NSW MASONIC YOUTH PROPERTY TRUST & ANOR v HER MAJESTY'S ATTORNEY-GENERAL IN AND FOR THE STATE OF NSW & ANOR - [2009] NSWSC 1301 - NSWSC 2009 case summary — Zoe

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NSW MASONIC YOUTH PROPERTY TRUST & ANOR v HER MAJESTY'S ATTORNEY-GENERAL IN AND FOR THE STATE OF NSW & ANOR

[2009] NSWSC 1301

Supreme Court of NSW|2009-04-27|Before: Hall J

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Supreme Court of NSW

Decision date

2009-04-27

Before

Hall J

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Judgment (81 paragraphs)

[1]

CITATION : NSW MASONIC YOUTH PROPERTY TRUST & ANOR v HER MAJESTY'S ATTORNEY-GENERAL IN AND FOR THE STATE OF NSW & ANOR [2009] NSWSC 1301

[2]

I make declarations and orders in the following terms:- (1) In relation to the following questions in paragraph 1 of the Second Amended Summons, namely:- (a) Whether in the events which have happened, the plaintiffs hold the property constituting the Fund known as the "Masonic Youth Welfare Fund of NSW & ACT" on trust for charitable purposes? (b) If the answer to (a) is in the affirmative, what are the said charitable purposes? The answers, by way of declaration, are as follows:- (a) The answer to question 1(a) is "yes". (b) In answer to question 1(b), "the charitable purposes are for the relief of poverty". DECISION : (2) A declaration that it is not practicable to apply the income, including the accrued surplus income, of the Masonic Youth Welfare Fund of NSW & ACT for the charitable purposes thereof as determined in these proceedings. (3) That the proceedings be stood over for hearing on a date or dates to be fixed for the determination of the relief sought in paragraph 3 of the Second Amended Summons, being orders for the settling of a scheme for the execution of the Masonic Youth Welfare Fund of NSW & ACT cy pres. (4) A declaration that the plaintiffs have been validly appointed as the trustees of the Edith Boyd Memorial Trust Fund. I make the following directions:- (1) The parties to produce a case management timetable in respect of the proceedings in relation to the order sought in paragraph 3 of the Second Amended Summons. (2) That the Notice of Motion filed on behalf of the plaintiffs on 21 April 2009 be stood over to 9.30 am on Thursday 10 December 2009. (3) The proceedings to be stood over for directions to 9.30 am on Thursday 10 December 2009 in relation to proceedings referred to in [224(3)] above. I will hear any submissions in relation to the order sought in paragraph 4 of the Second Amended Summons in relation to costs. In the event that the parties agree upon the appropriate order in that respect, then the costs order is to be incorporated within the short minutes of order to be prepared by the parties. Liberty to any party to apply.

[12]

(1) INTRODUCTION 1 The present proceedings were commenced by summons filed on 15 November 2007. The proceedings were brought with the leave of the Attorney General given pursuant to s.6 of the Charitable Trust Act 1993. An amended summons was filed on 14 January 2008. 2 The proceedings are brought by the New South Wales Masonic Youth Property Trust (first plaintiff) and the New South Wales Masonic Welfare Property Trust (second plaintiff). 3 The first and second plaintiffs are the corporate trustees of the Masonic Youth Welfare Fund of New South Wales and Australian Capital Territory (the "Welfare Fund"). The companies were limited by guarantee and were appointed following Judicial Advice given on 27 August 1971. 4 The corporate trustees are also trustees of the Edith Boyd Memorial Trust Fund ("Edith Boyd Fund") which was established in about 1942 to 1944. 5 The Attorney General in and for the State of New South Wales was joined in the proceedings as first defendant representing all charitable interests. The second defendant, Mr Robert French, was joined pursuant to the provisions of Part 7 Rule 6 of the UCPR to represent all those who might take part of the corpus or income of the Welfare Fund, if the Court were to find that no trust existed. 6 In the amended summons, the plaintiffs claim for relief was in the following terms:- "1. A declaration or declarations answering the following questions:- (a) Whether, in the events which have happened, the plaintiffs hold the property constituting the fund known as the 'Masonic Youth Welfare Fund of NSW and ACT' on trust for charitable purposes? (b) If the answer to (a) is in the affirmative, what are the said charitable purposes? 2. If the answer to 1(a) is in the affirmative, but the charitable purposes declared in answer to 1(b) are incapable of being executed, a declaration that the said trusts should be executed cy-pres. 3. Orders for the settling of a scheme for the execution of the said trusts cy-pres. 4. An order making provision for the costs of the proceedings. 5. Such further or other declarations, orders and directions as to the Court may seem fit." 7 The summons was supported by the affidavits of Alan Charles Pretyman sworn 15 November 2007, 3 July 2008, 12 August 2008 and 13 August 2008. Mr Pretyman has been a Director of each of the plaintiffs since about 10 September 2001. The plaintiffs also relied upon the affidavits of Claire Anna Derby sworn 3 July 2008 and of Damien Gregory Ward sworn on 27 November 2008. 8 In the event that question 1(a) in the amended summons is answered in the affirmative but that the charitable purposes declared in answer to question 1(b) are now incapable of being executed, then the plaintiff seeks an order for the settling of a scheme for the Fund to be applied cy pres. 9 The parties to the present proceedings accepted that the question of whether a cy pres scheme should be ordered (and, if so, on what terms), is a matter to be deferred until determination of the issues upon which declaratory relief is sought under paragraph 1 of the amended summons. 10 If, on the other hand, the trust fails as a trust for non-charitable purposes, no occasion, of course, would then arise for consideration of a cy pres scheme. In such an event, the question would arise as to whether the trust property is to be taken as held on a resulting trust for the donors or, alternatively, as a gift for the members of the Fund: Radmanovich v Nedeljkovic (2001) 52 NSWLR 641 at 661 per Young CJ in Eq (as his Honour then was).

[13]

(2) THE SEPARATE QUESTION CONCERNING THE TRUSTEES ON AND FROM 28 MARCH 1923 11 In the course of submissions made on behalf of the Attorney General, a question was raised as to who were the trustees under the trust (the NSW Masonic Schools Welfare Fund) established in 1923. On 27 August 2008, the following order was made by consent:- "Orders that the following separate question be decided in the proceedings on a date to be fixed:- On the assumption that a valid trust was created by the resolution passed at a meeting of the members of the NSW Masonic Schools Welfare Fund held on 28 March 1923, and that the trust has continued to exist, were the trustees of the trust on and from 28 March 1923:- (a) The members from time to time of the Fund?; or (b) The members from time to time of the executive of the Fund?" 12 On 1 October 2008, the third and fourth defendants were joined as parties to the proceedings for the purpose of arguing the separate question. 13 Mr Raymond Brooke, who was a member of the Fund, was joined as the third defendant to contend that past and present members of the Fund are not, and never have been, the trustees of the Fund. 14 Mr Oliver Bergstrom, the fourth defendant, was also joined to argue that past and present members of the executive of the Fund are not, and never have been, the trustees of the assets of the Fund but that the members of the Fund were the original trustees. 15 In a judgment given on 24 March 2009, I concluded that the question posed by way of the separate question was to be answered in terms of sub-paragraph (b) of the question raised, that is to say, that the members from time to time of the Executive of the Fund were the trustees of the Trust on and from 28 March 1923, which, for the purpose of the question, was assumed to have been a valid trust. 16 It is sufficient at this point to record that, at some time prior to 28 March 1923 a proposal was made to establish a Fund to be known as the "NSW Masonic Schools Welfare Fund" to be administered by a body charged with applying the Fund to specified objects concerning the children of the Masonic Schools of NSW. A "Committee", being a body comprising representatives of each Lodge in New South Wales, was convened at the Masonic Hall in Castlereagh Street, Sydney. 17 At the meeting of 28 March 1923, the representatives, as members of the proposed Fund and an unincorporated association with an identity which was distinct from the New South Wales Lodge of Masons, resolved to form the Welfare Fund in accordance with the proposal. The objects of the "Committee" (the Welfare Fund) set out in the minutes of the General Meeting are central to the issues raised in respect of the declaratory relief sought in paragraph 1 of the amended summons. The objects of the Fund are reproduced in paragraph [61] and are discussed later in this judgment. 18 Whilst the available documents do not disclose what funds, if any, were settled on the Welfare Fund at the time of its formation on 28 March 1923, the evidence permits an inference to be drawn that funds were settled on the Fund soon after its establishment and at a time when it was governed by the constitution recorded in the minutes of the meeting of 28 March 1923. 19 A number of purported amendments to the constitution of the Fund occurred over time. The first of the purported amendments occurred on 20 December 1926 and the last on 8 December 1997. The history of events concerning them will be discussed in detail below. 20 That history, as also discussed later in this judgment, includes the appointment of the plaintiffs as corporate trustees. 21 Mr Pretyman has been Treasurer of the Welfare Fund since about September 2005. His duties and responsibilities include his role as Chairperson of the Finance Sub-Committee and the oversight of the management of the Welfare Fund's financial assets. 22 His evidence established that from about 27 November 1972, all property of the Welfare Fund, including any bank accounts, has been directly or indirectly held by the two corporate trustees since their appointment. Following appointment, they then took over the day to day operation of the Trust purportedly as the successors to the individual personal trustees under a Deed executed on 14 January 1927. The net assets of the Welfare Fund, as at June 2008, amounted to $10,844,000. The bank accounts are held in the name of the "Masonic Youth Welfare Fund of NSW & ACT" and are controlled and operated by the Corporate Trustees. 23 A question has arisen in the proceedings as to whether the five trustees appointed under the 1927 Deed were validly appointed and whether that Deed became the constituting document of the trust. Once trustees had been appointed (as they were in 1923), they could only be removed or retire in accordance with the trust instrument or by the statutory procedure available under the Trustee Act 1925. The 1923 constitution was silent on such matters. No deed was executed and registered in respect of the retirement and purported appointment of the new trustees in 1927. I will return to this aspect of the matter below.

