Northern NSW Helicopter Rescue Service Limited v Attorney General of New South Wales

[2023] NSWSC 515

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Northern NSW Helicopter Rescue Service Limited v Attorney General of New South Wales [2023] NSWSC 515

Hearing dates:

24 April 2023

Decision date:

18 May 2023

Jurisdiction:

Equity

Before:

Robb J

Decision:

See [123] – [133]

Catchwords:

CHARITIES AND NOT-FOR-PROFITS — charitable gifts and trusts — cy-près scheme — application to extend permitted geographical area of operation of charitable trust — whether effect of present terms of the charitable trust is that they have ceased to provide a “suitable and effective method” of using trust property for the purposes of Charitable Trusts Act 1993 (NSW), s 9 — where future financial viability of the charitable trust depends on extension of geographical area and possible expansion of permitted purposes — whether proposed clause defining expanded purposes of charitable trust is unjustifiably broad

Legislation Cited:

Charitable Trusts Act 1993 (NSW), s 9

Cases Cited:

Allen Ralph Robinson as Trustee for the Trust Fund of the Fairfax Fellowships at Balliol College v Attorney General of New South Wales [2022] NSWSC 996

Attorney General for New South Wales v Fulham [2002] NSWSC 629

Coral Levett v Attorney General in and for the State of New South Wales [2014] NSWSC 1787

Forrest v Attorney-General [1986] VR 187

Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irenij Dobrijevic (2017) 94 NSWLR 340; [2017] NSWCA 28

Hunter Region SLSA Helicopter Rescue Service Ltd v Attorney General for NSW [2000] NSWSC 456

Hunter Region SLSA Helicopter Rescue Service Ltd v Attorney General of New South Wales [2013] NSWSC 1749

In re Lepton’s Charity [1972] Ch 276

Northern Sydney and Central Coast Area Health Service v The Attorney General for New South Wales [2007] NSWSC 881

Perpetual Trustee Company Ltd v Attorney General for the New South Wales (The Will of the Hon George Nesbitt) [2018] NSWSC 1456

Re Lepton’s Charity [1972] Ch 276

RSL Veterans' Retirement Villages Ltd v NSW Minister for Lands [2006] NSWSC 1161

University of New South Wales v Attorney General for New South Wales [2019] NSWSC 178

Varsani v Jesani [1999] Ch 219

Category:

Principal judgment

Parties:

Northern NSW Helicopter Rescue Service Limited (Plaintiff)
Attorney General of New South Wales (Defendant)

Representation:

Counsel:
C Mantziaris (Plaintiff)
T Glover/L Chapman (Defendant)

Solicitors:
Sparke Helmore (Plaintiff)
Crown Solicitor’s Office (Defendant)

File Number(s):

2021/00126371

Publication restriction:

Nil

JUDGMENT

1. The plaintiff is Northern NSW Helicopter Rescue Service Limited (“Northern”). The defendant is the Attorney General of New South Wales.

Northern

2. Northern is an unlisted public company, limited by guarantee. It was initially established in 1975 as an unincorporated association known as the Newcastle Branch of Surf Life Saving Australia. The Association operated a part-time volunteer helicopter surf rescue and coastal observation helicopter service. Northern was incorporated on 2 November 1984 under the name Newcastle Branch SLSA Helicopter Rescue Service Limited. Upon incorporation, Northern took over the assets and activities of the previous unincorporated association. At the time of incorporation, there was no geographical limitation as to the area in which Northern could provide its services. On 8 November 1998, Northern changed its name to Hunter Region SLSA Helicopter Rescue Service Limited. On 3 December 2012, Northern was registered with the Australian Charities and Not-for-profits Commission as a public charitable institution. Northern changed its name to its current name on 8 November 2016.

Relief originally claimed

3. Northern’s original summons was filed on 6 May 2021. It claimed the following substantive relief:

1. A declaration that clauses 3.1, 6.1, 6.2, 6.3(b), and paragraphs 3 and 4 of Schedule 3, of the plaintiff’s Constitution have become unsuitable and impractical for the circumstances of the plaintiff’s operations.

2.   An order approving an administrative scheme in the terms set out in Annexure “A” to these orders.

4. This relief is radically different to the relief that Northern now claims and is the subject of these reasons. The differences have some relevance to the outcome of the application. Because of the complexity of the subject matter of the orders sought, it will be convenient to defer the explanation of the effect of the relief until after the history of the charitable trust administered by Northern (the Trust) has been explained. For the moment it should be noted that prayer 2 sought an order that the Court approve an administrative scheme. The Court is now being asked to approve a cy-près scheme. It will be convenient to explain the difference between the two schemes now, in terms of the explanation given by Ward CJ in Eq (as her Honour then was) in University of New South Wales v Attorney General for New South Wales [2019] NSWSC 178 (University of NSW), as follows:

[34] Unlike a cy-près scheme, an “administrative scheme” is not directed towards altering the trust purposes. Rather, an administrative scheme enables the court to provide further and detailed machinery for the practical application of the trust property, where the stipulated means for the achievement or pursuit of the charitable objects have not been specified or are not sufficient for the practical application of the gift for the charitable purpose. Thus, Campbell J (as his Honour then was) said in Corish v Attorney-General’s Department (NSW) [2006] NSWSC 1219 (at [9]) that:

There is a clear conceptual difference between a cy près scheme and an administrative scheme for a charitable trust. It is the difference between ends and means. A cy près scheme can be directed when it is impossible or impractical to carry out the objects of the trust in all the details the settlor stipulated. An administrative scheme supplements and/or clarifies any provisions the settlor has stipulated concerning the manner in which the objects of the trust are to be pursued, when practical circumstances show that the settlor’s stipulation (if any) of the means is inadequate or impractical.

5. A cy-près scheme has the effect of changing the purpose of a charitable trust while an administrative scheme makes changes to how the original purpose is to be implemented. As will be explained below, for historical reasons, the terms of the Trust are incorporated in its constitution, rather than a separate trust instrument. Also for historical reasons, Northern originally acquired an unusual and cumbersome governance structure, whereby various government, community and industrial organisations had rights to be represented on its board of directors. In its original application, Northern primarily sought the Court’s approval to changes in its constitution that altered its membership and governance. It was apparently thought that these changes would require the Court’s approval as an administrative scheme. Although changes were sought to be made to the part of the constitution that consisted of the terms of the Trust, those changes were relatively minor compared to what Northern has sought to achieve by its final application.

First hearing

6. Northern’s summons was listed for hearing before me on 30 July 2021. In the course of the hearing, I raised questions concerning whether the Court’s approval of an administrative scheme was required and whether the proposed changes to the terms governing the Trust required that Northern make an application to the Court for the creation of a cy-près scheme. The hearing was adjourned to enable Northern to consider these issues in conjunction with the Attorney General. Northern has now substantially revised the relief that it seeks from the Court.

Relief claimed

7. Northern filed an amended summons on 17 April 2023. The summons sought the following relief:

1. A declaration pursuant to section 9 of the Charitable Trusts Act 1993 (NSW) that the original purposes of the trust identified by cy-près scheme approved by the Court on 13 December 2013 in the matter of Hunter Region SLSA Helicopter Rescue Service Limited v Attorney General in and for the State of New South Wales 2013/283629 (2013 Trust) have, wholly or partly, ceased to provide a suitable and effective method of using the 2013 Trust property.

2.   An order approving a cy-près scheme in the terms set out in the Deed Poll annexed as Annexure A to the orders.

3.   An order that the plaintiff be entitled to its costs from the 2013 Trust on an indemnity basis.

4.   An order that the defendant be entitled to his costs on the ordinary scale from the 2013 Trust.

8. I will explain the relevant terms of the Deed Poll below, after I have provided some background to the application so that the terms of the Deed Poll will be meaningful.

9. Northern's application to the Court in respect of the approval of a change to the purposes of the Trust has not been made because it has become impossible for Northern to administer the Trust in accordance with its current terms. As will be seen, Northern's management is of the view that the constraints placed upon the operation of the Trust by its current terms will jeopardise the financial viability of the Trust over the medium term.

Charitable Trusts Act

10. Northern's application has therefore been made under s 9 of the Charitable Trusts Act 1993 (NSW) (the Act), which provides:

9 Extension of the occasions for applying trust property cy pres

(1)    The circumstances in which the original purposes of a charitable trust can be altered to allow the trust property or any part of it to be applied cy pres include circumstances in which the original purposes, wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust.(2)    References in this section to the original purposes of a charitable trust are to be construed, if the application of the trust property or any part of it has been altered or regulated by a scheme or otherwise, as references to the purposes for which the trust property are for the time being applicable.

11. In the circumstances that I will explain below, the issue on this application is whether the purposes of the Trust have ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the Trust. If the Court accepts Northern's submission that the requirements of s 9 of the Act have been satisfied, then Northern asks the Court for an order that the trust property be applied cy-près in accordance with the terms of the Deed Poll referred to in prayer 2 of the amended summons.

Attitude of the Attorney General

12. Northern’s application on its amended summons was heard on 24 April 2023. At the hearing, Northern was represented by Dr C Mantziaris of counsel and the Attorney General was represented by Mr T Glover and Mr L Chapman, both of counsel.

13. Mr Glover properly advised the Court that the Attorney General appeared in his role as protector of charities and that he neither asserted that the orders sought by Northern should be made nor did he oppose those orders being made.

14. That said, the evidence establishes that Northern has cooperated with the Attorney General in pursuing the complicated course that has led on the one hand to the proposal that it amend its constitution in relation to governance and other matters, and that it formulate the cy-près scheme that is embodied in the Deed Poll. That has had the outcome that the Attorney General has not opposed the application made by Northern, nor has he criticised the terms of the proposed Deed Poll. The Court is comforted on this relatively complex and unusual application by the knowledge that the Attorney General has given careful consideration to the course that Northern wishes to follow. That observation is of particular significance because there are significant commercial considerations that underlay the making of Northern's application and the terms of the proposed Deed Poll.

History of the charitable trust

15. At the hearing, Northern provided the Court with a statement of facts agreed with the Attorney General: Exhibit A. As the agreed statement of facts is a relatively lengthy document, I will not set it out in these reasons. However, much of the factual history that I will relate is based upon the document.

