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New Zealand law explained for everyone

Building Societies Act 1965

Miscellaneous provisions

123: Inspections and special meetings

You could also call this:

“Checking a building society's activities and holding special meetings”

The Financial Markets Authority (FMA) can look into a building society’s affairs or call a special meeting if enough members ask for it or if the FMA thinks it’s necessary. If you’re a member of a building society, here’s what you need to know:

You can ask for an inspection or a special meeting if you have enough people supporting you. For big societies with more than 1,000 members, you need 100 people. For smaller societies, you need one-tenth of all the members.

If you ask for an inspection or meeting, you’ll need to show the FMA why it’s important. You’ll also need to tell the society about your request and pay for the costs upfront.

The FMA can choose who pays for the inspection or meeting. It might be you, the society, or other people involved with the society.

If the FMA decides to inspect or call a meeting without anyone asking, they have to tell the society first and listen to what the society has to say about it.

An inspector can look at all the society’s books and documents. They can also ask questions to anyone involved with the society.

For special meetings, the FMA can decide where and when it happens, and what people will talk about. They can also choose who will lead the meeting.

If a society doesn’t let an inspector do their job, they’re breaking the law.

The FMA has other powers too, based on different laws.

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Part 9 Miscellaneous provisions

123Inspections and special meetings

  1. On the application of the requisite number of members of a society, or, where no such application has been made but the FMA is of opinion that an investigation should be held into a society's affairs or that its affairs call for consideration by a meeting of the members, the FMA may—

  2. appoint an inspector to inquire into and report on the society's affairs; or
    1. call a special meeting of the society; or
      1. either on the same or on different occasions, both appoint such an inspector and call such a meeting.

        1. For the purposes of subsection (1), the requisite number of members is—

        2. 100 in the case of a society that has more than 1 000 members; and
          1. one-tenth of the whole number of members in the case of any other society.

            1. Where such an application is made by the requisite number of members, the following provisions shall apply:

            2. the application shall be supported by such evidence as the FMA may direct for the purpose of showing that the applicants have good reason for requiring an inspection or a special meeting, as the case may be, and that they are not actuated by malicious motives in making the application:
              1. such notice of the application shall be given to the society by the applicants or 1 or more of them as the FMA may direct:
                1. the FMA shall require the applicants to give security for the costs of the proposed inspection or meeting before the inspector is appointed or the meeting is called:
                  1. all expenses of and incidental to the inspection or meeting shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers or former members or officers of the society, in such proportions as the FMA may direct.

                    1. Before exercising its powers under subsection (1) in a case where no application is made, the FMA must—

                    2. give to the society not less than 14 days' notice in writing of the action the FMA proposes to take, specifying briefly the grounds on which the FMA proposes to take it; and
                      1. consider any representations with respect to the proposed action that may be made to the FMA by the society within the period of the notice or any further period that the FMA may allow, and, if the society so requests, give it an opportunity of being heard by the FMA within that period or further period.

                        1. An inspector appointed under this section may require the production of all or any of the books, accounts, securities, and documents of the society, and may examine on oath any of its officers, members, agents, and servants, and may administer an oath accordingly.

                        2. Despite anything in the rules of a society, if a special meeting is called under this section,—

                        3. the FMA may direct at what time and place the meeting is to be held, and what matters are to be discussed and determined at the meeting, and may give any other directions as it thinks fit with respect to the calling, holding, and conduct of the meeting:
                          1. the FMA may appoint a person to be chairperson at the meeting; and if the FMA does not do so the meeting may appoint its own chairperson:
                            1. the meeting has all the powers of a meeting called according to the society's rules.

                              1. Nothing in this section limits any power that the FMA has under the Financial Markets Authority Act 2011 or any other enactment.

                              2. If a society fails to allow an inspector appointed under this section to do anything that he or she is authorised to do thereunder, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act.

                              Compare
                              • Building Societies Act 1962 s 110 (UK)
                              Notes
                              • Section 123(1): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
                              • Section 123(3)(a): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
                              • Section 123(3)(b): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
                              • Section 123(3)(c): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
                              • Section 123(3)(d): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
                              • Section 123(4): replaced, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
                              • Section 123(6): replaced, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
                              • Section 123(6A): inserted, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
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