The Saint John's College Trust Board - [2022] NZHC 259

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2021-404-1550

[2022] NZHC 259

IN THE MATTER OF

AND
An application for directions under s 33 of the Trusts Act 2019

IN THE MATTER OF

An application by THE SAINT JOHN’S COLLEGE TRUST BOARD

Applicant

On the papers

Counsel:

B D Gray QC for the applicant

Judgment:

23 February 2022

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 23 February 2022 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

THE SAINT JOHN’S COLLEGE TRUST BOARD [2022] NZHC 259 [23 February 2022]

Introduction

[1] The Saint John’s College Trust Board (SJC Trust Board) is a charitable trust board incorporated under the Charitable Trusts Act 1967. It administers the assets of the St John’s College trusts, which are held, managed and distributed in accordance with the St John’s College Trusts Act 1972.

[2] The SJC Trust Board applies for directions under s 133 of the Trusts Act 2019. It seeks the Court’s approval of the trustees’ unanimous decision to forgive the Te Aute Trust Board’s (TA Trust Board) $14.85 million debt to the SJC Trust Board.

[3] Both Trust Boards operate under the auspices of the Anglican Church in Aotearoa, New Zealand and Polynesia (Church).

Background

[4] The TA Trust Board supports two Māori-Anglican schools in Hawke’s Bay, being Te Aute College and Hukarere Girls’ College. In 2012, its ability to provide financial support to the two schools became a cause for concern within the Church. The Church, wishing to prevent the schools’ closure, decided that the SJC Trust Board was the appropriate entity within the Church to assist.

[5]Between 2014 and 2020, the SJC Trust Board advanced approximately

$14.85 million to the TA Trust Board. The advances were conditional on members of the SJC Trust Board becoming trustees of the TA Trust Board — a proposal approved by various stakeholders within the Church, including Te Kotahitanga, the General Synod Standing Committee and Te Pīhopatanga o Aotearoa. Accordingly, between three and seven members of the SJC Trust Board were also trustees of the TA Trust Board during the relevant period.

[6] When it resolved to make the advances, the SJC Trust Board anticipated that the TA Trust Board would likely never be able to repay its debt. That prediction proved correct.

[7] The SJC Trust Board now proposes to forgive the TA Trust Board’s debt. On 16 June 2021, it resolved to do so, subject to the Court making orders granting its approval. The Court’s approval is sought “out of an abundance of caution” because the sum at stake is substantial and the SJC Trust Board has identified a possible historical conflict of the trustees’ duties.

[8] The possible conflict arose as a result of the appointment of SJC Trust Board trustees to the TA Trust Board. Those trustees were “dual trustees” in the period in which the…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2022] NZHC 259
Decision Date: 23 February 2022

CaseChat Overview and Summary

The Saint John’s College Trust Board, a charitable trust board incorporated under the Charitable Trusts Act 1967, applied to the High Court for directions under s 133 of the Trusts Act 2019. The application sought the Court’s approval of the trustees’ decision to forgive the Te Aute Trust Board’s $14.85 million debt to the Saint John’s College Trust Board. The Court was required to decide whether the proposed course of action was a proper exercise of the trustees’ powers, whether the decision was made in good faith, and whether it was vitiated by any conflict of interest. The Court found that the trustees had indeed formed the opinion which the Court was asked to bless, that the opinion formed was one at which a reasonable body of properly instructed trustees could properly have arrived, and that the opinion was not vitiated by any conflict of interest. The Court directed that it was proper and lawful for the Saint John’s College Trust Board to forgive the Te Aute Trust Board’s debt to the Saint John’s College Trust Board of approximately $14.85 million.

Orders