16. It may be helpful if I provide the following brief conspectus of the history of the provision by Northern of helicopter surf rescue and other helicopter medical emergency services since the inception of the unincorporated part-time volunteer organisation. From its inception in 1975, the service was provided by the Newcastle Branch of Surf Life Saving Australia. It operated over part of the New South Wales Lower North Coast and Central Coast from Tea Gardens and Hawks Nest in the north to Catherine Hill Bay in the south. The organisation acquired a helicopter that was funded in part by a loan from Westpac and the proceeds of a public fundraising appeal. At around that time, the service also provided helicopter emergency medical services for the Ambulance Service of NSW. Over time, by reason of changes in circumstances, there has been an impetus for Northern to widen the area within this State in which it provides services. That has happened in part because of increases in Northern's capacity and organisational competence, and the range of its helicopters, as well as the need for the provision of its services outside its original area of operations. However, increases in the area in which Northern has been permitted to provide its services have been constrained by the fact that a considerable proportion of its funds have been raised from communities in particular geographical areas within the State. In the manner that I will shortly explain, that has led to constraints being placed upon the areas in which Northern has been permitted to provide its services. However, for practical and commercial reasons, Northern has faced the need to grow and extend its area of operations, both to provide desirable services out of its current areas of operation and also to maintain its commercial viability. The purpose of the present application is to seek an order from the Court for the making of a cy-près scheme that further extends the available potential areas of operation for the provision of Northern's services, and gives Northern flexibility to extend the nature of its services, while maintaining an organisational structure that ensures that it applies charitable funds raised from the public in particular areas to the effective provision of its services to the people in those areas.

17. It will now be appropriate to consider the historical circumstances relevant to Northern's present application in further detail.

1991 proceedings

18. The background to the 1991 proceedings was explained by White J in Hunter Region SLSA Helicopter Rescue Service Limited v Attorney-General of New South Wales [2013] NSWSC 1749 (the second Northern decision) at [5] as follows:

[5] In 1991, a group of Newcastle citizens complained to the Attorney General that funds that had been raised from the Hunter region, including through the "Angel One Helicopter Appeal", should not be used for the benefit of a helicopter service based outside the Hunter region. The citizens complained that Northern's major assets had been used as security for the purchase of two helicopters in 1990 by Northern Region SLSA Helicopter Rescue Services Pty Ltd and Southern SLSA Helicopter Rescue Service Pty Ltd for use in the Sydney region and the Far North Coast around Lismore.

19. On 19 September 1991, the Attorney General commenced proceedings in this Court against Northern and other companies who had become involved in the provision of helicopter rescue and medical services with the assistance of the funds raised by Northern from the public.

1992 terms of settlement

20. On or about 30 January 1992, the parties to those proceedings entered into terms of settlement that were noted by a Registrar of this Court.

21. The 1992 terms of settlement contained the following provisions the purpose of which was to cause Northern to declare that certain of its funds were to become subject to a charitable trust. Those terms were:

The Trust

5.   The assets of the Hunter Region company [the plaintiff], as appearing from the audit at January 1, 1992, including but not limited to the Westpac Lifesaver Helicopter and the balance of the following bank accounts held at the Westpac Banking Corporation, Civic Centre Newcastle Branch: [account numbers stated] be declared to be held on trust for the provision of a helicopter service in the Hunter Region to be expressed in the memorandum of association of the company as follows:

It is acknowledged and declared by the company that:

(i)    members of the public resident within the areas of the Hunter Region, the Central Coast, the New England, Manning and mid North Coast areas of New South Wales (“the Area”) contribute funds from time to time for the conduct and maintenance of a helicopter service in that Area. The Company holds such monies upon trust for the provision of such a service;

(ii)    all those assets presently held by the Company and acquired or to be acquired by the Company are held upon the trusts referred to in (i) above and shall be applied accordingly.

6.   It to be noted in the Short Minutes of Order that the parties have agreed that the memorandum of association sets out the terms of the trust on which present and future assets of the Hunter Region company are held.

22. The 1992 terms of settlement also dealt with other matters. Clauses 1 to 4 contained an agreement that an audit by a major firm of accountants be undertaken of Northern's assets and accounts. Clause 7 had the effect of imposing certain accounting procedures on Northern. Clauses 8 and 9 permitted Northern to enter into certain contracts for the provision of its services for reward to other organisations. Clauses 10 and 11 acknowledged that Northern had entered into certain contracts, and made reference to a contract with the New South Wales Department of Health that was stated not to constitute a breach of trust on the part of Northern. Clause 12 stipulated who was entitled to become a member of Northern, and clauses 13 to 15 governed the constitution of Northern's board of directors, and nominated local government and other organisations who were entitled to nominate directors. Clause 16 required Northern to make such amendments to its memorandum and articles of association as were necessary or appropriate to give effect to the settlement.

23. A significant effect of the 1992 terms of settlement is that the terms of the Trust were embedded in what was then called Northern’s memorandum and articles of association, and is now called its constitution. That course sowed the seeds of potential confusion and administrative difficulty, as it led to the possibility, which as a practical matter has manifested itself in reality, that proposed changes to the constitution of Northern might have to be dealt with in the same way as proposed changes to the terms of the Trust, even though the constitutional changes may have no practical bearing on the administration of the Trust.

2000 orders made by Hamilton J

24. In 2000, Northern commenced proceedings in this Court seeking a variation to the terms of the Trust as set out in the 1992 terms of settlement, to expand the geographical area of the operation of the Trust to include the North West of NSW and to facilitate its operations from a helibase in Tamworth.

25. On 16 June 2000, the Court made orders approving a variation to the scheme in terms embodied in the 1992 terms of settlement. Clause 5 of the terms of settlement was amended as follows:

The Trust

5.   The assets of the Hunter Region company, as appearing from the audit at January 1, 1992, including but not limited to the Westpac Lifesaver Helicopter and the balance of the following bank accounts held at the Westpac Banking Corporation, Civic Centre Newcastle Branch: [account numbers stated] be declared to be held on trust for the provision of a helicopter service in the Hunter Region to be expressed in the memorandum of association of the company as follows:

It is acknowledged and declared by the company that:

(i)    members of the public resident within the areas of the Hunter Region, the Central Coast, the New England, the North West, Manning and mid North Coast areas of New South Wales (“the Area”) contribute funds from time to time for the conduct and maintenance of a helicopter service in that Area. The Company holds such monies upon trust for the provision of such a service;

(ii)    monies raised by the Hunter Region company from members of the public in New England and North West areas will be used solely for its helicopter service based at Tamworth or otherwise to fund its operations which directly servers those areas;

(iii)    monies raised by the Hunter Region company from members of the public in the Hunter Region, the Central Coast, Manning and mid North Coast areas will be used solely for its helicopter service based at Newcastle to service those areas; and

(iv)    all those assets presently held by the Company and acquired or to be acquired by the Company are held upon the trusts referred to in (i) above and shall be applied accordingly.

6.   It to be noted in the Short Minutes of Order that the parties have agreed that the memorandum of association sets out the terms of the trust on which present and future assets of the Hunter Region company are held.

26. As it happened, the 1992 terms of settlement were only handed up to the Registrar, and the Court was not asked to make formal orders to give effect to them. This omission was cured by the orders made by Hamilton J.

27. As is seen from the amendment to clause 5 of the 1992 terms of settlement that was approved by his Honour, clause 5 in its original form confined the services to be provided by the Trust to the regions that were described in subclause (i) as being included in what was defined as "the Area". That was done on the basis that members of the public resident within those regions contributed funds from time to time to the operation of the helicopter service in the Area. The new subclause (ii) had the effect of permitting Northern to apply monies raised from members of the public in the New England and North West areas to a helicopter service based at Tamworth. Subclause (iii) permitted Northern to continue to provide its helicopter service from its base at Newcastle, using monies raised from members of the public in the Hunter Region, the Central Coast, Manning and mid North Coast areas.

28. Hamilton J published his reasons on 22 May 2000 as Hunter Region SLSA Helicopter Rescue Service Ltd v Attorney General for NSW [2000] NSWSC 456 (the first Northern decision). Hamilton, J set out the circumstances that led to the making of the order that extended the permissible area of operation of the Trust at [7], as follows:

[7] The present problem is shown in the evidence by affidavit of the plaintiff's solicitor, Mr A J Deegan of Newcastle. Mr Deegan's evidence shows that the application of the trust's assets has been to the provision and maintenance of a helicopter rescue service in the Hunter Region, the Central Coast, the New England, and the Manning and Mid North Coast areas of New South Wales ("the trust area"). The plaintiff is a party to a contract with the New South Wales Ambulance Service to provide aero-medical retrieval and transfer services conveying sick or injured patients in appropriate cases to hospital or between hospitals. Generally, the plaintiff's services have been carried out within the trust area, but there are helicopter flights at times outside the trust area, when there is no alternative vehicle available. Increasingly, this has led to helicopter services in the Tamworth district, which is not in the trust area. It is now desired to establish a permanent heli-base at Tamworth for the provision of better services of this kind in the Tamworth and surrounding districts, and donations have been made towards the trust funds for this purpose. There is a general desire, however, that the funds raised in the trust area and the funds now raised in the Tamworth district for this extension of services should be treated separately, the funds raised in the trust area being applied there and the funds raised in the Tamworth district being applied in that district. The changes sought are comparatively simple changes to the Terms of Settlement, which effect this desired end.

29. It will be seen from this aspect of his Honour's reasons that circumstances had led to the result that Northern did not limit the area in which its helicopter services were provided to the area stated in clause 5 of the 1992 terms of settlement. That was in part because Northern was party to a contract with the Ambulance Service of NSW that had the effect that, from time to time, Northern was required to provide its services in the area described in subclause (ii) of clause 5, as amended by the orders made by Hamilton J. This had the effect of making it desirable that a permanent helibase be established by Northern at Tamworth, in addition to the helibase in Newcastle from which Northern serviced the original area in which it provided its services.

30. Thereafter, Northern's constitution was amended so that the terms of the Trust, as varied by the order made by Hamilton J, were incorporated in its constitution.

2013 orders made by White J

31. In or about September 2013, Northern commenced further proceedings in this Court seeking an administrative scheme by way of a variation to the scheme established by the 1992 terms of settlement (as subsequently varied in 2000); and, in the alternative, a cy-près scheme pursuant to s 9 of the Act. Northern sought to further expand the geographical area of the operation of the Trust into the North Coast area of NSW and to facilitate operations from a helibase in Lismore.

32. The proceedings were heard before White J on 20 November 2013. Judgment in the second Northern Decision was delivered on 29 November 2013.

