Kennedy Educational Scholarship Trust
[2025] NZHC 560
•18 March 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2024-485-815
[2025] NZHC 560
UNDER the Charitable Trusts Act 1957 IN THE MATTER
of an application to alter the mode of administration of trust in respect of the Kennedy Educational Scholarship Trust
KENNEDY EDUCATIONAL SCHOLARSHIP TRUST
Applicant
Hearing: On the Papers Counsel:
S D Barker for Applicant
Judgment:
18 March 2025
JUDGMENT OF McQUEEN J
[1] The trustees (the Trustees) of the Kennedy Educational Scholarship Trust (the Trust) apply to vary the Trust’s trust deed, dated 21 September 1977 (the Trust Deed). The Trustees seek approval of a scheme under pt 3 of the Charitable Trusts Act 1957.
Background
[2] The background to this application is set out in the first affidavit from Jeffrey Clarke, affirmed on 20 November 2024. Mr Clarke is a trustee of the Trust.
[3] The Trust was established by The Gas Association of New Zealand Inc (GANZ) by the Trust Deed. The purpose of establishing the Trust was to commemorate the outstanding services to the gas industry of the late Matthew Joseph Kennedy and his father and uncle before him. The Trust is registered as a charity under
KENNEDY EDUCATIONAL SCHOLARSHIP TRUST [2025] NZHC 560 [18 March 2025]
the Charities Act 2005, but its trustees are not incorporated as a board under the Charitable Trusts Act. GANZ was incorporated under the Incorporated Societies Act 1908 in 1909. However, the gas industry has evolved since then. In 2022, it became apparent that GANZ needed to restructure to best position itself for the future. In January 2023, the members of GANZ agreed to merge with The Liquefied Petroleum Gas Association of New Zealand Inc (LPGA). The purpose of the merger was to recognise the increasing diversity of gas and ensure the gas industry continued to grow and contribute to Aotearoa New Zealand in the future. In February 2023, LPGA adopted a new constitution and changed its name to GasNZ Inc (GasNZ) as part of the merger arrangements.
[4] GANZ then transferred its assets and operations to GasNZ, before seeking dissolution under s 28 of the Incorporated Societies Act. GANZ was formally dissolved on 19 December 2023.
[5] Prior to GANZ’s dissolution, it became apparent that the dissolution of GANZ would raise a number of issues for the Trust. For example, cl 7 of the Trust Deed requires that the general manager of the Natural Gas Corp (NGC), the secretary of GANZ and at least two other persons nominated by GANZ are included as trustees.
[6] In 1959, the New Zealand government established NGC to buy and process wholesale natural gas from the Kapuni gas field. In 1992, NGC was privatised and then sold to Vector Ltd in 2004. In 2016, NGC was acquired by First State Funds and renamed First Gas Ltd. The Trust Deed does not contain a construction clause that would automatically allow a reference to an organisation to include a reference to its successors or assignees. Accordingly, the Trustees are not currently able to comply with the requirement of cl 7 to include the general manager of NGC as a trustee.
[7] In addition, the Trust Deed does not include an amendment clause that would allow cl 7 to be updated to reflect the dissolution of GANZ.
[8] Under cl 8 of the Trust Deed, the power of appointment of new trustees is vested in GANZ as settlor “or such other person as it shall at any time by Deed appoint”. As part of the merger arrangements, GANZ appointed GasNZ as the
appointor of trustees of the Trust by Deed of Appointment of Appointer, dated 15 March 2023.
[9] Clause 7 of the Trust Deed empowers the Trustees to change the number of trustees by unanimous resolution. However, it also mandates that the Trustees “shall include” the secretary of GANZ, and at least two other persons nominated by GANZ. Since GANZ no longer exists, the Trustees are not currently able to comply with these requirements of cl 7.
[10] On 4 May 2023, the Trust, by its solicitor, wrote to Crown Law. The Trust asked if the Attorney-General would support an application by the Trust for a scheme under s 33 of the Charitable Trusts Act to amend the Trust Deed. The proposed amendment would replace the reference to GANZ in cl 7 with a reference to its successor organisation GasNZ. If the Attorney-General would support its application, the Trust also asked if this might provide an opportunity to update the Trust Deed in a number of other respects. The Trust proposed to update the reference to NGC, remove other outdated references and insert a construction clause. The Trust also proposed to insert an amendment clause, allowing administrative amendments to be made and to reduce the risk of similar issues arising in the future.
[11] The Attorney-General, by her solicitor, advised that an application for a scheme under s 33 of the Charitable Trusts Act was the correct way forward. Following an exchange of correspondence, the Trust provided a scheme to the Attorney-General for approval on 12 August 2024. The scheme takes the form of the original Trust Deed with the requested changes marked. The general tenor of the scheme has been to keep the requested changes to the minimum necessary to facilitate the administration of the Trust.
