Bishop's Action Foundation

[2016] NZHC 724

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV-2015-443-0080 [2016] NZHC 724

UNDER	the Charitable Trusts Act 1957
IN THE MATTER	of charitable trusts created by the wills of JAMES DAWSON BASHFORD and CLAUDE WILLIAM NICHOLLS
BETWEEN	BISHOP'S ACTION FOUNDATION Applicant

Hearing:	On the papers
Counsel:	K M McKenzie for Applicant V L Hardy for Attorney-General
Judgment:	19 April 2016

JUDGMENT OF M PETERS J

This judgment was delivered by Justice M Peters on 19 April 2016 at 2.30 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           Govett Quilliam, New Plymouth

Crown Law, Wellington

Re Bishop’s Action Foundation [2016] NZHC 724 [19 April 2016]

Introduction

[1]      By  originating  application  dated  20  November  2015  (“application”),  the Bishop’s Action Foundation (“Foundation”) seeks approval of a scheme concerning two  charitable  trusts,  being  the  Claude  William  Nicholls  Trust  and  the  James Dawson Bashford Trust (“scheme”, “CWNT” and “JDBT” respectively).

[2]      The application is made under Part 3 Charitable Trusts Act 1957 (“Act”). Part 3 of the Act makes provision for two principal matters.  The first is an inability to carry out the particular charitable purpose for which trust assets or income is held. The second is if the administration of trust assets or the carrying out of the trust could  be facilitated by extending or varying the powers of the trustee(s) or by varying the mode of administering the trust.

[3]      In either or both of these circumstances, the trustees concerned may seek the Court’s approval of a scheme intended to remedy the position.   The trustees must submit the scheme to the Attorney-General for consideration, who must then report on the same; file an application with the Court seeking approval of the scheme, together with the scheme itself and the Attorney-General’s report; and give notice of

the application in accordance with the requirements of the Act.1     Each of those

matters has been attended to in this case.

[4]      The Court may only approve a scheme if satisfied that:

(a)       the scheme is a proper one and should carry out the desired purpose or proposal;

(b)      the scheme is not contrary to law, public policy or good morals; (c)    the scheme can be approved under, in this case, Part 3;

(d)      every proposed purpose is charitable within the meaning of Part 3 and

can be carried out;

1      Charitable Trusts Act 1957, ss 32(1), 33 and 35.

(e)       there has been compliance with the requirements of Part 3, as there has in this case.

[5]      By a report dated 24 September 2015, the Attorney-General has confirmed that he is satisfied the scheme may be approved.   There is no opposition to the application and nor is there any objection to the Court determining the application on the papers.

Background

[6]      The CWNT and JDBT were settled in 1954 and 1963.   The terms of each have been varied from time to time, most recently in 2003.  The Foundation has been the sole trustee of each trust since February 2008.

[7]      Philip  Richardson,  the Anglican  Bishop  of  the  Diocese  of  Waikato  and Taranaki, and Mr Stuart Trundle have sworn affidavits in support of the application and  counsel,  Ms  K  McKenzie,  has  also  filed  a  memorandum  in  support  dated

20 November 2015.2

[8]      The gist of these documents is that it is difficult to fulfil the existing purposes of the two trusts because of a lack of applicants who meet the qualifying criteria. It is hoped that this will be overcome by broadening the purposes.  It is also considered that there is substantial efficiencies to be achieved by amalgamating the two trusts.

[9]      To this end, it is intended to vary the purposes of the CWNT and JDBT; to settle  a  new  trust  with  the  same  purposes,  that  trust  to  be  known  as  the Bashford-Nicholls Charitable Trust (“new trust”); to transfer the assets of the CWNT and JDBT to the new trust, or to resettle them as required; and then to wind up the “shells” of the CWNT and JDBT.  The Deed of Trust for the new trust is annexed

marked “K” to the Bishop’s affidavit and on its face appears to be in order.

