First Defendant: Attorney General of NSW
Second Defendant: Ian David Robb
Third Defendant: David William Thomas Parkin
Representation: Counsel:
Plaintiffs: S. Free
First Defendant: G. Stapleton
Second and Third Defendants: submitting appearance
[2]
Solicitors:
Plaintiffs: David Baxter, Pikes & Verekers Lawyers
First Defendant: Lea Armstrong, Crown Solicitor
File Number(s): 2017/276671
Publication restriction: No
[3]
Judgment
These proceedings are charitable trust proceedings under the Charitable Trusts Act 1993. They are brought by the trustees of what the Court finds to be a charitable trust over certain property used for religious purposes in Hurstville, a suburb of Sydney. And they are proceedings with respect to the administration of that charitable trust: Charitable Trusts Act, s 5.
Each of the five plaintiffs, Geoffrey Plummer, Clive Yeomans, Richard Davies, John Whittle SC, and Ronald Randall, is an ordained elder of The Church of the Living God in Hurstville (referred to in these reasons as "the Hurstville Church" or "the Church"). The Hurstville Church is not led by a minister. Rather, it is made up of a congregation of self-led believers professing the Christian faith, who meet of their own accord. Together, the plaintiffs are referred to in these reasons, for convenience, from time to time, as "the Trustees".
The Trustees seek judicial determination of issues relating to certain property said to be charitable trust property so they can administer that trust property in an appropriate manner. The trust property in question is as follows: six parcels of land in Hurstville; money in various bank accounts; and other items of personal property used in the day to day running of the Church.
Three defendants are joined to the proceedings. The first defendant is the Attorney General for NSW. The second and third defendants, respectively Mr Ian Robb and Mr David Parkin, who are, or were, former trustees of the charitable trust in question, have written to the solicitors for the plaintiffs indicating that they do not wish to be involved in the proceedings. The Court is satisfied that they have been appropriately served in the proceedings and that they are content to have this matter resolved in their absence and that they will thereafter comply with the Court's orders.
[4]
Relief Sought by the Plaintiffs
The declarations sought in the Trustees' Summons sufficiently identify the issues for decision. The declarations and orders sought address the following matters:
1. Whether charitable trusts were declared by any of the relevant deeds of trust made on 23 September 1971, 19 May 1978, or 12 September 1985;
2. Who are the Trustees of any charitable trusts constituted pursuant to the deeds of trust identified in (a);
3. Pursuant to which of the above deeds of trust do the Trustees hold six parcels of land in Hurstville, money in various bank accounts, and other items of personal property used in the day to day running of the Church;
4. Whether further or other ancillary orders that the Court deems appropriate, including orders under the Charitable Trusts Act, s 7(2) or in the alternative, Trustee Act 1925, s 70, should be made; and
5. Whether an order should be made that the plaintiffs' costs and the Attorney General's costs be paid out of the assets of such trusts as the Court holds to have been declared under the deeds.
[5]
Procedural History and Evidence Adduced
The Trustees commenced these proceedings by Summons on 12 September 2017. At the hearing they read the following affidavits in support of their application:
1. An affidavit of Richard Gordon Davies sworn on 21 August 2017;
2. An affidavit of Shirley Anne Welsh sworn on 21 August 2018;
3. An affidavit of Clive Julian Yeomans sworn on 23 August 2017; and
4. Affidavits of John Brian Whittle sworn on 25 August 2017 and on 4 May 2018.
Mr S. Free of counsel, instructed by David Baxter of Pikes & Verekers Lawyers appeared for the plaintiffs. Mr G. Stapleton of counsel, instructed by Lea Armstrong, the Crown Solicitor, appeared for the first defendant, the Attorney General of NSW.
The second defendant (Ian Robb) and the third defendant (David Parkin) have acted in the role of trustees of the trusts in question. One issue in the proceedings is whether indeed they may still be trustees, as there is a question about the efficacy of the instruments purporting to retire them as trustees. As has been earlier indicated, both Mr Robb and Mr Parkin have written letters to the Court acknowledging these proceedings and advising that they do not wish to take an active role and will abide by the orders of the Court. Darke J accepted at several directions hearings that these letters from Mr Robb and Mr Parkin should be treated as the equivalent of submitting appearances. Their letters were tendered and both these defendants were treated at the hearing as submitting to the orders of the Court. No costs order is sought against any defendant.
A charitable trust for the purposes of the Charitable Trusts Act is a "trust established for charitable purposes and subject to the control of the Court in the exercise of the Court's general jurisdiction with respect to charitable trusts". For the reasons elaborated below, the Court has concluded that the trusts that apply to the property of the Hurstville Church are established for charitable purposes, namely for religious purposes: Attorney General for NSW v The NSW Henry George Foundation Ltd [2002] NSWSC 1128 ("Henry George Foundation") at [22]. The Attorney General has given consent pursuant to Charitable Trusts Act, s 6(1) for the bringing of these proceedings.
[6]
Outline of the Sources of Evidence the Trustees Rely Upon
The plaintiffs' affidavit evidence draws upon the recollection and experiences of a number of persons involved with the Hurstville Church over 50 years. The deponents of the affidavits relied upon have the following associations with the Hurstville Church:
1. John Brian Whittle SC. In his affidavit sworn on 25 August 2017, together with the documents in Exhibit JBW-1 to that affidavit, Mr Whittle explains that he attended meetings of the Hurstville Church regularly between 1971 and 1975, occasionally between 1975 and 1994, and then regularly from 1994 to the present time. He was ordained as an elder of the Hurstville Church in July 2006. Mr Whittle sets out in his affidavit the history of the Hurstville Church from 1966 to the present, largely by reference to documentary records. One of those records is an affidavit of the late Desmond Arnold Rose sworn 18 February 2010. Mr Rose was an elder of the Hurstville Church. He died on 24 January 2014. In his second affidavit sworn on 4 May 2018, Mr Whittle SC makes some minor corrections to aspects of his first affidavit. He also provides an update as to the state of the bank accounts and funds held by the trustees.
2. Clive Julian Yeomans. In his affidavit sworn 23 August 2017, together with the documents in Exhibit CJY-1 to that affidavit, Mr Yeomans gives a history of having attended the meetings of the Hurstville Church regularly since 1977. Before that time, he was also involved in meetings of an associated Church group at Kingswood. Mr Yeomans was ordained as an elder of the Hurstville Church in July 1980. He has acted as a trustee since that time. Mr Yeomans explains in his affidavit that in about 1977, divisions had occurred between some individuals in the Kingswood and Hurstville congregations, resulting in certain settlements of disputes and the purported retirement of trustees and the appointment of new trustees.
3. Richard Gordon Davies. In his affidavit sworn on 21 August 2017, Mr Davies gives an account of having been ordained as an elder of the Hurstville Church in July 2006 and of his involvement with the Church in recent decades.
4. Shirley Anne Welsh. In her affidavit sworn 21 August 2017, Miss Shirley Welsh deposes that she began attending meetings of the Hurstville Church in 1969 and she gives an account of some of the early history the Hurstville Church from the perspective of a member of the congregation in those early times.
[7]
Objections to Evidence
The Attorney General was content for the affidavits to be received into evidence, without cross-examination of any deponent, on the basis of acknowledgments by the plaintiffs as to the limited use to which certain parts of the evidence could be put. Despite these technical limitations, the Court has been assisted by receiving the affidavits into evidence in their entirety. They contain the most complete and organised explanation of events relating to the Church that is available for the lengthy period in question.
The plaintiffs accepted that the technical limitations of the evidence listed below may affect the weight attached to that evidence by the Court. But the affidavits in each case make quite clear the difference between the deponent's opinion or judgment, and the underlying historical material on which that opinion or judgment is based. The Court has found these affidavits to be of considerable value, partly because they make this distinction clear.
The plaintiffs acknowledge that the affidavit of Mr Whittle SC sworn 25 August 2017 includes evidence that is not based on Mr Whittle's direct knowledge, but reflects his understanding based on conversations with other plaintiffs and the late Mr Rose, as well as on Mr Whittle's own review of the documents. Mr Whittle makes this clear. Many paragraphs of his affidavit also address matters that are within Mr Whittle's direct knowledge, for example with respect to church practices spanning the period both before and after Mr Whittle began attending the church. Some material is expressly based on information conveyed by Mr Baxter, the solicitor for the plaintiffs. Mr Whittle also refers to documents and provides some commentary. The documents largely speak for themselves. But Mr Whittle's commentary about the effect of documents was received as commentary only. And Mr Whittle's understanding or belief, based on his own observations and review of the documents, and his conversations with other plaintiffs and the late Mr Rose, is also admitted into evidence only as representing Mr Whittle's understanding or belief.
The plaintiffs also acknowledge that the affidavit of Mr Yeomans sworn 23 August 2017 includes references to conversations with other people and describes the understanding of Mr Yeomans based on such conversations. Mr Yeomans also refers to documents and provides some commentary. The plaintiffs accept that the documents largely speak for themselves but Mr Yeoman's commentary, as to the effect of documents, was received as comment only.
