St Hilda's College Ltd v Uniting Church in Australia Property Trust (Victoria)

Case •

[2023] VSC 462

•

9 August 2023
IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2022 03477

ST HILDA’S COLLEGE LTD (ACN 619 898 672) & ORS (as per the attached Schedule) Plaintiffs
v 
UNITING CHURCH IN AUSTRALIA PROPERTY TRUST (VICTORIA) First Defendant
and
ATTORNEY-GENERAL FOR THE STATE OF VICTORIA Second Defendant

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JUDGE:

McDonald J

WHERE HELD:

Melbourne

DATE OF HEARING:

24 and 25 July 2023

DATE OF JUDGMENT:

9 August 2023

CASE MAY BE CITED AS:

St Hilda’s College Ltd & Ors v Uniting Church in Australia Property Trust (Victoria) & Anor

MEDIUM NEUTRAL CITATION:

[2023] VSC 462

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TRUSTS – First defendant the trustee of a statutory charitable trust – First plaintiff and first defendant entered into a deed which authorised the first plaintiff to give directions to first defendant to deal with trust property – First plaintiff directed first defendant to transfer legal interest in trust property to first plaintiff – First defendant refused to comply with direction – First defendant not allowed to transfer legal title in trust property – Trust deed purported to vary terms of statutory trust – Trust deed purported to confer power to terminate first defendant as trustee and appoint new trustee – Direction to transfer legal interest in trust property not a direction to deal with trust property – Exercise of power to deal with trust property subject to an implied prohibition in statute creating trust – First plaintiff not an administrator of trust – No standing under Charities Act 1978 to seek order requiring transfer of legal title nor an order to apply trust property for charitable purpose – No power to make orders under s 7L Charities Act 1978 – Queen’s College Land Act 1962 ss 2-3 – Uniting Church in Australia Act 1977 ss 20(1), 23(1), 4(a) – Charities Act 1978 ss 7L(1), 7J.

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APPEARANCES:

 Counsel Solicitors
For the Plaintiffs Mr P Solomon KC with
Mr MQ Nguyen 		Clayton Utz
For the First Defendant Mr JP Moore KC with
Mr PD Reynolds 		KCL Law
For the Second Defendant Dr P Bender Victorian Government Solicitor

HIS HONOUR:

Introduction

  1. St Hilda’s College is a residential college of the University of Melbourne.  The College is situated at 19–27 College Crescent, Parkville (‘the Land’).[1]  Since its incorporation on 21 June 2017, the first plaintiff (‘SHCL’) has operated the College.  The second to twelfth plaintiffs are the present members of the Council, the governing body of the College.  The first defendant (‘the Property Trust’) is the registered proprietor of the Land.  It holds the Land on trust for the purposes of the College, pursuant to a charitable trust (‘the Trust’) created by the Queen’s College Land Act 1962 (‘QCL Act’).

    [1]Certificate of Title 8542 Folio 513.

  1. On 11 December 1992 the Property Trust and the members of the Council executed a trust deed (‘1992 Trust Deed’).  Clause 3 of the 1992 Trust Deed provides that the Council may give directions to the Property Trust to deal with the Land.  On 15 September 2021 the Council directed the Property Trust to transfer legal title in the Land to SHCL (‘the Direction’).  To date, the Property Trust has not complied with the Direction.  If the Property Trust does comply with the Direction, upon the transfer of land being registered, SHCL will become trustee in lieu of the Property Trust.

  1. For the reasons set out below I have concluded that the Direction is invalid and of no effect. The Property Trust is not authorised by the QCL Act to comply with the Direction. The Direction purports to vary the powers of the trustee prescribed by s 3 of the QCL Act and to create a power of termination of the trustee. The Direction is not a direction to ‘deal with’ the Land within the meaning of clause 3 of the 1992 Trust Deed. Further, there is an implied prohibition under the QCL Act upon a trustee transferring legal title in the Land to a third party whilst the Land continues to be subject to the charitable trust created by s 2 of the QCL Act.

