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  • Unreported Judgment

James Cook University v Townsville City Council

 

[2011] QSC 209

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

James Cook University v Townsville City Council & Anor [2011] QSC 209

PARTIES:

JAMES COOK UNIVERSITY
(applicant)
v
TOWNSVILLE CITY COUNCIL
(first respondent)
and
ATTORNEY-GENERAL AND MINISTER FOR INDUSTRIAL RELATIONS
(second respondent)

FILE NO/S:

S 9678 of 2010

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

23 June 2011

DELIVERED AT:

Brisbane 

HEARING DATE:

18 February, 20 April, 5 May 2011

JUDGE:

Philippides J

ORDER:

1.Upon its true construction the Deed of Covenant executed on 20 December 1963 (“the Deed”) establishes a charitable trust.

2.The applicant may lease the Land or any part of the Land:

(a)for the uses and purpose specified in paragraph 8(a) of the affidavit of Alan James Carpenter filed on 4 May 2011;

(b)upon the condition that the applicant applies the rents and profits derived from leasing of the land to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;

3.Notwithstanding s 32 of the Trusts Act 1973, the applicant has power to grant leases for the uses and purposes specified in paragraph 8(a) of the affidavit of Alan James Carpenter filed on 4 May 2011 over the Land for a period exceeding the terms specified in section 32(1)(e) and 32(3)(a) of the Trusts Act 1973 but for no longer than a term of 50 years.

CATCHWORDS:

CHARITABLE TRUST – TRUSTS AND TRUSTEES – where various declarations and directions were sought by the university as to land held by Deed of Covenant – where Deed of Covenant establishes a charitable trust – where  development projects for trust land are proposed – where declarations sought as to validity of terms of Deed – where power to sell land sought – where power to enter into long term lease sought trust

Charitable Funds Act 1958 (Qld), s 12

James Cook University Act 1997 (Qld), s 67, s 68, s69

James Cook University of North Queensland Act 1970 (Qld), s 45

Property Law Act 1974 (Qld), s 207

Saint Vincent’s Hospital Act 1912 (NSW), s 6

Statute of Charitable Uses (43 Eliz I, cap 4)

Sustainable Planning Act 2009 (Qld) s 242

Trusts Act 1973 (Qld), s 32, s 67, s 68, s 69, s 94, s 106

Trustee Act 1925 (NSW), s 81

Attorney-General v Kerr (1914) 79 JP 51

Attorney-General v Master, Wardens etc of the Wax Chandlers’ Co [1873] LR 6 HL 1

Attorney-General v The Archbishop of York (1831) 39 ER 469

Attorney-General (NSW) v Perpetual Trustee Co Ltd (1940) 63 CLR 209, 222

Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531

Commissioners for Taxation v Trustees of St Mark’s, Glebe [1902] AC 416

Commissioner of Taxation of the Commonwealth of Australia v Word Investments (2008) 236 CLR 204

Dodds v Attorney-General (NSW) [2003] NSWSC 1189

Freeman v Attorney-General (NSW) [1973] 1 NSWLR 729

Holles v Carr (1676) 36 ER 1004

Muschinski v Dodds (1985) 160 CLR 583

Oldham Metropolitan Borough Council v Attorney-General [1993] Ch 210

President and Scholars for the College of St Mary Magdalen, Oxford v Attorney General (1857) 6 HL Cas 189

Queensland Trustees Ltd v Marsland [1958] Qd R 431

Re Boning [1997] 2 Qd R 12

Re Howard Street Congregational Chapel, Sheffield [1913] 2 Ch 690

Re Hyne (decd), Queensland Trustees Ltd v Marsland [1958] Qd R 431

Re Mason’s Orphanage and London and North Western Railway Co [1896] 1 Ch 596

Re Parke’s Charity (1842) 59 ER 1158

Re Stable; Legacy Club of Brisbane v Marston [1957] 2t R Qd 90

Re Williams [1897] 2 Ch 12

Riddle v Riddle (1952) 85 CLR 202

RSL Veterans’ Retirement Villages Ltd v NSW Minister for Lands [2006] NSWSC 1161

Ryde Municipal Council v Macquarie University (1978) 139 CLR 633

Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159

Young v Smith (1846) 153 ER 787

COUNSEL:

GA Thompson SC with K O’Gorman for the applicant

AW Tan for the first respondent

H Blatman for the second respondent

SOLICITORS:

Roberts Nehmer McKee for the applicant

MacDonnells Law for the first respondent

Crown Law for the second respondent

PHILIPPIDES J:

1.The Application

  1. The applicant, James Cook University (“JCU”), is a university established under the James Cook University Act 1997 (Qld).  Its Douglas Campus at Townsville is the main campus. Part of the Douglas Campus is located on land held by the University pursuant to a Deed of Covenant executed 20 December 1963 (“the Land”).  JCU proposes to develop the Douglas Campus, including the Land and other adjoining land.  The proposed development is referred to in the material as the “Discovery Rise Project”.  A summary of what is proposed for the project with references to the relevant evidence was provided with JCU’s submissions and is attached as an appendix.
  1. JCU is seeking various orders to be made by the Court before embarking upon the development and to that end an amended Originating Application was filed seeking the following:
  1. A declaration pursuant to subsection 106(1)(a) of the Trusts Act 1973 that the Deed of Covenant that was executed on 20 December 1963 establishes a charitable trust;

1A.A declaration that the provisions of the Deed of Covenant executed on 20 December 1963 which state:

  1. “AND THE UNIVERSITY COVENANTS with the Council that no part of the said land shall be disposed of or possession thereof parted with, without the written consent of the Council; save that if a separate autonomous University body be at any time established, the said land may be transferred to such body upon the like trusts as far as applicable to these presents”; and
  1. “AND that if at any time any part of the said land becomes surplus to the requirements of the University, it will give the Council written notice thereof, and will if so required by the Council re-transfer to the Council the part so surplus to requirements”;

are void and of no force or effect.

  1. A declaration pursuant to subsection 32(1)(a) of the Trusts Act 1973 that the Applicant may sell (including to a company which is a subsidiary of the Applicant) a part of the land on which the Applicant’s Douglas Campus is located and which the Applicant holds on trust pursuant to a Deed of Covenant executed on 20 December 1963 (‘the Land’) so long as the Applicant applies the proceeds of the sale to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. A direction pursuant to subsection 106(1) of the Trusts Act 1973 that the Applicant may sell (including to a company which is a subsidiary of the Applicant) a part of the Land so long as the Applicant applies the proceeds of the sale to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. An order pursuant to subsection 94(1) of the Trusts Act 1973 conferring on the Applicant the power to sell (including to a company which is a subsidiary of the Applicant) a part of the Land so as to raise funds that will be applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. An order pursuant to subsection 105(1) of the Trusts Act 1973 altering the original purposes of the trust under which the Applicant holds the Land so as to include the purpose of selling (including to a company which is a subsidiary of the Applicant) a part of the Land so long as the Applicant applies the proceeds of the sale to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. A declaration pursuant to subsection 32(1)(e) of the Trusts Act 1973 that the Applicant may lease a part of the Land on commercial terms so as to raise funds that will be applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. A direction pursuant to subsection 106(1) of the Trusts Act 1973 that the Applicant may lease a part of the Land on commercial terms so as to raise funds that will be applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. A declaration pursuant to section 42 of the James Cook University Act 1997 that the Applicant may set up and maintain a scheme for the use of the Land under which the Land is leased on commercial terms so as to raise funds that will be applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. A declaration pursuant to subsection 12(1) of the Charitable Funds Act 1958 that the Applicant may set up and maintain a scheme for the use of the Land under which the Land is leased on commercial terms so as to raise funds that will be applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. An order pursuant to subsection 94(1) of the Trusts Act 1973 conferring on the Applicant the power to grant a lease over the Land on commercial terms so as to raise funds that will be applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. An order pursuant to subsection 105(1) of the Trusts Act 1973 altering the original purposes of the trust under which the Applicant holds the Land so as to include the purpose of leasing property on commercial terms, where the proceeds of that lease are applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;
  1. An order pursuant to subsection 94(1) of the Trusts Act 1973 conferring on the Applicant the power to grant a lease over the Land for a period that exceeds the maximum periods prescribed in section 32 of the Trusts Act 1973 (‘the maximum periods’);
  1. A declaration that a lease that the Applicant enters into in exercise of the power conferred by this Court and in contravention of section 32 of the Trusts Act 1973 will not be invalid by reason of the lease’s term exceeding the maximum periods.
  1. I note that although the amended originating application seeks orders with respect to the establishment of a scheme for the use of the Land under the James Cook University Act and the Charitable Funds Act, these were not the subject of any submissions. As it transpired, JCU presently seeks only the following orders, which are not opposed by the respondents, being the Townsville City Council (“TCC”) (the donor) and the Attorney-General and Minister for Industrial Relations (as parens patriae, concerned that property the subject of a charitable trust is used for its proper purposes):

