SECTION 7 : TRANSFER OF FORESTRY ASSETS
In this Section and the Attachments to this Section:
Adjustment Date means the next Business Day after the expiration of the period of 165 Business Days commencing on the Legislation Date;
Aoraki Forest means any one of the six forests described in paragraph 4 of Attachment 7.1;
Available Crown Forestry Assets means those assets described in Attachment 7.1;
Business Day means a day (other than
Saturday or Sunday) on which registered banks are open for normal banking
business in Wellington and Christchurch but shall exclude any day in the
period commencing 25 December in any year and ending on 5 January in the
following year and shall be
deemed to commence at 9.00 am and to terminate at 5.00 pm;
CFM means Crown Forestry Management Limited, the manager for the Crown of each Aoraki Forest;
Crown means Her Majesty the Queen in right of New Zealand and where the context permits, includes a Crown Body;
Crown Body means the Crown or a Crown Entity or a State Enterprise or any company which is wholly owned by a Crown Entity or a State Enterprise;
Crown Entity has the meaning given to it in section 2(1) of the Public Finance Act 1989 and includes the New Zealand Railways Corporation;
Crown Forest Land has the meaning given to it in section 2 of the Crown Forest Assets Act 1989;
Crown Forestry Licence has the meaning given to it in section 2 of the Crown Forest Assets Act 1989;
Crown Forestry Rental Trust means the forestry rental trust established under the Crown Forest Assets Act 1989;
this Deed means this Deed of Settlement, including the Attachments and Schedules to it;
Deed Date means the date on which this Deed was signed by both parties to it;
Documentation and Valuation Completion Date means the next Business Day after the date of expiration of the period of 227 Business Days commencing on the Legislation Date;
Final Selection Date means the next Business Day after the expiration of the period of 247 Business Days commencing on the Legislation Date;
Final Transfer Date means, in respect of any Forestry Asset, the next Business Day after the expiration of the period of 309 Business Days commencing on the Legislation Date or any earlier date agreed upon by the Crown and Te Rünanga;
Forestry Assets means those Potential Forestry Assets that Te Rünanga selects to acquire in accordance with clause 7.3.11;
Forestry Asset Transfer means the
transfer or other instrument vesting in Te Rünanga the title to any
Forestry Assets that Te Rünanga acquires from the Crown, which may
or may not incorporate a
Forestry Right;
Forestry Documentation means the documents to be agreed or determined in respect of any Forestry Right and any Forestry Asset Transfer during the documentation process as described in clauses 7.3.7 and 7.3.8;
Forestry Right means, in respect of any Aoraki Forest, the Ngäi Tahu Crown Forestry Licence or any other lease, licence or other form of tenure to be granted or reserved by the Crown to Te Rünanga, or vice versa by Te Rünanga to the Crown, to enable one party to exercise rights over the Trees or Land owned or to be owned by the other party, and includes any lease or tenancy in respect of any buildings from Te Rünanga to the Crown, and vice versa;
Forestry Right Market Rental is the amount, exclusive of GST, which:
(a) the Available Crown Forestry Asset
subject to a Forestry Right (including a Ngäi Tahu Crown Forestry Licence)
might be expected to lease on the Deed Date, subject to the specific Forestry
Right terms and conditions, by a willing grantor to a willing grantee in
an arm’s length transaction after proper marketing wherein the parties
had each acted knowledgeably, prudently and without
compulsion; and
(b) is to be determined by first ascertaining the current market rental for the Land, as if no Forestry Right nor any other interest did exist, and, next, by making adjustments (if any) to such rental so as to take into account the specific Forestry Right terms and conditions;
Fundamental Terms means the fundamental terms referred to in Paragraph 2 of Attachment 7.5;
GST means Goods and Services Tax;
Improvements in relation to any Land either acquired by Te Rünanga or retained by the Crown means all improvements on, or associated with, the Land as at any relevant date, when it is necessary to identify or value any improvements, and includes:
(i) all buildings and other structures affixed to the Land (but excludes any buildings or structures and any moveable huts or caravans owned by any third party); and
(ii) all roads, tracks, accessways, airstrips, firebreaks, bridges, culverts, irrigation works, erosion works, water-races, drainage works, water storage and all works related to the prevention, detection or fighting of fire,