  1. In the alternative, SHCL seeks an order pursuant to s 7L of the Charities Act 1978 requiring the Property Trust to transfer legal title in the Land to SHCL. SHCL does not have standing to seek orders under s 7L as it is not an administrator of the Trust. Further, s 7L does not confer power on the Court to make an order directing the Property Trust to transfer legal title in the Land to SHCL. SHCL’s application will be dismissed.

Background

  1. It is common ground that on 3 April 1962 a portion of the land occupied by Queen’s College, University of Melbourne was transferred by way of gift to ten members of the Council of St Hilda’s College to hold on trust for the purposes of St Hilda’s College. On 11 December 1962 the QCL Act was assented to and came into operation. Sections 2 and 3 of the QCL Act provide as follows:

2. Power to registered proprietors of Queen’s College land

(1)    Notwithstanding anything in any Act or enactment or in any trust deed the registered proprietors for the time being of the land described in the hereinbefore recited certificate of title shall have and shall be deemed to have had on and after the third day of April One thousand nine hundred and sixty-two power to transfer by way of gift the portion of that land described in the Schedule to this Act freed and discharged from all trusts encumbrances limitations restrictions and reservations to trustees upon trust for the purposes of the hereinbefore recited St. Hilda’s College.

(2)    Upon the registration of a transfer of the land described in the said Schedule pursuant to subsection (1) of this section the trustees to whom it is transferred shall hold the land upon trust for the purposes of the said St. Hilda’s College.

3. Powers of trustees to sell, mortgage etc. land in Schedule

(1)    Notwithstanding the provisions of sub-section (2) of section two of this Act the trustees to whom the said land is transferred and their successors in title subject to any trust encumbrance limitation or restriction that may be validly created after the land is transferred shall have full power to mortgage charge sell transfer convey lease exchange or dispose of the whole or any part of the said land freed and discharged from all trusts encumbrances limitations restrictions and reservations, but shall not exercise any such power without the consent of the Governor in Council thereunto having been first obtained.

(2)    Any moneys arising from the exercise by the said trustees of any of the powers conferred by subsection (1) of this section shall be applied for the purposes of the said St. Hilda’s College or of some other college affiliated to the University of Melbourne or for other educational purposes of a kindred nature.

  1. On 1 November 1963 a trust deed was entered into between the ten original trustees (on the one part) and the chairperson of the Council of St Hilda’s College on behalf of the Council members and their successors (on the other part) (‘the 1963 Trust Deed’).  The ten trustees had no function in relation to the operation of the College.  Their role was limited to holding on trust the land gifted by Queen’s College on 3 April 1962. 

  1. On 22 June 1977 the Uniting Church in Australia Act 1977 commenced operation.  Section 20(1) of the Act provided as follows:

20 Vesting of certain property in the Trust

(1) Subject to this Act, all property that, immediately before the appointed day, was vested in the Methodist Church (Victoria) Property Trust or otherwise in trust for the Methodist Church is hereby divested from that person and to the extent that it was so vested is (without any further act or instrument) hereby vested in the Trust and shall be held by the Trust in accordance with the provisions of this Act.

  1. Section 23(1) provided as follows:

23 Evidence

(1) Subject to subsection (2), a certificate under the common seal of the Trust to the effect that property therein specified is held by it upon trust for the Church shall in all circumstances and all proceedings whether civil or criminal be prima facie evidence that the property so specified is so held.

  1. Section 23(4)(a) provided as follows:

(4) A certificate under the common seal of the Trust to the effect that the estate or interest of persons therein specified in land so specified is an estate or interest vested in the Trust by this Act shall for the purposes of—

(a) any application by the Trust to be registered under the Transfer of Land Act 1958 as the proprietor of that estate or interest pursuant to the vesting;

  1. On 20 October 1993 a certificate under the common seal of the Property Trust certified that the Land vested in the Property Trust.  A transfer of land from the ten original trustees to the Property Trust was registered on 20 December 1993.  On 20 December 1993 the Property Trust replaced the ten original trustees as registered proprietor of the Land.

