City of Burnside v the Attorney-General (No 2) No. Scgrg-95-1354 Judgment No. S6647
[1998] SASC 6647
•1 May 1998
CORPORATION OF THE CITY OF BURNSIDE
v THE ATTORNEY-GENERAL (NO 2)
Civil
Debelle J
Application to vary a charitable trust
This application to vary a charitable trust is made pursuant to s69B of the Trustee Act, 1936. The application is made by the trustee, the Corporation of the City of Burnside (“the Council”).
The Council is the registered proprietor of a substantial parcel of land commonly known as “the Olympic Sports Field”. The land is situated between The Parade and Park Street, Kensington Park. It is used for a number of purposes. A large part of the land has been developed as a sports arena which is bounded by a fence and includes a substantial grandstand, mounds for spectators, a playing field, and an athletics running track. Beneath the grandstand there are change rooms, club rooms and other facilities. Strictly speaking, the name the Olympic Sports Field applies only to the grandstand and sports arena bounded by the fence. The rest of the land is disposed in other ways. A small building on The Parade frontage is used as the club rooms of the Kensington Park sub-branch of the Returned & Services League. In the north-west corner of the land a substantial indoor recreation centre has been constructed. It includes squash courts, a gymnasium and a multi-purpose area which can be used for playing basketball, netball and badminton. It is used by Pembroke School Inc (“Pembroke”) during school hours and is available to the public at other times. A car parking area is established in the western side of the land.
The facilities and improvements at the Olympic Sports Field and on the balance of the land have been developed to a relatively high standard. The funding for these improvements has been provided from a number of sources. In addition to expenditure by the Council, substantial sums have in the past been spent by Pembroke and the South Australian Amateur Athletics Association Incorporation (“the Athletics Association”) on improvements to the land. Substantial sums have also been provided by the Commonwealth Government. In all more than $2,000,000 have been spent. I will refer in a moment to the expenditure by Pembroke.
The Council holds this land pursuant to a charitable trust. The circumstances in which the Council came to hold the land and the terms of the trust are set out in the judgments of this court in action No 1540 of 1991 reported as City of Burnside v Attorney-General (1992) 163 LSJS 168 and, on appeal, (1993) 61 SASR 103. The court held, among other things,
that the Council holds the land as a public recreation ground for the use of the residents of the City of Burnside;
that, subject to the terms of the District Council Act, 1887, or any other Act amending or in substitution for it, the Council is invested with power to grant leases of the land;
that the Council could regulate the fees to be charged for admission to the land;
that the trust is a valid and enforceable charitable trust;
that the land is park lands within the meaning of the Local Government Act, 1934.
The present effect of para 2 is that the Council may grant leases subject to the terms of the Local Government Act. The Council is concerned that the land is now being used in a way which does not strictly accord with the terms of the trust. It, therefore, applies to vary the terms of the trust so that the use of the land is consistent with the terms of the trust. In order to understand the issues, it is necessary to examine in more detail how the land is now used and what is proposed.
The Indoor Recreation Centre
Pembroke runs a school on land which is very close to the Council land. Part of one boundary of the school land adjoins the Council land. Pembroke is within the Council area and is thus a resident of the City of Burnside. On 9 October 1986 the Council granted Pembroke a lease of a small portion of the land for a term of 21 years commencing on 1 September 1986. The lease includes a right of renewal for a further term of 21 years.
Pembroke has, with the Council and the Commonwealth Government, contributed to the cost of constructing and equipping an indoor recreation centre which now stands on the demised land. Pembroke’s contribution was some $565,000. In consideration of that fact, the Council agreed to give Pembroke certain advantageous terms in the lease. Thus, the lease provides that the rent is to be one dollar per annum and that Pembroke has exclusive use of the indoor recreation centre in school term time on Mondays to Fridays from 7am to 5.30pm and on Saturdays from 7am to 12.30pm. To all intents and purposes, Pembroke has exclusive use of the indoor recreation centre for school hours except during school holidays. The lease provides that the demised land shall be used “for indoor sports and school activities with associated car parking”.
