New South Wales Supreme Court CITATION : Hunter Region SLSA Helicopter Rescue Service Ltd v Attorney General for NSW [2000] NSWSC 456 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2429/00; 4532/93; 1052/94 HEARING DATE(S) : 15 and 22 May 2000 JUDGMENT DATE : 22 May 2000 2429/00 Hunter Region SLSA Helicopter Rescue Service Limited (P) The Attorney General in and for the State of New South Wales (D) 4532/93 The Returned and Services League of Australia (NSW Branch) (P1) PARTIES : Geoff Godfrey, Eugene Priest, Alexander Leslie Baker, John Thomas Walter Sheehan being Trustees of the New South Wales State Branch of the RSL Welfare and Benevolent Fund (P2) Attorney General of New South Wales (D) 1052/94 Attorney General of New South Wales (P) The Returned and Services League of Australia (NSW Branch) (D1) Geoff Godfrey, Eugene Priest, Alexander Leslie Baker, John Thomas Walter Sheehan being Trustees of the New South Wales State Branch of the RSL Welfare and Benevolent Fund (D2) JUDGMENT OF : Hamilton J 2429/00 R A Conti QC (P) R W Barlow, Solicitor (D) 4532/93 COUNSEL : No appearance (P1 & 2) R W Barlow, Solicitor (D) 1052/94 R W Barlow, Solicitor (P) No appearance (P1 & 2) 2429/00 Sparke Helmore (P) I V Knight, Crown Solicitor (D) 4532/93 SOLICITORS : Abbott Tout (P1 & 2) I V Knight, Crown Solicitor (D) 1052/94 I V Knight, Crown Solicitor (P) Abbott Tout (D1 & 2) CATCHWORDS : CHARITIES [33] - Administration and control by Court - Generally - Settlement of schemes - General principles - Administrative schemes - Variation of schemes - Cy-pres schemes. 43 Eliz I c4 (1601) Charities Procedure Act 1812 (Imp) LEGISLATION CITED : Australian Courts Act 1828 (Imp) Imperial Acts Application Act 1969 s 17 Charitable Trusts Act 1993 A-G v St John's Hospital, Bath (1865) LR 1 Ch App 92 A-G v The Bishop of Worcester (1851) 9 Hare 328; 68 ER 530 Baldry v Feintuck [1972] 1 WLR 552 In re Gott. Glazebrook v University of Leeds [1944] Ch 193 In re Ingram [1951] VLR 424 at 430 In re Pieper, deceased; The Trustees Executors and Agency Co Ltd v Attorney-General (Vic) [1951] VLR 42 In re Queen's School, Chester [1910] 1 Ch 796 In re Robinson. Besant v The German Reich [1931] 2 Ch 122 CASES CITED : In the Estate of Bower, Deceased (1980) 25 SASR 161 Kytherian Association of Queensland v Sklavos (1958) 101 CLR 56 Royal North Shore Hospital of Sydney v The Attorney General for New South Wales (1938) 60 CLR 396 The Diocesan Trustees of the Church of England in Western Australia v The Solicitor-General (1909) 9 CLR 757 Verge v Somerville [1924] AC 496 4 Halsbury's Laws of Australia tit Charities [75-645] Jacobs' Law of Trusts in Australia (6th ed, 1997) [1078] Sheridan and Delany, The Cy-Pres Doctrine (1959) 16 - 17, 140 - 142 IVA Scott on Trusts (4th ed, 1989) s 367.2 Tudor on Charities (8th ed, 1995) 446 - 447 DECISION : 2429/00 - Variation of scheme approved; 4532/93 and 1052/94 - Cy-pres scheme approved. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J MONDAY, 22 MAY 2000 2429/00 HUNTER REGION SLSA HELICOPTER RESCUE SERVICE LTD v ATTORNEY GENERAL IN AND FOR THE STATE OF NEW SOUTH WALES 4532/93 THE RETURNED AND SERVICES LEAGUE OF AUSTRALIA (NEW SOUTH WALES BRANCH) & ORS v ATTORNEY GENERAL FOR NEW SOUTH WALES 1052/94 ATTORNEY GENERAL FOR NEW SOUTH WALES v THE RETURNED AND SERVICES LEAGUE OF AUSTRALIA (NEW SOUTH WALES BRANCH) & ORS JUDGMENT HIS HONOUR: 1 These matters raise different aspects of the jurisdiction of the Supreme Court to deal with schemes in relation to charitable trusts. I intend, by way of preface, to say something about that jurisdiction. 2 In the first matter, the summons in terms asks that leave "be granted to the plaintiff to amend the terms of the trust". Once a charitable trust is created, it is well established that neither the donor nor the trustee may amend its terms: IVA Scott on Trusts (4th ed, 1989) s 367.2; Tudor on Charities (8th ed, 1995) 446 - 447; Baldry v Feintuck [1972] 1 WLR 552. However, there is a long-standing jurisdiction in the Court to settle schemes in relation to the carrying out of charitable trusts. That jurisdiction is stated as follows in 4 Halsbury's Laws of Australia tit Charities [75-645] as follows: "A charitable gift does not fail because there is an uncertainty as to the mode of carrying out the gift. In numerous cases of gifts for charitable purposes it is necessary to fill in a number of details where the testator or donor has not described his or her wishes in clear terms. In such cases the gift does not fail; the court fills in the details of the testator or donor's charitable intention by means of a scheme." And see The Diocesan Trustees of the Church of England in Western Australia v The Solicitor-General (1909) 9 CLR 757 at 763; Kytherian Association of Queensland v Sklavos (1958) 101 CLR 56 at 68 - 71; Verge v Somerville [1924] AC 496 at 507 - 508; In re Robinson. Besant v The German Reich [1931] 2 Ch 122 at 128 - 129; In re Gott. Glazebrook v University of Leeds [1944] Ch 193 at 197; In re Pieper, deceased; The Trustees Executors and Agency Co Ltd v Attorney-General (Vic) [1951] VLR 42 at 44 - 45; In re Ingram [1951] VLR 424 at 430. 