University of Adelaide v Attorney-General (SA)

Supreme Court of South Australia
(Civil)
UNIVERSITY OF ADELAIDE v ATTORNEY-GENERAL (SA)
[2023] SASC 17
Reasons for the Orders of the Honourable Justice McDonald
CHARITIES - CHARITABLE GIFTS AND TRUSTS - IN GENERAL
CHARITIES - CHARITABLE GIFTS AND TRUSTS - IN GENERAL - CONSTRUCTION - ASCERTAINMENT OF OBJECTS - GENERALLY
EQUITY - TRUSTS AND TRUSTEES - POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES - LIABILITY FOR BREACH OF TRUST - RELIEF FROM LIABILITY
The University of Adelaide made an application for approval of a variation scheme to the charitable bequest to the University made by way of the Will of John Andrew Tennant Mortlock dated 2 March 1950. The application was made pursuant to s 69B of the Trustee Act 1936 (SA) and the Court’s inherent jurisdiction. Additionally, the applicant sought relief from any historical breach of the trust found to have occurred in respect of its application of the bequest pursuant to s 56 of the Trustee Act 1936 (SA). The applicant submitted that the proposed variation scheme was necessary as the original purpose of the charitable bequest could not be carried out according to the directions of the Will, as the Will directed the applicant to use the bequest “in connection with the Waite Agricultural Research Institute”, (WARI) which no longer existed under that name, but existed as the Waite Research Institute (WRI) as its successor.
Held:
1. The last Will and Testament of John Andrew Tennant Mortlock executed on 2 March 1950 be varied in accordance with the schedule provided by the applicant.
2. That the applicant be retrospectively relieved from any liability for breaches of trust found to have occurred in respect of its application of the bequest, arising from clause 18(c) of the Last Will and Testament of Mortlock, pursuant to ss 56 and 60 of the Trustee Act 1936 (SA).
3. The applicant’s costs of and incidental to the application be paid out of Trust assets.
Trustee Act 1936 (SA) ss 56, 60, 69B, referred to.
University of Adelaide v Attorney-General (SA) [2018] SASC 82; JD & KZ Zohs Properties Pty Ltd v Ferme [2015] SASC 55, discussed.
Re de Vedas [1971] SASR 169, considered.

UNIVERSITY OF ADELAIDE v ATTORNEY-GENERAL (SA)
[2023] SASC 17
Civil: Application
McDONALD J.

On 29 March 2022 the University of Adelaide filed an originating application seeking orders for a trust variation scheme to the charitable bequest to the University made by way of the last Will and Testament of John Andrew Tennant Mortlock executed on 2 March 1950. Additionally, the applicant sought relief from any historic breach of the trust found to have occurred in respect of its application of the bequest.
On 1 August 2022 I made the following orders:
1.Pursuant to s 69B of the Trustee Act 1936 (SA) and the inherent jurisdiction of the Court, clause 18(c) of the last Will and Testament of John Andrew Tennant Mortlock executed on 2 March 1950 be varied in accordance with the Schedule that has been provided by the applicant.
2.Pursuant to ss 56 and 60 of the Trustee Act 1936 (SA) that the Applicant be relieved retrospectively from any liability for any breach of trust in respect of the applicant’s use of the bequest arising from clause 18(c) of last Will and Testament of John Andrew Tennant Mortlock executed on 2 March 1950.
3.The applicant’s costs of and incidental to the application be paid out of trust assets.
I now provide the reasons for making those orders.
Introduction
The University of Adelaide (‘the University’) makes an application for approval of a Trust Variation Scheme to the charitable bequest to the University, made by way of the Will of John Andrew Tennant Mortlock (‘Mortlock’) dated 2 March 1950 (‘the Will’). The application is made pursuant to s 69B of the Trustee Act 1936 (SA) (‘the Act’) and in the Court’s inherent jurisdiction. Further to that, the University seeks to be retrospectively relieved from any liability for breaches of the trust found to have occurred in respect of its application of the bequest, arising from clause 18(c) of the Will, pursuant to s 56 and s 60 of the Act.
The University also seeks an order that its costs of and incidental to this application are paid out of Trust assets.
