Whangarei Tourism Trust (in liquidation) [2014] NZHC 1083 (21 May 2014)

Last Updated: 23 May 2014

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV 2014-488-42 [2014] NZHC 1083

IN THE MATTER	of the Charitable Trusts Act 1957
AND
IN THE MATTER	of WHANGAREI TOURISM TRUST (IN LIQUIDATION)
AND
IN THE MATTER	of an application by STEPHEN KIM BENNETT as the Liquidator of WHANGAREI TOURISM TRUST (In Liquidation) that the surplus assets of WHANGAREI TOURISM TRUST be vested in WHANGAREI ART MUSEUM TRUST

Hearing:	(on the papers)
Counsel:	G Mathias for Applicant
Judgment:	21 May 2014

_{JUDGMENT OF HEATH J}

This judgment was delivered by me on 21 May 2014 at 2.15pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

_{Thomson Wilson, Whangarei}

Whangarei Tourism Trust (in liquidation) [2014] NZHC 1083 [21 May 2014]

[1] Whangarei Tourism Trust (the Tourism Trust) was established under the Charitable Trusts Act 1957 (the Act). By a resolution dated 26 June 2013, it was placed in liquidation and Mr Bennett was appointed as its liquidator. Mr Bennett took steps to realise the assets of the Trust. A surplus of $145,131 remains.

[2] On 1 April 2014, Mr Bennett applied to this Court for an order that the surplus assets be transferred to Whangarei Art Museum Trust (the Museum Trust).

[3] The jurisdiction to make the order sought springs from s 27 of the Act:

27 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.

[4] Clause 4 Section 111 of the Constitution of the Tourism Trust allows surplus assets to be transferred to such charitable organisation as the trustees of the Board of the Trust may determine, prior to winding up. No such direction was given before Mr Bennett’s appointment as liquidator. However, he seeks an order transferring the surplus to the Museum Trust, in order to give effect to the wishes of those who established the Trust.

[5] A preliminary question arose about the way in which the proposed application of funds should be notified to the members of the public. At a telephone conference held on 29 April 2014, having heard from Mr Mathias on behalf of Mr Bennett, I made the following directions:¹

[a] The application shall be advertised in the Northern Advocate newspaper on one occasion, on Saturday 3 May 2014. Subject to what follows, the advertisement shall be in the form reflected in exhibit D to Mr Bennett’s affidavit of 27 March 2014.

[b] The advertisement shall require any notices of opposition to be filed and served on or before 15 May 2014 and indicate that if none are filed and served by that date the application will be referred to a Judge for determination on the existing papers.

¹ Re Whangarei Tourism Trust (in liq) HC Whangarei CIV 2014-488-42, 29 April 2014 at para

[5](a)–(c).

[c] If any notices of opposition were filed and served, the notice shall advise members of the public that the application will be called at

9am on 22 May 2014, in the High Court at Whangarei.

[6] The application was duly advertised. No notices of opposition were filed. In accordance with another direction given after the telephone conference,² the Registrar referred the application to me for determination on the papers. In the absence of any objection, the hearing scheduled for 9am on 22 May 2014 has been vacated administratively.

[7] Evidence has been given by Mr Gleeson. He holds the position of Economic Development Manager for the Whangarei District Council. In that role, he has acquired knowledge of the operations of both the Tourism Trust and the Museum Trust. He was a trustee of the Tourism Trust when it resolved to liquidate.

[8] Prior to liquidation of the Tourism Trust, attempts were made by the trustees to use s 32 of the Act³ to distribute assets. This was done because of concerns that the Tourism Trust might not be considered as “charitable”, for legal purposes.

[9] The Attorney-General was asked to comment on the proposal. Under s 35 of the Act the Attorney-General fulfils a public interest role in considering any s 32 proposal which may have the effect of disposing of trust assets.

[10] The Attorney did not consider it was appropriate to dispose of the property in the manner proposed by the trustees.

[11] A different mechanism has now been used to achieve the same result. The Attorney is not required to be involved in this post-liquidation application. That is because the Tourism Trust is now defunct and the grounds for objection that may have been advanced to a transfer of its assets pre-liquidation are no longer relevant

_{considerations.}

² _{Ibid, at para [6].}

3. Section 32 of the Charitable Trusts Act 1957 allows for a scheme to be established to dispose of property for other charitable purposes.

[12] Having considered Mr Gleeson’s evidence, I am satisfied that surplus assets should be distributed to the Museum Trust. The Tourism Trust was engaged in promoting tourism at Whangarei’s “primary visitor attraction”, the Town Basin. Among other things museums and an art gallery are located within the Town Basin area.

[13] The former trustees of the Tourism Trust consider that the Museum Trust is “the only appropriate entity” to which surplus assets could properly be transferred on liquidation of the Trust. For the reasons given by Mr Gleeson, I am satisfied that the Museum Trust is the most appropriate recipient of the surplus funds.

[14] In the absence of opposition to the application, there is no reason to depart from the proposal made by the liquidator, supported by the cogent evidence of Mr Gleeson.

Result

[15] Under s 27 of the Act, I make an order that the surplus assets held by Mr

Bennett shall be transferred to the Museum Trust.

[16] Mr Bennett is entitled to his reasonable costs (including legal fees and disbursements) to be paid out of the surplus before it is transferred to the Museum Trust.

[17] I thank Mr Mathias for the quality of the material submitted to the Court in support of the application. That has enabled prompt disposition of it.

_{P R Heath J}

Delivered at 2.15pm on 21 May 2014