Associations & co‑operatives Co-operatives Running a co-operative Managing co-operative disputes

Managing co-operative disputes

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The co-operative’s rules must include a grievance procedure for dealing with a dispute between:

  • a member and another member (including a person who was a member not more than 6 months before the dispute occurred)
  • 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 have the effect of a contract between the co-operative and its members and any alleged breach of the rules should be dealt with according to the dispute resolution 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:

  1. Try to resolve the dispute directly with the parties involved.
  2. If this direct approach fails, then use the dispute resolution procedure in the co-operative’s rules. (The rules may require the parties to undertake a particular process where a dispute cannot be resolved directly with the co-operative.)
  3. If the matter remains unresolved, you could try an alternative dispute resolution method such as mediation or arbitration.
  4. A member or the co-operative can also apply to the Supreme Court of NSW for an order that declares or enforces the rights or obligations of the member or the co-operative.

A member or the co-operative may consider obtaining legal advice from a suitably qualified practitioner if the dispute cannot be resolved directly with the co-operative.

NSW Fair Trading

Fair Trading can only intervene in matters relating to alleged breaches of the Co-operatives National Law (NSW) including:

  • 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?

Legal assistance may be obtained from the following sources:

Need more information?

NSW Fair Trading

Make an enquiry online

Free Call: 1800 502 042

PO Box 22
Bathurst NSW 2795

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