Allen Ralph Robinson as Trustee for the Trust Fund of the Fairfax Fellowships at Balliol College v Attorney General of New South Wales

[2022] NSWSC 996

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Allen Ralph Robinson as Trustee for the Trust Fund of the Fairfax Fellowships at Balliol College v Attorney General of New South Wales [2022] NSWSC 996

Hearing dates:

11 February, 20 June 2022; further written submissions 30 March, 28 April, 11 July 2022

Decision date:

26 July 2022

Jurisdiction:

Equity - Applications List

Before:

Kunc J

Decision:

Scheme to be ordered

Catchwords:

CHARITIES AND NOT-FOR-PROFITS — Charitable gifts and trusts — Whether cy-près or administrative scheme can be ordered — Termination of Australian trust and transfer of Sterling denominated assets to English trust — “Original purposes of a charitable trust” — Charitable Trusts Act 1993 (NSW), s 9(1)

Legislation Cited:

Charitable Trusts Act 1993 (NSW)

Trustee Act 1925 (NSW)

Cases Cited:

College of Law Pty Ltd v Attorney General of NSW [2009] NSWSC 1474

Corish v Attorney General’s Department of NSW [2006] NSWSC 1219

Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (2017) 94 NSWLR 340; [2017] NSWCA 28

Gauidya Mission v Brahmachary [1998] Ch 341

In re Royal Society’s Charitable Trusts [1956] 1 Ch 87

Kytherian Association of Queensland v Sklavos (1958) 101 CLR 56; [1958] HCA 47

Lever v Attorney General of NSW [2018] NSWSC 838

Northern Sydney and Central Coast Area Health Service v The Attorney General for New South Wales & Ors [2007] NSWSC 881

Northern Sydney and Central Coast Area Health & Anor v The Attorney General for New South Wales & Ors [2008] NSWSC 1223

Perpetual Trustee Co Ltd v Attorney General (NSW) [2018] NSWSC 1456

Re Dion Investments Pty Ltd (2014) 87 NSWLR 753; [2014] NSWCA 367

Re Shipwrecked Fishermen and Mariners’ Royal Benevolent Society [1959] Ch 220

Texts Cited:

GE Dal Pont and S Petrow, Law of Charity (3rd ed, 2021, LexisNexis Australia

Macquarie Dictionary, online edition

Category:

Principal judgment

Parties:

Allen Ralph Robinson as Trustee for the Trust Fund of the Fairfax Fellowships at Balliol College (First Plaintiff)
Jackson Francis Edward Ehlers as Trustee of the Trust Fund of the Fairfax Fellowships at Balliol College (Second Plaintiff)
Dame Helen Ghosh as Trustee of the Trust Fund of the Fairfax Fellowships at Balliol College (Third Plaintiff)

Attorney General of New South Wales (Defendant)

Representation:

Counsel:
M B Oakes SC (Plaintiffs)
Dr C Mantziaris (Defendant)

Solicitors:

Hicksons (Plaintiffs)
The Crown Solicitor (Defendant)

File Number(s):

2021/284289

Publication restriction:

No

Judgment

Summary

1. These are proceedings brought with the consent of the Attorney General (the First Defendant) under the Charitable Trusts Act 1993 (NSW) (the Act). The three plaintiffs (the Trustees) are the current trustees of an Australian trust known as The Trust Fund of the Fairfax Fellowships at Balliol College (the Trust).

2. By summons filed on 21 September 2021, the Trustees seek this principal relief:

“1. A declaration pursuant to section 9(1) of the Charitable Trusts Act 1993 (NSW) that, since they were laid down, the original purposes of The Trust Fund of the Fairfax Fellowships at Balliol College (created by the Trust Deed of [sic] dated 26 July 1965 as supplemented by Order of this Honourable Court made on 4 June 1990, a copy of which appears in Schedule 1 to this Summons: the Australian Trust) have ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust.

2.   An order that on the implementation date (being 28 days after final orders are made in this proceeding) the trust property of the Australian Trust be applied cy–près to The Trust Fund for the Fairfax Scholarships created by Deed of Declaration of Trust which appears in Schedule 2 to this Summons: the English Trust).”

3. In summary, for the reasons which follow the Court has concluded:

1. The Court’s jurisdiction to order a cy-près scheme pursuant to the Act is not engaged because, as the Trustees properly wish to be the case, the purposes of the English Trust are identical to those of the Trust, so that it cannot be said that the original purposes of the Trust “wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust”.

2. The Court is able to order an administrative scheme for the Trust to be wound up and its assets paid to the English Trust when constituted because the current means by which the purposes of the Trust are given effect are no longer suitable.

3. The decision of Vaisey J in In re Royal Society’s Charitable Trusts [1956] 1 Ch 87 (Royal Society) adds nothing to, and says nothing about, the Court’s jurisdiction to order administrative schemes in relation to charitable trusts under the common law of Australia.

4. Mr M B Oakes of Senior Counsel appeared for the Trustees. Dr C Mantziaris appeared for the Attorney General.

Procedural history

5. As will be apparent from the facts set out below, the present application is the product of discussions between the interested parties, including the Crown Solicitor on behalf of the Attorney General, over a period of several years.

6. The Summons was filed on 21 September 2021. The evidence in support of the Summons (and upon which the Court’s recitation of the facts is based, save for paragraph [13] below which records matters of Australian history) was an affidavit affirmed by the first plaintiff Trustee, Mr Allen Robinson.

7. The Summons came before me for hearing in the Applications List on 11 February 2022. With the benefit of the parties’ helpful joint written submissions prepared up to that date and the matters that were traversed during the course of the hearing, it became apparent that further written submissions would be required and that in some respects it may be necessary for the Attorney General to assist the Court by providing some contradictory submissions where there was scope to do so. A list of questions to be addressed in those submissions was agreed between the parties and the Court.

8. After the Court received the parties’ further written submissions, a short hearing was held on 20 June 2022 in which two further short matters were raised which again resulted in the Court inviting further written submissions. The Court left it in the hands of the parties to indicate whether they required a further hearing.

9. After the final written submissions were provided, the parties informed the Court on 15 July 2022 that they did not require a further hearing and invited the Court to proceed to determine the matter on the papers.

10. The Court acknowledges the assistance it has derived from the parties’ submissions. It is not intended as any disrespect to their thoroughness that they are referred to in these reasons only to the extent that they touch directly upon what the Court considers to be the dispositive issues.

The facts

11. Balliol College (Balliol) is one of the constituent colleges of the University of Oxford. It was founded in 1263 and received its Royal Charter in 1588.

12. In addition to being incorporated by Royal Charter, Balliol is a charity registered with the UK Charity Commission and acts as trustee for a large number of existing trust funds devoted to the furtherance of the College’s charitable objects.

13. In 1838, one John Fairfax arrived from England in the colony of New South Wales. Over five generations members of the Fairfax family have, among other things, been prominent as media proprietors in Australia, as well as being notable philanthropists and supporters of the arts.

14. Some members of the Fairfax family attended Balliol. These included Sir Warwick Oswald Fairfax and his son James Oswald Fairfax.

15. Sir Warwick’s and his son’s desire to benefit Balliol led them to establish the Trust by a trust deed made on 26 July 1965 (the Trust Deed - which expression in these reasons, unless the context otherwise requires, includes subsequent amendments to the deed). The corpus of the Trust was a gift of 30,000 shares of 5/- each fully paid in John Fairfax Limited.

