Noeline Clark Foundation

[2020] NZHC 2473

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-000369

[2020] NZHC 2473

UNDER

sections 32 and 33 of the Charitable Trusts Act 1957;
part 19 of the High Court Rules 2016

IN THE MATTER

of an application under Part III of the Charitable Trusts Act 1957

IN THE MATTER

of a certain charitable trust The Noeline Clark Foundation

BETWEEN

NATHAN JAMES LINES, FIONA ELIZABETH CHILVERS HOLLINGWORTH and

ANDREW SAVVAS ROMANIDES OTT

as trustees of the Noeline Clark Foundation Applicants

Hearing:	21 September 2020
Appearances:	A G Needham for the Applicants
Judgment:	22 September 2020

JUDGMENT OF NATION J

[1]                  The Noeline Clark Foundation is a charitable trust settled by a Deed of Trust dated 9 August 2000 (the original trust deed). It was established by Noeline Clark for education purposes and particularly to provide a scholarship to students of Burnside High School to assist them to attend university.

[2]                  The trustees have made an application to the High Court under Part III of the Charitable Trusts Act 1957, for approval under s 32 and 33 of the Act, to a variation to the charitable purposes and mode of administration of the trust.

Noeline Clark Foundation [2020] NZHC 2473, 22 September 2020

[3]                  The original Deed of Trust vested property in the trustees for establishing scholarships for year 13 students of Burnside High School who were New Zealand citizens or permanent residents and who would be undertaking the first year of a degree course at the University of Canterbury.

[4]                  It is clear from the affidavit of Nathan James Lines, one of the trustees, that the trustees are currently constrained in implementing the purpose of the trust as apparent from its trust deed because a scholarship is only tenable for a period of one year and has to be for the first year of a degree course at the University of Canterbury. The Government recently introduced a policy of one year fees-free tertiary education and training, meaning that the intended scholarship recipients now have a reduced need for a scholarship. Conversely, other students now have a relatively greater need for a scholarship.

[5]                  The trustees are seeking to amend the trust deed to broaden the range of potential candidates to those who are undertaking a course of study at the University of Canterbury without the requirement for the recipient to be a year 13 student undertaking the first year of a degree course.

[6]                  I am satisfied the proposed amended purpose and scope of the trust is a charitable purpose within the meaning of Part III of the Act.1

[7]                  I am satisfied that, in terms of the potential recipients of the scholarship, the original scheme of the trust has become impracticable or inexpedient. I am also satisfied that, with the proposed amendment, the new scheme of the trust accords as closely as reasonably possible in the changed circumstances to the terms of the original trust.2

1      As required for the Court to have jurisdiction in terms of s 32. Public Trustee v Attorney-General

[1923] NZLR 433 (SC).

2      As is normally required by the Court. Re Whatman (1965) 1 NZTR 0-004 (NZSC) at 11; Re Goldwater (deceased) [1967] NZLR 754 (SC) at 755; Re Twigger [1989] 3 NZLR 329 (HC) at [342].

[8]                  Section 33 permits a Court to approve amendments to the terms of the charitable trust where the Court is satisfied the administration of the property or the carrying out of the trust “could be facilitated” by the variation sought.

[9]                  Difficulties have arisen with the appointment of new trustees. The original trust deed provided for one trustee to be nominated by the President of the Canterbury District Law Society and two other trustees to be nominated by the President of the Institute of Chartered Accountants of New Zealand. Those two organisations no longer exist. The President of the NZLS is willing to continue to make appointments but a fee would be charged. The President of the Chartered Accountants of Australia and New Zealand would not be willing to continue making appointments.

[10]              It is proposed the current trustees be vested with the power to appoint and remove trustees in the first instance. Consistent with the scheme of the original trust deed, one trustee is to be a barrister or solicitor, resident in Canterbury and holding a valid practicing certification with not less than five years’ post-qualification experience. One trustee shall be an accountant, resident in Canterbury and appropriately qualified with not less than five years’ experience. One trustee is to be an investment advisor/fund manager, resident in Canterbury with an appropriate qualification and not less than five years’ experience.

[11]              The proposed amendment provides a backstop provision that the President of the NZLS and the Principal of Burnside High School would be vested with particular powers of appointment if the trustees are unable or unwilling to act.

[12]              The original trust deed requires the trustees award the scholarship on the recommendation of the Scholarship Selection Committee. The original trust deed provides for the Committee to consist of three people, the Principal of Burnside High School, a woman university staff member nominated by the Vice-Chancellor of the University of Canterbury, and a woman nominated by the Committee of the Canterbury Branch of the New Zealand Federation of University Women Incorporated. This last organisation no longer exists and was replaced by the Canterbury Branch of the Graduate Women New Zealand Charitable Trust (GWNZ) in 2017. With the amendment, the third person on the Committee will be nominated

by GWNZ or any organisation that succeeds or replaces it, or if GWNZ is not willing or able to act, the Principal for the time-being of Burnside High School. It is also proposed that the nominations need not be of women only.

[13]              To future-proof the trust against any additional changes in Government policy that would erode or eradicate the purposes of the Foundation, it is proposed there be a term that allows the trustees to amend the terms of the trust where it has become “impractical, inexpedient or impossible” to fulfil the terms of the trust. A new sub- clause makes it clear that any amendment cannot alter the fundamental purpose of the trust.

[14]              The original trust deed has a similar provision which would permit the trustees in such circumstances to apply the trust fund to such “other purpose or purposes directly related to education and, in particular, the further education of senior high school students as the Trustees shall in their absolute discretion, determine”. A proposed amendment would clarify that such application is to be “consistent with the purposes of the Trust contained in clause 4 to the greatest extent possible in the circumstances”.

[15]              The trustees have also proposed changes to a number of clauses in the original trust deed which do not affect the substance or purpose of the trust.

[16]              I am satisfied the proposed amendments would be an improvement on the trust deed and would likely facilitate the trust and its trustees in the administration of the property and the carrying out of the trust’s charitable purpose as required by s 33.

[17]              The application for the Court’s approval of the proposed amendments has been appropriately advertised as required by s 36 of the Charitable Trusts Act. The proposed amended scheme and changes to the trust deed have been submitted to the Attorney- General for consideration. In a report of 7 July 2020, the Deputy Solicitor-General, for the Attorney-General, discussed in detail the proposed amendments. She was of the opinion that the proposed amendments could be approved in accordance with the requirements of ss 32 and 33 of the Act.

[18]              Accordingly, the Court makes an order approving the scheme of The Noeline Clark Foundation and changes to the original trust deed as provided for in the draft Deed of Trust already filed with the Court.

[19]              The applicants’ costs associated with this proceeding are to be paid from The Noeline Clark Foundation’s funds on an indemnity basis. The Attorney-General’s costs of $750 are to be paid from The Noeline Clark Foundation’s funds.

Solicitors:

Wynn Williams, Christchurch.