Dew
[2018] NZHC 624
•9 April 2018
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE
CIV 2017-442-0062
[2018] NZHC 624
UNDER the Charitable Trusts Act 1957 IN THE MATTER
AND
of a charitable trust created by the will of
EMMA ANN O’CONNOR late of Appleby, Spinster, deceased
IN THE MATTER
of an application by JOHN ATCHERLEY CARDINAL DEW of Wellington, Archbishop of the Archdiocese of
Wellington of the Estate of EMMA ANN O’CONNOR for approval of a scheme of variation of a charitable trust
Applicant
Hearing: 5 March 2018 Appearances:
N S P Laing and T B Elkington for Applicant
Judgment:
9 April 2018
JUDGMENT OF PETERS J
This judgment was delivered by Justice Peters on 9 April 2018 at 4.30 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date: ...................................
Re-delivered at 4:30 pm on 27 April 2018 as per minute of Peters J of 10 April 2018
Solicitors: Duncan Cotterill, Nelson
RE DEW [2018] NZHC 624 [9 April 2018]
Introduction
[1] Cardinal John Dew, as trustee of the Emma Ann O’Connor Trust (“trust”), seeks approval of a scheme prepared under Part 3 Charitable Trusts Act 1957 (“Act”).1 The application is made on the ground that it has become impossible or impracticable or inexpedient to carry out the existing purpose of the trust and the property or income of the trust is more than necessary for that purpose.2 Subject to [20] below, there is no opposition to the application.
[2] As required, the scheme has been submitted to the Attorney-General and he has confirmed that it may be approved.3 The required advertising has also taken place.4
[3]The Court may approve a scheme under Part 3 of the Act if satisfied:
56 Restrictions on approval of schemes
(1) …
(a)that the scheme is a proper one, and should carry out the desired purpose or proposal, and is not contrary to law or public policy or good morals; that the scheme can be approved under the Part of this Act under which the approval is sought; that every proposed purpose is charitable within the meaning of that Part of this Act and can be carried out; and that the requirements of that Part of this Act have been complied with in respect of the scheme:
…
Background
[4] Ms O’Connor died on 13 December 1937. By her will, Ms O’Connor gave the residue of her estate on trust, with the income therefrom to be applied in and for the following purposes (“primary purpose”):5
1 Originating Application dated 16 October 2017; and Charitable Trusts Act 1957, s 34.
2 Charitable Trusts Act 1957, s 32(1).
3 Section 35; Report of the Attorney-General dated 15 September 2017; and Supplementary Report of the Attorney-General dated 20 February 2018.
4 Charitable Trusts Act 1957, s 36; and Memorandum of counsel dated 21 February 2018 at [7] and annexures thereto.
5 Affidavit of Cardinal J A Dew sworn 5 October 2017 exhibit “A”.
(a)For the repair and painting of the Waimea Catholic Church at regular intervals as may seem necessary and expedient to my said trustees;
(b)In the upkeep and maintenance of the whole cemetery at Waimea West;
(c)In maintenance and repairs to the cottage to be occupied by my niece aforesaid;
(d)In a monthly offering of one mass per month for the deceased members of the Appleby branch of the O’Connor family;
(e)In offering a mass 3 times a year for all the deceased buried in the Waimea West cemetery.
[5] The Waimea Catholic Church and Cemetery, to which Ms O’Connor referred, is known as the Saints Peter and Paul Church and Cemetery (“Waimea West Church”).
[6] The trust’s assets comprise a 1.8 hectare block of land on which the cottage referred to in [4](c) above was, and is, situated, and accumulated cash. As at 31 October 2016, the trust had accumulated funds of more than $140,000. The present rateable value of the land and cottage is $1,070,000. The land and cottage are leased to a third party until 2028. The net annual income derived from the lease is more than
$35,000, excluding GST.