The affidavit of Mr Davies sworn 21 August 2017 includes references to conversations with other people associated with the Church and describes the understanding and belief of Mr Davies based on such conversations. This and Mr Davies other evidence to similar effect was treated only as reflecting the understanding or belief of Mr Davies.
The affidavit of Shirley Anne Welsh sworn 21 August 2017 includes references to conversations with other people associated with the Church and where it describes the understanding of Miss Welsh based on such conversations, the Court treated the evidence in question as only reflecting her understanding.
Based on this evidence and the underlying historical material, the Court now sets out a narrative of its findings on material matters. Not all the extensive evidence and the materials adduced before the Court are referred to in this narrative, which is focused upon the principal conclusions to be drawn from that evidence and those materials.
This narrative is substantially taken from the very helpful written submissions prepared by Mr Free of counsel, and his solicitors Messrs Pikes & Verekers, which the Court has found set out an historical narrative that is faithful to the underlying materials and evidence. The Court has mostly adopted the inferences that were sought to be drawn in the narrative prepared by counsel, because of its fidelity to the evidence and the reasonableness of its inferences.
[8]
History of the Hurstville Church
In 1966, a congregation of Christians began to meet at 25 Carrington Avenue Hurstville, in a meeting hall that had been created through the conversion of several rooms in a single storey timber house. At the time, 25 Carrington Avenue was owned by Miss Alma Rice, who regularly attended meetings of the congregation. Miss Rice lived in a flat in a rear section of the house.
From about 1966, 25 Carrington Avenue was known as "The Christian Fellowship Centre". A noticeboard outside the building displayed this name and advertised the times of meetings of the congregation. The people comprising the congregation were referred to as "the Church" (and also as "the Assembly") in keeping with traditional biblical usage of that term to describe a body of persons rather than a building.
The Hurstville Church has met continuously since 1966. It does not have a written constitution. Nor does it have any formal statement of doctrinal belief. Since 1971, within the Church there has been a major emphasis on the preaching and teaching of the principles of the doctrine of Christ set out in the Epistle to the Hebrews, 5:12-6:2. People are recognised as "members" of the Hurstville Church if they regularly attend meetings, profess faith in Jesus Christ, and have been baptised by immersion in water and taken the testimony of laying on of hands after baptism (in accordance with Hebrews 6:2). No formal process exists for joining the Church or being registered or recorded as a "member". According to Mr Whittle, it would not be possible, and would not have been possible at any time in the history of the Hurstville Church, to compile a definitive list of its "members". Almost all meetings of the Hurstville Church since 1966 have been open to the public. The main weekly meeting is held on a Sunday.
Leaders within the Hurstville Church, who among other responsibilities decide who is to preach from time to time, are ordained as the Church's "elders". The process of ordination of elders involves the laying of hands on the ordainee. At any one time, between two and five elders will usually serve the Hurstville Church.
[9]
The Kingswood Church
In the 1960s and 1970s, an association developed between the Hurstville Church and another group of Christians meeting in the Penrith area, who followed substantially the same doctrines and teachings as the Hurstville Church. From 1970, that other group, under the leadership of Maxwell McAuley and David Parkin, and known as the "Kingswood Church", congregated in a property at 80 Joseph Street Kingswood ("the Kingswood Property"). Mr Yeomans, who attended the Kingswood Church, provided the funds to acquire the Kingswood Property. Various people who attended the Hurstville Church also attended the Kingswood Church from time to time.
In July 1971, the Hurstville congregation divided due to some personality issues and friction among its members. In the result, all the ordained elders (other than Mr Desmond Rose) stopped attending meetings of the Hurstville Church. But the personal property then being used in the Hurstville Church remained in use. And the Hurstville Church's ANZ bank account continued thereafter to be used only for the Hurstville Church.
Between 1971 and 1977, the Kingswood Church and the Hurstville Church used such real and personal property as they each had available to them. But each Church used that real and personal property for that Church's own needs and meetings. This division of the use of property and funds was informal.
[10]
Contributions of Money and Hurstville Church Bank Accounts
Those attending the Sunday meetings of the Hurstville Church have always been given an opportunity to make voluntary contributions of money for the general ministries carried out by the Church. Beyond this, there has never been an appeal for gifts or any formal system of regular contributions to Church funds. Individuals have long been able to make voluntary gifts of money, goods or services at any time.
After the commencement of meetings of the Hurstville Church, the elders maintained a bank account with the Australia and New Zealand Banking Group Limited ("the ANZ"). The Hurstville Church no longer holds the ANZ Bank statements from that early period. But cheque butts are available from an ANZ cheque account XXXX21 relating to the period between 1969 and 1975.
[11]
Acquisition of Real Property and Declaration of Trust 1971-1975
In 1971, Miss Rice agreed to sell the property at 25 Carrington Avenue for $20,000. Completion of that sale occurred on 24 December 1971. The property was transferred to Messrs McAuley, Parkin and Rose as joint tenants. The property was purchased from Miss Rice using funds gifted by the members of the Hurstville Church, supplemented by a mortgage from the ANZ. The mortgage over 25 Carrington Ave was discharged not long afterwards in 1973. That mortgage, as with all later mortgages, was discharged using freewill offerings from those attending the meetings of the Hurstville Church, or from specific gifts or bequests made from time to time.
On 23 September 1971, shortly prior to the settlement of the sale of 25 Carrington Avenue, Messrs McAuley, Parkin and Rose entered into a trust deed (the 1971 Trust Deed). The timing and content of the 1971 Trust Deed indicate that it was probably drafted in anticipation of the settlement of the purchase of 25 Carrington Avenue. The operative effect of the 1971 Trust Deed was to declare that "the trust property" was held "upon trust to employ it for any charitable purpose or purposes which the Trustees may from time to time in their absolute discretion select": the 1971 Deed, clause 2(i). And the 1971 Deed, clause 1 defines "trust property" as "the whole of the real and personal property which may be acquired by and for the time being held by the Trustees for the purposes of the trust hereof".
The recitals to the 1971 Trust Deed refer to the purchase of the Kingswood Property. These recitals state that Messrs McAuley, Parkin and Rose had "recently purchased … 80-82 Joseph Street Kingswood … in trust for the above purposes". The "above purposes" are the purposes described in the recitals as being the use of properties for the purpose of gatherings of people to be "instructed in the doctrines of the apostles and the prophets that they may believe and be baptized in the name of Jesus Christ and continue meeting together in fellowship, worship, breaking of bread and to assist those who seek our help in matters of spiritual or physical need."
The 1971 Trust Deed, clause 17 confers on the trustees the power to acquire property, including real property. Clause 17 provides that property so acquired "shall be held by the Trustees upon the trusts hereof". By the 1971 Deed, clause 18, the trustees are authorised to apply the trust property or any part thereof for the benefit of any other charitable trust (whether or not the trustees of such other charitable trust include the trustees hereof or any of them).
After the 1971, Deed Mr Rose discussed a suggestion by Mr McAuley that 25 Carrington Avenue be put into the trust, with the three elders, Messrs McAuley, Parkin and Rose, to thenceforth hold it as trustees. As at the date of the 1971 Trust Deed, contracts had been exchanged for the purchase of 25 Carrington Avenue but settlement was yet to occur. Mr Rose agreed with Mr McAuley's suggestion. On that basis, 25 Carrington Avenue was transferred on settlement to Messrs McAuley, Parkin and Rose. Mr Rose's sworn affidavit constitutes evidence in writing by a trustee that shows 25 Carrington Avenue was then committed to the trust created by the 1971 Deed for trust purposes.
The Hurstville Church's property holdings expanded further. On 11 August 1975, Messrs McAuley, Parkin and Rose became the registered proprietors, as joint tenants, of the next door property, 23 Carrington Avenue, Hurstville. That next door property was purchased for $45,000 using funds from the Hurstville Church's ANZ cheque account, supplemented by a secured mortgage advance from the ANZ. At the time of its purchase, a single storey house was erected on the 23 Carrington Avenue property. Since then, the 23 Carrington Avenue property has been extensively modified.
[12]
Breakdown of Relations with McAuley and Parkin and Settlement of Dispute - 1977
In May 1977, relations within the congregation of the Kingswood Church broke down badly. Messrs McAuley and Parkin ceased attending the Kingswood Church. Mr Rose began to minister to the Kingswood Church congregation, at their invitation. On 27 May 1977, various members of the Kingswood Church and the Hurstville Church signed a document purporting to approve the retirement as trustees of Messrs McAuley and Parkin and the appointment of new trustees, Messrs Yeomans, McAuley and Robb (together with the continuation of Mr Rose as trustee). In July 1977, members of the Hurstville Church signed a document purporting to declare that Messrs McAuley and Parkin were no longer recognised as elders of that Church and purporting to approve Messrs Yeomans, McAuley and Colin Hall as "Responsible Brothers to be responsible for the flock".
