The Great Christchurch Buildings Trust v The Church Property Trustees and Canterbury Earthquake Recovery Authority; The Church Property Trustees v Attorney-General and The Great Christchurch Buildings Trust [2014] NZHC 1182 (High Court of New Zealand, Panckhurst J, 30 May 2014) This was a further hearing in a series of cases concerning the deconstruction and mooted reconstruction of Christchurch Cathedral (the Cathedral) after the 2011 earthquake. Two proceedings were consolidated into one hearing: 1. The first was a judicial review of a decision by Chisholm J which ordered a stay on deconstruction of the Cathedral to a height of two to three metres so that it no longer constituted a public hazard. The Great Christchurch Buildings Trust (GCBT) had asserted that the Church Property Trustees (the CPT) decision to deconstruct the Cathedral was in breach of trust because the CPT held the Cathedral land and buildings on trust and were bound to restore the Cathedral to its pre-earthquake condition. Chisholm J held that the CPT did hold the Cathedral land and buildings on trust, but decided that the terms of the trust were such that there was only a requirement to build a cathedral (of some kind) on the site, and not to maintain and restore the gothic revival Cathedral to its original condition: see at The Great Christchurch Buildings Trust v Church Property Trustees [2012] NZHC 3045. 2. The second proceeding was brought by the CPT. They sought directions confirming that insurance monies received for the earthquake damage to the Cathedral could be applied in part to the construction of a transitional cathedral at another site, which had already been commenced. Panckhurst J had originally decided that the insurance money had been applied in breach of trust to commence the building of the transitional cathedral, but had not decided the issue of personal liability for breach of trust: see Church Property Trustees v Attorney- General and the Great Christchurch Buildings Trust [2013] NZHC 678. In this hearing, the CPT at first sought relief against personal liability for the breach, if the application of the money for the transitional cathedral was in breach of trust. The CPT then applied to amend their Statement of Claim to abandon the application for relief against personal liability, arguing that it was no longer required. The parties 1. The CPT has the form of a corporate trustee, recognised by statute: see the Anglican (Diocese of Christchurch) Church Property Trust Act 2003. The CPT owns much of the church property in the Anglican diocese of Canterbury, New Zealand. They hold the land, and the now damaged Cathedral, upon the terms of the Cathedral Trust. 2. The GCBT was formed in August 2012 as an incorporated charitable trust. A group of prominent Christchurch citizens established the GCBT with the principal objective of promoting the preservation of heritage buildings damaged in the earthquakes. Their particular concern has been the restoration of the Cathedral. The decision of Chisholm J in 2012 Chisholm J first had to consider the history of the Cathedral to determine the extent of the trust on which it was held. The area around Christchurch was purchased by the Canterbury Association under Letters Patent dated 1849. The Cathedral was conceived by the Canterbury Association in 1849, and Cathedral Square was included as part of the initial town plan for Christchurch in 1850. Land was acquired in 1851, and the Canterbury Association declared by a deed dated 9 September 1851 that specified lands, including Cathedral Square, were reserved and appropriated:...to the intent and purport that the same may be used for the establishment and maintenance of Ecclesiastical and Educational Institutions in connection with the Church of England...to the intent that such Lands may be held by the said Association in trust for the said Ecclesiastical and Educational purposes with such power of Sale alienation Mortgage charge or any other
disposition and of general management as the said Association are by the said Letters Patent declared capable of having and enjoying. The Canterbury Provincial Council (which succeeded the Canterbury Association) passed the Church Property Trust Ordinance 1854(C) which established the CPT as a body corporate with perpetual succession. Subject to later statutory recognition in the Church Property Trust (Canterbury) Act 1879 (repealed 2003), and the Anglican (Diocese of Christchurch) Church Property Trust Act 2003, the CPT has existed ever since. The lands held by the Canterbury Association for ecclesiastical and educational purposes (including the land in Cathedral Square) were transferred to the Canterbury Provincial Council on trust for those purposes by section 6 of the Canterbury Association Ordinance 1855. The trust was therefore passed unaffected from one body to the other. Building of the main body of the Cathedral, which was in the Gothic Revival style, occurred between 1864 and 1904 using significant public donations. Since its completion, only small additions have been made to the building, such as the visitors centre and seismic strengthening works. The Cathedral is registered as a Category 1 heritage building by the New Zealand Historic Places Trust. Category 1 is the highest listing available, described in section 22(3) of the Historic Places Act 1993 as:... Places of special or outstanding historical or cultural heritage significance or value. The building is also listed as a Group 1 building in the Christchurch City Council s District Plan. This listing recognises the significance of the Cathedral to the Christchurch community. Options for reconstruction The Christchurch Earthquake Reconstruction