Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698937827204.pdf (New Zealand)
Reprint as at 10 September 2008 Community Trusts Act 1999 Public Act Date of assent Commencement 1999 No 54 20 May 1999 see section 1(2) Contents Title Short Title and commencement Purpose of this Act Act to bind the Crown Interpretation Trustees of community trusts Appointment of trustees Resignation and removal of trustees Disqualification of trustees Liability insurance for trustees Indemnities of trustees void Trustees not to be employed by successor companies Regional identity and purposes of community trusts Regional identity of community trusts Purposes of community trusts Page 2 2 2 2 3 3 4 4 5 6 6 6 6 Note Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.
A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This Act is administered by the Department of Internal Affairs.
1 Community Trusts Act 1999 Reprinted as at 10 September 2008 Operational requirements relating to community trusts Community trusts must comply with Financial Reporting Act 1993 Trustees must hold public meeting Contents of trust deeds Provisions required in trust deed Trust deed and amendments not to be inconsistent with this Act Restructuring of community trusts Merger of community trusts Formation of separate community trusts in place of existing community trust Other matters Sale of shares in trustee bank’s successor company Section 64 of Reserve Bank of New Zealand Act 1989 not to apply to community trusts Application of Trustee Act 1956 not affected Fees 7 8 8 9 9 11 13 13 13 14 An Act to make continued provision for the operation of the community trusts established under the Trustee Banks Restructuring Act 1988 1 (1) (2) Short Title and commencement This Act may be cited as the Community Trusts Act 1999.
This Act comes into force on the day after the date on which it receives the Royal assent.

Purpose of this Act The purpose of this Act is to make provision for the continued operation of the community trusts that were established under the Trustee Banks Restructuring Act 1988 to acquire the shares in the capital of a trustee bank’s successor company.

Act to bind the Crown This Act binds the Crown.
2 3 2 Reprinted as at 10 September 2008 Community Trusts Act 1999 s 5 4 Interpretation In this Act, unless the context otherwise requires,— community trust means a community trust established under Part 2 of the Trustee Banks Restructuring Act 1988 to acquire the shares in the capital of a trustee bank’s successor company and for the purposes specified in this Act Inland Revenue Acts means the Acts specified in the Sched- ule of the Tax Administration Act 1994 Minister means the Minister of Finance trustee bank means a trustee bank established under the Trustee Banks Act 1983 trustee bank’s successor company, in relation to a trustee bank, means a company formed and registered by that trustee bank and in which the undertaking of the trustee bank was vested under the Trustee Banks Restructuring Act 1988.
Trustees of community trusts 5 (1) (2) (3) Appointment of trustees The office of trustee of a community trust must be filled in the manner prescribed in the trust deed.

Every trustee must be appointed for a term not exceeding the maximum term of office for trustees permitted by the trust deed.

The maximum term of office for trustees permitted by a trust deed must not exceed 4 years.

(4) A trustee may hold office on more than 1 occasion.
(5) Despite subsections (2) and (3), where the term of office of a trustee expires, that trustee, unless sooner vacating office or being removed from office under section 6, continues to hold office by virtue of the appointment for the expired term until— (a) (b) (c) the trustee is reappointed; or a successor to the trustee is appointed; or the trustee is advised in writing by the Minister that the trustee will not be reappointed and that a successor to the trustee will not be appointed.
Compare: 1988 No 90 ss 15(2), 17(2), (3) 3 s 6 Community Trusts Act 1999 Reprinted as at 10 September 2008 Resignation and removal of trustees 6 (1) A trustee of a community trust may resign office in the manner prescribed in the trust deed.

(3) (2) A trustee is deemed to have resigned office if at any time he or she is prohibited from acting as a trustee by section 7.
The Governor-General may remove a trustee from office if— disability in relation to the performance of his or her (a) duties as a trustee, neglect of duty, or misconduct is proved to the satisfaction of the Governor-General; or the Governor-General satisfied on reasonable is grounds that the trustee has acted or is acting in a manner which is, or is likely to be, prejudicial to the interests of the trust.
(b) (4) If a trustee dies, resigns, or ceases to hold office, the office of the trustee becomes vacant and must be filled in the manner prescribed by the trust deed.

