In the matter of the estate of Martin Michael Healy, (deceased)
[2014] VSC 257
•21 August 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2013 5001
S CI 2014 1192
BETWEEN:
| THE TRUST COMPANY (AUSTRALIA) LIMITED (As Trustee of the Estate of Martin Michael Healy, Deceased) | Plaintiff |
| - v - | |
| SUSAN EDWARDS (as representing herself and all of the other next of kin of Martin Michael Healy, Deceased) | First Defendant |
| - and - | |
| THE ATTORNEY GENERAL FOR THE STATE OF VICTORIA | Second Defendant |
AND BETWEEN:
| SUSAN EDWARDS | Plaintiff |
| - v - | |
| THE TRUST COMPANY (AUSTRALIA) LIMITED (as Trustee of the Estate of Martin Michael Healy, Deceased) | Defendant |
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JUDGE: | Daly AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 9 April 2014, further written submissions by the Attorney‑General of the State of Victoria dated 1 July 2014 | |
DATE OF JUDGMENT: | 21 August 2014 | |
CASE MAY BE CITED AS: | In the matter of the estate of Martin Michael Healy, (deceased) | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 257 | |
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TRUSTS – Charitable Trusts – Application for income from trust fund to be applied cy-près — Relevant principles — Application by descendant of testator to become trustee — Sections 41 and 48 of Trustee Act 1958 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S. Newton | Wills and Probate Victoria |
| For the First Defendant | Ms C. Sparke QC | MNG Lawyers |
| For the Second Defendant | Mr R. H. Miller | Victorian Government Solicitor’s Office |
HER HONOUR:
Martin Healy (“the testator”) died in 1958. In his will, made a few years before his death (“Will”), he provided for various life interests in the income from a Trust established by the Will, including a life interest in favour of his daughter, Dorothy Quinn. Dorothy, the last surviving life interest holder, died on 14 August 2011. Her death triggered the operation of clause 7(c) of the Will which provides as follows:
From and after the death of the last survivor of my aforesaid sisters and the said Dorothy Kathleen Quinn and the said Adelaide May Langlands I DIRECT my trustees to pay and apply the income of my trust funds equally between the St. Augustine’s Boys’ Orphanage at Geelong and the St. Vincent de Paul’s Boys’ Orphanage at South - - Melbourne it being my desire that the said Orphanages shall as far as possible use such income to further the education by scholarship or otherwise of such boys as the Principal of such Orphanages may select AND I DECLARE that if either or both of such Orphanages shall have ceased to function at the date of my death or thereafter shall cease to function my trustees shall request the Roman Catholic Archbishop of Melbourne for the time being to nominate some other orphanage in the place of the Orphanage or Orphanages and the orphanage so nominated shall stand in the place of the Orphanage which has ceased to function as aforesaid and shall be entitled to receive the share of the income of my trust funds which the Orphanage so ceasing to function would have received AND I FURTHER DECLARE that the receipt of the Principal or other proper officer for the time being of any Orphanage entitled to a share of my trust funds shall be a good and sufficient discharge to my trustees. ______
Both the St Augustine’s Boys’ Orphanage in Geelong and the St Vincent de Paul’s Boys’ Orphanage in South Melbourne (“Orphanages”) ceased to exist in 1997, when their activities were taken over by MacKillop Family Services (“MacKillop”). MacKillop was founded in 1992 to take over the services until then provided by the Christian Brothers, the Sisters of Mercy, and the Sisters of St Joseph.
The plaintiff, The Trust Company (Australia) Limited (“Trustee”) is the successor in title to the Burns Philp Trust Company Limited, the original trustee nominated under the Will. The Will also provided that Dorothy Quinn be a joint trustee of Mr Healy’s estate, a role she undertook until her death in 2011.
On 25 September 2013, the Trustee issued a proceeding by way of Originating Motion, naming Dorothy’s daughter Susan Edwards and the Attorney-General of the State of Victoria, in his capacity as the protector of charities (“Attorney‑General”) as defendants. The Originating Motion sought, among other things:
2.A Declaration that the trust expressed in Paragraph 7(c) of the Will dated 19 October 1956 of the abovenamed Deceased is a charitable trust.
3.A Declaration that the trust contained in Paragraph 7(c) of the Will cannot be carried out according to the directions given and to the spirit of the gift.
4.Pursuant to s 2(1) of the Charities Act 1978, an order by way of scheme that the Plaintiff hold the fund the subject of the trust in Paragraph 7(c) of the Will on the following trust:
On trust to apply the income of the fund in awarding scholarships to underprivileged children and young people in Victoria, (the recipients of such scholarships to be selected by the trustee of the estate without any gender or denominational limitation), to assist the selected recipients with their secondary education and post-secondary education at educational institutions (also to be selected without any gender or denominational limitation).
5.Alternatively, an order by way of scheme that the Plaintiff apply the property the subject of the trust in such other way and in accordance with such other Scheme as the Court may approve.
6.An order that for the purposes of this proceeding the First Defendant represent herself and all of the other next of kin of the Deceased.
In March 2014, the first defendant in this proceeding, (“cy-près proceeding”) Ms Edwards, brought a separate proceeding seeking orders pursuant to ss 41 or 48 of the Trustee Act 1958 (Vic) (“Act”) that she be appointed as a trustee of the trust established under the Will (“Trust”). She also filed an appearance in the cy-près proceeding. The parties to both proceedings, being the Trustee, Ms Edwards, and the Attorney-General consented to the proceedings being heard and determined together.
Before turning to the issues for determination in the proceedings, I should note that all parties agreed that clause 7(c) of the Will exhibited a general charitable intention, and that this proceeding is an appropriate occasion for the making of an order that the Trusts under the Will be applied cy-près. There was no submission by Ms Edwards, representing the descendants of Mr Healy, that the intention under the Will had failed, and that the trust funds should be applied as if there was an intestacy. Indeed, Ms Edwards has proposed a cy-près scheme for consideration by the Court, and is keen for herself, and, in subsequent years, other family members to take an active role in giving effect to the charitable intention of the Trust.
