Re The New Zealand Institute for Cancer Research [2020] NZHC 2048

Re The New Zealand Institute for Cancer Research [2020] NZHC 2048 [13 August 2020]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2020-412-000018[2020] NZHC 2048RE THE NEW ZEALAND INSTITUTE FORCANCER RESEARCH TRUSTHearing: 29 July 2020Appearances: J W Cowan for the ApplicantJudgment: 13 August 2020JUDGMENT OF NATION J[1] The New Zealand Institute for Cancer Research Trust (the Trust)1 has appliedunder Part 3, Charitable Trusts Act 1957 (the Act) for approval of a scheme as to atrust created by deed and for approval of variations to the trust deed.[2] The Trust was established by deed dated 28 November 1985 (the original trustdeed).[3] In summary, the essential purposes of the Trust as set out in the original trustdeed are:(a) establishing and maintaining an institute for cancer research;(b) providing financial and administrative support to cancer research staff;(c) encouraging and supporting collaborative cancer research; and1 The Trust is not incorporated. The legal entity making the application is the New ZealandGuardian Trust Company Ltd as trustee of the Trust.(d) fostering and supporting the communicating and exchange of informationof medical discoveries relevant to cancer.[4] The Trust was established to initially support the late Dr Charles Goodall in hiswork with cancer research on his return to Dunedin. Not long after the Trust wasestablished, Dr Goodall moved to Wellington. The establishment of the Institute wasput on hold. The Trust has since elected to fund cancer research initially at theMalaghan Institute of Medical Research which was located at the Wellington campusof the University of Otago and, over more recent years, through providing funds forthe Trust chair in cancer pathology at the Dunedin School of Medicine at theUniversity of Otago.[5] The core intention of the founders was to enhance the opportunities for world-class cancer related research, particularly in the Otago region. Contrary to what wasanticipated when the Trust was formed, this has been facilitated without bringing intoexistence an "institute".[6] The trustee of the Trust was the New Zealand Guardian Trust Company Ltd,now Perpetual Trust Ltd trading as Perpetual Guardian (the Trustee). The Trusteeconsults with the Board of Advisory Trustees (the Board) currently comprising fivemembers. The Trust is a registered charity under the Charities Act 2005.[7] The original trust deed, particularly in its Schedule of Trustees' Powers, is in aform commonly associated with family trusts.[8] The Trustee and the Board initiated a review of the trust deed by Mr StuartWalker of the law firm Anderson Lloyd. Mr Walker is also a member of the Board.His review revealed what he considered were certain shortcomings in the deed'sprovisions, namely:(a) the stated aims and purposes of the Trust are outdated;(b) there are restrictive provisions dealing with the application of capital andincome;(c) the Trustee powers are not appropriate for a charitable trust;(d) there is no power allowing for amendment of the trust deed;(e) the restrictive qualifications required of the Board members; and(f) lack of certainty around the respective roles of the Trustee and the Board.[9] A proposed new trust deed has been approved by the Trustee and the Board.The Trustee seeks the Court's approval to that new trust deed.[10] The support from the Board is significant.[11] With the proposed new deed, the Board will have the role of promoting thecharitable purposes and activities of the Trust, including advising the Trustee inrelation to the appropriate recipients for grants and such other matters as might bedetermined by the Trustee from time to time after consultation with the Board. TheBoard would not have to approve the expenditure of capital or the winding up of theTrust. With the proposed deed, the Trustee is to have the full and absolute power,subject to the provisions of the deed, to deal with Trust assets and decide how Trustfunds should be administered and spent. The proposed obligation on the Trustee tohold the capital of the Trust fund and the income derived from it is subject to "thetrustee exercising its power to wind up the Trust".[12] In contrast to the original trust deed, the Trustee would have a completediscretion as to how the income of the Trust would be applied for the charitablepurposes of the Trust. With the original trust deed, the available income would haveto be spent as the Board directs. With the proposed new deed, the Board would nolonger have such authority or power. Their functions would include only "advisingthe trustee in relation to the appropriate recipients for grants".