Ruscoe v Perry
[2022] NZHC 1164
•25 May 2022
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-485-726
[2022] NZHC 1164
UNDER Part 19 of the High Court Rules and section 284 of the Companies Act 1993 IN THE MATTER
of Taratahi Agricultural Training Centre (Wairarapa) Trust Board (In Liquidation)
BETWEEN
DAVID IAN RUSCOE and MALCOLM
RUSSELL MOORE acting as liquidators of Taratahi Agricultural Training Centre
(Wairarapa) Trust Board (In Liquidation) Applicants
AND
PHILLIDA PERRY
First Respondent
ATTORNEY-GENERAL
Second Respondent
Hearing: 7 October 2021 Counsel:
J C Caird, D J Laing and S L Hawksworth for Applicants A A H Low for First Respondent
A S Butler and E M Jamieson for Second Respondent
Judgment:
25 May 2022
Reissued:
6 July 2022
JUDGMENT OF ELLIS J
Table of Contents
Paragraph
The liquidators’ originating application [9]
Was and is the Taratahi land held on express trust? [14]
RUSCOE and MOORE v PERRY [2022] NZHC 1164 [25 May 2022]
Historical context [16]
Impetus for the 1969 Act [36]
The 1969 Act [45]
Was an express trust created in 1918? [58]
Did the 1969 Act change this position? [62]
Answer [66]
Does the 1969 Act permit the Taratahi land to be sold? [67]
Answer [76]
Is the Taratahi land subject to pt 3 of the PWA and the GLP? [77]
The disposal processes under the PWA and the GLP [79]
The different potential starting points [89]
Discussion [92]
Answer [99]
Should the orders sought by the liquidators be made? [100]
Costs [102]
Apology [103]
[1] Towards the end of the Great War, Corran Perry returned to his family in New Zealand from the battlefront in France, wounded and shell-shocked. Moved by the plight of his son and others like him, Mr (later, Sir) William Perry put into action an idea that he had been harbouring for some time: a training farm to help returned servicemen re-establish themselves and to assist more generally in promoting modern farming practices in the Wairarapa.
[2] To that end, in November 1918 Mrs (later, Lady) Margaret Perry (Mr Perry’s wife) gifted approximately 329 acres of land (sections 51 and 59 of the Taratahi Plain Block) in the Wairarapa to the Crown. At about the same time, an adjacent area of land (sections 55–58 of the Taratahi Plain Block, comprising some 409 acres) was transferred by Mrs Ivelenah Rayner (who had earlier purchased it from the Perrys) to
the Crown for consideration of £9,005.11.3d, an amount that was funded through substantial donations made by a number of Wairarapa residents.1
[3] A short time later, the Wairarapa Cadet Training Farm (the training farm) was established on these lands (referred to in the remainder of this judgment as the Taratahi land). The stock initially farmed on the training farm was also gifted by Wairarapa residents. Funding for buildings, fences and ancillary items was provided by the Crown.
[4] Initially, the training farm (and the Taratahi land) was controlled and managed by a Committee appointed by the Minister of Agriculture. But since the passage of the Wairarapa Cadet Training Farm Act 1969 (the 1969 Act), the training farm (including the Taratahi land) has been vested in a Trust Board, constituted as a body corporate by s 3 of that Act.2
[5] In 2017 and 2018 the Trust Board was struggling financially, with further projected losses for 2019. Fewer enrolments of Equivalent Full Time Students resulted in the Trust Board being required to repay funding it had received from the Tertiary Education Commission (the TEC), requiring to be repaid. It had also borrowed extensively from Westpac New Zealand Ltd (Westpac). The Trust Board needed funding from the Crown to remain operational. But, on 10 December 2018, the Minister of Education and Minister of Agriculture declined any further financial support.
[6] A little over a week later, on 19 December, the Trust Board applied to the High Court to be placed into liquidation under ss 240B and 241(2)(c) of the Companies Act 1993 and for the appointment of interim liquidators. On 5 February 2019, the High Court put the Trust Board into liquidation and confirmed the appointment of liquidators: the applicants, Mr Ruscoe and Mr Moore.
1 It is plain from the affidavits filed on behalf of the first respondent that the contributions made by certain individuals were substantial. For example, Mr John McLaren has deposed that his great- grandmother Sarah McLaren donated £500, which is the equivalent of $58,000 today. Mr Daniel Riddiford has deposed that his great-uncles Eric and Vivian Riddiford each contributed £100.
2 By an amendment in 1981, the Cadet Training Farm was renamed the Taratahi Agricultural Training Centre, and the 1969 Act was restyled the Taratahi Agricultural Training Centre (Wairarapa) Act 1969. For consistency and ease of understanding I propose to use the original “training farm” nomenclature throughout this judgment.
[7] At the date of liquidation, the Trust Board owed around $11.9 million to the TEC and around $12.5 million to Westpac. The liquidators have reduced the amount owed to Westpac to $6,632,876 through distributions made during the liquidation.3
[8] Many of the Trust Board’s assets have already been realised by the liquidators.4 The Taratahi land is the last unrealised asset of significant value. If the Minister of Agriculture consents (as required by the 1969 Act, discussed below) the liquidators intend to sell the land and use the proceeds to pay creditors and the costs associated with the liquidation, in accordance with the Companies Act.5
The liquidators’ originating application
[9] In advance of any sale, however, the liquidators filed an originating application seeking orders under s 284 of the Companies Act that:
(a)a sale by the Taratahi Agricultural Training Centre (Wairarapa) Trust Board (In Liquidation) (Trust Board) of the land described in paragraph (b) of the Schedule to the Taratahi Agricultural Training Centre (Wairarapa) Act 1969 (Taratahi Act) now described as Lot 1 Application Plan 2256, as comprised and described in Record of Title WN8D/446 (Relevant Land), for the purpose of using the sale proceeds to pay creditors, and pay the liquidation costs, of the Trust Board is:
(i)a lawful action of the Trust Board (subject to s 10 of the Taratahi Act);
(ii)not subject to Part 3 of the Public Works Act 1981 (PWA), because the activities of the Trust Board and the land described in the Schedule to the Taratahi Act (Trust Land, including the Relevant Land) under the Taratahi Act are not a public work (being neither a Government work nor a local work) for the purposes of, and as defined in, the PWA;
3 The Liquidators have received over 400 claims from other creditors. The claims by preferential creditors have been reviewed and admitted, but the remaining claims have not yet been formally assessed. The Liquidators will do so once (and if) there are sufficient assets realised to pay those creditors.
4 Including the Mangarata farm (a 518ha sheep and beef breeding and “semi finishing” unit near Masterton), the leasehold interests for the Telford Farming Training Institute campus, the leasehold interests for the Glenside/Arahura leasehold interests (stock and machinery for a sheep, beef and deer farm near Gladstone in the Wairarapa) and the leasehold interests for the Tautane Station stock and plant (a sheep and beef station near Herbertville in the Tararua district).
5 In the meantime, the Taratahi Training Centre campus (but not the operating farm) has been leased to the Universal College of Learning Ltd (UCOL), with a view to re-establishing training on the Taratahi Land. The lease expires on 31 December 2021 (unless extended). The UCOL students may access the operation farm for primary-industry related courses (subject to certain protocols).
