a) if application is made to the controller, if the controller
believes that there are special reasons for so doing, the
35 controller may, by written notice given to the reporting
officers, extend that period until a specified day; and
page 353
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 21
(b) if application is made to the Supreme Court, if the Court
believes that there are special reasons for so doing, the Court
may, by order, extend that period until a specified day.
(4) As soon as practicable after granting an extension under
5 subclause (3)(a), the controller must lodge a copy of the notice with
the Registrar.
(5) As soon as practicable after the Supreme Court grants an extension
under subclause (3)(b), the reporting officers must lodge a copy of the
order with the Registrar.
10 (6) Subclauses (2), (3) and (4) do not apply in a case where a person
becomes a controller of property of a co-operative --
(a) to act with an existing controller of property of the
co-operative; or
(b) in place of a controller of the property who has died or ceased
15 to be a controller of the property.
(7) However, if subclause (2) applies in a case where a controller of
property of a co-operative dies, or ceases to be a controller of property
of the co-operative, before subclause (2) is fully complied with,
then --
20 (a) the references in subclauses (2)(b), (c) and (d) to the person;
and
(b) the references in subclauses (3) and (4) to the controller,
include references to the controller's successor and to any continuing
controller.
25 (8) If a co-operative is being wound up, this clause and clause 21 apply
even if the controller and the liquidator are the same person, but with
the necessary modifications arising from that fact.
21. Controller may require reports
(1) A controller of property of a co-operative may, by notice given to the
30 person or persons, require one or more persons included in one or
more of the following classes of persons to make out as required by
the notice, verify by a written statement in the approved form, and
submit to the controller, a report, containing such information as is
page 354
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 22
specified in the notice as to the affairs of the co-operative or as to
such of those affairs as are specified in the notice, as at a date
specified in the notice --
(a) persons who are or have been officers of the co-operative;
5 (b) if the co-operative was incorporated within 12 months before
the control day, persons who have taken part in the formation
of the co-operative;
(c) persons who are employed by the co-operative or have been
so employed within 12 months before the control day and are,
10 in the opinion of the controller, capable of giving the
information required;
(d) persons who are, or have been within 12 months before the
control day, officers of, or employed by, a co-operative that
is, or within that year was, an officer of the co-operative.
15 (2) Without limiting subclause (1), a notice under that subclause may
specify the information that the controller requires as to affairs of the
co-operative by reference to information that this Act requires to be
included in another report, statement or notice under this Act.
(3) A person making a report and verifying it as required by subclause (1)
20 must, subject to the regulations, be allowed, and must be paid by the
receiver (or the controller's successor) out of the controller's receipts,
any costs and expenses incurred in and about the preparation and
making of the report and the verification of the report that the
controller (or the controller's successor) considers reasonable.
25 (4) A person must comply with a requirement made under subclause (1).
(5) A reference in this clause to the controller's successor includes a
reference to a continuing controller.
22. Controller may inspect records
A controller of property of a co-operative is entitled to inspect at any
30 reasonable time any records of the co-operative that relate to the
property and a person must not fail to allow the controller to inspect
those books at such a time.
page 355
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 23
23. Lodging controller's accounts
(1) A controller of property of a co-operative must lodge with the
Registrar an account --
(a) within 28 days after the end of --
5 (i) 6 months, or a shorter period the controller
determines, after the day when the controller became
a controller of property of the co-operative; and
(ii) each subsequent period of 6 months throughout
which the controller is a controller of property of the
10 co-operative;
and
(b) within 28 days after the controller ceases to be a controller of
property of the co-operative.
(2) An account must be in the form approved by the Registrar and
15 show --
(a) the controller's receipts and payments during --
(i) in the case of an account under subclause (1)(a), the
6 months or shorter period, as the case requires; or
(ii) in the case of an account under subclause (1)(b), the
20 period beginning at the end of the period to which the
last account related, or on the control day, as the case
requires and ending on the day when the controller
ceased to be the controller;
and
25 (b) except in the case of an account lodged under
subclause (1)(a)(i), the respective aggregates of the
controller's receipts and payments since the control day.
(3) In the case of --
(a) a receiver appointed under a power contained in an
30 instrument; or
page 356
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 23
(b) anyone else who is in possession, or has control, of property
of the co-operative for the purpose of enforcing a charge,
the accounts must also show the following --
(c) the amount, if any, owing under that instrument or charge --
5 (i) in the case of an account lodged under
subclause (1)(a)(i), at the end of the control day and
at the end of the period to which the account relates;
or
(ii) otherwise, at the end of the period to which the
10 account relates;
and
(d) the controller's estimate of the total value, at the end of the
period to which the account relates, of the property of the
co-operative that is subject to the instrument or charge.
15 (4) The Registrar may, of the Registrar's own initiative or on the
application of the co-operative or a creditor of the co-operative, cause
the accounts lodged in accordance with subclause (1) to be audited by
a registered company auditor appointed by the Registrar.
(5) For the purpose of the audit, the controller must give the auditor any
20 records and information that the auditor requires.
(6) If the Registrar causes the accounts to be audited on the request of the
co-operative or a creditor, the Registrar may require the co-operative
or creditor, as the case may be, to give security for the payment of the
cost of the audit.
25 (7) The costs of an audit under subclause (3) are to be fixed by the
Registrar.