Nothing in the 1971 Trust Deed would make the processes reflected in these 1977 documents effective either to remove Messrs McAuley and Parkin as trustees or to appoint Messrs Yeomans, Robb and McAuley as new trustees. The plaintiffs have not suggested in submissions that these documents had any legal consequence. They are relevant only to the extent that they assist in understanding the historical context of events.
On 14 June 1977, Messrs McAuley and Parkin executed a "Deed of Removal of Trustee", purportedly removing Mr Rose as a trustee pursuant to the 1971 Trust Deed, clause 23. The Deed of Removal of Trustee was registered on 29 June 1977.
In July and August 1977, negotiations commenced between Messrs McAuley and Parkin, on the one hand, and Messrs Rose and Yeomans, on the other, with the objective of settling the disputes which had riven the Hurstville Church and the Kingswood Church. The matters negotiated are referred to in a narrative of solicitor's work contained in a memorandum of fees issued to Mr Yeomans on 15 August 1977. That narrative includes reference to the handing over of keys and a Certificate of Title on the Kingswood Property "in return for the release of the Hurstville Property by Deed and by Memorandum of Transfer". A Deed and the Memorandum of Transfer are said in the narrative to have been forwarded to "Mr Dufty of Hurstville". Mr Dufty was indeed the solicitor acting for Mr Rose in relation to Hurstville Church matters at that time.
Although the Chronological Bundle tendered in evidence in these proceedings includes a letter from Mr Dufty to Mr Rose, enclosing a "Deed of Appointment of New Trustees" and a Memorandum of Transfer, the deed in question has not been found.
There were in fact two Real Property Act Transfers executed in August 1977. And it should be inferred that they were intended to give effect to this settlement. By a transfer dated 18 August 1977, the Kingswood Property was transferred from Messrs McAuley, Parkin and Rose to Messrs McAuley and Parkin for consideration of $1.
By a transfer dated 15 August 1977, the properties at 23 Carrington Avenue and 25 Carrington Avenue were transferred from Messrs McAuley, Parkin and Rose to Mr Rose, Mr Phillip Alan Wareham, Mr Robb and Mr Alexander Cornell Stewart. This transfer is expressed as being "in pursuance of Deed dated 15 August 1977".
Despite their extensive searches, including at the Registry of Deeds, the plaintiffs have been unable to locate a copy of this 15 August 1977 Deed (which will be referred to in these reasons as "the Missing 1977 Deed"). Other documents are held in various places: among the records of the Hurstville Church, among Mr Parkin's records and among the documents at the offices of the solicitors retained at the time. But none of those document repositories have yielded a copy of the Missing 1977 Deed.
Based on the references to the Missing 1977 Deed contained in the available documents, and the surrounding circumstances disclosed in the documentary and affidavit evidence, it may reasonably be inferred that:
1. the parties to the Missing 1977 Deed were Messrs McAuley, Parkin, Rose, Wareham, Robb and Stewart. As he deposes in his affidavit, Mr Yeomans was not a party to the deed;
2. the Missing 1977 Deed was part of a settlement of the dispute involving the Kingswood Property and the properties at 23 Carrington Avenue and 25 Carrington Avenue Hurstville, and included the purported removal of Mr Rose as trustee under the 1971 Trust Deed. This is corroborated by the account given by the deceased elder Mr Rose in his affidavit;
3. the Missing 1977 Deed (and/or a related instrument) provided for the retirement of Messrs McAuley and Parkin as trustees in respect of 23 Carrington Avenue and 25 Carrington Avenue;
4. the deed (and the transfer executed at the same time) provided for the transfer of the properties at 23 Carrington Avenue and 25 Carrington Avenue so that those properties would no longer be held by Messrs McAuley and Parkin;
5. the Missing 1977 Deed (as reflected in the contemporaneous Transfer) provided for the transfer of 23 Carrington Avenue and 25 Carrington Avenue to Messrs Rose, Wareham, Robb and Stewart. Prior to the deed, Mr Rose was the only ordained elder of the Hurstville Church. Mr Rose explained in his affidavit that he thought it appropriate to hold the properties together with others because he regarded those properties as always having been held on trust for religious purposes and he did not think that he should hold them alone as trustee. Messrs Wareham, Robb and Stewart were members of the Hurstville Church at the time;
6. the Missing 1977 Deed provided for the appointment of Messrs Wareham, Robb and Stewart as trustees in respect of 23 Carrington Avenue and 25 Carrington Avenue. This is indicated by the reference in the solicitor's correspondence to a "Deed of Appointment of New Trustees". The available evidence does not suggest that the parties, or any of them, made a new trust deed or new declaration of trust in respect of 23 Carrington Avenue and 25 Carrington Avenue in 1977. Moreover, the notion of a "Deed of Appointment of New Trustees" assumes the appointment of new trustees to an existing trust, not the creation of a new trust. In the circumstances, it should be inferred that the settlement was made on the basis that the 1971 Trust Deed would continue to govern the trusts in respect of those properties and the new trustees were appointed under that trust deed; and
7. in relation to Mr Rose, the Missing 1977 Deed may have rescinded the purported removal of Mr Rose as trustee or otherwise provided for his re-appointment as trustee. Whichever mechanism was adopted, the parties evidently agreed to resolve a dispute about the purported removal of Mr Rose as trustee by agreeing that Mr Rose (with others) should henceforth act as trustee in respect of 23 Carrington Avenue and 25 Carrington Avenue. For the reasons explained above, it must be inferred that this was intended to be done pursuant to the 1971 Trust Deed.
The affidavit of Mr Davies gives an insight into the attitude of the members of the Hurstville Church to these matters concerning the Kingswood Church. Mr Davies, as a regular attendee of the Hurstville Church from 1971, understood in 1977 that the dispute with the Kingswood Church had been settled on the basis that the properties at 23 and 25 Carrington Avenue would be held on trust for the purposes of the Hurstville Church.
Mr McAuley died on 19 November 1982. After his death, the Kingswood Property was sold by Mr Parkin and Mr Parkin entered into a deed of release dated 25 May 1983 with Messrs Yeomans, Rose and Robb "as trustees of the Christian Fellowship Centre, Hurstville". Pursuant to that deed of release, the parties agreed to settle between them, "all differences arising out of the [Kingswood Property]" for the sum of $40,000 paid by Mr Parkin to the trustees.
[13]
The 1978 Trust Deed
On 19 May 1978, Messrs Rose, Wareham, Robb and Stewart executed a Trust Deed ("the 1978 Trust Deed"). But the 1978 Trust Deed was not registered until 2015.
The recitals to the 1978 Trust Deed indicate that by Deed dated 15 August 1977, Messrs Rose, Wareham, Robb and Stewart became the Trustees of 23 Carrington Avenue and 25 Carrington Avenue. This is further corroboration that the Missing 1977 Trust Deed had the various effects described earlier in these reasons.
The recitals to the 1978 Trust Deed further state that Messrs Rose, Wareham, Robb and Stewart as trustees had "resolved to enter into this Deed in order to clarify and redefine the terms of the Trust". Clause 1 provides that the name of the Trust shall be the Christian Fellowship Centre Trust.
Clauses 2 and 3 of the 1978 Trust Deed provide (with emphasis added):
"2. The purpose of the trust is to hold properties, buildings, furnishings and equipment to:
(a) afford a meeting place for:
(i) the preaching and propagation of the Word of God,
(ii) fellowship, worship and breaking of bread,
(iii) prayer,
(iv) the preaching and propagation of the Gospel of Jesus Christ,
(v) the holding of special meetings such as gospel campaigns, youth and children's meetings, and Holy Convocations,
(vi) the conducting of weddings and funerals,
(b) supply accommodation for
(i) workers who are active in the carrying out of the varied ministries associated with the Church gathering at the Christian Fellowship Centre
(ii) guests who come for periods of fellowship and ministry.
3. The Trustees hereby declare that they hold the properties specified in the Schedule hereto, together with all vehicles, furnishings, fittings and equipment and moneys entrusted to them from time to time upon trust for the Church meeting at the Christian Fellowship Centre and for the purposes of the trust."
The properties specified in the Schedule are the properties at 23 and 25 Carrington Avenue.
The 1978 Trust Deed, Clause 4 provides that the first Trustees of the Trust shall be the parties to the deed (that is, Messrs Rose, Wareham, Robb and Stewart) and subsequently the trustees shall be the elders of the Hurstville Church (chosen in accordance with the qualifications in 1 Timothy 3:1-7 and Titus 1:7-9).
The 1978 Trust Deed, Clause 6 deals with the removal and retirement of Trustees. It specifies that any trustee who resigns from his eldership or leaves the Hurstville Church, or who is removed from his office by the Church because of sin or heresy, "shall forthwith cease to be a Trustee and his name shall be removed from the Trust".