16. The Trust Deed includes (emphases added):

“3.   The Trust Fund shall be known as “The Fairfax Fellowship in Philosophy (Balliol College)” [amended in 1990 to become “The Trust Fund of the Fairfax Fellowships at Balliol College”].

4.   The Trustees shall hold the Trust Fund UPON TRUST to apply the income thereof in perpetuity for the endowment of the said Fairfax Fellowship at Balliol College within the University of Oxford and in particular but without affecting the generality hereof in payment of the stipend required to maintaining the said Fellowship and any other expenses and outgoings incidental thereto as the Governing Body of the College shall from time to time decide and direct and if and when the said Fellowship shall cease to exist then for one or more of the purposes or objects of the said Balliol College in connection with the teaching of Philosophy or other subjects in the Honour Schools of Literae Humaniores or Philosophy Politics and Economics as the Governing Body of the College for the time being shall deem fit. Any surplus income of the Trust Fund unexpended in any year after the purposes of the Trust have been fully provided for in that year (whether wholly by income from the Trust or partly by income from the Trust and partly by other means) may, at the discretion of the Governing Body of the College, either be accumulated and added to the capital of the Trust Fund and be dealt with as part of such capital (with power to the Governing Body at any time to apply such accumulations or any part thereof as if the same were income arising in the year current at the date of application) or for some purpose or purposes connected with the teaching of Philosophy or other subjects in the Honour Schools of Literae Humaniores or Philosophy Politics and Economics.

The primary and express purpose of the Trust Fund is the teaching of Philosophy or other subjects in the Honour Schools of Literae Humaniores or Philosophy Politics and Economics, but in the event of (a) there being a surplus in any one year of income from the Trust Fund unexpended after the purposes of the Trust Fund have been fully provided for as hereinbefore mentioned, or (b) if and when the Fellowship shall cease to exist then and in either case the Governing Body of the College may place before the Trustees any alternative proposal having as its purpose assistance in teaching subjects other than those hereinbefore mentioned which the Governing Body may desire to put forward for the use of the Trust Fund. The Governing Body shall consult with the Trustees fully thereon and apply all such information in regard thereto as the Trustees may require. The Trustees shall thereafter advise the Governing Body of the consent or otherwise of the Trustees to the proposal or of any amendments thereto which the Trustees may deem desirable. No such alternative proposal shall be adopted by the Governing Body of the College without the consent in writing of the Trustees thereto which consent shall be at the discretion of the Trustees and the decision of the Trustees shall be final and binding on the Governing Body.”

17. The founding trustees of the Trust were Sir Warwick Fairfax and his son James Fairfax, together with the Master for the time being of Balliol.

18. Sir Warwick Fairfax died in January 1987. His death left just two trustees. At the end of 1987, the shares which had been the sole assets of the Trust were compulsorily acquired for cash by an entity controlled by another son of the late Sir Warwick Fairfax, Warwick G.O. Fairfax, James Fairfax’s half-brother. As a result, the assets of the Trust were converted to cash.

19. On 4 June 1990, the Trust Deed was amended pursuant to an order of this Court made by Master Windeyer (as his Honour then was). The main amendments were:

1. The name of the Trust was amended to “The Trust Fund of the Fairfax Fellowships at Balliol College”;

2. The first plaintiff, Mr Robinson, a trusted accounting and financial adviser to James Fairfax (and now executor of James Fairfax’s estate) was appointed as a trustee in place of the late Sir Warwick Fairfax; and

3. The terms of the Trust Deed were amended including to expand the powers of the trustees to make overseas investments and to extend the range of assets which the Trust could hold.

20. The Trustees subsequently took a decision that because the income of the Trust was applied to stipends for fellows at Balliol, it would be prudent to invest in Sterling denominated assets rather than Australian dollars. That has occurred and the assets of the Trust have a current value of approximately £4 million.

21. James Fairfax continued his interest in the affairs of the Trust and used to meet regularly in Oxford with the fellows who benefited from the Fellowships. In 2015, James Fairfax’s health was failing and his great nephew, Jackson Frances Edward Ehlers, was appointed as an additional trustee on 30 October 2015. Mr Ehlers had also been a student at Balliol. With James Fairfax’s death in January 2017, the Trustees and present plaintiffs are Mr Robinson and Mr Ehlers (both of whom are Australian citizens), and Dame Helen Ghosh DCB, the current Master of Balliol.

22. In 2016, prior to the death of James Fairfax, the then trustees of the Trust were approached by representatives of Balliol. Those representatives explained that, for administrative purposes, they saw greater efficiencies in having all of the assets of the various Balliol trust funds (then valued at about £105 million) managed together in the United Kingdom. The trustees of the Trust indicated they were prepared for this to occur provided that the original intention of the Trust was maintained, together with the Fairfax name.

23. In his affidavit, Mr Robinson gave evidence of this conversation with James Fairfax:

“33.   On 30 November 2016, James Fairfax and I, being his accountant and appointed executor of his will, had the following discussion, or words to the effect of the following:

Allen Ralph Robinson (ARR): James, on a number of occasions over the last nine months we have discussed the suggestion of Balliol College to effectively appoint Balliol College as the Trustee of the Trust Fund for Fairfax Fellows at Balliol College and have the present Trustees become an Advisory Council. You have read the paper that I recently produced on this proposal.

James Oswald Fairfax (JOF): Yes, one thing that particularly attracts me to this idea is that one day I will no longer be able to continue as Trustee, you will also soon be in that situation and one day so will Jackson as well. This proposal will enable a reliable and sound Trustee to be available into perpetuity, and so the Trust, and more importantly its objectives of funding stipends for Fellows in Philosophy, or certain other subjects, at Balliol College can continue to be achieved. I also note that the Fairfax name will continue to be preserved for the Fund, which is important to both me and my late father; that the levels of income from the assets each year are likely to increase under this new arrangement; and the expenses of operating the Trust should be reduced.

ARR: James, I take it from your comments that you would like me to work with Balliol, using whatever legal advice we need, to organise these changes.

JOF: Yes I would.”

24. It is unnecessary to record the various intermediate steps and discussions which have since occurred between the Trustees, Balliol and the representatives of the Attorney General. The essence of the present application is that the assets of the Trust be applied cy–près by being paid to “The Trust Fund for the Fairfax Fellowships” to be created by the execution on behalf of Balliol of a Deed of Declaration of Trust (the English Trust referred to in the summons – see paragraph [2] above). The intended terms of the English Trust were in evidence and included:

“1.   Name and Objects

1,1   The name of the Trust is The Trust for the Fairfax Fellowships (or any other name chosen by resolution of the College provided the name Fairfax appears in the alternative name).

1.2   The objects of the Trust (the Objects) are:

1.2.1   subject to Clause 1.2.2 and clause 1.2.4, to advance education in the fields of Philosophy or other subjects in the Honours Schools of Literae Humaniores or Philosophy Politics and Economics (the Subjects) by providing one or more fellowships at the College in the said fields (the Fellowship), including payment of the stipend required to maintain the Fellowship and any other expenses and outgoings incidental thereto.