The relevant clause of the Mortlock Will, clause 18(c) states:
Subject to the interests of my said wife in my residuary estate my Trustees shall stand possessed thereof UPON TRUST to divide the same into two equal parts and pay one such part to THE LIBRARIES BOARD and pay the other part to the University of Adelaide for use in connection with the Waite Agricultural Research Institute. And I desire but without imposing any trust or obligation that a portion of the latter part may be used by the said University in building a wing or wings as an addition to the present buildings at the said Research Institute and to be known as the “John Mortlock Wing” of such buildings.
This application relates to the use of the words “for use in connection with the Waite Agricultural Research Institute” (‘WARI’). The proposed Trust Variation Scheme has become necessary because the original purpose of the charitable bequest cannot reasonably be carried out according to the directions of the Will. In particular, the Will directed the University to use the bequest in connection with the WARI.
The WARI was established by the University in 1924 and ceased to operate in 2002. Upon the establishment of the WARI, the 1924 University calendar stated that its purpose was “furthering the cause of education in Agriculture and allied subjects in this State”. In 2010, a new entity, the Wait Research Institute (‘WRI’) was established. The activities of the WRI, have considerably evolved since Mortlock made his Will. Notwithstanding, those activities’ still accord with the WARI’s original and enduring purpose, namely, to stay at the global forefront of agricultural research and practice.
Unlike many other applications of this nature, in my view, there is nothing contentious or controversial about the application. Rather it strikes me that, the very fact of the application, evidences good governance on the part of the University.
Evidence before the Court
The University relies on two affidavits: those being affidavits of Matthew Gilliham[1] and Celine Clare McInerney.[2] Dr Gilliham is the current Director of the WRI at the University. He was appointed to that role in 2019. Since 2009, Dr Gilliham has been a member of the WRI and progressed through many senior roles. Dr Gilliham has a Bachelor of Science in Ecology and a PhD in Plant Physiology. His areas of research specialisation are crop plant nutrition and stress resilience, with a focus on salinity and drought tolerance. The purpose of Dr Gilliham’s affidavit was to set out, from an agricultural scientist’s perspective, the history of the WARI/ WRI and focus on the evolving areas of agricultural research undertaken by the WARI/WRI.
[1] Affidavit of Matthew Gilliham dated 28 March 2022 (FDN 5) (‘Gilliham Affidavit’).
[2] Affidavit of Celine Clare McInerney dated 23 March 2022 (FDN 4) (‘McInerney Affidavit’).
Celine McInerney also provided an affidavit in support of the application. Ms McInerney was, at the time of preparing the affidavit, the General Counsel and Executive Director of the Legal and Risk Branch of the University. She held that position from 17 October 2005. In her affidavit, Ms McInerney provided in some detail the history of the Mortlock Bequest as well as the history of the WARI, which was later to become the WRI. In preparing her affidavit Ms McInerney had recourse to various historical records held by the University.
Establishment of the WARI
The WARI was established by the University on the Waite Campus in suburban Adelaide in 1924. The land had been gifted to the University by Peter Waite. In making this gift, on 3 October 1913 Mr Waite wrote a letter to the Vice Chancellor of the University and the Premier of South Australia explaining the purpose of his gift:
I have been much influenced by the wonderful work our Agriculturalists and Pastoralists have accomplished hitherto in face of the heavy odds they have had to meet.
With comparatively little scientific training they have placed out Wheat, Wool and fruits in the highest estimation of the World; our sheep have been brought to such perfection that they are sought after not only by all the Sister States, but South Africa; our Agricultural machinery has been found good enough even for the Americans to copy, and our farming methods have been accepted by the other States as the most up to date and practical for Australian conditions.
We have now reached a point where it behoves us to call science to our aid to a greater extent hitherto has been done, otherwise we cannot hope to keep in the fore front.
By indenture dated 29 January 1914, Mr Waite gifted his ‘Urrbrae’ estate to the University, subject to a life interest retained for him and his wife. In 1915 Mr Waite supplemented the Urrbrae gift by the addition of the adjoining estate of Claremont and Netherby, and in 1918 made provision for the income of 5,800 shares in Elder Smith & Co Ltd “to be applied in perpetuity for the promotion and encouragement of education in and in connection with the study of agriculture, botany, zoology, veterinary science, entomology and horticulture and forestry”.[3] After the deaths of Mr and Mrs Waite in 1992, the University received the Urrbrae, Claremont and Netherby lands effective 3 February 1923 for the purpose of furthering the cause of research in agriculture and allied subjects.