but does not include work done on or for the benefit of the Land by any owner, occupier or user thereof whether before or after such relevant date in:
(a) the draining, excavation, filling, reclamation or stabilising of the Land, or the making of retaining walls or other works appurtenant to that draining, excavation, filling, reclamation or stabilising;
(b) the grading or levelling of the Land or the removal of rocks, stone, sand or soil therefrom;
(c) the removal or destruction of vegetation, or the effecting of any change in the nature or character of the vegetation;
(d) the alteration of soil fertility or the structure of the soil; or
(e) the arresting or elimination of erosion or flooding,
and also excludes any improvements (such as, but not limited to, fences, water tanks, and related items) which have been placed on the Land by holders of current grazing or similar licences where such holder is entitled, in accordance with the terms of their licence, to remove such improvements at the expiration thereof;
Independent Expert means a person appointed in accordance with clause 7.6, as an independent expert to resolve differences between the parties;
Initial Forestry Right Market Rental means a Forestry Right Market Rental determined during the initial valuation process described in clauses 7.3.7 and 7.3.8;
Initial Selection Date means the next Business Day after the expiration of the period of 41 Business Days commencing on the Legislation Date;
Initial Transfer Value means a Market Value agreed or determined during the initial valuation process as described in clauses 7.3.7 and 7.3.8;
Key Date means any one or more of the Initial Selection Date, the Adjustment Date, the Documentation and Valuation Completion Date, the Final Selection Date and the Final Transfer Date;
Land where the Land is under separate ownership from the Trees and Improvements excludes:(a) all Trees growing or standing or, in the case of windthrow, lying on the Land; and
(b) all Improvements that have been acquired by any purchaser of the Trees on that Land or made thereafter by the purchaser of such Trees;
Legislation Date means the date on which this Deed becomes unconditional;
Licensed Land means any Crown Forest Land that is subject to a Crown Forestry Licence;
Marginal Strip has the meaning given to it in section 2 of the Conservation Act 1987;
Market Value is the amount, exclusive of GST, for which a Potential Forestry Asset might be expected to exchange, on the Deed Date, between a willing buyer and a willing seller, in an arm’s length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion. In applying this definition to any Potential Forestry Asset, the following matters shall be taken into account:
(a) the Fundamental Terms for the Potential Forestry Asset (including any warranties given or not given in respect of the Potential Forestry Asset) other than the possession and settlement dates which should be assumed to be the Deed Date;
(b) the Fundamental Terms of any Forestry Right or the terms and conditions of any existing Crown Forestry Licence over the Potential Forestry Asset; and
(c) any encumbrances or interests affecting or benefiting the Potential Forestry Asset appearing or to be shown on the title to the Potential Forestry Asset or as disclosed in writing by the Crown;
Ngäi Tahu Crown Forestry Licence
means a Forestry Right in respect of Aoraki Forest Land to be granted to
Te Rünanga or reserved to the Crown as the case may be pursuant to
clauses 7.5.6 or
7.5.7;
Potential Forestry Assets means those
Available Crown Forestry Assets that Te Rünanga on an indicative non-binding
basis notifies the Crown it is interested in acquiring in accordance with
clause
7.3.3(a);
RFR means the right of first refusal provided by the Crown to Te Rünanga set out in Section 9 (Rights of First Refusal);
Settlement Legislation means the bill
referred to in Section 17 (Conditions and Legislation) and, where the bill
has become law, means, if the context requires, the Act resulting from the
passing of
such bill;
State Enterprise has the meaning given to it in section 2 of the State-Owned Enterprises Act 1986;
Te Rünanga means Te Rünanga o Ngäi Tahu, established under section 6 of Te Rünanga o Ngäi Tahu Act 1996;
Transfer Value in respect of any Forestry Asset has, subject to the Fundamental Terms, the meaning set out in clauses 7.3.7 to 7.3.11; and
Trees means all the trees growing or standing or, in the case of windthrow, lying on land (but excluding logs unless otherwise agreed) that have either been acquired by Te Rünanga or retained by the Crown, as the case may be, as at any relevant date and all other trees thereafter growing or standing or, in the case of windthrow, lying on the land.
