BUILDING SOCIETIES ACT, 1989

• (d) enter into any guarantee or provide any security which is incidental to or connected with any such loan, disposal of property or payment; or

• (e) take part in any arrangement whereby—

• (i) another person enters into a transaction which if it had been entered into by the society would have contravened any of paragraphs (a) to (d), and

• (ii) that other person, in pursuance of the arrangement, has obtained or is to obtain any benefit from the society or a subsidiary of the society.

• (2) Subsection (1) (a) does not apply to—

• (a) any loan the amount of which when aggregated with any other relevant loans does not exceed £2,500;

• (b) any loan made in the ordinary course of the society's business, the amount of which is not greater, and the terms on which it is made are not more favourable, than it is reasonable to expect the society to have offered to a person of the same financial standing but not connected with the society;

• (c) any loan, the amount of which, when aggregated with any other relevant loans, does not exceed £50,000 made for or towards the purchase or improvement of a house used or to be used as the director's only or main residence and provided that loans of that description and on similar terms are ordinarily made to employees of the society.

• (3) Subsection (1) (b) does not apply to any lease or hiring of property—

• (a) the value of which when aggregated with the value of any other relevant leases or hirings does not exceed £5,000;

• (b) which is made in the ordinary course of the society's business and is on terms not more favourable than it is reasonable to expect the society to have offered to a person unconnected with the society.

• (4) Subsection (1) (c) does not apply to any payment—

• (a) amounting, when aggregated with any other relevant payments, to no more than £1,000 in respect of which the person on whose behalf it is made is under an obligation to reimburse the society within a period not exceeding 2 months beginning with the date of the payment; or

• (b) of an amount not greater and on other terms not more favourable than it is reasonable to expect the society to have offered to a person of the same financial standing but not connected with the society.

• (5) Subject to compliance with the requirements of subsection (6), subsection (1) does not preclude a society from doing anything to provide a director with funds to meet expenditure incurred or to be incurred by him for the purposes of the society or for the purpose of enabling him properly to perform his duties as a director of the society nor does it preclude the society from doing anything to enable a director to avoid incurring such expenditure.

• (6) The following are the requirements referred to in subsection (5)—

• (a) the things must either be done with the prior approval of the society given at a general meeting at which the requisite matters are disclosed or be done on condition that, if the approval of the society is not so given at the next annual general meeting, the loan is to be repaid, or any other liability arising under the transaction is to be discharged, within 6 months from the conclusion of that meeting; and

• (b) the amount provided, when aggregated with any other relevant provision of funds, does not exceed £10,000.

• (7) The following are the requisite matters which must be disclosed for the purposes of subsection (6) above—

• (a) the purpose of the expenditure incurred or to be incurred, or which would otherwise be incurred, by the director;

• (b) the amount of the funds to be provided by the society; and

• (c) the extent of the society's liability under any transaction which is or is connected with the thing in question.

• (8) A transaction or arrangement falling within subsection (1) is, for the purposes of this Part, made for a person if—

• (a) in the case of a loan, disposal or payment within paragraph (a), (b) or (c) of subsection (1), it is made, in the case of paragraph (a) or (b) to him or, in the case of paragraph (c), on his behalf;

• (b) in the case of a guarantee or security within paragraph (d), it is made as an incident of or in connection with a loan or disposal to him or a payment on his behalf; or

• (c) in the case of an arrangement within paragraph (e), the transaction to which the arrangement relates was made for him.

• (9) In this section—

“relevant”, in relation to a transaction of a description falling within paragraph (a), (b) or (c) of subsection (1), means an outstanding or, in the case of a lease or hiring, current transaction of that description (whether entered into by, or by arrangement with, the society), not being one authorised by any other authorising provision;

“authorising provision” and “authorised”, in relation to a transaction of a description falling within paragraph (a), (b) or (c) of subsection (1), mean respectively any provision of subsection (2), (3) or (4) or constituted by subsection (5) and any transaction or thing done to which that paragraph does not apply or which is not precluded from being done by virtue of that provision;

“outstanding”, in relation to loans, means outstanding in respect of any principal or interest and, in relation to the provision of funds subject to a condition for repayment or discharge of any other liability, means unpaid or undischarged to any extent;

“provision of funds” includes anything else which, by virtue of subsection (5), a society is not precluded from doing by subsection (1).

58 Sanctions for breach of section 57.

58.—(1) Where a building society enters into a transaction or arrangement contravening section 57 the transaction or arrangement shall be voidable at the instance of the society unless—

• (a) restitution of any money or any other asset which is the subject matter of the arrangement or transaction is no longer possible, or the society has been indemnified in pursuance of subsection (2) (b) for the loss or damage suffered by it; or

• (b) any rights acquired bona fide for value and without actual notice of the contravention by any person other than the person for whom the transaction or arrangement was made would be affected by its avoidance.

• (2) Without prejudice to any liability imposed otherwise than by this subsection but subject to subsection (3), where a transaction or arrangement contravening section 57 is made by a society for a director of the society or a person connected with such a director that director and the person so connected and any other director of the society who authorised the transaction or arrangement (whether or not it has been avoided in pursuance of subsection (1) is liable—

• (a) to account to the society for any gain which he has made directly or indirectly by the transaction or arrangement; and

• (b) jointly and severally with any other person liable under this subsection, to indemnify the society for any loss or damage resulting from the transaction or arrangement.

• (3) Where a transaction or arrangement contravening section 57 is entered into by a society and a person connected with a director of the society, that director shall not be liable under subsection (2) if he shows that he took all reasonable steps to secure the society's compliance with that section and, in any case, a person so connected and any such other director as is mentioned in subsection (2) shall not be liable if he shows that, at the time the transaction or arrangement was entered into, he did not know the circumstances constituting the contravention.

• (4) An officer of a society who authorises or permits the society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 57 shall be guilty of an offence.

• (5) A society which enters into a transaction or arrangement contravening section 57 for one of its directors shall be guilty of an offence unless it shows that, at the time the transaction or arrangement was entered into, it did not know the circumstances constituting the contravention.

• (6) A person who procures a society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 57 shall be guilty of an offence.

