New Zealand Medical Association (in liquidation)
[2025] NZHC 1957
•16 July 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2024-485-000617
[2025] NZHC 1957
UNDER Part 3 of the Charitable Trust Act 1957 IN THE MATTER OF
an application by the NEW ZEALAND MEDICAL ASSOCIATION
INCORPORATED (in liquidation), of 1/178 Willis Street, Wellington, a body
incorporated under the Incorporated
Societies Act 1908, for orders approving a revised scheme in relation to the NewZealand Medical Benevolent Fund
Hearing: 13 February 2025; further submissions received 13 June 2025 Counsel:
B J Marten for Applicant
S J Fairbrother for Hauora Taiwhenua Rural Health Network Inc
Judgment:
16 July 2025
JUDGMENT OF LA HOOD J
Introduction
[1] This is an application by the New Zealand Medical Association (in liquidation) (NZMA) for orders to approve a scheme under pt 3 of the Charitable Trusts Act 1957 (the Act). NZMA is the sole trustee of the New Zealand Medical Benevolent Fund (Trust).
[2]NZMA proposes a scheme under ss 32 and 33 of the Act to vary the:
(a)purpose of the Trust and enable the disposal of Trust property for another charitable purpose; and
RE NEW ZEALAND MEDICAL ASSOCIATION INC [2025] NZHC 1957 [16 July 2025]
(b)powers of the Trustee and the mode of administering the Trust, through the adoption of a new trust deed.
[3] The report of the Attorney-General dated 4 June 2024 states that the Attorney- General is satisfied the requirements of s 56 of the Act have been met and the scheme can be approved on condition that specified amendments are made to the draft trust deed. Those amendments have been made and the final version of the documents (as filed in court) were provided to the Attorney-General, who indicated she did not intend to take any further steps in the proceedings unless any opposition arose. There was no opposition.
[4] However, following the hearing a matter arose on which I sought further assistance from counsel. In a minute issued on 6 March 2025, I asked counsel to address the issue, which they did by joint memorandum of counsel dated 12 June 2026. In a further minute dated 16 June 2025, I asked counsel to indicate whether there was any objection to proposed amendments to the trust deed to address my concerns. On 14 July 2025, I received confirmation that counsel did not wish to raise objection to the proposed amendments. I return to this issue below.
Background
The New Zealand Medical Benevolent Friendly Society
[5] The New Zealand Medical Benevolent Fund was established in 1896 and formalised as the New Zealand Medical Benevolent Friendly Society (Society) in the mid-1930s. The Society aimed to provide aid to NZMA members and families of members who were experiencing financial hardship or distress, as set out in cl 3 of the rules of the Society:1
The objects of the Society shall be to raise money by annual subscriptions, donations, and by interest on capital, to provide immediate pecuniary relief for legally qualified members of the medical profession or wives, husbands or partners, widows or widowers or families, when in temporary difficulties and distress and as long as necessity exists, and to provide annuities for the aged and disabled among them, as funds will permit.
1 Affidavit of Ryan Eathorne dated 25 September 2024 at [4]; Rules of the New Zealand Medical Benevolent Fund Society dated 6 August 2001 at cl 3.
[6] The Society was registered under the Friendly Societies and Credit Unions Act 1982 and adopted its rules on 6 April 2001.
The Auckland Medical Benevolent Fund
[7] The Auckland Medical Benevolent Fund (AMBF) was created during World War II to alleviate hardship and financial distress faced by doctors and their families residing in Auckland. In 2007, the AMBF adopted a formal trust deed (AMBF deed). The AMBF deed defined beneficiaries as:2
“Qualifying Person” means a properly qualified member of the medical profession who when in practice is (or was) able to legally provide medical services in New Zealand, and includes any existing or former spouse of that person, any person who (although not legally married to that person) has entered into a relationship with that person in the nature of marriage (including a registered civil union) any child of that person (including an adopted child) or any other person in respect of whom that person is financially responsible under the law.
