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  4. The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland - [2022] QSC 38

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The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland[2022] QSC 38

The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland[2022] QSC 38

SUPREME COURT OF QUEENSLAND

CITATION:

The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland [2022] QSC 38

PARTIES:

THE PRESBYTERIAN CHURCH OF QUEENSLAND INCORPORATED BY LETTERS PATENT

(Applicant)

v

ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND

(Respondent)

FILE NO/S:

BS 5437 of 2021

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

18 February 2022

DELIVERED AT:

Brisbane (ex tempore)

HEARING DATE:

18 February 2022

JUDGE:

Brown J

ORDER:

The order of the Court is as per the draft order.

CATCHWORDS:

CHARITIES – TRUSTEES OF CHARITIES – ADMINISTRATION AND CONTROL BY COURT – GENERALLY 

CHARITIES – CHURCHES AND RELIGIOUS ASSOCIATIONS – CONSTITUTION, MANAGEMENT AND POWERS – CHURCH PROPERTY AND TRUSTS – DISPOSITIONS OF, AND DEALINGS WITH, CHURCH PROPERTY

CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – POWERS – TO APPLY TO COURT FOR DIRECTIONS

CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – DUTIES AND LIABILITIES – DUTIES – GENERALLY – where the Applicant is a body corporate established by letters patent issued under the Religious Educational and Charitable Institutions Act 1861 (Qld) – where receivers have been appointed on an interlocutory basis with a power of sale – where the receivers and managers have been appointed as receivers and managers, of the assets, property and undertaking of the Applicant – where the receivers and managers of the assets, property and undertaking of the Applicant seek directions – whether the receivers are justified in entering into and causing the Applicant to enter into, a sale and purchase agreement for three properties – whether the receivers justified in causing the Applicant to complete the sale and purchase agreement – whether the receivers are justified in taking all steps that are necessary or convenient to complete the sale and purchase agreement – whether directions should be made as to proceeds of sale

Religious Educational and Charitable Institutions Act 1861 (Qld)

The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland [2021] QSC 136
The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland [2021] QSC 219

COUNSEL:

P McQuade QC for the Applicant

A L Wheatley with BJ McEniery for the Respondent

E Robinson for the Managers and Receivers

SOLICITORS:

