New Zealand Guardian Trust Company Limited

[2014] NZHC 2120

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-00793 [2014] NZHC 2120

IN THE MATTER

of the Charitable Trust established by the

Will of Gladys Valentine Howey, late of
Auckland, Retired, Deceased

AND IN THE MATTER AND

of Sections 32, 33, 34 and 35 of the
Charitable Trusts Act 1957

THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED, 48

Shortland Street, Auckland, Trust
Company

Applicant

Hearing:	On the papers
Judgment:	4 September 2014

JUDGMENT OF FOGARTY J

This judgment was delivered by me on 4 September 2014 at 4.30 p.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           The New Zealand Guardian Trust Co Ltd

THE NEW ZEALAND GUARDIAN TRUST CO LTD  [2014] NZHC 2120 [4 September 2014]

[1]      Gladys Howey died in September 1985 aged 82.  She had never married.  Her next of kin were the children and grandchildren of five brothers and sisters.  At the time of her death her assets comprised cash and investments worth over $112,000 and chattels and a house property worth $400,000 in 1985.

[2]      At the present time the value of her estate is about $676,000.  The funds are presently invested with the trustee of her estate, The New Zealand Guardian Trust Company Limited.  This is no doubt the successor of South British Guardian Trust Company, originally appointed by her as the executor of her will.

[3]      By her will she desired there be an advisory board comprising a member of the Walt Disney Foundation, a progressive veterinarian, the National President of the SPCA, the President of the Cat Breeders Association, a mayor or city councillor and a school principal, or like people “to best advise and direct my trustee in the administration of the charitable trust or trusts of my will so as to have a true and humanitarian appeal to the public and education on the need for the registration of cats and all domestic animals and their care generally”.

[4]      After some minor bequests of personal effects to her family, she provided in cl 6 for the residuary estate to be held on trust for the following:

CHARITABLE PURPOSES

ATo a school whose pupils submit for the approval of the trust board the best essay on the care of their domestic pets, especially the cat and what they have learned about this and nature study generally during the year of the award.

BAN AWARD for the best publicly acclaimed PROFESSIONALLY produced movie or TV series introducing animal life or story such as Disney’s “Living Desert” or “Tomasena” or a grant towards producing the film of an education nature on the care of the domestic pet.

CAN  AWARD  on  best  DOCUMENTARY  on  subjects  that  will educate and enlighten people on the need to teach their children kindness  and  care  towards  animals  and  love  of  nature  and  that without which a child’s education is incomplete and has quantity rather than quality to promote a school syllabus of 1954.  That all domestic pets shall be registered and of value and not mere chattels.

DAN AWARD for the best HOME produced movie of people and their animals and their life together.

[5]      In cl 7 of the will Ms Howey expressed the wish that the trustees should retain sufficient funds from the income of the estate for the appointment of capable interested  part-time  organisers  in  as  many  senses  as  possible,  both  here  and Australia, who will be required and instructed by her trustee to contact their city councillors, SPCA, cat clubs, governments or such officials, newspapers, editors and the like to advise them of the work and desires of her trustee and convince them of the cruelty and health hazard of ignoring or allowing the exploding cat and dog population,  and  that  both  cat  and  dogs  should  be  registered.    This  provision continues on in considerable detail and suggests that this retainer be offered to some members of her family.

[6]      Part of cl 9 of the will purported to use her home to create a sanctuary for cats and birds.

[7]      The SPCA pursued use of the house. The High Court in a judgment delivered on 7 September 1989 by Grieg J determined that that cl 9 failed because it is a perpetuity, did not display any charitable intention, and was not an imperfect trust provision within the meaning of s 61(b) of the Charitable Trusts Act 1957.  He also held that the property was carried by cl 6 of the will.

[8]      The  SPCA appealed.    Its  appeal  was  dismissed.1      The  dismissal  of  the application to obtain the house as a charity left the question of whether the property is disposed of by cl 6 of the will.  The Court of Appeal upheld the High Court’s view that the words in cl 6 are sufficient to carry the house property, that the testatrix thought she had disposed of by cl 9.

