MATAU v FUSI [2017] NZHC 3210

MATAU v FUSI [2017] NZHC 3210 [19 December 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-2988[2017] NZHC 3210UNDER The Charitable Trusts Act 1957 and the HighCourt Rules 2016, Part 19IN THE MATTER of the Reformed Christian Church of Tuvaluin New Zealand TrustBETWEEN MALO MATAU, PULENI TAOMIA ANDMAKUSA VAELEI (as the remaining 2004trustees of the Board)ApplicantsAND REVEREND TEATU FUSIFirst Respondent/contHearing: On the papersCounsel: R S Pidgeon for the ApplicantsJudgment: 19 December 2017JUDGMENT OF GORDON JThis judgment was delivered by meon 19 December 2017 at 12.30 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors: Botting Legal Limited, AucklandCounsel: R S Pidgeon, AucklandREVEREND TEATU FUSI, HELINATELII, ALEE TALAVA, REVERENDHENELE TEKAVEI, MELEATANAKALA, PONI FAAVAE, IUSITINIFALEASIU, LOGOFOU PEPAA, TAUIALEFAIO, PITOKI FILIPO, LAGAFAOALAVATA, LAVINIA TEATU FUSI ANDENOSA FAIKISecond RespondentsTE EKALESIA KELISIANO TUVALUThird RespondentREVEREND SUAMALIE N T IOSEFAFourth RespondentSILIGA TALA, KAANI SEKONE,KALANISE FAAUILA, ARMSTRONGTEKIE, SAULO HAULAGI, PELEKAITUIA, IUSITINI FALEASIU, NOUATATANE, TUSIALOFA POEALA, IAPESAVAVE, TALATEA BOREHAM, KITIONATAUSI, TUAFAFA LATASI, SAINIMALALAU, FEALUINA LEULI ANDVAKAALIKI FAGATOAFifth RespondentsIntroduction[1] This is a without notice application under r 19.5 of the High Court Rules forleave to proceed by way of originating application, dated 15 December 2017.Background[2] The proceeding arises as a result of a dispute within a Tuvaluan churchcommunity in Auckland over who are the trustees of a charitable trust established bythe Church and which rules govern their church community.[3] In the late 1990s the Tuvaluan congregation separated from a combined PacificIsland congregation and established its own Tuvaluan church congregation in WestAuckland. In 2004, once the church had fundraised sufficiently, it purchased aproperty for the church at 92 Grassmere Road, Henderson.[4] A new charitable trust, The Congregational Christian Church of Tuvalu inAuckland Trust, was established by the church and incorporated as a charitable trustboard. The purchase of the property at 92 Grassmere Road was completed in the nameof the new charitable trust. The purchase was funded both by way of a fund raised bythe church as noted above, and by way of lending from the Bank of New Zealand.There is a mortgage over the property in favour of the Bank of New Zealand. Theloans secured by the mortgage are significantly in arrears and apparently the Bank ofNew Zealand agreed with the applicants that it would not to take enforcement steps ifthe current application was filed by 15 December 2017.[5] The Trust continues as the registered proprietor but its name was changed in2010 to The Reformed Christian Church of Tuvalu in New Zealand Trust.[6] The applicants are the only three surviving trustees of those appointed in 2004.There have been three attempts to appoint additional trustees to the Trust Board, thefirst in 2010, the second in 2015 and a third in 2017. The applicants' position is thatthe 2010 and 2015 attempts are invalid. They further say that a purported change ofname and change of rules in 2015 is also invalid.[7] In 2017, the applicants attempted to comply with the rules in appointingadditional trustees. Part of the originating application is to confirm the validity ofthose 2017 appointments as the Trust is presently operating without quorum.Orders sought in originating application[8] As is required, the applicants filed their originating application with theapplication for leave. The orders sought are as follows:(a) That the original 2004 rules of the Reformed Christian Church OfTuvalu in New Zealand Trust be declared to be valid and operable andof full legal effect; and(b) That the appointment of new Board members to the Reformed ChristianChurch Of Tuvalu in New Zealand Trust filed with the Registrar ofIncorporated Societies and date stamped 6 May 2010 is invalid and ofno legal force or effect.(c) That the alteration of rules, change of name and change of trustees ofReformed Christian Church Of Tuvalu In New Zealand Trust, dated27 November 2015 filed with the Registrar of Incorporated Societiesand date stamped 2 December 2015 is invalid and of no legal force oreffect;(d) That [named] persons be declared the present trustees of the TrustBoard (which Board is the registered proprietor of 92 Grassmere Road,Henderson Valley).Submissions in support of application[9] Mr Pidgeon, counsel for the applicants, commenced his memorandum insupport by realistically accepting that there is a strong case to decline the applicationand direct that the proceeding proceed by way of statement of claim.