33. On 13 December 2013, the Court declared that the original purposes of the Trust in the scheme established by the 1992 terms of settlement and subsequently varied and approved by Hamilton J had, wholly or in part, ceased to provide a suitable and effective means of using the trust property, having regard to the spirit of the trust, within the meaning of s 9 of the Act. White J approved a cy-près scheme in terms which included:

1.   The assets of the Hunter Region company, as appearing from the audit at January 1, 1992, including but not limited to the Westpac Lifesaver Helicopter and the balance of the following bank accounts held at the Westpac Banking Corporation, Civic Centre Newcastle Branch: [account numbers stated]; be declared to be held on trust for the provision of a helicopter service in the Hunter Region and the Central Coast, the New England, the North West, Manning, mid North Coast areas of New South Wales to be expressed in the memorandum of association of the company as follows:

“It is acknowledged and declared by the Company that:

(i)    members of the public resident within the areas of the Hunter Region, the Central Coast, the New England, the North West, Manning and mid North Coast area of New South Wales (“the Area”) contribute funds from time to time for the conduct and maintenance of a helicopter service in that area;

(ii)   members of the public resident within the North Coast (“the Extended Area”) may contribute funds from time to time for the conduct and maintenance of a helicopter service in the Extended Area;

(iii)   the Hunter Region company holds all monies referred to in (i) and (ii) above upon trust for the provision of a helicopter service in the Area and the Extended Area;

(iv)   monies raised by the Hunter Region company from members of the public in the New England and North West areas will be used solely for its helicopter service based at Tamworth or otherwise to fund its operations which directly service those areas;

(v)   monies raised by the Hunter Region company from members of the public in the Hunter Region, the Central Coast, Manning and Mid North Coast areas will be used solely for its helicopter service based at Newcastle or otherwise to fund its operations which directly service those areas;

(vi)   monies raised by the Hunter Region company from members of the public in the North Coast area will be used solely for any helicopter service based at Lismore or otherwise to fund its operations which directly service the North Coast area;

(vii)   all those assets presently held by the Company and acquired or to be acquired by the Company are held upon the trust referred to in (iii) above and shall be applied accordingly.”

2.   Notwithstanding paragraph 1 above, it is acknowledged that from time to time, due to an emergency or otherwise, the Company will pursuant to its contractual arrangements be tasked to operate the helicopter service outside the Area or Extended Area and this will not constitute a breach of the trust.

34. Clause 1(i) defined the Area as being the two areas in which Northern was permitted to provide its helicopter services by clause 5(i) of the 1992 deed of settlement, as varied by Hamilton J. Clause 1(ii) extended the area of provision of Northern's helicopter services to what was described as the North Coast. Clause 2 recognised the reality that, when it comes to the provision of emergency helicopter services, the necessity to give aid to persons in distress may require that the services be provided outside the permitted areas, so clause 2 provided that it would not be a breach of the terms of the Trust for Northern to provide its helicopter services, due to an emergency or otherwise, outside the Area or the Extended Area.

35. Significantly, however, the orders made by White J continued to have the effect of quarantining money raised from the public in particular areas for the purpose of that money being used to provide the helicopter services in those areas.

36. I will return to a consideration of the reasons published by White J, when I deal with the legal principles that are to be applied on this application. It will be convenient at this stage to note the reasons given by White J for the Court agreeing that the orders sought by Northern should be made. His Honour said:

[23] On 14 November 2013 the plaintiff entered into an agreement with Northern. The agreement recited that the parties had agreed to enter into a consortium to assist the plaintiff to tender for the provision of helicopter emergency medical services in the northern region. The parties agreed to work together for the preparation and lodgement by the plaintiff of a tender and, if successful, for the provision of helicopter emergency medical services in the northern region. They agreed to negotiate in good faith to enter into contracts including a lease by the plaintiff of the Lismore base and of Northern’s two Dauphin helicopters. The plaintiff agreed to offer employment contracts to almost all of Northern’s employees, subject to the plaintiff’s commencing the provision of helicopter emergency medical services in the northern region.

[24] The plaintiff’s application to alter the terms of the trust to allow it to operate throughout the proposed northern region, including the north coast and to allow it to tender for the provision of such services to the Ambulance Service has obvious merit. The plaintiff submitted that the present application involves no change to the spirit of the trust, but only to the geographic area in which it provides helicopter emergency medical services. Under the proposed alterations to the trust deed, funds raised from the community in one particular geographical area would be used for providing services in that particular area. Having reorganised its financial and accounting systems to facilitate an accounting on a divisional basis between the Newcastle division and the Tamworth division, the plaintiff could readily ensure that funds raised from the Hunter, New England or North-West, and Far North Coast communities would not be used to cross-subsidise operations in the other regions.

[25] The plaintiff submitted that the purposes of the trust involving particular geographic limits have ceased to provide a suitable and effective method of using the trust property since it is clear that the NSW Ministry of Health will next year award only two contracts for the provision of such services across the state being in a northern region and a southern region. If the plaintiff is not permitted to extend its area of operations, it will not be able to submit a compliant tender. This would have a devastating effect on the plaintiff’s operations. If it does not win the tender for the northern region, then it will no longer be able to employ the funds that have been contributed to it for the purposes for which they were intended. It receives very little tasking from other organisations such as the police, the fire brigade or the State Emergency Services or surf lifesaving. In 2012–13, flying missions other than for the Ambulance Service totalled 13 out of a total of 1,272 missions or approximately one per cent of all its missions. Its income from its current contract with the Health Administration Corporation accounts for about 40% of its operating budget. If its area of permitted operations is extended, the directors of the plaintiff consider that it would be well placed to secure the contract for the northern region as it has a proven track record of providing helicopter emergency services from Newcastle and Tamworth and has the organisational and operational capability to service the whole northern region.

[26] If there is power to alter the objects of the trust by expanding the plaintiff’s area of operations it is plainly appropriate to do so. It would not be possible for the plaintiff to make a tender for a new contract for the northern region without an alteration to the terms of the trust to expand the area of its operations by participating in a joint tender with another not-for-profit entity or a commercial operator. The Government proposes to make a contract only with one operator for the northern region.

[27] The circumstances are not materially dissimilar from those that existed in 2000 when the plaintiff sought and obtained approval from Hamilton J to the alteration to the terms of the trust. Hamilton J observed that the summons asked that leave be granted to the plaintiff to amend the terms of the trust. His Honour said that once a charitable trust is created it is well established that neither the donor nor the trustee may amend its terms, but the court has jurisdiction to settle schemes in relation to the carrying out of charitable trusts. His Honour observed that a cy-près scheme is appropriate and necessary where the instrument creating the trust evinces a charitable purpose but it is impossible to apply the gift to carry out the purpose. The court will then give effect to the intention of the donor as closely as possible. But, his Honour said, a cy-près scheme is only one subspecies of the genus scheme. His Honour said that what was then being sought was not a variation to the terms of the trust, but a variation of a scheme (at [6]). His Honour concluded (at [8]) that:

“This variation is not a Cy-Pres scheme, nor was the scheme embodied in the original Terms of Settlement. It was a scheme concerning administrative arrangements within the more general concept of scheme …”

37. To avoid confusion, I should note that the company referred to by White J at [23] as "Northern" was a different company to the plaintiff to which I have given the name "Northern" in these reasons. The company referred to by White J as "Northern" was a company that had provided helicopter emergency services on the North Coast, but those services had ceased to be economically viable. The underlying commercial cause of the application made to White J was the desirability of Northern expanding its operation to take over the services that had been provided by the other Northern.

38. After the date of the orders made by White J, Northern's constitution was amended to include, as Schedule 3, the orders made by the Court in the constitution of the company. Consequential amendments were made to the constitution to ensure that the constitution contained an acknowledgement of the charitable trust as amended by the Court's orders.

39. The current version of Northern's constitution contains the same arrangement, so it remains the case that the terms of the Trust are governed by the terms of Northern's constitution.

Original relief sought by Northern

40. At this point it will be meaningful to make a number of observations concerning the effect of the relief sought in Northern’s original summons. That will provide a basis for an understanding of the enlargement of the relief now sought by Northern.

41. It seems that the original summons was drawn by reference to Northern’s constitution in the form that it took on 8 November 2016. Prayer 1 sought a declaration that identified paragraphs of the constitution and paragraphs of Schedule 3 had become unsuitable and impractical for the circumstances of Northern’s operations. The identified paragraphs of the constitution concerned matters such as Northern’s membership, and the number and qualification and nomination and appointment of directors. Those changes to the constitution would have the effect of removing the right of surf clubs, a number of local councils, and a certain trade union, to nominate directors of Northern. It is not necessary to consider these changes further. I doubt that these changes would qualify as changes to the manner in which the objects of the Trust were to be pursued, so that they would require the Court’s approval as an administrative scheme. It is unlikely that changes to the constitution of a corporate trustee of a charitable trust in relation to its membership and board of directors would qualify as requiring the Court’s approval. The doubt and confusion probably arose out of the circumstances in which the Trust was created and the fact that its terms were embedded in the constitution of Northern.

42. As I have explained above, the terms of the Trust were set out in Schedule 3 to the constitution. Clauses 1 and 2 of Schedule 3 set out the terms of the cy-près scheme ordered by White J: see [33] above. Following judgment in the second Northern decision, on 13 December 2013 White J made the following orders:

1. Declare that the original purposes of the trust identified in the scheme established by Terms of Settlement dated 30 January 1992 and subsequently varied and approved by order 1 dated on or about 17 June 2000 in proceedings No. 2429/00 in the Supreme Court of New South Wales ("Amended Scheme") have, wholly or in part, ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust, within the meaning of s 9 of the Charitable Trusts Act 1993 (NSW).

2. Approves a cy-près scheme in the terms which embodies the matters set out at Annexure A to these orders.

3. Each party has its costs from the trust.

43. There is some uncertainty concerning the full text of Annexure A to the orders made by White J. Schedule 3 to the constitution contains a number of additional terms that may have been included. I will set out the part of Annexure A to Northern’s original summons that appears to be relevant to the terms of the Trust. It required the omission of paragraph 3 and the insertion of the following:

5. Schedule 3

a. Omit paragraph 3 from Schedule 3. Insert instead –

“3.   Paragraph 10 of the Amended Scheme is preserved.”