The 1978 Trust Deed, Clause 14 provides that the trustees may "from time to time acquire by purchase or otherwise any land or lands … [to] be held by the Trustees upon the trusts hereof".
As of May 1978, when the 1978 Trust Deed was made, the personal property used by the Hurstville Church consisted of a motor vehicle, chairs, hymn books, musical instruments, Christian books and money held in the Christian Fellowship Centre bank account (being at that time account 86.10321). The balance in the bank account at that time was $7,422.04.
The affidavit of Mr Davies again gives an insight into the attitude of the members of the Hurstville Church. Mr Davies, as a regular attendee of the Hurstville Church, has no recollection of any announcement of a new trust or new trust deed in or around 1978. Miss Welsh does recall that at a meeting around 1977 or 1978 Mr Rose read out what he described as a "new trust deed" and gave those present an opportunity to read the deed.
[14]
Retirements, Appointments and Acquisition of Property 1978-1981
By registered deed, executed on 21 July 1978, Mr Stewart retired as a trustee. The deed was executed by the "continuing trustees", Messrs Rose, Wareham and Robb.
The deed of retirement refers to the 1978 Trust Deed as the instrument by which Mr Stewart and the continuing trustees had "declared that they held certain properties and assets therein specified upon the trusts therein set out".
By Transfers of the same date as the deed of retirement of Mr Stewart, the properties at 23 Carrington Avenue and 25 Carrington Avenue were transferred from Messrs Stewart, Rose, Wareham and Robb to Messrs Rose, Wareham and Robb as joint tenants. The Transfers are stated to be made pursuant to the deed of retirement of 21 July 1978.
On 27 October 1978, Messrs Rose, Wareham and Robb acquired as joint tenants for a consideration $40,000 the other adjacent property to 25 Carrington Avenue, namely 27 Carrington Avenue. The available cheque book and cash book records for October 1978 indicate that a substantial part of the purchase price was funded through a personal loan from AC and DEC Stewart. At the time of purchase, there was a freestanding one storey brick cottage on 27 Carrington Avenue. That building remains on the property.
On 22 July 1980, Mr Robb and Mr Yeomans were ordained as elders of the Hurstville Church. The 1978 Trust Deed, clause 4 contemplated that that act of ordination as an elder was sufficient in itself to make Mr Yeomans a new trustee under the 1978 Trust Deed.
Notwithstanding this, on 22 September 1980, a deed was executed by Messrs Rose, Wareham, Robb and Yeomans (and ultimately registered only in 2015), which provided for the retirement of Mr Wareham as trustee and the appointment of Mr Yeomans as trustee ("the 1980 Retirement and Appointment Deed"). The appointment of the new trustee was said in the 1980 Retirement and Appointment Deed, clause 1 to be done pursuant to the powers under the 1978 Trust Deed and under the Trustee Act. By the 1980 Retirement and Appointment Deed, clause 3 it was declared that the properties specified in the Schedule were held "upon the trusts and with and subject to the powers and provisions contained in the [1978] Trust Deed". The properties specified in the Schedule were the properties at 23, 25 and 27 Carrington Avenue.
From 1980, Mr Yeomans acted as if he were a trustee in respect of the trust property.
By Real Property Act transfers of the same date as the 1980 Retirement and Appointment Deed, the properties at 23, 25 and 27 Carrington Avenue were transferred from Messrs Rose, Wareham and Robb to Messrs Rose, Robb and Yeomans as joint tenants. The Transfers are stated as being made in pursuance of the 1980 Retirement and Appointment Deed.
On 31 December 1981, Messrs Rose, Robb and Yeomans acquired 29 Carrington Avenue as joint tenants. The property was acquired for $75,000. The purchase price was funded by means of a cheque for $37,650 drawn on the Hurstville Church ANZ bank account XXXX66, with the balance being supplied through a loan secured by first mortgage from the ANZ. At the time of purchase, there was a freestanding one storey brick cottage on 29 Carrington Avenue. That building remains on the property.
[15]
1985 Trust Deed
On 12 September 1985, Messrs Rose, Robb and Yeomans as trustees executed a Trust Deed ("the 1985 Trust Deed"). The 1985 Trust Deed was also registered in 2015.
The recitals to the 1985 Trust Deed state that, "the Trustees have resolved to enter into this Deed in order to record the change of name [of the trust]" (from "Christian Fellowship Centre" to "Hebron") and "to set out the terms of the trust". This is further explained in the affidavit of Mr Rose, who says that the 1985 Trust Deed came about because Mr Rose considered it appropriate to draft a new document to reflect the change in name from Christian Fellowship Centre to "Hebron" (being the name used for the expanded property at Hurstville) and "The Church of the Living God" (being the name in which the Church's meetings were held).
The 1985 Trust Deed, clause 1 provides that the name of "the Trust" (described in the recitals as the trust declared by the 1978 Trust Deed) shall be the "Hebron Trust".
Clause 2 sets out "the purpose of the Trust" in identical terms to 1978 Trust Deed, clause 2, but for two minor variations:
1. "trust" is capitalised in the 1985 Trust Deed but not in the 1978 Trust Deed; and
2. in the 1978 Trust Deed, clause 2(a)(v) there is a reference to "Holy Convocations" but there is no such reference in cl. 2(a)(v) of the 1985 Trust Deed.
By the 1985 Trust Deed, clause 3, the Trustees purported to "declare that they hold the properties specified in the Schedule hereto, together with all vehicles, furnishings, fittings and equipment and moneys entrusted to them from time to time upon trust for the members of the Church which meets at Hebron and for the purposes of the Trust" (emphasis added).
The properties at 23, 25, 27 and 29 Carrington Avenue are the real property specified in the Schedule to the 1985 Trust Deed. Whatever may be its legal effects, the 1985 Trust Deed is one more cumulative historical step that confirms that the Trustees for the time being had long intended that the acquisition of the several adjacent properties commencing with the 25 Carrington Avenue was designed to add properties into a single trust that had existed since the time of the first acquisition of 25 Carrington Avenue.
As at the time of the 1985 Trust Deed, the Hurstville Church's bank account held $14,231.67.
[16]
Retirements, Appointments and Acquisition of Property - from 1989 to the Present
On 13 October 1989, Messrs Rose, Robb and Yeomans acquired 31 Carrington Avenue as joint tenants. The property was acquired for $205,000. The Hurstville Church applied its own funds for much of the purchase price of this property, with the balance being supplied by a loan from the ANZ secured by first mortgage. At the time of purchase, there was a freestanding one storey brick cottage on 31 Carrington Avenue. That building remains on the property.
On 15 May 1990, Messrs Rose, Robb and Yeomans executed a deed styled a "Deed of Variation of Trust". This 1990 Deed of Variation of Trust purported to vary the 1985 Trust Deed by:
1. amending the words of clause 3 to add, after the word "Hebron" in that clause, "which is the Church of the Living God (1 Timothy 3:15) whose pastors are the ordained elders of the Church"; and
2. adding 31 Carrington Avenue to the Schedule of trust property in the 1985 Trust Deed.
The 15 May 1990 Deed of Variation of Trust was lodged for registration in 2015 but rejected because of apparently defective execution as a deed.
Mr Geoffrey Laurence Plummer was ordained as an elder of the Hurstville Church on 9 June 1989.
According to the terms of both the 1978 Trust Deed (clause 4) and the 1985 Trust Deed (clause 4), the ordination of Mr Plummer as an elder was effective to make him a trustee under those deeds. Notwithstanding this, as with Mr Yeomans, the appointment was formalised in a deed. On 16 May 1990, Messrs Rose, Robb and Yeomans, with Mr Plummer, made a "Deed of Appointment of Additional Trustee" by which they purported to appoint Mr Plummer as an additional trustee of the trust declared in the 1985 Trust Deed. The appointment was said to be made in the exercise of all powers enabling the Continuing Trustees (ie Messrs Rose, Robb and Yeomans) to appoint Mr Plummer as a "Trustee of the Hebron Trust": clause 1. The 16 May 1990 Deed was lodged for registration in 2015 but also rejected because of defective execution as a deed.
Mr Plummer proceeded to act as if he were a trustee in respect of the trust property.
On 12 November 1993, Messrs Rose, Robb, Yeomans and Plummer acquired 21 Carrington Avenue as joint tenants. The property was acquired for $240,000. The purchase price came from a combination of gifts received by the Hurstville Church and a personal loan to the purchasers from a church member Mr David Tuckett (which loan was subsequently repaid). At the time of purchase, there was a freestanding one storey brick cottage on 21 Carrington Avenue. That building remains on the property and a large room and a smaller room have been added at the rear (for use principally for children's ministry).
On 3 July 2006, Mr Davies and Mr Whittle were ordained as elders of the Hurstville Church. Both proceeded to act as if they were trustees in respect of the trust property. That is consistent with the arrangement under the 1978 Trust Deed (clause 4) and the 1985 Trust Deed (clause 4) whereby the elders of the Hurstville Church are the trustees of the trust. But no deed was made to record the appointment of either Mr Davies or Mr Whittle as trustee.