[10] However, he submits that many recent examples where applications have beengranted are from the Family Court jurisdiction in terms of guardianship and theProtection of Personal and Property Rights Act 1988 and that there is a broad and looseanalogy as between an infant and an incapacitated person, both of whom who areunable to speak, and the Church to whom all parties belong but whose views regardingbest interests diverge.[11] Mr Pidgeon submits that applying the interests of justice test, the speed ofdisposal is a key issue here with the number of people affected both in the congregationand the Bank of New Zealand as mortgagee.[12] He submits that discovery and interlocutory procedures are not likely to benecessary. While acknowledging that viva voce evidence and cross-examinationought to occur, that can be accommodated under the rules.[13] Mr Pidgeon further submits that identifying the facts is likely to be the keyissue. He says the facts are only discernible from two sources, namely the resolutionsand documentary evidence, which are contained in four detailed affidavits filed insupport and evidence in person.[14] Mr Pidgeon properly acknowledges likely arguments that the respondents mayraise, namely justification of their acts, denial of any pressure to sign, general factualdivergence and justification of steps taken for the common good. Mr Pidgeon acceptsthis clearly militates against granting the application but, he says, for the interests ofjustice.[15] Mr Pidgeon submits that the interests of justice favour the securing promptresolution for the church and the originating application procedure will afford therespondents a chance to participate in the process and have their arguments heard.[16] Finally, Mr Pidgeon acknowledges that the rules of the Charitable Trust Boardare not as clear as they might be and along with factual disputes, the interpretation ofthose rules will be a large part of the contentious element.Decision[17] The Court may permit originating applications to be used to commenceproceedings in addition to those set out in HCR19.2-19.4. The only criteria expresslyreferred to in r 19.5 are the interests of justice. In Hong Kong and Shanghai BankingCorporation Ltd v Erceg,1 after reviewing a number of decisions on applicationsbrought under r 19.5, the High Court stated:These cases show that the type of proceeding suited to the originatingapplication procedure is a straightforward application, not requiring detailedpleadings or interlocutory orders for its fair resolution. Such a type ofproceeding tends to be an application under a specific statutory provision,where the issue that arises can be clearly defined, and the issues confined. Theprocedure is not well suited to the determination of substantive rightsinvolving the application of common law doctrines as distinct from statutorytests. It is not well suited to cases involving multiple parties, and cases wherethere is the possibility of crossclaims or counterclaims.[18] In my view, applying the interests of justice test, this is not a proceeding whichshould be commenced by originating application. My reasons are as follows:(a) There are three substantial and detailed affidavits filed in support of theapplication. It appears clear that there are facts here which create apotential for controversy between the parties.(b) It is apparent that the factual issues will not be within a narrowcompass.(c) There are five respondents and some of the respondents are comprisedof multiple individuals.(d) Notwithstanding the detail that has already been provided by way ofthe affidavit evidence, that does not obviate the need for discovery.(e) Given Mr Pidgeon's indication that the rules of the Charitable TrustBoard are not clear and will be a large part of the contentious element,this is not a simple case of, e.g. applying statutory tests.1 Hong Kong and Shanghai Banking Corporation Ltd v Erceg (2010) 20 PRNZ 652 at [25].[19] I acknowledge the applicants' wish for a speedy resolution but weighing thismatter against the other matters referred to above, I decline the application.Result[20] The application for leave to bring proceeding by way of an originatingapplication is declined. I direct that the proceeding be commenced by way ofstatement of claim.___________________________________Gordon J