Doyle
[2024] NZHC 1279
•22 May 2024
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2022-419-0000000283
[2024] NZHC 1279
UNDER The Trusts Act 2019 and Part 18 of the High Court Rules 2016 IN THE MATTER
of an application under s 133 of the Trusts Act 2019
BETWEEN
ADRIAN PAUL DOYLE, UWE KURT KROLL, ROBERT WELSFORD CARTER, SANDRA ROSE GREENSLADE and JOANNA MARY BRANSGROVE as
trustees of the King Country Trust Applicant
Hearing: 12 February 2024 Appearances:
J Nicolle for the Trustees
T Weston KC as counsel appointed by the Court
Judgment:
22 May 2024
JUDGMENT OF MOORE J
[Application for directions under s 133 of the Trusts Act 2019]
This judgment was delivered by me on 22 May 2024 at 2:30 pm pursuant to Rule 11.5 of the High Court Rules
…………………………………………………………………… Registrar/Deputy Registrar
Solicitor/Counsel:
Simpson Grierson, Auckland T Weston KC, Auckland
RE DOYLE & ORS [2024] NZHC 1279 [22 May 2024]
Introduction
[1] The trustees of the King Country Trust (“the Trust”) seek directions under s 133 of the Trusts Act 2019 that they may make five amendments (“the Proposed Amendments”)1 to the King Country Trust Deed (“the Trust Deed”), pursuant to their powers under cl 13 of that Deed. The trustees have brought this application as part of wider proposed reforms to the Trust Deed that began in 2021.
[2] Mr Weston KC was appointed by the Court to represent the beneficiaries of the Trust (referred to in the Trust Deed as “Consumers”) who might oppose the Trustees’ s 133 application. In a memorandum dated 20 September 2023, Mr Weston said that the concerns raised by two Consumers were addressed to his satisfaction and that no other Consumers had taken steps to oppose the application. Mr Weston thus advised that he did not formally oppose the Trustees’ application for directions.
Background
[3] The background to the Trustees’ application is helpfully set out in the submissions for the Trustees as follows:
4.For most of the 20th century, electricity generation in the King Country was split between two local Electric Power Boards - King Country Electric Power Board in the south and Waitomo Electric Power Board in the north.
5.Under energy sector reforms in the Energy Companies Act 1992, the King Country Electric Power Board’s energy undertakings were transferred to a new company called King Country Electric Limited (KCE). The Trust was settled on 18 June 1993 to enable the trustees to acquire the shares in KCE on behalf of beneficiaries (defined as “Consumers”) within the King Country Electric Power Board’s original geographic area (the District) and exercise the rights of owning those shares.
6.The Trust’s deed has been amended three times since its inception. The current version of the deed, dated 3 May 2022, outlines the Trust’s objectives at clause 3, which broadly include:
1 I acknowledge that the Trustees’ application referred to these amendments as the “Outstanding Amendments”, given these amendments form part of a package of amendments which are identified as the “Proposed Amendments” in the Trustees’ Statement of Claim. However, I use the term “Proposed Amendments” here given it is these amendments which are proposed for the purposes of the Trustees’ s 133 application. For the avoidance of doubt, where I use the term “Proposed Amendments” I intend to refer to what the Trustees’ refer to as “Outstanding Amendments”.
(i)buying or selling shares in KCE or other investments;
(ii)receiving dividends from KCE and any other income from shares / investments held in trust;
(iii)distributing or retaining income for the benefit of Consumers; and
(iv)eventually winding up after disposing all of its shares in KCE or upon reaching a defined termination date.
7.Further energy sector reforms in 1998 affected KCE and the Trust. The Electricity Industry Reform Act 1998 required KCE to split its lines network operation from its generation and retail functions. At this juncture, KCE and the northern-generator Waitomo Energy Limited (owned at that stage by Waitomo Energy Services Consumer Trust (WESCT)) merged. Out of that merger a new lines network company was formed called the Lines Company Limited (Lines Company) which provides lines network services throughout the entire King Country to this day. Also out of that merger, KCE continued to provide retail/generation services in both the north and south King Country.
8.As a consequence of the merger and the reforms, the Trust’s shareholding in KCE also changed. Under the 1998 Act, shareholdings in KCE and the Lines Company were restricted to 10% with the balance of the Trust’s shares sold.
