Dispute management in a co-operative

The co-operative’s rules must have a grievance procedure for handling disputes between:

• members of the co-operative (including a person who was a member for less than 6 months before the dispute)
• a member and the co-operative.

The grievance procedure must allow for natural justice to be applied. A member may appoint any person to act on their behalf in the grievance procedure.

The rules act as a contract between the co-operative and its members. Any breach of the rules should be resolved using the dispute procedure.

How are disputes within a co-operative handled?

Resolving a dispute at the earliest opportunity is usually the simplest and most cost-effective way for all involved. If a dispute arises:

• Try to resolve the dispute directly with the parties involved.
• If this approach fails, use the dispute resolution process in the co-operative's rules. (The rules may have a specific process for both parties. This is useful if the dispute cannot be handled directly with the co-operative).
• If it stays unresolved, the co-operative can try alternative methods. This may involve mediation or arbitration.
• A member or the co-operative can also apply to the Supreme Court of NSW. They can apply for an order that declares or enforces their rights and obligations.

A co-operative member may seek legal advice from a qualified legal practitioner. This is useful if the co-operative cannot resolve the dispute directly.

NSW Fair Trading’s role

Fair Trading can only intervene in alleged breaches of the Co-operatives National Law (NSW). These include:

• continuing to operate whilst insolvent or unable to pay debts
• acting with intent to defraud or for any other fraudulent purpose
• failure to hold board meetings
• failure to hold an annual general meeting
• failure to maintain minutes of meetings
• failure to provide financial reports to members
• failure to lodge annual reports/annual returns.

Fair Trading does not:

• intervene in or conciliate disputes between members or between members and a co-operative
• provide legal advice (including an interpretation of a co-operative’s rules)
• intervene in or determine the validity of meetings or elections.

Where can I get assistance?

Members or the co-operative can obtain legal assistance from the following sources:

• A legal practitioner of your choice.
• Legal Aid / Law Access NSW by visiting the Legal Aid website.
• Community Justice Centres at 1800 990 777 or visit their website.
• Your local Community Legal Centre. Visit the Community Legal Centre website for a list of centres.
• For help finding a private law firm, visit the Law Society of NSW Solicitor Referral Service.