Tilaima v Congregational Christian Church of Samoa (Westmere) Trust Board
[2013] NZHC 3272
•10 December 2013 at 11am
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2009-404-005844 [2013] NZHC 3272
UNDER the Charitable Trusts Act 1957 BETWEEN
SEUMANU TILAIMA, SEUMANU TUASA, SULAMANAIA TULIAUPUPU, SAVEASOI TOOMATA, MAGELE AH CHONG, TULASI ONOFIA, TAUFONU KEPAOA
Plaintiffs
AND
CONGREGATIONAL CHRISTIAN CHURCH OF SAMOA (WESTMERE) TRUST BOARD
Defendant
Hearing: 11-13, 15 November 2013 Appearances:
E Telle for Plaintiffs
S I Perese for Defendant
H G P Stokes for Public TrusteeJudgment:
10 December 2013 at 11am
(RESERVED) JUDGMENT OF ANDREWS J [Application to wind up Trust Board]
This judgment is delivered by me on 10 December 2013 at 11am pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Solicitors:
Neilsons Lawyers Limited, Auckland
Craig Griffin & Lord, Auckland (C Lord)
Public Trust, Hamilton
S I Perese, Barrister, Auckland
TILAIMA & ORS v CONGREGATIONAL CHRISTIAN CHURCH OF SAMOA (WESTMERE) TRUST BOARD [2013] NZHC 3272 [10 December 2013 ]
Table of Contents
Introduction ..........................................................................................................[1]
Background
Events up to December 2010..................................................................................[8]
The December 2010 judgment ...............................................................................[9]
Events since December 2010
(i) Use of the Church ......................................................................................[12] (ii) The Public Trustee’s appointment .............................................................[17] (iii) Report of counsel for the Public Trustee ...................................................[22] (iv) The present application to wind up the Trust ............................................[24] (v) Meeting on 1 November 2012 ...................................................................[25] (vi) Incorporation of the Ekalesia LMS (London Missionary Society) .................
Westmere Church Incorporated .................................................................[27]
Evidence ..............................................................................................................[28]
Submissions
The Tuasa group ...................................................................................................[32]
The Sanerivi group ...............................................................................................[33] The Public Trustee................................................................................................[34] Proposal by the Sanerivi group ............................................................................[36]
Discussion............................................................................................................[41]
Has the Tuasa group established a case for winding up the Trust Board, and liquidation of the Trust assets? ............................................................................[43]
Directions ............................................................................................................[57]
Costs ....................................................................................................................[61]
Introduction
[1] The Court has been asked to make an order pursuant to ss 25 and 27 of the Charitable Trusts Act 1957 to wind up the Congregational Church of Samoa (Westmere) Trust Board (“the Trust Board”), and to order the liquidation and division of the assets of the Congregational Church of Samoa (Westmere) Trust (“the trust”). The trust is a charitable trust under the Charitable Trusts Act.
[2] A schism developed between two groups of the members of the Congregational Christian Church of Samoa at Westmere, (“the Westmere Church”, or “the Church”), after a dispute arose in mid-2006. Proceedings were later issued by each of the two groups, against the other. One group sought a permanent injunction restraining the other from entering and using the Westmere Church in the manner they sought. The other group sought an order to wind up the Trust Board. The proceedings were the subject of a defended hearing before me on 29 and 30
November and 2 December 2010, and my judgment was delivered on 20 December
2010 (“the December 2010 judgment”).1 At that hearing I had the benefit of hearing from counsel for the Attorney-General, as amicus curiae. The parties were before me again in December 2011, leading to an oral judgment delivered on 13 December
2011 (“the December 2011 judgment”).2
[3] As will become evident, the two groups have not resolved their differences. Mr Tuasa's group has now made a fresh application to wind up the Trust Board. Mr Sanerivi's group responds that there are no grounds on which the Court could make the orders sought. It is also contended that, given time, the two groups may yet be able to reconcile.
[4] The two groups were before me for a defended hearing for four days in
November 2013. As has been noted in respect of previous hearings in this proceeding, the significance of the proceeding to the people concerned was again
1 Congregational Christian Church of Samoa (Westmere) Trust Board v Tilaima; Seumanu Tilaima v Congregational Christian Church of Samoa (Westmere) Trust Board, HC Auckland CIV-2008-
404-1893 and CIV-2009-404-5844, 20 December 2010.
2 Congregational Christian Church of Samoa (Westmere) Trust Board v Tilaima; Seumanu Tilaima v Congregational Christian Church of Samoa (Westmere) Trust Board HC Auckland CIV-2008-
404-1893 and CIV-2009-404-5844, 13 December 2011.
amply demonstrated by the large number of persons present during the hearing. It is clear that the dispute remains of real significance to everyone concerned.
[5] As I said in the December 2010 judgment, it should not be assumed that a charitable trust will be wound up simply because that is the most convenient course.3
In relation to an application to wind up a charitable trust Ongley J said in Re
Wellington Regional Housing Trustees:4
It is neither necessary nor desirable at this stage of the history of [s 25 of the Charitable Trusts Act 1957] to generalise as to the kind of situation in which the Court will exercise its discretion in favour of a petitioner. Each case will depend upon its own facts and it will be for the petitioner in a particular case to show that he is so affected by the continued existence of a trust board that in justice to him its life should be terminated. Winding up is a drastic step and is one which in relation to limited liability companies has been said to be a remedy of last resort.
[6] Have matters now reached the point where justice requires the Court to take the “last resort” step of winding up the Trust Board? That is the issue I have to decide.
[7] For convenience, I have referred to each group by the name of the principal witness for each group. Thus, the group which sought an injunction has been referred to a “Mr Sanerivi’s group”, or “the Sanerivi group”, and the group which sought an order to wind up the Trust Board has been referred to as “Mr Tuasa’s group”, or “the Tuasa group”. I shall continue to refer to the two groups in this manner. I do not intend any disrespect to either Mr Sanerivi or Mr Tuasa, or the members of the two groups in doing so, nor do I intend to personalise the dispute. It is purely for convenience.