9.Following the merger and divestment of KCE’s lines network to the Lines Company, TLC became dependent on the Lines Company to identify individual power connections to the lines network, and therefore its Consumers entitled to receive dividends from the Trust (which are provided by way of a credit on Consumers’ electricity bills).
10.In 2015 and 2016, a holding company of Trustpower Limited (now known as Manawa Energy Limited) acquired a majority share in KCE. In 2018, Trustpower’s holding company and the Trust assumed full ownership of KCE between them. As part of that buy-out, KCE retained ownership of its generation assets, while its retail customers were transferred to Trustpower.
11.As at 2023, KCE solely provides generation services, with its customers served by various retailers in the market. The Lines Company still provides network services in the District and the Trust remains dependent on information supplied by the Lines Company to identify its Consumers in order to pay dividends. A series of data sharing and privacy consent documents between Consumers, retailers, the Lines Company and the Trustees enables the Trustees to identify its Consumers and dividends are issued as credits on their bills. Between the 2016 and 2022 financial years, the Trust has paid (by way of credits on electricity bills) about $7.2m to its approximately 10,700 Consumers. Over the same period it has also paid about $1.477m to various community projects benefiting Consumers in the District. The Trust has also managed to increase its KCE shareholding to 25%.
12.In early 2020, the Trustees decided to update the Deed to better serve Consumers, reflect technological changes and be written in plain English. The Trustees carried out a Public Consultative Procedure (PCP), as required by clause 13.1 of the Deed, between August 2021 and March 2022.
13.During a public Trust Deed review meeting on 25 March 2022, supplemented by written resolutions dated 3 May 2022, the Trustees approved the [Proposed Amendments] subject to applying to the High Court for directions.
Proposed Amendments
[4] The five Proposed Amendments that were approved by the Trustees subject to directions from this Court are changes to the Trust Deed that would:2
(a)remove the requirement for the Trust to be wound up if all shares in King Country Energy Limited were sold and enable the Trust to continue to benefit Consumers through the management of other investments;
(b)introduce new powers for the Trustees to alter the Trust Deed without requiring the Public Consultative Procedure in Schedule 4 of the Trust Deed to be followed, where the amendment is:
(i)of a minor, formal, administrative or technical nature (including changes to Schedules);
(ii)to correct a manifest error, to cure any ambiguity or to correct or supplement any defective or inconsistent provision; or
(iii)necessary or desirable to comply with the provisions of any law or the requirements of any statutory authority;
(c)amend the definition of Consumers to clarify that persons who pay the Lines Company for line services but who do not own the connected premises are Consumers;
2 I take this summary of the effect of the Proposed Amendments from the Trustees’ Statement of Claim.
(d)clarify the powers of Trustees to make a donation or grant to charity for the indirect benefit of Consumers by:
(i)including an express power in cl 5 for Trustees to make a donation or grant (with or without conditions) to a local charitable entity selected by the Trustees from time to time;
(ii)defining “Local Charitable Entity” in the Deed; and
(e)amend the definitions of the key dates to reflect the changes made in the Trusts Act to the maximum duration of a trust, and the repeal of the Perpetuities Act 1964.
[5] As counsel did at the hearing, I refer to these five proposed amendments as the first, second, third, fourth and fifth proposed amendments, respectively.
Legal principles
[6] The Trustees’ powers to amend the Trust Deed are, as indicated, contained in cl 13 of the Trust Deed. Clause 13 provides:
13.1Variations to Deed: This Deed may be altered or amended only by the unanimous resolution of the Trustees in writing provided however that no amendment shall be effective unless it has been subject to the Public Consultative Procedure.
13.2Limitations to Variations: Notwithstanding clause 13.1, no alteration or amendment may be made to this Deed that has the effect of limiting or restricting the obligations or powers of the Trustees under this Deed to:
(a)Review Proposals: review proposals and available options for the ownership of the Shares held by the Trustees, in accordance with clause 4; or
(b)Sale of Shares: sell, transfer, or dispose of the Shares following an Ownership Review held in accordance with clause 4.