The Will provides for the income of the Trust to be applied annually for the purposes set out in clause 7(c) of the Will. The evidence filed on behalf of the Trustee shows that, as at 27 March 2014, the current estimated capital of the Trust is $3,405,494.24. Approximately half of the assets of the Trust are held in the form of “blue-chip” shares, while the remainder are invested in managed funds, mostly, it appears, funds managed by the Trustee. The sum of $273,874.69 is the balance of the income of the Trust which has remained undistributed since the death of Dorothy Quinn. No evidence was given regarding the amount available for annual distribution, but assuming an annual rate of return of 5%, I estimate the Trust could generate an annual income of $156,580.98.[1]
[1]Based upon a capital figure of $3,131,619.60, being the total value of the trust less the undistributed income of $273,874.69. The actual income may be less, because if the undistributed income from the Trust is divided by 2.5 (the time in years since Dorothy Quinn’s death) one arrives at the sum of $109,549.87.
Shortly prior to the hearing, counsel for the Trustee prepared a cy-près scheme for the consideration of the Court, which differed to some extent from the scheme put forward by the Trustee in the Originating Motion. The scheme proposed by the Trustee is as follows:
The trustees shall pay and apply the income of the trust funds to MacKillop Family Services Limited of 237 Cecil Street, South Melbourne in the State of Victoria and the said MacKillop Family Services Limited shall, as far as possible, use such income to further the education, in such manner as it sees fit, of young people in need.
The written submissions relied upon by Ms Edwards opposed the scheme proposed by the Trustee, and propose the following alternative scheme:
The Trustees shall pay and apply the income of the trust fund:-
(i)in awarding scholarships, or otherwise providing assistance, to underprivileged children (the recipients of such scholarships to be selected without any gender or denominational limitation)
(ii)to assist the selected recipients with their education and educational institutions (also to be selected without any gender or denominational limitation)
(iii)the recipient or recipients to be selected by the trustee or trustees of the estate after consultation with the legal personal representative of Dorothy Quinn and after the death of that person, with a linear descendant of the late Martin Michael Healy, such person being nominated by the family of the said Martin Michael Healy.
During the course of the investigations and consultations carried out by the Trustee prior to the hearing, the Trustee wrote to the Roman Catholic Archbishop of Melbourne (“Archbishop”) regarding the Trustee’s proposed application to the Court. On 26 July 2012 the Business Manager for the Archbishop responded in the following terms:
The Archbishop agreed that the Testator had a general charitable intention. He is also willing to support the awarding of scholarships to under privileged children and young people in Victoria without any gender limitation to assist them with their secondary and post-secondary education.
It is the Archbishop’s view as apparent in the Will that it was also the intention of the Testator to support institutions of the Catholic Church. On this basis the Archbishop wishes these scholarships to be made available to eligible candidates to assist their secondary education in a Catholic school. The Archbishop is agreeable to scholarships being awarded to eligible students to assist them with post-secondary education (both technical and tertiary) without a denominational limitation.
On 24 October 2013, the Deputy Victorian Government Solicitor advised the solicitor for the Trustee[2] that “the Attorney-General would not oppose a scheme that successful recipients for scholarships for their secondary education be at Catholic schools and successful recipients for scholarships for post-secondary education be without denominational limitation”.
[2]Exhibit “NF-8” to the affidavit of Noel Finck sworn 31 January 2014.
Accordingly, the Court has before it three materially different schemes. The common ground between the parties is first, that the Trust under the Will has a charitable intention, and secondly, that the Court should not approve a scheme which discriminates on the basis of gender.
In the proceeding brought by Ms Edwards (“trustee proceeding”), Ms Edwards seeks orders pursuant to s 41, or, alternatively, s 48 of the Act that she be appointed as a trustee of the Trust in addition to the Trustee.
At the hearing of the proceedings, the active parties relied upon the affidavit evidence filed on behalf of the parties, and their written and oral submissions. No deponent was required to attend for cross‑examination. Unusually, the Attorney-General was represented by counsel and took an active part in the proceeding, making submissions in support of the proposal put forward to the Trustee by the Archbishop, referred to at paragraph 10 above.
Accordingly, the key issues for determination in these proceedings are as follows:
(a)what role, if any, the successor organisation to the Orphanages, MacKillop Family Services, should play in allocating and administering the income of the Trust;
(b)the relevance of the fact that the Orphanages were auspiced by orders of the Catholic Church, and the reference in the Will to the Archbishop;
(c)whether the reference in the terms of the Will to the income of the Trust being used “to further the education by scholarship or otherwise of such boys as the Principal of such orphanages may select” imposes some limitation upon the manner in which the funds may be used, that is, to the payment of funds to assist individual children and/or young people, or may be used for educational purposes generally;
(d)whether the term “boys” is sufficiently broad to encompass primary aged children, and, on the other hand, young people engaged in post‑secondary education, as well as secondary school students, and, in respect of the latter, whether assistance could be provided to young people who had reached the age of 18; and
(e)whether the income of the Trust ought to be administered by the Trustee (either alone or in conjunction with Ms Edwards, and subsequently, other descendants of the testator), MacKillop Family Services, or by or on behalf of the Archbishop;
(f)whether, if it is found appropriate that the funds be used for direct assistance to individual students, whether such direct assistance should be limited to the payment of fees for Catholic schools; and
(g)the role, if any, Ms Edwards, and in due course, other lineal descendants of Mr Healy, should play in the administration of the Trust and the allocation of its income.
During the course of the hearing of the applications, senior counsel for Ms Edwards raised the issue of whether the Court had jurisdiction to hear the application, given that probate of the Will had been granted in New South Wales. Senior counsel for Ms Edwards referred to the decision of the High Court in Permanent Trustee Co (Canberra) Ltd v Finlayson,[3] where the Court held that the New South Wales Commissioner of Stamp Duties was not entitled to collect death duties from the executor of an estate where the estate assets were located in the Australian Capital Territory, not New South Wales. The Court stated:[4]
the Territory executor, however, was neither liable nor entitled to pay out of the Territory assets any claims which were not sustainable against it according to the law of the Territory …
The principle … rests upon the undoubted proposition that an administration of assets is to be carried out in accordance with the lex fori.
[3](1968) 122 CLR 338.
[4]At 342-43.
The issue is significant in these proceedings for two reasons: first, of course, it is necessary for the Court to find it has jurisdiction to make orders that the Trust under the Will be applied cy‑près, and secondly, if the Trust is governed by the law of New South Wales, the Trustee Act 1925 (NSW) provides that where a trust is established with two trustees, a replacement trustee must be appointed upon the death, retirement or removal of one of the trustees.[5]
[5]Sub-section 6(5).