“ THE COURT DECLARE THAT:

  1. Upon its true construction, the Deed of Covenant executed on 20 December 1963 (“the Deed”) establishes a charitable trust.
  1. The provisions of the Deed of Covenant executed on 20 December 1963 which state:

(a)AND THE UNIVERSITY COVENANTS with the Council that no part of the said land shall be disposed of or possession thereof parted with, without the written consent of the Council; save that if a separate autonomous University body be at any time established, the said land may be transferred to such body upon the like trusts as far as applicable to these presents’; and

(b)‘AND that if at any time any part of the said land becomes surplus to the requirements of the University, it will give the Council written notice thereof, and will if so required by the Council re-transfer to the Council the part so surplus to requirements’;

are void and of no force or effect.

THE COURT ORDERS THAT:

3.The Applicant may lease the land the subject of the charitable trust established by the Deed of Covenant executed on 20 December 1963 (“the Land”), or any part of the Land:

(a)for the uses and purposes specified in paragraphs 8(a) to (i) of the Affidavit of Alan James Carpenter filed on 4 May 2011;

(b)upon the condition that the applicant applies the rents and profits derived from leasing of the Land to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;

4.Notwithstanding section 32 of the Trusts Act 1973, the Applicant has power to grant leases for the uses and purposes specified in paragraphs 8(a) to (i) of the Affidavit of Alan James Carpenter filed on 4 May 20 over the Land for periods exceeding the terms specified in section 32(1)(e) and 32(3)(a) of the Trusts Act 1973.

5.The applicant may sell the Land or any part of the Land, upon condition that:

(a)the applicant first takes reasonable steps to satisfy itself that the purchaser from the applicant proposes to use the land for a purpose identified in the Schedule annexed hereto; and

(b)the applicant applies the proceeds of the sale to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education.” 

  1. The schedule referred to in the draft order specified the purposes for which the Land may be used as follows:
  1. Education and research and development activities complementary with the Applicant’s conduct of an educational institution at University level.
  1. Commercial enterprises, where the enterprise supports, is ancillary to, draws upon or is synergistic with the Applicant’s conduct of an educational institution at University level or the activities described in paragraph 1.
  1. Accommodation facilities and residential areas complementary with the Applicant’s conduct of an educational institution at University level or for persons employed by or otherwise associated with the Applicant or with the activities referred to in paragraphs 1 and 2 above.
  1. Educational, commercial and retail enterprises, where the enterprise provides services that are supportive of the Applicant’s conduct of an educational institution at University level, the residential communities referred to in paragraph 3 above or the activities referred to in paragraphs 1 and 2 above.
  1. Facilities for recreational sports and leisure activities in connection with the Applicant’s conduct of an educational institution at University level or to support the residential communities referred to in paragraph 3 above.

2.Background

  1. In 1961, the University College of Townsville commenced under the auspices of the University of Queensland (“UQ”).  On 20 December 1963, the Council of the City of Townsville and UQ executed the Deed of Covenant (“the Deed”) with respect to the Land, being “Portion 566 and Subdivision 3 of Portions 144 and 129, Parish of Stuart, County of Elphinstone … and Subdivision 1 of Portion 170 and of Subdivision 1 of Portions 144 and 129 in the said Parish”. 
  1. The Deed materially provides:

“WHEREAS the Council, being the registered proprietor of an estate in fee simple in the land described in the Schedule hereto, has offered to make a gift of the said land to the University for the purpose of establishing and conducting an educational institution at University level and conditionally on its being so used, which gift the University is willing to accept on the said condition and subject as hereinafter appears:

AND WHEREAS the said land is about to be transferred by the Council to the University accordingly:

NOW THEREFORE the University declares that it will, when the said land is transferred to it as aforesaid, hold the said land upon trust for the establishment and conduct of an educational institution at university level (conformably to conceptions from time to time currently accepted as fit and proper for a university education) whether as a University College or Colleges of and associated with the University established by the University of St Lucia in Brisbane, or as a branch University of the said University or a subsidiary thereof, or as a separate autonomous institution; and purposes fairly incidental thereto, and for no other purpose (unless by consent of the Council).

AND THE UNIVERSITY COVENANTS with the Council that no part of the said land shall be disposed of or possession thereof parted with, without the written consent of the Council; save that if a separate autonomous University body be at any time established, the said land may be transferred to such body upon the like trusts as far as applicable to these presents.

AND that if at any time any part of the said land becomes surplus to the requirements of the University, it will give the Council written notice thereof, and will if so required by the Council re-transfer to the Council the part so surplus to requirements.”

  1. In 1970, the James Cook University of North Queensland Act 1970 (Qld) was passed.  It provided for the establishment of the James Cook University of North Queensland.  Section 45 of that Act stated:

Provisions relating to the University College of Townsville

45.(1)Upon the commencement of this Act, the University College of Townsville shall cease to exist.

    (2)Where by any testamentary disposition or otherwise property would pass to or for the benefit of the University College of Townsville if that institution were still in existence, such property shall pass to or for the benefit of the university and shall vest in the university or any trustees for it, as the case may be, but without prejudice to any other lawful claim of any person in relation to such property.

    (3)All real and personal property which immediately before the commencement of this Act was held by or vested in the University of Queensland in trust for or on behalf of the University College of Townsville shall by virtue of this Act be divested from the University of Queensland and shall, as from such commencement, vest in the university and shall, subject to subsection (4), be applied by the university for the objects and purposes for which the university is established.

    (4)If any property vested in the university by subsection (3) is or shall be subject to any condition or trust, such property shall be held by the university subject to the conditions or trusts upon which it was held immediately before such vesting; and any reference in any such conditions or trusts to the University College of Townsville shall, as from the commencement of this Act, be read and construed as a reference to the university.

…”.

