SEATON, NOBLE & MOTTERAM

Supreme Court of South Australia
(Civil)
SEATON, NOBLE & MOTTERAM
[2022] SASC 152
Judgment of the Honourable Justice Blue
CORPORATIONS - MANAGED INVESTMENTS - AMENDMENTS TO TRUST DEED OR CONSTITUTION
EQUITY - TRUSTS AND TRUSTEES - POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES - MISCELLANEOUS OTHER POWERS, DUTIES AND LIABILITIES - POWER TO AMEND TRUST DEED
The applicants are the trustees of a charitable trust, the Rotary Club of Adelaide Charitable Trust Fund, under a trust deed.
The applicants seek the following orders under the Trustee Act 1936 (SA):
1Judicial advice under section 91 of the Act that they would be justified in applying monies and property of the Trust to another public ancillary fund pursuant to clause 7 of the Trust Deed.
2Alternatively, an order pursuant to sections 60 and 67 (or alternatively section 69B) of the Act varying the substantive terms of the Trust Deed.
3Alternatively, an order under section 59B of the Act conferring power on the trustees of the Trust to apply its assets to or for another public ancillary fund.
4Alternatively, an order pursuant to sections 60 and 67 of the Act (or under the Court’s inherent power) varying the terms of the Trust Deed to insert a new clause empowering the trustees to apply the fund to or for another public ancillary fund.

Held:
1On the proper construction of clause 7 of the trust deed, there is no power to apply property of the Trust to another public ancillary fund (at [84]).
2Sections 60 and 67 of the Act confer on the Court an independent statutory power, independent of the Court’s equitable power, to vary the terms of a charitable trust if relevantly the Court is satisfied that the variation is to the advantage or benefit of the trust (at [115] and [118]).
3It is to the advantage or benefit of the Trust to vary the terms of its trust deed as proposed subject to several alterations (at [126], [127], [136], [143], [156] [170], [176], [181], [193], [202], [211], [213], [214] and [216]).
4An order should not be made under section 59B of the Act to confer power on the trustees of the Trust to apply its assets to or for another public ancillary fund (at [226]).
5An order should not be made under sections 60 and 67 of the Act or under the Court’s inherent power varying the terms of the trust deed to insert a new clause empowering the trustees to apply the fund to or for another public ancillary fund (at [231]).
6Order made varying the terms of the Trust’s trust deed as proposed subject to several alterations (at [232]).

Administration and Probate Act 1919 (SA) s 69 and s 70; A New Tax System (Tax Administration) Act 1999 (Cth); Associations Incorporation Act 1985 (SA); Charitable Trusts Procedure Act 1922 (SA); Income Tax Assessment Act 1936 (Cth) s 78(1)(a); Income Tax Assessment Act 1997 (Cth) s 30-15 and sub-div 30-B; Legislation Interpretation Act 2021 (SA) s 17; Taxation Administration Act 1953 (Cth) div 426; Tax Laws Amendment (2004 Measures No. 1) Act 2004 (Cth); Tax Laws Amendment (2011 Measure No. 7) Act 2011; Trustee Act 1936 (SA) s 59B, s 60-69, s 69B and s 91; Trustee Act Amendment Act 1941 (SA); Trustee Act Amendment Act 1980 (SA); Trustee Act 1925 (NSW) s 81, referred to.
Attorney-General v Bishop of Worcester (1851) 9 Hare 328; Attorney-General v Sherborne Grammar School (1854) 18 Beav 256; Baptist Churches of South Australia Inc v Attorney-General for the State of South Australia [2018] SASC 14; Burke v Public Trustee for the State of South Australia [2022] SASCA 64; College of Law Pty Ltd v Attorney General of NSW [2009] NSWSC 1474; In Re Dutton, Deceased [1968] SASR 295; In Re Hart, Deceased (1973) 3 SASR 147; Re Dion Investments Pty Ltd [2014] NSWCA 367; Re The Lutheran Laypeople’s League of Australia Inc [2016] SASC 106; The Trusts of the Church of Saint Jude, Brighton [1956] SASR 46, considered.

SEATON, NOBLE & MOTTERAM
[2022] SASC 152

BLUE J: The applicants David Seaton OAM, Stephen Noble and David Motteram OAM are the trustees of a charitable trust, the Rotary Club of Adelaide Charitable Trust Fund (the Trust), under a trust deed (the Trust Deed).
The applicants seek the following orders under the Trustee Act 1936 (SA) (the Act):
1Judicial advice under section 91 of the Act that they would be justified in applying monies and property of the Trust to another public ancillary fund pursuant to clause 7 of the Trust Deed.
2Alternatively, an order pursuant to sections 60 and 67 (or alternatively section 69B) of the Act varying the substantive terms of the Trust Deed.
3Alternatively, an order under section 59B of the Act conferring power on the trustees of the Trust to apply its assets to or for another public ancillary fund.
4Alternatively, an order pursuant to sections 60 and 67 of the Act (or under the Court’s inherent power) varying the terms of the Trust Deed to insert a new clause empowering the trustees to apply the fund to or for another public ancillary fund.
The interested party, the Attorney-General for the State of South Australia, represents the beneficial objects of charitable trusts in the Attorney-General’s role on behalf of the Crown as parens patriae.[1] Subject to the form of the orders, the Attorney-General does not oppose the orders sought.
[1] Attorney-General v Bishop of Worcester (1851) 9 Hare 328 at 361 (68 ER 530) per Turner VC.
Background
The Rotary Club of Adelaide (the Club) was founded in 1923 as a member of Rotary International. It was founded as an unincorporated association but is now incorporated under the Associations Incorporation Act 1985 (SA).
The Club is a member of Rotary International District 9510 Incorporated, which encompasses all Rotary Clubs in South Australia. The Club has approximately 170 members. Rotary International has approximately 1.2 million members of Rotary Clubs worldwide.
The Club is governed by a Constitution (the Club Constitution) and By Laws (the Club By Laws), both of which were adopted in June 2020. The primary purposes of the Club are to pursue Rotary International’s Objects of Rotary (which focus on service to the community) and to carry out service projects based on Rotary International’s five Avenues of Service.
The principal governing body of the Club is its Board. Members of the Board comprise the President, President Elect, Two Vice Presidents, the Secretary and the Treasurer (who also collectively comprise the Executive Committee of the Board), together with the Immediate Past President and six Directors elected by Active Members of the Club.
Article 17 of the Club By Laws provides that the Board shall not without the approval of the Active Members by special resolution gift or dispose of any part of the capital of the Trust.
The Trust was created by execution of the Trust Deed on 11 December 1968. The Trust Deed is a bilateral deed that was executed by the Club and by the three inaugural trustees of the Trust.
On 11 December 1968 the members of the Club in general meeting authorised and approved of the Trust and the appointment of the inaugural trustees.
The principal recital in the Trust Deed provides:
WHEREAS the Club is desirous of establishing a fund to be known as "The Rotary Club of Adelaide Charitable Trust Fund" (hereinafter called "the fund") with the object of receiving moneys and property from time to time given devised or bequeathed to the Club by donors for disposition or payment out by the Club to such charitable organisations approved as hereinafter provided as the Board of Directors of the Club from time to time in its absolute discretion may select
The Trust Deed provides that the trustees (the Trustees) agree and declare that they will receive and hold all moneys and property donated devised and bequeathed to the Club for the purposes referred to in the principal recital upon trust subject to the conditions contained in the clauses of the Trust Deed (the declaration of trust).
Clause 3 provides that all moneys received by the Trustees are to be paid to the credit of a bank account in the name of the Trust.
Clause 4 authorises investment by the Trustees in the following terms:
The Trustees may in their discretion invest in the name of the fund any moneys received by them in any investment authorised by the laws of the Commonwealth of Australia or any of its States for the investment of trust moneys with power from time to time to sell or get in any such investments and to transpose them for other investments of the like nature. The income (if any) arising from such investments shall be accumulated and added to the capital of the fund and shall be dealt with as part of the fund.
Clause 6 addresses expenses. It provides:
The expenses of and incidental to the management and administration of the fund shall be borne by the Club and shall under no circumstances be paid out of the funds.
Clause 7 addresses the application of property of the Trust. It provides:
The Trustees may pay and apply moneys credited to the fund or other property of the fund only as gifts to such fund, authority or institution in Australia as has been approved by the Commissioner of Taxation as being a fund, authority or institution referred to in one of the subparagraphs of section 78 (1) (a) of the Income Tax Assessment Act and as the Board of Directors of the Club may from time to time resolve and the Trustees shall not apply moneys or property to such a fund, authority or institution if the sub-paragraph of section 78 (1) (a) which refers to that fund, authority or institution refers to a specific purpose unless they direct that the moneys or property shall be applied by the recipient for that purpose.
Clauses 8 and 10 provided for changes of the Trustees. Clause 9 provides for the appointment of new Trustees by the Board of the Club such that there are always two or three Trustees.
Clause 11 exempts Trustees from personal liability in the following terms:
A Trustee shall not be under any personal liability in respect of any loss or breach of trust relating to the fund unless such loss or breach of trust arise from his own wilful default.
Clause 12 provides for winding up of the Trust in the following terms:
If the Club by special resolution decides to discontinue the fund the same shall be deemed to be wound up when all then remaining moneys and property thereof shall be got in and realised and paid and applied by the Trustees in accordance with their powers as specified in Clause 7 in this Deed.
It is necessary to distinguish between two basic types of charity trusts. The first type is a charitable trust which itself undertakes charitable works, to which I refer as a charitable works trust. The second type is a charitable trust which does not itself undertake charitable works but pays money or applies property to one or more charitable works trusts. I refer to the second type as a charitable distribution trust because it distributes money or property to charitable works trusts (whether or not it also distributes money or property to other charitable distribution trusts).
The Trust is a charitable distribution trust. Clause 7 provides for it to distribute money or property to charitable works trusts. There is an issue of construction, addressed below, whether clause 7 also empowers it to distribute money or property to another charitable distribution trust.
In 1968 when the Trust was created, there was no Commonwealth regulation of charities or charitable trusts.
