SOCIETY OF ST VINCENT DE PAUL V WANGANUI OZANAM VILLA TRUST HC WANG CIV 2005-483-320

SOCIETY OF ST VINCENT DE PAUL V WANGANUI OZANAM VILLA TRUST HC WANG CIV 2005- 483-320 24 July 2006IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY CIV 2005-483-320IN THE MATTER OF the Charitable Trusts Act 1957 BETWEEN SOCIETY OF ST VINCENT DE PAUL Applicant AND WANGANUI OZANAM VILLA TRUST Respondent Hearing: 8 May 2006 Appearances: B M Piper for the Society of St Vincent de Paul (Applicant) S Burlace for Wanganui Ozanam Villa Trust (Respondent) Judgment: 24 July 2006JUDGMENT OF ALLAN JSolicitors: Horsley Christie (B M Piper), PO Box 655, Wanganui Treadwell Gordon (S Burlace) PO Box 4084, Wanganui[1] This is an application by the Society of St Vincent de Paul (the Society) for orders rescinding and/or recalling orders made by the Court on 24 November 2005 with respect to the liquidation of the Wanganui Ozanam Villa Trust (the Trust) and the distribution of its assets. [2] The application is brought on two broad grounds, which to some degree overlap: a) That the Society had a proper interest, known to the Trust, in the subject matter of the Trust's application to the Court, but the Society's interest was not disclosed to the Court with the result that the Trust's application was effectively determined on an ex parte basis. b) That in all the circumstances, an order for the winding-up of the Trust and the distribution of its assets ought not to have been made. Instead, the Trust ought to have been required to settle a scheme pursuant to Part III of the Charitable Trusts Act 1957 (the Act). The Trust had failed to draw to the attention of the Court the provisions of Part III of that Act and had failed to disclose to the Court factual material relevant to the possible application of Part III. [3] The Society invokes the Court's inherent jurisdiction to do what is just and equitable in order to prevent an injustice. [4] In order to place this somewhat unusual application in its proper factual and procedural setting, it is necessary to discuss, first the purpose and history of the Trust, and then the course which the proceedings in this Court have taken.The Trust[5] In support if its application, the Society filed affidavits by Judith Mary O'Hara, currently Chairperson of St Vincent de Paul, Wanganui, and Edward Downs, a trustee of the Trust from its inception and for some 20 years thereafter.[6] The trustees of the Trust filed two affidavits in opposition by Walter Stephen Vautier, who is a current trustee of the Trust, and the liquidator appointed by the Court on 24 November 2005. [7] Some aspects of the evidence given by the Society's deponents are challenged by Mr Vautier on the basis of records held by him. It is not possible, nor is it presently necessary, to resolve disputed issues of fact relating to the history of the Trust. What follows is drawn largely from the affidavits filed by the Society, but without any intention to make binding factual findings between the parties. [8] The Society is a charitable organisation and is part of the Society of St Vincent de Paul National Council of New Zealand, which is a charitable trust board incorporated under the Act. [9] In about 1978, the Society, in the course of its work, which included patient visiting at Wanganui hospital, saw the need for accommodation close to the hospital for the families of patients. Some long-stay patients were unable to have relatives and friends visit because they came from out of town and could not afford hotel or motel expenses. A large house became available in Wanganui for $20,000. This was the Ozanam Villa. The property was purchased by the Society utilising $3500 of its own funds, some $6500 made available by the Wellington Catholic Archdiocese, and the balance of $10,000 from the National Council of the St Vincent de Paul Society. This latter sum of $10,000 was a loan. It was repaid over a period of several years. [10] The house was relatively old and in order to convert it into viable accommodation, the Society called a meeting of all interested parties. There was considerable support for the project from the Council, from other charitable organisations, and from public spirited citizens. The Ozanam Villa was turned into 'first-class accommodation', as Mr Downs puts it. [11] The Society continued to make substantial contributions to the project over succeeding years by offering meals to residents, stocking the house with foodstuffs, linen and furniture, and providing clothing, as necessary. Other charitable organisations provided significant support as well.