Re Trusts of Kean Memorial Trust Fund

IN RE THE TRUSTS OF THE KEAN MEMORIAL
TRUST FUND;
THE TRUSTEES OF THE KEAN MEMORIAL
TRUST FUND v THE ATTORNEY-GENERAL FOR SOUTH
AUSTRALIA
[2003] SASC 227

BESANKO J: This is an application by the trustees of the Kean Memorial Trust Fund (“the Trust”) for the determination of certain questions of construction and for orders under ss 59B and 69B of the Trustee Act 1936 (“the Act”) and the inherent jurisdiction of the Court. The defendant is the Attorney-General for South Australia.
The action was commenced by inter partes summons dated 24 June 1999. A number of affidavits were filed in support of the orders sought in the summons. The summons has since been amended and further affidavits have been filed by the trustees. In these reasons it is sufficient to refer to the orders sought in a document filed by the trustees entitled “A Scheme for the Execution of the Trusts of the Kean Memorial Trust Fund” (the “scheme document”). It is the orders in the scheme document which the trustees now seek.
A Judge of this Court has already made two important orders in this action, and in due course it will be necessary to set out these orders and the circumstances in which they were made.
Unfortunately, the Judge who heard the application for the orders now sought became ill and I was assigned to complete the matter. The parties were content for me to do so by reading the scheme document, the affidavits and a transcript of the submissions made to the Judge.
The Facts
Eileen Margaret Kean late of Findon in the State of South Australia (“the testatrix”) died on 24 September 1994. She executed a will which was admitted to probate by this Court in its testamentary causes jurisdiction on 2 June 1995.
The testatrix’s will consists of two documents. The first is a document called “The Last Will and Testament” which was executed by the testatrix on 4 February 1981. In the grant of probate it is referred to as paper writing marked “A”. The relevant clause of the document provides as follows:
“3.I GIVE DEVISE AND BEQUEATH the whole of my real and personal estate to my trustees UPON TRUST to pay thereout my funeral and testamentary expenses and debts and carry out the distribution of my estate as follows:-
…
(d) As to the rest and residue of my estate to be applied in ‘THE KEAN MEMORIAL TRUST FUND” for ST JOSEPHS PARISH SCHOOL Richmond as defined in a letter to the said Kevin Vincent Kerin on the 5^th January 1981.
To date this Trust Fund has not been finalised but it is my desire that should I predecease its implementation my Trustees are to ensure its fulfilment.”
The second document is a letter from the testatrix to Mr Kevin Kerin, solicitor, prepared on 5 January 1981 (but incorrectly dated 5 January 1980). In the grant of probate it is referred to as paper writing marked “B”. The relevant parts of the letter are as follows:
“The purpose of the TRUST FUND is to initiate a fund for the purchase of properties adjoining the ST JOSEPH’S PRIMARY SCHOOL and ST ALOYSIUS CHURCH, BROOKER TERRACE, RICHMOND, as they become available for sale and at a fair market price.
As I have devoted my entire working life to the education, welfare and recreational needs of school children I feel that this contribution, if wisely invested, could benefit this CRAMPED SCHOOL and in particular the children who attend it in years to come.
The areas marked out on the sheet enclosed are in two (2) zones. ZONE I being first priority and ZONE II being second, depending on resources available.
When the houses purchased in these Zones have reached the end of their useful life as a place of residence for tenants or others as nominated they are to be demolished to provide a grassed playing area for the school children with a minimum of encroachment by school buildings, etc.
Although this may appear rather ambitious, with good management I feel this project will succeed.
The TRUST FUND is for this reason to be administered by the CATHOLIC ENDOWMENT SOCIETY, the ST JOSEPH’S SCHOOL BOARD, yourself, MR KEVIN KERIN, for all legal matters, etc. and MR RALPH MARTIN.
It is my wish that MR RALPH MARTIN upholds my interests in this venture and therefore has the POWER OF VETO in all decisions relating to the TRUST FUND during my lifetime and his.
…
It is my wish that the information contained in this letter be kept in strict confidence at all times.”
The letter refers to a sheet enclosed showing Zone I and Zone II. No sheet showing Zone I and Zone II forms part of the documents admitted to probate. However, one of the trustees Mr Ralph Martin has produced the sheet or plan that the testatrix was referring to. Mr Martin has prepared a drawing (set out below) based on the plan which shows the two zones and the location of buildings on the various properties. The eastern boundary of Zone I is the eastern boundary of the properties at 1 Redin Street and 2 Bickford Street, respectively, and the western boundary of Zone I is the western boundary of the properties at 11 Redin Street and 12 Bickford Street, respectively.
Weaver Street
For convenience, I will refer to the documents admitted to probate and the plan as “the trust document”.
A school previously called St Joseph’s School Richmond and a church, St Aloysius Church Richmond, are situated on the property at 68 Brooker Terrace, Richmond. The school operating on the property is now called the Tenison Woods Catholic School. The property is and has at all material times been owned by the Catholic Church Endowment Society Incorporated (“CCES”) and is contiguous with and to the east of Zone I. CCES is the registered proprietor of the property.
During the lifetime of the testatrix, CCES, using its own funds and independently of the Trust, purchased the property at 1 Redin Street, Richmond and 2 Bickford Street, Richmond. CCES is the registered proprietor of both properties. After purchase, the property at 1 Redin Street was made available to St Joseph’s School, Richmond and it is said by the trustees that as a result of that fact the School is indebted to CCES in the sum of $29,742.81 and interest.
The house which was on the property at 1 Redin Street was demolished when it became uneconomical to maintain. A transportable classroom was placed on the southern end of the property. Part of that property and part of the property at 2 Bickford Street were converted into a grassed playing area for the children of the School. The cost of converting the property at 1 Redin Street was borne by St Joseph’s School Richmond by paying the sum of $2,461.93 from its own funds and borrowing the sum of $12,000 at interest from CCES. CCES has an option to purchase the property at 3 Redin Street, Richmond, and it leases part of the backyard of that property from the registered proprietor. The area leased is used by the children of the School. There is playground equipment on the leased area. It is said that the playground equipment was purchased by the School for the sum of $25,677.79. To pay for the playground equipment the School borrowed that sum at interest from CCES.
St Joseph’s School Richmond was not a separate legal entity. There was another school in the Thebarton area called the Kilmara School. It was not a separate legal entity. In early 1997 the two schools amalgamated to form one school operating from the site at 68 Brooker Terrace, Richmond. The school was called the Tenison Woods Catholic School. It is not a separate legal entity. As part of the amalgamation a new resource centre was built on the property at 68 Brooker Terrace, Richmond, at a cost of $630,000, which included an unbudgeted cost overrun of $130,000.
I turn now to say something of the previous orders made by a Judge of this Court in this action.