[13] As set out in the proposed deed, the proposed scheme of the Trust is for it tosupport, within New Zealand but principally in Dunedin, scientific research into thecauses, nature, pathogenesis and treatment of cancer and related cancer diseases andconditions in humans. The most significant change to the scheme of the charity is thatthe Trust's support would no longer be to an "institute". There is also no longer to bereference to the Trust's support being for research as to cancer in humans and "otherorganisms", as referred to in the original trust deed. The new deed would also permitthe Trustee to apply both income and capital for the purposes of the Trust.[14] Because there is no institute established by the Trust that engages directly withmembers of the public, it was not considered necessary to consult wider than with theBoard. The changes will not, of themselves, negatively affect the parties who currentlyreceive a direct financial benefit from the Trust because, with the proposed changes,they will still be able to benefit from the Trust. I accept the general public would notbe negatively affected by the proposed changes as the Trust will continue to supportcancer research, as it has since its inception.[15] The scheme has been advertised in the New Zealand Gazette and in the publicnotices' column of the Otago Daily Times in accordance with the requirements of s 36of the Act. No opposition was received following advertising.Proposed change to the scheme of the Trust[16] The scheme, as provided for in the draft amended deed, was submitted to theAttorney-General in accordance with s 35 of the Act.[17] A comprehensive report on the proposed scheme has been provided for theAttorney-General by Virginia Hardy, the Deputy Solicitor General (I refer to her reportas being from the Attorney). The Attorney has reported that, with certain exceptions:(a) they are satisfied the scheme is a proper one;(b) it is not contrary to law or policy or good morals;(c) the scheme can be approved by the court under pt 3 of the Act;(d) every proposed purpose is charitable within the meaning of pt 3 and canbe carried out; and(e) the requirements of pt 3 have been complied with in respect of the schemeup to the date of his report.[18] In the context of this application, the Court acknowledges the value andimportance of the Attorney-General's oversight role in respect of proposed changes tothe scheme of a charitable trust, as provided for by the Act.[19] As was identified by the Attorney and in submissions for the Trustee, s 32 ofthe Act provides for the variation of charitable trusts where their purposes havebecome "impossible or impracticable or inexpedient" to carry out. Inexpedience is alower threshold than "impracticable".2 Accordingly, inexpedience embodies a valuejudgement rather than simply an assessment of feasibility. The Attorney noted that,more recently, in the context of the replacement of trustees, the High Court hasaccepted that "expediency" (in the context of the court's power to replace trusteesunder s 51 Trustee Act 1957) "is a lower threshold than necessity and importsconsiderations of suitability, practicality and efficiency".3 The Attorney submitted,and I accept, this observation might equally be applied to s 32 of the Act.[20] The Attorney agreed with the Trustee, based on the evidence before the Court,that it is inexpedient to now establish a cancer research institution. The variationsought, with the deletion of any reference in the proposed trust deed to theestablishment, maintenance and support of such an institute, is in accordance with thefundamental purpose of the Trust (to support research into the causes, nature, treatmentand prevention of cancer). The variation also reflects the manner the Trust has beenfunding research since its inception. The Attorney thus accepts the proposed variationin this respect accords as closely as is reasonably possible to the original purposes ofthe Trust.[21] The original trust deed stated the trust fund was to be held upon trust to supportand maintain the institute for the causes, nature, treatment and prevention of cancerand related diseases and conditions in humans and in other organisms. The Attorneyadvised the Court that the removal of the reference to "other organisms" is justified.The Attorney noted the evidence does not suggest the Trust has supported research ofthis nature nor is it likely to do so. The evidence provided indicates the founders of2 Re McElroy Trust [2003] 2 NZLR 289 (CA).3 Low Hock Peng v Rothschild Trust (Schweiz) AG [2017] NZHC 25, (2017) 4 NZTR 27-001, at[38].the Trust were concerned with the prevention and cure of cancer in humans. Removalof the reference to "other organisms" will not prevent the Trust from supporting studiesin relation to cancer in other organisms so long as such studies were pursued with theaim of better understanding, and so preventing or treating, cancers in humans.