In the case of a charitable trust, the focus, of course, must be on whether the objectives of the trust are opposed to the continuation of the trustee, since a charitable trust has no beneficiaries.
34 Although the legislative test and the test identified by Dixon J appear to be expressed in different terms, the difference is more apparent than real. The question of what is expedient cannot be answered in the abstract. It must be answered having regard to the particular objects that are sought to be achieved by the exercise of power. In the case of s 70, those objects are the objects referred to by Dixon J: see Re The Estate of Roberts (1983) 20 NTR 13 at 17 per O'Leary J; Porteous v Rinehardt (1998) 19 WAR 495 at 507 per White J. There is no practical differences between what is expedient to attain those objectives and what the court should, in the exercise of its inherent power, do to attain them.
35 In my opinion, Challenge Foundation should be replaced by Achieve as the trustee. That is so whether the power is exercised under s 70 of the Trustee Act 1925 or in the exercise of the Court's inherent jurisdiction. I say that for two broad reasons.
36 First, in my opinion, it would be conducive to the efficient administration of the trusts if Achieve were the trustee. It appears from the evidence that Challenge Foundation itself has not considered how it would administer the trusts. However, Mr McDonald, who is chairman of Challenge Foundation, gave evidence that what he would expect is for the Crowle Home to prepare an application to Challenge Foundation for the expenditure of any money the subject of the trusts. That application would be supported by relevant information and would be considered by the Board of Challenge Foundation at one of its meetings. The likelihood is that a similar application would be made by the management of the Crowle Home to the Board of Achieve as the owner of the Crowle Home.
37 Mr McDonald did not explain what he would expect to happen if the Board of Challenge Foundation disagreed with a particular proposal. Presumably, however, it would be necessary for the two organisations to meet so that Challenge Foundation could explain its objections with a view to reaching an agreement on whether the proposed expenditures should be made and what modifications to any proposal might be acceptable to Challenge Foundation. In my opinion, this approach is likely to lead to considerable overlap and delay. It is also likely to place an administrative burden on those responsible for operating Crowle Home in circumstances where they would be better off directing their time and resources to the activities of the Home and the welfare of its residents.
38 The approach that would need to be followed if Challenge Foundation were to remain as the trustee appears to be particularly inappropriate where only small sums of money are sought by Crowle Home. The inefficiencies that the approach involves might be justified where large sums of money are involved or where Challenge Foundation has particular expertise or where it is clear that that is what the testatrix intended. However, none of those factors is present in this case. Although the bequest is a substantial one, I do not think it is so large that an additional layer of bureaucracy is justified to ensure that the money is properly applied. The Board of Challenge Foundation has no particular expertise in evaluating how best the money should be spent. Indeed, given the lack of contact between the Crowle Home and Challenge Foundation since 1993, Challenge Foundation is likely to have very limited knowledge of the current needs of Crowle Home. It is true that the testatrix appointed Challenge Foundation as the trustee. However, she did that at a time when Challenge Foundation was the legal entity that owned the relevant assets and the legal entity that had the closest connection to the activities of Crowle Home. She could not have known at the time that she made her will that things would change in the way that they have.
39 Secondly, if Challenge Foundation were to remain as the trustee, I think there is a significant risk of conflicts in the future. Those potential conflicts are of two main types. First, there appears to be a significant degree of friction between the management of Crowle Home and Challenge Foundation. That friction has arisen as a consequence of the litigation and the differences of opinion in relation to Lacey House. It is likely to have its genesis in the fact that a number of the current directors of Challenge Foundation were opposed to the devolution of its branches. At best, that friction is likely to affect the efficient administration of the trust. At worst, it may lead to serious disagreements that may result in further litigation and a consequent diminution of the trust assets. The second source of potential conflict arises from the possibility, albeit small, that some time in the foreseeable future Crowle Home will cease to exist. In that case, it seems likely that the gift would revert to Challenge Foundation. That possibility may affect Challenge Foundation's attitude to the administration of the trust. It may be reluctant to agree to the expenditure of money in the hope that, some time in the future, that money will become available for its own purposes. The conflict in this case is not between the management of the two organisations but between Challenge Foundation's duties as trustee and its own interests.
40 Mr Hallen SC, who appeared for Challenge Foundation, submitted that it was premature to replace Challenge Foundation as trustee for these reasons. They may or may not come to fruition and, until they do, no change should be made. In my opinion, this submission has considerable force where there is some good reason for Challenge Foundation to remain as trustee or where the testatrix was conscious of the potential for conflict but nonetheless appointed it as the trustee: see Monty Financial Services Ltd v Delmo [1996] 1 VR 65 at 83. But, in my opinion, neither of those considerations apply in this case. The only reason Mr McDonald could give for Challenge Foundation remaining as trustee was the possibility that part of the gift may eventually revert to it. However, in my view, that possibility is remote - as Mr McDonald conceded. In view of that, I do not think that any weight should be placed on it. Nor do I think that any real weight should be placed on the fact that the testatrix chose Challenge Foundation. As I have said, she did so in circumstances that are far different from those that now prevail.
41 There was some suggestion during submissions, although it was not seriously pursued, that the court may not have power to replace a trustee when, as in this case, the trust property has not actually vested in the trustee. There appears to be no authority directly on point. Halsbury's Laws of Australia para [430-3360], relying on Re Boyce (1864) 4 De GJ & Sm 205; 46 ER 896, suggests that the power exists in the case of the statutory jurisdiction. Re Boyce did concern a contingent gift to a trustee, which vested on the death or remarriage of the testator's wife. However, in that case the application brought under s 32 of the Trustee Act 1850 (UK) to replace the trustee appointed by the testator (who had become of unsound mind) was not brought until after the testator's wife had died. By that time, the property must already have vested. Nonetheless, in my opinion, where, as here, the trust has clearly been established and it is simply an administrative matter to transfer the trust assets, there is nothing to prevent the court from replacing a nominated trustee either in the exercise of its powers under s 70 of the Trustee Act 1925 or as part of the court's inherent power to see that trusts are properly executed. The trust has been established and the trustee has been appointed. It is those events which attract the operation of s 70 or of the inherent power of the court, not the vesting of the property. In some cases, it may be clear that no property will ever vest. In those, there may be no utility in appointing a new trustee and, for that reason, the court may, in the exercise of its discretion, decline to appoint a new trustee. But that is not this case.
42 In my opinion, the appropriate replacement for Challenge Foundation is Achieve, since it is now the entity that owns and operates the Crowle Home. Ms Bryce, who is the Chief Executive Officer of both Achieve and Crowle, gave evidence of how Achieve would apply the bequests. She said that they would be used to address needs arising from a lack of staff, building maintenance and access concerns, the aging of persons accessing the services of the Home, the shortage of funding from government authorities and the setting up of a respite program. Ms Bryce was cross-examined by Ms Sharp, who appeared for the Attorney-General, to determine whether those purposes related to the activities of the Crowle Home. Ms Bryce's responses suggested that they may not all do so. However, I do not think that this is a reason not to appoint Achieve as the trustee. There is no reason to suppose that the Board of Achieve (or Ms Bryce, for that matter) will not use the bequests for the "activities of the Crowle Home" as that expression has been explained in this judgment.