[12] The Villa was settled on trust by deed dated 19 September 1978. The settlor was a Wanganui builder, Mr Ian Kerr, who played a major role in the project. The first trustees were five in number. They included Mr Kerr and Mr Downs. [13] Subsequently, by a deed executed on 11 February 1986, the Villa was resettled on a successor charitable trust. There is evidence that this was done because the Inland Revenue Department took the view that the first deed of trust did not adequately set forth a lawful charitable purpose. On this second occasion, the settlor was a Mr B D Simmonds, a Wanganui legal executive. There were six trustees, who included Mr Downs but not Mr Kerr.The Trust Deed[14] It is common ground that the Villa is held on the trust established by the deed of trust dated 11 February 1986. That deed is expressed to have been created: for the benefit of the Community generally, in particular for the benefit of those members of the Community receiving medical, surgical, psychiatric, therapeutic or other treatment at Wanganui Hospitals and the families of such patients as hereinafter defined [15] The objects of the Trust were further defined as being: to provide on such terms and conditions as the Board shall decide, accommodation for persons who may at any time receive medical, surgical, psychiatric, therapeutic or other treatment at Wanganui Hospital and for any members of the families of any such persons, and for that purpose to acquire and continue the property at No. 1 Koromiko Road, Wanganui, known as the Ozanam Villa.[16] The reference to 'the Board' is a reference to the Board of Trustees constituted by the deed. Rule 13 of schedule 4 of the deed (which section of the deed comprises the rules of the Board), provides that the Board shall have power to apply for incorporation under the provisions of the Charitable Trusts Act 1957, but there is no direct evidence that the Board was so incorporated. [17] Clause 4 of schedule 3 of the deed deals with the winding-up of the Board and the distribution of surplus assets. It provides:4. THAT upon the winding-up or dissolution of the Board all surplus assets after the payment of all costs debts and liabilities shall be paid or disposed of to or for the benefit of such Charitable organisation or such charitable purposes within New Zealand as The Board may determine prior to winding-up but in all respects subject to the provisions of Section 27 of The Charitable Trust Act 1957 which provides that on dissolution the surplus assets shall be disposed of as the High Court ofNew Zealand directs. Upon dissolution or winding-up the Board will apply to the High Court for directions to dispose of its surplus assets in accordance with this Clause.[18] The winding-up of the Board is also addressed in rule 9 of section 4 of the deed. That rule provides:9. WINDING-UP:- (a) The Board may be wound up by application to the High Court ofNew Zealand if at a Special General Meeting called for that purpose a Resolution requiring the Board to be wound up is passed by a majority of not less than three-fourths of the members entitled under these Rules to vote present personally or represented by proxy at such meeting. (b) If upon the winding-up of the Board there remains after the satisfaction of all its debts and liabilities any property whatever the same shall not be paid or distributed among the members of the Board but shall be disposed of in accordance with the Objects and powers of the Board set forth in Clause 4 of Section III of this Schedule.[19] Rule 9(a) appears to contemplate a procedure by which a resolution passed by a three-fourths majority of the members of the Board would constitute the foundation for an application to this Court for an order approving the winding-up of the Trust. Upon the making of an order by the Court, the terms of the deed effectively incorporate the provisions of s 27 of the Act by requiring that surplus trust assets be disposed of as this Court directs. In effect, the provisions of ss 25- 27, which expressly apply to Boards incorporated under the Act, are to apply whether or not the Board is in fact incorporated.Recent developments[20] It is not in dispute that over time the general objectives of the Trust have become less relevant to the needs of those persons visiting patients at Wanganui hospital. There were fewer in-patients staying at the hospital on a long-term basis.Day surgery became common. Some patients who would formerly have been treated at Wanganui were now being referred to Palmerston North. But over the years, many people stayed at the Ozanam Villa in times of sickness and accident – Mr Downs said they totalled 'countless thousands'. [21] There is general agreement that the Villa has served the community well but that it is now necessary to utilise the property or the proceeds of any sale for alternative charitable purposes more in keeping with contemporary needs. [22] On 12 May 2005, the trustees of the Ozanam Villa Trust Board (eight in number) unanimously resolved as follows:1. That the Committee as Trustees of the Ozanam Villa Trust Board be wound up. 2. That the Ozanam Villa Trust Board land and buildings be sold and the Cancer Society be offered first refusal at market value. 