McKay - [2023] NZHC 1527

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-182

[2023] NZHC 1527

UNDER Parts 3 and 5 of the Charitable Trusts Act 1957

IN THE MATTER OF

W H Hargreaves Trust

BETWEEN

DOUGLAS ALEXANDER McKAY

Applicant

Hearing: 19 June 2023

Appearances:

L C Elliott for Applicant

Judgment:

19 June 2023

ORAL JUDGMENT OF DUNNINGHAM J

[1] The applicant, Douglas Alexander McKay, is the sole trustee of the W H Hargreaves Trust (the Trust). He applies under s 33 of the Charitable Trusts Act 1957 (CTA) to vary the Trust’s mode of administration. He also seeks an order under s 52 of that Act that the reasonable expenses of an incidental to making the application are paid from the assets of the Trust.

[2] The background to the application is summarised in the memorandum of counsel for the applicant. The Trust was established pursuant to the terms of the will of Mr William Hartley Hargreaves dated 16 August 1927 (the Will). The Will gave the directors of the Bank of New Zealand the power, among other things, to establish the Trust with the residuary funds in Mr Hargreave’s estate, upon the death of the last of Mr Hargreaves’, wife, son and daughter. The Trust was established in 1974 upon

RE McKAY [2023] NZHC 1527 [19 June 2023]

the death of Mr Hargreaves’ daughter and was registered with Charity Services pursuant to the Charities Act 2005 in 2008. However, on creation of the Trust, no trust deed was prepared. The trustee is instead exercising his powers and obligations pursuant to the Will, the Trusts Act 2019, the CTA, and the Charities Act 2005.

[3] Pursuant to the Will, the trust funds were to be allocated to indigent widows of bank officers at the discretion of the Bank of New Zealand. By an order of the High Court dated 28 July 1989, the range of potential beneficiaries of the Trust was extended to include:

(a)widows and widowers of officers of BNZ in financial hardship;

(b)former officers and employees of BNZ in financial hardship;

(c)officers and employees of BNZ in financial hardship; and

(d)the dependents of any of the above in financial hardship.

[4]The applicant applies for orders varying the Trust by:

(a)Creating a formal trust deed, including clearly stated terms of the Trust. The trust deed is intended to modernise and codify the trustees’ duties and obligations in one place.

(b)Providing powers of appointment and/or removal of trustees, and of specialist trust advisers.

(c)Providing for a minimum number of trustees (two).

[5] The applicant does not seek to amend the Trust’s purposes. The purposes remain substantively in the terms stated in the 1989 order.

[6] A draft trust deed is provided with Mr McKay’s application and in his affidavit, Mr McKay sets out some of the difficulties with the Trust’s present mode of operation and administration. These include:

(a)The trustees’ role and powers derive from the bare terms of the Will and the default…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 1527
Decision Date: 19 June 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Christchurch Registry, Douglas Alexander McKay, the sole trustee of the W H Hargreaves Trust, applied for a variation of the Trust’s mode of administration and sought an order that the reasonable expenses incurred in making the application be paid from the Trust's assets. The Trust, established by the will of William Hartley Hargreaves, was intended to support indigent widows of bank officers and their dependents. However, the Trust's operation had been hampered by the lack of a formal trust deed, leading to difficulties in the trustees' duties and powers. McKay sought to address these issues by proposing a formal trust deed that would modernise and codify the trustees' duties and obligations, including the appointment and removal of trustees and the requirement for a minimum of two trustees. The Court was required to determine whether the proposed scheme met the criteria set out in the Charitable Trusts Act 1957, particularly that the scheme was proper, not contrary to law, public policy, or good morals, and that the Trust's charitable purposes could be carried out. The Court found that the application met the criteria and granted the application, including the reimbursement of the applicant's reasonable expenses from the Trust's assets.

Orders