Neumann & Turnour Lawyers for the Applicant

Crown Law for the Respondent

Allens for the Managers and Receivers

  1. [1]
    HER HONOUR:   This is the fourth application by receivers who were appointed over the assets of the applicant, The Presbyterian Church of Queensland Incorporated by Letters Patent, who I will otherwise refer to as PCQ, for directions from the Court.  The appointment specifically included all the assets, property and undertaking of PresCare, which is relevant to the properties which are the subject of the application for judicial directions today.  PCQ is a party.  The Attorney-General of Queensland (the Attorney-General) has also appeared as a relevant party given the Attorney-General’s position as a protector of charities.
  2. [2]
    I have previously addressed the scope of the Court’s powers in relation to the giving of directions in my decision, which has been referred to as The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland [2021] QSC 136 (PCQ (No. 1)).  I have also previously discussed the background of PCQ, in terms of the nature of the entity PCQ, its status as a charitable trust and as a body which was established by letters patent issued under section 1 of the Religious Education and Charitable Institutions Act 1861 (Qld).  I will not revisit those other than to note that in my second decision, which is referred to as The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland [2021] QSC 219 (PCQ (No. 2)), I referred to the fact that some dispute had been raised by a party in relation to whether all the property acquired by PCQ was, in fact, impressed by a charitable trust.  However, as was the case in that decision, it is not a matter which requires determination by me today in the present application.
  3. [3]
    I also note that the receivers seek directions from this Court, that they are justified in causing PCQ to complete three contracts for the sale of certain properties owned by PCQ, which are located at Sherwood (the Sherwood property); Inala (the Inala property); and Rockhampton (the Rockhampton property); and that they were justified in causing PCQ to enter into the sale contracts in question. Further directions are also sought to the effect that until further order the receivers are justified in using the proceeds of sale on completion of the sale contracts to pay the costs and expenses of the sale, to pay the costs and expenses incurred in the ordinary course of PresCare trading, to pay the receivers’ remuneration, and to pay any other costs in connection with the receivership.
  4. [4]
    The receivers identify two additional reasons that they seek the directions to the usual reasons for directions; namely, that there are limits on the circumstances in which a trustee of a charitable trust can exercise its power of alienation and it would ordinarily be imprudent for a trustee to alienate trust property without first obtaining the sanction of the Court, and secondly, the desirability of obtaining the sanction of the Court given the fact that receivers have been appointed on an interlocutory basis, albeit with a limited power of sale.  I accept those are additional reasons as to why the directions are properly sought.  I am also satisfied that the directions are properly sought within the principles that I outlined in my original decision, PCQ (No. 1).
  5. [5]
    Mr Carter, who is one of the receivers, has provided a comprehensive affidavit of the process that has been undertaken in relation to the sale of the three properties including the detailed investigations that have been carried out in respect of the history of the properties and relevant documentation to ensure that there were no relevant restrictions to the sale of the properties. In particular, Mr Carter’s affidavit considers whether issues arose by virtue of the fact that the Sherwood property had been transferred to PCQ in its conduct of PresCare by Sherwood respite centres, the Inala property was acquired from the Inala Respite Centre Inc.
  6. [6]
    In both cases, there was in contemplation, that was reflected in correspondence at least, that PresCare would continue to carry out the respite centres services for those communities.  However, based on the extensive review of the relevant documentation by the receivers, and particularly having regard to the terms of the deeds which were entered into for the transfer of those properties and what has subsequently occurred, I am satisfied there is no reason why the sales are not justified and that there is no particular restriction on the sales occurring even if there may have been some issues in relation to how the properties were operated by PresCare in the past and arrangements that were entered into in that regard.  I should say I do not suggest that any of the conduct of PresCare, in fact, does raise issues of breach of trust, but to the extent it may have, it has been canvassed very carefully in the receivers’ submissions. 
  7. [7]
    In addition, the properties themselves have now been vacant for some time and both the Sherwood respite centre and the Inala respite centre have been deregistered.  Prior to the sales the properties were not being used for any particular purpose.
  8. [8]
    The proposed contracts of sale have been entered into with organisations which Mr Carter has investigated and on the basis of his investigations is satisfied that they are reputable.  In the case of the Sherwood property, the proposed purchaser carries out home care and community services to older people at home.  In the case of the Inala property, the proposed purchaser is expanding its portfolio in relation to disability services.  Assuming each of those purchasers uses the property to carry out operations which reflect those services which I have just outlined, the work, while not necessarily the same as that carried out by PresCare, is consistent with the social mission of PresCare, insofar as it supports the vulnerable in the community.
  9. [9]
    In relation to the Rockhampton property, the evidence establishes that it was a PresCare property that had been used as an office by PresCare, which was subsequently leased to another party, but, again, has recently been left vacant.  There are no evident issues that could raise any question of impediment to entering a sale in relation to that property.
  10. [10]
    Mr Carter’s evidence reflects that a proper marketing campaign has been carried out, and in the case of Inala and Sherwood, the sale followed an auction where there were several bidders.  The price obtained in relation to those properties was above the valuations obtained.  In the case of Rockhampton, a marketing campaign was carried out.  There was little interest in the property.  However, the party who has now purchased the property has also entered a contract of sale for an amount which is above the valuation that was obtained by the receivers.
  11. [11]
