In this article we highlight the requirements for adequate and
correct meeting notices (for Societies and companies), look at
good practice and also draw your attention to some of the common
pitfalls (which can actually lead to the proceedings of the relevant
meeting being declared invalid).
The rules for meetings differ depending upon the legal structure
you are using.
There are no specific provisions in the Incorporated Societies Act
1908 setting out requirements for Notices of meetings. Reference
should always be made to the Constitution of the relevant Society
and the provisions followed closely.
For companies, Schedule 1 of the Companies Act 1993 requires
that written notice of the time and place of a meeting of
shareholders be sent to every shareholder entitled to receive such
notice and to every director and an auditor of the company not less
than 10 working days before the meeting. For board meetings,
Schedule 3 of the same Act provides that not less than 2 days’
notice of a meeting must be sent to every director who is in New
Zealand, and the notice must include the date, time and place of the
meeting and the matters to be discussed. The Constitution of the
relevant company may of course prescribe longer periods of notice
so it should always be checked.
What does “X days’ notice” mean?
Sometimes a Constitution made provide that “X days’ notice” or “X
days’ clear notice” is required. The Courts have determined that
even where “clear” is not part of the wording, the principle is the
same – both the day of posting or sending of the Notice and the
day of the meeting (and any part days) must be excluded from the
calculation. Should the wording refer to a different measurement of
time – for example weeks or months etc – the same principles
apply.
What form should the Notice take?
The Companies Act 1993 prescribes that a Notice of a meeting of
shareholders must be in writing. The same Act does not require
Notice of a board meeting to be in writing, but the Constitution of
the relevant company might – and, in practice, we would certainly
recommend it.
The Constitution of most Societies will require Notices of meetings
to be in writing – and again, even if the Constitution does not
require it, we would recommend it.
Some organisations will make special provision for the calling of
meetings (especially committee meetings) by phone or fax, and
large meetings are often called by notice in a newspaper
circulating in the relevant area. The important thing is that the
meeting is called in such a way that adequate notice is given to all
entitled parties or members.
What should the Notice contain?
Subject to the specific requirements of the Constitution of the
relevant organisation, good practice would be for the Notice to
contain:
The date, time and place of the meeting;
An explanation as to the reason for the meeting;
An Agenda/list of the matters to be dealt with. This
should be detailed and should include the wording of any
motions proposed along with any background information
and reports or recommendations that are relevant.
Recipients of the Notice should not be directed to an
external source for information – for example a Notice
directing recipients to the organisation’s website for
additional information would not be sufficient to meet the
requirements of a valid Notice.
What defects have caused the Courts to hold meetings to be i
nvalid?
The following are some examples of situations/problems with
Notices which have led the Courts to declare meetings invalid due
to inadequate or inappropriate notice:
The Notice does not give the date, time and place of the
meeting.
The Notice is ambiguous or misleading – good practice
would always be for the Notice to be couched in clear and
plain terms.
The Notice comes from someone who does not have the
requisite authority – as usual, the Constitution of the
relevant organisation is the first port of call here but
usually it will be the responsibility of the Secretary to
send out Notices. However, in one case it was held that a
meeting was improperly convened where the Secretary
sent out Notices without the authority of the board.
The Notice is unreasonable or the meeting deliberately
held at a time or place intended to prevent some members
attending.
The period of notice is insufficient.
The Notice is conditional – a valid Notice must not be
dependent upon some other event taking place.
The Notice does not fully specify the reason for the
meeting or does not give sufficient information as to the
nature of the business to be discussed – for example, the
Courts have held that it was insufficient for a Notice to
say that a meeting was to “report and discuss the matter”
relating to a certain person, when in fact the meeting was
convened to discuss that person’s expulsion from the
organisation.
Where some members were not sent proper notice – for a
particularly strict application of this see below.
Miscellaneous
1. Some Constitutions make provision for regular
meetings taking place on the same day of the week or
month at the same place. In these circumstances, Notice
of those meetings is not usually required. However, an
agenda should still be circulated and good practice would
be for a schedule of the meetings to be sent to all of the
relevant parties in advance.
2. In one case it was held that a meeting was invalid
because the Notice was not sent to one member, despite
the fact that the member in question had already advised
the relevant Society that she did not intend to attend
meetings!
3. The Companies Act 1993 provides that an irregularity
in a Notice of a meeting (of shareholders or directors) can
be waived if all the shareholders/directors entitled to
receive notice/attend the meeting, do attend the meeting
without protest as to the irregularity, or agree to such
waiver.
For Societies, yes – you’ve guessed it, the Constitution may well
contain provisions for validation or waiver in relation to an invalid
notice, either at the relevant meeting or subsequently.
In either case, you will not be surprised to learn that it is better to
get the Notice right in the first place, rather than rely on
subsequent validation or waiver by the affected parties.
