Auckland Observatory and Planetarium Trust Board

[2017] NZHC 1224

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-3026 [2017] NZHC 1224

UNDER

Part 3 of the Charitable Trusts Act 1957

(the Act)

AND

IN THE MATTER

of an application by AUCKLAND OBSERVATORY  AND PLANETARIUM   TRUST   BOARD   a duly registered charitable trust having its registered office at One Tree Hill Domain,
670  Manukau  Road,  Royal  Oak, Auckland, for orders approving a scheme for extending or varying the powers of the trustees or for prescribing or varying the mode of administering the trust

Hearing:	7 June 2017
Appearances:	R O Parmenter for Applicant
Judgment:	7 June 2017

JUDGMENT OF LANG J

This judgment was delivered by me on 7 June 2017 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

In the matter of Auckland Observatory and Planetarium Trust Board [2017] NZHC 1224 [7 June 2017]

[1]      The Auckland Observatory and Planetarium Trust (the Trust) is a registered charitable trust established by Deed of Trust dated 13 September 1956.   It was incorporated under the provisions of the Charitable Trusts Act 1957 (the Act) on

29 October 1956.

[2]      The affairs of the Trust are currently conducted by a board comprising nine trustees.    All  of  the  trustees  are  members  of  and  nominated  by  the Auckland Astronomical Society (the Society).  The President and Treasurer of the Society are automatically trustees, whilst the remaining seven trustees are also appointed by the Society.   Each year the longest serving trustee is required to stand down and the resulting vacancy is filled by a new appointment.

[3]      The Board now seeks an order under s 33 of the Act approving a scheme varying the trust deed in several respects.

Background

[4]      The Trust was established “to establish and maintain an observatory and planetarium for promoting the science of astronomy”.  It operates a facility known as the Stardome facility at  One Tree  Hill  in Auckland.   This  is  an  attraction  that comprises a planetarium, interpretive galleries and educational spaces.   Each year approximately 125,000 people visit the facility.  A large proportion of visitors pay to attend planetarium shows.  In addition, the Trust receives significant public funding.

[5]      The proposed amendments follow a review recently undertaken by the Board of the governance and operational provisions of the current deed of trust.  The Board appointed  a  company  called  Visitor  Solutions  Limited  to  undertake  a  holistic strategic review of these issues.   The resulting report identified several areas in which the existing trust deed fails to provide the Board with an optimal platform for the administration of the trust’s affairs.   The Board now seeks to implement the majority of the review’s recommendations by seeking the Court’s present approval to several amendments to the deed of trust.

The proposed amendments

[6]      The proposed amendments can be summarised as follows:

(a)      At present the trust deed requires the Board to have nine members, with one trustee standing down each year.   It is proposed that this provision be varied to allow for a minimum of eight and a maximum of nine trustees.   Of these, the three longest serving members will stand down each year and be replaced by new trustees.

(b)The Board seeks to establish an appointments committee that will be responsible for recommending persons to be appointed as trustees.

(c)      When a casual vacancy occurs, a trustee appointed to fill the vacancy will hold office until the next annual general meeting of the Board rather than the next annual general meeting of the Society.

(d)The quorum of trustees necessary to conduct trust business shall be four   trustees,   unless   the   business   in   question   relates   to   the appointment of trustees when the number of trustees has fallen to three or fewer.  In that case no prescribed quorum is required.  This provision does not bring about any substantive change.  It merely re- states the existing position using clearer wording.

(e)      A trustee may be removed by unanimous resolution of the remaining trustees in certain circumstances.   The remaining trustees may not exercise this power unless they have first advised the other trustee of their concerns, and given him or her an opportunity to address those concerns.

(f)      The trustees are to have the power to make decisions by way of written resolution signed by all trustees, thereby avoiding the need for all trustees to be present at a meeting when decisions are made.

(g)The trustees are to have the power to vary the trust deed solely for administrative purposes in the future without the need to seek the approval of the Court.

Procedural requirements

[7]      The application has been advertised in accordance with directions given by the Court and no objections or notices of opposition have been filed. The application has also been served on the Attorney-General as protector of charities.  The report filed on  behalf  of the Attorney-  General  confirms  he  accepts  that  the proposed amendments are appropriate.

