Here's the legal letter sent to Toi Foundation that led to a restart of the 28-day community consultation period on the proposed TSB & Heartland Bank Merger, published with permission from Taranaki Community Accountability Society:
VERY URGENT: PROPOSED SALE OF SHARES IN TSB BANK LIMITED – PUBLIC NOTICE DATED 3 JUNE 2026 – NON-COMPLIANCE WITH CLAUSE 7.4 OF THE TRUST DEED
1. We act for Taranaki Community Accountability Society Inc. Our instructions are as follows.
2. This correspondence is being sent to the generic email address on the Foundation's website, together with Tania, who we understand to be the executive assistant to the Board of Trustees. Please ensure that this correspondence is passed to the trustees as a matter of urgency.
3. Our client has been formed to advance the interests of residents, who wish to be part of it, who reside in the Specified Area as defined in the Toi Foundation Trust Deed dated 10 March 2021 (“the Trust Deed”).
4. We refer to the public notice given by the Foundation under clause 7.4 of the Trust Deed in respect of the proposed sale of 100 per cent of the Foundation's shares in TSB Bank Limited to Heartland Group Holdings Limited (“the Notice”). The Notice records on its face that its last publication date was 3 June 2026.
The requirements of the Trust Deed
5. The proposed sale would result in the Foundation relinquishing its controlling interest in TSB Bank Limited. Clause 7.4(b) of the Trust Deed accordingly requires that, before voting on any resolution approving the sale, the Trustees must give the prescribed notice and consider any submissions received in response to that notice. The giving of a compliant notice is a mandatory precondition to the exercise of the power of sale.
6. Clause 7.4(d)(iii) prescribes the content of that notice. Among other things, the notice must state that any person residing in the Specified Area may, within 28 days after the last publication of the notice, make written submissions to the Trustees regarding the proposed resolution.
The defect
7. On the settled principles governing the computation of time, the day of publication is excluded. The 28-day period conferred by clause 7.4(d)(iii) commenced on 4 June 2026 and expired at midnight on 1 July 2026. Every person residing in the Specified Area was entitled, as of right under the Trust Deed, to make a written submission at any time up to and including the whole of 1 July 2026.
8. The Notice does not state that period. It instead states that written feedback “must be received within 28 days from the last publication of the notice, and in any event, by no later than 5.00pm, Tuesday 30th June 2026.”
9. The stated deadline of 5.00pm on 30 June 2026 falls on day 27 of the period prescribed by the Trust Deed and curtails the submission window by more than 31 hours. The words “in any event” operate as an absolute cut-off, so that a reasonable member of the public reading the Notice would understand that a submission made after 5.00pm on 30 June 2026, or at any time on 1 July 2026, was out of time. Under the Trust Deed, it was not.
The consequences
10. A notice which misstates, and materially abridges, the very right it exists to confer, is not a notice prescribed by clause 7.4(d). Clause 7.4(d)(iii). The time frames are expressed in mandatory terms, and it protects the interests of the residents of the Specified Area. Strict compliance is required. It follows that the prescribed notice has not been given, the precondition in clause 7.4(b) remains unsatisfied, and the Trustees presently have no power to put or pass the proposed resolution. Any resolution purportedly passed in reliance on the Notice would be invalid and of no effect.
11. We note that the deficient notice is likely to have had real consequences. The public reading the public notice will have taken from it that no submission or response will be considered by the Trust if it was not received by the specified deadline of 5 p.m. on 30 June 2026. Accordingly, it cannot be said that the failure to provide the mandatory notice is of no consequence. By way of example only, a members of the group of beneficiaries may have wished to make a submission but did not do so, given that the deadline expired prematurely.
What is required
12. In the circumstances, we require the following undertakings from the Trustees:
a) that the Trustees will not put, pass, or act upon any resolution to approve the proposed sale in reliance on the Notice;
b) that the Trustees will publish a fresh notice complying in all respects with clause 7.4(d), and will allow the full 28-day period following its last publication to expire, and will consider all submissions received within that period, before voting on any resolution.
13. In the meantime, we will be writing further in relation to the proposed sale and the material published by the Foundation on its website. Needless to say, our client opposes the proposed sale. In the meantime, please advise when the trustees will be meeting to consider making a decision. Although our client asserts that the trustees are not able to vote at this stage, the date is requested so that we have a firm deadline to provide you with our client’s substantive response.
14. We will be writing further in due course regarding the proposed sale. In the meantime, our client has carefully reviewed the community's opposition, and it is overwhelming. The proposed transaction is more than substantial. It is the sale of the Trust's principal asset and source of funds. Should the transaction proceed despite the community's opposition, it cannot be reversed. Accordingly, should the trustees decide to proceed with the sale
despite the clearly expressed opposition. Our view is that Court approval must be obtained by way of an application pursuant to section 133 of the Trust Act 2019. Without overlooking the trustees' failure to comply with clause 7 of the Trust Deed, please confirm that prior to the trustees considering approval of the transaction, they will seek directions pursuant to the Trust Act 2019.
15. We strongly advise that the trustees obtain legal advice before responding to this correspondence. Please let us have a response to this letter by 3 p.m. on Wednesday 8 July 2026. Should a satisfactory response not be received, we have been instructed to apply for injunctive relief to restrain the Trustees from voting on the proposed transaction.
We look forward to your urgent response.
Yours faithfully
Foy & Halse
Graeme Halse
Consultant
