Co-operative Housing and Starr-Bowkett Societies Act 1998 (NSW)

Co-operative Housing and Starr-Bowkett Societies Act 1998 No 11 An Act to make provision for the establishment, powers, membership, management, supervision and regulation of co-operative housing societies, Starr-Bowkett societies and associations; and for other purposes. Part 1 Preliminary Division 1 Introductory 1 Name of Act This Act is the Co-operative Housing and Starr-Bowkett Societies Act 1998. 2 Commencement This Act commences on a day or days to be appointed by proclamation. 2A Prohibition on formation or registration of new societies and admission of new members Despite any other provision of this Act— (a) a society cannot be formed or registered on or after the commencement of this section, and (b) a Starr-Bowkett society cannot admit any person to membership on or after that commencement. Division 2 Interpretation 3 Definitions (1) In this Act— accounting records include— (a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry, and (b) documents and records that record such entries, and (c) such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up. accounting standard has the meaning given by section 9 of the Corporations Act. accounts means statements of financial performance and statements of financial position, and includes statements, reports and notes (other than auditors' reports or directors' reports) attached to or intended to be read with any of those statements. advertisement includes matter that is not in writing but because of the form or context in which it appears conveys a message. affairs, in relation to a body corporate, has the meaning given by section 53 of the Corporations Act. approved form means a form approved by the Registrar. association means a body registered as an association under this Act. bank means— (a) a bank as defined by section 5 of the Banking Act 1959 of the Commonwealth, or (b) a bank constituted under a law of a State. board, in relation to a co-operative housing body, means the board of directors of the body. body includes an entity. body corporate means any body corporate whether formed or incorporated within or outside this State, but does not include— (a) a body corporate that is incorporated within Australia or an external Territory and is a public authority or an instrumentality or agency of the Crown, or (b) a corporation sole. borrow means to obtain financial accommodation. certificate of confirmation has the meaning given by section 150 (Definitions). company means a company incorporated, or taken to be incorporated, under the Corporations Act. consolidated accounts, in relation to a co-operative housing body, means all of the following— (a) a consolidated statement of financial performance that section 129 (Group accounts) requires to be made out in relation to a financial year of the body, (b) a consolidated statement of financial position that section 129 (Group accounts) requires to be made out in relation to the financial year, (c) statements, reports and notes (other than a directors' report) attached to, or intended to be read with, that consolidated statement of financial performance or consolidated statement of financial position. co-operative housing body means— (a) a society, or (b) an association. co-operative housing society means a body registered under this Act as a co-operative housing society. Corporations Act means the Corporations Act 2001 of the Commonwealth. Court means the Supreme Court, or a Supreme Court Judge, of this State. director has the meaning given by section 5. economic entity has the meaning given by section 5A. entity has the meaning given by section 5A. executive officer, in relation to a co-operative housing body or entity, means a person (by whatever name called) who is concerned, or takes part, in the management of the body or entity. expert, in relation to a matter, means an independent person whose profession or reputation gives authority to a statement made by the person in relation to the matter. financial institution means a building society or credit union under the financial institutions legislation. financial institutions legislation has the same meaning as in the AFIC (NSW) Code. friendly society means a friendly society under the Friendly Societies Act 1989. group means an economic entity of which a co-operative housing body is a part. group accounts, in relation to a holding society, means a set of consolidated accounts for the group in relation to which the society is the holding society. holding body corporate means a body corporate that is the holding body corporate of another body corporate. holding society has the meaning given by section 7. inspector means a person authorised under section 30 (Inspectors). national business names register has the meaning given by the Corporations Act. officer has the meaning given by section 9 (Interpretation—meaning of "officer"). profit or loss means— (a) in relation to an entity—the profit or loss resulting from operations of the entity, and (b) in relation to 2 or more entities or an economic entity constituted by 2 or more entities—the profit or loss resulting from operations of those entities. registered company auditor means a person registered as an auditor, or taken to be registered as an auditor, under Part 9.2 of the Corporations Act. Registrar—see section 47A. related body corporate has the meaning given by section 10. securities has the meaning given by section 92 of the Corporations Act. services corporation means a body corporate declared to be a services corporation under section 13. share means a share in the share capital of a body corporate. society means a co-operative housing society or a Starr-Bowkett society. standard means a standard that is continued in force under clause 21 of Schedule 5. Starr-Bowkett society means a body registered under this Act as a Starr-Bowkett society. State means a State or Territory. subsidiary has the meaning given by section 11. transferee society has the meaning given by section 150 (Definitions). transferor society has the meaning given by section 150 (Definitions). Note— The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. (2) Schedule 1 (General interpretative provisions) has effect. (3) Notes in the text of this Act do not form part of this Act. (4) A reference in this Act to a provision of the Corporations Act that is applied by or under this Act (or a part of this Act) is a reference to that provision to the extent that it is declared to apply to a matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 as a law of this State. 