(8) The Registrar may if the Registrar considers it appropriate make an
order declaring that, for the purposes of clause 5(1), the costs of the
audit are taken to be a debt incurred by the controller as referred to in
30 clause 5(1) and, if such an order is made, the controller is liable
accordingly.
(9) A person must comply with a requirement made under this clause.
page 357
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 24
24. Payment of certain debts, out of property subject to floating
charge, in priority to claims under charge
(1) This clause applies if --
(a) a receiver is appointed on behalf of the holders of debentures
5 of a co-operative that are secured by a floating charge, or
possession is taken or control is assumed, by or on behalf of
the holders of any debentures of a co-operative, of property
subject to a floating charge; and
(b) at the date of the appointment or of the taking of possession
10 or assumption of control (the "relevant date") --
(i) the co-operative has not commenced to be wound up
voluntarily; and
(ii) the co-operative has not been ordered to be wound up
by the Supreme Court.
15 (2) The receiver or other person taking possession or assuming control of
property of the co-operative must pay, out of the property coming into
the receiver's possession or control, the following debts or amounts in
priority to a claim for principal or interest in relation to the
debentures --
20 (a) first, an amount that in a winding up is payable in priority to
unsecured debts under the Corporations Act section 556, as
applying under this Act;
(b) next, if an auditor of the co-operative applied to the Registrar
for consent to resign as auditor and the Registrar refused that
25 consent before the relevant date, the reasonable fees and
expenses of the auditor incurred during the period beginning
on the day of the refusal and ending on the relevant date;
(c) subject to subclauses (4) and (5), next, a debt or amount that
in a winding up is payable in priority to other unsecured debts
30 under the Corporations Act section 556(1)(e), (g) or (h) or
560, as applying under this Act.
(3) The receiver or other person taking possession or assuming control of
property must pay debts and amounts payable under subclause (2)(c)
in the same order of priority as is prescribed by the Corporations Act
35 Part 5.6 Division 6, as applying under this Act, for those debts and
amounts.
page 358
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 25
(4) If an auditor of the co-operative applied to the Registrar for consent to
resign as auditor and the Registrar, before the relevant date, refused
consent, a receiver must, when property comes into the receiver's
possession or control, before paying a debt or amount referred to in
5 subclause (2)(c), make provision out of the property for the
reasonable fees and expenses of the auditor incurred after the relevant
date but before the date on which the property comes into the
receiver's possession or control, being fees and expenses for which
provision has not already been made under this subclause.
10 (5) If an auditor of the co-operative applies to the Registrar for consent to
resign as auditor and, after the relevant date, the Registrar refuses
consent, the receiver must, in relation to property that comes into the
receiver's possession or control after the refusal, before paying any
debt or amount referred to in subclause (2)(c), make provision out of
15 the property for the reasonable fees and expenses of the auditor
incurred after the refusal and before the date on which the property
comes into the receiver's possession or control, being fees and
expenses for which provision has not already been made under this
subclause.
20 (6) A receiver must make provision for reasonable fees and expenses of
an auditor for a particular period as required by subclause (4) or (5)
whether or not the auditor has made a claim for fees and expenses for
the period, but if the auditor has not made a claim, the receiver may
estimate the reasonable fees and expenses of the auditor for the period
25 and make provision in accordance with the estimate.
(7) For the purposes of this clause, the references in the Corporations Act
Part 5.6 Division 6, as applying under this Act, to the relevant date are
to be read as references to the date of the appointment of the receiver,
or of possession being taken or control being assumed, as the case
30 may be.
25. Enforcement of controller's duty to make returns
(1) If a receiver of property of a co-operative --
(a) who has defaulted in making or lodging a return, account or
other document or in giving notice required by law fails to
35 make good the default within 14 days after the service on the
controller, by a member or creditor of the co-operative or
page 359
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 4 Receivers, and other controllers, of property of co-operatives
cl. 26
trustee for debenture holders, of a notice requiring the
controller to make good the default; or
(b) who has become a controller of property of the co-operative
otherwise than by being appointed a receiver of the property
5 by a court and who has, after being required at any time by
the liquidator of the co-operative so to do, failed to render
proper accounts of, and to vouch, the controller's receipts and
payments and to pay over to the liquidator the amount
properly payable to the liquidator,
10 the Supreme Court may make an order directing the controller to
make good the default within the time specified in the order.
(2) An application for an order under subclause (1) may be made --
(a) if subclause (1)(a) applies, by a member or creditor of the
co-operative or by a trustee for debenture holders; and
15 (b) if subclause (1)(b) applies, by the liquidator of the
co-operative.
26. Supreme Court may remove controller for misconduct
If, on the application of a co-operative, the Supreme Court is satisfied
that a controller of property of the co-operative has been guilty of
20 misconduct in connection with performing or exercising the
controller's functions and powers, the Court may order that, on and
after a specified day, the controller cease to act as receiver or give up
possession or control, as the case requires, of property of the
co-operative.
25 27. Supreme Court may remove redundant controller
(1) The Supreme Court may order that, on and after a specified day, a
controller of property of a co-operative --
(a) cease to act as receiver, or give up possession or control, as
the case requires, of property of the co-operative; or
30 (b) act as receiver, or continue in possession or control, as the
case requires, only of specified property of the co-operative.