(5) Any person filling a vacancy under subsection (4) holds office for the remainder of that trustee’s term of office.
Compare: 1988 No 90 s 17(4), (5), (6), (7) Disqualification of trustees A person must not be appointed or reappointed, or hold office as a trustee of a community trust, if he or she is— (a) a bankrupt who has not obtained a final order of dis- charge, or whose order of discharge has been suspended for a term not yet expired, or is subject to a condition not yet fulfilled: convicted of an offence punishable by imprisonment for a term of 2 years or more: convicted of an offence punishable by a term of impris- onment of less than 2 years and is sentenced to impris- onment for that offence: subject to an order made under section 383 of the Com- panies Act 1993: a person to whom section 151(2)(ba) or section 151(2)(c) of the Companies Act 1993 applies: [Repealed] not resident in the area or region of the trust: (b) (c) (d) (e) (f) (g) 7 4 Reprinted as at 10 September 2008 Community Trusts Act 1999 s 8 (h) employed in the service of, or holding an office (other than the office of director) in, a trustee bank’s successor company in which that trust holds shares.
Compare: 1988 No 90 s 16 Section 7(f): repealed, on 10 September 2008, by section 3(2) of the Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008 (2008 No 64).
Liability insurance for trustees 8 (1) A community trust may directly or indirectly effect insurance for a trustee of the trust but only in respect of— (a) liability, not being criminal liability, for an act or omis- sion in his or her capacity as a trustee; or costs incurred by that trustee in defending or settling a claim or proceeding relating to that liability; or costs incurred by that trustee in defending criminal pro- ceedings in which the trustee is acquitted.
(b) (c) (2) (3) Effecting the insurance must be expressly authorised by the trust deed and have the prior approval of the trustees.

The trustees who vote in favour of authorising the effecting of the insurance must sign a certificate stating that, in their opin- ion, the cost of effecting the insurance is fair to the community trust.
(4) A trustee is personally liable to the community trust for the (c) cost of effecting insurance if— (a) (b) subsections (1) and (2) have not been complied with; or the relevant provisions of the trust deed have not been complied with; or reasonable grounds did not exist for the opinion set out in the certificate given under subsection (3).
(5) A trustee is not personally liable to the community trust under subsection (4) to the extent that the trustee proves that the cost of effecting the insurance was fair to the community trust at the time the insurance was effected.

In this section— (a) effect insurance includes pay, whether directly or indi- rectly, the costs of the insurance: trustee includes a former trustee.
(b) Compare: 1993 No 105 s 162(1), (5), (6), (8), (9) (6) 5 s 9 9 Community Trusts Act 1999 Reprinted as at 10 September 2008 Indemnities of trustees void An indemnity given by a community trust to a trustee of that trust in respect of liability for acts or omissions in his or her capacity as a trustee, or costs incurred by the trustee relating to that liability, is void.
10 Trustees not to be employed by successor companies (1) A trustee of a community trust must not be employed in the service of, or hold an office in, a trustee bank’s successor com- pany in which that trust holds shares.

(2) Despite subsection (1), a trustee may be appointed, or hold office, as a director of the company.
Compare: 1988 No 90 s 23 Regional identity and purposes of community trusts Regional identity of community trusts 11 (1) A community trust must remain established in respect of the area or region which corresponds with the area of operation of the trustee bank (as prescribed under section 28 of the Trustee Banks Act 1983), the undertaking of which was transferred to that bank’s successor company, in which the trust holds shares, or held shares at the time of its establishment.
This section is subject to sections 17 and 18.

Compare: 1988 No 90 s 18 (2) 12 (1) (2) Purposes of community trusts Property vested in, or belonging to, a community trust must be— (a) held on trust to be applied for charitable, cultural, phi- lanthropic, recreational, and other purposes; and applied for purposes that are beneficial to the commu- nity principally in the area or region of the trust.
The purposes of a community trust are deemed to be charitable for the purposes of the application to a community trust of any enactment or rule of law.

(b) (3) Despite subsection (2), the application to a community trust of the Inland Revenue Acts or any other enactment that im- 6 Reprinted as at 10 September 2008 Community Trusts Act 1999 s 13 poses or provides for the collection of a tax, duty, levy, or other charge is not affected.
Compare: 1988 No 90 s 21 Operational requirements relating to community trusts 13 Community trusts must comply with Financial Reporting Act 1993 (2) (1) A community trust must comply with the Financial Reporting Act 1993 as if it were a reporting entity within the meaning of section 2 of that Act.

The trustees of a community trust are deemed to be directors within the meaning of section 2 of the Financial Reporting Act 1993.
Sections 15, 16(1), 38(a), and 40 of the Financial Reporting Act 1993 apply to a community trust as if it were an issuer within the meaning of section 4 of that Act.