59 Records of loans etc. falling within section 57.

59.—(1) A building society shall maintain a register containing a copy of every subsisting transaction or arrangement (other than a transaction or arrangement excepted by subsection (6)) falling within section 57 (1) made for a director or a person connected with a director of the society during the current financial year or any of the preceding 10 financial years, but excluding years prior to 1989.

• (2) In the case of a transaction or arrangement which is not in writing, there shall be kept in the register a written memorandum setting out its terms.

• (3) A society shall make available for inspection by members—

• (a) at its chief office during the period of 15 days expiring on the date of its annual general meeting, and

• (b) at the annual general meeting,

a statement containing the requisite particulars of the transactions and arrangements falling within section 57 (1) which were included in the register under subsection (1) at any time during the last complete financial year preceding the meeting.

• (4) Two copies of the statement required to be so made available to members shall be sent by the society to the Central Bank (together with the auditor's report as required by subsection (8)) not later than the date on which the statement is required to be first made available to members and the Bank shall keep one of them in the public file of the society.

• (5) A copy of the latest statement required to be so made available shall also be sent by the society, on demand and on payment of a fee which may be specified by the Central Bank, to any member of the society.

• (6) There are excepted from the obligations imposed by this section on a society with respect to a financial year all transactions or arrangements made or subsisting during that year for a person who was at any time during that year a director of the society or was connected with a director of the society if the aggregate of the values of each transaction or arrangement made for that person and of each agreement for such a transaction or arrangement, less the amount (if any) by which the value of those transactions or arrangements has been reduced, did not exceed £1,000 at any time during that year.

• (7) The “requisite particulars” of a transactions or arrangement required by subsection (3) are such particulars of the terms of the transaction or arrangement, as may be specified from time to time by the Central Bank.

• (8) It shall be the duty of the auditors of a society to examine the statement required under subsection (3) before it is made available to the members of the society and to make a report to the members on the statement; and the report shall be annexed to the statement before it is made available.

• (9) A report under subsection (8) shall state whether in the opinion of the auditors the statement contains the particulars required under subsection (7) and, where their opinion is that it does not, they shall include in the report, so far as they are reasonably able to do so, a statement giving the required particulars.

60 Record and disclosure of certain business.

60.—(1) Where, at anytime during a financial year of a building society, a person both is an officer of a society and is, or is a director of or a partner in, a business associate of the society, this section shall apply as respects that year to the society in relation to the relevant service provided to the society by the business associate.

• (2) A person is a “business associate” of a society in any financial year of the society if that person—

• (a) carries on a business which consists of or includes the provision of relevant services,

• (b) provides relevant services during that year to the society, and

• (c) is not a subsidiary of the society.

• (3) Subject to this section, a society shall maintain at its chief office a register containing the particulars required by subsection (4) in relation to every business associate of the society.

• (4) The particulars referred to in subsection (3) are the aggregate amount of fees paid to the business associate by the society or on its behalf in respect of each of the relevant services in the last complete financial year and each of the 5 financial years preceding that year but excluding years prior to the year 1989.

• (5) The following are “relevant services” for the purposes of this section—

• (a) conveyancing services,

• (b) surveying and valuing land or other property,

• (c) arranging for the provision of insurance against loss of or damage to property or on human life,

• (d) advertising or public relations services, and

• (e) any other services as may be specified as relevant services by the Central Bank from time to time.

• (6) Where a business associate of a society provides the society with services which are relevant services by virtue of subsection (5), any administrative services provided to the society by the business associate are also relevant services.

• (7) No particulars of the business of a business associate of a society need be kept in the register provided for by subsection (3) as respects any financial year of the society in which the volume of the business of which the particulars referred to in subsection (3) are required did not exceed £5,000 or such other sum as may be specified from time to time by the Central Bank.

• (8) A society shall make available for inspection by members at its chief office during the period of 15 days expiring on the date of its annual general meeting and at the annual general meeting, a statement containing the particulars required to be kept in the register as respects the last complete financial year preceding the meeting.

• (9) Two copies of the statement required to be so made available to members shall be sent by the society to the Central Bank not later than the date on which the statement is required to be first made available to members and the Bank shall keep one of them in the public file of the society.

• (10) A copy of the statement required to be so made available shall also be sent, on demand and on payment of such fee as may be specified by the Central Bank, to any member of the society.

61 Particulars of directors' salaries etc. to be given in accounts.

61.—Section 191 of the Act of 1963 shall, subject to any necessary modifications, apply as if the society were a company.

62 Prohibition of tax-free payments.

62.—(1) It shall not be lawful for a society to pay a director remuneration (whether as director or otherwise) free of income tax or otherwise calculated by reference to or varying with the amount of his income tax or to or with the rate of income tax.

• (2) Any provision in a society's rules or in any contract or in any resolution of a society or a society's directors, for payment to a director of remuneration as in subsection (1) shall have effect as if it provided for payment, as a gross sum subject to income tax, of the net sum for which it actually provides.

• (3) In this section “remuneration” includes emoluments within the meaning of section 191 of the Act of 1963.

63 Directors' names on business letters.

63.—(1) A society shall in all business letters on or in which the society's name appears and which are sent by the society to any person state in legible characters in relation to every director his present surname together with his present forename (or the initials of that forename) and any former names.

• (2) If special circumstances exist which render it in the opinion of the Central Bank expedient that such an exemption should be granted, the Bank may, subject to such conditions as it may think fit, grant exemption from the obligations imposed by this section.

64 Disqualification of certain persons from acting as directors or auditors of or managing building societies.

64.—(1) A person who has been adjudicated bankrupt and whose bankruptcy still subsists or who has been convicted of an indictable offence in relation to a building society or involving fraud or dishonesty or against whom a disqualification order has been made shall not be qualified to be appointed or act as an officer, auditor, receiver, liquidator or to be in any way, whether directly or indirectly, concerned with or to take part in the promotion, formation, direction or management of a society.

• (2)
• (a) Where the court is satisfied in any proceedings or as a result of an application under this section that—

• (i) a person has been guilty, while a promoter, officer, auditor, receiver or liquidator of a society, of any fraud in relation to the society, its members or creditors; or

• (ii) a person has been guilty, while a promoter, officer, auditor, receiver or liquidator of a society of any breach of his duty as such promoter, officer, auditor, receiver or liquidator; or

• (iii) the conduct of any person as promoter, officer, auditor, receiver or liquidator of a society makes him unfit to be concerned in the management of a society; or

• (iv) in consequence of a report of inspectors appointed by the Central Bank under this Act the conduct of any person makes him unfit to be concerned in the management of a society; or

• (v) a person has been persistently in default in relation to the relevant requirements;

the court may, of its own motion, or as a result of the application, make a disqualification order against such a person for such period as it sees fit.