[3] McInerney Affidavit at [65]-[66].
It is of significance that the purpose of the WARI, from its very creation, was to ensure that South Australia remained at the cutting edge of scientific developments in agriculture. The 1924 University calendar reported that the WARI comprised of a Director and Professor of Agriculture, a Professor of Agricultural Chemistry, a Plant Pathologist, an Assistant Chemist, an Assistant Agronomist, a Field Officer, laboratories for agronomy, agricultural chemistry and plant pathology, and was initially concerned with:
(1) Investigations concerning the production, utilization, and improvement of farm crops, and the control of fungoid diseases affecting such crops; (2) Soil problems, including the accumulation of data regarding soil types found in the agricultural areas of the State, and the adaptation of newer standard laboratory methods to Australian productions.
In 1950, the year that Mortlock made his Will, the University stated the same purpose as it had in 1924 when the WARI had first been established. However, the WARI had considerably evolved. The 1950 University calendar sets out that the WARI:
a.had purchased a further 92 acres and leased a further 90 acres to carry out its activities;
b.owned and operated three further laboratories, and glasshouses, implemented sheds, a cereal barn and a wool shed had been added since establishment and a field station at Yudnapinna, in the north-west of South Australia;
c.now focused its research on Agronomy and Grassland Ecology, Genetic and Plant Breeding, Plant Pathology, Plant Physiology, Economic Entomology, Agricultural Chemistry and Soil Science; and
d.provided teaching in the advanced years of the Faculty of Agricultural Science and in association with the appropriate schools of pure science in the University for post-graduate training and research.
It should be noted that, almost from its inception, the WARI worked in collaboration with other research and commercial bodies to achieve its purpose. That form of collaboration played an important part in the role of the Institute right up until recent times.
Establishment of the WRI
In 2002, the WARI ceased to operate as an institute, which coincided with the establishment of a new Faculty of Science, subsuming the Faculty of Agricultural and Natural Resources. At that time, the Director of the WARI retired and was not replaced. The new faculty of science contained a School of Agriculture and Wine, which included the WARI’s research and teaching activities in its ambit. The Faculty of Science continued these research and teaching activities at the Waite Campus but also at the Adelaide and Roseworthy Campuses and field offices as the University’s activities outgrew the Waite Campus.
In 2009, the University statute under which WARI had been officially established was repealed and in 2010 the WRI was established at the Waite Campus.[4] In the intervening period, the WARI had no independent budget or management structure. In “The Waite - A social and scientific history of the Waite Agricultural Research Institute”,[5] the Dean of the Faculty of Science, Professor Edwin Cornish, observed that during that period the WARI had become a “virtual institute” comprising a “set of activities” on the campus rather than a managing entity. It would appear that, over time, the University continued to maintain the Mortlock Bequest in the form of a commercial farming venture and largely reinvested any income back into that venture.[6]
[4] McInerney Affidavit at [13] and [76].
[5] Lynette D Zeitz, The Waite – A social and scientific history of the Waite Agricultural Research Institute (Barr Smith Press, 2014).
[6] McInerney Affidavit at [91].
The WRI was established in 2010 as the first of the University’s research institutes, of which there are now seven. A University media release dated 27 July 2010 announced that the research activities to be conducted by the WRI included “plant and pest biology, plant genetics and breeding, integrated farming systems, soil science, wine science and agronomy and agriculture economics”. It described the WRI’s aim as to “ensure profitable and productive agriculture in the face of climate change, increased costs of energy, limited natural resources, urbanisation and environmental degradation”.[7]
[7] McInerney Affidavit at [78].
In his affidavit, Dr Gilliham described the role of the WRI in the following terms:[8]
It is the WRI’s mission and purpose to act as the University’s flagship for Agricultural innovation, performing research that will lead to impact for the Agriculture, Food and Wine sectors of the State and nation.
[8] Gilliham Affidavit at [11].