(3) (4) Despite section 7 of the Financial Reporting Act 1993, the (5) balance date of a community trust is the close of 31 March.
In addition to complying with section 8 of the Financial Re- porting Act 1993, the financial statements of a community trust must show separately— (a) the names of persons or organisations to whom distribu- tions of income and capital have been approved or paid by the community trust under section 12 in that finan- cial year; and the amounts approved or paid.
(b) (6) Despite section 15(2) of the Financial Reporting Act 1993, an auditor appointed by the trustees of a community trust— (a) must be appointed in accordance with the provisions of the Companies Act 1993 which, for that purpose, apply with such modifications as may be necessary; and (b) must not be a trustee, employee, or agent of the trust.
(7) Unless directed otherwise by the Minister, the trustees of a community trust must, not later than 31 August in each year,— send the financial statements and the auditor’s report to (a) the Minister; and 7 s 14 Community Trusts Act 1999 Reprinted as at 10 September 2008 (b) publish copies of the financial statements and the audi- tor’s report— (i) (ii) in the Gazette; and either in 1 or more principal newspapers circulating in the area or region of the trust; or by distribution to every household in that area or region.
(iii) (8) Despite subsection (7)(b), the trustees are not required to pub- lish in the Gazette the information specified in subsection (5) if the trustees publish in the Gazette, with the financial state- ments and auditor’s report, a statement that a list of all distri- butions of income and capital approved or paid by the commu- nity trust in the relevant financial year is available, on request, from the office of the trust.
Compare: 1988 No 90 s 24(3), (6) 14 (1) (2) Trustees must hold public meeting The trustees of a community trust must hold a public meeting in the area or region of the trust not later than 31 October in each year.

The trustees must give not less than 14 days’ notice of the meeting in 1 or more principal newspapers circulating in the area or region of the trust.
(3) At the meeting the trustees must report on— (a) the operation of the trust during the preceding financial year; and the financial statements of the trust for that year.
(b) Compare: 1988 No 90 s 25 Contents of trust deeds Provisions required in trust deed The trust deed of a community trust must contain provisions— (a) (b) (c) specifying the number of trustees: for the holding of, and voting at, meetings of trustees: specifying the quorum required for the holding of meet- ings of trustees: for the remuneration of trustees: (d) 15 8 Reprinted as at 10 September 2008 Community Trusts Act 1999 s 17 (e) (f) (g) (h) (i) (j) (k) specifying the manner in which a vacancy in the office of trustee must be filled: for the appointment of officers, employees, managers, and agents: specifying the investment powers of trustees: specifying the powers of trustees to expend capital and income of the trust: for the keeping of accounts: specifying the manner in which the trust deed may be varied: specifying any other matters that the Minister considers appropriate.
Compare: 1988 No 90 s 26 16 Trust deed and amendments not to be inconsistent with this Act (1) A provision in the trust deed of a community trust must not be inconsistent with this Act.

(2) A trust deed must not be varied in a manner that is inconsistent with this Act.

(3) A provision in the trust deed of a community trust, or a vari- ation of a trust deed, which is inconsistent with this Act is of no effect.
Compare: 1988 No 90 s 27 Restructuring of community trusts 17 Merger of community trusts (1) The trustees of 2 or more community trusts may, in accordance with a resolution passed by not less than 75% of the trustees of each trust, submit to the Minister a scheme for the amalgam- ation of those trusts into a single community trust.
(2) A scheme submitted under subsection (1) must— (a) (b) (c) state the names of the existing community trusts: state the names of the trustees of the existing commu- nity trusts: have annexed to it the trust deeds establishing the exist- ing community trusts: 9 s 17 Community Trusts Act 1999 Reprinted as at 10 September 2008 (3) (4) (d) (e) (f) have annexed to it a proposed trust deed for the pro- posed community trust on which the property, rights, assets, and liabilities of the existing community trusts are proposed to be held: state the names, addresses, and occupations of the pro- posed trustees of the proposed community trust: contain a summary of any submissions made under sub- section (4): contain such other matters as may be appropriate: be dated.
(g) (h) The trustees of the existing community trusts must supply to the Minister any additional information relating to the scheme required by the Minister.
Before submitting a scheme to the Minister under subsection (1), the trustees of each existing community trust must— (a) give notice in the Gazette and in 1 or more principal newspapers circulating in the area or region of the trust— (i) stating that the trustees of the trust intend to sub- mit the scheme to the Minister; and specifying details of the scheme; and stating that any person residing in the area or re- gion of the trust may, within 28 days after the last publication of the notice, make written submis- sions to the trustees regarding the scheme; and (ii) (iii) (5) have regard to any submissions made within that period.
(b) The Governor-General may on the advice of the Minister, by Order in Council, approve a scheme for the amalgamation of 2 or more existing community trusts referred to in the order.
(6) On a date specified in the order— (a) (b) the new community trust on which the property, rights, assets, and liabilities of each of the existing community trusts are proposed to be held is deemed to be estab- lished on the terms in the proposed trust deed submitted to the Minister under subsection (1); and the persons proposed for appointment as trustees of the trust under the scheme are appointed as trustees of the new community trust; and 10 Reprinted as at 10 September 2008 Community Trusts Act 1999 s 18 (c) (d) (e) the property, rights, assets, and liabilities of each of the existing community trusts vest in those trustees in the manner specified in the order, and are held by them on and subject to the trusts contained in the trust deed; and the existing community trusts are dissolved; and the trustees of the existing community trusts cease to hold office as trustees of those trusts.
The area or region of the new community trust established under subsection (6)(a) must correspond with the area or re- gion of the existing community trusts referred to in subsection (2)(a).