• (b) In paragraph (a) “the court” means the High Court except in relation to a disqualification order made by a court of its own motion under paragraph (a) (i), (ii), (iii), or (v) in which case it includes any court.

• (3)
• (a) For the purposes of subsection (2) (a) (v) the fact that a person has been persistently in default in relation to the relevant requirements may (without prejudice to its proof in any other manner) be conclusively proved by showing that in the 5 years ending with the date of the application he had been adjudged guilty (whether or not on the same occasion) of 3 or more defaults in relation to those requirements.

• (b) A person shall be adjudged guilty of a default in relation to a relevant requirement for the purposes of this subsection if he is convicted of any offence consisting of a contravention of a relevant requirement.

• (4) In this section “disqualification order” means an order made under subsection (2) or section 184 of the Act of 1963.

• (5) An application under subsection (2) may be made by the Director of Public Prosecutions or the Central Bank.

• (6) An application under paragraph (a) (i), (ii) or (iii) of subsection (2) may be made by any member, officer, auditor, receiver, liquidator or creditor of any society in relation to which the person who is the subject of the application—

• (a) has been or is acting or is proposing to or being proposed to act as officer, auditor, receiver or liquidator, or

• (b) has been or is concerned or taking part, or is proposing to be concerned or take part, in the promotion, formation, direction or management of a society,

and where the application is made by a member or creditor of the society, the Court may require security for all or some of the costs of the application.

• (7) Where it is intended to make an application under subsection (2) in respect of any person, the applicant shall give not less than 10 days' notice of his intention to that person.

• (8) Any person who is disqualified by virtue of this section may apply to the Court for relief, either in whole or in part, from that disqualification and the Court may, if it deems it just and equitable to do so, grant such relief on whatever terms and conditions it sees fit.

• (9) A disqualification order may be made on grounds which are or include matters other than criminal convictions notwithstanding that the person in respect of whom the order is to be made may be criminally liable in respect of those matters.

• (10) Whenever a person holding an office in a society becomes ineligible by virtue of this section to hold office, he shall forthwith cease to hold that office and the vacancy shall be deemed to be a casual vacancy and may be filled in the manner provided for such a vacancy in the rules of the society.

• (11) A person who is disqualified by virtue of subsection (1) from holding any position in relation to a society and permits his name to be put forward for election or appointment to that position shall be guilty of an offence.

• (12) Any person who in relation to any society, acts in a manner or capacity which, by virtue of being disqualified under subsection (1), he is prohibited from doing shall be guilty of an offence.

• (13) In this section “relevant requirement” means any provision of this Act which requires or required any return, account or other document to be given or sent to, or notice of any matter to be given to the Central Bank.

65 Register of members.

65.—(1) Every building society shall keep a register of the names and addresses of its members.

• (2) The register shall be kept at the chief office of the society or, with the consent in writing of the Central Bank, at one or more offices of the society other than its chief office.

• (3) Every society having more than 50 members shall, unless the register is in such a form as to constitute an index, keep an index of the names of the members of the society and shall, within 14 days after the date on which any alteration is made in the register of members, make any necessary alteration in the index, and the index shall at all times be kept at the same place as the register of members.

• (4)
• (a) A member of a society may, for the purpose of communicating with other members on a subject relating to its affairs, request the board of directors of the society to transmit to those other members such information as he requests and where the board, having regard to the interests of members as a whole and to any other relevant circumstances, is satisfied that the request is made in good faith, it shall comply with the request.

• (b) Where the society complies with a request under paragraph (a) the applicant shall be liable for any costs incurred by the society in complying with the request and the society may require the applicant to give security for payment of costs.

• (5) In the event of the refusal of a society to comply with a request under subsection (4), it shall notify the member who made the request of the grounds for such refusal and the member may refer the refusal to the Central Bank.

• (6) A decision on a request under subsection (4) shall be notified to the member who made the request within a period of one month after the day on which the request is received by the society.

• (7) Where an applicant makes a reference to the Central Bank under subsection (5), the Bank may, as it thinks proper, having heard any representations made by the society, direct the society to comply with the request subject to such limitations or conditions (including conditions relating to the nature of the information to be given, and to arrangements for payment of costs) as the Bank may think fit.

• (8) At any time when a society has had its authorisation revoked under section 40 any 10 members of the society shall have the right to obtain from the register kept under subsection (1) the names and addresses of members of the society for the purpose of communicating with them on a subject relating to the affairs of the society.

66 Register of directors, etc.

66.—(1) Every building society shall keep at its chief office or, with the consent in writing of the Central Bank, at one or more of the offices of the society other than its chief office a register containing the following particulars relating to each director, the chief executive and the secretary of the society—

• (a) his present surname and forenames and any former names and, in the case of a person known by a title different from his “surname”, that title;

• (b) his usual residential address;

• (c) his place and date of birth;

• (d) his nationality;

• (e) in the case of a director, his business occupation (if any); and

• (f) particulars of any other directorships of bodies corporate, whether incorporated in the State or elsewhere, held by him or which have been held by him within the preceding 5 years.

• (2)
• (a) A society shall within the appropriate period referred to in paragraph (b), send to the Central Bank a return in such form as it may require of the particulars contained in a register under this section and a notification of any change in the register, together with the date of such change.

• (b) The periods mentioned in paragraph (a) are—

• (i) in the case of the return, 14 days from the commencement of this section where a society is incorporated before such commencement, and 14 days from the date of appointment of the first directors where a society is incorporated after such commencement; and

• (ii) in the case of a change, 14 days from the change.

• (3) Any member of a society or any other person may require a copy of the register, or of any part thereof on payment of such fee as the Central Bank may fix, and the society shall cause any copy so required to be sent to the person within a period of 10 days after the day on which the request for the copy is received by the society.

• (4) A register under this section shall be open to inspection by any member free of charge, and by any other person on payment of such fee as the Central Bank may fix, subject to such reasonable restrictions as the society concerned may impose at a general meeting, but so that not less than 2 hours in each business day be allowed for inspection.