[22] To the extent the new deed amends the purposes and scheme of the Trust, theAttorney thus advised that the proposed variation might be approved by the HighCourt. Insofar as the proposed deed does this, in setting out the charitable purposes ofthe Trust, it has the approval of the Court.Proposed variation to the powers of the Trustee and the mode of administeringthe Trust[23] The proposed amendments to the mode of administration of the Trust fall to beconsidered under s 33 of the Act. Section 33 provides that, where: the administration of the property or income or the carrying out of the trustcould be facilitated by extending or varying the powers of the trustees or byprescribing or varying the mode of administering the trust, the powers of thetrustees may be extended or varied, and the mode of administering the trustmay be prescribed or varied, [24] The courts have interpreted "facilitated" to mean "made easier, promoted orhelped forward".4[25] The Attorney advises the Court that "for the most part, the scheme proposedby the Trustee provides a more comprehensive and logical administrative frameworkfor carrying out of the Trust as contemplated by s 33 and does not raise concerns".There are however certain proposed variations the Attorney did not support, forreasons fully articulated in the Attorney's report. The Attorney advised, in respect ofthose matters, the application for approval ought to be refused. Despite thatopposition, the Trustee sought the Court's approval for the proposed variations withoutmodification to the draft considered by the Attorney.4 Re Melanesian Mission Trust Board (1998) 1 NZTR 8-003 (HC) at 205, as applied in Re YMCANew Zealand Soldiers Great War Memorial Trust [2013] NZHC 2516 at [32]; Re Frank SydenhamScholarship Trust [2012] NZHC 654 at [47]; and Re St Barnabas Roseneath Trust Board HCWellington CIV-2011-485-1254, 3 August 2011 at [3].[26] One such clause is the proposed new cl 19:19. Winding up19.1 The Trust may be wound up at any time by the Trustee.19.2 In the event of the Trust being wound up and after all liabilities of theTrust have been discharged the Trustee shall transfer all remainingfunds and assets comprising the Trust Assets to another organisation inNew Zealand which is exclusively charitable and which has purposessimilar to those of the Trust. The receipt of the treasurer or secretary orother proper officer of such regional trusts or organisations shall be asufficient discharge to the Board and the Board will not be bound tofurther see the application of those funds and assets.[27] There was no similar provision in the original trust deed.[28] Another clause the Attorney objected to is the proposed cl 9.4. It reads:Subject to the Trustee exercising its power to wind up the Trust, the Trusteewill hold the capital of the Trust Fund and the income derived from it in trustin perpetuity:(a) To pay all costs and expenses incurred in carrying out and achieving thepurposes of the Trust;(b) To retain as much income as the Trustee thinks fit as a reserve for anypurpose authorised by this deed or by law;(c) To pay or apply the income and/or the capital, or as much of the incomeand/or the capital as the Trustee thinks appropriate, for such charitablepurposes of the Trust as the Trustee in its absolute discretion thinks fit,after considering advice from the Advisory Board. In doing so, theTrustee may further and promote any one or more of the charitablepurpose(s) and need not treat each purpose equally.[29] The Attorney objected to the proposed cl 9.4(c) because it introduced a generaldiscretion for the Trustee to apply capital of the Trust for a charitable purpose of theTrust in contrast to cl 3 of the original trust deed which, in the Attorney's submission,provided only for the application of income to such charitable purposes. The Attorneywas concerned there was no limit on the exercise of that discretion that might ensureapplication of capital did not significantly reduce the capital to the extent the Trustcould no longer operate. The Attorney argued that inclusion of cl 9.4(c) would createa risk of capital exhaustion that would be contrary to the founders' intentions to createa perpetual trust.[30] The Attorney considered the evidence "does not establish any pressing needfor the introduction of this clause" and referred to evidence from the Trustee that theTrust's "income generation is sufficient to meet its charitable needs".[31] For the Trustee, Mr Cowan suggested the ability to use capital for the purposesof the Trust would future-proof the Trust. The evidence from the Trustee is that"although in the Trust's current state it is unlikely that capital would be applied for itscharitable purposes, the Trust considers it prudent to have a provision that allowsaccess to capital if necessary".