4 Interpretation—meaning of "associate" (1) This section applies for the purposes of this Act other than section 103 (Financial accommodation to directors and associates). (2) A person is an associate of another, or is associated with another, if— (a) they are partners, or (b) one is a spouse, de facto partner, parent or child of the other, or (c) they are both trustees or beneficiaries of the same trust, or one is a trustee and the other is a beneficiary of the same trust, or (d) one is a body corporate or other entity (whether inside or outside Australia) and the other is a director or member of the governing body of the body or entity, or (e) one is a body corporate or other entity (whether inside or outside Australia) and the other is a person who has a legal or equitable interest in 5% or more of the share capital of the body or entity, or (f) they are related bodies corporate, or (g) a relationship of a prescribed kind exists between them, or (h) a chain of relationships can be traced between them under any one or more of the above paragraphs. Note— "De facto partner" is defined in section 21C of the Interpretation Act 1987. 5 Interpretation—meaning of "director" (1) Subject to subsection (2), for the purposes of this Act, a reference to director, in relation to a body corporate, includes a reference to— (a) a person occupying or acting in the position of director of the body, by whatever name called and whether or not validly appointed to occupy, or duly authorised to act in, the position, and (b) a person in accordance with whose directions or instructions the directors of the body corporate are accustomed to act, and (c) in the case of a body corporate incorporated outside Australia— (i) a member of the body's board, and (ii) a person occupying or acting in the position of member of the body's board, by whatever name called and whether or not validly appointed to occupy, or duly authorised to act in, the position, and (iii) a person in accordance with whose directions or instructions the members of the body's board are accustomed to act. (2) A person is not to be regarded as a person in accordance with whose directions or instructions— (a) a body corporate's directors, or (b) the members of the board of a body corporate incorporated outside Australia, are accustomed to act merely because the directors or members act on advice given by the person in the proper performance of the functions attaching to— (c) the person's professional capacity, or (d) the person's business relationship with the directors, the members of the board or the body. 5A Interpretation—meaning of "economic entity" and "entity" If an accounting standard defines the term economic entity or entity the definition in the accounting standard has effect for the purposes of this Act. Otherwise, the term has the meaning prescribed by the regulations. Note— Accounting Standard AASB 1024:Consolidated Accounts defines economic entity to mean "a group of entities comprising the parent entity and each of its subsidiaries" and defines entity to mean "any legal, administrative or fiduciary arrangements, organisational structure or other party (including a person) having the capacity to deploy scarce resources in order to achieve objectives". 6 Interpretation—reference to a holding body corporate A reference in this Act to the holding body corporate of another body corporate is a reference to a body corporate of which the other body corporate is a subsidiary. 7 Interpretation—meaning of "holding society" A society is a holding society if the society— (a) controlled another entity during all or part of a financial year of the society, or (b) controlled another entity at the end of a financial year of the society. 8 Interpretation—meaning of "making a decision" A reference in this Act to the making of a decision includes a reference to— (a) making, suspending, revoking or refusing to make an order or determination, or (b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission, or (c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument, or (d) imposing a condition or restriction, or (e) making a declaration, demand or requirement, or (f) retaining, or refusing to deliver up, an article, or (g) doing or refusing to do anything else. 9 Interpretation—meaning of "officer" (1) Subject to subsection (2), for the purposes of this Act, officer, in relation to a body corporate or entity, includes— (a) a director, secretary, executive officer or employee of the body or entity, and (b) a receiver and manager, appointed under a power contained in an instrument, of property of the body or entity, and (c) an official manager, or deputy official manager, of the body or entity, and (d) a liquidator of the body or entity appointed in a voluntary winding-up of the body or entity, and (e) a trustee or other person administering a compromise or arrangement made between the body or entity and other persons. (2) None of the following is an officer of the body corporate or entity— (a) a receiver who is not also a manager, (b) a receiver and manager appointed by a court, (c) a liquidator appointed by a court. 