KERIN v Attorney-General (SA)

Case [2019] SASC 103

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

KERIN v ATTORNEY-GENERAL (SA)

[2019] SASC 103

Judgment of The Honourable Justice Nicholson

24 June 2019

CHARITIES - CHARITABLE GIFTS AND TRUSTS - WHEN APPLIED CY-PRES - GENERALLY - STATUTORY PROVISIONS

CHARITIES - CHARITABLE GIFTS AND TRUSTS - WHEN APPLIED CY-PRES

EQUITY - TRUSTS AND TRUSTEES - APPLICATIONS TO COURT ON ORIGINATING PROCESS

The plaintiff applied pursuant to s 69B of the Trustee Act 1936 (SA) for orders approving a trust variation scheme for the E. W. Stevens Trust Fund, which is a charitable trust (the Trust). The purposes of the Trust include the advancement of education and relief from natural disasters. The Attorney-General neither consented to nor opposed the proposed orders, but raised matters for the consideration of the Court. The plaintiff sought the following four variations to the Trust:

1.       an additional new purpose;

2.       certain wording changes to remove ambiguity;

3.       a narrowing of the permissible fields of study with respect to the scholarship purpose; and

4.       to relax the Trust requirement concerning the proportion of income to be distributed to an available purpose in any given year.

Held:

1.       The plaintiff’s application for the approval of a trust variation scheme is allowed in part, but otherwise dismissed.

2. Pursuant to s 69B of the Trustee Act 1936 (SA) and the inherent jurisdiction of the Court, the terms of the charitable trust created pursuant to the will of EARNEST WILLIAM STEVENS dated 6 July 1987 with respect to which probate was granted by the Supreme Court of South Australia on 1 June 1989 is varied in accordance with the trust variation scheme as set out in paragraph [63] of the reasons.

3. The plaintiff’s costs of and incidental to the application pursuant to s 69B of the Act are to be paid out of the Trust.

Trustee Act 1936 (SA) s 59, s 69B, referred to.
Public Trustee (GD Butler Medal Trust) v Attorney General (SA) [2019] SASC 21; University of Adelaide v Attorney-General (SA) [2018] SASC 82, discussed.
Forrest v Attorney-General (Vic) [1986] VR 187, considered.

KERIN v ATTORNEY-GENERAL (SA)
[2019] SASC 103

Civil: Application

NICHOLSON J.        

Introduction

  1. The plaintiff applied pursuant to section 69B of the Trustee Act 1936 (SA) (the Act) for orders approving a trust variation scheme for the E.W. Stevens Trust. The purposes of the Trust, which include the advancement of education and relief from natural disasters, bring it within the category of a charitable trust. The Attorney-General is a necessary defendant to such an application as the formal representative of the objects of charities.[1]  The Attorney-General neither consented to nor formally opposed the variations sought but provided very helpful submissions directed at assisting the Court in its consideration of the application. 

    History of the E.W. Stevens Trust Fund

  2. The Trust was created under the last Will and Testament of Earnest William Stevens (the deceased) executed on 6 July 1987.…

Continue reading KERIN v Attorney-General (SA)

Sign in free to access the full text

Details
AGLC
KERIN v Attorney-General (SA) [2019] SASC 103
Case
[2019] SASC 103
Decision Date

CaseChat Overview and Summary

The case of Kerin v Attorney-General (SA) involved the plaintiff, Kerin, seeking approval for a trust variation scheme concerning the E.W. Stevens Trust Fund. The dispute arose from the proposed changes to the charitable purposes of the trust, which was established by the will of Earnest William Stevens. The matter was heard in the Supreme Court of South Australia.

The central legal issue before the Court was whether the proposed variations to the trust's purposes were justified under section 69B of the Trustee Act 1936 (SA). The Court had to determine if the proposed variations aligned with the spirit of the trust and were justified in the circumstances. This involved assessing whether the original purposes of the trust had been fulfilled, could not be carried out, or if other relevant factors made the variations necessary.