[32] Mr Cowan stressed, if there is to be any withdrawal and expenditure of capital,it would still have to be for Trust purposes. He suggested the ability to use capitalwould allow the Trust to make one-off sizeable grants if an opportunity arose for sucha grant to be of real benefit for the purposes of the Trust, for instance to fund particularresearch where there might be the opportunity of achieving a major breakthrough withgreater financial assistance from the Trust. The ability to draw on capital could alsobe useful where a reduced return on investments might otherwise inhibit the Trust fromcontinuing with the funding of research in ways the Trust has previously considereddesirable.[33] Mr Cowan also suggested it was not clear the original trust deed allowed onlyincome to be used for Trust purposes. He suggested, in other cases, the High Courthad allowed charitable trusts to draw on capital for trust purposes even though, in suchcases, there might have been a theoretical possibility that the exercise of such a powercould bring the trust to an end.[34] Mr Cowan accepted that a power to wind up the Trust was not essential to theTrustee. He nevertheless submitted inclusion of such a power would avoid the needfor the Trustee to have to come back to the Court for approval if a winding up of theTrust became necessary.[35] I accept that, as a general principle, a charitable trust, once established, cannotbe terminated or wound up as indicated by the Attorney.5[36] As stated in Tudor on Charities, careful thought needs to be given to identifyingthe relevant charitable trust before seeking to apply this principle.6[37] Wilberforce J in Re Roberts recognised an important limitation to the idea ofperpetual existence when, with reference to Re Faraker, he said:7Those words, that it is not competent for the court or the charitycommissioners to bring an endowed charity to an end, seem to me notnecessarily to apply to a case where the trustees of the charity are givenexpress powers to terminate the charity.[38] Likewise, a charity will also terminate if it no longer has funds:8There is thus a distinction between a charity with a permanent endowment anda charity which has power to spend both income and capital. In the latter case,the charity trustees can terminate the charity by applying all its funds for thepurposes set out in the governing instrument.[39] As outlined for the Attorney, there are certain other circumstances in which acharity trust can be wound up but the two just mentioned are of relevance here. In cl9.4 of the proposed deed, the Trustee wishes to include a clause giving the Trustee thepower to spend both capital and income for the purposes of the Trust. They proposeto include cl 19 which introduces a power to wind up the trust.[40] Having carefully considered the terms of the original trust deed, I am satisfiedthis was a charitable trust established in perpetuity. I am also satisfied the originaltrust deed required capital to be held by the Trust for the purposes of the Trust and foronly the income to be spent for the purposes of the Trust.[41] The opening clause of the original trust deed stipulates:5 National Anti-Vivisection Society v Inland Revenue Commissioner, [1948] AC 31 at 74; ReFaraker (1912) 2 Ch 488 (CA).6 William Henderson, Johnathan Fowles and Julian Smith Tudor on Charities (10th ed, Sweet &Maxwell, 2015) at [21.023].7 At [21.024]; Re Roberts [1963] 1 W.L.R. 406.8 Tudor on Charities, above n 6, at [21.025].1. THE Trustees shall hold the sum of $1,000.00 together with all othermonies or property transferred to the trust UPON TRUST for the followingaims and purposes: There is then reference to the aims and purposes of the Trust as previously discussed.9[42] Clause 3 and its subclauses in the original trust deed stipulates that the incomeof the trust shall be dealt with:(a) in payment of the costs of administration and management of the Trust;(b) through the trustee advising the Board as to the remainder of the net annualincome of the Trust;(c) in payment or application of all or part of the remainder of net annualincome as the Board should direct; and(d) through accumulation of any remaining net annual income.[43] Clause 7 of the original trust deed provides for there to be a Board of AdvisoryTrustees and stated:THERE shall be a Board of Advisory Trustees which shall be responsible forthe applications of balance of the net annual income of the Trust in accordancewith the aims and purposes of the Trust.[44] The original trust deed does not contemplate the Board being concerned withthe application of capital from the Trust.[45] It was suggested for the Trustee that the Trustee's power to deal with the trustfund, as set out in the Schedule of Trustees' Powers, is consistent with the Trusteehaving a power to expend capital as well as income. The Schedule of Trustees' Powersincludes:GENERAL UNRESTRICTED POWERTHE INTENTION OF THE SETTLOR is that the trustees have and may intheir discretion exercise the fullest possible powers in relation to the trust fundand the persons who are or may be interested in it, and that they may doeverything they think desirable notwithstanding that it is something which9 At [3] of this judgment.they would not normally have power to do in the absence of an express poweror an order of the Court.THE SETTLOR THEREFORE DECLARES that the trustees may in theirdiscretion do any-thing pertaining to the trust fund which they think fit as ifthey owned it absolutely.