TRUSTEES EXECUTORS LTD V PERPETUAL TRUST LTD HC AK CIV 2012-404-3569

TRUSTEES EXECUTORS LTD V PERPETUAL TRUST LTD HC AK CIV 2012-404-3569

The Court had jurisdiction under s49 of the Securities Act 1978 and, exercising its discretion to protect security holders where there was a significant risk of material prejudice and deed provisions were inadequate, it was justified in amending the trust deed and declaration and ordering termination of the illiquid Mortgage Fund to provide an efficient, equitable winding-up mechanism and to prevent recurrence of the risky lending practice.

Citation
openlaw-48a6cb9b_3305_49db_a469_bd744671f38d.pdf
Parties
Plaintiff: Trustees Executors Ltd; Defendant: Perpetual Trust Ltd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
19 September 2012
Procedural Posture
Application Under S49 Securities Act 1978 / Oral Judgment and Orders Made Resolving S49 Application
Outcome
Orders made under s49 of the Securities Act 1978 amending the Deed of Trust and Declaration of Establishment and terminating the Perpetual Mortgage Fund; costs awarded against Perpetual Trust Ltd
Legal Topics
Statutory Supervisor Powers, Section 49 Jurisdiction, Fund Termination, Moratorium, Investor Protection, Redeemable Participatory Securities
Securities Law Trust Law Financial Regulation Civil Procedure Statutory Supervisor Powers Section 49 Jurisdiction Fund Termination Moratorium +2 more

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Parties

Trustees Executors Ltd

Plaintiff

Perpetual Trust Ltd

Defendant

Procedural Posture

Application Under S49 Securities Act 1978 / Oral Judgment and Orders Made Resolving S49 Application

Legal Issues

  1. 1 Whether the Court has jurisdiction under s49 of the Securities Act 1978 to amend trust deeds and order termination of a fund
  2. 2 Whether the statutory supervisor had formed a view of significant risk of material prejudice to security holders and inadequacy of deed provisions
  3. 3 Whether the Court should exercise its discretion to make orders to protect investors including amendment of documents and winding up of an illiquid fund

Ratio Decidendi

The Court had jurisdiction under s49 of the Securities Act 1978 and, exercising its discretion to protect security holders where there was a significant risk of material prejudice and deed provisions were inadequate, it was justified in amending the trust deed and declaration and ordering termination of the illiquid Mortgage Fund to provide an efficient, equitable winding-up mechanism and to prevent recurrence of the risky lending practice.

Court Disposition

Orders made under s49 of the Securities Act 1978 amending the Deed of Trust and Declaration of Establishment and terminating the Perpetual Mortgage Fund; costs awarded against Perpetual Trust Ltd

Orders

  • Amend Deed of Trust dated 14 October 1991 as per Appendix A of draft order
  • Amend Declaration of Establishment of the Cash Fund dated 2 October 1992 as per Appendix B of draft order to narrow authorised investments