Authority was concerned that the Cathedral was unsafe, particularly as it continued to be damaged as further earthquakes occurred during 2011. CPT s advisers considered various options for make-safe procedures. These were: Option 1: to retain the outer walls in full (cost estimate: $100 million excluding GST) Option 2: to deconstruct the building to sill level, and reconstruct at some point (cost estimate: $66 76 million excluding GST) Option 3: to stabilise the eastern end of the building and to deconstruct or demolish the western end. Insurance moneys due were estimated at $28 million. CPT chose option 2 in so far as it related to deconstruction. GCBT complained that CPT as trustee was obliged to use the insurance moneys received to repair and reinstate the Cathedral to its original form. In June 2012, a review panel commissioned by GCBT considered the options, and concluded that the Cathedral could be rebuilt following retention of the outer walls under option1 (above). Legislative provisions applicable In terms of the applicable legislation, Chisholm J said that section 5 of the Church Property Trust (Canterbury) Act 1879 (the 1879 Act) provided that all the powers and authorities conferred on the CPT by various Ordinances (including the Church Property Trust Ordinance 1854(C)) remained in full force and effect to the extent that they were not affected, altered, or amended by the Act. The most significant change brought about by the 1879 Act was the termination of all trusts relating to lands specified in Schedule A (the Bishopric Estate) and Schedule B (the Dean and Chapter Estate): section 6. The Cathedral land was not included in those estates. The purpose of the Anglican (Diocese of Christchurch) Church Property Trust Act 2003 (the 2003 Act) was stated in section 3 to:...(a) consolidate and amend the Church Property Trust Ordinance 1854 (C) and the Church Property Trust (Canterbury) Act 1879 and their amendments; and (b) widen the investment powers of trustees who hold real and personal property on trusts relating to the Anglican Diocese of Christchurch; and
(c) apply the variation of trusts provisions in the Anglican Church Trusts Act 1981 to trusts under this Act. Historical ordinances and legislation, including both the Church Property Trust Ordinance 1854(C) and the 1879 Act, were repealed by the 2003 Act. The relevant sections of the 2003 Act were sections 5 to 7 and 9. Section 5 provides: (1) There continues to be a body called the Church Property Trustees. (2) The Church Property Trustees continues to be a body corporate with perpetual succession and a common seal. (3) The Church Property Trustees is the same body of that name existing immediately before the commencement of this Act under the Church Property Trust Ordinance 1854(C). Thus, it is clear from the 2003 Act that the statutory body created by the Act was a continuation of the body that originally came into existence in 1854. The function of the CPT to hold and administer trust property in accordance with this Act is described in section 6 of the 2003 Act. His Honour was clear that the trust property referred to was the Cathedral land (at [55]). The powers available to the CPT when carrying out its section 6 function are described in section 7 of the 2003 Act: (1) For the purpose of carrying out its function, the Church Property Trustees may exercise the powers set out in Schedule 1 and in the Trustee Act 1956. (2) The Church Property Trustees must exercise its powers subject to any authorisations that this Act requires to be given by the Synod or other body or person. His Honour said (at [56] of the 2012 decision): While the powers in the Trustee Act are of no immediate significance, there are two powers in Schedule 1 that are potentially relevant: the power to build on or develop any property whatsoever [at clause 14] and the power to enter into such contracts and do or perform such things as in the opinion of the [CPT] will be for the benefit of any trust administered by it [at clause 17]. Section 9 of the 2003 Act directs that in carrying out its function, the CPT must comply with all canon and ecclesiastical laws and regulations that, under the authority of the Synod, apply to the administration of trust property. Apart from a requirement for a consecrated cathedral to be debt free, no such laws appeared to be relevant to this case. Part 3 of the Act contains detailed provisions relating to the Bishopric Estate, Dean and Chapter Estate, and local endowments. The provisions in the 1879 Act are carried forward in relation to those matters. In the case of the Dean and Chapter Estate there are the following secondary trusts listed in section 19: The secondary trusts are to hold the capital and the income of the Dean and Chapter estate on trust (e) to keep the Cathedral and its precincts in good repair: (h) to maintain and repair the Cathedral:. In relation to the legislation applicable, GCBT contended that the Cathedral was held on the terms of the 2003 Act only. CPT considered that the 2003 Act did not alter the terms of the Trust on which the Cathedral was held, namely, maintaining the ecclesiastical institution. What were the terms of the trust? GCBT contended that the Cathedral is held by the CPT upon a trust to preserve and maintain the Cathedral as it was built. CPT s position was that first and foremost, the trust on which the Cathedral is held is for the advancement of religion rather than for the advancement of a building. The 1851 deed declared that specified lands, including Cathedral Square, were to be held on trust for the