On 23 September 1999 the Judge made the following order:
“Pursuant to section 59B of the Trustee Act 1936 that the trustees of the Kean Memorial Trust Fund be empowered and authority is hereby conferred on them, insofar as is necessary and notwithstanding the terms of the paper writing marked “B” annexed to the probate in the estate of Eileen Margaret Kean granted on 2^nd June 1995 by this Court in its testamentary causes jurisdiction, to approach the owners of the properties in the areas defined as Zone I and Zone 2 in the annexed plan, to enquire whether any of the said properties are for sale.”
I can deal with the circumstances which led to the making of that order quite briefly. The trustees claimed that properties were coming onto the market and being sold quickly. In some cases the properties came onto the market and were sold before the trustees had discovered the properties were for sale. A passive buying scheme, namely, one where the trustees waited until it came to their attention that a property was available for sale was (said the trustees) proving unworkable. Mr Martin has sworn a number of affidavits on behalf of the trustees. In his affidavit sworn on 27 May 1999 Mr Martin deposed to the fact that the property at 12 Bickford Street, Richmond, was sold in late April 1999 without it coming to the trustees’ attention that the property was available for sale. The trustees’ attempts to buy the property from the purchasers at a premium were unsuccessful. In an affidavit sworn on 10 September 1999 Mr Martin deposed to the fact that the owner of 5 Redin Street, Richmond, a Mrs W Strugala, had signed a contract to sell the property to a company that wished to develop the property by placing additional dwellings thereon. The contract was dated 26 August 1999 and was conditional on the company obtaining the relevant planning consent. The trustees did not become aware of the fact that the property was for sale until after the contract had been executed. A copy of the contract was later put before the Court and the purchaser was Mr D Kalogerinis and/or nominee.
The trustees engaged in negotiations with Mrs Strugala in an attempt to purchase 5 Redin Street, Richmond, should the sale to Mr Kalogerinis not proceed. Unfortunately, a number of difficulties arose and eventually the trustees began negotiating directly with Mr Kalogerinis. I mention in passing that the trustees claim that as a result of what occurred at about this time they have a claim against Mrs Strugala’s solicitors in an amount of about $100,000. At all events, on 21 October 1999 the Judge made the following order (it is unnecessary for present purposes to include the relevant amounts):
“1.Pursuant to section 59B of the Trustee Act 1936 that the trustees of the Kean Memorial Trust Fund be empowered and authority is thereby conferred on them, insofar as is necessary and notwithstanding the terms of the paper writing marked “B” annexed to the probate in the estate of Eileen Margaret Kean granted on 2 June 1995 by this court in its testamentary causes jurisdiction:
1.1 to purchase from Don Kalogerinis and/or his nominee the house property situate and known as 5 Redin Street, Richmond, in the State of South Australia for $______________ plus any incidental costs incurred by him in and about his purchase thereof.
1.2 to pay to the said Don Kalogerinis and/or his nominee a sum not to exceed $__________________ representing his and/or his nominee’s anticipated net profit on the proposed redevelopment and sale of the said property.”
The trustees considered that the property at 5 Redin Street, Richmond, was an essential property in terms of the buying scheme envisaged by the terms of the trust. The order was made when it became clear that the only way the trustees were going to secure the purchase of the property at 5 Redin Street, Richmond, was to negotiate with Mr Kalogerinis and to agree to pay him an amount representing foregone profit on the redevelopment of the property.
The property at 5 Redin Street was subsequently purchased by the Trust and placed in the name of CCES.
In accordance with the authority given by the order made on 23 September 1999 the trustees sent a circular letter to the owners of the properties in Zone I and Zone II asking if they were interested in selling their property. This resulted in one purchase, namely, the purchase of the property at 13 Redin Street, Richmond. The property was put in the name CCES as registered proprietor and CCES agreed to hold the property for the Trust. The property is presently leased at a certain amount per week.
Mr Martin, in his affidavit sworn on 21 February 2000, deposes to his attempts to secure the purchase of other properties in Zone I or Zone II. At that time it was anticipated that the trustees would secure an option to purchase the property at 11 Redin Street, Richmond. Furthermore, the trustees were looking to purchase the property at 12 Bickford Street, Richmond and because of uncertainty about the fair market value of the property – the owners were claiming that the property had development potential – were seeking the Court’s approval to purchase the property at an amount fixed by the Court. That application to the Court did not proceed.
On 24 January 2001 the trustees issued an application seeking the approval of the Court to the scheme set out in the scheme document. The application is supported by an affidavit of Mr Martin sworn on 24 January 2001. In that affidavit Mr Martin deposes to the fact that despite attempts to do so the trustees have been unable to purchase any other properties (ie., other than the properties at 5 and 13 Redin Street, Richmond) in Zone I or Zone II. As I have said, the possible purchase of the property at 12 Bickford Street did not proceed and the trustees were unable to secure an option to purchase the property at 11 Redin Street. Mr Martin deposes to the fact that the trustees believe that they have reached an impasse in implementing the buying scheme. Furthermore, Mr Martin deposes to the fact that the estimated value of the properties in Zone I not owned by the Trust or CCES is approximately $1,345,000 and the estimated value of the properties in Zone II not owned by the Trust or CCES is approximately $660,000. In January 2001 the funds held by the Trust were $1,195,072.60. It was said that there were and are insufficient Trust funds to purchase the remaining properties in Zone I, let alone those properties and the remaining properties in Zone II.
In various affidavits sworn by him, Mr Martin provides information as to the trustees’ prospects of purchasing the properties at 6 and 8 Bickford Street, Richmond. Both properties are owned by Mr M Hutchinson. The property at 6 Bickford Street is used by Mr Hutchinson as a woodyard, together with an ice plant and stables. That use of the property is an existing use and it is protected under the Development Act 1993. Mr Hutchinson lives in a house on the property at 8 Bickford Street. Mr Martin has had a number of conversations with Mr Hutchinson who has told him that he has rejected several large offers for the business (excluding the land) conducted on the property at 6 Bickford Street. The short point is that the trustees consider that it is very unlikely that anyone will be able to purchase 6 Bickford Street in the foreseeable future without having to pay a very substantial amount for the business conducted on that property.
In his affidavit sworn on 9 March 2001, Mr Martin deposes to the testatrix’s intention and the fact that the backyards of the properties in Zone I could be readily converted into playing areas. He states:
“Because of the amount of open space behind them, an oval could be developed out of the backyards of those properties. I discussed the formulation of the scheme with Miss Kean and am able to depose to that that was the plan originally intended.”
I turn now to briefly summarise the other evidence put forward by the trustees in support of the orders sought. Apart from evidence relevant to particular orders, the trustees sought to establish that not only had they reached an impasse in the buying scheme envisaged by the trust document, but there was now a pressing need for funds to be devoted to the Tenison Woods Catholic School for building works, repairs and maintenance, and curriculum development. I accept the evidence I now summarise where it establishes facts, and where it is evidence of opinions and beliefs I accept that those opinions and beliefs are genuinely held.
