Joslyn Maria Mongoo on behalf of the Trust Advisory Committee of the Yugunga-Nya People's Trust v Fiduciary Administration Services Pty Ltd [No 2]
[2020] WASC 182
•29 MAY 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: JOSLYN MARIA MONGOO on behalf of the TRUST ADVISORY COMMITTEE OF THE YUGUNGA-NYA PEOPLE'S TRUST -v- FIDUCIARY ADMINISTRATION SERVICES PTY LTD [No 2] [2020] WASC 182
CORAM: ALLANSON J
HEARD: 19 - 22 MAY 2020
DELIVERED : 29 MAY 2020
FILE NO/S: CIV 1188 of 2020
BETWEEN: JOSLYN MARIA MONGOO on behalf of the TRUST ADVISORY COMMITTEE OF THE YUGUNGA-NYA PEOPLE'S TRUST
Plaintiff
AND
FIDUCIARY ADMINISTRATION SERVICES PTY LTD
First Defendant
THE ATTORNEY GENERAL OF WESTERN AUSTRALIA
Second Defendant
FILE NO/S: CIV 1198 of 2020
BETWEEN: FIDUCIARY ADMINISTRATION SERVICES PTY LTD
Plaintiff
AND
ATTORNEY GENERAL OF WESTERN AUSTRALIA
First Defendant
AC ADMINISTRATION SERVICES PTY LTD
Second Defendant
Catchwords:
Charitable trust - Where Trust created for benefit of Aboriginal community - Where Trust Deed provided for election of Trustee Advisory Committee at annual community meeting - Whether Advisory Committee validly elected - Turns on own facts
Charitable trust - Construction of Trust Deed - Where community meeting in later year failed to complete vote for election of Advisory Committee - Whether existing Advisory Committee remains in office until next community meeting
Charitable trust - Construction of Trust Deed - Where power to vary Trust Deed subject to requirement to consult with Advisory Committee - Where no validly elected Advisory Committee - Whether Trustee can exercise power to vary Trust Deed
Legislation:
Charitable Trusts Act 1962 (WA), s 21
Result:
CIV 1188 of 2020
Declaration that Deed of Variation of the Trust Deed is invalid
Application otherwise dismissed
CIV 1198 of 2020
Declaration that plaintiff remains the validly appointed Trustee of the Yugunga‑Nya People's Trust
Category: B
Representation:
CIV 1188 of 2020
Counsel:
| Plaintiff | : | N Lucarelli QC & J Paterson |
| First Defendant | : | C Stokes |
| Second Defendant | : | M J Elliott |
Solicitors:
| Plaintiff | : | Forbes Kirby |
| First Defendant | : | Chris Stokes & Associates |
| Second Defendant | : | State Solicitor for Western Australia |
CIV 1198 of 2020
Counsel:
| Plaintiff | : | C Stokes |
| First Defendant | : | M J Elliott |
| Second Defendant | : | N Lucarelli QC & J Paterson |
Solicitors:
| Plaintiff | : | Chris Stokes & Associates |
| First Defendant | : | State Solicitor for Western Australia |
| Second Defendant | : | Forbes Kirby |
Case(s) referred to in decision(s):
Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253
Harben v Phillips (1883) 23 Ch D 14
Montevento Holdings Pty Ltd v Scaffidi [2012] HCA 48; (2012) 246 CLR 325
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; (1988) 165 CLR 107
ALLANSON J:
The proceedings
CIV 1188 of 2020
By originating summons filed 10 February 2020, amended 20 February 2020 and again on 22 April 2020, Joslyn Maria Mongoo applied for orders:
a.It be declared that the First Defendant [Fiduciary Administration Services Pty Ltd] was removed as trustee of the Yugunga-Nya People's Trust (Trust) by resolution of the Yugunga-Nya People's Trust Advisory Committee passed on 8 January 2020, alternatively by a resolution of the [Advisory Committee] passed on 4 April 2020.
b.It be declared that AC Administration Services Pty Ltd was appointed as trustee of the Trust by resolution of the [Advisory Committee] passed 8 January 2020, alternatively by a resolution of the [Advisory Committee] passed on 4 April 2020.
Ms Mongoo also seeks an order that a purported Deed of Variation of the Trust Deed is invalid as it is contrary to cl 14.2 of the Trust Deed and/or was made for improper purposes, namely to attempt to:
(a)remove the lawful members of the [Advisory Committee], who had been elected by the Community; and
(b)to remove the Community’s right to elect the members of the [Advisory Committee].
Ms Mongoo brings the proceedings as a member of the Advisory Committee under the Trust Deed, and on behalf of the other members of the Advisory Committee.
Fiduciary Administration Services Pty Ltd is the first defendant to the action. The Attorney General for Western Australia appeared as the second defendant.
CIV 1198 of 2020
By originating summons filed 12 February 2020, Fiduciary Administration Services applied for:
(1)A declaration that [it] is and remains the validly appointed trustee of the Yugunga-Nya People's Trust.
(2)That the Trustee may pay the costs of this application from the Trust funds.
AC Administration Services, the proposed incoming trustee, is named as the second defendant to the action.
The Attorney General of Western Australia also appeared in this action as the first defendant.
The evidence
Evidence in these applications was on affidavit, save for that of Mr Andrew White, who attended on subpoena. Most witnesses were cross-examined.
Ms Mongoo gave evidence,[1] and also relied on evidence from the following witnesses:
[1] Affidavits of Ms Mongoo sworn 10 February 2020 (exhibit 1.1); 16 April 2020 (exhibit 1.2); and 24 April 2020 (exhibit 1.3).
(1)Yung Tri Nguyen;[2]
(2)Audrey Shar;[3]
(3)Evelyn Gilla;[4]
(4)Cheryl Shay;[5]
(5)Leonie Ruth Gentle;[6]
(6)Andrew Gentle Senior;[7]
(7)Matthew Wade Vernon Taylor;[8]
(8)Trevor Shay;[9]
(9)Andrew White;
(10) Mitchell Terry Tolcon.[10]
[2] Affidavit sworn 30 March 2020 (exhibit 2).