1.2.2   in the event that the Subjects (or any of them) cease to be taught by the College, the College may (with the approval of the Advisory Council substitute other subjects, being those most proximate in nature to the ones no longer taught, which other subjects shall thenceforth fall within the definition of the Subjects.

1.2.3   subject thereto, in the event that:

(a)   there is a surplus in any year after the Fellowship has been fully provided for; or

(b)   the Fellowship ceases to exist,

such surplus or the assets of the Trust (as the case may be) may be applied for one or more of the purposes or objects of the College in connection with the teaching of the Subjects as the College shall from time to time deem fit and subject thereto, for such other purposes or objects of the College connected with teaching as are approved in advance by the Advisory Council.

1.2.4   any fellowship or fellow funded by the Trust must show the name Fairfax in his or her title. …

5.   The Fairfax Trust Advisory Council (the Advisory Council)

5.1   The Trust shall have an Advisory Council numbering between three and four members, a majority of whom must be citizens of Australia.

5.2   The first members of the Advisory Council are the current trustees of the Trust Fund of the Fairfax Fellowships at Balliol College, a charitable trust established under the laws of New South Wales, Australia.

5.3   Additional or replacement members of the Advisory Council may be appointed by the current members, provided that their appointment must be notified to the College within 30 (thirty) days.

5.4   The College shall provide the Advisory Council with:

5.4.1   quarterly reports setting out financial income and academic expenditure in relation to the Trust; and

5.4.2   such other information relating to the financial, investment or academic administration of the Trust as the Advisory Council may reasonably request.

5.5   Before making any substantive amendments to the policies referred to in Clauses 1.3, 2.2.2 and 4.2 (such as would have a material impact upon the administration of the Trust), and subject to Clause 8 the College shall consult on such proposed amendments with the Advisory Council.

5.6   Decisions of the Advisory Council may be made by majority. …

10.   Performance of the Trust and Advisory Council’s reserve power

10.   If at any point the Advisory Council reasonably considers that the College is not discharging its duties as the charity trustee of the Trust with regard to the criteria identified in Claus 9.2:

10.1.1   the Advisory Council will notify the College and the College will arrange a meeting between representatives of the College and the Advisory Council to discuss the Advisory Council’s concerns.

10.1.2   if, following such meeting, the Advisory Council reasonably considers that its concerns have not been adequately addressed, it may make a formal meeting of the College’s governing body, and to which the College will provide a written response within 60 days of the relevant meeting.

10.1.3   if, following receipt of the College’s written response, the Advisory Council reasonably considers that tis concerns have still not been adequately addressed and that the College is continuing not to discharge its duties as the charity trustee of the Trust, it shall have the power to remove the College as a trustee of the Trust. In the event that this power is exercised, the statutory power to appoint a new or replacement trustee or trustees shall be vested int eh Advisory Council.

10.2   The relevant criteria are:

10.2.1   Academic: the assets of the Trust are not being applied in furtherance of the Objects.

10.2.2   Financial and investment: the Trust’s investments are not performing in line with:

(a)   any benchmarks established in periodic independent investment performance reviews commissioned by the College’s Investment Committee and shared with the Advisory Council; or

(b)   in the absence of any independent performance review within a seven year period, any benchmarks identified by an independent performance review commissioned by the College’s Investments Committee at the request and expense of the Advisory Council.”

The issues for determination

25. Before turning to the legal issues for determination, it is convenient to record that, having read Mr Robinson’s evidence, I indicated to the parties during the course of the initial hearing, and remain of the view, that what the Trustees wish to achieve by this application was eminently sensible as a means to continue to give effect to the purposes and intentions of the founders of the Trust. In practical terms, what is sought to be done is to move the domicile of the Trust from Australia to the United Kingdom, appoint Balliol as trustee and preserve the Fairfax and Australian connections though the role of the Advisory Council and the name of the Fellowships. The administrative efficiencies of having Balliol administer the corpus of the Trust and potential financial benefits by allowing it to be invested as part of Balliol’s much larger pool of trust investments were clearly established by Mr Robinson’s evidence.

26. The issue presented to the Court by the parties was how could this entirely laudable outcome be achieved as a matter of law? As a result of the course of argument and the various written submissions, the answer is provided by considering three questions:

1. Does s 9 of the Act apply?

2. If the answer to question (1) is “No”, can an administrative scheme be ordered?

3. If the answer to question (2) is “No”, can a scheme be ordered by reference to the decision of Vaisey J in Royal Society?

27. I will consider each of these in turn.

Section 9 of the Act

28. Part 3 of the Act provides:

“9 EXTENSION OF THE OCCASIONS FOR APPLYING TRUST PROPERTY CY PRES

(1) The circumstances in which the original purposes of a charitable trust can be altered to allow the trust property or any part of it to be applied cy-pres include circumstances in which the original purposes, wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust.

(2) References in this section to the original purposes of a charitable trust are to be construed, if the application of the trust property or any part of it has been altered or regulated by a scheme or otherwise, as references to the purposes for which the trust property are for the time being applicable.

10 REQUIREMENT FOR GENERAL CHARITABLE INTENTION OF DONOR

(1) This Part does not affect the requirement that trust property cannot be applied cy pres unless it is given with a general charitable intention.

(2) However, a general charitable intention is to be presumed unless there is evidence to the contrary in the instrument establishing the charitable trust.

11 DUTY OF TRUSTEE TO SECURE APPLICATION OF TRUST PROPERTY CY PRES

A charitable trust places a trustee under a duty, if the case permits and requires the trust property or any part of it to be applied cy pres, to secure its effective use for charitable purposes by taking steps to enable it to be so applied.”

29. The leading appellate authority on s 9 of the Act is Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (2017) 94 NSWLR 340; [2017] NSWCA 28 (Free Serbian Orthodox). This and other authorities were, if I may respectfully say so, thoroughly considered by Leeming JA, sitting at first instance, in Perpetual Trustee Co Ltd v Attorney General (NSW) [2018] NSWSC 1456 (Perpetual).

30. In Perpetual, Leeming JA said:

“81.   The upshot of the foregoing is this.

(1) There continues to be a precondition to the exercise of a power to order a cy-près scheme that there be a general charitable intention. Originally a requirement of equity, it is now entrenched by s 10(1) of the Charitable Trusts Act.

(2)   The requirement that a charitable intention, if found, is general, is presumptively taken to be satisfied, and the presumption may only be displaced by contrary evidence in the instrument establishing the trust.

(3)   Even if there be such evidence, it would be open to weigh the textual indications against the “nature of the charitable trust itself and what is involved in the author’s plan or project”. Consistently with what Dixon and Evatt JJ said in Attorney-General (NSW) v Perpetual Trustee Co Ltd, the evidence bearing upon a general charitable intention is not confined to the text of the instrument, and s 10 not merely creates a presumption, it also limits the evidence recourse to which may be had in order to rebut it. Textual indications may be strong or slight. It would be one thing, for example, if the instrument conveyed in plain terms that an essential aspect of the gift was a condition which could not be performed then. If say Mr Nesbitt’s will had said “for the avoidance of doubt, if for any reason the school declines to abide by my wishes that scholarships must not be received by students whose parents are Roman Catholics, then all funds are to be given to the Red Cross”, then that would be a strong indication that the condition precluding receipt by the children of Roman Catholics was essential. However a less potent textual indication might be found not to displace the statutory presumption.