[7] The Roman Catholic Archbishop of the Archdiocese of Wellington, presently Cardinal Dew, has been the sole trustee since March 1971.6
[8] The present Waimea West Church was erected in 1889; initially formed part of the parish of St Mary’s Nelson; in 1935 was transferred to the then newly established Motueka parish; and then in 1960 was included in the new parish of Richmond.7
Secondary purpose
[9] In 1991, this Court approved an earlier scheme, effecting a variation of the purposes of the trust. The effect of the variation was to add a “secondary” purpose and permit the trustee to apply accumulated funds and surplus income:8
6 At [15].
7 Affidavit of M E O’Connor and P J Noble sworn 20 February 2018 at [21].
8 Re the Estate of Emma Ann O’Connor HC Nelson M46/91, 11 November 1991; and Affidavit of M E O’Connor and P J Noble, above n 7, at [6].
(a)… at the Trustee’s discretion for the repair and maintenance of the Richmond Parish Church of Our Lady of Perpetual Help at William Street, Richmond and other Parish buildings and grounds.
[10] The variation reflected, first, that income derived from the trust assets exceeded the sum required to meet the primary purpose and, secondly, that the Waimea West Church was then within the Richmond parish and that excess funds were best applied to defray the expenses and costs of general upkeep.
Scheme
[11] In April 2017, the Richmond, Takaka and Motueka parishes amalgamated to form a new parish, named Our Lady of the Bays.9
[12] The scheme in respect of which approval is now sought would vary the secondary purpose and allow the application of surplus accumulated funds and income to the repair, maintenance and payment of outgoings associated with church buildings, land and grounds within that enlarged parish.
[13] In addition, having considered the scheme, the leadership group of the Waimea West Church has sought amendments to the primary purpose to make it clear that the first priority of the trust remains the upkeep etc of the Waimea West Church and to ensure that the matters on which trust income may be expended in respect of the primary purpose mirror those proposed for the secondary purpose.10 Subject to that, the leadership group supports the amendments to the secondary purpose and the proposal to apply surplus funds to church assets over the increased geographical area. It is expected that parishioners geographically close to the Waimea West Church as well as those within the former Richmond parish, will enjoy the buildings and assets within the new parish of Our Lady of the Bays.11
[14] I am advised by counsel that the trustee agrees to the amendments proposed to the primary purpose, and these are reflected in the terms of the variation now sought. Cardinal Dew has also confirmed in his affidavit that the income of the trust will
9 Affidavit of Cardinal J A Dew, above n 5, at [24].
10 Affidavit of M E O’Connor and P J Noble, above n 7, at [8] to [13] inclusive.
11 At [21]; and Affidavit of Reverend Father S Pijfers sworn 6 October 2017 at [18].
continue to be applied to meet the primary purpose in the first instance.12 It is expected, however, that the costs of doing so will continue to be less than the trust’s income.13
[15]The precise scheme in respect of which approval is sought is:
1That the charitable trust created in the last will of Emma Ann O’Connor, late of Appleby, Spinster, deceased, be varied as follows:
1.1Firstly, The Trustee is to apply income from the Emma Ann O’Connor Trust at the Trustee’s discretion for the following purposes:
1.1.1For the repair, maintenance and painting of the Waimea Catholic Church at regular intervals as may seem necessary and expedient to my said trustees;
1.1.2In the upkeep and maintenance of the whole cemetery at Waimea West;
1.1.3In maintenance and repairs to the cottage to be occupied by my niece aforesaid;
1.1.4In a monthly offering of one mass per month for the deceased members of the Appleby branch of the O’Connor family;
1.1.5In offering a mass 3 times a year for all the deceased buried in the Waimea West cemetery;
1.1.6Capital expenditure on new or replacement capital items, and other sundry expenditure, for the building, land and grounds at the Waimea Catholic Church;
1.1.7The payment of local authority rates in respect of land at the Waimea Catholic Church; and
1.1.8The payment of premiums on insurance policies held in respect of land and buildings at the Waimea Catholic Church.
1.2Secondly, excess reserve funds accumulated and the excess income from the Emma Ann O’Connor Trust is to be applied at the Trustee’s discretion for:
1.2.1the repair and maintenance of the buildings, land and grounds comprised as part of the Our Lady of the Bays Parish;
12 Affidavit of Cardinal J A Dew, above n 5, at [35].
13 Affidavit of Reverend Father S Pijfers, above n 11, at [9].
1.2.2capital expenditure on new or replacement capital items, and other sundry expenditure, for those buildings, land and grounds comprised as part of the Our Lady of the Bays Parish;
1.2.3the payment of local authority rates in respect of land comprising the Our Lady of the Bays Parish; and
1.2.4the payment of premiums on insurance policies held in respect of land and buildings comprising the Our Lady of the Bays Parish.