  1. The Land was vested in the James Cook University of North Queensland as the registered proprietor pursuant to a Request to Vest lodged on 15 November 1973 with the Deputy Registrar of Titles (Northern District).
  1. In 1997, the James Cook University Act 1997 (Qld) was passed.  Sections 67 to 69 of that Act stated:

Repeal

  1. The James Cook University of North Queensland Act 1970 No. 19 is repealed.

Continuation of university and union

68.(1) The former university is continued as the university established under section 4.

Assets, liabilities and contracts

69.(1) On the commencing day—

(a) the assets and liabilities of a former corporation vest in the continuing corporation for the former corporation; and

(b)any property that, immediately before the commencing day, was held in trust by a former corporation vests in the continuing corporation for the former corporation on the same trusts to which the property was subject immediately before the vesting.

…”.

3.Construction of the Deed - Did the Deed create a Charitable Trust?

  1. It was submitted that the Deed created a charitable trust and not merely an absolute gift that was conditional upon the Land being used for an identified purpose: see Re Williams [1897] 2 Ch 12 at 19, Muschinski v Dodds (1985) 160 CLR 583 at 605 per Brennan, at 625 per Dawson, Re Hyne (decd), Queensland Trustees Ltd v Marsland [1958] Qd R 431 at 446.  Thus it was contended that, although the words of the recital and conditionally on its being so used, which gift the University is willing to accept on the said condition” suggested a conditional gift, the use of the words “condition” and “conditionally” were not decisive.  In this regard, reliance was placed on Re Boning [1997] 2 Qd R 12 at 21, where White J citing Attorney-General v  Master, Wardens etc of the Wax Chandlers’ Co [1873] LR 6 HL 1 observed that the “use of the expression ‘on condition’ in a will is of little weight in ascertaining the intention of the testator to make an absolute gift, a conditional gift strictly so called, a gift upon condition or to create a trust”.  Her Honour also noted that the Courts are inclined to construe a gifting document as giving rise to a trust rather than a conditional gift.
  1. In submitting that the deed establishes a trust, JCU pointed to the operative part of the Deed which states that the Land was gifted to UQ “to be held on trust” for a specific purpose: “the establishment and conduct of an educational institution at university level and purposes fairly incidental thereto”. This submission was said to be fortified by the use of the words, “if a separate autonomous University body be at any time established, the said land may be transferred to such body upon the like trusts as far as applicable to these presents”. It was submitted that the Deed created a trust for a purpose: Attorney-General (NSW) v Perpetual Trustee Co Ltd (1940) 63 CLR 209, 222.  Moreover, the purpose for which the Land was gifted came within the description of charitable purposes that was identified in the preamble to the Statute of Charitable Uses (43 Eliz I, cap 4)[1] and, in particular, the second category of charitable purposes identified in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 at 583, namely “trusts for the advancement of education”.  I accept these submissions and find that on its true construction the Deed establishes a charitable trust. 

4.Power to sell the Land

  1. At common law, charitable trustees have a power of sale, whether or not the sale was authorised by the trust instrument (President and Scholars of the College of St. Mary Magdalen, Oxford v Attorney-General (1857) 6 HL Cas 189; Re Mason's Orphanage and London & North Western Railway Co [1896] 1 Ch 596; Re Howard Street Congregational Chapel, Sheffield [1913] 2 Ch 690)Trustees also have a statutory power of sale under s 32(1)(a) Trusts Act 1973 (Qld), which has application to charitable trusts. The Court additionally has power under s 94 to make orders authorising the sale or lease of trust property on such terms, and subject to such provisions and conditions (if any) as the Court may think fit.  (See also s 106(1)(a) of the Trusts Act which provides that in proceedings in the case of a charitable trust the Court may give directions in respect of the administration of the trust).
  1. Of course, the power of sale is limited in the respect that it cannot be exercised in breach of trust, and thus is not exercisable where the very purpose of the trust would be changed or defeated: Oldham Metropolitan Borough Council v Attorney General [1993] Ch 210.
  1. In the present case, the question of the power to sell any part of the Land raises consideration of the provisions of the Deed requiring re-transfer to TCC (which in turn requires consideration of the nature of the interest created and the role of the rule against perpetuities) and the provision of the Deed restricting alienation. However, I note that Mr Carpenter in his further affidavit, has outlined in more detail the land use proposals that are contemplated. In summary, the material indicates:

(a)JCU Council has resolved that the Land, which is to a significant extent surrounded by JCU land which forms part of the Discovery Rise Project, and is central to that Project, will be used for the Project and only in accordance with the Deed and JCU’s obligations as trustee of that Land.

(c)It is JCU’s intention for the Land not to be sold to third parties wherever possible.  Its preference is to enter into both short term and long term leases.  In particular, sale of land would not be contemplated in any circumstances for the land described as “Discovery Central”, the “Academic Core” or the “Enterprise Park”.

(d)No sale of the Land will occur before a Local Area Plan (the Discovery Rise Local Area Plan) has been finalised and approved pursuant to s 242 of the Sustainable Planning Act 2009The Plan will be incorporated into the Townsville City Council City Plan and will establish a set of land use planning controls.  The Plan will require that any development on the Land can only be carried out in compliance with the land uses specified in the Plan.

(e)Any purchaser or lessee of the Land would be constrained to only develop the land in compliance with the Plan, which will accord with the purposes of the Deed and JCU’s intentions for the Project.

  1. The affidavit material of Mr Carpenter indicates that it is the intention of JCU to use all the Land and its use is said to be central to the Project. There is no suggestion that any part of the Land is surplus to JCU’s requirements. Further, there is currently no intention to sell any of the Land. As Mr Carpenter deposes, JCU “would only consider sale of freehold land in the residential area, and only then if the leasehold has been tried and found to be not commercially feasible”.  Moreover, even in that regard, it is accepted that the terms and effect of the Local Area Plan which has yet to be finalised will be highly relevant.  In those circumstances, I do not consider that it is appropriate at this stage to make any determination or orders in relation to the power of sale.

5.Lease of the Land on commercial terms

  1. Pursuant to s 32(1)(e) of the Trusts Act 1973 (Qld), a trustee has a statutory power to grant a lease of trust property (for any term not exceeding 30 years, in the case of a building lease, or 21 years, in the case of any other lease). Clearly, the power to lease cannot be exercised in breach of trust where the very purposes of the trust would be defeated.  In the present case, the “Discovery Rise Project” contemplates that JCU may lease the Land, or some parts of it, to third parties on commercial terms.  The material indicates that JCU is contemplating offering leases to third parties to:

(a)enable JCU or third parties to undertake commercial and retail activities that service students, staff and other persons associated with functioning of the University;

(b)enable JCU to raise revenue that it may then apply towards more traditional university activities.

