UNIVERSITY OF OTAGO V THE TRUSTEES OF THE UNIVERSITY OF OTAGO FOUNDATION TRUST HC DUN CIV 2008-412-000604

UNIVERSITY OF OTAGO V THE TRUSTEES OF THE UNIVERSITY OF OTAGO FOUNDATION TRUST HC DUN CIV 2008-412-000604 5 September 2008IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY CIV 2008-412-000604BETWEEN UNIVERSITY OF OTAGO Applicant AND THE TRUSTEES OF THE UNIVERSITY OF OTAGO FOUNDATION TRUST Respondent Hearing: 4 September 2008 Counsel: R J Sim for Applicant Judgment: 5 September 2008JUDGMENT OF FOGARTY J[1] This is an application that the Court approve a variation to the mode of administration of numerous specific trusts held by the Council of the University as trustee. The proposal is that the assets of each of these trusts be transferred to the trustees of the University of Otago Foundation Trust, a charitable trust established by deed. [2] All references to the University as trustee of each of the funds will be read hereafter as a reference to the trustees of the Foundation Trust. However, the purposes for which the funds are previously held will remain the same. [3] The University has been running a common pool of investments and that will continue. The administrative provisions of the deed of the trust to the Foundation Trust will apply except to the extent that those provisions are inconsistent with any express requirement which may apply in respect of a particular fund. For example, if a donor wishes to limit the investment of the funds donated to a class or according toa set of criteria, distinct from the investment criteria of the common pool, then that specific funds investment requirement will prevail. [4] For that reason clauses 7.3 and 8.2 of the Foundation Deed are very important limitations on the Trust's powers. In approving this application this Court is assuming that the trustees for the time being of the Foundation Trust will put in place measures to ensure that the terms of all donations will be scrutinised from the outset to see if the manner of holding, investing and allocating the property or profits from investments of the property donated are subject to any reservations, trusts, liabilities or obligations or special purposes or directions. Second, that having identified those that there be a process of scrutiny to ensure that those limitations are given effect at all times. [5] I have been aided in approving this application by the affidavit of Mr Patrick, the Chief Operating Officer and the Chief Financial Officer of the University, and by the report of Ms C R Gwyn, Deputy Solicitor-General, dated 18 June 2008. That report expresses the Solicitor-General's satisfaction that the scheme is a proper one and can be approved by this Court under Part 3 of the Charitable Trusts Act 1957. [6] I have examined the draft order and approved the same. Costs of $5000 and disbursements in favour of the Crown are awarded.Solicitors: Crown Law, Wellington Gallaway Cook Allan, Dunedin