7.2.1 Action before Deed Date
The Crown and Te Rünanga have, prior to the Deed Date (Stage 1):
(a) identified the Available Crown Forestry Assets which Te Rünanga may on an indicative non-binding basis initially select as Potential Forestry Assets and, if so selected, later may be chosen as Forestry Assets. If this Deed becomes unconditional, the Crown shall transfer (or procure the transfer of) the Forestry Assets to Te Rünanga in accordance with the relevant provisions of this Deed; and
(b) agreed on the Fundamental Terms applicable to the appropriate Potential Forestry Assets.
7.2.2 Seven Stage Process
The Crown and Te Rünanga have agreed on a seven stage process (including Stage 1 referred to in clause 7.2.1) by which:
(a) Stage 2 - Disclosure the Crown shall disclose relevant information on the Available Crown Forestry Assets to Te Rünanga and shall permit Te Rünanga to inspect those assets and panels of Independent Experts will be established;
(b) Stage 3 - Initial Selection if this Deed becomes unconditional Te Rünanga shall notify the Crown of:
(i) its indicative non-binding selection (including any combination of selection units, sub-units and/or stands) of Available Crown Forestry Assets that it is at the time of such notification interested in acquiring (which will as a consequence be classed as Potential Forestry Assets); and
(ii) any further terms and conditions that it will be seeking to have included in a Forestry Right or a Forestry Asset Transfer in addition to the Fundamental Terms;
(c) Stage 4 - Documentation and Initial
Valuation the Crown and Te Rünanga shall agree, or
shall have determined, various issues relating to the grant or reservation
by the Crown to Te Rünanga (or vice versa) of Forestry Rights, the
form and content of Forestry Documentation and the Initial
Transfer Values and Initial Forestry Right Market Rentals for the Potential
Forestry Assets;
(d) Stage 5 - Adjustment the Crown and Te Rünanga shall, if required, agree, or shall have determined, any adjustment to any Initial Transfer Value or any Initial Forestry Right Market Rental in order to establish the Transfer Value and/or the Forestry Right Market Rental of each Potential Forestry Asset;
(e) Stage 6 - Final Selection Te Rünanga shall select the Potential Forestry Assets which it wants to acquire (which will as a consequence be classed as Forestry Assets); and
(f) Stage 7 - Transfer the Crown shall transfer to Te Rünanga, or procure the transfer to Te Rünanga of the Forestry Assets and Te Rünanga shall acquire those assets in accordance with the provisions of this Section.
7.3 THE PROCESS STAGE BY STAGE
Stage 2 - Disclosure
7.3.1 Provision of Information
As soon as practicable after the Deed
Date, but no later than 21 Business Days after that date, the Crown shall
provide, or procure the provision of, the information set out in Attachment
7.2 to Te
Rünanga to enable Te Rünanga to make its selection referred to
in clause 7.3.3. Subject to the disclaimer set out in paragraph 4 of Attachment
7.2, the Crown undertakes to use its best endeavours to disclose to Te Rünanga
all material information in a timely manner including any information that
would be material to Te Rünanga’s interest in Available Crown
Forestry Assets that comes to the knowledge of the Crown subsequent to that
initial disclosure and prior to the Final Selection Date (i.e. the next
Business Day after the date of expiration of the period of 247 Business
Days commencing on the Legislation Date).
7.3.2 Panels of Independent Experts
During the period of 62 Business Days
after the Deed Date, the Crown and Te Rünanga shall initiate,
follow and complete the process set out in clause 7.6 to establish panels
of relevant Independent
Experts who may be called upon to resolve disputes between the parties in
accordance with the
provisions of this Section.