In 1968 section 78(1)(a) of the Income Tax Assessment Act 1936 (Cth) (the 1936 Assessment Act) provided that gifts of two dollars or more to certain Australian funds, authorities and institutions (collectively institutions) were deductible against the income of the donor for income tax purposes. Section 78(1)(a) listed in 44 subparagraphs institutions or classes of institutions that were eligible for this purpose. Some, but not all, of those institutions or classes of institutions were recognised at common law as charities. Section 78(1)(a) then provided at its chaussette for a public fund for the purpose of providing benefits to one or more of the 44 institutions or classes of institutions listed in the 44 subparagraphs. The chaussette effectively referred to a charitable distribution trust.
In 1997 the Income Tax Assessment Act 1997 (Cth) (the 1997 Assessment Act) was enacted. It replaced some of the provisions of the 1936 Assessment Act. The Income Tax (Transitional Provisions) Act 1997 (Cth) (the Transitional Act) identified which provisions of the 1997 Assessment Act applied in respect of future income tax years (in replacement for provisions of the 1936 Assessment Act). Generally replacements were made with effect for the income year ended 30 June 1998 onwards.
In 1997 the Tax Law Improvement Act 1997 (Cth) (the Improvement Act) was enacted. Schedule 1 introduced additional provisions into the 1997 Assessment Act. These included a new Division 30 Gifts and contributions, which was far more elaborate than section 78 of the 1936 Assessment Act. Schedule 9 introduced provisions into the Transitional Act. These included a provision that Division 30 of the 1997 Assessment Act applies with effect for the income year ended 30 June 1998 onwards.
Section 30-15 of the 1997 Assessment Act (as amended by the Improvement Act) enacted a table (the section 30-15 table) that contains the rules for tax deductible non-testamentary gifts or donations setting out the identity of the eligible recipient, the type of gift or contribution that can be made to the recipient, how much can be deducted and any special conditions.
Item 1 of the section 30-15 table applies to recipient institutions listed in the tables in Subdivision 30-B (the Subdivision 30-B tables). Those tables in turn list numerous institutions and classes of institutions, grouped into categories (such as health, education and research) that are more extensive and more elaborate than those listed in the subparagraphs of section 78(1)(a) of the 1936 Assessment Act.
Item 2 of the section 30-15 table when first enacted applied to a public fund established and maintained under a will or instrument of trust solely for the purpose of providing benefits to an institution listed in the Subdivision 30-B tables for purposes set out in the item or for the establishment of such an institution (a public fund). It was broadly equivalent to the chaussette of section 78(1)(a) of the 1936 Assessment Act.
In 2000 the 1997 Assessment Act was amended[2] by inserting a new subdivision 30-BA empowering the Commissioner of Taxation to endorse an entity as a deductible gift recipient. In 2004 Division 426 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (the Administration Act) was inserted[3] to provide procedures for such an endorsement. An entity could be endorsed as a public ancillary fund under Item 2 of the section 30-15 table.
[2] By the A New Tax System (Tax Administration) Act 1999 (Cth).
[3] By the Tax Laws Amendment (2004 Measures No. 1) Act 2004 (Cth).
In August 2002 the Trust was endorsed by the Commissioner of Taxation as a deductible gift recipient under item 2 of the section 30-15 table with effect from 1 July 2000.
In 2011 the 1997 Assessment Act was amended[4] to amend item 2 of the section 30-15 table to refer to an “ancillary fund” instead of a public fund. An ancillary fund was defined to mean a private ancillary fund or a public ancillary fund as defined by Schedule 1 to the Administration Act. Schedule 1 to the Administration Act was amended[5] at the same time to define, and provide for endorsement of, private ancillary funds and public ancillary funds.
[4] By the Tax Laws Amendment (2011 Measures No. 7) Act 2011.
[5] Ibid.
Section 426-103 of Schedule 1 to the Administration Act requires the Minister to formulate public ancillary fund guidelines setting out rules with which public ancillary funds and their trustees must comply for (ongoing) endorsement as a deductible gift recipient. Section 426-102 defines a public ancillary fund relevantly to be a trust, each trustee of which is a constitutional corporation[6] which has agreed, in the approved form given to the Commissioner of Taxation, to comply with rules in the public ancillary fund guidelines.
[6] Or the Public Trustee of a State or Territory or a trustee prescribed by the regulations. These alternatives are irrelevant in the present case.
Clause 39 of Schedule 8 to the Amending Act contained a transitional provision that permitted a public ancillary fund to have individual trustees if it was a public fund under item 2 of the section 30-15 table immediately before the public ancillary fund provisions came into operation (1 January 2012).
In 2011 the Minister issued the Public Ancillary Fund Guidelines 2011 (the 2011 Guidelines). The 2011 Guidelines contained extensive provisions for the establishment, operation and winding up of a public ancillary fund.
In 2012 the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (the ACNC Act) was enacted. It created the Australian Charities and Not-for-profits Commission (the Commission) and the Commissioner of the Australian Charities and Not-for-profits Commission (the ACNC Commissioner). It required the ACNC Commissioner to maintain the Australian Charities and Not-for-profits register (the Register). It entitled an entity to registration in the Register as a charity if it was a charity as defined. It also provided for registration as a subtype of charity.
In December 2012 the Trust was registered by the Commission as a charity.
In 2013 the Charities Act 2013 (Cth) was enacted. It contained definitions of charities and subtypes that were adopted by the ACNC Act.
By 2017 the Trustees and the Club had identified several problems with the structure of the Trust and the Trust Deed. These included that:
·the Trust Deed provided only for individual trustees, which required changes in investments whenever there was a change in trustee and which was not in accordance with the requirements for public ancillary funds (subject to the grandfathering provision);
·the Trust Deed provisions were elementary and did not contain the type of provisions contained in modern trust deeds;
·the Trust Deed did not accord with the 2011 Guidelines;
·clause 7 of the Trust Deed defined eligible recipients by reference to section 78(1)(a) of the 1936 Assessment Act which had been replaced by Division 30 of the 1997 Assessment Act; and
·there was no power of amendment of the Trust Deed.
In April 2018 the Trustees recommended to the Board of the Club that a new trust, with a new corporate trustee, be established to take over the assets and role of the Trust to address the problems referred to in the previous paragraph.
In April 2018 the Australian Taxation Office issued a Public Ancillary Fund Model Trust Deed for South Australian public ancillary funds (the Model Deed). Compliance with the Model Deed is not mandatory but obviously a trust deed that complies with it is more likely to be assessed as complying with the 2011 Guidelines.
In May 2018 the members of the Club resolved that a new trust, with a new corporate trustee, be established to take over the assets and role of the Trust.
In April 2019 RCA-CTF Ltd (RCA-CTF) was incorporated as a public company limited by guarantee. It was incorporated for the purpose of acting as the corporate trustee of the proposed new trust (or as corporate trustee of the Trust if its Trust Deed were amended to provide for a corporate trustee).

The Constitution of RCA-CTF (as amended in April 2021) (the Constitution) by clause 3 provides for two classes of members, being Ordinary members and Honorary members. Only Ordinary members have a right to vote.
Clause 3.1.4 paragraphs (a) and (b) of the Constitution provide that the Board of RCA-CTF has power to admit as an Ordinary member a person who is at least 18 years old, is and has been for the preceding three years an Active member of the Club and who has applied in writing and agreed to become an Ordinary member. Clause 3.1.1(b) provides that that the Board will actively encourage Active Members of the Club who meet these criteria to become Ordinary Members.
In addition, clause 3.1.4 paragraphs (c) and (d) of the Constitution provide that the Board of RCA-CTF must admit a person as an Ordinary member if they are an Active Member, or a member of the Board, of the Club and have applied in writing and agreed to become an Ordinary member.
Clause 7.1(a) of the Constitution provides that there must be at least three directors of the company. Clause 7.1(c) provides that generally the Directors are to be appointed by resolution of Ordinary members passed in a general meeting. Clause 7.1 paragraphs (c) and (d) provide that the Club may nominate a member of the Board of the Club to be a Director and the Board must appoint such a person as a Director (but there is only to be one such Club-nominated director at any one time). Clause 7.1 paragraphs (c), (e) and (f) provide that the Board may appoint an Ordinary member as a Director to fill a casual vacancy or as an additional director to hold office until the next annual general meeting.
In August 2021 the board of directors of RCA-CTF approved the terms of a proposed trust deed (the Proposed Trust Deed) for a new trust to be called the Rotary Club of Adelaide Charitable Trust Foundation (the Proposed New Trust). The Proposed Trust Deed was modelled on a combination of the Model Deed, taking into account the provisions of the 2011 Guidelines, and the provisions of the Trust Deed.
In February 2022 the Minister issued the Taxation Administration (Public Ancillary Fund) Guidelines 2022 (the Guidelines). The Guidelines in form replaced, but in substance amended to a relatively minor degree, the provisions of the 2011 Guidelines.
During the hearing of this proceeding, revised versions of a proposed trust deed were prepared and submitted to the Court containing proposed replacement terms for the existing terms of the Trust Deed if the Court were minded to make the second order sought as summarised at [2] above. The substantive terms of those draft trust deeds contained a number of alterations from the Proposed Trust Deed as a result of comments made by the Attorney-General or by the Court during the hearings.
In October 2022 the solicitors for the Trust and the Club sent a letter to the Australian Taxation Office submitting the then proposed trust deed to the Taxation Office and sought an indication that it did not foresee any difficulty if the Trust Deed were modernised in accordance with the enclosed proposed trust deed.
In October 2022 the Australian Taxation Office sent a letter to the Trust’s and the Club’s solicitors stating that, although it could not make an endorsement decision until an application were received, the proposed trust deed dated 20 September 2022 seemed to satisfy the requirements for endorsement as an ancillary fund.
The primary source of income of the Trust is donations by members of the Club. The Trust also receives donations from members of the public (usually via the Club’s website) and on occasions donations from the Club itself. The other source of income is income on, or the revaluation of, investments of the Trust.
Evidence
I received an affidavit sworn by Mr Seaton on 27 January 2022 and a second affidavit sworn by him on 30 November 2022. He exhibited relevant documents, described the Trust and its history, described changes in the regulatory and tax environments, explained why the applicants are seeking the orders sought and described the steps taken by the Club and the Trust as summarised above.
I received an affidavit by Heidi Unferdorben affirmed on 4 February 2022. Ms Unferdorben was the Immediate Past President of the Club. She described the Club, its governance, membership and history. She described the role of the Club in relation to the Trust and also in the review of the operation of the Trust and the proposed new arrangements.
I received an affidavit by Paul Denver affirmed on 2 February 2022. He was the President of the Club. He deposed to the fact that Ms Unferdorben and Mr Seaton were well-placed to inform the Court of matters relevant to the application from the perspective of the Club and the trustees respectively.