PART VI Meetings, Resolutions, Voting, etc.

67 Annual general meeting.

67.—(1) Subject to subsections (2) and (3), a building society shall hold a meeting in the State, in the first 4 months of each financial year, as its annual general meeting (in addition to any other meetings in that year), and shall specify the meeting as such in the notices calling it.

• (2) A society need not hold an annual general meeting in the year in which it is incorporated.

• (3) The Central Bank may at its discretion, upon application being made to it in writing by a society, fix a longer period than 4 months for the purposes of subsection (1).

• (4) Where default is made in complying with subsection (1), the Central Bank may call or direct the calling of an annual general meeting and give such ancillary or consequential directions as it thinks expedient, including directions modifying or supplementing the operation of the rules of the society in relation to the calling, holding and conduct of the meeting.

• (5) Notwithstanding anything in the rules of a society, the business which may be dealt with at the annual general meeting may include any resolution (including as special resolution or a conversion resolution).

68 Notice of meetings.

68.—(1) Any provision in the rules of a building society shall be void to the extent that it provides for the calling of a meeting of the society (other than an adjourned meeting) by less than 21 or more than 42 days' notice expiring with the date of the meeting or, if earlier, the date specified by the society, under its rules, as the final date for the receipt of instruments appointing proxies to vote at the meeting.

• (2) A meeting of a society called by a shorter notice than 21 days' notice shall be deemed to have been properly called if it is so agreed by the Central Bank on application being made to it in writing by the society.

• (3) A society shall give notice of a meeting of the society—

• (a) by sending to every person entitled to notice of the meeting a notice in such form as the Central Bank may direct, or

• (b) with the consent of the Central Bank given where the Bank considers it proper in the circumstances, by publishing in at least 2 daily newspapers published in the State and circulating in the area in which the chief office of the society is situated a notice in such form as the Bank may direct.

• (4) Where notice of a meeting is given in accordance with subsection (3) (b), any other requirement under this Act to send to members with the notice of or in connection with a meeting a proxy instrument, notice or other document shall be satisfied as respects it if either—

• (a) it is published along with the notice, or

• (b) the notice under subsection (3) (b) states that it may be obtained at all offices of the society during normal office hours,

as the Central Bank may direct.

• (5) Notice of a meeting of a society shall be given to every member of the society eligible to vote on the date of the notice and to the Central Bank.

• (6) Neither accidental omission to give notice of a meeting of a society to a person entitled to receive notice of the meeting nor the non-receipt by such a person of a notice of such a meeting shall invalidate the proceedings at that meeting.

69 Members' entitlement to vote on resolutions.

69.—(1) Subject to section 16 and this section, the persons entitled to vote on a resolution of a building society are—

• (a) on a resolution, other than a conversion resolution, all the members who at the end of the last financial year of the society before the date of the meeting or the postal ballot, as the case may be, had held continuously shares to the value of not less than £100 for the preceding period of 6 months and continue to hold such shares on the voting date; and

• (b) on a conversion resolution, all members within the meaning of paragraph (a) and all other persons who were borrowing members within the meaning of section 71 (2) at the end of the last financial year and continue to be so on the voting date.

• (2) Subject to subsection (3), any provision in the rules of a society is void to the extent that it would have the effect of restricting the rights conferred by subsection (1) but nothing in this section implies that a society cannot in its rules grant voting rights to members of any description.

• (3) On a vote on a resolution, which under this Act will not be effective unless it is passed as a special resolution or a conversion resolution, each member entitled to vote shall have one vote.

• (4) In this section “voting date”, with reference to any resolution, means—

• (a) the date of the meeting at which the resolution is moved, except where paragraph (b) applies; and

• (b) where voting on the resolution is to be conducted by postal ballot, the date which the society specifies as the final date for the receipt of completed ballot papers.

70 Special resolutions.

70.—(1) No resolution of a building society shall be passed as a special resolution unless it is required to be so passed by or under this Act or by the rules of the society.

• (2) A resolution of a society shall be a special resolution when it has been passed by a majority of such members of the society as, being entitled to do so—

• (a) vote in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a special resolution has been duly given; or

• (b) vote in a postal ballot on the resolution of which notice specifying that the resolution will not be effective unless it is passed as a special resolution has been duly given.

• (3) The terms of any special resolution before a general meeting of a society may be amended by ordinary resolution moved at the meeting if the chairman of the meeting is satisfied that the terms of the resolution as amended will still be such that adequate notice of the intention to move the resolution can be deemed to have been given.

71 Conversion resolutions.

71.—(1) A resolution of a society shall be a conversion resolution when it has been passed by a majority of such members of the society as, being entitled to do so—

• (a) vote in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a conversion resolution has been duly given; or

• (b) vote in a postal ballot on the resolution of which notice specifying that the resolution will not be effective unless it is passed as a conversion resolution has been duly given.

• (2) For the purposes of this section and Part XI a person is a borrowing member of a society at any time if at that time his indebtedness to the society is in respect of—

• (a) a loan, made under the repealed enactments, secured by the mortgage of freehold or leasehold estate or interest in a house, or

• (b) a housing loan,

and if, in either case, the amount of his mortgage debt is not less than £500 or such other amount as the Central Bank may, from time to time, prescribe by regulation.

72 Proxies.

72.—(1) A member of a building society who is entitled to attend and vote at a meeting of the society may appoint another person (whether a member of the society or not) as his proxy to attend, speak and, subject to subsection (2), to vote at the meeting instead of him, and may direct the proxy how to vote at the meeting.

• (2) A proxy is entitled to vote on a poll but, subject to any provision in the rules of the society, not otherwise.

• (3) In every notice calling a meeting of a society there shall appear with reasonable prominence a statement—

• (a) that a member entitled to attend and vote may appoint a proxy to attend, speak and vote instead of him;

• (b) that the proxy need not be a member of the society; and

• (c) that the member may direct the proxy how to vote at the meeting.

• (4) Every notice calling a meeting of a society shall have annexed to it one instrument for appointing a proxy for completion by the member if he wishes to appoint a proxy.