The 1992 trust deed

  1. On 11 December 1992 the Property Trust (on the one part) and the Chairperson of the Council of St Hilda’s College on behalf of the Council’s members and their successors (on the other part) executed the 1992 trust deed.  The recitals to the trust deed record the following matters:

A. The Trustee is a corporation constituted under The Uniting Church in Australia Act 1977 of Victoria (as amended) and by the said Act is empowered to hold property in trust for The Uniting Church in Australia and upon any other trusts affecting the property.

B.   The land described in the Second Schedule hereto having previously been vested in certain persons as Trustees for the said College (pursuant to a Trust Deed dated 1 November 1963 of which a photocopy is annexed hereto) is presently vested in the Trustee by virtue of the provisions of the abovementioned Act upon certain trusts which are special trusts within the meaning of Section 20(7) of the said Act.

C.     The Trustee wishes by this Deed to acknowledge the special trusts upon which it now holds the said land and will in future hold any other lands hereafter acquired for the said College.

  1. Under clause 1 of the 1992 trust deed the Property Trust declared that it held the ‘trust property’ defined to mean the Land and any lands acquired for the College in the future, on trust ‘for use and occupation by and for the general purposes of the College’.  The Land is the only land that is ‘trust property’ under the 1992 trust deed.

  1. Clauses 2 and 3 of the 1992 trust deed provide as follows:

2.   That the Trustee will not except by authority of a resolution of the Council sell, transfer, lease, mortgage or otherwise deal with or encumber the trust property or any part thereof.

3.   That the Trustee will whenever directed by resolution of the Council deal with the trust property or any part thereof and with all money raised from sale, mortgage or other dealings with the trust property or any part thereof as directed or authorised by the Council for the lawful purposes of the College and not otherwise.[2]

[2]CB141, Trust Deed dated 11 December 1992.

  1. Other provisions of the 1992 trust deed prescribe the responsibility of the Council to make payments for all outgoings in respect of the Land, and to maintain insurance cover and pay for all costs and expenses incurred by the Property Trust.

  1. On 15 September 2021 the Council wrote to the Property Trust.  The letter referred to a resolution which had been passed on 12 October 2017 whereby the Council resolved that, subject to the Governor’s consent ‘all necessary and reasonable steps be taken to transfer legal title to the Land’ from the Property Trust to SHCL.[3]  The letter of 15 September 2021 stated that the Governor’s consent had been obtained and that the Council had agreed to direct the Property Trust to transfer the Land.  It then conveyed the Direction in the following terms:

The Council hereby directs the Property Trust to deal with the Land by transferring legal title in it to St Hilda’s College Limited and to take all necessary steps for St Hilda’s College Limited to become registered as proprietor of the Land within 60 days of the date of this letter.[4]

[3]CB147, Resolution of the Council members of St Hilda’s College.

[4]CB150, Letter from the Council to the Property Trust dated 15 September 2021.

  1. The Property Trust has not complied with the Direction.  On 6 September 2022 the present proceeding was commenced in the name of the Council by originating motion.  Since the commencement of the proceeding SHCL has been removed as a defendant and joined as the first plaintiff.  The present members of the Council have been named as the second to twelfth plaintiffs and the Attorney-General has been joined as the second defendant.

  1. By a further originating motion filed 6 April 2023 SHCL seeks:

(a)   A declaration that the Property Trust is bound by the Direction; and

(b) An order that, pursuant to the Direction and/or s 7L of the Charities Act, the Property Trust transfer legal title in the Land to SHCL and take all necessary steps for SHCL to become registered as proprietor of the Land.

