Peace and Goodwill to all Members

This is not a religious (or political) article, but the well-rehearsed Christmas theme of peace and goodwill to all has prompted me to consider more deeply the relationship between members of a society.  That relationship is largely taken for granted when people join community organisations, and, sadly, it receives critical consideration only when things go wrong. The common law heritage In the absence of a statutory framework for the incorporation of societies, British case law characterises the relationship between members in a society and between a member and a society as being contractual in nature.  Despite having statutory provision for the incorporation of societies, that rationalisation has been adopted in Commonwealth countries such as New Zealand, Australia and Canada.  With the prospect of new societies’ legislation being considered by the Law Commission it is timely to consider whether that legislation should establish minimum expectations of a society’s members. New Zealand Case Law Our Courts have accepted the contractual analogies derived from Britain: On becoming a member a contract arises between the member and the society, the terms of which are set out in the rules of the society (for instance, see Henderson v Kane and The Pioneer Club [1924] NZLR 1073 at 1076, O’Neill v Pupuke Golf Club Inc [1932] NZLR 1012, Temple v Hawke’s Bay Football Association [1970] NZLR 862 at 864, and Finnigan v New Zealand Rugby Football Union Inc [1985] 2 NZLR 159 at 177 (CA)), By virtue of their membership members agree to be bound by the society’s rules (see, for instance, Tucker v Auckland Racing Club [1956] NZLR 1), but The Courts seem reluctant...

Proxies at Meetings

Just as there is often confusion about the quorum for meetings, discussed in my last article, so, too, there is often confusion about proxies at meetings. The first point to note is that, unless expressly permitted by an organisation’s constitution, members must be present at a meeting in person to exercise their votes and cannot vote by proxy (Harben v Phillips (1883) 23 Ch 14 (CA), McArthur v Manawatu Knitting Mills Ltd [1943] NZLR375, and Maori Development Corporation Ltd v Power Beat International Ltd [1995] 2 NZLR568 at 574, supported by the terms of section 24(2), Incorporated Societies Act 1908). Most lawyers would not immediately go to Māori Land Court decisions for summaries of general legal issues, but a comprehensive summary of the law on proxies is to be found in Wall v The Māori  Land Court, Māori  Appellate Court MB 55 A20090002091 2010 Appeal 55, 29 March 2010, paragraph [59]: a)     At common law a vote on a show of hands means that each person present and entitled to vote has one vote and only one vote and those that wish to vote do so by show of hands: Ernest v Loma Gold Mines [1897] 1 Ch 1. Under this method the voting does not take into account variations and sizes of shareholdings or other entitlements, nor the presence of representatives of absent persons entitled to vote. A proxy cannot vote on a show of hands unless the rules or articles, or relevant statute expressly provides otherwise. However, even when rules permit a proxy to vote on a show of hands, a member who holds a proxy for another...