3. That the proceeds to (sic) be divided evenly between Hospice, the Cancer Society and the Heart Foundation. 4. That Walter Stephen Vautier be appointed Liquidator.[23] The Society's position is that the Villa ought to be retained and used for community accommodation of a different character. The name 'Ozanam' is derived from the founder of the Society of St Vincent de Paul, Frederick Ozanam. Mr Downs says that the Villa would never have been utilised for charitable purposes without the work of the Society and that the original charitable purpose would be best reflected by widening the category of persons who might resort to the Villa for accommodation. The Society is opposed to the steps taken by the trustees of the Trust to liquidate the Trust and to apply the assets in a manner not directly connected to the Trust's original purpose.This proceeding[24] On 15 September 2005, the trustees unanimously passed a resolution authorising the chairman of trustees, Mr F C McMillan, to swear an affidavit in support of an originating application for an order that the Trust be placed inliquidation. This proceeding was filed on 18 October 2005 by way of notice of originating application. It sought the following orders:1. THAT the WANGANUI OZANAM VILLA TRUST be wound up. 2. THAT all land and buildings be sold. 3. THAT the CANCER SOCIETY be offered first refusal of the property owned by the Trust. The Cancer Society to be offered the property at market value. 4. AFTER the sale of all assets the proceeds to be divided evenly between Hospice, the Cancer Society and the Heart Foundation. 5. THAT WALTER STEPHEN VAUTIER be appointed liquidator. 6. SUCH costs as the Court deems fit.[25] The grounds upon which the application was based were expressed in the following terms:(a) The Wanganui Ozanam Villa Trust provided accommodation for family (sic) of patients; (b) Over the last three (3) years the attendances have dropped significantly causing the Trust to struggle financially; (c) The Trustees believe there is no longer a need for this type of accommodation in Wanganui as the Wanganui Base Hospital has changed its structure; (d) The present manager is retiring and the Trust has been unable to obtain a suitable replacement.[26] The application was expressed to be made in reliance on s 25 of the Charitable Trusts Act 1957, s 254 of the Companies Act 1993, and Mr McMillan's affidavit of 10 October 2005. Although described as a notice of originating application, the application was clearly ex parte in character. It is marked for the attention only of the Registrar of the High Court at Wanganui. There was no supporting memorandum nor any application for directions as to service. [27] Mr McMillan's affidavit is extremely brief. It is appropriate to set it out in its entirety:I, FREDERICK CHARLES MCMILLAN of Wanganui, Retired, swear:1. I am the Chairman of the Wanganui Ozanam Villa Trust Board being the Applicant and am authorised to swear this affidavit on behalf of the Trust Board. A copy of the Trustees special resolution authorising me is annexed hereto and marked "A". 2. I have been the Chairman of the Trust Board since 22 April 2004 and am familiar with the affairs of the Trust. 3. On the 11th day of February 1986 a Deed dated 11 February 1986 created a charitable trust namely the Wanganui Ozanam Villa Trust. Attached hereto and marked with the letter "B" is a copy of the said Trust. 4. Pursuant to the terms of the Trust the Trust Board have made the following resolutions: (a) That the Wanganui Ozanam Villa Trust be wound up. (b) That all land and buildings be sold. (c) That the Cancer Society be offered first refusal of the property owned by the Trust. The Cancer Society to be offered the property at market value. (d) After the sale of all assets the proceeds to be divided evenly between Hospice, the Cancer Society and the Heart Foundation. (e) That Walter Stephen Vautier be appointed Liquidator. (f) Attached hereto and marked with the letter "C" is a copy of the resolution. 5. The Trustees seek the Court's approval to the above resolutions.[28] It will be observed that the affidavit does little more than exhibit the trust deed and the two resolutions. The Court is told nothing of the history of the Trust or of the circumstances in which the application is made. Nor is there any reference to the assets of the trust (beyond the Villa itself), or any indication of the total value of the Trust assets. Moreover, there is no indication of any sort as to the reasons which have prompted the trustees to select the three named charities as beneficiaries of the distribution of assets upon winding-up. Even now there is nothing before the Court to indicate the financial position of the Trust, although I infer that the Trust's primary asset is the Villa, which I take to be valued at several hundred thousand dollars. That much was confirmed from the bar at the hearing of the present application.