Explanatory note

Schedule 3 of the Constitution reflects the orders of his Honour Justice White on 13 December 2013 in [the second Northern decision]. The references to “Amended Scheme” are references to the administrative scheme ordered by his Honour Justice Hamilton on 17 June 2020 in [the first Northern decision]. Paragraph 10, concerning contracts with the New South Wales Department of Health, will be retained in the amended Constitution. Paragraph 12, concerning eligibility for membership of the Company, will be replaced with the provisions at [6] below. Paragraph 15, concerning eligibility to nominate directors of the Company, will be replaced with the provisions at [7] below.

b. Omit paragraph 4 of Schedule 3. Insert instead –

“4.   Paragraph 10 of the Amended Scheme, which is preserved under paragraph 3 of this Schedule, is as follows:

“The Department of Health contract

10 It be a acknowledge that:

(i) the Company may enter into contracts consistent with the trust with person or body, including Surf Life Saving Australia Ltd, SLSA Helicopters Pty Ltd and any Crown or State instrumentality for the use for reward or otherwise of any of the assets of the company including for the provision of a co-ordinated helicopter services in conjunction with other helicopter services operating in the State of New South Wales;

(ii) the contact [sic] presently in force between Surf Life Saving Australia Limited and the New South Wales Department of Health does not constitute or entail a breach of trust on the part of the Company.”

Explanatory note

Schedule 3 of the Constitution reproduces paragraphs 10 and 12 of the Amended Scheme. The reproduction of paragraph 10 will be retained. The reproduction of paragraph 12, which concerns membership of the Company, will be deleted.

44. The import of this provision is not entirely clear. I should note that the first Explanatory Note referred to an administrative scheme ordered by Hamilton J because, as appears from the first Northern decision, his Honour apparently understood that such a scheme was required, rather than a cy-près scheme. White J noted this circumstance in the second Northern decision at [29]. When White J made comparable orders to those that had been made by Hamilton J, his Honour made the orders in the form of a cy-près scheme. I respectfully agree with White J.

45. Although this explanation of the effect of the relief sought by Northern in its original summons may seem complicated, the only significant point is that Northern sought an order from the Court for an administrative scheme concerning changes in its constitution relating primarily to its membership and governance, but the amendments to the constitution concerning the terms of the Trust appear not to have changed the substance of those terms, or alternatively only to have introduced minimal changes.

Proposed amendments to Northern’s constitution

46. I will now turn to the terms of Northern's proposal that an extraordinary general meeting of its members be held to consider, and if thought fit, pass a special resolution to make amendments to the constitution of the company that are intended to take effect in conjunction with, but after, the Court makes the orders sought by Northern in its amended summons. The Court is not asked to consider and approve the amendments to the constitution. Northern rightly takes the view that the terms of its constitution concerning the manner of its governance are not matters that fall within the purview of the Court's jurisdiction to supervise charitable trusts. Northern has therefore taken the course of separating the terms of its constitution from the terms that govern the Trust. As I have explained above, that was an issue that impeded the Court in dealing with Northern's initial application on 30 July 2021. Northern's objective is to avoid the problem in the future that amendments to its constitution may appear to be linked to the terms of the Trust in a way that may require the approval of the Attorney General and the Court to any such amendments. The purpose of Northern of putting evidence before the Court concerning the proposed changes to its constitution is only to satisfy the Court that those amendments, if adopted, will not have a detrimental practical effect on Northern's ability to carry out its duties as trustee of the Trust.

47. It is therefore only necessary to note the following terms that will be included in the constitution, if the proposed amendments are adopted. Clause 6 will have the effect that the objects of Northern will be to carry out the “Trust Purpose” and act as trustee of the “Trust”. "Trust Purpose" will be defined in clause 77 as meaning the "Trust Purpose" as defined in the Deed Poll. Clause 7 will be an acknowledgement that Northern declares that all assets presently held by the company or to be acquired by the company are held subject to the Trust and applied in accordance with the Deed Poll. By clause 8, Northern will have all of the powers of a trustee company, as set out in the Deed Poll and the law. Clause 9 will have the effect of requiring Northern to operate as a not-for-profit company. Clause 10 will prohibit members from passing a special resolution that causes the company to no longer be a registered charity, or affects its ability to act as trustee of the Trust. As the Trust will be governed by the terms of the Deed Poll, the schedule of the current constitution that contains the present terms of the Trust will be deleted.

Terms of proposed Deed Poll

48. It will now be appropriate to consider the terms of the proposed Deed Poll. As noted above, the Deed Poll will become Annexure A to order 2 that will have the effect of approving a cy-près scheme on the terms of the Deed Poll, as sought in prayer 2 of the amended summons.

49. Clause 4.1 the Deed Poll contains definitions of the terms used in the document. Clause 4.1(e) contains the following definition:

(e) Existing Service Region means each of the areas defined as:

(i)    the New England and North West Service Regions;

(ii)   the Hunter Region, Central Coast, Manning and Mid North Coast Service Region; and

(iii)   the Northern Service Region.

50. Those three regions are separately defined to include areas that show that the Existing Service Region comprises of the three areas the subject of clause 1 of the orders made by White J in 2013.

51. In clause 4.1(p), "New Service Region” is defined as meaning "a region or area within Australia which is not an Existing Service Region". This definition is intended to have the effect, in conjunction with other proposed terms, that Northern will be permitted to extend the provision of its services to any area in Australia, provided that is done on the terms of the Deed Poll.

52. There is a definition of “Service Regions" in clause 4.1(u) that has the effect that Service Regions may be each of the Existing Service Regions, or parts of an Existing Service Region, together with any New Service Region. The intent of this provision is that not only may Northern extend the area for the provision of its services outside the Existing Service Regions, but it may also, where appropriate, divide Existing Service Regions into individual Service Regions.

53. There is a definition of "Head Trust Fund” in clause 4.1(h) that means all of Northern's assets that do not form part of a Sub-trust Fund, or that are raised by Northern from members of the public that do not reside in a Service Region. "Sub-trust Fund" is defined in clause 4.1(v) as meaning for each Service Region all of Northern's assets that are held on trust for that Service Region, and monies raised by Northern from members of the public residing in that Service Region. These terms are intended to facilitate the outcome that Northern will be able to conduct its financial affairs on the basis that funds raised within particular Service Regions are accounted for as being Sub-trust Funds for the purposes of those reasons, but funding raised generally by Northern may be accounted for as part of a Head Trust Fund.

54. By clause 4.1(aa) the "Trust Purpose" means the purpose of the Trust set out in clause 5.1. Clause 5.1 provides:

5.1 Trust Purpose

The purposes of the Trust are:

(a)   to establish, maintain and operate a helicopter service for all aspects of search, rescue, retrieval, medical transfer, medical aid, training missions and standby and all other activities incidental thereto in the Existing Service Regions;

(b)   to provide helicopter services as directed by the Ambulance Service of NSW within Australia;

(c)   to investigate the viability of and to establish, maintain and operate a helicopter service for all aspects of search, rescue, retrieval, medical transfer, medical aid, training missions and standby and all other activities incidental thereto in New Service Regions as the Trustee in its absolute and unfettered discretion thinks fit;

(d)    to directly or indirectly relieve the suffering or distress of people in need by undertaking other activities and providing other services in Australia as the Trustee in its absolute and unfettered discretion thinks fit; and

(e)    do all such acts as are incidental and conducive to the furtherance of the above purposes, including fundraising for the Trust Purpose.

55. Clause 5.2 has the effect of requiring funds raised by Northern from members of the public resident in a particular Service Region to be held in the Sub-trust Fund for that Service Region and applied towards the Trust Purpose for the benefit of that Service Region, unless the member of the public contributes money on the basis that Northern is not required to take that course. All other funds raised by Northern will be applied for the Trust Purpose generally.

56. Clause 5.3 provides:

5.3   Trustee may operate and apply Trust Funds outside Service Regions where required.

(a)   the Trustee operates a geographically integrated helicopter emergency service within its Service Regions and it is acknowledged that from time to time, due to an emergency or otherwise, the Trustee will, in furtherance of the Trust Purpose:

(i)   use assets in the Trust Fund outside the Service Regions; or

(ii)   use assets in the Sub-trust Fund outside the Service Region for which the Sub-trust Fund was established.

For the avoidance of doubt, the application of the Trust Fund pursuant to this clause will not constitute a breach of the trust.

(b)   Where an asset of a Service Region is used outside the Service Region the Trustee, in its absolute discretion, may apply or not apply such charges for the use of the asset for the benefit of the Service Region to which the asset belongs as it determines in its absolute discretion.

57. Clause 6 contains Northern's powers. Relevantly, clause 6.9 provides:

6.9 Power to mix funds.

The Trustee may mix money forming part of a Sub-trust Fund or the Head Trust Fund with money forming part of any other Sub-trust Fund or the Head Trust Fund, provided it is able to identify money forming part of each Sub-trust Fund and the Head Trust Fund.

58. The purpose of this provision is to enable Northern to mix the funds that are part of the Head Trust Fund or the separate Sub-trust Funds relevant to the individual Service Regions, provided it is able to account separately for the funds of each of the separate trusts.

59. The effect of clause 12.1 is that if Northern is dissolved or its endorsement as the recipient of charitable trust donations is revoked, Northern will be required to apply to the Court for orders relating to the future management or disposition of the Trust Fund.

60. Where convenient in the reasons that follow, I will use the terms defined in the Deed Poll with the meanings that are used in that document.

61. The overall effect of the Deed Poll will be that Northern will be required to provide the helicopter service to each of the existing three regions, and for that purpose will be required to apply funds raised from the public who are resident in those regions separately for the provision of the services in that region, unless persons making the donations indicate otherwise. However, Northern will be permitted to establish New Service Regions anywhere else in Australia, and to divide Existing Service Regions into separate Service Regions. If Northern does so, it will be required to conduct its operations in the same manner as it does so currently, but for the New Service Regions. By this arrangement, Northern will be authorised to extend the geographical provision of its services to anywhere within Australia, but it will be required to do so by emulating the existing restrictions governing its use of funds raised from residents of the New Service Regions to the provision of its services within those regions.

62. Consequently, in one sense the present application is a logical extension to the approach adopted by Hamilton J in 2000 and then White J in 2013, by making orders extending the geographical areas in which Northern is authorised to provide its services to new geographical areas. However, the application differs from the earlier approach in that it seeks a cy-près order in global terms that authorises Northern to provide its services anywhere in Australia, to be decided by Northern itself, without Northern being required on a piecemeal basis to return to the Court for a new cy-près order in each case that authorises the extension of the provision of services to the particular New Service Region determined by Northern.

