PUBLIC TRUSTEE AS EXECUTOR OF THE ESTATE OF CATHREINE ELIZABETH O'CONNOR (DECEASED) - [2014] SASC 46

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
PUBLIC TRUSTEE AS EXECUTOR OF THE ESTATE OF CATHREINE ELIZABETH O'CONNOR (DECEASED)
[2014] SASC 46
Judgment of The Honourable Justice Stanley
1 April 2014
CHARITIES - CHARITABLE GIFTS AND TRUSTS - VALIDITY AND PRACTICABILITY - PROPERTY SUBJECT TO CHARITABLE TRUST
SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - ASCERTAINMENT OF TESTATOR'S INTENTION
Application by the Public Trustee pursuant to s 69B of the Trustee Act 1936.
The Public Trustee applies pursuant to s 69B of the Trustee Act 1936 to vary the terms of a charitable trust established pursuant to the will of Cathreine Elizabeth O’Connor (deceased) made 18 July 1989, to hold the residue of the estate of the deceased on trust for the benefit of the Hutt Street Centre Limited.
Whether the charitable trust established under the will of the deceased can be carried out. Whether the trust variation scheme proposed by the Public Trustee accords with the testamentary intention of the deceased.
Held (allowing the application):
1. The trust established under the will of the deceased for the benefit of “Charity Daughters” cannot be carried out as there is no organisation of that name (at [23]).
2. The trust variation scheme accords with the testamentary intention of the deceased (at [24] - [25]).
Trustee Act 1936 (SA) s 69B, referred to.

PUBLIC TRUSTEE AS EXECUTOR OF THE ESTATE OF CATHREINE ELIZABETH O'CONNOR (DECEASED)
[2014] SASC 46
STANLEY J
Introduction