[15]

(4) THE FOUNDATION OF THE WILLIAM THOMPSON MASONIC SCHOOLS AND HOSTELS 29 In the period 1923 to 1965, the New South Wales Masonic Schools Welfare Fund was inextricably linked to the William Thompson Masonic Schools. 30 In 1921, William Thompson, then the Grand Master of Lodges in New South Wales, submitted a proposal for the establishment of a Masonic School for the children of deceased Brethren, which proposal was approved and implemented on 160 acres at Baulkham Hills. 31 The establishment of the New South Wales Masonic Schools Welfare Fund followed the foundation of the Schools. 32 William Thompson also conceived the proposal of creating a committee of Masons that in due course became known as the Masonic Schools Welfare Fund. It is recorded in the work, A History of the United Grand Lodge of Ancient, Free and Accepted Masons of New South Wales by Carl R Cramp and George Mackaness (1938) Volume 2, Chapter XXXI (exhibited to the affidavit of Mr Pretyman sworn 3 July 2008 and marked AP-3(3)), that the proposal in respect of the Fund would involve a committee "… whose duty it would be to give special attention to the after-care of the pupils of the school, and to place them in suitable positions as well as to assist them financially until they were able to support themselves" (p.631). 33 At p.632, reference was made to the fact that the Grand Master (Mr Thompson) had stressed that the Fund should be supported wholly by voluntary contributions. The abovementioned work further records (p.633):- "The original Constitution has been amended on several occasions in order to meet the growing requirements …" 34 The history of the Fund also observed that, as at 31 January 1938, a majority of the expenditure for that year "… went for sustenance to ex-pupils now in employment, in addition to tuition fees and rail fares". 35 The Schools were described in Thompson v Federal Commissioner of Taxation (1959) 102 CLR 315 at 319 as follows:- "The rules of the Grand Lodge in operation at the time of the death of the testatrix provided that the William Thompson Masonic Schools and Hostels were for the free education and maintenance of the children of deceased brethren who at the time of death were members of a lodge under the jurisdiction of the Grand Lodge, the children of brethren who whilst such members were prevented by permanent incapacity from supporting their children, and children, admitted by the council in special circumstances, of deceased brethren who had been, but at the time of death were not, members of a lodge under the jurisdiction of the Grand Lodge. The children admitted must, in the case of boys, be between the age of five and twelve years and in the case of girls five and fourteen years. Boys after doing their full primary course and girls after attainting the intermediate certificate standard attended the local public school or the nearest high school or technical school as the case might be, to continue and complete their education. But while doing so they were maintained at the William Thompson Schools and Hostels, which provided shelter, food, clothing, medical and dental attention for the children and supplied them with text books, note books and the like, as well as sporting accessories and pocket money." 36 Copies of relevant historical events in the formation and establishment of the Welfare Fund were exhibited to Mr Pretyman's affidavit sworn 15 November 2007 collected together in a folder of documents marked as Exhibit "AP-1(1)". The following draws upon that material. 37 In approximately November 1922, two bungalows for the Masonic Schools were completed and furnished ready to receive the first group of children. They were opened on 11 November 1922. By that time, approximately 70 eligible children had been nominated and were waiting to enter the William Thompson Masonic Schools. 38 On 26 March 1923, the third bungalow was opened, increasing accommodation for children to 72. 39 In about 1929, there were 10 cottage bungalows, five on the northern side of the administration block for the girls and five on the southern side for the boys. There was also a senior boys' hostel which accommodated 96 children. 40 On 18 January 1926, a large house on Pennant Hills Road was rented by the trustees as a temporary hostel for the older boys. This was known as "Wyoming". On 18 February 1926, 33 boys went into residence at "Wyoming". 41 On 12 April 1927, the Petersham Welfare Hostel located on the corner of Eltham Street and The Boulevard, Petersham was opened. It could accommodate 25 boys and 15 moved in immediately. It was considered as an extension of the Masonic Schools. A condition of residence was that the boys attend night school or an appropriate course connected with their trades. 42 On 16 May 1927, the first group of 42 boys moved from "Wyoming" into the new senior hostel at Baulkham Hills. 43 In about 1930, the capacity of the Petersham Welfare Hostel doubled with the addition of a new wing. 44 On 31 August 1935, the Petersham Welfare Hostel closed. 45 In February 1941, the eligibility of children into the Masonic Schools was extended to children of Masons unfinancial at the time of their death, provided they had not been unaffiliated for more than 10 years. 46 In 1929, there were about 380 pupils at the school and it was, accordingly, a substantial enterprise at that time. By 1942, as Mr Pretyman deposed, the number of children had reduced to 237. The maximum number reached in the post-war period was 279, a peak being reached in about September 1953 and October 1957. Thereafter, the gradual decrease in numbers continued. 47 In the 1960s, significance resources were invested into the maintenance and further development of the Masonic Schools. 48 In about February 1963, it was agreed that the children of divorced parents who had custody could be admitted. 49 In 1970, the educational facilities closed down, the Masonic Schools underwent a change in status and it became necessary to licence the complex as a children's home. 50 On 11 November 1972, the Masonic Schools celebrated its 50th anniversary. At this time, the enrolment was 56 pupils. 51 In 1976, the Masonic Schools Council purchased a property at Castle Hill to house girls of the Masonic Schools. The home was called "Boronia". At about the same time, the Masonic Schools Council created a family group home for boys named "Wybalena". 52 On 27 November 1976, 54 years after the Masonic School opened, the children were transferred to their new accommodation, seven girls to "Boronia" and 10 boys to "Wybalena", leaving 19 children in the Masonic School's care as non-residents. 53 In about 1978, the Masonic Schools Council purchased "Orana", a large home in Buckingham Road, Baulkham Hills and during the same year "New Wybalena" was built in Hodgson Crescent, Baulkham Hills. 54 "Boronia", "New Wybalena" and "Orana" all became "mixed" homes in order to keep brothers and sisters together. 55 In about October 1983, there were only six children in care with 69 participating in the family support scheme and, at the end of 1983, the last home, "Orana", closed. 56 The William Thompson Masonic Schools and Hostels ceased to exist in about 2001. Since that time, no child has fallen within the original description of the purpose of the Welfare Fund as stated in the Constitution of the Welfare Fund when the Trust was created in about 1923.

[16]