Background
Events up to December 2010
[8] I set out, first, the narration of the background to the dispute between the two groups, from my December 2010 judgment:5
3 December 2010 judgment, above n 1, at [98]. See also Society of St Vincent de Paul v Wanganui
Ozanam Villa Trust [2007] NZAR 77 (HC) at [46]–[48].
4 Re Wellington Regional Housing Trustees [1980] 2 NZLR 14 (HC) at 19.
5 December 2010 judgment, above n 1, at [6]–[22].
[6] The Westmere Church is part of the Congregational Christian Church of Samoa (“the Mother Church”). The Westmere Church was started in May 1976. Two families who were at the time members of the Congregational Christian Church of Samoa on the North Shore were finding it difficult to travel from their homes in Grey Lynn to the North Shore for services and other Church activities, and decided to establish a new church in Westmere. The family of Mr Tuasa Ma’i (Mr Tuasa) was one of the founding families.
[7] At first, the congregation of the Westmere Church used an Anglican church building for worship. In 1982 the members learned of a church property for sale in Francis Street, Westmere. Members of the congregation made donations towards the purchase price for the property and a loan was obtained to complete the purchase.
[8] At the time of this purchase a number of documents were drawn up by solicitors acting for the congregation and duly executed. These were:
(a) A Trust Deed dated 28 November 1982 (“the Trust Deed”), between Setoga Setoga (the then Minister of the Westmere Church), Mr Tuasa Tautala Ma’i, and Mr Palenapa Maiva Aumau (the three together defined in the Trust Deed as “the Trustees”), and the Congregational Christian Church of Samoa (Westmere) (defined in the Trust Deed as “comprising the persons whose names and descriptions appear in the Schedule hereto” and as “the Beneficiary”). In the Trust Deed the Trustees declared that they held the land purchased for the Westmere Church in trust for the Beneficiary.
(b) A declaration signed by Reverend Setoga dated 20
December 1982 (“the Declaration of Trust”), in which
Reverend Setoga declared that a duly convened meeting of
the “Trustees of the Congregational Christian Church of Samoa (Westmere)” had resolved to apply for incorporation of the Trustees as a Board, and that all property held by the Trustees would be “held upon trust in terms of the Constitution of the Congregational Christian Church of Samoa (Westmere) Trust as amended from time to time”.
(c) The Constitution of the Trust dated 20 December 1982 (“the
Constitution”).
(d) An “Application for Incorporation of Trustees as a Board” dated 20 December 1982, by which Reverend Setoga, Mr Tuasa Ma’i and Mr Palenapa Aumau, as Trustees for the Westmere Church, applied to be incorporated as a trust board under the provisions of the Charitable Trusts Act 1957.
[9] Amendments were made to the Constitution on 19 October 1987, and were registered on 22 October 1987. The amendments may be summarised as confirming the charitable objects of the Westmere Church.
[10] In 1994 the congregation of the Westmere Church started fundraising for a new church building. In addition to the fundraising efforts,
donations were received from members of the congregation of the Westmere Church and from other Congregational Christian Churches, and grants were received from the New Zealand Lottery Grants Board and the ASB Community Trust. A loan was obtained from the Bank of New Zealand.
[11] Reverend Setoga retired as Minister in 1999. Reverend Vagatai
Va’aelua was selected and called to be Minister of the Westmere Church.
[12] In mid-2006 Reverend Va’aelua and his wife went away on sabbatical leave. After their departure Mr Tuasa’s group raised concerns about Reverend Va’aelua at a meeting of the congregation. This concern centred on the following matters:
(a) First, they were concerned at what Mr Tuasa described as Reverend Va’aelua’s “controlling and bullying manner”. Mr Tuasa gave as an example the donation by members of the congregation for the building of a new Church at Sapapali’i. The Westmere Church congregation had agreed to donate NZ$1,000 per household (a total of WS$50,000). However, Mr Tuasa said, just before the Sapapali’i Church was to be opened, Reverend Va’aelua told the congregation that the donation was to be WS$100,000.
(b) Secondly, in February 2006, Mr Tuasa learned that in October 2005 NZ$35,000 had been transferred to Reverend Va’aelua’s personal bank account. This was shown in Church records as a loan from the Mother Church to the Westmere Church. Mr Tuasa said the payment to Reverend Va’aelua had been made without the knowledge of many Church members, and the discovery of the payment made them lose trust and confidence in Reverend Va’aelua.
[13] At the meeting of the congregation of the Westmere Church a majority of votes was in favour of a motion that Reverend Va’aelua stand down as Minister. When he returned from sabbatical leave Reverend Va’aelua refused to stand down. Mr Tuasa’s group sought assistance from Reverend Va’aelua’s supervising Minister, and were advised that Reverend Va’aelua would not stand down.
[14] The tension between the opposing groups led to a physical altercation outside the Church building, and the Police were called. Mr Sanerivi requested Police presence outside the Church during the service the following Sunday. Mr Tuasa’s group found the Police presence humiliating and, in order to keep the peace, made arrangements to worship elsewhere until such time as matters could be resolved. They have since been worshipping in a rented hall.
[15] On 7 October 2006 a trespass notice was served on an elderly member of Mr Tuasa’s group, Mr Fonotia, after he had put a notice on the notice board of the Westmere Church. Mr Tuasa’s group took this, and the fact that the Police had been called earlier, to mean that none of the group should enter the Westmere Church building.
[16] Both Mr Sanerivi and Mr Tuasa said in evidence that their respective groups had made substantial efforts to resolve the dispute, including
meetings and attempts at mediation, but the opposing group had not responded positively.
