Samuel Marsden Collegiate School Trust Board - [2024] NZHC 1136

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-132

[2024] NZHC 1136

IN THE MATTER of The Charitable Trusts Act 1957

AND

IN THE MATTER

of The Samuel Marsden Collegiate School Trust Board

SAMUEL MARSDEN COLLEGIATE SCHOOL TRUST BOARD

Applicant

Telephone conference: 8 May 2024

Counsel:

O C Gascoigne and B T Haddleton for Applicant

Judgment:

8 May 2024

JUDGMENT OF McHERRON J

[1] The Samuel Marsden Collegiate School Trust Board (the Applicant) applies for a variation of its Deed of Trust pursuant to s 33 of the Charitable Trusts Act 1957 (the Act).

Background

[2] Samuel Marsden Collegiate School (Marsden) is an independent girls’ school in Karori, Wellington. The Applicant is incorporated under the Act. It comprises the Chair and six trustees appointed by the (Anglican) Diocesan Trusts Board.

SAMUEL MARSDEN COLLEGIATE SCHOOL TRUST BOARD [2024] NZHC 1136 [8 May 2024]

[3] Under a deed of trust dated 28 August 1920 (the Land Trust Deed), the land in Karori on which Marsden is located was vested in the Applicant to be held on trust (together with other money arising or property held):

… for the purposes generally of any school or schools from time to time established conducted or maintained within the Diocese of Wellington by or under the authority of the Synod of the Wellington Diocese of the Church of the Province of New Zealand commonly called the Church of England or for any purpose connected with the imparting from time to time of education within the said Diocese under the authority of the said Synod…

[4] The applicant has considered a range of changes to Marsden’s operating and funding model to ensure its long-term financial viability. A five-year strategy (the Strategy) has recently been approved by the Applicant, which includes several initiatives, including to develop and implement an “NCEA+ curriculum”.

[5] To implement the strategy, the Applicant requires an injection of capital and an additional source of income. The Applicant has identified some of its land as potentially being surplus to Marsden’s requirements. The Applicant considers either selling or mortgaging certain parcels of land to be an appropriate additional income source.

[6] However, the Land Trust Deed only permits the net proceeds of any such sale or mortgage to be applied for the purposes of capital expenditure. As currently drafted, the Land Trust Deed does not permit land to be sold or borrowing secured against it to be used for operational expenditure.

The application

[7] Against this background, the Applicant seeks to amend the Land Trust Deed to enable land to be sold or borrowing secured against it for operational expenditure.

[8] The specific amendments to the Land Trust Deed sought in the application are marked up below:

2. THE SAID parcel of land and any other hereditaments for the time being held under these presents may be used or dealt with and such moneys as aforesaid be applied in such manner in every respect for the…

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: [2024] NZHC 1136
Decision Date: 8 May 2024

CaseChat Overview and Summary

The Samuel Marsden Collegiate School Trust Board (the Applicant) sought a variation of its Deed of Trust pursuant to section 33 of the Charitable Trusts Act 1957. The Applicant, which governs an independent girls' school in Karori, Wellington, wishes to alter the terms of the Land Trust Deed to allow the sale or mortgage of certain parcels of land to raise funds for both capital and operational expenditure. The current terms of the Land Trust Deed restrict the application of the proceeds from any sale or mortgage to capital expenditure only, which the Applicant argues hampers its ability to secure the long-term financial viability of the school.

The legal issues before the Court included whether the proposed amendments to the Land Trust Deed would facilitate the administration of the Trust, align with the charitable objects of the Deed, and comply with the requirements of the Charitable Trusts Act 1957. The Court examined whether the changes proposed were necessary and reasonable, and whether they would protect against the risk of capital exhaustion.

In its judgment, Justice McHerron found that the proposed variations to the Land Trust Deed would indeed facilitate the administration of the Trust and allow for the better achievement of its charitable objects. The Court accepted that the current restrictions were out of step with modern financial practices and unnecessarily limited the Applicant's ability to manage its resources effectively. The Court also noted the safeguards included in the proposed amendments, such as the annual cap on the use of proceeds for operational expenditure, and the requirement for approval from the Synod of the Wellington Anglican Diocese for any sale of land.

The Court approved the variations to the Land Trust Deed, with a minor amendment to clarify that income earned on the proceeds of any sale or mortgage would form part of the five per cent total of trust funds that may be applied to expenditure in any single year. Justice McHerron ordered that the Applicant pay the Attorney-General $750 for her report and that the reasonable costs of the Applicant arising out of the current application may be met from the funds of the Trust.

Orders