[29] Prior to the filing of the application, there had been a certain amount of communication between the Society and the trustees of the Trust. In or about June 2005, Mrs O'Hara became aware that the trustees might be contemplating dissolution. She wrote to Mr McMillan outlining the Society's initial involvement in the setting up of the Trust and the purchase of the Villa and the subsequent contributions for which the Society was responsible. She asked that the Society be considered for distribution of a share of the assets, as she believed was authorised by the 1976 trust deed. There was no response to that letter. [30] On 28 June 2005, Mr Downs wrote to the Trust Board outlining his involvement and that of the Society in the creation of the Trust and seeking dialogue with respect to the future of the Trust and the Villa. That letter was also directed for the attention of Mr McMillan. There was no response to that letter either. [31] The Society's solicitors, Horsley Christie, wrote to Mr McMillan on 18 July 2005 requesting information about the winding-up or dissolution of the Trust and requesting, on behalf of the Society, that it be considered for distributions by the trust board. That letter was evidently received. It was the subject of an acknowledgement by Mrs McMillan, secretary of the Board, who on 4 August 2005, wrote to Horsley Christie acknowledging the letter and indicating that it had been tabled at a meeting of trustees held on 4 August 2005. She further advised that 'this matter is in the hands of our Lawyers'. [32] Although Mr Vautier filed two affidavits in opposition to the present application, there was no further affidavit from Mr McMillan and so it is not possible to say whether the letters from Mrs O'Hara and Mr Downs actually reached him. It is, however, plain that the trustees had received formal notice from the Society's solicitors to the effect that the Society wished to take an active part in matters related to the winding-up of the Trust and the distribution of its assets. It is fair to say, however, that the focus of the Society's expressed concern at that point appears to have been upon the application of the proceeds of sale of the Villa, rather than the promotion of an alternative scheme involving retention of the Villa.[33] The possibility of an alternative charitable use of the Villa was, however, something which had been drawn in a formal way to the attention of the trustees. There is in evidence a letter written on 26 April 2005 by the City Missioner at Wanganui on behalf of Christian Social Services Wanganui to Mr McMillan. In that letter, the Commissioner (Shirley-Joy Barrow) draws Mr McMillan's attention to what she calls 'Project Jericho', which envisages the establishment of overnight accommodation for a range of people in need. The Missioner suggested that Ozanam House ' could be the perfect place as it already has much of what we would need'. [34] The Trust's application came before Miller J in Wanganui on 24 November 2005. Ms Burlace appeared for the Trust. There was no appearance for any other party. But the application had been the subject of a single public notice which appeared in the Wanganui Chronicle on Saturday, 29 October 2005. That advertisement was in the following terms:NOTICE OF APPLICATION FOR APPROVAL OF A WINDING-UP APPLICATION, APPOINTMENT OF LIQUIDATOR AND DISBURSEMENT OF ASSETS UNDER THE CHARITABLE TRUSTS ACT 1957 IN THE HIGH COURT OF NEW ZEALAND WANGANUI DISTRICT IN THE MATTER of the Charitable Trusts Act 1957 AND IN THE MATTER OF AN Application by the WANGANUI OZANAM VILLA TRUST a Charitable Trust by Deed dated 11 th day of February 1986 NOTICE IS HEREBY GIVEN that F C McMillan authorised by the Trustees of the Wanganui Ozanam Villa Trust has filed in the office of the High Court at Wanganui an application for approval of the following: 1. That the Wanganui Ozanam Villa Trust be would (sic) up. 2. That all land and buildings be sold. 3. That the Cancer Society be offered first refusal of the property owned by the Trust. The Cancer Society to be offered the property at market value. 