[17] On 27 March 2008, the solicitors for Mr Tuasa’s group sent a letter to counsel for Mr Sanerivi’s group, enclosing a notice of meeting at which the business to be discussed included a proposal for the joint use of the Westmere Church by both groups. The response from counsel for Mr Sanerivi’s group, dated 28 March 2008, was to the effect that the notice of meeting was invalid, that Mr Tuasa’s group were no longer members of the Westmere Church, and that the proposed joint use was ultra vires the Trust Deed and the Constitution of the Mother Church.
[18] The solicitors for Mr Tuasa’s group reiterated their client’s position in a letter dated 3 April 2008. Annexed to the letter was a resolution signed by seven “Trustees of the Congregational Christian Church of Samoa (Westmere)”6 setting out times at which each of the two groups would have the use of the Church building. The solicitors asked for a set of keys to the Church building for their clients’ use. The solicitors also said that if a set of keys was not provided, their clients would arrange for the locks to be changed and a new set of keys provided to each group.
[19] Following that letter Mr Sanerivi’s group issued the injunction proceeding, in which the “Congregational Christian Church of Samoa (Westmere) Trust Board” was named as plaintiff and the seven signatories of the resolution (all of whom are members of Mr Tuasa’s group) were named as defendants. The plaintiff sought a permanent injunction prohibiting the named defendants (“the named parties”) from carrying out the terms of the letter of 3 April 2008, that is, entering the Westmere Church property in the manner and under the circumstances set out in the letter. An order was also sought to prohibit the named parties from holding themselves out as Trustees of the Westmere Church. Interim orders were also sought prohibiting the named parties from “trespassing onto the [Westmere Church]”, and from entering the property to change locks, and from “enforcing a joint use of the property”.
[20] Mr Tuasa’s group filed a statement of defence and counterclaim. They deny that Mr Sanerivi’s group has standing to bring proceedings in the name of the Congregational Christian Church of Samoa (Westmere) Trust Board, alleging that they are not “the rightful legal trustees and/or the rightful legal board of management of the Trust”. In the alternative, they claim that the named parties are beneficiaries of the Trust, have a beneficial interest in the Church property, and have been unfairly excluded from the property contrary to the terms and intention of the Trust.
[21] On 9 September 2008 Mr Tuasa’s group issued the liquidation proceeding, in which the defendants in the injunction proceeding are named as plaintiffs and the plaintiff in the injunction proceeding is named as defendant. In that proceeding the plaintiffs seek an order that the defendant be put into liquidation on the grounds that it is just and equitable, and that following liquidation the assets of the Trust be divided between the two groups. The grounds on which liquidation is sought are, in essence, that Mr Sanerivi’s group is acting without authority and in breach of the Trust.
6 Who were the trustees was an issue determined in the December 2010 judgment; see [9], below.
[22] The application for interim orders was resolved by Mr Tuasa’s group giving an undertaking not to take any steps or action to enter the property until order of the Court.
The December 2010 judgment
[9] In the December 2010 judgment I held that:
(a) The Trust was intended to be Charitable Trust, for the benefit of the public. Accordingly, none of the individuals named in the schedule to the Trust Deed could have any interest in the Trust’s assets, as individuals.7
(b) The “beneficiaries” named in the Trust Deed have no role as
beneficiaries in their personal capacity.8
(c) Trustees of the Trust, after the three original trustees appointed under the Trust Deed, are to be appointed by duly convened meetings of the congregation of the Church.9
(d) The trustees’ role is to hold Trust monies, and to transfer monies and
investments to, and receive monies from, the Board.10
(e) The Board of Management of the Church has the powers set out in clause 6 of the Trust Deed. The Constitution of the Church makes no provision as to the appointment of Board members.11
(f) Under the Constitution of the Church, the trustees and the Board of
Management are separate entities, with separate roles.12
(g) Mr Tuasa was the only current trustee.13
7 December 2010 judgment, above n 1, at [30].
8 At [31].
9 At [41].
10 At [46].
11 At [55].
(h)The Constitution of the Church had not been complied with. There had not been a Board of Management in place that complied with the Constitution. With the exception of Mr Tuasa, there were no current trustees. There were not in existence the entities provided for in the Constitution to hold the assets of the Trust and to administer the
affairs of the Trust.14
(i)Mr Tuasa's group did not leave Westmere Church voluntarily, or of their own free will.15
(j) As a trustee, Mr Tuasa had standing to seek liquidation of the Trust.16
(k) I could not conclude that winding up was appropriate.17
(l)My preliminary view was that, unless the parties could agree on the trustee or trustees to be appointed, then an appointment of a completely independent person, such as the Public Trustee, would be appropriate. The independent trustee was to be encouraged to, among other things, endeavour to facilitate resolution of the parties’
differences, so that the Church could be reunited.18
[10] In the December 2011 judgment, I noted the parties’ agreement that the Public Trustee should be appointed, and that it was necessary that the Public Trustee act, and be seen to be acting, completely independently.19 For a limited period of time, the Church would be best served by Mr Tuasa standing aside, to allow the Public Trustee to at independently.20 I also made orders as to the terms of the appointment of the Public Trustee,21 and as to joint use of the Church over the 2011–
2012 Christmas and New Year period.22
14 At [66].
15 At [91].
16 At [92].
17 At [99].
18 At [107].
19 December 2011 judgment, above n 2, at [4] and [7].
20 At [9] and [10].
[11] In a Minute issued on 11 December 2012, I made directions as to joint use of the Church over the 2012–2013 Christmas and New Year period.