10 Interpretation—meaning of "related body corporate" If a body corporate is— (a) the holding body corporate of another body corporate, or (b) a subsidiary of another body corporate, or (c) a subsidiary of the holding body corporate of another body corporate, the first body corporate and the other body corporate are related to each other. 11 Interpretation—meaning of "subsidiary" (1) Subject to subsection (5), a body corporate is a subsidiary of a co-operative housing body if— (a) the co-operative housing body— (i) controls the composition of the body corporate's board of directors, or (ii) is in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the body corporate, or (iii) holds more than 50% of the issued share capital of the body corporate (other than any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), or (b) the body corporate is a subsidiary of a body corporate that is a subsidiary of the co-operative housing body (including a body corporate that is a subsidiary of the co-operative housing body by another application of this paragraph). (2) The composition of a body corporate's board of directors is controlled by a co-operative housing body if the co-operative housing body can appoint or remove all or a majority of the directors by the exercise of a power exercisable with or without the consent or concurrence of another person. (3) For the purposes of subsection (2), a co-operative housing body is taken to have power to make an appointment of directors if— (a) a person cannot be appointed as director without the exercise of such a power by the co-operative housing body in the person's favour, or (b) a person's appointment as a director follows necessarily from the person being a director or other officer of the co-operative housing body. (4) Subsection (2) does not limit by implication the circumstances in which the composition of a body corporate's board of directors is taken to be controlled by a co-operative housing body. (5) In determining whether a body corporate is a subsidiary of a co-operative housing body— (a) any shares held or power exercisable by the co-operative housing body in a fiduciary capacity must be treated as not held or exercisable by it, and (b) subject to paragraphs (c) and (d), any shares held or power exercisable— (i) by any person as a nominee for the co-operative housing body, or (ii) by, or by a nominee for, a subsidiary of the co-operative housing body (other than a subsidiary that is concerned only in a fiduciary capacity), and must be treated as held or exercisable by the co-operative housing body, and (c) any shares held or power exercisable by a person under a debenture, or a trust deed for securing the issue of debentures, must be disregarded, and (d) any shares held or power exercisable by, or by a nominee for, the co-operative housing body or its subsidiary merely by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing financial accommodation must be disregarded. (6) If it is relevant to determine for the purposes of this Act whether a body corporate is a subsidiary of another body corporate that is not a co-operative housing body and subsection (1) does not apply, the first body corporate is a subsidiary of the other body corporate if it would be such a subsidiary under the Corporations Act. 12 Interpretation—when one entity controls another (1) For the purposes of Divisions 4 (Accounts) and 5 (Audit) of Part 4 (Management), an entity controls another entity if the entity is a subsidiary of the first entity. (2) Despite subsection (1), a regulation may make provision for determining, for the purposes of those Divisions as they apply in relation to a society in relation to prescribed financial years, whether or not an entity controls another entity. (3) (Repealed) 13 Services corporations The Registrar may, by Gazette notice, declare a body corporate that provides or proposes to provide financial or other services to societies to enable them to further their objects to be a services corporation. Division 3 Operation of Act 14 Act binds the Crown (1) This Act binds the Crown in right of this State and, so far as the legislative power of the Legislature of this State permits, the Crown in all its other capacities. (2) Nothing in this section permits the Crown in any of its capacities to be prosecuted for an offence. Division 4 Application of Corporations Act to co-operative housing bodies 15 Definition In this Division— excluded Corporations legislation provision means any provision of the Corporations legislation that does not apply to a co-operative housing body or its securities as a law of the Commonwealth. 16 Excluded matter (1) The following matters are declared to be excluded matters for the purposes of section 5F of the Corporations Act in relation to the whole of the Corporations legislation other than to the extent specified by this section— (a) co-operative housing bodies, (b) securities of such bodies. Note— This section ensures that neither the Corporations Act nor Part 3 of the Australian Securities and Investments Commission Act 2001 of the Commonwealth will apply to co-operative housing bodies, other than to the extent specified in this section. Section 5F of the Corporations Act provides that if a State law declares a matter to be an excluded matter in relation to the whole of the Corporations legislation other than to a specified extent, then that legislation will not apply, except to the specified extent, in relation to that matter in the State concerned. However, other provisions of this Act apply certain provisions of the Corporations legislation to co-operatives as laws of this State. (2) Subsection (1) does not exclude the application of the following provisions of the Corporations