IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2021-470-000049
[2021] NZHC 3469
UNDER
the Trusts Act 2019 and Part 18 of the High Court Rules 2016
IN THE MATTER
of an application under ss 130 and 131 of the Trusts Act 2019
BETWEEN
WILLIAM BEAU HOLLAND, NATALIE ANNE BRIDGES, PETER JOHN BLACKWELL, PETER JOHN FARMER, MARK EDMOND ARUNDEL and TINA
LYNN JENNEN as trustees of the TAURANGA ENERGY CONSUMER TRUST
First Plaintiffs
AND
WILLIAM BEAU HOLLAND, NATALIE ANNE BRIDGES, PETER JOHN BLACKWELL, PETER JOHN FARMER, MARK EDMOND ARUNDEL and TINA
LYNN JENNEN as trustees of the TECT CHARITABLE TRUST
Second Plaintiffs
AND
WILLIAM HERMANUS EDUARD JONKERS
Defendant
Hearing:
15, 16, 17 November 2021
Appearances:
J B M Smith QC and S E Quilliam-Mayne; and
M D Arthur and L C Bercovitch (by VMR) for plaintiffs J F Anderson QC as Independent Counsel (by VMR)
Judgment:
16 December 2021
JUDGMENT OF DOOGUE J
RE TAURANGA ENERGY CONSUMER TRUST [2021] NZHC 3469 [16 December 2021]
This judgment was delivered by me on at pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
TABLE OF CONTENTS
Introduction [1]
Issues for the Court to Determine [10]
Background [11]
Establishment of TECT and the 2002 Charitable Trust
1992 Electricity Reforms [14]
Trustpower [25]
Current position [31]
History of TECT’s distributions [35]
Sale of Trustpower [41]
The Proposed TECT Restructure [47]
Consumer consultative procedure (CCP 2021) [49]
The Current Trustees’ decisions [65]
Opposition to the Proposed TECT Restructure [70]
Ms Anderson QC’s summary [80]
Key aspects of opposition to the Proposed TECT Restructure [81]
Jurisdiction [83]
Section 133 of the Act – directions to trustees [87]
Principles in trustees’ directions applications [90]
Summary of the approach under s 133 [95]
Court’s inherent jurisdiction [98]
The principles of interpretation to apply to trust deeds [108]
Interpretation of the Trust Deeds [110]
TECT
What are TECT’s purposes and objects? [111]
Interested Parties’ and Ms Anderson QC’s interpretation of cl 4 [116]
The Current Trustees’ interpretation [126]
Discussion [136]
Conclusion on the objects and purposes of the TECT Deed [147]
Clause 5 [148]
Clause 6 [149]
Clause 9 and Schedule II [150]
Clause 13 [154]
The 2002 Charitable Trust Deed [158]
Section 21 of the Act - guiding principle in performing duties [165]
Proposed variations to the TECT Deed [170]
Do the proposed variations to the TECT Deed do impermissible damage to the substratum? [171]
Relevant authorities [177]
First issue: whether the Current Trustees use of their express powers of variation is permissible
or not
[203]
Name change
[204]
Purpose
[205]
Replacing the requirement in cl 6 to pay out any surplus assets on winding up for the “benefit of Consumers” with the requirement these be paid to the TECT Community Trust [213]
Changes to the definitions of “Consumer” and “District” [218]
Amendments to the distributive powers [226]
Amendments to the winding up provision [228]
Changing the governance structure of TECT, such that the Current…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Holland v Jonkers [2021] NZHC 3469
Case
[2021] NZHC 3469
Decision Date
CaseChat Overview and Summary
The High Court of New Zealand, Tauranga Registry, was asked to decide whether the Current Trustees of the Tauranga Energy Consumer Trust (TECT) had the power and acted properly in proposing a restructure of the trust. The restructure involved winding up TECT and establishing a new charitable trust to hold and manage its assets. The Court was asked to determine whether the trustees' decisions were lawful, in accordance with their duties, and whether any conflicts of interest existed. The Court found that the trustees had the power to make the proposed changes under the trust deed and that they had acted properly in making their decisions. The trustees had considered all relevant factors, including the potential impact of the trust's rebate on electricity prices, and had not acted in breach of their duties or with conflicts of interest. The Court granted the trustees' application for an order confirming the lawfulness of their proposed restructure.