This is an application by the Public Trustee pursuant to s 69B of the Trustee Act 1936 (SA) (“Trustee Act”) to vary the terms of a charitable trust established pursuant to the will of Cathreine Elizabeth O’Connor (deceased) made on 18 July 1989, to hold the residue of the estate of the deceased on trust for the benefit of the Hutt Street Centre Limited.
Background
The Public Trustee is the trustee of the estate of Cathreine Elizabeth O’Connor (deceased) late of 206 Sir Donald Bradman Drive, Cowandilla in the State of South Australia (“the deceased”). The deceased died on 13 May 2013 having made her last will dated 18 July 1989. Probate in the estate of the deceased was granted to the Public Trustee on 6 August 2013. The net value of the deceased’s estate disclosed in the statement of assets and liabilities is the sum of $450,875.37.
Paragraph 4 of the deceased’s will provides:
IN THE EVENT of my husband failing to survive me for the aforesaid period I GIVE DEVISE AND BEQUEATH the whole of my real and personal estate to my trustee upon trust to call in or sell and convert into money all such parts thereof as shall not consist of money with power to postpone such conversion for so long as my trustee shall think fit and pay there out my funeral and testamentary expenses and debts and stand possessed of the residue upon trust for CHARITY DAUGHTERS of 258 Hutt Street, Adelaide.
The deceased’s husband, Timothy Francis O’Connor, died on 18 December 1998.
The deceased died at the age of 97 without leaving any issue.
I am satisfied on the basis of evidence before me that there is no organisation by the name of Charity Daughters located at 258 Hutt Street, Adelaide.
The premises at 258 Hutt Street, Adelaide, are now occupied by the Hutt Street Centre, which is a meal and day centre for the homeless and disadvantaged.
The Hutt Street Centre is conducted by Hutt Street Centre Limited (“the company”) under the auspices of the Daughters of Charity of St Vincent de Paul (“the Daughters of Charity”), a religious congregation of nuns within the Catholic Church both in Australia and internationally. The property of the Daughters of Charity is held by the Trustees of the Daughters of Charity of St Vincent de Paul.
The Court received an affidavit of Sister Pauline Flynn who is the Provincial of the Daughters of Charity in Australia and a member of the Trustees of the Daughters of Charity of St Vincent de Paul.
The Hutt Street Centre
The Daughters of Charity began work at 258 Hutt Street, Adelaide, in 1954. At that time, the Daughters of Charity’s house at Hutt Street was known as St Louise’s House. They began their service at St Louise’s House by visiting people in their homes and when people arrived at the back gate looking for food they were provided with sandwiches and a jar of tea. Initially the Daughters of Charity did not employ any staff at St Louise’s and all the work was performed by the Sisters themselves and volunteers.
St Louise’s House relied on the Sisters and volunteers to provide the services and voluntary fundraising to fund the operations. Fundraising activities such as an annual fete, an annual concert and raffle were used to raise funds. Over time, St Louise’s House became very well known in the Adelaide community and demand increased.
As the work of the Sisters at St Louise’s House increased, people receiving assistance generally referred to attending at St Louise’s House as “going to the Sisters”, or “going to Hutt Street” because of the presence of the Sisters at Hutt Street. Police, the Department of Social Security and many other agencies often referred people who were hungry or in need to St Louise’s House.
In about 1987 the facilities at St Louise’s House were upgraded to provide a kitchen and meal centre as well as showers and toilets for people who needed assistance. Before the early 1990s St Louise’s House was staffed solely by the Sisters and volunteers. It was not until about the early 1990s that paid staff first worked at St Louise’s House.
Over the years St Louise’s House has received government funding and developed a day centre providing a TV room, a quiet room and a shower block for the benefit of people in need.
In her affidavit, Sister Pauline Flynn deposes to the practice of the Sisters that, wherever possible, bequests in wills are made to the Trustees to be held on trust for the purpose of a particular incorporated work, rather than being made as a bequest to a particular incorporated work. The Trustees maintain separate accounts for each bequest made to the Trustees or any separate incorporated work. The Trustees maintain separate accounting records for each specific bequest so that the funds from each particular bequest can be applied by the Trustees for the specific purposes of each particular gift.
At the time that the deceased made her will in July 1989, if a gift of money had been made to St Louise’s House, those funds would have been held by the Trustees for the benefit of the ministry undertaken at Hutt Street.
When it was first established in 1954 by the Daughters of Charity, St Louise’s House was not a separate legal entity. The property was held on trust by the Trustees of the Daughters of Charity of St Vincent de Paul.
In 1992, however, the Hutt Street Centre was incorporated as a company limited by guarantee. After the Hutt Street Centre was incorporated, the Trustees transferred their interest in the assets of the Hutt Street Centre to the company by two Deeds of Gift respectively made 1 April 1992 and 19 August 1992.
Sister Pauline Flynn, on behalf of the Trustees, supports the variation to the terms of the trust in accordance with the application made by the Public Trustee.
Section 69B of the Trustee Act
Section 69B(1) of the Trustee Act provides:
(1) The purposes for which property is required or permitted to be applied in pursuance of a charitable trust may be altered by a scheme (a trust variation scheme) approved under this section in any of the following circumstances:
(a) where the original purposes, in whole or in part—
…
(ii) cannot be carried out, or not according to the directions given and to the spirit of the gift; or
…
(d) where it is not reasonably practicable having regard to—
…
(ii) changes in circumstances that have taken place since the constitution of the trust; or
(iii) any other relevant factor,
to apply the trust property in accordance with the original purposes; …
Section 69B(6) provides:
(6) If the relevant authority is satisfied, on application under this section, that the variation of the terms of a trust proposed in a trust variation scheme—
(a) accords, as far as reasonably practicable, with the spirit of the trust; and
(b) is justified in the circumstances of the particular case,
the relevant authority may approve the trust variation scheme and the approved scheme prevails over inconsistent provisions of a relevant instrument or declaration of trust.
Section 69B(3) provides that the relevant authority, where the value of the trust property exceeds $300,000, is this Court.
Consideration
I find that the trust established under the will of the deceased for the benefit of “Charity Daughters” cannot be carried out as there is no organisation of that name.
I am satisfied that the trust variation scheme proposed by the Public Trustee accords with the testamentary intention of the deceased. I am satisfied the deceased intended to apply the trust property, constituting the charitable trust created pursuant to her will, to the institution now incorporated as the company and for the purposes the works undertaken by the company serve.
In the circumstances described above, I am satisfied that application of the trust property for the benefit of the Hutt Street Centre Limited would accord with the original purposes and the spirit of the trust.
Accordingly, I am satisfied that the power conferred upon the Court by s 69B should be exercised to approve a trust variation scheme in the circumstances of this case. I order that the terms of the trust for the benefit of Charity Daughters established pursuant to the will of Cathreine Elizabeth O’Connor (deceased) dated 18 July 1989 be varied to the intent that the Public Trustee hold the residue of the estate of the deceased on trust for the benefit of the Hutt Street Centre Limited.
Conclusion
I order that:
1.The terms of the trust for the benefit of Charity Daughters created pursuant to the will of Cathreine Elizabeth O’Connor late of 206 Sir Donald Bradman Drive, Cowandilla, in the State of South Australia dated 18 July 1989 be varied in accordance with the Trust Variation Scheme annexed hereto and initialled this day.
2.Public Trustee or any interested person may apply for further orders and directions.
The trust variation scheme
The charitable trust for the benefit of Charity Daughters created pursuant to the Will of Catherine Elizabeth O’Connor late of 206 Sir Donald Bradman Drive, Cowandilla in the State of South Australia dated 18 July 1989 be varied to the intent that Public Trustee stand possessed of the residue of the estate of the said Cathreine Elizabeth O’Connor upon trust for the Trustees of the Daughters of Charity of St Vincent de Paul for the benefit of the Hutt Street Centre Limited of 258 Hutt Street, Adelaide in the said State.