Building Societies Act, 1989

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Consequential provisions on conversion of society.

107.—(1) Where a building society becomes converted into a company pursuant to this Part—

(a) every shareholding in and deposit with the society shall on conversion become a deposit of the same amount with the successor company, and

(b) the business, property, rights and liabilities of the society, shall, on the conversion date, vest in the company.

(2) Without prejudice to the generality of subsection (1), the following provisions shall have effect where a society becomes converted into a company pursuant to this Part, that is to say—

(a) a reference (express or implied) to the society in any instrument made, given, passed, or executed before the conversion date shall be read and construed as a reference to the company;

(b) except as provided in subsection (3), all contracts, agreements, conveyances, mortgages, deeds, leases, licences, other instruments, undertakings and notices (whether or not in writing) entered into by, made with, given to or by, or addressed to the society (whether alone or with any other person) before the conversion date and subsisting immediately before the conversion date shall, to the extent that they were previously binding on and enforceable by, against, or in favour of the society, be binding on and enforceable by, against, or in favour of the company as fully and effectually in every respect as if, instead of the society, the company had been the person by whom they were entered into, with whom they were made, or to or by whom they were given or addressed as the case may be;

(c) an instruction, order, direction, mandate, or authority given to the society and subsisting immediately before the conversion date shall be deemed to have been given to the company;

(d) a security held by the society as security for a debt or other liability to the society incurred before the conversion date shall be available to the company as security for the discharge of that debt or liability and, where the security extends to future or prospective debts or liabilities, shall be available as security for the discharge of debts or liabilities to the company incurred on or after the conversion date; and, in relation to a security, the company shall be entitled to all the rights and priorities (howsoever arising) and shall be subject to all liabilities to which the society would have been entitled or subject if the society had not become converted into a company;

(e) all the rights and liabilities of the society as bailor or bailee of documents or chattels shall be vested in and assumed by the company;

(f) a negotiable instrument or order for payment of money which before the conversion date is drawn on or given to or accepted or endorsed by the society or payable at a place of business of the society shall, unless the context otherwise requires, have the same effect on and after the conversion date as if it had been drawn on or given to or accepted or endorsed by the company instead of the society or was payable at the place of business of the company;

(g) nothing effected or authorised by this Part—

(i) shall be regarded as placing the society, or the company, or any other person in breach of contract or confidence or as otherwise making any of them guilty of a civil wrong; or

(ii) shall be regarded as giving rise to a right to any person to terminate or cancel any contract or arrangement or to accelerate the performance of any obligation; or

(iii) shall be regarded as placing the society, or the company, or any other person in breach of any enactment or rule of law or contractual provision prohibiting, restricting or regulating the assignment or transfer of any property or the disclosure of any information; or

(iv) shall release any surety wholly or in part from any obligation; or

(v) shall invalidate or discharge any contract or security;

(h) any action, arbitration or proceedings, or cause of action which immediately before the conversion date is pending or existing by, against, or in favour of the society or to which the society is a party may be prosecuted, and without amendment of any writ, pleading, or other document, continued and enforced by, against, or in favour of the company;

(i) on the conversion date each employee of the society shall become an employee of the company but, for the purposes of every enactment, law, award, determination, contract and agreement relating to the employment of each such employee, the contract of employment of that employee, shall be deemed to have been unbroken and the period of service with the society shall be deemed to have been a period of service with the company, and the terms and conditions of employment of each such employee shall, until varied, be identical with the terms and conditions of that employee's employment with the society immediately before the conversion date and be capable of variation in the same manner.

(3) Where a society becomes converted into a company pursuant to this Part and the conversion scheme provides for the conversion or alteration of the rights or liabilities of any person that were subsisting immediately before the conversion date, those rights and liabilities shall, notwithstanding subsection (2), cease to be enforceable by, against, or in favour of the company on or after the conversion date except in accordance with that scheme.

(4) Where a society becomes converted into a company pursuant to this Part and the conversion scheme provides for any rights or liabilities to arise immediately after the conversion date, those rights and liabilities shall be enforceable by, against, or in favour of the company on and after the conversion date.