Liability of members of committee of management of society
63.—(1) A member of the committee of management of a society must at all times act honestly and use reasonable diligence in the discharge of the duties of the member’s office.
(2) Subject to subsection (3), a member of the committee of management of a society may, when exercising powers or performing duties as such a member, rely on reports, statements, financial data and other information prepared or supplied, and on professional or expert advice given, by any of the following persons:
(a)
an employee of the society whom the member believes on reasonable grounds to be reliable and competent in relation to the matters concerned;
(b)
a professional adviser or an expert in relation to matters which the member believes on reasonable grounds to be within the person’s professional or expert competence;
(c)
any other member, or any committee of such members on which the member concerned did not serve, in relation to matters within that other member’s or committee’s designated authority.
(3) Subsection (2) applies to a member of the committee of management of a society if, and only if, the member —
(a)
acts in good faith;
(b)
makes proper inquiry where the need for inquiry is indicated by the circumstances; and
(c)
has no knowledge that such reliance is unwarranted.
(4) An officer or agent of a society must not make improper use of either of the following to gain, directly or indirectly, an advantage for himself or herself or for any other person, or to cause detriment to the society:
(a)
his or her position as an officer or agent of the society;
(b)
any information acquired by virtue of that position.
[3/2018]
(5) Any member of the committee of management of a society who contravenes subsection (1), or any officer or agent of a society who contravenes subsection (4) —
(a)
is liable to the society for any profit made by the member, officer or agent (as the case may be) or for any damage suffered by the society as a result of such contravention; and
(b)
shall be guilty of an offence and liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both.
(6) Where the committee of management of a society has appointed a person as a chief executive officer to administer and manage the affairs of the society, the appointment does not absolve the committee of management from its responsibility for the proper direction of the affairs of the society.
[3/2018]
(7) In this section, unless the context otherwise requires —
“agent”, in relation to a society, includes a banker, a solicitor or an auditor of the society and any person who at any time has been a banker, a solicitor or an auditor of the society;
“officer”, in relation to a society, includes a person who at any time has been an officer of the society.
(8) This section is in addition to and not in derogation of any other written law or rule of law relating to the duty or liability of officers of a society.