(iii)expressly permitted by the Taratahi Act (subject to s 10) and, to that extent, the Taratahi Act overrides anything to the contrary in the PWA;
(b)the use of any such proceeds for that purpose is a lawful application of those proceeds;
[10] While the second respondent (the Attorney-General) supports the liquidators’ position, and the orders sought, the first respondent (Ms Phillida Perry) does not.6 Ms Perry has authority to represent certain descendants of Lady Perry and has received support from descendants of the original Committee of Donors.7 She and those whom she represents (to whom I shall collectively refer as the first respondents) are primarily concerned that the Taratahi land continue to be used for the purpose for which it was gifted.
[11] Although the first respondents’ notice of opposition was wide-ranging, their position was helpfully refined by Ms Low in her submissions before me. She submitted that:
(a)either the Taratahi land:
(i)is held by the Trust Board on express trust for the Crown and both the Board and the Crown have fiduciary obligations under the 1969 Act and arising as a result of the original gift to the Crown; and
(ii)cannot be sold (because the Trust power does not include a power of sale); or
(b)in the alternative the land should not be sold to:
6 Although the Crown initially did not seek joinder to the proceeding, it later became apparent that the Crown had interests in and arising out of the liquidation. Following a joint memorandum of all counsel consenting to the joinder, Gwyn J made the order under r 4.56 of the High Court Rules 2016 joining the Attorney-General as second respondent to the proceeding.
7 The Committee of Donors comprised those persons who had crowd-funded the purchase of the Rayner Land by the Crown. No descendants of Mrs Rayner have, however, come forward.
(i)meet debt that has not been approved by the Minister in accordance with the 1969 Act;
(ii)meet debt incurred for purposes other than those for which the Taratahi land is held; or
(iii)effectively meet the shortfall of a secured creditor:
Ø whose security did not extend to the Taratahi land; and
Ø where the Taratahi land could not be used as security without Ministerial consent; or
(c)in the alternative the Taratahi land is subject to the offer back provisions of the Public Works Act 1981 (PWA) and/or the Gifted Land Policy (GLP) and, if surplus to requirements, must be offered back to the respondents who are the successors to the original owners in terms of s 40 of the PWA or beneficially entitled persons under the GLP.
[12] To some extent, the first respondents’ opposition was predicated on the proposition that the liquidators’ application was premature, because no specific sale is presently proposed or contemplated. Indeed, Ms Low accepted that the first respondents might, depending on the identity of the purchaser and the terms of any sale, support a particular proposal. And at the time of the hearing before me, the prospect of such an agreement looked relatively promising; the present Minister of Agriculture has indicated his commitment to investigating all options for retaining agricultural education at the training centre and his officials have been willing to engage with the first respondents about the future of agricultural education there.
[13] Relatedly, the grounds of opposition summarised at [11](b) above are focused on considerations that—the liquidators and the Crown acknowledge—may well be relevant for the Minister to consider at whatever point in future he is asked to approve a sale. So, while the liquidators have themselves formed a view on those matters (namely, that all debts requiring Ministerial approval have been incurred with that
approval and that there is no legal impediment to applying the proceeds of sale to debts proved in the liquidation), those arguments are, effectively, for another day. As I understood it, Ms Low now agrees with that. So, the focus of this judgment is therefore solely on the matters outlined at [11](a) and [11](c) above. I propose to address these under headings of my own devising:
(a)Was and is the Taratahi land held on express trust for the Crown?
(b)Does the 1969 Act permit the Taratahi land to be sold?
(c)Is the Taratahi land subject to pt 3 of the PWA and the GLP?
(d)Should the orders sought by the liquidators be made?
Was and is the Taratahi land held on express trust?
[14] As I hope will already be clear, the first respondents’ contention that the Taratahi land is held on trust is not motivated by self-interest. It is not, as I understand it, suggested that the donors (the first respondents’ forebears) intended to reserve any beneficial interest in the Taratahi land when they transferred it to the Crown in 1918.8 Rather, the first respondents’ anxiety is to see that the purposes and terms of (what they say is) the trust that was settled continue to be met.
[15] Nor do the first respondents assert that any formal trust deed was executed at the time the Taratahi land was transferred. That is unsurprising; the extensive archival research conducted by Mr Brent Parker (the longstanding Historical Research Manager at Crown Law) has not uncovered one and certain documents he has unearthed refer to its absence. But that is not, of course, the end of the matter—it may be possible to infer a declaration of trust. For that reason, and because the wider context of the training farm is also said to be relevant when it comes to interpreting the 1969 Act, it is necessary to begin with examining the history of the training farm in more detail.
8 Putting to one side the question of any interests they might have under pt 3 of the Public Works Act 1981, discussed below.
Historical context
[16] As noted earlier, the genesis of the training farm concept itself lay with William Perry. At his instigation, there were public discussions of the idea between several notable Wairarapa residents between 1917 and 1919.
[17] Of some significance in terms of the way in which the training farm idea evolved are the reports in both the Wairarapa Age and the Wairarapa Daily Times on 26 September 1917. According to the Wairarapa Daily Times, on that day a committee appointed by the Masterton A&P Association presented their report “upon the question of procuring a farm in the Wairarapa for the accommodation of shell-shock soldiers” at a meeting of the executive of the Wairarapa Patriotic Association and the following resolution was submitted:
That Messrs William Perry, Q Donald and D McGregor, with power to add to their number, be appointed trustees for the returned soldiers’ farm (320 acres) donated by Mr William Perry; and 409 acres 1 rood 15 perches, purchased from Mr Rayner,9 with full power of management and control, including power to appoint a board or boards of management, and to frame rules and regulations with reference to the Association.
That the intention of the Trust is that the trustees or their successors shall have full power of control of the property, with the right to hand over the farm for educational purposes if and when the trustees consider it has served its usefulness as a training or rest farm for the returned soldiers.
[18] The newspaper report of the discussion of this resolution records that Mr Perry himself addressed the meeting. He said:
… he had come to the conclusion that they should establish a farm for the soldiers. The soldiers would only require the farm for a few years, and it could then be used for a school farm.
[19]The report also notes that:
(a)“The speaker thought that probably it would be better to have the Government represented in the control of the farm”;10 and
9 The newspaper report records that Mr Rayner had placed his land “at the disposal of the committee at a good deal below its value”.
10 On my reading of the report the reference to the “speaker” is a reference to Mr Perry.
(b)the motion was carried.
[20] It seems Mr Perry’s proposal that the Government be involved was promptly pursued. On 20 April 2018 the Wairarapa Daily Times reported:
A deputation from the Wairarapa interviewed the Right Hon W F Massey and Sir Joseph Ward at Wellington yesterday regarding a proposed training farm for returned soldiers, costing about £30,000. The land has been secured, Mr W Perry having given 700 acres, and 400 additional acres having been purchased. A further sum of £15,000 is required for buildings and the development of the property, and the deputation suggested that the Government should find it and contribute towards the maintenance of the farm, on the understanding that when the place is no longer needed as a training farm for soldiers, it should revert to the Government as a farm to be used in conjunction with an agricultural college.