(4)   The power to order that a trust be applied cy-près extends to circumstances when the original purpose, even if it is not impossible or impracticable to carry out, has ceased to provide a suitable or effective method of using the trust property. In exercising the power, it is necessary to have regard to the spirit of the trust, being the basic intention underlying the gift.”

31. His Honour also drew attention to this passage in Free Serbian Orthodox (per Payne JA; Ward and Gleeson JJA agreeing):

“196.   Section 9 is engaged by three interacting criteria through which to consider the continuing utility of the original trust purposes:

(1)   First, the notion of “wholly or in part”;

(2)   Secondly, a “suitable and effective method”;

(3)   Thirdly, the requirement to have “regard to the spirit of the trust”.

197.   It is textually clear that the requirements of s 9 involve a threshold lower than the general law cy-près requirement of impossibility or impracticality. The test is whether the original purposes of the trust have ceased to provide a suitable and effective method of using the property, in whole or in part, having regard to the “spirit of the trust”. The spirit of the trust is thus a broader conception than the original purposes of the trust. It is clear that the general law requirement for impossibility or impracticability of achievement of the trust purposes is no longer a condition precedent to the making of an order.”

32. Neither party suggested that this was a case where the general law jurisdiction to apply charitable trust property cy-près was engaged because carrying out the original purposes of the Trust had failed or become impossible. With respect, they were correct not to put that submission, which would have been completely unsupported by Mr Robinson’s evidence.

33. However, both Mr Oakes SC and Dr Mantziaris urged upon the Court that s 9(1) of the Act had been engaged. Before turning to that aspect of the argument, and noting the passage I have quoted from the judgment of Leeming JA in Perpetual, I record that the Court presumes the general charitable intention of the Trust (a conclusion which the Court would in any event have reached in relation to such a trust for the advancement of education) and finds that there is nothing in the Trust Deed that could be considered “evidence to the contrary” for the purposes of s 10(2) of the Act. The parties did not suggest otherwise.

34. The matter that has caused the greatest difficulty in this aspect of the case is whether, on the evidence, it has been demonstrated that, for the purposes of engaging s 9(1) of the Act, “the original purposes [of the Trust], wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the Trust property, having regard to the spirit of the Trust”.

35. Question 4 of the questions about which the Court asked the parties to make submissions was “How is it said that those original purposes have “ceased to provide a suitable and effective method of using the Trust property having regard to the spirit of the Trust” for the purposes of s 9(1)?” The Trustees’ answer to this was (emphasis added):

“13.   In answer to Question 4, and applying the Free Serbian approach of applying the s 9 criteria as a whole, the investment regime under the existing provisions has ceased to provide a suitable method of using the trust property. This approach is consistent with the observations of Windeyer J in Northern Sydney and Central Coast Area Health Service & Anor v The Attorney-General for New South Wales & Anor [2007] NSWSC 881 [the Graythwaite Case], where he said at paragraph [25], that section 9 “makes it possible to order a scheme, even though the trust has not become impracticable or impossible to perform”; and at paragraph [26], that “[t]he clear purpose of this section is to allow schemes to be ordered even if, strictly speaking, the trust purpose can in some way be carried out albeit not in an economic and most effective or beneficial way”.”

36. The Attorney General’s submissions in response were (emphasis added):

“56.   The Trustees’ submissions on Questions 4–6 are thin, providing very little to contradict. It is for the Trustees to make out the case for the current impracticability of the trust expressed in the 1990 Deed, and why the proposed scheme provides a suitable and effective method of using the trust property. The evidence appears at CB 15[24]–CB 26[45].

57.   The Attorney General will address the proposed alteration of the Trust Purpose and certain questions of law which the Court will need to resolve in the answers provided to Questions 4–6 by the Trustees. …

68.   In the present case, there is no evidence that the Trust Purpose is impossible of performance under the 1990 Deed. If impossibility were the only criterion, any alteration of the trust (or indeed the termination of the current trust and its substitution by another) would be considered unnecessary.

69.   There is adequate and uncontradicted evidence that a more efficient and beneficial method for the fulfilment of the self–same Trust Purpose can be implemented through the scheme proposed. The degree of impracticability of the current arrangements is a matter of subjective assessment. Some observations can be made:

(a)   The identity of the trustees is no longer a material concern as the trustees selected by the settlor wish to retire and consider their replacement to be in the best interests of the trust: CB 16[25]–18[24].

(b)   If one accepts that the adequate and efficient financing of the performance of the Trust Purpose is within the ‘spirit of the trust’, the evidence as to the benefits of the proposed scheme indicates that the Trust Purpose would be better advanced through the proposed scheme.

(c)   There may also be other ways to amend the 1990 Deed. But such proposals are not in evidence.

70.   In circumstances where the Trustees and the Attorney General are agreed that the Trust Purpose can be more suitably and effectively pursued under the proposed scheme and where there is no hard constraint on the exercise of the CTA s 9 jurisdiction, it is respectfully submitted that the Court should lean towards the facilitation of the scheme: see Knowles v Attorney-General [2016] TASSC 25 [34]–65].”

37. The Court’s difficulty with the parties’ submissions is twofold. First, they pay insufficient attention to identifying the “original purposes” (the “ends”) as opposed to the means by which those purposes are carried into effect (issues such as management and investment of the trust corpus). Second, the process of reasoning appears to be that the parties are in agreement that there is a “more efficient and beneficial method for the fulfilment of the self-same Trust Purpose” (emphasis added) and therefore, assuming that to be the case, it must follow that the original purposes have “ceased to provide a suitable and effective method of using the trust property”.

38. I will deal with the second matter first. In doing so, I accept that s 9 is a beneficial provision which should be interpreted generously and practically. Nevertheless, such an approach is not a licence to disengage completely from the text of the section in order to achieve what might generally be agreed to be a desirable outcome.

39. Experience teaches that, with the passage of time, social, technological or other developments may well create circumstances where there is a more suitable and effective “method of using” trust property (as to the meaning of which see paragraphs [41] to [44] below). However, if that were sufficient to engage s 9, cy-près applications would likely become far more common.

40. However, the existence of a more suitable and effective “method of using” the Trust property does not reflect the statutory test. That test requires the original purposes to have ceased to provide a suitable and effective method. To ascertain whether that test has been met, the “original purposes” must be identified, which brings me to the first point referred to in paragraph [37] above.

41. In turning to that matter, even accepting the beneficial nature of s 9, the “original purposes” must be distinguished from the means by which those purposes are carried into effect. “Purposes” are not means. As to this, the parties’ submissions may have succumbed to a confusing use of language in s 9(1) itself prompted by the words “method of using”, with “method” inviting a conceptual elision into consideration of “means”.

42. The online Macquarie Dictionary, for example, gives as a definition of “method”: “a way of doing something, especially in accordance with a definite plan”. In my respectful view, because it is used in relation to “purposes” (which are an end or outcome) “method” means “way” so that that the original purposes must have “ceased to provide a suitable and effective [way] of using the trust property”. It does not refer to the means by which the purpose is carried into effect.