I received in closed court a counsel opinion by Suzanne Mackenzie dated 7 March 2022.
I received copies of the October 2022 correspondence passing between the Trust’s solicitors and the Australian Taxation Office and a copy of the Guidelines.
The legislative regime
Section 60 to 69 applications
Part 4 of the Act addresses charitable trusts. Sections 60 to 69 provide:
Part 4—Charitable trusts procedure
60—Applications to Supreme Court
(1)In every case of a breach of any trust or supposed breach of any trust created for charitable purposes, or whenever the direction or order of the Supreme Court shall be deemed necessary for the administration or management or to the advantage or benefit of any trust created for charitable purposes, it shall be lawful for a person referred to in subsection (2) to apply to the Supreme Court, stating such breach or supposed breach, or the grounds upon which such direction or order is necessary, as the case may be, and seeking such relief as the nature of the case may require.
(2)An application may be made by any of the following persons:
(a)the Attorney-General; or
(b)a trustee of the trust; or
(c)     a person who is named in the instrument establishing the trust as a person who is entitled to, or may, receive money or other property for the purposes of the trust; or
(d)     a person who is named in the instrument establishing the trust as a person who must, or may, be consulted by the trustees before distributing or applying money or other property for the purposes of the trust; or
(e)     a person who has in the past received money or other property from the trustees for the purposes of the trust; or
(f)a person of a class that the trust is intended to benefit; or
(g)     any other person who satisfies the Court that he or she has a proper interest in the trust.
61—Application to be accompanied by affidavit
An application must be accompanied by an affidavit made by 1 of the persons making the application or a person who can swear positively to the facts, verifying the application and the grounds on which the proposed relief is sought.
62—Application to be heard in open court
An application must be heard in open court.
63—Evidence may be brought by affidavit or otherwise
(1)An applicant or other person appearing at the hearing of the application may bring before the court evidence by affidavit, or, if the court so directs, oral evidence, and the court may call on an applicant or other person appearing at the hearing of the application to prove before it, by affidavit or otherwise, as the court directs, such matters as the court thinks fit.
(2)The attendance of any witness or the production of any document for the purposes of this section may be enforced by subpoena issued at the instance of the person requiring such attendance or production.
64—Service of application and copy of affidavit
The application, together with a copy of the accompanying affidavit, shall be served upon the Attorney-General where the application is presented by some person other than the Attorney-General, and upon such other persons as the court may direct.
65—Attorney-General may address court at hearing
The Attorney-General may appear and address the court, either personally or by counsel, at the hearing of the application.
66—Person may address court with permission of Judge
With the permission of the court, any person interested who has not been served with the application may appear and address the court on the hearing of the application, but shall not be allowed costs out of the trust funds unless the court so directs.
67—Powers of court in dealing with application
The court may make such order on the application as to it seems just, or may refuse to make any order, or may direct that the right to the relief sought be determined in an action to be brought for that purpose.
68—Court may order costs
The court may make such order as to costs as to the court may seem just, and may order an applicant to pay the adjudicated costs of any person appearing at the hearing in pursuance of section 66.
69—Powers of Supreme Court may be exercised by a single Judge
The authority and jurisdiction by this Act vested in the Supreme Court may, subject to any rules or orders of that court in relation thereto, be exercised by a single judge of such court.
The Court has jurisdiction to make an order under sections 60 and 67 if two conditions are satisfied:
1application is made by an eligible person, relevantly here a trustee of the trust in question;[7] and
2one of the following applies:[8]
(a)there is a breach or supposed breach of a charitable trust;
(b)a direction or order of the Court is deemed necessary for the administration or management of a charitable trust; or
(c)a direction or order of the Court is to the advantage or benefit of a charitable trust.
[7] Subsection 60(2).
[8] Subsection 60(1).
If the Court has jurisdiction, it has a discretion under section 67 not to entertain the application.
If the Court exercises jurisdiction, it is empowered to make such order as the nature of the case may require (section 60) and to it seems just (section 67) to deal with the (supposed) breach or with the subject of the administration, management, advantage or benefit of the charitable trust.
Sections 69A, 69C and 69D partially define what is a valid charitable trust for the purposes of sections 60 to 69 and generally. They are not presently relevant.
Section 69B applications
Section 69B was introduced into the Act in 1980.[9] It has since been amended several times. The current version of the Act relevantly provides:
[9]    By the Trustee Act Amendment Act 1980 (SA).
69B—Alteration of purposes of charitable trust
(aa1)Subject to subsection (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 approved under this section.
(a1)The powers of the trustees of a charitable trust in respect of which a trust variation scheme under this section may be approved by the Attorney‑General (on account of the operation of subsection (3)(b)) to manage or administer the trust may be altered by a scheme approved under this section.
(1)The purposes for which property is required or permitted to be applied in pursuance of a charitable trust may be altered by a trust variation scheme 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.
…
(3)A trust variation scheme may be approved, on the application of the trustee, by—
(a)the Supreme Court; or
(b)     if the value of the trust property does not exceed $300 000 or another limit prescribed by regulation—the Attorney-General.
(3a)The authority to which the application is made (ie the Supreme Court or the Attorney-General) is referred to in this section as the relevant authority.
…
(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.
…
(10)In this section—
trust variation scheme means a scheme approved under this section for the alteration of a charitable trust.
This Court has equitable power (referred to below) to direct a scheme (known as a cy-pres scheme) varying the purpose of a charitable trust if, due to a change in circumstances, the original purpose can no longer be achieved. Section 69B confers an independent statutory power on the Court to approve a scheme for the alteration of a charitable trust which involves a variation of its purpose.
The circumstances in which the Court can exercise the statutory power are broader than those in which it can exercise the equitable power. For example, paragraph (c) of subsection 69B(1) includes a circumstance where the trust property could be more effectively used if combined with other property applicable for similar purposes and administered jointly with that property, which is outside the scope of the equitable power. Paragraph (a) appears to replicate the circumstances in which the equitable power can be exercised and paragraphs (b), (d) and (e) appear to partially replicate, and partially extend beyond, the circumstances in which the equitable power can be exercised.
Section 59B applications
Section 59B was introduced into the Act in 1941.[10] It has since been amended several times. The current version of the Act relevantly provides:
[10] By the Trustee Act Amendment Act 1941 (SA).
59B—Advantageous dealings
(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.
…
(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.
…
Section 59C applications
Section 59C was introduced into the Act in 1980 at the same time as section 69B. [11] It does not apply to charitable trusts. It is indirectly relevant because it might be seen as the counterpart for non-charitable trusts to sections 60 to 69 and 69B for charitable trusts. The current version of the Act relevantly provides:
[11] By the Trustee Act Amendment Act 1980 (SA).
59C—Power of Court to authorise variations of trust
(1)The Supreme Court may, on the application of a trustee, or of any person who has a vested, future, or contingent interest in property held on trust—
(a)vary or revoke all or any of the trusts; or
(b)where trusts are revoked—
(i)distribute the trust property in such manner as the Court considers just; or
(ii)resettle the trust property upon such trusts as the Court thinks fit; or
(c)     enlarge or otherwise vary the powers of the trustees to manage or administer the trust property.
(2)In any proceedings under this section the interests of all actual and potential beneficiaries of the trust must be represented, and the Court may appoint counsel to represent the interests of any class of beneficiaries who are at the date of the proceedings unborn or unascertained.
(3)Before the Court exercises its powers under this section, the Court must be satisfied—
(a)     that the application to the court is not substantially motivated by a desire to avoid, or reduce the incidence of tax; and
(b)     that the proposed exercise of powers would be in the interests of beneficiaries of the trust and would not result in one class of beneficiaries being unfairly advantaged to the prejudice of some other class; and
(c)     that the proposed exercise of powers would not disturb the trusts beyond what is necessary to give effect to the reasons justifying the exercise of the powers; and
(d)     that the proposed exercise of powers accords as far as reasonably practicable with the spirit of the trust.
(4)An order made by the Supreme Court in the exercise of powers conferred by this section is binding upon all present and future trustees and beneficiaries of the trust.
(5)This section does not apply to—
(a)a trust affecting property settled by an Act; or
(b)a charitable trust.
(6)This section does not derogate from any other power of the Supreme Court to vary or revoke a trust, or to enlarge or otherwise vary the powers of trustees.
Other power-conferring provisions
There are several other provisions in the Act that confer power on the Court to make orders in relation to trusts (generally both non-charitable and charitable trusts). They include the conferral of:
·power to apportion the cost of repairs as between parties interested in the trust property (subsection 25A(2));
·power to authorise repairs and alterations (section 25B);
·power to appoint or remove a trustee (section 36);
·power to vest land, stock or a chose in action in a person (sections 37 and 42);
·power to release land from a contingent right (section 40);
·power to authorise a dealing with property (section 48);
·power to authorise purchase of property by the trustee (section 49);
·power to authorise sale of land and minerals separately (section 50);
·power to relieve a trustee from personal liability for breach of trust (section 56); and
·power to make a complicit beneficiary indemnify for breach of trust (section 57).
Judicial advice

The first order sought by the applicants is judicial advice under section 91 of the Act that they would be justified in applying property of the Trust to another public ancillary fund pursuant to clause 7 of the Trust Deed. This involves the proper construction of clause 7.
Section 91 of the Act provides:
91—Advice and directions of court and commission
Sections 69 and 70 of the Administration and Probate Act 1919 apply to trustees as defined by this Act, and section 90 of this Act shall extend to applications under either of the same sections, but without limiting the powers of the Supreme Court, apart from the said section 90, with regard to such applications.
Section 69 of the Administration and Probate Act 1919 (SA) relevantly provides:
69—Public Trustee and other persons may obtain judicial advice or direction
(1)The Public Trustee shall, and any trustee, executor, or administrator may, when in difficulty or doubt, apply to a Judge for advice or direction as to matters connected with the administration of any estate, or the construction of any will, deed, or document.
(2)Such application may be made either without notice to or upon summons served upon any of the parties interested.
…
(4)A Judge may, upon the hearing of an application under this section, make any order, declaratory or otherwise, that he sees fit as to the administration of the estate, or the construction of the will, deed, or document, which is the subject of the application, and also as to the costs of the application.