[21] The deputation was asked to supply additional details to Ministers, who promised to submit the matter to Cabinet. It is recorded elsewhere that, during this meeting, Sir Joseph Ward (who in 1918 was the Minister of Finance):
… pointed out that it would be necessary for the property to be vested in the Crown as it would not be competent for the State to pay £15,000 of State money to a semi-publicly controlled Institution.
[22] After the proposal had been referred to Cabinet, it was then referred to the Board of Agriculture (of which Mr Perry was a member). During a discussion at a meeting on 15 May 1918, the Board passed a motion endorsing the proposal and recommending that the Government should accept it. The minutes record that the “Wairarapa people” would be contributing the land and that they wished the Government to assist in providing “the cost of buildings, equipment, and maintenance”. The minutes noted that:
When the time came that the farm was not required for training soldiers, the institution could be utilised as a farm school for the sons of settlers for all time.
[23] At that point it seems that the suggestion was that the training farm should be under the control and management of a Board of Governors “to be selected by the Government, the donors of the land, the local agricultural and pastoral [A&P] associations and the Education Board of the Wellington district”, although the relevant arrangements were thought to need further consideration.
[24] A meeting of the Board of Agriculture in September 1918 was attended by a committee of the donors of the land “for the purpose of discussing details of control, equipment and management of the training farm, and the amount of subsidy that the Government should be requested to provide”. The Director-General of Agriculture, Industries & Commerce (the Director-General) and the Director of Education were also present. After “exhaustive” discussion, it seems the Board resolved to advise the Minister of Agriculture that the donors would vest the land (736 acres) in the Government and provide the stock and a Government contribution of £7,000 would be sought for buildings, fences, implements and other necessary items. It was also agreed that “the control of the institution be under a Board of Trustees” comprised of two members from each of the A&P associations and two members nominated by the Government.
[25] The Director-General prepared a memorandum dated 10 October 1918 for submission to the Minister of Agriculture and thence to Cabinet. The memorandum (which was also read by the Director-General to the Board of Agriculture at their meeting that day) explained that the training farm would be used:
(a)as a demonstration farm;
(b)as a place for accommodating returned soldiers desirous of learning good farming methods;
(c)as a place for training youths in modern farming practices; and
(d)for furthering the advancement of practical farming methods, generally.
[26]It was noted that:
All the above purposes are capable of being fulfilled on the existing Government Farms, but the demand for facilities for instructing youths in practical modern farming methods is a strong and increasing one, and there would be ample scope for this proposed new farm’s activities from an education standpoint.
[27] The Director-General confirmed that the control and management of the training farm would be placed in the hands of a “Committee” consisting of two
Masterton A&P Association nominees (one of them to be representative of the donors); two Wairarapa and East Coast A&P Society nominees (one of them to be representative of the donors); two nominees of the Government (one of whom may be representative of the donors) and the Director-General of Agriculture (ex officio).11 There was an estimate of the proposed expenditure and funding needed from the Government and it was proposed that, in future:
any further capital required for the purposes of the farm be advanced to the Committee by the Government at current rates of interest for Government loans and on the usual terms.
[28] The idea was that the training farm would be self-supporting and any profits from the farming operations were:
… after providing for such improvements on the farm as the Committee deems necessary, to be expended in the furthering of agricultural and pastoral advancement in the Wairarapa district by educational methods, special attention being given to the needs of returned soldiers settled on the land.
[29] The memorandum recommended that the donors’ “generous offer” be accepted seeing as “the Government would acquire a property valued at £18,400, with stock of an estimated value of £900.” It proposed that the Crown agree to fund the initial farm salaries and necessary residences, farm buildings, yards, fencing and so on in the amount of £8,000 in the first year, with further funding of £1,000 in the following year.
[30] Cabinet agreed to these proposals on 11 November 1918. Soon after, the Director-General wrote to William Perry and the “Committee of Donors” informing them of the approval and of the conditions on which it was given.
[31] Margaret Perry executed the memorandum of transfer for the Perry land on 19 December 1918. The memorandum of transfer states:12
WHEREAS MARGARET JANE PERRY, wife of William Perry of Taratahi, Sheepfarmer being registered as the proprietor of an estate in fee simple … in all that piece of land …
11 On 16 December 1918 the Wairarapa Age reported that William Perry, D McGregor, C Reid, and Quinton Donald had been appointed by the Masterton A&P Association and the Wairarapa A&P Society to represent them on the Board of Control.
12 Italicisation added.
WHEREAS the said Margaret Jane Perry is desirous of giving the said piece of land to the Government of New Zealand for Educational purposes NOW THIS TRANSFER WITNESSETH that in pursuance of such desire and in consideration of the premises she the said MARGARET JANE PERRY doth hereby transfer to the said HIS MAJESTY THE KING all her estate and interest in the said piece of land.
[32] Over the years that followed, the nomenclature used to describe the Committee charged with managing the training farm was variable. Although on some occasions reference is simply made to “the Committee”, the minutes of the Committee itself often use the words Committee and Trustees interchangeably. Indeed, they are often headed “Minutes of meetings of Trustees”. A report of a meeting between the Committee and Wairarapa College (thought by Mr Parker to date from the early 1940s) recorded that:13
The Farm itself was vested in the Government and the Trustees were really much in the same position as the members of the Board of Governors [of Wairarapa College] in that they administered a farm for the Government …
[33] In late 1954, at the behest of the Committee and with the support of the Director-General, Cabinet reviewed aspects of the rules that had been agreed in 1918 about the running of the training farm. The amended rules altered the basis on which appointments to the Committee would be made and made it clear that Committee members acting within those new rules would be exempt from personal liability for any acts done within their authority. They also clarified the basis upon which the Committee could make operating and capital expenditure, including that Ministerial approval would in some circumstances be required:
General operating expenditure within the normal overall earning capacity of the farm, and minor capital expenditure, including capital replacement, will be at the Committee’s discretion, subject to the prior approval of the Minister of Agriculture being obtained for:
(i)Capital expenditure exceeding £1,000 on any one item of new buildings, equipment, or extension to existing capital works;
(ii)Any proposed movement in investments; and
(iii)Any major change of policy regarding the use and purposes of the farm.
13 At this time there was talk of the College utilising the training farm for educational purposes.
[34] The question of the Committee’s powers and duties (and so the legal status of the Committee itself) was directly raised in a letter to the Director-General written in November 1960 by the solicitors then acting for the training farm. They said:
From time to time we have discussed with the Trustees of the Wairarapa Training Farm, the desirability of having their powers and duties defined.
As far as we are aware, the only authority of the Trustees is set out in a letter dated the 13th December, 1954 … from the then Director-General of Agriculture to the Secretary.
It does not seem to be quite clear, from a legal point of view, as to exactly what the position of the Trustees is in this matter.
It may be that the Trustees are purely agents for the Crown, or it may be that the Trustees are, in fact, legal trustees with the statutory powers and duties of ordinary trustees.
It has seemed to us for some time that it would be preferable for the Trustees to be constituted by legislation. …
[35]To this, the Director-General replied stating:
As the farm property is vested in the Government the trustees are agents of the Crown and not legal trustees. Insurance on the farm should be in the name of the Crown …
I do not think that there is any need for trustees to be constituted by legislation. The terms of the Cabinet decision conveyed to the Secretary of the farm by letter dated 13 December 1954 appears to cover the position adequately but I shall be pleased at any time to clarify any points that may arise relating to the trustees’ powers and duties.