43. A simple example can demonstrate the point. A testator might have endowed a charitable trust to operate a school in Sydney to teach English to migrants from country X. This is the original purpose of the trust. The funds are invested and the income is used to purchase premises and pay teachers. With the passage of time, migration from country X almost completely stops. The school has so few students that it is no longer economically or practically viable, but the purpose of the trust is not impossible because there is still a handful of migrants from country X. Nevertheless, the original purpose is no longer a suitable or effective way of using the trust property. This says nothing about matters such as how the fund is being invested. Having regard to the spirit of the trust, a scheme might be settled by reference to s 9(1) for the school to accept migrants from any country who wish to learn English.

44. It is therefore necessary to focus attention on identifying the “original purposes” because it is these which are (to use the prefatory words of s 9(1)) “altered to allow the trust property or any part of it to be applied cy-pres”. Free Serbian Orthodox was a case where there was no written trust instrument. That is not the case here.

45. In question 2 of the matters upon which the Court sought submissions, the parties were invited to address “What are the “original purposes” of the charitable trust in this case for the purposes of s 9 of the” Act. The Attorney General submitted that the original purposes of the Trust were those set out in the Trust Deed.

46. The Trustees also submitted that the “original purposes” of the Trust were those set out in clause 4 of the Trust Deed (see paragraph [16] above). However, they resisted answering the Court’s question as one of three separate questions (going to the “original purposes”, the “spirit of the trust” and how the original purposes had “ceased to provide a suitable and effective method …”). They did so by reference to the observations of Payne JA which I have set out fully in paragraph [31] above, quoting his Honour’s conclusion that “The question posed by s 9 must be considered as a whole, and not examined artificially by reference to each of its separate components”.

47. The Trustee’s resistance was, with respect, misconceived. The question posed by s 9(1), which necessarily must be answered with “regard to the spirt of the trust”, is nevertheless a question about the “original purposes”. Whether or not formally recorded in writing, those purposes are not identified by reference to the “spirit of the trust”. Those purposes, once identified, are then interrogated by reference to the balance of s 9(1), including the “spirit of the trust”.

48. In the present case, there can be no doubt that the “original purposes” of the Trust appear in Clause 4 of the Trust Deed. The difficulty is that when those “original purposes” are properly identified as such, Mr Robinson’s evidence does not demonstrate that those purposes “wholly or in part, have since they were laid down, ceased to provide a suitable and effective method of using Trust property having regard to the spirit of the Trust”. The best evidence that those “original purposes” (as opposed to the means by which they are carried into effect) do not satisfy the test in s 9(1) is that those very same purposes are reproduced, albeit in more contemporary language, in Clause 1.2 of the English Trust which sets out its objects. This observation can be made good by a comparison.

49. First, these extracts from Clause 4 of the Trust Deed:

“The Trustees shall hold the Trust Fund UPON TRUST to apply the income thereof in perpetuity for the endowment of the said Fairfax Fellowship at Balliol College within the University of Oxford and in particular but without affecting the generality hereof in payment of the stipend required to maintaining the said Fellowship and any other expenses and outgoings incidental thereto …The primary and express purpose of the Trust Fund is the teaching of Philosophy or other subjects in the Honour Schools of Literae Humaniores or Philosophy Politics and Economics.”

are to be compared with Clause 1.2.1 of the English Trust:

“1.2.1   subject to Clause 1.2.2 and clause 1.2.4, to advance education in the fields of Philosophy or other subjects in the Honours Schools of Literae Humaniores or Philosophy Politics and Economics (the Subjects) by providing one or more fellowships at the College in the said fields (the Fellowship), including payment of the stipend required to maintain the Fellowship and any other expenses and outgoings incidental thereto.”

50. Next, this part of Clause 4 of the Trust Deed:

“.. if and when the said Fellowship shall cease to exist then for one or more of the purposes or objects of the said Balliol College in connection with the teaching of Philosophy or other subjects in the Honour Schools of Literae Humaniores or Philosophy Politics and Economics as the Governing Body of the College for the time being shall deem fit.”

may be compared with Clause 1.2.2 of the English Trust:

“1.2.2   in the event that the Subjects (or any of them) cease to be taught by the College, the College may (with the approval of the Advisory Council substitute other subjects, being those most proximate in nature to the ones no longer taught, which other subjects shall thenceforth fall within the definition of the Subjects.”

51. Finally, this part of Clause 4:

“In the event of (a) there being a surplus in any one year of income from the Trust Fund unexpended after the purposes of the Trust Fund have been fully provided for as hereinbefore mentioned, or (b) if and when the Fellowship shall cease to exist then and in either case the Governing Body of the College may place before the Trustees any alternative proposal having as its purpose assistance in teaching subjects other than those hereinbefore mentioned which the Governing Body may desire to put forward for the use of the Trust Fund. The Governing Body shall consult with the Trustees fully thereon and apply all such information in regard thereto as the Trustees may require. The Trustees shall thereafter advise the Governing Body of the consent or otherwise of the Trustees to the proposal or of any amendments thereto which the Trustees may deem desirable. No such alternative proposal shall be adopted by the Governing Body of the College without the consent in writing of the Trustees thereto which consent shall be at the discretion of the Trustees and the decision of the Trustees shall be final and binding on the Governing Body.”

is to be compared with Clause 1.2.3 of the English Trust:

“1.2.3   subject thereto, in the event that:

(a)   there is a surplus in any year after the Fellowship has been fully provided for; or

(b)   the Fellowship ceases to exist,

such surplus or the assets of the Trust (as the case may be) may be applied for one or more of the purposes or objects of the College in connection with the teaching of the Subjects as the College shall from time to time deem fit and subject thereto, for such other purposes or objects of the College connected with teaching as are approved in advance by the Advisory Council.”

52. Whether at general law or pursuant to s 9(1), any cy-près scheme necessarily involves an alteration to the original purposes of the charitable trust. There is plainly no change in those original purposes as between the Trust Deed and the English Trust. If there were any doubt about this, it is clear from Mr Robinson’s evidence that one thing which the Trustees, entirely properly, are anxious to achieve is that the original purposes continue to be served by the new arrangements.

53. The intention to ensure that the original purposes “continue to be achieved” appears from the conversation with James Fairfax to which Mr Robinson deposes in his affidavit extracted in paragraph [23] above. Furthermore, Mr Robinson himself says in paragraph 22 of his affidavit that the English Trust “was drafted by the parties in a manner which preserves the original purposes of the [Trust], whilst allowing the Balliol College to run it in a manner which is in accordance with their policies, which would result in saving on operational expenses and greater return on investment. At the same time, the Current Trustees are given powers to safeguard and ensure that the Trust Fund is used and managed properly to fulfil its original purposes” (emphases added).

54. Mr Robinson’s evidence is silent as to any perceived inadequacy in the “original purposes” of the Trust. What is intended to be done is premised upon maintaining those “original purposes”. In those circumstances, the evidence does not permit the Court, and it does not, to conclude that those original purposes “wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the Trust property, having regard to the spirit of the trust”.

55. In reaching this conclusion, it is necessary to make some observations about the decision of Windeyer J in the Graythwaite Case, to which the Trustees refer in their submission reproduced in paragraph [35]. Justice Windeyer, both as an eminent solicitor and later as a Master and then Judge of this Court, was deeply experienced in matters of charity law. I would respectfully hesitate to disagree with his Honour in this field of legal discourse.