• (5) Any provision in the rules of a society shall be void to the extent that it would have the effect of requiring the instrument appointing a proxy or any other document necessary to show the validity of, or otherwise relating to the appointment of a proxy to be received by the society or any other person more than 10 days before a meeting or adjourned meeting in order that the appointment may be effective at the meeting or adjourned meeting.

• (6) The instrument appointing a proxy shall be in such form as the Central Bank may direct and the Bank may specify as respects a proxy instrument—

• (a) matters to be included in or excluded from the instrument, and

• (b) the declarations to be made in the instrument by the member appointing a proxy.

• (7) Except at the written request of a member, no instrument for the appointment of a proxy shall be issued by a society or at the society's expense apart from the instruments issued under subsection (4).

• (8) A society shall keep in a safe place for a period of one year from the date of their receipt all instruments appointing proxies and requests from members under subsection (7).

73 Right to demand a poll.

73.—(1) Any provision in the rules of a building society shall be void in so far as it would have the effect either—

• (a) of excluding the right to demand a poll at a meeting of the society on any question other than the election of the chairman of the meeting or the adjournment of the meeting, or

• (b) of making ineffective a demand for a poll on any such question which is made by not less than 10 members having the right to vote at the meeting.

• (2) The instrument appointing a proxy to vote at a meeting of a society shall be deemed also to confer authority to demand or join in demanding a poll, and, for the purposes of subsection (1), a demand by a person as a proxy for a member or members shall be the same as a demand by the member or members.

74 Members' right to propose and circulate resolutions.

74.—(1) If 25 members, or such lesser number as may be specified in the rules of a building society, who are entitled to vote on a resolution, give notice in writing to the society of their intention to move, or to cause to be moved on their behalf, at an annual general meeting, a resolution (the text of which is included in the notice), other than a conversion resolution, it shall be the duty of the society, subject to subsections (2), (3) and (9)—

• (a) to include in the notice of the annual general meeting a notice specifying the intention to move the resolution, or to cause it to be moved on their behalf, at the meeting and, where applicable, the intention to move it as a special resolution; and

• (b) at the request of the members intending to move the resolution, or to cause it to be moved on their behalf, to send to each member entitled to receive notice of the meeting a copy of a statement of not more than 300 words with respect to the matter referred to in the resolution.

• (2) Subsection (1) does not require a society to send notices of a resolution or copies of a statement to members of the society in any case where—

• (a) the contents of the resolution or, as the case may be, the statement would be likely to diminish substantially public confidence in the society;

• (b) the rights conferred by subsection (1) are being abused to seek needless publicity for defamatory matter or for frivolous or vexatious purposes; or

• (c) if the resolution were passed, the society would be involved in activities likely to be ultra vires;

and that subsection shall not be taken to confer any rights on members, or to impose any duties on a society, in respect of a resolution or statement which does not relate directly to the affairs of the society.

• (3) If the rules of a society so provide, subsection (1) does not require notice of a resolution to be given to members of the society if the resolution is in substantially the same terms as any resolution which has been defeated at a meeting or on a postal ballot during the period beginning with the third annual general meeting before the date on which notice of the resolution is given to the society.

• (4) Where the society refuses, or proposes to refuse to give notice of a resolution or to send to members a statement submitted under subsection (1), it shall within 14 days after the receipt of the resolution notify the members who submitted it of such refusal and the grounds for the refusal and the said members may within 7 days of the refusal refer the refusal to the Central Bank who may direct the society to circulate the resolution or the statement subject to such conditions as the Bank may require.

• (5) No copies of a statement with respect to a resolution shall be sent to members of a society if, on any of the grounds in subsection (2) or (3), the society does not give the notice of the resolution to them required by subsection (1) (a).

• (6) Notice of a resolution given under subsection (1) must be given to the society not later than the last day of the financial year of the society preceding the financial year in which is held the annual general meeting at which it is intended to move the resolution and any statement to be sent to members under subsection (1) (b) must also be sent to the society not later than that day.

• (7) The notice of a resolution and the copies of a statement required to be sent to members by subsection (1) (a) or (b) shall be sent to them in the same manner and (so far as practicable) at the same time as the notice of the annual general meeting at which the resolution is intended to be moved, and, where it is not practicable for them to be sent at the same time as the notice, they shall be sent as soon as practicable thereafter.

• (8) Where notices of a resolution, or copies of a statement in respect of a resolution intended to be moved at a meeting are required to be sent to any persons, the proceedings at the meeting are not invalidated by—

• (a) the accidental omission to send a notice or copy to a person entitled to receive one, or

• (b) the non-receipt of a notice or copy by such a person.

• (9) This section shall not apply to a special resolution where, in the case of a society which, under the repealed enactments, was entitled to issue shares to which voting rights did not attach—

• (a) 75 per cent. of the holders of that class of shares, issued before 15 August, 1984, to which voting rights then attached consider that the resolution would, if passed, be unreasonable having regard to their interests;

• (b) the shareholders referred to in paragraph (a), in accordance with the rules of the society, refer the question for arbitration and, for this purpose, the rules shall be deemed to be an arbitration agreement within the meaning of the Arbitration Acts, 1954 and 1980; and

• (c) the arbitrator finds that the resolution would, if passed, be unreasonable having regard to the interests of the shareholders referred to in paragraph (a).

75 Postal ballots.

75.—(1) The rules of a building society may provide for the voting in an election of directors or on any resolution of the society to be conducted in all or in any particular circumstances by postal ballot; and in this Act “postal ballot”, in relation to an election, or a resolution of the society, means the postal ballot, if any taking place by virtue of those rules in the case of the election or the resolution in question.

• (2) Where, under the rules of a society, a postal ballot is to take place, the following provisions of this section have effect.

• (3) Notice of a postal ballot shall be given not less than 21 nor more than 42 days before the date which the society specifies as the final date for the receipt of completed ballot papers (referred to in this section as the “voting date”).

• (4) Subject to the provisions of this Part, notice of a postal ballot shall be given to every member of the society who would be entitled to vote in the election or on the resolution if the voting date for the election or the resolution fell on the date of the notice.

• (5) Notice of a postal ballot shall contain a ballot paper and such other notices relating to the election or resolution, and shall be accompanied by such other documents, as would be required to be given or sent to a member in connection with notice of a meeting, had it been intended to hold the election or vote on the resolution at a meeting instead of by postal ballot with the exception, however, of any notice relating to voting by proxy at a meeting.