Impetus for the 1969 Act
[36] The impetus for finally putting the governance of the training farm on a more certain legal footing arose from challenges the Committee faced in obtaining ongoing funding for the training farm’s operations during the 1950s and 1960s.
[37]In July 1968 the Director-General wrote to the State Advances Corporation:14
The Wairarapa Cadet Training Farm is a Crown trust property of 736 acres 6 miles south of Masterton. The property was given to the Crown in 1918 and Government grants were made at the time to help the farm training scheme. It was the donor’s wish that the farm be used to train ex-servicemen and (later)
14 The description of the training farm below was replicated almost exactly in a memorandum dated 10 October 1968 from the Minister of Agriculture to Cabinet.
young men. The farm is administered as a commercial undertaking by an honorary committee of six trustees and a representative of the Director- General of Agriculture who are agents of the Crown. […]
[38] After noting that the training farm’s fluctuating revenues throughout the 1950s had led to the exhaustion of reserves and a need for funding injections by the Government, the Director-General advised that a loan in the order of $15,000 was required to enable the training farm to increase its productivity with a view to it again becoming self-supporting. Then, he said:
As this is Crown property and the Department has no facilities for lending money it is proposed to recommend to Government that an advance could be considered under Section 19 State Advances Corporation Act but before doing so I would like your views on the proposal.
[39] Although Cabinet approved this $15,000 loan in October 1968, legal impediments were subsequently identified. The State Advances Corporation considered the loan could not be advanced because the “Board” had no power to borrow. Moreover, any loan could not be secured over the training farm because it was Crown land.15
[40] In a broader sense, these difficulties again highlighted the absence of any statutory or other formal status of the training farm and the Committee. In a memorandum to the Secretary to the Treasury in February 1969 the Director-General explained:
In discussion with Mr Spiers, a public accountant in Masterton who is the Secretary to the Committee, it has been found that there is no trust instrument for the farm. The designation of ‘Trustee’ given to the Committee members is something that has grown up over the years and maintained by this department.
[41] The perceived impediments to the proposed loan were raised a month or so later by the solicitors instructed by the Secretary of the training farm Committee in a letter to the Director-General:
One condition stipulated by the Corporation is that the security for the loan is to be by way of written acknowledgement of debt with the personal liability of the Trustees to be limited to the assets of the trust. There is, as we
15 The same issue was also identified as an impediment to the Committee having an overdraft facility notwithstanding that such a facility had, in fact, already been established.
understand the position, no formal trust in existence, the Trustees merely being a committee appointed by the Minister. It would seem therefore that as the Crown is the owner of the farm then the Crown only could sign any acknowledgement.
[42]In his reply, the Director-General said:
Evidently you are of the view that as there is no formal trust (instrument) in existence you doubt whether the Trustees are competent to sign the acknowledgement. You also seem to assume that since the Minister appoints the members of the Committee the Minister does so on behalf of the Crown as the owner of the land. The farm land is owned by the Crown but in so far as this Department is concerned its involvement is solely for administrative purposes. In appointing the Trustees the Minister of Agriculture is merely exercising a power of appointment. I am sure if you disassociate the power of appointment from ownership of the land you will see your way clear.
Since the Corporation which is fully aware of history of the Wairarapa Training Farm is prepared to accept an acknowledgement from the Farm’s Trustees and since the Trustees have in the past managed to invest and obtain bank accommodation I see no difficulty for the Trustees in signing an acknowledgment which is limited to the assets of the trust that they administer.
[43] The documents show that the loan was eventually made to the training farm “with the consent of the Minister of Finance and secured by a written acknowledgement of debt, the personal liability of the Trustees being limited to the assets of the Trust.” But the difficulties had undoubtedly revealed a need for greater clarity in the future. In a May 1969 memorandum advising the Attorney-General of the resolution of the loan issue, the Minister of Agriculture said:
While the title to the farm is vested in the Crown and the Government is represented on the committee of Trustees, the control and management is nevertheless entirely the responsibility of the committee. There is no Order in Council or any other authority appointing or empowering the committee. The rules for running the farm brought down by Cabinet on 11 November 1918 and amended on 1 December 1954 … are the only documents on the Department of Agriculture’s record.
It is now desired to place the control and running of the training farm on a more formal footing by the preparation of legislation containing the present rules as set out … [on] 1 December 1954, and incorporating provision for borrowing,
I should be pleased if you would request the Cabinet Committee on Legislation for a drafting priority for the Wairarapa Cadet Training Bill.
[44]Cabinet approved the drafting of a Bill in May 1969.
The 1969 Act
[45] The Wairarapa Cadet Training Farm Bill was introduced on 26 September 1969. On that occasion, the Minister of Agriculture, the Hon Brian Talboys told the House:16
The Bill simply provides for the incorporation of the Wairarapa cadet training farm trust board for the purpose of controlling and managing the Wairarapa cadet training farm, and sets out the functions and powers of the board. Honourable members will know that the Wairarapa cadet training farm is situated about 6 miles from Masterton. It was vested in the Crown in 1918 upon trust for certain purposes which are set out in the preamble to the Bill, and it was acquired for those purposes partly by gift and partly by way of public subscription. The training farm has been held by the Crown for these purposes under the control and management of an informally constituted committee. There are plans for the development of the farm in order to increase productivity and to upgrade these facilities. This is simply seen as an opportune time to constitute the farm and the committee as a trust board, and this is the simple purpose of this Bill.
[46] And on the second reading of the Bill, Mr Carter, the Parliamentary Under Secretary to the Minister of Agriculture, said:17
It is a very simple Bill providing for the incorporation of the [trust board] for the purpose of controlling and managing the [farm].
…
Clause 9 defines the powers of the board. […]
Clause 10 provides that the Minister has control over the sale, lease, or exchange of the any part of the training farm. […]
All these clauses place the general guidance of the trust in the hands of the trust board under the Minister of Agriculture, and through him the Government.
[47]Mr Donald, the MP for Wairarapa, stated:18
This bill formalises the position of the trustees of the training farm. It enables the trustees to borrow money, using the assets of the farm as security…”
[48]Mr Moyle (then an opposition MP) put it this way:19
16 (26 September 1969) 363 NZPD at 3087–3088 (emphasis added).
17 (21 October 1969) 369 NZPD at 3689–3690 (emphasis added).
18 At 3693.
19 At 3691.
The Bill merely incorporates the Wairarapa Cadet Training Farm. Therefore it does nothing more than is already being done. It only clears up a legal technicality concerned with the borrowing of money by the farm.
[49] The Wairarapa Cadet Training Farm Act 1969 received royal assent on 24 October 1969.
