TRUSTEES EXECUTORS LIMITED HC INV CIV-2011-425-000031

TRUSTEES EXECUTORS LIMITED HC INV CIV-2011-425-000031 6 April 2011IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYCIV-2011-425-000031UNDER the Charitable Trusts Act 1957IN THE MATTER OF a charitable trust created by the Will ofCATHERINE BEEHANBETWEEN TRUSTEES EXECUTORS LIMITEDApplicantHearing: 5 April 2011Counsel: J C D Guest for ApplicantJudgment: 6 April 2011JUDGMENT OF LANG JThis judgment was delivered by me on Wednesday, 6 April 2011 at 3pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:J C D Guest, Downie Strewart, DX YP80013, Dunedin. Email: jim.guest@downiestewart.co.nz[1] Catherine Beehan died on 29 May 1971, leaving a last Will dated 29 August 1967. Under that Will, Ms Beehan directed that her trustee was to divide herresiduary estate into halves, with one half thereafter to be held under a trust to beknown as the Patricia Beehan Memorial Scholarship Fund.[2] The income from the fund was to be paid annually to the principal of StCatherine's Convent in Invercargill. The principal of the convent was to use thosefunds to provide scholarships for pupils attending the convent, or to assist the furthereducation (musical or otherwise) of any past pupil of the convent. One half of theannual income of the fund was to be utilised to provide a musical scholarship orscholarships, and the other half was to be used for a general scholarship orscholarships.[3] The applicant, Trustees Executors Ltd, is the trustee charged withadministering the trust created by the Will. It has now encountered a problem inadministering the trust, because St Catherine's Convent ceased to exist in 1982. Itmerged at that time with Marist College in Invercargill to form a new school calledVerdon College. As a result, any pupils who would previously have attended StCatherine's Convent are now likely to attend Verdon College.[4] For that reason, the trustee has applied for an order approving a schemevarying the trust. It proposes that the funds will henceforth be payable annually tothe principal of Verdon College. The principal of that college will be required to usethose funds to provide scholarships for pupils attending the college, or to assist thefurther education of pupils and/or past pupils. It is proposed that one half of theannual income of the fund will be used for a musical scholarship or scholarships, andthat the balance will be used to provide a general scholarship or scholarships.[5] The application has been advertised and there is no opposition to it. TheAttorney-General has also filed a report in which he favours the Court approving theproposed variation.[6] Section 32 of the Charitable Trusts Act 1957 provides that, where a charitablepurpose has become impossible, impracticable or inexpedient to carry out, the trustfunds are to be disposed of for some other charitable purpose. As the Attorney- General points out, in exercising the power to vary a trust under s 32 the Court is exercising a statutory discretion. The following factors are, however, likely to inform the manner in which the Court will exercise its discretion:(a) The application must come within the statutory jurisdiction (whichincludes the requirement that the purposes were charitable at the dateof settlement);(b) The substituted arrangements must be charitable as that term isunderstood in law;(c) In deciding whether to approve the substituted arrangements the newscheme should accord as closely as reasonably possible in thechanged circumstances to the terms of the original trust;(d) The Court will dispose of the property in such a way as will best servethe interests of those intended to be its beneficiaries and the public.1[7] Like the Attorney-General, I am satisfied that the above criteria are satisfied.The proposal accords so far as possible with the testator's intention at the time thatshe executed her Will. Although the funds will be applied for the benefit of pupilsand past pupils of a different institution, it is likely that those persons would haveattended St Catherine's Convent if it had remained in existence. The funds will alsobe applied for exactly the same purposes as those specified in the Will.[8] In those circumstances, and in the absence of any opposition, I approve theproposed scheme and make orders in terms of the draft orders filed by counsel forthe applicant...Lang J1 Re Tennant [1996] 2 NZLR 633 at 636.