(2) The Supreme Court may make an order under subclause (1) if it is
satisfied that the objectives for which the controller was appointed, or
page 360
[Draft Bill for public comment]
Co-operatives Bill 2006
Receivers, and other controllers, of property of co-operatives Schedule 4
cl. 28
entered into possession or took control of property of the
co-operative, as the case requires, have been achieved, so far as is
reasonably practicable, except in relation to property specified in the
order under subclause (1)(b).
5 (3) For the purposes of subclause (2), the Supreme Court may have
regard to --
(a) the co-operative's interests; and
(b) the interests of the holder of the charge that the controller is
enforcing; and
10 (c) the interests of the co-operative's other creditors; and
(d) any other relevant matter.
(4) The Supreme Court may make an order under subclause (1) on the
application of a liquidator appointed for the purposes of winding up
the co-operative in insolvency.
15 (5) An order under subclause (1) may also prohibit the holder of the
charge from doing any or all of the following, except with the leave of
the Supreme Court --
(a) appointing a person as receiver of property of the
co-operative under a power contained in an instrument
20 relating to the charge;
(b) entering into possession, or taking control, of the property for
the purpose of enforcing the charge;
(c) appointing a person to enter into possession or take control of
the property for the purpose of enforcing the charge, whether
25 as agent for the chargee or for the co-operative.
28. Effect of clauses 26 and 27
(1) Except as expressly provided in clause 26 or 27, an order under that
clause does not affect a charge on property of a co-operative.
(2) Nothing in clause 26 or 27 limits any other power of the Supreme
30 Court to remove, or otherwise deal with, a controller of property of a
co-operative.
page 361
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 5 Applied co-operatives provisions
cl. 1
Schedule 5 -- Applied co-operatives provisions
[s. 384]
1. Provisions applicable to participating co-operatives
The following provisions apply to participating co-operatives --
5 (a) Part 1 Division 4, other than section 9;
(b) section 243;
(c) section 253;
(d) section 453;
(e) section 454;
10 (f) Part 17;
(g) section 488;
(h) section 490.
2. Provisions applicable to non-participating co-operatives
(a) Part 1 Division 3 and 4, other than section 9;
15 (b) section 12(2);
(c) section 13
(d) section 14;
(e) Part 3;
(f) section 76;
20 (g) section 77;
(h) Part 4 Division 5;
(i) section 98;
(j) section 100;
(k) section 101;
25 (l) section 241;
(m) section 242;
(n) section 243;
(o) Part 10 Division 1;
(p) Part 13;
page 362
[Draft Bill for public comment]
Co-operatives Bill 2006
Applied co-operatives provisions Schedule 5
cl. 2
(q) section 453;
(r) section 454;
(s) Part 17;
(t) section 489;
5 (u) section 490.
page 363
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 6 Modifications to Corporations Act
cl. 1
Schedule 6 -- Modifications to Corporations Act
[s. 392]
1. Modifications to winding up provisions
The Corporations Act Parts 5.4B and 5.6 apply with the following
5 modifications --
(a) a reference in those Parts to ASIC is to be read as a reference
to the Registrar;
(b) a reference in those Parts to an application to wind up a
company under section 464 or Part 5.4A is to be read as a
10 reference to an application by the Registrar under Part 14
Division 4;
(c) a reference in those Parts to a winding up ordered by the
Court under a provision of Part 5.4A is a reference to a
winding up ordered by the Court under Part 1 Division 4;
15 (d) a reference in those Parts to an order under a provision of
Part 5.4A is a reference to an order under section 391;
(e) for the purposes of an application by the Registrar to wind up
a foreign co-operative, those Parts apply, with such
modifications as the circumstances require, as if a winding up
20 application had been made by the co-operative;
(f) those Parts apply as if a ground specified in section 391 were
a ground for winding up by the Court specified in the
Corporations Act section 461;
(g) a reference in those Parts to an official liquidator is to be read
25 as a reference to a person approved by the Registrar as a
liquidator of a co-operative;
(h) sections 467(4) and (5), 480(d), 481(5)(b), 513B, 517, 518,
523 and 524 do not apply;
(i) a reference in section 485(2) to persons entitled to any
30 surplus is a reference to a person entitled to the surplus under
section 393 of this Act;
(j) section 516 is to be read as if "together with any charges
payable by the member to the co-operative in accordance
with the rules" were inserted after "past member";
page 364
[Draft Bill for public comment]
Co-operatives Bill 2006
Modifications to Corporations Act Schedule 6
cl. 1
(k) Part 5.6 Division 6 Subdivision C does not apply;
(l) a reference in those Parts to section 233 is to be read as a
reference to Part 4 Division 5 of this Act;
(m) those Parts are to be read subject to sections 76 and 331 of
5 this Act for the purposes of determining the liability of
members and past members to contribute on a winding up of
a co-operative;
(n) any other modifications, within the meaning of Part 3 of the
Corporations (Ancillary Provisions) Act 2001, that are
10 prescribed by the regulations.
page 365
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 7 Transitional and savings provisions
Division 1 Preliminary
cl. 1
Schedule 7 -- Transitional and savings provisions
[s. 497]
Division 1 -- Preliminary
1. Terms used in this Schedule
5 In this Schedule --
"co-operative company" means a co-operative company registered
under the Companies (Co-operative) Act 1943 Part VI;
"former Act" means --
(a) in relation to a co-operative company, the Companies
10 (Co-operative) Act 1943; and
(b) in relation to a Registered society, the Co-operative and
Provident Societies Act 1903;
"registered society" means a society registered or deemed to be
registered under the Co-operative and Provident Societies
15 Act 1903;
"transition period" means the period beginning on the day on which
this Act comes into operation and ending on the day before
sections 495 and 496 come into operation.
