The community group opposing the deal lacks the legal right to challenge the trust
The High Court of New Zealand refused to block a charitable trust's $620 million sale of TSB Bank to Heartland Group.
The court dismissed the application on 24 August 2026 in Taranaki Community Accountability Society Inc v Ussher [2026] NZHC 2519, rejecting a community group's bid for a temporary order to stop the trustees of Toi Foundation from voting on the sale.
Toi Foundation, a Taranaki charitable trust, held all the shares in TSB through a holding company and returned the bank's profits to community causes. Under a conditional agreement signed on 1 June 2026, it agreed to sell that shareholding to Heartland Group Holdings for total consideration of $620 million. The package included a $50 million cash dividend, $250 million in Heartland shares, a $264 million loan from the trust, and $56 million of lower-ranking debt. The total was 76 percent of TSB's book value and would leave the trust with a 17.5 percent stake in Heartland. The sale needed the support of at least 75 percent of the trustees, who were due to vote on 26 August 2026.
Taranaki Community Accountability Society, formed in June 2026 to oppose the sale, argued that the trust's community consultation had been inadequate and that the sale was so unreasonable that no reasonable trustee could approve it.
The court found that the group had no legal right to bring the claim. It held that a charitable trust had no beneficiaries, no individuals entitled to enforce it, and that under the Trusts Act 2019 only a beneficiary could ask a court to review a trustee's decision. Charitable trusts, the court said, were enforced by the attorney-general on behalf of the Crown. That finding alone was enough to dispose of the application.
The court went on to reject the challenge on its merits. It found that the trust deed did not require the trustees to consult while the proposal was still, in the applicant's words, at a "formative stage," to offer alternative options, or to stay neutral. The confidential commercial advice the trust had received was not part of the "details of the proposed sale" that it had to disclose. The consultation materials, the court held, were not materially inaccurate, misleading, or incomplete.
The court found that delaying the vote carried significant risk for the trust. The group's promise to cover any losses caused by an order was, on its own witness's evidence, "essentially, worthless." The court dismissed both the application and refused a request that the trust fund the group's costs in advance.