Given that the issue had been raised at quite a late stage, the hearing of the applications proceeded on the basis that this Court did have jurisdiction, with provision being made for the parties to file written submissions and convene a further hearing on the question of jurisdiction if required. Ultimately, submissions were filed on behalf of the Attorney‑General contending that this Court had jurisdiction for the following reasons:
(a)this is a proceeding to vary a trust established by a will which was prepared and executed in Victoria, by a testator domiciled in Victoria, naming Victorian beneficiaries;
(b)the authority referred to by counsel for Ms Edwards referred to the principle that “the administration of the estate of a deceased person is governed entirely by the lex loci, and it is only when the administration is over that the law of his domicile comes in”;
(c)in the current case, the administration of the estate was completed shortly after his death by his then executors Burns Philp and Dorothy Quinn. Their duties and functions were finalised long ago and the Court is now concerned with a trust which was created in Victoria, is administered in Victoria (Burns Philp having ceased to be the trustee in 1990), and has the closest connection with Victoria;
(d)the trust holds no real estate in New South Wales, which may have been a basis for contending that this Court had no jurisdiction; and
(e)there is no basis for this Court to refuse to exercise jurisdiction on the grounds that Victoria is a “clearly inappropriate forum”. Indeed, most of the relevant connecting factors favour the proceeding being heard in Victoria.
Counsel for the Attorney‑General relied upon the decision of Habersberger J in Thomas Hare Investments Ltd v Hare and ors,[6] where his Honour determined that this Court had jurisdiction to entertain an application to vary the terms of a trust even though the trust concerned had a much more substantial connection with New South Wales than Victoria: the trustee, the directors of the trustee, the trust property, and the beneficiaries were all located in New South Wales. In that case, Habersberger J noted that there was no territorial limitation on the jurisdiction or powers of the Court under s 63A of the Act, and cited with approval the statement of Judd J in Re McDonald Trust No 1,[7] that when the Court was entertaining an application under s 63A of the Act, the Court
… would look for some connection between the trust, its beneficiaries, and jurisdiction.
[6][2012] VSC 200.
[7][2010] VSC 324.
In the cases referred to above, this Court was dealing with applications with respect to trusts which had substantially greater connections with New South Wales than the Trust, in circumstances where no comparable legislative provision existed in New South Wales. In Re McDonald, a Victorian domiciled trustee had been appointed apparently in an attempt to invoke the jurisdiction of this Court. In Hare Investments, Habersberger J considered it sufficient that given that the class of potential beneficiaries of the relevant trust was not closed, there was every possibility that the Court may be varying the terms of the trust to benefit a person who was or may have become a resident of Victoria, and that such an expansive approach to jurisdiction was consistent with the authorities.
Counsel for the Attorney‑General submitted that while the authorities referred to above concerned applications under s 63A of the Act, which empowers the Court to approve any arrangements varying or revoking trusts, or enlarging the powers of trustees, or administering trust property, such principles can be applied by analogy to applications seeking the Court to exercise its cy-près jurisdiction. I agree that it is appropriate to draw such an analogy, and that there is no reason of principle why the Court’s approach to its cy-près jurisdiction should be more confined. In any event, there is a real and substantial connection between the trust which is the subject of the current application and Victoria, and, indeed, the Trust’s connection with New South Wales is largely historical in nature. For completeness, I note that counsel for the Trustee and Ms Edwards have indicated by correspondence that they support the Attorney‑General’s submissions regarding the question of jurisdiction.
There was further common ground between the parties, in that all parties agreed that there should be declarations that the Trust is a charitable trust, and that the Trust cannot be carried out according to the directions given in the Will and in accordance with the spirit of the gift, given that there are no longer any orphanages in Victoria. All agreed that it is inappropriate in the current era to limit the beneficiaries of the income of the Trust to young males alone. All agreed that the Will evinced an intention to assist young people who were financially disadvantaged or otherwise in need. And finally, while there were shades of difference in the proposals put forward by the parties, each party indicated a flexible approach to the age limitations imposed by the terms of the Will.
I agree with the submissions of the parties that, despite the references in the Will to the Orphanages, the terms of clause 7(c) of the Will evidence a general charitable intention rather than a particular charitable intention. Again, the distinction is important, because if it were found that there was a particular charitable intention (that is, only to benefit boys who were resident of the Orphanages and nominated by the principals of the Orphanages), then the inability to carry out that particular purpose would result, in the current case, to the failure of the Trust and the distribution of the assets of the estate as if it were an intestate estate (the residuary beneficiaries all being deceased).[8]
[8]Jacobs’ Law of Trusts in Australia, at [1068].
In the current case, the general charitable intention can be inferred from the language of clause 7(c) of the Will: first, the reference to the testator’s desire that the income of the Trust “to further the education by scholarship or otherwise of such boys as the Principals of such Orphanages may select” suggests that the intended beneficiaries are “boys”, not the orphanages; and secondly, the provision in clause 7(c) of the Will of a mechanism to nominate replacement Orphanages should one or both of them close down. The evidence of Ms Edwards regarding the interests and intentions of the testator, her grandfather, to the extent that it is admissible (see below), also supports the view that the testator intended that the income from the Trust be used to further the education of underprivileged boys in perpetuity, rather than confer a specific benefit upon the Orphanages as such.
Section 2(1) of the Charities Act 1978 (Vic) provides that:
2 Occasions for applying property cy près
(1)Subject to subsection (2), the circumstances in which the original purposes of a charitable gift can be altered to allow the property given or part of it to be applied cy près shall be as follows –
(a) where the original purposes, in whole or in part –
(i) have been as far as may be fulfilled; or
(ii)cannot be carried out, or not according to the directions given and to the spirit of the gift; or
(b)where the original purposes provide a use for part only of the property available by virtue of the gift; or
(c)where the property available by virtue of the gift and other property applicable for similar purposes can be more effectively used in conjunction, and to that end can suitably, regard being had to the spirit of the gift, be made applicable to common purposes; or
(d)where the original purposes were laid down by reference to an area which then was but has since ceased to be a unit for some other purpose, or by reference to a class of persons or to an area which has for any reason since ceased to be suitable, regard being had to the spirit of the gift, or to be practical in administering the gift; or
(e)where the original purposes, in whole or in part, have, since they were laid down –
(i)been adequately provided for by other means; or
(ii)ceased, as being useless or harmful to the community or for other reasons, to be in law charitable; or
(iii)ceased in any other way to provide a suitable and effective method of using the property available by virtue of the gift, regard being had to the spirit of the gift.
Both s 2(1)(a)(ii) and s 2(1)(d) of the Charities Act are applicable to the circumstances of the current case, in that the directions in clause 7(c) of the Will cannot be carried out (that is, the mechanism by which the beneficiaries of scholarships and other assistance can be selected), and in that the class of persons to be benefited (boys nominated by the principals of the Orphanages) cannot be practically ascertained.
