The late Cyril David Cork spent his entire and lengthy life in Dorrigo, New South Wales. He never married and, as far as is known, had no children. On his death in November 2007, he left his estate to be applied to a discretionary trust for the benefit of the people and community organisations of the Dorrigo area. That trust, which he named in honour of his late parents, is the George and Annie Cork Memorial Trust (the Trust). The terms of the Trust are set out in schedules to Mr Cork's will made on 29 October 2007 and which was admitted to probate by this Court on 17 April 2008 (the Will).
The Trust has already been the subject of detailed judicial consideration. In Wright v Stevens [2018] NSWSC 548, Hallen J answered a number of questions in relation to the administration of the Trust. These included expressing the conclusion, with which I respectfully agree, that the Trust is not a charitable trust, but is in law a private discretionary trust. These reasons should be read in conjunction with his Honour's decision, which provides a great deal of background to, and analysis of, the terms of the Trust which it is unnecessary for me to repeat in this judgment.
It is plain from the evidence that the Trust has already been of great benefit to the people of the Dorrigo area. The current trustee (who was not the trustee at the time of the litigation before Hallen J) is the plaintiff in these proceedings, Ms Nikki Gibson, a solicitor practising in Dorrigo. It is also obvious from the material before me that she has devoted a great deal of time and effort to the proper and transparent administration of the affairs of the Trust, to ensure that it is applied for the maximum benefit of the Dorrigo community which the late Mr Cork wished to make the object of his bounty.
These proceedings reflect an entirely understandable desire on the part of Ms Gibson in the exercise of her duties as trustee to put the affairs of the Trust on a more permanent and clearly charitable basis by transferring its assets to the defendant, G & A Memorial Company Ltd. The defendant is a company limited by guarantee which has been established expressly for that purpose. Its objects are directed to achieving the same end as the Trust. It is registered as a charity with the Australian Charities and Not-for-profits Commission and has on its board representatives of various Dorrigo community organisations. The intention is to ensure that the benefit of the Trust continues to inure in accordance with Mr Cork's wishes but administered by a perpetual entity under the control of citizens of the Dorrigo area. The defendant has entered a submitting appearance in relation to all orders sought and the giving or entry of judgment in respect of all claims made.
Gibson v G & A Cork Memorial Company Ltd [2021] NSWSC 945 | Case summary | Zoe
These proceedings have been brought by summons seeking this relief:
"Appointment and payment of the Defendant as 'Beneficiary' of the George and Annie Cork Memorial Trust
1 Declaration that upon the proper construction of clause 1.3 of the First Schedule and Item 2 of the Second Schedule of the will of the late Cyril David Cork ('the Deceased') dated 29 October 2007 and admitted to probate by the Supreme Court of New South Wales on 17 April 2008 ('Will'), Nikki Stuart Gibson ('the Plaintiff') in her capacity as trustee of the George and Annie Cork Memorial Trust ('Trust') has the power to appoint in writing G & A Memorial Company Ltd (A.C.N. 632 033 311)('the Defendant') as a 'Beneficiary' of the Trust ('the Appointment').
2 Declaration that after the Appointment contemplated in Prayer 1, the Defendant is an object of:
(a) the power to appoint income of the Trust as provided for in clause 2 of the First Schedule of the Will;
(b) the power to appoint the Trust Fund of the Trust prior to the 'vesting date' as provided for in clause 4.3 of the First Schedule of the Will;
(c) the power to appoint capital of the Trust at the 'vesting date' as provided for in clause 4.1 of the First Schedule of the Will.
3 Declaration that after the appointment of the Trust Fund (including income and capital of the Trust) contemplated in Prayer 2, and before the date being the last day within 70 years from the date of death of the Deceased (being 5 November 2077), the Plaintiff may appoint the 'vesting date' pursuant to clause 1.2.2 of the First Schedule of the Will.
Taking and passing of accounts of the Trust
4 Order that the Court take and pass the accounts in common form with respect to the Trust in relation to the receipts and expenditure of the Trustee since the appointment of the Trustee as trustee of the Trust on 29 June 2018 as provided for in:
(a) the affidavit of Nikki Stuart Gibson sworn on 23 February 2021; and
(b) the exhibit to the Affidavit marked 'NSG-2'.
5 Order that the usual requirement for vouching of the accounts be dispensed with.
6 Order that the Plaintiff be discharged after:
(a) the matters in prayers 1 to 3 happening; and
(b) the passing of the accounts of the Trust pursuant to Order 4.
Other orders
7 Order that the costs of the Plaintiff be paid from the income and / or capital of the Trust on the indemnity basis."
While the approach taken by the summons is entirely understandable, it is, with respect, misconceived. That is not to be critical of anyone. Having reviewed the very helpful submissions prepared by Mr D Barlin of Counsel, who appeared for the plaintiff, the Court has come to the view that the appropriate way to proceed is by providing Ms Gibson with judicial advice under s 63 of the Trustee Act 1925 (NSW) (the Act). The plaintiff is clearly entitled to that advice because the issues raised by the summons are classic examples of questions "respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument" (s 63 of the Act).