The Court found that Variation 4 was not justified as it did not align with the spirit of the trust. However, it approved the wording changes sought by the plaintiff, as they provided clarity and removed ambiguity. The Court exercised its inherent jurisdiction and approved Variation 2, which aligned with the original charitable purposes of the trust. The Court also ordered that the plaintiff’s costs of the application be met from the Trust fund.

The Court made the following orders: the application for the approval of the trust variation scheme was allowed in part, the terms of the charitable trust were varied according to the approved scheme, and the trustee’s costs were to be paid out of the E.W. Stevens Trust Fund. The approved trust variation scheme specified the Fund Trustees' roles and the purposes for which the trust income would be applied.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

NICHOLSON J
Variation 4 has not been justified. However, the plaintiff has also sought wording changes as reflected in paragraph 1(c) of the draft minutes. These were sought, as I understand the position, in the context of the consideration of Variation 4. However, they operate in any event to provide clarity and remove ambiguity and I grant approval on the same basis as expressed with respect to Variation 2.Conclusion For the foregoing reasons, and with some regret, I find that I am only able to approve Variation 2. Nevertheless, in the circumstances there is no good reason why the plaintiff’s costs of and incidental to this application should not be met out of the Trust fund and I will so order. I make the following orders:1.The plaintiff’s application for the approval of a trust variation scheme is allowed in part as provided for in order 2, but otherwise dismissed.2.Pursuant to section 69B of the Trustee Act 1936 (SA) and the inherent jurisdiction of the Court, the terms of the charitable trust created pursuant to the will of EARNEST WILLIAM STEVENS dated 6 July 1987 for which probate was granted by the Supreme Court of South Australia on 1 June 1989 be varied in accordance with the trust variation scheme as set out in Annexure A to these minutes of order.3.The trustee’s costs of and incidental to the trustee’s application pursuant to section 69B(1) of the Act be paid out of the E.W. Stevens Trust Fund.ANNEXURE A to Minutes of OrderTrust Variation Scheme for the Administration of the E.W. Stevens Trust Fund1.The person for the time being holding office of Chief Executive of Primary Producers SA Incorporated (hereinafter referred to as “the Association”) and persons nominated by the Board Members of the Association (such persons together with their successors are hereinafter referred to as “the Fund Trustees”) are to HOLD the residue of EARNEST WILLIAM STEVENS’ (deceased) estate as Trustees for the purpose of providing assistance on a needs basis to persons residing in country areas upon the following terms and conditions:-(a)monies held by the Fund Trustees to have constituted a trust to be known as the “E.W. STEVENS TRUST FUND” (hereinafter referred to as “the Fund”);(b)the Fund Trustees shall invest the Fund and all accretions thereto in investments from time to time sanctioned by law for the investment of trust funds and shall apply the income therefrom in their discretion in the following manner:-(i) as to one half thereof for the provision of a scholarship or scholarships to assist a student or students residing in rural or remote areas who are in or whose parents or guardians are in difficult financial circumstances to undertake study at secondary or tertiary teaching institutions approved by the Trustees;and(ii) as to one half thereof for the provision of financial assistance to farmers and/or graziers who have suffered hardship due to a natural disaster;(c)In the event that the Trustees do not make a grant of assistance under sub-clauses (i) or (ii) hereof in any one year, or make a grant or grants of less than the total income, the income of the Fund or unapplied balance thereof shall be reinvested and shall be applied at the discretion of the Trustees during any subsequent year;(d)the said executive and finance committee may remove any Trustee from office by written notice given to the Trustee and may appoint a new Trustee to take the place of any Trustee whose office shall be vacated or who is removed from office;(e)In the event of the proposed winding up of the Association the said Executive and Finance Committee shall appoint another Association having similar aims and objectives to the Association to act in the place of the Association for the purposes of the Trust hereby created.

Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

The Court has inherent jurisdiction in respect of charitable trusts. This jurisdiction has been supplemented by various statutory provisions including section 69B of the Act which allows for the alteration of the purposes of a charitable trust in certain circumstances. 69B—Alteration of purposes of charitable trust(1)The purposes for which property is required or permitted to be applied in pursuance of a charitable trust may be altered by a scheme (a trust variation scheme) approved under this section in any of the following circumstances:(a) where the original purposes, in whole or in part—(i)have been as far as possible 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 trust property; or(c) where the trust property could be more effectively used if combined with other property applicable for similar purposes and administered jointly with that property; or(d)where it is not reasonably practicable having regard to—(i)the value of the trust property; or(ii)changes in circumstances that have taken place since the constitution of the trust; or(iii)any other relevant factor,to apply the trust property in accordance with the original purposes; or(e) where the original purposes, in whole or in part— (i)have been adequately provided for by other means; or (ii)have ceased to be charitable purposes; or (iii)have ceased to provide a suitable and effective method of using the trust property.(2)References in this section to the original purposes of a charitable trust shall be construed, where the purposes for which the trust property is required or permitted to be applied have been altered or regulated by a scheme or otherwise, as referring to the purposes for which the property is for the time being required or permitted to be applied. (3)A trust variation scheme may be approved, on the application of the trustee, by— (a) the Supreme Court; or (b) if the value of the trust property does not exceed $300 000 or another limit prescribed by regulation—the Attorney-General.(3a)The authority to which the application is made (ie the Supreme Court or the Attorney-General) is referred to in this section as the relevant authority.(4)…(5)…(6)If the relevant authority is satisfied, on application under this section, that the variation of the terms of a trust proposed in a trust variation scheme—(a)accords, as far as reasonably practicable, with the spirit of the trust; and(b)is justified in the circumstances of the particular case,the relevant authority may approve the trust variation scheme and the approved scheme prevails over inconsistent provisions of a relevant instrument or declaration of trust.(7)The reasonable costs of an application under this section are payable at the direction of the relevant authority from the trust property.(8)…(9)… In University of Adelaide v Attorney-General (SA),[7] Stanley J considered the application of section 69B.While s 69B represents a significant legislative expansion of the Court’s capacity to vary charitable trusts,[8] a trust variation will not be justified on the basis of mere expediency or because it appears that the trust assets could be used more beneficially for another purpose.[9]The effect of s 69B(6) is that a trust variation scheme should accord as closely as possible to the original purposes of the trust. This is consistent with the general law and equitable principles. (Footnotes in original)According to Stanley J, the “spirit of the trust” where referred to in subsection 69B(6) encompasses a broader conception than merely the original purpose(s) of the trust.[10]What constitutes the spirit of the trust will comprise a broader conception than the original purposes of the trust. When determining the spirit of the trust, it is appropriate and necessary to have regard to the trust’s history and the social context of the time at which it was established. The ascertainment of the spirit of the trust requires an evaluative judgment.[11](Footnotes in original)[7] University of Adelaide v Attorney-General (SA) [2018] SASC 82 at [8]-[9].[8] The inherent jurisdiction to order a cy-près scheme remains, but given the greater breadth of s 69B it is less likely to be relied upon: Re Estate of Pitt [2002] SASC 332 at [40]-[44], (2002) 84 SASR 109 at 118-119.[9] Re Trusts of Kean Memorial Trust Fund [2003] SASC 227 at [54]-[56], [66]-[68], (2003) 86 SASR 449 at 463-464 and 466.[10] University of Adelaide v Attorney-General (SA) [2018] SASC 82 at [12].[11] Free Serbian Orthodox Church Diocese for Australian and New Zealand Property Trust v Bishop Irinej Dobrijvic [2017] NSWCA 28 at [217], (2017) 94 NSWLR 340 at 385.