2. Interpretation Act 1984 not affected
20 The transitional and savings provisions of this Act do not prejudice or
affect the application of the Interpretation Act 1984 to and in relation
to the repeals effected by sections 495 and 496.
3. Transitional regulations
(1) If there is no sufficient provision in this Act for dealing with a
25 transitional matter, regulations under this Act may prescribe all
matters that are required or necessary or convenient to be prescribed
for dealing with the matter.
(2) Regulations made under subclause (1) may provide that specified
provisions of this Act --
30 (a) do not apply; or
page 366
[Draft Bill for public comment]
Co-operatives Bill 2006
Transitional and savings provisions Schedule 7
Prohibition on registration under former Act Division 2
cl. 4
(b) apply with specified modifications,
to or in relation to any matter.
(3) If regulations under subclause (1) provide that a specified state of
affairs is taken to have existed, or not to have existed, on and from a
5 day that is earlier than the day on which the regulations are published
in the Gazette but not earlier than the day this Act comes into
operation, the regulations have effect according to their terms.
(4) In subclauses (2) and (3) --
"specified" means specified or described in the regulations.
10 (5) If regulations contain a provision referred to in subclause (3), the
provision does not operate so as --
(a) to affect in a manner prejudicial to any person (other than the
State), the right of that person existing before the day of
publication of those regulations; or
15 (b) to impose liabilities on any person (other than the State or an
authority of the State) in respect of anything done or omitted
to be done before the day of publication of those regulations.
Division 2 -- Prohibition on registration under former Act
4. Prohibition on registration under Companies (Co-operative)
20 Act 1943 or Co-operative and Provident Societies Act 1903
During the transition period, a corporation cannot --
(a) register as a co-operative company under the Companies
(Co-operative) Act 1943 Part VI; or
(b) register under the Companies (Co-operative) Act 1943
25 Part XI; or
(c) register as a co-operative and provident society under the
Co-operative and Provident Societies Act 1903.
page 367
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 7 Transitional and savings provisions
Division 3 Transfer to incorporation under this Act
cl. 5
Division 3 -- Transfer to incorporation under this Act
5. Co-operative companies and registered societies to register under
this Act
(1) Unless subclause (2) applies, a co-operative company or a registered
5 society must apply for registration under Part 2 Division 5 not later
than 3 months before the end of the transition period.
(2) A co-operative company or a registered society is not required to
register as a co-operative under this Act if it has --
(a) applied for incorporation under another written law, and not
10 had that application refused; or
(b) in the case of a co-operative company, applied to the Court
for an order under the Companies (Co-operative) Act 1943
Part IV Division 12 sanctioning a scheme for reconstruction
or amalgamation that will, when implemented, result in the
15 dissolution of the company, and not had that application
refused; or
(c) in the case of a registered society, passed a special resolution
under the Co-operative and Provident Societies Act 1903
section 41 or 42 to amalgamate or transfer its engagements
20 and is proceeding to give effect to that resolution; or
(d) in the case of a registered society, voted under the
Co-operative and Provident Societies Act 1903 section 46 to
dissolve the society and is proceeding towards dissolution; or
(e) commenced to be wound up.
25 (3) The Companies (Co-operative) Act 1943 section 176A does not
prevent a co-operative company from becoming registered as a
co-operative under this Act.
(4) The Co-operative and Provident Societies Act 1903 section 42 does
not prevent a registered society from becoming registered as a
30 co-operative under this Act.
page 368
[Draft Bill for public comment]
Co-operatives Bill 2006
Transitional and savings provisions Schedule 7
General transitional provisions Division 4
cl. 6
6. Decision of Registrar to register co-operative company or
registered society
(1) If a co-operative company or a registered society fails to comply with
clause 5(1) the Registrar may decide to register --
5 (a) the company or society as a co-operative bearing the
corporate name determined by the Registrar; and
(b) rules for the co-operative, the content of which is determined
by the Registrar under subclause (2).
(2) The rules for the co-operative are the model rules amended --
10 (a) as the Registrar considers necessary having regard to the
circumstances of the co-operative; and
(b) in the case of a co-operative company, to comply with the
Companies (Co-operative) Act 1943 section 176C.
(3) If the Registrar decides under this section to register a co-operative
15 company or registered society as a co-operative the Registrar must --
(a) ensure registration under the former Act is cancelled; and
(b) issue to the co-operative a certificate of registration, and a
copy of its rules; and
(c) publish notice of the issue of the certificate in the Gazette.
20 (4) On issue of the certificate of registration --
(a) registration and incorporation take effect; and
(b) section 35 applies as if a co-operative company or registered
society registered under this clause was a corporation
registered under Part 2 Division 5.
25 Division 4 -- General transitional provisions
7. Special resolutions, applications to the Court and court orders
(1) A special resolution or court order is not to be given effect under this
clause if to do so would cause a transferred co-operative to be in
contravention of this Act.
30 (2) If immediately before the transfer day a transferred co-operative, as
previously incorporated, has passed a special resolution and the
page 369
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 7 Transitional and savings provisions
Division 4 General transitional provisions
cl. 8
resolution has not been given effect, the resolution is to be given
effect under the former Act whether or not that Act has been repealed.