Mr A Nicholls was the principal of St Joseph’s School Richmond and a trustee of the Trust in 1995 and 1996. Mr Nicholls deposes to the fact that in 1995 enrolments at the School were at their lowest level since the School was established and that, generally speaking, the School buildings were in a poor condition. The needs of the new amalgamated school extended to the upgrading of buildings and curriculum development. Mr Nicholls expresses the view that the purpose of the Trust was not consistent with the needs of the School whilst he was principal.
Mr C Hamam has been the principal of the Tenison Woods Catholic School Richmond and a trustee of the Trust since the commencement of the 1997 academic year. Mr Hamam expresses the view that the purpose of the Trust, namely, the provision of additional playing space as the School expands is important, but is not consistent with the immediate needs of the School, which are the development of curriculum resources and the upgrading of buildings. He deposes to the fact that by reference to the South Australian Commission for Catholic Schools System Funding Principles, the school is ranked as the sixth most disadvantaged of the established Catholic primary schools in South Australia. The upgrading of existing buildings and the construction of new buildings is needed. Mr Hamam deposes to the use of community facilities by the school for activities such as swimming and athletics.
Up until 1998 Mr M Davidson was the chairman of the board of the school and a trustee of the Trust. He deposes to the purchase by the school in 1995 of the playground equipment and the reasons for it. It is unnecessary for me to set out the details.
Mr G Warnock is the general manager of the Catholic Finance and Property Office and the Commercial Financial Administrator for the time being of the Roman Catholic Archdiocese of Adelaide. He deposes to the names and positions of the trustees of the Trust in May 1999. The trustees fall into three categories, namely, the testatrix’s personal representatives, representatives of the School and representatives of the Catholic Church. Mr Warnock describes the role and function of CCES. He deposes to his belief that CCES, through the Catholic Finance and Property Office, has the administrative and management facilities and experience to properly manage and control property entrusted to it.
Mr R Greenrod is the manager, property, of CCES. CCES is the registered proprietor of the properties at 68 Brooker Terrace, Richmond, 1 Redin Street, Richmond, 2 Bickford Street, Richmond, and it leases a portion of the backyard of 3 Redin Street, Richmond. The total area of these properties is 1.818 hectares. He deposes to the fact that each property in Zone I and Zone II is likely to produce an average annual net rental of $5,000.
Mr A Fantasia is the Manager of Development for the Roman Catholic Archdiocese of Adelaide and Fund Manager for the Catholic Development Fund controlled by the said Archdiocese. He has had considerable experience in banking and assessing credit applications and financial projections. In the result, I do not think the trustees placed any reliance on the projections in his affidavit and I do not propose to mention his evidence any further.
Mr A Dooley is the Director of the Catholic Education Office and the Executive Officer of the South Australian Commission for Catholic Schools. He deposes to the amalgamation of St Joseph’s School, Richmond and the Kilmara School, Thebarton to form the Tenison Woods Catholic School and the work carried out at the time of the amalgamation. The Catholic Education Office acknowledges the importance of the purposes of the Trust but is concerned to support an outcome which allows some of the Trust monies to be applied to the School’s immediate needs in terms of curriculum development and educational resources. Mr Dooley deposes to the fact that the viability of the School needs to be sustained by attracting and retaining students. That will be achieved in part at least by improvements to the curriculum and educational resources.

I pause at this point to say that I agree with counsel for the Attorney-General that the evidence put forward by the trustees does not go so far as supporting a finding that without the payments referred to in paragraphs 5(2) – (4) inclusive of the scheme document the School will be forced to close.
Mr K Hinkly is the Senior Education Adviser – Planning, in the Catholic Education Office in the Archdiocese of Adelaide. Mr Hinkly deposes to various school models in terms of whether a school has recreational and play areas on site or uses community facilities near the school. He deposes to the most efficient use of the original School site, and the properties at 1 Redin Street, Richmond, and 2 Bickford Street, Richmond. Mr Hinkly deposes to the fact that if the Trust purchased a property which was not contiguous with the existing site of the Tenison Woods Catholic School or properties contiguous with it, such property could not be used effectively for the purposes of the School and he gives his reasons for that view.
Mr M Story is a town planner employed by the City of West Torrens. He deposes to the existing use rights in relation to the property at 6 Bickford Street, Richmond, and to the fact that they would enure for the benefit of a new owner of the property.
It seems from the evidence of Mr Martin (affidavit sworn 27 May 1999) that the testatrix made gifts to St Joseph’s School, Richmond, for various purposes during her lifetime. The purposes included general maintenance work and in one case the replacement of a defective copying machine. It was said that these gifts showed that the testatrix was prepared to make gifts for the general needs of the School.
The present trustees of the Trust are:
1.     Mr Martin.
2.The chairperson for the time being of the board of the Tenison Woods Catholic School.
3.     The principal for the time being of the said School.
4.The Roman Catholic Archbishop of Adelaide’s Appointee for the time being responsible for the pastoral care of St Aloysius’ Parish, Richmond.
5.     A representative of CCES.
6.Such members of the board of Tenison Woods Catholic School who have elected to be so appointed during their membership of the said board.
In addition to the funds held by the Trust, the Trust owns the properties at 5 and 13 Redin Street, Richmond, and receives rent in relation to those properties.
The Orders sought and the Powers of the Court
In terms of the orders sought, the scheme document is divided into three Parts. Part 1 seeks the determination of four questions of construction. They are as follows:
“3.On its true construction, or its true construction in the events which have occurred, the paper writing hereinbefore referred to as ‘B’:
(1)     authorises the solicitation of the purchase of any real property in the areas designated ‘Zone I’ and ‘Zone II’ in the plan annexed as the Second Schedule
[or, authorises the purchase of any real property in the areas designated ‘Zone I’ and ‘Zone II’ in the plan annexed as the Second Schedule only if it is offered for sale without any invitation, instigation or solicitation by the trustees]
(2)     does not require the observance of any priority between the said zones in the purchase of the properties therein.
[or, authorises the purchase of the properties in Zone II only after all of those in Zone I have been purchased]
(3)     authorises the demolition of any dwelling house or other improvement on any such property when the trustees consider it to be expedient
(4)     obliges [or, does not oblige] the trustees to keep confidential the object, purpose or any other aspect of the Trust.”
The statements in parentheses in paragraphs 3(1) and (2) may be put to one side. They were included in the scheme document by the trustees simply to show the alternative construction. As far as paragraph 3(4) is concerned, the trustees do not wish to be under an obligation to keep confidential the object, purpose or any other aspect of the Trust.
There is no doubt that the Court has the power to determine questions of construction arising in relation to the Trust document (s 69 of the Administration and Probate Act 1919; s 91 of the Act; Rules 63.04(e), (f) and (g) and 103.02(b) and (d) of the Supreme Court Rules 1987). Alternatively, it was submitted by the trustees that if the questions of construction are resolved in a way contrary to the construction for which they contend or there is a doubt about the proper construction, orders in terms of paragraph 3(1) – (4) inclusive should be made under s 59B of the Act and/or the inherent jurisdiction of the Court to order a general scheme.