• (6) Accidental omission to give notice of a postal ballot, or to send any document required by subsection (5) to accompany such a notice, to a person entitled to receive it, or non-receipt of such a notice or document by that person, does not invalidate the postal ballot.

PART VII Accounts and Audit

76 Accounting records, systems of business control and keeping of title deeds.

76.—(1) A building society shall—

• (a) cause proper accounting records to be kept on a continuous and consistent basis, and

• (b) establish and maintain systems of control of its business and records and systems of inspection and report thereon,

in accordance with this section.

• (2) The accounting records of a society shall be such as to—

• (a) correctly record and explain the transactions of the society;

• (b) disclose, with reasonable accuracy and promptness, the financial position of the society at any time;

• (c) enable the directors properly to discharge the duties imposed on them by or under this Act and their functions of direction of the affairs of the society;

• (d) enable the society properly to discharge the duties imposed on it by or under this Act; and

• (e) enable the accounts of the society to be readily and properly audited.

• (3) Without prejudice to the generality of subsection (1) or (2), accounting records kept pursuant to this section shall contain—

• (a) entries from day to day of all sums of money received and expended by the society and the matters in respect of which the receipt and expenditure take place;

• (b) a record of the assets and liabilities of the society and entries from day to day of every transaction entered into by the society which will or may give rise to liabilities or assets of the society; and

• (c) in respect of the provision of services, a record of the services provided and of all the invoices relating thereto.

• (4) For the purposes of subsection (1) proper accounting records shall be deemed to be kept if they comply with subsections (2) and (3), and give a true and fair view of the state of affairs of the society and explain its transactions.

• (5) The systems of control which are to be established and maintained by a society pursuant to subsection (1) are systems for the control of the conduct of its business as required by or under this Act and in accordance with the decisions of the board of directors and for the control of the accounting and other records of its business and no such systems shall be treated as established or maintained unless there is kept available to the board a detailed statement in writing of the systems as in operation for the time being.

• (6) The systems of inspection and report which are to be established and maintained by a society pursuant to subsection (1) are systems of inspection on behalf of, and report to, the board of directors on the operation of the systems of control of the society's business and records as required by subsection (5).

• (7) Without prejudice to the generality of subsection (1), the systems of control and of inspection and report must be such as to secure that the society's business is so conducted and its records so kept that—

• (a) the information necessary to enable the directors and the society to discharge their duties and functions is sufficiently accurate, and is available with sufficient regularity or at need and with sufficient promptness for these purposes; and

• (b) the information obtained by or furnished to the Central Bank is sufficiently accurate for the purposes for which it is obtained and is available as required by the Bank.

• (8) The accounting records of a society shall be kept at the chief office of the society or at such other place as the directors think fit and shall at all reasonable times be open to inspection by the directors.

• (9) Every record required to be kept under this section shall be preserved by the society for a period of not less than 6 years after the latest date to which it relates.

• (10) Where a society has subsidiaries, the society shall also secure that such accounting records are kept and such systems of control and of inspection and report are established and maintained by the society and the subsidiaries as will enable the society to comply with the requirements of this section in relation to the business of the society and those subsidiaries.

• (11) Every society shall establish and maintain a system to ensure the safe custody of all documents of title belonging to the society and of deeds relating to property mortgaged to the society.

• (12)
• (a) A society which contravenes this section or a director of a society or a chief executive who fails to take all reasonable steps to secure compliance by the society with this section or has, in the case of a director or chief executive, by his own wilful act been the cause of any default by the society thereunder, shall, in respect of each such failure or act, be guilty of an offence.

• (b) In any proceedings under this subsection against a person for an offence of failing to take all reasonable steps to comply with this section it shall be a defence to prove that he had reasonable grounds for believing and did believe that a competent and reliable person was charged with the duty of ensuring such compliance and was in a position to discharge that duty.

77 Annual accounts.

77.—(1) The directors of a building society shall prepare in respect of each financial year of the society—

• (a) an income and expenditure account giving a true and fair view of its income and expenditure for that year,

• (b) a balance sheet giving a true and fair view of the state of its affairs as at the end of that year, and

• (c) a statement of the source and application of funds giving a true and fair view of the manner in which its business has been financed and in which its financial resources have been used during that year,

and each of these shall be in such form and shall contain such particulars as the Central Bank may direct.

• (2) Subject to subsection (5), if, at the end of its financial year, a society has subsidiaries, the directors shall also prepare, with respect to that year, group accounts dealing respectively with the income and expenditure, the state of the affairs and the source and application of the funds, of the society and the subsidiaries.

• (3) The directors of a society which has subsidiaries shall secure that, in so far as it is practicable, the financial year of each of its subsidiaries coincides with the society's own financial year.

• (4) Where the directors prepare a statement of the source and application of funds of the society and its subsidiaries under subsection (2), they need not also prepare such a statement as to the society's funds under subsection (1).

• (5) The Central Bank may, as it thinks proper, on application by a society—

• (a) grant a dispensation from the requirement—

• (i) to prepare group accounts,

• (ii) to deal with all subsidiaries in group accounts, and

• (b) permit group accounts to be prepared in other than consolidated form.

• (6) Unless the Central Bank otherwise allows, the income and expenditure account, the balance sheet and the statement of the source and application of funds of a society for any financial year shall, where applicable, include corresponding particulars for the preceding financial year.

• (7) The annual accounts shall also contain, whether in the form of notes or otherwise, such supplementary information as is required by or under this Act.

• (8) The Central Bank may, by regulations, make further provision with respect to the annual accounts of a society and, without prejudice to the generality of this subsection, the regulations may—

• (a) add to the documents to be comprised in a society's accounts to be prepared for each financial year under subsection (1) or (2),

• (b) make provision as to the matters to be included in any document comprised in a society's accounts,

• (c) prescribe accounting principles and rules for the preparation of annual accounts, and

• (d) require the annual accounts of societies to deal also with bodies associated with them to a prescribed extent.

• (9)
• (a) Where a director or a chief executive of a society fails to take all reasonable steps to secure compliance with this section he shall be guilty of an offence.

• (b) In any proceedings against a person in respect of an offence under this section, it shall be a defence to prove that he had reasonable grounds for believing and did believe that a competent and reliable person was charged with the duty of seeing that this section was complied with and was in a position to discharge that duty.