[50]As for the Act itself, the preamble states:20
WHEREAS the lands described in the Schedule to this Act and known as the Wairarapa Cadet Training Farm and certain livestock were in the year 1918 conveyed as a gift to the Crown by certain residents of the Wairarapa district to be held upon the following trusts:
(a)As a demonstration farm to provide in a practical and efficient manner an object lesson to learners and to farmers in sound, practical, modern profit-earning practice, nothing to be done either in the shape of erection of farm buildings or farming methods which is not within the capacity, financially, of the ordinary farmer:
(b)As a place for accommodating returned soldiers desirous of learning good farming methods and giving them all facilities for doing so:
(c)As a place for training youths in modern practical farming practice:
(d)For furthering the advancement of practical farming methods generally, thereby assisting to stimulate increased production:
And whereas the training farm and the stock and implements thereon and other personal property have been and are being administered on behalf of the Crown by a committee of trustees in accordance with the terms of the trust: And whereas a plan of development has been prepared in respect of the training farm in order to increase its productivity, to upgrade its facilities, and to improve the finances of the farming and training programmes, which plan will require the provision of additional finance: And whereas it is desirable that for this purpose the committee of trustees be incorporated and the training farm and the personal property subject to the trusts be vested in the corporate body.
[51] The only difference of any possible consequence at all between these “trusts” and the purposes set out in the Director-General’s 1918 memorandum was wrought by s 7, which clarified that “for the purposes of this Act the expression modern practical farming practice in paragraph (c) of the Preamble shall include theoretical tuition and training”.
20 Emphases added. The discussion of the 1969 Act in this part of this judgment refers to the original version of the Act. All the Act has since been amended, none of the changes are of any present consequence.
[52] Section 3(1) of the 1969 Act established the Trust Board as a body corporate with the power to hold property, sue and be sued, and do and suffer all such acts and things as bodies corporate may do and suffer, “subject to this Act”.21 Under s 3(2):
(a)the members of the Trust Board are to be appointed by the Minister, albeit that certain organisations have the right to nominate; and
(b)the Director-General of the Ministry for Primary Industries is to be an ex officio member of the Board.
[53]The Minister also has the power of removal, under s 4.
[54]As well, the Act:
(a)stated that the functions of the Trust Board are “to administer all real and personal property vested in it upon the trusts specified in the Preamble to this Act”;22
(b)vested in the Trust Board:23
(i)subject to the provisions of the Act, the land described in the Schedule to the Act (referred to in the Act as “the training farm”) “for an estate in fee simple”; and
(ii)all Taratahi-related personal property that had previously been vested in the Crown;
(c)granted the Trust Board a wide range of powers including powers to sell, exchange, or otherwise deal with personal property vested in it; acquire personal property, and real property; enter into contracts;
21 Section 3(1).
22 Section 7.
23 Section 8(1) and (2).
borrow (including by way of mortgage or charge over real and personal property).24
[55] Notwithstanding the powers given to the Trust Board, the Act also continued the previous administratively imposed restrictions on its ability to deal with farm assets. In particular, the “prior consent of the Minister” was expressly required for certain transactions or activities, including, relevantly:
(a)the sale, lease or exchange of the training farm;25
(b)acquisition of any real property;26
(c)incurring capital expenditure over $2,000;27
(d)altering the mode of investment of its funds;28
(e)making any major policy change with respect to the use of the training farm;29 and
(f)borrowing, and particularly secured borrowing.30
[56] The Act provides that no member of the Trust Board shall be personally liable for any act done or omitted by the Board or by any member thereof in good faith in the course of the operations of the Board.31
[57]Further:
24 Sections 9(1) and 11.
25 Section 10.
26 Section 9(1)(d).
27 Section 9(2)(a). The original $2,000 figure is now $100,000, plus any GST.
28 Section 9(2)(b).
29 Section 9(2)(c).
30 Section 11(2).
31 Section 16.
(a)section 15 exempts the Trust Board form the payment of any land or income tax;32 and
(b)section 17 requires the Trust Board to prepare an annual report and provide it to the Minister.
Was an express trust created in 1918?
[58] In my view, the gifting of the Taratahi land to the Crown in 1918, on the terms set out (inter alia) in the Director-General’s 1918 memorandum, gave rise to a charitable educational purposes trust despite the absence of any formal trust deed.33 As far as the Perry portion of the land is concerned, I think that is particularly clear from the express terms of the transfer made by Margaret Perry, but the other contemporaneous records—a number of which I have referred to earlier—support the same conclusion.
[59] More particularly, there is no room for any real debate about what the donors’ intention was. It was not to gift the land to the Crown to use however it wished; there were detailed discussions of the use to which the land was to be put. I have no doubt that it would not have been transferred but for the Crown’s agreement to use the land (and the stock) as the core of the training farm enterprise envisioned by the donors. Nor is there room for debate as to the subject matter of the trust: it was the land and the stock donated for that purpose. The way in which the trust was to be administered and its purposes effected (and by whom) was also clear. And while it is not of course possible to identify specific beneficiaries, that is not necessary in light of the trust’s indisputably charitable purpose. To adopt the words of the former Chief Judge in Equity of New South Wales:34
When one examines the gift it would seem to me … when a citizen asks Her Majesty … to use property which has been given to her in a particular way,
32 The Trust Board was registered under the Charities Act 2005 until it was deregistered from 14 December 2020 for not filing its annual return.
33 It suffices for the purposes of this discussion to focus principally on the Perry land, in respect of which the position is arguably more straightforward. If I conclude that there was no trust in relation to the Perry land, I think it inevitably follows that there could be no trust in relation to the Rayner landConversely, if I find that a trust existed in relation to the Perry land, then it probably does not matter whether there was also a trust in relation to the Rayner land. .
34 Ryder v the Attorney-General in and for the State of New South Wales [2004] NSWSC 1171 at [11].
then there is an obligation (though it might be hard to define precisely that obligation) to use that property in that way. Such an equitable obligation attached to property is to my mind a trust relationship and thus I consider that there is a trust involved, even though the word “trust” is not actually used.
[60] Contrary to the submission by counsel for the Attorney-General, I do not consider that the 1954 changes made by the Crown to the rules governing the Committee have any bearing on this conclusion. The alterations were of a mechanical kind and did not affect the operation of the trust or its purposes. Indeed, the new requirement for Ministerial consent to certain kinds of expenditure (a matter carried through into the 1969 Act) is consistent with my view that the Crown was—as trustee—exercising control as a fiduciary to ensure that any major transaction was consistent with the terms of the trust. And while one of the changes appears to contemplate that the Minister might approve a “major policy change with respect to the use of the training farm” I doubt that this power could lawfully be used to authorise the use of the training farm in a way that was inconsistent with the terms of the original trust. But I heard no argument on that point.
[61] Nor can any significance be placed on the terminology used between 1918 and 1969 to describe the Committee. As the applicants and the Attorney-General submitted, the land was at that point vested in the Crown, not the Committee. As I have said, it was the Crown that was its trustee. The most that can be said is that the frequent (if loose) use of the word “trustees” to describe the Committee was indicative of the understanding of those involved as to the fiduciary nature of the wider arrangement. But the reality was—as the Director-General said in 1960—the Committee was acting as the Crown’s (the trustee’s) agent in controlling and managing the wider farm enterprise. It may be observed that an agency relationship is, itself, a fiduciary one.
Did the 1969 Act change this position?
[62] The 1969 Act vested the Taratahi land in what was formerly the Committee but, by dint of the Act, had become a formally constituted Trust Board. It gave the Board the further powers it needed to run the training farm in accordance with the original (1918) trust purposes—the trusts confirmed in the preamble of the Act.