Summary of evidence

63. It will now be appropriate to consider the evidence tendered by Northern to support its application. That evidence was provided by affidavits made by Northern's Chief Executive Officer (CEO) and its Chief Financial Officer (CFO). Northern's CEO explained the nature of Northern's current operations, and how the circumstances in which it has provided its services have changed since the Trust was formed. Northern now employs 148 staff and operates four helicopters from three integrated operational bases across northern New South Wales, as well as a dedicated deep level maintenance facility and administrative base. It operates sophisticated aircraft such as the AgustaWestland AW 139 helicopter, which has a dedicated health emergency service fit out. On average over the past five years, Northern's income from payments received under its services agreement with the Ambulance Service of NSW and from community funding and corporate sponsorships has been in the proportion 75% from its services agreement and 25% from community funding. Northern aims to raise at least $12 million per annum from the community to assist in funding its operations from its operational bases. The CEO said in his 8 February 2023 affidavit:

45. Northern's vision is to be Australia's leading aeromedical and rescue services provider. Its mission is to always "be there for" the community, delivering the highest standard of aeromedical and rescue services to those in need.

46. To facilitate Northern's growth, mission and vision, and to assist in securing its long-term future and sustainability, Northern seeks the ability to expand its helicopter emergency medical services into new service areas in Australia.

64. Notwithstanding Northern's ambition to be able to expand, the CEO explained how Northern has put in place effective administrative arrangements to ensure that it is able, consistently with its obligations under the terms of the existing Trust, to provide effective services in each Existing Service Region and to quarantine funds donated by residents in each region to the provision of Northern's services to that region. The CEO explained that Northern has the ability to duplicate that arrangements for any New Service Region.

65. The CEO explained Northern's aspiration to be authorised to establish and operate helicopter emergency medical services in New Service Regions (see clause 5.1(c) of the Deed Poll) as follows:

60…

b. The ability to expand its operations beyond the Existing Service Regions, within the broader Trust purpose, without disturbing Northern's ongoing operations with respect to the use of Sub-trust Funds. This will facilitate Northern's future growth. In particular, it will give the flexibility to tender for the provision of helicopter emergency medical services in areas beyond Northern New South Wales and will avoid the need for costly and time-consuming approvals for expansions on a piecemeal basis.

i.   For example, if another State government tendered for the provision of helicopter emergency medical services, Northern could lodge a tender and, if successful, Northern would not need to apply to the Supreme Court to be able to commence the work needed to provide services in the new area.

ii.   It also improves Northern's ability to compete with other helicopter emergency services operators that are not subject to the same trust restrictions in their operations. For example, Toll Helicopters who operate the NSW Ambulance contract in the southern part of New South Wales.

66. The CEO gave the following explanation for the inclusion in the Deed Poll of clause 5.1(d), which would involve doing anything to relieve the suffering or distress of people in need by undertaking other activities and providing other services in Australia, as Northern in its absolute and unfettered discretion thinks fit, in the following terms, in par 61:

61…

a. Northern is a registered charity under the sub-type of public benevolent institution. This additional Trust purpose will allow Northern to carry out a broader range of benevolent activities and services that meet the requirements of a public benevolent institution. This will provide Northern with the flexibility – again, within the established Head Trust/Sub-trusts structure – to be able to engage in a broader range of fundraising activities associated with its charitable purpose to support the complex and costly aviation services it currently provides. For example, Northern could provide training to other organisations undertaking life-saving activities (such as first aid training or aviation related training).

67. Northern's CFO provided an elaboration of these reasons in his 14 April 2023 affidavit.

68. At present, helicopter emergency medical services are provided in New South Wales through two principal contracts that are coordinated by the Ambulance Service NSW, one by Northern for Northern New South Wales and one by Toll Helicopters for Southern New South Wales. Northern's contract was entered into in December 2014 through a wholly-owned subsidiary. The term of the current contract extends to May 2027, with the Ambulance Service NSW having a right to extend the contract for a further term of up to five years. Northern performs the services under this contract by way of a subcontract with its subsidiary.

69. In relation to Southern New South Wales, Toll Helicopters (NSW) Pty Ltd, a private commercial company based in Melbourne, Victoria, provides the services to the Ambulance Service NSW under a contract entered into in December 2014. The CFO understands that this contract will extend to 2032, and he would not expect the Ambulance Service of NSW to put this contract to tender until shortly before 2032. Accordingly, the CFO considers that there is little or no prospect of Northern being able to tender for these services in the immediate future.

70. The CFO then explained what arrangements are in place for the provision of search and rescue and helicopter emergency medical services in the other states and territories of Australia, and then provided a list of recent tenders for services offered by various Australian governments, to which Northern could not respond without seeking approval from the Court. The CFO then set out information, following a search of the Australian Tenders website, of current and expected rotary wing aviation services under tender by the Queensland Government, the Commonwealth Government and the Tasmanian Government.

71. The CFO then said:

31. It is not possible to speculate on whether Northern would tender for all future upcoming contracts without further information about each tender. Should new tenders come up in the future, Northern would be likely to review the tender to determine whether to participate in the process.

32. The description of helicopter services in Northern's proposed Deed Poll has been drafted to accommodate this range of services. Currently, due to the geographically limited trust purpose, Northern could only participate in such tenders on a conditional basis (i.e., Northern could only commit to provide the services after obtaining Court approval to expand) or it would need to seek an urgent decision from the Court permitting expansions should Northern be successful. The former could place Northern at disadvantage in any tender process. The latter is time-consuming and expensive and may be difficult to achieve depending upon the time period that the tender is open for.

72. The CFO added the following further explanation for Northern's desire to have the Deed Poll approved containing clause 5.1(d):

36. [The CEO] referred to Northern's ability to provide training to other organisations undertaking life-saving activities (such as first aid training or aviation related training). This is a field of knowledge and practice in which Northern has significant experience. Northern is an accredited registered training organisation which currently employs 8 staff who provide or support the provision of aviation related safety training to its own staff and staff of NSW Health under the contract with NSW Ambulance. Training is also a service provided by other aviation companies,…

37. A power to undertake other activities as described in paragraph 5.1(d) of the Deed Poll would also allow Northern to provide, or join with others in providing, services that are similar to, but broader than, its current helicopter services. For instance, the provision of helicopter emergency response services that are not necessarily search, rescue, retrieval, medical aid or medical transfer services. This could include, for example, fire-fighting or disaster relief services. Other potential areas could include the transport of patients by means other than helicopter (such as fixed-wing air or road transport).

73. Finally, the CFO gave the following explanation of the benefits to the Trust of the expansion in Northern's authorised activities:

42. Northern currently employs over 150 staff across Newcastle & Lake Macquarie, Tamworth, and Lismore. Staff roles include Pilots, Aircrew, Officers, Engineers, and support staff, including training, HR, finance, facilities, IT, legal, and marketing/fundraising. Northern is supported by a highly skilled Board of Directors, and over 850 fundraising volunteers.

43. In 2022, Northern flew 1,580 patient missions, a combination of pre-hospital emergency response to 000 Calls; Inter Hospital Transfers to move unwell patients to the care they require; and Search and Rescue missions. Northern provided surge capacity in 2021 through an additional short-term aircraft to assist the NSW Government in its response to an anticipated surge in demand from COVID-19 in regional and remote NSW. Northern also responds to Natural Disasters in partnership with the NSW Government. This included the 2021 North West and 2022 Northern Rivers floods.

44. Northern is a highly experienced provider of helicopter emergency medical services, search and rescue retrieval services and related aviation training. It has provided these life-saving services to the community and government since 1975, assisting thousands of people across northern New South Wales.

45. The ability for Northern to establish New Service Regions and/or provide additional services would be beneficial to the trust administered by Northern in the following respects:

a.   An ability to expand would allow the potential for Northern to utilise its vast experience to provided services for the benefit of an even larger section of the public in communities across Australia.

b.   An ability for Northern to engage in a wider range of activities increases the potential income sources for Northern which can then be applied to fund its aviation services for the benefit of the communities that Northern services. The potential to explore a broader range of income sources assists in insuring longer term sustainability of the trust.

c.   Northern's existing contract with NSW Ambulance is due to expire mid-2027, with the option for an extension of up to 5 years. As I mentioned above, I believe that Toll's contract is currently in place until 2032. An ability for Northern to provide services outside of New South Wales and potentially provide a broader range of services would increase the opportunities Northern has to ensure its longevity and sustainability so that it can continue to provide its life-saving services. Being limited to only one contract that may be subject to tender in the future, poses a risk to Northern's survival should it be unsuccessful in the future tender.

d.   By expanding its service offering and area Northern will be better positioned to be able to compete with other providers for future tenders and contracts.

74. Northern tendered its 2022 Annual Report: Exhibit B. The report recorded that in the year to 30 June 2022, Northern had consolidated revenue from continuing operations of $52,927,975 and other revenue of $3,318,035. Expenses were $49,555,555, giving an income of $6,690,455. Total equity was $43,483,405. Northern received $14,238,351 in gross fundraising support.

Legal principles

75. In Attorney General for New South Wales v Fulham [2002] NSWSC 629, Bryson J (as his Honour then was), stated the power of the Court at general law to make cy-près orders in relation to the property of charitable trusts in the following terms:

[12] The power which the Court has under the general law to order a cy-pres scheme appears from a passage in the judgment of Romilly M R in Attorney-General v Sherborne Grammar School (1854) 18 Beavan 256, 52 ER 101. At 280 - 281 110-111 his Lordship said:

"....what is the power which this Court possesses, in this state of circumstances, with reference to this charity? The duties and authority of this Court in dealing with matters of charity, is not, I think, on this point, open to much doubt or question. This Court has authority to redress a breach of trust, where the objects of a founder have been prevented or neglected. It also has authority to direct a scheme, in order to enforce the more complete attainment of those objects. This Court has a further power and authority when the objects contemplated by the founder cannot be carried into effect, to direct the application of the revenues of the charity to promote objects in accordance with the spirit of the original foundation, the actual compliance with which has become impossible. But it has no authority to vary the original foundation, and to apply the charity estates in a manner which it conceives to be more beneficial to the public, or even such as the Court may surmise that the founder would himself have contemplated, could he have foreseen the changes which had taken place by the lapse of time."

