Co-operative Societies Act 1979 · 2020 Revised Edition · Part 5 · Organisation and Management of Societies
63. Liability of members of committee of management of society
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A member of the committee of management of a society must at all times act honestly and use reasonable diligence in the discharge of the duties of the member’s office.
member
“member” includes an individual person or institution qualifying for membership in a co-operative society, who or which join in the application for the registration of a society, and an individual person or institution admitted to membership after registration in accordance with this Act, the Rules and the by-laws;
Subject to subsection (3), a member of the committee of management of a society may, when exercising powers or performing duties as such a member, rely on reports, statements, financial data and other information prepared or supplied, and on professional or expert advice given, by any of the following persons:
committee of management
“committee of management” means the governing body (by whatever name called) of a society which is responsible for the management of the affairs of the society;
an employee of the society whom the member believes on reasonable grounds to be reliable and competent in relation to the matters concerned;
a professional adviser or an expert in relation to matters which the member believes on reasonable grounds to be within the person’s professional or expert competence;
any other member, or any committee of such members on which the member concerned did not serve, in relation to matters within that other member’s or committee’s designated authority.
Subsection (2) applies to a member of the committee of management of a society if, and only if, the member —
society
“society” means a co-operative society registered under this Act and includes a primary society, a secondary society and an apex organisation;
acts in good faith;
makes proper inquiry where the need for inquiry is indicated by the circumstances; and
has no knowledge that such reliance is unwarranted.
An officer or agent of a society must not make improper use of either of the following to gain, directly or indirectly, an advantage for himself or herself or for any other person, or to cause detriment to the society:
officer
“officer” includes a chairperson, vice‑chairperson, director, secretary, assistant secretary, treasurer, assistant treasurer, member of committee of management, employee, internal auditor, liquidator or other person empowered under this Act, the Rules or the by-laws, to give directives in regard to the business of a society or to supervise the business;
his or her position as an officer or agent of the society;
any information acquired by virtue of that position.
Any member of the committee of management of a society who contravenes subsection (1), or any officer or agent of a society who contravenes subsection (4) —
is liable to the society for any profit made by the member, officer or agent (as the case may be) or for any damage suffered by the society as a result of such contravention; and
shall be guilty of an offence and liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both.
Where the committee of management of a society has appointed a person as a chief executive officer to administer and manage the affairs of the society, the appointment does not absolve the committee of management from its responsibility for the proper direction of the affairs of the society.
In this section, unless the context otherwise requires —
“agent”, in relation to a society, includes a banker, a solicitor or an auditor of the society and any person who at any time has been a banker, a solicitor or an auditor of the society;
auditor
“auditor”, in relation to a society, means any person referred to in section 33(1) or 36(4)(b);
“officer”, in relation to a society, includes a person who at any time has been an officer of the society.
This section is in addition to and not in derogation of any other written law or rule of law relating to the duty or liability of officers of a society.