Events since December 2010 (i) Use of the Church
[12] Following the December 2010 judgment, the Tuasa group’s then solicitors wrote to the Sanerivi group’s solicitors on 22 December 2010, giving “notice of [their] intention to use the church building and church hall over the festive season and every Sunday until a decision is reached either through appointments of new trustees or through appointment of a Public Trustee”. In response, the Sanerivi group’s counsel referred to the December 2010 judgment, where I directed that “unless the parties agree (and the Christmas season would appear to present an ideal opportunity for coming together), the arrangements in place at present are to
continue”.23 The Tuasa group’s “demand” was rejected.
[13] The Tuasa group again sought to use the Church over the 2011–2012
Christmas and New Year festive season. The request was declined, and the Tuasa group applied for directions as to joint use of the Church. I heard the application on
13 December 2011. It was submitted for the Tuasa group that since the schism, they had been unable to hold funerals, marriages, or baptisms in the Church of which they were members, and to which they had contributed financially, and in terms of physical work. The Sanerivi group opposed an order that both groups be able to use the Church at different times, primarily on the grounds that joint use was not permitted under the Constitution of the Church.
[14] In an oral judgment, I directed that each group be permitted to use the Church at specified times during the festive period.24 Those terms of usage had been agreed between the two groups (both reserving their respective positions). However, a difficulty arose in that Minister of the Westmere Church, Reverend Va’aelua, took
the view that he should choose the Minister to conduct the Tuasa group’s services.
23 December 2010 judgment, above n 1, at [108].
This issue was resolved following the intervention of the parties’ solicitors, and the
Tuasa group’s services were conducted by a Minister of their own choice.
[15] The Tuasa group again sought joint use of the Church for services over the
2012–2013 Christmas and New Year period. Again, an application was made to the Court for orders. On 11 December 2012, I directed that each group was to use the Church on the same terms as for the previous year. Those directions were recorded in a Minute dated 11 December 2012. Again, however, a difficulty arose.
[16] It had been agreed that a member of the Sanerivi group would be present to unlock the Church doors for the Tuasa group’s services. When the Tuasa group arrived for their New Years Eve service at 7 pm on 31 December 2012, the Church doors were locked. The group waited, but no-one arrived. At about 8.30 pm Mr Mulitalo (who had been assisting the Tuasa group) arrived to attend the service. He found the Tuasa group member families waiting outside the Church. Mr Mulitalo then went with Mr Tuasa to the Minister’s house, which is on the Church premises. Mr Mulitalo’s evidence (which was not contradicted by evidence from the Sanerivi group), was that the Minister’s initial response was to ask what the Tuasa group was doing on Church premises, and to profess to having no knowledge of the Tuasa group’s use of the Church. However, he later agreed to open the doors, and the service started at about 9 pm.
(ii) The Public Trustee’s appointment
[17] Like the issue of use of the Church facilities, this matter has not proceeded smoothly. In the December 2010 judgment I indicated that my preliminary view was that, unless the parties could agree on the appointment of new trustee or trustees, the Court would appoint as trustee a person who was completely independent of either group. I also indicated that the appointment would be on an interim basis, and the trustee or trustees would be encouraged to, among other things, endeavour to facilitate resolution of the parties’ differences with a view to the appointment of trustees and a board of management so that the Westmere Church could be
reunited.25
[18] On 2 February 2011, I heard counsel for the parties. Prior to the hearing, counsel had filed memoranda in which it was, in essence, agreed that the Public Trustee should be appointed. I directed that the Public Trustee be appointed as trustee, and that counsel provide me with a brief joint memorandum setting the requested terms of appointment. I also directed that Mr Sanirevi's group was to give full disclosure as to the financial position of the Trust, and that the Public Trustee’s costs (in the first instance) were to be met from the Trust. Leave was reserved for an application to be made, should it be considered appropriate that the Public Trustee’s costs be met in some other manner.
[19] On 5 September 2011 I issued a Minute, expressing my concern that the parties had not agreed on the terms of the Public Trustee’s appointment. I urged both sides of the dispute to put their particular, and personal, concerns aside in order to reach agreement as to the appointment of the Public Trustee.
[20] The parties did not agree on the terms of the Public Trustee’s appointment. That issue was considered at the hearing before me on 13 December 2011. At issue was the contention by the Tuasa group that Mr Tuasa and the Public Trustee should act jointly, and the submission by the Sanerivi group that, if Mr Tuasa were to remain a trustee, he should be required to give an undertaking to abide by any decision of the Public Trustee, or stand aside, or be replaced by another trustee. It was submitted that Mr Tuasa did not have the confidence of the Sanerivi group.
[21] In the December 2011 judgment I recorded Mr Tuasa’s undertaking that for the period of the Public Trustee’s appointment he would stand aside and allow the Public Trustee to act independently.26 I also made directions as to the terms of the Public Trustee’s appointment. The Public Trustee was to compile a list of the members of the congregation of the Westmere Church, to convene a meeting of the congregation to appoint three members to be trustees in addition to Mr Tuasa, to review the constitution and submit a report as to any amendments required, and to have discussions with both groups with a view to promoting a mediated resolution of
the differences between them.27
26 December 2011 judgment, above n 2, at [10].
27 At [24].
(iii) Report of counsel for the Public Trustee
[22] Counsel for the Public Trustee, Mr Stokes, submitted a report dated 21 March
2013. He reported as follows:
(a) The issue of membership had not been simple to resolve, and there was disagreement between the two groups as to how a list of members should be compiled. He had received list of members from each group, stated as being members of the church as at 13 December
2011. He noted that it had been suggested that one group had “bolstered” its numbers, but concluded that since the membership lists had been prepared solely for the purpose of electing trustees, and each group could only elect trustees for that group, there could be no advantage from having a large number of members.