legislation to co-operative housing bodies and the securities of such bodies to the extent they would otherwise be applicable to such bodies and securities— (a) provisions applying to, or about, the following— (i) bodies, (ii) bodies corporate, (iii) disclosing entities, (iv) eligible bodies, (v) persons, (vi) securities, including securities of a particular type, (vii) securities, including securities of a particular type (for example, shares or debentures) of a body corporate, (b) provisions applying to or about bodies or bodies corporate included in the official list of any prescribed financial market (including provisions of Chapter 6 applying to or about a company as defined for that Chapter), (c) Chapter 2L (Debentures), (d) Chapter 6D (Fundraising), (e) Part 7.10 (Market misconduct and other prohibited conduct relating to financial products and financial services), (f) provisions— (i) about the interpretation of a provision mentioned in paragraphs (a)–(e) (non-excluded Corporations Act provision), including a provision defining a word used in the non-excluded Corporations Act provision, or (ii) vesting power in the Australian Securities and Investments Commission, but only to the extent that they vest power for the purposes of a non-excluded Corporations Act provision, or (iii) empowering a court to make an order (including an order curing a procedural irregularity), but only to the extent that they empower the court to make an order for the purposes of a non-excluded Corporations Act provision, or (iv) otherwise about the administration of a non-excluded Corporations Act provision. (3) The expressions used in subsection (2) (a), (b) and (f) have the meanings given by the Corporations Act. 17 Applying the Corporations legislation to co-operative housing bodies (1) The regulations may declare any matter relating to a co-operative housing body to be an applied Corporations legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 in relation to any excluded Corporations legislation provision or provisions (with such modifications as may be specified in the declaration). Note— Part 3 of the Corporations (Ancillary Provisions) Act 2001 provides for the application of provisions of the Corporations Act 2001 and Part 3 of the Australian Securities and Investments Commission Act 2001 of the Commonwealth as laws of the State in respect of any matter declared by a law of the State (whether with or without modification) to be an applied Corporations legislation matter for the purposes of that Part in relation to those Commonwealth provisions. Section 14 (2) of the Corporations (Ancillary Provisions) Act 2001 ensures that a declaration made for the purposes of Part 3 of that Act only operates to apply a provision of the Corporations legislation to a matter as a law of the State if that provision does not already apply to the matter as a law of the Commonwealth. If a provision referred to in a declaration already applies as a law of the Commonwealth, nothing in the declaration will affect its continued operation as a law of the Commonwealth. (2) Without limiting subsection (1), any such regulations may— (a) specify modifications to the definitions and other 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 subject of the declaration, but only if— (i) ASIC is to exercise that function pursuant to an agreement of the kind referred to in section 11 (8) or (9A) (b) of the Australian Securities and Investments Commission Act 2001 of the Commonwealth, and (ii) ASIC is authorised to exercise that function under section 11 of the Australian Securities and Investments Commission Act 2001 of the Commonwealth, and (c) specify that a reference to ASIC in any excluded Corporations legislation provision that is the subject of the declaration is to be read as a reference to another person, and (d) identify any excluded Corporations legislation provision to which the declaration relates by reference to that provision as in force at a particular time, and (e) specify a court of this State (other than the Supreme Court) to exercise any function conferred on a court or the Court by any excluded Corporations legislation provision to which the declaration relates. (3) However, a regulation may not declare a matter to be an applied Corporations legislation matter in relation to an excluded Corporations legislation provision to the extent that the application of the provision would be inconsistent with a provision of this Act. (4) Words and expressions used in this section and also in Part 3 of the Corporations (Ancillary Provisions) Act 2001 have the same meanings as they have in that Part. 18 (Repealed) Part 2 Functions and powers of Registrar Division 1 General 19 Functions of Registrar The functions of the Registrar are— (a) to register, supervise and regulate co-operative housing bodies, and (b) to supervise and enforce compliance by co-operative housing bodies with this Act and with standards, and (c) to ensure that an effective and efficient system of prudential supervision is applied to societies, and (d) to facilitate or direct the transfer of engagements of, or the conversion or merger of, co-operative housing bodies, and (e) (Repealed) (f) to carry out such other functions as are conferred on the Registrar by or under this or any other Act. 20 General powers (1) The Registrar has power to do all things necessary or convenient to be done for, or in connection with, the performance of the Registrar's functions. (2) Without limiting subsection (1), the Registrar has such powers as are conferred on the Registrar by or under this or any other Act. 21 Application of variation under standards (1) If a standard provides that the operation of the standard in relation to a particular co-operative housing body may be varied by the Registrar by temporarily changing a requirement of the standard, the Registrar may temporarily change the requirement as allowed under the standard. (2) Subsection (1) does not limit section 20 (General powers). 