3 Tertiary Education Institutions and their Councils
Powers of tertiary education institutions
The Education Act 1989 provides that each TEI is a body corporate capable of owning assets, suing and being sued, and doing all things that bodies corporate may do (s 166). The Act confers the following powers on TEIs (s 192(1)):
(a) the rights, powers, and privileges of a natural person; and
(b) the power to issue debentures; and
(c) the power to grant floating charges on the institution’s undertaking or property, or any of it; and
(d) the power to do any other thing it is authorised to do by this Act, by any other enactment, or by any rule of law.
The Act further specifies that a TEI may only exercise these powers for the purpose of performing the following functions:
- functions characteristic of institutions of the class (e.g., ITP, university or wānanga) to which the TEI belongs
- functions of a kind that the TEI’s council believes may be performed “conveniently, and without disadvantage to the performance of those characteristic functions”, and that are appropriate for institutions of the class to which the institution belongs.
Whether a TEI has the legal power to enter into a transaction or to undertake a particular activity outside its usual or characteristic activities depends on the reasonable judgement of the council as to whether the transaction or activity is convenient or appropriate for the TEI.
Some powers that have the potential to affect the Crown’s long-term ownership interest in TEIs may only be exercised by TEI councils with the written consent of the Secretary of Education (the Secretary) or within limits specified by the Minister for Tertiary Education, Skills and Employment (the Minister). These restricted powers include (s 192(4)):
(a) the power to sell or otherwise dispose of assets or interests in assets:
(b) the power to mortgage or otherwise charge assets or interests in assets:
(c) the power to grant leases of land or buildings or parts of buildings:
(d) the power to borrow, issue debentures, or otherwise raise money.
A TEI does not require the written consent of the Secretary to exercise these restricted powers in the following circumstances where (s 192(5), Education Act 1989):
- selling or otherwise disposing of, or mortgaging an asset does not exceed an amount determined by the Minister (sale or disposal is limited to assets for which the TEI has direct title)
- the total term of the lease term does not exceed 15 years
- borrowing, issuing of debentures, or otherwise raising money does not exceed an amount determined by the Minister.