The largest concentration of agricultural researchers in the Southern hemisphere are located at the WRI on the Waite Campus. Many of the key areas of research activity that are carried out at the WRI have evolved out of the WARI in 1950-51.[9] These would now be considered as areas of research activity undertaken by the WRI that correspond to Morlock’s desire for cutting edge technological research.[10]
[9] Gilliham Affidavit at [20].
[10] Gilliham Affidavit at [21].
In her affidavit, Ms McInerney summarises the evolving purpose of the WARI/WRI in the following terms:[11]
My review of the materials relevant to WARI’s and WRI’s purpose reveals to me that:
a.Waite’s vision was for WARI to be a world-leading, global innovator in agricultural research and practice;
b.Waite’s vision remained fundamental to WARI during Mortlock’s lifetime, after his death, and has continued in the WRI of today;
c.In striving to achieve Waite’s vision, WARI/WRI has continually adapted and diversified in its research activities, governance and structure and locations;
d.WARI/WRI has routinely pursued cross-disciplinary, cross-institutional and private corporate opportunities and partnerships; and
e.WARI/WRI’s activities have routinely extended beyond the Waite campus.
[11] McInerney Affidavit at [83].
It is clear from the material before me that the governance, structure, operations and research activities of the WRI had evolved considerably from those of the WARI as constituted in 1950. However, the WARI and the WRI never deviated from their fundamental purpose. The WARI and the WRI have always existed to keep South Australia as an international leader in agricultural research. It is the WRI’s mission and purpose to act as the University’s flagship in agricultural innovation, performing research that will lead to a positive impact for the agricultural, food and wine sectors of the State and nation.[12]
[12] Gilliham Affidavit at [19].
Variation of the terms of the trust
Pursuant to s 69B of the Act, and the inherent jurisdiction of the court, the University seeks that clause 18(c) of the last Will and Testament of John Andrew Tennant Mortlock executed on 2 March 1950 be varied in accordance with the Schedule provided.
The proposed Trust Variation Scheme schedule seeks to amend clause 18(c) as follows:
Subject to the interests of my said wife in my residuary estate my Trustees shall stand possessed thereof UPON TRUST to divide the same into two equal parts and pay one such part to THE LIBRARIES BOARD and pay the other part to the University of Adelaide for use in connection with the ~~Waite Agricultural Research Institute.~~ Waite Research Institute including evolving areas of agricultural research and education in association with the Waite Research Institute and its collaborative partners both on and off the Waite campus. And I desire but without imposing any trust or obligation that a portion of the latter part may be used by the said University in building a wing or wings as an addition to the present buildings at the said Research Institute and to be known as the “John Mortlock Wing” of such buildings.
It is submitted that the proposed Scheme reflects first and foremost that the WARI no longer exists and that the WRI now exists in its place. It then seeks to nullify any notion that the use of the bequest is restricted to specific activities as they were characterised in 1950. It does this by expressly permitting uses in connection with evolving areas of agricultural research and teaching both on and off the Waite Campus. In this way, the proposed Scheme remains anchored to the broad types of activities that were carried out at the WARI at the time of the Mortlock Bequest, namely agricultural research, and teaching, but also accommodates the WRI’s current status as a hub for innovation and collaborative research and anticipates continuing evolution of these activities into the future both on and off the Waite Campus.
The law relating to variation of charitable trusts
The University has applied for orders approving a proposed Trust Variation Scheme pursuant to s 69B of the Act. The Attorney-General appeared as he represents the objects of charities and is a party to any application to vary the purposes of a charitable trust.[13] Having said that, given the non-contentious nature of this application, the Attorney-General did not seek to be heard.
[13] University of Adelaide v Attorney-General (SA) [2018] SASC 82 at [4].
Counsel for the applicant provided lengthy written submissions contending that the intent behind the Mortlock Bequest was to create a charitable trust. Having regard to those submissions, as well as the wording and circumstances of the bequest in the context of other clauses in the Will, I am satisfied that the preferred construction is that the bequest to the University in clause 18(c) comprises a charitable trust for use in connection with the WARI.
The Court has an inherent jurisdiction in respect to charitable trusts. The jurisdiction has been supplemented by various statutory provisions, including s 69B of the Act, which allows for the alteration of the purposes of a charitable trust in certain circumstances. Section 69B relevantly states:
69B—Alteration of purposes of charitable trust
…
(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.