56. I do not think the conclusion I have reached involves any such disagreement. Three points should be made:

1. His Honour’s observations about the proper construction and operation of the Act are obiter dicta. In the Graythwaite Case, the Court was considering the position at general law. So much is apparent from his Honour’s finding at paragraph [31] that “the result is that I find the trust purposes have failed”. Any doubt is dispelled by then referring to the next case in the litigation, which concerned the ordering of the cy-près scheme itself: Northern Sydney and Central Coast Area Health & Anor v The Attorney General for New South Wales & Ors [2008] NSWSC 1223. His Honour approaches the consideration of the alternative schemes proposed by the parties solely by reference to the general law consideration of which scheme is cy-près or nearest the original objectives of the failed trust purposes. While his Honour made passing reference in paragraph [21] of the subsequent judgment to s 9 of the Act, it is clear from his Honour’s reasons that it had no part to play in what he had to decide in either the first or second case.

2. His Honour’s statement in paragraph [25] of the Graythwaite Case that s 9 “makes it possible to order a scheme, even though the trust has not become impracticable or impossible to perform”, is, with respect, plainly correct. Nothing I have concluded in these reasons is inconsistent with that proposition.

3. The passage quoted by the Trustees from paragraph [26] of the Graythwaite Case should be read in context: “The clear purpose of this section is to allow schemes to be ordered even if, strictly speaking, the trust purpose can in some way be carried out albeit not in an economic and most effective or beneficial way. The purpose of the section is not to alter or determine the proper construction of the trust instrument.” What I respectfully understand his Honour to be saying is that the “original purposes” must be identified as a matter of proper construction and that, once identified, s 9 will permit a scheme to be ordered in circumstances that do not meet the demanding general law test of failure or impossibility. I do not understand his Honour’s statement to be inconsistent with the conclusion which I have reached to the effect that just because someone can identify a more economic, effective or beneficial way of carrying out the original purposes, it must necessarily follow that those purposes have “since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust”.

An administrative scheme?

57. The Court has a general law jurisdiction to settle an administrative scheme in relation to charitable trusts.

58. In Corish v Attorney General’s Department of NSW [2006] NSWSC 1219 (Corish), J.C. Campbell J (as his Honour then was) said:

“9   There is a clear conceptual difference between a cy près scheme and an administrative scheme for a charitable trust. It is the difference between ends and means. A cy près scheme can be directed when it is impossible or impractical to carry out the objects of the trust in all the details the settlor stipulated. An administrative scheme supplements and/or clarifies any provisions the settlor has stipulated concerning the manner in which the objects of the trust are to be pursued, when practical circumstances show that the settlor’s stipulation (if any) of the means is inadequate or impractical.”

59. What Mr Robinson’s evidence clearly demonstrates, and the Court finds, is that the means of giving effect to the Trust’s original purposes have become, with the passage of time and events, “inadequate or impractical” to adopt Campbell J’s language in Corish. The features that meet that description include that the current trustees wish to retire, that the likelihood of finding suitable successor trustees in Australia is small, the administration from Australia of a fund now exclusively held in Sterling assets is inefficient, not having the obvious trustee (Balliol) is not in the interests of the Trust, and the fact that the likely increase in return on investment were the Trust’s assets to be managed as part of Balliol’s larger corpus of investments is not presently open to the Trust. All of these matters go to means and not ends.

60. In my respectful view, the closest case in this Court of which I am aware to the present circumstances is the decision of Brereton J (as his Honour then was) in College of Law Pty Ltd v Attorney General of NSW [2009] NSWSC 1474 (College).

61. The College of Law building in Chandos Street, St Leonards will be familiar to many lawyers in this state. In 1978, the Land and Valuation Court of New South Wales held that the purposes of the plaintiff company were charitable, and that the Chandos Street property was held by it as constructive trustee of a charitable trust.

62. The relevance of College to these proceedings is that the administrative scheme ordered by Brereton J in that case expressly provided for the winding up of the charitable trust and the payment of its assets to a corporate entity that would, in effect, carry on the charitable purposes but with all the administrative and other advantages that were perceived to come with incorporation. At paragraph [8], his Honour identified the purpose of the proposed administrative scheme as being “primarily to permit the winding up of the trust so as to permit the transfer of the trust assets to a new company (for present purposes called TCOL Limited), the objects of which are to be the same charitable objects as those of the trust”.

63. His Honour’s judgment includes:

“6.   Because the trust upon which CoL holds the Chandos Street property and the business is a constructive one, there is no trust instrument, and the precise terms of the trust, at least in some respects, remain therefore unclear.

7 Where there is uncertainty as to the mode of carrying out the objects of the charitable trust - for example, because the donor has failed to specify a particular means by which the gift is to be applied for those objects, or the means specified are insufficient for its practical application - the Court has the jurisdiction to provide the detailed machinery for the administration of the donor’s charitable objects by means of an administrative scheme [see Re Robinson; Besant v German Reich [1931] 2 Ch 122; Re Gott; Glazebrook v University of Leeds [1944] Ch 193 at 197; The Diocesan Trustees of the Church of England in Western Australia v The Solicitor-General (1909) 9 CLR 757, 763; Kytherian Association of Queensland v Sklavos (1958) 101 CLR 56, 66; Phillips v Roberts [1975] 2 NSWLR 207, 222 - 223]. Such administrative schemes are to be distinguished from cy-pres schemes, which result in the charitable object being varied, in order to achieve a general charitable intent where the stipulated charitable object is no longer capable of attainment [Corish v Attorney-General of New South Wales [2006] NSWSC 1219, [9]]. …

11   Because the evidence indicates that the College proposes to take advantage of clause 14 in order to wind up the trust in order to transfer the assets to TCOL, it is appropriate to make some further observations about TCOL. TCOL is a not for profit company limited by guarantee. Its objects are to provide higher education and conduct research through the acquisition, maintenance and promotion of the College of Law. Its profits, income and property must be applied solely towards those objects, and none is to be paid or transferred to a member, whether by way of dividends, bonds or otherwise. Provision is made for the governance of TCOL by a Board of Governors in whom management of the company is to be vested, comprising a number of elected and appointed members and some emeritus members; the governance structure is broadly akin to that adopted by other higher education institutions. In the event of TCOL being wound up, any property must not be paid or distributed to members, but must be given or transferred to some other institution having objectives or purposes similar to those of TCOL, and whose constitution prohibits the distribution of income and property amongst its members to the same extent at least as is imposed on TCOL. Substitution of such a successor institution is to be determined by the members, or upon application to the Court.”

64. His Honour ordered the scheme that enabled the charitable trust to be wound up and its assets to be paid to TCOL Limited. The only difference between College and the present case is that the entity to which it is proposed to pay the assets of the wound up trust is foreign, with no presence in Australia and not subject to the control of this Court in relation to the administration of the English Trust. The submissions for the Attorney General suggested that this circumstance meant that this Court could not order an administrative scheme. For the reasons which follow, I respectfully disagree.

65. Dr Mantziaris on behalf of the Attorney General submitted that there were three considerations which suggested that an administrative scheme was inappropriate.

66. The first reason was that the proposed scheme alters the Trust’s purpose. It will be apparent from what I have set out in paragraphs [48] to [54] above that the Court does not accept that submission.