3 The type of scheme most commonly encountered is the cy-pres scheme. A cy-pres scheme is appropriate and necessary where the instrument creating the trust evinces a charitable purpose but it is impossible to apply the gift to carry out the purpose, for instance, where the gift specifies an institution or particular object which does not exist or the nominated institution declines the performance of the trust. The Court will then give effect to the intention of the donor as closely as possible (cy-pres): Royal North Shore Hospital of Sydney v The Attorney General for New South Wales (1938) 60 CLR 396. But the cy-pres scheme is only one subspecies of the genus scheme, and schemes other than cy-pres schemes may be implemented where there is lack of clarity as to the particular objects, or where there are no trustees, or where there is not proper machinery for the management and control of the trust property, or regulating its distribution and application. In giving those instances, I am not intending to be exhaustive. 4 Despite the succinct statement which I have quoted from a modern legal encyclopedia, available in loose leaf and electronic forms, the jurisdiction is an ancient one. Despite a belief which at one stage existed, it preexisted the well-known but defunct statute of Queen Elizabeth I relating to charitable trusts, 43 Eliz I c4 (1601). The jurisdiction is a jurisdiction of Courts of Chancery or Equity whereby the Crown as parens patriae exercises supervision over charities in much the same way as it does over infants and did, in times past, over lunatics. Traditionally, the jurisdiction had to be invoked in a suit brought by information which was a complex and expensive proceeding. To permit more summary, simpler and cheaper proceedings there was enacted the statute 52 Geo III c101, which was known as Sir Samuel Romilly's Act and, afterwards, as the Charities Procedure Act 1812. That Act provided: "That, from and after the passing of this Act, in every case of a Breach of any Trust, or supposed Breach of any Trust created for Charitable Purposes, or whenever the Direction or Order of a Court of Equity shall be deemed necessary for the Administration of any Trust or Charitable Purposes, it shall be lawful for any Two or more Persons to present a Petition to the Lord Chancellor [et ceteros]" As to the foregoing, see Sheridan and Delany, The Cy-Pres Doctrine (1959) 16 - 17, 140 - 142. The direction or order of the Court for the administration of a charitable trust was expressly encompassed in the procedure prescribed by 52 Geo III c101. That Act was applied in New South Wales by the provisions of the Australian Courts Act 1828, 9 Geo IV c83. When the major revision of Imperial legislation in force in New South Wales was made in 1969, 52 Geo III c101 was repealed, but replaced in virtually identical terms in s 17 of the Imperial Acts Application Act 1969. The procedure by petition continued to be used on the Equity side of this Court right up to the reorganisation of this Court's jurisdictions and procedures by the Supreme Court Act 1970. Thereafter, s 17 of the Imperial Acts Application Act 1969 was repealed, not with the intent of removing the jurisdiction, but because it was no longer necessary, the procedure in such applications now being regulated by the Supreme Court Rules and applications being brought by summons under those Rules. 5 The last piece of the legislative framework which should be noticed was the enactment of the Charitable Trusts Act 1993. Some learned authors have questioned the utility of that Act (see Jacobs' Law of Trusts in Australia (6th ed, 1997) [1078]) and, indeed, its purpose is somewhat hard to discern, other than the establishment of a mechanism whereby in certain instances the Attorney General can institute schemes. The Attorney General has always played an important part in the supervision of charitable trusts and was and is generally necessary as a party to any proceedings relating to charitable trusts. Under the Charitable Trusts Act 1993 the Attorney General was given a power coordinate with that of the Court to institute schemes in relation to small trusts, ie, charitable trusts with a value under $500,000. There seems no doubt that there was no intention to constrain the Court's exercise of its jurisdiction over charitable trusts: see second reading speech, Parliamentary Debates, Legislative Assembly, 21 April 1993, 1385. From that framework I shall pass to the facts relating to the two cases in respect of which I am delivering judgement. 