The Olympic Sports Field Indoor Recreation Centre Inc
The lease also provided that the Council and Pembroke would establish a committee to manage and maintain the indoor recreation centre. The committee was called the Olympic Sports Field Indoor Sports Stadium Management Committee (“the Committee”). The Rules and Regulations of the Committee are set out in an appendix to the lease. Pembroke agreed to comply with the requirements of the Committee in relation to the use of the centre.
It was later decided by the Council and Pembroke to incorporate an association pursuant to the Associations Incorporation Act, 1985 to perform the role of the Committee. The incorporated body was called “The Olympic Sports Field Indoor Recreation Centre Inc” (“OSFIRC”). It has registered the business name “Kensington Community Leisure Centre” and operates the indoor recreation centre under that name. The objects of the OSFIRC, as provided in its Rules, are:
“The object for which the Association is established is for the purpose of promoting the interests of the local community by promoting the Centre and making the same available for use by any interested group body club person or organisation (hereinafter called “the other users”) during the hours in which the same will not be used by the School as provided in the Lease and in determining matters related to use of the Centre at these times, the Association shall have regard to all of the following principles and objectives:
(1) The Association shall manage the Centre so as to maximise community use and ensure fair proper and equitable access by all sections of the community interested in using the Centre.
(2) In allocating use by the other users, priority shall be given to the following user groups and in the following order:
(i) the Council;
(ii) community groups based in the City of Burnside a significant proportion of whose membership are residents of the City of Burnside;
(iii) residents of the City of Burnside;
(iv) use in connection with activities being undertaken by lessees or other users of Olympic Sports Field facilities;
(v) the School when use is required outside of the hours as set out in the Lease
(vi) other groups;
(vii) non-resident individuals.”
In these rules, “the School” means Pembroke.
The Rules of the OSFIRC limit the membership to seven persons but provide that those seven persons may appoint other members. Those additional persons do not, however, have voting rights. The membership, as provided in Rule 5, is as follows:
“The Association shall be comprised of the following members:
(1) four representatives of the School (which members are hereinafter called “the School Representatives”);
(2) two representatives of the Council (which members are hereinafter called “the Council Representatives”);
(3) one person approved by the Council and the School being a ratepayer to the Council and of good standing and repute but not being a member of the Council or the School appointed to represent the interests of the other users of the Centre;
(4) such further or other member or members being persons interested in the use of the Centre or advising the Association in relation to the Centre or its use nominated by the Association from time to time which persons shall have no voting rights at any meetings of the Association (who shall be known as Associate Members)”.
It is apparent that Pembroke has the voting power to control the affairs of the OSFIRC.
Rule 6 provides that the income of the OSFIRC is to be applied, first, to offset operating expenses and, secondly, for improvement, development and maintenance of the indoor recreation centre and its equipment. Any surplus remaining will be applied towards offsetting any accumulated operating losses and the capital investment made by Pembroke. If the OSFIRC is wound up and surplus assets remain, those assets shall be applied to offset accumulated operating losses and the capital investment made by Pembroke. Any surplus remaining thereafter will be paid to the general revenue of the Council. The rules do not define what is meant by “surplus assets”. The Annual Report of OSFIRC for the year ended 30 June 1997 shows that Pembroke has contributed a total of $290,015 for the purpose of purchasing equipment and effecting improvements to the centre. The whole of the income for that financial year was applied towards offsetting the capital expenditure by Pembroke. On the face of the accounts, the income has not been applied in accordance with the rules in that it has not been applied first towards operating expenses. However, the notes to the accounts show that Pembroke is paying operating expenses and has contributed to the maintenance of the centre. Accounts in future years should show in greater detail how the income is applied and, if there is a surplus, how that has been applied towards reducing the capital investment made by Pembroke.
The Council has power to amend the Rules but only with the consent of Pembroke. Thus, Pembroke effectively controls the OSFIRC and has first call on its assets on a winding up.