[3] Affidavit sworn 13 February 2020 (exhibit 3).
[4] Affidavit sworn 13 February 2020 (exhibit 4).
[5] Affidavits sworn 13 February 2020 (exhibit 5).
[6] Affidavits sworn 13 February 2020 (exhibit 6.1); 16 April 2020 (exhibit 6.2); and 12 May 2020 (exhibit 6.3).
[7] Affidavit 13 February 2020 (exhibit 7).
[8] Affidavit sworn 6 April 2020 (exhibit 8).
[9] Affidavit sworn 18 February 2020 (exhibit 9).
[10] Affidavit sworn 23 April 2020 (exhibit 13).
Fiduciary Administration Services relied on evidence from the following witnesses:
(1)Phillip Eric Williams;[11]
(2)William ('Bill') Shay;[12]
(3)Franklin Michael Gaffney.[13]
[11] Affidavits sworn 11 February 2020 in CIV 1198 of 2020 (exhibit 11.1); 25 February 2020 in CIV 1188 of 2020 (exhibit 11.2); 14 April 2020 in CIV 1188 of 2020 (exhibit 11.3); and 15 May in 1188 of 2000 (exhibit 11.4).
[12] Affidavit sworn 26 March 2020 (exhibit 10).
[13] Affidavit sworn 14 may 2020 (exhibit 12). Mr Gaffney was not required to attend for cross-examination.
I will make some brief preliminary comments on the evidence.
First, the issues were limited, and turned largely on the construction of the Trust Deed and on what occurred at two meetings. The parties filed 1,169 pages of documents. Much of that material (including material to which no party objected) was irrelevant.
Second, I understand that there are wider matters at play, including who is entitled to receive payments from Sandfire Resources NL under the Yugunga-Nya and Sandfire Land Access Agreement, and how those payments will be administered. The parties adduced evidence about negotiations by Mr Williams and Fiduciary Administration Services with Sandfire; and the information sessions and authorisation meetings for the Yugunga-Nya native title claim, including whether there was a valid vote on a particular outcome (described as outcome 5) at a meeting held on 19 November 2019. These issues raise potentially complex factual disputes. They do not arise in these actions, which are concerned with specific issues relating to the Yugunga-Nya People's Trust. Were those matters to be properly addressed by the court, they would need to be pleaded. I do not need to consider whether that could properly be done by an amendment to the existing originating summons, with orders for pleadings or for statements of facts, issues, and contentions; or whether it would be preferable for a fresh action to be commenced by writ.
Third, the affidavits filed on behalf of Ms Mongoo by other members of the Advisory Committee about what happened at the meeting of 8 January 2020 were of little evidentiary value. Ms Gilla described herself as an elder of the Yugunga-Nya community, and Ms Shar said she attended by telephone. Otherwise the wording of the affidavits of Ms Gilla, Ms Shar, Mr Gentle, Ms Gentle, and Trevor Shay was identical. An affidavit must be the evidence of the deponent. The affidavits of the Advisory Committee members were clearly not in the words of the deponents.
The issues
The following factual issues were identified by the parties as arising on the two applications.
Issue 1:Was an Advisory Committee validly elected by the community on 18 September 2018 and, if so, who were the members of the Advisory Committee?
Issue 2:In January 2020 was there a lawfully constituted Advisory Committee and, if so, who were the members of the Advisory Committee as at 8 January 2020?
Issue 3:Did the Advisory Committee validly vote on 8 January 2020 to remove Fiduciary Administration Services as the Trustee of the Trust and to appoint AC Administration Services as Trustee in its place?
Issue 4:Was the Advisory Committee meeting held on 8 January 2020 properly convened?
Issue 5:Does the Variation Deed, made 17 January 2020, comply with the requirements of the Trust Deed, alternatively, was it made for an improper purpose and/or not in compliance with the Trust Deed?
Issue 6:In the alternative to issue 3 above, did the Advisory Committee validly vote on 4 April 2020 to remove Fiduciary Administration Services as the Trustee of the Trust and to appoint AC Administration Services in its place?
Background
For convenience I will refer to Fiduciary Administration Services as the Trustee, and Ms Mongoo and those she represents as members of the Advisory Committee, rather than referring on each occasion to the purported Trustee or purported Advisory Committee.
In this section I set out a general background in chronological order. Those matters which were the subject of dispute are dealt with in more detail later in these reasons.
The Yugunga-Nya People's Trust was established by a deed, dated 26 May 2004, and amended on 10 October 2008 (Trust Deed). Relevantly, the Trust Deed provides for the appointment of a Trustee, and a Trust Advisory Committee elected by the Yugunga-Nya community.[14]
[14] Trust Deed cl 5 and cl 9. The Trust Deed was attachment PEW 1 to exhibit 11.1. An Amending Deed dated 10 October 2008 was PEW 2.
On 24 June 2017, a Yugunga-Nya community meeting was held. The attendees voted for the election of 10 members to constitute the Advisory Committee. Ms Mongoo was elected a member of the Advisory Committee, and contends in this action that she remains a member with eight of the others also elected on 24 June 2017.
On 10 July 2017, the original trustee, Thomas Graham Greenaway, retired and Bulhari Holdings Pty Ltd was appointed as incoming Trustee.
On 24 April 2018, the Advisory Committee resolved to remove Bulhari Holdings and appoint ISPL Y-N Pty Ltd as the new Trustee.
On 18 September 2018, the annual general meeting of the Yugunga‑Nya People's Trust voted on the election of the Advisory Committee members. The effect of that vote was in contention in these actions.
Following that meeting, assuming the vote was effective, the Advisory Committee comprised Andrew Gentle (Snr), Leonie Gentle, Evelyn Gilla, Russell Little, Terrence Little, Joslyn Mongoo, Audrey Shar, Bill Shay, Cheryl Shay, Trevor Shay.
