Willows Foundation Trust
[2023] NZHC 3602
•8 December 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2023-409-131
[2023] NZHC 3602
UNDER the Charitable Trusts Act 1957 and the Companies Act 1993 IN THE MATTER
of an action for the liquidation of a Charitable Trust
BY
THE WILLOWS FOUNDATION TRUST
Applicant
Hearing: (On the papers) Counsel:
A R McRae for applicant
Judgment:
8 December 2023
JUDGMENT OF ASSOCIATE JUDGE LESTER
(in relation to application for leave to use originating application procedure)
RE THE WILLOWS FOUNDATION TRUST [2023] NZHC 3602 [8 December 2023]
[1] This proceeding concerns The Willows Foundation Trust (the Trust) which was incorporated in December 1995 under the Charitable Trusts Act 1957.
[2] This judgment concerns an application by the Trust for leave to use the originating application procedure for this proceeding along with an application that service of the application be dispensed with.
[3] The focus of the Trust is to encourage school children to become involved in matters associated with the game of cricket. The Trust solicited donations from supportive individuals.
[4] The Trust has a close association with The Willows Cricket Club (the Club) which was initially established as an unincorporated entity in 1995 and was incorporated as a society on 7 December 2011 and registered as a charity on 19 December 2021.
[5] The Trust did not apply for registration as a charity when the requirement came into effect under the Charitable Trusts Act 2005. The Trust is not currently a registered charity.
[6] The Trust has historically provided financial support to the Club for ground development, the provision of facilities, and for the activities of the Club.
[7] With the Club now being a registered charity in its own right, there is a duplication between the role of the Trust and the Club.
[8] To avoid that duplication and the expense of maintaining the Trust, the board of the Trust has resolved to liquidate the Trust pursuant to s 25 of the Charitable Trusts Act 1957 (the Act) and distribute its surplus assets to the Club.
[9]Section 25 of the Act provides:
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.
(2)Any application to the court to put a board into liquidation may be presented by—
(a)the Attorney-General; or
(b)the board; or
(c)a member; or
(d)a creditor; or
(e)the Registrar; or
(f)any other person who, in the opinion of the court, should make the application.
(3)All costs incurred by the Attorney-General or the Registrar in making the application shall, unless the court otherwise orders, be a first charge on the assets of the board.
(4)Subject to this Act and to any regulations made under this Act, Parts
16 and 17 of the Companies Act 1993 shall apply, with such modifications as may be necessary,—
(a)to the application for the appointment of a liquidator as if the application was an application under section 241(2)(c) of that Act; and
(b)to the liquidation as if the liquidator had been appointed under section 241(2)(c) of that Act.
I also note s 27 of the Act provides:
Distribution of surplus assets
On the liquidation of a board or on its dissolution by the Registrar, all surplus assets after the payment of all costs, debts, and liabilities shall be disposed of as the court directs.
[11]Clause 14 of the Trust Deed provides:
Disposition of surplus assets
On the winding up of the Trust or on its dissolution by the Registrar, all surplus assets after the payment of costs, debts and liabilities shall be given to such exclusively charitable organization within New Zealand as the Board decides or, if the Board is unable to make such decision, shall be disposed of in accordance with the directions of the High Court pursuant to section 27 of the Charitable Trusts Act 1957
[12] To give effect to the liquidation, the Trust has sought leave to utilise the originating application procedure. Leave is sought on the grounds that its application is not contentious, that is, it is not disputed by anyone involved with the Trust or the Club, extensive pleadings are not required, nor is it likely that there would be any interlocutory applications and that the use of the originating application is an efficient way of dealing with the application. I agree with counsel’s submissions in that regard.
[13] Accordingly, there is leave for the Trust to utilise the originating application for this application. That leave is subject to one more substance which is that the certification annexed to the without notice application for leave is not in the full form. Counsel is to file a memorandum setting out the full certificate that is required in a without notice application. That certificate can be found in Form G32 of the High Court Rules 2016.
[14] I will issue a separate Minute in respect of the application for directions as to service.
Associate Judge Lester
Solicitors:
Gresson Dorman & Co, Timaru
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