(5)Any such order made in the absence of an interested party shall have the same effect, or be of the same force or validity, so far as regards protection to the Public Trustee, or other trustee, or the executor, or administrator, as if the same had been a decree or order made in an action where all parties concerned were represented.
(6)The Judge may refer any question of law arising on an application under this section for the opinion of the Supreme Court, or may direct an issue to be tried by, or an action to be instituted in, the Supreme Court.
The Court has jurisdiction to give advice or direction in respect of a trust under the combination of section 91 of the Act and section 69 of the Administration and Probate Act 1919 (SA) if three conditions are satisfied.
1Application is made by an eligible person, relevantly here a trustee of the trust in question.[12]
2There is difficulty or doubt about the question the subject of the application.
3The subject matter of the application is connected with the construction of a deed or document.[13]
[12] An application can be made under section 69 of the Administration and Probate Act 1919 (SA) alone by an executor or administrator of an estate but that is irrelevant in the present case where the application is made also under section 91 of the Act.
[13] Again, on an application under section 69 of the Administration and Probate Act 1919 (SA) alone by an executor or administrator of an estate, the subject matter may be connected to the administration of an estate or construction of a will but that is irrelevant in the present case where the application is made also under section 91 of the Act.
These three conditions are satisfied in this case. The Court therefore has jurisdiction to give advice on the power of the Trustees to apply property of the Trust to another public ancillary fund pursuant to clause 7 of the Trust Deed.
However, merely because the Court has jurisdiction does not necessarily mean that the Court will exercise the jurisdiction. In some cases, it may be appropriate that the Court decline to give judicial advice and instead the applicant should seek a declaration binding on all beneficiaries or relevant parties.[14]
[14] Burke v Public Trustee for the State of South Australia [2022] SASCA 64 at [165] per Livesey P, [373] [374] per Doyle JA and [481] per Stanley AJA.
Clause 7 of the Trust Deed provides:
The Trustees may pay and apply moneys credited to the fund or other property of the fund only as gifts to such fund, authority or institution in Australia as has been approved by the Commissioner of Taxation as being a fund, authority or institution referred to in one of the subparagraphs of section 78 (1) (a) of the Income Tax Assessment Act and as the Board of Directors of the Club may from time to time resolve and the Trustees shall not apply moneys or property to such a fund, authority or institution if the sub-paragraph of section 78 (1) (a) which refers to that fund, authority or institution refers to a specific purpose unless they direct that the moneys or property shall be applied by the recipient for that purpose.
Subsection 78(1)(a) of the Income Tax Assessment Act 1936 (Cth) relevantly provided in 1968 when the Trust Deed was executed:
(1)The following shall, subject to sub-section (11.) of section seventy-seven A, section seventy-seven B and section seventy-nine C of this Act, be allowable deductions:—
(a)     Gifts (not being testamentary gifts) of the value of Two dollars and upwards of money or of property other than money which was purchased by the taxpayer within twelve months immediately preceding the making of the gift, made by the taxpayer in the year of income to any of the following funds, authorities or institutions in Australia:—
(i)a public hospital, or a hospital which is carried on by a society or association otherwise than for the purposes of profit or gain to the individual members of that society or association;[15]
[15] Six subparagraphs selected for illustrative purposes only and not because they are relevant in the present case.
(ii)     a public benevolent institution;
(iii)… a public fund established and maintained for the relief of persons in Australia who are in necessitous circumstances;
…
(ix)    the Commonwealth or a State, when made for purposes of defence;
…
(xx)   the Royal Australasian College of Surgeons;
…
(xliv) the Australian Conservation Foundation Incorporated,
or to a public fund established and maintained under a will or instrument of trust exclusively for the purpose of providing money, property or benefits to or for funds, authorities or institutions referred to, and for the purposes (if any) referred to, in any of the sub-paragraphs of this paragraph, or for the establishment of such funds, authorities or institutions, being a public fund as to which the Commissioner is satisfied that the terms of the will or instrument of trust are such that any moneys (including income derived from investments and proceeds of the realization of investments) paid or accrued to the fund as a direct or indirect result of the particular gift and not applied for the purposes of fund may not be invested by the trustee otherwise than in a manner in which trustees are permitted by an Act, a State Act or a law of a Territory of the Commonwealth to invest trust moneys without special authorization
The issue of construction of clause 7 of the Trust Deed is whether the words “a fund, authority or institution referred to in one of the subparagraphs of section 78(1)(a) of the Income Tax Assessment Act” refer to:
·an institution referred to in one of subparagraphs (i) to (xliv) of section 78(1)(a); or
·an institution referred to in one of those subparagraphs or in the chaussette to 78(1)(a).
The applicants contend for the latter construction.
Starting with the text of the provision, a reference to “the subparagraphs of section 78(1)(a)” is literally a reference to the subparagraphs and not to either the chapeau or the chaussette of section 78(1)(a).
This is supported by the fact that clause 7 refers to a “fund, authority or institution” which is how the entities in the subparagraph are described in the chapeau, whereas the chaussette refers instead to a “public fund”.
This is also supported by the proviso contained within clause 7 that prohibits the trustees applying property to such a fund, authority or institution “if the sub-paragraph of section 78(1)(a) which refers to that fund, authority or institution refers to a specific purpose unless they direct that the moneys or property shall be applied by the recipient for that purpose”. This suggests that the only eligible recipients are funds, authorities or institutions listed in the subparagraphs of section 78(1)(a).
Turning to the context of clause 7 within the Trust Deed, the principal recital (reproduced at [11] above) refers to monies received by the Club for payment “to such charitable organisations approved as hereinafter provided” as the Board may select. This suggests that the recipients will themselves be charitable organisations rather than organisations that do not undertake charitable works but pay monies on to organisations that undertake charitable works.
The evident purpose of clause 7 in particular, and the Trust Deed as a whole, is to create an entity whose function is the receipt of monies from the Club representing donations to the Club for charitable purposes and to pay those monies to charitable organisations. This evident purpose involves the interposition of the Trust between the Club and the charitable organisations. This evident purpose does not extend to the interposition of a yet further entity between the Trust and the organisation undertaking charitable works.
For these reasons, I reject the construction of clause 7 advanced by the applicants.
I decline to give the advice sought.
Variation of substantive terms of Trust Deed
The next, alternative, order sought by the applicants is an order pursuant to sections 60 and 67 of the Act varying the substantive terms of the Trust Deed. I address below the proposed variations. In form, it is proposed to substitute new clauses for the existing clauses of the Trust Deed. In substance, the effect of the proposed variations is to retain in substance the purpose of the Trust as embodied in the principal recital and clause 7, add additional provisions or modify existing provisions to modernise the Trust Deed and comply with the Guidelines and include a power of amendment of the terms of the Trust Deed.
Power to vary
Sections 60 and 67 of the Act are the substantive provisions defining the jurisdiction and powers of the Court. Sections 61 to 66 and 68 to 69 are procedural provisions.
Starting with the text of sections 60 and 67, literally they empower the Court to make such order as to it seems just (section 67) and grant such relief as the nature of the case may require (section 60) without otherwise imposing a limitation on the type of order that might be made.
On its face, this would encompass an order varying the terms of the charitable trust (leaving aside for the time being variation of the purposes of the trust).
Under the terms of section 60, the Court has jurisdiction to make an order if, amongst others, the order is to the advantage or benefit of a charitable trust. Again, on its face, this would encompass an order varying the terms of the charitable trust (again leaving aside variation of the purposes of the trust).
There is nothing in sections 60 and 67, or in Part 4 of the Act more generally, that is cause to read down the power conferred on the Court. Both the power and the conditions for its exercise are expressed in very broad terms.
Turning to the context of sections 60 to 69, it includes other provisions of the Act outside Part 4 conferring power on the Court. As summarised at [63] to [68] above, there are numerous such provisions contained in the Act. They are generally expressed to confer statutory power on the Court to make orders of a prescribed type in prescribed circumstances. They are expressed independently of any existing equitable jurisdiction the Court may already have.
As summarised at [67] above, section 59C confers power on the Court to vary the terms of a non-charitable trust in a very broad manner and in very broad circumstances. Section 59C(5)(b) excludes from the operation of the section a charitable trust. This proceeds on the implicit assumption that the provisions of Part 4 already confer broad and ample powers on the Court to vary the terms of a charitable trust. There is no reason why the powers conferred on the Court in respect of charitable trusts should be narrower than in respect of non-charitable trusts. For the reasons given below, they should be broader (if anything). Although section 59C was not enacted until after sections 60 to 69, under section 17 of the Legislation Interpretation Act 2021 (SA) an Act is to be considered as speaking at all times.
The context includes the legislative history of the provisions. When first enacted in 1936 those sections replaced, and replicated, sections 2 to 11 of the Charitable Trusts Procedure Act 1922 (SA). In turn, that Act replaced the Imperial Act (1812) 52 Geo III chapter 101 (which was received into South Australian law in 1836). Section I of the Imperial Act (commonly known as Sir Samuel Romilly’s Act) relevantly provided:
That, from and after the passing of this Act, in every case of a Breach of any Trust or supposed Breach of any Trust created for Charitable Purposes, or whenever the Direction or Order of a Court of Equity shall be deemed necessary for the Administration of any Trust for Charitable Purposes, it shall be lawful for any Two or more Persons to present a Petition to the Lord Chancellor …, Master of the Rolls for the time being, or to the Court of Exchequer, stating such Complaint, and praying such Relief as the Nature of the case may require; and it should be lawful for the Lord Chancellor …, and for the Master of the Rolls the Court of Exchequer, and they are hereby required to hear such Petition in a summary way, and upon Affidavits or such other Evidence as shall be produced upon such hearing to determine the same, and to make such Order therein … as to him or them shall seem just …
Section 60 of the Act (and section 2 of the Charitable Trusts Procedure Act had) reproduced the first two limbs identified at item 2 of [59] above from the Imperial Act. However, significantly they added the third limb, not present in the Imperial Act, that the direction or order of the Court is to the advantage or benefit of a charitable trust. This was a deliberate extension of the scope of the jurisdiction and power conferred on the Court.
When first enacted, section 60 limited persons eligible to bring an application to the Attorney-General, the trustee of the trust or two beneficiaries. In 1999, section 60 was amended[16] to introduce a new subsection 60(2) defining persons eligible to bring an application in terms of paragraphs (a) to (g) as they now appear in that subsection.
[16] By the Statutes Amendment (Trusts) Act 1999 (SA).