This Act applies with any necessary modifications to every new community trust established under this section and to the trustees of those trusts.
Compare: 1988 No 90 s 19 Formation of separate community trusts in place of existing community trust The trustees of a community trust may, in accordance with a resolution passed by not less than 75% of the trustees, submit to the Minister a scheme for the formation of 2 or more separ- ate community trusts in place of that community trust.
(7) (8) 18 (1) (2) A scheme submitted under subsection (1) must— (a) (b) (c) (d) (e) (f) state the name of the existing community trust: state the names of the trustees of the existing commu- nity trust: have annexed to it the trust deed establishing the exist- ing community trust: have annexed to it the trust deeds for the proposed com- munity trusts on which the property, rights, assets, and liabilities of the existing community trust are proposed to be held: specify the property, rights, assets, and liabilities of the existing community trust which it is proposed will be held by each of the proposed community trusts: state the names, addresses, and occupations of the per- sons who it is proposed will be trustees of the proposed community trusts: 11 s 18 Community Trusts Act 1999 Reprinted as at 10 September 2008 (3) (4) (g) contain a summary of any submissions made under sub- section (4): contain such other matters as may be appropriate: be dated.
(h) (i) The trustees of the existing community trust must supply to the Minister any additional information relating to the scheme required by the Minister.
Before submitting a scheme to the Minister under subsection (1), the trustees of the existing community trust must— (a) give notice in the Gazette and in 1 or more principal newspapers circulating in the area or region of the trust— (i) stating that the trustees of the trust intend to sub- mit the scheme to the Minister; and specifying details of the scheme; and stating that any person residing in the area or re- gion of the trust may, within 28 days after the last publication of the notice, make written submis- sions to the trustees regarding the scheme; and (ii) (iii) (5) (b) have regard to any submissions made within that period.
The Governor-General may on the advice of the Minister, by Order in Council, approve a scheme for the formation of sep- arate community trusts in place of an existing community trust referred to in the order.
(6) On a date specified in the order,— (a) (b) (c) (d) the new community trusts on which the property, rights, assets, and liabilities of the existing community trust are proposed to be held are established on the terms in the proposed trust deeds submitted to the Minister under subsection (1); and the persons proposed for appointment as trustees of the trusts under the scheme are appointed as trustees of the new community trusts; and the property, rights, assets, and liabilities of the exist- ing community trust vest in those trustees in the man- ner specified in the order and are held by them on and subject to the trusts contained in the trust deeds; and the existing community trust is dissolved; and 12 Reprinted as at 10 September 2008 Community Trusts Act 1999 s 21 (7) (8) 19 20 (e) the trustees of the existing community trust cease to hold office as trustees of that trust.
The area or region of each new community trust established under subsection (6)(a) is the part of the area or region of the existing community trust referred to in subsection (2)(a) as is specified in the order.

This Act applies with any necessary modifications to every new community trust established under this section and to the trustees of those trusts.
Compare: 1988 No 90 s 20 Other matters Sale of shares in trustee bank’s successor company The trustees of a community trust may sell or otherwise dis- pose of any shares held by the trust in the capital of a trustee bank’s successor company if a resolution has been passed by not less than 75% of the trustees approving the sale or dispos- ition.
Compare: 1988 No 90 s 22(1) Section 64 of Reserve Bank of New Zealand Act 1989 not to apply to community trusts Section 64 of the Reserve Bank of New Zealand Act 1989 does not apply to— (a) (b) a community trust: the incorporation of the trustees of a community trust under Part 2 of the Charitable Trusts Act 1957.

