Resolving deadlocks in Societies and Charities

2012 Article, updated March 2018 Dealing with Deadlocks At a mediation I was involved in some years ago, a mediator observed that those who go to Court should be seeing a psychiatrist rather than a lawyer.  That is doubly true where society deadlocks cannot be resolved, especially in view of the deficiencies of the Incorporated Societies Act 1908 (see Porima v Te Kauhanganui o Waikato Inc [2001] 1 NZLR 472, [80] [84]).  Such deadlocks usually occur in meetings or in elections. Deadlocks in Committee and General Meetings Subject to any contrary constitutional provisions, a chairperson has a normal vote as a member (a “deliberative vote”) and no further or “casting” vote (see Turner v Pickering [1976] 1 NZLR 129 at 134 and a number of UK decisions, three involving one Council are cited below). As noted in R v Bradford Metropolitan City Council ex p Wilson [1989] 3 All ER 140 (Divisional Court) at 151 (and see 147-148), the “… purpose of granting a casting vote to chairmen of local authorities cannot have been to enable them to preserve the status quo, because any motion will lapse if there is no majority for it . . . Unless the tie is broken, decisions cannot be made. That is essential if the administrative measures necessary for the proper conduct of local government are to be passed.” The wisdom of that decision was reflected in the 2004 amendment to the Local Government Act 2002 (which, as first enacted, was intended to remove the casting vote of the chairperson of local authority meetings), with Clause 24, Schedule 7, now confirming that although there...

Responsibilities of those in Governance

2012 Article, updated March 2018 Judging from email correspondence I have received after my article “Liability of Charitable Trustees” was first published, it appeared to have hit some raw nerves, as I have received illustrations of (allegedly) inappropriate behaviour by those governing community organisations.  Without considering whether the allegations are justified, it is worth recording some of the issues raised.  This I have done by identifying categories of behaviour which are patently inappropriate: Employment Harassment, bullying and intimidation of staff. Side-lining or dismissing staff drawing financial problems to the attention of those in governance. Comment:  Those employed in the voluntary sector are entitled to all the rights of employees, and to the protections afforded by legislation such as the Employment Relations Act 2000, Human Rights Act 1993, and criminal law. Member relationships Members browbeating, tormenting and threatening other members. Comment:  Such behaviour is likely to be contrary to the Human Rights Act 1993 and in some circumstances may be subject to sanctions under the criminal law.  In my article “Peace and Goodwill to all Members” I referred to the need for members to treat other members of a society with respect, saying “The membership of most societies is glued together by membership respect, honesty and integrity.  If members treat each other or guests in a rude, contemptuous, or disrespectful manner, or abuse the privilege of using society property, then all members and the society suffer.  Acting in a civilised mature way is not much to ask.” Failures in governance Failing to be objective when dealing with complaints by showing bias against upholding complaints against members. Seeking to marginalise or coerce anyone who dares...