Rudman's city: How ironic: Vector's Tory saves the lefties

By BRIAN RUDMAN

Tonight, all going to plan, peace should break out at the Auckland Energy Consumer Trust, with the five trustees unanimously agreeing to an equal distribution of three years of backed-up dividends.

This will mean that the 269,000 customers of the powerline firm Vector, be they an Otara pensioner or a power-guzzling Otahuhu processing plant, will get the same payout, around $570 apiece.

The support for an equal distribution comes despite legal advice from John Katz, QC, showing "bias" - to use his own word - "in favour of disproportionate or differential payments."

They say that all's well that ends well, and no doubt apart from a few big businesses who feel they deserve more, and the several hundred residential customers who closed their accounts in the weeks before the magic cut-off date, most of us will be happily looking forward to our little windfall.

That said, you have to scratch your head and wonder what the past four months of internecine warfare inside the trust was all about.

A case, perhaps, of too many lawyers spoiling the broth. At the heart of it all was lawyer Karen Sherry, leader of the victorious, left-leaning Powerlynk team in last September's election.

She and her two colleagues, Pauline Winter and Coralie Van Camp, pledged during their campaign to seek an equal distribution of trust dividends.

In the past the dividend pot had been divided roughly two ways, with the 236,000 residential customers getting equal shares of their half and the 33,000 business customers sharing their half according to usage.

Ms Sherry, who became trust chair, and her two colleagues were joined on the board by two Citrats, lawyer and former National Party president John Collinge and Hirepool managing director Mike Buczkowski.

The trustees had hardly got acquainted when Ms Sherry began bad-mouthing her colleagues, accusing them of backsliding away from their election policy of equal distributions for all. Eventually they got sick of her constant harangues, and replaced her as chair with Ms Winter.

What had dampened their ardour was advice from the trust secretary, lawyer Tony Kermode, that they could personally be sued by aggrieved businesses if they changed the distribution policy without good reason.

The result was resort to yet another lawyer, Mr Katz. Ms Sherry was later to claim that his opinion backed her case.

I aroused Mr Katz's ire by reporting this. He wrote to Mr Kermode asserting his "bias" in the other direction.

Having subsequently read the opinion, I concede it's true: Mr Katz's bias lay with the unequal option. However, as with many legal opinions, it was flexible enough to allow Ms Sherry to claim it gave the nod to her case as well.

Mr Katz wrote that the trustees had a "largely unfettered"discretion to distribute the dividend as they liked as long as they did not do it in a manner that was perverse, irresponsible or capricious.

Before the trustees today is a paper from Mr Collinge justifying an equal payout which is neither perverse, irresponsible nor capricious.

He argues that the powerlines of Auckland, Manukau and Papakura are owned by the consumers as a community. "All consumers in a community have an equal interest in the lines in the same way as all residents have an equal but undivided interest in the assets of a city. It is an undivided share but still, I believe, an equal one. If so, they are entitled to the distribution in equal shares."

Mr Collinge argues that just as the rich citizen has no greater rights or number of votes than the poor, neither should the big company have more rights than the home owner. If the heavy consumer is to be rewarded, Mr Collinge says, it is more appropriate to do it through bulk pricing discounts.

Given Ms Sherry's antics, it's ironic that her Tory rival has supplied the philosophical and legal underpinning needed to uphold her election pledge.

With this row out of the way, let's hope the trustees can now begin working co-operatively on major issues of concern such as reviving the stalled powerline undergrounding programme.