67. The second reason was that the scheme involves the termination of the Trust as created by the Trust Deed. Again, that is not a proposition which the Court accepts as a matter of general principle. If authority be required, then it is provided by the decision in College. As I shall discuss further below, the essential issue is not that the administrative scheme may involve the determination of the particular charitable trust. It is that the Court will only order such an administrative scheme where it is satisfied that whatever assets remain after the termination will be applied to a charitable purpose, ideally one as close as circumstances permit to the original charitable purpose.

68. Third, attention was drawn to authorities to the effect that while the Court may order an administrative or cy-près scheme which relates to purposes to be effected outside the jurisdiction, the Court has no power to direct a scheme if the proposed trustee resides outside the jurisdiction. In such cases, the appropriate order is to transfer the fund to the trustee to be applied according to the terms of the trust without directing a scheme.

69. The modern expression of the relevant principles which is usually cited is the judgment of Mummery LJ (with whom Leggatt and Morritt LJJ agreed) in Gauidya Mission v Brahmachary [1998] Ch 341. His Lordship said (at 351-352):

“Many cases are cited in the footnotes in support of that passage. The important point is that the special charitable jurisdiction of the High Court to make a scheme is not exercised, or even regarded as exercisable, in a case of a charity which has been established, or which it is intended to establish, under a foreign legal system. In such a case, the foreign charity and those engaged in the administration of it, are beyond the control of the court. …

The practice established so long ago has been followed in modern times. In In re Robinson; Besant v. German Reich [1931] 2 Ch. 122, a gift to the German government for the benefit of disabled German soldiers, Maugham J. said, at p. 129:

“if the trustee is abroad there is no power in the court to direct a scheme to be settled, and the practice in such a case is to hand over the fund to the trustee to be applied according to the trusts of the will without directing a scheme.”

These cases show that the courts of this country accept that they do not have the means of controlling an institution established in another country, and administered by trustees there. This was recognised as the reason why courts have no authority to make a scheme: see Attorney-General v. Sturge 352(1854) 19 Beav. 597, a decision of Sir John Romilly M.R., where a gift had been made to a school established by the testatrix in Genoa. The practical problems were most forcefully stated by Lord Brougham in Mayor of Lyon v. East India Co. (1836) 1 Moo.P.C. 175, 297–298, in a passage which merits quotation. Lord Brougham said:

“The objection, in the ordinary case, to administering a foreign charity under the superintendence of the court, is this: those who are engaged in the actual execution of it, are beyond the court's control, and those who are within the jurisdiction are answerable to the court for the acts of persons as to whom they can derive no aid from the court. Such an office will not easily be undertaken by any one; and its duties cannot be satisfactorily performed; at least the party must rely more on the local, that is, the foreign, authorities for help, than on the court to which he is accountable.”

70. The underlying policy was pointedly summarised by Leggatt LJ in his concurring judgment, where his Lordship said (at 355-356) that:

“Charities provide a prime example of institutions which it is in the English public interest to regulate and control. But that is only so if they are English charities. Any attempt to control foreign charities would represent something akin to encroachment upon the sovereignty of a foreign state.”

71. These principles only need to be stated to demonstrate that the present application is not an attempt to settle a scheme about or control the activities of a foreign trustee (in this case Balliol) in relation to a foreign trust. These proceedings are an application concerning a trust that was settled in Australia, is subject to Australian law and has two out of three trustees as Australian citizens.

72. In my respectful opinion, the present case is an example of the application of the now uncontroversial principle that where the trustee is within the jurisdiction, the Court may settle an administrative scheme even if the objects of the charity reside outside of the jurisdiction: see, for example, Kytherian Association of Queensland v Sklavos (1958) 101 CLR 56 at 70-71 (being the judgment of the Court comprising McTiernan, Fullagar and Taylor JJ).

73. A relatively recent application of this distinction in this state is the decision of Ward CJ in Equity (as her Honour then was) in Lever v Attorney General of NSW [2018] NSWSC 838. In that case the testator had left part of her estate “to establish a trust in [the deceased’s] name to benefit women and children in the United Kingdom”. The evidence was that it was intended that a trust was to be established by trust deed drafted by solicitors in the United Kingdom and that the deed was to be settled and registered with the UK Charity Commission. Her Honour accepted that because the trustees and the trust were outside Australia, the appropriate order was to transmit the funds from the estate to the United Kingdom to be applied in accordance with the terms of the trust established there without directing a scheme.

74. In this case, there can be no doubt that the Trustees and the Trust are subject to the jurisdiction and control of this Court. The fact that the objects of the Trust are scholars at Balliol does not mean that the Court cannot order an administrative scheme in respect of the Trust, including for the payment of the assets of the Trust to a foreign trustee.

75. However, as the decision in College demonstrates, the Court will only order such a scheme if it is satisfied that the funds when paid to the foreign trustee will continue to be applied for charitable purposes. This is because of the second of the two legal principles which Professor Dal Pont identifies in relation to both the jurisdiction to order cy-près schemes and administrative schemes (citations omitted):

“But underlying the jurisdiction to settle both types of schemes are two legal principles. The first is that, unlike trusts for individuals, a valid trust for charitable purposes does not fail for uncertainty of objects. The second is that, subject to contrary intention in the terms of the gift and any vitiating factors, once a property is effectually dedicated to charity, it cannot in the future be applied to a non-charitable object; it attracts an indestructibility that serves to forever exclude claims by the donor’s next of kin.” GE Dal Pont and S Petrow, Law of Charity (3^rd ed, 2021, LexisNexis Australia) 14.6 (Dal Pont)

76. This is why, for example, in paragraph [11] of College Brereton J drew attention to the provisions in TCOL Limited’s Constitution to the effect that if it were to be wound up, its assets would have to pass to another entity to be applied towards substantially the same charitable objects. Another manifestation of the same consideration was that a constitutional provision to that effect was a requirement of regulatory authorities for a company created to carry on a charitable purpose (usually limited by guarantee) to be licensed not to use the word limited in its name.

77. In this case, the Court has no doubt that if the assets of the Trust are paid to Balliol in its capacity as trustee of the English Trust, they will continue to be applied to what under Australian law is a charitable purpose. That conclusion is fortified by the fact that the Court has found that there is no material difference between the purpose of the Trust and the purpose of the English Trust.

A scheme authorised by the decision in Royal Society?

78. The Trustees submitted that the decision in Royal Society establishes jurisdiction to order an administrative scheme in relation to a charitable trust distinct from the jurisdiction which I have considered in the previous section. Because the Court has concluded it is appropriate to order an administrative scheme in relation to the Trust of what might be called the traditional variety, it is not strictly to consider the status of Royal Society in Australia. However, out of deference to the parties’ submissions, the Court will briefly do so.

79. The Attorney General’s submissions in response to the Trustees’ reliance on Royal Society were:

“90. A handful of Australian cases cite In re Royal Society’s Charitable Trusts [1956] 1 Ch 87 (Re Royal Society) as authority for the proposition that the Attorney General is endowed with specific powers to enforce and supervise charitable trusts: Kerin v Attorney-General (SA) [2019] SASC 103, [12]; Lutheran Laypeople’s League, [6]; University of Adelaide v Attorney-General (SA) [2018] SASC 82, [4]. The case is also cited in Re Ansett Australia Ltd (2006) ACSR 718, 740-741, though in relation to the pooling of the funds of non–charitable trusts. None of these cases consider Re Royal Society in any way relevant to the present application.