A charitable trust created by statute

  1. Contrary to recital B of the 1992 trust deed the Land did not vest ‘in certain persons as trustees for the said College (pursuant to a trust deed dated 1 November 1963)’.[5] Rather, the Land vested in the ten original trustees pursuant to s 2(1) of the QCL Act. Pursuant to s 2(2), upon registration of the transfer of land, the ten trustees held the Land upon a charitable trust for the purposes of St Hilda’s College. The Land subsequently vested in the Property Trust by virtue of the Uniting Church in Australia Act 1977. The Property Trust is the successor in title of the ten original trustees. The powers of the Property Trust as trustee are prescribed by s 3(1) of the QCL Act.

    [5]CB141, Trust Deed dated 11 December 1992.

  1. The primary issue for determination in the present proceeding is not, as contended by SHCL, whether the Direction is a direction to ‘deal with’ the Land within the meaning of clause 3 of the 1992 trust deed. Rather, the primary issue for determination is whether the Property Trust would be acting beyond the powers conferred upon it by s 3(1) of the QCL Act if it complied with the Direction.

The Direction is outside the scope of the Property Trust’s powers

  1. Under 3(1) of the QCL Act the Property Trust, as successor in title to the original trustees, has ‘full power to mortgage, sell, transfer, convey, lease, exchange or dispose of the whole or any part of the said Land freed and discharged from all trusts, encumbrances, limitations, restrictions and reservations’. This power is not to be exercised without the consent of the Governor in Council having first been obtained. Further, the power is ‘subject to any trust, encumbrance, limitation or restriction that may be validly created after the Land is transferred’.

  1. SHCL submits that the power conferred upon the Property Trust by s 3(1) includes a power to transfer legal title in the Land.[6] Insofar as SHCL submits that the Property Trust’s power to transfer legal title in the Land is unqualified, the submission must be rejected. The power conferred upon the Property Trust by s 3(1) is qualified in three respects. First, the power is subject to any trust, encumbrance, limitation or restriction validly created after the Land is transferred. Second, the power to transfer legal title in the Land is subject to the proviso that the Land must be freed and discharged from all trusts, encumbrances, limitations, restrictions and reservations. Third, the exercise of the power is subject to the consent of the Governor in Counsel.

    [6]First Plaintiff’s written submissions dated 5 May 2023, [43].

  1. The power conferred by s 3(1) of the QCL Act is ‘subject to any trust, encumbrance, limitation that may be validly created after the Land is transferred’. Clause 1 of the 1992 trust deed provides:

The Trustee declares that as from the date of the vesting in it of the land described in the Second Schedule hereto and any lands acquired for St. Hilda’s College in the future (all of which lands are hereinafter referred to as "the trust property") it holds the trust property UPON TRUST for use and occupation by and for the general purposes of St. Hilda’s College, University of Melbourne ("the College").[7]

[7]CB141, Trust Deed dated 11 December 1992.

  1. Clause 1 does not create a charitable trust. The only charitable trust under which the Land is held by the Property Trust for the general purposes of St Hilda’s College is the charitable trust created by s 2(2) of the QCL Act. Clause 1 is an acknowledgement of the charitable trust created by the QCL Act and the vesting of the Land in the Property Trust pursuant to the Uniting Church in Australia Act 1977.

  1. As the 1992 trust deed does not create a trust, the only power which the Property Trust has to transfer the Land is that conferred by s 3(1) of the QCL Act: to transfer the Land freed and discharged from all trusts, encumbrances, limitations, restrictions and reservations.  The Direction is not a direction to transfer legal title to the Land freed and discharged from the charitable trust under which the Land is held for the purposes of St Hilda’s College.  Rather, the Direction is to transfer legal title to the Land subject to the charitable trust.    

  1. There is no power under the QCL Act to vary the powers conferred on a trustee by s 3(1) of the QCL Act. A trustee does not have an implied power to vary a trust deed.[8]  A trustee’s function is ‘to take the trusts as it finds them and to administer them as they stand’.[9] Clause 3 of the 1992 trust deed is invalid insofar as it purports to expand the powers conferred upon a trustee by s 3(1) of the QCL Act by authorising the trustee to transfer the legal interest in the Land to a third party whilst the Land is still subject to the charitable trust created by s 2(2) of the QCL Act.

