Hau v Saulala - [2013] NZHC 1622

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-7565 [2013] NZHC 1622

BETWEEN FAKA'OSI HAU, VA'ELUA HAKAUMOTU AND MA'ULUPE TU'ITUFU
Plaintiffs

ANDDR LIUFAU SAULALA First Defendant

ANDTOKAIKOLO CHRISTIAN CHURCH TRUST BOARD
Second Defendant

Hearing: 27 June 2013

Counsel: T J Darby for Plaintiffs
P McKendrick for Defendants

Judgment 1 July 2013

JUDGMENT OF KEANE J

This judgment was delivered by on 1 July 2013 at 3pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar
Date:

Solicitors:
S T Fonua, Auckland
Glaister Ennor, Auckland

FAKA'OSI HAU, VA'ELUA HAKAUMOTU AND MA'ULUPE TU'ITUFU v DR LIUFAU SAULALA [2013] NZHC 1622 [1 July 2013]

[1] In issue in this case, principally, is whether donations by members of the Tokaikolo Christian Church, some 2000 people mainly living in Auckland, have since 2003 have been misapplied by the first defendant, the president of the Church, and by the second defendant, the board of the charitable trust incorporated to serve its purposes, of which the president is one trustee.

[2] The first plaintiff, also a founding member of the church, and until recently also a minister and a trustee, and the two remaining plaintiffs, who are long standing church members, have, they say, made extensive donations over the years in issue, always understanding that the church’s primary need was to clear its mortgage.

[3] They believe that since 2003 the donations solicited for that purpose have been misapplied. The mortgage, they always understood, was meant to be cleared in
2003 - 2004. In those years, they say, they were assured that it had been. The Board’s mortgage liability now appears to be almost three times greater. They point also to at least three other instances where they say money has been misapplied.

[4] Throughout those years, the plaintiffs say, there has been a lack of financial discipline. The Board has not kept proper accounts. In breach of its trust deed, they say, it has never had its annual financial statements externally audited. The statements filed with the Charities Commission, they say, prepared by an internal accountant, cannot be relied on. One church member, the Auditor General of the Government of Tonga, has identified several deficiencies.

[5] After, they say, failing to agree with the defendants a regime to identify the extent of the problem they suspect, and to bring discipline to the Board’s expenditure in the future, they became obliged as they now have, to seek an injunction restraining the defendants from expending church funds. Also orders securing church funds in a trust account, to be controlled by a chartered accountant, and appointing an external auditor.

[6] The three orders the plaintiffs apply for as final relief are each expressed to be ‘until further order’ and are inherently interim. However, the plaintiffs more immediately seek an interim injunction, akin to the first order they seek finally, to

control the Board’s ability to spend money until the case is heard; and an order directing an inquiry and audit to establish 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.

Continue reading Hau v Saulala

Details

AGLC: Hau v Saulala [2013] NZHC 1622
Case: [2013] NZHC 1622
Decision Date: 1 July 2013

CaseChat Overview and Summary

The High Court of New Zealand heard a case brought by Faka'osi Hau, Va'elua Hakaumotu, and Ma'ulupe Tu'itufu against Dr Liufau Saulala and the Tokaikolo Christian Church Trust Board. The plaintiffs alleged that the defendants, who are the president and board of the church, had misapplied donations made by church members since 2003. They sought an interim injunction to prevent further expenditure of church funds and an order for an audit and inquiry to determine the extent of any misapplication. The defendants denied any wrongdoing and opposed the applications. The court had to decide whether the plaintiffs had raised a serious question to be tried and whether the balance of convenience lay in favour of granting the interim relief. The court found that the plaintiffs had not provided sufficient evidence to support their claims of misapplication of funds. The allegations were speculative and lacked hard information. Additionally, the requested audit and inquiry were not permissible under the rules as they sought to establish liability rather than the quantum of any remedy. The court declined both applications and noted that the plaintiffs could consider other avenues if they believed they had grounds for a breach of trust claim after the defendants completed a three-year audit. The defendants were awarded costs.

Orders