The Present Use of the Indoor Recreation Centre
The indoor recreation centre operates under the name of “The Kensington Community Leisure Centre”. The centre has been operated by the Young Men’s Christian Association of Adelaide Inc (“the YMCA”) pursuant to a licence granted by Pembroke and the OSFIRC since 1 December 1993. The licence includes the entitlement to use the name “The Kensington Community Leisure Centre”. The licence agreement was renewed by an agreement dated 30 August 1995 for a period of five years expiring on 31 December 1999. The YMCA has an option to renew the agreement for a further term of five years: clause 3 of the agreement. Both Pembroke and the YMCA are entitled to terminate the agreement on three months notice in writing: clause 5. The YMCA pays a licence fee of $1,500 per month as well as half of all electricity charges, water and sewerage rates, and cleaning costs of the centre. It pays the cost of all telephone charges. It is also required to pay one third of the cost of maintaining the equipment in the centre.
The licence permits the YMCA to operate the centre in the following hours:
at all times during school holidays, except for two days in late January in each year which are nominated by Pembroke for school book distribution; and
2...... during school term time, after 5.30pm on week days, after 12.30pm on Saturdays and all day on Sundays.
Pembroke has so far permitted the YMCA to operate for longer hours than those provided in the licence agreement. The YMCA is permitted to make the centre available to members of the public attending fitness classes between the hours of 6.15am and 8.00am on weekdays. It is also permitted to open an area of the centre used for weights to members of the public from 3.30pm during week days.
In school terms, the centre is open from 5.30pm until 10.30pm on Mondays to Fridays. The YMCA also opens the centre on Saturdays from 12.30pm until 10.30pm and on Sundays from 8.30am until 8.00pm. In school holidays the YMCA opens the centre on week days between 6.15am and 10.30pm, on Saturdays from 12.30pm until 10.30pm, and on Sundays from 8.30am until 8.00pm. Those are the general hours during which the centre is open. The manager employed by the YMCA says that the centre is quite extensively used by members of the public for a variety of activities including badminton, volleyball, basketball, squash, indoor soccer and netball. Some indication of the use made by the public of the centre is provided by the fact that in the week commencing 20 February 1998, outside the hours during which the centre was used by Pembroke, the centre was attended by 778 persons over the age of 18 years, 73 persons between the ages of 12 and 18 years, and six persons under the age of 12 years. The centre is, therefore, used quite heavily by members of the public.
The YMCA has a person in attendance in the reception area of the centre for all of the hours in which the centre is open other than the period 6.15am to 8.00am on week days. If casual and part-time staff are included, the YMCA employs 16 persons at the centre. The YMCA also facilitates booking of the centre outside the hours when it has an employee in attendance at the centre.
The Olympic Sports Field
As already mentioned, the name the Olympic Sports Field applies only to the fenced sports arena on the land. It now consists of a substantial grandstand, a playing field and tracks and other facilities for athletics. There are mounds for spectators. Beneath the grandstand are changing rooms, club rooms and other facilities. I will refer to the whole as the “sports arena”. From time to time, those sporting organisations using the sports arena have charged fees for admission.
The sports arena has in the past been used by a number of sporting organisations including the Athletics Association. The Athletics Association now has other facilities available to it and has ceased to use the sports arena. There is now no single sporting organisation which regularly uses the arena. The Council proposes to develop the sports arena in the following way:
1................ The running tracks and other athletics facilities will be removed and the area of the playing field will be completely grassed.
2................ The sports arena will be available for use as a community sports area and oval for use by sporting organisations.
3................ The grandstand, the club rooms and other facilities in the grandstand will be retained.
4................ The carpark on the western side of the land will be retained.
5................ The fencing around the perimeter of the sports arena will be removed.
6................ Surplus terracing will be removed.
7................ Members of the public will have access to the whole of the sports arena and the mounds will be lowered to allow greater visibility of the sports arena from The Parade.
8................ As funds become available, the land on the northern, southern and eastern sides of the sports arena will be developed as parkland. Existing trees will be supplemented by planting of further trees. It is proposed that the development will include picnic areas, a play area for children, tennis courts and a basketball area for older children.
The Council will lease the club rooms beneath the grandstand to the OSFIRC. The lease will be for a term of 20 years and the OSFIRC will have a right of renewal for a further term of 20 years. The rent will be $50,000 per annum. The proposed lease requires that the OSFIRC must also pay water and sewerage rates and other outgoings. The lease provides that the permitted use of the land is for “School Activities and Community Activities”. “Community Activities” are defined to mean:
“Those recreational and community activities carried on by persons living in or within the vicinity of the City of Burnside or by groups or other incorporated bodies located or operating in or within the vicinity of the City of Burnside but not including senior sports”.