    [8]Mercanti v Mercanti (2016) 50 WAR 495, 517-8 [81].

    [9]Re Dion Investments Pty Ltd (2014) 87 NSWLR 753, 773 [94].

  1. The powers conferred upon the Property Trust by s 3(1) of the QCL Act are not qualified by the 1992 trust deed because the trust deed does not constitute a trust validly created after the transfer of the Land. The Property Trust has no power to transfer legal title in the Land to SHCL subject to the charitable trust created by s 2(2) of the QCL Act. This is so irrespective of whether the Direction is a direction to ‘deal with’ the Land within the meaning of clause 3 of the 1992 trust deed. However, if this conclusion is incorrect, I would in any event conclude that the Direction is not a direction to ‘deal with’ the Land within the meaning of clause 3 of the 1992 trust deed.

The Direction is not a direction to ‘deal with’ the Land

  1. SHCL submits that in its ordinary and natural meaning the concept of a ‘dealing’ with property has a very wide ambit and includes a transfer of the legal interest in property to another person.[10] SHCL submits that clause 3 of the 1992 trust deed should not be read down in light of s 3 of the QCL Act. It submits that the power conferred upon the Property Trust by s 3(1) includes the power to transfer legal title in the Land. It submits that nothing in the QCL Act expressly or impliedly prohibits a trustee from entering into an agreement under which it undertakes to exercise its powers to deal with the Land in a particular manner or under particular circumstances.[11]

    [10]First Plaintiff’s written submissions dated 5 May 2023, [40], citing Commissioner of State Revenue v Abbotts Exploration Pty Ltd (2014) 48 WAR 300, 327 [110]–[111].

    [11]First Plaintiff’s written submissions dated 5 May 2023, [43]–[44], citing Tipperary Developments Pty Ltd v Western Australia (2009) 38 WAR 488, 542 [250].

  1. The principles which govern the construction of contracts apply equally to the construction of clause 3 of the 1992 trust deed.[12]  In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd,[13] French CJ, Nettle and Gordon JJ set out the principles which govern construction of commercial contracts as follows:

    [12]Byrnes v Kendle (2011) 243 CLR 253, 275 [59] (Gummow and Hayne JJ), 286 [102] (Heydon and Crennan JJ).

    [13](2015) 256 CLR 104.

The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.

Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.

However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals.

Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties’ statements and actions reflecting their actual intentions and expectations.

Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption “that the parties … intended to produce a commercial result”. Put another way, a commercial contract should be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.

These observations are not intended to state any departure from the law as set out in Codelfa Construction Pty Ltd v State Rail Authority (NSW) and Electricity Generation Corporation v Woodside Energy Ltd. We agree with the observations of Kiefel and Keane JJ with respect to Western Export Services Inc v Jireh International Pty Ltd.[14]

[14](2015) 256 CLR 104, 116-117 [46]-[52].

  1. In Adaz Nominees Pty Ltd v Castleway Pty Ltd[15] Whelan JA and Riordan AJA summarised the principles governing construction of commercial contracts as follows:

    [15][2020] VSCA 201.

To construe the terms of a commercial contract, the Court asks ‘what a reasonable businessperson would have understood those terms to mean’. To answer that question, ‘the reasonable businessperson [is] placed in the position of the parties’, and the Court applies the following principles:

(ll)The terms are construed objectively, and the subjective intentions of the parties are irrelevant.

(mm)The objective approach requires reference to the text and its ordinary meaning, together with:

(i) the context, being the entire text of the contract including matters referred to in the text; and

(ii) the purpose.

These matters will ordinarily be identified by reference to the contract alone, but evidence of mutually known objective background circumstances relevant to the purpose is admissible ‘no matter how clear the “ordinary meaning” of the words’. Identification of purpose may allow admission of evidence of the genesis of the transaction, the background, the context and the market in which the parties are operating.

