Charitable trusts live forever. When their charitable purpose has ended, they have to be legally killed and buried; now required for a Whangarei children’s trust set up in 1925 but now defunct.
Charitable trusts differ from the hundreds of thousands of discretionary family trusts existing in New Zealand. Charitable status requires all trust income and assets to be applied for the benefit of a defined but wide sector of society. Too narrow a focus and the purpose is no longer charitable. The focus of family trusts is typically extended family; too narrow to be a charity. These family trusts are invalid if they do not have a specified limited life, a hangover from English legal rules which prohibited malign testators ruling from the grave attempting to tie up their assets forever. But charitable trusts live forever, on the assumption they provide a public benefit.
The High Court was told what became the Tikipunga Protestant Children’s Home was established in 1925 with the purchase of land in Corks Road by Mr and Mrs Frederick Seymour Potter. An orphanage was subsequently built on the site with funds provided by both the Potters and the local council. The original trust deed stated the orphanage was for the benefit of ‘orphans and destitute children who must be brought up in the protestant faith.’ The orphanage closed in 2012, at that time the last privately-run establishment of its type in New Zealand.
A subsequent court-approved change to its trust deed allowed the Trust to sell off its land and distribute most of the $4.8 million sale proceeds to charities around Northland supporting disadvantaged children. As acknowledgement of the Potters pioneering work, a playground was built in Whangarei for local children to enjoy; known as Potter Park. Now, $22,937 is left in the kitty.
David Reyburn, secretary of the Trust, administered the last rites getting a High Court order that the Trust be put into liquidation with any surplus after liquidation costs going to another charity: CCS Disability Action.
re Tikipunga Protestants Children’s Home – High Court (17.03.23)
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