The context also includes the historical jurisdiction exercised by the Court of Chancery over charitable trusts. The Court of Chancery exercised jurisdiction to direct a scheme in relation to charitable trusts under which trustees were directed to administer the trust in accordance with the Court’s directions. The Court might, where necessary, direct a change in the purposes of the trust or, where expedient, direct a change in the other provisions of the trust.
In Attorney-General v Sherborne Grammar School[17] Sir John Romilly MR said:
This Court has authority to redress a breach of trust, where the objects of the founder have then prevented or neglected. It has also 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.[18]
[17] (1854) 18 Beav 256 (52 ER 101).
[18] At 280.
Such schemes were called cy-pres schemes when they varied the purposes or objects of the trust and, in that case, it had to be established that the original purposes or objects could not be achieved. Such schemes were called administrative schemes when they varied other provisions of the trust and, in that case, it had to be established that the variation was expedient.[19]
[19] College of Law Pty Ltd v Attorney General of NSW [2009] NSWSC 1474 at [7] per Brereton J; Baptist Churches of South Australia Inc v Attorney-General for the State of South Australia [2018] SASC 14 at [27]-[32] per Stanley J.
Leaving aside variations to the purposes of a charitable trust, it may be expected that sections 60 and 67 of the Act were intended to confer an independent statutory jurisdiction broader than, or at least as broad as, the Court had as a court of equity.
Turning to the evident purpose of the provisions, charitable trusts differ from non-charitable trusts in several respects. Charitable trusts are purpose trusts and this is recognised in the language of section 60 which refers to a “trust created for charitable purposes”. Charitable trusts do not have human beings as objects. By contrast (subject to minor and irrelevant potential exceptions), non-charitable trusts must have human beings as objects.
Charitable trusts exist for the public benefit and it is this benefit which is the rationale for the law’s recognition of charitable trusts as purpose trusts which are generally not otherwise permitted. Non-charitable trusts are generally trusts which exist for private benefit.
In the case of non-charitable trusts, courts enforce compliance at the instance of (potential) beneficiaries of the trust. In the case of charitable trusts, it is the role of the Attorney-General to enforce compliance.
These characteristics of charitable trusts entail that it may be expected that broader powers are needed to be conferred on the Court in relation to charitable trusts than those conferred in relation to non-charitable trusts. The evident purpose of sections 60 to 67 is to confer broad powers on the Court to make orders including orders to the advantage or benefit of a charitable trust.
Having regard to the text, context and evident purpose of sections 60 to 67, they empower the Court to make an order varying the terms of a charitable trust (again leaving aside for the time being variation of the purposes of the trust) if the Court is satisfied that the variation is to the advantage or benefit of the trust.
Turning to authority, in The Trusts of the Church of Saint Jude, Brighton[20] a trust was established to enlarge, alter, repair and reinstate a church. The trustees presented a petition under section 60 of the Act seeking an order empowering them to demolish the existing church and erect a new church in its stead. Hannan AJ held that there was no power to make the orders sought. It is not clear from the reasons for judgment what the reason was for this conclusion but it appears to have been that the Court could not vary the purposes of the trust. Hannan AJ gave advice to the trustees that they did not have power to act as they proposed.
[20] [1956] SASR 46.
In In Re Dutton, Deceased[21] a trust was established for cleaning a church, provision of sanctuary lights for the church and maintenance of the church choir. The trustee sought an order varying the purposes of the trust to provide instead for repairs to the organ, repairs and maintenance of the church and payment of the organ blower’s wages. Mitchell J held that that section 67 of the Act conferred power to vary the purposes.
[21] [1968] SASR 295.
In In Re Hart, Deceased[22] Mitchell J held that The Trusts of the Church of Saint Jude, Brighton [23] is not authority for the proposition that the power conferred by section 60 of the Act is confined to giving advice or declaring the existing legal position and held to the contrary.
[22] (1973) 3 SASR 147.
[23] [1956] SASR 46.
In ReThe Lutheran Laypeople’s League of Australia Inc[24] Hinton J referred to the question whether sections 60 and 67 empower the Court to vary the terms of a trust deed so as to permit the trust to obtain registration as a charity on the Register. However, Hinton J did not decide the question, holding that the Court had power either under the equitable jurisdiction or under the Act. I note that at [19] of his reasons for judgement, Hinton J raised a question whether an order made under section 67 to the advantage or benefit of a charitable trust must be to the advantage or benefit of its administration or management. I consider that, on its proper construction, it is sufficient that the order is to the advantage or benefit of the charitable trust regardless of whether it relates to administration or management. This accords with both the natural and grammatical reading of subsection 60(1) and with the evident purpose of the provision.
[24] [2016] SASC 106.

The Attorney-General contends that sections 60 and 67 are limited in their operation to extending the class of applicants who can invoke the Court’s equitable jurisdiction to seek an administrative scheme in relation to a charitable trust and, as such, the provisions are procedural rather than substantive in nature.
I reject that contention. For the reasons given above, the text, context and evident purpose of sections 60 and 67 indicate that the legislature intended to confer upon the Court an independent power to make orders in relation to charitable trusts rather than merely to enact procedural provisions relating to the Court’s equitable jurisdiction.
There is nothing in sections 60 to 69 that refers to the Court’s equitable jurisdiction. The provisions of sections 60 to 69 are expressed in standalone terms. Further, other provisions of the Act (summarised at [68] above) often confer power on the Court in independent terms where the Court has equitable powers in respect of trusts.
Section 60 defines circumstances in which the Court has jurisdiction to make an order under sections 60 and 67 as summarised at [59] above. If it were merely intended to provide procedural provisions, primarily as to standing, in relation to the exercise of the Court’s existing equitable jurisdiction, it may be expected that section 60 would simply have so provided. However, on the contrary section 60 sets out its own criteria for the exercise by the Court of jurisdiction conferred by the section. The criteria differ from those applying to the Court’s equitable jurisdiction. The reference to an order being to the advantage or benefit of a charitable trust differs from the criterion for the exercise of the Court’s equitable jurisdiction.
Sections 60 and 67 should be construed having regard to their text, context and evident purpose and not on the presumption that the legislature did not intend to affect the Court’s equitable jurisdiction other than in respect of standing and procedural matters. In any event, there is nothing in sections 60 to 69 that impliedly removes the Court’s pre-existing equitable jurisdiction to direct a scheme. Sections 60 to 69 confer an independent statutory jurisdiction on the Court in parallel with its continuing equitable jurisdiction.
In conclusion, sections 60 to 67 empower the Court to make an order varying the terms of a charitable trust (again leaving aside for the time being variation of the purposes of the trust) if the Court is satisfied that the variation is to the advantage or benefit of the trust.
The Attorney-General contends, as part of or a corollary of his contention referred to above, that the Court can make an order under sections 60 and 67 that a trust be administered in accordance with a scheme ordered by the Court that differs from the terms of the trust’s trust deed but it cannot make an order directly varying the terms of the trust’s trust deed.
I reject that contention essentially for the reasons given above. Sections 60 to 67 confer on the Court a statutory power to make such order as to it seems just which is independent of the Court’s equitable power to order a scheme in respect of a trust. There is nothing in section 60 or section 67 or in the Act as a whole that limits the orders that the Court may make to ordering a scheme as if it were exercising the equitable power.
The order need not be expressed in terms of a scheme. The order may be expressed in terms of varying the terms of the existing trust deed.
Substantive variations
The proposed replacement clauses are closely modelled on the provisions of the Model Deed. The applicants in their submissions identify reasons for deviating from relevant provisions of the Model Deed. Those reasons are primarily to reflect in substance existing provisions of the Trust Deed; to reflect the specific circumstances of the Trust and the Club (the Model Deed provisions necessarily being generic); or to make drafting improvements.
The Attorney-General makes submissions in relation to only a minority of the proposed replacement clauses.
Name
Proposed replacement clause 1 names the Trust as the Rotary Club of Adelaide Charitable Trust Foundation in lieu of its current name Rotary Club of Adelaide Charitable Trust Fund.
Mr Seaton in his second affidavit gave evidence, informed by his experience with two other charities whose name ends with the word “Foundation”, that there is a general understanding in the community that the word "Foundation" is descriptive of an organisation engaged in charitable grant-making that often raises funds from the public. He said that the proposed new name, which incorporates the word "Foundation" instead of “Fund”, better reflects the Trust's activities in the twenty-first century.
Mr Seaton referred to many well-known charities that raise funds for charitable grant-making that adopt the description of being a "Foundation" so that the name intrinsically signals to the public both the fund-raising and grant-making aspect of their activities. He gave as examples the "Women's and Children's Hospital Foundation", the "McGrath Foundation" and the "Paul Ramsay Foundation Limited".
Mr Seaton said that there is a degree of uncertainty among members of the Club as to the operations and purpose of the Trust and this would be remedied by changing the name to provide a clear signal to members and potential donors that the Trust operates as a Foundation.
The name of the Trust has no legal effect on its purposes or operation. There is no disadvantage to the Trust in its name being changed as such. I accept that the existing name ending in the word “Fund” is not, in the twenty-first century particularly apposite and that a name ending in the word “Foundation” would be apposite. I accept that the existing name is liable to cause confusion and that a change of name is likely to enhance the prospect of an increase in donations received by the Trust.
It follows that the proposed change of name is to the benefit and advantage of the Trust.
Declaration of trust
Proposed replacement clause 3 declares that the Trustee holds and manages the Trust Fund on trusts, with the powers and subject to the provisions of the Trust Deed. This is to the same effect as the declaration of trust contained in the existing Trust Deed.
The Trustee
Proposed replacement clause 10.1 empowers the existing trustees to appoint RCA-CTF as the Trustee and to retire as trustees. Proposed replacement clause 10.2 requires, subject to clause 10.1, the Trust to have a sole corporate trustee.
The variation to provide for appointment of a corporate trustee ensures ongoing compliance with Section 426-102 of Schedule 1 to the Administration Act which, subject to the grandfathering provision, requires a corporate trustee. In addition, in the 1960s it was usual for trustees of charitable trusts to be individuals; whereas it is now usual for charitable trusts to have a corporate trustee.
Proposed replacement clause 11.1 requires a corporate trustee to have a Board of Directors comprising at least three persons the majority of whom are Responsible Persons, who must be active directors of the corporate trustee. Proposed replacement clause 11.2 requires the Trustee not to exercise any power unless and until the clause 11.1 requirements are met. These provisions are required to comply with section 12 of the Guidelines.