2      Affidavit of P Richardson sworn 20 August 2015; Affidavit of S Trundle sworn 4 March 2016;

and Memorandum of Counsel dated 20 November 2015.

Purposes

[10]     Bishop Richardson summarises the present purposes of the CWNT and JDBT

as follows:3

9.        The charitable purpose of the [JDBT] … is to apply the income … for the provision of scholarships and bursaries to assist in the maintenance, education or benefit of persons of both sexes up to the age of 30 years, born or living in New Zealand, to attend an agricultural or veterinary college or school  in  New  Zealand  for  the  purpose  of  furthering their  education  in farming  or  veterinary  science.  The  recipients  are  required  to  have  an intention to take up farming or an occupation connected with primary production in New Zealand for which specialist training is required.

10.      The charitable purpose of the [CWNT] … is to apply the income …

for the provision of scholarships and bursaries for persons up to the age of

30 years, living in New Zealand, to attend agricultural or veterinary college or school or otherwise, and to provide an education in farming or veterinary

surgery, who are intending to take up farming as a career or be engaged in an occupation  concerned  with  farming  for  which  specialised  training  is

required.

[11]     The evidence is to the effect that few applicants meet these criteria.   The nature of agricultural and veterinary education today is such that many deserving candidates are older than 30 and many are seeking grants for purely research purposes.  Hence the intention to vary the purposes as follows:4

4.        PURPOSES

4.1The Trustees hold the Trust Fund on trust to pay or apply so much of the capital and income of the Trust Fund as the Trustees think fit exclusively for or towards any one or more of the following exclusively  charitable  purposes,  which  are  declared  to  be  the purposes of the Trust, namely:

4.1.1    To grant monies by way of scholarship, bursary or grant for: (a)     The purpose of training or education in the fields of

agriculture or veterinary science at an educational

institution; and

(b)       Research  by  New   Zealand   citizens  resident  in New Zealand, working in or directly connected to the fields of agriculture and veterinary science,

3      Affidavit of P Richardson, above n 2, at [9] and [10].

4      FN this from new trust deed.

such training, education or research must provide a career to the recipient or an economic, social or environmental improvement or benefit to the province of Taranaki.

4.1.2    Through any other initiatives or functions determined from time to time by the Trustees, in accordance with the general purposes referred to above; and

4.2      None of the purposes of the Trust will be:

4.2.1    In any way limited or restricted by reference to or inference from the terms of any other clause or the name of the Trust, except where the context specifically or expressly requires it; and

4.2.2    Treated as subsidiary or ancillary to any other purpose of the

Trust.

4.3      The Trustees are empowered to carry out anyone or more of the purposes of the Trust independently of any other purpose of the Trust.

4.4      All of the purposes of the Trust must be pursued exclusively within

New Zealand.

[12]     Having regard to the evidence before me, I am satisfied that it is impossible or impracticable or inexpedient to carry out the existing purposes of the CWNT and JDBT and that the proposed purposes are charitable purposes falling within Part 3.

Administration

[13]     I also accept that there are advantages to be gained by amalgamating the CWNT and JDBT by transferring the assets to, or resettling their assets on, the new trust.  As Bishop Richardson says in his affidavit, doing so will facilitate the administration of the trust and the carrying out of its purposes, and reduce the cost of doing so.  I am also satisfied that it is appropriate to vary the terms of the CWNT and JDBT  so  as  to  confer  power  on  the  trustee  to  wind  up  after  the  transfer  or resettlement of the assets.   I consider such a power to be ancillary to the other aspects of the scheme and, in particular, to be necessary if the intended efficiencies are to be realised.

Orders

[14]     Pursuant to s 53(c) of the Act I make orders in terms of the draft annexed marked “A”.   Counsel  should submit the order for sealing, with the  trust deed referred to in [1.1] of the attached draft to be annexed to that sealed order.

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M Peters J