(5) THE EVENTS LEADING TO THE CONSTITUTION OF THE "NSW MASONIC SCHOOLS WELFARE FUND" 57 In evidence is a copy of a letter dated 12 January 1923 written to Grand Master William Thompson. The unknown author of the letter advised that he had been directed by Mr B Drummer, Chairman of the Baulkham Hills Christmas Tree Committee, to take "the necessary steps towards the formation of a permanent committee which shall be representative of all Lodges in New South Wales, and whose duty it will be to provide for the children of the Masonic Schools those benefits which do not strictly come within the province of the management of the school" (Tab 3 of Exhibit AP-1(1)). 58 I note here that the expressed intent of providing benefits over and beyond that able to be provided by the school management is reflected in later constitutional documents referred to below. 59 In about February/March 1923, a circular was sent to all Lodges requesting a volunteer from each Lodge to form the Committee. The notion of a permanent Committee reflected a desire to have a body responsible to provide for such benefits. 60 In February 1923, a Draft Constitution (Tab 5, Exhibit AP-1(1)) referred to the objects of the Welfare Fund as being "as set out in previous circular" being the circular referred to above. 61 On about 28 March 1923, the first meeting of the proposed Committee was held. The meeting attended by representatives of Lodges resolved to constitute a fund to be called "NSW Masonic School Welfare Fund" ("the 1923 Resolution"). A copy of the Minutes of the meeting dated 28 March 1923 is at Tab 6, Exhibit AP-1(1). They are significant in establishing the history of the Fund as they represent a clear and unequivocal statement of those at the meeting supporting the constitution of the Fund. The minutes were, in part, in the following terms:- " N.S.W. MASONIC SCHOOLS WELFARE FUND MINUTES of a General Meeting of the Representatives held at the Masonic Hall Castlereagh Street on Wednesday March 28th, 1923. Meeting was opened at 7.30 p.m. but our M.W. Grand Master who occupied the Chair, Bro. Hiller, read the circular convening the meeting and setting out the objects of the Committee. A draft of the regulations to govern the committee was then dealt with as follows. NAME The Fund formed under these rules and hereinafter referred to as 'The Fund' shall be known as the N.S.W. Masonic Schools Welfare Fund. OBJECTS To relieve the Honorary Superintendent of responsibility in matters outside the School functions and render him any assistance he may find necessary to seek . To provide for the children of the Masonic Schools of N.S.W. such benefits as shall be deemed, by agreement with the Hon. Supt. and the Trustees, to be outside of their domain such as : (a) The supply and renewal of Sports Material also to provide honorary qualified instructors in the various branches of sport . b The supply and renewal of books for the Library . c To provide prizes for scholastic attainments . d To arrange or organise entertainments e To arrange an annual picnic for the whole school . f To arrange for those children, who have no suitable homes to go to during vacation to secure the desired change . g To provide railway fares and make all necessary arrangements for Mothers or Guardians to be with their child in cases of serious sickness . h To place the children in suitable positions on their leaving the Schools, to secure homes for them, assist them financially untill [sic] they are in a position to support themselves, take a personal interest in their welfare, and maintain their interest in the Schools . i To assist any who show the necessary qualifications to obtain their degrees at the University . To co-ordinate the work of the various Lodges, desiring to assist in helping our Children To maintain the individual interest of the Brethren of N.S.W. in the Masonic Schools . MEMBERS Each Lodge in N.S.W. shall be entitled to have one representative to become a member of the Fund. The representative shall be the Lodge collector for the Fund. OFFICERS The Executive shall be elected from the Representatives. MEETINGS There shall be an Annual General Meeting during Easter Week to receive a report of the previous year's transactions from the Executive together with the Hon. Treasurers balance sheet; to elect the Executive for the ensuing year; to transact such other business as may be submitted by the Executive and to consider any question or proposal made by any member, of which six days notice shall have been given to the Executive through the Hon. Secretary. At least ten days clear notice of the Annual or special meetings shall be given the members by circular. Nominations for the Executive shall be signed by two members and must be lodged with the Secretary not less than four days before the date of the Annual Meeting. Special meetings of the members shall be convened by the Secretary by direction of the Present or Vice President, or at the written request of fifteen members. MINUTES Minutes of the proceedings of all meetings shall be recorded and shall be signed by the Chairman of the meeting at which the minutes are read and confirmed, and every minute so signed shall be conclusive evidence of the facts stated therein. ACCOUNTS All funds shall be lodged with the Commonwealth Bank, Sydney in the name of the N.S.W. Masonic Schools Welfare Fund All payments shall be made by cheque signed by the President or Vice President and the Treasurer, when certified by the Secretary as correct The Treasurer by direction of the President or Vice President shall have power to pay any reasonable expenses, and the vouchers for such payments shall be submitted to the Executive at the first meeting after the money is expended for confirmation of action taken. The Secretary shall receive all monies and issue receipts for same in the name of the Fund, such monies to be handed to the Treasurer who will issue a receipt to the Secretary. An audited balance sheet shall be submitted to the Annual General Meeting. The financial year of the Fund shall close on the last day of February each year AUDIT One qualified honorary Auditor shall be elected at the Annual meeting Nominations for the position of honorary Auditor shall be signed by two members and shall be Lodged with the Secretary at least four days prior to the Annual Meeting. The hon. Auditor shall have access to all books and documents of the Fund and receive such information from the Secretary and other Officers as he may require. In addition to the certifying of the correctness of the accounts, the hon. Auditor shall prepare a brief report on the financial transactions for the past year for submission to the Annual Meeting, such report to be in the hands of the hon. Secretary fourteen days prior to the Annual Meeting. HONORARY The treasurer shall discharge all bills and accounts TREASURER duly attested when approved by the Executive and shall keep a clear and complete record of all monetary transactions in books kept especially for the purpose and shall submit same for inspection when called upon to do so by the hon. Auditor or the Executive. He shall submit to the Executive an audited balance sheet at least fourteen days prior to the Annual Meeting. HONORARY The Secretary shall issue all summons calling the SECRETARY various meetings record the proceedings of each meeting, keep the minute book, attend to all correspondence and perform such other duties as may be directed by the President or Vice President from time to time. MANAGEMENT The affairs and business of the Fund shall be administered by an Executive consisting of a President, Vice-President, Hon. Treasurer Hon. Secretary and six other members of the Fund. The Executive shall meet at least once a month for the dispatch of business, four to form a quorum. The Executive shall have power to appoint special committees from the Members of the Fund, under the chairmanship of a member of the Executive. Each committee, through its Chairman shall furnish the Executive at each monthly meeting with the full programme that it proposes for the ensuing month, together with the approximate cost of same. The approval of the Executive must first be obtained before the programme can be carried out. Absence from two consecutive meetings without good cause shall disqualify any officer from further holding of office. The Executive shall have power to fill all interim vacancies and to act notwithstanding vacancies. All officers appointed to fill vacancies shall hold office until the next Annual Meeting. GENERAL Every subscribing member of a Lodge shall be asked to contribute a sum not less than sixpence per annum, which amount shall be collected by the Representative of the Lodge and handed to the Secretary of the Fund. In the event of the amount received from the Brethren being insufficient, the Executive upon procuring proper authority from the Grand Master, has power to appeal to the Lodges of N.S.W. to make such donations from their funds as they may feel disposed. The Executive may raise funds by other means which they consider desirable, from time to time. Each clause was submitted to the meeting and carried. Election of Executive resulted as follows: …" (emphasis added) 62 On the basis of available records, the Minutes of the Meeting of 28 March 1923 constitute the only contemporaneous record of the agreement of those attending the Meeting to constitute the fund now known as the Welfare Fund in a manner that was binding and which stated its objects. All the necessary elements were in existence for the constitution of a trust including an intention to create a trust and binding obligations with respect thereto. Accordingly, the minutes of the meeting held on 28 March 1923 effectively incorporated the constitution of the Fund. 63 In evidence is a document (Tab 7, Exhibit AP-1(1)) dated 18 June 1923 entitled "NSW Masonic Schools Welfare Fund". It reproduced the constitution of the Welfare Fund. The objects set out are similar to those in the Minutes of 28 March 1923. 64 The two initial paragraphs of the stated objects of the Fund reflect the original objects or purposes as they had been expressed in the circular letter of 12 January 1923, namely, that the Welfare Fund was to provide for the children the "benefits" considered to be beyond "… the province of the management of the school" or "outside of their [the Honourable Superintendent and Trustees of the school's] domain". 65 There was essential agreement between the parties to the present proceedings that the meeting of 28 March 1923 was effective to constitute a trust. The remaining matters for determination include the question as to who were the trustees and the issue as to the trust objects in the years that followed the establishment of the Fund in 1923. 66 A matter of central importance discussed below is the fact that the 1923 trust did not include a power to amend the terms of the trust. In accordance with settled law, charitable purposes cannot be amended by resolution unless there is an express power to do so, as, for example, by a resolution of the body constituting the charitable trust. Additionally, if the constitution of a trust does not contain a power of amendment, such power of amendment cannot be incorporated by a later amendment. 67 Despite the absence of a power to amend the original 1923 trust, a number of amendments were purportedly made in the decades that followed. These are discussed in paragraphs [69] to [94] and [108] to [119].

[24]

(a) The 1926 "amendments" 69 On or about 20 December 1926, a Special General Meeting of the Welfare Fund was held in Sydney. Despite the absence of a power to amend, the meeting resolved that further clauses be added to the Constitution. These were to the effect that the monies and property of the Fund (other than monies used for current expenses) be vested in five trustees to be elected by the members. Additionally, certain powers were conferred on those trustees, including the power to "expend the monies entrusted to them in such manner as may be deemed by the Executive". 70 A Deed was subsequently signed on 14 January 1927. Minutes of the meeting are at Tab 10, Exhibit AP-1(1) and a handwritten version is also at Tab 10. The Minutes were in the following terms:- " Minutes of special general Meeting of the Welfare Fund held on Monday December 20th 1926 at the Masonic Hall Castlereagh Street, Sydney The meeting was opened at 7.45 by the President Most Wor. Bro. William Thompson. Most. Wor. Bro. Wm. Thompson moved that the report and recommendation of the executive that a House and ground situated in the Petersham having a frontage to the Boulevarde [sic] be purchased for a Hostel for the boys who have left the school and are in employment to be furnished and maintained in accordance with the report of the committee be adopted. Bro. W.F. Leighton Bayley seconded carried unanimously. Bro. Bannerman moved that the following clauses be added to the constitution: 1. The monies and property of the fund other than monies used for current expenses shall be vested in five (5) trustees to be elected by the members. 2. The said trustees shall have power out of the trust funds to purchase a. Real and personal estate for the purpose of the erection and equipment of Masonic Hostels b. To provide for the maintenance of the said Hostel and the occupants thereof. c. To expend the monies entrusted to them in such manner as may be deemed by the executive. Bro. W.F. Leighton Bailey seconded the motion. carried. A Deed of Trust prepared by Rt.Wor.Bro. Boyce was read and on the motion of Bro. Bannerman seconded by Bro. Leighton Bayley it was adopted." 71 The Hostel referred to in the Minutes of 20 December 1926 was subsequently purchased and it operated between 1927 and 1935. Subsequently, it ceased to operate and was, in due course, sold.

