Arguing over control of a $40,000 bank balance; a bitter battle between Electrical Institute factions based separately in Auckland and Wellington has seen a $40,000 Westpac balance run down to $200, chewed up by legal expenses.
Wellington members objected to an Auckland ‘takeover’ of branch funds. Auckland was not validly appointed as Institute executive and had no grounds to disband Wellington branch, the High Court ruled. The Institute was founded in 1940. Regional branches were established, with members paying a branch fee together with a capitation figure forwarded to ‘head office’. It describes itself as a non-profit industry body providing training and support. The Institute is currently managed by the Horan family, out of Pukekohe.
Wellington branch members took legal action after a September 2016 edict that their branch was disbanded; all funds were to be transferred to Auckland. Justice Cooke ruled the Auckland-based executive had not been validly elected at a previous annual general meeting. They had declared themselves re-elected, without the need for either re-nomination, or a vote.
In addition to not having executive authority to deal with Wellington branch, Justice Cooke ruled the Auckland faction failed to comply with natural justice. It did not give Wellington a proper opportunity to respond. Complaints Wellington branch had failed to file tax returns were invalid; tax filing was a ‘head office’ responsibility. Allegations about misuse of Branch funds had no substance. The Auckland executive also ignored its own rules; if a branch were disbanded, branch funds had to be held in trust for five years before coming under Institute control, pending a possible revival of branch activities.
The Institute’s financial statements to March 2019 disclose accumulated funds totalling $9900, down from some $135,000 three years previously. Legal action over control of the $40,000 Westpac account was described by Justice Cooke as being totally uneconomic.
NZ Electrical Institute Inc v. Westpac – High Court (19.06.19)
19.112