Stage 3 - Initial Selection
7.3.3 Indicative Non-Binding Selection
No later than the Initial Selection Date (i.e. the next Business Day after the date of expiration of the period of 41 Business Days commencing on the Legislation Date) Te Rünanga shall provide the Crown with:
(a) an indicative non-binding selection of the Available Crown Forestry Assets that it is interested at that time in acquiring. In making that selection Te Rünanga:
(i) may, in respect of any Aoraki Forest, select:
(aa) either Land, or Trees, or Land and Trees;
(bb) any combination of selection units described in paragraph 4 of Attachment 7.1 that comprise any Aoraki Forest which combination is consequently to be treated as one selection unit for all purposes of this Section;
(cc) subject to paragraphs 2 and 3
of Attachment 7.3, any combination of sub-units that comprise any selection
unit referred to in clause 7.3.3(a)(i)(bb) which combination is consequently
to be
treated as a selection unit for all purposes of this Section; and/or (dd)
in the case of Trees associated with any Aoraki Forest, subject to paragraph
2.3.2 of Attachment 7.1, any combination of groups of stands described in
paragraph 2.3.1 of Attachment 7.1, and any such combination of groups of
stands is consequently to be treated as a selection unit for all purposes
of this Section;
(ii) subject to paragraphs 1 and 2 of Attachment 7.4, may, in respect of any Licensed Land, select any combination of selection units described in paragraph 3 of Attachment 7.1 and which combination is consequently to be treated as one selection unit for all purposes of this Section; and
(iii) shall otherwise follow the selection principles set out in paragraph 2 of Attachment 7.1; and
(b) the particulars of any further terms and conditions that it would seek to have included in any Forestry Documentation in addition to the Fundamental Terms.
7.3.4 Potential Forestry Assets
Any Available Crown Forestry Assets that are included in any indicative nonbinding selection referred to in clause 7.3.3(a) shall be classed for the purposes of this Section as Potential Forestry Assets.
7.3.5 Later Inclusion of Potential Forestry Assets
Any Available Crown Forestry Assets,
that are not included in any indicative nonbinding selection referred to
in clause 7.3.3(a), may, nevertheless, by notice from Te Rünanga to
the Crown, be
included as Potential Forestry Assets, at any time prior to the Adjustment
Date (i.e. the next Business Day after the date of expiration of the period
of 165 Business Days commencing on the Legislation Date). If any such notice
is given, the Crown and Te Rünanga shall jointly determine the timetable
for applying Stages 4 and 5 to the Available Crown Forestry Assets listed
in such notice.
7.3.6 Sample Audit
No later than 21 Business Days after
the Initial Selection Date, Te Rünanga may complete a random sample
audit of the Potential Forestry Assets for the purpose of verifying the
accuracy of the
information supplied by the Crown to Te Rünanga pursuant to clause
7.3.1. If this audit reveals any material inaccuracies in the information
so supplied, then Te Rünanga shall provide the Crown with the
results of the audit to enable the Crown to verify the audit results. If
the inaccuracies are verified, the Crown shall at its cost correct the information
as soon as possible.
SECTION 7 : TRANSFER OF FORESTRY ASSETS
7.3 THE PROCESS STAGE BY STAGE
7.4 FURTHER INFORMATION AND INSPECTION OF ASSETS
7.7 ASSET MAINTENANCE PROVISIONS
ATTACHMENT 7.1
AVAILABLE CROWN FORESTRY ASSETS
ATTACHMENT 7.2
DISCLOSURE INFORMATION
ATTACHMENT 7.3
AORAKI FOREST DOCUMENTATION AND VALUATION
ATTACHMENT 7.4
LICENSED LAND DOCUMENTATION AND VALUATION
ATTACHMENT 7.5
FUNDAMENTAL TERMS OF FORESTRY DOCUMENTATION AND TRANSFER PROCESSES