(b)A meeting had been held at the church on 5 October 2012, which resulted in the trustees being confirmed as follows:
(i) The Public Trustee
(ii) Mr Tuasa and Mr To’amata (for the Tuasa group); and
(iii) Mr Sanerivi and Mrs Yandall-Vaega (for the Sanerivi group). (c) A meeting of the trustees had been called for 1 November 2012, for
the purpose of discussing proposed changes to the constitution and trust deed. Mr Stokes reported, concerning this meeting:
From the very start of that meeting it became clear to Counsel for the Public Trust that [the] two groups were quite simply not going to be able to come together and work successfully as one united unit. It was clear that the distrust between the two groups runs very, very deep. There was quite robust discussion between the Tuasa Group trustees and the Sanerivi Group trustees and their respective counsel who were present. Counsel for the Public Trust formed the view that although it would be possible to draft a constitution that addressed all matters in terms of membership and all matters that should be addressed by a constitution in a situation such as this, the provision of such documentation, no matter how perfect will not be sufficient
for the Sanerivi and Tuasa groups to be able to reform as one united church.
On that basis Counsel for the Public Trust considered that as it was so unlikely that the two groups will be able to unite it is more appropriate for them to be able to determine the terms and requirements of each of their constitutions in a normal manner as any charitable organisation would be able to do without the input of an imposed third party. This is on the basis that if they are going to continue as two separate groups then the dispute between them would not affect each individual group’s right and ability to determine the contents of its constitution subject to the provisions of applicable charitable law.
…
Neither of the groups have been particularly co-operative with each other despite both expressing willingness to resolve matters. The envisaged resolution that each party seems willing to achieve would appear to be poles apart.
[23] Mr Stokes also set out his view that the constitution of the Church and the trust deed should be totally re-written as one document addressing issues such as clarity in references to the Mother Church and the Westmere Church, how membership of the Church is to be achieved, different levels of membership and termination of membership, clarifying the role of trustees and the board of management and clarifying how assets of the Westmere Church are to be held and applied. He noted a conflict between the trust deed and the constitution in respect of holding assets.
(iv) The present application to wind up the Trust
[24] The present (second) application to wind up the Trust was filed on 20 March
2013. The grounds on which an order to wind up the Trust was sought may be summarised as follows:
(a) As a result of the Tuasa group being “forced to worship elsewhere” the Sanerivi group had wrongfully taken the position that the Tuasa group were no longer members of the Westmere Church and therefore not entitled to use the Church property;
(b) The Sanerivi group had refused to allow the Tuasa group to use the
Church property, unless Court orders were in place;
(c) The Sanerivi group had conducted itself in an unfair, unjust and inequitable way since about mid-2006 to ensure (insofar as it could) that it the full and exclusive use of the Church property to the exclusion of the Tuasa group;
(d)Since the December 2010 judgment there had been ongoing disputes and disagreements between the two groups;
(e) Because of the lack of trust and confidence between the two groups and the trustees of the two groups, the appointed trustees were unable to properly operate the Trust and therefore the Trust and the Westmere Church were dysfunctional;
(f) Because of that dysfunction, no management board had been put in place to manage the Trust and/or the Westmere Church;
(g)As a result of the disputes and issues between the two groups, there was a deep set resentment between the two groups, which was now irreconcilable; and
(h)All routes towards reconciliation had been attempted over the period of seven years that the two groups had been separated and the only option, being the last resort, was for the Trust to be liquidated, and in the circumstances, it was just and equitable for the Court to make the orders sought.
(v) Meeting on 1 November 2012
[25] As noted earlier, a meeting of the trustees (that is, Mr Tuasa and the trustees elected by each group Mr To’omaga, Mr Sanerivi, and Mrs Yandall-Vaega) was held at the Westmere Church on 1 November 2012. This meeting was called by Mr Stokes, and attended also by the groups’ respective counsel.
[26] Prior to the meeting, counsel had exchanged correspondence with the Public Trustee (copied to each other) as to the matters to be discussed. It is evident from the correspondence that the two groups differed widely in their views as to what should be discussed. Counsel for the Sanerivi group suggested certain amendments to the constitution, while counsel for the Tuasa group expressed the view that the “minor issues” raised were a “clear indication that there is little or no goodwill between the parties”, and that efforts would be “more advantageously directed towards winding up” the Trust. Neither group’s position was acceptable to the other. The meeting did not result in any progress being made.
(vi) Incorporation of the Ekalesia LMS (London Missionary Society) Westmere
Church Incorporated
[27] On 17 June 2013, the Ekalesia LMS (London Missionary Society) Westmere Church Incorporated (“Ekalesia LMS”) was incorporated by the Tuasa group, under the Incorporated Societies Act 1908. The application for registration of Ekalesia LMS was made by Mr Mulitalo at the request of the Tuasa group.
Evidence
[28] The application by the Tuasa group was supported by affidavits from Mr Tuasa and 11 other members of the Tuasa group. The Sanerivi group’s opposition to the application was supported by affidavits by Mr Sanerivi and four other members of the Sanerivi group. Most of the witnesses were cross-examined on their affidavit evidence.
[29] Without wishing to belittle the extensive evidence before the Court, for both sides, I do not consider it necessary to set out the evidence in any detail. It is a fair summary of the evidence that each of the groups considers that it has made efforts towards reconciliation, but the other group has rebuffed them. I do not doubt the sincerity of the evidence of each witness, or the passion each has for his or her membership of the Westmere Church. It is evident that, on both sides, membership of the Church, and attendance at Church services and other gatherings, is of vital importance.
[30] The Tuasa group has taken the view that the logical first step towards reconciliation was for them to be allowed joint use of the Church; that from such use a lessening of the conflict would follow. However, the witnesses said that the Sanerivi group had consistently refused joint use, except when an application had been made to the Court, and even when the Court had ordered joint use, the Sanerivi group had not facilitated it.
