Wainuiomata Licensing Trust

[2013] NZHC 232

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-2691 [2013] NZHC 232

UNDER  the Companies Act 1993

AND

UNDER  the Sale of Liquor Act 1989

IN THE MATTER OF     an application for liquidation of a Licensing

Trust

WAINUIOMATA LICENSING TRUST Applicant

Hearing:         18 February 2013 (Heard at Wellington)

Counsel:         B.J.J. Sheehan - Counsel for Applicant

No appearances for any other parties

Judgment:      18 February 2013

REASONS FOR DECISION OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           ARL Lawyers, PO Box 30430, Lower Hutt 5010

WAINUIOMATA LICENSING TRUST HC WN CIV-2012-485-2691 [18 February 2013]

Introduction

[1]      Before the Court in the List today was an application by the Wainuiomata Licensing Trust (the applicant) a Licensing Trust constituted by the Wainuiomata Licensing Trust Constitution Notice 1968 seeking an order that it be placed into liquidation.

[2]      Mr Sheehan appeared as counsel for the applicant.  There was no appearance by or for any other parties nor any opposition filed to this application.

[3]      That said, after considering the statement of claim filed by the applicant on

13 December 2012 verifying affidavit in support statement of advertising, consent to appointment as liquidators and memorandum filed by counsel for the applicant, and having heard submissions advanced to me, I was of the view that the application should succeed. Accordingly, the following orders were made:

(a)       The applicant trust, the Wainuiomata Licensing Trust, was placed into liquidation.

(b)      Patrick Gerard Thomas Sheehan and Stephen John Graves both of

Lower Hutt, Chartered Accountants were appointed liquidators.

(c)       Costs on this application were awarded to the applicant on a category

2B basis together with disbursements as fixed by the Registrar.

(d)      The orders made were timed today, 18 February 2013 at 10.44 am.

[4]      In giving this decision and making these orders I indicated that my detailed reasons for the decision would follow.  I now set out those reasons.

Background Facts

[5]      The applicant was duly constituted as a Licensing Trust by clause 2 of the

Wainuiomata Licensing Trust Constitution Notice 1968.   It was established, as I

understand it, for the purposes of the sale and supply of liquor within the boundaries of the Wainuiomata County Town pursuant to the Licensing Trusts Act 1949.

[6]      The Licensing Trusts Act 1949 was repealed by the Sale of Liquor Act 1989 and the operations of the applicant are now governed by that later statute.

[7]      Licensing trusts generally were established to regulate the sale and supply of liquor and to distribute the profits of such sales in specific geographic areas.  In the present case, the applicant was established to cover the area comprised within the boundaries of the Wainuiomata County Town, an area that has now become part of Lower Hutt.

[8]      The applicant I am told has no registered office.  The present application is filed in the Wellington registry of this Court, as the registry closest to Lower Hutt, being the town in which broadly speaking the applicant’s business was operated.

[9]      Licensing trusts previously had the sole right to establish and operate on- licenses and off-licenses in their district.  Section 241 of the Sale of Liquor Act 1989 provided that licensing trusts in existence at the commencement of that Act would continue to exist under the same name and in the same district or area.   It further divided existing licensing trusts into two categories.  Those licensing trusts listed in Part 1 of the Third Schedule to the Sale of Liquor Act 1989 have specific trading privileges, similar to the original purposes of licensing trusts.  Licensing trusts listed in  Part  II  of  the Third  Schedule,  which  includes  the  applicant  here,  had  those privileges removed.  They effectively became ordinary licensees, still able to supply and sell liquor, but only on the same grounds as all other applicants for on-licences and off-licences. All licensing trusts however were and are subject to rules regarding distribution of profits to the community.

[10]     In the present case, the applicant, as I understand the position, no longer holds any on-licenses or off-licenses.  Its business operations ceased approximately ten years ago.  The Trustees of the applicant trust wish to wind it up and distribute its remaining cash assets, which amount to some $62,835.35 (plus accruing interest).

[11]     The current Trustees of the applicant I am informed are Anthony Leatham, Rosemary White and Geoff Auty.  The chairman of the Trust, Anthony Leatham, has filed a verifying affidavit in support of this application.

Present Application and My Decision

[12]     The Notice under which the applicant was constituted does not include any provisions governing its dissolution or winding up as a Licensing Trust.  Section 212 of the Sale of Liquor Act 1989 however states:

“Parts 16 and 17 of the Companies Act 1993 shall apply, with any necessary modifications, to a licensing trust as if it was a company incorporated under that Act.”

[13]     And, section 213 of the Sale of Liquor Act 1989 does go on to provide some further guidance as to the winding up of a licensing trust:

“Where the High Court puts a licensing trust into liquidation, any net surplus, whether or not in money, shall be distributed to each local authority whose district is included wholly or partly within the trust district; and, where 2 or more such local authorities qualify, the Court shall determine the shares in proportion to the number of residents of each local authority’s district who are electors of the licensing trust.”

It is clear that the Hutt City Council is the only local authority within the

applicant’s district.

[14]   As to liquidation of companies under Part 16, section 241(2)(c) of the Companies Act 1993 provides that a liquidator may be appointed for a company by the Court on the application of that company.  In the present case, the applicant Trust has brought this application seeking the appointment of a liquidator for itself which is entirely proper.

[15]     And, pursuant to section 241(4)(d) of the Companies Act 1993, the Court may appoint a liquidator here if it is satisfied that it is “just and equitable that the [applicant] be put into liquidation.”

[16]     It needs to be noted here that section 241(2)(a) of the Companies Act 1993 does provide that a liquidator may be appointed in respect of a company by special

resolution of those shareholders entitled to vote and voting on the question.  While section 212 of the Sale of Liquor Act 1989 states that the liquidation provisions in Parts 16 and 17 of the Companies Act 1993 apply to a licensing trust as if it were a company with the necessary modifications, section 213 of the Sale of Liquor Act

1989  in  my view does  anticipate that  it  is  this  Court  that  generally  will  put  a licensing trust into liquidation.  This is because s.213 does not provide any further provision as to how the net surplus of that licensing trust’s assets would otherwise be distributed, unless it was the High Court that put the trust into liquidation.   As I understand the position, it is for this reason that the applicant has chosen to bring the present application before this Court.

[17]     On the question of who might be appointed liquidators, Stephen John Graves and Patrick Gerard Thomas Sheehan, both Lower Hutt chartered accountants, have agreed to be appointed liquidators by the Court.  Signed consents to act have been provided.

[18]     The applicant I understand it has no known creditors.  Its sole asset I am told represents the funds held on trust for it by ARL Lawyers, being $62,835.35 (held on interest bearing deposit).  I am told it has completed all necessary audited financial statements and tax returns, up to the year ending 31 March 2012.

[19]     For all the reasons outlined above, I am satisfied therefore that as the present application has been properly advertised in January 2013 and has attracted no opposition, and, as the applicant no longer holds any licences, it ceased its business operations some ten years ago, and it has a significant cash asset that should be distributed now and no debts or liabilities, it is just and equitable for the applicant to be put into liquidation.  This is also for the purpose of ensuring that its net surplus assets can be distributed to the Hutt City Council as the appropriate local authority pursuant to s 213 of the Sale of Liquor Act 1989.

[20]     The application before me therefore succeeded. The orders accordingly made as outlined at para [3] above are confirmed.

‘Associate Judge D.I. Gendall’