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Incorporated Societies Act 2022

Administration of societies - Capacity, powers, and validity of actions

20: Dealings between society and other persons

You could also call this:

"Dealing with a society: what happens if something goes wrong"

Illustration for Incorporated Societies Act 2022

You deal with a society, and they do things that are not right. The society or its guarantor cannot say you should know they did something wrong. A guarantor is someone who promises to pay if the society cannot pay its debts. You are dealing with the society, and someone is acting on their behalf. If that person is not supposed to be acting for the society, the society still has to honour the deal. If you are dealing with the society and you know something is not right, the society can say you should have known better. This means if you know the person acting for the society is not supposed to be doing so, the society can use that against you. When you deal with a society, you are a person dealing with them. This includes buying or selling something from the society, or getting something from them. You can see how this law is similar to an older law, the 1986 law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS100881.

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Topics:
Money and consumer rights > Consumer protectionBusiness > Industry rules
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19: Validity of actions, or

"Things a society does are still valid even if they're not supposed to do them"

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21: No notice or knowledge of constitution merely because it is registered or available for inspection, or

"Being able to see a society's rules doesn't mean you know them or have to follow them."

Part 3Administration of societies
Capacity, powers, and validity of actions

20Dealings between society and other persons

  1. A society or its guarantor may not assert against a person dealing with the society that—

  2. this Act or the society’s constitution has not been complied with:
    1. a person named as an officer of the society in the register—
      1. is not an officer of the society; or
        1. has not been properly elected or appointed; or
          1. does not have authority to exercise a power that, given the nature of the society, an officer ordinarily has authority to exercise:
          2. a person held out by the society as an officer, employee, or agent of the society—
            1. has not been properly elected or appointed; or
              1. does not have authority to exercise a power that, given the nature of the society, a person elected or appointed to that capacity ordinarily has authority to exercise:
              2. a person held out by the society as an officer, employee, or agent of the society does not have the authority to exercise a power that the society holds them out as having:
                1. a document issued on behalf of the society by an officer, employee, or agent of the society with actual or usual authority to issue the document is not valid or is not genuine.

                  1. However, a society or its guarantor may assert any of the matters referred to in subsection (1)(a) to (e) against a person dealing with the society if that person had, or ought to have had, because of the person’s position with or relationship to the society, knowledge of those matters.

                  2. Subsection (1) applies even if a person of the kind referred to in subsection (1)(b) to (e) acts fraudulently or forges a document that appears to have been signed on behalf of the society, unless the person dealing with the society has actual knowledge of the fraud or forgery.

                  3. In this section,—

                    guarantor means a guarantor of an obligation of a society

                      person dealing—

                      1. includes, in the case of a transaction with a society, the other party to the transaction; and
                        1. includes a person who has acquired property, rights, or interests from a society.

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