MacAlister v Royal New Zealand Foundation of the Blind

[2015] NZHC 909

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2014-404-2473 [2015] NZHC 909

BETWEEN

ALISTER MACALISTER, RICHARD

COLIN BILLINGS, KAREN BILLINGS Applicants

AND

ROYAL NEW ZEALAND FOUNDATION OF THE BLIND Defendant

Hearing:	(on the papers)
Counsel:	D R I Gay for Applicants No appearance by, on behalf of Respondent H Carrad and T Westaway for Attorney-General
Judgment:	4 May 2015

JUDGMENT OF HEATH J

This judgment was delivered by me on 4 May 2015 at 4.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Craig Griffin Lord, Newmarket
Crown Law, Wellington

Department of Internal Affairs, Wellington (Legal Services)

MACALISTER v ROYAL NEW ZEALAND FOUNDATION OF THE BLIND [2015] NZHC 909 [4 May 2015]

The application

[1]      The existing Advisory Trustees of the Henderson Trust (the Trust) apply for orders varying the terms of the relevant Trust Deed and retrospectively validating certain acts carried out by persons acting in the position of Trustees and Advisory Trustees at times when their legal authority to do so is now in doubt.

[2]      On  24  September  2014,  Associate  Judge  Bell  directed  service  of  the application and supporting documents on the Attorney-General, exercising his supervisory powers over charitable trusts, and on the Charities Registration Board. Counsel for the Attorney-General has filed a helpful memorandum in response to the application. The Charities Registration Board abides the decision of the Court.

Background1

[3]      The  Trust  was  established  on  29  July  1984  by  Mr  Charles  William Henderson, as settlor.  Royal New Zealand Foundation for the Blind was appointed as Trustee.   The Trust Deed settles certain property on the Trustee for purposes (among other things) to  provide assistance for blind persons, or associations or organising such assistance in the New Plymouth, Wanganui, Manawatu, Wairarapa, Wellington and Hutt Valley areas.

[4]      Historically, the Trust has been administered by the Trustee in accordance with directions made by Advisory Trustees.  Four persons were named in cl 5 of the Trust Deed to fulfil that role.  One Advisory Trustee was to be appointed annually by the Wellington Advisory Committee of the Royal New Zealand Foundation for the Blind,  until  “the  settlor  shall  cease  to  have  the  power  of  appointment”.    Mr Henderson died in 1986.

[5]      On 30 April 2003, Part 4 of the Royal New Zealand Foundation of the Blind Act 2002 (the Royal Foundation Act) came into force.  Since that time, arrangements set out in the Trust Deed to deal with the appointment and removal of Advisory

Trustees became unworkable.  The Trustee, the Royal New Zealand Foundation for

1      Gratefully, I adopt much of the content of the memorandum of counsel for the Attorney-General of 15 April 2015 as a source for my summary of the relevant background.

the  Blind,  was  disestablished  by  the  Royal  Foundation Act,  and  replaced  with another  body,  known  as  the  Royal  New  Zealand  Foundation  of  the  Blind.2

Section 20  of  the  Royal  Foundation Act  had  the  effect  of  replacing  the  former Trustee with the new organisation, and contemplated assumption of its role and responsibilities under the Trust Deed.

[6]      However, district and regional organs of the Royal New Zealand Foundation for the Blind, and various committees formed by them, no longer exist.  That change led to an inability to follow the appointment and removal processes ordained by cls 6 and 7 of the Trust Deed. They provide:

Clause 6

The Advisory Trustees except the trustee appointed by the Wellington Advisory Committee shall be appointed and may be removed by the Settlor during his lifetime or until he shall vest such powers in the Trustee and thereafter the Trustee shall have the power of appointment and removal subject to the provisions of Clause 7 hereof.

Clause 7

Upon the power of appointment vesting in the Trustee one Advisory Trustee shall be the person elected to the Board of the Trustee by the Electing Committee of the Wellington Regional District as provided in Clause 7(ee) of the Empowering Act and the remaining Advisory Trustees shall be appointed and may be removed by the Trustee on the recommendation of the Advisory Committee.

The applicants’ proposals to remedy the problem

[7]      The Advisory Trustees  seek to invoke s 64A of the Trustee Act 1956 to achieve the following objectives:

(a)      To delete the underlined words from cl 6:

The Advisory Trustees  except the trustee appointed by the Wellington advisory committee shall be appointed and may be removed by the Settlor during his lifetime or until he shall vest

such powers in the Trustee, and thereafter the Trustee shall

2      My emphasis in each reference to the Royal Foundation.

have the power of appointment and removal, subject to the provisions of clause 7 hereof.