It is necessary to consider the scope of s 59B of the Act and what orders may be made under the inherent jurisdiction of the Court.
Section 59B of the Act provides as follows:
“(1) Where in the management or administration of any property vested in a trustee, any sale, lease, mortgage, surrender, release, or disposition, or any purchase, investment, acquisition, expenditure, or transaction, is in the opinion of the Supreme Court expedient, but cannot be effected by reason of the absence of or defect in any power for that purpose vested in the trustee by the instrument, if any, creating the trust, or by law, the Supreme Court –
(a)     may by order confer upon the trustee, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions, including adjustment of the respective rights of the beneficiaries, as the Supreme Court may think fit; and
(b)     may direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne as between capital and income.
(2)     Subsection (1) of this section shall be deemed to empower the Supreme Court, where it is satisfied that an alteration whether by extension or otherwise of the trusts or powers conferred on the trustee by the trust instrument, if any, creating the trust or by law is expedient, to authorise the trustee to do or abstain from doing any act or thing which if done or omitted by them without the authorisation of the Supreme Court or the consent of the beneficiaries would be a breach of trust, and in particular the Supreme Court may authorise the trustee -
(a)     to sell trust property notwithstanding that the terms of or the consideration for the sale may not be within any statutory powers of the trustee, or within the terms of the instrument, if any, creating the trust, or may be forbidden by that instrument;
(b)     to postpone the sale of trust property;
(c)     to carry on any business forming part of the trust property during any period for which a sale is postponed;
(d)     to employ capital money subject to the trust in any business which the trustee is authorised by the instrument, if any, creating the trust or by law to carry on;
(e)     to borrow money on such terms and conditions as the court orders.
(3)     The Supreme Court may from time to time rescind or vary any order made under this section, or may make any new or further order.
(4)     The powers of the Supreme Court under this section shall be in addition to the powers of the Supreme Court under its general administrative jurisdiction and under this or any other Act.
(5)     This section applies to trusts created either before or after the commencement of the Trustee Act Amendment Act 1941.
The Attorney-General submits that this is a charitable trust and that s 59B of the Act does not apply to charitable trusts. It only applies in the case of private trusts.
It is well-established in other jurisdictions that the powers contained in sections equivalent to s 59B (eg., s 57 of the English Trustee Act 1925; s 81 of the Trustee Act 1925 (NSW)) may be invoked in the case of charitable trusts (In re Shipwrecked Fishermen and Mariners’ Royal Benevolent Society [1959] Ch 220; Re Dutton [1968] SASR 295; Freeman & Ors v Attorney-General for New South Wales [1973] 1 NSWLR 729; Meagher and Gummow, Jacobs’ Law of Trusts in Australia (6^th ed, 1997), [1706]). However, the Attorney-General refers to certain observations of Legoe J in City of Burnside v Attorney-General of South Australia (1993) 61 SASR 107 at 141 to the effect that s 59B does not apply in the case of charitable trusts. The other members of the Full Court (Perry and Duggan JJ) did not make similar observations in their respective reasons for judgment. The trial Judge in that case (Debelle J) did not hold that s 59B did not apply to charitable trusts (Burnside City Council v Attorney-General of South Australia [No 2] and Anor (1992) 76 LGRA 226). With respect, I would not follow Legoe J on this point. There is nothing in the words of s 59B which suggests it does not apply in the case of charitable trusts. I do not think that the reference to “beneficiaries” in s 59B(1) and (2) limits, or was intended to limit, the operation of the section to private trusts. Furthermore, there is well-established authority in other jurisdictions that the equivalent to s 59B applies to charitable trusts as well as private trusts. I would so hold.
The criterion under s 59B is the Court’s opinion of what is expedient, and it has been said that this is a criterion of the widest and most flexible kind and is not restricted by any implications (Riddle v Riddle (1952) 85 CLR 202 per Dixon J at 214). However, s 59B does not authorise the Court to empower a trustee to do that which would alter the substantive nature of the trust or determine the trust. Nor can the section be used as a substitute for what is, in truth, an application to apply the trust property cy-près (In Re Dutton [1968] SASR 295 per Mitchell J at 296 – 297; Burnside City Council v Attorney-General of South Australia [No 2]and Anor (1992) 76 LGRA 226 per Debelle J at 228).
Section 59B(4) preserves the inherent jurisdiction of the court to authorise a general scheme. Such a scheme is to be distinguished from a cy-près scheme. In In re Robinson, Besant v The German Reich [1931] 2 Ch 122, Maugham J described the inherent jurisdiction of the court to authorise a scheme in the following terms (at 128 – 129):
“There remains a question of technicality rather than of substance. I should point out that a scheme directed by this Court in relation to gifts for charitable purposes is not necessarily or, I think, generally a scheme for the application of the fund cy- près. It is well known that a charitable gift in this country does not fail merely because there is an uncertainty as to the mode of carrying out the gift. In numerous cases of gifts for charitable purposes it is necessary to fill up a number of details in regard to which the testator or the donor has not described his wishes in clear terms. In such cases the gift does not fail, but the Court fills up the details of the donor’s charitable intention by means of a scheme: there is no question of selecting objects cy-près, because the objects to be benefited are the very objects pointed out by the testator, but the Court is doing no more than completing the trusts to carry out objects which, on the assumption with which I am dealing, have been indicated in sufficiently clear terms by the testator.”
The scope of the inherent jurisdiction is discussed in the standard texts (Picarda, The Law and Practice Relating to Charities (1977), chapter 29; Ford and Lee, Principles of the Law of Trusts (1996), chapter 20, [20100]; Jacobs’, (above) [1068]). I should mention that the Attorney-General did not suggest that certain orders in Parts I and II of the scheme document which he did not oppose could not be made in the exercise of the inherent jurisdiction.
In Part II of the scheme document, the trustees seek orders pursuant to s 59B of the Act and/or the inherent jurisdiction of the Court. The orders sought are as follows:
“4.Pursuant to section 59B of the Trustee Act 1936, that the trustees are empowered and authority is hereby conferred on them:
(1)     in their discretion, to purchase, if offered for sale, the contents of any real property in Zone I or Zone II.
(2)     to sell any chattels purchased with any Zone I or Zone II property which they consider to be surplus to requirements.
(3)     to lease or let for such period to such person or persons and upon and subject to such covenants and conditions as the trustees may think fit, any Zone I or Zone II property purchased, including, where relevant, the contents thereof.
(4)    to pay all costs and expenses of and incidental to the demolition of any Zone I or Zone II property and of the provision of any grassed playing area for Tenison Woods Catholic School.
(5)     to expend such moneys as may be necessary to make such property suitable for the purposes of Tenison Woods Catholic School, and in the upkeep and maintenance thereof by (without limiting the generality thereof) erecting signs, security and other fencing, installing lighting and playground equipment, landscaping and tree planting, establishing lawns, concreting and paving, demolishing and removing structures or improvements, erecting shelters, sinking bores, reticulating and irrigating water therefrom and establishing drainage systems.