There was no dispute between the parties about the applicable law as to how a gift is to be applied cy‑près. Put simply, the Court is obliged to order or sanction a scheme which applies the gift in a manner as close as possible to the testator’s original general intention.[9] There is authority which indicates that it is possible for the Court to take into account extrinsic evidence of the testator’s intentions.[10] However, in my view, while the Court, if necessary or appropriate, may be informed by extrinsic evidence, the best evidence of the testator’s intentions, particularly given the passage of many decades since his death, is the terms of clause 7(c) of the Will, and the significance of any extrinsic evidence would generally be limited where it is possible to identify a clear intention from the terms of the Will or resolving any ambiguities that might arise. The task of the Court is to best give effect to the testator’s intentions in the contemporary context. Each of the parties has a different view of what the testator’s intentions might have been, and as such, different proposals as to how the Trust should be administered.
[9]Price v Attorney-General [1914] AC 20.
[10]Phillips v Roberts [1975] 2 NSWLR 207.
The Trustee’s submission in favour of providing the income of the Trust to MacKillop was primarily based upon MacKillop’s role as the successor organisation to the Orphanages, providing residential and other support services to a substantially similar client base to those children who would have resided in the Orphanages, albeit in a contemporary context.
In support of its proposal that the income from the trust be provided to MacKillop to administer, the Trustee relied upon an affidavit sworn by Mr Noel Finck, a senior manager with the Trustee, on 31 January 2014. In that affidavit, Mr Finck, among other things, summarised the history of the Orphanages. The St Augustine’s Orphanage opened in Newtown (Geelong) in 1855, with the Christian Brothers taking over its operation in 1878. In 1939 the St Augustine’s Orphanage moved to Highton, where approximately 350 boys were housed and trained in farming techniques on 620 acres of farmland. In 1966 the orphanage changed its name to St Augustine’s Boys Home Highton. In 1988, the name changed again, to “St Augustine’s Adolescent and Family Services Whittington”, and the operations moved to Whittington. By then, rather than housing children and young people in a single institution, they were cared for in small groups in residential houses in various locations in and around Geelong.
The St Vincent de Paul’s Boys’ Orphanage commenced operations in South Melbourne in 1855, and was until 1997 also run by the Christian Brothers. Its name changed to “St Vincent de Paul Boys’ Home” in 1967.
MacKillop was formed in 1997, and took over the management of the following institutions:
· St Vincent de Paul Boys’ Home, South Melbourne;
· St Augustine’s Adolescent and Family Services, Whittington;
· St Vincent’s Girls’ Orphanage, South Melbourne and Black Rock;
· St Catherine’s Girls’ Orphanage, Geelong;
· St Joseph’s Home for Boys, Surrey Hills;
· St Joseph’s Babies’ Home, Broadmeadows;
· St Joseph’s Receiving Home, Carlton;
· St Anthony’s Home, Kew.
MacKillop’s programs include foster care and residential care, disability services, youth support, education and training, family support, refugee services and support to women and men who, as children, were in the care of its founding agencies.
Mr Finck deposed that the Trustee wrote to the Archbishop in accordance with the terms of the Will. He deposed that, pending the hearing of this proceeding, the Trustee would continue to investigate how the income of the Trust could be applied to serve the spirit of the gift contained in the Will. In particular, the Trustee would consider whether the spirit of the gift in the Will could be appropriately met by substituting MacKillop in place of the Orphanages, either as the direct recipient of the income of the Trust, or as a conduit for the application of the Trust’s income for the benefit of disadvantaged children whose circumstances in life most closely resemble that of the “orphans” that the testator intended to benefit.
According to an affidavit sworn by Mr Graham Boal, the Director of Finance and Business Services and Company Secretary of MacKillop, the objects of MacKillop include:
To conduct, manage and carry on, in conformity with the Canon Law of the Roman Catholic Church, and as part of the Mission of the Church, a Catholic agency of child, youth and family care services.
Mr Boal deposed further, in summary, as follows:
(a)the MacKillop constitution specifically provides for its assumption of the management and control of a number of organisations formerly controlled by certain orders of the Catholic Church, including the Orphanages;
(b)although MacKillop is a Catholic organisation it provides assistance to people irrespective of the nature of their religious beliefs;
(c)each year MacKillop assists more than 2,000 children and young people as well as almost 5,000 families, with more than 500 children and young people having access to its education services. It runs specialist schools at Maidstone and Geelong for troubled young people, and employs a teacher to provide educational services at the residential units operated by it;
(d)apart from providing educational services directly, mainly for young people who are unable to thrive in mainstream schooling, MacKillop also assists children attend at private schools by scholarships, full and partial, and by provision of materials and the like;
(e)the income from the Trust could be used to provide additional educational services to young people. One of MacKillop’s main goals in its current strategic plan is to improve the educational outcomes of children in its care and those attending the specialist schools it operates, but these education services are generally under resourced, and the demands upon those services is ever increasing; and
(f)as a result of his position with MacKillop he is aware of the history of the Orphanages, and that to the best of his knowledge and belief the histories set out in the affidavit of Mr Finck sworn on behalf of the Trustee are correct.
Counsel for the Trustee submitted that paying the income of the Trust to MacKillop for educational purposes would be consistent with the principle that a gift to a charitable institution which has ceased to exist should take effect in favour of an institution which has taken over the work previously carried on by the named institution and which can properly be regarded as the successor to the institution named in the Will.[11] In his submission, one could not get nearer to the original object of the Trust where it can be given to the institution which carries on the role of the original institution, and the evidence demonstrates that MacKillop does carry out this role.
[11]Re Tyrie, deceased(No 1) [1972] VR 168, 177.
The Trustee’s nomination of MacKillop as the organisation best placed to receive and allocate the income from the Trust was not accepted by either Ms Edwards or the Attorney‑General. While both parties stressed that their positions should not be taken in any way to criticise or downplay the importance and the quality of the work done and services provided by MacKillop, each had their reasons for considering that MacKillop was not the appropriate organisation to receive and administer the income of the Trust.
Counsel for the Attorney‑General submitted that the testator’s intention, as set out in the Will, was to provide scholarships and other financial aid for underprivileged young people, not to provide additional income for a large charitable institution such as MacKillop, which has net assets of approximately $40 million and an annual income of approximately $50 million. Further, while MacKillop provides some educational services for vulnerable and traumatised young people in its care, these services are limited to children and young people with special needs. Its formal education facilities are geographically restricted. Such a limitation on potential beneficiaries would not have been within the contemplation of the testator.
