13 July 2004

Greater Wellington welcomes High Court decision on Wellington Regional Stadium Trust

The Greater Wellington Regional Council has welcomed the decision of the High Court upholding the charitable status of the Wellington Regional Stadium Trust.

The court found that the dominant purpose of the Stadium Trust is not to make a profit, but to provide a successful multi-purpose sporting and cultural venue for the benefit of the region. In technical terms, the court agreed that the Stadium Trust was not a ‘council controlled trading organisation’ under the Local Government Act 2002.

“The decision of the court is common sense, and good news for the region”, said Margaret Shields, Chairperson of Greater Wellington Regional Council. “We didn’t fund the stadium in order to make money, we funded it to provide an essential recreational and cultural facility for the region.”

Ms Shields said that the decision removed the current threat that the Regional Stadium Trust would have its income tax exemption withdrawn, and require the City and Regional Council to charge interest on their advances to the Trust.

“Taxing the Stadium’s profits and charging interest would undermine its ability to repay its loans and to operate as a going concern. From the start the goal of the City and Regional Councils’ was to establish the Trust on a businesslike basis, and to ensure that it was financially stable. That means any ‘profits’ being reinvested in debt reduction and operational improvements.”

Ms Shields said that the wisdom of the decision is well summed up in the judges finding that the profits the stadium makes are “a means to an end, namely to enable the stadium to operate as a going concern, not an end in themselves”.

“I hope this is an end to the matter, and allows the trust to focus on the important business of successfully running the Stadium for the benefit of the region,” said Ms Shields.

ENDS

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