In August 2007, Mr Robb ceased acting as an elder of the Hurstville Church. He has not attended meetings at the Hurstville Church since that time.
By letter dated 27 August 2007 to Messrs Rose, Yeomans and Plummer, Mr Robb stated that he wished to resign his position as trustee of "the properties of the Church of the Living God". He stated his willingness to attend to any necessary legal documentation. Mr Plummer stated in a reply dated 1 September 2007 that Mr Robb's resignation was accepted by the other trustees and that it would be necessary for a deed reflecting the resignation to be executed.
A "Deed of Retirement of Trustee" was executed in about October or November 2007. This 2007 Deed of Retirement of Trustee provides for the retirement of Mr Robb as trustee of the Trust, defined as the trust declared in the 1978 Trust Deed. That deed is signed by Mr Robb (as the "Retiring Trustee") and by Messrs Rose, Yeomans, Plummer, Davies and Whittle (as the "Continuing Trustees").
Mr Whittle explains in his affidavit that he was responsible for the drafting of the 2007 Deed of Retirement of Trustee, but in light of the history of the trust deeds of which he has subsequently become aware, he no longer regards the recitals to this deed as an accurate account of the early history of the trusts.
At about the same time as the 2007 Deed of Retirement of Trustee, Mr Robb executed transfer documents providing for the transfer of all the real property in Carrington Avenue to the continuing trustees.
The present registered proprietors of the Carrington Avenue properties are as follows:
Street address Folio ID Registered proprietors
21 Carrington Ave D/334764 Robb, Yeomans and Plummer as joint tenants
23 Carrington Ave E/334764 Robb and Yeomans as joint tenants
25 Carrington Ave Auto Consol 12242-201 Robb and Yeomans as joint tenants
27 Carrington Ave 70/1958 Robb and Yeomans as joint tenants
29 Carrington Ave 69/1958 Robb and Yeomans as joint tenants
31 Carrington Ave Folio 68/1958 Robb and Yeomans as joint tenants
[17]
On 21 December 2008, Mr Ronald Ashley Randall was ordained as an elder of the Hurstville Church.
Mr Rose died on 24 January 2014.
The Trustees hold donations to the Hurstville Church in several bank accounts with the ANZ for the purposes of the Church. These bank accounts also hold money given by a small meeting of believers who attend meetings at rented premises in the Northern Beaches of Sydney. A table of the various bank accounts held by the plaintiffs as at 27 April 2018 is at Annexure A to the affidavit of Mr Whittle sworn 4 May 2018 and the list need not be reproduced in these reasons.
As of 25 August 2017, the personal property held by the plaintiffs for the purposes of the Hurstville Church (apart from the moneys held at the bank), consisted of a number of motor vehicles, four small to medium sized buses, chairs, hymn books, Christian books, dining hall and kitchen equipment, the furnishings and fittings in the properties, computers and musical instruments. All this personal property has been acquired using Church funds.
The plaintiffs have obtained development consent from Hurstville City Council for the purpose of redeveloping the land at 21-31 Carrington Avenue as a hall, carpark, accommodation, offices and service rooms. It is a condition of the development consent that the whole of the site be consolidated into one allotment by a registered plan of subdivision. The development consent will lapse on 20 August 2019 if substantial commencement has not occurred before that date.
[18]
Stamp Duty Issues
One of the reasons why the plaintiffs are seeking an authoritative statement as to the terms on which trust property is held is that they have encountered difficulties with the Office of State Revenue concerning the stamping of various instruments. These matters are referred to in the Yeomans Affidavit. One concern is that conveyances of the trust property of the Hurstville Church are treated as attracting ad valorem duty because the trustees are persons who are, or could become, beneficiaries under the trust. This concern arises from the reference in the 1978 Trust Deed to property being held "upon trust for the Church meeting at the Christian Fellowship Centre and for the purposes of the trust" (and the similar reference in the 1985 Trust Deed to "members of the Church"). It not a matter in issue in these proceedings for the Court to consider the correctness of the stamp duty treatment of particular instruments by the Office of State Revenue. That could not occur as the Office of State Revenue is not a party to the proceedings. These matters are referred to in the evidence only because they form part of the factual context giving rise to the present proceedings.
[19]
Analysis of the Trusts in Question
What follows is an analysis of the questions for determination based on the effect of the various deeds and the circumstances found in the above narrative. This analysis is closely based on the careful submissions of counsel on this subject with which the Court agrees.
The nature of the trust associated with each of the parcels of land acquired for the purposes of the Hurstville Church should first be examined, starting with the earliest acquisitions and moving to the later acquisitions.
The property 25 Carrington Street was acquired by Messrs McAuley, Parkin and Rose as joint tenants on 24 December 1971. A few months prior, Messrs McAuley, Parkin and Rose had made the 1971 Trust Deed in which they made a declaration (in clause 2(i)) that they shall hold "the trust property" upon trust to employ it for "any charitable purpose or purposes which the Trustees may from time to time in their absolute discretion select". The "trust property" was defined to mean the whole of the real and personal property "which may be acquired by and for the time being be held by the Trustees for the purposes of the trusts hereof" (clause 1). And the recitals to the 1971 Trust Deed also refer to the Kingswood Property having recently been acquired for trust purposes.
The purposes of the trust declared in the 1971 Trust Deed are as set out in clause 2(i). There is a different formulation of the trust purposes in the recitals. However, in circumstances where the declaration of trust in the operative part of the deed (clause 2(i)) is in clear and unambiguous terms, the recitals cannot be used to alter the meaning of the deed: see Robert F Norton, Robert J A Morrison and Hugh J Goolden, A Treatise on Deeds (2nd ed, 1981, Sweet & Maxwell) ("Norton on Deeds") at 197-198.
Under the 1971 Trust Deed, clause 17 the Trustees had the power to acquire land and any land so acquired "shall be held by the Trustees upon the trusts hereof".
The property 25 Carrington Avenue was acquired using the funds of the Hurstville Church. There does not appear to have been any separate declaration or deed of trust relating specifically to 25 Carrington Avenue at the time of purchase. But the very clear inference from the contents of the 1971 Trust Deed, its timing and surrounding circumstances, is that 25 Carrington Avenue was acquired pursuant to the terms of the 1971 Trust Deed and thereafter became part of the trust property under that trust.
A trust of land of this kind must be manifested and proved by writing: Conveyancing Act 1919, s 23C(1)(b). Various documents set out in the narrative of fact post-dating the acquisition of 25 Carrington Street provide written evidence that the property was held on trust. Documents created after the declaration of trust in respect of property can be relied on to satisfy the statutory requirement that the trust be evidenced in writing: Secretary, Department of Social Security v James (1990) 95 ALR 615; [1990] FCA 213 at 622.
The trust thereby created in respect of 25 Carrington Avenue was a valid charitable trust. The 1971 Trust Deed provides that the land was held for "for any charitable purpose or purposes which the Trustees may from time to time in their absolute discretion select." That is a sufficiently certain declaration of trust because charitable trusts "are not held void for uncertainty of objects if there is a clear indication of a general purpose of charity": J D Heydon, Jacobs' Law of Trusts in Australia (7th ed, 2006, LexisNexis Butterworths) at [1061].
In 1975, Messrs McAuley, Parkin and Rose purchased 23 Carrington Avenue using the funds of the Hurstville Church. Again, there does not appear to have been any separate declaration or deed of trust specifically relating to 23 Carrington Avenue at the time of purchase. But the clear inference is once again that 23 Carrington Avenue was, as with 25 Carrington Avenue, acquired pursuant to the terms of the 1971 Trust Deed and became part of the trust property under that trust. As with 25 Carrington Avenue, there are a number of subsequent documents referred to in the narrative that provide evidence in writing that 23 Carrington Avenue was held on trust.
The Court's inferences as to the likely contents of the Missing 1977 Deed are referred to in the narrative. Pursuant to that deed, was a purported appointment of new trustees under the 1971 Trust Deed. As will be developed in analysis further below, such an appointment could only properly be effected by registered deed. That did not occur in 1977. It follows that although Messrs Rose, Wareham, Robb and Stewart proceeded to act as if they were trustees of the trust property under the 1971 Trust, they were not validly appointed trustees. To the extent that they acted as if they were trustees after that date they did so as trustees de son tort.
The 1978 Trust Deed and the 1985 Trust Deeds purported to clarify in various ways, but did not alter the existing trust or create a new trust in respect of 23 and 25 Carrington Avenue. But the legal effect, if any, of both these deeds requires closer analysis.