Counsel for the Attorney‑General submitted that the characterisation of MacKillop as the successor organisation to the Orphanages is misconceived, because the Orphanages have no successor: they simply no longer exist. Further, counsel submitted that the reference in clause 7(c) to the nomination function of the Archbishop means that the Archbishop’s role is central to the administration of the income from the Trust, and, reading the words of the Will in context, the cy‑près scheme ultimately ordered by the Court should recognise the central role of the Archbishop in determining the successor beneficiary or beneficiaries. He submitted that it was clear that the testator intended that the Archbishop be involved in how the scholarship scheme was to be established, how scholarships were to be granted, and how scholarships were to be administered.
Counsel for the Attorney‑General also criticised the scheme proposed by the Trustee on the grounds that, based upon the proposed language of the Trustee’s scheme, the income from the Trust could be deployed by MacKillop for general educational purposes. He noted that the reference in clause 7(c) of the Will to “further the education by scholarship or otherwise” clearly indicated that the testator intended that the income from the Trust was to be used for specific educational purposes, and that the use of the word “scholarship” contemplates the provision of direct financial assistance to individuals, not the provision of services.
Ms Edwards’ concerns regarding the appropriateness of MacKillop in some respects mirrored those raised by the Attorney-General, in particular, any suggestion that the income of the Trust be used for general educational purposes rather than to provide scholarships and like assistance to eligible children and young people, but differed in other respects. Senior counsel for Ms Edwards submitted that MacKillop provides services, mostly of a non‑educational nature, and for persons and families of all ages, not just children. However, Ms Edwards also objected to the income from the Trust being given to a professedly Catholic organisation such as MacKillop, when her evidence demonstrates that the testator did not profess or follow the Catholic faith or observe Catholic rituals and traditions. This submission is the critical point of distinction between the submissions of Ms Edwards and the Attorney-General, in that the latter’s proposed scheme is based upon a submission that the terms of the Will demonstrated that the testator intended to benefit Catholic institutions.
Senior counsel for Ms Edwards submitted that, under the terms of the Will, the only role for the Archbishop was to nominate a successor orphanage or successor orphanages in the event that one or both of the Orphanages closed. Given that both of the Orphanages have closed, and there are no more orphanages in Victoria, no scheme giving effect to the testator’s intention requires the involvement of the Archbishop.
Senior counsel for Ms Edwards rejected the contention that the testator intended, by the terms of the Will, to benefit Catholic institutions. Ms Edwards, who was 16 when her grandfather died, said that the testator was not avowedly Catholic, the family did not observe Catholic rituals, the testator did not seek the last rites in accordance with Catholic tradition, and the Will did not prescribe a Catholic service after the testator’s death. Rather, the income from the Trust was left to be administered by the Orphanages not because of their Catholicism but because, at the time that the Will was made, it was Catholic institutions such as the Orphanages that were providing accommodation and services to the class of children that the testator intended to benefit from the Will.
However, as noted above, the submissions made on behalf of Ms Edwards did align with those made on behalf of the Attorney‑General in respect of the purposes for which the income of the Trust could be used. In particular, senior counsel for Ms Edwards submitted that it is clear from the terms of the Will that the income of the Trust was to be used for educational purposes, and not for the broader charitable purposes engaged in by an organisation such as MacKillop, and furthermore, not merely for general educational purposes, but for specific educational purposes, particularly scholarships, but also direct financial assistance of a like character. The use of the term “scholarships or otherwise” in the Will was intended to expand the assistance available beyond school based scholarships to other forms of direct financial assistance, with the proviso that the assistance must be linked to education.
Counsel for the Attorney‑General and Ms Edwards in their oral submissions put forward some suggestions as to how the scholarship schemes proposed by their respective clients might be administered. Counsel on behalf of the Attorney‑General suggested that the scholarships, to be known as the “Healy Scholarships” could be advertised as being available to needy, deserving young people. The Trustee, perhaps in consultation with the Archbishop and/or a TAFE provider, would select the beneficiaries based both upon eligibility and the funds available from the income of the Trust in any one year. One possible means of determining eligibility for assistance could be to require applicants to provide their parents’ tax returns for the previous two years.
Senior counsel for Ms Edwards agreed that the Trustee ought to be responsible for promoting the availability of the scholarships, either through advertising, or through philanthropic organisations, and that the selection of the beneficiaries be undertaken by the Trustee in conjunction with Ms Edwards, or another representative of the family. Senior counsel for Ms Edwards rejected any suggestion that the Archbishop be involved in the selection process, on the basis that the Will never contemplated that the Archbishop have such a role: the Archbishop’s function under the Will was limited to the nomination of successors to the Orphanages.
Counsel for the Trustee rejected the criticisms of both the Attorney‑General and Ms Edwards, and the alternative schemes propounded by both of those parties, on the following grounds:
(a)the evidence establishes that MacKillop is the successor organisation to the Orphanages. That is clear from MacKillop’s constitution alone, but in any event, based upon the evidence of what MacKillop actually does, it would be difficult to identify anything closer to what the Orphanages would have done in the 1950s, having regard to the societal changes which have taken place since that time;
(b)the evidence shows MacKillop does provide educational services: it awards scholarships, it runs schools, and employs teachers to work in its supported residential services;
(c)the Trustee would not, as was contended on behalf of Ms Edwards, be abrogating its responsibility by passing the income of the Trust over to a suitable organisation to determine the ultimate beneficiaries of that income: rather, that is exactly what was contemplated by the testator in the Will where the role of the Trustee was merely to pay over funds to the candidates nominated by the principals of the Orphanages;
(d)the testator left the decision as to the ultimate beneficiaries of the income of the Trust in the hands of the parties he presumably considered were best placed to make that decision. In the current environment, MacKillop is in an equivalent position to the principals of the Orphanages, dealing on a day to day basis with prospective beneficiaries. The terms of the Will did not contemplate any role in the selection process for either the Archbishop or a family member;
(e)the fact that MacKillop is a large organisation is irrelevant to the question of whether it can carry out the role contemplated by the testator: its size and reach simply reflects modern society and its demands for economies of scale; and
(f)there is no basis to confine assistance to those attending Catholic schools: indeed such a religious limitation is not evident from the terms of the Will and would be contrary to established authority.[12]
[12]See, for example, Re Lysaght [1966] Ch 191.
