Background
Toi Foundation, a Taranaki charitable community trust and indirect owner of all TSB Bank shares, entered a conditional agreement in June 2026 to sell its TSB holding to Heartland Group Holdings. The transaction required, among other conditions, approval by at least 75 per cent of Toi’s trustees. The trustees were due to vote on 26 August 2026.
Taranaki Community Accountability Society Inc (TCAS), formed in response to opposition to the sale, sought an urgent interim injunction preventing the vote. It alleged that Toi’s community consultation under its trust deed was deficient, that a sale would not be reasonably open to the trustees, and that the trustees had predetermined the outcome. It also sought prospective costs and an order requiring the trustees to seek court directions.
The Court’s Holding
Isac J dismissed both applications. TCAS lacked standing to seek review under ss 126–127 of the Trusts Act 2019 because Toi Foundation is a charitable trust and TCAS was not a “beneficiary” under the Act. Charitable trusts are enforced in the public interest by the Attorney-General, not by persons who may benefit from the charity’s purposes. The Court also declined to recognise an equivalent inherent-jurisdiction route that would circumvent that statutory position.
In any event, TCAS had not shown a serious question to be tried. Clause 7.4 of the trust deed required notice of the proposed sale’s details, an opportunity for written submissions, consideration of those submissions, and regard to the sale’s effect on the Taranaki community. It did not require consultation while a proposal was still formative, disclosure of confidential commercial advice, presentation of alternatives, neutrality, or a community referendum. The Court found no seriously arguable material inaccuracy or inadequacy in Toi’s published materials, no arguable irrationality, and no evidence of predetermination.
The balance of convenience and overall justice also favoured refusal. Delay posed significant risks to the Foundation and its charitable purposes, while TCAS’s undertaking as to damages was effectively worthless. Section 133 gave trustees a discretion to seek directions; it did not empower the Court to compel them to apply.
Key Takeaways
- A community group is not a Trusts Act “beneficiary” merely because it represents people eligible to benefit from a charitable trust.
- A trust-deed consultation clause is construed by its text, purpose, statutory setting and practical context.
- Interim relief was inappropriate where delay risked harming the charity and the applicant could not provide a meaningful damages undertaking.
Why It Matters
The decision draws a firm distinction between private trusts, whose beneficiaries may enforce trustee duties, and charitable trusts, whose enforcement is generally entrusted to the Attorney-General. It limits the ability of community opponents to use Trusts Act review provisions to challenge trustees’ commercial decisions.
For trustees, the case confirms that a deed-specific consultation obligation need not import administrative-law standards beyond the deed’s actual requirements. Where the deed requires notice and consideration of submissions on a concrete proposal, it does not necessarily require full commercial disclosure or public approval of the decision.