4                                                              03 May 2017

Finance and Performance Committee

12 April 2017




File: (17/667)





Report no: FPC2017/2/122


Urban Plus Limited - Amendment to Constitution


Purpose of Report

1.    The purpose of this report is to seek Council approval to amend the Constitution of Urban Plus Limited (UPL), to enable its Directors to provide indemnity to Directors and employees of its current and any future subsidiary companies relating to potential liabilities arising from the performance of their duties as directors.


That the Committee recommends that Council:

(i)    approves the amendment to the UPL Constitution attached as Appendix 3 to the report, regarding the ability for Urban Plus Limited (UPL) Directors to provide indemnity to Directors and employees of its current and future subsidiary companies; and

(ii)   notes that a Deed of Indemnity will also have to be entered into as part of this proposal; and

(iii)  notes that the purpose is to provide indemnification to previous (retired), current and future Directors and employees of UPL subsidiary companies.



2.    With the approval from Hutt City Council’s Chief Executive, UPL has created a subsidiary company Fairfield Waters Limited (FWL) via a Limited Partnership structure - Fairfield Limited Partnership (FLP).  The purpose of this structure is to manage a residential housing development in Fairfield.

3.    External legal and tax advice was sought from Price Waterhouse Coopers (PWC) prior to setting up the limited partnership structure, as well as to prepare and execute the appropriate documentation with the Companies Office.

4.    The external (PWC) legal advice was also peer reviewed by Greenwood Roche.

5.    At the March 2017 Board Meeting, the UPL Chairman queried whether UPL Directors had sufficient authority within the UPL Constitution to provide indemnity to the Directors and employees of its subsidiary company FWL.

6.    As a result of 5. above, the UPL Chairman also requested that enquiries be made to ascertain whether the indemnification covers previous (retired), current and future directors and employees of these subsidiaries.  If it did not, then this should also be incorporated into the amendment actions.

7.    A subsequent review of UPL’s Constitution by Greenwood Roche has indicated that the current Indemnity and Insurance clause is considered insufficient (‘does not contain a broad enough power’) for this purpose as the current Constitution does not expressly authorise this action, and that an amendment would enable the indemnification issue to be resolved.

8.    Further, as per the Greenwood Roche advice, should the Indemnity and Insurance clause of UPL’s Constitution be amended accordingly, a deed of indemnity could then be entered into for the current and future subsidiaries.


9.    The advice from Greenwood Roche outlines the issue and suggests that an amendment be made to enable wider indemnity coverage for current and future subsidiary companies of UPL – attached as Appendix 1 to the report.

10.  The current UPL Constitution is attached as Appendix 2 to the report.  Note UPL was originally known as De Luien Developments Limited.

11.  Attached as Appendix 3 to the report is the proposed wording to be inserted into the UPL Constitution.


12.  There are two options open to Council: that is to either agree to amend UPL’s Constitution or not.   Council could ask for more information before making this decision.


13.  UPL officers have sought external legal advice including peer review assessments on several occasions (PwC and Greenwood Roche), in the creation and setting up of the subsidiary company structure, as well as seeking in-house (Council) legal review prior to HCC approval to create FWL.  The request to amend the Constitution will not be publicly advertised or notified.

Legal Considerations

14.  External legal advisors Greenwood Roche have provided advice (refer Appendix 1 attached), which considers Section 162 of the Companies Act 1993 and other relevant legal aspects.

Financial Considerations

15.  No financial implications are anticipated.

Other Considerations

16.  In making this recommendation, officers have sought external legal advice which has given careful consideration to the Companies Act 1993 – specifically section 162.  Officers believe that these recommendations support the intent of these subsidiary companies, as well as provide prudent company management powers to its Directors.






Greenwood Roche Memorandum re Indemnification of Directors



UrbanPlus Limited (previously De Luien Developments Limited) Constitution



UrbanPlus Limited Constitution - proposed amendment re Indemnity and Insurance Clause








Author: Daniel Moriarty

Portfolio Manager, Urban Plus







Reviewed By: Brent Kibblewhite

Chief Financial Officer




Reviewed By: Joycelyn Raffills

General Manager, Governance and Regulatory




Approved By: Craig Walton

Chief Executive, Urban Plus