[25]

(b) The Deed of Trust executed on 14 January 1927 72 The Deed appears to have been signed on 14 January 1927 by Messrs Thompson, Cropley, Bannerman, Green and Packer and it provided:- " DECLARATION OF TRUST. TO ALL TO WHOM THESE PRESENTS SHALL COME WE William Thompson, Rubert Sidney Cropley, John Gordon Bannerman, Alfred William Green, Lewis Packer, herein after called the said Trustees SEND GREETING WHEREAS by resolution of a body of persons calling themselves the New South Wales Masonic Schools Welfare Fund hereinafter called the Welfare it is provided that all property of whatsoever description belonging to the said Welfare shall vest in five Trustees to be elected by the said Welfare for the use and benefit of the said Welfare to be called the Welfare Trustees who shall hold the said property and funds and all investments thereof upon the trusts and for the purposes and with the powers and in accordance with the terms expressed and contained in a Declaration of Trust to be executed by such Trustees AND WHEREAS we the said five Trustees were duly elected as such Trustees of the said Welfare and WHEREAS the said Welfare have decided to purchase land and erect the buildings for purposes connected therewith NOW THESE PRESENT WITNESS that we the said Trustees DO and EACH of us DOTH HEREBY DECLARE that we and the survivors and survivor of us and the Executors and Administrators of such survivor and other the Trustees who may hereafter be elected all of whom are included in the designation the said Trustees will henceforth stand possessed of and hold all land hereditaments buildings furniture chattels effects and fittings and moneys coming to our hands either by or through the said Welfare upon the trusts for the ends intents and purposes and with under and subject to the powers provisoes declarations and agreements hereinafter declared and contained that is to say: …" (emphasis added) 73 There were then set out 11 clauses to the Declaration of Trust which were directed to the powers of the trustees in respect of real estate. 74 On 11 April 1927, the Annual General Meeting of the Welfare Fund was held in Sydney. It resolved that the Constitution recommended by the Executive on 14 February 1927 be adopted. 75 The amendments to the constitution purportedly made at the General Meeting held on 11 April 1927 were directed to:-

[31]

(d) The 1956 "amendments" 81 On 3 May 1956, the Annual General Meeting of the Welfare Fund was held at Sydney. Further amendments to the Constitution were approved and adopted at that meeting. A copy of the Minutes of the Meeting held on 3 May 1956 are at Tab 16, Exhibit AP-1(1). At Tab 17, Exhibit AP-1(1) is the Constitution approved and adopted at the Meeting. 82 The 1956 Constitution provided:- "2. Objects (a) To foster among all Masonic Brethren an interest in the ex-pupils of the School and to maintain a constant interest and care for the welfare of such ex-pupils. (b) To relieve and assist ex-pupils of the School in necessitous circumstances in any of the following ways, namely, by placing them in suitable positions, be encouraging their scholastic attainments or vocational or professional ambitions or aptitudes, by assisting those showing promise or talent to proceed to a University or engage in any other course of study or special course of training for a vocation or profession, by providing financial aid, by obtaining suitable home accommodation or board and residence, by providing necessary clothes, textbooks, tools-of-trade, professional instruments and equipment or any other essential requisite in the furtherance of the career chosen. (c) To purchase, take on lease, furnish and maintain buildings and/or offices for the purposes of the Fund, hostels and/or club rooms for the use and accommodation of ex-pupils of the School." 83 The 1956 Constitution included, for the first time, provisions entitled "Auxiliaries". These provided for the establishment of Welfare Fund auxiliaries throughout New South Wales. An object of each auxiliary was to collect or raise funds for the general purposes and objects of the Welfare Fund. 84 In April 1964, Mr John Laurence of counsel was asked to advise in relation to two trustees of the Welfare Fund retiring without new trustees being appointed to replace them: see Tab 19, Exhibit AP-1(1). He concluded that an amendment to the Constitution of the Welfare Fund was a necessary prerequisite to any reduction in the number of trustees: see Tab 20, Exhibit AP-1(1). However, counsel did not regard an application to the Court as necessary or appropriate. Mr Laurence's advice was adopted in changes to the Constitution which were made in 1965.

[32]

(e) The 1965 "amendments" 85 Amendments were purportedly made in 1965 to the objects of the Fund to extend the coverage of the Fund beyond ex-students of the School to children of deceased and incapacitated members of the NSW Lodge of Masons and to broaden the objects of the Fund to cover relief and assistance of Masonic youth "in necessitous circumstances". 86 On 15 January 1965, the Welfare Fund Secretary, Mr Booth, sent a letter to all Lodges headed "Amendment of Constitution". This outline proposed amendments to the Constitution to be put to the Annual General Meeting of the Welfare Fund to be held on or about 3 May 1965. 87 Behind Tab 23, Exhibit AP-1(1) is a document which provides a brief summary of the proposed 1965 amendments to the Constitution. At the Annual General Meeting held on 3 May 1965, the various amendments as proposed were submitted. At Tab 25, Exhibit AP-1(1) is a copy of the Notice of Motion outlining the proposed amendments. These formed the basis of the 1965 Constitution which was approved and adopted in its original form at the Annual General Meeting on 3 May 1965. A copy of the 1965 Constitution is at Tab 26, Exhibit AP-1(1). 88 On 3 May 1965, the number of trustees of the Welfare Fund was reduced from five to three. 89 The key changes and amendments to the Constitution which took place in 1965 were summarised in a circular to all Lodges on or about 31 May 1965: see Tab 27, Exhibit AP-1(1). 90 The provisions of the objects clause purported to make substantial changes, including, in clause 2(a), to the fostering amongst Masonic Brethren an interest in "Masonic Youth as herein defined and to maintain a constant interest and care for the welfare of such Masonic Youth". 91 In addition, as indicated above, clause 2(b), in providing for "relief and assistance to Masonic Youth", expanded the objects beyond those established on 28 March 1923 in that, by the definition of "Masonic Youth", relief and assistance was to be provided to all Masonic youth and not merely ex-pupils of the School.

[34]

(g) Senior counsel's opinion 96 On 26 May 1971, Mr Forbes Officer QC provided an opinion (Tab 31, Exhibit AP-1(1)). In relation to the Edith Boyd Fund, he noted that although the Equity Court had made a decree declaring the validity and charitable nature of the Edith Boyd Fund in 1950, he considered that Thompson's case and Davies v Perpetual Trustee Co [1959] AC 279 case (both judgments having been delivered in 1959) would require a declaration of invalidity as a charitable trust because the persons eligible would not, in accordance with those cases, have constituted a "section of the public". He did not consider the effect of those cases on the Welfare Fund but did express his agreement with Mr Greenwood's conclusion that the Fund would be held not to be charitable for the reasons given in Thompson's case. 97 In the course of the Opinion of Mr Forbes Officer, the question whether any valid power of amendment had ever been adopted was not considered. However, he expressed his view as to the width of the power which the Constitution contained and, in his Opinion, in relation to the Welfare Fund stated (at p.8):- "… As a matter of principle any power of amendment would in default of clear words not be treated as extending to an amendment of objects." 98 At p.9 of his Opinion, he stated:- "The principle, however, would I think derive its justification from the sanctity in charity law of the 'purposes' laid down by the founders of the charity and from this would be derived, in my opinion, the approach that where some effect could be given to a power of amendment, it was not, in default of clear words, to be treated as extending to the objects or purposes." 99 Accordingly, Mr Forbes Officer considered that the second and third courses discussed in the Advice of Greenwood Challoner of 10 March 1971 (that is, an amendment to the Constitution of the Welfare Fund) were probably not available. However, an amendment to the Constitution of the school, which would widen the class of children and youth covered by that Constitution, could be made provided it was for genuine purposes connected with the operation of the school.

[35]

(h) Appointment of the corporate trustees 100 On 27 August 1971, the Equity Court (Street J, as his Honour then was) (Plaint no 1064 of 1971) gave judicial advice to the trustees of each of the Welfare Fund and the Edith Boyd Fund concerning the expenditure of the Trust Funds to incorporate two companies, Juventis Nominees and Welfare Nominees respectively, with a view to each of those companies being appointed trustees to each of the Welfare Fund and the Edith Boyd Fund, concurrent with the retirement of the applicant individual trustees. 101 A copy of the Judicial Advice of (then) Justice Street dated 27 August 1971 is at Tab 33, Exhibit AP-1(1). 102 The name of Juventis Nominees was later changed to the NSW Masonic Welfare Property Trust. The name of the Welfare Nominees was later changed to the NSW Masonic Youth Property Trust. 103 Mr Whittle observed in his opening submissions that the statement of facts produced for the purposes of the proceedings before Street J exhibited a copy of the declaration of trust of 14 January 1927. It was accepted in the present proceedings that the Fund was, in fact, constituted by the resolutions passed in 1923. However, that fact, a most material one, was not included in the statement of facts provided to Street J. That, it was said, was no doubt by accident, the true position having been obscured by the passing of time. The Judicial Advice given accordingly could be said to have been given on an incorrect factual basis. 104 Following that Advice (dated 27 August 1971), application was made to the Attorney General of New South Wales with respect to both funds and on 6 April 1972, the Corporate Affairs Commission notified its approval of the changes to the names of the trustees: Tab 35, Exhibit AP-1(1). 105 At Tabs 36 and 37, Exhibit AP-1(1), are copies of the Memorandum and Articles of Association for both the NSW Masonic Welfare Property Trust and the NSW Masonic Youth Property Trust, both dated 27 April 1972. 106 A Trust Deed No 912 Book 3081 dated 21 November 1972 appointed the Corporate Trustees and the individual personal trustees retired. The Deed was registered on 7 February 1973. From about 21 November 1972 to the present time, all property of the Welfare Fund, including any bank accounts, has been vested in the two plaintiff companies, the Corporate Trustees:-

[37]