[8]The objects and purposes of AMBF were:3
(a)To provide for Qualifying Persons in the Region who are for whatever reason sick, needy, poor, aged, infirm or disabled, through the provision of grants of money and other financial assistance to those persons (whether those grants of money and financial assistance are paid directly to those persons or applied indirectly for the benefit of those persons) in connection with such things as:
(i)medical and healthcare
(ii)housing (and repairs to housing)
(iii)hospital and rest home care
(iv)food and meals
(v)clothing and bedding
(vi)fuel and heating
(vii)transportation
(viii)or other things and necessaries of a similar nature that will improve the well-being of those persons.
(b)Promoting any other object and purpose for the benefit of the Qualifying Persons that is recognized as being charitable under
2 Auckland Medical Benevolent Fund Deed dated 17 April 2007 at cl 1.1.11.
3 Auckland Medical Benevolent Fund Deed dated 17 April 2007 at cl 2.4.
New Zealand law and which is generally consistent with the more specific objects and purposes outlined above.
New Zealand Medical Benevolent Fund
[9] In 2015, the Trust came into existence. Funds from the Society were transferred to NZMA as sole trustee, by way of vesting deed, dated 31 May 2015 (current deed).
[10] The Trust also comprises funds transferred from the AMBF, by way of trustee resolution, dated 6 April 2016. The resolution transferred AMBF Trust property to the New Zealand Benevolent Fund Subcommittee (Subcommittee). The Trust property was to be “held in the same separate bank account that the NZMA has established to hold the assets of the recently wound up New Zealand Medical Benevolent Fund Friendly Society”.4
[11] The transfer was subject to a condition that the Trust’s rules be amended to ensure at least one Subcommittee member was domiciled in Auckland. The change reflected the purpose of AMBF which was to provide supplementary support to that available from the Trust for qualifying beneficiaries in Auckland.
[12]Mr Ryan Eathorne — the liquidator of NZMA and de facto trustee of the Trust
— has provided evidence in support of this application by way of affidavit. He states that he is not aware of any further documentation relating to amendment of the Trust’s rules. Mr Eathorne deposes that the “national” and “Auckland” funds were never the subject of a further trust deed. The current deed is effectively the Trust’s governing document.
[13] The Attorney-General noted several developments relating to the AMBF as unorthodox, namely:
(a)The execution of the AMBF deed was, in effect, a variation of the AMBF trust’s terms. The Trust did not propose a scheme under s 35 of
4 Minutes of Meeting of Trustees of Auckland Medical Benevolent Fund dated 6 April 2016 at [3].
the Act for variation of the mode of administering the AMBF, and to obtain the Court’s approval.
(b)The 2016 resolution effectively wound up the AMBF and transferred funds to the Trust without the Court’s oversight. The Attorney-General noted that this offends the cy-près doctrine and procedure prescribed by the Act.5 The AMBF Trustees should have sought to modify the Trust, or applied under s 27 of the Act to wind it up and distribute the funds.
Charitable purposes
[14]The Trust’s charitable purposes are set out at cl 4(a) of the current deed:6
The Benevolent Fund will be held by the NZMA in trust to provide immediate pecuniary relief for legally qualified members of the medical profession or their wives, husbands or partners, widows or widowers or families, when in temporary difficulties and distress and as long as necessity exists, and to provide annuities for the aged and disabled among them, as funds will permit.
[15] Despite the condition of the AMBF transfer, without amendment to the current deed, there is no actual requirement that the Trust be exercised for the benefit of qualifying persons residing in Auckland.
Activities
[16] Trust property is administered by the Subcommittee, whose members take responsibility for:
(a)reviewing, and approving or declining all grant requests; and
(b)reviewing and providing advice to the NZMA Board regarding investment strategies.
5 Public Trustee v Attorney-General [1923] NZLR 433 (SC).
6 New Zealand Medical Benevolent Friendly Society and New Zealand Medical Association Incorporated Vesting Deed dated 31 May 2015.
[17] If the Subcommittee is satisfied an applicant needs relief, it may grant one-off or quarterly payments to relieve financial distress, or pay accounts overdue for “necessities, medical or dental treatment, school fees, school clothing or books, clothing”.7
Variation and proposed new trustee
[18] Mr Ryan Eathorne describes the primary driver for which the variation is sought as the liquidation of NZMA. Mr Eathorne states that the decline of NZMA is due to the model of a single overarching advocacy body being no longer suitable for an increasingly diverse pool of doctors in New Zealand.
