Dilworth Trust Board

[2017] NZHC 3118

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2946 [2017] NZHC 3118

IN THE MATTER

of the Charitable Trusts Act 1957

AND

﷢﷢﷢﷢﷢

IN THE MATTER

of THE DILWORTH TRUST BOARD being a board of trustees incorporated under the provisions of the Charitable Trusts Act 1957 and having its office at Auckland

Applicant

Hearing:	On the papers
Appearances:	C Harris for Applicant
Judgment:	14 December 2017

JUDGMENT OF LANG J

[on application for approval of resolution increasing remuneration of trustees]

This judgment was delivered by me on 14 December 2017 at 3.30 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

In the matter of THE DILWORTH TRUST BOARD [2017] NZHC 3118 [14 December 2017]

[1]      In this proceeding The Dilworth Trust Board (the Board) seeks an order approving a resolution by the trustees to increase the maximum aggregate remuneration payable to trustees from $430,000 per annum to the sum of $561,875 per annum with effect from 1 February 2017.

Background

[2]      The Board is responsible for administering the trusts of the will of the late James Dilworth as amended by several Acts of Parliament and orders of this Court under Part 3 of the Charitable Trusts Act 1957.  One of the principal responsibilities of the Board is the governance of the Dilworth School.  This provides education for boys who are largely from disadvantaged circumstances.

[3]      The school now operates on three campuses and has a current roll of 645 students. This makes it the largest full boarding school in New Zealand.

[4]      By order dated 26 November 1976,1 this Court approved a scheme under pt 3 of the Charitable Trusts Act 1957 and pursuant to s 7 of the Dilworth Trustees Act

1967.  Clause 3 of the scheme provides as follows:

Notwithstanding anything contained in Section 5 of the Dilworth Trustees Act

1967 the aggregate remuneration payable to the Trustees being the members of the Dilworth Trust Board shall be such sum as may be fixed by the Board

to a maximum in any one year of $15,000 or such greater sum as the Board may from time to time with the approval of the [High] Court of New Zealand.

[5]      Over the years this Court has approved increases in the remuneration payable

to trustees.  These began with an increase to the sum of $50,000 in December 1985. Approval to increase the remuneration to the current level of $430,000 was given by

Toogood J on 9 November 2016.2

1      Re Dilworth Trust Board SC Auckland M1289/76, 26 November 1976.

2      Re Dilworth Trust Board HC Auckland CRI-2016-404-2815 [Minute of Toogood J, 9 November

2016].

[6]      On 11 December 2017, the Board of Trustees passed a resolution determining that with effect from 1 February 2017 the maximum aggregate remuneration payable to trustees would be increased to the sum of $561,875 per annum. 1 February 2017 is the date upon which the Board’s current financial year commenced.

The evidence

[7]      Evidence has been provided in support of the application in the form of affidavits by the Chairman of the Board, Mr Jonathan Wain, and the General Manager of the Board, Mr Robert Campbell.   These confirm that in fixing the new rate of remuneration the Board adopted the recommendations contained in a report it had commissioned from a specialist adviser in this area.   This recommended that the remuneration payable to the trustees be increased to a range between $525,625 and

$561,875.  The adviser said that this range “represents appropriate and competitive levels for a commercially oriented New Zealand trust organisation with extensive governance responsibilities.”   The increased remuneration would be shared by the Chair, the Deputy Chair and all remaining members of the board.

[8]      The Board currently comprises six trustees, all of whom are experienced professionals engaged in the fields of commerce, industry, accountancy and the law. Trustees meet each month for a full day.   Prior to each monthly meeting board members receive a full and well-documented agenda, normally comprising 100 to 160 typewritten pages.  As a result, trustees are required to spend a considerable amount of time preparing for meetings.

[9]      In addition, board members have considerable involvement in trust and school affairs between monthly board meetings.   These include attendances at special meetings and participation in the selection process undertaken in relation to the admission  of new  students  to  the school.    This  is  one of the  trustees’ primary responsibilities and is not delegated by the Board.  It is also a significant undertaking because each year between 360 and 540 boys seek admission to the school.  Only 87 are successful.

[10]     Board members also serve on three committees that meet regularly.  These comprise the Audit, Finance and Risk Committee, the Admissions Committee and the

Scholarship Review Committee.   In addition, the principal and general manager regularly call on board members to discuss particular issues in relation to which those members have specific expertise.

[11]     The demands placed on board members means that their remuneration must be commensurate both with their expertise and the time they are required to devote to the Board’s business.  The present increase is significantly greater than that approved by this Court last year.   It is therefore important that the Board has acted on external professional advice that recommends the level of remuneration that should now be paid. All of these factors persuade me that the orders that the applicant seeks should be made.

Order

[12]     I make orders in terms of the originating application dated 13 December 2017.

Lang J

Solicitors:

Jackson Russell, Auckland