[31] Witnesses for the Sanerivi group expressed the view that the two groups could be reconciled, given time. This was particularly evident from the evidence given by Mrs Yandall-Vaega. However, the Sanerivi group’s witnesses maintained that the Tuasa group had left the Westmere Church, and that joint use of the Church by the two groups, under different Ministers, was contrary to a fundamental rule of the Congregational Christian Church of Samoa that there be only one Church in each village. Accordingly, reconciliation could occur only if the Tuasa group returned to the Westmere Church, under the ministry of Reverend Va’aelua.
Submissions
The Tuasa group
[32] Mr Telle submitted as follows:
(a) The Sanerivi group has excluded, and continues to exclude, the Tuasa group from the Westmere Church, notwithstanding the finding in the December 2010 judgment that the Tuasa group members are members of the Westmere Church. Further, he submitted that the Sanerivi group (in particular the Minister and Mr Sanerivi) had excluded Mr Tuasa and Mr To’amata from any involvement in carrying out their role as trustees in relation to Trust Board matters.
(b)Any efforts towards reconciliation would be bound to fail, as while Reverend Va’aelua and Mr Sanerivi remain, the Tuasa group stands no chance of having any of their issues fairly, reasonably, and justly dealt with.
(c) There is such deep mistrust and disunity between the two groups, which is entrenched, that any order for joint use of the Church on a long term basis is not likely to lead to reunification. The involvement of the Public Trustee had not enhanced the prospects of reconciliation.
(d) The Tuasa group’s incorporation of Ekalesia LMS is not inconsistent
with its continued membership of the Westmere Church.
(e) The Trust Board is dysfunctional in that Mr Tuasa and Mr To’amata have been sidelined and even Mrs Yandall-Vaega has been excluded from exercising her role as trustee. There is a complete deadlock between the members of the Trust Board.
(f) In the seven and a half years since the dispute arose, notwithstanding the involvement of Church Elders, Court intervention since 2008 (including a judicial settlement conference in 2008), and the involvement of the Public Trustee since early 2011, the parties are no closer to reconciling.
The Sanerivi group
[33] Mr Perese submitted for the Sanerivi group that:
(a) The December 2010 judgment became final upon delivery of the February 2011 judgment. The decision that winding up was not appropriate is final (and has not been appealed) and cannot be revisited. Against that background, only events following the December 2011 decision can be taken into account when considering whether it is appropriate to wind up the Trust Board.
(b)As at the December 2011 judgment, the groups had agreed the terms of reference for the Public Trustee’s appointment, and agreed to the process outlined in the judgment. However, less than a year later, at the 1 November 2012 meeting, the Tuasa group advised that there was no chance of reconciliation.
(c) Until October 2012, both groups appeared to be working to meet the agreed process set out in the December 2011 judgment. The Tuasa group’s advice (shortly before the November 2012 meeting) that there should be discussion of winding up came “completely out of the blue”, and “completely and utterly frustrated” that meeting.
(d)The Tuasa group had wrongly described its “requests” to use the Westmere Church at Christmas and New Year. The Tuasa group had demanded that they use the Church “through the festive season and every other Sunday”, and it was the reference to “every other Sunday” that was rejected. Mr Perese further submitted that joint use of the Church is “antithetical” to reconciliation, and would not assist reunification.
(e) On a personal level, the groups behaved really well with each other, and treat each other in a Christian way.
(f) The Tuasa group does not appear to be willing to return to the Westmere Church given that it has, in fact, already decided to establish “their LMS Church”. The Court should, therefore, question whether it is just and equitable to wind up the Trust Board.
(g)While the Trust Board is encountering difficulties, these are not difficulties which would justify liquidation. Clearly referring to Mr Tuasa and Mr To’amata, Mr Perese submitted that it is axiomatic that where trustees apply to liquidate the Trust Board, and refuse to discuss and attend Board meetings, the Board of a trust cannot be operating properly. However, he submitted, equity would bar trustees from seeking to rely on problems they have caused, when seeking an order for winding up. Mr Perese acknowledged that he was referring only to the 1 November 2012 meeting, and that Mr Tuasa and Mr To’amata had not been invited to any other trustees’ meetings.
The Public Trustee
[34] Mr Stokes submitted that it is simply not possible for the two groups to reunite. This is not for lack of desire for resolution of the dispute by either party, it is that the resolution that each party desires are poles apart. Mr Stokes submitted that however the constitution and Trust Deed may be amended, that cannot resolve the underlying issues and the rift between the two groups. He submitted that each group needs to be able to move on, and operate autonomously. He submitted that each group should now establish their own constitution.
[35] As to further orders that may be made as to division of the assets, Mr Stokes was uncertain as to whether the two groups would be able to reach any agreement as to how the assets should be divided.
Proposal by the Sanerivi group
[36] At the close of his submissions, Mr Perese submitted a proposal for joint use of the Westmere Church. This was that the Tuasa group could worship in the Church, but under the auspices of the Ekalesia LMS. Under this proposal, for a period of six months, each group would have the use of the Church on alternate days from Monday to Saturday, with each using the Church for half of each Sunday. Mr Perese further submitted that the Tuasa group would not be required to pay rent, but would pay a pro rata share of utilities and fixed costs (such as rates and insurance) but not mortgage payments. He proposed that payment of costs was to be “personally guaranteed by representatives to the Trust Board, on a debt due basis”.
[37] Mr Perese acknowledged that this proposal was founded on the Tuasa group having incorporated the Ekalesia LMS. He submitted that that alleviated the Sanerivi group’s concern as to the Tuasa group using the Church, as members of the Westmere Church, but under a different Minister. Because other counsel had not had prior notice of this proposal, I invited them to make further submissions.
[38] Mr Telle submitted in supplementary written submissions that the Tuasa group is concerned as to the genuineness of the proposal, particularly as it is premised on the Tuasa group worshipping “under the auspice of” the Ekalesia LMS.