[19] Mr Eathorne states that the application is necessary to transfer the Trust property to Hauora Taiwhenua Rural Health Network (HTRHN), and to modernise the current deed. There have been multiple difficulties identified with the current deed:
(a)It has become inexpedient to carry out the Trust’s purpose due to the lack of recent distributions of the funds for the charitable purpose.
(b)There is no single deed setting out the powers of the trustees or the terms on which the Trust is administered.
(c)The current deed does not provide for the appointment of new Trustees.
(d)The current deed requires updating for developments brought about by the Trust Act 2019, and powers commonplace in a Trust of this nature, including the ability to meet administration costs from Trust property.
[20] HTRHN is proposed as the appropriate successor organisation to have oversight of the Trust. Mr Eathorne states that the HTRHN is a “well-regarded” organisation that has a complementary range of objectives with the NZMA. The HTRHN is a registered charity with a focus on the welfare of the health workforce, including doctors.
7 Rules of the New Zealand Medical Benevolent Fund Society dated 6 August 2001 at cl 20.
Proposed variations
[21] HTRHN has prepared a proposed trust deed to replace the current deed (proposed deed).
Variation of purposes
[22] The current deed benefits “legally qualified members of the medical profession or their wives, husbands or partners, widows or widowers or families”. The proposed deed would maintain the same definition of “qualifying person”, and provide a similar charitable purpose as the AMBF deed:8
1.1.13 Qualifying Person means a properly qualified member of the medical profession who when in practice is (or was) able to legally provide medical services in New Zealand, and includes any existing or former spouse, civil union partner, or de facto partner of the person, and any child of that person or any other person in respect of whom that person is financially responsible under law;
…
8.1Charitable purposes: The Trust Fund is to be applied, and the activities of the Trust are to be carried out for charitable purposes, including, without limitation, to:
8.1.1Relieve poverty by providing pecuniary relief to Qualifying Persons in times of temporary difficulties or distress, with priority given to Qualifying Persons working in rural health positions;
8.1.2Relieve poverty by providing annuities for aged and disabled Qualifying Persons, with priority given to Qualifying Persons working in rural health positions;
8.1.3Pursue any other charitable purposes which the Trustees consider are consistent with the purposes set out above; or
8.1.4… with the purposes of Hauora Taiwhenua.
[23] The proposed deed would also introduce a requirement that priority be given to qualifying beneficiaries working in rural health positions. The requirement is said
8 Hauora Taiwhenua Benevolent Fund Trust Charitable Trust Deed dated 2024.
to align with Hauora Taiwhenua’s own constitution and charitable purposes and give priority to “Qualifying Persons” working in rural health positions.
[24]In relation to the proposed variations, I note:
(a)The requirement of a qualifying primary beneficiary is defined as “a properly qualified member of the medical profession … able to legally provide medical services”.
(b)The proposed variation permits applications from “primary” qualifying persons, who are no longer in practice.
(c)The proposed variation extends the scope of the “secondary” qualifying person, being a person with a qualifying relationship with the primary qualified person. The extension is to “former” partners of the person and “any other person in respect of whom that person is financially responsible under law”.
[25] The Trust’s current purposes are linked with the operations of NZMA, its sole trustee. Counsel submits that a new “focus on rural practitioners … [is a compromise] required to bring the trust fund within the scope of a new organisation that can provide it with a ‘home’ and the infrastructure necessary to operate it”. Counsel notes that the proposed substituted purpose accords as closely as possible with the purpose of assisting doctors in need of financial support.
[26] At the hearing, I raised the issue of whether the definition of “Qualifying Person” in 1.1.3 of the proposed trust deed was intended to capture all health practitioners rather than just doctors. The term “health worker” is used in the Attorney-General’s report but the definition of Qualifying Person in 1.1.3 in its present form appears to capture only medical professionals (doctors).