• (10) The accounts prepared with respect to a society's financial year under this section, whether as individual accounts or group accounts, together with the notes to them, are referred to in this Act as “the annual accounts”.

78 Directors' report.

78.—(1) The directors of a building society shall prepare in respect of each financial year of the society a report on the society's business containing—

• (a) a fair review of the development of its business during the financial year and of its position at the end of it, and

• (b) such information relating to such aspects of the business, including its future development, of the society and any subsidiaries or other bodies associated with it as the Central Bank may specify.

• (2) The directors' report shall be signed by 2 directors (other than the chief executive) on behalf of the board of directors of the society.

• (3) Where the society has subsidiaries or other associated bodies the report shall, in addition to containing any information required in relation to them under subsection (1) (b), review the development of the business of the society and its subsidiaries and other associated bodies during the financial year and their position at the end of it.

• (4)
• (a) Where a director of the society fails to take all reasonable steps to comply with the requirements of this section he shall be guilty of an offence.

• (b) In any proceedings against a person in respect of an offence under this section, it shall be a defence to prove that he had reasonable grounds for believing and did believe that a competent and reliable person was charged with the duty of seeing that this section was complied with and was in a position to discharge that duty.

79 Summary financial statement.

79.—(1) The directors of a building society shall prepare in respect of each financial year a summary financial statement for that year derived from the annual accounts and the directors' report giving a fair and accurate summary account of the society's financial development during that year and financial position at the end of the year.

• (2) The summary financial statement shall be signed by 2 directors (other than the chief executive) on behalf of the board of directors and by the chief executive of the society.

• (3) Where the society has subsidiaries or other associated bodies the statement shall (so far as they are dealt with in the group accounts) give an account of the financial development and position of the society and its subsidiaries and other associated bodies.

• (4) The Central Bank may specify the form and content of the summary financial statement.

• (5) Every summary financial statement shall include a statement of the auditors' opinion as to its consistency with the annual accounts of the society and the directors' report and its conformity with the requirements of this section and the Central Bank.

• (6) A copy of the summary financial statement and, where it includes a qualification, a copy of the auditors' report under section 88 shall, not later than 21 days before the date of the annual general meeting at which the annual accounts and directors' report are to be considered be sent by the society to every member who is entitled to notice of the meeting and to the Central Bank, which shall keep a copy of the statement in the public file of the society.

• (7) Every summary financial statement shall also include statements to the effect that—

• (a) it is only a summary of information in the annual accounts and directors' report,

• (b) in so far as it summarises the information in the annual accounts, those accounts have been audited, and

• (c) copies of the annual accounts, auditors' report and directors' report will be available to members and depositors at every office of the society after a specified date on payment of such fee, if any, as the Central Bank may fix.

80 Display of statement.

80.—A building society shall display and at all times keep displayed in a conspicuous place in every office, branch or other place of business of the society a statement, in such form as the Central Bank may direct, in relation to the business carried on by the society.

81 Signing of balance sheet.

81.—(1) Every balance sheet of a building society shall be signed on behalf of the board of directors by 2 of the directors (other than the chief executive) and by the chief executive of the society.

• (2) There shall be annexed to every balance sheet of a society the income and expenditure account, the statement of the source and application of funds and the group accounts, if any, and the auditors' report and the directors' report shall be attached thereto, and any account and statement so annexed shall be approved by the board of directors before the balance sheet is signed on their behalf and the date of their approval of these documents shall be endorsed on the balance sheet.

• (3) A society which, and any person who, issues, circulates or publishes a balance sheet that has not been signed as required by subsection (1) or does not have annexed to it or attached to it the documents required by subsection (2) shall be guilty of an offence and so shall every person who was a director at the time of default.

82 Documents to be laid before annual general meeting.

82.—(1) The directors of a society shall lay before the society at the annual general meeting the annual accounts in respect of the last financial year.

• (2) The directors of a society shall send a copy of the annual accounts for the last financial year to the Central Bank not later than 21 days before the date of the annual general meeting and the Bank shall keep a copy of those documents in the public file of the society.

• (3) Every society shall, as from the date by which at the latest its directors are required to send them to the Central Bank, make copies of the annual accounts available to members of and depositors with the society at every office of the society during office hours and shall send copies of those documents within 7 days to any member or depositor who demands them on payment of such fee as may be fixed by the Bank.

• (4) The Central Bank may, if it thinks fit, require a society to send free of charge within a specified time a copy of any document referred to in this section to every member of the society.

• (5) In this section any reference to the annual accounts includes a reference to the documents annexed or attached to them under section 81.

• (6) If default is made in complying with subsection (1), (2) or (3) every person who was a director at the time of the default shall be guilty of an offence.

83 Appointment and removal of auditors.

83.—(1) A building society shall, at each annual general meeting, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.

• (2) Notwithstanding any agreement between the society and an auditor, and without prejudice to any rights of the auditor in relation to his removal under this Act, a society may by resolution at a general meeting remove an auditor before his term of office expires and may appoint in his place any other person who has been duly nominated for appointment, who is qualified under this Act to be an auditor of a society and of whose nomination due notice has been given to its members and the Central Bank.

• (3) The first auditors of a society may be appointed by the directors at any time before the first annual general meeting.

• (4) Where the directors fail to exercise their powers under subsection (3), these powers may be exercised by the society in general meeting and thereupon the said powers of the directors shall cease.

• (5) Where, at an annual general meeting, no auditor is appointed, the Central Bank may appoint a person to fill the vacancy and the remuneration and expenses of auditors so appointed may be fixed by the Bank.

• (6) A society shall—

• (a) within one week of the Central Bank's power under subsection (5) becoming exercisable, give the Bank notice of that fact, and

• (b) where a resolution removing an auditor is passed, give notice of that fact to the Central Bank in such form as may be required by the Bank within 14 days of the meeting at which the resolution removing the auditor was passed.

• (7) The directors of a society or the society in general meeting may fill any casual vacancy in the office of auditor but, while any such vacancy continues, the surviving or continuing auditor or auditors, if any, may act.

• (8) The appointment of a firm by the name of the firm to be the auditor of a society shall be deemed to be an appointment of those persons who from time to time during the period of the appointment are the partners in that firm as from time to time constituted and are qualified to be auditors of the society.