The words I have emphasised represent a departure from the terms of the trust and will be omitted from the lease when executed. “Senior sports” means “any sporting or recreational activities which are carried on by adults at A Grade or professional level”. “School Activities” mean “those activities forming part of a school’s curriculum cultural and sporting activities”. The definition of the permitted use provides a means whereby the Council will be able to ensure that the use by Pembroke is not exclusive of other community groups and that other community groups will have access to the club rooms when they are not required by Pembroke. By Clause 5.4 of the lease, the OSFIRC agrees that preference will be given during school term between the hours of 7.30am to 5.30pm on Mondays to Fridays and 7.00am to 12.30pm on Saturdays to use of the facilities by Pembroke. The OSFIRC will sublease to Pembroke on those terms. Outside those hours and in school holidays, the OSFIRC has covenanted to give preference in the use of the facilities for recreational and community activities to persons living in or in the vicinity of the Council area save and except for sporting or recreational activities carried on by adults at an A Grade or professional level. The OSFIRC cannot use the demised land for any purpose other than school and community activities.
The Council will also grant Pembroke an annual licence to use the sports arena for 14 hours in each week during school terms, the licence to be renewable by Pembroke for a period of 20 years. In consideration for that licence, Pembroke will, on 1 July 1998, pay the Council $535,000. In addition to that sum, during each year it holds pursuant to the licence, Pembroke will at its own cost maintain the sports arena which cost will include the cost of water used for that purpose. At the end of the period of twenty years Pembroke may apply for renewal of the licence but, as the licence agreement (which is called “The Permit Agreement”) provides, Pembroke “will be treated no better and no worse than any other applicant for a renewal of an annual permit of the type contributed by the permit”.
Thus, Pembroke will be able to use the indoor recreation centre, the sports arena, and the club rooms beneath the grandstand to the exclusion of other residents of the City of Burnside in what, broadly speaking, are school hours.
The Council Proposes a Variation
It is in these circumstances that the Council applies for a variation to the terms of the trust. The terms of the proposed variation are set out in Exhibit RWSD 7 to the affidavit of Mr R W S Donne sworn 10 February 1998. It is unnecessary to refer to the terms of that documents other than to note that the Council seeks to vary the trust to the extent necessary to give effect to
the lease dated 9 October 1986 between the Council and Pembroke in respect of the land on which the indoor recreation centre is constructed;
the Council’s proposal to grant a lease in respect of the club rooms beneath the grandstand to OSFIRC;
the proposal that the Council grant an annual licence to Pembroke for a period of up to 20 years to use the sports arena for the specified hours during school terms; and
to provide for powers of management, investment, and other incidental matters.
Is a Trust Variation Scheme Necessary?
Given that the trust empowers the Council to grant leases of land, it is arguable that a trust variation scheme is not necessary in respect of either of the two leases or the annual licence which the Council has granted or proposes to grant. However, real questions exist as to whether the exclusive use of the land by Pembroke during certain hours is consistent with the terms of the charitable trust and, in particular, the requirement that the land is to be used as a public recreation ground for the residents of the City of Burnside: see Municipality of Randwick v Rutledge (1959) 102 CLR 54; Storey v North Sydney Municipal Council (1970) 123 CLR 574; Attorney-General (NSW) (Ex rel. Stone) v Warringah Shire Council [1972] 1 NSWLR 526; Woollahra Municipal Council v Minister for Environment (1991) 23 NSWLR 710; cf Friends of Pryor Park Inc v Ryde City Council (1996) 91 LGERA 302. The exclusive use by Pembroke is not a use by residents of the City of Burnside in general but by one particular group of residents. Further, it is fair to infer that not all of the staff and students reside in the Council area. If it merits approval, a trust variation scheme will remove any questions as to the lawfulness of the actions of the Council in granting exclusive use during school hours to Pembroke. I think that the preferred course is to vary the trust if in all the circumstances it is proper to do so. I proceed, therefore, to consider whether the variation ought to be approved.