[7] Section 133(1) of the Trusts Act relevantly provides that a trustee may apply to the Court for directions about the exercise of any power or performance of any
function by a trustee. The section provides that on an application under the provision, the Court may give any direction it thinks fit.3
[8] In the present application, the Trustees believe that they have the requisite power to make the Proposed Amendments under the Trust Deed but consider it prudent to seek the Court’s directions under s 133 of the Trusts Act that they may do so. The application thus proceeds on the basis that there is no real doubt about the trustees’ powers but that directions are sought because the proposed course of action (here, adopting the Proposed Amendments) is “momentous in nature”.4
[9] In deciding whether to make directions under s 133, it is well-established that the Court generally asks three questions:5
(a)Have the trustees in fact formed the opinion which the court is asked to confirm?
(b)If so, is the opinion one which a reasonable body of trustees, properly instructed as to the proper meaning of any relevant provisions of the trust deed, could properly have arrived at?
(c)And, is the opinion vitiated by any conflict of interest under which any of the trustees might have been labouring?
[10] However, given the number of applications that have been brought in this context, the Courts have adopted a more tailored approach to the question of whether directions should be given confirming the propriety of amendments to the deeds of Electricity Trusts. This more tailored approach is amply demonstrated in Holland v Jonkers.6 In that case, Doogue J approached the contested application for directions that certain Trust Deed amendments were proper and lawful by considering:7
3 Trusts Act 2019, s 133(3).
4 Re Darlow (as trustees of the Hugh Green Trust) [2021] NZHC 2184, (2021) 5 NZTR 31-016 at [31], citing Re Honoris Trust [2017] NZHC, [2018] 3 NZLR 160.
5 At [33], citing Public Trustee v Cooper [2021] WTLR 901 (Ch) at 925.
6 Holland v Jonkers [2021] NZHC 3469.
7 At [95].
(a)whether the decisions to make the proposed amendments in that case were lawful in the sense that they were within the trustees’ express powers under the relevant trust deeds and not fettered by the context and objectives of the trust in that case;
(b)whether the trustees made their decisions properly and in accordance with their duties; and
(c)whether any conflicts of interest existed which prevented the Court from approving the decisions.
[11] Here, the Trustees have adopted the Proposed Amendments subject to the Court’s directions under s 133 and have thus “in fact formed the opinion the Court has been asked to confirm”.
[12] There is also no question that the Trustees are not labouring under a conflict of interest. The decision to adopt the Proposed Amendments was made with the benefit of legal advice and following extensive public consultation. Furthermore, no complaints have been received from any Consumers alleging a conflict of interest.
[13] As such, whether the directions sought should be made turns on whether the Trustees’ decisions to approve the Proposed Amendments were lawful (in the sense that they were open to it under cl 13 of the Trust Deed) and reasonable (in the sense that they were decisions that a reasonable body of trustees could have made).
Would it be lawful and reasonable for the Trustees to adopt the proposed amendments?
First proposed amendment
[14] The present Trust Deed provides that the Trust must be wound up if it no longer holds any equity or debt security issued by King Country Electric Limited (“KCE”). The first proposed amendment is thus aimed at enabling the Trust to continue even if it sells the very asset it was settled to hold.
[15] While this would seem to go against the very settlor intention that drove the creation of the Trust in the first place, the Trustees say that the first proposed amendment is necessary and reasonable because:
(a)KCE does not operate in the same way nor earn the same levels of income as it did when it was the King Country Electric Power Board. Rather, it is now solely a generator.
(b)The Trust’s smaller shareholding in KCE and KCE’s different business model limits income from traditional sources. However, income from previous KCE share sales has been invested in other revenue- generating investments.
(c)Although the Trust has no current plans to sell all of its KCE shares, future sector reforms or a situation where KCE’s revenue no longer justifies holding its shares cannot be completely ruled out.
[16] Mr Weston agrees. Although he acknowledges that the history of the Trust might at first suggest otherwise, he says that when viewed properly in context and with the benefit of subsequent developments, the original emphasis in the Trust Deed on holding shares in KCE “need not constrain the future”.
[17] I also agree. While the history of the Trust’s settlement is obviously relevant to whether the power to amend the Trust in this way is consistent with the purpose for which the power of amendment was granted,8 I do not consider that history to be a barrier here. As the Trustees explain, whether held as shares in KCE or as investments from KCE share sales, the legacy of the King Country Electric Power Board’s assets is still owned by the Trust, and still to be held for the benefit of those for whom it was intended.
[18] I accordingly consider that a direction that the first proposed amendment is proper and lawful should be made.