4. After the sale of all assets the proceeds to be divided evenly between Hospice, the Cancer Society, and the Heart Foundation.5. That W S Vautier be appointed liquidator. Copies of this application may be inspected free of charge at the office of the Registrar of the High Court at Wanganui or at the offices of the Trustee C/o Treadwell Gordon, Solicitors, Suite 8, Wicksteed Terrace, Wanganui. The application has been set down for hearing in the High Court at Wanganui on the 24th day of November 2005 at 9.30 am. Any person desiring to oppose the scheme is required to give notice of his or her intention to do so to the Registrar of the High Court at Wanganui and to F C McMillan C/o Treadwell Gordon (J Evans), Solicitors, Suite 8, Wicksteed Terrace (PO Box 4084/DX PA87505), Wanganui not less than Seven (7) clear days before the above mentioned date. I R Burgess Solicitor for the applicant[35] An identical advertisement appeared in the NZ Gazette of Thursday, 27 October 2005. The advertising undertaken complied with the provisions in the Companies Act 1993 which apply to the advertisement of applications for the liquidation of incorporated companies. Presumably the trustees or their legal advisers took the view that s 25 of Act (which incorporates by reference the advertising provisions of the Companies Act) was applicable. Be that as it may, the advertisements were followed by a declaration of advertising completed by a law clerk employed by Treadwell Gordon, who act for the Trust. That declaration is somewhat confusing. It commences:1. That I am a Law Clerk employed by Treadwell Gordon, the solicitors for the Wanganui District Council. 2. That I arranged for publication of the approved advertisement in accordance with the instructions of the Registrar of the Wanganui High Court.[36] So far as I am aware the Wanganui District Council has no role in this proceeding. Presumably a precedent was used in the preparation of the declaration, and the person drawing the document neglected to make the necessary amendment. However, I am unaware of anything on the Court file which might constitute an approval of the advertisement or which might amount to an instruction from the Registrar of the Court.[37] On 22 November 2005, Mr I R Burgess, solicitor for the plaintiff, filed a memorandum which read inter alia as follows:1. That no persons have taken steps to oppose the application under the Charitable Trusts Act 1957. 2. That the matter should now be dealt with in terms of the application.[38] When the Trust's application was called in Court, Ms Burlace appeared for the Trust. There was no other appearance. The Society had missed the advertisement and had been unaware of the hearing. The Judge minuted the file as follows:Having read Mr McMillan's affidavit, I am satisfied that it is just and equitable that the Trust should be put into liquidation. The proposed orders are consistent with clauses 9 and 4 of the Trust Deed. There will be orders in terms of paragraph 1 to 5 of the application. Counsel may file a memorandum as to costs if the Court is required to fix them.[39] Those orders were drawn up and sealed on 29 November 2005. [40] I understand from counsel that the Cancer Society has not taken up its option to purchase the Villa and accordingly as matters stand the Villa is to be sold and the nett proceeds distributed among the three charities stipulated by the Board. [41] The Society subsequently became aware of what had transpired and filed the present application. Mr Vautier, in his capacity as liquidator, has undertaken to the Court to take no steps to sell the Villa until the Society's application is determined.Discussion[42] It is not suggested that the Trust or its solicitors have acted otherwise than in good faith. The solicitors were plainly anxious to act properly in all respects and to follow the appropriate procedure. [43] On 8 August 2005, a legal executive at Treadwell Gordon (Mrs Evans) wrote to the Crown Law Office in Wellington in the following terms:1. The writer has been approached by the above Trust Board. They have passed a resolution to appoint a liquidator and wind up the Trust. They further resolved to sell all the land and buildings and to divide all proceeds evenly between Hospice Cancer Society and the Heart Foundation. 2. In the past I picked Margaret Soper's brain but I believe one of the members of our staff said she is now overseas. 3. Should this process of winding-up and distributing the proceeds be processed through your office? If so, would you be able to give us some sort of guidelines as to the paperwork required or point me in the right direction. 4. The Trust Deed notes that on dissolution the surplus assets shall be disposed of as the High Court of New Zealand directs. 5. We look forward to your advice.