The Power to Approve a Variation
A trust to provide recreational facilities for the public benefit is a charitable trust: s69C of the Trustee Act. The statutory provision confirms the common law: see, for example, Inre Hadden; Public Trustee v More [1932] 1 Ch 133; Oldham Borough Council v Attorney-General [1993] Ch 210. Section 69B(1) of the Act empowers the Court to approve a variation of a charitable trust in a variety of circumstances. For present purposes, it is sufficient to note s69B(1)(d) which authorises the Court to act
“where it is not reasonably practicable having regard to -
(i) the value of the trust property; or
(ii)... changes in circumstances that have taken place since the constitution of the trust; or
(iii).. any other relevant factor.
to apply the trust property in accordance with the original purposes”.
This is a substantial and valuable parcel of land. Circumstances have changed since the land was originally vested in the Council over 100 years ago and the trust was constituted. Present circumstances warrant consideration being given to a variation. It is apparent that there are problems funding the maintenance and upkeep of the facilities, particularly the sports arena and grandstand. In order to approve the variation, s69B(6) requires the Court to be satisfied
“... on application under this section, that the variation of the terms of a trust proposed in a trust variation scheme -
(a).... accords, as far as reasonably practicable, with the spirit of the trust; and
(b) is justified in the circumstances of the particular case”.
Once the variation is approved, it prevails over inconsistent provisions of the relevant instrument or declaration of trust: s69B(6).
Relevant Factors
The terms of the trust empower the Council to grant leases. Given the bare terms in which the trust is expressed, the power to lease is wide enough to authorise a lease of either the whole or part of the land. The fact that there is power to lease indicates that the donors of the trust contemplated that the Council should, as trustee, have power to enter into leases with suitable persons or organisations who would use the land in a way which is consistent with the terms of the trust. The power to grant a lease implies a power to grant a measure of exclusivity in the use by the lessee of the demised land. It is not, therefore, necessarily inconsistent with the objects and purposes of the trust that the Council should grant a lease to a person or organisation to use the land for a recreational purpose.
The terms of the trust require that the power to grant leases be subject to the terms of the Local Government Act. As I have already said, this Court has held that the land the subject of these proceedings is park lands within the meaning of the Local Government Act. It is, therefore, necessary to consider the provisions of Part XXII of that Act. The Council is empowered by s454 to do whatever is required to adapt the land for the purposes of public recreation. By s457 the Council is authorised to grant a lease of any portion of the land for a term not exceeding 21 years provided that the land is used, among other things, for sport and recreation. A lease for a term exceeding three months requires a resolution in its favour of a meeting of electors, that is to say, persons enrolled on the voters roll of the Council: s457(4). A meeting of electors on 28 May 1986 approved the lease from the Council to Pembroke of the land on which the indoor recreation centre stands. A later meeting of electors on 31 July 1997 carried a resolution in favour of the lease of the club rooms beneath the grandstand from the Council to OSFIRC. Both leases limit the use of the land to sporting and recreational activities. Both leases, therefore, satisfy the requirements of s457. It is a nice question whether a lease which contains within its terms a right of renewal for a period of 21 years complies with s457. As at present advised, I am not prepared to hold that it does not.
There are several factors which point to an order approving the proposed variation.
The incorporated body which is Pembroke School is a resident of the City of Burnside. The fact that some of the staff and students are not residents is not, I think, relevant.
Both of the leases and the annual licence enable the land to be used for sport and recreation.
Although Pembroke has the exclusive use of the sports arena, indoor recreation centre and club rooms for quite substantial periods during the school hours mentioned earlier, the public will have access at all other times. Instead of a sports arena fenced in a way to deny the public access to it, it will be physically open to the public at all times other than the times when Pembroke has exclusive use. The area will be available for both active and passive recreation. Thus, the public will have access on weekdays before and after school hours and for the greater part of weekends. Out of school term time, the public will have virtually unlimited access to both the sports arena and the indoor recreation centre.
The relatively extensive use by the public of the indoor recreation centre demonstrates that the long hours in which Pembroke has exclusive use is not a disincentive for active use by the public.
The area of the indoor recreation centre represents approximately 1.5 percent of the whole of the subject land and the area of the grandstand a little over 2 percent. Thus, less than 4 percent of the whole of the land is occupied by these buildings. In other words, the predominant part of the subject land is made more available for community use than hitherto.