(a)Leases to service students, staff and other persons associated with functioning of the University

  1. It was submitted that commercial and retail activities which aim to service students, staff and others associated with the operation of the University, do not involve a breach of the terms of the charitable trust. Reference was made to Ryde Municipal Council v Macquarie University (1978) 139 CLR 633 and Salvation Army (Vic) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159.  It was submitted that the authorities indicate that the relevant test focuses upon whether the particular activity is incidental to the charitable purposes of the trust, or whether the activity is more appropriately described as collateral or additional to those charitable purposes. In this regard, it was noted that the Deed expressly recognises that the purposes of the trust are not only the “establishment and conduct of an educational institution at University level (conformably to conceptions from time to time currently adopted as fit and proper for a university education)”, but also “purposes fairly incidental thereto”.
  1. In Macquarie University, the Macquarie University Union had entered into leases of parts of a “market building” with third party tenants carrying on various commercial businesses in the leased areas.  The activities included a co-operative bookshop, a retail shop, a chemist shop, an office leased to the Australian Union of Students for the purposes of a travel centre, branches of two banks, a handicrafts and gift shop and an area occupied by the University Sports Association which also included a shop.  The shops operated with a view to profit, but primarily served the students and staff of the University.  The banks provided general banking services, and lent money for housing and other purposes.  The shops and the banks were open to the general public, although by reason of their location, it was unlikely that many members of the public patronised them: they were essentially used by staff and students of the University.  The question for consideration was whether the land came within statutory exceptions to the rating provisions in the Local Government Act 1919 (NSW).  The exceptions applied where the land belonged to a public charity, “and was used or occupied by the charity for the purposes thereof”, or (under an exemption numbered (fii)) where the land was “vested in the Macquarie University, or in a college thereof, and was used or occupied by the University or college, as the case may be, solely for the purposes thereof”.  The majority of the High Court (Gibbs ACJ, Stephen and Murphy JJ) held that the market building came within the statutory rating exceptions.
  1. As was accepted by JCU in its submissions, that decision turned largely on an interpretation of the exceptions to the rating provision under consideration. But the reasons of both Gibbs ACJ and Stephen J (with whom Murphy J agreed) also addressed the scope of charitable educational purposes. A central question was whether the leased areas in respect of which the University had, by granting the leases, yielded up exclusive possession to the tenants, were nevertheless “used” by the University.  (In the present case, it was submitted that although the operative part of the present Deed does not expressly include the words “use” or “used”, the restriction on use is implicit and the recital records that the gift of the land was made “conditionally on its being so used”).
  1. Gibbs ACJ observed (at 640) that it had long been common for universities to arrange or permit shopping and commercial facilities to be available within their grounds, and that it had become recognised as convenient that students and staff be able to do some shopping and banking business within the University precincts. His Honour held that leasing the premises to the third parties for the provision of such services and activities nonetheless constituted the use of those premises by the University. In considering whether the land was used for the purposes of the University, Gibbs ACJ said (at 643):

“According to the Macquarie University Act, 1964 (N.S.W.), s. 6, the functions of the University (as one might expect) include the provision of educational facilities, the dissemination of knowledge and the promotion of scholarship. The purpose of the University was to perform those functions. Ordinarily speaking, one would not say that the purpose of the University was to provide shops or other commercial establishments for the use of staff or students. However, it is now well settled that when an exemption from rates or taxes is given in respect of land used for the purposes of a charity, the exemption is not confined to land used for those purposes the pursuit of which make the body a charity, i.e., which give it its character as such. If the land is used for purposes which are ‘merely a means to the fulfilment’ of the charitable purposes and ‘incidental thereto’ it is within the exemption: Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation.  In other words, if the use which the charity makes of the land is ‘wholly ancillary to’, or ‘directly facilitates’, the carrying out of its charitable objects, that is sufficient to satisfy the requirements that the premises are used for charitable purposes: Glasgow Corporation v Johnstone. If, on the other hand, the use is only ‘collateral’ or ‘additional’ to the purposes which give the charity its character as such, the land will not be used for the purposes of the charity: Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation”. (citations omitted)

  1. It was said that the terms of the Deed presently under consideration overlap with the test that Gibbs ACJ applied in the Macquarie University case.  Noting that a recital in a deed may operate as a covenant where it appears to have been the intention of the parties that it should so operate (Holles v Carr (1676) 36 ER 1004, Young v Smith (1846) 153 ER 787) it was submitted that the condition expressed in the recital does not require the relevant use to be a use by the University itself.  It recites that the Council has offered to make a gift of the Land to the University “for the purpose of establishing and conducting an educational institution at University level and conditionally on its being so used”.  It was said that the words “conditionally on its being so used” qualify the purpose (ie “of establishing and conducting an educational institution at University level”).  They do not require that the Land be used for that purpose only by the University.  Thus, it was submitted by JCU that the Land might be used for that purpose (or purposes incidental to that purpose) by a lessee holding the Land or part of the Land under a lease from the JCU.  Applying the test in Macquarie University, it was argued that it would be within the “conduct of an educational institution at university level” for the University:

(a)to develop the Land for the purposes of providing services and facilities for its staff, students and those persons associated with the functioning of the JCU; and

(b)to enter into leases providing for the demise of parts of the Land to third parties for the purposes of those third parties conducting businesses directed to the supply of such services and facilities.

  1. I accept the contention of JCU that the fact that it may receive rent from the lessees of parts of the Land or of buildings constructed on the Land does not of itself detract from the charitable purpose of the trust, where the receipt of the rent is merely an incident of the use of the site for the provision of appropriate facilities to staff, students and those associated with the functioning of JCU.

(b)Leases to enable the University to raise revenue that the University may then apply towards more traditional University activities

  1. A more robust submission was made on behalf of JCU: that the use of the Land for the purpose of raising revenue was relevantly incidental to the modern conceptions of conducting a university. This was said to be supported and illustrated by the following evidence contained in the affidavit material:

(i)In a letter dated 1 September 2010 to Professor Sandra Harding, the Vice-Chancellor of the University, Mr Ian Kimber, the Acting Assistant Director General (Tertiary and Non-State Education) of the Department of Education, Training and the Arts, noted that the Department was considering:[2]

“options to address the restrictions [concerning State land that is held by universities under the Land Act 1994], including extending the maximum term of university trust land leases from 25 years, as currently required in university legislation (30 years in the Land Act), to 99 years. The options under consideration are aimed at facilitating the ability of universities to enter into commercial leasing arrangements for trust land and to encourage external investment in universities.”

(ii)In a report dated November 2010, Mr Craig Stack from Knight Frank gave examples of long-term leases that were entered into by either universities or research institutes.[3]

(iii)The affidavit of Ms Patricia Brand, the Executive Director of the Division of Finance & Resource Planning of the University, addressed the involvement of the CSIRO in the construction of the Australian Tropical Science & Innovation Precinct at the University’s Townsville campus. Ms Brand deposed that:[4]

“I am also aware from my dealings with CSIRO that it has entered into a 99 year lease with the University of Queensland and two similar arrangements with the Queensland Government, both of which involve 99 year leases to CSIRO for the Health and Food Science Precinct in Brisbane and Eco Science Precinct at Boggo Road in Brisbane.”

(iv)In October 2010, Alan Carpenter, Patricia Brand and Rodney Barnes conducted an international study tour of other universities “to investigate the experiences and lessons learned from international universities engaged in development activities similar to that contemplated by Discovery Rise Project.”[5]  The report that Alan Carpenter co-authored with Patricia Brand and Rodney Barnes stated:

“For over 10 years, each of [University of British Columbia] and [Simon Fraser University] have been successfully developing utilizing 99 year leases for residential developments and other long term lease arrangements for commercial developments. Portland advised that it had granted an 85 year lease to an operator of a student accommodation facility.”[6]

(v)On a visit to Macquarie University in 2008, Alan Carpenter observed that:

“a number of leading research and development companies such as Nortel, Goodman Fielder and Dow Corning had premises in the Macquarie University Research Park.  I also noticed that a private hospital was under construction on The University land and was told of plans to establish the global headquarters of Cochlear on The University Land.”[7]