(6)     to expend $25,677.79 with interest, in the repayment of a loan owing to Catholic Church Endowment Society Incorporated by Tenison Woods Catholic School as the successor to St Joseph’s School Richmond for the purchase and installation of playground equipment.
(7)     to appoint Catholic Church Endowment Society Incorporated as their agent for or in connection with the purchase or management of any Zone I or Zone II property.
(8)     to cause any property (including chattels) purchase to be conveyed to and registered in the name of Catholic Church Endowment Society Incorporated.”
Counsel for the Attorney-General put forward, without dissent from counsel for the trustees, a more precise formulation of paragraphs (4) and (5) above as follows:
“(4)to pay all costs and expenses of and incidental to the demolition of any Zone I or Zone II property and of the provision of a grassed playing area upon the properties purchased by the Trust for Tenison Woods Catholic School.
(5)to expend such monies as may be necessary to make property purchased by the Trust suitable for the purposes of a playing area for students of Tenison Woods Catholic School, and in the upkeep and maintenance thereof by (without limiting the generality thereof) erecting signs … drainage systems.”
During submissions, counsel for the trustees raised an alternative to paragraph (7) as follows:
“(7)to appoint such agents as they may consider appropriate for or in connection with the purchase or management of any Zone I or Zone II property.”
Part III of the scheme document seeks orders under s 69B of the Act approving a trust variation scheme. It is in the following terms:
“5. Pursuant to section 69B(6) of the Trustee Act 1936 the Court approves:
(1)     application of the property of The Kean Memorial Trust Fund for the benefit of Tenison Woods Catholic School
(2)     a single contribution of $300,000 from trust funds towards the costs of the building upgrading and refurbishment referred to in recital P
(3)     expenditure of not more than $75,000 from trust funds upon grounds development and the development of the curriculum of Tenison Woods Catholic School by the introduction or expansion in science, technology, computing and such other subjects, whether existing or not, as the trustees may determine on the advice of the Board of the said School, including resource and material costs
(4)      expenditure from trust funds of a sum which is annually not to exceed $10,000 for repairs, maintenance and grounds development.
The relevant provisions of s 69B provide as follows:
“69B.(1)     The purposes for which property is required or permitted to be applied in pursuance of a charitable trust may be altered by a scheme (a trust variation scheme) approved under this section in any of the following circumstances.
(a)    where the original purposes, in whole or in part –
(i)    have been as far as possible fulfilled; or
(ii)cannot be carried out, or not according to the directions given and to the spirit of the gift; or
(b)     where the original purposes provide a use for part only of the trust property; or
(c)     where the trust property could be more effectively used if combined with other property applicable for similar purposes and administered jointly with that property; or
(d)    where it is not reasonably practicable having regard to -
(i)    the value of the trust property; or
(ii)changes in circumstances that have taken place since the constitution of the trust; or
(iii)    any other relevant factor,
to apply the trust property in accordance with the original purposes; or
(e)     where the original purposes, in whole or in part -
(i)    have been adequately provided for by other means; or
(ii)     have ceased to be charitable purposes; or
(iii)have ceased to provide a suitable and effective method of using the trust property.
…
(5)     Notice of an application for approval of a trust variation scheme must be given as the relevant authority directs.
(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.”
Courts of Equity have developed detailed principles relating to the approval of cy-près schemes. In equity, the Court may order a cy-près scheme in any one of the following three circumstances. First, a cy-près scheme may be ordered if the case is one of initial impossibility and there is either an out and out intention to benefit charity or a general charitable intention plus a possible mode of effectuating that intention. Secondly, a cy-près scheme may be ordered in the case of supervening impossibility, and an order may be made whether the intention be general or merely particular. Thirdly, a cy-près scheme may be ordered where a trust has exhausted its original purpose and a surplus remains. In the third case, it does not matter whether the original purpose is particular or general in intent.
In equity, “impossibility” means something less than physical impossibility. The question is whether the mode of application specified by the donor can be carried into practical effect. On the other hand, a Court of Equity is not at liberty to approve a cy-près scheme simply because it considers the scheme would allow the trust property to be used in a manner more expedient or beneficial to the community. Expediency is not a sufficient basis for a cy-près scheme. Furthermore, the new purpose needs to be in the nature of the particular purpose intended by the settlor, so far as that could be ascertained. Finally, (for present purposes) partial impossibility or impracticability is not a sufficient basis for a cy-près scheme (Picarda, (above), chapter 25; Jacobs’, (above), [1071] – [1072]).
Section 69B seems to embody the principles developed by Courts of Equity in relation to cy-près schemes and it is difficult to see where the section does not at least cover the same area previously covered by those principles. However, it is clear that the section goes further in terms of the circumstances in which the Court may authorise a trust variation scheme than the principles developed by Courts of Equity in relation to cy-près schemes. It is unnecessary to identify the areas in which s 69B extends the principles developed by Courts of Equity (for a discussion on this issue see Picarda, (above), chapter 25, pp 233 – 236; Oldham Borough Council v Attorney-General [1993] Ch D 210; Re Estate of Pitt (2002) 84 SASR 109 per Duggan J at 118). For present purposes, it is sufficient to say that even under s 69B mere expediency or the fact that trust property could, in the opinion of the Court, be applied for a purpose more beneficial to the community is not a sufficient basis for a trust variation scheme.

It is convenient to start with the most far-reaching orders sought by the trustees in the scheme document, namely, the orders in Part III.
The Orders sought in Part III
I mention at the outset that if I was minded to approve a trust variation scheme I would not do so before hearing from the parties as to whether notice of the application for approval should be given (see s 69B(5)), and if so, to which persons. If notice was given, the persons notified would have to be given the opportunity to be heard.
The first basis upon which the trustees seek a trust variation scheme is that it is said that in early 1997 St Joseph’s School, Richmond, ceased to exist. As I have said, St Joseph’s School, Richmond was not an incorporated entity and Tenison Woods Catholic School is not an incorporated entity. The property at 68 Brooker Terrace, Richmond, has at all material times been owned by CCES. The only change that has occurred is a change in the name of the school on the property. On the face of it, the particular name of the school on the property does not appear to have been a material part of the requirements and directions in the trust document (Picarda (above), pp 255 – 256; Re Faraker [1912] 2 Ch 488). If an order was necessary I would make it. However, I do not think that an order is necessary.
The trustees submit that a trust variation scheme involving the payments identified in paragraphs 5(2), (3) and (4) of the scheme document should be approved for various reasons. First, the trustees submit that the estimated value of the unpurchased properties in Zone I and Zone II considerably exceeds the funds in the Trust fund. Secondly, the trustees submit that the ownership of the property at 6 Bickford Street is integral to the scheme envisaged by the testatrix. Having regard to the existing use rights for a woodlot on that property, it is unlikely the trustees will be able to purchase that property in the foreseeable future either because it will not be put up for sale, or, if it is, it will not be at a price which it is appropriate for the trustees to pay. Thirdly, the trustees submit, more generally, that despite efforts on their part, the trustees have been unable to purchase any further properties in Zone I and Zone II. Fourthly, the trustees submit that the School has more pressing needs in terms of curriculum development and the upgrading of buildings (including the construction of new buildings) than the provision of a grassed playing area for the children attending the School.