8 Lord Napier and Ettirick v R F Kershaw Ltd [1999] 1 WLR 756 (HL) at 766, citing Hole v Garnsey
[1930] AC 472 (HL).
Second proposed amendment
[19] The present Trust Deed provides that the Trustees must undertake a Public Consultative Procedure for every variation, no matter how trivial. That procedure involves extensive notification and consultation with beneficiaries, requiring significant time and demanding significant resources from Trustees. For these reasons, the Trustees consider that the Public Consultative Procedure is both inefficient and unnecessary for small and technical amendments.
[20] Although the second proposed amendment would afford the Trustees the discretion to decide which amendments meet the criteria to avoid public consultation, the Trustees say that the requirement to take advice for exercising that discretion will act as an effective check on that power.
[21] Again, Mr Weston agrees and so do I. The Public Consultation Procedure is evidently costly and time-consuming. The Trustees should be empowered to make changes to the Trust Deed that do not require going to this expense when the changes are minor or necessary to comply with any law.
[22] I accordingly consider that a direction that the second proposed amendment is proper and lawful should be made.
Third proposed amendment
[23]The present Trust Deed defines Consumers as:
… persons, who at any appropriate date designated by the Trustees from time to time, are named in the records of the Lines Company as persons whose premises are connected to the Lines Company’s networking within the District, unless any such person who qualifies as a Consumer in accordance with this definition advises the Lines Company or the Trustees irrevocably in writing that he, she or it does not wish to be a Consumer for the purposes of this Deed.
(emphasis added).
[24] The effect of the third proposed amendment is to include those who do not own connected premises by replacing the words “whose premises are” with the words “who own and/or use an electrical installation”.
[25] The Trustees explain that the motivation for this was because the Lines Company updated its terms and conditions in 2021 to define customers as:
Someone who owns and/or uses an installation connected to our network who is liable for the charges for line function services billed by us or by an electricity retailer as our agent.
(emphasis added).
[26] During public consultation, two Consumers submitted feedback that the current definition of Consumers was intended to limit the Trust’s beneficiaries solely to property owners. These Consumers said that the third proposed amendment therefore improperly expanded that to other people, including rental tenants.
[27] While the Trustees accept that there is potential ambiguity over the word “premises”, they consider that any ambiguity should be resolved in favour of a definition of Consumers that extends to tenants and other occupiers. Therefore, the Trustees say that the third proposed amendment simply makes a clarification and does not alter the class of intended beneficiaries under the Trust. The Trustees say that this is the right interpretation because:
(a)The plain and ordinary meaning of the word “premises” is simply “land”, “house” or “building” without any connotation of ownership.
(b)The word “premises” has its own broad definition in the Residential Tenancies Act 1986 and extends rights to tenants of premises.
(c)Limiting Consumers to property owners would exclude individuals the settlors intended as beneficiaries. The Establishment Plan did not purport to limit interests in KCE solely to farmers or other landowners. Moreover, the original Deed defined Consumers broadly to encompass tenants and other occupants in the District liable to pay lines or retail services.
(d)Limiting Consumers to property owners would also lead to an unfair outcome in which the District’s tenants and other non-owner occupiers would be charged by the Lines Company for network services which
their community built but would not receive any corresponding benefits from the Trust.
[28] The Trustees further say that limiting consumers in this way would lead to practical problems for the Trust’s distributions to Consumers, given the Lines Company’s records do not distinguish between property owners, tenants and other occupants. They say that if the Trust wanted to continue distributing income to Consumers by way of credits on electricity bills, it would need to hold additional records of which connected networks were held by property owners in the District. This, in turn, would require an extra level of data collection and significant additional administration for the Trust.
[29] Mr Weston takes a similar view of the history of the Trust’s settlement. He explains that the original trust deed defined Consumers to include the tenants of premises. While subsequent amendments to the Trust Deed appeared to have narrowed this definition, he considers that it does not appear this was done advertently with the view to excluding tenants. Though he queries why the Line Company’s change in billing necessitates the third proposed amendment, he agrees that the amendment is sensible and falls within the Trustees’ power of amendment under cl 13.