[46] These clauses do not vary the terms of the trust as apparent from the body ofthe original trust deed and particularly the clauses earlier referred to. It is apparentfrom the Schedule of Trustees' Powers that the schedule is a document normallyassociated with family trusts and not for a charitable trust, as was established here.The power apparently bestowed on the Trustee the ability to do anything to the trustfund as if it owned it. This was at odds with the intention of the parties to the originaltrust deed to establish a charitable trust with the obligations that the Trustee had todeal with the trust fund for the particular charitable purposes set out in the deed and inaccordance with the Act. The Trust was not established by a "settlor" but by "thefounders". These were six named people who included doctors, research scientistsand lecturers associated with the University of Otago.[47] My interpretation of the original trust deed is also consistent with the way ithas been administered since the Trust was establishment.[48] In 1993, an updated trust deed was adopted by the founders of the Trust andthe NZ Guardian Trust as trustee. As the Attorney noted, there was no power in theoriginal trust deed to amend the original trust deed. The purported amendments werenot put before the court in a scheme for approval under the Act. The purportedamendments were of no legal effect. But, in that amended deed, the trustee was notgiven the power to spend capital and income for the purposes of the Trust. Thatamended deed provided for only the income of the Trust to be dealt with in the sameterms as with the original trust deed. The Board was to be responsible only for theapplication of the balance of net annual income in accordance with the aims andpurposes of the Trust.[49] The amended deed did not purport to bestow on the Trustee a power to windup the Trust. Nevertheless, it did state that, upon the winding up of the Trust, the nettrust fund, after settlement of the affairs of the Trust and payment of debts, was to betransferred "to such one or more Charitable Trusts for charitable purposes whichinclude among their main objectives Cancer Research ". That clause was consistentwith the founders' intentions to establish a trust to operate in perpetuity.[50] One of the original founders, Professor Broughton, swore an affidavit insupport of the current application. He has been a member and chair of the Board since26 November 1985. In his affidavit, he described how the Trust had operated since itsestablishment and the way it has assisted with cancer research, initially in associationwith Dr Goodall, then through Malaghan Institute of Medical Research in Wellingtonand, more recently, through the establishment of a chair in cancer pathology at theDunedin School of Medicine and the funding of a post-doctoral fellowship for a doctorwho has made a significant research contribution in association with the chair in cancerpathology. In his affidavit, Professor Broughton said, "[i]n the very long term, as thecapital base continues to grow, [the Trust] may be able to look at further extendingfunding for cancer research". There was no suggestion in his affidavit that the Boardexpected the Trust would use capital in funding such research. There was no indicationthat the Board had any intention of winding up the Trust.[51] It appears from the evidence that the Trust has benefited from significantlegacies or other gifts which were likely made with the expectation that the Trustwould continue in perpetuity. The capital of the Trust has grown to nearly $9.5 millionas at 30 November 2019.[52] Mr Cowan drew support for the proposed changes from both the High Courtand the Attorney-General's approval of the changes to the scheme of a charitable trustin the case of Re Bartels.10[53] In Re Bartels, a trust, in terms of its trust deed, arguably was required to retainand acquire properties and interests in properties for the purpose of furthering itscharitable objectives. The trustees considered that holding its funds in property wasnot the most efficient way of furthering the trust's purposes. They wished to be ableto sell land and transfer properties to a new trust. The trustees sought the Court'sapproval to change its trust deed, in part to include a general power to distribute10 Re Bartels [2017] NZHC 104, [2017] NZAR 411.capital. In that case, the original trust deed had specific restrictions on the use of thetrust's capital. The High Court accepted there was at least uncertainty as to the abilityof the trustees to make capital distributions to any other charitable trust. The trustsought the Court's approval of a new clause enabling the fund to make donations ordistributions from either income or capital to other organisations in New Zealandwhich were exclusively charitable and which had purposes similar to those of the trust.