I turn now to consider these submissions in light of the relevant provisions of s 69B of the Act.
I start by excluding those paragraphs which could not be relevant on the facts. Subsection 69B(1)(b) provides for a scheme where the original purposes provide a use for part only of the trust property. There was no indication at the time the Trust was established that the original purposes provided for a use for part only of the trust property. It is possible I suppose that that may transpire to be the case but that point has not yet been reached. Subsection 69B(1)(c) provides for a scheme where the trust property could be more effectively used if combined with other property applicable for similar purposes and administered jointly with that property. There is no suggestion that that criterion arises on the facts in this case. Subsection 69B(1)(e)(i) and (ii) provide for a scheme where the original purposes, in whole or in part, have been adequately provided for by other means or have ceased to be charitable purposes. On the evidence in this case there is no suggestion that either criterion is relevant.
Subsection 69B(1)(a) provides for a scheme where the original purpose(s), in whole or in part have been as far as possible fulfilled or cannot be carried out, or not according to the directions given and to the spirit of the gift. It is fundamental to the application of this ground to determine the original purposes of the Trust. The original purpose of the Trust is the provision of a grassed playing area for the school children of the School. The question is whether a grassed playing area of a particular area and configuration is part of the object of the Trust. I do not think the grassed playing area need include the area in Zone II. The testatrix referred to properties in Zone II as being second priority “depending on resources available”. Clearly, it was envisaged that resources may not permit the purchase of properties in Zone II. It is more difficult to determine if it is part of the object of the Trust that the grassed playing area include the whole of the area in Zone I. The evidence of Mr Martin that the plan intended by the testatrix was that an oval be developed out of the backyards of the properties in Zone I suggests that the grassed playing area was to include all the properties in Zone I. However, I think when one has regard to the words of the trust document the proper conclusion is that it is not an essential element of the object of the Trust that all the properties in Zone I be purchased. The trust document refers to a grassed playing area not an oval. The conditions identified in the trust document – cramped conditions – can be alleviated by the provision of a playing area less than the whole of the area in Zone I. Reading the trust document as a whole I do not think that the testatrix would not have wanted the scheme to proceed if, for example, the property at 11 Redin Street or 12 Bickford Street could not be purchased.
The evidence probably establishes that if all the properties in Zone I became available for purchase tomorrow the funds held by the Trust including the funds generated by the sale of the Zone II property (13 Redin Street, Richmond) would be insufficient to purchase all of the properties. Most could be purchased but probably not all. The evidence does establish that there would be no funds remaining for the purchase of any of the properties in Zone II. However, my conclusion that it is not essential to the object of the Trust that any of the properties in Zone II be purchased or all of the properties in Zone I be purchased means that these facts do not establish that the original purposes in whole or in part have been as far as possible fulfilled or cannot be carried out, or not according to the directions given and to the spirit of the gift.
The conclusion that it is not essential to the fulfilment of the object of the Trust that all properties in Zone I be purchased does not mean that the inability to purchase a particular property or properties in Zone I may not lead to the conclusion that the original purpose has been as far as possible fulfilled or cannot be carried out or not according to the directions given and to the spirit of the gift. That situation may arise if it can be fairly said in all the circumstances that the property or properties are essential or integral to the proper implementation of the scheme envisaged in the trust document. The evidence establishes that the trustees are unlikely to be able to purchase the property at 6 Bickford Street, Richmond, in the foreseeable future, or at least at a price at which it is appropriate for the trustee to pay. However, even accepting for the purposes of argument that it is an essential or integral part of the scheme, circumstances may change and I do not think sufficient time has elapsed for the conclusion to be drawn that for the purposes of the scheme the property at 6 Bickford Street cannot be purchased.
It also follows that the trustees’ unsuccessful attempts to purchase other properties in Zone I does not at this point in time establish that for the purposes of the scheme none of the other properties in Zone I can be purchased. In view of these conclusions the fact that it may be expedient to devote the funds to other purposes is not sufficient to bring the circumstances of the case within subsection (1)(a) of s 69B.
Subsection (1)(d) provides for a scheme where it is not reasonably practicable to apply the trust property in accordance with the original purposes having regard to the value of the trust property or changes in circumstances that have taken place since the constitution of the Trust or any other relevant factor. For reasons I have given in relation to subsection (1)(a), the circumstances of the case do not fall within the terms of this paragraph.
Subsection 69B(1)(e)(iii) provides for a scheme where the original purposes in whole or in part have ceased to provide a suitable and effective method of using the trust property. On the face of it this is a broad criterion. However, it must be read in context and bearing in mind subsection (6) which provides that approval of a scheme may be given if the scheme accords, as far as reasonably practicable, with the spirit of the trust and is justified in the particular circumstances of the case. I do not think the criterion provides the basis for a scheme merely because it is expedient or because it involves the use of trust property for purposes considered more useful or beneficial. I do not think subsection (1)(e)(iii) authorises a scheme in circumstances where the point has not yet been reached where the application of the trust property in accordance with the original purposes is not reasonably practicable even though the needs of the School in the areas of curriculum development and the upgrading of buildings are pressing. For present purposes I emphasise the word “ceased” in subsection (1)(e)(iii). There is no evidence or no sufficient evidence to suggest that in accordance with the testatrix’s wishes the use of the Trust property to secure a grassed playing area for school children of the School is not a suitable and effective method of using the trust property. I note that there might also be a question as to whether any particular emphasis is to be placed on the word “method” in subsection (1)(e)(iii).
For these reasons I am not satisfied that the trustees have established that a trust variation scheme in terms of paragraphs 5(2) – (4) inclusive of the scheme document should be approved.
I decline to make the orders sought in paragraphs 5(2) – (4) inclusive of the scheme document.
Before leaving the question of whether the orders in paragraph 5(2) – (4) inclusive should be made, I make it clear that my decision is based on the circumstances existing at the time the affidavits were sworn. The possibilities as to what may occur in the future are many and varied and any future application will have to be considered having regard to the circumstances then existing.
The Orders sought in Part I
The Attorney-General does not oppose the trustees having the powers and authorities referred to in paragraph 3(1) – (4) inclusive of the scheme document. Nevertheless, I must consider the issues raised by the trustees’ application and be satisfied that orders should be made.
In view of the size of the trust fund and the estimated value of the unpurchased properties in Zone I and Zone II it is appropriate to consider the question in paragraph 3(2) before considering the question in paragraph 3(1).