• (9) Where the Central Bank is of the opinion that it would not be in the interests of a society or in the interest of shareholders in or depositors with the society, it may direct, as the circumstances require, the society not to appoint or re-appoint to the office of auditor, or the directors not to fill a casual vacancy in that office with, a named person and the direction shall be complied with.

• (10) An auditor of a society who decides not to make himself available for re-appointment to the office of auditor shall serve notice of his decision on the society at least 35 days before the annual general meeting at which his term of office is to expire.

• (11) Where notice is given by an auditor under subsection (10) the provisions of subsections (2) to (5) of section 85 shall apply with necessary modifications.

84 Resolutions relating to appointment and removal of auditors.

84.—(1) Subject to subsection (2), a resolution at a general meeting of a building society—

• (a) appointing as auditor a person other than a retiring auditor,

• (b) providing that a retiring auditor shall not be reappointed,

• (c) removing an auditor before the expiration of his term of office,

• (d) filling a casual vacancy in the office of auditor, or

• (e) re-appointing as auditor a retiring auditor who was appointed by the directors to fill a casual vacancy,

shall not be effective unless notice of the intention to move it has been given to the society and to the Central Bank not less than 28 days before the meeting at which it is to be moved.

• (2) Where, after notice of the intention to move such a resolution has been given to the society, a general meeting of the society is called for a date less than 28 days after the notice has been given, the notice, although not given within the time required by subsection (1) shall be deemed to have been properly given for the purpose of that subsection.

• (3) A society shall give its members notice of any such intended resolution at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, it shall give them notice, the period of which has been approved by the Central Bank, of the intended resolution by advertisement in a daily newspaper published in the State and circulating in the area in which the society's chief office is situated.

• (4) A notice under subsection (3) shall not be given within 7 days of the date of the receipt of the intended resolution.

• (5) On receipt of notice of such an intended resolution as is mentioned in subsection (1), the society shall forthwith—

• (a) if the resolution is a resolution mentioned in paragraph (a) or (b) of the subsection, send a copy thereof to the retiring auditor;

• (b) if the resolution is a resolution mentioned in paragraph (c) of the subsection, send a copy thereof to the auditor proposed to be removed;

• (c) if the resolution is resolution mentioned in paragraph (d) of the subsection, send a copy thereof to the person (if any) whose ceasing to hold the office of auditor of the society occasioned the casual vacancy;

• (d) if the resolution is a resolution mentioned in paragraph (e) of the subsection, send a copy thereof to the person so ceasing to hold office.

• (6) Where notice is given of such an intended resolution as is mentioned in paragraphs (a), (b) and (c) of subsection (1) and the retiring auditor or the auditor proposed to be removed, as the case may be, makes in relation to it representations in writing to the society (not exceeding a reasonable length) and requests their notification to the members of the society, the society shall, subject to subsection (7), (unless the representations are received by it too late for it to do so)—

• (a) in any notice of the intended resolution given to members of the society, state the fact of the representations having been made, and

• (b) send a copy of the representations to every member to whom notice of the meeting is or has been sent,

and if a copy of the representations is not sent as aforesaid because it was received too late or because of the society's default, the auditor may (without prejudice to his right to be heard orally) require that his representations shall be read out at the meeting.

• (7) Subsection (6) shall not apply if, on the application either of the society or of any other person who claims to be aggrieved, the Central Bank is satisfied that compliance with it would diminish substantially public confidence in the society or that the rights conferred by it are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.

• (8) An auditor of a society who has been removed shall be entitled to attend—

• (a) the annual general meeting of the society at which, but for his removal, his term of office as auditor of the society would have expired, and

• (b) the general meeting of the society at which it is proposed to fill the vacancy occasioned by his removal, and

to receive all notices of, and other communications relating to, any such meeting which a member of the society entitled to notice of the meeting is entitled to receive, and to be heard at any such meeting on any part of the business of the meeting which concerns him as former auditor of the society.

85 Resignation of auditors.

85.—(1) An auditor of a building society may by a notice in writing, that complies with subsection (3), served on the society and stating his intention to do so, resign from the office of auditor to the society, and the resignation shall take effect on the date on which the notice is so served or on such later date as may be specified in the notice.

• (2) A copy of a notice under subsection (1) shall be sent by the auditor to the Central Bank at the same time as it is served on the society.

• (3) A notice under subsection (1) shall contain either—

• (a) a statement to the effect that there are no circumstances connected with the resignation to which it relates that the auditor concerned considers should be brought to the notice of the members of, depositors with or creditors of the society, or

• (b) a statement of any such circumstances.

• (4) Subject to subsection (5), where a notice under subsection (1) is served on a society, the society shall, not later than 14 days after the date of such service, and if the notice contains a statement referred to in subsection (3) (b), send a copy of the notice to every person who is entitled to notice of a general meeting of the society.

• (5) Copies of a notice served on a society under subsection (1) need not be sent to the persons specified in subsection (4) if, on the application of the society concerned or any other person who claims to be aggrieved, the Central Bank is satisfied that the sending of the notice would be likely to diminish substantially public confidence in the society or that the rights conferred by this section are being abused to secure needless publicity for defamatory matter.

86 Requisitioning of general meeting of society by resigning auditor.

86.—(1) A notice served on a building society under section 85 by a resigning auditor, which contains a statement in accordance with subsection (3) (b) of that section, may also requisition the convening by the directors of the society of a general meeting of the society for the purpose of receiving and considering such account and explanation of the circumstances connected with his resignation from the office of auditor to the society as the auditor may wish to give to the meeting.

• (2) Where an auditor makes a requisition under subsection (1) the directors of the society shall, within 14 days of the service on the society of the said notice, proceed duly to convene a general meeting of the society for a day not more than 28 days after such service.

• (3) Subject to subsection (4), where—

• (a) a notice served on a society under section 85 contains a statement in accordance with subsection (3) (b) of that section, and

• (b) the auditor concerned requests the society to circulate to its members—

• (i) before the general meeting at which, apart from the notice, his term of office would expire, or

• (ii) before any general meeting at which it is proposed to fill the vacancy caused by his resignation or convened pursuant to a requisition under subsection (1),

a further statement in writing prepared by the auditor of the circumstances connected with the resignation that the auditor considers should be brought to the notice of members,