[63] As both the wider context and the Hansard debates make clear, the 1969 Act was, quite explicitly, a legislative solution that responded to practical difficulties that had arisen. The efficacy of that solution depended on the land being vested in a separate legal entity; the Trust Board in the form of a body corporate. While the Act may have had the effect of changing the trustee, it did not alter the pre-existing trust. Nor do I think it can be seen as the Crown shedding entirely its own prior fiduciary obligations. That is undoubtedly why the Act retains for the Crown the same oversight and control over the Trust Board it had previously had over the Committee. Of critical importance (both generally and in this case) is the fact that the Taratahi land cannot be sold without the Minister’s consent.35 As the Hansard debates also make clear, the training farm was intended to be (and has remained) at its heart, a Government undertaking.36
[64] Importantly, I did not understand Ms Low to contend that the trust—which I have found existed before the 1969 Act—placed fiduciary obligations on the Crown (or the Trust Board) that went beyond or were inconsistent with the terms of the Act itself.37 Nor does she contend that the trust was created by the Act. Those points distinguish the present from the cases involving “statutory” trusts referred to me by counsel for the Attorney-General, the facts of which were very different.38 And as the Court of Appeal expressly noted in the New Plymouth District Council v Waitara Leaseholders Association Inc case, context is everything:39
… In some instances, depending on the terms of the relevant statute, a charitable trust may be created. However, that does not give rise to a general proposition that all public entities which hold lands as endowments under statute for specified public purposes hold that land as charitable trustees. The precise extent of the holder’s obligations in any particular case will depend on the terms of the statute under which the land is held, assessed in the context in which the issue arises. The holder of the land will be required to meet those obligations that arise expressly or by necessary inference from the relevant statute.
35 Taratahi Agricultural Training Centre (Wairarapa) Act, s 10.
36 If pressed (and if it matters) I would be prepared to conclude that the effect of the 1969 Act is that the Trust Board is now holding the Taratahi land on trust for the Crown.
37 If I am wrong about that—and Ms Low was in fact contending that the limited power or sale conferred by s 10 needed to be read more restrictively because of the pre-existing trust—I do not agree with her. Apart from anything else, the s 10 “power” (which Ms Low would say is a prohibition) in fact reflects the rules governing the trust that were implemented in 1954.
38 Wellington Harness Racing Club Inc v Hutt City Council [2004] 1 NZLR 82 (HC); and New Plymouth District Council v Waitara Leaseholders Association Inc [2007] NZCA 80.
39 At [43] (emphasis added).
[65] Neither Waitara Leaseholders case nor the Wellington Harness Racing Club Inc v Hutt City Council involved land that had initially been gifted to the Crown for a specific charitable purpose.40 As I read those (and earlier) cases, they are concerned with whether a “trust in equity” could be superimposed on a “statutory trust” such that the owner of the relevant land (or recipient of income from the land) had fiduciary obligations that went beyond the obligations imposed by, or implicit in, the governing statute. Here, there is no need for such an expansive approach. The 1969 Act merely reflects and confirms the charitable trust that I have found was created in 1918. Compliance with the statute will equate to compliance with the terms of the original trust.41 And for the same reason, the Court’s public law supervisory jurisdiction (to ensure that statutory powers contained in the 1969 Act are lawfully exercised) and its supervisory jurisdiction in relation to trusts (to ensure that the terms of a trust are complied with)seem to me to coincide.
Answer
[66] The arrangements surrounding the establishment and continuation of the training farm are unique and perhaps difficult to fit into orthodox legal or equitable pigeonholes. But for the reasons I have given, I consider that:
(a)the Taratahi land was held by the Crown from the outset on an express charitable trust for educational purposes as described in the various contemporaneous documents referred to earlier in this judgment;
(b)that trust is now reflected in the terms of the 1969 Act, albeit with ownership of the land (for practical reasons) now residing in the Board of Trustees; and
40 In Waitara Leaseholders the land had been confiscated by the Crown from Māori in the 19th century and the leaseholders sought (in effect) to prevent it being returned to them through the Treaty settlement process. In Wellington Harness Racing Club the land had been owned by the Crown until it was the subject of a Crown Grant under the Public Reserves Act 1854 to the Superintendent of Wellington by Sir George Grey in 1866 “as a Race Course”. It was this grant that was said to have established a trust “in the equity sense”.
41 I necessarily do accept, that the fact that the trust here—and the powers of appointment—now
take statutory form removes this Court’s usual equitable jurisdiction to remove trustees, because the Court cannot override the statutory power of appointment and removal. This was an argument accepted in Auckland Harbour Board v Commissioner of Inland Revenue [1959] NZLR 204 (SC) and endorsed in Waitara Leaseholders as a reason for not overlaying a statutory trust with a trust in equity.
(c)while the trust powers must now be exercised in accordance with the provisions of the 1969 Act, exercising them in that way will also be consistent with the original trust: the “statutory” trust and the “trust in equity” are the same.
Does the 1969 Act permit the Taratahi land to be sold?
[67]This issue focuses on s 10 of the Act. Section 10 now provides:
Except with the prior consent of the Minister, the Trust Board shall not sell, exchange, or lease the training centre or any part thereof.
[68] The term “training centre” (which replaced the earlier “training farm”) is defined as the lands described in the Schedule to this Act, including the Taratahi land.42
[69] Whether s 10 of the Act is conceptualised as conferring a power of sale (as the liquidators and the Attorney-General would have it) or as a general prohibition on sale with a limited exception (as the first respondents would have it) is immaterial. The question will always be whether the Minister can, in any given case, lawfully approve a specific sale. I use the word “lawfully” here in its normal public law sense including in particular:43
(a)after taking into account all relevant considerations (including, most obviously, the purposes of the 1969 Act and the relevant trusts confirmed by it);
(b)without taking irrelevant considerations into account; and
(c)in accordance with the principles of natural justice (which might for example include consulting with those such as the first respondents).
[70] It is the first of these matters that is most directly raised by the orders sought by the liquidators here, so I elaborate on it further.
42 Taratahi Agricultural Training Centre (Wairarapa) Act 1969, s 2 (definition of “training centre”).
43 Because the Minister has not yet exercised his s 10 power and the detail of some of the matters listed here will be fact dependent, it is important to record that I do not intend to express any definitive views on them.
[71] The proposition that the s 10 power must be exercised by reference to the 1969 Act and its purposes (including the trusts) is, I think, uncontroversial. In general terms, the Minister could not approve a sale if to do so would be inconsistent with the preambular trusts and the mechanisms contained in the Act designed to enable those trusts to be effected. And at first blush, the first respondents’ contention that any outright sale of the training centre (or the Taratahi land) is likely to cut directly across those trusts is understandable.
[72] But the position is not that simple. The first and obvious response is that the very existence of s 10 means that a sale could lawfully be approved. And the reality is that the Trust Board has had conferred upon it—as a necessary adjunct to its obligations to administer the statutory trusts and manage the training farm—the power to enter into contracts, borrow money and mortgage farm property (provided Ministerial consent is first obtained). And if lawfully entering into transactions of that kind meets and furthers the trust purposes (as it can), it inexorably follows that performing the legal obligations flowing from such transactions—including by repaying lawfully incurred debts—are also within those purposes. Similarly, the appointment of liquidators in circumstances where the Trust Board no longer has the wherewithal to meet the obligations it has incurred in the course of pursuing trust purposes must also be seen as furthering those purposes.