To the extent that the 1978 Trust Deed purported to "clarify and redefine" the terms of the trusts on which 23 and 25 Carrington Avenue were held, it was ineffective. The trustees already held those properties on trust pursuant to the terms of the 1971 Trust Deed. The trustees had no power under the 1971 Trust Deed or otherwise to change the terms of those trusts. Any purported variation of the terms of the trust, including the charitable purposes of the trust, was ineffective: see NSW Masonic Youth Property Trust v Her Majesty's Attorney-General in and for the State of NSW [2009] NSWSC 1301 ("Masonic Youth Property") at [123]-[133], [137], citing Attorney General for New South Wales v Fred Fulham & Ors [2002] NSWSC 629 ("Fred Fulham") and RSL Veterans' Retirement Villages Limited v NSW Minister for Land [2006] NSWSC 1161 ("RSL Veterans").
Moreover, the trustees who were purporting to effect this clarification and redefinition of the 1971 Trust were not themselves validly appointed trustees in respect of that trust.
It follows that the 1978 Trust Deed cannot be construed as effecting a new declaration of trust in respect of 23 and 25 Carrington Avenue. In any event, given the reference to "clarifying" the terms of the Trust, on its proper construction the 1978 Trust Deed should not be understood as purporting to create a new trust or alter the substance of the existing trust in respect of that property. Any attempt in the 1978 Trust Deed to "redefine" the terms of the existing trust in respect of 23 and 25 Carrington Avenue was legally ineffective.
It also follows from this reasoning that there was no subject matter for the purported declaration of trust in the 1978 Trust Deed and it was also ineffective for that reason. The trust property purportedly settled by the 1978 Trust Deed was 23 and 25 Carrington Avenue, together with "all vehicles, furnishings, fittings and equipment and moneys entrusted to them from time to time upon trust for the Church meeting at the Christian Fellowship Centre and for the purposes of the trust": clause 3. Such property was already impressed with the trust declared in 1971.
An equivalent analysis applies in respect of the 1985 Trust Deed. This later deed was made to "record the change of name" (that is, the change of the name of the trust from the Christian Fellowship Centre Trust to the Hebron Trust) and to "set out the terms of the trust". By application of the principles stated in Masonic Youth Property at [123]-[133], [137], Fred Fulham and RSL Veterans, the 1985 instrument was not legally capable of changing the terms of the trust on which the trustees already held the trust property, including 23 and 25 Carrington Avenue.
[20]
Construction of "Trust Purposes" in the 1978 and 1985 Trust Deeds
The next question is to identify the trust that applied to each of the properties acquired from 1978 onwards. But first, a general question as to the proper construction of the 1978 and the 1985 Trust Deeds must be addressed.
The 1978 Trust Deed, clause 2 describes the "purpose of the trust" as being to hold properties, buildings, furnishings and equipment to afford a meeting place and supply accommodation for the purposes of the Church and associated activities. This stated purpose is a valid charitable purpose, namely the advancement of religion: see, for example, Wylde v Attorney General for NSW (1948) 78 CLR 224; [1984] HCA 39 ("Wylde") at 255. By 1978 Trust Deed, clause 3, the trustees also declared that they held the properties in the Schedule (and other property) "upon trust for the Church meeting at the Christian Fellowship Centre and for the purposes of the trust". Notwithstanding that clause 2 states explicitly what the "purposes of the trust" are, clause 3, on one view, states an additional purpose, namely the holding of property "upon trust for the Church meeting at the Christian Fellowship Centre".
The reference to "the Church meeting at the Christian Fellowship Centre" is a reference to a group of people. A church in this sense is a voluntary, unincorporated association: Wylde at 258. The narrative shows that the Church of the Living God does not have, and has never had, any readily identifiable group or list of persons comprising the Church at any given time.
If there is no readily identifiable group of persons comprising the "Church", then the reference in clause 3 may perhaps be meaningless or ineffective. A trust, unless charitable, must have beneficiaries: Leahy v Attorney-General for New South Wales [1959] AC 457 at 478-479, 484; Re Endacott; Corpe v Endacott [1960] 1 Ch 232 at 246; Pedulla v Nasti (1990) 20 NSWLR 720 at 722. In the absence of proper identification of such beneficiaries, the notion of property being held for "the Church meeting" cannot be understood as a gift to such people or as a purported trust for beneficiaries.
The impossibility of identifying with any precision the persons who qualify as "the Church meeting" at Hurstville must have been a notorious fact at the time of the 1978 Deed. Therefore, those words in the 1978 Deed, clause 3 should not be construed as making a gift to such persons. If the words are perhaps to be construed as describing with sufficient precision a group of people, then clause 3 could be read as reflecting an intention to gift the trust property to all present and future members of the Church (or, alternatively, the class of members at the time of the 1978 Deed).
But it is clear from the balance of the 1978 Trust Deed that an immediate disposition in the form of a gift to present members was not intended. The purpose of holding the trust property to conduct church meetings and provide associated accommodation is incompatible with gifting that property to a group of people for their benefit.
A gift to all present and future members would infringe the rule against perpetuities, which remained applicable until the commencement of the Perpetuities Act 1984. A gift in perpetuity which was not a charity was void, prior to the Perpetuities Act: South Eastern Sydney Area Health Service v Wallace (2003) 59 NSWLR 259; [2003] NSWSC 1061 at 264.
A more fundamental difficulty exists in reading the 1978 Trust Deed as a gift of trust property to persons. The property in question was already held for charitable purposes pursuant to the 1971 Trust Deed. Any purported gift of that property to persons would be contrary to the terms of the existing charitable trust. Any such purported gift by the trustees would, in my view, be void.
A number of alternative hypothetical analyses lead to the same result. The first part of the 1978 Trust Deed, clause 3 could, for example, be characterised as a gift for a non-charitable purpose which failed. In such circumstances, no possibility of apportionment of the property between the two purposes would arise and the trust property as a whole would be treated as being held for the charitable purpose: Dal Pont and Gino Evan, Law of Charity (2nd ed, 2017, LexisNexis Butterworths) ("Law of Charity") at [13.13] citing Re Coxen [1948] Ch 747 at 752 per Jenkins J.
This is an exception to the ordinary principle that would require some apportionment between charitable purposes and quantifiable gifts to non-charitable purposes (which thereby fail). The exception is appropriate in circumstances where "as a matter of construction the gift to charity is a gift of the entire fund or income subject to the payments thereout required to give effect to the non-charitable purpose, in which case the amount set free by the failure of the non-charitable gift is caught by and passes under the charitable gift": Re Coxen [1948] Ch 747 at 752 per Jenkins J.
This analysis is consistent with the Charitable Trusts Act, s 23 which provides that the inclusion of a non-charitable purpose, as well as some charitable purpose, does not invalidate a trust.
Another alternative construction would lead to the same result. The phrase in clause 3 "upon trust for the Church meeting at the Christian Fellowship Centre and for the purposes of the trust" could be read not disjunctively as referring to distinct purposes, but to different aspects of the same charitable purpose. That property was being held on trust "for the Church meeting" was expressing no more than an aspect of the general charitable intention for the property to be applied to the purposes described more particularly in clause 2. The approach to such formulations of trust objects is described by Dal Pont in the Law of Charity at [13.8] in the following terms:
"[13.8] Gifts construed as specifying cumulative requirements, one of those being that the object be charitable, will generally be upheld. Cumulative requirements, unlike alternatives, operate to restrict the scope of the gift not just to charitable purposes, but to charitable purposes that also meet the other specified requirements."
Thus in Manoogian (Armenian Patriarch of Jerusalem) v Sonsino [2002] EWHC 1304 (Ch) ("Armenian Patriach"), a trust was upheld where the income of the trust was to be applied "for the purpose of the education and advancement in life of Armenian children". Jacob J read the words conjunctively such that "advancement" was construed as "qualifying the sort of education to which the income is to be applied". That is, the object of the charity was "education which will advance the children's future life". To like effect, the 1978 Trust Deed, clause 3 may be understood as meaning that the trustees hold the trust property for the benefit of the worshippers of the Church by pursuing the purposes of the trust as specified in clause 2. The reference to "the Church meeting" may thereby be understood as just one aspect of the charitable purpose of advancing religion.
In Armenian Patriarch Jacob J at [25] and [26] considered that his Lordship's preferred construction was reinforced by the fact that the will referred to a single "purpose", rather than plural purposes. The 1978 Trust Deed exhibits slightly conflicting indications: clause 2 refers to "the purpose of the trust", whereas clause 3 refers to "the purposes of the trust". But clause 2, being explicitly formulated as a statement of "the purpose of the trust" in the singular, tends to suggest that the settlors of the trust intended that there would be only one purpose. The reference to additional matters in clause 3 should be understood as an expression of an aspect of the same charitable purpose.
The same analysis applies to the 1985 Trust Deed. That deed refers to "the members of the Church". Those words in isolation might suggest a more explicit intention to gift property to persons. But read in context, the analysis of those words should be no different from that above in relation to the 1978 Trust Deed.
Even if the 1978 and the 1985 Trust Deeds were effective to declare a trust in respect of particular property, which, in my view, they were not, the trust so declared should be understood as being a trust to hold the property for the purpose of the trust described in clause 2 of each of those deeds. And that purpose is to be understood as being advantageous to those who from time to time comprise the Church meeting at Hurstville.
