Trustees Executors Limited (Beehan) HC Invercargill CIV-2011-425-000031

[2011] NZHC 410

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2011-425-000031

UNDER  the Charitable Trusts Act 1957

IN THE MATTER OF     a charitable trust created by the Will of

CATHERINE BEEHAN

BETWEEN  TRUSTEES EXECUTORS LIMITED Applicant

Hearing:         5 April 2011

Counsel:         J C D Guest for Applicant

Judgment:      6 April 2011

JUDGMENT OF LANG J

This judgment was delivered by me on Wednesday, 6 April 2011 at 3pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

J C D Guest, Downie Strewart, DX YP80013, Dunedin. Email:  [email protected]

TRUSTEES EXECUTORS LIMITED HC INV CIV-2011-425-000031 6 April 2011

[1]      Catherine Beehan died on 29 May 1971, leaving a last Will dated 29 August

1967.   Under that Will, Ms  Beehan directed  that her trustee was to  divide her residuary estate into halves, with one half thereafter to be held under a trust to be known as the Patricia Beehan Memorial Scholarship Fund.

[2]      The income from the fund was to be paid annually to the principal of St Catherine’s Convent in Invercargill.  The principal of the convent was to use those funds to provide scholarships for pupils attending the convent, or to assist the further education (musical or otherwise) of any past pupil of the convent.  One half of the annual income of the fund was to be utilised to provide a musical scholarship or scholarships, and the other half was to be used for a general scholarship or scholarships.

[3]      The   applicant,   Trustees   Executors   Ltd,   is   the   trustee   charged   with administering the trust created by the Will.   It has now encountered a problem in administering the trust, because St Catherine’s Convent ceased to exist in 1982.  It merged at that time with Marist College in Invercargill to form a new school called Verdon College.   As a result, any pupils who would previously have attended St Catherine’s Convent are now likely to attend Verdon College.

[4]      For that reason, the trustee has applied for an order approving a scheme varying the trust.  It proposes that the funds will henceforth be payable annually to the principal of Verdon College.  The principal of that college will be required to use those funds to provide scholarships for pupils attending the college, or to assist the further education of pupils and/or past pupils.   It is proposed that one half of the annual income of the fund will be used for a musical scholarship or scholarships, and that the balance will be used to provide a general scholarship or scholarships.

[5]      The application has been advertised and there is no opposition to it.   The Attorney-General has also filed a report in which he favours the Court approving the proposed variation.

[6]      Section 32 of the Charitable Trusts Act 1957 provides that, where a charitable purpose has become impossible, impracticable or inexpedient to carry out, the trust

funds are to be disposed of for some other charitable purpose.   As the Attorney- General points out, in exercising the power to vary a trust under s 32 the Court is exercising  a  statutory discretion.    The  following  factors  are,  however,  likely to inform the manner in which the Court will exercise its discretion:

(a)      The application must come within the statutory jurisdiction (which includes the requirement that the purposes were charitable at the date of settlement);

(b)The substituted arrangements must be charitable as that term is understood in law;

(c)      In deciding whether to approve the substituted arrangements the new scheme  should  accord  as  closely  as  reasonably  possible  in  the changed circumstances to the terms of the original trust;

(d)The Court will dispose of the property in such a way as will best serve the interests of those intended to be its beneficiaries and the public.[1]

[1] Re Tennant [1996] 2 NZLR 633 at 636.

[7]      Like the Attorney-General, I am satisfied that the above criteria are satisfied. The proposal accords so far as possible with the testator’s intention at the time that she executed her Will.  Although the funds will be applied for the benefit of pupils and past pupils of a different institution, it is likely that those persons would have attended St Catherine’s Convent if it had remained in existence.  The funds will also be applied for exactly the same purposes as those specified in the Will.

[8]      In those circumstances, and in the absence of any opposition, I approve the proposed scheme and make orders in terms of the draft orders filed by counsel for the applicant.

……………………………..

Lang J