[44] On 31 August 2005, the Crown Law Office responded in the following terms:Thank you for your letter of 8 August 2005. As discussed with you on 19 August, clause 9 of the Trust Deed provides that the Board may make an application to the High Court for the Board to be wound up. Such an application may only be made following a resolution passed by not less than three-quarters of the members present and entitled to vote at a Special General Meeting called for that purpose. Once such a resolution has been passed, the matter would then be governed by s 25 of the Charitable Trusts Act 1957, which applies to the liquidation of incorporated trust boards. Section 25 provides that the Court may, on the application of the Board, appoint a liquidator if the Court is satisfied that it would be just and equitable for the Board to be put into liquidation. Under s 25(4), the liquidation provisions in the Companies Act 1993 will apply to the liquidation of the Board. Accordingly, the winding-up would be commenced by making an application to the High Court in much the same manner as for a company liquidation. Clause 4 of the Trust Deed provides that on winding-up the Board may nominate particular charitable organisations or purposes that are to receive any surplus assets. This clause is expressed to be subject to s 27 of the Charitable Trusts Act, which provides that the disposition of surplus assets is a matter for the Court's discretion. Clause 4 of the Trust Deed places an obligation on the Board to decide in advance which organisations or purposes are to receive any surplus assets and to apply to the Court, subject to the Court's overriding discretion, for directions accordingly. I trust this answers your questions. If you would like to discuss anything further, please do not hesitate to telephone me on (04) 494 5633.[45] Treadwell Gordon were accordingly given to understand by Crown counsel that s 25 of the Act applied and that by virtue of s 25(4), the Trust ought to followthe procedure prescribed by the liquidation provisions of the Companies Act 1993. That no doubt accounts for the fact that the Trust's solicitors complied with the advertising requirements for liquidation proceedings under the Companies Act, and gave no apparent consideration to the possible need for directions as to service. Whether they were right to adopt that course is a matter requiring examination. [46] The Trust is not insolvent. It owns a valuable asset which it proposes to sell. The decision to do so stems from a change in the pattern of hospital care and a diminution in the need for accommodation for hospital visitors. That being so, the provisions of Part III of the Act might be thought to be applicable. Section 32(1) provides:(1) Subject to the provisions of subsection (3) of this section, in any case where any property or income is given or held upon trust, or is to be applied, for any charitable purpose, and it is impossible or impracticable or inexpedient to carry out that purpose, or the amount available is inadequate to carry out that purpose, or that purpose has been effected already, or that purpose is illegal or useless or uncertain, then (whether or not there is any general charitable intention) the property and income or any part or residue thereof or the proceeds of sale thereof shall be disposed of for some other charitable purpose, or a combination of such purposes, in the manner and subject to the provisions hereafter contained in this Part of this Act.[47] On the limited evidence before the Court, it is a distinct possibility (to put the issue at its lowest) that it has become 'impracticable or inexpedient' to carry out the original charitable purpose of the Trust. If that is the position, a positive duty is cast upon the trustees to prepare a scheme under Part III of the Act and to lay it before the Attorney-General, as required by s 35: Attorney-General Ex Rel Rathbone & McKay v Waipawa Hospital Board [1970] NZLR 1148 at 1153-1154. It may be that, in an individual case, all parties having an interest in the disposition of the corpus of a charitable trust are in agreement; in those circumstances, where the Court accepts that the assets of the Trust should be dealt with under ss 25-27, it may be possible to avoid the application of Part III of the Act and to give effect to the proposals of the parties under s 27: In the matter of the Mercury Bay Undenominational Church Association Trust Board (Inc) HC HAM, M113/00, 15 June 2000. But that is not this case.[48] The trustees were under a prima facie duty to comply with Part III of the Act and, where they proposed to proceed in a manner contrary to that advocated by the Society, they ought not, I think, simply to have adopted the procedure prescribed by ss 25-27, convenient as that might have been to the Trust. Part III is a statutory reflection of the cy-pres principle which, as Hammond J said in the Mercury Baycase: ' has informed so much of charities law over the years'. It seems to me that only in a clear case, of which Mercury Bay is an example, would trustees be justified in avoiding their obligations under Part III by simply taking steps to wind up the Trust. A weighty obligation rests upon the trustees of a charitable trust to ensure that the assets of the trust are disposed of in accordance with the cy-pres principle where the provisions of Part III apply. [49] The Trust ought at least to have been alive to the issues raised by Part III and placed before the Judge for his consideration the question of whether orders ought to have been made under ss 25-27 at all in the light of the