[21]
Trusts Applicable to the Real Property Acquired from 1978 Onwards
Between the 1978 Trust Deed and the 1985 Trust Deed, two properties were acquired using the funds of the Hurstville Church. The property 27 Carrington Avenue was acquired by Messrs Rose, Wareham and Robb on 14 November 1978. The property 29 Carrington Avenue was acquired by Messrs Rose, Robb and Yeomans on 31 December 1981. The use of the Church's funds for these acquisitions by many of the same trustees as had acquired the earlier adjacent properties impressed with the trust created by the 1971 Deed is itself a strong indication that these later acquisitions were intended to be held on that same trust.
There was no separate, specific declaration of trust made in respect of the 27 and 29 Carrington Avenue properties at the time of their purchase. It is evident from the narrative that later documents indicate that the transferees understood that those properties were acquired and held under the 1978 Trust Deed.
It is theoretically possible to analyse this history on the basis that 27 and 29 Carrington Avenue were acquired and held under the terms of 1978 Trust Deed, even though 23 and 25 Carrington Avenue were, as a matter of law, held pursuant to the 1971 Trust Deed. Analysis of this kind has been applied where there are indications that those acquiring different properties at different times intended to settle those properties under different trusts, despite the properties being associated with a single organisation: see Fred Fulham.
But such an analysis here would have an air of unreality. There is nothing to indicate that the trustees at any time understood that they were acquiring 27 and 29 Carrington Avenue to be held on a different trust from that which applied to 23 and 25 Carrington Avenue. No distinction was ever drawn between the properties in terms of the trusts which applied to them. Nor is there any indication that any distinction was ever drawn in the donation of funds, or the handling of the funds of the Hurstville Church between donations made at particular times. The 1971 Trust Deed provided for the creation of a trust fund consisting of all moneys received by the Trustees under the trusts referred to in the deed: clause 6. Such a fund has been maintained (in one or more bank accounts) continuously since 1971 and added to by contributions, gifts and bequests from persons attending the Hurstville Church or supporting its work from time to time over that whole period.
The properties acquired from 1978 onwards were not intended to be impressed with a new and different trust, but were acquired subject to the same trust as applied to 23 and 25 Carrington Avenue. The trustees who acquired properties after 1978 may have had the mistaken understanding that the terms of that trust were as set out in the 1978 Trust Deed. But these reasons have concluded that that the terms of the applicable trust were as set out in the 1971 Deed, not the 1978 Deed. Despite this misstatement in the 1978 Trust Deed, the trust which applied to 23 and 25 Carrington Avenue was, as a matter of law, the trust created by the 1971 Trust Deed. It follows that 27 and 29 Carrington Avenue should be understood as having been acquired pursuant to the same trust.
An equivalent conclusion was reached by Hall J in Masonic Youth Property at [136]-[154] in relation to moneys held in a fund known as the Masonic Youth Welfare Fund of NSW and ACT. In that case, a single fund had been maintained since 1923. Hall J concluded that various purported "amendments" to the trust in 1927 and later years were not effective to create new trusts and the money contributed to the fund continued to be impressed with the terms of the original trust.
The same analysis applies to the property acquisitions after 1985. On 13 October 1989, Messrs Rose, Robb and Yeomans acquired 31 Carrington Avenue as joint tenants. The declaration of trust in respect of that property is evidenced in the 1990 Deed of Variation of Trust by which the trustees added 31 Carrington Avenue to the schedule of trust properties. On 12 November 1993, Messrs Rose, Robb, Yeomans and Plummer acquired 21 Carrington Avenue using Hurstville Church funds.
The recitals to the 1985 Trust Deed indicate that there was no intention to settle a separate trust in 1985. The 1985 Trust Deed only represents a restatement of the terms of what was thought to be the existing 1978 trust and reflected the change in name of the Church. The 1985 Trust Deed erroneously assumed (like the 1978 Trust Deed itself) that the 1978 Trust Deed had been effective to create a trust and to impress 23 and 25 Carrington Avenue with the terms of that trust, notwithstanding that they were in fact held on the terms of the 1971 Trust Deed. For the reasons earlier given, to the extent that the 1985 Trust Deed is construed as purporting to "redefine" the terms of the existing trusts over 23, 25, 27 and 29 Carrington Avenue, it did not have that effect. Those properties were already held in trust pursuant to the 1971 Trust Deed. Neither of the 1971 or the 1978 Deeds gave the trustees the power to redefine the terms of the trust or the basis on which property acquired by the trustees in that character was to be held.
[22]
Trust Property in the Form of Money and other Personal Property
The Trustees have never attempted to distinguish between different trusts or trust instruments with respect to the money held in the Hurstville Church's bank accounts and the personal property used by and for the Church. The 1971 Trust Deed was effective to impress the existing property held by and for the Hurstville Church, including money and chattels, with the terms of that trust. No separate accounts were created contemporaneously with the 1978 Trust Deed, such as might suggest an intention to collect and hold funds for the separate purposes of a new trust. There is no practical way to now distinguish between the funds collected at different times. In the circumstances, the only practical conclusion is that the money held in bank accounts and the personal property used by and for the Hurstville Church is held pursuant to the terms of the 1971 Trust Deed.
[23]
Identity of the Trustees and Orders to Regularise the Position of Trustees
The next question to be addressed is: who are the trustees of the trusts that the Court has found to have been created and the trust property that the Court has found to have been impressed with the trust created by the 1971 Deed?
Each of the plaintiffs, Messrs Plummer, Yeomans, Davies, Whittle and Randall, has purported to act as a trustee in respect of, and has dealt with, such of the trust property as is in their care, custody and control. If any of these individuals has not been validly appointed as a trustee, that person is a trustee de son tort in respect of the trust insofar as they have come into possession of particular trust property.
Messrs Yeomans and Plummer are the registered proprietors of real property of the trust. Each of the plaintiffs is a signatory to at least some of the bank accounts of the Hurstville Church and has dealt with trust money on that basis. As trustees de son tort, the plaintiffs remain accountable for such trust property to the same extent as if they had been validly appointed as express trustees: Pearce v Pearce (1856) 52 E.R. 1103; see H A J Ford and William A Lee, Principles of the Law of Trusts (2nd ed, 1990, LawBook Co) at [22910]; Thomas Lewin, Lewin on Trusts (17th ed, 2000, Sweet & Maxwell) at [42-60]-[42-63]; R P Austin, "Constructive Trusts" in P D Finn (ed) Essays in Equity (1985, LawBook Co) at 207-211.
If the plaintiffs are not properly appointed, it is now appropriate for the Court to formalise their position as trustees by order appointing them as trustees.
It is necessary to consider the position of each of the plaintiffs, the defendants and other relevant individuals under the 1971 Trust Deed, the 1978 Trust Deed and the 1985 Trust Deed.
The Court has accepted the plaintiffs' primary submission that all of the trust property continues to be held under the 1971 Trust Deed. The analysis now proceeds on that basis.
Under the 1971 Trust Deed, the original trustees were Messrs McAuley, Parkin and Rose. Clause 22 of the 1971 Trust Deed provides that:
"The Trustees may at any time appoint a new Trustee. The number of trustees shall not by any appointment of a new Trustee be increased beyond four. The Trustees shall at all times make such appointments of a new Trustee as shall be necessary to ensure that a [sic] number of Trustees shall not for any considerable period be reduced below two."
The 1971 Trust Deed, clause 23 provides that any one Trustee may at any time be removed from office by deed executed by the other Trustees and registered in the Office of the Registrar General in accordance with the requirements of the Trustee Act. Such removal was effective upon registration.
And Trustee Act, s 8 authorises retirement by registered deed.
The 1971 Trust Deed does not specify a formal procedure for the appointment of a new trustee. The Trustee Act, s 7(1) provides that a new trustee may be appointed by registered deed in addition to any existing trustee or trustees. Section 7(1) applies only if and as far as a contrary intention is not expressed in the instrument creating the trust and has effect subject to the terms of that instrument: s 6(13) read together with s 7(7). The 1971 Trust Deed, clause 22 provides that new trustees may be appointed but says nothing about the mode by which they are to be appointed. There is no relevant contrary intention to displace Trustee Act, s 7(1), which applies, such that new trustees may be appointed only by registered deed.
Messrs McAuley and Rose are now deceased. Mr Parkin ceased having any involvement with the Hurstville Church from 1977. But it appears that he was never formally removed from the office of trustee. The Missing 1977 Deed probably provided for his removal. However, it was not registered either pursuant to the 1971 Trust Deed, clause 23, or under the Trustee Act, ss 6 and 8 procedures for removal and retirement of a trustee by registered deed.