(3) If immediately before the transfer day for a transferred co-operative a
person, or the co-operative as previously incorporated, has applied to
5 a court for an order in relation to the co-operative as previously
incorporated and the court has not made an order on that application,
the application is to be considered, and any resulting order given
effect, under the former Act whether or not that Act has been
repealed.
10 (4) If immediately before the transfer day for a transferred co-operative
the court has, in relation to that co-operative as previously
incorporated, made an order that has not been given effect, the order
is to be given effect under the former Act whether or not that Act has
been repealed.
15 8. Inspections or inquiry
(1) If immediately before the transfer day for a transferred co-operative
an inspection or inquiry into the affairs of the co-operative as
previously incorporated has started under the Companies
(Co-operative) Act 1943 and not been completed, the inspection or
20 inquiry is to be completed under that Act whether or not it has been
repealed.
(2) For the purposes of this clause, an inspection or inquiry is completed
when the findings of that inspection or inquiry are reported.
(3) The reported findings of an inspection or inquiry completed under
25 subclause (1) in relation to a transferred co-operative may, in relation
to that co-operative, be used for any purpose that the reported findings
of an inquiry or inspection under this Act may be used for.
9. Acquisition of shares of shareholders dissenting from scheme or
contract approved by majority
30 (1) This clause applies to an offer by a company (the "transferee") to
acquire shares in a co-operative company (the "transferor") under a
scheme or contract.
(2) If immediately before the transfer day for a transferred co-operative,
an offer to acquire shares in the co-operative as previously
page 370
[Draft Bill for public comment]
Co-operatives Bill 2006
Transitional and savings provisions Schedule 7
Pending incorporation, reconstruction or winding up Division 5
cl. 10
incorporated has been made but not completed, and subclause (3)
does not apply, the offer is to be completed under the Companies
(Co-operative) Act 1943 whether or not that Act has been repealed.
(3) Part 13 Division 3 of this Act applies to an offer made during the
5 4 month period ending on the transfer day.
(4) For the purposes of subclause (2), an offer is completed if --
(a) 6 months has expired since the making of the offer and the
transferee has not given a notice under the Companies
(Co-operative) Act 1943 section 160 to dissenting
10 shareholders; or
(b) the transferee has --
(i) acquired the shares of dissenting shareholders to
which the transferee gave notice; and
(ii) complied with any court order given on the
15 application of a dissenting shareholder under
Companies (Co-operative) Act 1943 section 160.
10. Transitional provisions about active members
The Registrar may, for a particular transferred co-operative, specify a
period longer than 3 years for the purposes of
20 sections 123(4), 173(2), 193(3) or 200(3).
Division 5 -- Pending incorporation, reconstruction or winding up
11. Pending incorporation
If immediately before the day the former Acts are repealed a
co-operative company or registered society has passed a special
25 resolution to transfer to registration or incorporation under another
written law and the application for registration or incorporation has
been neither granted nor refused --
(a) the special resolution is to be given effect under the former
Act; and
30 (b) the company or society continues to be incorporated and be
regulated by the former Act until the application for
registration or incorporation is either granted or refused.
page 371
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 7 Transitional and savings provisions
Division 5 Pending incorporation, reconstruction or winding up
cl. 12
12. Pending reconstruction
(1) Subsection 2 applies if immediately before the day the former Acts
are repealed a co-operative company or registered society is engaged
in any of the following processes --
5 (a) in the case of a co-operative company, the company has
applied to the Court for an order under the Companies
(Co-operative) Act 1943 Part IV Division 12 sanctioning a
scheme for reconstruction or amalgamation that will, when
implemented, result in the dissolution of the company, and
10 not had that application refused;
(b) in the case of a registered society, the society has passed a
special resolution under the Co-operative and Provident
Societies Act 1903 section 41 or 42 to amalgamate or transfer
its engagements and is proceeding to give effect to that
15 resolution;
(c) in the case of a registered society, the society has voted under
the Co-operative and Provident Societies Act 1903 section 46
to dissolve the society and is proceeding towards dissolution.
(2) If a co-operative company or registered society is engaged in a
20 process referred to in subsection (1) --
(a) the process is to be completed under the former Act; and
(b) the company or society continues to be incorporated and be
regulated by the former Act until either the process is
completed or an event occurs that prevents the process from
25 being completed.
13. Pending wind up
(1) If immediately before the day the former Acts are repealed a
co-operative company or registered society has started to be
wound-up but the winding up has not been completed --
30 (a) the process of winding up is to be completed under the former
Act; and
(b) the company or society continues to be incorporated under
and be regulated by the former Act until it is dissolved.
page 372
[Draft Bill for public comment]
Co-operatives Bill 2006
Transitional and savings provisions Schedule 7
Pending incorporation, reconstruction or winding up Division 5
cl. 13
(2) For the purposes of this clause --
(a) the winding up of a co-operative company or registered
society starts when a court has ordered the winding up or the
company or society has passed a resolution for winding up;
5 and
(b) the winding up of a co-operative company or registered
society has been completed when the company or society is
dissolved.
page 373
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 8 Consequential amendments and repeal
Division 1 Consequential amendments commencing on registration of
Co-operative Bulk Handling Limited
cl. 1
Schedule 8 -- Consequential amendments and repeal
[s. 498]
Division 1 -- Consequential amendments commencing on
registration of Co-operative Bulk Handling Limited
5 1. Grain Marketing Act 2002 amended
(1) The amendments in this clause are to the Grain Marketing Act 2002*.
