Tikipunga Protestant Children's Home (Incorporated)

[2023] NZHC 550

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2022-488-93

[2023] NZHC 550

UNDER

the Charitable Trusts Act 1957

AND

IN THE MATTER

of an application of TIKIPUNGA PROTESTANT CHILDREN’S HOME

(INCORPORATED) an incorporated charitable trust having its registered offices C/- Summit Chartered Accountant, Level 2, 4 Vinery Lane, Whangarei

Judgment:

(On the papers)

17 March 2023

JUDGMENT OF BREWER J

This judgment was delivered by me on 17 March 2023 at 4 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

WRMK (Whangarei) for Applicant

Crown Law (Wellington) on behalf of the Attorney-General

RE TIKIPUNGA PROTESTANT CHILDREN’S HOME (INC) [2023] NZHC 550 [17 March 2023]

Introduction

[1]                 Tikipunga Protestant Children’s Home (Incorporated) (the Home) is an incorporated charitable trust. It applies for orders placing it in liquidation and distributing its surplus assets.1

[2]                 There is no-one to respond to the application. Out of courtesy, the Home served the application on the Attorney-General. A memorandum on behalf of the Attorney-General has been provided for the assistance of the Court. I am grateful for that.

[3]                 The documents filed in support of the application, and in particular the affidavit of Mr David Reyburn, when read with the memorandum on behalf of the Attorney- General, satisfy me that there is no need for an oral hearing.

[4]This judgment decides the application.

Background

[5]                 In 1925, Mr and Mrs Frederick Seymour Potter established and funded a trust to purchase an 11-hectare property in Corks Road, Tikipunga (now a suburb of Whangārei).

[6]                 In 1936, a new Deed of Trust declared the purpose of the trust to be “for the benefit of orphans and destitute children who must be brought up in the Protestant Faith”.

[7]                 The Home came into existence when the predecessor trust was incorporated in 1939. That year, Mr and Mrs Potter donated more money so that, with a contribution from the local authority, an orphanage was built on the Home’s land.

[8]                 The Home operated the orphanage, adapting as social conditions changed, until 2012. In that year it closed because it was too expensive to continue. It was the last privately owned establishment of its type in New Zealand.

1      The application is brought under Parts 2 and 3 of the Charitable Trusts Act 1957 [the Act].

[9]                 In 2018, this Court amended the Home’s Trust Deed to enable it to sell its assets and use the proceeds “for the benefit of children from disadvantaged backgrounds”.2

[10]             The Home sold its assets, realising approximately $4,800,000. In addition, it sold land to the Whangārei District Council for $1 and granted that Council $130,000 to establish a children’s playground. The playground, in an economically deprived area, is popular. It is called “Potter Park” after the philanthropic couple who established the original trust nearly 100 years ago.

[11]             Since the amendment of the Trust Deed the Home has made numerous grants to charities around Northland in support of disadvantaged children. It has given away almost all its money and is left with $22,937. If liquidated, the Home would use this fund to pay legal and accounting fees. It proposes that any balance be donated to CCS Disability Action.

The Attorney-General’s memorandum

[12]             The Attorney-General does not identify any impediment to the Home’s application and does not oppose it. He suggests that Part 2 of the Charitable Trusts Act 1957 (the Act) is more applicable than Part 3. He does not oppose the transfer of residual funds to CCS Disability Action.

Discussion

[13]Part 2 of the Act contains s 25 which provides (inter alia):

(1)A board may be put into liquidation by the appointment by the court as liquidator of a named person or an Official Assignee for a named district if the court is satisfied that it is just and equitable that the board should be put into liquidation.

[14]             I am satisfied that the Home’s capital has reduced to the extent where it is no longer viable for it to continue. I am further satisfied that the Home has reached this position through the proper and lawful exercise of its charitable purpose. Accordingly, it is just and equitable that the Home should be put into liquidation.

2      Re Tikipunga Protestant Children’s Home (Inc) [2018] NZHC 2794 at [3(b)].

[15]That being my conclusion, there is no need for me to consider Part 3 of the Act.

[16]             The Attorney-General advises that CCS Disability Action is a nationwide charitable organisation with a national incorporated entity and branches around the country which are also incorporated entities. The organisation provides, in particular, respite home care for disabled children and young people.

[17]             I note from Mr Reyburn’s affidavit that the Home has previously given grants to CCS Disability Action. His view is that CCS Disability Action shares a common purpose with the Home.

[18]             Section 27 of the Act provides that on liquidation, “all surplus assets after the payment of all costs, debts, and liabilities shall be disposed of as the court directs”. Generally speaking, in situations where liquidation is ordered, the Court prefers to direct remaining assets to a charity which is compatible with and substantially similar to the objects of the liquidated trust.3 I am satisfied that CCS Disability Action is within this preference.

Decision

[19]             The application to place Tikipunga Protestant Children’s Home (Incorporated) into liquidation is granted. I appoint David Dawson Reyburn of Whangārei as liquidator.

[20]             I direct that any surplus assets after the payment of all costs, debts and liabilities shall be disposed of by gifting them to CCS Disability Action.

[21]             I note that  the  Home  did  not  nominate  a  person  to  be  liquidator  and  Mr Reyburn did not volunteer to be liquidator. I have appointed him because he has been a member of the Home’s Board since 1995 and is currently its secretary. Leave

3      Re The Wellington Nurses Education  Trust  Board  (Inc)  HC Wellington  CIV-2009-485-236, 25 March 2009 at [6]; and Re Mercury Bay Undenominational Church Association Trust Board (Inc) HC Hamilton M113/00, 15 June 2000 at [14].

is reserved to Mr Reyburn to disclaim the appointment and for the Home (in liquidation) to nominate a replacement.

Brewer J