[13] In Attorney-General for New South Wales v Adams (1908) 7 CLR 100 Isaacs J 124 - 125 cited with approval a passage from the judgment of Kay J in Re Taylor; Martin v Freeman 58 LT 538 at 543 which included the following expressions explaining execution of a charitable trust cy-pres:

" '...that is, carry out the general paramount intention in some way as nearly as possible the same as that which the testator has particularly indicated without which his intention itself cannot be effectuated.' "

[14] In Attorney General (NSW) v Perpetual Trustee Co (Ltd) (1940) 63 CLR 209 at 225 Dixon and Evatt JJ gave the following account of the act of the Court when ordering a cy-pres scheme:

"...the court will execute the trust by decreeing some other application of the trust property to the furtherance of the substantial purpose, some application which departs from the original plan in particulars held not essential and, otherwise, keeps as near thereto as may be."

[15] Hutley JA said, in Phillips v Roberts [1975] 2 NSWLR 207 at 211 to 212:

"The fundamental responsibility of a court administering charitable trusts is to give effect to the trusts as laid down by the testator or settlor. In Re Weir Hospital [1910] 2 Ch 124, at p131, Cozens-Hardy MR said: 'The first duty of the court is to construe the will, and to give effect to the charitable directions of the founder, assuming they not be open to objection on the ground of public policy. The Court does not consider whether those directions are wise or whether a more generally beneficial application of the testator's property might not be found.' "

76. The power is only exerciseable "when the objects contemplated by the founder cannot be carried into effect". The Court is required to formulate the cy-près scheme as nearly as possible to the general paramount intention of the party who created the trust. The Court does not have the power to vary the terms of the charitable trust for reasons that it conceives to be more beneficial to the public.

77. As Bryson J noted at [16], s 9 of the Act "has widened the grounds on which the Court may act, in that it is no longer necessary that actual compliance with the original term should be impossible. It is now enough that they have ceased to provide a suitable and effective method of using the trust property." His Honour added at [17]:

[17] The Court may alter the purposes of a charitable trust where the original purposes have ceased to provide a suitable and effective method of using the trust property; this is well short of a test requiring impossibility. Subs 9(1) greatly widens the circumstances in which the Court may act and the influence which it may allow considerations of practicality to have.

78. Bryson J then made a number of further observations concerning the approach that the Court is permitted to take when it is called upon to fashion a cy-près scheme:

[18] The special position in which the Court acts when dealing with cy pres schemes was referred to in Phillips v Roberts in the judgment of Hutley JA at 211, where his Honour stated reasons why:

"...it has been recognized by distinguished lawyers that the administrative task of re-organizing charitable trusts requires freedom from restrictions associated with the judicial process..."

It is not in my opinion required that the Court search for a new definition of the charitable purpose which in rigorous logic is as nearly as possible the same as the one which failed. The Court acts administratively, makes choices and has regard to practical considerations in a search for an appropriate analogous application of charitable property, in a context where it is impossible to achieve the original purpose, no existing charity can exactly qualify and no existing charity has any rights. If existing charities had any actual entitlement there would be no need for a scheme. The Court is not bound by all ordinary judicial processes including adherence to evidence law and need not extend procedural justice to all charities which may conceivably have some expectations. To take expressions from the judgment of Hutley JA in Phillips v Roberts [1975] 2 NSWLR 207 at p 211-p 212, contests as to the form of cy-pres schemes are rare, they are free from technicality and the Court is in uncharted territory.

79. The observation extracted from the judgment of Hutley JA that applications for the making of a cy-près scheme "are free from technicality and the Court is in uncharted territory" is significant. The Court does not usually receive detailed evidence as it ordinarily would on a contested claim inter partes. In the present case, the Court has relied upon a broad statement of agreed facts and limited testimonial and documentary evidence. Circumstances force the Court to determine the application on the basis of relatively broad evaluative considerations.

80. In RSL Veterans' Retirement Villages Ltd v NSW Minister for Lands [2006] NSWSC 1161 (RSL Veterans’), Palmer J observed:

[57] It is true, as the Plaintiff says, that the terms of the trust do not refer to any qualification for eligibility to the benefits of the trust property, except war service. However, s 9(1) of the Charitable Trusts Act requires the Court, in determining whether a cy-pres scheme is appropriate, to have regard not only to the letter of the terms of the trust but also to its spirit. In ascertaining the spirit of this trust, it is relevant to have regard to the trust’s history and the social context of the time at which it was established.

81. That observation suggests that, in determining the spirit of the charitable trust, the Court need not look only to the terms of the instrument that created the trust and any variations resulting from subsequent cy-près schemes, but that the Court may also have regard to the circumstances in which the charitable trust was initially established and the history of the administration of the trust in so far as that administration may be assumed to have implemented its spirit.

82. Palmer J made observations concerning the question of proof in applications such as the present, where the reason put forward by the trustee as to why the original purposes of the trust have ceased to provide a suitable and effective method of using the trust property, because circumstances have changed in a way that might jeopardise the commercial viability of the trust by observing, at [24]: "…It is not possible for the Plaintiff to be precise about the rate of that decline or about the impact of that decline on the level of demand by veterans and other eligible persons for accommodation in the Retirement Village. Nor is it possible to be precise about the impact of that decline on the level of demand by veterans and other eligible persons who are impoverished, as distinct from veterans and eligible persons who can afford to pay the ingoing contribution fees”.

83. Palmer J concluded, in expressing the reasons why his Honour had accepted that in the circumstances the original purposes of the trust had ceased to provide a suitable and effective method of using the trust property:

[52] I am satisfied that if the purposes of the present trust are confined to benefiting war veterans, the declining number of war veterans in the community will, sooner or later, lead to the real risk that the Village will become uneconomical to maintain and the Plaintiff will become insolvent. There is no dispute that it would not be for the benefit of any war veteran who might require maintenance, accommodation and care facilities in the Village in the future that the Village and the Plaintiff cease to be available for that purpose. In those circumstances, I am satisfied that the original purpose of the present trust has ceased to provide a suitable and effective method of using the trust property.

[53] The Attorney General agrees with the Plaintiff that a cy pres scheme should be ordered and recognises that the Plaintiff will have to make accommodation and facilities in the Village available to a broader range of people in the community than impecunious war veterans. He accepts that in order to survive economically, the Village will, to some degree, have to be open to those who have no connection with war service and who are able to pay commercial rates for accommodation and facilities. However, the Attorney General is concerned that the categories of persons eligible for accommodation and facilities in the Village may be made so wide, and the directors of the Plaintiff be so unlimited in the exercise of their discretion as to who is to have the benefit of such services, that the Village may in time become far more of a commercial enterprise than a charitable institution in the spirit of the original trust.

84. This case is thus an example of original purposes ceasing to provide a suitable and effective method of using the trust property when it is reliably anticipated that strict conformance with the existing purposes will lead to the charitable trust becoming uneconomical by reason of changed circumstances concerning how the charitable trust is required to be administered in relation to its original purposes.

85. Windeyer J in Northern Sydney and Central Coast Area Health Service v The Attorney General for New South Wales [2007] NSWSC 881 observed, at [25], that s 9 of the Act "makes it possible to order a scheme, even though the trust has not become impracticable or impossible to perform”. His Honour said, at [26]-[27], following the judgments of Bryson J and Palmer J that have been considered above, that: "The clear purpose of this section is to allow schemes to be ordered, even if, strictly speaking, the trust purpose can in some way be carried out, albeit not in an economic and most effective or beneficial way."

86. In Perpetual Trustee Company Ltd v Attorney General for the New South Wales (The Will of the Hon George Nesbitt) [2018] NSWSC 1456 (Perpetual Trustee), Leeming JA provided an explanation of the historical development of the concept of the “spirit of the trust” at [58] to [70]. In the course of that explanation, his Honour referred to a number of helpful judicial statements that assist in understanding the meaning of the term. At [60], Leeming JA set out the following extract from the judgment of Sir John Pennycuick VC in In re Lepton’s Charity [1972] Ch 276 at 284-285:

The occasions for applying property cy-près are now set out in section 13 of the Charities Act 1960. It is clear that this section in part restates the principles applied under the existing law, but also extends those principles. … The expression ‘spirit of the gift’ may be an echo of the words used in the Campden Charities case. It must, I think, be equivalent in meaning to the basic intention underlying the gift, that intention being ascertainable from the terms of the relevant instrument read in the light of admissible evidence. (Emphasis added)

87. At [62], Leeming JA referred to the decision of the Court of Appeal in Varsani v Jesani [1999] Ch 219. His Honour noted that in reaching the conclusion that he should order a scheme, Morritt JA said at [24]:

The court is enjoined by section 13(1)(e)(iii) of the Charities Act 1993 to have regard to the spirit of the gift. In my view it does not matter whether the origin of that concept is to be found in Inre Campden Charities (1881) 18 Ch D 310, 333, as suggested by counsel for the Attorney-General in InRe Lepton’s Charity [1972] Ch 276, 283, or in section 15 of the Educational Endowments Act 1882 (45 & 46 Vict c 59) as indicated in the Report of the Committee on the Law and Practice relating to Charitable Trusts to which I have already referred and suggested by counsel for the majority group in this case. Either way the concept is clear enough, namely, the basic intention underlying the gift or the substance of the gift rather than the form of the words used to express it or conditions imposed to effect it. It is noteworthy that the phrase is used in section 13(1) only in contexts which require the court to make a value judgment. (emphasis added).

88. His Honour noted at [64] that Chadwick LJ agreed, stating at 238

The need to have regard to the spirit of the gift requires the court to look beyond the original purposes as defined by the objects specified in the declaration of trust and to seek to identify the spirit in which the donors gave property upon trust for those purposes. That can be done, as it seems to me, with the assistance of the document as a whole and any relevant evidence as to the circumstances in which the gift was made. (emphasis added)

89. Finally, Leeming JA referred at [66] to the judgment of Nathan J in Forrest v Attorney-General [1986] VR 187, where his Honour identified at 191-2 the “fundamental purpose and objective” of the testator.

90. Relevantly to these aspects of the principles governing the application of s 9 of the Act, Ward CJ in Eq (as her Honour then was) said in University of NSW:

[32] More recently, in Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (2017) 94 NSWLR 340; [2017] NSWCA 28, Payne JA said (at [196]) that s 9 is engaged by three interacting criteria through which to consider the continuing utility of the original trust purposes; the notion of “wholly or in part”; a “suitable and effective method”; and the requirement to have “regard to the spirit of the trust”; and said (at [197]) that:

It is textually clear that the requirements of s 9 involve a threshold lower than the general law cy-pres requirement of impossibility or impracticality. The test is whether the original purposes of the trust have ceased to provide a suitable and effective method of using the property, in whole or in part, having regard to the “spirit of the trust”. The spirit of the trust is thus a broader conception than the original purposes of the trust. It is clear that the general law requirement for impossibility or impracticability of achievement of the trust purposes is no longer a condition precedent to the making of an order.