This was, he submitted, indicative of the Sanerivi group’s unwillingness to recognise the Tuasa group as being members of the Westmere Church. He further submitted that the Sanerivi group’s proposal that the Tuasa group personally guarantee payment of a pro rata share of utilities and fixed costs also raised concern that the Sanerivi group did not genuinely seek reunification.
[39] In summary, the Tuasa group did not consider that the proposal could assist in bringing the groups back together.
[40] Mr Stokes made brief oral submissions on the proposal. He submitted that it appeared to be too simplistic to address the rift between the groups, which is very large. In particular, he submitted, the proposal did not contain any mechanism for addressing the issues that are of concern to each group. Those issues would need to be concerned before there could be any prospect of reunification. Principal among those concerns was the continued presence of Reverend Va’aelua.
Discussion
[41] In the particular circumstances of this case, the partisan nature of the evidence, and the submissions of counsel for each group, was disappointing. Each group held the other responsible for their continued failure to reconcile. I am not prepared to apportion blame one way or the other. I have concluded that Mr Stokes was right when he said in his report of 21 March 2013:
Neither of the groups have been particularly co-operative with each other despite both expressing willingness to resolve matters. The envisaged resolution that each party seems willing to achieve would appear to be poles apart.
[42] I am satisfied, on the evidence, that the Tuasa and Sanerivi groups are so far apart that there is no prospect of reconciliation. The Tuasa group wishes to remain members of the Westmere Church, but has no confidence in Reverend Va’aelua or Mr Sanerivi. The Sanerivi group would accept the Tuasa group worshipping in the Westmere Church (at least for the proposed six months) but only as members of the Ekalesia LMS; that is, not as members of the Westmere Church.
Has the Tuasa group established a case for winding up the Trust Board, and liquidation of the Trust assets?
[43] The jurisdiction under s 25(1) of the Charitable Trusts Act 1957(“the Act”) is
as follows:
25 Liquidation of a Board by Court
(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.
Pursuant to s 25(4) of the Act, the provisions of the Companies Act 1993 as to liquidation apply to the liquidation of the board of a charitable trust.
[44] In the December 2010 judgment I referred to the discussion of the jurisdiction by Heath J in World Vision of New Zealand Trust Board v Seal.28 In World Vision, Heath J observed that the applicant must satisfy the Court, on the balance of probabilities, that it is just and equitable to make the order, having regard to all the relevant rights and interests.29 His Honour rejected a submission that the discretion to make orders is wide, and the matters to which the Court could have regard are broad in scope. His Honour also rejected a submission at the opposite end of the spectrum: that something of an “unforeseen or calamitous nature” is required before the jurisdiction to wind up should be exercised. He held that the discretion to exercise the jurisdiction should not be unduly circumscribed, but the circumstances in which it might be exercised differ significantly from those in which it might be exercised in relation to a common business enterprise.30
[45] Although Heath J’s comments in World Vision concerned an application to wind up a body corporate, his Honour applied them in the context of an application for liquidation of a trust board under the Charitable Trusts Act in Peilua v Evangelical Samoan Wesleyan Methodist Church of Otahuhu Board (No. 2).31 In
Peilua, Heath J dismissed the application to wind up the trust board. A “compelling
28 World Vision of New Zealand Trust Board v Seal [2004] 1 NZLR 673 (HC).
29 At [77].
30 At [78]–[87].
31 Peilua v Evangelical Samoan Wesleyan Methodist Church of Otahuhu Board (No 2) HC Auckland CIV-2006-404-2441, 16 November 2007 at [40].
factor” against making the order sought was that the Church members who had left the Church had done so of their own free will, knowing that those remaining would continue to use the assets in the same manner as they had done before. With that knowledge, the departing group were, in effect, attempting to recover gifts made voluntarily to the Church for religious purposes.32
[46] The present case is different from Peilua. As I held in the December 2010 judgment, the Tuasa group did not leave voluntarily and of their own free will. Rather, they left in order to avoid conflict that had occurred, and in order to keep the peace. It was not as a result of a positive desire to cease to be members of the
Westmere Church.33
[47] Although I accept (and Mr Telle did not submit to the contrary) that the findings in the December 2010 judgment stand, and cannot be revisited, I do not accept that that precludes me now from including events prior to that judgment in my consideration, or from considering whether it is now just and equitable to wind up the Trust (when I did not consider that to be the case in February 2011. The more recent events must be considered in the context of the matters that I found as facts in the earlier judgment.
[48] Further, I do not accept Mr Perese’s submission that the incorporation of the Ekalesia LMS changes the position as to the Tuasa group’s membership of the Westmere Church. That is, I do not accept that it indicates that the Tuasa group has decided to establish a new Church and do not still regard themselves as members of the Westmere Church. In Apineru v The Board of Trustees of the Congregational Christian Church of American Samoa in New Zealand (Porirua) Trust, the issue
before Wild J was control of the church’s assets.34 In that case, a group of members
of the Congregational Christian Church of American Samoa at Porirua (“the Porirua
Church”) had left the Church after a dispute which centred on the Church’s Minister.
32 At [48].
33 December 2010 judgment, above n 1, at [91]. (In Peilua, at [45], Heath J observed that the exclusion by one group of another by active encouragement or more passive means favours liquidation. In a Minute dated 10 April 2008, Priestley J described the Tuasa group as having shown “admirable restraint”).
34 Apineru v The Board of Trustees of the Congregational Christian Church of American Samoa in
New Zealand (Porirua) Trust HC Wellington CIV-2003-485-713, 16 September 2004.
Thereafter, they worshipped elsewhere. The remaining members continued to use the Church building, worshipping under the Minister. Intervention by a delegation of Elders from the mother church in Samoa failed to achieve reunification. A little under two years after the split, the departing group incorporated the “Tokelauan Christian Church in Porirua” (“the Tokelauan Church”) as a charitable trust, under the Charitable Trusts Act 1957.
