Media Statement 12 August 2009

Released on behalf of Richard Sinke - Save Our Arts Centre Campaign

Attorney-General investigation should delay Music School consultation

The Christchurch City Council is being advised that it should delay this Thursday's (13 Aug 2009) decision to commence a Special Consultative Procedure for seeking community views on the Council's role for funding and developing a proposed University of Canterbury Music School on Arts Centre land.

Dux de Lux owner Richard Sinke, who is one of a growing number of individuals and groups opposing the music school proposal, has made the call for the delay.

In a recent development, through his lawyer Wynn Williams & Co, Richard Sinke has lodged a complaint with the Attorney-General, Christopher Finlayson. He is calling for an investigation into what he understands are several significant legal issues casting serious doubt over the lawfulness of allowing the music school proposal to be established on Arts Centre land. (see Attorney-General involvement below)

He claims the Arts Centre Trust Board has acted outside the terms of its own trust deed and until his complaint has been investigated by the Attorney-General, he says it would be improper for the Council to commence the Special Consultative Procedure which is estimated to cost ratepayers up to $20,000.00.

Mr Sinke's lawyer, Jared Ormsby of Wynn Williams & Co, said, "Several alterations have been made to the original 1978 Arts Centre trust deed, some of which are believed to be outside of its powers. The most recent of these alterations, in March 2007, was in breach of the law, as they (Arts Centre Trust Board) have changed the first object to not only holding but also developing the land. " (see executive summary of Attorney-General complaint below)

Richard Sinke said, "This is a very serious matter and it's certainly not an attempt on my part to simply find a way of stalling the project. The bottom line is what they (the Arts Centre Trust Board, the Council and the University of Canterbury) are wanting to do, according to the legal advice I've received, is simply unlawful and must be stopped now before hundreds of thousand dollars are spent pursuing a development that the Arts Centre trust deed clearly doesn't allow for."

On Thursday Wynn Williams & Co will present a deputation to the Christchurch City Council (see attached), which in summary states that:

* The City Council should delay the commencement of the Special Consultative Procedure until after the Attorney-General has completed his investigation into the variations made to the Arts Centre of Christchurch Trust Deed. * * The City Council's Statement of Proposal to Fund a New Building for the University of Canterbury at the Arts Centre does not accurately identify the issues, which were raised in our legal submissions dated 23 July 2009. The following two key legal issues have not been identified in the Statement: * a. The validity of variations made to the Arts Centre of Christchurch Trust Deed; and * b. The duration of the term of the loan and leasing arrangements. * * However, should the Council decide on Thursday to proceed with the Special Consultative Procedure, then in order to properly consult on these matters, the wording of the proposal must be changed to more properly reflect the significance of the Arts Centre site, and to more properly articulate the question of whether the Arts Centre site itself is appropriate for this type of development. * * Wynn Williams & Co, have suggested the following alternative wording for a Council resolution.

Amend the statement of proposal and summary of information attached to the staff report to more properly describe the proposal as follows:

a. fund the development of a new building for the University of Canterbury on a site in the inner city;

b. fund the development of a new building for the University of Canterbury at the Arts Centre of Christchurch and not at any alternative inner city site;

c. use an existing Council controlled trading organisation, Civic Building Limited, to manage the development and own the new building when it is completed;

d. enter into a lease with the Arts Centre Trust Board for the land on which the building is to be constructed if the Arts Centre site is the preferred site;

e. borrow the funds required to complete the development and on lend them to Civic Building Limited.

For further comment:
Backgrounder

Attorney General Involvement:

1. Charitable Trusts are supervised on behalf of the New Zealand public by the Attorney-General.

2. Section 60 allows the Attorney-General to initiate proceedings if necessary to fulfil the Attorney-General's function of supervising charitable trusts for the benefit of the New Zealand public.

Executive summary of complaint to Attorney-General regarding Arts Centre Boards Trust Deed associated with proposed music school:

a. The Trust Board has varied its Trust Deed to enable it to undertake property development on the Land.

b. The original Trust Deed did not allow for such development and there is no power in the Trust Deed, which allows for variation of the Trust Deed in this way.

c. The variation of the Trust Deed is not a proper exercise of the Trust Board's power to amend the Trust Deed because:
i. The Trust Board's exercise of the power is ultra vires;
ii. The Trust Board exercised the power to vary the Trust Deed for an improper purpose. As a consequence, the variation is invalid.

d. The Trust Board has also committed other variations to the Trust Deed which are invalid.

e. The Trust Board, by continuing to apply Trust property (in furtherance of its development project) is acting in breach of Trust by applying Trust property outside the terms of the trusts upon which the Trust Board holds the Trust Fund.

ENDS

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