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Legal strife on $2.5 billion power trust
A legal fight has erupted on Auckland's $2.5 billion power trust, with one trustee alleging another was ineligible to be elected and asking the High Court to remove him.
Papers filed with the High Court at Auckland claim former National MP Paul Hutchison did not live within the district covered by the Entrust organisation which owns 75 percent of listed power company Vector Ltd.
Hutchison has made a statutory declaration rejecting the claim.
A private investigator, Paragon, looked into Hutchison's living arrangements on the instruction of Auckland QC Bruce Stewart and submitted a 17-page report alleging Hutchison lived beyond the trust's boundaries. The private investigators even carried out physical surveillance of Hutchison at his South Auckland property.
The report is among court papers filed by another trustee, James Carmichael, who says Hutchison claimed for the 2015 election to have lived in Epsom while always residing in Drury.
Carmichael's statement of claim against his fellow trustee includes evidence from electoral rolls, neighbours and Hutchison's company and vehicle registrations.
The pair are two of five trustees, all from the Community and Residents (C&R) ticket which swept the Entrust elections that year. However Carmichael has since failed to gain that organisation's nomination for this year's election in October.
At the last election Hutchison was one of Carmichael's referees to C&R when he sought nomination.
Entrust holds the Vector shareholding in trust for Aucklanders, returning about $100 million annually to those customers in dividends from the company – and was in the news this month for removing the longstanding chairman of Vector Ltd, Michael Stiassny. Carmichael is one of two trustees appointed to Vector's board. Vector today had a market capitalisation of $3.36 billion, valuing Entrust's stake at $2.5 billion.
Carmichael's suit was filed on Monday and lists all four other trustees as defendants: Hutchison, chairman William Cairns, Michael Buczowski and Karen Sherry.
It says Hutchison was and is ineligible to have stood and been elected to the trust because his actual residence is outside the specified boundaries for Entrust.
Before the October 2015 election, the statement of claim says, Hutchison said he lived in Onslow Ave, Epsom, which was in fact his brother Alistair's home. That same address was listed as Hutchison's residential address for a subsequent list of trustees' contact details after the election.
Carmichael alleges the Entrust chairman, Cairns, who lived near Onslow Ave, told him that he had never seen Hutchison in the area.
When Carmichael challenged Hutchison last month over the discrepancy, the former Port Waikato MP's lawyer said the Onslow Ave house had been his principal place of residence at the time of the election, and a Remuera Rd address was his new, rented, home. Last week, after further lawyers' letters, Hutchison signed a declaration to that effect and also that he maintained a residence in Leamy Way, Drury, which had been his family home.
Carmichael was not satisfied and his High Court action alleges Hutchison's principal residence "was at all material times the Leamy address" which was outside the electoral district.
His suit shows Paragon searched the Companies Office for evidence of what Hutchison listed as his residential address for five businesses. Carmichael says on May 16 and 18 "after being confronted on the issue of eligibility" Hutchison changed that listing for those companies to the Remuera Rd address.
Carmichael also says Hutchison lists his Leamy Ave address as his home in both the general election electoral roll and the one for the Franklin ward of the Auckland Council election.
"At all material times, the Leamy address has been recorded in the financing statement and vehicle ownership records for the motor vehicle registered as [number plate withheld]."
The extent of Carmichael's investigations of Hutchison is shown in the statement of claim: "Inquiries have been made of various persons who know Mr Hutchison, including the neighbour of the Leamy address. Those persons expressed the clear view that, from 2014, Mr Hutchison has resided at the Leamy address and/or in Drury."
Carmichael asks the court to declare Hutchison "had not satisfied the eligibility requirements to be a trustee of Entrust" and that his "purported appointment as a trustee of Entrust is void and a nullity".
Newsroom has seen Hutchison's defence, in a signed statutory declaration. He says he and his wife have lived in Epsom and Remuera as they needed to be closer to the city for their daughters' education and their Drury home has been up for sale for much of the past three or four years.
Hutchison, a medical doctor, works at a clinic in Takanini and in his declaration he says he stays at the Drury house if he is late, and the family spend "some weekends there".
"I am aware that I have not been consistent in my use of addresses for a range of different businesses and personal purposes ... I have now notified my change of address for the electoral roll and at the Companies Office.
"I accept that I will need to take great care to maintain and update my details in future."
The defendants will now have to respond to Carmichael's statement of claim, just four months before the Entrust election.