On 27 June 2019, the Advisory Committee resolved to remove ISPL Y‑N and appoint Fiduciary Administration Services as the new Trustee. Philip Eric Williams is the managing director Fiduciary Administration Services. Allan Geoffrey Butson and Leslie O'Neill are the other directors. Fiduciary Administration Services was formally appointed as Trustee on 8 July 2020.
The Yugunga-Nya People have a native title claim which has not yet been determined. In September 2019 and November 2019, authorisation meetings were held in Meekatharra and Perth in respect of the Yugunga-Nya Native Title Claim.
On 27 November 2019, Ms Mongoo gave notice of a proposed meeting of the Advisory Committee to be held on 4 December 2019 for the purpose of passing a resolution to terminate the appointment of Fiduciary Administration Services and appoint IE Services Pty Ltd as replacement Trustee.[15] It does not appear that the meeting proceeded.
[15] Exhibit 11.1, PEW 12 at 105.
On 6 December 2019, Mr Williams, as Trustee, executed a Deed of Variation of Discretionary Trust which increased the membership of the Advisory Committee from 10 to 11 members.[16] That variation has not been challenged in these actions.
[16] Exhibit 11.4, PEW at 57.
On 10 December 2019, the Trustee called a community meeting of the Yugunga-Nya People's Trust. One of the matters for consideration at that meeting was the election of the Advisory Committee. The meeting ended without the election being completed. The effect of the failure to re-elect Advisory Committee members at that meeting is a critical issue for determination in these actions. I am not required, or able, to make findings about who was responsible for what occurred.
In December 2019, Ms Mongoo gave notice of a meeting of the Advisory Committee scheduled for 8 January 2020. The notice stated:
NOTICE is hereby given in accordance with provisions of the Deed of Trust dated 26 May 2004 … That a Meeting be convened between the Advisory Committee and the Trustees pursuant to Clauses 9.9 and 9.6 of the Deed …[17]
[17] Exhibit 1.1, JMM 6 at 49.
The agenda for the meeting provided, as special business:
Pursuant to clause 9.9 of the Deed, the Advisory Committee seeks:
•To terminate the appointment of the Trustees;
•Appoint AC Administration Services Pty Ltd … as a replacement Trustee; and
•Any change will be documented by a Deed of Variation of Trust to give full effect to this resolution.[18]
[18] Exhibit 1.1, JMM 8 at 52.
The minutes of the meeting of 8 January 2020 record that the meeting was attended by Trevor Shay, Cheryl Shay, Andrew Gentle (Snr), Evelyn Gilla, Joslyn Mongoo, Leonie Gentle, Audrey Shar (by telephone), and Bill Shay (by telephone). Apologies were recorded for Terence Little and Russell Little. Also present were Chris Clarke, Frank Ashe, Yung Nguyen, and Roslyn Gentle. Mr Clarke and Mr Ashe are directors of AC Administration Services. Mr Nguyen is a solicitor ‑ then employed with D'Angelo Legal.[19]
[19] Exhibit 1.1, JMM 8 at 53.
The minutes record that the resolutions in the notice were passed.[20] All Advisory Committee members who attended (either in person or by telephone) needed to vote for the resolution for the necessary majority to be obtained.
[20] Exhibit 1.1, JMM 8 at 54.
Fiduciary Administration Services was advised of the resolution, but did not accept the validity of the meeting or that the resolution had been passed with the required majority. It now questions both the procedure by which the meeting was convened, and whether Bill Shay voted 'yes'.
On 17 January 2020, Mr Williams and Allan Geoffrey Butson, as directors of Fiduciary Administration Services, executed a Deed of Variation of Discretionary Trust. Ms Mongoo challenges the validity of that Deed of Variation.
On 1 February 2020, a circulating resolution was signed by the eight Advisory Committee members who had attended the meeting on 8 January. It authorised the taking of legal proceedings against Fiduciary Administration Services, and specifically authorised Ms Mongoo to act on behalf of the Advisory Committee.[21]
[21] Exhibit 1.1, JMM 10 at 56.
Ms Mongoo commenced proceedings in CIV 1188 of 2020 on 10 February 2020.
The Trustee commenced proceedings in CIV 1198 of 2020 on 12 February 2020.
On 20 February 2020, a registrar ordered that the two actions be listed and heard at the same time and that evidence in one be evidence in the other. The evidence at trial was filed largely in CIV 1188 of 2020, but read in each action.
On 10 March 2020, I provisionally listed the two actions for hearing on 22 and 23 April 2020.
On 25 March 2020, Bill Shay resigned as a member of the Advisory Committee.
On 27 March 2020, Ms Mongoo sent a notice convening another meeting of the Advisory Committee to be held on 4 April 2022, to again vote to remove Fiduciary Administration Services as Trustee.
In her notice of 27 March 2020, Ms Mongoo asked the other members to provide her with proxy votes. The 'meeting' on 4 April 2020 was attended only by Ms Mongoo and a justice of the peace.[22]
[22] Trial ts 58.
The Trust Deed
The Yugunga-Nya People's Trust was established as a perpetual charitable trust 'to assist the Beneficiaries who are Persons of Aboriginal Descent'.[23]
[23] Trust Deed, recital B.
The Beneficiaries under the Trust Deed, as amended on 10 October 2008, are the Yugunga-Nya People, the spouses and children of Yugunga-Nya People, and any persons of Aboriginal descent living permanently or temporarily in the Shire of Meekatharra or the Shire of Cue.[24]
[24] Trust Deed cl 3.1, as amended on 10 October 2008.
The Trust is a discretionary trust. No individual Beneficiary or group of Beneficiaries has any vested interest in, or entitlement to, any of the Trust Fund.[25]
[25] Trust Deed cl 3.2.
