University of New South Wales v Attorney General for New South Wales

Supreme Court of NSW|2019-02-13|Before: Ward CJ

Judgment

HER HONOUR: Before me for hearing on 13 February 2019 was an application brought by The University of New South Wales (the University), in its capacity as trustee of the UNSW International House Charitable Trust (the IH Trust), for the making of an order for the establishment of a scheme (in accordance with Annexure A to the summons filed on 25 September 2018) comprised of both cy-près and administrative elements (which I will explain below) on the basis that the purposes of the IH Trust have ceased to provide a suitable and effective method of using the trust property, within the meaning of s 9 of the Charitable Trusts Act 1993 (NSW).
The Attorney General for the State of New South Wales (the Attorney) authorised on 16 July 2018 the commencement of these proceedings, as charitable trust proceedings, in accordance with s 6(1)(a) of the Charitable Trusts Act and has been joined as the defendant to these proceedings in his role as the protector of charities.
The University submits that the proposed scheme (under which the University will continue directly to manage a residential college (as it does presently on an interim basis), with the assistance of an external committee who will give independent advice to the University regarding the College's operations) will place the administration of the IH Trust on a sound footing and will enable the University properly to provide for the safety and welfare of the student residents, as well as to discharge its duties as trustee to exercise reasonable care in the management of the trust property.

Background

The University is the legal owner of the building and land at Kensington upon which a student residential college known as International House (the College) is located. The University holds the building and land subject to the terms of the IH Trust. The IH Trust came into existence in the following circumstances.

The 1962 Trust

In 1962, by a deed dated 24 August 1962 (Trust Deed) a trust was established under which funds were proposed to be raised by a group of Rotarians by public appeal for the erection and establishment of two residential colleges, one at the University and the other at the University of Sydney were to be held and administered (collectively, the Universities).
The Recitals to the Trust Deed stated that the committee formed for the purposes of the appeal was: … desirous of raising money by public subscription and establishing a Fund for the purpose of erecting and establishing International Houses for the University of Sydney and for the University of New South Wales with a view to promoting the tertiary education of certain students in New South Wales and with a view to promoting goodwill and understanding among such students as shall be occupying such Houses from time to time.
The Trust Deed required each House to be: … managed and controlled by an independent Board of Management constituted by the Governing Body of each respective University in which shall rest the ultimate responsibility for each House and that the House shall be managed separately and apart from the University upon whose grounds each House shall be established.
Pausing here, the University points out that the concept of management and control by an "independent Board of Management" is not explained nor defined in the Trust Deed and, as will be seen below, in due course uncertainty as to this requirement has led to difficulty in the proper administration of the IH Trust.
The Trust Deed provided that the sums contributed to the public appeal, after payment of all necessary expenses, should be paid to the respective Universities in equal shares "for the specific purpose of the erection and establishment of the said International Houses to be erected on land belonging to each University in furtherance of the declared objective of the Appeal".
Prior to making any payment to the respective Universities, the Trust Deed required the trustees to obtain an undertaking from the governing body of each University that "all sums paid to each University will be specifically applied in the erection establishment and administration as aforesaid".

Undertaking

On 2 April 1965, Mr Freeman, the then chairman of the trustees of the 1962 Trust, wrote to the Vice Chancellor of the University, noting that under the Trust Deed it was the duty of the trustees to obtain an undertaking from the governing body of the University and attaching a draft undertaking which it was said "had been prepared by the solicitors for the trustees and submitted to and approved by eminent Senior Counsel". The draft undertaking stated that: I advise that the contents of the Trust Deed governing the Fund of the University's International House Appeal have been brought to the attention of the Council of the University of New South Wales and particularly the provision requiring the Trustees of the Fund to obtain a specific undertaking from the Council before monies from the Appeal are paid over to such University by the Trustees. I am directed by the Council of this University to inform you that the Council undertakes that all sums paid to this University by the Trustees will be specifically applied in the erection, establishment and administration of the International House in this University as specified by the terms of the Trust Deed.
On 12 July 1965, the Executive Committee of the University's Council recommended to the Council that the Vice-Chancellor be authorised to sign the undertaking on behalf of the Council and the Council resolved accordingly.
On 22 May 1967, the University received its share of the funds raised from the public appeal in accordance with the Trust Deed, on the terms of the undertaking given by the University to the trustees of the Trust. By letter dated 22 May 1967, the Bursar of the University advised the trustees that: This University receives the sum of $203,265.94 in full settlement of all monies due in terms of the appeal and subject to the undertakings that the funds will be applied in a manner which has been agreed upon in earlier correspondence. [the Undertaking]
Thus, the IH Trust is comprised of the Undertaking given by the University in the form attached to the 2 April 1965 letter, which expressly incorporates the terms of the Trust Deed by requiring the University to apply the moneys in the "erection, establishment and administration of the International House … as specified by the terms of the Trust Deed".
The purposes of the IH Trust included not only the construction of the College, but also the continuing use of the College building and land upon which the building is constructed for the purposes stated in the Trust Deed. The University thus accepts that the IH Trust is impressed upon the building and land upon which the College is constructed, from time to time.