These variations are to the advantage and benefit of the Trust.
Proposed replacement clause 10.3 empowers the Trustee, with the prior consent of the Founder, to appoint a successor trustee and then retire as trustee provided that the successor trustee satisfies the qualifications under clause 11. I address below the reasons for introduction of the concept of the Founder but for present purposes the Founder can be treated as synonymous with the Club. It is necessary to have a provision for change of trustee in case circumstances arise in which it is necessary for the current trustee to retire as Trustee.
Existing clause 9 of the Trust Deed provides for the appointment by deed of new Trustees by the Board of the Club. Proposed replacement clause 10.3 provides for the appointment to be made by the Trustee but requires the prior consent of the Founder. It is appropriate to vest the appointment power in the Trustee rather than in the Club but to retain a requirement that the Club (or the Founder) agree to the change. This variation is to the advantage and benefit of the Trust.
The chaussette of proposed replacement clause 10.3 provides that the consent of the Founder is to be taken to have been given if the deed of appointment is executed by the President or a Vice President of the Club together with one other member of the Board of the Club.
The purpose of that proposed provision is to create a form of “indoor management rule” so that the Trustee does not have to inquire into the validity of a Board resolution. However, existing clause 9 requires the agreement of the Board to a change and, under the proposed replacement provision, in theory there could be a change of trustee with only two members of the Board agreeing and not the Board itself. Although this is a remote possibility, there is no benefit or advantage to the Trust in removing the need for agreement by the Board itself. The chaussette of proposed replacement clause 10.3 should be amended to provide that the consent of the Founder shall be given by deed executed on behalf of the Founder in accordance with the Club Rules. The same change should be made to clause 10.4, which provides for appointment by the Founder of a Trustee if there is no Trustee.
Subject to these alterations of proposed replacement clauses 10.3 and 10.4, the proposed variations effected by proposed replacement clauses 10 and 11 are to the advantage and benefit of the Trust.
The Founder
The Club is a party to the Trust Deed. Under the Trust Deed, the agreement of the Club (via the Board) is required for payment to eligible entities and the Trust is to be wound up if the Club by special resolution so resolves. Proposed replacement clause 2 defines the Founder prima facie as the Club.
Proposed replacement clause 21 creates a mechanism to replace the Club as the Founder if the Club is to be dissolved or wound up. In that event, the Club is required to approve either termination of the Trust or appointment by the Trustee of a replacement Founder. If that does not occur, Rotary International District 9510 Incorporated is to be appointed as the replacement Founder. If that cannot occur, the Trustee may apply to a court for appointment of a replacement Founder.
This variation is to the advantage and benefit of the Trust as it fills a vacuum that would otherwise be left if the Club were dissolved or wound up.
In relation to the drafting of clause 21 and proposed provisions referring to “the Founder”, there are a number of proposed provisions that refer to management and control of the Founder, including the terms “Active Member”, “Club Board”, “Special Club Member Resolution” and “Club Rules”. These provisions assume that any replacement Founder will have a structure enabling application of those provisions that are drafted by reference to the structure of the Club as the existing Founder.
Proposed replacement clause 21(e) seeks to address this issue by providing how a reference to those defined terms is to apply in the case of a replacement Founder (called a “New Founder”). For example, proposed replacement clause 21(e)(ii) provides that a reference to an Active Member will be taken to be a reference to a member of the New Founder entitled to vote at a general meeting of the New Founder.
However, proposed replacement clause 21 does not ensure that the replacement Founder will have a structure such that the definitions in clause 21(e) apply. For example, the replacement Founder might not have a constitution providing for a special resolution. Proposed replacement clause 21(a) should therefore provide that the Trustee may appoint an incorporated entity that has a structure and constitution enabling it to perform the role of the Founder under the Deed as replacement Founder.
Subject to this alteration, the proposed variation effected by proposed replacement clause 21 is to the advantage and benefit of the Trust.
Trust purposes
Proposed replacement clauses 4.1 and 4.2 provide:
4.1 Foundation Purpose
The purpose of the Foundation is to:
(a)establish and maintain the Trust Fund with the object of receiving Gifts and Deductible Contributions from time to time given devised or bequeathed to the Founder or the Foundation; and
(b)subject to clause 4.2, pay or apply the Trust Fund as approved by the Club Board for the purpose of pursuing, promoting or advancing any Charitable purpose.
4.2 Payment and application of the Trust Fund
(a) The Trustee must pay or apply the Trust Fund solely for the purpose of providing money, property or benefits to or for Eligible Entities, or the establishment of Eligible Entities, in accordance with the Public Ancillary Fund Guidelines.
(b) Where gifts to an Eligible Entity are deductible only if, among other things, the conditions set out in the relevant table item in subdivision 30-B of ITAA 97 are satisfied, a payment or application of the Trust Fund must be made in accordance with those conditions.
(c) Unless to satisfy the requirements of a Relevant Law:
(i)    the Trustee must not pay or apply capital of the Trust Fund unless it is approved by Special Club Member Resolution or it is paid or applied pursuant to the terms of a Gift or Deductible Contribution;
(ii)     the Trustee must not pay or apply more than 90% of the income of the Trust Fund of any Financial Year; and
(iii)    in any case, the Trustee must not pay or apply the Trust Fund unless such payment or application of the Trust Fund is approved by a resolution of the Club Board.
Clause 2 defines an Eligible Entity as follows:
Eligible Entity means a fund, authority or institution:
(a)which is Charitable, or
(i) would be a charity within the meaning of the Charities Act 2013 (Cth) if it were not a ‘government entity’ as defined in that Act; and
(ii) would, but for its connection to government, be a charity as set out in section 69D of the Trustee Act 1936 (SA); and
(b)gifts to which are deductible under item 1 of the table in section 30-15 of ITAA 97.
The combined effect of these provisions (leaving aside for the time being proposed replacement clause 4.2(c)) is that the purpose of the Trust, as provided in the current Trust Deed, is preserved such that money and property of the Trust can only be paid to entities that are eligible to receive tax-deductible donations under the Commonwealth income tax legislation. The variations are primarily the result of the replacement of section 78 of the 1936 Assessment Act by Division 30 of the 1997 Assessment Act.
Proposed replacement clause 4.2(c)(iii) replicates in effect existing provisions contained in the Trust Deed.
These variations do not in substance alter the purpose of the Trust. I note that the Attorney-General accepts that proposed replacement clauses 4.1 and 4.2 are an accurate replication of the purpose and mechanism stated in the principal preamble and clause 7 of the Trust Deed.
These variations are to the advantage and benefit of the Trust in light of the legislative changes.
Proposed replacement clause 4.2(c)(i) requires, subject to two provisos addressed below, the agreement of the members of the Club by special resolution (in addition to agreement of the Club Board) to any payment out of capital. This is not required under the existing terms of the Trust Deed. The existing terms of the Trust Deed do not distinguish between capital and income in terms of payment out. On the contrary, clause 4 provides that income is to be accumulated and in effect becomes capital and the principal preamble contemplates payment out of capital.
In the circumstances, it is not to the benefit or advantage of the Trust to entrench in the Trust Deed a requirement for the agreement of Club members by special resolution to any payment out of capital. Rather, as far as the Trust is concerned, there should simply be a requirement that the Club (or rather the Founder) must approve any payment out by resolution of the Club Board and, if the Club Rules require any additional approval such as by members, by the body or person whose approval is required by the Club Rules.
The first proviso to proposed replacement clause 4.2(c)(i) referred to above is that agreement of the Club (or rather of the Founder) to a payment out of capital is not required if it is paid or applied pursuant to the terms of a Gift or Deductible Contribution. This provision is taken directly from the Model Rules but is not required by the Guidelines.
The existing preamble to the Trust Deed contemplates that moneys will be given to the Club by donors for payment out by the Club to charities. It is possible that the terms of the gift will require payment out to a charity or to a particular charity. It is in the interests of the Trust to facilitate and encourage the making of such gifts. Accordingly, it is to the benefit and advantage of the Trust that there be a proviso to proposed replacement clause 4.2(c)(i) where the terms of the gift require payment out of the gift to a charity. The proviso should refer generically to a gift or bequest rather than to the legislatively defined terms “Gift” or “Deductible Contribution” (which are defined to refer to gifts defined in items 2, 7 or 8 of the section 30-15 table).
The second proviso to proposed replacement clause 4.2(c)(i) referred to above is where it is necessary to satisfy the requirements of a Relevant Law, which is defined to be the Guidelines, legislation or regulations of which the Commissioner of Taxation or the ACNC Commissioner have the general administration or any other law applicable to public ancillary funds. Given the desirability or necessity of compliance with the Guidelines and such laws, the inclusion of this proviso is in the interests and to the advantage and benefit of the Trust.
Proposed replacement clause 4.2(c)(ii) requires that 10 per cent of the income of the Trust be preserved as capital. The purpose of including this constraint is to ensure that the real value of the capital of the Trust (taking into account inflation) is preserved. However, this constraint does not appear in the existing Trust Deed and it is not to the benefit or advantage of the Trust to entrench such a constraint. The Trustee may wish to exercise its discretion in this manner but it should not be constrained to require it to do so.
Subject to the alterations referred to above, the proposed variations effected by proposed replacement clause 4 are to the advantage and benefit of the Trust.
Portability
Proposed replacement clause 5 empowers, subject to provisos, the Trustee to pay all or part of the trust fund to another public ancillary fund or a private ancillary fund.
This clause is modelled on an almost identical provision contained in the Model Deed but is not required by the Guidelines.
The applicants identify the principal purpose of the proposed inclusion of this clause as being that in future it may be desirable for the Trust to merge with another public ancillary fund such as one associated with a different Rotary club or a group of Rotary clubs.
This gives rise to an issue of power as well as an issue whether the proposed variation is to the benefit or advantage of the Trust.
In relation to the issue of power, on the one hand sections 60 and 67 are expressed in broad terms and are not expressed to be confined to orders affecting a trust other than its purposes or to exclude orders affecting the purposes of a trust. On the other hand, section 69B expressly empowers the Court in defined circumstances to make orders affecting the purposes of a trust and, if sections 60 and 67 are read as conferring a parallel power, that parallel power would not be constrained by the defined circumstances contained in section 69B.