[*Act No. 30 of 2002.
For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 197.]
10 (2) Section 48(2)(b) is amended by deleting subparagraph (ii) and
inserting instead --
"
(ii) Co-operative Bulk Handling Limited, a
co-operative registered under the
15 Co-operatives Act 2006,
".
(3) Schedule 1 clause 5(3) is amended in the definition of "CBH" by
deleting all of the definition after "Limited," and inserting instead --
" a co-operative registered under the Co-operatives Act 2006. ".
20 2. Local Government Act 1995 amended
(1) The amendments in this clause are to the Local Government
Act 1995*.
[*Reprint 3 as at 5 August 2005.
For subsequent amendments see Western Australian Legislation
25 Information Tables for 2005, Table 1, p. 267 and Acts Nos. 38 of 2005
and 28 of 2006.]
(2) Section 6.26(2)(i) is amended by deleting "company" in each place
that it occurs and inserting instead --
" co-operative ".
page 374
[Draft Bill for public comment]
Co-operatives Bill 2006
Consequential amendments and repeal Schedule 8
Consequential amendments commencing on commencement Division 2
cl. 3
(3) Section 6.26(3) is amended by deleting "company" and inserting
instead --
" co-operative ".
Division 2 -- Consequential amendments commencing on
5 commencement of this Act
3. Civil Judgments Enforcement Act 2004 amended
(1) The amendment in this clause is to the Civil Judgments Enforcement
Act 2004*.
[*Act No. 28 of 2004.
10 For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 64 and Act No. 28 of
2005.]
(2) Section 45 is amended in paragraph (c) of the definition of "financial
institution" by inserting after "1903" --
15 "
, or a co-operative registered under the
Co-operatives Act 2006 that is permitted
under that Act to accept money on deposit
".
20 4. Criminal Property Confiscation Act 2000 amended
(1) The amendment in this clause is to the Criminal Property
Confiscation Act 2000*.
[*Reprint 1 as at 9 December 2005.]
(2) The Glossary is amended in paragraph (e) of the definition of
25 "financial institution" by inserting after "1903" --
"
, or a co-operative registered under the
Co-operatives Act 2006 that is permitted under
that Act to accept money on deposit.
30 ".
page 375
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 8 Consequential amendments and repeal
Division 2 Consequential amendments commencing on commencement
of this Act
cl. 5
5. Equal Opportunity Act 1984 amended
(1) The amendments in this clause are to the Equal Opportunity
Act 1984*.
[*Reprint 4 as at 1 April 2005.
5 For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 149 and Acts Nos. 18 of 2006
and 28 and 29 of 2006.]
(2) Section 35N(1)(a) is amended by inserting after "1903" --
"
10 or of a co-operative registered under the
Co-operatives Act 2006
".
(3) Section 66ZS(1)(a)(i) is amended by inserting after "1903" --
"
15 or of a co-operative registered under the
Co-operatives Act 2006
".
(4) Section 69(1)(b)(i) is amended by inserting after "1903" --
"
20 or of a co-operative registered under the
Co-operatives Act 2006
".
6. Taxi Act 1994 amended
(1) The amendment in this clause is to the Taxi Act 1994*.
25 [*Reprint 2 as at 4 August 2006.]
(2) Section 3(3)(b) is amended after "1943" by inserting --
"
or a co-operative incorporated under the
Co-operatives Act 2006.
30 ".
page 376
[Draft Bill for public comment]
Co-operatives Bill 2006
Consequential amendments and repeal Schedule 8
Consequential amendments commencing on repeal of former Division 3
cl. 7
7. Western Australian Treasury Corporation Act 1986 amended
(1) The amendment in this clause is to the Western Australian Treasury
Corporation Act 1986*.
[*Reprint 2 as at 2 September 2005.
5 For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 502 and Act No. 28 of 2006.]
(2) After Schedule 1 item 6 the following item is inserted --
"
6a. Co-operatives registered under the Co-operatives
Act 2006.
".
10 Division 3 -- Consequential amendments commencing on repeal
of former Acts
8. Civil Judgments Enforcement Act 2004 amended
(1) The amendment in this clause is to the Civil Judgments Enforcement
Act 2004*.
15 [*Act No. 28 of 2004.
For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 64 and Act No. 28 of
2005.]
(2) Section 45 is amended in paragraph (c) of the definition of "financial
20 institution" by deleting "a society registered or deemed to be
registered under the Co-operative and Provident Societies Act 1903,
or".
9. Criminal Property Confiscation Act 2000 amended
(1) The amendment in this clause is to the Criminal Property
25 Confiscation Act 2000*.
[*Reprint 1 as at 9 December 2005.]
(2) The Glossary is amended in paragraph (e) of the definition of
"financial institution" by deleting "a registered society within the
meaning of the Co-operative and Provident Societies Act 1903, or".
page 377
[Draft Bill for public comment]
Co-operatives Bill 2006
Schedule 8 Consequential amendments and repeal
Division 3 Consequential amendments commencing on repeal of former
Acts
cl. 10
10. Equal Opportunity Act 1984 amended
(1) The amendments in this clause are to the Equal Opportunity
Act 1984*.
[*Reprint 4 as at 1 April 2005.