  1. It was submitted that, if the Court found that current conceptions concerning the operation of a university did not extend to the leasing of university land on commercial terms, there was nevertheless authority recognising a general power of the trustee to sell, lease or mortgage charity land, even where the land was gifted to the trust on condition that it be used for a specific charitable purpose.  It was said that a distinction was to be made between a gift to a charity for its general purposes and a gift of property on condition that it be used for a specific purpose.  In this respect, land, for example, could be given to be held for investment (referred to in some cases as “investment land”) rather than for use for the purposes of the charity’s activities (often referred to as “functional land”).
  1. It was argued that a comparable distinction was drawn in Attorney-General (NSW) v Perpetual Trustee Co Ltd (1940) 63 CLR 209 (at 216 - 217) where Latham CJ distinguished between a “general charitable intention” and a “particular charitable intention”.  By a similar line of reasoning, it was said that charity land is used as “functional land” when it is used as a place from which the trust conducts activities that further the “particular charitable intention” of the charitable trust, while land is used as “investment land” when it is used to generate income that may be applied either to the “particular” or “general charitable intention” of the trust.  The essential question was whether TCC made it clear that the Land which it gave to the University in trust was the land on which it intended the charitable purposes of the gift to be carried out and that retention of that land were part of the purposes of the gift.
  1. JCU accepted that, if the donor of the Land made it sufficiently clear that the Land which it had given in trust was to be used only for the specified charitable purposes to be carried out, then the trustee was bound to carry that intention into effect, unless an alternative use of the Land was approved by the Court: Re Stable (decd); Legacy Club of Brisbane v Marston [1957] St R Qd 90; Commissioners of Taxation v Trustees of St Mark’s, Glebe [1902] AC 416. 
  1. I note, that when pressed on the matter in the course of oral submissions, counsel for JCU did not contend that the Land was other than functional land.
  1. JCU however also pointed to a line of cases, which it submitted supported the proposition that the power of the trustee to lease or dispose of charity land is unconcerned with whether the land is “functional land” or “investment land”: Attorney-General v The Archbishop of York (1831) 39 ER 469, Re Parke’s Charity (1842) 59 ER 1158, Attorney-General v Kerr (1914) 79 JP 51.  And it was contended that the decision in Commissioner of Taxation of the Commonwealth of Australia v Word Investments Ltd (2008) 236 CLR 204 suggests that the Court may now take a more liberal approach as to what constitutes charitable activities.  Reference was made to the majority view (at 220) that the activities of an entity may be characterised as charitable, even if the entity aims to make a profit from those activities where they were carried out in furtherance of a charitable purpose.  Reference was also made to the majority’s observation (at 226) that “the charitable purposes of a company can be found in a purpose of bringing about the natural and probable consequence of its immediate and expressed purposes, and its charitable activities can be found in the natural and probable consequence of its immediate activities”.  JCU accepted that, ultimately, the question was one of the proper construction of the Deed, but contended that, as a matter of construction of the Deed, retention and use of the Land by JCU itself was not the exclusive purpose of the charitable trust JCU noted that the Deed states:  “and for no other purpose (unless by consent of the Council)”.  (The TCC here consents to the declarations being sought by JCU, so that qualification is satisfied). 
  1. Bearing in mind these submissions, I am not persuaded that the leasing of the Land generally by JCU on commercial terms, and as part of a commercial venture per se, so as to raise funds that would ultimately be applied to conduct an educational institution at university level may be considered sufficient to result in compliance with the terms of the charitable trust.  

6.Identification of specific proposals for long term leasing

  1. Although JCU initially sought a general power to lease on commercial terms and provided an initial draft order on that basis, the powers to lease now sought, as reflected in the final version of the draft order put forward by the parties at a further hearing when supplementary submissions were made, are more restrictive. They are confined to leases in line with the proposed leases outlined in Mr Carpenter affidavit filed 4 May 2011. In that affidavit, Mr Carpenter referred to specific proposals for long term leases set out below, several of which are at an advanced stage of negotiations. He stated that prospective lessees require extended lease terms to make the investments in developing the Land viable and to allow them to obtain an appropriate return on investment having regard to the extent of funds being contributed for facility development.

(a)The CSIRO lease (para 8(a) affidavit of Alan Carpenter):

The Australian Tropical Sciences and Innovation Precinct (ATSIP) is a joint science and research venture between JCU and CSIRO. In his affidavit Mr Carpenter referred to a number of similar facilities to the ATSIP being established at other universities, including the “Brain Institute” at the University of Melbourne’s Parkville Campus and the Howard Florey Institute as examples. The operating agreement between JCU and CSIRO specifies that the ATSIP is being established to create the tropical research and development headquarters for Queensland and Australia. CSIRO required a 50 year lease as a condition of the CSIRO Board’s commitment to funding a $10m capital contribution to construction on the Land of the ATSIP. Presently, the building is complete and pending consent of the Court to a lease of a term of 50 years being granted, CSIRO has accepted an interim arrangement of a 30 year lease with what is said to be a 20 year licence thereafter.  The terms of the current lease have been provided. 

(b)The Queensland Department of Employment, Economic Development and Innovation (DEEDI) lease (para 8(b) affidavit of Alan Carpenter): 

The University is currently proposing to enter into a lease with the DEEDI in respect to a collaborative venture known as the Australian Institute for Tropical Agricultural Science (AITAS).  There is an Operating Agreement between JCU and DEEDI under which it is proposed that there will be constructed a biosecurity laboratory complex on the Land, with DEEDI contributing $18 million to the construction of that complex.  DEEDI will not have ownership of the land but has required a lease of 50 years to provide for a return on its investment. Mr Carpenter in his affidavit also deposed to a number of similar facilities at other universities, including the new global headquarters for Cochlear at the Macquarie University campus and the Bio 21 Institute of Molecular Science and Biotechnology at the University of Melbourne.  The proposed terms of the lease have not been provided.

(c)Lease in respect of the Clinical Practice Building (CPB) (para 8(c) affidavit of Alan Carpenter):  

JCU wishes to develop a CPB on the Land to co-locate all JCU clinical training functions on the Townsville campus.  It is proposed that the building will include facilities for both public and private patients across almost all disciplines of medical treatment.  The building will have mixed uses, comprising clinical training for health and social science related courses, related private professional offices, and retail services for the precinct and the University.  It is proposed Queensland Health will invest $10m with a further $5m from the Federal Government and the balance of the construction costs of $20m will be borrowed.  A long term lease for a term of 50 years is proposed to give return on investment and security for financiers.  The financial arrangement for the facility is needed to be finalised by August 2011.  Commencement of construction has some urgency because JCU wishes the building to be available for the commencement of the 2013 academic year for clinical training purposes.  Notwithstanding the tight timetable, no draft of any proposed lease has been provided.

(d)Student Accommodation Building (para 8(d) affidavit of Alan Carpenter):

The building will be owned and operated by a third party with a long term lease required to secure tenure being for at least a 40 year period.  (A 50 year lease is anticipated to be suitable for this purpose).  A concept design has been completed for the proposed facility and business cases established.  JCU has a current unmet demand and need for 600 undergraduate beds.  The material indicates that privately operated student accommodation is found on leased land on university campuses throughout Australia and overseas. JCU wishes to proceed with this project in the second half of 2011 and requires certainty that it is able to enter into a long term lease for the facility to interest potential developers.  

I note that the material indicates that the building will be owned and operated by a third party.  The Campus Development and Management Plan exhibited to Mr Carpenter’s affidavit refers to options to avoid where possible the sale of the Land through “the creation of long-term sub leases and/or ‘Build Own and Transfer’ (BOT) arrangements” and “Build Own Operate and Transfer (BOOT) schemes”.  The plan indicates that in the case of BOT the developer pays for the full development and in doing so obtains the right to operate the facility for an agreed term.  JCU retains ownership and at the end of the term the right to operate the facility reverts to JCU.  BOOT appears to proceed on a similar basis except that the developer owns the facility for the period of the agreement and there may or may not be payment for the re-transfer at the end of the term.  There is no indication as to what is intended in respect of the student accommodation building.