[54] The Court referred to and accepted evidence that, in the particular way thattrust operated, the retention of property curtailed its ability to operate effectively as aservice provider and likewise exposed its assets to risk. The Court noted that,consistent with the purposes of the trust, it continued to provide residential supportservices. Its intention was that it should be assisted in those objectives by the proposeddistributions. Those distributions included distributions of capital. The Court notedthat the Attorney concurred in that objective. The Court accordingly approved, unders 32, a variation of the trust deed to expressly permit the trust to make donations ordistributions from capital to other organisations in New Zealand which wereexclusively charitable and had similar purposes to those of the trust.[55] In seeking to vary the terms of the Trust to allow both the expenditure of capitaland the winding up of the Trust, the Trustee here is seeking to change the fundamentalbasis on which the Trust was established. I accept the threshold for satisfying theCourt that a change to the terms or conditions of a charitable trust would facilitate theadministration of the trust is not high. Nevertheless, and in contrast to thecircumstances in Re Bartels, there is no evidence that the proposed variations in cl 9.4and cl 19, which the Attorney objects to, would facilitate the carrying out of the Trust.[56] It was apparent from counsel's submissions and the affidavit filed on behalf ofthe Trustee that the Trustee is seeking a variation to permit expenditure of capitaland/or the winding up of the Trust because such flexibility is common withcontemporary charitable trust deeds. The variations would allow the Trustee to applycapital or wind up the Trust without having to seek the approval of the High Court.[57] At this stage, it is entirely speculative as to whether the Trustee would need toexercise the powers it would have if the relevant clauses are included in the proposeddeed. In that way, the situation the Trustee and the Court are concerned with can bedistinguished from the circumstances which justified the changes sought and approvedin Re Bartels.[58] Inclusion of the relevant clauses would potentially pose a risk to the inperpetuity continuance of the Trust. The proposed cl 9.4(c) introduces a generaldiscretion for the Trustee to apply the capital of the Trust to charitable purposes. Asthe Attorney points out, the deed provides for no limitation on that discretion thatmight ensure the application of capital did not significantly reduce the capital to theextent the Trust could no longer operate. Neither the terms of the original Trust northe proposed amendments establish any general obligation on the Trustee to act so asto ensure the ongoing viability of the Trust. The Trust could be wound up or capitalspent in a manner that could risk capital exhaustion.[59] Consistent with the Attorney's objections, I am accordingly not satisfied thatthe proposed cl 9.4, with its reference to the Trustee having a power to wind up theTrust and the power of the Trustee to apply the capital of the Trust to the charitablepurpose of the Trust, are needed to facilitate the carrying out of the Trust for its statedcharitable purposes.[60] I am also not satisfied that a variation to the trust deed, so as to permit theTrustee to wind up the Trust, is needed to facilitate the carrying out of the Trust for itsstated charitable purposes.[61] I accordingly decline approval of cls 9.4 and 19.1 as they are in the proposeddeed.Power to amend the trust deed[62] The Trustee also seeks to obtain the Court's approval to clauses that wouldallow the Trustee to amend any provisions of the deed. This power is set out in part17 of the proposed new deed:17. Alterations and additions17.1 The Trustee may resolve to amend any provisions of this Deed. Thisclause is subject to clause 17.2.17.2 No amendment may be made to the Trust Deed in any respect whichwould have the effect of causing the Trust to cease to be a charitabletrust or to amend the Purposes.17.3 Notwithstanding anything set out in clauses 17.1 or 17.2 the Trusteeshall amend this Deed to comply with the Tax Act and the Charities Act.[63] The evidence from the Trustee acknowledged the current deed contains nopower of variation but said:Today, charitable trust deeds will typically contain such a power, subjectalways to ensuring that no variation is permitted which would be in breach ofany law or which would cause the trust to cease to qualify as a charity.