5 For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 149 and Acts Nos. 18 of 2006
and 28 and 29 of 2006.]
(2) Section 35N(1)(a) is amended by deleting "of a society registered
under the Co-operative and Provident Societies Act 1903 or".
10 (3) Section 66ZS(1)(a)(i) is amended by deleting "of a society registered
under the Co-operative and Provident Societies Act 1903 or".
(4) Section 69(1)(b)(i) is amended by deleting "of a society registered
under the Co-operative and Provident Societies Act 1903 or".
11. Housing Loan Guarantee Act 1957 amended
15 (1) The amendments in this clause are to the Housing Loan Guarantee
Act 1957*.
[*Reprint 4 as at 16 June 2006.
For subsequent amendments see Act No. 28 of 2006.]
(2) Section 5(1)(a) is amended by deleting "or Co-operative and
20 Provident Societies Act 1903".
(3) Section 10 is amended by deleting "or Co-operative and Provident
Societies Act 1903".
12. Local Government Act 1995 amended
(1) The amendment in this clause is to the Local Government Act 1995*.
25 [*Reprint 3 as at 5 August 2005.
For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 267 and Acts Nos. 38 of 2005
and 28 of 2006.]
(2) Section 5.74 is amended in the definition of "corporation" as follows:
30 (a) by deleting paragraph (d) and the "or" after it;
page 378
[Draft Bill for public comment]
Co-operatives Bill 2006
Consequential amendments and repeal Schedule 8
Consequential amendments commencing on repeal of former Division 3
cl. 13
(b) by inserting after paragraphs (a) and (b) --
" or ".
13. Taxi Act 1994 amended
(1) The amendment in this clause is to the Taxi Act 1994*.
5 [*Reprint 2 as at 4 August 2006.]
(2) Section 3(3)(b) is amended by deleting "a company within the
meaning of the Companies (Co-operative) Act 1943, or".
14. Western Australian Treasury Corporation Act 1986 amended
(1) The amendments in this clause are to the Western Australian Treasury
10 Corporation Act 1986*.
[*Reprint 2 as at 2 September 2005.
For subsequent amendments see Western Australian Legislation
Information Tables for 2005, Table 1, p. 502 and Act No. 28 of 2006.]
(2) Schedule 1 items 5 and 6 are deleted.
15
page 379
[Draft Bill for public comment]
Co-operatives Bill 2006
Defined Terms
Defined Terms
[This is a list of terms defined and the provisions where they are defined.
The list is not part of the law.]
Defined Term Provision(s)
active member............................................................................................. 4(1)
active membership provision ....................................................................... 4(1)
active membership resolution ....................................................................... 111
administrator ....................................................................................Sch. 4, cl. 1
affairs........................................................................................................... 431
agreement.................................................................................................... 4(1)
alter............................................................................................................. 4(1)
applied provisions ......................................................................................11(1)
appointed person ......................................................................................157(1)
appropriate person ....................................................................................344(1)
appropriate Registrar .................................................................................... 394
assets ...........................................................................................340(1), 401(1)
associate.......................................................................................... 4(1), 222(1)
authorisation notice ...................................................................................... 370
authorised attorney .....................................................................................50(1)
board........................................................................................................... 4(1)
CCU ........................................................................................................262(1)
chargee...............................................................................Sch. 3, cl. 9, 3, cl. 32
chief executive officer ..............................................................................432(1)
company .......................................................................................................... 8
compulsory acquisition notice...................................................................360(1)
control.......................................................................................................... 229
control day .......................................................................................Sch. 4, cl. 1
controller...................................................................Sch. 4, cl. 1,Sch. 4, cl. 5(3)
controller's charge ....................................................................... Sch. 4, cl. 9(1)
co-operative ..................................................... 357(1), Sch. 3, cl. 1, Sch. 4, cl. 1
co-operative ................................................................................................ 4(1)
co-operative capital unit .............................................................................. 4(1)
co-operative company.......................................................................Sch. 7, cl. 1
co-operative group....................................................................................... 4(1)
co-operative venture ..................................................................................... 403
co-operatives law ......................................................................................... 370
corporation.................................................................................................. 4(1)
Corporations Act ......................................................................................... 4(1)
Corporations legislation.................................................................................... 8
costs............................................................................................................. 431
critical day ..................................................................................... Sch. 3, cl. 26
daily newspaper................................................................................Sch. 4, cl. 1
debenture .................................................................................................... 4(1)
page 380
[Draft Bill for public comment]
Co-operatives Bill 2006
Defined Terms
declaratory provision ..................................................................................11(1)
deed of arrangement .................................................................................... 4(1)
defective notice ..........................................................................Sch. 3, cl. 21(1)
deferral period..........................................................................................126(1)
deposit taking co-operative .......................................................................... 4(1)
dissenting shareholder .................................................................................. 358
divulge.....................................................................................................481(1)
document of title ..............................................................................Sch. 3, cl. 1
earlier charge..............................................................................Sch. 3, cl. 30(1)
entity............................................................................................................ 229
excluded Corporations legislation provision...................................................... 8
excluded shares ............................................................................................ 358
expenses of the postal ballot .....................................................................194(1)
financial records.......................................................................................... 4(1)
financial report ............................................................................................ 4(1)
financial services business ........................................................................... 4(1)
financial services licensee............................................................................ 4(1)
financial statements ..................................................................................... 4(1)
foreign co-operative .................................................................................... 4(1)
former Act........................................................................................Sch. 7, cl. 1
further offence period ...............................................................................483(3)
incapable person.......................................................................................157(1)
independent director .................................................................................206(1)
inspector ..................................................................................................... 4(1)
instrument ....................................................................................340(1), 401(1)
interest ........................................................................................................... 75
investigator .................................................................................................. 431
involved person ............................................................................................ 431