The objects of the Trust are set out in cl 4. The primary object and purpose is the relief of 'aged, poverty, sickness, suffering, distress, misfortune or destitution' of the Beneficiaries. Secondary objects and purposes include the advancement of education, culture and religion of the Beneficiaries and other purposes beneficial to the community of the Beneficiaries.[26]
[26] Trust Deed cl 4.1(b).
By cl 4.2, the Trustees are to hold the Trust Fund in perpetuity and pay or apply the capital and income among the Beneficiaries for the objects and purposes set out in cl 4.1, with priority in preference to the primary object and purpose of the Trust.
Clause 5 provides for the appointment of a Trustee, including a corporation. A Trustee shall act until such time as that person retires or is replaced as Trustee in accordance with the Trust Deed, or the Trustees Act 1962 (WA) or other applicable legislation.[27] Subject to cl 5.1 (as to number of persons acting as Trustee) and cl 9.3 (which requires the Trustee to consult with and obtain the recommendation of the Advisory Committee on specified matters) a Trustee may appoint additional persons to act as Trustees.[28]
[27] Trust Deed cl 5.2.
[28] Trust Deed cl 5.3.
The power in cl 5.3 is to appoint an additional Trustee, and does not empower a Trustee to replace itself with a successor. The power to remove or replace a Trustee is set out in cl 5.4. In summary, if there is more than one person acting as Trustee, and subject to receiving any recommendation from the Advisory Committee, a continuing Trustee may terminate the appointment of one Trustee and appoint a replacement Trustee; where there is no other person acting as Trustee, the Advisory Committee shall terminate the appointment of a Trustee and appoint a replacement in accordance with cl 5.5.
By cl 5.5:
The Advisory Committee may by a three-quarter majority decision of all Advisory Committee members, terminate the appointment of a person as Trustee and may appoint a person or persons as a replacement Trustee and such person or persons appointed shall, on acceptance of such appointment, become a Trustee.
Clause 6 deals with the powers of Trustees. The Trustee 'shall have the ultimate decision-making power in all matters relating to the Trust'.[29] By cl 6.4(a):
Subject to this Deed, the Trustees shall be solely entitled to determine all questions and matters of doubt which may arise in the course of the management, administration, and realisation of the Trust, but may take the advice or recommendations of the Advisory Committee into account in such determinations.
[29] Trust Deed cl 6.3(a).
Clauses 7 and 8 deal with the procedures and liability of the Trustee.
Despite the Trustee's ultimate decision making power, the Trust Deed provides for the appointment of an Advisory Committee.[30] The Trustee shall 'consult with and obtain the recommendation of' the Advisory Committee on specified matters, including the investment of the Trust Fund, the distribution of the Trust Fund, any variation to the Trust Deed, and the appointment of Trustees referred to in sub-clauses 5.3, 5.4 and 5.5.[31] The Trustee may consult with the Advisory Committee about other matters.[32] The Trustee is not, however, bound to act on any recommendation or advice of the Advisory Committee.[33]
[30] Trust Deed cl 9.
[31] Trust Deed cl 9.3.
[32] Trust Deed cl 9.4.
[33] Trust Deed cl 9.5.
Clause 9.6 prescribes the procedure for consultation with the Advisory Committee. Consultation shall be undertaken, unless otherwise agreed, at regular meetings convened for that purpose. The Trustee shall give the Advisory Committee seven days written notice of such a meeting, or as otherwise agreed. Meetings may take place in person or by telephone or other medium.
If Trustees are not able to arrange a meeting to consult with the Advisory Committee, the Trustees may consult with Advisory Committee members individually.[34] By cl 9.6(e), the Trustees are excused from consulting with any Advisory Committee member 'if the Trustees are not able to reasonably communicate with that member and the Trustees have consulted with at least two thirds or more of other Advisory Committee members in relation to that matter'. Clause 9.6(f) provides for the Advisory Committee to provide recommendations or advice in writing signed by at least two thirds of the Advisory Committee members. Clause 9.6 (g) provides:
Where the Trustees do not receive oral advice or recommendations at a meeting of the Advisory Committee or written advice or recommendations in accordance with sub‑clause 9.6(e), the Trustees may act on those matters without further reference to the Advisory Committee.
[34] Trust Deed cl 9.6(d).
Clauses 9.9, 9.10 and 9.11 are of critical importance and I will set them out in full:
9.9Meetings of Advisory Committee to Appoint Remove or Replace Trustee
Any Advisory Committee member may convene a meeting of the Advisory Committee for the purpose of appointing a new Trustee (if there is none) or to remove and replace a person acting as Trustee as set out in sub‑clauses 5.4 and 5.5 and the method of organising a meeting of the Advisory Committee as set out in sub-clause 9.6 shall apply with necessary modifications.
9.10Resignation and Replacement of Advisory Committee
(a)Unless the functions of the Advisory Committee have ceased pursuant to sub-clause 9.14, commencing in the year 2005, the Trustee shall organise a community meeting of the Yugunga-Nya People and thereafter ensure that such a meeting is organised at least once each calendar year. The reasonable expenses associated with convening the community meeting may be paid out of the Trust Fund.
(b)A quorum for the said community meeting shall be fifteen (15) adult Yugunga-Nya People.
(c)If a quorum is present, then the community meeting may elect a new Advisory Committee by a simple majority of votes, which shall upon election replace the previous Advisory Committee.
(d)If a quorum is not present, than the existing members of the Advisory Committee shall serve a further 12 months term as the Advisory Committee.
(e)Where an Advisory Committee member resigns during the 12 months he or she has been elected to serve as a member of the Advisory Committee, his or her position may be filled by the remaining Advisory Committee members appointing a person in the resigning Advisory Committee member's place, and that person shall hold that position until the next community meeting referred to in subclause 9.10(a).
9.11Term of Advisory Committee Members
The Advisory Committee shall act for a minimum of 12 months beginning from the time they are elected and may continue to act for a further 12 months if a quorum is not present at the community meeting of the Yugunga-Nya People called in accordance with clause 9.10.
