Trust Company Limited re Peter Mitchell v Attorney-General of New South Wales

[2011] NSWSC 206

Supreme Court

New South Wales

Medium Neutral Citation:

TRUST COMPANY LIMITED re PETER MITCHELL v ATTORNEY-GENERAL OF NEW SOUTH WALES [2011] NSWSC 206

Hearing dates:

15 March 2011

Decision date:

15 March 2011

Before:

Tamberlin AJ

Decision:

The Court:

1. Determines that the original Empire purposes of the Peter Mitchell British Military Forces Trust and the Peter Mitchell British Empire Naval Forces Trust have ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trusts.

2. Orders that a cy-pres scheme be settled to apply:

(i) the capital and income of the Peter Mitchell British Empire Military Forces Trust to augment the capital of the Peter Mitchell Australian Military Forces Trust; and

(ii) the capital and income of the Peter Mitchell British Empire Naval Forces Trust to augment the capital of the Peter Mitchell Australian Naval Forces Trust.

3. Orders that Orders made by Justice Myers in this matter on 14 April 1961 which were taken out on 27 March 1972 be vacated and that the above orders be made in lieu thereof.

4. Orders that the Plaintiff's costs be paid equally on an indemnity basis from the Peter Mitchell Empire Military Forces Trust and the Peter Mitchell British Empire Naval Forces Trust.

5. Orders that the Defendant's costs be paid equally on an indemnity basis on the Peter Mitchell British Empire Military Forces Trust and the Peter Mitchell British Empire Naval Forces Trust.

6. Liberty for either party to apply on three days' notice.

Catchwords:

EQUITY - trusts - charitable trusts - application of cy-pres scheme where purpose not suitable and effective method of using the trust property - application of Charitable Trusts Act 1993 (NSW), s 9 to proceedings commenced before enactment of Act considered - operation of cl 5.26 - whether substantive or procedural

Legislation Cited:

Charitable Trust Act 1993 (NSW), ss 9, 26

Cases Cited:

Attorney-General for New South Wales v Fulham [2002] NSWSC 629
Permanent Trustee Company Ltd v Attorney-General (Re Byrnes Estate) (No 2) (Unrep 1 March 1995 NSWSC) (BC9504291)

Category:

Principal judgment

Parties:

Trust Company Limited as trustee for the Peter Mitchell British Empire Military Forces Trust and the Peter Mitchell British Empire Naval Forces Trust - Plaintiff
Attorney-General of New South Wales - Defendant

Representation:

Counsel:
R N S Young - Plaintiff
M Izzo - Defendant
Solicitors:
E Lawson, The Trust Company - Plaintiff
I V Knight - Defendant

File Number(s):

2000/38257

Judgment

1. HIS HONOUR: In this matter, by Amended Notice of Motion the plaintiff seeks orders declaring that the purpose of the Peter Mitchell British Empire Military Forces Trust and the Peter Mitchell British Empire Naval Forces Trust have ceased to provide a "suitable and effective method of using the trust property having regard to the spirit of the trust[s]".

1. This quoted language is taken from the wording of s 9 of the Charitable Trust Act 1993 (NSW) ("the Act") which relates to the extension of the occasions for applying trust properties cy-pres. It provides as follows:

"The circumstances in which the original purpose of a charitable trust can be altered to allow the trust property or any part of it to be applied cy pres include circumstances in which the original purposes, wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust." (Emphasis added.)

1. The application is not opposed by the defendant, the Attorney-General of New South Wales, who has appeared to make submissions as to the background of the matter and also to provide authorities to the Court.

1. The section was considered by Justice Bryson in the case of Attorney-General for New South Wales v Fulham [2002] NSWSC 629 decided on 19 July 2002. My attention has been directed specifically to provisions of paragraphs [16]-[20] of that decision.

1. I have before me extensive evidence in the form of an Affidavit from Clare Maree Stanford and annexures detailing the history and the problems which apply in relation to the implementation of the trust according to the precise terms of the trust.