The scheme will enable the injection of substantial funds for the maintenance and improvement of the whole area. Not only will there be the initial capital sum of $535,000 but, in addition, a further sum of $50,000 in each year.
This substantial financial contribution must be weighed against the fact that the Council may not always be able to find funds to develop and maintain the land. The Council already has to find funds to pay for the maintenance and improvement of at least twelve other areas of varying size within its area which are parklands or reserves within the meaning of the Local Government Act. One of those, the Kensington Garden Reserve containing almost 16 hectares, is in close proximity to the subject land. The Council has considered selling the subject land because of the costs involved in maintaining its parklands and reserves. The scheme enables the preservation of this important and useful area for public recreation.
One factor which points to a decision to refuse the application is the preferment of Pembroke in the use of the sports arena, the club rooms and the indoor recreation centre. That preferment is not consistent with the purpose of the trust that the land be available for public recreation. That preferment has inherent in it a real risk that Pembroke will be perceived to be the sole occupier of the land. That, in turn, carries with it the potential for Pembroke to gain exclusive use in a way wholly inconsistent with the objects and purposes of the trust. But, as already mentioned, the present use by the public of the indoor recreation centre demonstrates the unlikelihood of that occurring, particularly if these facilities are managed by a person independent of Pembroke.
There are obviously significant benefits to Pembroke. It is able to use land which it does not own on terms which are extremely advantageous. The position is not far short of Pembroke owning the land but making it available to residents of Burnside when Pembroke does not require it. However, those factors must be weighed against the fact that Pembroke has spent a substantial sum on facilities which will be available to the residents of Burnside and will be continuing to spend money in the future to maintain the sports arena. Thus, there are facilities which are available to the residents of Burnside which might not otherwise have been provided. The indoor recreation centre is a particular example. Furthermore, the land is more available for community use than hitherto. However, the fact that Pembroke has spent that substantial sum should not give it any priority when these arrangements come to an end and the Council is considering the future use of the land.
It is important that the Council or some other independent person answerable to the Council should administer the land and the improvements on it and be responsible for making them available to the residents of Burnside outside the hours when Pembroke has exclusive use. That function is already carried out quite satisfactorily in respect of the indoor recreation centre by the YMCA. The YMCA has agreed to keep a key to the club rooms to facilitate access by residents. But the Council should also supervise the arrangements and be responsible for ensuring access by residents. The Council through its legal representatives has indicated its willingness to do so. Another means of seeking to ensure that the land and its improvements will continue to be available to the residents of Burnside is to erect notices at suitable locations drawing the attention of the residents of Burnside to the fact that the land and its improvements are available for community use. The parties have agreed to do so.
The objects of the OSFIRC require it to operate the indoor recreation centre in a way which will promote the interests of the local community and make it available for use by that community. Pembroke has de facto control of the OSFIRC. If the OSFIRC failed to act consistently with its objects, the Council’s appointees would be able to issue legal proceedings under the Associations Incorporation Act. It is undesirable that a party should have to commence fresh proceedings to require the OSFIRC to fulfil its objects. The Court has jurisdiction to remedy a breach of a charitable trust: see s60 of the Trustee Act which authorises any two or more natural persons who are objects of the trust, the Trustee or the Attorney-General to petition the Court. In order to facilitate enforcement of the trust, it is desirable to give liberty to apply to the Council and to the Attorney-General in this action. It would be beneficial to give liberty to apply also to two or more residents of the City of Burnside but, as it is not possible to give liberty to apply to unidentified persons, I will not do so. If there is a breach of the trust, it will be necessary for two or more residents of the City of Burnside to petition the Court pursuant to s60. As the lease by the Council requires that the club rooms should be made available to the residents, the Council is able to ensure that the OSFIRC acts in a manner consistent with the terms of the trust.
These measures will go some way to maintaining a reasonable balance between making the land and its improvements available generally to the residents of the City of Burnside and the priority given to Pembroke in that use. The measures will prevent Pembroke from being able to use the land as its own.