establishment and maintenance of ecclesiastical and educational institutions. His Honour agreed that the trust created by the 1851 deed was for the broad purpose of establishing and maintaining ecclesiastical and educational institutions, not for particular buildings. However, he held that the trust created in 1851 did not reflect the trust on which the Cathedral is held by the CPT today (at [102]). The Cathedral Square Ordinance 1858 was of more importance. Clause 4 of that instrument recorded that the Cathedral site was reserved by the Provincial Council:... as a site for the erection of a Cathedral in connection with the Church of England, which site shall be conveyed to the Bishop of Christchurch and his Successors, to be held, in trust, for the uses as aforesaid, of the Church of England in the said province: and the said Superintendant, upon commencement of the said Cathedral, is hereby empowered and required to convey the aforesaid site accordingly... His Honour said that this meant that the trust was to be for the erection of a Cathedral in the sense of bricks and mortar (subject, of course, to a spiritual dimension) (at [105], [emphasis added]). The Cathedral Square Ordinance 1864 dispelled all doubt in this respect. That Ordinance repeated that the land was to be held by the Superintendent of the Province and his successors:... as a site for the erection of a Cathedral... and upon trust as soon as the building of the said cathedral shall be commenced to convey the fee simple and inheritance in the same by deed unto the then Bishop of Christchurch and his successors to be held in trust for the purpose aforesaid. [emphasis added] His Honour concluded that (at [106] of the 2012 decision): Thus it is clear that the grantor of the trust (the Provincial Council) contemplated that a Cathedral, in the sense of bricks and mortar (with a spiritual dimension), would be erected on the land. Therefore, an express trust was created in 1858 and confirmed in 1864 by the successive Ordinances. The purpose of the trust was certain: the erection of a Cathedral on the land designated for that purpose. The trust was complete when the land was transferred to the Bishop (synonymous with the transfer to the CPT). It was inherent in the arrangement that the land was to be held by the CPT on that trust indefinitely. Thus, the CPT s proposition that the Cathedral land was held in trust in the present day for ecclesiastical purposes failed to take proper account of the express trust established in 1858. While the Cathedral Square land was originally part of a wider trust for ecclesiastical and educational purposes (as described in the 1851 deed), that trust was overtaken in relation to the Cathedral Square land by the express trust declared in 1858. What was the trust for? It is a valid purpose of a charitable trust that buildings for worship be provided. The trust in question in this case was for the erection of a Cathedral. The Cathedral did not have to be of any particular type (at [112]): No term requiring a particular style, for example Gothic, was imposed on the trustee. Had there been such a requirement it might be expected that this requirement would have been spelled out in the Ordinance creating the trust or at least in some other instrument produced by the grantor around the time the trust was being created. Certainly there was an opportunity to specify a particular style when the Provincial Council revisited the Cathedral issue in 1864. GCBT s contention was that the trust was for the Cathedral. But was it for the magnificent Gothic cathedral as built, or for just a Cathedral? His Honour returned to a legislative analysis, concluding that:
...the 2003 Act does not alter the fundamental terms of the Cathedral trust; in particular it does not reflect a legislative intention that the Cathedral as it stood before the earthquakes must be preserved indefinitely; nor does it authorise deconstruction of the Cathedral other than for the purpose of repair or rebuilding. Overall, His Honour held that (at [146] [148] of the 2012 decision [emphasis added]): What happens in the situation that has arisen where the Cathedral has been severely damaged? The answer is that unless the terms of the Cathedral trust are varied, either the structure that remains will have to be repaired or it will have to be replaced by another Cathedral. In the absence of one of those steps the whole purpose of the trust would be defeated. Any necessary deconstruction and/or demolition would come within the terms of the trust provided such deconstruction or demolition is for the purpose of repairing or replacing the existing structure. While the timeframe for repair or replacement would be for the CPT to determine, its obligations as trustee require it to honour the spirit of the trust. Thus it would not be in the spirit of the trust for the repair or reconstruction to be unnecessarily deferred. When determining the timeframe the CPT would be entitled to take into account the practical realities of the situation it faces...the terms of the Cathedral trust do not require a replacement Cathedral (if that is the option decided upon) to be identical to the Cathedral that existed before the earthquakes occurred. But the structure would, of course, have to qualify as a Cathedral in terms of the trust. Was the decision of the CPT valid? The CPT decided on partial deconstruction of the Cathedral (option 2 on the list above). His Honour said (at [163]): It seems to me that the decision made by the CPT on 1 March 2012 is susceptible to two possible interpretations. One is that it defeats the central purpose of the trust, constitutes a breach of trust accordingly, and is thereby unlawful. The other is that it would be premature to reach that conclusion because the CPT intends to rebuild the Cathedral