A permanent society is one which has not by its rules any such fixed date or specified result, at which it shall terminate. 37 & 38 Vict. c. 42, 8. 5.

DEFINITION of COURT. See COURT (24).

REGISTRAR. See REGISTRAR (134).

DEPOSIT BOOKS must contain sects. 15 & 16 of 37 & 38 Vict. c. 42. See POWER TO BORROW (108). DEPOSITORS, How far affected by Rules. See POWER TO BORROW (110).

Entitled to copy of Accounts. See
ACCOUNTS (1).

DEPOSITS may be received to a limited extent. See
POWER TO BORROW (106).

DIRECTORS.

31. The manner of appointing, remunerating, and removing the board of directors or committee of management, as well as their powers and duties, are to be set forth in the rules, by which they are to be bound. 37 & 38 Vict. c. 42, ss. 16, 21.

32. They may require all officers, having the receipt or charge of money, to account (sect. 24), and they have the general management of the society (a).

33. Personal liability of.—If the loans or deposits received are in excess of the limits prescribed by the Act, the directors or committee of management receiv

(a) With respect to the duties of directors, Mr. Henry Davis, in his excellent work on Building Societies, remarks: "The active supervision of the affairs of the society is generally entrusted by the rules to certain of the members, elected by the whole body of shareholders. They are in the position of trustees to the remainder of the members, and it is their duty to carry on the business of the society in such manner as, having a due regard to the rules, will most conduce to the welfare of the society." p. 99.

ing such loans or deposits on its behalf are personally liable. 37 & 38 Vict. c. 42, s. 43.

DISCOUNT, no Restriction as to, under 37 & 38 Vict. c. 42. See PAID-UP SHARES (104).

DISPUTES.

34. All disputes, whether between the society and any of its members, or any person claiming by or through any member, or under the rules, are to be determined either by arbitrators, or by the registrar, or by the court, and such determination is to be binding and conclusive on all parties, and final to all intents and purposes, and not subject to appeal, nor removable to any court of law, nor restrainable by the injunction of any court of equity; but a case may be stated for the opinion of the supreme court of judicature on any question of law. 37 & 38 Vict. c. 42, ss. 16 and 34-36.

35. The rules must set forth whether disputes shall be settled by reference to the court, or to the registrar, or to arbitration. 37 & 38 Vict. c. 42, s. 16.

36. Determination of disputes by arbitration.—Where the rules of a society direct disputes to be referred to arbitration, arbitrators shall be named and elected in the manner such rules provide, or if there be no such provision, at the first general meeting. 37 & 38 Vict. c. 42, s. 34.

If elected at some subsequent meeting, the election would still be valid for this part of the provision is directory, and not imperative, as it contains "mere matter of direction, and nothing more" Taunton, J., in Pearse v. Morrice, 1834, 2 A. & E. 96.

"There is a known distinction between circumstances which are of the essence of a thing required to be done by an Act of parliament and clauses merely directory. The precise time in many cases is not of the essence": Lord Mansfield, in Rex v. Loxdale, 1758, 1 Bur. 447.

The 54 Geo. 3, c. 84, enacted that the Michaelmas quarter sessions shall be holden in the week next after the 11th of October. Held that this was directory, and that they might legally be holden at another time: The King v. Leicester, 7 B. & C. 6.

By a local Act constituting a dock company, it was enacted, that the minutes of the proceedings of the meetings of the directors should be signed by the chairman at each respective meeting Held, that signature at a subsequent meeting after the minutes had been read and confirmed, was a sufficient compliance: Southampton Dock Company v. Richards, 1 Scott N. R. 219, 1840; London and Brighton Railway Company v. Fairclough, 5 Scott N. R., 68, 1841; West London Railway Company v. Bernard, 3 Q. B. 873, 1843; Miles v. Bough, 3 Q. B. 845, 1843; "Dwarris on Statutes," 2nd ed. 1848, p. 606, et seq.

37. None of the said arbitrators may be beneficially interested, directly or indirectly, in the society's funds;

A certain number of them, not less than three, shall be chosen by ballot in each case of dispute, the number and mode of ballot being determined by the rules;

Their award determines the dispute, and compliance with the same may, if necessary, be enforced by the court upon the petition of any person concerned. 37 & 38 Vict. c. 42, s. 34.

38. Notice of an appointment by arbitrators for the purpose of proceeding with a reference, must be properly served, and not merely addressed to the member, by post, according to the last entry on the register: Hilton v. Hill, 1863, 9 L. T. (N. s.) 383.

39. The arbitrators may decline to hear counsel: In re Macqueen, 1861, 9 C. B. (N. s.) 793.

40. Arbitrators dying, or refusing or neglecting to act. -The society at a general meeting is to name and elect an arbitrator to act in the place of the one dying, or refusing or neglecting to act. 37 & 38 Vict. c. 42,s. 34.