mandatory requirements of s 32(1). But the Judge was not afforded the assistance to which I think he was entitled in that respect. [50] The Trust was, I believe, obliged to bring to the Judge's attention the provisions of Part III, which provide a clear and arguably mandatory alternative to the procedure actually adopted. In the course of doing so, the Trust was obliged, in my view, to place before the Court all relevant information relating to the history of the Trust, its objects, its financial position and the reasons both for the liquidation initiative and the choice of the three named charities as recipients of the corpus of the Trust. [51] The Trust was also obliged, in my view, to disclose to the Court the position of the Society by reason both of the Society's role in the genesis of the Trust and its recent active involvement in discussions as to the future of the Trust and of the Ozanam Villa. Had all that been done then it is likely that the Judge would have deferred making orders under ss 25 and 27, at least until the Court was satisfied that the provisions of Part III were inapplicable.[52] In determining whether Part III applied, the Court would have been likely to take into account not only the mandatory provisions of s 32(1) but also the detailed procedural requirements set out in ss 35-37 which involve the laying of a scheme before the Attorney-General, the provision of a report by the Attorney-General, the filing of an application for approval of the scheme, the advertisement of the scheme at least once in the Gazette and at least three times in a newspaper circulating in the district in which the relevant Registry of the Court is situated, and the making of provision for filing of notices of opposition. [53] Without in any way making a ruling on the point, I observe that applications under Part III of the Charitable Trusts Act 1957 may be brought by way of originating application: Rule 458D(1)(a)(iii). Proceedings which seek a determination of the question of whether a Part III application ought to be made are likely to be regarded as falling within Rule 458D(1)(e); the Court might well, in the interests of justice, permit any such proceeding to be commenced by the filing of an originating application. Whether the trustees proceeded under Part 4A or commenced an ordinary proceeding, they were obliged, in my view, either to obtain directions requiring the Society to be served, or alternatively to name the Society as a party. [54] As it was, the paucity of material made available to the Court was likely to have led the Judge to assume that there was unanimity among all those affected as to both the desirability of an order for winding-up and the disposition of the Trust assets. [55] In my view, this proceeding has miscarried. The Judge ought never to have been asked to make an order for winding-up and a further order approving disposition of the assets without being asked to consider the implications of Part III of the Act and without being provided with a great deal more evidence than was available to him. The Trust's approach to the litigation has deprived the Society of what I believe to have been its entitlement to be heard on a matter in which it has a vital interest.[56] Mr Piper submitted that the Court has authority in the exercise of its inherent jurisdiction to rescind the orders made, irrespective of the fact that they were sealed on 29 November 2005. He relied upon several recent decisions of this Court, each of which cited with approval a passage in an article based on a lecture by Master Jacob, "The Inherent Jurisdiction of the Court" [1970] CLP 23, 51:[T]he inherent jurisdiction of the court may be defined as being the reserve or fund of powers, a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so, and in particular to ensure the observance of the due process of law, to prevent improper vexation or oppression, to do justice between the parties and to secure a fair trial between them.[57] In Charter Financial Services Ltd v STL Linehaul Ltd HC WN M433/98, 25 February 1999, the Court rescinded an order for liquidation (even though the winding-up orders had been sealed) upon the ground that the company had been unaware of the liquidation proceedings and that there was evidence to show that it was solvent. Wild J said:I draw upon the residual power source to which Master Jacob there refers to achieve what I consider is just and equitable, and will prevent an injustice, here.