On the one hand, section 69B did not exist when the Act was enacted containing sections 60 and 67 (or indeed when its predecessor was enacted). On the other hand, under section 17 of the Legislation Interpretation Act 2021 (SA), legislation is to be considered as speaking at all times. Ultimately, it is not necessary to decide this issue of construction. As it is an issue of general importance, it is preferable that it not be decided until a case arises in which it is necessary to do so. I assume that sections 60 and 67 are not to be read down so as to exclude an order affecting the purposes of a charitable trust.
I deal first with the question whether the inclusion of proposed replacement clause 5 would change the purposes of the Trust. I have concluded above that, on the proper construction of clause 7 and the other provisions of the Trust Deed, the Trust is a charitable distribution trust empowered to distribute money or property to eligible charitable works trusts but not to other charitable distribution trusts. It follows that the inclusion of proposed replacement clause 5 would necessarily change the purposes of the Trust to extend them to distributing money or property to other charitable distribution trusts (being public or private ancillary funds).
I next address the question whether the inclusion of proposed replacement clause 5 is empowered under section 69B of the Act. None of the paragraphs of subsection 69B(1) applies. There is no impediment to or impracticability in the original purposes of the Trust in whole or in part being fulfilled (applying paragraphs (a), (b), (d) or (e)). If in future there is a specific proposal for merger of the Trust with another public ancillary fund, paragraph (c) probably empowers the making of an order for or to permit such a merger if desirable. However, paragraph (c) does not empower the making of an order having the effect of varying a trust deed to empower the trustee itself to effect any merger with any other charitable trust. Accordingly, the inclusion of proposed replacement clause 5 is not empowered under section 69B of the Act.
Assuming that sections 60 and 67 empower the making of an order varying the purposes of a charitable trust, it is not to the benefit or advantage of the Trust to vary the terms of the Trust Deed to empower distributions of money or property to other charitable distribution trusts being public or private ancillary funds. The purpose of the Trust is the distribution of money or property to such charitable works trusts as are agreed by the Club. That purpose would not be fulfilled, and would be defeated, to the extent that money or property was distributed instead to charitable distribution trusts.
Proposed replacement clause 5 should not be included in any variation to the terms of the Trust Deed.
Trustee powers
Proposed replacement clause 12.1 provides that the Trustee must invest money of the Trust only in a way in which trustees are permitted to invest under the laws of Australia or a State or Territory of Australia. This is in essentially the same terms as the Model Deed. It is also in substance the same as the relevant part of clause 4 of the existing Trust Deed.
Proposed replacement clause 12.2 sets out specific powers of the Trustee in essentially the same terms as the Model Deed. The powers are more comprehensive than those contained in clause 4 of the existing Trust Deed. In general terms, in modern times, it is appropriate that a trustee of a charitable trust have such powers.
The powers conferred by clause 12.2 encompass incurring expenses or liabilities on behalf of the Trust. For the reasons given below in respect of clause 17, the chapeau to clause 12.2 should be expressed to be subject to clause 17.
Subject to these alterations, the proposed variations effected by proposed replacement clause 12 are to the advantage and benefit of the Trust.
Trust expenses
Proposed replacement clause 17 provides that the Trustee may apply the Trust Fund to pay or reimburse the Trustee for reasonable expenses incurred as Trustee in respect of the Trust. There is an exclusion in respect of penalties imposed under section 426-120 of Schedule 1 to the Administration Act. This clause is essentially the same as the relevant clause in the Model Deed.
By contrast, clause 6 of the existing Trust Deed requires the expenses of managing and administering the Trust to be borne by the Club and not paid out of Trust funds.
The applicants submit that there is no intention to change the position that the expenses of managing and administering the Trust are borne by the Club. Their concern is that the Trustee’s right of indemnity out of the trust assets be preserved in the event that the Club does not pay the expenses.
Under the general law, a trustee generally has a right of indemnity out of trust assets in relation to liabilities properly incurred in the administration of the trust. If there were no right of indemnity, there may be difficulties in a trustee being willing to act as Trustee of the Trust. On the other hand, it is not in the interests of the Trust to remove the existing obligation of the Club to bear the expenses of managing and administering the Trust.
Accordingly, a clause requiring the expenses of managing and administering the Trust to be borne by the Club (or rather the Founder) should be retained and become replacement clause 17.1. Proposed replacement clause 17 should become replacement clause 17.2 and should be expressed to be limited to the extent that expenses are not paid or reimbursed by the Founder.
Subject to this alteration, the proposed variation effected by proposed replacement clause 17 is to the advantage and benefit of the Trust.
Trustee indemnity
Proposed replacement clause 13.1 provides that, subject to clause 13.2, the Trustee, its officers, employees or agents are indemnified from the Trust Fund in respect of the purported exercise of the trusts or powers conferred on the Trustee. This is in essentially the same terms as the relevant clause of the Model Deed.
Proposed replacement clause 13.2 excludes indemnity in respect of a liability attributable to dishonesty, gross negligence, recklessness, a knowing breach of trust or a penalty imposed under section 426-120 of Schedule 1 to the Administration Act. This replicates the wording of the relevant clause of the Model Deed. It is required by section 14 of the Guidelines.
The existing Trust Deed is silent in relation to indemnity. However, clause 11 provides:
A Trustee shall not be under any personal liability in respect of any loss or breach of trust relating to the fund unless such loss or breach of trust arise from his own wilful default.
A trustee is entitled under the general law to indemnity or recoupment out of the trust assets in respect of liabilities properly incurred on behalf of the trust.[25]
[25] See for example HAJ Ford and WA Lee, Principles of the Law of Trusts (The Law Book Company Limited, 3^rd ed, 2022) [14:110].
The provisions of proposed replacement clause 13 place the Trust in a better position in respect of indemnity than under the existing Trust Deed. This variation is to the advantage and benefit of the Trust.
Provisions required by the Guidelines
Proposed replacement clause 4.5 requires the Trust to be a not-for-profit entity. Proposed replacement clause 4.6(a) requires the Trust to be operated only in Australia. These are required by sections 10 and 11 of the Guidelines.
Proposed replacement clause 4.7 requires that the public be invited to contribute to the Trust. This is required by section 24 of the Guidelines.
Proposed replacement clause 6 requires compliance with the Guidelines, legally binding directions given by the Commissioner of Taxation and applicable Australian laws. This is required for the Trust to be a public ancillary fund and by section 25 of the Guidelines.
Proposed replacement clause 7.1 prohibits the Trustee from entering into uncommercial transactions. Proposed replacement clause 7.2 prohibits the Trustee from providing benefits to the Trustee; its members, officers, employees or agents; a donor; the Founder; or an associate thereof. These are required by section 22 of the Guidelines.
Proposed replacement clause 9.6 requires the preparation, maintenance and implementation of an investment strategy. This is required by section 20 of the Guidelines.
Proposed replacement clause 9.5 requires the Trustee to issue receipts for donations. This is required by section 24 of the Guidelines.
Proposed replacement clause 9.2 requires the Trustee to keep accounts as required by the Guidelines. This is required by section 17 of the Guidelines.
Proposed replacement clauses 9.3 and 9.4 require the preparation and audit of annual financial statements. These are required by sections 18 and 19 of the Guidelines.
Proposed replacement clause 9.1 requires the market value of assets to be estimated as required by the Guidelines. This is required by section 16 of the Guidelines.
Proposed replacement clause 8.1 requires the Trustee to give to the Commissioner of Taxation returns as required by law and information required by the Guidelines. This is required by sections 17(2), 18(5), 19(7) and 20(5) of the Guidelines.
Proposed replacement clause 16.2 requires that, if the Trust Deed is amended, the Trustee must notify the ACNC Commissioner or the Commissioner of Taxation of the amendment within 21 days in accordance with the Guidelines. This is required by section 13 of the Guidelines.
These variations are therefore to the advantage and benefit of the Trust.
Winding up
Proposed replacement clause 19.1 provides for winding up of the Trust if:
1the Trustee executes a deed, approved by Special Club Member Resolution, terminating the Trust;
2the Trust ceases to be a public ancillary fund; or
3the Trust’s endorsement as a deductible gift recipient is revoked by the Commissioner of Taxation.
This is the same in substance, although different in form, to the relevant clause of the Model Deed.
Clause 12 of the existing Trust Deed provides for winding up of the Trust if the Club by special resolution decides to discontinue the Trust. This is the same as the first event under proposed replacement clause 19.1, except that under the proposed replacement clause the concurrence of the Trustee is also required. It is in the interests of the Trust, and to its advantage and benefit, that the concurrence of the Trustee be required.
The additional two events under proposed replacement clause 19.1 are not contained in existing clause 12. However, either event would prevent the Trust in a practical sense from continuing to receive donations and it is in the interests of the Trust, and to its advantage and benefit, that it be wound up in these events.
Proposed replacement clause 19.2 provides for distribution of the surplus on the winding up of the Trust. Clause 19.2(a) requires distribution only to Eligible Entities decided by the Trustee with the approval of the Club Board and a Special Club Member Resolution. This is essentially the same as the provisions of existing clause 12 (taking into account the replacement of section 78 of the 1936 Assessment Act by Division 30 of the 1997 Assessment Act) with one exception.
The exception is that, under proposed replacement clause 19.2(a), a distribution requires the approval of a Special Club Member Resolution. This is not required by existing clause 12 of the Trust Deed. For the same reasons as in respect of replacement clause 4.2(c)(ii) addressed above, it is not to the benefit or advantage of the Trust to entrench in the Trust Deed a requirement for the agreement of Club members by special resolution to a distribution on winding up. Rather, as far as the Trust is concerned, there should simply be a requirement that the Club (or rather the Founder) must approve any payment out by resolution of the Club Board and, if the Club Rules require any additional approval such as by members, by the body or person whose approval is required by the Club Rules.
Proposed replacement clause 19.2(d) provides that any surplus remaining after such distributions is to be distributed to the Australian Rotary Foundation Trust provided that it is an Eligible Entity or, in default, to an Eligible Entity of the Australian Rotary organisation decided by the Trustee with the approval of the Club Board and a Special Club Member Resolution. This provision does not appear in the existing Trust Deed. This provision is unnecessary because the Trustee can distribute all of the surplus before the operation of clause 19.2(d) and, if clause 19.2(d) operates, the distribution could have been made to the recipient pursuant clause 19.2(a). Proposed clause 19.2(d) should not be included.