The Trustees shall keep the Trust Fund entirely separate and distinct from any other fund and nothing shall require or cause the Trustees to join the Trust Fund with any other fund held by it as a Trustee or in any other capacity[35]
[35] Trust Deed cl 10.1.
The last of the important provisions, for the purposes of these applications, are the general provisions in cl 14. Clause 14.2 provides for variation of the Trust Deed:
Subject to sub‑clause 9.3(d), if the Trustees consider it necessary, the Trustees may at any time and from time to time by supplemental deed revoke, add to or vary all or any of the terms of this Deed, provided that any such revocation, addition or variation shall:
(i)not be in favour of or for the benefit of or result in any benefit to any Trustee or to the Settlor; and
(ii)not revoke, add to, or vary any of the objects of the Trust so as to change the general purpose or intention of this Trust unless such variation is necessary to ensure that the Trust remains as a charitable trust and/or in order to ensure that the Trust gains an exemption for payment of income tax and other rates, taxes and duties.
The Deed of Variation of Discretionary Trust
The Deed of Variation begins with recitals. Fiduciary Administration Services, as the sole party to the deed, recited that the constitution of the Advisory Committee remained uncertain and that the 'parties' desired to amend the terms of the Trust Deed '[i]n order to provide certainty as to the constitution of the Advisory Committee and consistency with the Yugunga-Nya Direct Benefits Trust … and the Yugunga-Nya Trust No 2'.[36]
[36] Exhibit 11.2 PEW 47, recital D ‑ E.
The Deed of Variation replaced cl 9.7 of the Trust Deed with the following:
The composition of the Advisory Committee as at the date of this deed and thereafter shall be the same composition as the Y-N TAC referred to in the Yugunga-Nya People's Trust Deed No 2 …[37]
[37] Exhibit 11.2 PEW 47, cl 2.1.
Clauses 9.8, 9.10 and 9.11 were deleted with consequential renumbering of the remaining clauses.[38]
[38] Exhibit 11.2 PEW 47, cl 2.1.
It is not in dispute that Fiduciary Administration Services did not consult with the Advisory Committee or receive any oral or written advice or recommendation from the Advisory Committee regarding the proposed Deed of Variation before the community meeting of 10 December 2019.
The Yugunga-Nya People's Trust No 2[39]
[39] Exhibit 13 MTT 5, 704.
The Yugunga-Nya People's Trust No 2 Deed (Trust Deed No 2) was executed on 20 December 2019 by Paul McLean Miller (Settlor) and Fiduciary Administration Services. The Beneficiaries of Trust No 2 are the Yugunga-Nya People, the children of Yugunga-Nya People and certain other persons of Aboriginal descent.[40]
[40] Trust Deed No 2 cl 3.1. Trust Deed No 2 was attachment MTT 5 to exhibit 13.
Trust No 2 is established for the primary object and purpose of the relief of aged, poverty, sickness, suffering, distress, misfortune or destitution of the Beneficiaries. Secondary objects and purposes include the advancement of education, culture, and religion of the Beneficiaries and other purposes beneficial to the community of the Beneficiaries.[41]
[41] Trust Deed No 2 cl 4.1.
Although having essentially the same Beneficiaries and objects, Trust No 2 differs considerably in the terms of the Deed.
Trust Deed No 2 provides for meetings by and consultation with an advisory committee, named the YN TAC.[42] The Trustee may seek the advice, guidance and recommendation of the YN TAC on any matter pertaining to its administration of the Trust. Any such advice, guidance or recommendation is not binding on the Trustee, although the Trustee may take it into consideration when deliberating on the issue to which it relates.[43]
[42] Trust Deed No 2 cl 5.6.
[43] Trust Deed No 2 cl 5.6(a) ‑ (b).
Clause 7 provides for Fiduciary Administration Services to be the Initial Trustee, ceasing on 30 June 2022 unless it is reappointed, removed, or resigns in accordance with the Deed. The Trustee must at all material times also be the trustee of a Direct Benefits Trust (the YN DBT).[44]
[44] Trust Deed No 2 cl 7.3.
The Trustee may be removed by a Special Resolution of the Yugunga‑Nya People. Clause 7.4 sets out in detail the procedures to be followed to effect a removal.
Schedule 2 of Trust Deed No 2 is headed 'Trustee Advisory Committee Rules', and sets out the purpose of the YN TAC, the expected conduct of members and behaviour at meetings, duties of members, disclosure and declarations of interest, and the Trustee's responsibilities.
Relevantly, r 9 establishes a major difference in the constitution of the YN TAC.
The initial composition of the YN TAC is to be the named applicants on the Yugunga-Nya People's native title claim. The YN TAC is, from time to time, to comprise 11 members of the Yugunga-Nya People nominated and elected by the Yugunga-Nya People, with a non-voting representative appointed by the Trustee and one or more observers who may attend at the invitation of the YN TAC or the Trustee.
By r 7, 'all apical ancestors of the Yugunga-Nya native title claim (WAD 29 of 2019) must be represented on the YN TAC'.[45] Rule 7 further provides that 'as far as is practical, each Member will represent one family group, so as to ensure fair family representation on the YN TAC'.[46] A member is entitled to serve two consecutive terms of appointment.[47]
[45] The evidence in these applications does not show how many apical ancestors are identified in the native title claim; the evidence at trial was that all but two of the members of the Advisory Committee are in one descent group.
[46] Trust Deed No 2 sch 2 r 7, Nomination and Election (b).
[47] Trust Deed No 2 sch 2 r 7, Nomination and Election (g).
The status or validity of Trust No 2 is not in issue in these proceedings.
The decision tree
The central issues arising in these actions have a logical sequence: the legal effectiveness of one event determines the effectiveness of a later one.