[30] I agree. In construing the meaning of a trust deed’s terms, the principles that govern the construction of contracts essentially apply insofar as practicable.9 Thus, in understanding what the term “whose premises are” means in this Trust Deed, an appropriate guidepost is to ask what meaning that phrase would convey to a reasonable person having all the background knowledge which would reasonably have been available to those who varied the definition of Consumers in the Trust Deed accordingly.10 As Mr Weston’s helpful exposition of the history of the Trust makes clear to me, there was never any indication when the Trust Deed was being varied that those who amended it that way did so to exclude tenants. Considering that history, the original definition of the term that included tenants of premises, the otherwise ordinary
9 New Zealand Māori Council v Foulkes [2014] NZHC 1777, [2015] NZAR 1441 at [71].
10 To paraphrase the essential test set down by Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) at 912, endorsed by the Supreme Court in Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2015] 1 NZLR 432, [2014] NZSC 147 at [60]. See also Holland v Jonkers, above n 6, at [109].
meaning of the word “premises” and a clear settlor intention to include such tenants, I agree that the variation here is not one that extends the Trust’s class of beneficiaries.
[31] For those reasons, and the practicalities mentioned, I further consider that the clarification that the third proposed amendment would provide is appropriate and reasonable.
[32] I accordingly consider that a direction that the third proposed amendment is proper and lawful should be made.
Fourth proposed amendment
[33] The fourth proposed amendment is to clarify the charitable powers of the Trust. While the Trustees do not intend to re-settle the Trust as a charitable trust and still see direct Consumer distributions as their primary method of distribution, the Trustees consider the discretion afforded to them under cl 5.1 to be sufficiently broad enough to enable distributions to community and charitable groups operating in the District for the benefit of some or all Consumers.
[34]Clause 5.1 provides:
The Trustees may subject to Clause 5.2 pay, apply or appropriate the whole or any part of the current net annual income derived by or credited to the Trust Fund in any Financial Year to or for or otherwise howsoever for the benefit of the Consumers or such one or more of them to exclusion of the others or others of them in such manner and in such shares and proportions that the Trustees in their absolute and unfettered discretion shall consider proper.
(emphasis added).
[35] Although the Trustees consider cl 5.1 to empower them to make distributions for the benefit of Consumers (as opposed to being limited solely to distributions directly to Consumers), they consider the fourth proposed amendment necessary to clarify this point.
[36] In Holland v Jonkers, Doogue J confronted a similar problem. There, the Judge had to consider whether a trust deed’s objects and purposes were to benefit the consumer beneficiaries in that case exclusively, or whether those objects and purposes
also permitted benefits to the community at large. The Judge considered that the objects and purposes of the trust deed permitted the latter because: 11
(a)the objects had to be examined by reference to both the original and varied versions of the trust deed in that case, and not exclusively the original trust deed;
(b)the plain meaning of the clause that set out the trust deed’s objects and purposes did not support the former interpretation; and
(c)the surrounding factual matrix supported the more generous interpretation of the trust’s objects and purposes.
[37] The Trustees invite the Court to adopt the same view for effectively the same reasons.
[38] As the Trustees would seem to appreciate, the original language of the Trust Deed tends to militate against an interpretation that permits distributions to community and charitable groups for the benefit of Consumers. This is because what was originally Recital D to the Trust Deed provided that the object of the Trust was, among other things, to “distribute to the Consumers in their capacity as owners, the benefits of ownership of the shares”. Thus, to an extent, it would seem that the original Trust Deed was concerned with making distributions to Consumers directly in a way akin to a Company paying a dividend to a shareholder.
[39] However, I accept – as Doogue J said in Holland v Jonkers – that the original deed is not the sole reference point. In that respect, it is especially significant that the current objects of the Trust Deed include cl 3.8 which provides that the Trust is established “… to take any action which, in the opinion of the Trustees, is in the best interests of the Consumers until the Termination Date …”. Given that much broader and less confined purpose, I consider the current cl 5.1 permits distributions to community and other charitable groups provided that distributions can be said to be in “the best interests of the Consumers”.
11 Holland v Jonkers, above n 6, at [136].
[40] However, I also consider that adopting the fourth proposed amendment is a proper course of action for the Trustees to take, notwithstanding that it would seem to be merely clarificatory. The Trustees say that their aim is to make a significant difference to the lives of the Trust’s Consumers through a mixture of direct and charitable distributions. They explain that their investment plan has proven highly successful and they expect that distributable funds will increase five per cent per annum over the foreseeable future. In response to Mr Weston’s helpful feedback, they have now come up with the following advertised criteria by which distributions to charitable and community groups may be made:
The King Country Trust (KCT) wants to make a real difference to the day-to- day lives of its consumer beneficiaries within its district. The KCT's district comprises the southern part of the King Country broadly between Taumarunui, Tūrangi and Ohakune. It may pay or apply its income for the benefit of all or a portion of the consumer beneficiaries including through making a grant to a local charitable entity selected by the Trustees. Such entities may be local community groups, clubs and/or organisations with projects and initiatives that create safer, healthier; sustainable and connected communities within the King Country Trust district.