later charge.................................................................................Sch. 3, cl. 30(1)
liabilities ..........................................................................340(1), 357(1), 401(1)
limited dividend .......................................................................................276(1)
main office ...............................................................................................410(2)
malice ......................................................................................................... 5(2)
management contract................................................................................224(1)
managing controller..........................................................................Sch. 4, cl. 1
marketable security...........................................................................Sch. 3, cl. 1
material interest........................................................................................222(2)
member......................................................................................................80(4)
member director ...........................................................................204(1), 206(1)
model rules ................................................................................................. 4(1)
mortgage..................................................................................................... 4(1)
national newspaper...........................................................................Sch. 4, cl. 1
new body ................................................................. 312, 337(2), 338(2), 339(2)
new co-operative ......................................................................................136(1)
page 381
[Draft Bill for public comment]
Co-operatives Bill 2006
Defined Terms
non-participating co-operative ...................................................................... 370
non-trading co-operative.............................................................................. 4(1)
obstruct ....................................................................................................428(1)
officer ................................ 4(1), 212, Sch. 3, cl. 32, Sch. 4, cl. 1, Sch. 4, cl. 3(2)
oppressed member.......................................................................................... 86
original body....................................................................337(2), 338(2), 339(2)
original co-operative.....................................................................136(1), 401(1)
participating co-operative ............................................................................. 370
participating registrar.................................................................................... 370
participating State......................................................................................... 370
place ............................................................................................................ 403
present liability.................................................................................Sch. 3, cl. 1
primary activity........................................................................................... 4(1)
primary conviction ...................................................................................483(2)
principal executive officer ........................................................................... 4(1)
prior charge................................................................................. Sch. 4, cl. 9(1)
prior registered charge................................................................Sch. 3, cl. 45(1)
priority time ...............................................................................Sch. 3, cl. 45(1)
property ........................................................... 357(1), Sch. 3, cl. 1, Sch. 4, cl. 1
proposed company....................................................................................298(1)
prospective liability ..........................................................................Sch. 3, cl. 1
receiver ...................................................................... Sch. 3, cl. 32, Sch. 4, cl. 1
records ........................................................................................................ 4(1)
Register of Co-operative Charges .....................................................Sch. 3, cl. 1
registered charge ........................................................................Sch. 3, cl. 45(1)
Registered society ............................................................................Sch. 7, cl. 1
registrable charge .............................................................................Sch. 3, cl. 1
Registrar ..................................................................................................... 4(1)
related corporation....................................................................................... 4(1)
relevant date...............................................................................Sch. 4, cl. 24(1)
relevant day................................................ 337(2), 338(2), 339(2), Sch. 3, cl. 26
relevant documents....................................................................................... 403
relevant interest ........................................................................................... 4(1)
relevant person ............................................................................... Sch. 3, cl. 32
relevant shares..........................................................................................155(1)
repayable amount ...........................................................................74(1), 130(1)
repealed ...................................................................................................481(1)
reporting officer .........................................................................Sch. 4, cl. 20(1)
required period .........................................................................................123(1)
rules............................................................................................................ 4(1)
seal ............................................................................................................. 4(1)
secondary office .......................................................................................410(3)
share ........................................................................................................... 4(1)
show cause notice.....................................................................................382(1)
page 382
[Draft Bill for public comment]
Co-operatives Bill 2006
Defined Terms
specified...................................................................................... Sch. 7, cl. 3(4)
State............................................................................................................. 370
State co-operative......................................................................................... 394
State Registrar.............................................................................................. 394
subordinated ............................................................................................254(1)
subsequent registered charge.......................................................Sch. 3, cl. 45(1)
subsidiary.................................................................................................... 4(1)
substantial change ....................................................................................281(5)
substantial share interest ...........................................................................281(4)
successor co-operative..............................................................................401(1)
surplus ........................................................................................................ 4(1)
surplus property........................................................................................324(1)
third party property...................................................................... Sch. 4, cl. 6(1)
trading co-operative..................................................................................... 4(1)
transfer................................................................................................... 75, 312
transfer day ................................................................................................. 4(1)
transferee ............................................................ 357(2), 359(1), Sch. 7, cl. 9(1)
transferor............................................................. 357(2), 359(1), Sch. 7, cl. 9(1)
transferred co-operative ............................................................................... 4(1)
transition day............................................................................................401(2)
transition period ...............................................................................Sch. 7, cl. 1
undertaking ..............................................................................................278(1)
unregistered charge.....................................................................Sch. 3, cl. 45(1)
warrant form ............................................................................................418(5)
page 383
[Draft Bill for public comment]
WESTERN AUSTRALIA
Co-operatives Bill 2006
DRAFT BILL FOR PUBLIC COMMENT
The Government proposes to provide a legislative
framework for the formation, registration and
management of co-operatives and for related
purposes.
This draft Bill has been prepared for public
comment but it does not necessarily represent the
[Index] [Search] [Download] [Related Items] [Help]