[27]Counsel referred me to cl 22.3 of the proposed deed, which provides:9
The Appointer may at any time recommend to the Trustees that they amend the definition of Qualifying Person if for any reason the Appointer considers that doing so is necessary or desirable, including but not limited to as a result of changes in the medical profession or health system, or in light of changes to Hauora Taiwhenua’s activities or purposes. The Trustees must consider the Appointer’s recommendation but shall not be obliged to act on that recommendation if they consider that doing so would be inconsistent with or contrary to their obligations under this deed or at law. If an amendment to the definition of Qualifying Person has the effect of varying the Trust’s charitable purposes, they will follow the requirements of section 32 of the Charitable Trusts Act.
[28] I was advised that the purpose of this clause is to allow Hauora Taiwhenua the ability to extend the definition of “Qualifying Person” to other workers in the health system, for example, all health practitioners.10 As Mr Eathorne notes in his affidavit, medical professionals are generally well-off and there are few doctors and their families who have faced financial distress and there are no current applications for support. There are no current annuities being paid out and no outstanding applications for support.
[29] Mr Eathorne stated that, without a variation to widen the charitable purpose and enable a broader range of assistance to health professionals generally, the funds will result in accumulating surpluses. Mr Eathorne further deposes that even with the introduction of broader charitable purposes under the new deed, it is possible that over time there will be too few medical professionals (or their families) in need of funds. In that circumstance, surpluses will continue to accumulate. Mr Eathorne says extending charitable benefits to others within the medical sector, such as medical students or nurses, will provide more flexibility.
[30] I was advised that rather than changing the definition of “Qualifying Person” in the proposed deed to provide for an extension to health professionals more generally at this point, cl 22.3 was considered the appropriate approach. Clause 22.3 will allow HTRHN an opportunity to consider whether, and if so, how the definition of “Qualifying Person” should be amended to incorporate people involved in the health system more generally. That clause expressly provides that if the amendment has the
9 Hauora Taiwhenua Benevolent Fund Trust Charitable Trust Deed dated 2024.
10 As defined the Health Practitioners Competence Assurance Act 2003.
effect of varying the Trust’s charitable purposes, they will follow the requirements of s 32 of the Charitable Trusts Act.
Variation of trustee powers, and mode of administration
[31] Related to the proposed variation of the purposes, the proposed scheme seeks to vary the Trust’s administration by removing any requirement for an Auckland representative.
[32]Additionally, the proposed deed provides a set of powers for the Trustees:11
a.Provides for incorporation under the Charitable Trusts Act, and registration under the Charities Act (cl 7), necessary to reflect the regulatory environment within which the trustees may now choose to operate;
b.Consolidates and modernises the terms for the provision of grants (cl 8.2.1), necessary to provide a clear and up-to-date basis for the granting of financial assistance while continuing the primary objects of the NZMBF and AMBF;
c.Provides a clear basis for the collection of subscriptions and gifts (cl 8.2.2), necessary to enable the ongoing fund-raising activities typical of a benevolent fund;
d.Acknowledges the Treaty of Waitangi, as well as the new Trusts Act 2019 duties on trustees (cls 9–10), necessary to reflect modern trust deed drafting and trustee obligations, particularly with in the wider community-facing charitable sector with significant interaction with te ao Māori;
e.Provides for Trustees appointed by Hauora Taiwhenua (cls 11–12), necessary to ensure there is a new entity to take an ongoing interest in the trust;
f.Updated and clear administrative provisions for meetings, trustee powers, conflicts of interest, and so on, as found in the vast majority of modern trust deeds, and necessary for attracting trustees of a suitable calibre to serve on such trusts (cls 13–20, 23–25);
g.A clause on dissolution that preserves ongoing application of funds for charitable purposes, necessary in any trust of this kind (cl 21).
11 Affidavit of Ryan Eathorne dated 25 September 2024 at [23].
Relevant law
General principles governing applications under Part 3
[33] The application invokes the Court’s jurisdiction under ss 32 and 33. Pursuant to s 56(1)(a), the Court may approve a scheme under pt 3 if it is satisfied:
(a)the scheme is a proper one;
(b)the scheme is not contrary to law of public policy or good morals;
(c)the scheme can be approved under the Part of the Act under which approval has been sought;
(d)every proposed purpose is charitable … and can be carried out; and
(e)that the requirements of the relevant Part of this Act have been complied with.
