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  4. Perpetual Trustee Co Ltd v Corporation of the Synod of the Diocese of Brisbane - [2024] QSC 163

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Perpetual Trustee Co Ltd v Corporation of the Synod of the Diocese of Brisbane[2024] QSC 163

Perpetual Trustee Co Ltd v Corporation of the Synod of the Diocese of Brisbane[2024] QSC 163

SUPREME COURT OF QUEENSLAND

CITATION:

Perpetual Trustee Company Ltd v The Corporation of the Synod of the Diocese of Brisbane [2024] QSC 163

PARTIES:

PERPETUAL TRUSTEE COMPANY LIMITED

(Applicant)

v

THE CORPORATION OF THE SYNOD OF THE DIOCESE OF BRISBANE

(First Respondent)

and

THE PRESBYTERIAN CHURCH OF QUEENSLAND INCORPORATED BY LETTERS PATENT

(Second Respondent)

and

THE PRESBYTERIAN CHURCH OF QUEENSLAND

(Third Respondent)

and

ATTORNEY-GENERAL FOR QUEENSLAND

(Fourth Respondent)

FILE NO/S:

BS 977 of 2024

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

Orders made on 25 July 2024, reasons published on 26 July 2024

DELIVERED AT:

Brisbane

HEARING DATE:

25 July 2024

JUDGE:

Bowskill CJ

ORDERS:

  1. 1.
    Pursuant to sections 94, 105(1)(e)(iii) and 106(1)(a) of the Trusts Act 1973 the assets and income of the EG Sinclair Church Extension Fund established by clause 9 of the Will of Eric Gordon Sinclair, deceased dated 27 October 1967 be applied cy pres by paying them to the first respondent and the second respondent equally for the purposes of:
  1. (a)
    building in Queensland or in any island mission area of the Respondents, new church buildings including Sunday Schools and buildings for similar purposes; or
  1. (b)
    renovations, improvements or upgrades to church buildings of the First and Second Respondents, including Sunday Schools, halls, parish centres and buildings for similar purposes in Queensland or in any island mission area of the Respondents.
  1. 2.
    Pursuant to rule 69 of the Uniform Civil Procedure Rules 1999, the third respondent be removed as a party to the proceedings.
  1. 3.
    The applicant’s and the second respondent’s costs of this application be paid on the indemnity basis from the assets of the EG Sinclair Church Extension Fund.

CATCHWORDS:

CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS – CONSTRUCTION – CONSTRUCTION GENERALLY – ASCERTAINMENT OF TESTATOR’S INTENTION – OTHER PARTICULAR CASES – whether an order should be made under s 105(1)(e)(iii) of the Trusts Act 1973 (Qld), altering the original purposes of a charitable trust created by a will, to allow the property to be applied cy pres, where the original purposes have ceased to provide a suitable and effective method of using the property available, having regard to the spirit of the trust

Trusts Act 1973 (Qld), s 94, s 105(1)(e)(iii), s 106(1)(a)

COUNSEL:

R T Whiteford for the applicant

S L Walpole for the second respondent

A K Lossberg for the fourth respondent

SOLICITORS:

Perpetual Trustee Company Limited, applicant

Allens for the second respondent

Crown Solicitor for the fourth respondent

  1. [1]
    The application the subject of this proceeding came on for hearing in the applications list on 25 July 2024.  I made orders in the terms set out above, for brief reasons articulated in the course of the hearing, but indicated that I would publish my reasons in more detail subsequently.
  2. [2]
    Mr Sinclair made a will in October 1967.  He died in April 1970.  He appointed Queensland Trustees Limited (now the applicant) to be the executor and trustee of his will.  By clause 9 of the will, Mr Sinclair gave his residuary estate to his trustee on trust:
  1. “… to establish a fund to be known as the ‘EG Sinclair Church Extension Fund’ from which my trustees shall from time to time at their discretion and at the written request of such Churches pay the same equally in sums of One thousand dollars to the PRESBYTERIAN CHUCH OF QUEENSLAND and to the CHURCH OF ENGLAND IN QUEENSLAND to be applied to or towards the building in Queensland or in any island mission area of such Churches, new Church buildings including Sunday Schools and the like.”
  1. [3]
    Mr Sinclair’s wife lived for many more years, only passing away in 2015, when she was aged 100.  Mr Sinclair’s will, including as altered following an application for further provision, provided for a life interest for his wife and various annuities, the operation of which affected the composition of the residuary.  This, together with the fact that the applicant was not advised of Mrs Sinclair’s death for some time afterwards, is said to explain why the present issue has not arisen earlier.   
  2. [4]
    Relevantly, the EG Sinclair Church Extension Fund is presently valued at about $228,000.
  3. [5]
    The applicant says that two practical difficulties have impeded the effective use of the assets of the Fund.  The first is the limitation of paying only $1,000 at a time, upon the written request of each of the named churches.  As Ms Bird of the applicant says, “since the Will was made the value of money has reduced such that $1,000.00 now does little to defray the cost of building churches”.  The second arises from the fact that the second respondent, the Presbyterian Church, was placed in receivership and management in May 2021, which has impacted its ability to build new churches; although Mr Owen, the receiver and manager, notes that various Queensland church properties are in need of repair and maintenance works,[1] and he provides some examples in his affidavit.   On the other hand, the first respondent (the Anglican Church) is said to be actively engaged in building churches.  This presents an obvious practical dilemma for the applicant.
  4. [6]
    The applicant submits that the original purposes of the EG Sinclair Church Extension Fund now:
    1. cannot be carried out, at least in accordance with the directions given in the will and the spirit of the trust (referring to s 105(1)(a)(iii) of the Trusts Act 1973); or
    2. have ceased to be a suitable and effective method of using the assets of the trust, regard being had to the spirit of the trust (referring to s 105(1)(e)(iii) of the Trusts Act 1973).
  5. [7]
    In those circumstances, the applicant has brought the present application, seeking orders to alter the original purposes of the trust, to allow the Fund to be applied cy pres either to the first respondent only (because it is actively engaged in building new churches) or in such proportions as the applicant determines to both or either of the first and second respondents for the (broader) purposes of building new church buildings and repairing or maintaining existing church buildings in Queensland.
  6. [8]
    The first respondent indicated in advance of the hearing of the application that it did not propose to appear and considered it a matter for the Court to decide the appropriate order.
  7. [9]
    In the event the Court might be inclined to adopt the applicant’s first proposed alteration (to provide for the Fund to be applied to the first respondent only), the second respondent submitted that the application is premature, because the receivers have been appointed only on an interlocutory basis and until certain proceedings (the subject of a reserved judgment) are resolved, the financial position of the second respondent remains uncertain.    Otherwise, the second respondent said it would support the second proposed alteration.
  8. [10]
    The Attorney-General, which has an involvement in matters such as these by virtue of s 106 of the Trusts Act, submitted that, if persuaded to make an order of the kind sought, the Court might consider the following things: imposing some payment limit (for example, $20,000 was suggested), rather than allowing for the Fund to be exhausted all at once – on the basis that would be more consistent with the original purpose; that, if possible, the second respondent should remain a beneficiary of the Fund; that it might be that “renovations and upgrades” is more consistent with the spirit of the Fund, than mere “repairs and maintenance”; and that the Court might consider it appropriate to include a condition that no payment be made to the second respondent, unless the receivers establish to the satisfaction of the applicant that any property renovated or upgraded using the money will not be sold, or wait until the situation with the receivership is resolved before making any payment.
  9. [11]
    All were agreed that the third respondent should be removed as a party as it is an unincorporated association, not a separate legal entity.
  10. [12]
    Counsel for all three parties who appeared on the hearing of the application made comprehensive and helpful submissions, which facilitated the efficient hearing and determination of this matter, by the making of orders at the time of the hearing.  The delivery of reasons a short time later was simply the product of a busy applications list.
  11. [13]
    It is accepted that the trust created by clause 9 of the will is a charitable trust, since the purpose of it – the construction of churches – is for the advancement of religion.[2]
  12. [14]
    Section 105 of the Trusts Act relevant provides;
  1. “(1)
    Subject to subsection (2), the circumstances in which the original purposes of a charitable trust can be altered to allow the property given or part of it to be applied cy pres shall be as follows –
  1. (a)
    where the original purposes, in whole or in part –
  1. (i)
    …; or
  1. (ii)
    can not be carried out; or
  1. (iii)
    can not be carried out according to the directions given and to the spirit of the trust;
  1. …
  1. (e)
    where the original purposes, in whole or in part, have, since they were laid down –
  1. …
  1. (iii)
    ceased in any other way to provide a suitable and effective method of using the property available by virtue of the trust, regard being had to the spirit of the trust.”
  1. [15]
    In order to exercise the power under s 105, it is not necessary that actual compliance with the original terms of the trust be impossible; it is enough that the original terms have ceased to provide a suitable and effective method of using the trust property.[3]  Section 105 requires the court to have regard to the “spirit of the trust”, which directs attention to the “basic intention underlying the gift” and obliges the court to apply the property to a charitable purpose “in a presently effective and practical way”.[4]
  2. [16]
    I accept that the original terms of the trust created by clause 9 of the will have ceased to provide a suitable and effective method of using the trust property (s 105(1)(e)(iii) of the Trusts Act), because of the limitation on the amount which can be paid on any one occasion to $1,000, which is of little practical utility today in terms of building a new church (or even repairing an old one); the requirement for payment only upon written request; the practical dilemma arising from the need for equal payment, where one church makes a request and the other does not; and the practical dilemma where one church is able to undertake new projects and the other is, at least at present, not.  
  3. [17]
    I also accept that it is appropriate to deal with this now, rather than waiting until the situation concerning the second respondent is resolved, having regard to the duties of administration owed by the applicant, the uncertainty about when the proceedings involving the second respondent will finally resolve and the inappropriateness of, effectively, “paralysing” the administration of the trust until the second respondent is in a position to build new churches.
  4. [18]
    Having said that, I am not persuaded it is appropriate to exercise the power under s 105 by altering the trust so that payment may be made only to the first respondent.  That would not, in my view, be consistent with the spirit of the trust, which was plainly intended to benefit both the Presbyterian Church of Queensland and the Church of England in Queensland (now, the Anglican Church), equally, for the stated purpose.  That resolves the second respondent’s objection that the application is premature.
  5. [19]
    Having regard to the amount of money remaining in the Fund, and the fact that it is also proposed that the costs of this application be paid from it on the indemnity basis (which will further deplete it, leaving, perhaps, only about $150,000), and having regard to the scale of costs involved in renovation works (let alone new building works), I consider it appropriate to remove the payment limit altogether, rather than to substitute another figure, such as $20,000 as suggested by the Attorney-General.  I appreciate that it is to be inferred that Mr Sinclair had in mind small, regular contributions to both churches.  But what $1,000 could achieve in 1967 when the will was made bears no comparison to what is required to undertake even the smallest of building works today (which is demonstrated by the estimates referred to in Mr Owen’s affidavit).   Retaining a payment limit, even if higher, has the result that practical difficulties associated with written requests and ongoing administration charges remain.  Enabling the Fund to be distributed once, in the spirit of the trust, is in my view practical, effective and more cost effective.
  6. [20]
    There was broad agreement to the expansion of the purpose beyond the building of new churches, to include renovations, improvements or upgrades.  I accept the Attorney-General’s submissions that this form of words is more closely aligned to the original purpose, than mere “repairs and maintenance”.
  7. [21]
    That leaves only the point about the second respondent’s receivership position.  The point made, in favour of sequestering any payments to the second respondent, pending the resolution of that position, is that it could defeat the purpose of the trust if, for example, money from the Fund were used to renovate or improve a church building, which was then sold by the receivers in order to pay creditors.   That is of course a risk.  But as against that, Mr Owen’s evidence demonstrates that there are a number of the second respondent’s existing church buildings in need of renovation, to which money from the Fund could be contributed.  There are also practical difficulties with either delaying any payment to the second respondent, or somehow attaching a condition to it – including in terms of how that would be managed, consistent with the requirement for equal payment to both churches, the uncertainties it would create for administration of the Fund, and the additional administration costs it would incur.  And, in addition, it must be said there would always have been risks, out of the control of the deceased, in terms of what became of any church property benefited by his gift under the will.  Although I accept it was an appropriate point to be raised by the Attorney-General, in the end result I consider that altering the original purpose of the trust in the manner reflected in the orders does give effect to the spirit of the trust and is an appropriate (practical and efficient) way in which resolve the present dilemma.