(i) The 1972 "amendments" 108 In 1972, further purported amendments to the Welfare Fund Constitution were proposed. It appears that the reservations as to the extent of any power of amendment that had earlier been expressed by Mr Forbes Officer QC were of no effect, at least, so far as those voting for the amendments were concerned. 109 On 9 October 1972 at a Special General Meeting of the Welfare Fund, the 1972 amendments were approved and adopted. The purported amendments provided for the retirement of the existing trustees and the appointment of the corporate trustees. The trustees, by Deed dated 21 November 1972, duly retired and the corporate trustees (the first and second plaintiffs) were appointed subject to the trust as declared in 1927. 110 A copy of the 1972 Constitution is at Tab 44, Exhibit AP-1(1). The Constitution conforms to those amendments. 111 The precise effect of the amendments made in 1972 were to amend the provisions of clause 1, "Name" and clause 7, "Trusteeship". 112 The proposal to amend clause 1 was explained in the following terms in the notice of motion at Tab 43, Exhibit AP-1(1):- "The effect of this proposed amendment would be to extend the scope of the Fund by enabling it to benefit any youthful person considered by the Executive Committee to be necessitous and deserving. This proposal coincides with the trend towards Masonic support of charity generally. It could also be a step towards taxation concessions …" 113 In relation to the amendment of clause 7, the proposal was explained in the following terms:- "The proposed amendments pave the way for the appointment of the two Companies as Trustees in lieu of the present three personal Trustees. Last year an application was made to the Equity Court for judicial advice and on 27 August 1971, Mr Justice L.W. Street advised the Trustees that they would be justified in proceeding with the incorporation of the two companies with a view to their own retirement and appointment of the companies as Trustees, subject, however, to the appropriate amendments having been made to the Constitution of the Fund …" 114 The amendments made to the Constitution, accordingly, in part, were as follows:- "Name and Definition The name of this organisation (prior to 3rd May, 1965, known as the New South Wales Masonic School Welfare Fund) shall be the NEW SOUTH WALES MASONIC YOUTH WELFARE FUND, hereinafter referred to as 'the Fund'. Masonic Youth shall mean all youth in the community and includeand include including the ex-pupils of the William Thompson Masonic School at Baulkham Hills , hereinafter referred to as 'the School', the children of deceased Brethren who at the time of their death were, or at some time prior thereto had been, subscribing members of a Lodge under the jurisdiction of the United Grand Lodge of New South Wales, and the children of Brethren who, while subscribing members as aforesaid, are prevented by incapacity from adequately supporting their children. It shall not be a condition of the receipt of benefits under the Fund that any person shall be a member of the Masonic Order or related to a member of it. … 7. Trusteeship (a) All property and funds of whatsoever description belonging to the Fund shall vest in five (5) Trustees who have already been elected, and they shall hold the said property and funds and all investments thereof upon the trusts and for the purposes and with the powers and in accordance with the terms expressed and contained in a Declaration of Trust dated 14 January, 1927 … and provided further that the Trustees for the time being may at any time by registered deed concurrently appoint New South Wales Masonic Welfare Youth Property Trust and New South Wales Masonic Welfare Property Trust (each being a company duly incorporated under the Companies Act 1961 on 27th April 1972) as new Trustees in place of the appointing Trustees and themselves concurrently retire … … (d) Upon and after the appointment of New South Wales Masonic Welfare Youth Property Trust and New South Wales Masonic Welfare Property Trust as Trustees in pursuance of sub-clause (a) hereof, anything in this Constitution inconsistent with the appointment and existence of two corporate Trustees and no other Trustees shall, to the extent of the inconsistency, be inoperative. " (additions emphasised) 115 Mr Whittle observed in the course of his submissions that the expression "Masonic Youth" as meaning "all youth in the community including ex-pupils of the School" was an amendment purportedly made to overcome the effect of the High Court's decision in Thompson's case: transcript, 14 August 2008, pp.20 to 21. The element of "necessitous circumstances" was retained in clause 1 of the proposed amendments and the name of the Fund changed from NSW Masonic Schools Welfare Fund to NSW Masonic Youth Welfare Fund.

[41]

(a) The decision in Fulham's case 127 In Attorney General for New South Wales v Fred Fulham & Ors [2002] NSWSC 629, the charity the subject of consideration in that case, was originally formed in 1941 and was conducted by a voluntary association. As recorded in a subsequent history of the charity, the 1941 Constitution was purportedly varied on a number of occasions with the objects in some of the later Constitutions being different from those stated in the original (1941) Constitution. 128 In the course of the judgment in that case, Bryson J observed:- "52. There is a profusion of available possible objects in these many constitutions, and although they do not vary greatly, it is necessary to decide which objects have effect in order to address in a clear way the question whether the objects have become impossible to attain or have ceased to be suitable and effective and to discern the spirit of the Charity which should be given effect in any scheme …" 129 His Honour went on to observe that it was not open to the members of the unincorporated association to alter the terms of any charitable trust to which the trust property had become subject if the document which records the objects does not contain a power of amendment. If there was a power of amendment, his Honour held at [53] it must extend to amending the objects of the charitable trust, citing the decision in Free Church of Scotland v Overtoun; MacAlister v Young [1904] AC 515 as a "… powerful illustration of the inability of a majority, short of unanimity, to alter the Trusts upon which the property of a voluntary association is held, unless there is power which extends to altering the Trusts: see Attorney General (NSW); Ex rel MacLeod v Grant (1976) 135 CLR 587 at 603 at 605 (Gibbs J) …" 130 Bryson J, accordingly, observed that after two particular parcels of land had been impressed with the charitable trusts expressed in the 1941 Constitution:- "… it was not possible for the members, even unanimously, to alter those trusts by agreement among themselves, as those rules did not provide for amendment of the charitable objects, or for any other amendment. Land was held on trust for the objects stated in the rules which existed when it was acquired; it was not held on trust for the objects stated in the rules of the Hall Trust whatever they may become. In my opinion then Trust Land 1 and Trust Land 2 always remained subject to a charitable trust for the objects which appear from the 1941 Constitution, and those objects were not altered when the Constitution of the Hall Trust was altered from time to time."

[42]

(b) Distinguishing the rules of the unincorporated association and the terms of the trust 131 In written submissions of Mr Free of counsel on behalf of the Attorney General (paragraph 6), it was observed that in considering post-1923 events, it was necessary to distinguish between the amendment of the rules of the Fund as an unincorporated association and the purported variation of the terms of the Trust operated by the Fund. 132 The distinction in this respect was one observed by Bryson J in Fulham (supra), wherein his Honour stated:- "54. The instrument creating a charitable trust may, in concept, confer power on some person to alter the charitable trust. It would not be enough that the rules of a voluntary association which conducted a charitable trust contained a power to amend the rules; the power must extend to alteration of the charitable trust, and it would be a question of construction of the rules to ascertain whether the power extended so far. It would also be for consideration whether some purported alteration fell within the power; there may be limits relating to the purposes for which the power may be exercised, or limits to the nature of the amendment authorised, arising from the limits, wide as they are, to the concept of an amendment or in some other way from limits in the terms in which the power was created …" 133 The distinction between the rules governing an unincorporated entity and the terms of a Trust administered by that entity was also the subject of consideration in RSL Veterans' Retirement Villages Limited v NSW Minister for Land [2006] NSWSC 1161. In that case, the Court (Palmer J) observed:- "32. The question then arises: are the purposes of the War Veterans' Home, incorporated by reference as the terms of the trust, the objects of the company as they appeared in the company's Memorandum of Association at the time of the grant in 1959 or are the purposes of the trust the objects of the company as appearing in its Constitution as amended from time to time? The Plaintiff urges the latter construction, saying that the purposes of the trust are now defined by its 1999 constitution. The Defendants contend for the former construction. 33. The Plaintiff submits that the Crown, knowing that the grant was to a company and that a company may change its purposes over time by amendment to its constitution, must be taken to have intended that the purposes of the Trust should be the purposes of the Plaintiff from time to time. In other words, the purposes of the Trust have been changed in accordance with the procedures of Corporations Law. 34. The Defendants place strong reliance on the word 'in the grant 'upon trust for … the purposes hereinafter declared … and for no other use, trust or purpose whatsoever'. They say that those words indicate that the purposes of the trust were identified in the grant and fixed immutably at the time of the grant. 35. In my opinion, the Defendants' submission is correct. The Plaintiff, being a corporation, has an indefinite existence. Like any corporation, its purposes can change over a long period of time, as circumstances change. So, in the present case, a little more than 60 years after the Plaintiff's incorporation, its constitution already gives eligibility for residents in the Village to a much wider range of people than was given in the 1942 Memorandum of Association. … 37. In my opinion, the words of the grant, particularly in their insistence that the trust assets be used only for the declared purposes, indicate strongly that the purposes of the trust are those stated in the Memorandum of the Plaintiff as at the date of grant in June 1959 and that those purposes may be altered in accordance with the law of trusts, not in accordance with the law of corporations."