Counsel for the Trustee indicated that, subject to the submissions outlined above, the Trustee would have a flexible approach to the question of the age of potential beneficiaries and any limitations upon the purposes for which MacKillop could apply the income from the Trust beyond those provided for in the scheme put before the Court by the Trustee.
In my view, while each case and set of circumstances is different, where it is necessary for the Court to exercise its cy-près jurisdiction in order to preserve and facilitate the charitable intention of a trust, the fact that there is a successor organisation carrying out substantially similar functions to the original beneficiaries under the Will is a matter weighing in favour of constructing or sanctioning a scheme involving that successor organisation.
In my view, MacKillop is an appropriate organisation to administer and allocate the income from the Trust, albeit within certain parameters. First, it is clearly the successor organisation to the Orphanages, and the governance arrangements of MacKillop reflect its institutional heritage. Indeed, and while this is of course not determinative, its administrative headquarters occupy the site previously occupied by the St Vincent de Paul’s Boys’ Orphanage in South Melbourne. It was the intention of the Will, as represented by the terms of clause 7(c), that the distribution of the income of the Trust was to be at the discretion of the Principals of the Orphanages, who were almost certainly members of the orders (now described in the MacKillop constitution as “congregations”) who are now represented on the MacKillop Board of Management. The fact that MacKillop is a large charitable organisation with substantial assets does not detract from either its status as the successor organisation of the Orphanages or its capacity or appropriateness for administering the income from the Trust according to its terms. The evidence is that it does, in fact, offer and administer scholarships.
I also do not accept that because MacKillop only provides education services to children and young people with special needs, and only operates two schools, that the class of children and young people would be confined to a much narrower group than the group that was in the contemplation of the testator when he made his Will. Indeed, both the Attorney‑General and Ms Edwards propose, in some respects at least, a substantial broadening of the access of persons likely to be eligible for assistance from the income of the Trust, that is, to financially disadvantaged children and young people generally.
True it is that MacKillop offers a range of support services, not just residential care, to adults as well as families and young people. However, in my view, to the extent that MacKillop provides residential care and support services to children and young people, including young people in foster care placements, its client base is still fundamentally the same class of children and young people living in the Orphanages: that is, those children and young people who, for whatever reason, cannot live with and be supported by their own families. The reasons why that might be the case, and the models of service delivery, have changed since the 1950s. But the target group of the Orphanages and the recipients of the residential and allied services provided by MacKillop appear to be substantially similar. The MacKillop Annual Report refers to MacKillop being “one of the largest providers of foster care, residential care and lead tenant programs for children and young people unable to live at home in Victoria.”[13]
[13]Exhibit “GHB-2” to the affidavit of Graham Boal sworn 8 April 2014.
In my view, the proposals which extend the assistance to be provided by the income of the Trust to financially disadvantaged children and young people generally would broaden the class of potential beneficiaries well beyond what was contemplated by the terms of the Will. The testator could have chosen to provide scholarships and financial support to financially needy children: no doubt the prevalence of children and young people being hampered in their educational opportunities by financial disadvantage was as significant in the 1950s as it is today. But the testator clearly intended to assist those who were not or could not be supported by their families. Further, the class of children and young people he intended to benefit from the terms of his Will was quite narrow, being the residents of two Orphanages, and as such, the class of potential beneficiaries would have only numbered in the hundreds at any one time. Accordingly, the argument that MacKillop’s client base would unduly narrow the class of intended recipients is not consistent with the principle that in exercising its cy-près jurisdiction, the Court should, as much as practicably possible, give effect to the testator’s intentions.
I also do not accept the submissions made on behalf of Ms Edwards that MacKillop should not be selected to administer and allocate the income of the Trust because of its association with the Catholic Church. Ms Edwards’ evidence is that her family, including her grandfather, were not overtly Catholic, and did not attend church, or observe Catholic rituals and traditions. She does not recall her grandfather ever discussing matters of religion, and she noted the terms of the Will did not provide for the deceased’s funeral to be conducted in accordance with Catholic rites. That may well be the case, although, given that religious faith and affiliation is often a very private matter, I would be reluctant to make positive findings regarding such matters in respect of someone who died more than fifty years ago. Further, while there was no positive evidence to the contrary, it seems intuitively incorrect that Catholic institutions were the only organisations running orphanages in the 1950s.
However, in my view, not much turns on this question when determining whether MacKillop is an appropriate organisation to administer and allocate the income of the Trust. The evidence is that MacKillop provides services to children and young people regardless of their religious identification or affiliation, and therefore, no issue of discrimination arises. However, it is clear from the terms of the Will, and in particular, the reference to the Archbishop nominating suitable successor organisations to the Orphanages, that the testator was aware that the Orphanages were Catholic institutions. Whether those affiliations were a determining factor, or even the primary determinant in his selection of the Orphanages can never be known. However, the testator’s lack of overt adherence to the Catholic faith is no reason for excluding MacKillop as being an appropriate successor organisation on the basis that it is a Catholic affiliated institution, if it is otherwise a suitable organisation to administer the income of the Trust.
However, while I consider that providing the income of the Trust to MacKillop to administer and allocate is appropriate and consistent with the testator’s intentions as set out in the Will, I do not consider that it would be consistent with the intentions of the testator for the Trustee to simply provide the income of the Trust to MacKillop to apply in a manner in which it sees fit, even if it was used for its schools or educational services, notwithstanding that those schools and educational services may meet a very real and pressing need in the community. In my view, the use of the term “to further the education by scholarship or otherwise of such boys the Principal may select” makes it clear that the testator envisaged that the income of the Trust would be used to provide direct financial assistance to individual children and young people to further their education. Using the income of the Trust to fund schools, or other educational programs and services would not be consistent with the testator’s intention as expressed in the Will. For completeness, I also consider that the class of potential beneficiaries should not be limited to those children and young people who are attending schools run by MacKillop.
Accordingly, while the precise form of the language of the Trust can be the subject of further consideration, it seems to me that the income from the Trust should be provided to MacKillop to offer scholarships, and other financial assistance for educational purposes, to individual children and young people for whom it has the responsibility for providing residential care and support, including those children and young people it supports in foster care placements. The latter qualification is intended to reflect that the testator intended to benefit those who did not have families or for whatever reason, could not live with their families, recognising that foster care is an established alternative to care in facilities directly operated by charitable and other organisations.
Further, the use of the term “scholarship or otherwise” is sufficiently flexible to extend the type of financial support able to be provided from the income of the Trust beyond the payment in full or in part of fees charged by independent schools. On any view, assistance to children and young people by way of bursaries to defray the expenses of attending non fee paying schools, such as the cost of school uniforms, textbooks, computer hardware and software, and excursions could well fall within the terms of the Trust. The main qualification is that the funds must be used to further the education of the selected children and young people.