Charitable organisations are encouraged to apply for funding for projects and initiatives which: •
·Create a healthy community
·Bring the community together
·Keep the community safe
·Encourage energy saving initiatives
·Create, maintain and support infrastructure and initiatives which have a wide benefit to the community.
[41] All of this supports the conclusion that the fourth proposed amendment is one that a reasonable – and indeed highly responsible – body of trustees would make. In that respect, what Doogue J said in Holland v Jonkers is directly on point:
[145] Indeed, it is of benefit to Consumers to live in a community where every member of that community has an enhanced sense of wellbeing derived from those community projects or initiatives. For instance, the wellbeing of Consumers, those who live in the same household as a Consumer or in the same community as a Consumer will be enhanced by initiatives such as the provision of education sponsorship, construction of sports facilities or subsidisation of search and rescue agencies, as but three examples.
[42] While not suggesting that the Trustees have in any way acted in breach of trust in making the distributions to the community and charitable groups they have, Mr Weston supports the fourth proposed amendment because some of the charitable distributions the Trust has made “appear to be very much at the edge of the envelope in terms of cl 5.1”. He says it is unsatisfactory that there should be an ambiguity as to the extent of the Trustees powers.
[43]Again, I agree. Though I consider that the Trustees have the power under cl
5.1 (when read with cl 3.8 and the broader scheme of the Trust Deed) to make the charitable distributions which they consider to be in the best interests of Consumers, I concur with Mr Weston that a Trust of this kind and size should be constituted so that its Trustees can be sure as to what it can (and cannot) do.
[44] I accordingly consider that a direction that the fourth proposed amendment is proper and lawful should be made.
Fifth proposed amendment
[45] The fifth proposed amendment is simply to reflect and take advantage of the fact that the maximum duration of a Trust is now 125 years from its creation.12 The fifth proposed amendment is simply to take advantage of the fact that the maximum duration of a Trust is now 125 years from its creation, and to implement what amendments are necessary as a consequence.
[46] Unsurprisingly, Mr Weston agrees with this amendment as do I. Indeed, given that this will enable the Trust to continue benefitting its Consumers for longer, I consider that it is an entirely proper amendment to make.
[47] I accordingly consider that a direction that the fifth proposed amendment is proper and lawful should be made.
12 Trusts Act 2019, s 16.
Concluding comments
[48] The Trustees of the King Country Trust have, to their enormous credit, embarked upon a suite of reforms to the King Country Trust Deed aimed at better serving their beneficiaries. Their responsible and forward-thinking stewardship is to be commended. It is the Court’s happy function to be able to “bless” the proposed amendments for which the Trustee’s s 133 application is made.
Result
[49] At the hearing, Mr Nicolle for the Trustees, provided me with draft directions. I make these, as stipulated:
(a)That the Trustees of the King Country Trust have the necessary powers to make the Proposed Amendments to the King Country Trust Deed as set out in the Appendix to this judgment and the tracked changes to the Trust Deed annexed to the Trustees’ statement of claim.
(b)That it is proper and lawful for the Trustees of the King Country Trust to make the Proposed Amendments to the King Country Trust Deed, as set out in the Appendix to this judgment and the tracked changes to the Trust Deed annexed to the Trustee’s statement of claim.
(c)In order to give effect to the Proposed Amendment, the Trust Deed is to be amended as set out in the Appendix to this judgment.
[50] Given the Trust has agreed to meet Mr Weston’s costs, I make no order as to costs.