(nn)Unless a contrary intention appears in the contract, the court is entitled to approach the task of interpretation on the assumption that the parties intended to produce a commercial result, and should construe it so as to avoid a commercial nonsense. However, the court does not weigh the commerciality of the agreement, and business common sense is a topic on which reasonable minds may differ.

(oo)If, after completion of this process, the language used in the contract ‘is ambiguous or susceptible of more than one meaning’, then evidence of surrounding circumstances external to the contract is admissible to assist with interpretation of the language in question.

(pp)However, ‘evidence of the parties’ statements and actions reflecting their actual intentions and expectations’ is inadmissible. Although evidence of prior negotiations is admissible to establish objective background facts known to both parties and the subject matter of the contract, evidence of negotiations reflective of actual intentions and expectations is not receivable.

(qq)Post-contractual conduct is inadmissible to construe the terms of the contract. However, the parties’ subsequent communications may be relevant to determine whether the parties intended to enter into a binding contract.[16]

[16]Ibid [70].

  1. Ordinarily the process of construction of a commercial agreement, including the commercial purpose of the agreement, is possible by reference to the contract alone.[17]  This approach is consistent with the judgment of the majority of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd:[18]

This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.[19]

[17]Ibid and the authorities cited therein.

[18](2004) 219 CLR 165.

[19]Ibid 179 [40]; See also Retirement Services Australia Pty Ltd v 3143 Victoria Street, Doncaster Pty Ltd (2012) 37 VR 486, 507 [65], 516 [106].

  1. The meaning of clause 3 of the 1992 trust deed is to be determined in accordance with what a reasonable person in the position of the parties would have understood the clause to mean. The meaning of clause 3 is to be construed in the context of the 1992 trust deed as a whole. Further, the provisions of the QCL Act are part of the context within which clause 3 is to be construed. Part of the surrounding circumstances known to both parties when the deed was executed was that the trustees’ powers were prescribed by s 3 of the Act. Further, it was known to both parties, and recorded in paragraph B of the Recitals that the Land vested in the Property Trust pursuant to the provisions of the Uniting Church in Australia Act 1977. 

  1. I accept SHCL’s submission that in its ordinary meaning a direction to ‘deal with’ trust property would include a direction to transfer the legal title to a third party.  However, I do not accept that a reasonable person in the position of the parties to the 1992 trust deed would have understood clause 3 to confer upon the Council of St Hilda’s College the power to direct the Property Trust to transfer legal title to the Land to a corporation which did not exist in December 1992, with the consequence that the Property Trust would cease to be the trustee of the trust.

  1. Paragraph C of the Recital records that ‘the Trustee wishes by this deed to acknowledge the special trusts upon which it now holds the said land and will in future hold any other lands hereafter acquired by the said College’. The deed is silent as to the removal of the Property Trust as trustee. There is no provision in the QCL Act relating to removal of the trustee of the trust. However, s 29(3) of the Uniting Church In Australia Act precludes the Property Trust from retiring or declining to act as trustee in respect of property which has vested in it by or pursuant to the provisions of the Uniting Church In Australia Act. The only source of power to remove the Property Trust as trustee is s 48 of the Trustee Act 1958, or alternatively, the inherent jurisdiction of the Supreme Court of Victoria.[20]  A reasonable person in the position of the parties to the deed would not have understood clause 3 to confer upon the Council of St Hilda’s College the power to give a direction to the Property Trust which, if complied with, would result in the Property Trust ceasing to be trustee.

    [20]Miller v Cameron (1936) 54 CLR 572, 580-1 (Dixon J).

  1. If, contrary to the conclusions set out above, the Direction was a direction to ‘deal with’ the Land within the meaning of clause 3 of the 1992 trust deed, there is an implied prohibition under the QCL Act upon the Property Trust complying with the Direction.