[33] In ascertaining the “spirit of the trust”, it is relevant to have regard to the trust’s history and the social context of the time at which it was established: (see RSL Veterans’ Retirement Villages Ltd v NSW Minister for Lands [2006] NSWSC 1161 at [57], per Palmer J). In Perpetual Trustee Company Ltd v Attorney General for the New South Wales (The Will of the Hon George Nesbitt) [2018] NSWSC 1456, Leeming JA reviewed the cases dealing with the requirement to have regard to the “spirit of the trust” (at [56]–[70]). At [63], his Honour referred to what was said by the Morritt LJ in Versani v Jesani [1999] Ch 219 at [24], including that:

… the concept is clear enough, namely, the basic intention underlying the gift or the substance of the gift rather than the form of the words used to express it or conditions imposed to effect it. It is noteworthy that the phrase is used in section 13(1) only in contexts which require the court to make a value judgment.

91. In the second Northern decision, White J made the following observations which are important to the case where, at the time the application is made, the circumstances have not yet occurred whereby the original purposes of the trust have ceased to provide a suitable and effective method of using the trust property. His Honour said:

[36] The only potential difficulty with the application of s 9 is that the circumstances have not yet occurred whereby the original purposes of the trust have ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust. That will happen if the plaintiff fails in its tender for a contract to provide helicopter emergency medical services to the northern region from 2014. But at present the original purposes of the trust are working well.

[37] In my view, s 9 can be applied proleptically. Section 9 is remedial and beneficial legislation and not to be narrowly construed. A construction of s 9 that the court could not make an order altering the original purposes of a charitable trust until those purposes have ceased to provide a suitable and effective method of using the trust property, even though it will then be too late to do anything about it, should not be adopted if an alternative construction is reasonably available. Section 9(1) does not purport to state exhaustively the circumstances in which the court can alter the original purposes of the charitable trust. The section says that the circumstances in which those original purposes can be altered “include” circumstances in which the original purposes have ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trust. As the power can be exercised in those circumstances, it is only logical that it can also be exercised if it is shown that the original purposes will cease to provide a suitable and effective method of using the trust property having regard to the spirit of the trust.

92. The conclusion that s 9 of the Act may be applied proleptically is important in cases such as the present, where the application for an order for a cy-près scheme will not made at the time when the present effect of the circumstances in which the charitable trust is administered has not been that the use of the trust property has ceased to provide a suitable and effective method for its use. Rather, the trustee anticipates that the changes in circumstances that are being experienced in the administration of the trust will have that effect in the future. If the section were not able to be applied proleptically, in many cases the benefit of the relaxation in the law of charitable trusts effected by s 9 of the Act would be lost, because in the particular case it will simply be too late to achieve a suitable and effective method of using the trust property once the change in circumstances has occurred. Simply put, it may be too late after the change in circumstances has occurred for any cy-près scheme that may be ordered by the Court to achieve a suitable and effective method of using the trust property.

93. Nicholas AJ adopted these observations of White J, with apparent approval, in Coral Levett v Attorney General in and for the State of New South Wales [2014] NSWSC 1787 at [10].

94. See also the consideration of the principles relevant to the application of s 9 of the Act by Kunc J in Allen Ralph Robinson as Trustee for the Trust Fund of the Fairfax Fellowships at Balliol College v Attorney General of New South Wales [2022] NSWSC 996 at [28]-[31].

Consideration

95. Section 9(1) of the Act requires: (1) the identification of the original purposes of the charitable trust; (2) the identification of relevant changes in circumstances; (3) the determination of whether the effect of those circumstances is that the original purposes, wholly or in part, have ceased to provide a suitable and effective method of using the trust property; (4) the identification of the "spirit of the trust"; and (5), having regard to the spirit of the trust, what alterations to its purposes should be made by a cy-près order. In a case where it is proper to apply s 9 of the Act proleptically the words “will cease” may be substituted for “have ceased” in (3).

96. The effect of s 9(2) of the Act is that, where the purposes of the charitable trust have been altered by a prior cy-près scheme, the original purposes for the purpose of s 9(1) will be the purposes of the charitable trust that are inherent in the most recent cy-près scheme. That means in this case is that the original purposes of the Trust are the purposes demonstrated by the orders made by White J in 2013.

97. The logical place to start is to deal with steps (1) and (4), as both arise out of the circumstances of the creation of the Trust, as affected by the terms of the latest cy-près scheme that may have altered its purposes.

98. The purposes of the Trust in this case must be distilled from the terms of the orders made by White J in 2013, as those orders reaffirmed but varied the orders made by Hamilton J in 2000. The orders made by White J are set out at [33] above. Those orders are expressed in order 1 as requiring Northern to hold its "assets" "on trust for the provision of a helicopter service". The nature of the "helicopter service" was not expressly defined. Northern was required to provide the helicopter service in three separate areas, defined as the Area, the Extended Area, and the North Coast area in a manner where funds raised from members of the public in each of the three areas was required to be expended in the provision of the helicopter service for the area in which the funds were raised. Order 2 created an exception to the limitations on the purpose of the charitable trust such that from time to time, due to an emergency or otherwise, Northern may be required pursuant to its contractual arrangements to provide the helicopter service outside of the permitted areas.

99. The unusual circumstances in which the Trust was created and varied in this case introduce special considerations into the determination of the spirit of the Trust. This is not a case where the charitable trust was created by a settlement made by a settlor under the terms of a trust instrument. The spirit of the Trust cannot be referable to the inferred intention of a settlor. In this case, the terms of the Trust were determined by a settlement agreement in which the parties to the 1991 proceedings had separate interests and agreed to a compromise of those interests. Furthermore, the administration of the Trust does not simply involve the investment of its assets and the distribution of its capital and income in accordance with the expressed purposes of the trust. At its inception, the Trust in this case was imposed upon an operating enterprise that had assets and service contracts and was required to operate profitably for its long-term viability. A number of features of the evolution of the Trust are material to the determination of its spirit. It was initially a part-time volunteer service that acquired a corporate identity, but it has continued in a substantial way to depend upon the provision of volunteer services. The work of the Trust was initially confined to surf rescue and coastal observation, but that work has evolved significantly into the provision of search, rescue, retrieval, medical aid and medical transfer services across wide areas. The financing of the operation of the charitable trust has evolved from being substantially dependent on charitable and commercial donations to involving service fees from a major government institution in the form of the Ambulance Service of NSW.

100. Having regard to the fact that the original purpose of the Trust as embodied in the 1992 terms of settlement has evolved through two schemes made by orders of this Court, the determination of the spirit of the Trust must acknowledge the historical stepwise expansion of its areas of operation in response to changing needs and practical circumstances. Before the formal commencement of the Trust its operations were without territorial limitation. The spirit of the Trust does not include any absolute territorial limitations, but requires that funds donated by residents of particular areas be quarantined and expended in the provision of the helicopter services in those areas. It is consistent with the spirit of the Trust that its areas of operation be expanded, provided that the model for dealing with charitable donations by residents remains the same.

101. Perhaps unsurprisingly, the appropriate way to conceive of the spirit of the Trust in this case is to embrace the reality that its spirit is necessarily nebulous, and involves the idea of Northern providing services for the benefit of persons in need by means of helicopter operations over defined areas linked to the provision of charitable donations by residents of those areas, augmented by formal government contracts, in circumstances where the Trust has experienced a history of expansion to meet new needs and to respond to the commercial circumstances that affect its viability. In that way, the spirit of the Trust in this case is not and has not been static.

102. Before I consider the changes in circumstances that have occurred, and whether the effect of those circumstances is that the original purposes have ceased to provide a suitable and effective method of using the Trust’s property, it will be appropriate to refer to the varied purposes that are the subject of Northern's application for the making of the proposed cy-près scheme. As a practical matter, the ultimate issue is whether the effect of the changes in circumstances should be found to justify the alteration of the purposes of the Trust in the application of s 9 of the Act.

103. In this case, the new purposes are as set out in clause 5.1 of the Deed Poll, which is set out at [54] above. The structure of clause 5.1 is that it commences: "The purposes of the Trust are". That chapeau is followed by five separate subclauses that are expressed in terms of five separate purposes. The wording of clause 5.1 does not distinguish in priority or significance between each of the stated purposes.

104. As Northern's application now involves a greatly expanded range of purposes than was the subject of the original summons, it is necessary to consider and treat each of the five purposes stated in clause 5.1 separately.

105. Clause 5.1(a) describes a purpose that I consider is, in substance and effect, the existing purpose of the Trust as stated in the orders made by White J. It provides for the provision of helicopter services in the Existing Service Regions. I am satisfied on the evidence that the explicit description of what is involved in a helicopter service that is included in clause 5.1(a), but is missing from the orders made by White J, will not involve a significant change in the nature of the helicopter service to be provided, but is merely given for greater clarity.

106. Clause 5.1(b) provides that a trust purpose will be to provide helicopter services as directed by the Ambulance Service of NSW within Australia. That statement of purpose evidently is intended to reflect the existing contract with the Ambulance Service of NSW. The statement of purpose is inherently linked to this State, even though it would permit the provision of helicopter services within Australia, as those services would have to be directed by the Ambulance Service of NSW. However, as stated, clause 5.1(b) would introduce a purpose that would allow Northern to enter into a new contract with the Ambulance Service of NSW, whatever the area in which those services were to be provided, whether limited to all parts of this State or anywhere within Australia.

107. Clause 5.1(c) would introduce a new purpose whereby Northern could, after investigating its viability, operate the same helicopter service as it operates at present within the Existing Service Regions in any New Service Regions, as Northern in its absolute and unfettered discretion thought fit. "New Service Region" is defined as meaning "a region or area within Australia which is not an Existing Service Region". The effect of clause 5.1(c) would thereby be to enlarge the purposes of the charitable trust to permit Northern to provide the same helicopter service in any region of Australia as it now provides in the Existing Service Regions. The provision of the helicopter service in New Service Regions would, however, be required by clauses 5.2 and 5.3 to be provided on the same basis as to the quarantining of funds donated by members of the public for the purpose of the provision of the helicopter services in a particular Region as is required by the existing terms of the trust. The Deed Poll would require Northern to service each New Service Region in the same way as it is required to service Existing Service Regions.