The following questions regarding the Advisory Committee lie at the heart of these disputes:
a)Were the 10 members who purported to form the Advisory Committee validly elected at a meeting of the Yugunga-Nya community on 18 September 2018?
b)If yes, did those 10 members continue in office following the failure to record a vote on the election or re-election of Advisory Committee members at the 10 December 2019 meeting?
c)If yes, did Ms Mongoo validly convene the Advisory Committee meeting held on 8 January 2020?
d)If yes, did the Advisory Committee, at its meeting on 8 January 2020, vote by a three quarter majority decision to remove and replace Fiduciary Administration Services as Trustee? If the meeting of 8 January 2020 did not vote to remove Fiduciary Administration Services, was that effected by the further meeting on 4 April 2020?
The questions require close consideration of the Trust Deed, and in particular cl 5.5 and cl 9.
One issue lies outside that logical sequence. If Fiduciary Administration Services was removed as Trustee by the vote on 8 January 2020, the Deed of Variation of 16 January 2020 was not effective. But even if Fiduciary Administration Services remained the Trustee, the validity of the Deed of Variation must be separately considered - in particular, by reference to the failure of the Trustee to consult with and obtain the recommendation of the Advisory Committee.
Findings
The community meeting of 18 September 2018
Clause 9.10 of the Trust Deed requires the Trustee to ensure that a community meeting of the Yugunga-Nya People is organised at least once each calendar year. If a quorum is present, the community meeting may elect a new Advisory Committee to replace the previous Advisory Committee.
Two meetings were held on 18 September 2018, a general community update meeting in the morning and an annual general meeting in the afternoon.[48] The agenda for the afternoon meeting included 'Election of Trustee Advisory Committee Members', and stated:
The Yugunga-Nya People's Trust Deed requires Trustee Advisory Committee members to be reviewed yearly at the annual general meeting.
Members can re-elect existing committee members or nominate and vote in new committee members.[49]
[48] Exhibit 11.3, PEW 51; exhibit 1.1, JMM 2.
[49] Exhibit 8, MWVT 1.
Both the agenda and minutes for the afternoon meeting are headed 'Yugunga-Nya People's Trust Annual General Meeting'.[50] Counsel for Fiduciary Administration Services submitted that the meeting was not a 'community meeting' as required by the Trust Deed. The fact that it was referred to as a Trust meeting is, in my opinion, not determinative. The meeting was organised by the then Trustee, ISPL-YN, and was attended by approximately 80 people including representatives of the Trustee, the Advisory Committee, and community members. There were approximately 70 to 75 community members in attendance.[51] It was an annual meeting of the community organised by the then Trustee.
[50] Exhibit 11.3; PEW 51; exhibit 1.1, JMM 2.
[51] Exhibit 8, [7] - [8].
The evidence about the voting on the resolution to elect members of the Advisory Committee was not consistent. Mr Taylor, who facilitated the meeting, said that three options were put to the meeting: to re-elect the Advisory Committee as it then was; to conduct a vote for all Advisory Committee positions; or to re-elect the existing nine Advisory Committee members and vote by secret ballot to elect a tenth member (one of the members having died in the previous year). In his affidavit, Mr Taylor deposed that he could not recall whether anyone voted in favour of the first or second options, but that there was an almost unanimous vote in favour of the third.
Counsel for Fiduciary Administration Services suggested that, in cross‑examination, Mr Taylor's evidence changed, and that he could now recall the vote on the first and second options. Mr Taylor said in cross‑examination that in the voting on the first two options, 'if there were a show of hands, or if there wasn't a show of hands, the number was so insignificant … three or four people may have put their hands up'.[52] I am satisfied that there was no material inconsistency in Mr Taylor's evidence.
[52] Trial ts 149.
A more general challenge was made to Mr Taylor's evidence based on his relationship with Ms Mongoo. Mr Taylor said, in evidence‑in‑chief, that he had been married to the sister of Ms Mongoo. They had separated in 1999 but had children and remained friends. He remained in contact with her family. Mr Taylor is now married to Ms Tralee Cable, a justice of the peace who witnessed affidavits sworn by community members. Mr Taylor was asked if he had discussed his evidence with Ms Mongoo before making his affidavit, and if he had discussed his evidence with Ms Cable. He said that he had not.[53] I believed him as to that evidence, and accepted his evidence generally.
[53] Trial ts 145.
Ms Mongoo and Ms Gentle also gave evidence regarding the meeting of 18 September 2018. Their recollection about how the vote proceeded was not entirely consistent.
The recorded resolution was not clearly worded: 'The Yugunga-Nya member present have passed the Resolution to add one member to the existing Trustee Advisory Committee by the simple majority'.[54] The resolution must be read with the statement in the minutes that the chairperson, Ms Gentle, 'has recommended to keep the existing nine members in the Trustee Advisory Committee and vote to add tenth member to the Trustee Advisory Committee'.[55] When the minutes are read as a whole, I believe the meaning of the resolution is clear.
[54] Exhibit 1.1, JMM 2 at 39.
[55] Exhibit 1.1, JMM 2 at 39.
There are several facts supporting the finding that the meeting voted to re-elect the existing members and add one further member. First, it is supported by the contemporaneous documents, including the minutes of the meeting and, to some extent, the agenda. Second, the meeting proceeded to elect a tenth member by secret ballot. Third, I accept the evidence of Mr Taylor. Fourth, there is no evidence of any demur from within the community to the Advisory Committee acting over the following approximately 15 months before the community meeting of 10 December 2019. Fifth, the then trustee, ISPL Y-N, which called the meeting, attended, and kept the minutes, raised no objection when the Advisory Committee members who were elected at that meeting voted to remove and replace it as Trustee.
As a result, I am satisfied that following the 18 September 2019 meeting, the members of the Advisory Committee were (in alphabetical order): Andrew Gentle (Snr), Leonie Gentle, Evelyn Gilla, Russell Little, Terrence Little, Joslyn Mongoo, Audrey Shar, Bill Shay, Cheryl Shay and Trevor Shay.