  1. A trustee has no power to sell trust property unless authorised expressly or impliedly by the trust instrument or by statute or court order.[21] The QCL Act precludes the transfer of legal title in the Land if the Land has not been freed and discharged from the charitable trust created by s 2(2) of the QCL Act. A transfer of the legal title in the Land to SHCL subject to the charitable trust would be directly inconsistent with the purpose of s 3 which is to restrict the trustee’s power to transfer legal title in the Land, whilst the Land is subject to the charitable trust created by s 2(2) of the QCL Act.[22]

    [21]J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) [20–02].

    [22]Cf Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, 426 (Mason J).

Conclusion on SHCL’s claim based on the Direction

  1. The Direction is invalid and of no effect. There is no power conferred on the Property Trust by the QCL Act which permits compliance with the Direction. Second, the Direction is not a direction to ‘deal with’ the Land within the meaning of clause 3 of the 1992 trust deed. Third, if the Direction is a direction to ‘deal with’ the Land within the meaning of clause 3, there is an implied prohibition under the QCL Act upon the Property Trust complying with the Direction.

  1. In light of these findings, it is unnecessary to address the parties’ submissions on the question of whether it was necessary for the plaintiff to obtain the Attorney-General’s fiat prior to commencing this proceeding.

Section 7L Charities Act 1978

  1. SHCL claims in the alternative for an order pursuant to s 7L of the Charities Act 1978 requiring the Property Trust to transfer legal title in the Land to SHCL and to take all necessary steps for SHCL to become registered as proprietor of the Land. 

  1. Section 7L of the Charities Act provides as follows:

7L Leave to apply trust fund for further purposes

(1) On the application of the trustees or the administrator of any charitable trust (whether created before, on or after 1 April 1959) the court may grant leave empowering the trustees or the administrator—

(a) to apply the trust fund for such further purposes as are necessary or desirable in order to carry out the purposes of the trust or to make them fully effective or are incidental to the carrying out of those purposes; and

(b) without affecting the generality of paragraph (a), if the carrying out of the purposes of the trust will impose on a charity an expense that is not adequately met by payments made pursuant to the trust, to apply such portion of the trust fund as is proper to meet those expenses.

(2) If leave is granted, the trustees or the administrator (as the case may be) may exercise the power subject to and in accordance with that leave.

(3) Any trustees or administrator wishing to obtain leave under this section may apply to the court by summons to which the Attorney-General is to be made a party

(4) In this section administrator means any person (other than the trustees) administering a trust fund.

  1. In order to succeed in its claim for relief pursuant to s 7L, SHCL must establish:

(i) That it is the administrator of the charitable trust created by the QCL Act; and

(ii)  That an order requiring the Property Trust to transfer legal title in the Land to SHCL would empower SHCL to apply the Land:

(a)       for such further or other purposes as are necessary or desirable in order to carry out the purposes of the trust; or

(b)      to make them fully effective; or

(c)       are incidental to the carrying out of those purposes.

  1. Section 7L(4) defines ‘administrator’ as ‘any person (other than the trustees) administering a trust fund.’ This definition contemplates that there may be a person other than the trustee involved in the administration of a trust fund.

  1. ‘Administering’ is defined as:

·‘to direct or control (the affairs of a business, government etc)’[23]

·‘to control the operation or arrangement of something ‘.[24]

[23]Collins English Dictionary, (13th ed, 2019) ‘administer’.

[24]Cambridge Dictionary (online at 1 August 2023) ‘administer’.

  1. The trust fund is comprised solely of the Land which was transferred by way of gift to the original ten trustees on 3 April 1962.  SHCL is the administrator of St Hilda’s College.  It holds financial and non-financial assets (other than the Land), employs staff, enters into contracts and obtains finance for the purposes of the College.[25]

    [25]CB573, Affidavit of Peter Kempen sworn 5 May 2023 at [8], [10].

