Committee Regulations

The TAANZ Bonding Committee Regulations are by-laws of the Association made by the board of Directors pursuant to its powers contained in Rule 35 (e) of the Constitution and Rules of the Association

The regulations of the Bonding Committee of the Board of Directors of the Travel Agents’ Association of New Zealand to apply as from the 30 July 1997 are as follows:

Definitions

1.(a) In these regulations the following expressions shall (except where the context otherwise requires) have the following meanings:

The Association

Travel Agents’ Association of New Zealand Incorporated.

Constitution and Rules

The Constitution and Rules of the Association.

The Committee

The Bonding Committee

Bonding Authority

The person or persons from time to time appointed by the Board of Directors of the Association as the Bonding Authority.

Bond

Any bond, guarantee, cross indemnity or other security to be given by members under these regulations or required by the Committee in accordance with these regulations.

Bond Monies

Monies comprised in or secured by any bond.

The Fund

The sum of $40,000 which has been paid out of the accumulated funds of the Association for the purpose and in accordance with the decision of the special general meeting of the Association held on the 18th May 1981 together with all bonding levies payable by members and together with all bond monies received by the Committee in accordance with these regulations and income earned by such sum and such monies.

Obligor

The person who has given or is liable upon any bond and includes any person who has given or is liable under any guarantee or cross indemnity of any bond.

Member

A full member of the Association.

Principals

Principals of land, sea/or air transport and/or accommodation firms, organisations and companies (including tour wholesalers).

1.b) Unless otherwise stated above expressions defined in the Constitution and Rules shall have the same meaning in these regulations.

Constitution of the Committee

2.(a) The Committee shall consist of the full Board of the Association as elected from time to time. The members of the Board shall be the trustees of the fund.

(b) The Committee shall administer the fund and shall act for an on behalf of the Association in processing claims on the fund and in the enforcement of bonds.

(c) The Committee shall meet to conduct its business at such times and in such manner as it shall from time to time determine. The quorum for meetings of the Committee and the procedure adopted by the Committee shall in the absence of any special determination by the Committee be the same as applies in relation to meetings of the Board of Directors of the Association.

(d) The Committee shall cause to be kept minutes of its meetings, proper accounts of all monies and funds received and expended by the Committee, and shall upon request produce such accounts and report upon its activities to the Board of Directors and to any general meeting of the Association.

The Bonding Authority

3.(a) The Committee shall appoint a Bonding Authority. The appointment shall be on such terms and conditions as shall from time to time be determined by the Committee.

(b) The Committee shall pay out of the fund the reasonable charges, fees, and expenses of the Bonding Authority.

Function of the Bonding Authority

4.(a) The Bonding Authority shall determine whether the bond of any applicant for membership or an existing member is acceptable to the Association and shall determine what guarantees, indemnities or securities are necessary to support such bond.

(b) In addition to reviewing the annual bonding returns and annual financial statements that members are required to provide to the Bonding Authority, the Bonding Authority may at any time require a member to provide financial reports at more frequent intervals and/or additional financial material.

(c) The Bonding Authority will maintain complete confidentiality regarding all information received from a member.

Application of the fund

5.(a) The Committee shall employ and expend the Fund in reimbursing members of the public (“customers”) for moneys paid directly to a member for the purpose of arrangement of travel and for accommodation, deposits, bookings or reservations, or related services, where either:

(i) the member has not paid the appropriate principals and as a result of such nonpayment by the member the customer has not obtained the tickets or vouchers which would entitle the customer to receive the services which the customer has paid the member to arrange; or

(ii) the member has paid another TAANZ member or an IATA approved agent the moneys, or some of the moneys, that the member has received from the customer for the purpose of arrangement of travel and/or for accommodation deposits, bookings or reservations, or related services, and that TAANZ member or that IATA approved agent has not paid the appropriate principals, and, as a result of such nonpayment by that TAANZ member or that IATA approved agent, the customer has not obtained the tickets or vouchers which would entitle the customer to receive the services which the customer paid the member to arrange.

(b) Claims on the fund pursuant to paragraph 5(a)(ii) hereof can only be made and will only be accepted by the Committee when the TAANZ member or IATA approved agent receiving the money from the member which dealt directly with the customer is itself acting as an agent and is pursuant to its obligations as an agent
required to account to its principals for all or part of the moneys it receives.

