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Building Societies Act 1965

Management and administration - Accounting records and financial reporting

99: Resolutions as to appointment and removal of auditors

You could also call this:

"How building societies can change their auditors"

You need to know about how a building society can change its auditors. If the society wants to appoint a new auditor or not reappoint the current one, they must follow certain rules.

The society must tell its members about the plan to change auditors at least 28 days before the annual general meeting. If they can't do this, they can still give notice if the meeting is called less than 28 days after they decide to change auditors.

The society must also tell its members about this decision. They can do this when they tell members about the meeting, or at least 21 days before the meeting by putting an ad in a newspaper or using another way allowed by the society's rules.

When the society gets notice about changing auditors, they must tell the current auditor right away. The current auditor can write back to the society about this decision. If they do, the society must tell its members that the auditor wrote back and send a copy of what the auditor said to all members. If they can't send it, they might have to read it out at the meeting.

Sometimes, the society or someone else might think the auditor is misusing these rules to spread harmful information. In this case, they can ask the High Court to decide if the auditor's response should be shared.

These rules also apply if the society wants to remove its first auditors.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM372071.

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98: Appointment of auditors, or

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Part 7Management and administration
Accounting records and financial reporting

99Resolutions as to appointment and removal of auditors

  1. A resolution at a society's annual general meeting—

  2. appointing as auditor a person other than a retiring auditor; or
    1. providing expressly that a retiring auditor shall not be reappointed—
        1. shall not be effective unless notice of the intention to move it has been given to the society not less than 28 days before the meeting at which it is moved: provided that if, after notice of the intention to move such a resolution has been given to the society, the annual general meeting is called for a date less than 28 days after the notice has been given, the notice, though not given within the time required by this subsection, shall be taken to have been so given.

      1. A society shall give to its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting, or, if that is not practicable, shall give them notice of the resolution, not less than 21 days before the meeting, either by advertisement in a newspaper having an appropriate circulation or in any other way allowed by the society's rules.

      2. On receipt by a society of notice given under subsection (1) of an intended resolution, the society shall forthwith send a copy of the notice to the retiring auditor (if any).

      3. Subject to subsection (5), where such a notice is given, and the retiring auditor makes representations in writing to the society (not exceeding a reasonable length) with respect to the intended resolution, and requests that those representations be notified to members of the society, the society shall, unless the representations are received too late for it to do so,—

      4. in any notice of the resolution given to members, state the fact of the representations having been made; and
        1. send a copy of the representations to every member to whom notice of the meeting is sent (whether before or after receipt of the representations by the society)—
            1. and if a copy of the representations is not so sent either because they were received too late or because of the society's default, the auditor (without prejudice to his or her right to be heard orally) may require that they be read out at the meeting.

          1. Copies of any such representations need not be sent out, and they need not be read out at the meeting, if, on the application either of the society or of any other person who claims to be aggrieved, the High Court or a Judge thereof is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the court or Judge may order the society's costs on any such application to be paid in whole or in part by the auditor, notwithstanding that he or she is not a party to the application.

          2. Subsections (4) and (5) shall apply in relation to a resolution to remove the first auditors of a society, by virtue of subsection (4) of section 98, as they apply in relation to a resolution that a retiring auditor shall not be reappointed.

          Compare
          • Building Societies Act 1962 s 85 (UK)
          Notes
          • Section 99(5): amended, on , pursuant to section 12 of the Judicature Amendment Act 1979 (1979 No 124).