(e)Cornerstone Building (para 8(e) affidavit of Alan Carpenter): 

A proposed mixed use building to contain short and medium term accommodation, university staff club, retail offerings and offices suited to university administration or professionals.  The model for funding for this building is proposed to be similar to the CPB.  A power to enter into a 50 year lease for this purpose is sought on the basis that a long term lease of that duration is required in order to secure potential partners prepared to invest the significant capital sums required for such a project.  No details of what is proposed by way of a standard form lease has been provided.

(f) School (para 8(f) affidavit of Alan Carpenter):

JCU is currently in negotiations with Queensland Department of Education and Training to establish a school in the soon to be vacated Western Campus buildings. Although the proposal is in its early stages of negotiation, a partnering framework is being prepared and the parties require certainty on the threshold question as to whether or not a long term lease (a 40 year lease is considered sufficient) will be permissible as that will be an important consideration in obtaining fund for the project.  Examples of such projects on other university campuses were provided.  No model lease document has been provided. 

(g)Hotel, Conference and Studio Apartment Building (para 8(g) affidavit of Alan Carpenter):

JCU intended to develop a hotel, conference and studio apartment building to provide accommodation for visitors, mature age post graduate and post doctoral researchers, with particular application to visiting persons for short to medium term stays.  It is intended that the building would be owned and operated by a third party which, having regard to infrastructure and capital investment requirements, would require a long term lease of at least a 40 year period to secure the funds and the tenure for appropriate return on investment. 

I note that it is intended that the building be owned and operated by a third party and that the comments made above concerning the student accommodation building and any recourse to BOT or BOOT schemes is pertinent here also.

(h)Data Centre (para 8(h) affidavit of Alan Carpenter):

JCU is planning to develop a Data Centre to provide digital data storage centre to be built on the land termed “Enterprise Park” to be available for use by JCU for internal data storage requirements and as part of teaching in the computer services courses (but also State and Local Government and private industry) for data warehousing.  It is also intended that the facility serve as a disaster management centre for North Queensland.  It is intended that the facility would be developed as a public/private partnership and would require a long term lease of at least a 50 year period to secure the funds and the tenure for appropriate return on investment.  The affidavit material deposed to three universities in Victoria having combined data centre operations into a single facility.  No details of the nature of the proposed lease has been provided.

(i) Long term lease in respect of the establishment of a residential community   (para 8(i) affidavit of Alan Carpenter):

The University wishes to establish a residential community on its campus to complete the UniversityTown concept and the Project.  A 99 year lease is proposed with an obligation on the lessor on completion of the term to either extend or purchase at the current value.  The business plan is planned to be submitted to the University Council in August 2011.  The business plan contemplates the first land to be leased for housing purposes in late 2012 however, certainty that JCU can lease land for long periods, up to 99 years, is required for the business plan to develop any further.

  1. JCU seeks approval to enter into the specific long term leasing transactions as identified in Mr Carpenter’s affidavit upon the condition that all rent raised from leasing the Land will be applied to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education. It was submitted that the proposed long term leases are for land uses which can be described as purposes fairly incidental to conduct of an educational institution at university level conformably to conceptions from time to time currently accepted as fit and proper for a university education.  Those purposes it was contended satisfy the test in Macquarie University and Salvation Army (Victoria) Property Trust v Fern Tree Gully Corp (1952) 85 CLR 159 at 171; the purposes were appropriately described as “wholly ancillary to”, or “directly facilitating”, the carrying out of JCU’s charitable objects. 
  1. JCU seeks an order that, in relation to those proposed leases described above, notwithstanding s 32 of the Trusts Act 1973, the grant of a lease over the Land for a period exceeding the terms specified in s 32(1)(e) and s 32(3)(a) of the Trusts Act 1973 is not invalid. 

7.Whether the University may enter into long-term leases

  1. Citing Riddle v Riddle (1952) 85 CLR 202 and Freeman v Attorney-General (NSW) [1973] 1 NSWLR 729, it was submitted that the Court has power to make an order declaring that JCU has power to enter a long-term lease under s 94 of the Trusts Act, which applies to charitable, as well as non-charitable, trusts: RSL Veterans’ Retirement Villages Ltd v NSW Minister for Lands [2006] NSWSC 1161 at [43], [44], interpreting the equivalent provision of the Trustee Act 1925 (NSW), s 81.
  1. Section 94(1) of the Trusts Act provides:

94Court’s jurisdiction to make other orders

(1)Where in the opinion of the court any sale, lease, mortgage, surrender, release or other disposition, or any purchase, investment, acquisition, retention, expenditure or other transaction is expedient in the management or administration of any property vested in a trustee, or would be in the best interests of the persons, or the majority of the persons, beneficially interested under the trust, but it is inexpedient or difficult or impracticable to effect the disposition or transaction without the assistance of the court, or it or they cannot be effected by reason of the absence of any power for that purpose vested in the trustee by the trust instrument (if any) or by law, the court may by order confer upon the trustee, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions (if any) as the court may think fit, and may direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne, and as to the incidence thereof between capital and income.”

  1. It was accepted that for present purposes the power under s 94 of the Trusts Act may be exercised only if:
  1. the long-term lease cannot be entered into “by reason of the absence of any power for that purpose vested in the trustee by the trust instrument (if any) or by law”. 
  1. the Court considers that it is “expedient in the management or administration of any property vested in” JCU that the order be made. 
  1. As for the first requirement, it is met because, by virtue of ss 31 and 32(1)(e) of the Trusts Act, JCU has no power to enter into a long-term lease. As regards the second matter, reference was made to Riddle v Riddle (1952) 85 CLR 202, where s 81 of the Trustee Act 1925 (NSW), which is the equivalent provision to s 94 of the Trusts Act, was considered. Williams J held at 222-223:

“The one and only test is the expediency of the act or thing which the Court is asked to authorise the trustee to do or abstain from doing. The Court has only to be of opinion that the trust property as a whole will in fact benefit from the making of the order.

Section 81 authorises the Court to step in whenever it is of opinion that sound practical business considerations make it expedient that trustees should have administrative powers in addition to or overriding the powers derived from the trust instrument or the general law.”

  1. In Freeman v Attorney-General (NSW) [1973] 1 NSWLR 729, Helsham J stated at 735 - 736:

“in connection with [charitable] trusts expediency must be determined by reference to the purpose or objects of the particular trust. The section would not permit an order to be made that enabled a use of trust property which went outside the confines of the purpose or objects to benefit of achieve [sic] which the trust was constituted, but would permit an order which enabled use of trust property directed towards furthering such purpose or objects.”

  1. In Freeman, the order made under s 81 of the Trustee Act 1925 (NSW) empowered the trustees to grant a long-term lease over the trust property, the lease being stated (at 734) to be “for a term of twenty-five years with an option for renewal of ten years and perpetual options for renewal for further periods of ten years”.  Without making any direct observations as to the length of the lease, Helsham J held (at 736) “that the entering into a lease such as that proposed would in all the circumstances be expedient”.
  1. The expediency of a charitable trustee having the capacity to grant long-term leases was also considered in Dodds v Attorney General for NSW [2003] NSWSC 1189.  In that case, the plaintiffs were the trustees of land that was the subject of the Saint Vincent’s Hospital Act 1912 (NSW).  Section 6 of the Saint Vincent’s Hospital Act 1912 limited the trustees’ power to lease trust property in the following way:

“(1)The trustees may, for any purpose of or connected with the hospital, from time to time lease any portion of the land described in the First or Second Schedule or acquired at any time by the trustees:

(a)for a term not exceeding 21 years, to a public or local authority constituted by or under an Act, or

(b)for a term not exceeding 10 years, to any other person.”

