By Tony Stickley for NZPA

Auckland, Feb 15 NZPA - The High Court at Auckland has ordered the winding up of the beleaguered Pacificare Trust which is mired in debt and controversy.

Last week it was reported that the trust's contract to cater for 200 mental health clients, mostly of Pacific origins, had been transferred to the mainstream Challenge Trust in Botany.

The switch brought allegations of racism.

And around 100 staff who worked for Pacificare Resthome and Hospital in Mangere complained they had not been paid.
Justice Ailsa Duffy said in a recently-released judgment that Pacificare was now "plainly insolvent" and had to be wound up under the Companies Act.

The judge said that Pacificare's trustees had applied for the appointment of a liquidator order under the Charitable Trusts Act.
However, two "substantial" creditors, Culverden Group Ltd and NZ Guardian Trust Co Ltd, had initially opposed the move.
They said at the time that the trust could not establish it was insolvent.

However, the judge said that since the hearing last June, there had been a number of further developments. The IRD had served the trust with a statutory demand for unpaid GST and employer deductions totalling more than $605,000 on January 27.
Pacificare said it could not pay.

Furthermore, Justice Duffy said, Pacificare had lost its contract with the Counties Manukau District Health Board on January 31.
Then on February 3, Guardian Trust called in the receivers.

The judge said that Guardian Trust had now withdrawn its opposition to Pacificare being wound up.
Culverden had not responded to the new material filed by the other parties.

However, the judge said it was difficult to see how Culverden could maintain its opposition to the winding up order.
"Whatever the position at the time of the hearing, Pacificare is now plainly insolvent," she said.

Credit:NZPA