1. I am satisfied, having regard to the submissions of both Counsel and the Affidavit of Clare Maree Stanford and having regard to the provisions of the legislation that this is a case where I should make an order under s 9 of the Act.

1. My attention has been directed to the fact that in 1961 orders were made in this proceeding by Justice Myers of this Court which were founded on his Honour's view that there should not be a grant of a cy-pres application in this Estate because it was not impractical or impossible to implement the terms of the trust as they were provided for by the Will. These orders were taken out in 1972.

1. Since that time, the relevant law and principles have changed significantly and s 9 of the Act contains provisions which use different tests as to when there should be an implementation of a cy-pres scheme. In particular, the language used in the section refers to "suitable and effective" and also refers to having regard to "the spirit" of the trust.

1. Having regarded to the nature of the trusts which are intended to be augmented by the assets of the present trusts, I am satisfied that they are in the "same spirit" as the original trust. I am also satisfied that having regard in particular to considerations such as the number of countries in the British Commonwealth, the diversity of cultures and languages and the diverse military practices and standards in those countries, it is not a suitable and effective method of using the trust property particularity having regard to the costs which are involved and the limited funds available. The evidence establishes that it is not practicable or effective to use the funds of the trust property by operating the trust or carrying out the trusts according to its original terms.

1. I note that the 1961 orders of Justice Myers were made in this same proceeding. There has been some discussion as to the operation of s 26 of the Act which provides that nothing in any provision of the Act affects any proceedings relating to a trust that were commenced in the Court before the commencement of the provision concerned.

1. The submission has been made to me which I accept, that this clause is intended to relate to the procedural aspects of a matter and is not directed to the operation of the substantive provisions of the Act and in particular, s 9.

1. Some support of this view is obtained from a decision of Justice Young in Permanent Trustee Company Ltd v Attorney-General (Re Byrnes Estate) (No 2) (Unrep 1 March 1995 NSWSC) (BC9504291) at p 3.

1. The orders which I propose to make in this matter therefore are in accordance with the Amended Notice of Motion. I am satisfied that the appropriate procedure has been used in this application.

1. The orders that I make are:

(1)   Firstly, a declaration that the original purpose of the Peter Mitchell British Empire Naval Forces Trust failed at the date of death of the tenant in 1954.

(2)   Secondly, a determination that the original purposes of the Peter Mitchell British Empire Military Forces Trust and the Peter Mitchelll British Empire Naval Forces Trust since they were laid down ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trust.

(3)   The cy-pres scheme be settled to apply to the capital and income of the Peter Mitchell British Empire Military Forces Trust to augment the capital of the Peter Mitchell Australian Military Forces Trust and the capital and income of the Peter Mitchell British Empire Naval Forces Trust to augment the capital of the Peter Mitchell Australian Naval Forces Trust.

(4)   I also make orders vacating the orders which were made by Justice Myers in this matter on 14 April 1961. I note they were taken out as at 27 March 1972, and substitute the orders which I have made above in lieu thereof.

(5)   I also order that the plaintiff's costs be paid equally on an indemnity basis from the Peter Mitchell British Empire Military Forces Trust and the Peter Mitchell British Empire Naval Forces Trust.

(6)   The defendant's costs be paid equally on an indemnity basis from the Peter Mitchell British Empire Military Forces Trust and the Peter Mitchell British Empire Military Naval Forces Trust.

HIS HONOUR: Are there other orders that Counsel would think to be appropriate in the circumstances? That seems to cover everything that has been raised so far and also in the Amended Notice of Motion.

YOUNG: Liberty to restore to apply just in case.

HIS HONOUR: I reserve liberty to apply on 3 days' notice.

In relation to that, do I need to make the order - it occurred as I was making it that the original purpose has failed as at the date of the life tenant - I don't need to make that first order above.

IZZO: No, your Honour.

HIS HONOUR: I won't make that order. I revoke that at this point. I don't think it necessary or appropriate.

The real gist of the decision is the second one namely that ceases to provide a suitable and effective method and the following orders. I will delete that first order and make the orders as I have announced them.

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Decision last updated: 28 March 2011