Incorporation of company to manage the College

On 26 October 1964, the University incorporated a company named 'The University of New South Wales International House Limited' (IHL) for the purpose of managing the College. By 2016, issues had arisen as to IHL's management of the College.

Termination proceedings

On 4 April 2016, the University served on IHL a notice of termination in respect of its occupation of the College building and its management of the College, on a number of grounds, including alleged food and fire safety violations.
In June 2016, IHL commenced proceedings in this Court seeking (amongst other relief) an injunction against the University in respect of that notice of termination. Those proceedings were heard by McDougall J (see University of New South Wales International House Ltd v University of New South Wales [2016] NSWSC 1709). At [63], his Honour noted that: The University was obliged, by the terms of its undertaking, to ensure that International House, once constructed and open for business, was used as a place of residence for overseas and Australian students undertaking courses of study at the University and his Honour also noted that that the terms of the IH Trust included both the requirement that there be an "independent Board of Management" constituted by the University Council and the requirement for "the ultimate responsibility for each House" to "rest" in the relevant "Governing Body", being the University Council.
His Honour considered that the requirement that the University constitute an "independent Board of Management" must be read as a "power to constitute, or establish, it afresh, or from time to time, as circumstances might require", and that the University Council had the power to terminate the appointment of a manager from time to time in office but that this power was one to be exercised only for the purposes of the IH Trust (i.e., when its exercise was required in the interests of, and in the furtherance of the purposes of, the IH Trust).
His Honour concluded that, although the University had the power to terminate the appointment of the manager (IHL), the power of termination had not been validly exercised (as the University had taken into account irrelevant considerations, such as changes to the Constitution of IHL and the failure of the University and IHL to reach agreement on the terms of a lease and management agreement). His Honour granted IHL injunctive relief against the University.
On 31 March 2017, his Honour delivered a further judgment (University of New South Wales International House Ltd v University of New South Wales (No. 2) [2017] NSWSC 306) dealing with the question of costs, in which his Honour declared that the reserves of money accumulated by IHL during its time as manager of the College, held in its own name, and were derived from its operation of the College, formed part of the assets of the IH Trust.

Second notice of termination

Subsequently, on 9 June 2017, the University issued to IHL a second notice of termination of its services as the manager of the College, with effect on and from 4 December 2017, again relying upon failure to ensure compliance with food and fire safety regulations, but also relying upon IHL's failure to respond to requests for information regarding the operations of the College. In that regard, the University relied upon IHL's refusal to provide to the University: copies of insurance policies currently in force; a report prepared by Randwick Council of a food safety inspection conducted on 11 April 2017; the management structure and organisation chart of IHL (which it is said precluded the University from being satisfied as to whether or not the College's operations were adequately or appropriately staffed); and operational plans, policies and/or procedures for managing student misconduct and welfare.
The University maintained that its duties as trustee included exercising reasonable care in the conduct of the administration of the College, including by appropriately supervising IHL's performance as a manager. IHL asserted, to the contrary, that the University did not have any general supervisory function with respect to IHL's performance as a manager, as this would be inconsistent with control being vested in an "independent Board of Management", and declined to provide the information sought by the University. (As adverted to above, the University points to confusion as to the roles and responsibilities of the University and IHL as stemming directly from the terms of the Trust Deed itself, which it says provides no clarity as to how the University's duties as trustee were to be discharged if an "independent Board of Management" conducted the College's day-to-day operations.)