2429/00 - Hunter Region SLSA Helicopter Rescue Service Ltd v Attorney General in and for the State of New South Wales 6 These proceedings, as I have already noted, in terms claimed an amendment of the trust. As I have already indicated, that cannot be done. However, where appropriate the same result may be achieved under the rubric of variation of scheme. The Court, not surprisingly, always had a jurisdiction, once it had approved a scheme, subsequently to vary that scheme in appropriate circumstances: A-G v The Bishop of Worcester (1851) 9 Hare 328 at 360; 68 ER 530 at 546; A-G v St John's Hospital, Bath (1865) LR 1 Ch App 92 at 106; In re Queen's School, Chester [1910] 1 Ch 796 at 802 - 803; In the Estate of Bower, Deceased (1980) 25 SASR 161 at 164. In the present case, what is sought is, in effect, a variation of a scheme. That scheme as it at present exists is embodied in Terms of Settlement entered into in 1993 between the same parties in relation to proceedings 4778 of 1991 brought in this Division in relation to this charitable trust. There were at that time various disputes relating to the trust property which resulted in injunctive relief being granted by Rolfe J in 1991. In 1993, the proceedings were settled and the Terms of Settlement were handed up and noted before the Registrar of this Division. As to the appropriateness of that procedure, I shall have something to say in due course, but, undoubtedly, the trust has continued to be administered pursuant to that regime since that time. The Terms of Settlement certainly embodied a scheme such as the Court might well specifically adopt and enforce. 7 The present problem is shown in the evidence by affidavit of the plaintiff's solicitor, Mr A J Deegan of Newcastle. Mr Deegan's evidence shows that the application of the trust's assets has been to the provision and maintenance of a helicopter rescue service in the Hunter Region, the Central Coast, the New England, and the Manning and Mid North Coast areas of New South Wales ("the trust area"). The plaintiff is a party to a contract with the New South Wales Ambulance Service to provide aero-medical retrieval and transfer services conveying sick or injured patients in appropriate cases to hospital or between hospitals. Generally, the plaintiff's services have been carried out within the trust area, but there are helicopter flights at times outside the trust area, when there is no alternative vehicle available. Increasingly, this has led to helicopter services in the Tamworth district, which is not in the trust area. It is now desired to establish a permanent heli-base at Tamworth for the provision of better services of this kind in the Tamworth and surrounding districts, and donations have been made towards the trust funds for this purpose. There is a general desire, however, that the funds raised in the trust area and the funds now raised in the Tamworth district for this extension of services should be treated separately, the funds raised in the trust area being applied there and the funds raised in the Tamworth district being applied in that district. The changes sought are comparatively simple changes to the Terms of Settlement, which effect this desired end. 8 This, it seems to me in the circumstances, is appropriate, and the Court is prepared to effect a variation of the existing scheme. This variation is not a cy-pres scheme, nor was the scheme embodied in the original Terms of Settlement a cy-pres scheme. It was a scheme concerning administrative arrangements within the more general concept of scheme, as I have discussed it above. 9 The reservation which I have mentioned as to the method by which the scheme operating under the Terms of Settlement came into effect is as follows. The scheme was devised by the parties and is, in fact, embodied in a document by agreement between them. That agreement was simply noted by the Registrar and not brought into effect by a formal order of the Court. Any great alarm at this is ameliorated by the fact that one of the parties was the Attorney General. It is doubtful whether this scheme was one sufficiently small for the Attorney General himself to have dealt with and, in any event, even if it was, the Attorney General of the day did not purport to do so. The scheme was put into effect simply by the handing up of the Terms of Settlement before the Registrar, and the noting by the Registrar of those Terms. I have already required that a document be engrossed which includes both the original Terms of Settlement and, embodied in their appropriate places in the same document, the terms now sought to be included. In view of the doubts about the nascence of the scheme, I think it is appropriate, rather than simply dealing with the variation, for the Court now to approve a scheme in terms of the Terms of Settlement previously approved and embodying the amendment now brought forward. In this matter, short minutes should be brought in to that effect. 