(2)References in this section to the original purposes of a charitable trust shall be construed, where the purposes for which the trust property is required or permitted to be applied have been altered or regulated by a scheme or otherwise, as referring to the purposes for which the property is for the time being required or permitted to be applied.
(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.

In University of Adelaide v Attorney-General (SA),[14] Stanley J considered the application of s 69B of the Act:[15]
While s 69B represents a significant legislative expansion of the Court’s capacity to vary charitable trusts, a trust variation will not be justified on the basis of mere expediency or because it appears that the trust assets could be used more beneficially for another purpose.
The effect of s 69B(6) is that a trust variation scheme should accord as closely as possible to the original purposes of the trust. This is consistent with the general law and equitable principles.
(Footnotes omitted)
[14] [2018] SASC 82.
[15] University of Adelaide v Attorney-General (SA) [2018] SASC 82 at [8]-[9].
Stanley J went on to determine what amounts to the “spirit of the trust” as referred to in s 69B(6) of the Act:[16]
What constitutes the spirit of the trust will comprise a broader conception than the original purposes of the trust. When determining the spirit of the trust, it is appropriate and necessary to have regard to the trust’s history and the social context of the time at which it was established. The ascertainment of the spirit of the trust requires an evaluative judgment.
(Footnote omitted)
[16] University of Adelaide v Attorney-General (SA) [2018] SASC 82 at [12].
This is particularly apposite in the context of the bequest currently under consideration. In that, the evolution of science and technology that has occurred over the last 70 years is not something that Mortlock could have predicted. Certainly concepts of climate change, urbanisation and environmental degradation were not in the contemplation of those working and studying in agricultural science in 1950.
It is apparent from the initial terms of the Mortlock Bequest, and the circumstances in which it was made, that the variation sought reflects the original purposes of the trust. I accept the contention of Ms McInerney “that through the effluxion of time, the scheme in the Will does not now operate beneficially for the purposes of the bequest, and the interests of the charity can be better promoted by an altered scheme, consistent with more modern usage”.[17] The proposed trust variation scheme does no more than reflect the manner in which science and the operation of the WARI/WRI evolved over time.
[17] McInerney Affidavit at [17].
I adopt the succinct summary of the position provided by the applicant’s counsel:[18]
The spirit of the trust was to continue and promote the development of agricultural science in South Australia and to maintain the University of Adelaide as a world-leading, global innovator in agricultural science. The proposed variation would allow the University to continue using the trust to fund new and innovative agricultural research that will continue to develop over the many years to come. Additionally, the variation does not alter the class of beneficiaries or substantially change the field of study, such that it is distinguishable from the precedents mentioned at [77]-[78] above.
[18] Written Submissions of the Applicants (FDN 13) at [108].
Retrospective relief from liability for prior breaches of the trust
The second order sought by the University is:
Pursuant to ss 56 and 60 of the Trustees Act 1936 (SA) that the Applicant be relieved retrospectively from any liability for any breach of trust in respect of the plaintiff’s use of the bequest arising from clause 18(c) of the last Will and Testament of JOHN ANDREW TENNANT MORTLOCK executed on 2 March 1950.
The Court may, both under its inherent jurisdiction and s 56 of the Act, relieve charity trustees from breaches of trust. Section 56 confers a power on the Court to relieve a trustee from a prior breach of trust. Section 56 provides as follows:
56—Jurisdiction of Supreme Court in cases of breach of trust
If it appears to the Supreme Court—
(a)that a trustee is, or may be, personally liable for any breach of trust (whether the transaction alleged to be a breach of trust occurred before or after the passing of this Act); but
(b)that the trustee has acted honestly and reasonably and ought fairly to be excused for the breach of trust, and for omitting to obtain the directions of the said court in the matter in which he has committed such breach,
then the said court may relieve the trustee, either wholly or partly, from personal liability for the breach of trust.