(b)      To replace cl 7 with the following:

The powers of appointment and removal of Advisory Trustees shall be at the sole discretion of the Trustee after consideration of the recommendations of the Advisory Trustees.   Any decisions as to appointment and/or removal shall be made by the Board of the Trustee without further documentation.

[8]      Further, a declaration is sought under s 66 of the Trustee Act to approve retrospectively appointments of Advisory Trustees since the Royal Foundation Act came into force, and to validate decisions and acts of those people.

Variation of the terms of the Trust Deed

[9]      The Trust is a charitable trust, registered under the Charitable Trusts Act

1957.  While that statute may provide a source of jurisdiction for the orders sought, given the way in which the proceeding has unfolded, my preference is to exercise powers under either the Trustee Act or the inherent jurisdiction of the Court to achieve the objectives sought.  The purpose of the application relates to positions of trustees, as opposed to the purposes of the Trust.

[10]     Although Mr Gay, for the applicants, relied on s 64A of the Trustee Act, I agree with counsel for the Attorney-General that the s 64A jurisdiction is inapt in the circumstances of this case.  As counsel for the Attorney submits, s 64A is directed to an arrangement which is approved on behalf of a beneficiary.3    On the other hand, the present application is concerned with the power of appointment of trustees and

their entitlement to act in particular ways.

3      Generally,  see  Clifton  v  Clifton  HC  Auckland  CIV-2004-404-4185,  5  November  2004 (Paterson J), at paras [39]–[42], in which the Judge declined to exercise jurisdiction in s 64A for broadly analogous circumstances.

[11]     I consider that s 64 is the more appropriate provision under which relief that seeks to vary the terms of the Trust Deed may be granted.  Only in the absence of statutory power would it be appropriate, in my view, to exercise the inherent jurisdiction; though clearly such power exists.4

[12]     Section 64(1) provides the Court with authority to approve a “transaction”. That term has been judicially interpreted to include a variation of a Trust5  and the ability to vary terms of its Trust Deed to ensure charitable status was maintained.6

[13]     I agree with the Attorney that amendments proposed by the applicants that refer to the “settler” are unnecessary, and that they should be expressed in more simple terms. The Attorney recommended approval in this form:

(a)       Clause 6:

The Trustee shall have in his or her sole discretion the power to appoint and remove Advisory Trustees subject to the consultation requirement in cl 7.

(b)      Clause 7:

The Trustee shall take into account the recommendations of the Advisory Trustees when exercising the Trustee’s power of appointment and removal.

[14]     Mr Gay, for the applicants, agrees that the amendments proposed by the Attorney are appropriate and seeks leave to amend the Statement of Claim accordingly.  Leave is granted.

[15]     I am satisfied that the amendments proposed by the Attorney meet the needs of the Trust.  I am prepared to make orders in those terms.

4      For example, Nysse v Nysse [2014] NZHC 2833.

5      Banicevich v Gunson [2006] 2 NZLR 11 (CA) at para [41].

6      Re Bruce McLaren Trust HC Auckland M663-IM02, 18 June 2002 (Heath J).

Declaration confirming prior acts of trustees

[16]     The Attorney does not oppose a declaration under s 66 of the Trustee Act, that the appointment of the Advisory Trustees named in para 9 of the Statement of Claim are valid.  They acted under authority that they believed existed and carried out their duties appropriately.  I make an order validating their appointment.  That order shall have effect from the date of their respective appointments.

[17]     That being so, as the applicants now accept, a declaration that the acts and decisions taken by them are deemed to be valid is unnecessary.   In any event, as counsel for the Attorney-General submitted, it is arguable that such relief would go beyond the jurisdiction under s 66 as it does not address specifically difficulties caused by removal of the bodies who exercised appointment functions in the past.

Result

[18]     For those reasons:

(a)       I grant leave to amend the Statement of Claim.7

(b)       I make an order varying cls 6 and 7 of the Trust Deed.8

(c)      I  make  an  order  validating  the  appointments  of  the  Trustees  and Advisory Trustees whose names are set out in para 9 of the Statement of Claim.9

(d)      No order as to costs.

7      See para [14] above.

8      See paras [13] and [15] above.

9      See para [16] above.

[19]     I thank counsel for their assistance.    In particular, I thank counsel for the

Attorney-General,  Ms  Carrad  and  Mr Westaway,  for  their  helpful  memorandum which has assisted in early resolution of this proceeding.

P R Heath J

Delivered at 4.00pm on 4 May 2015