Mr Parkin has submitted to the orders of the Court. The Court will formalise the position that has prevailed since 1977 by making an order formally removing Mr Parkin as a trustee of the trust created by the 1971 Trust Deed. Such an order may be made under Charitable Trusts Act, s 7(2) and the Trustee Act, s 70 or the Court's inherent jurisdiction.
Mr Rose, one of the other original trustees, was purportedly removed from the office of trustee by the deed executed on 14 June 1977 by Messrs McAuley and Parkin. That deed was registered on 29 June 1977. It should be inferred that Messrs McAuley and Parkin agreed, as part of the subsequent settlement in 1977, either to rescind the purported removal or to re-appoint Mr Rose as a Trustee under the 1971 Trust Deed, clause 22. But no registered deed exists by which Mr Rose was reappointed as a trustee. Although he purported to resume acting as a trustee from 1977 onwards, he did so as a trustee de son tort and not as a validly appointed trustee.
As indicated in the narrative, it should be inferred that that the parties to the Missing 1977 Deed intended that Messrs Wareham, Robb and Stewart would become newly appointed trustees under the 1971 Trust Deed. But the deed was not registered and they were not validly appointed. Although Messrs Wareham, Robb and Stewart proceeded to act on the good faith assumption that they had been appointed as trustees, they were only trustees de son tort from that time.
Both Mr Stewart and Mr Wareham subsequently retired as trustees, by way of registered deeds. In the case of Mr Stewart, the deed of retirement was executed in July 1978 and registered in 2015. In the case of Mr Wareham, the deed of retirement was executed on 22 September 1980 and registered in 2015. In each case, the deeds of retirement referred to the declarations of trust in the 1978 Trust Deed. But understood in context, it is clear that both Mr Stewart and Mr Wareham intended to retire from all responsibilities as trustees in respect of the trust property, including 23 and 25 Carrington Avenue. Trustee Act, s 8 authorizes retirement by registered deed. The deeds of retirement record the consent of the other trustees to such retirement. Although they had been trustees de son tort in respect of the 1971 Trust Deeds to that time, they ceased dealing with trust property from that time and plainly took all appropriate steps to end their trusteeship and disclaim any office of trustee that they may have held.
Mr Robb stopped acting as an elder and trustee in August 2007 and wrote a letter indicating his desire to resign his position as trustee of "the properties of the Church of the Living God". The 2007 Deed of Retirement of Trustee was executed in about October or November 2007 for him. It provided for his retirement as trustee of the Trust, which it defined as the trust declared in the 1978 Trust Deed. The deed was not registered.
The 2007 Deed of Retirement of Trustee was not effective to remove Mr Robb as a trustee of the 1971 Trust Deed if he had been validly appointed. But he only ever acted as a trustee de son tort. Since 2007, he has not acted as a trustee. He no longer wishes to hold that office. But despite this, he is still recorded as the registered proprietor of all of the trust properties on Carrington Avenue.
He may therefore still be a trustee de son tort. In order to remove any doubt about his status, the Court will order that Mr Robb be removed as a trustee of the trust created by the 1971 Trust Deed by way of his substitution for new trustees. Such an order may be made under Charitable Trusts Act, s 7(2), under Trustee Act, s 70 or the Court's inherent jurisdiction. As Mr Robb remains the registered proprietor of all of the real property held by the trust on Carrington Ave, the Court will order that he execute the appropriate Real Property Act Transfers of such property, or if required, that the property vest in the new trustees under Trustee Act, s 9.
Since 1977, various other persons have purported to act as trustees in respect of the property held under the 1971 Trust Deed. From 1978 onwards, there was no explicit act of appointment under the 1971 Trust Deed of any of these persons. This was because those involved with the trust property proceeded on the erroneous basis that the 1978 Trust Deed (or the 1985 Trust Deed for appointments after 1985) was the relevant instrument governing the property and the appointment and removal of trustees. In each case, it was plainly intended that the appointed trustee would be a trustee in respect of all trust property, including 23 and 25 Carrington Avenue.
Each of the plaintiffs has been acting as a trustee for a period of time. Each is also an elder of the Hurstville Church. There has not been any valid act of appointment (by way of registered deed) making any of the plaintiffs trustees under the 1971 Trust Deed. But each has become a trustee de son tort by proceeding to deal in good faith with various trust property as if he were a trustee.
To regularise the existing arrangements, the Court could make orders under Charitable Trusts Act, s 7(2), Trustee Act, s 70, or the Court's inherent jurisdiction that each of Mr Yeomans, Mr Plummer, Mr Davies, Mr Whittle and Mr Randall be appointed as a trustee of the trust created by the 1971 Trust Deed. At present, all five of those people are acting as trustees. But the 1971 Trust Deed provides for a maximum of 4 trustees. The plaintiffs have therefore resolved among themselves that Messrs Yeomans, Plummer, Davies and Randall should be appointed and that is what the Court will order.
The plaintiffs submit that these appointments are appropriate in circumstances where the individuals in question are long established elders of the Hurstville Church. In that capacity, it is submitted, they are the leaders of the Hurstville Church, they have established their suitability as custodians of the trust property and they also qualify as trustees according to the terms of the 1978 and 1985 trust instruments. The Court agrees with that submission and will appoint them because of their proven custodianship.
The Court has not found that the trust property is governed by the 1978 Trust Deed or the 1985 Trust Deed because separate trusts were created by those instruments. It is only necessary therefore to make appointments of trustees under the 1971 Trust Deed and not the later deeds.
[24]
Conclusion and Orders
For these reasons, the Court makes the following declarations and orders:
1. Declare that the deed made by Maxwell John McAuley, David William Thomas Parkin and Desmond Arnold Rose on 23 September 1971 ("the 1971 Trust Deed") established a charitable trust in respect of property ("the 1971 Trust").
2. Declare that the deeds made by Desmond Arnold Rose, Phillip Alan Wareham, Ian David Robb and Alexander Cornell Stewart on 19 May 1978 ("the 1978 Trust Deed") and by Desmond Arnold Rose, Ian David Robb and Clive Julian Yeomans on 12 September 1985 ("the 1985 Trust Deed") did not establish any additional or separate charitable trust in respect of property.
3. Declare that, as at the date of the hearing of these proceedings, the trustee of the 1971 Trust is David William Thomas Parkin.
4. Declare that each of the plaintiffs is a trustee de son tort of the 1971 Trust to the extent that he is possessed of any of the trust property identified in declarations 5 and 6 below.
5. Declare that each of the following parcels of land is subject to the 1971 Trust:
1. 25 Carrington Avenue, Hurstville (Folio 71/1958 and 72/1958);
2. 23 Carrington Avenue, Hurstville (Folio E/334764);
3. 27 Carrington Avenue, Hurstville (Folio 70/1958);
4. 29 Carrington Avenue, Hurstville (Folio 69/1958);
5. 31 Carrington Avenue, Hurstville (Folio 68/1958); and
6. 21 Carrington Avenue, Hurstville (Folio D/334764).
1. Declare that the money standing in the following bank accounts is held on trust under the 1971 Trust:
1. ANZ Bank BSB 012 402 Account Number XXXXXX872 - Hebron ANZ Cheque Account;
2. ANZ Bank BSB 012 402 Account Number XXXXXX491 - Northern Beaches Account;
3. ANZ Bank BSB 012 402 Account Number XXXXXX474 - ANZ Term Deposit 1;
4. ANZ Bank BSB 012 402 Account Number XXXXXX975 - ANZ Term Deposit 2;
5. ANZ Bank BSB 012 402 Account Number XXXXXX124 - ANZ Term Deposit 5;
6. ANZ Bank BSB 012 402 Account Number XXXXXX604 - ANZ Term Deposit 6;
7. ANZ Bank BSB 012 402 Account Number XXXXXX755 - ANZ Term Deposit 7;
8. ING Bank (Australia) Limited BSB 923 100 Account No XXXXXX167 - ING Business Optimiser Account;
9. ANZ Bank BSB 012 402 Account Number XXXXXX121 - ANZ Term Deposit 8;
10. ANZ Bank BSB 012 402 Account Number XXXXXX731 - ANZ Bethel Business Debit Card Account;
11. ANZ Bank BSB 012 402 Account Number XXXXXX708 - ANZ Hebron Business Debit Card Account.
1. Order under Charitable Trusts Act, s 7, Trustee Act, s 70, and the Court's inherent jurisdiction:
1. that David William Thomas Parkin be removed as a trustee of the 1971 Trust;
2. that Ian David Robb be removed as a trustee of the 1971 Trust; and
3. that each of Clive Yeomans, Geoffrey Plummer, Gordon Davies and Ronald Randall (the new trustees) be appointed as a trustee of the 1971 Trust.
1. Order that the costs of these proceedings be paid out of the assets of the 1971 Trust on the indemnity basis.
2. Grant liberty to apply to facilitate the further implementation of these orders, including (should it be necessary) for orders that Ian David Robb execute transfers in respect of the Carrington Avenue properties to the new trustees.
[25]
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Decision last updated: 19 June 2018