In JD & KJ Zohs Properties Pty Ltd v Ferme,[19] Stanley J discussed the nature and extent of the court’s powers pursuant to s 56 in the following terms:[20]
Section 56 confers power on the court to excuse any breach of trust where the trustee has acted honestly and reasonably and ought fairly to be excused for the breach. The provision can apply to a representative who has committed a devastavit. The burden of proving that the trustee acted honestly and reasonably in the matter is on the applicant for relief. Once that has been established, it is for the court to decide whether the trustee ought fairly to be excused for the breach of trust committed. Each case depends on its own circumstances. The court has a wide discretion in matters of this kind and must look to the whole circumstances in which the breach took place. The Court should not be hard on a trustee who has tried to act honestly but it must not encourage laxity of dealings.
(Footnotes omitted)
[19] [2015] SASC 55.
[20] JD & KZ Zohs Properties Pty Ltd v Ferme [2015] SASC 55 at [60]-[61].
Upon any such application, the Court has plenary power to remedy the position. Section 67 of the Act provides as follows:
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.
In her affidavit, Ms McInerney sets out concerns about the University’s unintentional non-compliance with the terms of the bequest that have occurred over time. She has identified three junctures at which that may have occurred. These are:
a.when the University gifted Martindale Hall to the State of South Australia;
b.from 2002, when the WARI ceased to operate as an institute until 2010 when the WRI was established; and
c.from 2009 to the present, during which time the University applied the Mortlock Bequest in accordance with legal advice obtained in 2009.
a. The gifting of Martindale Hall
In 1965 Dorothy Mortlock, the widow of Mortlock, surrendered part of her life interest in the residuary estate to the University by way of an indenture between herself, the University and the Libraries Board. Mrs Mortlock’s surrendered interest was defined as the “University’s Martindale land”, namely “the Residence near Mintaro known as Martindale Hall together with the Three hundred and twenty acres of land surrounding or adjacent thereto” (University’s Martindale Land). The indenture designated the University’s Martindale Land “for use by the Waite Agricultural Research Institute for a long range program of animal husbandry research”.
Upon the transfer of the University’s Martindale Land, the University established an agricultural research station which became known as the Mortlock Experiment Station, the main focus of which was in animal research.[21]
[21] McInerney Affidavit at [33]-[36].
In August 1979, Mrs Waite died and the remainder of Mortlock’s residuary estate became distributable in accordance with clause 18(c) of the Will. As under its charter the Libraries Board was unable to hold land, the University received all land holdings remaining in the residuary estate comprising of the balance of the Martindale Land.
In 1986, on South Australia’s 150^th Anniversary, the University gifted to the State part of the University’s Martindale Land on which Martindale Hall was located.[22]
[22] McInerney Affidavit at [45]. The portion of the land that was gifted was Martindale Hall and its 21 Hectare curtilage.
The decision to make the gift was made on the advice of the Chairman of the University Council’s Finance Committee, the Honourable Justice Jacobs, who was a sitting Judge of the Supreme Court of South Australia at the time. Justice Jacobs believed that there was a strong case for making the gift, noting the difficulties the University had in maintaining the property in accordance with the requisite State Heritage Standards and that the building was a serious impediment to prospects of a future sale “because no purchaser could be expected to accept the responsibility for the hall that the University had undertaken out of a sense of moral obligation”.[23]
[23] McInerney Affidavit at [46].
That decision was the subject of discussion at the University Council meeting on 13 December 1985 and as such, was recorded in the minutes under the heading ‘Martindale Hall Management Committee - 1985 Income and Expenditure 1986 Budget’. The relevant portion of those minutes read:[24]
The Hon. Mr. Justice Jacobs, speaking as Chairman of the Finance Committee, advised that the proposal before Council was to offer Martindale Hall and an appropriate curtilage to the State of South Australia as a gift on the occasion of the State’s 150th Anniversary. He stressed that the offer would be subject to certain conditions, in particular (i) that the Hall be preserved as part of the State’s Heritage and (ii) that the University would be represented on any future committee of management to be able to monitor that the Hall was being preserved and used in accordance with the wishes of the Mortlock family.
…
Council approved the proposal to present the Martindale Hall complex to the State of South Australia as a 150th Birthday present, providing that all of the conditions laid down by the University were accepted by the donee as necessary obligations of accepting the property. …
[24] Minutes of the University Council meeting of 13 December 1985. Exhibit 14 McInerney Affidavit.