[8]      The Society also held a Special General Meeting on 11 August 2014 at which those present resolved to support and endorse the proposed amendments.1

Jurisdiction

[9]      Section 33 of the Act provides:

33       Extension of powers or alteration of mode of administration of trust

In any case where it is made to appear that any property or income is given or held upon trust, or is to be applied, for any charitable purpose, and the administration of the property or income or the carrying out of the trust could be facilitated by extending or varying the powers of the trustees or by prescribing or varying the mode of administering the trust, the powers of the trustees may be extended or varied, and the mode of administering the trust may be prescribed or varied, in the manner and subject to the provisions hereafter contained in this Part of this Act:

Provided that nothing in this section shall restrict the powers that are or may be conferred on the Court or the trustees by or under the Trustee Act 1956 or any other Act or by law.

[10]     As Ms Hardy for the Attorney-General points out, s 33 requires the applicant

to demonstrate that the proposed variations will “facilitate” the administration of

trust property or the overall operation of the trust.  In Re Melanesian Mission Trust

1      The resolution of the Society also endorsed an amendment that gave the trustees the power to wind up the Trust.  The Attorney-General would not support that proposal because the original deed of trust did not provide for the Trust to be one of limited duration, and it did not contain a provision permitting the trustees to wind the Trust up.  That provision is no longer contained in the proposed amendments.

Board, Paterson J held that the ordinary dictionary meaning of “facilitate” in this context is “made easier, promoted or helped forward.”2   That test has been applied in numerous recent cases.3     It accords with the purpose of s 33, which is to enable trustees to remedy administrative problems that they encounter by virtue of changing circumstances.

Decision

[11]     I   concur   with   counsel   for   the   Attorney-General   that   the   proposed amendments  will  enable  the  Board  to  conduct  the  Trust’s  affairs  in  a  more streamlined manner than is presently the case.

[12]     In  particular,  the  proposed  changes  to  the  retirement  and  appointment procedures will permit the Board to adopt a transparent means by which to seek out persons with the necessary skills and interests to be members of the Board.  The fact that three trustees must retire each year also provides for new members to be appointed more regularly.   This will enable the Board to receive input from three new members each year.  They can be expected to provide a fresh perspective to the Board’s decision making processes.  Furthermore, it makes sense for the Board to have the power to remove a trustee for cause provided all remaining trustees are in agreement with that occurring, and the trustee in question has been given an opportunity to address the other trustees’ concerns.

[13]     The only new provision that has given me any cause for concern is that which will permit the Board to vary the trust deed for administrative reasons, and without the Court’s supervision, in the future. As Dobson J pointed out in Re Neil Barr Farm Forestry Foundation, this type of provision creates a risk that a series of small amendments to the Trust deed could over time change the focus of the Trust in a

manner that should properly be the subject of supervision by the Court.4   Ultimately,

however, Dobson J approved such a provision in Neil Barr, and Ms Hardy for the

2      Re Melanesian Mission Trust Board HC Auckland M1140/98, 24 September 1998.

3      See for example Re YMCA New Zealand Soldiers Great War Memorial Trust [2013] NZHC 2516 at [32]; Re Frank Sydenham Scholarship Trust [2012] NZHC 654 at [47]; and Re St Barnabas Roseneath Trust Board HC Wellington CIV-2011-485-1254, 3 August 2011 at [3].

4      Re Neil Barr Farm Forestry Foundation [2014] NZHC 2324 at [7].

Attorney-General points out that similar provisions have been also recently been approved by the Court in Re Brooks and Re St Barnabas Roseneath Trust Board.5

[14]     Upon reflection I agree with Ms Hardy that this risk is met by the fact that the Board may only exercise the power for administrative and not substantive purposes. Furthermore, any decision to amend the trust deed must be unanimous and amendments can only be made with the prior written consent of the Society.

[15]     I have therefore concluded that all of the proposed amendments will facilitate the administration of the trust property, and will enable the Board to conduct the affairs of the Trust more effectively.

Result

[16]     The Court therefore gives its approval to the proposed variations under s 33 of the Act.

[17]     The trust is to pay costs to the Attorney-General in the sum of $750.

Lang J

5      Re Brooks [2015] NZHC 950; Re St Barnabas Roseneath Trust Board HC Wellington CIV 2011

485 1254, 3 August 2011.