[9]      That brings us to this application.  Guardian Trust has formed the view that the directions set out in cls 6 and 7 of the will have failed because they are either not charitable at law or are impracticable or inexpedient to carry out.

[10]     The Guardian Trust argued that while the purpose of cl 6(a) may constitute an educational purpose, the same cannot be said for the rest of cl 6:

(a)       There  is  doubt  that  the  purpose  in  the  first  limb  of  cl  6(b)  is sufficiently charitable;

(b)      Clause 6(c) has purposes that are clearly not charitable;

(c)       Clause 6(d) has a purpose that does not have sufficient educational or moral value to be charitable; and

(d)      Clause 7 does not contain a charitable purpose.

[11]     With  the  total  value  of  the  estate  being  just  under  $700,000,  there  are obviously serious questions as to whether or not these objects can be pursued, let alone whether or not they are of charitable purpose.

[12]     The Guardian Trust has applied now to this Court for the approval of a scheme for variation of cls 6 and 7.  This new scheme is in the form of a deed of trust  declared  by New Zealand Guardian Trust  Company.   The scheme has  the support of the Attorney-General who has filed a very detailed analysis of the merits of the application via Ms Sheryl Gynn, the Deputy Solicitor-General. She is satisfied that the scheme is a proper one and should be approved by this Court under s 3 of the Charitable Trusts Act 1957.  She has considered the case law but it is sufficient to

adopt the dictum of Tipping J in Re Twigger:2

… that those promoting a scheme under Part III should seek to substitute beneficiaries or purposes resembling as closely as possible in the changed circumstances those which originally commended themselves to the person who established the trust.

[13]     It is not necessary to set out the whole of the proposed trust deed.  Relevant to this decision is cl 1.2, which states the purpose of the trust:

The  purpose  of  the  trust  is:  Educate  children  on  the  proper  care  and treatment of domestic pets (especially cats) but not excluding the welfare of animals more generally; encourage news media and publicity activities relating to, and the welfare of, animals as pets and companions to the people of New Zealand; promote the prevention of cruelty to domestic animals; make awards and distributions to schools and organisations who undertake and facilitate such purposes and such other consequential community benefit

in New Zealand to the extent that this is a charitable purpose under the laws of New Zealand from time to time.

[14]     Then follows cl 1.3 which, in summary form, provides that at least once a year the Guardian Trust will seek proposals from charitable organisations in New Zealand,  including  the  SPCA Auckland,  the  Royal  NZSPCA,  the  New  Zealand Companion Animal Council Inc, and other similar entities.  The Guardian Trust can distribute income or capital or both for any such proposed project or projects and have complete discretion as to the amounts to be distributed and any conditions it may impose.

[15]     In deciding which projects or activities to fund, the trustee will keep in mind

the type of education or other activities indicated in the deceased’s will, including:

(a)       School activities relating to learning about the care of domestic pets, especially cats;

(b)Television and other media events of an educational nature on the care of domestic pets;

(c)       Incorporating animal welfare topics in the school syllabus.

[16]     I am entirely satisfied that this scheme is in sympathy with the intentions of Ms Howey and is a more practical application of her intentions.  I accept the report of the Attorney-General and endorse the application of the New Zealand Guardian Trust.

[17]     Accordingly, the Court makes the following orders exercising the statutory jurisdiction conferred on the Court by s 33 of the Charitable Trusts Act 1957:

(a)       That cls 6 and 7 of the will of the deceased dated 21 November 1973 be varied by:

(i)Deleting from cl 6 all of the words from line 8 of that clause to the end of the clause – that is from the words “the following CHARITABLE PURPOSES” onwards.

(ii)Substituting  for  them  the  words:  “the  charitable  purposes specified in the deed creating The Gladys Valentine Howey Charitable Trust, the terms of which are set out in exhibit E of the affidavit of Shane Edward Pearce, sworn on 14 February

2014.

(iii)     Deleting all of cl 7.

(b)That all reasonable expenses of preparing, perusing and advertising of this scheme shall be paid out of and be a charge on the property or income of the Trust.

[18]     These  costs  shall  be  submitted  to  this  Court  and  placed  before  me  for approval.  These costs shall include the costs of the Attorney-General fixed in the sum of $750.