[43]

(c) Application of the principles applied in Fulham and RSL Veterans 134 The principles referred to and applied in both Fulham (supra) and RSL Veterans' (supra) raise for consideration the question as to whether the purported amendments of the constitution of the Welfare Fund, including in particular, those made in 1927, 1965 and 1997, were effective to vary the terms of the Trust subject to which property was held. 135 The decision in relation to the purported alterations made to the constitution at the Annual General Meeting held on 11 April 1927 was based upon a proposal that it be amended "… as recommended by the Executive …". The proposal was carried. The objects as proposed by the Executive were, as earlier noted, set out in the minutes of the Executive Meeting held on 14 February 1927. In due course, they were incorporated into a re-publication of the Constitution in 1936. Clause 2 of the Constitution in that version (a copy of which is behind Tab 15 of Exhibit AP-1(1)), reformulated, as a matter of expression, the objects as adopted at the last-mentioned Annual General Meeting of the Welfare Fund. 136 As also noted above, the objects proposed in 1927, unlike the 1923 trust (which expressed the objects of the trust as being to "provide for the children of the Masonic Schools of NSW such benefits …"), were "amendments" expressed to deal with the welfare and needs of "ex-pupils" of the Schools and, inter alia, to purchase and maintain "Central Hostels" for the use and accommodation of "ex-pupils of the Schools …". 137 The Declaration of Trust in 1927, accordingly, purported to alter the objects and to re-settle or transfer the trusteeship of trust property. However, the purported amendments related to an express trust that had been completely constituted and which was therefore binding and irrevocable. There being no power of amendment or revocation reserved in the Trust, the "amendments" were ineffective. 138 I have additionally concluded that it would not be open to conclude that the purported amendments operated so as to create a new trust independent of the 1923 Trust. There having been one continuous Fund operating over the years from 1923 to the present, there is no basis to support a conclusion that the settlors who contributed donations after 1923 agreed to a resettlement of the Trust. I accept Mr Free's submission that this was unlikely, particularly given the absence of a power of revocation. 139 Accordingly, whilst the amendments purportedly made in 1927 and in later years up to 1997, may have been effective to alter the rules of the Welfare Fund, under which its members conducted its affairs, they were not effective amendments to the 1923 Trust. The trust objects, accordingly, have remained unaltered from the date of its original establishment. 140 What are the consequences of this conclusion? The submissions for the Attorney General raised the question as to whether monies contributed to the Fund after 1923 are to be taken as impressed with the terms of the original Trust (including the objects and beneficiaries specified in the original constitution of the Fund) or whether the proper construction of the events is that particular funds settled from time to time are to be taken to have been settled on the terms of the Trust as described in the constitution of the Fund at the time of the particular settlements: Attorney General's Written Outline of Submissions at [14]. 141 It was noted in those submissions that if the latter construction was the appropriate one, then it would be a case of multiple trusts operating under the umbrella of the Fund. Each version of the constitution of the Fund which varied its objects had the effect of creating a distinct class of settlements formed by the contributions to the Fund made on the terms of that version of the constitution as and when it was in operation: Attorney General's Written Outline of Submissions at [14]. 142 Whilst Bryson J dealt with a similar issue in terms of the timing of particular settlements of trust property in Fulham (supra), trust property consisted of land, namely, "Trust Land 1" and "Trust Land 2", both parcels of land having been acquired at the time when the 1941 Constitution was in effect. 143 Bryson J held that the preferred view of the facts was that the persons controlling the affairs of the Hall Trust in 1969 probably intended that land which they then acquired would be held on trust established by the then current constitution. 144 In the present proceedings, Mr Burke of counsel for the second defendant raised the possibility of the reasoning of Bryson J in Fulham (supra) being applied to the facts concerning the Fund. 145 If that reasoning was applied, he contended it would lead to a conclusion that a portion of a fund is held for the objects set out in the 1997 Constitution while other portions of the Fund would be held for the objects set out in earlier Constitutions: Second defendant's Outline of Submissions, paragraph 17. 146 Whilst Mr Burke acknowledged that there was insufficient evidence before the Court to determine which portions of the Fund were raised at specific times, in his written submissions he observed:- "19. It is likely the funds raised between 1923 and 1927 have been expended and so it is unlikely that any portion of the fund would remain impressed with the trusts expressed in the minutes of the meeting of 28 March 1923. 20. Funds raised between 1927 and 1936 would be held, if any are still held, on terms set out in 1927 Deed of Trust and the 1927 Constitution. The objects set out therein were very wide and contemplated, inter alia, funds being expended in establishing and maintaining a hostel. It seems from the evidence that such a hostel was established and maintained but later sold. If any of the proceeds of sale of the hostel have not been expended and remain in the fund, that portion of the fund would remain impressed with the same trusts as those set out in 1927 Trust Deed and the 1927 Constitution. 21. Monies raised between 1936 and 1972, if they still form part of the fund, would be impressed with the trusts set out in the 1936 Constitution (if raised between 1927 and 1936), the 1956 Constitution (if raised between 1956 and 1965) or the 1965 Constitution (if raised between 1965 and 1972). There is nothing apparent from the evidence that would suggest any major assets were purchased during this period. 22. Similarly, monies raised from 1972 until the present time would be impressed with the trust set out in the 1972 Constitution (if raised between 1972 and 1997) or the 1997 Constitution (if raised after 1997)." 147 Reference was made to the assets of the Fund as at April 2007 set out in the balance sheet at Tab 64 of Exhibit AP-1(2). The submission was that it appeared likely that the real property held at that time was likely to have been acquired after 1972. With the exception of money spent on the Hostel and other fixed assets referred to in the balance sheet dated April 2007, Mr Burke observed that the monies held in the Fund were largely used to make payments to wards. He submitted:- "… Assuming the monies were applied on a 'first in, first out' basis, it is likely the majority of the remaining funds are subject to the objects set out in the 1972 Constitution or the 1997 Constitution." ( Second Defendant's Outline of Submissions , [23]) 148 I am of the opinion that the reasoning and approach adopted in Fulham (supra) is not one, as a matter of practicality, that can be readily applied to the Fund assets that are essentially held as a single fund. 149 It was acknowledged in the submissions for the Attorney General ([16]) that a strong inference may be drawn that a settlor who decided to donate money to the Fund at a particular time intended that the Fund (or its validly appointed trustees following the appointment of separate trustees from 1927) should hold such money on trust for the purposes and according to the terms then described in the constitution of the Fund. 150 However, it was also acknowledged that that theoretical possibility may be rendered practically impossible by the structure of the Fund, it having been operated as a single Fund, with all contributions being collected, intermingled in the Fund and expended, apparently without discrimination according to the date of the contribution and the version of the Fund's constitution which was in operation as at that date: paragraph [17] of the Written Outline of Submissions.

[49]

(9) THE APPROACH TO BE TAKEN TO THE MONIES DONATED TO THE WELFARE FUND FROM TIME TO TIME 154 In final submissions, Mr Whittle addressed the question as to the basis upon which it may be taken that those who donated funds over many years after 1923 made their contributions. 155 He observed, in my opinion, with respect correctly, that, between 1923 and 1972, most of the objects of the Trust could be characterised as benefiting children who have been connected with the Masonic School, however the objects be described. They all had in common what senior counsel, Mr Whittle, referred to as "a broad overreaching description of being for the benefit of Masonic children in necessitous circumstances" (transcript, 27 April 2009, p.34). On that basis, it might be said that the donors over those years were essentially donating for objects which had the fundamental idea behind them of benefiting children of the Masonic brethren who were in necessitous circumstances. 156 The widening of the objects in 1972, it was suggested in submissions, had been prompted by concerns that had been expressed by Mr Officer QC when he raised doubt as to whether or not amendments could be made to the Fund absent an express power of amendment. It was submitted that that the purported amendments did not detract from the fundamental idea of assisting children in necessitous circumstances whilst attending the School and subsequently with training, accommodation and tertiary education. In that respect, Mr Whittle submitted (transcript, 27 April 2009, at 35):- "… when one looks at the really fundamental objects here, that is, assisting students with their education through to a tertiary level in getting set up in life, that perhaps in all its various formulations the object of this trust was that underlying sub-stratum. I don't think one can say that therefore the objects of the trust all the way through have been the same, because clearly they have been broadened very much as the years have gone on and altered and re-expressed and so forth. I mean the original objects were clearly limited to the students at the school and after they'd left the school and to be done in consultation with the headmaster of the school and so forth. That changed over the years. But it perhaps does provide some basis on which one can say that donations over the years can be legitimately treated as being in one fund leaving aside horrendous difficulties … of holding the contrary which is to try and work out on what basis people did give their money. If there is no fund, who does it go back to? Are there a series of trusts, each one with slightly different objects, most of which I add now could not be worked out and so forth? It clearly leads to an impossible situation …" 157 The possible beneficiaries under the 1923 Trust included both school age children and ex-pupils of the schools. The benefits which the Fund provided were principally directed to providing assistance with education and post-school training and qualifications and otherwise supporting ex-pupils in making a start in life. 158 Seen in this light, the spirit of the trust was directed towards providing benefits that would assist in the education and training of needy students and ex-pupils of the Schools. As earlier noted, the purported amendments, particularly those from 1936 through to 1997, significantly broadened the class of potential beneficiaries. Affiliation with the Masonic movement in due course was not an essential criteria. Even if the purported resolutions had been effective to vary the trusts or trust objects, the underlying purpose or objective of the Fund would have reflected the principal objects of the original trust, namely, the provision of assistance for children or youth in necessitous circumstances during their primary and secondary education an later training. 159 Even in cases where there has been a significant re-organisation of a trust, it has been held that notwithstanding the extensive changes made, the substratum of a trust may still remain and not be destroyed by the variations made: see, for example, Cachia v Westpac Financial Services Limited (2000) 170 ALR 65 per Hely J at 83. 160 Whilst the purported amendments to the trust broadened both the class of beneficiaries and its purposes, it is possible to identify the substratum of the Fund throughout the many years following 1923. It was, in my opinion, the provision of financial assistance to youth, both male and female, in necessitous circumstances in the form of financial benefits directed towards meeting their educational needs and associated costs at primary, secondary and tertiary levels. In that respect, it can be said that the Welfare Fund had essentially continued to operate upon the basis of the substratum to which I have referred.