Inexpedience
[16]I accept that:
(a)the amendments proposed to the primary purpose are desirable to ensure conformity between the primary and proposed secondary purpose; and
(b)in the absence of the amendments to the secondary purpose, the trustee will be unable to apply the accumulated or other income of the trust to church assets outside the former boundaries of the Richmond parish, which would be inconvenient and undesirable for the reasons given.
[17] In the context of s 32(1), “inexpedient” connotes the original charitable purpose having become “unsuitable, inadvisable or inapt”.14 Given the above, I am satisfied that it is inexpedient to carry out the existing charitable purpose.
[18] I am also satisfied that the scheme proposed follows Ms O’Connor’s wishes as closely as possible and, in particular, that Ms O’Connor, a devout Catholic, would have wished funds that were surplus to the primary purpose to be applied as proposed.15
[19] For all these reasons, I am satisfied that the requirements of s 56(1) of the Act, referred to in [3] above, are met.
14 Re McElroy Trust [2003] 2 NZLR 289 (CA).
15 Re Twigger [1989] 3 NZLR 329 (HC); and Affidavit of M E O’Connor and P J Noble sworn 20 February 2018 at [17] and [18].
Affidavit of Theresa Mary Berry sworn 26 February 2018
[20] I have also considered the affidavit of Ms Theresa Mary Berry, Ms O’Connor’s great grandniece, who seeks an amendment so as to delete clause 1.1.3 of the scheme as reproduced in [15] above. Ms Berry also has a different view from Ms O’Connor and Ms Noble of some of the historic background, which it is unnecessary for me to determine.
[21] Ms Berry seeks the deletion of clause 1.1.3 given the death in 1976 of the niece to whom Ms O’Connor gave a life interest in the cottage.
[22] Having considered Ms O’Connor’s will, I am satisfied that by clause 1.1.3 she stipulated that the cottage was to be maintained in perpetuity, and not only during the term of the life interest. I consider that Ms O’Connor referred to her niece as a means of identifying the cottage rather than as any limitation to the period in which it should be maintained. Given that, I decline to make the amendment proposed.
Orders
[23] I make orders in terms of the body of counsel’s draft order filed on 21 February 2018. However, the preamble to the draft order is incorrect. It should read as follows:
Upon reading the notice of application dated 16 October 2017 of John Atcherley Cardinal Dew, as trustee of the estate of Emma Ann O’Connor, for approval of a scheme of variation of a charitable trust; the affidavits of [full names of all deponents and the dates on which the affidavits were sworn]; the reports of the Attorney-General dated 15 September 2017 and 20 February 2018; memoranda of counsel dated 9 and 21 February 2018; and upon hearing Nicholas Shaun Patrick Laing and Tiana Brooke Elkington, THIS COURT ORDERS:
[24]Counsel should submit a revised order for sealing.
[25] Counsel is also asked to provide a copy of this judgment to each of Ms M E O’Connor, Ms P J Noble and Ms T M Berry.
Recall
[26] I issued judgment in the above terms on 9 April 2018. When I did so, I did not know that counsel for the applicant had filed a memorandum dated 16 March 2018, advising that the trustee was considering subscribing for shares in an irrigation scheme affecting the trust’s land. Accordingly, I recalled the judgment on 10 April 2018, to allow counsel and any affected party time to file any further evidence and submissions they considered appropriate in the circumstances.
[27] Since then, the trustee has subscribed for the said shares, Cardinal Dew has filed and served a further affidavit sworn 23 April 2018 and the Attorney-General has filed a further report dated 26 April 2018.16
[28] Given the contents of this recent documentation, I am satisfied that the scheme remains a proper one for approval. I confirm the order in [23] above. Counsel will, however, need to amend the preamble to the order to ensure that it refers to the recent documents, that is Cardinal Dew’s most recent affidavit and the report of the Attorney- General to which I have just referred.
Peters J
16 Supplementary Affidavit of Cardinal J A Dew sworn 23 April 2018; and Supplementary Report NO 2 of the Attorney-General dated 26 April 2018.
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