  1. The trustees were stated (at [3]) to be “participating in the development of a significant proposal in relation to the land”. The proposal entailed the leasing of the land in favour of the company that operates the hospital that was built on the land and a company that operates a medical research institute (the Victor Chang Cardiac Research Institute Ltd). The leases were for an initial term of 31 years, with successive options for the lessee to renew for a period of 40 years and then 19 years. Pursuant to s 6 of the Saint Vincent’s Hospital Act 1912, the trustees had no power to enter the proposed leases.  The trustees applied successfully to the Court for an order under s 81 of the Trustee Act 1925 (NSW), which conferred on the trustees the power to enter into the agreement to grant the three leases.  Barrett J noted (at [10]) the breadth of s 81 of the Trustee Act as a means of enabling trustees to do things beyond their express powers, where it is beneficial to the trust property for them to do so.  His Honour concluded at [12]:

“[i]n the present case, the trust property is land held upon a charitable trust for hospital purposes.   The management and administration of the property therefore entail pursuit of activities directed towards patient care and treatment in the broadest sense including, obviously, medical research directed towards possible improvement in such care and treatment.  The benefits that will flow to St Vincent’s Hospital and its activities from the land in question being committed to this project, from the point of view of enhancing the hospital’s opportunities to obtain beneficial results from collaboration in research activities, are made clear by the evidence.  The only detriment is loss of the trustees’ ability to turn the land to account in some other way during the period of 31 years and possibly 71 years or 9 years in total for which the land is being committee to the project.  The valuation evidence shows that the balance in that respect favours the trustees’ participating in the project.  The evidence shows, and I find, that the steps the trustees propose to take with respect to land subject to s.2 of the Act, viewed in their entirety, entail benefits to the charitable purposes of the hospital that outweigh the detriments involved.  It is therefore ‘expedient’ in the management and administration of the trust property that they should have the additional powers they seek so that they may properly take those steps.”

  1. It was said that the facts of the Dodds’ case were similar to the facts of this case and that given “sound practical business considerations” (Riddle v Riddle (1952) 85 CLR 202 at 222) require JCU to be able to grant, on commercially competitive terms, a lease of part of the Land, it is expedient that JCU be so empowered. 
  1. There is weight in the submissions that current conceptions as to the operation of a university require universities in certain cases to enter into long-term leases. As regards the lease to the CSIRO in respect of the ATSIP, I accept that a lease to that entity for the purposes of the ATSIP accords with the purposes of the Trust. Further, the affidavit material addressing the involvement of the CSIRO in the construction of the ATSIP which was predicated on the basis that the CSIRO “had a guaranteed long term tenure by way of a 50 year lease (with minimal rental obligations) and with a review of the building requirements at the conclusion of a 50 year period (which is approximately the life of the building)”[8] satisfies me that it is “expedient in the management or administration “of the property vested in JCU that the order in respect of paragraph 8(a) of the affidavit of Alan James Carpenter sought be made. The fact that the current lease has been provided so that the Court can be appraised of the leasing arrangement proposed is highly pertinent in making that determination.
  1. However, in relation to the other leasing powers, there is a difficulty in being able to conclude whether it is expedient in the management or administration of the Land for JCU to be empowered in the manner sought. Assuming that leases for projects referred to in Mr Carpenter’s affidavit can be said to be consonant with the purpose of the trust, the Court ought to be provided with some detail as to the nature of the proposed lease terms as occurred in Freeman and Dodds.  In the absence of that detail and particularly where it appears that ownership of the building will be held by a third party, the Court is not placed in a position to make its own determination as to whether what is proposed can be said expedient in the management or administration of the Land vested in JCU. 
  1. In those circumstances, at this stage I am only prepared to make the orders sought in relation to the proposed lease dealt with in paragraph 8(a) of the affidavit of Alan James Carpenter.

8.Orders

  1. I make the following orders:
  1. Upon its true construction the Deed of Covenant executed on 20 December 1963 (“the Deed”) establishes a charitable trust.
  1. The applicant may lease the Land or any part of the Land:

(a)for the uses and purposes specified in paragraph 8(a) of the affidavit of Alan James Carpenter filed on 4 May 2011;

(b)upon the condition that the applicant applies the rents and profits derived from leasing of the Land to conduct an educational institution at University level conformably to conceptions from time to time currently adopted as fit and proper for a university education;

  1. Notwithstanding s 32 of the Trusts Act 1973, the applicant has power to grant leases for the uses and purposes specified in paragraph 8(a) of the affidavit of Alan James Carpenter filed on 4 May 2011 over the Land for a period exceeding the terms specified in section 32(1)(e) and 32(3)(a) of the Trusts Act 1973 but for no longer than a term of 50 years.

APPENDIX

The Discovery Rise Project

  1. Since 2002, the University has authored and commissioned papers that develop a proposal of the University redeveloping the Douglas Campus.
  1. In 2002, a “Campus Development and Management Plan”, which was presented to the University’s Senior Management Planning Conference, raised the possibility of redeveloping the Douglas Campus.[9]
  1. In early 2004, Alan Carpenter, who was then the Manager of Planning and Development at the University, co-authored a paper that identified the need for the University to develop the Douglas Campus into a “university village”.[10]  That paper stated, inter alia, that:[11]

“The vision for [the university village] is to create a physical environment which has, among our target audiences, both immediate and lasting associations with JCU as:

i)a tropical university of the first rank;

ii)having a vibrant academic, social, artistic and commercial life;

iii)an exemplar of sustainable development; and being

iv)of the community rather than apart from it

such that JCU Douglas becomes a mini university town. Such a campus would support and promote JCU in its drive to become a world class tropical university.”

  1. In November 2005, November 2005, CRI, who are development advisers and architects, and Hassell, as sub consultants to CRI, produced for the University “The University Village Master Plan.[12]
  1. In 2007, Gamble McKinnon Green produced a revised Master Plan for the University’s development of the Douglas Campus.[13]
  1. In January 2009, Gamble McKinnon Green produced a Plan for the Community and Biomedical precincts. [14]
  1. In early 2009, Mr Alan Carpenter and Robyn Harding, an Associate Director of Urban Design with Urbis, authored a paper entitled ‘Legacies Stewardship and Future Visions’ (“the Stewardship Paper”). The “key conclusions” of that Paper included:[15]

“i)There is a trend to urbanisation in the world in general and university campuses in particular.

iii)Many universities are seeking to connect with their surrounding communities through the built environment by either blurring the line between institution and community, or by development which incorporates the wider community into the university community.

v)A successful university community is much more than just staff and students, it extends to include alumni, retired and former staff, business partners and friends of the university in a learning centred community with a network of collaboration, support and influence.”