22 (Repealed) 23 Inspection of documents (1) A person may— (a) inspect documents prescribed by the regulations or documents of a class prescribed by the regulations kept by the Registrar relating to co-operative housing bodies on payment of the fee (if any) prescribed by the regulations, and (b) obtain, on payment of the fee prescribed by the regulations, a certified copy of a document that a person may inspect under paragraph (a). (2) If a reproduction or transparency of a document, or an extract of information contained in a document, is produced for inspection, a person is not entitled under subsection (1) to require the production of the original of that document. 24 Power of Registrar to reject documents, etc (1) If the Registrar is of the opinion that a document submitted to the Registrar— (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) because of an omission or misdescription has not been duly completed, or (d) does not comply with the requirements of this Act, or (e) contains an error, alteration or erasure, the Registrar may refuse to register, or may reject, the document and may request— (f) that the document be appropriately amended or completed and resubmitted, or (g) that a fresh document be submitted in its place, or (h) if the document has not been duly completed—that a supplementary document be submitted. (2) The Registrar may require a person who submits a document to the Registrar to also produce another document, or to give any information, that the Registrar considers necessary in order to form an opinion whether the Registrar should refuse to register or should reject the document. 25 Extension or abridgment of time The Registrar may, on receipt of written application by a co-operative housing body or of the Registrar's own initiative, extend or abridge the time within which anything is required to be done under this Act or the body's rules, even if that time has ended. 26 Review of Registrar decisions (1) A person whose interests are affected by a decision of the Registrar made under this Act may, by written notice given to the Registrar, request the Registrar to review the decision. (2) The Registrar must comply with a request under subsection (1). (3) However, a person may not request the Registrar to review— (a) a decision made under subsection (6) to confirm, vary or reverse a decision (the original decision), or (b) the original decision as confirmed or varied. (4) A request under subsection (1) must be made within 1 month after the person is given notice of the decision. (5) When reviewing a decision, the Registrar must give the person who requested the review an opportunity to appear before the Registrar and make a submission in relation to the decision. (6) The Registrar may confirm, vary or reverse the decision. 27 Administrative review by NCAT of Registrar decisions (1) A person whose interests are affected by a decision of the Registrar made under this Act may apply to the Civil and Administrative Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the decision. (2) This section does not apply to any of the following decisions of the Registrar— (a) a decision under any of the following provisions— (i) section 21 (Application of variation under standards), (ii) Subdivision 1 (Enforcement powers) of Division 2 (Specific powers) of Part 2 (Functions and powers of Registrar), (iii) section 40 (Special meeting and inquiry), (iv) section 42 (Power to suspend operations), (v) section 43 (Appointment of administrator), (vi) section 47 (Power to control advertising), (vii) section 156 (Registrar may direct a transfer of engagements between societies of the same type), (viii) (Repealed) (b) a decision under section 41 (Intervention by Registrar), other than the following decisions— (i) a decision to remove an individual director, (ii) a decision to remove an auditor, (iii) a decision directing a co-operative housing body to change any practice if the practice is not dealt with by a standard, (c) a decision prescribed by the regulations for the purposes of this subsection. (3) For the purposes of a review to which this section applies, the internal review referred to in section 55 (1) (b) of the Administrative Decisions Review Act 1997 is a review under section 26 of this Act. (4) Section 53 (Internal reviews) of the Administrative Decisions Review Act 1997 does not apply to a decision of the Registrar made under this Act. Division 2 Specific powers Subdivision 1 Enforcement powers 28 Obtaining information etc (1) The Registrar may, if it is reasonably necessary for the purposes of the Registrar's functions under this Act, by written notice given to a co-operative housing body, or a body corporate related to a co-operative housing body, require the co-operative housing body or body corporate— (a) to give to the Registrar, within a reasonable period and in a reasonable way specified in the notice, specified information and reports, and (b) to give to the Registrar, at the reasonable times and in a reasonable way specified in the notice, periodic reports on specific matters, and (c) to notify the Registrar, within the reasonable time and in a reasonable way specified in the notice, if— (i) a specified event or change of circumstances happens, or (ii) the co-operative housing body or body corporate becomes aware that a specified event or change of circumstances is likely to happen. (2) The Registrar may, if it is reasonably necessary for the purposes of the Registrar's functions under this Act, by written notice given to a services corporation, or a body corporate related to a services corporation, require the services corporation or