Clause 19.2(c) requires that not less than 95% of the surplus is to be distributed to no more than four eligible entities operating in South Australia. This provision does not appear in the existing Trust Deed. While the Trust is operating, under the proposed replacement clauses there is no limitation on the number of eligible entities to whom distributions may be made. It is not to the benefit or advantage of the Trust to constrain distributions on a winding up to not more than four eligible entities. Proposed clause 19.2(c) should not be included.
Subject to the alterations addressed above, the proposed variation effected by proposed replacement clause 19 is to the advantage and benefit of the Trust.
Trust deed amendment
Proposed replacement clause 16 provides:
16.1 Amendment
The Trustee may by deed amend this Deed, subject to the following limitations:
(a)     the amendment must be approved by Club Member Resolution; and
(b)     unless the Commissioner consents to the amendment:
(i)    no amendment is made to clause 1 (Name), or is made to amend substantively the terms of clauses 5 (Portability), 7 (Transaction that is uncommercial and benefits), 12 (Trustee’s Powers) or the definition of ‘Trust Fund’ in clause 2.1; and
(ii)     no amendment is made that is contrary to the requirements of, or would result in the Foundation not complying with, the Public Ancillary Fund Guidelines; and
(c)no amendment is made to substantively affect the terms of clauses 4.1, 4.2(a), 4.2(b), or 4.2(c)(iii);
(d)no amendment is made to this clause 16 so as to permit this Deed to be amended in a manner prohibited by clauses 16.1(b) or 16.1(c).
The existing Trust Deed contains no power of amendment. This is not in the interests of the Trust because it necessitates an application to the Court under the Act to vary the terms of the Trust Deed, which is both expensive and time-consuming, regardless of the nature of the proposed amendment. Subject to limitations on the scope of the power of amendment, it is in the interests of the Trust and to its benefit and advantage that a power of amendment be conferred.
The Court has power under sections 60 and 67 of the Act to vary the terms of a trust deed of a charitable trust to confer or amend a power of amendment. Those sections are expressed in broad terms that enable the Court to make such order as the nature of the case may require (section 60) and to it seems just (section 67) that relevantly is to the advantage or benefit of the trust. There is no reason to read this power down to exclude the insertion or variation of a power of amendment of the terms of the Trust Deed.
Under proposed replacement clause 16.1(a), any amendment must be approved by Club Member Resolution. This is an ordinary resolution requiring a simple majority. The requirement for approval by members of the Founder is an important safeguard. Conferring a power of amendment of the terms of the Trust Deed (albeit subject to the limitations referred to below) involves a substantial and significant change. It should require the concurrence of a super majority of members of the Founder in general meeting, namely at least two thirds of members present (being the definition of a Special Club Member Resolution contained in proposed replacement clause 2.1). It is in the interests, and to the benefit and advantage, of the Trust for this constraint on the power of amendment to be included.
Under proposed replacement clause 16.1(c), no amendment can be made to substantively affect the terms of clauses 4.1, 4.2(a), 4.2(b) or 4.2(c)(iii). Those clauses define the purpose of the Trust and to whom and in what circumstances distributions can be made. It is appropriate that the power of amendment not extend to changing those matters. On the other hand, there is no reason to preclude a drafting amendment that does not have any substantive effect.
Proposed replacement clause 16.1(c) does not preclude amendment to proposed clause 4.2(c)(i). That clause imposes an additional restriction on distributions to those contained in the existing Trust Deed. As such, there is no reason to preclude its removal or variation.
Under proposed replacement clause 16.1(b), amendments to certain clauses require the consent of the Commissioner of Taxation. These amendments are to clause 1 (involving a change of name of the Trust), clause 7 (preclusion on entering into uncommercial transactions) clause 12 (trustee powers) and the definition of Trust Fund in clause 2.1. This provision is modelled on, and is virtually identical to, a provision in the Model Deed. The Commissioner of Taxation has an important ongoing supervisory and regulatory role in relation to charitable trusts. For this reason, I am satisfied that it is for the benefit and advantage of the Trust to include this constraint on the power of amendment.
Under proposed replacement clause 16.1(d), no amendment can be made to clause 16 so as to permit the Trust Deed to be amended in a manner prohibited by clause 16.1(c). This provision is appropriate to entrench the preclusion on amendment contained within clause 16.1(c) and to prevent its being outflanked by an amendment to it.[26]
[26] This limitation would probably be implicit in any event but it is desirable that it be made explicit.
Subject to the alterations addressed above, the insertion of replacement clause 16 is to the benefit and advantage of the Trust.
Other provisions
The proposed replacement clauses include various machinery provisions such as definitions and interpretation (clause 2), provisions for advisory committees, patrons and ambassadors (clauses 14 and 15), severance provisions (clause 20), a governing law provision (clause 22) and miscellaneous provisions (clause 18). These are mostly modelled on provisions of the Model Deed.
Insertion of these proposed clauses is to the benefit and advantage of the Trust.
Conclusion
Subject to the alterations referred to above, I am satisfied that variation of the terms of the Trust Deed to replace the existing clauses with the proposed replacement clauses is to the benefit and advantage of the Trust and the Court should exercise its discretion to order such variation.
Form of order
As observed above, the Attorney-General submits that under sections 60 and 67 the Court only has power to direct a scheme in the same manner as under its equitable jurisdiction. I have rejected that submission.
There is a choice to be made as to the form of the order. It could either be an order varying the terms of the Trust Deed or an order that the Trust be administered under a scheme as if the terms of the Trust Deed had been varied. The Trust is closely regulated by the Commissioner of Taxation and the ACNC Commissioner. If the existing provisions of its Trust Deed are retained, but it is to be administered in accordance with different terms, this is likely to cause confusion and complications in the Trustee’s dealings with the regulatory bodies. It might also cause confusion in dealings with other bodies or persons. The preferable course is that the provisions of the Trust Deed be directly varied rather than a direction being given that the Trust be administered in accordance with a scheme embodied in a court order.

It is proposed that the final form of the varied Trust Deed will be submitted to the Commissioner of Taxation for consideration. I will grant liberty to apply in the unlikely event that that process requires an amendment to the varied Trust Deed or the Trustee or the Attorney-General otherwise wishes to exercise liberty to apply in respect of terms of the Trust Deed in future.
Conferral of power to transfer assets to another public ancillary fund
The applicants seek, in the alternative to the order sought addressed above, an order under section 59B of the Act conferring power on the Trustees of the Trust to apply its assets to or for another public ancillary fund.
It is not necessary to address this order sought because it is the preference of the applicants that an order be made under sections 60 and 67 varying the substantive terms of the Trust Deed and I have concluded that it is appropriate to make such an order.
For completeness, I address this order sought briefly.
Section 59B is reproduced at [66] above. The power conferred by that section can be exercised where a proposed sale, lease, mortgage, surrender, release, disposition, purchase, investment, acquisition, expenditure or transaction is:
(a)expedient; and
(b)beyond the power of the trustee.
The applicants contend that a transfer of the assets of the Trust to RCA-CTF as trustee of the Proposed New Trust would comprise a “transaction” within the meaning of section 59B, is beyond power and is expedient.
If an order were made authorising the applicants to transfer the assets of the Trust to the Proposed New Trust, it would involve termination of the Trust. It is doubtful that this falls within the concept of a “transaction” within the meaning of section 59B. It may well be that such a transaction is confined to a transaction in the course of operation of the Trust rather than one resulting in its termination.
In Re Dion Investments Pty Ltd[27] the New South Wales Court of Appeal considered section 81(1)(a) of the Trustee Act 1925 (NSW), which is in identical terms to section 59B(1)(a) of the Act. The Court held that this provision does not authorise variation of the terms of a trust to confer power to amend the terms of the trust. Barrett JA (with whom Beazley P and Gleeson JA agreed) said:
Variation of the terms of a trust (including by way of conferral of some new power on the trustee) is not something within the ordinary and natural province of a trustee. It is not something that it is "expedient" that a trustee should do; nor, fundamentally, is it something that is done "in the management or administration of" trust property. A trustee's function is to take the trusts as it finds them and to administer them as they stand. The trustee is not concerned to question the terms of the trust or seek to improve them. I venture to say that, even where the trust instrument itself gives the trustee a power of variation, exercise of that power is not something that occurs "in the management or administration of" trust property. It occurs in order that the scheme of fiduciary administration of the property may somehow be reshaped.[28]
[27] [2014] NSWCA 367, (2014) 87 NSWLR 753.
[28] At [94].
Although the applicants in the present case do not seek variation of the terms of the Trust Deed under section 59B, it may be that transfer of the assets of the Trust to another entity is not “within the ordinary and natural province of a trustee”.
However, it is not necessary to decide this question. Assuming that the proposed distribution amounts to a “transaction” within the meaning of section 59B, it is not expedient to authorise such a transaction in circumstances where it is appropriate to make an order for variation of the substantive terms of the Trust under sections 60 and 67 of the Act to address the underlying problems.
Conferral of power to transfer assets to another public ancillary fund
The applicants seek, in the further alternative to the orders sought addressed above, an order under sections 60 and 67 (or under the Court’s inherent power) varying the terms of the Trust Deed to insert a new clause empowering the Trustees to apply the fund to or for another public ancillary fund.
It is also unnecessary to address this order sought because it is the preference of the applicants that an order be made varying the substantive terms of the Trust Deed and I have concluded that it is appropriate to make such an order.
For completeness, I address this order sought briefly.
If the order sought by the applicants under this heading were made, it would have the effect of changing the purpose of the Trust. As observed above, given the enactment of section 69B empowering the Court to change the purpose of a trust, it may be that the power conferred by section 60 and 67 is implicitly limited so as not to extend to changing the purpose of a trust. However, it is unnecessary to decide that question.
For the reasons given above, it is not to the benefit or advantage of the Trust to empower the Trustees to transfer the assets of the Trust to another public ancillary fund.
Conclusion
I make the following orders:
1Pursuant to an application made by the applicants under section 60 of the Trustee Act 1936 (SA), and pursuant to sections 60 and 67 of that Act, the Rotary Club of Adelaide Charitable Trust Fund be varied by replacing the terms of the Trust Deed dated 11 December 1968 with the terms set out in the replacement deed provided by the applicants to the Court on 15 December 2022 (the Replacement Deed) with effect on and from execution of the Replacement Deed by the applicants.
2Liberty to apply to the applicants, the Trustee of the Trust or the Attorney-General to vary the terms of the Trust.

[2022] SASC 152

14 December 2022