Given that the trust envisages leases to a particular body, that the leases are in accordance with the Local Government Act, that the leases enable the land to be used for recreation and sport, and that reasonable provision is made for use by the residents of Burnside, I am, after a deal of hesitation, satisfied that the proposals reasonably accord with the spirit of the trust and are, in the circumstances of this case, justified. The parties have indicated the terms and conditions of the proposed variation. In all the circumstances, I am satisfied that the trust should be varied in the manner proposed.
It should be noted that the Attorney-General consents to the application. The Attorney-General, on behalf of the Crown, acts as parens patriae to protect charitable trusts. He represents the beneficial objects of the charity: Attorney-General v Bishop of Worcester (1851) 9 Hare 328 at 361, 68 ER 530 at 546-7. For that reason, while that opinion is not conclusive, it is a view to which significant weight should be attached and I have regard to it.
For all of these reasons, it is appropriate to approve variations to the trust
to authorise the lease dated 9 October 1986 between the Council and Pembroke;
to enable the Council to enter into the proposed lease with the OSFIRC;
to enable the Council to grant an annual licence to Pembroke for a period of up to 20 years; and
to provide for powers of management, investment of income, and other incidental matters.
Mr Johns, who appeared for the Attorney-General, submitted that the construction of buildings such as the grandstand and indoor recreation centre was inconsistent with the terms of the trust. The mere construction of such improvements is not in itself a breach of the terms of the trust since they could be available for use by the residents of Burnside. It is the use of such improvements which will determine whether or not there is a breach.
Mr Johns also submitted that the terms of the trust do not contain sufficient specific direction as to the application of the trust’s property so that this was an appropriate case in which the Court, in the exercise of its inherent jurisdiction, should order a general scheme. It is well settled that the Court has inherent jurisdiction to approve a scheme for a charitable trust in certain circumstances including instances where the donor has made a charitable gift but has not provided for the method of administration: Inre Gott; Glazebrook v University of Leeds [1944] Ch 193 at 197; Wellbeloved v Jones (1822) 1 Sim & Saint 40, 57 ER 16. The jurisdiction to settle a scheme is different from the power of the Court to order a cy-près scheme. The distinction is noted by Maugham J in Inre Robinson; Besant v German Reich [1931] 2 Ch 122 at 128-129 in these terms:
“I should point out that a scheme directed by this Court in relation to gifts for charitable purposes is not necessarily or, I think, generally a scheme for the application of the fund cy-pres. It is well known that a charitable gift in this country does not fail merely because there is an uncertainty as to the mode of carrying out the gift. In numerous cases of gifts for charitable purposes it is necessary to fill up a number of details in regard to which the testator or the donor has not described his wishes in clear terms. In such cases the gift does not fail, but the Court fills up the details of the donor’s charitable intention by means of a scheme”.
I do not think that it is necessary or desirable in the circumstances of this case for the Court to order a scheme since the terms of the trust clearly identify the trustee, the objects of the charitable intention, and the land the subject of the trust. The intention that the land be used for public recreation permits a relatively wide variety of uses of the land. As the history of this land illustrates, the kind of recreational uses to which the land will be put will change from time to time. Those changes will be caused by a range of factors including changes in community attitudes and preferences as to the forms of recreation in which people might wish to engage and the capacity of particular persons or organisations to provide particular kinds of recreation. As the circumstances change, so will the nature of the use of the land and the nature of the administration of it. The Council has the power to administer the trust in a way which will reflect the changes in the preferred use of the land. A scheme settled by the Court might hinder the Council at some future time in the proper management of the trust.
The Returned & Services League
A small building constructed at the north-west corner of the land is used by the Returned & Services League (“the RSL”). The Council has for many years granted the Kensington Park Sub-Branch of the RSL an annual licence to use the building. It is used for branch meetings and social activities of the Kensington Park Sub-Branch. The land occupied by the building is 0.41 percent of the whole of the land subject to the trust. The Council has made an oral application to seek a variation of the trust to authorise the annual licence to the RSL. The Attorney-General consents to the application. Like considerations to those just mentioned justify approving a variation of the trust to authorise the use by the RSL of the small building which serves as its club rooms. The area occupied by the club rooms is very small indeed.
Variations Approved
For all of these reasons, I am satisfied that it is proper to make an order approving variations to the trust. I will hear the parties as to the terms of the order.
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