A reading of the entirety of the minutes makes it plain that the decision was motivated by practical and financial considerations. Martindale Hall and its surrounding land were “extremely run down”, which impacted on the profitability of the property. Justice Jacobs put to the meeting:[25]
The University had subsequently considered all ways that Martindale Hall might be used while at the same time be preserved and none were viable until the present arrangement. The University was not however in the business of running a tourist facility nor of maintaining the State’s Heritage.
[25] Minutes of the University Council meeting of 13 December 1985. Exhibit 14 McInerney Affidavit.
It is significant that the decision to make the gift of this portion of the land was made on the advice of a sitting Judge of the Supreme Court of South Australia.
b. From 2002 when the WARI ceased to operate and 2010 when the WRI was established
As previously mentioned, there was something of a hiatus between 2002 when the WARI ceased to operate as a separate institution and 2010 when the WRI was established. This appears to have been a by-product of a broader University departmental restructure but does not appear to have impacted on the work and research carried out at the Waite Campus.
During this period the University maintained the bequest in the form of a commercial farming venture and generally reinvested any income back into that venture, consistent with the spirit of the bequest.
c. The 2009 legal advice
On 12 November 2009, the University obtained legal advice as to the compliant use of the Mortlock Bequest given that the Will required the bequest to be used “in connection with the Waite Agricultural Research Institute”, and the WARI as such no longer existed. The advice they received was:[26]
the proceeds of the Mortlock bequest ought to be used “in connection with” the current activities at Waite which correspond with those outlined in Section 2.1 of this memorandum (that is, those areas in which activities were undertaken by the Waite Agricultural Research Institute around the date of the Mortlock will). At the time of the Mortlock will, the focus of research activities [sic] the Waite Agricultural Research Institute was primarily on the crop and pasture aspects of agriculture.
[26] Legal Advice provided on 12 November 2009. Exhibit 5 McInerney Affidavit.
The income of the Mortlock Bequest has, since that time, been applied consistent with the 2009 advice. One implication of that advice is that the principal activities of the WARI in 1950 – agricultural chemistry, agronomy, agrostology, genetics and plant breeding, entomology, plant pathology and plant physiology – do not include more recent and evolving areas of agricultural research undertaken by WARI.
Further acting in reliance on the advice the University has ceased applying the proceeds of the Mortlock Bequest to activities previously conducted at the Waite Campus under the WARI that are now undertaken at other sites, such as animal physiology at the Roseworthy Campus.
It is contended that such limitations to the use of the Mortlock Bequest would not have been the intention of Mortlock. To the contrary, the very terms of the bequest as well as other aspects of the Will, make it plain that it was his intention that the bequest ensure that developments in agricultural science would remain a strong priority for the University. It is plain that the spirit of the trust was to continue to promote the development of agricultural science in South Australia and to maintain the University as a world-leading, global innovator in agricultural science.
In her affidavit Ms McInerney has raised a concern that in following the advice provided in 2009, the University has come to apply the income of the Mortlock Bequest in a manner that is too limited to best reflect the purpose of the Mortlock Bequest. In doing so that manner of use of the funds does not adequately have regard to the true spirit of the bequest. Insofar that this has resulted in a breach of the trust, the University seeks to be relieved retrospectively from any liability for that breach.
It would be seen that there has not been strict compliance with the precise conditions of the bequest in the manner identified by Ms McInerney. However, I am of the view that, at all times, those involved in the decision making or administration of the bequest endeavoured to do all that they could to comply with the spirit of the trust. I accept that at each of the junctures identified, the University acted responsibly and honestly.
In the circumstances, I am satisfied that an order should be made under s 56 and s 60 of the Act, relieving the University from any breaches of the trust in order to put matters right for the future.[27]
[27] Re de Vedas [1971] SASR 169 at 192 (Wells J).
Conclusion
Pursuant to section 69B of the Trustee Act 1936 (SA) and the inherent jurisdiction of the Court, I grant the application for approval of a variation scheme to the charitable bequest made to the University made by way of the Mortlock Will in the terms set out in the application.
Further, I retrospectively relieve the University from any liability for breaches of the trust found to have occurred in respect of its application of the bequest, arising from clause 18(c) of the last will and testament of Mortlock, pursuant to s 56 and s 60 of the Act. I also grant that the University’s costs of and incidental to this application be paid out of Trust assets.

[2023] SASC 17

8 February 2023