Variation of purposes
[34] Section 32 provides for the variation of charitable trusts where their purposes have become “impossible or impracticable or inexpedient” to carry out. When varying trusts under s 32, the Court exercises a statutory jurisdiction and is not bound by the common law doctrine of cy-près.12 However, it has been held that those promoting a scheme should nonetheless seek to substitute beneficiaries or purposes resembling as closely as possible those specified by the original settlor.13
12 Public Trustee v Attorney-General, above n 5.
13 See for example, Re Twigger [1989] 3 NZLR 329 (HC) at 342.
[35] In Re Tennant, Hammond J summarised the principles governing an application for variation of trust purposes as follows:14
(a)The application must come within the statutory jurisdiction (which includes a necessity for the purposes to have been charitable at the date of settlement).
(b)The substituted arrangements must be charitable as that term is understood in law.
(c)The new scheme should accord as closely as is reasonably possible in the changed circumstances to the terms of the original trust.
(d)The Court will dispose of the property in such a way as will best serve the interests of those intended to be beneficiaries and the public.
[36] Inexpedience is a lower threshold than “impracticable”. In Re McElroy Trust, the Court of Appeal held that inexpedient “in its present context is of the original charitable purpose or purposes having become unsuitable, inadvisable or inapt”.15 Accordingly, inexpedience embodies a value judgement rather than simply an assessment of feasibility. It may remain possible or practicable to carry out the original purpose of a trust, but it may nonetheless have become inexpedient to do so.
[37] In addition, more recently, this Court accepted that “expediency” (in the context of the Court’s power to replace trustees under s 51 of the Trustee Act 1956) “is a lower threshold than necessity and imports considerations of suitability, practicality and efficiency”.16 This observation is equally applied to s 32 of the Act.
14 Re Tennant [1996] 2 NZLR 633 (HC) at 636. The courts have adopted and applied this framework on several occasions: see for example, Re YMCA New Zealand Soldiers Great War Memorial Trust [2013] NZHC 2516 at [17] per Kós J; Re Frank Sydenham Scholarship Trust [2012] NZHC 654 at [37] per Wylie J; Re Tikipunga Protestant Children's Home [2012] NZHC 3078 at [16] per Lang J; and Re Public Trust [2022] NZHC 2758 at [23] per Isac J.
15 Re McElroy Trust [2003] 2 NZLR 289 (CA) at [14].
16 Peng v Rothschild Trust (Schweiz) AG [2017] NZHC 25 at [38].
Variation of trustee powers, and mode of administration
[38] Section 33 of the Act provides where the administration of trust property or income, or the carrying out of a trust, could be facilitated by extending or varying trustees’ powers, or by prescribing or varying the mode of administering the trust, the powers may be extended or varied, and the mode of administering the trust may be prescribed or varied. Courts have interpreted “facilitated” to mean “made easier, promoted or helped forward”.17
Decision
Variation of purposes
[39] I agree with the report of the Attorney-General that it is inexpedient to continue to carry out the purpose of the Trust in light of NZMA being unable to continue as the sole trustee.
[40] I am satisfied the proposed class of beneficiaries remains charitable and aligns with the purpose of the relief of poverty. I am also satisfied the proposed class of beneficiaries accords closely with the original purpose of the Trust: to financially support medical practitioners in financial distress and other persons reliant on them for financial support.
[41] I agree with the parties that it is more likely there is need for financial assistance in rural rather than urban areas. The prioritisation of rural workers does not exclude urban qualifying persons from seeking and receiving support from the Trust. I am satisfied that the proposed variation accords closely to the original purposes of the Trust to the extent that this element of the proposed scheme varies the Trust’s purpose.
17 Re Melanesian Mission Trust Board HC Auckland M1140/98, 24 September 1998, as applied in Re YMCA New Zealand Soldiers Great War Memorial Trust, above n 14, at [32]; Re Frank Sydenham Scholarship Trust, above n 14, at [47]; and Re St Barnabas Roseneath Trust Board HC Wellington CIV-2011-485-1254, 3 August 2011 at [3].
[42] A power to amend the definition of a qualifying person — provided doing so is in accordance with the charitable purposes of the Trust — facilitates the operation of those purposes in a developing modern environment.