If the TAANZ member or IATA approved agent which receives the money from the member which dealt directly with the customer is acting as a principal and selling its own product there will be no claim on the Fund if such TAANZ member or IATA approved agent becomes insolvent and is unable to deliver the services for which it has been paid.

The Committee shall take cognisance of the fact that when a TAANZ member and/or IATA approved agent acts as a tour operator/tour wholesaler it will invariably be acting as a principal and in such cases no claim can be made against the Fund pursuant to the provisions of paragraph 5(a)(ii) hereof.

(c) Subject only to the qualification contained in paragraph 5(h) hereof the maximum amount of the fund which the Committee can expend in reimbursing members of the public in relation to the default of any one member/IATA approved agent shall be the sum of $250,000.00. For the avoidance of any doubt a TAANZ member who pays and applies moneys received from a customer to another TAANZ member or an IATA approved agent for the purposes of arrangement of travel and/or for accommodation deposits bookings or reservations, or related services for that customer, is not in default of its obligations to that customer. Claims on the Fund pursuant to paragraph 5(a)(ii) hereof are claims which relate solely to the default of the TAANZ member or IATA approved agent which failed to pay the appropriate principals, and the maximum amount of the Fund which the Committee can expend in reimbursing members of the public in relation to all such defaults by that TAANZ member or IATA approved agent shall be $250,000.00. In such a case there shall be no claim on the Fund in relation to the activities of the member who received moneys from the customer and paid or applied those moneys to another TAANZ member or IATA approved agent for the purposes of arrangement of travel and/or for accommodation deposits bookings or reservations or related services. If the sum total of claims accepted by the Committee in relation to the default of one member, or in the case of claims under paragraph 5(a)(ii) which involve an IATA approved agent in relation to an IATA approved agent, exceeds the sum of $250,000.00 payment to the claimants shall be made on a pro rata basis.

(d) The Committee is empowered in its absolute and unfettered discretion to pay from the fund claims which are made by customers of a lapsed member and shall give favourable consideration to paying such claims if they are otherwise acceptable, when in the committee’s opinion the customers of such lapsed member have
paid onies to the lapsed member without knowing or having had a reasonable opportunity to find out that the status of such lapsed member had changed and that the lapsed member was no longer a member of TAANZ.

(e) The Committee shall also be empowered to employ and expend part of the fund by the allocation of $650,000 to a separate fund to be known as the Airline Fund and to supplement such fund from time to time as provided for in the TAANZ/Airline Agreement.

(f) (i) The Committee shall not pay from the fund any claim by a member of the public where the member of the public utilises the services of a non TAANZ member (hereinafter in this provision referred to as “the Third Party”) to arrange travel, accommodation, deposits, bookings or reservations, or related services. This is the case notwithstanding the fact that the “Third Party” utilises the services of a TAANZ member to implement such arrangements and the loss suffered by the member of the public arises as a consequence of the TAANZ member failing to supply the services for which it has been paid by the Third Party/member of the public. The fund is only available to answer claims in respect of retail transactions in which a member of the public deals directly with a TAANZ member or an approved salesperson engaged by a TAANZ member.

(iii) Monies paid to a member for group travel and/or accommodation by or on behalf of members of a club or association complying with the legal requirements for concessions for such group travel and/or accommodation shall have the protection of the fund and claims in respect of such monies shall be accepted by the Committee in terms of paragraph 5(a) of this regulation.

(g) The Committee will not accept any claim made by a customer pursuant to Clause 5(a) hereof unless the same is lodged with the Association within six months of the date of the default by the member.

(h) The Committee may at its discretion make immediate payment of claims against the bonding fund in cases in which travel or accommodation of consumers is imperilled as a result of the default of a bonded member. In the event of the final sum of all claims exceeding the maximum liability of the bonding fund in respect of a default by a member and it becoming necessary to make payments on a pro-rata basis, in such case the maximum liability of the bonding fund shall be increased by the amount paid to such customer over and above this pro-rata entitlement.

(i) The Committee shall pay from the Fund the reasonable costs of the Association in administering the Fund and the TAANZ Bonding Scheme and such sums as the Committee may from time to time authorise as expenditure for the purposes of protecting and preserving the Fund.”

