Church Property Trustees v Carrell - [2021] NZHC 1130

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-461

[2021] NZHC 1130

BETWEEN
CHURCH PROPERTY TRUSTEES

Plaintiff

AND

RIGHT REVEREND PETER RUANE CARRELL

First Defendant

ATTORNEY-GENERAL

Second Defendant

Hearing: On the Papers

Appearances:

J W A Johnson, S D Campbell and W L Porter for Plaintiff K J May and A J Summerlee for First Defendant

D Jones and C N Tocher for Second Defendant

Judgment:

20 May 2021

JUDGMENT OF MANDER J

This judgment was delivered by me on 20 May 2021 at 4 pm pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar Date: .

CHURCH PROPERTY TRUSTEES v CARRELL [2021] NZHC 1130 [20 May 2021]

[1] The plaintiff, Church Property Trustees (CPT),1 is a body corporate whose function is to hold and administer various properties held on trust that are associated with the Anglican Diocese of Christchurch (the Diocese), in accordance with the Anglican (Diocese of Christchurch) Property Trust Act 2003 (CPT Act) and relevant trust instruments. In that capacity it arranged insurance for these properties.

[2] Following the Canterbury earthquakes, CPT reached a global settlement with its insurer and carried out an extensive repair programme. CPT is now nearing the completion of that programme and, for a variety of reasons, it is estimated there will be surplus funds of around $9.8 million (the surplus).

[3] CPT is uncertain in a number of respects as to how the surplus should be treated. After much consideration, CPT has reached its preferred view as to how to proceed. The Diocese agrees with the approach proposed by CPT. However, because of the legal and factual complexities involved, CPT seeks directions pursuant to s 66 of the Trustee Act 1956 (the Act) and/or to the Court’s inherent jurisdiction as to the treatment of the surplus.

Background

[4] CPT is empowered to hold and administer property in accordance with the CPT Act. It is also the corporate trustee of various charitable trusts associated with the Diocese. It is a charity registered under the Charities Act 2005. The Right Reverend Peter Ruane Carrell is the Bishop of Christchurch (the Bishop) and the head of the Diocese, which comprises 59 “ministry units” within the Canterbury and Westland area, made up of local church parishes, certain Anglican schools and the Christ Church Cathedral Chapter. The Bishop is named as the first defendant. The second defendant is the Attorney-General, being the officer of the Crown who exercises supervisory jurisdiction over charitable trusts.

[5] CPT holds property, including a significant amount of real property, on trust for purposes and organisations associated with the Diocese (the property trusts),

1 Church Property Trustees is a body politic and corporate with perpetual succession constituted under s 2 of the Church Property Trust Ordinance 1854 (C), and which continues in existence by s 5(3) of the Anglican (Diocese of Christchurch) Church Property Trust Act 2003.

including land and buildings that are used by the various ministry units of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 1130
Decision Date: 20 May 2021

CaseChat Overview and Summary

The Church Property Trustees (CPT), a body corporate with perpetual succession, sought directions from the Court on how to distribute surplus funds following the settlement of claims for earthquake damage to properties held on trust by CPT. The Court was asked to provide directions on the distribution of the surplus, the allocation of surplus, the division of premiums, and the reimbursement of the General Trust Estate (GTE) and ministry units that contributed to the 2012/2013 premiums. The Court was also asked to validate the payment of interest to the GTE and contributing ministry units.

The Court considered the application on the papers and accepted that the surplus should be held on the same trusts as the property trusts. The Court also considered the allocation of surplus, which should be allocated to those property trusts or ministry units that had valid claims under the insurance policy. The Court considered the division of premiums, which should be based on the value of each claim under the insurance policy. The Court considered the reimbursement issue and found that it was appropriate for CPT to compensate the GTE and contributing ministry units in the way it did. The Court found that it was appropriate for CPT to pay interest to the GTE and contributing ministry units.

The Court made the following directions pursuant to s 66 of the Trustee Act 1956 and/or the Court’s inherent jurisdiction: (a) CPT may hold the surplus funds: (i) as they relate to insured properties, on the same trusts as the particular insured property is held; (ii) as they relate to contents, for the purposes of the ministry units that own the contents; (b) CPT may allocate the surplus funds to all insured properties and contents where entitlements arose under the insurance policy; (c) CPT may divide the surplus funds proportionately on the basis of the value of the policy entitlements of each claim under the insurance policy; and (d) CPT’s refunding of the advances made by the GTE and from ministry units to pay for the 2012/2013 premium including interest was lawful. The Court also made the following orders: (a) CPT may recover its indemnity costs of, and incidental to, this proceeding from the surplus funds, pursuant to its indemnity; (b) The costs of the Bishop, in his capacity as representative of the Anglican Diocese of Christchurch, of and incidental to this proceeding may be met from the surplus funds on an indemnity basis.

Orders