The effect of the failure of the meeting of 10 December 2019 to elect an Advisory Committee
On 10 December 2019, a general meeting of the Yugunga-Nya People's Trust was held. Notice of the meeting advised community members that the meeting was 'for the purpose of appointing the Trust Advisory Committee'; and that, as a result of the decision at the authorisation meetings of the Yugunga-Nya Native Title Claimants, 'the Trustee would like to appoint a new Trust Advisory Committee which is representative of the Trusts Beneficiaries'. The notice advised that a vote would take place 'to confirm the appointment of the applicants for the Yugunga-Nya native title claim to also be the Trust Advisory Committee'. [56]
[56] Exhibit 11.1, PEW 14 at 176.
The terms of the notice of meeting, in particular the reference to the Trustee 'appointing' a new Advisory Committee, with the meeting to 'confirm the appointment' of Advisory Committee members, were inconsistent with the terms of the Trust Deed. Clause 9.10 expressly refers to the election of Advisory Committee members by the community.
A resolution was put to the meeting in these terms:
Appointment of members to the TAC of the Yugunga-Nya People's Trust
The meeting resolves to appoint the Applicants of the Yugunga-Nya Native Title Claim (WAD 29 of 2019) as members of the TAC for the Yugunga-Nya People's Trust for a term of no more than two years.
At the expiry of the first anniversary of their terms, 50% of the TAC members must retire and the Trustee must call for nominations to fill those vacant positions in accordance with the Yugunga-Nya People's Trust Deed (as varied or amended from time to time).
It is the intention that the nominations for the positions reflect the apical ancestors of those Members whose terms have expired.
If a person ceases to be an Applicant of the Yugunga-Nya Native Title Claim (WAD 29 of 2019) for whatever reason, their appointment as a member of the TAC will automatically expire.[57]
[57] Exhibit 11.1, PEW 14 at 179.
If passed (and if effective as an election under cl 9.10 of the Trust Deed), the resolution would have resulted in the replacement of the members of the Advisory Committee who were not applicants in the native title application, including Ms Mongoo.[58] No alternative resolution was put to the meeting for election of members of the Advisory Committee.
[58] Other Advisory Committee members who were not applicants and who would have been removed were Andrew Gentle Snr, Cheryl Shay, Trevor Shay and Terence Little: exhibit 1.3 [17].
The resolution would also have required an amendment to the Trust Deed before it could be put into effect. The requirement for a member to be an applicant in the native title claim, and to have their appointment automatically expire if they ceased to be an applicant, is inconsistent with the Trust Deed.
It was not, however, contended in these actions that the meeting of 10 December 2019 was not a community meeting for the purposes of cl 9.10(a) of the Trust Deed.
The critical question in these proceedings is whether, as a result of the failure of that election, the existing members of the Advisory Committee continued in that office. The alternative is that there was no Advisory Committee following that meeting. The question turns on the proper construction of the Trust Deed.
The submissions
Fiduciary Administration Services submitted that the term of appointment of the Advisory Committee members expired on 10 December 2019 with the holding of a community meeting at which a quorum was present. It submitted that cl 9.11 of the Trust Deed imposes a maximum period of two years for the appointment of Advisory Committee members, and does not authorise the term of the Advisory Committee members to exceed two years when there is a quorum at a community meeting held pursuant to cl 9.10(a) during that period.
Fiduciary Administration Services further submitted that the appointment of a new Advisory Committee is discretionary and not mandatory. The effect of the failure to elect a new Advisory Committee at the meeting of 10 December 2019 was that the Trustee could act even in those matters where it was required to consult with the Advisory Committee by cl 9.3 of the Trust Deed.
Ms Mongoo submitted that the Advisory Committee has an important role in the operation of the Trust, referring in particular to its functions under cl 5 and cl 9 of the Trust Deed. The only circumstance where the Advisory Committee may cease to operate is where the person acting as Trustee is a corporation, the membership of which is only open to the Yugunga‑Nya People.[59]
[59] Trust Deed cl 9.14.
Ms Mongoo submitted that, on the proper construction of cl 9.10 and cl 9.11:
(1)an Advisory Committee has a minimum term of 12 month but no maximum term;
(2)there cannot be a period during which there is no Advisory Committee;
(3)clause 9.10(c) permits or authorises a community meeting to elect a new Advisory Committee ('the community meeting may elect') but does not compel such an election;
(4)an Advisory Committee remains in place from when it is elected until the next valid vote at an annual meeting organised under cl 9.10(a).
Accordingly, there having been no valid vote at the community meeting of 10 December 2019, those Advisory Committee members who had been elected in 2018 remained members and will continue to be members until the next valid vote at a community meeting organised under cl 9.10.
The Attorney General submitted that the term of an Advisory Committee extended from its election to the next community meeting at which a quorum is present. After 10 December 2019, there were no validly appointed members of the Advisory Committee.
Consideration
The rules for the construction of contracts apply also to trusts.[60] The court must look to the ordinary and natural meaning of the words that are used in cl 9, when that clause is read in the context of the whole document.[61] As in the construction of a contract, '[in] divining intention from the language which the parties have employed the courts may look to the nature of the transaction and the circumstances, including commercial necessity, in order to infer or impute intention'.[62]
[60] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 [59], [102] .
[61] See, for example, Montevento Holdings Pty Ltd v Scaffidi [2012] HCA 48; (2012) 246 CLR 325 [25].
[62] Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; (1988) 165 CLR 107, 121.
The Trust Deed does not expressly deal with the present circumstance, where a community meeting has been held, with a quorum present, but has not elected a new Advisory Committee.