91. Within English law, the jurisdiction suggested by Re Royal Society has not been further developed, perhaps because the use of this general jurisdiction appears to have been overtaken by the Trustee Act 2000 (UK) which provided a statutory basis for the widening of investment powers: see Cotterell v Ismay [2020] EWHC 2234 (Ch), [35].

92. Jacobs cites Royal Society at [10.78] as a comparison to Re Ethel Pedley Memorial Travelling Scholarship Trust (1949) 49 SR (NSW) 329, a case in which the court consolidated funds with similar purposes, where doing so did not involve any alteration to the fundamental conditions of the trusts.”

80. In Royal Society, Vaisey J had two matters to consider. First, the Royal Society as trustee under a variety of charitable trusts, wished to be able to consolidate or pool the trust funds while maintaining the interests of the several trusts in the pooled fund in aliquot shares (not dissimilar to what is proposed under the English Trust). The second application was to enlarge the scope of permissible investments for the pooled fund.

81. His Lordship observed (at 91):

“The case was put forward in the first instance as one which came within section 57 of the Trustee Act, 1925 , or, alternatively, under the rather ill-defined scope of the courts' general jurisdiction. In my judgment, this matter does not come within the section at all, nor do I think that it is within the general jurisdiction of the court as exercised in relation to ordinary trusts. This matter must, in my opinion, be approached on the special ground that we are dealing here with charities.”

82. An immediate doubt about the correctness of Royal Society arises from his Lordship’s conclusion that s 57 of the English Trustee Act did not apply. That is the equivalent of the advantageous dealings provision in s 81 of the Trustee Act 1925 (NSW) (the TA). In his work, Professor Dal Pont, correctly in my respectful opinion, says that his Lordship was wrong to conclude that the Court cannot expand investment powers through the expediency jurisdiction of s 81 (Dal Pont, 14.18 n 130). Doubt about the correctness of that aspect of his Lordship’s decision was expressed as early as 1959, when Danckwerts J reached the opposite conclusion in Re Shipwrecked Fishermen and Mariners’ Royal Benevolent Society [1959] Ch 220 at 228.

83. The critical passage in Royal Society is at 92-93 (emphasis in original):

“Now, on this question of jurisdiction I have come to the conclusion that the court has, at the instance of the trustees, jurisdiction, where the Attorney-General consents or does not object, to authorize such proposals as the present by way of scheme. I emphasize those last four words. It seems to me that, although the Attorney-General does in a sense represent all the objects of the charity, he cannot act except with the authority of the court, and in practice it may be equally true that the court cannot act without the concurrence of the Attorney-General, to whose views it must always pay the closest attention. … This is, however, in my view, an exceptional case. There is evidence that the Royal Society takes special care in selecting and varying its investments. Again, it by no means follows that the range of investment ought to be widened as of course whenever a charity finds its available income less than the trustees of it would wish. The existence of a multiplicity of trusts under the administration of one trustee ought not in every case to be regarded as justifying a pooling of investments. The jurisdiction which I hold that I have, should, in my judgment, be exercised sparingly, and not indiscriminately. The circumstances here are, to my mind, unusual.”

84. In my respectful opinion, at least on one reading, the decision in Royal Society is anomalous, even if the particular scheme in that case might be seen as unexceptional. If his Lordship is to be understood as saying that in charities schemes the consent of the trustees together with the Attorney General provides a universal solvent leading to the ordering of a scheme where there might not have otherwise been jurisdiction, then I am unable to agree. It is fundamental that parties cannot by consent confer jurisdiction on a court where there is none. Similarly, even if there is jurisdiction, a court is not bound by the consent of the parties to exercise that jurisdiction as they might have agreed.

85. If, on the other hand, his Lordship’s judgment is to be understood as saying that he noted there was unanimity between the trustees and the Attorney General, and that he was independently satisfied that this was a case for the ordering of a scheme of the kind which he considered “exceptional”, then the case adds nothing to the body of principle in relation to administration schemes in relation to charitable trusts.

86. However it is understood, and with deference to his Lordship, in my opinion Royal Society adds nothing to, and says nothing about, the Court’s jurisdiction to order administrative schemes in relation to charitable trusts under the common law of Australia.

Concluding observations

87. There are three concluding observations.

88. First, some submissions were directed to whether s 81 of the TA provided an alternative basis upon which the Court could give effect to the Trustees’ proposal. Both parties submitted this required attention to the decision of the Court of Appeal in Re Dion Investments Pty Ltd (2014) 87 NSWLR 753; [2014] NSWCA 367 and what could constitute a “transaction” for the purposes of s 81. Neither party considered whether what was being proposed might, in any event, be a “disposition” for the purposes of that section.

89. The parties’ submissions acknowledged that there was a real issue identified in the texts and the authorities as to whether s 81 permitted the Court to determine a trust.

90. The possible application of s 81 was not the focus of the parties’ arguments. The Court intends no criticism by making that observation. The issues raised in relation to s 81 are not appropriate to be dealt with on the papers. Because the Court has concluded that an administrative scheme can be ordered, it is unnecessary in this case to consider the question of s 81 further. Resolution of the interesting and important questions touched upon by the parties in relation to s 81 must abide another case on another day.

91. Second, the Attorney General’s submissions invited the Trustees to make some explanation in relation to two provisions of the English Trust:

1. Clause 9 in relation to amendments to the deed for the English Trust; and

2. Clause 1.2.3 relating to the disposition of any surplus after the Fellowship has been fully funded or the Fellowship ceases to exist.

92. The Court sees no difficulty with either provision. There is no reason why a charitable trust deed cannot confer a power of amendment on the trustee subject only to maintaining the charitable nature of the gift. The power of amendment in clause 9 requires both the agreement of the Advisory Council and renders any amendment to the objects of the English Trust invalid should they cause those objects to cease to be exclusively charitable according to the law of England and Wales.

93. In relation to the provision for surplus, the Court accepts the Trustees’ submission that it substantially reflects a provision which already exists in the Trust Deed.

94. Third, it remains to record that the parties will now be given an opportunity to bring in orders for a scheme to give effect to these reasons and to agree upon the costs of these proceedings. That scheme should authorise the Trustees to wind up the Trust, including to pay to Balliol as trustee of the English Trust the assets of the Trust remaining after the discharge of all proper debts and other liabilities. However, such payment should not be permitted:

1. unless and until the English Trust has been established in terms identical to, or at least not materially different from, those in evidence; and

2. whatever regulatory approvals or registration that may be required has been obtained from the UK Charity Commission in relation to the English Trust.

95. Like Brereton J in College at [14], I have given consideration as to whether the scheme should confer a power on the Trustees, it then being a matter for the Trustees to seek judicial advice as to whether they are justified to exercise that power. However, whether that is necessary or desirable is a matter for the Trustees to consider and will, at least in part, depend upon the precise terms of the scheme and any terms or undertakings upon which it is ordered to take effect (if any).

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I certify that this and the preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice Francois Kunc

26 July 2022

         Mary Boneham

DATED

         Associate

Amendments

26 July 2022 - Change to [82] inclusion of notation from Dal Pont, end of sentence 3.

Decision last updated: 26 July 2022