    Mr Carter’s affidavit also canvasses the fact that consideration was given to whether there were alternatives to the properties being sold.  For the reasons which he has set out, those alternatives are not evidently viable, particularly given PCQs financial circumstances.  He has also identified several reasons why he has reached the conclusion that the sales of the properties are in the best interests of PCQ.  Those reasons are outlined by Mr Carter in his affidavit, particularly at paragraph 229, which support his conclusion that the sale of the properties is in the best interests of PCQ.  I am satisfied that those reasons do support the conclusion that entry into the contract of sale and the sale themselves are justified and in the best interests of PCQ. 
  12. [12]
    The position of the receivers is informed and enforced by the submissions that have been provided on behalf of PCQ and the Attorney-General.  PCQ joins in the application of the receivers given the adverse circumstances that PCQ finds itself in and considers that having regard to the affidavit of Mr Carter, that the transactions reflect one of the purposes for which PCQ sought to appoint the receivers, namely, to realise PresCare property.  Counsel for PCQ confirmed that the transactions proposed by the receivers are supportive of the interests of PCQ and are appropriate for the reasons set out by Mr Carter.
  13. [13]
    As I have indicated, the Attorney-General is a party to the application given the Attorney-General’s role as a protector of charities.  The Attorney-General does not oppose the directions sought.  The Attorney-General has provided submissions outlining the fact that the Attorney-General has carefully considered the proposed sales and the relevant considerations.  That includes the fact that the Attorney-General is satisfied on the evidence of Mr Carter that the properties are PresCare property within the meaning of that term as it is used in the appointment order. The Attorney-General is also satisfied that the properties are assets that the receivers are authorised to sell by the appointment orders. The Attorney-General is also content with Mr Carter’s explanation that he believes that his staff have identified and reviewed PCQ records that would most likely contain relevant references to the properties.
  14. [14]
    The Attorney-General has also canvassed the fact that the nature of the directions sought, which are forward-looking, can appropriately be given by the Court and does not oppose the directions sought. 
  15. [15]
    I am, therefore, satisfied that the directions should be given in relation to the sale of the three properties which have been sought on the basis that the evidence supports the fact that the receivers were justified in causing PCQ to enter into the sale contracts in question and are justified in causing those contracts to be completed. 
  16. [16]
    The receivers, as I indicated, seek further directions in relation to the use of the proceeds of sale which have been summarised at paragraph 97 of the receivers’ outline of submissions.  The issue of the use of proceeds by receivers, particularly where trust property is involved, was considered by Justice Freeburn in a previous application by the receivers in this matter on 10 December 2021, his reasons being exhibit 1.
  17. [17]
    The property that was considered by his Honour was not PresCare property and an issue had been raised as to whether it was potentially impressed by a specific trust.  His Honour considered that there was insufficient evidence to conclude that the property was held on a specific trust, Freeburn J also considered the use of the proceeds of sale and whether the moneys ought to be quarantined, if the evidence had suggested that the property in question was held on a specific trust.  His Honour canvassed a number of the authorities and reached the conclusion that the moneys should not be quarantined even if subject to a specific trust.
  18. [18]
    In the present case, the question of a property being subject to a specific trust does not arise.  However, his Honour’s reasoning, in terms of the fact it is not appropriate to quarantine the proceeds of sale in relation to these particular properties is apt. 
  19. [19]
    There do not appear to be any distinguishing features of this case which would mean that his Honour’s reasoning did not apply.  In fact, the circumstances of this case would suggest that there is no proper basis to consider that the moneys should be quarantined in the circumstances. Both PCQ and the Attorney-General do not oppose the directions sought in that regard and do not raise any issues which would indicate that the directions sought by the receivers are not justified.  Having reviewed his Honour’s reasons and having reviewed the submissions that are made to me in that regard, I am also satisfied that the directions in relation to the use of the proceeds are justified in order that the receivers have the clarity they need.
  20. [20]
    It is appropriate to make the directions that are sought so that the receivers clarify their entitlement to use the moneys that are received as part of the proceeds of sale.
  21. [21]
    Finally, in terms of the orders sought, there is an order sought in relation to confidentiality over parts of the affidavit material that has been provided to me.  That is sought on the basis that that information is said to be commercially sensitive and could jeopardise a future sale of any of these properties if, for any reason, the sales did not occur.  It is, therefore, appropriate given those circumstances for orders providing for the confidentiality of that information to be maintained to be made.  I will, therefore, make the order in accordance with the draft that has been provided to me.
  22. [22]
    The reasons that I have provided are relatively short, but that is a product both of the fact that I have previously given decisions canvassing a lot of the issues relevant to the present application, but also to the very detailed affidavit evidence and submissions that have been provided by all counsel in relation to this matter, particularly counsel for the receivers. That is not to take away from the submissions provided by the other parties which enforce that. 
  23. [23]
    HER HONOUR:   Adjourn the Court.
Close

Editorial Notes

  • Published Case Name:

    The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland

  • Shortened Case Name:

    The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland

  • MNC:

    [2022] QSC 38

  • Court:

    QSC

  • Judge(s):

    Brown J

  • Date:

    18 Feb 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland(2021) 7 QR 794; [2021] QSC 136
2 citations
Jump To
Cite 1 - [2021] QSC 136
Cite 2 - [2021] QSC 136
The Presbyterian Church of Queensland Incorporated by Letters Patent v Attorney-General for the State of Queensland [2021] QSC 219
2 citations
Jump To
Cite 1 - [2021] QSC 219
Cite 2 - [2021] QSC 219

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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