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Debt burden weighs heavily on Taratahi

The land at Taratahi farm training centre may have to be sold to repay the debt that caused the training centre to enter liquidation in 2018, after a High Court judgement.

In her judgement, Justice Rebecca Ellis said approval could be given to a sale by the liquidators if it was necessary to meet the trust’s lawfully incurred debts.

The 1969 Wairarapa Cadet Training Farm Act allows the land to be sold with the approval of the Minister of Agriculture.

Justice Ellis found the sale of the land for the purpose of paying creditors would be lawful, as long as the sale was agreed to by the Minister of Agriculture. She said a decision to sell was likely to require wider consideration by the Minister.

Justice Ellis said the receivers for the Taratahi Agricultural Training Centre sought the High Court ruling, but descendants of the original donors wanted the land retained for education – the reason their families gifted the land in 1918.

The respondents to the case were Phillida Perry, a descendent of a land donor, and the Attorney General.

The respondents argued that the legislation did not grant power to the trust to sell the land and if it was to be discarded, it should be offered back to the descendants of donors.

This comes as the centre’s liquidator Grant Thornton’s March report showed the trust owed $15.9 million to 1194 unsecured creditors when the firm was appointed in 2019.

“To date, we have received 247 unsecured creditors’ claims totalling $15.2m. It is unknown if the amount of funds that will be available to make payment to unsecured creditors as it is dependent on the sale of the home campus and dairy farm.”

Wairarapa MP Kieran McAnulty said on Tuesday that he sought a personal guarantee from the Minister of Agriculture that the land would always be used for agricultural training regardless of ownership.

“Since learning of the High Court decision, I have again sought that assurance, which I have received.”

McAnulty said he was encouraged that the issue of ownership could now be resolved, and the next step could be in providing agricultural training on an ongoing basis at Taratahi.

“As long as the liquidator was involved the opportunities for investment into the grounds and expanding training were restricted.”

O’Connor said he was committed to securing sustainable agricultural education at Taratahi on an ongoing basis.

He said Ministry of Primary Industries was working closely with the High Court-appointed liquidators to find a long-term solution. The campus remained open and was being used by UCOL to deliver short courses.

Wairarapa farmer Mike Butterick said the facility was massively needed.

“You’ve only got to look at the shortage of workers in the agricultural sector, it was an institution that was formerly there.”

He said there were five other training programmes in Wairarapa, but between them they only took about 31 students a year.

“They have really good reputations for producing quality people but it’s not enough.”

Butterick said he knew a few of the creditors who were owed “significant sums” by the trust.

Thornton said paying out the claims was dependent on the ability of the liquidators to sell the Wairarapa campus and home dairy farm.

It said that while the training centre was in interim liquidation, it did not receive a viable proposal to maintain education operations at the Wairarapa or regional campuses.

“As such, on our appointment as liquidators, the decision was made to close the academic part of the trust.”

It said the campus’ suitability for education was proven by the sub-lease to Southern Institute of Technology and short-term lease to Universal College of Learning.

Justice Ellis said at the time of liquidation, the board owed $11.9m and a further $12.5m to Westpac.

The amount owed to Westpac was then reduced to $6.6m.

“The Taratahi land is the last unrealised asset of significant value,” Justice Ellis said.

Justice Ellis said the Attorney General supported the liquidator’s position but noted that the Minister was committed to finding options for retaining agricultural education at the training centre.

She said the gifting of land in 1918 was for charitable educational purposes.

“It was not to gift the land to the Crown to use however it wished; there were detailed discussions of the use to which the land was to be put.

“I have no doubt that it would not have been transferred but for the Crown’s agreement to use the land [and the stock] as the core of the training farm enterprise envisioned by the donors.”

A history of the agricultural training centre

After World War I, William and Margaret Perry donated 131ha to help returning servicemen re-establish themselves and promote modern farming practices in Wairarapa.

“Towards the end of the Great War, Corran Perry returned to his family in New Zealand from the battlefront in France, wounded and shell-shocked.

“Moved by the plight of his son and others like him, William Perry put into action an idea that he had been harbouring for some time: a training farm to help returned servicemen re-establish themselves and to assist more generally in promoting modern farming practices in the Wairarapa,” Justice Rebecca Ellis said.

She said that about the same time, a neighbouring 163ha was bought off Ivelenah Rayner with funds raised from the Wairarapa community, which led to the establishment of the Wairarapa Cadet Training Farm.

The community also donated livestock while the Government funded buildings, fences, and equipment.

Until 1969, the farm was controlled and managed by a committee appointed by the Minister of Agriculture, but the passing in 1969 of the Wairarapa Cadet Training Farm Act vested the farm and land in a trust board.

That change was needed to give governance a more certain legal footing and to provide easier access to funding.

Ellis said the board was struggling financially in 2017 and 2018, and fewer enrolments of full-time students resulted in the trust board being required to repay funding it had received from the Tertiary Education Commission.

She said the trust also borrowed extensively from Westpac New Zealand.

She said the trust needed funding from the Crown to remain operational, but that funding was denied by the Minister of Agriculture on December 10, 2018.

By February 5, 2019, the High Court put the Trust Board into liquidation and confirmed the appointment of liquidators.

 



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