[64] The Attorney objects to the proposed cl 17 on the basis it fails to limit thepower to ensure it is not used to vary the deed to allow the application of the Trust'scapital for charitable purposes. The Attorney advised that, if the Court does notapprove a variation to the Trust that would permit the Trust to use capital, then thereshould also be a consequent amendment to the proposed cl 17.2 to ensure noamendments are made that could subsequently bring about a change which the Courthas refused.[65] Mr Cowan submitted, with a prohibition against any amendment which couldcause the Trust to cease to be a charitable trust or any amendment that could amendthe purposes of the Trust, the power to amend could apply only to changes that mightbe made as to administrative matters.[66] I do not however accept that such a limitation would be inherent in theproposed new cl 17. Were the Trustee to amend the trust deed to permit the Trustee toapply capital or income from the Trust for the purposes of the Trust or to provide forthe Trustee to have the power to wind up the Trust, the inclusion of such powers wouldnot, of themselves, have the effect of causing the Trust to cease to be a charitable trust.Only the exercise of such powers would have such an effect. I agree with theAttorney's objection to this clause as drafted.[67] I observe that, in other cases where the High Court has approved the inclusionof a clause providing a power to amend the trust deed, the Court has noted that theclause had the approval of the Attorney-General, was limited to the administration ofthe Trust and included important mechanisms for the protection of the Trust.11[68] Given the Attorney's objection and the Court's decision not to approve theproposed change as to the ability to expend capital or wind up the Trust, cl 17 shouldbe amended. The power to amend should be limited in such a way as to ensure therewill be no change to the trust deed which could allow the Trust to be administered ormanaged in a way that would jeopardise the ongoing viability of the Trust.The end result[69] It will be apparent from all the above that the Court is not able to approve thewhole of the proposed deed as sought by the Trustee.[70] I accept however it is foreseeable that, in certain particular circumstances thatmight arise, either through a reduction in the income available to the Trust or becausea particular avenue of cancer research might require funds in excess of the incomeavailable, the purposes of the Trust might well be promoted through the Trustee beingable to make capital available to meet such expenses.[71] The capital in the Trust has grown significantly through regular bequests,legacies and donations. That is apparent from the accounts for the Trust which werein evidence. Its income is, in comparison, relatively modest. Its annual expenditurefrom income ranged from $129,000 to $242,000 in the years ending 30 November2009 to 30 November 2019.[72] It would also facilitate the carrying on of the Trust if the Trustee could usecapital to a limited extent, that would not prejudice the ongoing viability of the Trust,without having to seek approval of the Court. In the report, the Attorney suggestedthe risks of capital exhaustion might be obviated if the proposed clause was to includereasonable limits on the Trustees' ability to draw on capital. The Attorney suggested11 Re Bartels, above n 10; Re Brooks [2015] NZHC 950; Re Neil Barn Farm Forestry Foundation[2014] NZHC 2324; Royston Hospital Trust Board v Attorney-General [2015] NZHC 1753.that, if the proposed cl 9.4(c) were to be amended so as to provide that any drawing ofcapital should only be up to a certain percentage of the capital in a particular year, orthat capital drawn upon was not to reduce the remaining capital below a certainamount, such a clause might be sufficient to safeguard the ongoing viability of theTrust.[73] The Attorney advised that such possible amendments had been discussed withthe Trust's legal advisors but were not acceptable. As has happened, the Trust soughtthe Court's approval of the proposed clauses without any such safeguards. With theCourt not approving cl 9.4 as drafted, the Trustee might well wish to reconsider itsposition regarding both cl 9 and cl 17.[74] I accordingly reserve leave for the Trustee to come back to the Court with anapplication for approval of amended clauses that might meet the concerns of theAttorney and the Court as referred to in this judgment. Any such application is to befiled no later than 5 October 2020.[75] In the meantime, and by consent, I order that the Trustee is to pay to theAttorney the sum of $750 for costs incurred in connection with these proceedings tothis date.Solicitors:Anderson Lloyd, DunedinCrown Law.