There are practical benefits as well in having the income from the Trust administered by MacKillop. The Annual Report shows that MacKillop has what appears to be a robust and well resourced governance and administrative infrastructure, such that the administrative tasks of promoting awareness about the assistance available from the income of the Trust, identifying suitable candidates for assistance from among its clients, and making the necessary payment arrangements, are unlikely to impose an unwarranted burden upon it.
I do not agree with the proposal of the Archbishop, as endorsed by the Attorney‑General in this proceeding, that the income from the Trust should be limited to providing scholarships for young people to attend Catholic secondary schools, and for young people to attend post‑secondary educational institutions without denominational limitation. No such limitation can be identified from the terms of the Will. It may well have been that, had the income of the Trust been payable to the Orphanages while they still were in existence, the practical reality would have been that at least a substantial proportion of the income of the Trust would have been used mostly to fund scholarships or bursaries to assist the boys in their care to attend Catholic schools. However, no such limitation was imposed by the terms of the Will. Further, the use of the term “scholarship or otherwise” could readily have been interpreted to include financial support for vocational training: while there was no evidence on the point, it appears unlikely that the Catholic education sector provided extensive vocational training services and programs.
The other difficulty with the proposals of the Trustee and the Archbishop is that they contemplate limiting the assistance provided to young people in secondary and post‑secondary education, thereby impliedly excluding primary school aged children from assistance. I agree with the submissions made on behalf of Ms Edwards that no such limitation can be inferred from the terms of the Will. On the other hand, the use of the term “boys” in the Will appears to me to confine the class of potential beneficiaries to those who are not legally adults, which suggests that the testator did not contemplate the income of the Trust being used to assist the beneficiaries to fund the costs of post‑secondary education.
The question of the upper age limit for potential beneficiaries of the Trust is a little problematic, although not fatal to the crafting of a suitable cy‑près scheme. First, at the time the Will was made, the legal age of majority was 21. Accordingly, if the term “boys” was said to have corresponded with “not adult”, this would encompass the class of young people, then as now, potentially engaged in post‑secondary education. If an upper limit of 18, being the current legal age of majority was adopted, this would potentially have the impact of making significant numbers of young people in their final year or even two years of secondary education ineligible for financial support, which was unlikely to have been the intention of the testator at the time.
In my view, the best formulation to adopt for eligibility for the scheme would be to define the class of potential beneficiaries as those children and young people who are in receipt of supported residential care or like services provided by MacKillop who are engaged in primary and secondary education, irrespective of whether the young people concerned had attained the age of 18.
Accordingly, while I accept in general terms the scheme proposed by the Trustee, in that the income from the Trust be provided to MacKillop to administer and allocate, I consider that the terms of the Will require the terms upon which the income is to be allocated to be more closely prescribed than that contended for by the Trustee. In particular, in order to adhere to the principle that a cy-près scheme must, as best as possible, give effect to the intentions of the testator, the funds must be used to provide direct financial assistance to individual children and young people, and not to augment the moneys available to MacKillop to fund its schools and educational programs.
The above finding, by implication, rejects the submissions advanced on behalf of the Attorney‑General and Ms Edwards, although their submissions have been of significant assistance in formulating an appropriate scheme. In particular, the submission made on behalf of the Attorney‑General that the “role of the Archbishop is central” to the formulation of a cy‑près scheme is not borne out by the terms of the Will. Under the Will, the role of the Archbishop was to nominate the successor “orphanage or orphanages” in event that either or both of the Orphanages closed. In my view, given that there are now no orphanages in Victoria, the function assigned by the terms of the Will to the Archbishop has been exhausted.
The difficulty with the scheme proposed by Ms Edwards, while it properly recognises that the terms of the Will require the provisions of scholarships and other direct financial assistance to individual beneficiaries, is that the scheme impermissibly extends the class of potential beneficiaries to all financially disadvantaged children, and impliedly rejects the role of MacKillop as a suitable successor organisation to the Orphanages. Further, the terms of the Will did not contemplate the Trustee (or trustees), or any family member, having a role in the selection of beneficiaries of the income from the Trust. Given the existence of an appropriately qualified successor organisation to the Orphanages, with the capacity to appropriately administer the income from the Trust, being MacKillop, the necessity to develop an alternative selection mechanism for the beneficiaries of the income of the Trust does not arise. Indeed, the schemes proposed by both Ms Edwards and the Attorney‑General for the allocation of the income of the Trust are somewhat deficient in detail as to how the schemes would work in practice. In particular, given the extremely broad target audience contemplated by these schemes (being financially disadvantaged children and young people generally), how would the assistance available be promoted? Who would be responsible for processing and assessing applications, and administering payments? What would be the cost of undertaking those tasks, and would meeting those costs represent a disproportionate drain upon the income of the Trust which would otherwise be available to provide direct financial assistance to eligible beneficiaries? All of these issues are capable of resolution, given attention, but again, point to the practical benefits of having the income from the Trust administered by MacKillop, although I accept that the question of what is most practical or convenient is not one of the key determinants in the current application.
The final question for determination in these proceedings is Ms Edwards’ application to be appointed as a trustee pursuant to s 41 or 48 of the Act in addition to the Trustee. Section 41 of the Act provides for the appointment of new trustees in circumstances where a trustee dies, remains outside Victoria, or wishes to be discharged from his or her role as trustee. The power to appoint a new trustee lies with the party nominated for that purpose in the document creating the Trust, or the surviving or continuing trustee(s). In the current case, the Trustee has refused to exercise that power to appoint Ms Edwards as a trustee.