  1. The Property Trust has no role to play in the management and control of the College. Under the trust created by the QCL Act, the Property Trust’s sole function, subject to the powers prescribed by s 3(1) and (2), is to hold the Land upon trust for the purposes of St Hilda’s College. SHCL has management and control of the College but does not have management and control of the Land. It is not an administrator of the Land within the meaning of s 7L of the Charities Act. On this basis, SHCL’s claim for relief pursuant to s 7L of the Charities Act must be dismissed.

  1. If I am wrong, and SHCL is an administrator, the orders sought by SHCL do not ‘apply the trust fund for such further purposes of the trust’ within the meaning of s 7L(1)(a) of the Charities Act.

  1. ‘Trust fund’ is defined in s 7J of the Charities Act to mean ‘any property subject to a charitable trust’. A ‘charitable trust’ is defined in s 7J as ‘a trust created for a charitable purpose’. The reference to ‘purposes’ in s 7L(1)(a) is a reference to ‘charitable purposes’.

  1. Section 7L was introduced into the Charities Act by the Charities (Amendment) Bill 2006 (Vic). The explanatory memorandum for the Bill stated that the purpose of s 7L was to allow administrators and trustees to seek the Court’s leave ‘to apply trust funds for additional and incidental purposes that are complementary to the trust’s existing purposes’.[26]

    [26]Explanatory Memorandum, Charities (Amendment) Bill, cl 3.

  1. The Court has power under 7L(1)(a) to grant leave to the administrator of a charitable trust ‘to apply the trust fund…’  The definition of ‘apply’ includes:

·To bring to: to put into practical operation, as a principle, law, rule etc

·To put to use; employ: they know how to apply their labour

·To devote to some specific purpose: to apply a sum of money to pay a debt.[27]

[27]Macquarie Dictionary, (7th ed, 2017) ‘apply’.

  1. The reference in s 7L(1)(a) to ‘apply the trust fund’ is a reference to the trust fund being put to use/employed for further charitable purposes of the trust. I accept the submission made on behalf of the Attorney-General that the orders sought by SHCL would not apply the trust fund within the meaning of s 7L(1)(a). Rather, the effect of the orders sought is to substitute SHCL as trustee in lieu of the Property Trust. The orders will not result in the Land being employed/put to use for a further charitable purpose. All that would occur is a change in the registered proprietor of the Land and the removal of the Property Trust as trustee. An order that, pursuant to the Direction, the Property Trust transfer legal title in the Land to SHCL would confer a new power upon SHCL, namely, the power to change the trustee of the trust. There is a distinction between the conferral of a new power and the application of a trust fund for charitable purposes.[28]  As the order sought by SHCL would not constitute the grant of leave to apply the trust fund for a further charitable purpose, the Court has no power to make the orders sought. 

    [28]Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204, 216-7 [17].

  1. SHCL’s application for orders under s 7L of the Charities Act will be dismissed.  I shall provide the parties with an opportunity to make submissions on the costs of the proceeding.

SCHEDULE OF PARTIES

S ECI 2022 03477

ST HILDA’S COLLEGE LIMITED (ACN 619 898 672)

First Plaintiff

DAVID GILBERTSON

Second Plaintiff

PETER KEMPEN

Third Plaintiff

BRENDA HOLT

Fourth Plaintiff

DORREEN THOMAS

Fifth Plaintiff

RICHARD JAMES

Sixth Plaintiff

MATTHEW LISTON

Seventh Plaintiff

TIMOTHY GREENALL

Eighth Plaintiff

SALLY ELFORD

Ninth Plaintiff

LYNNE WILLIAMS

Tenth Plaintiff

JOSHUA HEALEY

Eleventh Plaintiff

ZARA WILLIAMS

Twelfth Plaintiff

AND

THE UNITING CHURCH IN AUSTRALIA PROPERTY TRUST (VICTORIA)

First Defendant

ATTORNEY-GENERAL FOR THE STATE OF VICTORIA

Second Defendant

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Cases Cited

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Mercanti v Mercanti [2016] WASCA 206
Gambotto v WCP Ltd [1995] HCA 12
Mercanti v Mercanti [2016] WASCA 206 (S)