Enforcement of Bonds

6.(a) The Committee shall take all reasonable steps to enforce Bonds given by or on behalf of a member in every case where the Committee is going to pay or apply or has paid or applied any part of the fund pursuant to the provisions of Clause 5 hereof.

(b) The Committee may, in the name of and on behalf of the Association, make any demands or claims commence, prosecute and compromise any proceedings, make any appeal, take any proceedings to enforce any judgement or award or do any other act or thing required to enforce or realise any security and for any such purpose may engage any Solicitors, Counsel or other agents and pay or make provision for the costs of anything done or to be done under this paragraph.

(c) The Committee may as a precautionary step even where it has not received notice of any claims pursuant to Clause 5 hereof, if the terms and conditions of any bond so permit call upon the Obligor to honour the terms of the bond if any of the following events shall have occurred:
(i) A petition has been presented to the Court for the compulsory winding up of the member.

(ii) The member has convened a meeting of its creditors, informally or otherwise for the purpose of considering any arrangement with such creditors or pursuant to the provisions of Section 284 of the Companies Act 1955, or any statutory modification or re-enactment thereof.

(iii) A receiver has been appointed over any of the property or assets of the member.

(iv) The member has stopped payment of its debts or can be shown to be unable to pay its debts within the meaning of Section 287 of the Companies Act 1993, or has ceased to carry on its business as a result of being unable to pay its debts as they fall due.

(v) The member being an individual, a petition in bankruptcy has been presented to the Court to adjudicate the member as bankrupt, a judgement has been entered against the member or the member has convened a meeting of creditors.

Expenses and Interest

7.(a) Any bond monies recovered but not spent or required for any purpose set out in Regulation 5 may be applied by the Committee for any of the following purposes:
(i) Discharging or reimbursing the Association’s expenses (including legal or other professional costs) in processing claims, in enforcing bonds, and in administering and accounting for the application of bond monies.

(ii) In reimbursing any interest or bank charges incurred or in making good any interest lost by the Association as a result of having to borrow money or expend the fund or any part thereof for any of the purposes specified in Regulation 5 and in paragraph (i) of this regulation before receipt of the relative bond monies.

Banking and Investment

8.(a) The fund shall be held by the Committee in a separate bank account designated “The Travel Agents’ Association of New Zealand Bonding Account”. The signatories of such bank account are to be approved by the Committee. Monies paid into such account not immediately required for the purposes specified in these regulations shall be invested by the Bonding Committee.

(b) Any interest or income actually earned or arising from the investment of any monies for the time being in the hands or under the control of the Committee shall (unless the Committee in its uncontrolled discretion otherwise determines) be treated as an accretion to the fund and shall be utilised, employed and expended in the same manner as the monies in respect of which it has accrued.

(c) The Committee shall have the power to pay or allow interest at such rate or rates as the Committee shall consider reasonable or appropriate on any sums deposited by any Obligor from time to time for any purpose.

Certificates and Surplus Bond Monies

9. Where the terms of any bond given by an Obligor in favour of the Association do not otherwise specify a method of fixing the amount of any monies spent or applied for any purposes contemplated in these regulations then as between the Obligor and the Association:
(i) The certificate of the auditors for the time being of the Association of the amount of any monies spent or applied for any purposes contemplated by these regulations (including any costs, interest charges or expenses incurred) shall be final and binding on the Obligor and his estate and his successors in title.

(ii) Any bond monies recovered by the Association from an Obligor and not spent or required for any of the purposes specified in these regulations shall in the absence of express agreement in writing between the Association, the Obligor and the member to the contrary be the property of and be repayable by the Association to the Obligor.

Cessation of Membership

10. These Regulations and any amendment to these regulations, or any regulations replacing them from time to time shall continue to apply and bind a member and Obligor pursuant to the terms of the bonds given by each notwithstanding that the member may have ceased to be a member of the Association.

Guidelines

11. The guidelines on the TAANZ Bonding Scheme published from time to time in the TAANZ Directory and Information Guide or other similar publications shall where not inconsistent with the specific provisions herein contained and where not inconsistent with the Rules and Constitution of the Association form part of these regulations.