108. It will be convenient to repeat the terms of clause 5.1(d), which provides:

(d)    to directly or indirectly relieve the suffering or distress of people in need by undertaking other activities and providing other services in Australia as the Trustee in its absolute and unfettered discretion thinks fit

109. It is obvious that this proposed additional purpose would have an entirely different effect than the addition of the purpose expressed in clause 5.1(c). The extension of the purposes of the charitable trust proposed in clause 5.1(c) would involve incremental extension to the areas in which Northern currently provides helicopter services after investigation, but would involve the provision of essentially the same services on the same administrative basis as at present. The addition of the purpose in clause 5.1(d) would permit Northern to apply its assets for the purpose of relieving the suffering or distress of people in need in Australia, without restriction, and would permit all other activities and services that Northern decided to provide.

110. As I have explained above, Northern's CEO and CFO gave examples of the new services that Northern may decide to provide if the Court orders the cy-près scheme sought by Northern. For example, Northern may use its existing staff and facilities to provide ancillary services such as training to other organisations. Northern may extend the mode of transport that it uses to fixed wing aircraft or road transport. Northern may provide firefighting or disaster relief services. However, even if Northern's current aspirations are limited, the position is that there are no such limitations in clause 5.1(d).

111. Clause 5.1(e) states as a purpose that Northern "do all such acts as are incidental and conducive to the furtherance of the above purposes, including fundraising for the Trust Purpose." As this purpose is confined by the use of the word "incidental" I do not think it will be problematic for a cy-près scheme to include that purpose.

112. I will now turn to the issue of the changes in circumstances upon which Northern relies to support the making of the cy-près order that it seeks.

113. As was noted by White J in the second Northern decision at [15], the then current contract between Northern and the Health Administration Corporation had been extended to 13 May 2014. At [16]-[22], White J explained the evolution in the arrangements for the provision of helicopter services in this State, which had led the Ministry of Health to advise in 2013 that it intended to enter into contracts with a single operator for the northern contract region and a single operator for the southern contract reason. The northern region would require the operator to have aircraft at Newcastle, Lismore and Tamworth. The fact that the northern region would include the North Coast, so that Northern would need the ability to service that area in order to tender for the contract for the northern contract region, was a substantial reason why White J made the cy-près order that he did.

114. The 2013 orders therefore contemplated that Northern would tender for the contract to provide helicopter services to the Ambulance Service of NSW for the northern region. After the 2013 orders were made, Northern did so and was successful. That contract will extend until 2027, although the Ambulance Service of NSW may exercise an option to extend the contract for a period up to five years. It is therefore not known whether Northern will have to retender for a new contract in 2027 or 2032.

115. Northern is presently dependent for 75% of its operating income on its contract with the Ambulance Service of NSW. The receipt of that income is essential for the maintenance by Northern of its ability to service its numerous operating leases, including of its present four helicopters and its operating and service bases.

116. The position is that Northern's financial viability now depends upon it being able to secure a new contract with the Ambulance Service of NSW, or additional or equivalent contracts for the southern area of New South Wales or other parts of Australia. Northern sees the need for it to be able to maintain its financial viability, generally, by being permitted to use its existing assets and facilities to provide services for reward outside its existing contracts.

117. Northern's evidence is that, as it will probably have to compete in the tender process for new contracts with established private commercial organisations, it is necessary that its purposes should be expanded in advance by the making of a cy-près scheme that permits Northern to tender for and, if successful, provide, the helicopter services that it now provides to the Existing Service Regions to any New Service Regions throughout Australia. Northern perceives that it is not a commercially viable course for it to submit tenders that are subject to the condition that Northern's authority to provide the services required by the contract will be granted by cy-près orders made by this Court after the date of the award of the contract. Nor will it be realistic for Northern to expect to be able to obtain from the Court a cy-près order that permits Northern to enter into the contract between the time the tender is notified to the public and the time when tenders must be submitted.

118. The essence of Northern's submission is that it will cease to be financially viable if it is not awarded a new contract by the Ambulance Service of NSW when the current contract expires, unless it has been able in the intervening period to expand the area of its operations by entering into new contracts for the provision of helicopter services in New Service Regions, so that it can make its operations more financially robust. In short, Northern wishes to avoid the risk of extinction faced by all species who are dependent upon one source of sustenance, if that source is lost.

119. I am satisfied that the current circumstances represent a change in the circumstances as they existed at the time of the 2013 orders, and that the effect of the change is that the purposes of the charitable trust that are inherent in the 2013 orders have ceased to provide a suitable and effective method of using the trust property represented by the assets and undertaking of Northern. That conclusion is limited in its effect to the consequences of the territorial limitation to the permitted areas for the provision of the helicopter services to the three areas that constitute the Existing Service Areas. That is, the relevant effect of the change in circumstances, is to make it no longer a suitable or effective method of using the Trust’s property to confine its operations to the Existing Service Areas.

109. I consider that the conclusion that I have reached is a proper logical extension of the reasoning adopted by White J in the second Northern decision, to the effect that the purposes of a charitable trust may cease to provide a suitable and effective method of using the trust property where the evidence shows that there is a real likelihood that the trust will cease to be viable if it is confined to its existing trust purposes. The decision of Palmer J in the RSL Veterans' case also supports the conclusion that a trust's purposes may cease to be a suitable and effective method of using the trust property if there is a real likelihood that the trustee will become insolvent.

110. This conclusion also depends upon the proposition expressed by White J that s 9 of the Act can be applied proleptically. If the section cannot be applied in that way, then the result would be that a trustee of a charitable trust could only make an application for an order for a cy-près scheme in cases where the effect of the change in circumstances was to destroy the possibility of the achievement of the trust's purposes, because the application could not be made until the feared outcome had actually occurred. An interpretation of s 9 of the Act that permits the Court to order a cy-près scheme proleptically preserves the possibility that the trustee and the Court can act early enough to preserve the spirit of the trust to the fullest extent possible, having regard to the change in circumstances.

111. I am satisfied that it is not too early at this time to anticipate the possible consequences of the end of Northern's current contract with the Ambulance Service of NSW. There is no benefit in the Court delaying the making of a cy-près scheme that extends the areas within Australia in which Northern may provide its helicopter services. Prudence justifies the conclusion that Northern should be given as much time as possible to augment its financial resources before it has to face the possibility of failing to renew its contract for the northern part of New South Wales.

112. I am satisfied that the Court should make the orders sought in prayer 1 of the amended summons, as well as order 2, insofar as the Deed Poll contains clause 5.1 of the draft Deed Poll that is Annexure A to the amended summons, save that I consider that it is not justifiable that the Deed Poll contain clause 5.1(d) in its present terms.

113. It is important that it be realised that s 9 of the Act effects a liberalisation of the principles that govern the powers of the Court to order the making of a cy-près scheme. As I have already noted, this issue has been more fully dealt with by Leeming JA in Perpetual Trustee Company. Further, as Payne JA said in Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irenij Dobrijevic (2017) 94 NSWLR 340; [2017] NSWCA 28 (Ward and Gleeson JJA agreeing):

[197] Is textually clear that the requirements of s 9 involve a threshold lower than the general law cy-près requirement of impossibility or impracticality. The test is whether the original purposes of the trust have ceased to provide a suitable and effective method of using the property, in whole or in part, having regard to the “spirit of the trust”. The spirit of the trust is thus a broader conception than the original purposes of the trust. It is clear that the general law requirement for impossibility or impracticability of achievement of the trust purposes is no longer a condition precedent to the making of an order.

125. The point is that s 9 of the Act reduces the threshold that must be satisfied before the Court can make an order cy-près that changes the purposes of a charitable trust, but it is essential that it is the Court that exercises that jurisdiction, that it satisfies itself that the preconditions to the exercise are satisfied, and that it determines what alterations to the purposes are justified in the particular circumstances, having regard to the spirit of the trust.

126. If the Court were to make a cy-près order that had the effect that the purpose stated in clause 5.1(d) was added to the purposes of the trust, it would then be open to the directors of Northern to cause the corporation to engage in any activity that fell within the relatively unlimited ambit of the provision. That would involve an impermissible delegation by the Court of its jurisdiction and responsibility under s 9 of the Act to decide whether to make orders for cy-près schemes that were appropriate in the particular circumstances of the case.

127. Accordingly, I will not make the order sought in prayer 2 of the amended summons, as long as the Deed Poll contains clause 5.1(d).

128. It does not follow that Northern will not be able to justify the making of an order by the Court for a cy-près scheme that includes some of the additional purposes sought by Northern, provided that clause 5.1 is drafted in appropriate terms to specifically identify the additional purposes in terms that will warrant the order being made by the Court. Provided that the term has the effect that Northern is required, so long as it is legally and practically able to do so, to provide the existing helicopter services in the Existing Service Regions, and that it is also authorised to provide the same services on the same basis in the New Service Regions, to the extent that the additional purpose does not impede its ability to provide the services in the Existing Service Regions, it may be proper for Northern to be permitted to provide further ancillary services for reward, or otherwise using its existing assets and facilities.

129. For example, it may be a justifiable adjunct to the provision of helicopter services that Northern provide pilot training and helicopter servicing to third parties when the provision of those services does not impede the implementation of the primary purposes of the Trust. The possibility of Northern earning additional income by that means would appear to be consistent with the spirit of the Trust.

130. It may also be justifiable for a purpose to be added that permitted Northern to provide its helicopter services in a particular area, on terms that Northern would also offer adjunct transport services involving fixed wing aircraft or road transport. A contract with the Ambulance Service in Western Australia might involve the provision of helicopter services for much of the state and fixed wing transportation in the Pilbara and other northern and eastern parts of the state.

131. The point of these observations is to record that it may be possible for the Court to order a cy-près scheme that augments the charitable trust purposes, provided the additional purposes are defined with sufficient specificity for the Court to be able to decide that it is proper for those additional purposes to be included in the scheme. It would probably be necessary for the additional purposes to be described in a way that made it clear that they were ancillary to the primary purposes and not to be implemented in a manner that excluded or was inconsistent with the implementation of the primary purposes.

132. I will not say anything more about this possibility in these reasons. Any further consideration of the issue would be speculative. I will cause my Associate to have the matter relisted at an appropriate time after I have delivered these reasons for judgment, so that I can explore with counsel for the parties the issues that may be involved in redrafting the Deed Poll to include an acceptable alternative to the present clause 5.1(d).

133. I am satisfied that the Court should make the orders sought in prayers 3 and 4 of the amended summons concerning the parties' costs of the proceedings.

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Amendments

16 June 2023 - Par 121 missing words inserted

Decision last updated: 16 June 2023