The trustees submit in relation to paragraph 3(2) that the trust document should be construed so as not to require the trustees to observe any priority in the purchase of properties in Zone I. They accept that when regard is had only to the trust document it is clear that the testatrix had in mind that properties in Zone I would be purchased in priority to properties in Zone II. However, they submit that regard may be had to events after the death of the testatrix, and that when this is done it is clear as a matter of construction that the trust document does not require priority. I do not accept that argument. The question of construction must be determined by reference to the trust document and, possibly, the conduct of the testatrix.
I start with the proper construction of the trust document. It relevantly provides:
“The areas marked out on the sheet enclosed are in two (2) zones. Zone I being first priority and Zone II being second, depending on resources available.”
This suggests that priority is to be given to the purchase of properties in Zone I. Such a conclusion is clearly supported by the location of the said properties and, I suppose, by the fact that the backyards of the properties in Zone I are more adaptable to a grassed playing area than the open space areas of the properties in Zone II. On the other hand, such an interpretation could, depending on the circumstances, create difficulties in implementing the buying scheme. It may take many years before all the properties in Zone I are purchased. In the meantime, properties in Zone II may be bought and sold by others on a number of occasions. If priority is accorded to the purchase of properties in Zone I then it may be a very long time before all the properties that can be purchased having regard to available funds are purchased. Despite this consideration I think the proper construction of the trust document is that priority is to be accorded to the purchase of properties in Zone I.
The question therefore becomes whether it is expedient within the provisions of s 59B or within the inherent jurisdiction of the Court to order a general scheme to make an order in terms of paragraph 3(2).
The order of the Court made on 23 September 1999 authorised an approach by the trustees to all the property owners in Zone I and Zone II to inquire whether any of the said properties are for sale. Shortly thereafter, a property in Zone II was purchased (ie., 13 Redin Street, Richmond).
A comparison of the estimated values of the unpurchased properties in Zones I and II and the level of the funds presently held in the Trust suggests that if all the properties in Zone I are purchased, no properties in Zone II can be purchased and converted into a grassed playing area. If an order is made that the trustees are not required to observe any priority between the purchase of properties in Zones I and II then that may mean that properties in Zone I cannot be purchased because the Trust funds have been used to purchase properties in Zone II. I suppose that that may be overcome at the appropriate time by the sale of Zone II properties to provide the funds for the purpose of the purchase of Zone I properties. That could certainly be done in the case of the Zone II property presently held by the Trust. Furthermore, it is not inconceivable that a grassed playing area including most of the Zone I properties and one or more Zone II properties would be within the object of the Trust or, if necessary, a trust variation scheme approved by the Court under s 69B of the Act. However, the difficulty at the moment is that the evidence strongly suggests that no properties in Zone II can be purchased if all the properties in Zone I are purchased.
The order sought in paragraph 3(2) was not the subject of detailed submissions. The Attorney-General did not oppose an order in terms of paragraph 3(2). I would give both parties the opportunity to make further submissions on this paragraph. If an order is made it may need to be made on condition that a certain amount be retained for the purchase of properties in Zone I should they become available for purchase.
I turn now to paragraph 3(1) of the scheme document. Because of my conclusion in relation to paragraph 3(2), I will confine my consideration of paragraph 3(1) to an active buying scheme in relation to properties in Zone I.
The trustees submit in relation to paragraph 3(1) that the trust document should be construed so as to authorise the trustees to engage in an active buying scheme (ie., to approach property owners with a view to securing the purchase of properties). They accept that when regard is had only to the trust document it is clear that the testatrix had in mind a passive buying scheme. However, they submit that when regard is had to events after the death of the testatrix, I should construe the trust document as authorising an active buying scheme. For the same reasons I gave in relation to paragraph 3(2), I reject this approach.
I start with the proper construction of the trust document. There is no express prohibition on an active buying scheme. There are some directions which suggest the testatrix had in mind a passive buying scheme. Properties are to be purchased “as they become available for sale”. No time limit is specified either for the purchase of all properties or the provision of the grassed playing area. The trust document states that houses on properties purchased are to be demolished when they have reached “the end of their useful life as a place of residence for tenants or others”. Furthermore, there is the statement towards the end of the trust document in the following terms:
“It is my wish that the information contained in this letter be kept in strict confidence at all times.”
The testatrix may have had any number of reasons for imposing the requirement of confidence. On the one hand, it might be said that the testatrix foresaw that if it became known that someone connected with the School was purchasing the properties in Zone I and Zone II that might artificially inflate the prices of those properties. That is understandable to a point, but it might also have been thought that after a number of properties had been purchased by someone connected with the School, details of the scheme would be known or at least strongly suspected by potential vendors in the area. On the other hand, there are some personal details in the letter and perhaps this fact, together with a desire not to be known as the benefactor, were the reasons the testatrix imposed the requirement. Of course it is possible that the testatrix had in mind all of these considerations.
In my opinion, although there is no express prohibition on an active buying scheme it is not clear whether the trust document authorises the trustees to engage in an active buying scheme. I accept that a passive buying scheme has proved unworkable or largely unworkable in practice, and that that state of affairs is likely to continue in the future. I have already referred to Mr Martin’s evidence concerning the trustees’ attempts to purchase the properties at 12 Bickford Street, Richmond, and 5 Redin Street, Richmond, and the order of the Court made on 23 September 1999. In my opinion, it is expedient within the terms of s 59B of the Act that an order be made in terms of paragraph 3(1) in relation to properties in Zone I. I will consider whether the order should be extended to properties in Zone II at the same time as submissions in relation to paragraph 3(2) are made.
In relation to the order sought in paragraph 3(3), the relevant passage in the trust document is as follows:
“When the houses purchased in these Zones have reached the end of their useful life as a place of residence for tenants or others as nominated they are to be demolished to provide a grassed playing area for the school children with a minimum of encroachment by school buildings, etc.”
The trustees pose the question which arises out of this direction, namely, “Do houses reach the ends of their useful lives when they cease to be tenantable, or do they reach the ends of their useful lives when, though still tenantable, their presence impedes the development of the grassed playing area?”. The direction appears clear enough but there is tension between it and the obvious intent of the testatrix that the cramped conditions at the School be alleviated and presumably that this be done as soon as it becomes reasonably practicable to do so. Whatever be the proper construction of the trust document, I think it is expedient that the trustees have the power to demolish any dwelling house or other improvement when they consider it expedient to do so. Of course that should only be done when it would lead to the provision of a grassed playing area for the school children.

I have already set out the passage in the trust document relevant to the order sought in paragraph 3(4). Plainly the issue here is not one of construction but rather whether it is expedient to make an order under s 59B that the trustees are not obliged to keep confidential the object, purpose or any other aspect of the Trust. In my opinion, it is expedient to make an order varying the obligation of confidence on the trustees, although I think the order should be framed more precisely than it is at the moment. I think an order is expedient for a number of reasons. First, even if the obligation remained, knowledge of the buying scheme would inevitably come to the attention of property owners in the area at some stage. Secondly, for reasons I have given, an active buying scheme is expedient and the implementation of such a scheme would involve some disclosure of the buying scheme. Thirdly, there has already been some disclosure of the buying scheme by reason of the steps taken by the trustees following the order of the Court made on 23 September 1999.