Footnotes

[1]Exhibit AB-7 to the affidavit of Ms Bird (CFI 2).

[2]Re Pitt [2002] SASC 332 at [22].

[3]The Congregation of the Religious Sisters of Charity of Australia v The Attorney-General in and for the State of Qld [2011] QSC 100 at [22].

[4]Cram Foundation v Corbett-Jones [2006] NSWSC 495 at [45].

Close

Editorial Notes

  • Published Case Name:

    Perpetual Trustee Company Ltd v The Corporation of the Synod of the Diocese of Brisbane

  • Shortened Case Name:

    Perpetual Trustee Co Ltd v Corporation of the Synod of the Diocese of Brisbane

  • MNC:

    [2024] QSC 163

  • Court:

    QSC

  • Judge(s):

    Bowskill CJ

  • Date:

    25 Jul 2024

  • White Star Case:

    Yes

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
Re Pitt [2002] SASC 332
1 citation
Jump To
Cite 1 - [2002] SASC 332
The Congregation of the Religious Sisters of Charity of Australia v Attorney-General [2011] QSC 100
1 citation
Jump To
Cite 1 - [2011] QSC 100
The Cram Foundation v Corbett-Jones [2006] NSWSC 495
1 citation
Jump To
Cite 1 - [2006] NSWSC 495

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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