[73] That is not to say, however, that the Minister can ignore the wider purposes and trusts set out in the preamble to the 1969 Act when deciding whether to approve any sale. For example, even if a sale was necessary to meet the Trust Board’s properly incurred debts, the Minister might (if possible) still be required to explore sale options that were more consistent with the terms of the trusts and, perhaps, give preference to a purchaser who might be proposing to use the land for similar purposes.44 And given the circumstances in which the Crown first acquired the Taratahi land, it might be relevant to consider a sale back to those, such as the first respondents, if that is what
44 The evidence here suggests that considerations of that kind have, in fact, been at the forefront of the current Minister’s mind when dealing with this matter.
they wish.45 But I deliberately express no concluded view on those matters which, again, may be fact and circumstance dependent.
[74] I also acknowledge that one of the matters that has prompted the first respondents to take the position they have is their belief that the liquidation of the Trust Board is a result of its mismanagement by the Board and/or that some of the Board’s debts (which ultimately resulted in the liquidation) were not incurred in accordance with the 1969 Act. Although the liquidators have deposed that they are satisfied that, where necessary under the Act, the Minister’s consent was obtained, the first respondents have not yet accepted that. If they are right about that then there may well be an argument to be made that the land could not be sold to meet those debts.
[75] As noted earlier, the parties accept that it is not possible to resolve this particular dispute in this judgment. The first respondents’ complaints may ultimately lie against the Trustees personally. The Trustees are not parties to this application.
Answer
[76] The 1969 Act permits the Taratahi land to be sold provided the particular sale is consistent with the trusts reflected in, or the purposes of, the Act and is lawfully approved by the Minister under s 10. Approval could be given to a sale by the liquidators, if that sale is necessary to meet the Trust’s lawfully incurred debts (debts incurred in the lawful and trust consistent performance of the Board’s statutory functions). But in deciding whether to consent to any particular sale, there are likely to be wider relevant (purpose or trust-based) considerations for the Minister to take into account, depending on the circumstances. It is not possible to elucidate further or firmly on what those considerations might be in the absence of a concrete sale proposal.
45 Difficult issues of price might arise as there would potentially be a tension between the fact that the land was gifted by the first respondents’ forebears and the need for the liquidators to pay creditors, in accordance with the Act.
Is the Taratahi land subject to pt 3 of the PWA and the GLP?
[77] The first respondents alternatively contend that the Taratahi land is subject to offer back under the PWA and the GLP. Again, however, there is no “one size fits all” answer to the questions posed by that contention. The answer depends on the starting point.
[78] Before turning to consider the different possible scenarios, it is useful to say something about the operation of the PWA disposal processes.
The disposal processes under the PWA and the GLP
[79] Where land is held for a public work but is no longer required for that or any other public work, s 40 of the PWA provides (subject to specified exceptions) that the Crown should offer to sell the land by private contract to the successors of the original owner(s). Section 40 draws no distinction between land that was acquired by the Crown under public works legislation (either compulsorily or by agreement) and land that was gifted to it.46
[80] The term “public work” is defined in the PWA as incorporating both “Government works” and “local work”. Government work is relevantly defined as:47
… a work or an intended work that is to be … undertaken, established, managed, operated, or maintained by or under the control of the Crown or any Minister of the Crown for any public purpose …
[81] Some land held for the purposes of a public work is land that was originally gifted to the Crown for those purposes (rather than purchased or compulsorily taken). Where land of that kind later becomes surplus, there is a tension between the Crown’s moral obligations to the original donor (or their descendants) and the vendor agency’s need for a financial return on surplus assets. The purpose of the GLP, approved by
46 See for example Urlich v Attorney-General [2022] NZCA 38 where land that had in substance been gifted to the Crown for the purpose of a school was offered back under s 40 of the Public Works Act (PWA). In that case, however, the original acquisition was by way of a proclamation made under the Public Works Act 1928.
47 PWA, s 2.
Cabinet in 1995, is to resolve this tension. The GLP is, in a sense, a policy that informs the operation of s 40 in cases where it applies.48
[82]The GLP does this by providing (in essence) that:49
(a)gifted land that is surplus can be returned to the donor at nil value on the condition that the donor pays the value of any improvements on the land that were constructed by the Crown; and
(b)payment will be made by LINZ to the vendor agency of the value of the gifted land, subject to Cabinet approval of funding.
[83] While not all gifted land is subject to s 40 of the PWA, in many cases s 40 and the GLP intersect. When they do, the processes required to be followed are set out in the LINZ Standard for disposal of land held for a public work (Standard) and the LINZ Guideline for disposal of land held for a public work (Guideline).50
[84] Although those documents do not, as I understand it, have legislative authority, they are written in apparently mandatory terms. So, while it may be that—as counsel for the applicants contended—the GLP is not legally binding, the Standard and the Guideline may well suffice to ground a legitimate expectation that the processes contained in them will, in a qualifying case, be followed.
[85]In any event, the section in the Standard addressing GLP obligations begins:51
15.1General
A vendor agency that wishes to dispose of land that was gifted must comply with the gifted land policy (GLP) and must apply to LINZ with the information specified in 15.2.
48 As I understand it, the GLP often—but does not always—intersect with the processes under s 40 of the PWA. If s 40 applies to land covered by the GLP, it is (as I understand it) necessary to seek approval for a sale at less than market value under s 40(2)(d).
49 Toitū te Whenua | Land Information New Zealand Guideline for disposal of land held for public work LINZG15700 (13 November 2009) at 31–32 [the Guideline].
50 Toitū te Whenua | Land Information New Zealand Standard for disposal of land held for a public work LINZS15000 (13 November 2009) [the Standard]; and the Guideline, above n 49.
51 The Standard, above n 50, at 23 (footnotes omitted).
15.2Identification of gifted land
If land was gifted, the vendor agency must provide a report to LINZ that sets out:
(a)the circumstances and components of the gift,
(b)the name of the donor,
(c)whether there are any statutory obligations or practical considerations that would limit application of the GLP,
(d)whether the GLP should be effected by the provisions of s 40. If the beneficially entitled person is the same as the successor to the former owner, then s 40 must be used to effect the GLP. If the beneficially entitled person is different from the successor, s 40 must be addressed first and then the GLP applied,
(e)identification of any improvements, their value and how such improvements will be treated in any offer,
(f)confirmation that the donor or beneficially entitled person is interested in receiving an offer of the land and to purchase the improvements, and
(g)a recommendation on the application of the GLP.
15.3Approval to return land for nil consideration
If the GLP is effected by the provisions of s 40, the vendor agency must, in addition to providing the information required under 15.2, seek approval to return the land for nil consideration under s 40(2)(d) of the PWA.