[58]

(11) WAS THE WELFARE FUND A VALID CHARITABLE TRUST? 162 On the basis and for the reasons discussed above, the only valid trust which operated in respect of the Fund was that established on 28 March 1923. That trust was governed by the constitution of the Fund that was adopted at that time. In those circumstances, the relevant inquiry is whether the trust, as described in the 1923 Constitution, may be characterised as a trust for "charitable purposes". 163 In Attorney General (NSW) v Perpetual Trustee Co (Limited) (1940) 63 CLR 209 at 222, Dixon and Evatt JJ observed that a charitable trust is a trust for a purpose, not for a person. Their Honours further also observed:- "… The objects of ordinary trusts are individuals, either named or answering a description, whether presently or at some future time. To dispose of property for the fulfilment of ends considered beneficial to the community is an entirely different thing from creating equitable estates and interests and limiting them to beneficiaries. In this fundamental distinction, sufficient reason may be found for many of the differences in treatment of charitable and ordinary trusts." 164 In the written submissions for the Attorney General, it was observed that one of the objects of the trusts as described in the original constitution of the Fund was to provide benefits to "the children of the Masonic Schools of NSW". A question was raised as to whether or not, to the extent that the trust property was to be used for the benefit of the identified class of beneficiaries, the trust was a trust for "purposes" in the relevant sense. 165 However, Mr Free also observed that the objects of the Fund and the original constitution included "to relieve the Hon. Supt. of responsibility in matters outside the School functions, and render him any assistance he may find necessary to seek". This object went beyond the class of beneficiaries (students) and was directed to a purpose. Considered as a whole, it was submitted, it was arguable that the trust was one for "charitable purposes" in the relevant sense. It was also observed in the Attorney General's Outline of Submissions (paragraph 21) that it was also significant that a trust for the relief of poverty, which is limited in its application to some aggregate of ascertainable individuals, may nevertheless be a "charitable trust", notwithstanding the limited class of potential beneficiaries. In this respect, reference was made to Re Scarisbrisk [1951] 1 Ch 622 at 649; Re Hilditch (deceased) (1985) 39 SASR 469 and to the work by Dal Pont, Charity Law in Australia & New Zealand at p.122. 166 The contention for the Attorney General was that, for reasons developed in the written submissions, the Fund may be classified as a trust for the relief of poverty. With respect, I accept the contention as a correct construction. 167 It is well recognised that a charitable trust must fall within one of four classes as was observed by Lord MacNaghten in Income Tax Special Purposes Commissioners v Pensel [1891] AC 531 at 583:-

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(a) Trusts for educational purposes 169 I will, firstly, consider the issue as to whether the Welfare Fund, as established in 1923, can be classed as a trust for the advancement of education. 170 For reasons discussed below, I do not consider that it is open to find that the 1923 Welfare Fund was a trust for "educational purposes". 171 The High Court in Thompson (supra), in considering s.8(5) of the Estate Duty Assessment Act 1914-1947, held that a gift to schools restricted to the children of Masons in New South Wales lacked the necessary element of public benefit. The claim for exemption from duty was in respect of a share of residue bequeathed to the William Thompson Masonic Schools, Baulkham Hills. 172 Section 8(5) of the Act provided that estate duty was not to be assessed or payable upon so much of an estate as was devised or bequeathed or passed by gift inter vivos or settlement for religious, scientific or public education or purposes in Australia. 173 Dixon CJ noted (at p.319) that there were 150 children at the William Thompson Masonic Schools and Hostels. There was significance in the fact that the schools and hostels were restricted to the children of Free Masons. The expression "section of the public" in sub-section (8) was used in the same sense as the words are used in the law of charitable trusts and the words "public educational purposes" in sub-section (5) would receive an interpretation as wide as they properly possessed in that head of equity. 174 Dixon CJ (at p.321) observed:- "… The tendency of the trust must be to benefit the public, a condition that is satisfied if it tends to the benefit of the public at large, or a class or section of the public. The trust may be limited in their operations by reference to locality, to conditions of people, to their disabilities, defects or misfortunes and by reference to many other attributes of men and things, yet the trusts may retain their 'public' character." 175 A little later at 322, Dixon CJ observed:- "For myself, I would reject the view that a trust in favour of the William Thompson Masonic Schools and Hostels is to be considered a charitable trust because it is for the advancement of education. I would reject it because such a trust would lack the 'public' element, the element of public benefit or advantage that is necessary … Large as is the membership of the Masonic order in New South Wales, it forms but a society of persons bound together as a voluntary association into which members are admitted by the election of the existing members as provided by the rules adopted contractually for the government of the society." 176 The Welfare Fund, as at 28 March 1923, was, by its constitution, subject to the same considerations that were decisive in Thompson's case. Accordingly, the absence of the element of public benefit (as at the date of its formation) in the William Thompson Masonic Schools leads to the conclusion that the Trust established was not a charitable trust on the basis that it was one for the advancement of education. Accordingly, it is necessary to consider whether the Welfare Fund was a trust for the relief of poverty and, on that basis, a valid charitable trust.

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(2) The children of Free Masons who, whilst members of such a Lodge, were prevented by permanent incapacity from supporting their children. 179 The report of the High Court's decision in Thompson's case indicates that, in the main, children accepted into the William Thompson Masonic Schools were stated to be "orphans". In this regard, the argument of counsel appearing for the appellant, A B Kerrigan QC (who appeared with F J D Officer (later Officer QC)), was to the following effect (at p.316):- "… Free Masons constitute a section of the public. It is beneficial to the community that the Schools are maintained and, particularly, that they provide education and maintenance for orphan children. They are not merely schools for a select class. The schools confer a benefit on the community by their existence …" 180 Although the beneficiaries of the Welfare Fund were often described as "orphans" of Masons, the use of the word "orphan" was a somewhat inaccurate one. The original trust contemplated, inter alia, that the children of Masons who had died could be provided for in a school where they could be accommodated on a full-time basis. 181 The William Thompson School was more accurately to be described as one for the fatherless children of deceased Masons or for children whose father, a Mason, had become incapacitated and unable to support them. 182 A reading of the High Court's judgment in Thompson (supra) indicates that the Court was not invited to determine whether the Welfare Fund was a trust for the relief of poverty and that, accordingly, the judgment in that case does not provide any impediment to the issue being determined in the present proceedings. 183 The history of the William Thompson Masonic School from 1922 to 1988 was recorded in a publication "A Start in Life" by Beverley Earnshaw, extracts of which are exhibited to the affidavit of Mr Pretyman behind Tab 60 of AP-1(2). In what appears to have been a well-researched publication in relation to the William Thompson Masonic School as founded in 1922, the learned author records (at pp.7 to 8):- "The William Thompson Masonic School was founded in 1922 at Baulkham Hills, NSW for the care and education of the children of deceased Freemasons. For over 50 years, the school remained the show piece of childcare establishments in N.S.W., the focus of Masonic pride and affection and displayed to the outside world that one of the basic principles of Freemasonry is charity. Today the school still extends a compassionate hand to children in need … From its time of opening, the school cared for over 2,300 orphans during childhood and later assisted them in a variety of ways to take their place as educated and responsible members of society. The Masonic School gave A START IN LIFE to children whose family suffered economic or social distress and demonstrated to the Community at large the depth of compassion and benevolence which is part of the Masonic Ethic. … After Word War 1, with a vast increase in the number of orphans, it became apparent that many Masonic Orphans were not eligible for assistance because their fathers had belonged to Lodges not affiliated with the Society. At this time, a number of circumstances were beginning to emerge, which would combine to bring into being one of the most spectacular childcare projects ever undertaken in Australia, the William Thompson Masonic School." 184 The author of the text, A Start in Life, also recorded part of the address of William Thompson at the occasion of the laying of the School's foundation stone on 25 February 1922. In the course of his address, Mr Thompson is recorded as stating, inter alia (at p.14):- "We are here today to give some tangible evidence of that divine spirit of charity in establishing a home where our little children in years to come will be assured of all the benefits of home life, combined with the very best education that can be procured (Applause). We are eliminating the taint usually conveyed by the word 'Orphanage', and are calling our establishment 'The Masonic School' …" 185 The evidence points strongly to the fact that the intended beneficiaries of the Trust established on 28 March 1923, namely, the specified classes of children, could be properly classed as having been impoverished. 186 There was no express reference in the 1923 trust instrument to poverty. However, an intention to relieve poverty, though not expressed, may, nonetheless in some cases, be inferred or implied from the nature of the gift itself. 187 In The Law and Practice relating to Charities, 3rd ed, Hubert Picarda, it is observed (at [37]):- "Sometimes the intention to relieve poverty is not expressed in the gift, but may be inferred from its nature. It is not absolutely necessary to find poverty expressed in so many words, but the Court will look the whole gift, and, if it comes to the conclusion that the relief of poverty was meant, will give effect to it, although the word 'poverty' is not to be found in it. The collocation of the words 'widows' and 'orphaned children' gives rise to the inference of poverty, whether they be widows and orphans of a particular parish or of deceased officers or ex-officers of a bank … Trusts for poor employees or poor ex-employees had been thrice blessed in the Court of Appeal: the decision of the House of Lords in Dingle v Turner has now put the matter beyond doubt." 188 Further, in Jacobs' Law of Trusts in Australia (supra), it is observed (at [1020]):- "It is not necessary to find poverty expressed in the gift in so many words, but the Court will look at the whole gift, and, if it comes to the conclusion that the relief of poverty was meant, will give effect to it, although the word 'poverty' is not to be found in it … In Re Central Employment Bureau for Women and Students' Careers Association, a fund established 'for the purpose of helping educated women and girls to become self-supporting' and which had no commercial end in view was held to be a valid charitable trust, as being for the advancement of education and the relief of poverty, the expressed purpose of the gift being a sufficient implication that its recipients were poor within the meaning of the Statute of Elizabeth. The requirement of poverty had also been imported into a gift to 'aged widows and spinsters' and to 'widows and orphans'. That a trust might be a valid charitable trust for the relief of poverty, although it makes no express reference to poverty, the element of poverty being nearly implicit in the language of the trust, was accepted by the High Court of Australia in Union Trustee Co of Australia Ltd v Federal Commissioner of Taxation …" 189 In RSL Veterans' Retirement Villages Limited v NSW Minister for Land (supra), Palmer J observed at [57]:- "57. … In ascertaining the spirit of this trust, it is relevant to have regard to the trust's history and the social context of the time at which it was established." 190 Similarly, in Re Gillespie [1965] VR 402, Little J, at 406, stated:- "Poverty is a relative term. In order to be valid as a gift for the relief of poverty, the law does not require that the persons to be benefited should be destitute or even on the border of destitution." 191 I have earlier set out the criteria that determined eligibility of the children of deceased Masons as at the time the 1923 Trust was established. As Mr Free in his submissions (paragraph 25) observed, having regard to the prevailing social conditions at that time and the role of fathers as the primary breadwinners, it may reasonably be inferred that children of deceased ex-Masons were in a position of relative poverty and financial difficulty. As he there, with respect, correctly observed:- "The intention of the settlors to relieve such poverty is reflected not only in the general objects of the Fund as specified in 1923, but also in the specific examples included in the objects …" 192 I am of the opinion that the objects of the Welfare Fund as at 28 March 1923 were for the relief of poverty and, as such, the trust thereby established was a valid charitable trust.