Variation of trustee powers, and mode of administration
[43] The proposed amendments to the mode of administration are to be considered under s 33. The threshold to be established under s 33 of the Act is that the variation proposed would facilitate the carrying out of the Trust.
[44] Some clauses in the proposed deed expressing the powers and duties the Trustees have under the law are not formalised in the current deed.18 Some vary or extend the Trustees’ powers and duties. To the extent the clauses actually vary or extend the Trustees powers, they are addressed below.
[45] I accept the Attorney-General’s observation that cl 9 of the proposed deed requires the Trustees, in carrying out the purposes of the Trust, to recognise the views and expectations of Māori as tangata whenua, to recognise the importance of equitable access for Māori, and recognise and honour a commitment to the values and concepts of Te Tiriti o Waitangi. Clause 9 has been added to align with HTRHN’s own constitution, values and commitment to Te Tiriti o Waitangi. I accept that cl 9 does not extend or vary the powers of the Trustees. Nor does it vary the charitable purpose, as cl 9 must be applied “in carrying out the Purposes”.19
[46] Clause 8.1.3 has been amended in accordance with the Attorney-General’s report such that a distribution for a charitable purpose consistent with the purposes of HTRHN may only be made if the Trustees are satisfied it is not possible to distribute funds for the primary charitable purpose.
18 For example, cl 7 of the proposed deed provides for incorporation under the Charitable Trusts Act 1957 if the Board so resolves. The Trustees may also apply for registration under the Charities Act 2005 if the Trustees consider it appropriate to do so.
19 Clause 9.1 of the proposed deed.
Auckland representative
[47] I am satisfied it is not necessary for the activities of the Trust to be informed by an Auckland representative, particularly where the purpose of the Trust is varied to prioritise assistance to rural health care workers. The requirement for an Auckland representative does not facilitate the carrying out of the Trust and does not assist in achieving its purposes.
Modernisation of language
[48] The updated language in cl 8.2 facilitates carrying out the Trust’s charitable purpose in a modern environment. Clause 8.2 adds to the type of things for which grants of money and other financial assistance may be made (for example, referring to “school equipment” rather than “school book”).
[49] Clauses 24 and 25 modernise the language associated with Trustee indemnity and limitation of Trustee liability. To the extent the proposed deed varies the mode of administering the Trust, I am satisfied they are appropriate.
Trusts Act 2019 duties and trustees’ powers
[50] Clause 10 expressly applies the mandatory duties and some of the default duties set out in pt 1 of pt 3 of the Trusts Act 2019. Clause 10 also excludes (or modifies) some of the default duties, including the duties to invest prudently, to not take any reward for acting as a Trustee, to avoid a conflict of interest between the interests of the Trustee and the beneficiaries of the Trust, and to act unanimously.
[51] I am satisfied the following proposed amendments in the proposed deed facilitate the carrying out of the Trust:
(a)clause 16 requires all income, benefit or advantage from the Trust to be applied for the charitable purposes of the Trust. Clause 16 holds that a person (including a trustee) may only derive a benefit in specified circumstances, including professional services provided or employment by the Board;
(b)clause 23 provides for the management of conflicts of interest between Trustees and the Trust; and
(c)clause 13.7 provides for “majority” decision-making.
Appointment of trustees by HTRHN
[52] Clauses 11 and 12 provides for the appointment of new Trustees. I am satisfied these proposed amendments are appropriate for a trust of this nature and will facilitate the carrying out of the Trust.
Administrative amendments
[53] Clauses 13, 14, 15, 18, 19 and 20 formalise matters which relate to the administration of the Trust, which I am satisfied facilitate the carrying out of the Trust.
Dissolution clause
[54] Clause 21 introduces a power to wind up the Trust. The Trust may be wound up by Trustee resolution where remaining property is distributed to one or more organisations approved as having charitable purposes “similar to those set out in this deed”.
[55] The Attorney-General’s report notes that a charitable trust is distinguishable from a private trust because, as a general rule, charitable trusts cannot be terminated.20 If the passing of time or a change in circumstances means it becomes impossible or difficult to carry out the Trust as originally intended, generally the Trustees cannot terminate the Trust. Instead, the Trustees are under a duty to apply to the Court for a variation of the purposes or mode of administration under the Act.21 The purpose of the Court’s jurisdiction is to enable Trustees to continue applying funds to charitable purposes where the original purposes have become impossible, impracticable or
20 National Anti-Vivisection Society v Inland Revenue Commissioners [1947] 2 All ER 217 at 25 “a charity once established does not die, though its nature may be changed”.