The following matters guide my construction of the relevant clauses. First, expressly by cl 9.11, the Advisory Committee shall act for a minimum of 12 months from when elected. Second, each of cl 9.10(d), cl 9.10(e) and cl 9.11 refers to a term of 12 months. The obligation imposed on the Trustee by cl 9.10(a) is to ensure that a community meeting is organised each calendar year at which a new Advisory Committee may be elected; accordingly the period between annual community meetings may exceed 12 months. The way to reconcile these provisions, consistently with the intention of the clauses, is to construe the references to a '12 months' term in cl 9.10 and cl 9.11 as the minimum term of an Advisory Committee. The actual term (or further term under cl 9.10(d) or cl 9.11) is until the next community meeting called in accordance with cl 9.10 at which a vote may be taken to elect a new Advisory Committee.
The effect of this construction is that, should a community meeting fail to elect a new Advisory Committee to replace the previous Advisory Committee, there will be a hiatus. During that period, the Trustee will be unable to consult with and obtain the recommendation of the Advisory Committee. That has serious implications for the proper functioning of the Trust. But the alternative is that an Advisory Committee elected for a period until the next quorate community meeting continues in office notwithstanding the failure of the community to elect them.
In that context, I would construe the words in cl 9.10 and cl 9.11 as providing a minimum term of 12 months, with the term to continue until the next community meeting called to elect a new Advisory Committee.
The Trustee is obliged under cl 9.10 to organise a community meeting 'at least once each calendar year'. Should the Trustee be unable to properly administer the Trust, because it is unable to exercise those powers which require consultation with the Advisory Committee, a further meeting could be called in the same calendar year under cl 9.10(a). Alternatively, application could be made under s 21 of the Charitable Trusts Act 1962 (WA) for directions in respect of the administration of the Trust.
It is not consistent with the terms of the Trust Deed, in my opinion, for either the Advisory Committee to continue, or for the Trustee to regard its powers as unfettered by the requirement to consult.
The meeting of 8 January 2020
The consequence of my finding on the preceding question is that the meeting of 8 January 2020 was not a valid meeting of the Advisory Committee.
It also follows that the meeting of 4 April 2020 was not a valid meeting.
Counsel for the Attorney General requested the court deal with the issue of proxy voting, even if I found that there was then no Advisory Committee. The precedent value of an obiter comment does not, in my opinion, warrant further consideration. I could, in any event, add nothing to the statement of the law in Harben v Phillips.[63]
Was the Deed of Variation validly made
[63] Harben v Phillips (1883) 23 Ch D 14.
The Trust Deed may be varied pursuant to cl 14.2. The Trustee's power to vary the Deed is expressed to be 'subject to sub-clause 9.3(d)'.
Clause 9.3, in full, provides:
The Trustees shall consult with and obtain the recommendation of the Advisory Committee on the following matters:
(a)the investment of the Trust Fund in accordance with sub‑clause 10.3;
(b)the distribution of the Trust Fund in accordance with sub‑clause 10.4;
(c)the termination of the Trust in accordance with sub‑clauses 13.2;
(d)any variation to this Deed in accordance with sub-clause 14.2; and
(e)the appointment of Trustees referred to in sub‑clauses 5.3, 5.4 and 5.5.
In contrast, cl 9.4 provides that the Trustees may consult with the Advisory Committee about trust expenditure or any other trust activity not referred to in cl 9.3.
By cl 9.5, the Trustees are not bound to act on any recommendation or advice of the Advisory Committee, even for those matters set out in cl 9.3.
Clause 9.6 sets out, in detail, the procedure for consultation with the Advisory Committee, including how the Trustee may consult in situations of urgency and when the Trustees may be excused from consulting with any Advisory Committee member.
The power to vary the Trust was not intended to be exercised without the Trustee complying with cl 9.3. First, the Trustee holds the Trust Fund subject to the terms of the Trust. Second, the Trust Deed, as a whole, recognises the central importance of the Advisory Committee as the elected representatives of the Yugunga-Nya community. Clause 9.2 provides that there shall be an initial Advisory Committee and names the members. Clause 9.14 provides that the Advisory Committee may cease to operate only when any person acting as Trustee 'is a corporation whose membership is only open to Yugunga-Nya People'. Even then, the Advisory Committee must resolve to cease functioning and may be subsequently re-formed pursuant to cl 9.14(c). Third, the powers of the Advisory Committee include the power to appoint, remove or replace the Trustee. Fourth, the requirement that the Trustee 'shall consult with and obtain the recommendation of the Advisory Committee' on the exercise of certain powers is unambiguous. The clause is expressed in mandatory terms. The procedure for consultation and obtaining a recommendation is detailed. The settlor did not intend that the Trustee exercise its powers to vary the Trust without consultation with the community, through the elected Advisory Committee. Fifth, cl 14.2 is unambiguous that the power to vary the Trust Deed is subject to cl 9.3(d).
My finding as to the operation of cl 14.2 makes it unnecessary to further consider the argument that the power to vary the Trust Deed was exercised for an improper purpose. The obligation to consult is a condition of the valid exercise of the power to vary the terms of the Trust.
Conclusion
Accordingly, as to the issues raised, I would give the following answers:
Issue 1:The community, on 18 September 2018, validly elected the following as members of the Advisory Committee: Andrew Gentle (Snr), Leonie Gentle, Evelyn Gilla, Russell Little, Terence Little, Joslyn Mongoo, Audrey Shar, Bill Shay, Cheryl Shay, and Trevor Shay,
Issue 2:In January 2020 there was no lawfully constituted Advisory Committee following the failure to elect members of an Advisory Committee at the meeting on 10 December 2019.
Issue 3 and 4: Because there was then no lawfully constituted Advisory Committee, there was no valid meeting or vote on 8 January 2020.
Issue 5:Fiduciary Administration Services did not comply with the requirements of the Trust Deed in purporting to vary the Trust by the Deed of Variation, made 17 January 2020. The variation was not validly made.
Issue 6:The meeting on 4 April 2020 was not validly constituted for the reasons given in Issue 2.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CG
Associate to the Honourable Justice Allanson29 MAY 2020
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