  1. In December 2009, Cox Rayner produced a report entitled “a scoping study for a Douglas Smart community”.[16]
  1. In February 2010, Architectus and the Hornery Institute produced the Discovery Rise Preliminary Residential Urban and Community Plan.[17]
  1. In early 2010, Alan Carpenter and Robyn Harding co-authored a paper entitled “Discovery Rise – Towards a New Vision and Critical Specification” (“the Critical Specification Paper”).[18]  The Paper states that an aim of the Project is to:[19]

“… reconceive and reshape the built environment of Douglas Campus from an isolated institutional campus to an integrated university town with a vibrant knowledge community.”

  1. The Critical Specification Paper also outlines the University’s specifications for the Project and states that:

“Discovery Rise envisages:

A tropical knowledge community that brings international acclaim to James Cook University and the City of Townsville.

A knowledge precinct called Discovery Central …

The creation in Discovery Central of a mixed use knowledge precinct combining research and innovation enterprises, professional offices, commercial and retail activity, residential accommodation and university based teaching and learning.

A diverse and inclusive residential community of knowledge workers from JCU, other Discovery Rise participants and The Townsville Hospital as well as others who have an affinity with the university.

An urban residential community with its own economic agents, thus delivering maximum transport and infrastructure efficiencies and that rarest of urban outcomes, a complete community.

An investment trust fund established for the benefit of the university towards academic development, research and sustainability initiatives.”

  1. The University’s aim with the Project is ‘to facilitate the growth of ‘integrated knowledge communities’’. “Integrated knowledge communities” are communities that “foster interactions between the students and staff of The University, professionals and commercial industry across disciplinary and institutional boundaries”.[20] Under the Project, the University “intends to adopt innovative methods of town planning in order to integrate alongside traditional academic activities the activities of different professions and commercial industries, as well as residential facilities.”[21]
  1. The University plans to develop areas at the Douglas Campus that have different focuses. The planned location of each of these areas is evident on the map at Exhibit AJC-2 to Mr Carpenter’s first affidavit.
  1. The areas that the University proposes to develop under the Project are:

(a)Discovery Central, which:

(i)is to be “used for the purposes of research and development and related activity by both JCU and organizations that are external to JCU but whose research interests are complementary with the research interests of JCU Schools and Departments.”[22]

(ii)“will contain research and innovation enterprises, professional offices, commercial and retail activity linked to, or necessary for, the integrated knowledge community, residential accommodation and university-based teaching and learning.”[23]

(b)The Academic Core, which will:

(i)“house the facilities for conventional teaching and research activities.”[24]

(ii)house research institutes that are external to JCU. [25]

(c)The Residential Zone, which will provide accommodation to both members of the University, ie, students and staff, as well as non-members of the University, including “hospital staff, professionals, researchers or individuals who are interested in a particular area of learning, alumni and retired staff”. [26]

(d)The Enterprise Park, which will “contain ‘science parks’ in which the businesses that utilize acquired knowledge work in partnership with academia in order to develop commercial outcomes of University research”.[27]

(e)The School Zone, which will “provide a school for children who reside in the residential accommodation that the Project provides” and “provide a resource for JCU’s teacher education course.”[28]

(f)The Recreation Precinct, which students and staff of the University will use for formal and informal sport and recreation activities.[29]

(g)The Green Zone, which has been set aside for nature conservation.[30]

  1. Under the Project, the University contemplates selling or leasing the Land, or a part of the Land, to third parties so as to enable:

(a)the purchaser or the lessee to conduct on the Trust Land some of the activities outlined in para 14; and

(b)the University to raise funds that the University may then apply to the conduct of its activities as a university.  The University “expects to receive either a steady revenue stream or significant lump sum capital payments from its implementation of the [Project]”.[31]

  1. The University has not yet identified the “specific governance structure” that it would employ to implement the Project.[32]  However, the University has established the “Discovery Rise Executive Steering Committee” which is tasked with recommending to the University Council the governance structure that the University should employ to implement the Project.[33]
  1. On 21 May 2010, the University Council of the University passed a resolution that provides:[34]

“(2)to the extent to which the Discovery Rise Project (the Project) relates to the Covenant Land, the Project be undertaken by the University:

(a)for the ‘conduct of an educational institution at university level (conformably to conceptions from time to time currently accepted as fit and proper for a university education) … and purposes fairly incidental thereto, and for no other purpose’ in accordance with the terms of the Covenant; and

(b)to raise revenue that may be applied to the ‘conduct of an educational institution at university level (conformably to conceptions from time to time currently accepted as fit and proper for a university education) … and purposes fairly incidental thereto, and for no other purpose’ in accordance with the terms of the Covenant;

(3)any revenue return or consideration of any kind, generated by and in the course of the University’s implementation of the Project by the exploitation (whether by sale, lease, easement or grant of rights in any other form) of Covenant Land, is applied by the University:

(a)in accordance with its statutory obligations and internal policies as in force from time to time; and

(b)to the ‘conduct of an educational institution at university level (conformably to conceptions from time to time currently accepted as fit and proper for a university education) … and purposes fairly incidental thereto, and for no other purpose’ as required by the Covenant…”

Footnotes

[1] 43 Eliz I c.4 was repealed by the Trusts Act 1973 (Qld), s 103(1) of which provides that “this repeal shall not affect the established rules of law relating to charity”.

[2] Exhibit MWK-3 to the affidavit of Mr Michael Kern (file no 6) filed 4 November 2010.

[3] Exhibit CJS-2 to the affidavit of Mr Craig Stack (file no 10) filed 22 December 2010 at part 4.2 of the Report.

[4] Affidavit of Ms Patricia Brand (file no 7) filed 4 November 2010 at [28].

[5] Affidavit of Mr Alan Carpenter (file no 5) filed 4 November 2010 at [2].

[6] Exhibit AJC-16 to affidavit of Mr Alan Carpenter (file no 5) filed 4 November 2010 at page 14, at point [3.3.8].

[7] Affidavit of Mr Alan Carpenter (file no 5) filed 4 November 2010 at [50].

[8] Affidavit of Ms Patricia Brand (file no 7) filed 4 November 2010 at [25].

[9] Exhibit AJC-4 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010.

[10] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [14].

[11] Exhibit AJC-5 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at page 89.

[12] Exhibit AJC-6 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010.

[13] Exhibit AJC-8 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010.

[14] Exhibit AJC-9 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010.

[15] Exhibit AJC-10 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at page 388.

[16] Exhibit AJC-12 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010.

[17] Exhibit AJC-11 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010.

[18] Exhibit AJC-13 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010.

[19] Exhibit AJC-13 to the affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at page 579.

[20] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [25].

[21] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [26].

[22] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [27].

[23] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [28].

[24] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [31].

[25] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [32].

[26] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [37].

[27] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [38].

[28] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [42(a) and (b)].

[29] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [42(c)].

[30] Affidavit of Mr Alan Carpenter (file no 2) filed 9 September 2010 at [42(d)].

[31] Affidavit of Ms Patricia Brand (file no 7) filed 4 November 2010 at [22].

[32] Affidavit of Mr Michael Kern (file no 6) filed 4 November 2010 at [11].

[33] Affidavit of Mr Michael Kern (file no 6) filed 4 November 2010 at [13].

[34] Affidavit of Mr Michael Kern (file no 6) filed 4 November 2010 at [7].

Close

Editorial Notes

  • Published Case Name:

    James Cook University v Townsville City Council & Anor

  • Shortened Case Name:

    James Cook University v Townsville City Council

  • MNC:

    [2011] QSC 209

  • Court:

    QSC

  • Judge(s):

    Philippides J

  • Date:

    23 Jun 2011

Litigation History

No Litigation History

Appeal Status

No Status