21 Society of St Vincent de Paul v Wanganui Ozanam Villa Trust [2007] NZAR 77 (HC) at [47]–[48].
inexpedient to fulfil, and not to terminate the Trust. There are some limited exceptions to the “no termination” principle,22 but none are currently applicable.
[56] Clause 21 was amended, in accordance with the Attorney-General’s report, so that if the Trustees incorporate as a board under the Act, upon dissolution any remaining property shall be disposed of as the Court directs under s 27 of the Act.
[57] However, in my minute of 6 March 2025, I asked the parties to address how the amended cl 21 met all the concerns raised in the Attorney-General’s report, as it appeared to still contain a power to wind up the Trust without first exhausting all of the income and capital of the Trust for the Trust’s purpose. This is in contrast to the winding up clause approved by the Court in Re Auckland City Mission Inc.23
[58] The joint memorandum of counsel dated 13 June 2025 filed in response to my minute proposed further amendments to cl 21.1, which make it clear that the Trust may only be wound up if the Trustees have exhausted all of the income and the capital of the Trust Fund by applying or appropriating that income or capital to the purpose of the Trust. The parties also proposed further amendments to cl 21.3 to state that if the Trustees want to wind up the Trust, but the income and capital of the Trust Fund has not been exhausted by applying or appropriating it to the purpose of the Trust, any remaining funds (after payments of debts) shall be paid to one or more organisations as approved by the High Court.
[59] In a minute dated 16 June 2025, I indicated that I proposed to approve the amended cl 21.1. However, I remained concerned that the proposed amendment to cl 21.3 does not fully capture the principle that a charitable trust that has not exhausted its income and capital cannot be wound up unless the High Court is satisfied that variation of the Trust under s 32 is not the more appropriate course.24
22 Re Auckland City Mission [2024] NZHC 255 at [35].
23 At [31]-[37].
24 Re application by the Tawhiri Trust Board [2025] NZHC 390 at [13].
[60]I therefore considered cl 21.3 should be amended to read as follows:
[21.3] In the event the Trustees wish to wind up the Trust, but the income and capital of the Trust Fund has not been exhausted as required by clause 21.1:
[21.3.1] if the Trustees have not incorporated as a board pursuant to the Charitable Trusts Act, winding up of the Trust must be approved by the High Court, and any assets remaining after the due settlement of the affairs of the Trust and the payment of all costs, debts and liabilities shall be disposed of as the High Court directs; or
[21.3.2] if the Trustees have incorporated as a board pursuant to the Charitable Trusts Act, winding up of the Trust must be approved by the High Court, and any assets remaining after the due settlement of the affairs of the Trust and the payment of all costs, debts and liabilities shall be disposed of as the High Court directs under s 27 of the Charitable Trusts Act.
[61] On 14 July 2025, I had received confirmation that the parties and Attorney- General have no objection to the proposed amendments to cl 21.3.
Conclusion
[62] I am therefore satisfied that the procedural and substantive requirements for approval of the Scheme have been met:
(a)Advertising has been undertaken as required.25
(b)The Attorney-General has reported and supports the scheme.26
(c)The proposed variation is a proper one that will be carried out for the desired purpose, is not contrary to law, public policy or good morals.
(d)Every proposed purpose is charitable within the meaning of pt 3, and can be carried out.
(e)The proposed variation is as close as is reasonably possible to the original purposes and is one that should be approved by the Court.
25 Section 36 of the Act.
26 Section 35 of the Act.
(f)The varied Trustee powers will facilitate the charitable purpose and the administration of the property, income and carrying out of the Trust.
[63] I therefore make an order approving the scheme under pt 3 of the Act provided the amendments to cl 21 of the trust deed set out above are made.
La Hood J
Solicitors:
Izard Weston, Wellington for Applicant
Duncan Cotterill, Wellington for Hauora Taiwhenua Rural Health Network Inc
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