Section 48 of the Act provides as follows:
(1)The Court may, whenever it is expedient to appoint a new trustee or trustees, and it is found inexpedient difficult or impracticable so to do without the assistance of the Court, make an order appointing a new trustee or new trustees either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee …
In Ms Edwards’ affidavit in support of her application to be appointed as a trustee pursuant to s 48 of the Act, she deposed as follows:
(a)she is a grand-daughter of the testator, being the daughter of his only child, Dorothy Quinn;
(b)the Will appointed the predecessor of the Trustee, Burns Philp, to be a co‑trustee of the Trust with her mother, Dorothy;
(c)she has always taken an interest in the involvement of the family in the Trust. She believes that the appointment of a family member trustee would create consistency in the trusteeship and introduce some knowledge of the circumstances of the deceased, his values and beliefs;
(d)she has sufficient knowledge and experience to act as co‑trustee, having studied economics and politics at Swinburne University, and holding a diploma of social studies. She has been employed as a teacher and a social worker, and has carried on a residential property investment and development business;
(e)she held her mother’s power of attorney, and between August 2007 and August 2011 liaised regularly with the Trustee on Dorothy’s behalf, including with respect to her mother’s entitlements and the investment decisions;
(f)she believes that the deceased appointed Burns Philp as a corporate trustee owing to Dorothy’s lack of formal education and lack of confidence in managing money. However, Dorothy was consulted about investment decisions taken by the Trustee;
(g)she believes her mother wanted another family member to be involved in the Trust, but that Dorothy did not understand what rights or powers she had to appoint a substitute trustee in her place;
(h)over the years Dorothy’s relationship with the Trustee deteriorated, primarily as a result of disputes regarding Dorothy’s entitlements under the Trust;
(i)she believes that the testator had an intention that a family member remain involved in the operation of the Trust, first, because of the terms of the Will itself, and secondly, she believed that the Will was drafted on the basis of what Dorothy wanted; and
(j)the Trustee has not acceded to Ms Edwards’ request that she be appointed as a co‑trustee of the Trust.
The Trustee opposed Ms Edwards’ appointment as a co‑trustee, on the following grounds (as deposed to in an affidavit sworn by one of its senior trust managers, Mr Socratis Katsigiannis, on 8 April 2014);
(a)the Trust is a perpetual charitable trust, not a discretionary trust. The Will provides that the income must be paid each year to the named charitable beneficiaries. The Will does not provide for any discretionary powers of selection to be exercised by the Trustee;
(b)the Trustee is a professional trustee with the skills and capabilities to carry out the trustee’s functions of investing the Trust funds in accordance with the Act, and to administer the Trust in accordance with its terms;
(c)Ms Edwards does not have the necessary expertise and experience to administer the Trust, and her appointment as co‑trustee would unnecessarily complicate the administration of the Trust; and
(d)the Trustee had specific objections to Ms Edwards’ appointment as a co‑trustee, based upon the Trustee’s dealings with her, and, prior to her death, Dorothy Quinn.
Ms Edwards swore an affidavit in reply, which amplified upon her qualifications and experience and the role she could play in the affairs of the Trust, and responded to the allegations and objections referred to at paragraph (d) above. In summary, Ms Edwards’ position was that to the extent that those objections implied that she had misused or sought to diminish the value of the Trust assets, all dealings with respect to Trust assets were between her mother and the Trustee, and she was unaware of any disputes between them regarding those assets.
In any event, it is not necessary for me to resolve any of these factual disputes between the Trustee and Ms Edwards, save to say that one could not describe Ms Edwards as unqualified, and all of her evidence and the submissions made on her behalf indicate that she has a keen and genuine interest in ensuring that the objects of the Trust are carried out.
However, I do not consider that it is “expedient” to appoint Ms Edwards as a co‑trustee. The investments of the Trust are managed by an experienced corporate trustee. Further, given the nature and structure of the cy-près scheme I propose to order, there is no role for the Trustee, or a co‑trustee, for that matter, in exercising any discretion as to how the income from the Trust is ultimately distributed, given that that responsibility is to be assumed by MacKillop, although of course the Trustee will need to have some oversight as to how the income of the Trust is distributed by MacKillop.
I do not accept that the terms of the Will, or for that matter, any other evidence, evidenced an intention on the part of the testator that either Dorothy, or any other of his descendants, would have any ongoing involvement in the Trust, in particular the administration of the charitable purpose of the Trust. The Will contains no mechanism for the replacement of Dorothy Quinn as trustee after her death, and, given that the operation of clause 7(c) of the Will was postponed until after the death of the last life interest holder, the testator must have not contemplated any involvement by Dorothy Quinn in the administration of the income of the Trust for charitable purposes.
There is evidence that Dorothy Quinn encouraged the testator to make a will which benefited underprivileged children, and in particular, which provided assistance for their education. There is evidence that Dorothy Quinn expressed a desire that her own children remained involved with the Trust.
There is no basis to question the veracity of this evidence. However, it is the intention of the testator, not Dorothy Quinn, which is relevant to the determination of the question of whether Ms Edwards ought to be appointed as a trustee, either in her own right, or as the first of many descendants of the testator. As such, in the absence of any mechanism for the replacement of Dorothy Quinn by Ms Edwards under the Will, it is necessary to consider whether it is “expedient” to appoint Ms Edwards as a trustee.
I accept that Ms Edwards is well motivated and, on her evidence, is otherwise an appropriate person to be appointed as trustee. I accept that she and her family have a genuine and legitimate interest in maintaining an involvement in the affairs of the Trust and the furthering of its charitable purposes. However, as indicated above, under the cy-près scheme I propose to sanction, there is very little role for a trustee apart from the investment and administration of the capital of the Trust. Ms Edwards’ appointment as a trustee might not be inappropriate, but it is not necessary or “expedient”.
There is very little authority regarding the principles governing the Court’s discretion under s 48 of the Act, particularly in circumstances such as this, where a party wants to voluntarily assume the role of trustee, not because of the misconduct or incapacity of an existing trustee, but because they have an altruistic interest in the affairs of the trust concerned. In the current case, it is clearly not “necessary” that Ms Edwards be appointed as a trustee, given the existence of a professional trustee.
The real question is, is it “expedient”? The dictionary definition[14] of “expedient” is, relevantly, as follows:
1. Tending to promote some proposed or desired object; fit or suitable for the purpose; proper in the circumstances. 2. Conducive to advantage or interest, as opposed to a right. … 4. A means to an end …
[14]Macquarie Dictionary, 3rd ed. 1997.
This definition suggests that there must be some purpose, utility or other positive benefit in appointing a new or replacement trustee. In the current and future circumstances of the Trust, it is difficult to see what value Ms Edwards might add as trustee. I stress that this statement should not be taken by Ms Edwards as a criticism: rather, it simply reflects the very limited functions required of a trustee of the Trust, and the fact that there is no reason to believe that this role has not been and will continue to be adequately filled by the Trustee. The suggestion advanced by senior counsel for Ms Edwards that it would be beneficial for there to be an independent trustee to oversee the Trustee’s management of the Trust, does not of itself, in the absence of any evidence of mismanagement, make it “expedient” to appoint Ms Edwards as a trustee.
I will hear further from counsel on the form of orders to be made, and the question of costs.
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