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Pryor v Bulley

Pryor v Bulley

Case [2013] NZCA 559 14 November 2013

Trust Deed Interpretation

Consumer Approval

Retrospective Authorization

Trustee Discretion

Share Acquisition

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA245/2012
[2013] NZCA 559

BETWEEN	GRAHAM PRYOR, STEPHEN TIPENE PERENARA MARR, CATHY DEWES, KENNETH RAURETI, HARINA WARBRICK, MARTIN MARR AND MEREPEKA RAUKAWA-TAIT AS TRUSTEES OF THE TE MANA O NGATI RANGITIHI TRUST Appellants
AND	DAVID ALLEN BULLEY, KEVIN JOSEPH HENNESSY, BRIAN EDWIN PONTING, PETER JAMES PATTERSON, DONNA MAREE SMIT AND WADE ROSS BROWN AS THE TRUSTEES OF THE EASTERN BAY ENERGY TRUST First Respondents
AND	THE ATTORNEY-GENERAL FOR AND ON BEHALF OF THE MINISTRY OF ENERGY Second Respondent

Hearing:	13 August 2013
Court:	Randerson, Wild and White JJ
Counsel:	C R Carruthers QC and M D Branch for Appellants A P Molloy QC and M S King for First Respondents No appearance for Second Respondent D G Hurd for consumers
Judgment:	14 November 2013 at 12.00 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BOrder empowering the first respondents, as trustees of the Eastern Bay Energy Trust, to retain the additional 52.29 per cent shareholding the Trust has already acquired in Horizon Energy Distribution Ltd.
CThe appellants are to pay the first respondents’ costs for a standard appeal on a band A basis and usual disbursements. We certify for two counsel.
DThe appellants are also to pay the costs of the consumers for a standard appeal on a band A basis and usual disbursements.
ECosts in the High Court should be fixed by that Court.

____________________________________________________________________

REASONS OF THE COURT

(Given by White J)

Table of Contents

Para No
Introduction [1]
Issue 1 – a 25 per cent cap? [10]

The Energy Companies Act 1992[13]
The Bay of Plenty establishment plan  [25]
The EBET Trust Deed[37]
Subsequent events  [45]
The High Court decision  [60]
Submissions  [62]
Our decision  [66]

Issue 2 – a valid poll? [74]

Factual background  [76]
The High Court decision  [80]
Submissions  [82]
Our decision  [84]

Issue 3 – orders under s 64(1) of the Trustee Act 1956? [92]

The High Court decision [95]
Submissions [99]
Retrospectivity[102]
Discretion[116]

Result [125]

Introduction

The genesis for this appeal lies in the reform of electricity power boards which began with the passage of the Energy Companies Act 1992 and continued with the Electricity Industry Reform Act 1998.
In 1994 the business of the former Bay of Plenty Power Board (the Power Board) was taken over by a new company initially called Bay of Plenty Electricity Ltd but subsequently renamed Horizon Energy Distribution Ltd (Horizon) on 1 April 1999.[1]
[1]For convenience we refer throughout to the current names of relevant entities.
When Horizon was formed, 25.03 per cent of the shares were allocated under a share allocation plan to a consumer trust, called the Bay of Plenty Electricity Consumer Trust, which was formed on 1 August 1994 and renamed in October 2000 the Eastern Bay Energy Trust (EBET). After the new legislation in 1998, EBET conducted a consumer poll in September of that year which supported the acquisition of further shares in Horizon. In December 1999 EBET increased…

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.

Continue reading Pryor v Bulley

Details

AGLC: Pryor v Bulley [2013] NZCA 559
Case: [2013] NZCA 559
Decision Date: 14 November 2013 at 12.00 pm

CaseChat Overview and Summary

The appeal was heard by the Court of Appeal of New Zealand, with Randerson, Wild, and White JJ delivering the judgment. The appeal was brought by Graham Pryor and others, as trustees of the Te Mana o Ngati Rangitihi Trust, against David Allen Bulley and others, as trustees of the Eastern Bay Energy Trust, and the Attorney-General for and on behalf of the Ministry of Energy. The primary dispute involved the ownership of shares in Horizon Energy Distribution Ltd by the Eastern Bay Energy Trust.

The Court of Appeal addressed three main issues in the appeal. The first issue was whether the Eastern Bay Energy Trust (EBET) was entitled under the terms of its Trust Deed to acquire more than 25 per cent of the shares in Horizon. The second issue was whether the poll of consumers conducted by EBET authorized it to acquire further shares in Horizon. The third issue was whether the Court was entitled to make orders under s 64(1) of the Trustee Act 1956 permitting EBET to retain the additional 52.29 per cent shareholding it had already acquired and to acquire the balance of the shares in Horizon.

The Court of Appeal found that EBET was entitled under the terms of its Trust Deed to acquire more than 25 per cent of the shares in Horizon, as the 25 per cent cap was only applicable to the initial allocation of shares. The poll of consumers conducted by EBET did not authorize it to acquire further shares in Horizon, as the poll did not provide sufficient information for consumers to make an informed decision about a specific acquisition. However, the Court found that the Court was entitled to make an order under s 64(1) of the Trustee Act 1956 permitting EBET to retain the additional 52.29 per cent shareholding it had already acquired in Horizon.

The appeal was dismissed, and the Court made an order empowering the first respondents, as trustees of EBET, to retain the additional 52.29 per cent shareholding the Trust had already acquired in Horizon Energy Distribution Ltd. The appellants were ordered to pay the first respondents' costs for a standard appeal on a band A basis and usual disbursements, as well as the costs of the consumers for a standard appeal on a band A basis and usual disbursements. Costs in the High Court should be fixed by that Court.

Orders