Plain language law

New Zealand law explained for everyone

Building Societies Act 1965

Dissolution and winding up

118: Dissolution by appointment of liquidator

You could also call this:

“How a building society can be closed down by someone in charge”

This law is about how a building society can be closed down by appointing someone to take control of it. This is called liquidation. Here’s what you need to know:

A court can appoint a person or an Official Assignee to be in charge of closing down the society. This person is called a liquidator.

Different people can ask the court to appoint a liquidator. These include a member of the society if they have special permission, someone who is owed more than $100 by the society, or a government agency called the FMA.

When a society is being closed down like this, it’s treated similar to a company. The same rules that apply to closing down companies will also apply to the society.

If the FMA asks the court to appoint a liquidator, the court can say no if it thinks this would be better for the society members who didn’t do anything wrong. The court can also set conditions if it says no.

These conditions might include making sure the society closes down in a different way, joins with another society, or fixes the problem that led to this situation. The court can also make the people responsible for the problem pay for the costs.

In this law, when they talk about “the relevant default”, they mean the problem that made someone ask for a liquidator in the first place.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM372363.

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Part 8 Dissolution and winding up

118Dissolution by appointment of liquidator

  1. Nothing in the foregoing provisions of this Part limits or affects this section or any other enactment that provides for the dissolution or liquidation of societies.

  2. A society may be put into liquidation by the appointment by the court as liquidator of a named person or an Official Assignee for a named district.

  3. An application for the appointment of a liquidator under subsection (2) may be made by—

  4. a member authorised by special resolution to make the application:
    1. a judgment creditor for a sum exceeding $100:
      1. the FMA in the exercise of any power conferred by this Act.

        1. Subject to the provisions of this Act and of any regulations made under this Act, a society shall be deemed for the purposes of any liquidation under this section to be a company, and the provisions of Parts 16 and 17 of the Companies Act 1993 relating to the liquidation of companies, so far as they are applicable and with the necessary modifications, shall apply accordingly.

        2. Where in the exercise of any power conferred by this Act the FMA makes an application under this section, the court may, if it thinks fit, having regard to the interests of those members of the society (if any) who were not responsible for the relevant default, and to all the other circumstances, refuse to make an order appointing a liquidator, and may make its refusal subject to any conditions.

        3. The conditions that the court may impose under subsection (5) may include conditions for ensuring—

        4. that the society be dissolved under section 114 or section 115; or
          1. that the society unite under section 32 with another society, or that it transfer its engagements to another society under section 33—
              1. and may also include conditions for ensuring that the relevant default be made good, and that the costs of the proceedings on the application be met by the person or persons responsible for that default.

            1. In this section, the expression the relevant default, in relation to an application for the appointment of a liquidator, means the default that was the occasion of the application being made.

            Notes
            • Section 118: replaced, on , by section 8 of the Building Societies Amendment Act 1993 (1993 No 111).
            • Section 118(3)(c): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
            • Section 118(5): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).