McLachlan & South Ozz Shelter (Charity Licence No CCP3261) an Incorporated Charitable Institution v Hamilton

[2020] SASCFC 123

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Permission to Appeal)

MCLACHLAN & SOUTH OZZ SHELTER (CHARITY LICENCE NO CCP3261) AN INCORPORATED CHARITABLE INSTITUTION v HAMILTON

[2020] SASCFC 123

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Blue and The Honourable Justice Stanley)

17 December 2020

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - BY LEAVE OF COURT

Application for permission to appeal against the decision of Justice Peek.

Held (per Kourakis CJ, Blue and Stanley JJ agreeing):

1.    Permission to appeal is allowed.

MCLACHLAN & SOUTH OZZ SHELTER (CHARITY LICENCE NO CCP3261) AN INCORPORATED CHARITABLE INSTITUTION v HAMILTON
[2020] SASCFC 123

Full Court:  Kourakis CJ, Blue and Stanley JJ

1. KOURAKIS CJ:     The facts are of narrow compass.  Ms McLachlan operates an animal rescue home in Moorook (the Moorook Shelter).  Ms Hamilton volunteered to build a website for the shelter and, later, to build a donation facility on it in order to raise money for the Moorook Shelter on-line.  Funding in this way, sometimes called crowd funding, is becoming more common.  Unfortunately, a printout of the webpage was not put into evidence.  However, it was common ground that the donation button appeared on the website promoting the Moorook Shelter and advertising its activities.  Ms Hamilton testified that her name did not appear on the website but when donations were made, they were deposited into a Progress Saver bank account operated by Ms Hamilton.  Ms Hamilton gave evidence that the details of the bank account were seen to persons after making a donation, including her name as the holder of the account. 

2. Ms Hamilton’s evidence was that she added the donation page at Ms McLachlan’s request and her account was used because Ms McLachlan was too concerned about ‘hacking’ to use her own account.

3. Approximately $114,000 was deposited between 2010 and 2013.  Ms McLachlan brought an action to recover some $75,000 which she alleged was wrongfully paid into another of Ms Hamilton’s bank account which was used for her personal purposes.  Ms Hamilton denied the claim saying that cash withdrawals from her personal account were paid to Ms McLachlan to pay, amongst other things, an unregistered vet to de-sexed animals at the Moorook Shelter.  Ms Hamilton claimed that she had shredded all her hardcopy records in a manic episode in 2013 and that she threw out her computer after it crashed.  The use of the funds was the primary factual issue before the Magistrate. 

4. However, the Magistrate did not decide that issue, finding instead that the moneys were subject to a charitable purpose trust and that the dispute therefore fell within the exclusive jurisdiction conferred by s 60 of the Trustee Act 1936 (SA):

   60—Applications to Supreme Court

   (1)In every case of a breach of any trust or supposed breach of any trust created for charitable purposes, or whenever the direction or order of the Supreme Court shall be deemed necessary for the administration or management or to the advantage or benefit of any trust created for charitable purposes, it shall be lawful for a person referred to in subsection (2) to apply to the Supreme Court, stating such breach or supposed breach, or the grounds upon which such direction or order is necessary, as the case may be, and seeking such relief as the nature of the case may require.

   (2)     An application may be made by any of the following persons:

   (a)     the Attorney-General; or

   (b)     a trustee of the trust; or

   (c)     a person who is named in the instrument establishing the trust as a person who is entitled to, or may, receive money or other property for the purposes of the trust; or

   (d)     a person who is named in the instrument establishing the trust as a person who must, or may, be consulted by the trustees before distributing or applying money or other property for the purposes of the trust; or

   (e)     a person who has in the past received money or other property from the trustees for the purposes of the trust; or

   (f)     a person of a class that the trust is intended to benefit; or

   (g)     any other person who satisfies the Court that he or she has a proper interest in the trust.

5. Section 8 of the Magistrates Court Act 1991 (SA) (the Magistrates Court Act) provides:

   8—Civil jurisdiction

   (1)     The Court has jurisdiction—

   (a)     to hear and determine an action (at law or in equity) for a sum of money where the amount claimed does not exceed $100 000;

   (b)     to hear and determine an action (at law or in equity) to obtain or recover title to, or possession of, real or personal property where the value of the property does not exceed $100 000;

   (c)     to hear and determine an interpleader action where the value of the property to which the action relates does not exceed $100 000;

   (d)     to grant any form of relief necessary to resolve a minor civil action.

   (2) The parties to an action may waive any monetary limit on the civil jurisdiction of the Court, and, in that event, the Court will have jurisdiction to determine, the action without regard to that limitation.

6. I interpolate here that s 8 of the District Court Act 1991 (SA) confers on the District Court the jurisdiction of this Court in equity. A similar but identical question of construction of s 60 of the Trustee Act 1936 (SA) (the Trustee Act) may arise with respect to the respective jurisdictions of the District and Supreme Courts.

7. Peek J confirmed the decision of the Magistrate.

8. I accept that ss 60-64 of the Trustee Act constitute a code for the determination of disputed questions of breach of trust by charitable trustees, and as to the terms on which they hold the trust funds. I would draw that conclusion from s 64 of the Trustee Act which requires service on the Attorney-General so that he can represent and, by so doing, bind all potential beneficiaries as to the proper purposes of the trust and its administration. An obligation to serve to the Attorney-General is not imposed by s 8 of the Magistrates Court Act.

9. The decisions of the Magistrate and Peek J proceed on the premise that the charitable purpose trust was constituted with Ms Hamilton as the trustee because she held the chose in action connected to her Progress Saver bank account.  They, therefore, characterised the action as one brought by a beneficiary, or person interested, in a remedy for a breach of trust (by Ms Hamilton) and not as a claim for damages or equitable compensation by Ms McLachlan, as the true Trustee of charitable trust, against her agent Ms Hamilton.

10. It was accepted that the money was donated for the purposes of the operations of the Moorook Shelter.  Accepting that an outright gift by the donors to Ms McLachlan was correctly excluded, there is a real question as to whether the trustee of the donated money was Ms Hamilton or Ms McLachlan.  It seems to me that it is arguable that the intention of the donors was that the money be held on a trust administered by the operator of the Moorook Shelter which could only be Ms McLachlan.  If Ms McLachlan was the trustee, her action is a claim in law and or in equity for Ms Hamilton to account for the money she held as the trustee’s agent or for equitable compensation or damages for any defalcation.   It is, of course, not uncommon for a trustee to collect money through an agent, who may be a collector on a street corner, or a professional fundraising business. 

11. Accordingly, I think the appeal has merit.  The ultimate order may be one remitting the action to the Magistrates Court to receive further evidence on the contents of the webpage and to make a finding as to who the trustee is.

12. BLUE J:      I agree.

13. STANLEY J:     I agree permission should be granted.