[12] Mr Clarke deposes to his belief that updating the Trust Deed in the manner proposed by the attached scheme would facilitate the administration of the Trust and allow the Trustees to further the charitable purposes of the Trust in compliance with the Trust Deed. He records that there is no proposed change to the Trust’s charitable purposes.
[13] In a second affidavit, dated 4 February 2025, Mr Clarke confirms that the scheme has been advertised as required under s 36 of the Charitable Trusts Act.
Relevant law
[14] Applications to vary the administration of a charitable trust may be brought under s 33 of pt 3 of the Charitable Trusts Act, which provides:
33Extension 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:
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 Trusts Act 2019 or any other Act or by law.
[15]Section 34 of the Charitable Trusts Act provides that:
34 Trustees may prepare a scheme
Where the trustees of any such property or income are desirous that it shall be dealt with subject to this Part, they may prepare or cause to be prepared, in accordance with this Part, a scheme for the disposition of the property or income and for extending or varying the powers of the trustees or for prescribing or varying the mode of administering the trust.
[16] Under s 35 of the Charitable Trusts Act, every scheme prepared under s 34 is to be submitted to the Attorney-General. After the Attorney-General has delivered their report on the scheme, the trustees may apply for the Court to approve the scheme.1 Before any such application is considered by the Court, s 36 of the Charitable Trust Act requires that notice must be given in the Gazette. The notice must also be given at least three times with an interval of not less than six days between, in one newspaper circulating in the judicial district of the Court where the application has been filed.
1 Charitable Trusts Act 1957, s 35.
[17] Section 53(c) of the Charitable Trusts Act provides that the Court may make an order approving the scheme with or without modification, as it thinks fit.
[18] Section 56(1)(a) of the Charitable Trusts Act provides that the Court shall not approve a scheme under pt 3, unless it is satisfied:
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.
[19] Once the Court approves of or refuses the scheme, notice of the Court’s decision is to be published by the Registrar of the Court in the Gazette as soon as practicable.2
Attorney-General’s report
[20] The Attorney-General’s report dated 20 August 2024 discusses the background to the proposed scheme and the proposed variations. The Attorney-General then comments as follows:
17.The updating of references to relevant corporations and their successors will facilitate the carrying out of the Trust’s charitable purposes. These changes reflect the changes to the structure of the gas industry since the deed was first executed in 1977 and ensure the trustees can be appointed consistently with the deed both now, and as the industry continues to change. In future, the new construction clause (cl 14) will assist the Trust by removing the need to apply to this Court each time relevant corporations and positions are updated.
18.The more general modernisations (e.g. the reference to local authorities in cl 11) similarly reflect regulatory changes since the deed was first executed and for that reason will, in the Attorney-General’s view, facilitate the carrying out of the charitable purposes of the Trust.
19.Clause 11 of the amended deed excludes s 36 of the Trusts Act 2019. Section 36 sets out the trustee's duty not to profit. It is discretionary and thus can be excluded by express or implied terms of a trust, including a charitable trust. In the Attorney-General’s view, these amendments to cl 11 will assist with the administration of the Trust by allowing the trustees to continue carrying out work for the Trust (cl 11(o)) and carrying out work as directors of companies with which
2 Section 54.
the Trust has dealings (cl 11(q)(i)) without risking breach of the default duty not to profit.
20.New clauses 13, 14 and 15 will, in the Attorney-General’s submission, also assist the Trust with resolving administrative and interpretation issues arising from the deed in future without the need for recourse to the Court (footnotes omitted).
[21]The Attorney-General concludes that:
(a)she is satisfied that the scheme is a proper one and should carry out the desired purpose or proposal, and is not contrary to law to public policy or good morals;
(b)the scheme can be approved by the Court under pt 3 of the Charitable Trusts Act;
(c)every proposed purpose is charitable within the meaning of pt 3 of the Charitable Trusts Act and can be carried out; and
(d)the requirements of pt 3 of the Charitable Trusts Act have been complied with in respect of the scheme up to the giving of the report.
Discussion
[22] The jurisdiction under s 33 of the Charitable Trusts Act is intended to deal with any problem of administration faced by charitable trustees in giving effect to the intended purpose. The threshold to be established is only that the variation proposed would facilitate the carrying out of the Trust.3
[23] I am satisfied that, in the exercise of the Court’s power under s 33 of the Charitable Trusts Act and in accordance with s 56(1)(a), the Trust Deed should be varied in accordance with the scheme submitted.
[24]Accordingly, I consider that I may approve the scheme.
3 Re Melanesian Mission Trust Board HC Auckland M1140/98, 24 September 1998.
Orders
[25]I order that:
(a)the proposed variations of the Trust Deed are approved under s 33 of the Charitable Trusts Act 1957, following the wording as incorporated into the Trust Deed in Exhibit D to the affidavit of Mr Clarke affirmed on 20 November 2024; and
(b)the costs of preparing the Attorney-General’s report in the sum of $750 are to be met by the Trust.
McQueen J
Solicitors:
Sue Barker Charities Law, Wellington for Applicant
0
0
0