[58] Bridon New Zealand Ltd v Tent World Ltd [1992] 3 NZLR 725 was a similar case. The company had been unaware of a notice given pursuant to s 218 of the Companies Act 1955 and of subsequent winding-up proceedings. Again, there was evidence of solvency. Thomas J ordered that the winding-up order be rescinded, despite the existence of a body of authority to the effect that a winding-up order once perfected could not be rescinded. At p 730, Thomas J said:The Court's inherent jurisdiction to set aside a winding-up order which has been procured by fraud or other improper means or where there is a miscarriage of justice has already been recognised: see Re Kim Maxwell Ltdper Tipping J at p 72; and KW & LM Powell Ltd per Thorp J at p 98,705, (although Tipping J does not expressly mention miscarriage of justice, he refers to Thorp J's judgment which does). To my mind, however, the Court's jurisdiction to rescind a winding-up order should also extend to cases which do not involve fraud or impropriety or where there cannot necessarily be said to be a miscarriage of justice. An inherent power to this effect would seem implicit in the strictures of Master Jacob, approved by the Court of Appeal in Champtaloup v Northern Districts Aero Club Inc [1980] 1 NZLR 673, at p 676. In his lecture the distinguished Master said that "the inherent jurisdiction of the court may be defined as being the reserve or fundof powers, a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so ". As I apprehend it, the Court's powers under its inherent jurisdiction are not limited to cases where there would otherwise be an impropriety or a miscarriage of justice. Indeed, unless there is some good reason to the contrary, they may be equated with the need to do justice.[59] Ben View Farms Ltd v GE Capital Returnable Packaging Systems Ltd [2002] 1 NZLR 698, was an unusual case in which original counsel for the appellant advised the Court that the appeal should be withdrawn. It later transpired that counsel was suffering from a mental illness and that he had no instructions to withdraw the appeal. In those circumstances, Fisher J held that this Court has inherent jurisdiction to protect the effectiveness of its own processes in order to avoid a miscarriage of justice, at least in circumstances where remedial steps would not expressly or impliedly conflict with legislation to the contrary. His Honour expressly referred to Master Jacob's article as authority for the existence of an inherent jurisdiction to reinstate the appeal. [60] While the facts of this case are, of course, quite different from those of the cases discussed above, the principles outlined therein are nevertheless applicable. The inherent jurisdiction of the Court to rescind its own orders is not to be invoked as a matter of routine. But in order to do justice in this case, it is, I think, necessary to ensure that the Court has the benefit of evidence and argument relevant to the question of whether the issues before the Court ought to be determined in terms of Part III of the Act, and also to ensure that the Society has an opportunity of arguing its case. That being so, the appropriate course is to rescind the orders made by Miller J on 24 November 2005 in their entirety. Mr Piper's initial position was that the winding-up order could remain but that the consequential orders ought to go. In the course of argument, he accepted that the orders ought to stand or fall together. I think that must be right. [61] Should it ultimately be held that Part III of the Act is applicable, then the primary responsibility for preparing a scheme under Part III falls upon the trustees of the Trust who will be unable to fulfil their obligations if the Trust remains in liquidation.Result[62] For the foregoing reasons, I rescind in their entirety the orders made on 24 November 2005. That leaves the proceeding on foot as an originating application for orders pursuant to ss 25-27 of the Act but leaves open, of course, the question of whether Part III applies to the exclusion of those sections. [63] It would appear appropriate for that matter to be argued as a preliminary question, but that is a matter for the parties. The Society has, of course, already participated significantly in this proceeding but without any formal order as to its status. I direct that it be treated hereafter as a party which has been served with the proceeding. It is accordingly entitled to be served with copies of all documents filed by the Trust. [64] It does not seem to me to be appropriate to give any further directions at present. The Trust will need to consider its position and to determine what its next step ought to be.Costs[65] Mr Piper advised the Court that, should the Society's application succeed, as it has, no costs would be sought against the Trust. I am uncertain of the basis for that generous concession. It may have been based on an assumption that in due course the society is likely to derive some tangible benefit from the proceeding. Whether that is the eventual outcome remains to be seen. I think, in the circumstances, that the better course is simply to reserve the costs of the application. The Court may at some point wish to consider whether there ought to be an order for costs out of the assets of the Trust.C J Allan J