Compare: 1988 No 90 s 14(4) Application of Trustee Act 1956 not affected The Trustee Act 1956 applies to a community trust.
21 (1) (2) Despite section 2(4) of the Trustee Act 1956, if the trustees of a community trust are not a body corporate, the powers conferred on a trustee by the Trustee Act 1956— (a) are in addition to the powers given by this Act and the instrument creating the trust: 13 s 22 Community Trusts Act 1999 Reprinted as at 10 September 2008 (b) unless otherwise stated, apply and have effect subject to any contrary intention expressed in this Act or the instrument creating the trust.
(3) Despite section 2(5) of the Trustee Act 1956, if the trustees of a community trust are a body corporate, the powers conferred on that body corporate by the Trustee Act 1956— (a) are in addition to the powers given by this Act, the in- strument creating the trust, and the powers given by any Act under which the trustees are incorporated: unless otherwise stated, apply and have effect subject to any contrary intention expressed in this Act or the instrument creating the trust: unless otherwise stated, apply and have effect subject to any contrary intention expressed in the Act under which the trustees are incorporated.
(b) (c) (4) Nothing in subsection (3)(c) affects any Act which applies to all trustees, whether corporations or not.

Compare: 1988 No 90 s 28 22 (1) (2) Fees The Governor-General may from time to time, by Order in Council made on the recommendation of the Minister, make regulations prescribing or providing for fees or charges payable by community trusts to the department for the provi- sion of services by the department.
The regulations may— (a) prescribe the services for which fees or charges are payable: prescribe or provide for the amounts of any fees or charges or the method or rates by which they are to be assessed: prescribe the method of payment of any fees or charges: prescribe the circumstances in which payment of the whole or any part of the fees or charges may be remitted or waived.
(b) (c) (d) (3) A fee or charge imposed by regulations made under subsection (1)— (a) must be reasonable having regard to the expenses in- curred or to be incurred by the department in providing 14 Reprinted as at 10 September 2008 Community Trusts Act 1999 s 22 a service in relation to the community trust by which the fee or charge is payable; and is payable to the department and recoverable in a court of competent jurisdiction as a debt due to the Crown.
(b) The Minister must not recommend the making of an Order in Council that imposes or increases a fee or charge unless the Minister has previously consulted all interested commu- nity trusts.

In this section, department means the department of State that, under an enactment or with the authority of the Prime Minister, is for the time being responsible for the relevant function or matter.
(4) (5) 15 Notes Community Trusts Act 1999 Reprinted as at 10 September 2008 Contents 1 2 3 4 General Status of reprints How reprints are prepared Changes made under section 17C of the Acts and Regulations Publication Act 1989 List of amendments incorporated in this reprint (most recent first) General This is a reprint of the Community Trusts Act 1999.

The reprint incorporates all the amendments to the Act as at 10 September 2008, as specified in the list of amendments at the end of these notes.
Relevant provisions of any amending enactments that have yet to come into force or that contain relevant transitional or savings provisions are also included, after the principal enactment, in chronological order.

Status of reprints Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment.
This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

of How reprints are prepared A number editorial in the preparation of enacting words provisions are that are repealed or conventions reprints.
not included followed are the For example, and in Acts, revoked are omitted.

5 Notes 1 2 3 16 Reprinted as at 10 September 2008 Community Trusts Act 1999 Notes see For a detailed list of http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.
the editorial conventions, 4 Changes made under section 17C of the Acts and Regulations Publication Act 1989 Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice.

Changes that would alter the effect of the legislation are not permitted.
A new format of legislation was introduced on 1 January 2000.

Changes to legislative drafting style have also been made since 1997, and are ongoing.

To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.
In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint: • omission of unnecessary referential words (such as “of this section” and “of this Act”) typeface and type size (Times Roman, generally in 11.5 point) layout of provisions, including: • • indentation position of section headings (eg, the number and heading now appear above the section) format of definitions (eg, the defined term now appears in bold type, without quotation marks) format of dates (eg, a date formerly expressed as “the 1st day of January 1999” is now expressed as “1 January 1999”) 17 • • • • Notes Community Trusts Act 1999 Reprinted as at 10 September 2008 • • • • • • • position of the date of assent (it now appears on the front page of each Act) punctuation (eg, colons are not used after definitions) Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly case and appearance of letters and words, including: • followed by small capital format of headings (eg, headings where each word formerly appeared with an initial capital letter letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter) small capital letters in section and subsection references are now capital letters • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly running heads (the information that appears at the top of each page) format of amendments, and schedules of are rearranged into alphabetical order, chronological).
two-column schedules of consequential they rather than repeals (eg, List of amendments incorporated in this reprint (most recent first) Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008 (2008 No 64): section 3 Wellington, New Zealand: Published under the authority of the New Zealand Government—2010 5 12 18