Moore J
Appendix
First Outstanding Amendment - Purpose of Trust
(a)replacing the word "Shares" with "Trust Fund" at clause 1.l(i);
(b)amending clause 3.7, to acknowledge that this clause (about how the Trustees interact with King Country Energy) is only applicable to the extent that it is consistent with the Trustees' holding of Shares;
(c)amending clause 4 to:
(i)amend the clause title to make it clear that the review process will apply to the whole Trust Fund and not just to Shares;
(ii)modernise clause 4.2(b) for clarity and to replace references to "Shares" with "Trust Fund";
(iii)amend provisions requiring the Trustees to carry out an ownership review of the whole Trust Fund as required under clauses 4.1, 4.10 or 4.11; and
(iv)delete the requirement for the Distribution Plan to contain details about consideration for the Shares;
(d)amending clause 14.1 as follows:
(i)additional wording to clarify that the Trustees must pass resolutions requiring the Trust be wound up in the event of a "Trigger Event", being:
1. the full distribution of the Trust Fund leaving the Trust with no assets; or
2. no resolution to wind the Trust up being passed before the Determination Date (as defined in proposed clause 1.l(h));
(ii)clarifying changes to reflect that if a Trigger Event occurs but winding up resolutions have not been passed by the Termination Date (as defined in proposed clause 1.l(y)), the existing surplus property provisions in clause 14.2 shall apply; and
(iii)deleting references to equity security or debt security issued by King Country Energy;
Second Outstanding Amendment - Variations to Deed
(a)inserting a new clause 13.1 which permits amendments without the Public Consultative Procedure where, after taking advice as the Trustees determine, the amendment is:
(i)of a minor, formal, administrative or technical nature (including changes to the Deed's schedules);
(ii)to correct a manifest error, cure any ambiguity, to correct or supplement any defective or inconsistent provision; or
(iii)necessary or desirable to comply with the provisions of any law or the requirements of any statutory authority;
(b)re-numbering the existing power to amend the Deed through the Public Consultative Procedure as clause 13.2 (rather than clause 13.1);
(c)amending clause 13.2 to state that, except as permitted under clause
13.1 (i.e. the new minor amendments power described above), all variations to the Deed require the Public Consultative Procedure;
(d)retaining clauses (renumbered clause 13.3(a) and (b)) which prevent any change that would limit or restrict review of the ownership of Shares or the sale of them when required; and
(e)deleting clause 13 of Schedule 3 (which provides for amendments to administrative provisions in schedules without the need for the Public Consultative Procedure), as this would now be captured in clause 13.l(a) of the Deed;
Third Outstanding Amendment - Redefining Consumer
(a)amending clause 1.1(e) by:
(i)deleting reference to "whose premises are";
(ii)inserting "who own and/or use an electrical installation"; and
(iii)inserting "and who are liable for payment of any amounts for the supply of line function services to the person".
Fourth Outstanding Amendment - Power to make grant or donation to charity
(a)inserting a new clause 1.1(r) to define "Local Charitable Entity";
(b)amending clause 5.1 to:
(i)expressly permit the Trustees to pay or apply the income to some or all of the Consumers or to a Local Charitable Entity as the Trustees see fit, subject to clause 5.2; and
(ii)modernise the language in the clause.
Fifth Outstanding Amendment - Definition of Dates
(a)the insertion of clause 1.1(h) to provide that the Determination Date means the earlier of:
(i)1 January 2117 being 12 months prior to the Termination Date; and
(ii)such other date as designated by the Trustees as the appropriate date for determination;
(b)the amendment of clause 1.l(y) setting out the definition of Termination date;
(c)the insertion of clause 1.l(aa) to define the "Trust Expiry Date" as 125 years from the date of execution of the Deed on 18 June 1993, being:
(i)17 June 2118; or
(ii)Any later date permitted by law at any time for the purposes of setting the maximum duration of a trust;
(d)the replacement of clause 1.3 setting out that the maximum duration of the Trust is the period beginning from 18 June 1993 and ending on the Trust Expiry Date;
(e)amending the following clauses not already mentioned to reflect the correct use of the defined terms "Termination Date" and "Determination Date":
(i)clause 1.l(g) (ascertainment of Default Beneficiaries);
(ii)clause 3.6 (application of capital at mandatory wind up of Trust at end of its life);
(iii)clause 3.8 (ascertainment of beneficiaries for purposes of acting in their best interests);
(iv)clause 4.10 (describing when ongoing review obligation ends);
(v)clause 6.2 (capital held for benefit of Consumers until Termination Date, and Default Beneficiaries from Termination Date); and
(vi)clause 14.1 (winding up required to be commenced from the Determination Date).
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