The Orders sought in Part II
The Attorney-General does not oppose the orders sought in paragraph 4(1), (2) and (3) of the scheme document. Again, it is for the Court to determine if the orders should be made. I have no doubt that such orders should be made. Clearly, the testatrix envisaged that houses on the properties purchased by the trustees may be retained by them and leased or let to tenants. It is expedient within the terms of s 59B of the Act that the trustees have the power to buy and sell the contents of properties purchased by them, and that they have the power to lease or let such properties and the contents thereof.
The Attorney-General does not oppose the orders sought in paragraph 4(4) and (5) as amended. It is expedient that such orders be made. Clearly, the testatrix envisaged that houses on the properties purchased by the trustees would be demolished in due course and that a grassed playing area would be provided. It is expedient within the terms of s 59B of the Act that the trustees have the power to pay the costs associated with the demolition of houses and the provision of a grassed playing area and the upkeep and maintenance thereof.
The Attorney-General opposes the order sought in paragraph 4(6). He did so, as I understood it, on the ground that the payment of debts was no part of the objects of the Trust. I do not think that that is a reason not to make the order. Payment of the sum of $25,677.79 and interest would result in the playground equipment becoming the property of the Trust. The real issue is whether the purchase and installation of playground equipment is within the objects of the Trust. I do not think that it is. The object of the Trust is the provision of a grassed playing area for the children of the School. There is no mention of the purchase and maintenance of playground equipment in the trust document and I do not think that is within the objects of the Trust. Section 59B of the Act cannot be used to expand the objects of the Trust.
The trustees sought to derive assistance from s 69C of the Act. That section provides:
“(1)Any trust (whether constituted before or after the enactment of this section) to provide, or assist in the provision of, recreational facilities for the public benefit is a charitable trust.
(2)     This section does not apply to recreational facilities unless -
(a)     the facilities are provided with the object of improving the conditions of life of the persons for whom they are primarily intended; and
(b)     either -
(i)those persons have need of those facilities by reason of their youth, age, infirmity or disablement, poverty or social and economic circumstances; or
(ii)the facilities are to be available to the general public, or a substantial section of the general public.”
This section does not help the trustees. The section provides that trusts for certain purposes are charitable trusts. It does not expand the objects or purposes of charitable trusts. I would not make the order sought in paragraph 4(6) of the scheme document.
I pass over the order sought in paragraph 4(7) of the scheme document for the moment. Paragraph 4(8) seeks an order that the trustees have the power to cause any property (including chattels) purchased by the Trust to be conveyed to, and registered in, the name of CCES. The Attorney-General opposes an order in those terms. The trustees submit that it is inconvenient for the property of the Trust to be registered in the names of all the trustees because the trustees change from time to time and the fact that there are a number of them means that it is costly and time-consuming arranging the appropriate alterations. I accept that where there are a number of trustees there is a degree of inconvenience involved in the requirement that Trust property be registered in the names of all the trustees. However, it is the general rule that all the trustees should be the purchasers of property purchased and held as trust property and the registered proprietors of real property (Lewis v Nobbs (1878) 8 Ch D 591 per Hall V-C at 594; Guazzini v Pateson (1918) 18 SR (NSW) 275; Jacobs’, (above), [1702]). I am not persuaded that a degree of inconvenience is sufficient to justify a departure from this rule. I mention that the Judge raised with counsel the possibility of the trustees incorporating as an entity under the Associations Incorporation Act 1985. Whether that can be done and whether it will achieve what the trustees wish to achieve are matters for the trustees and their advisers to consider.
I return to paragraph 4(7) of the scheme document. The Judge was told that at present, the two properties owned by the Trust were managed by a firm of agents called “The Professionals”, Richmond. In his submissions, counsel for the trustees referred to the difficulties created by the trustees having to individually attend to all matters (large and small) relating to the management, maintenance and repair of properties owned by the Trust.
The general rule has been that a trustee must not delegate his duties or powers. However, delegation is permitted in three circumstances, namely, where it is specifically authorised by the trust document, where it is specifically authorised by statute and where, speaking generally, the delegation is to perform a purely ministerial act or, subject to certain conditions, is dictated by the necessity of the case (Jacobs’, (above), [1723]).
In this case, delegation is not specifically authorised by the trust document. The Court could confer a power of delegation on the trustees under s 59B of the Act and/or the inherent jurisdiction of the Court if the circumstances warrant such an order.
The Act gives trustees powers of delegation in certain circumstances. Pursuant to s 17, powers, authorities and discretions of the trustees may be delegated by power of attorney for a period of up to twelve months. Section 19 gives trustees certain powers of delegation in relation to ADI (Authorised Deposit-taking Institution) accounts. Section 24 gives trustees a power to delegate to solicitors their ability to receive monies or other valuable consideration or property receivable by the trustees under the trust. In this case, the trustees could utilise the power of delegation in s 17 of the Act, although as counsel for the trustees submitted, there is the disadvantage that the power of attorney would need to be renewed every twelve months.
The third circumstance in which delegation is permitted may enable the trustees to delegate a number of the tasks they wish to delegate in this case. However, the trustees seek an order of the Court because they do not wish to proceed in circumstances in which there is a doubt about their power to delegate.
The Judge raised with counsel for the trustees the possibility that the question of the trustees’ ability to delegate was linked to the question of whether the trustee should be an incorporated body under the Associations Incorporation Act. I am inclined to think that an appropriate order giving the trustees the authority to delegate certain powers is justified, but I will give the trustees the opportunity to consider whether that should be considered at the same time as consideration is given to incorporating an entity under the Associations Incorporation Act.
Conclusions
In relation to Part I of the scheme document, I wish to hear the parties further in relation to paragraph 3(2). I am prepared to make an order under s 59B of the Act in terms of paragraph 3(1) in relation to properties in Zone I and to hear the parties as to whether the order should extend to properties in Zone II. I am prepared to make an order under s 59B of the Act in terms of paragraph 3(3). I am prepared to make an order under s 59B relieving the trustees from the obligation of confidence (paragraph 3(4)), but I wish to hear the parties further as to the precise terms of such an order.
In relation to Part II of the scheme document, I am prepared to make orders in terms of paragraphs 4(1), 4(2), 4(3), 4(4) (as amended), and 4(5) (as amended). I am not prepared to make orders in terms of paragraphs 4(6) and (8). In relation to paragraph 4(7), I am disposed to make an order giving the trustees certain powers of delegation, but I will give the trustees the opportunity to give further consideration to the terms of any such order.
In relation to Part III of the scheme document, I am not prepared to make orders in terms of paragraphs 5(1) – (4) inclusive of the scheme document.

[2003] SASC 227

25 July 2003