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(3) The resulting trust alleged in the statement of claim did not arise. 199 In his judgment of 21 December 1949, Roper CJ in Eq recorded that the deceased, a wealthy many with a philanthropic nature, had an extreme interest in Free Masonry, in particular, in the educational work of the Welfare Fund. He wished to establish the Fund as a memorial to his deceased wife, Edith. 200 By decree of the Court made on 21 November 1950, Roper CJ in Eq declared that certain funds which had been received by the Welfare Fund on account of "the NSW Masonic School Welfare Fund" were held upon trust to apply the income of the funds in accordance with the terms of a draft trust deed styled "Edith Boyd Memorial Trust Fund" and that such trusts were charitable and valid. 201 As earlier noted, the present plaintiffs were appointed as trustees of the Edith Boyd Fund on 27 November 1972. 202 The present plaintiffs in the capacity of trustees of the Edith Boyd Memorial Trust Fund commenced proceedings (No 2055 of 1975) in this Court joining the Attorney General of New South Wales and seeking orders concerning the administration of the Edith Boyd Memorial Trust Fund. An amended summons was filed on 11 November 1975 which joined two directors of the plaintiffs and set out a proposed cy pres scheme for the further administration of that Fund. 203 The proceedings were heard before Helsham J on 28 November and 11 December 1975. His Honour made declarations and orders on 11 December 1975 for a cy pres scheme, the details of which were set out in the Second Schedule to the order made on 11 December 1975 and entered on 14 January 1976. 204 Since the latter date, the Edith Boyd Memorial Trust Fund has been administered in accordance with the order establishing the scheme. 205 Mr Whittle, in his submissions in relation to the relief claimed in paragraph 3A, referred to the submissions made on behalf of the Attorney General in the present proceedings which suggested that the persons purportedly appointed as trustees of the Masonic Schools Welfare Fund of NSW & ACT under the Deed made on 14 January 1927 were not validly appointed as trustees of the Welfare Fund. In the plaintiffs' written submissions in relation to the relief claimed in paragraph 3A, it was observed that it would follow from those submissions that:-

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(2) Since the plaintiffs derived their title from the trustees purportedly appointed in 1927, the plaintiffs are, at best, trustees de son tort of the Welfare Fund. 206 It was also noted in the plaintiffs' submissions (paragraph 13) that the question of whether the present Executive Committee of the Welfare Fund (as successors to the original Executive elected in 1923) are the true trustees of the Welfare Fund was a matter to be determined in the present proceedings. 207 In the proceedings determined by Roper CJ in Eq, the defendants to those proceedings were alleged in the statement of claim, and found to be, the "trustees of the NSW Masonic School [sic] Welfare Fund". The plaintiffs have submitted that, given the history of the Welfare Fund and the documents contained in Exhibit AP-1, this must be read as the persons who had taken office as trustees from time to time under the Deed of 14 January 1927. It was said that this is confirmed by the history of the appointment of the successive trustees pursuant to that Deed which is set out in the recitals to the Deed of 27 November 1972. 208 The submission was that when these documents are examined it is seen that three of the defendants in 1947 proceedings were persons who had been appointed trustees by the Deed of 1927 and the remaining two defendants in the 1947 proceedings had subsequently been appointed as trustees. 209 In the plaintiffs' submissions on paragraph 3A (paragraph 15) it was contended:- "15. It is therefore further submitted that the effect of the decree made by Roper CJ in Eq is that the trustees under the 1927 Deed and their successors were declared to be trustees of the Boyd Fund. This declaration has never been impeached." 210 The submissions record the history, to which I have earlier referred, as to the trustees under the 1927 Deed commencing proceedings (No 1064 of 1971) in the Supreme Court seeking judicial advice from the Court in relation to the incorporation of the present plaintiffs with a view to the existing trustees retiring and investing the assets of the Welfare Fund and the Edith Boyd Memorial Trust Fund in the plaintiffs. 211 Following incorporation of the plaintiffs, the assets of both the Welfare Fund and the Edith Boyd Memorial Trust Fund were transferred to them as trustees by Deed made on 27 November 1972. 212 In these circumstances, it was submitted on behalf of the plaintiffs:- "18. It is therefore submitted that, whomever may be found to be the true trustees of the Welfare Fund, the plaintiffs have a clear chain of title as trustees of the Boyd Fund from the persons the Court declared to be trustees of the Edith Boyd Fund in 1950, and the plaintiffs were therefore validly appointed in 1972 and remained trustees of the Boyd Fund." 213 It was, accordingly, submitted that the Court should make the declaration sought in paragraph 3A of the Second Amended Summons. 214 The Attorney General did not make any submissions in relation to the Edith Boyd Fund issue. 215 It is clear that the plaintiffs do have a clear chain of title in respect of the Edith Boyd Fund. The persons who were initially to hold the Fund were the five gentlemen Mr Boyd identified and which the Court (Roper CJ in Eq) determined were the original trustees. 216 Following the declaration of them as trustees, they, in turn, over time resigned and either the remaining original trustees or their successors resigned offices in 1972 in favour of the plaintiffs. It is clear on the evidence that there is a proper basis for the making of the declaration sought in paragraph 3A.

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(12) APPLICATION PURSUANT TO S.81 OF THE TRUSTEE ACT 1925 IN RESPECT OF ASSETS OF THE FUND 217 The plaintiffs filed in Court a Notice of Motion dated 21 April 2009. An order was sought in it in the following terms:- "That, until the conclusion of these proceedings and any appeals therefrom, the Plaintiffs be granted, pursuant to section 81 of the Trustee Act 1925 (NSW), power to sell, convert, transfer or otherwise dispose of any of their assets at any time in the general purposes of the Fund known as the 'Masonic Youth Welfare Fund of NSW & ACT', including the payment of any costs incurred or ordered to be paid by them in these proceedings or any appeals therefrom." 218 The application was supported by the affidavit of Mr Pretyman sworn 22 April 2009. In that affidavit, Mr Pretyman provided his assessments in respect of the future financial commitments of the Fund together with details as to legal costs incurred and anticipated. 219 Taking into account the Welfare Fund's projected income from the date of his affidavit and the variables to which he referred, he stated there was a real possibility that the Fund would have insufficient income to meet its current and future financial obligations and liabilities to 30 June 2010 as they arise. 220 On that basis, the plaintiffs expressed a wish to have the power to sell property in the form of shares and securities to meet the Fund's current and future financial obligations and liabilities if such sale or sales become necessary. 221 Mr Pretyman exhibited to his affidavit a copy of the advice provided by Mr Whittle dated 5 December 2008 which deals with the appropriate course for the plaintiffs to follow in this respect. 222 On 27 April 2009, the question was raised as to whether or not the Court would need to postpone making the order sought in the notice of motion until judgment was delivered in the substantive proceedings. I decided that the application should not be heard before the issues to be considered in this judgment were determined. 223 In the circumstances and, in particular, in light of the findings and conclusions I have expressed in this judgment, the Notice of Motion is to be re-listed for further hearing.