Insofar as the matters of construction raised by the first three prayers in the summons are concerned, there is no doubt that the defendant (whose registered office and proposed activities are in the Dorrigo area) qualifies to be appointed by the trustee of the Trust as a beneficiary as defined in the Second Schedule in the Will, which includes "companies or charities, residing in or otherwise carrying on business in Dorrigo". The subsequent steps which the Court proposes to advise Ms Gibson that she is justified in taking are all matters which are properly available to her in accordance with the Will upon the appointment of the defendant as a beneficiary of the Trust. However, as I indicated to Mr Barlin during the course of argument, it is not appropriate in the absence of a contradictor or any real dispute for the Court to make declarations of the kind sought in the summons.
Similarly, in relation to the application for the taking and passing of accounts in the balance of the summons, in my respectful opinion that is something that should not be done unless and until the defendant (who will in effect become the sole beneficiary of the Trust) has had an opportunity to receive the accounts of the Trust from Ms Gibson and to give her a discharge in respect of those accounts. Provided they are in order, she would be entitled to such a discharge as a matter of law: In the matter of Austec Wagga Wagga Pty Ltd (in liq) [2018] NSWSC 1476 at [29] per Brereton JA (sitting in the Corporations List).
While on the authorities Ms Gibson may not be legally entitled to a release and indemnity under seal from the defendant, there is no reason why she should not also ask the defendant for that: see J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths) at [21-29]. In making that observation I am not to be taken as suggesting that the defendant must accede to any such request. That will be a matter for the defendant.
If for some reason Ms Gibson is unable to obtain a discharge from the defendant, the orders that I will make will give her liberty to apply to have the Court take and pass the accounts of the Trust. That process would not be the taking of accounts under the Probate and Administration Act 1898 (NSW) and Pt 78 Div 11 of the Supreme Court Rules 1970 (NSW) because they are not accounts of the estate of the late Mr Cork. It would be an application for the taking and passing of accounts in the general equitable jurisdiction of the Court. Were that to be required, and subject to any further submissions at the time, my preliminary view is that would best be done by the Court referring out an examination of the accounts to an independent accountant to determine the question of whether they present a true and fair view of the financial affairs of the Trust and its final balance.
For these reasons, the Court makes these directions and orders:
1. Direct that the affidavit of Nikki Stuart Gibson sworn 23 February 2021 (the Affidavit) stand as the statement under s 63 of the Trustee Act 1925 (NSW) (the Act).
2. Order pursuant to s 63 of the Act that the Plaintiff as trustee of the George and Annie Cork Memorial Trust (the Trust) is justified in taking the steps set out in Annexure A.
3. Direct that the Plaintiff shall, pursuant to s 63(8) of the Act, give notice of these orders and her intention to act in accordance with them to the beneficiaries set out in Annexure B and to the Dorrigo community by advertisement in the Don Dorrigo Gazette specifying that each such beneficiary or any interested person may, within 21 days of receipt or publication of the notice, apply to the Court for such order or directions as the circumstances may require.
4. Grant liberty to the Plaintiff to apply on 7 days' notice by email to the Associate to Kunc J in relation to any application for the taking and passing of accounts or the implementation of any of the steps set out in Annexure A.
5. Order that the costs of the Plaintiff be paid from the income or capital of the Trust on the indemnity basis.
Annexure A
1. Pursuant to Item 2 of the Second Schedule of the Trust Instrument, appoint in writing the Defendant as a Beneficiary.
2. Pursuant to cl 2.1 of the Trust Instrument, pay and apply all of the income of the Trust Fund (if any) to the Defendant as a Beneficiary.
3. Pursuant to cl 4.1 of the Trust Instrument and before the Vesting Date, irrevocably appoint the Defendant as Beneficiary as to the whole of the Trust Fund for whose absolute benefit the Trustee shall hold the Trust Fund upon trust.
4. Determine a Vesting Date pursuant to cl 1.2.2 of the Trust Instrument.
5. Pay the Trust Fund to the Defendant as Beneficiary upon the Vesting Date determined pursuant to cl 1.2.2 of the Trust Instrument, but retaining $200,000 in respect of the matters referred to in [61] of the Affidavit.
6. Present final accounts for the Trust to the Defendant as Beneficiary for the purpose of obtaining a discharge.
In this annexure:
(a) "Trust Instrument" means the First Schedule and the Second Schedule to the Will of the late Cyril David Cork made on 29 October 2007; and
(b) Capitalised terms have the meaning ascribed to them in the Trust Instrument.
Annexure B
a. Dorrigo Cricket Club;
b. Dorrigo Swim Club Inc;
c. Dorrigo Memorial RSL & Golf Club;
d. Rotary Club of Dorrigo;
e. Dorrigo Showground and Public Recreation Reserve Trust;
f. Dorrigo Youth Clinic;
g. Dorrigo Men's Shed;
h. Dorrigo Recreation Ground Committee;
i. The Arts Council of The Dorrigo;
j. Don Dorrigo & Guy Fawkes Historical Society Museum;
k. Dorrigo Chamber of Commerce;
l. Girl Guides Association - Dorrigo District;
m. Dorrigo & Guy Fawkes Agricultural Society.
[2]
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Decision last updated: 30 July 2021