41. Registrar may determine dispute.-Where the parties to the same agree to refer it to him, or where the rules direct disputes to be so referred; and his award has the same effect as that of arbitrators. 37 & 38 Vict. c. 42, s. 34.

42. Court may determine disputes.—

(i). If application has been made by either party to the other to have the dispute settled

by arbitration, and such application has not within forty days been complied with;

(ii). If the arbitrators have refused, or, for a period of twenty-one days, have neglected, to make any award;

(iii.) Where the rules direct disputes to be referred to the court or to justices. 37 & 38 Vict. c. 42, s. 35.

43. The effect of directing disputes to be referred to arbitration is to oust the jurisdiction of the ordinary tribunals in such cases, and to preclude either party to the dispute from having recourse to an action at law instead.

"It is, undoubtedly, true that the jurisdiction of the superior courts of Westminster is not to be ousted, except by express words, or by necessary implication (Cates v. Knight, 1789, 3 T. R. 442); yet where the object and intent of the statute manifestly require it, words that appear to be permissive only, shall be construed as obligatory, and shall have the effect of ousting the courts of their jurisdiction. As in Cates v. Knight, where a clause enacted, that it shall and may be lawful for the justice of the peace to hear and determine offences against the Act, that subject the offender to penalties not amounting to fifty pounds, with a power to the justices to mitigate the penalties, whilst the same Act directed that all penalties which amount to fifty pounds or more shall be sued for in His Majesty's courts at Westminster; it was held, that by necessary implication the courts above were ousted of their jurisdiction in the case of penalties not amounting to fifty pounds. Now, in this case the legislature has enacted, that disputes of the description of the present shall be referred— words which in their natural force denote an obligation, not a permission only; and unless these words are construed to be compulsory on the plaintiff, they mean nothing. If they are not compulsory on the plaintiff, neither can they be so upon any principle of fair construction upon the defendant. And if recourse to arbitration is not intended, except both parties choose to adopt it, then, indeed, the Act is made a dead letter, for it would be competent for both parties to refer the dispute to arbitration, if they both agreed upon it, without the intervention of the statute. In order, therefore, to give these words of the statute any force or operation, the word "shall" must by construed as obligatory; that is, that the matter in dispute shall of necessity be referred to arbitration, and not be determined in any of the courts of Westminster Hall. But, looking at the object and intention of the legislature, we think it clear that their remedy by action is taken

away, and that by arbitration substituted in its place": Per Tindal, C. J., in Crisp v. Bunbury, 1832, 8 Bing. 394.

66

"Upon a rule for a mandamus to the judge of the county court to proceed with this action, which was brought by a member of a building society, within the provisions of the 6 & 7 Will. 4, c. 32, against an officer of the society, it was contended, that by sect. 4 of that statute, incorporating the provisions of 10 Geo. 4, c. 56, ss. 27, 28, 29, and by the 25th rule of the society, directing a reference of all disputes to justices of the peace, the right to bring the action was taken away; and I am of opinion that this is so. By those sections, provision is directed to be made by the rules, specifying whether disputes shall be referred to justices or to arbitration; and the decision upon such reference is made final. Those sections and this rule, providing for a cheap, simple, and speedy decision, oust the jurisdiction of the ordinary tribunals (Crisp v. Bunbury [see above], Timms v. Williams, 1842, 3 Q. B. 413). In Cutbill v. Kingdom, 1847, 1 Ex. 494, the action was held maintainable, because the rule there relating to reference did not comprise the matter of that action; but by the exception the rule was recognized. The 9 & 10 Vict., c. 95, s. 58, does not operate to take away the effect of these statutes from county courts, or revive a power of bringing actions there, which had been taken away from all courts generally. The rule must, therefore, be discharged": Erle, J., in Ex parte Payne, 5 Dowl. & L. 679, 1849.

44. The view taken in the above cases of Crisp v. Bunbury and Ex parte Payne was followed by Bacon, V. C. in the case of Thompson v. Planet Building Society, where the plaintiff sought to compel immediate payment of the sums subscribed by him in respect of his shares, claiming a right to withdraw under notice properly given; and also to restrain the directors from applying the funds of the society in paying other persons in priority to himself, and to make the directors personally liable, and the Vice-Chancellor held, that it was contrary to the language of the statute (a), and against the policy of the law, that internal disputes between the members, or office-holders, of a building society, and the society should be the subject of actions at law or suits in equity.

His Honour, in giving judgment, said it was a most important case, for benefit building societies were scattered over the face

(a) The Acts 10 Geo. 4, c. 56, s. 27, and 4 & 5 Will. 4, c. 40, s. 7, incorporated with 6 & 7 Will. 4, c. 32. The provisions of 37 & 38 Vict. c. 42, leave even less room for doubt.