4532/93 - The Returned and Services League of Australia (New South Wales Branch) & Ors v Attorney General for New South Wales 1052/94 - Attorney General for New South Wales v The Returned and Services League of Australia (New South Wales Branch) & Ors 10 These matters, by contrast, are a case of a cy-pres scheme in the proper sense. Charitable trusts existed for the provision of neurological services, particularly to ex-service men and women, and the object of the trust was the Northcott Neurological Centre at Lytton Street Cammeray where such services were provided in a hospital setting. That institution has closed. Other problems arose relating to the administration of the trust and some intermingling of the funds belonging to this charitable trust with moneys of the plaintiff which it held for itself beneficially. 11 These matters were dealt with in a judgement of Cohen J delivered on 16 July 1996. His Honour indicated that, although the intermingling of funds had constituted a breach of the trust, there had been no question of any misapplication of funds. His Honour defined the portions of the funds which belonged to the plaintiff beneficially and those which should be regarded as being held on the charitable trust. His Honour rejected any notion that the charitable trust had come to an end and directed the preparation of a cy-pres scheme. In expressing that conclusion, His Honour said the following: "From a reading of the contemporary documents, it is clear that there was concern at the time that many ex-servicemen and women were suffering from problems which were not readily recognised or diagnosed as having a neurological basis. Some of these would have been as the result of war service. The publicity indicated that the benefits to be obtained from a neurology service were intended for ex-servicemen and women, their dependents and war widows. In an article in The Sun on 8 November 1950 it was said that the only qualification for attention at the new clinic would be to come within that category of persons. The League was responsible for the appeal and it would have been widely known that it had the care of ex-servicemen and women as its principal activity. In 1950 there were very many persons who had served in either World War I or World War II or were widows or other dependents of those persons. The emphasis at the time of the appeal to the public was on the need for a particular medical health service for that large group of people in the community. There is still a large number of ex-service personnel or their dependents who require medical treatment. The need for specialised neurological assistance outside the existing hospital system is not so apparent. Medical assistance goes beyond the diagnosis and treatment of current medical problems. It includes the care of the aged who are also suffering from long-term medical problems and research into specific diseases. I consider that any alternative scheme should be directed to medical diagnosis, treatment or research primarily for ex-servicemen or women, their widows or widowers or their dependents. It would not exclude similar treatment for persons who do not come with [sic] that category. It may be that some of the activities of the Welfare Benefit fund under the control of the League would fall into that category. Without knowing what existing charitable activities would fall into that group, it is not possible to be too specific. What I have said can only be a guide in considering the preparation of a cy pres scheme. …" 12 The scheme required by His Honour to be settled has now been brought forward and is deposed to in an affidavit of Professor G A Broe. The documents setting out the scheme in detail accompany Professor Broe's affidavit and the professor himself speaks to the scheme. I shall not go into the details but, in general terms, Professor Broe speaks of a need for neurological services of the type previously delivered at the Northcott Neurological Centre to be available on an out patient basis, and on the importance of the conduct of further research work in the area. In broad terms, the proposal is that the fund is now to be available for the purposes of a proposed Northcott Clinical Neurosciences Laboratory. To the services of that laboratory veterans, war widows and other beneficiaries associated with the plaintiff will receive priority, but the services will also be available to patients in the general community. The scheme appears worthy, appropriate and well thought out, and I have no hesitation in making orders to give effect to that scheme as a cy-pres scheme. 13 In these matters I make orders in accordance with the short minutes initialled by me and placed with the papers. …oOo… Last Modified: 09/26/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.