on the same site. Had it not been for [counsel s] indication from the bar that the CPT intends to rebuild the Cathedral I would probably have adopted the first interpretation. However, given the indication from the bar, I have concluded that the better interpretation at this juncture is that the decision is incomplete. The CPT had really operated on a misapprehension about the purpose, in legal terms, of the Cathedral trust. The CPT proceeded on the basis that the purpose of the trust was the advancement of religion and the maintenance of the ecclesiastical institution related to the Cathedral site, not of particular buildings. His Honour said that while it is not for the Court to become involved in the merits of the decision, it has a responsibility to ensure that the purposes of the trust are honoured (at [171]). Therefore, the application for judicial review was granted and the decision of the CPT made on 1 March 2012 was stayed until further order of the Court. In addition there was a declaration made that while there must be a Cathedral on the site, it did not necessarily have to replicate the Cathedral as it stood before the earthquakes occurred. The reconstruction decision taken by the CPT On 5 September 2013, the CPT took the decision to build a cathedral in a modern, contemporary style on the original site of the gothic revival Cathedral. This would involve further deconstruction of the damaged original Cathedral. This decision raised considerable opposition from the CGBT and some public controversy. However, His Honour in this case was not concerned with the nature of the building proposed. He said that this involved a discretionary power (at [40]): In making decisions concerning the Cathedral the Trustees exercised a discretionary power. The obligations to which trustees generally are subject are well settled. In 1851 they were outlined as follows:
it is to the discretion of the trustees that the execution of the trust is confided, that discretion being exercised with an entire absence of indirect motive, with honesty of intention, and with a fair consideration of the subject. The duty of supervision on the part of this court would thus be confined to the question of honesty, integrity, and fairness with which the deliberation has been conducted, and will not be extended to the accuracy of the conclusion arrived at, except in particular cases. Hence, decisions must be reached with an absence of indirect motive, with honesty of intention and with a fair consideration of the issues, including knowledge of the matters relevant to the decision. It is not for this Court to endeavour to evaluate the correctness, or merit, of the decision reached. The lifting of the stay on deconstruction The court concluded that the stay on deconstruction should be lifted, because: 1. The CPT had now committed to the construction of a new cathedral on the original site and therefore the stay was no longer required (at [45] [46]); 2. The CPT had given fair consideration to all relevant issues before reaching its decision to deconstruct and build a new contemporary cathedral (at [47] [48]); 3. There was no evidence that improper motive, dishonest intention or conflict of interest affected the CPT s decision (at [53]); 4. The merits of the decision to rebuild a cathedral in a contemporary design was a matter for the CPT, and not for the court. The court s role was limited to ensuring that the decision was reached after fair consideration of all the relevant issues, and not for any improper reasons. This test had been met, and so there were no grounds for judicial review of the CPT s decision (at [40]). The liability issue The application of $4 million of insurance money received by CPT to the erection of the transitional cathedral on another site was, in His Honour s words, a mistake (at [53]). Did liability attach to the CPT for this decision, made in breach of trust? His Honour reserved his decision on this matter to a later date, as further evidence was required. He was clear that the claim relating to liability should not be abandoned, and the Attorney-General agreed. His Honour said (at [61]): In any event I am not comfortable with the notion that restoration of the Cathedral Trust is an automatic and complete answer to the original breach of trust. This matter needs to be viewed in its particular context. The claim for relief is part-heard and already in the public domain. As noted, issues relating to the Cathedral are of intense public interest in the city. It is, therefore, appropriate for the claim to be resolved in open Court even if the outcome proves to be straightforward as CPT anticipates. Therefore, the stay on deconstruction was ordered to be lifted. The court made it clear that it was for the GCBT to establish any grounds which justified retention of the stay, which may indicate that future steps in this litigation may be expected. This case may be viewed at: http://www.nzlii.org/nz/cases/nzhc/2014/1182.html The 2012 decision of Chisholm J may be viewed at: http://www.nzlii.org/nz/cases/nzhc/2012/3045.html The 2013 decision of Panckhurst J may be viewed at: http://www.nzlii.org/nz/cases/nzhc/2013/678.html
Implications of this case The part of this case reserved for a later decision relates to deciding if the CPT is liable for breach of trust for building the transitional cathedral on another site. The Attorney-General submitted that even if the CPT should be held not liable, since they had restored the $4 million spent in breach of trust back into the trust, it was better to have this decision made in open court for the benefit of any future enquiry which might arise into the events surrounding the Cathedral s affairs.