[49] Wild J held that incorporation of the Tokelauan Church was not inconsistent with continued membership of the Porirua Church. Rather, it was “a vehicle to enable the [Tokelauan Church] group to continue worshipping in an organised manner, having effectively been excluded from the [Porirua Church], save on terms which they found unacceptable”.35 The circumstances of Apineru are almost identical to those of the present case. Here, I am satisfied that incorporation of Ekalesia LMS was likewise a vehicle to enable the Tuasa group to continue worshipping in an organised manner.
[50] Further, I cannot accept that the proposal put forward in the closing submissions for the Sanerivi group provides an acceptable alternative to winding up. The fatal flaw in the proposal is that it is premised on the Tuasa group being regarded not as members of the Westmere Church, but rather as members of an entirely separate Church, Ekalesia LMS. That premise was the only basis on which the Sanerivi group would contemplate joint use of the Church, and it effectively isolates the Tuasa group from the Westmere Church. I cannot conclude that that would promote reconciliation. Further, as Mr Stokes submitted, the proposal fails to address any of the substantive issues between the parties.
[51] Finally, I do not accept Mr Perese’s submission that the Trust Board is not dysfunctional. The two groups of trustees have shown no ability or real inclination to work with each other. The Sanerivi group has excluded the Tuasa group from exercising any role as trustees, and the Tuasa group shows no willingness to work with the Sanerivi group. While Mrs Yandall-Vaega’s approach is to be commended,
it is clear that she finds herself constrained by the niceties of the Church hierarchy.
35 At [55](a).
[52] Winding up the Trust Board and liquidating its assets is a serious step to take. There are families who are at present divided between the two groups, and winding up and liquidation may “cement” that division. Further, if winding up is ordered, the assets of the Trust will be divided between the two groups. In effect, the value of the Westmere Church facilities will be divided.
[53] Inevitably, both groups would end up with a much smaller asset base than they would have, together, if the Trust’s assets were not divided. Each group would have to undertake the task of establishing a separate Church – both in terms of legal structure and in terms of physical assets. The impact of winding up on members of the Church would be, to say the least, significant.
[54] Notwithstanding my concerns, I have reached the conclusion that in the circumstances where it is now more than seven years since the dispute arose, and five years of Court intervention has failed to bring the groups any closer together, reconciliation between the two groups is not likely. In the circumstances, the point has been reached where it is just and equitable for the Trust Board to be wound up, and the only option is to exercise the last resort of winding up the Trust Board, and dividing the assets of the Trust.
[55] Each of the Tuasa and Sanerivi groups comprises persons who were members of the original Church, and their descendants, and in each group contributions have been made to the Church over time both financial and by work and gifting. It was put to me that the fact that the Sanerivi group has been paying for ongoing maintenance of the Church since 2006 should lead to an unequal division in favour of the Sanerivi group. I do not accept that submission. The Sanerivi group has had the benefit of the use of all of the Church facilities. The Tuasa group has had no such benefit. The Tuasa group has had to worship in far less satisfactory conditions, and has had to pay for the facilities it has had to rent. In the circumstances, I am satisfied that equal division would be appropriate.
[56] However, I do not consider it appropriate to make an order to wind up the Trust Board immediately, and do not do so. Although Mr Stokes indicated at the hearing that he would be prepared to accept appointment as liquidator, he has not
filed a written consent to appointment, as required by s 282 of the Companies Act
1993. Further, counsel have not addressed me as to the formalities of liquidation; in particular as to whether s 280(1)(cb) of the Companies Act would preclude the appointment of Mr Stokes. For that reason, I intend to adjourn the proceeding for further hearing on 28 February 2014.
Directions
[57] The application to put the Congregational Christian Church of Samoa (Westmere) Trust Board into liquidation pursuant to s 25(1) of the Charitable Trusts Act 1957 is adjourned for further hearing on 28 February 2014, at 10 am.
[58] Prior to the hearing, counsel are to file memoranda addressing the matters raised at [56], above. In the event that it is agreed that Mr Stokes may be appointed, Mr Stokes is to file a formal consent to appointment. In the event that Mr Stokes is precluded from being appointed, counsel for the Tuasa group is to nominate a suitable person for appointment, whether the Official Assignee or another independent person. In the event that the Official Assignee is not nominated, a formal consent to appointment will be required.
[59] It is appropriate to make orders as to the use of the Westmere Church in the meantime, over the coming Christmas and New Year season, and then until the hearing on 28 February 2014. I direct that the groups are to have the use of the Church under the same terms as were ordered in respect of the 2011–2012 and 2012–
2013 Christmas and New Year periods. As from Friday 3 January 2014, and until further order of the Court, the following shall apply:
(a) The Tuasa group is to use the Church and the hall on Mondays, Tuesdays, Wednesdays, and every Sunday morning until 12 pm;
(b)The Sanerivi group is to use the Church and the hall on Thursdays, Fridays and Saturdays and every Sunday from 1 pm onwards;
(c) A change of days on which a group has use of the Church and/or the hall may be agreed by the parties, on application on reasonable notice;
(d)The Tuasa group is to be provided with a key to the Church and the hall;
(e) Each group may attend services of the other group;
(f) Until further order of the Court, the Manse may be occupied by
Revered Va’aelua;
(g)The Tuasa group is to pay a pro rata share of utilities and fixed costs, but not mortgage payments.
(h) Mr Stokes is to remain a trustee of the Trust Board. Meetings of the
Trust Board are to include all Trustees.
[60] I reserve leave for the parties to seek directions, as may be necessary.
Costs
[61] Mr Telle sought an order for costs in favour of the Tuasa group. After consideration, I am not persuaded that such an order should be made. I have concluded that costs should lie where they fall. For the avoidance of any doubt, I direct that Trust funds are not to be used for either group’s costs in relation to this
proceeding.
Andrews J
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