[86]In terms of relevant definitions, the Standard defines:
(a)“vendor agency” as:52
a Crown agency disposing of land under the PWA and includes a Crown property accredited supplier contracted to dispose of the land
(b)“Crown agency” as including “former government agencies, now private entities, that have obligations under s 40 of the PWA”.53
(c)“Beneficially entitled person” as:54
52 At 7.
53 At 5.
54 At 5.
the donor of gifted land, or, where the donor has died, the person who benefits from the donor’s estate at the time of death or subsequently, including those determined as entitled successors by the Māori Land Court.
(d)“Donor”, with specific reference to the GLP, as:55
… the person who gifted the land, or if that person has died, is the beneficially entitled person who benefits from that person’s estate at the time of death or subsequently, including those entitled successors as determined by the Māori Land Court. […]
[87] The GLP applies if it is established that the Crown did not acquire the land by way of an absolute gift (a gift given free of conditions of use). The Guideline states that if the intended use of a gift is not clear, the vendor agency should err on the side of caution and assume:56
(a)the gift was not absolute;
(b)the land was given for a specific purpose; and
(c)the GLP applies.
[88] The onus is on the donor or beneficially entitled person to provide evidence of entitlement, which may include statutory declarations or succession orders.
The different potential starting points
[89] One starting point (the one envisioned by the liquidators) is that the Minister has satisfied himself that a particular proposed sale of the land is consistent with the 1969 Act, and with the trusts confirmed in it, and lawfully consents to the sale. If that is so, then—regardless of whether it is held for a public work—the land cannot be described as “surplus” at all; the land is still needed to fulfil the purposes of the Act. In that case, the relevant disposal processes under the PWA and the GLP could not be triggered.
55 At 5.
56 The Guideline, above n 49, at 35.
[90] But there is another possibility. If the land cannot lawfully be sold under the 1969 Act but is for some reason surplus, then the application of the PWA and the GLP may require consideration. Again, without wishing to express any definitive view of when such circumstances might arise, it is possible to conceive of hypothetical scenarios where the Taratahi land is surplus (no longer needed for the purposes of the Act) because:
(a)the Trust Board is not in liquidation or significantly indebted but, for other reasons (say for lack of ongoing enrolments or funding) it is apparent that the training farm cannot continue; or
(b)the training farm cannot continue because the Trust Board is in liquidation, but the land cannot be sold because the relevant debts were incurred by the Trust Board as a result of the unlawful exercise of its statutory powers or breaches of its fiduciary duties.
[91] As noted earlier, the first respondents are of the view that the second kind of circumstance exists in this case. So, although I (again) cannot express a view on that question here, it is useful to consider whether the PWA or GLP might then apply.
Discussion
[92] To reiterate what should by now be obvious, the discussion that follows is predicated on the Taratahi land—for whatever reason—no longer being required for the purposes of the 1969 Act. It has no application if the starting point articulated at
[89] pertains.
[93] As to the application of the PWA more generally, I agree with Ms Low that the training farm falls within the definition of “Government work” (and so, the definition of “public work”) because the Trust Board is under the control of a Minister for the public purpose of providing education.57 That control derives not just from the
57 In particular, the statutory powers and obligations of the Minister under the 1969 Act—such as his power to appoint the members of the Trust Board and the requirement for his consent to significant transactions—can be seen as giving him sufficient “control” over the enterprise to qualify it as a “Government work”.
Minister’s powers of appointment and removal of trustees but also from the fact that his consent is required to enter any significant transactions. This view is also fortified by the history of the training farm and what I have found to be the limited changes intended to be wrought to the pre-existing position by the 1969 Act.
[94] If that is so, then pt 3 of the PWA—and the requirement to offer the Taratahi land back to the descendants of the original owners before it can be disposed of— would potentially arise.58
[95] Once that point is reached, I also consider that the GLP would potentially apply, for the reasons that follow.
[96] First, if I am right that the training farm is a “Government work” for PWA purposes, then it must follow that—as the owner of the land on which the work is situated—the Trust Board is a “Crown agency” and so a “vendor agency”.
[97] Secondly, the evidence does not satisfy me that the Taratahi land was gifted unconditionally. The terms of the transfer signed by Margaret Perry make it very clear that the Perry land was gifted for an educational purpose and the surrounding documents clearly set out that purpose.
[98] And thirdly, determining whether or not Ms Perry and some or all of those represented by her in these proceedings qualify as “beneficially entitled” persons is beyond the scope of these proceedings. But on the face of it (and based on the evidence they have filed), it seems quite likely.
Answer
[99] My answer to whether the Taratahi land is subject to the PWA and GLP processes is, therefore, that it depends. More particularly:
58 There has been no suggestion that the land is required for any other public work.
(a)if a particular sale of the Taratahi land can lawfully be approved by the Minister to meet the Trust Board’s lawfully accrued debts, then the land is not surplus and the PWA and GLP do not apply; but
(b)if the training farm cannot continue in operation but the Minister is unable to lawfully approve a sale of the Taratahi land, then the land is surplus and the PWA and the GLP do potentially apply.
Should the orders sought by the liquidators be made?
[100] I have set out the orders originally sought by the liquidators at [9] above. It will be evident from my analysis and conclusions that I am not prepared to make them as originally proposed. Rather, the orders I make are as follows:59
(a)a sale by the Taratahi Agricultural Training Centre (Wairarapa) Trust Board (In Liquidation) (Trust Board) of the land described in the Schedule to the Taratahi Agricultural Training Centre (Wairarapa) Act 1969 (the 1969 Act) now described as Lot 2 Application Plan 2256 as comprised and described in Record of Title WN8D/445 and Lot 1 Application Plan 2256, as comprised and described in Record of Title WN8D/446 (together the Relevant Land), for the purpose of using the sale proceeds to pay creditors and the liquidation costs of the Trust Board is a lawful action of the Trust Board, subject to the Minister’s prior consent being sought and lawfully given under s 10 of the 1969 Act;
(b)in circumstances where the Minister’s consent has been lawfully given to a sale of the Relevant Land, the land is not subject to Part 3 of the Public Works Act 1981 (PWA) or the Gifted Land Policy (GLP), because the land is still required for the purposes of a Government work (the Taratahi Agricultural Training Centre) and so is not surplus;
59 These orders were initially issued in draft form and, after input from (and agreement by) counsel have since been slightly amended, as now set out here.
(c)the use of the proceeds from any such lawful sale for the purpose of paying creditors, and paying the liquidation costs, of the Trust Board is a lawful application of those proceeds; and
(d)in the event that a sale of the Relevant Land cannot be lawfully consented to by the Minister under s 10 of the 1969 Act, but the land is no longer required for the purposes of the Taratahi Agricultural Training Centre, or any other public work, Part 3 of the PWA and GLP processes may apply to any disposal of the Relevant Land (subject to the ability of any beneficially entitled persons to provide evidence of their entitlement).
(e)Leave is reserved for the Applicants to apply for further directions, if necessary, in the event that the circumstances referred to in paragraph
(d) become applicable.
Costs
[101] After an indication form me, the parties are agreed that costs should lie where they fall.
Apology
[102]I regret the time it has taken me to complete this judgment.
Rebecca Ellis J
Solicitors:
Simpson Grierson, Auckland for Applicants
Lockhart Legal, Auckland for First Respondent Crown Law, Wellington for Second Respondent
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