Appointment of administrators and then liquidators to IHL

On 6 September 2017, voluntary administrators were appointed to IHL pursuant to s 436A of the Corporations Act 2001 (Cth) and on 12 October 2017, at a meeting of creditors, the creditors (which included the University in its capacity as trustee of the IH Trust) resolved that IHL be wound up under s 439C(c) of the Corporations Act and the administrators were appointed as the liquidators of IHL.

Operations of the College since November 2017

In late 2017, the University applied to this Court for orders under s 81 of the Trustee Act 1925 (NSW) in relation to certain building issues (2017/00290380). That application was heard and determined by Rein J. His Honour granted the University power to demolish an extension to the College building and to conduct related renovation works.
On 30 November 2017, the transfer of the operations of the College to the University was completed. Since then, the University's Student Accommodation division (UNSW SA) has undertaken the management and control of the College. The University submits that UNSW SA is highly experienced in the provision of student accommodation, noting that, at full capacity, approximately 2,000 students reside in residences managed by UNSW SA (which include: UNSW Colleges, which are all located on the University's Kensington campus and comprise Basser College, Goldstein College, Philip Baxter College, Fig Tree Hall, Colombo House and UNSW Hall; and UNSW Apartments, which comprise University Terraces, Barker Street Apartments, Mulwarree Apartments and 46 High Street Apartments).
In March 2018, the University made a further application again under s 81, for an order to confer power upon the University to manage and control the College until further order of the Court, having regard to the absence of such power in the Trust Deed or Undertaking. That application was heard and determined by Sackar J (University of New South Wales v Attorney General for the State of New South Wales [2018] NSWSC 550). On 17 April 2018, his Honour made an interim order (in anticipation of the University making the present application to vary the Trust by way of cy-près and administrative scheme) to the effect that the University have power to manage and control the College until further order. The Attorney was a party to that proceeding, as well as to the earlier s 81 application.

Relevant principles

The Court's jurisdiction at general law to apply charitable trust property cy-près, was originally restricted to circumstances in which the original purposes of the Trust had become impossible or impracticable to carry out (see Attorney-General v Sherborne Grammar School (1854) 18 Beav 256 at 280; 52 ER 101 at 111); expediency not being sufficient (see Re Weir Hospital [1910] 2 Ch 124 at 141).
However, s 9(1) of the Charitable Trusts Act extends the circumstances in which the Court can order a cy-près scheme (without affecting the Court's existing powers). In Attorney General for New South Wales v Fred Fulham & Ors [2002] NSWSC 629, Bryson J, as his Honour then was, (at [16]-[17]) recognised that s 9 had widened the grounds on which the Court may act, it being no longer necessary that actual compliance with the original terms should be impossible and that it was enough that the original trust terms have ceased to provide a "suitable and effective method" of using the trust property. Thus, his Honour said (at [17]) that: The Court may alter the purposes of a charitable trust where the original purposes have ceased to provide a suitable and effective method of using the trust property; this is well short of a test requiring impossibility. Subsection 9(1) greatly widens the circumstances in which the Court may act and the influence which it may allow considerations of practicality to have.
Windeyer J in Northern Sydney and Central Coast Area Health Service v The Attorney-General for New South Wales [2007] NSWSC 881 (at [25]) made a similar observation, noting that the section made it possible for a court to order a scheme even though the trust has not become impossible or impracticable to perform.
More recently, in Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (2017) 94 NSWLR 340; [2017] NSWCA 28, Payne JA said (at [196]) that s 9 is engaged by three interacting criteria through which to consider the continuing utility of the original trust purposes; the notion of "wholly or in part"; a "suitable and effective method"; and the requirement to have "regard to the spirit of the trust"; and said (at [197]) that: It is textually clear that the requirements of s 9 involve a threshold lower than the general law cy-pres requirement of impossibility or impracticality. The test is whether the original purposes of the trust have ceased to provide a suitable and effective method of using the property, in whole or in part, having regard to the "spirit of the trust". The spirit of the trust is thus a broader conception than the original purposes of the trust. It is clear that the general law requirement for impossibility or impracticability of achievement of the trust purposes is no longer a condition precedent to the making of an order.
In ascertaining the "spirit of the trust", it is relevant to have regard to the trust's history and the social context of the time at which it was established: (see RSL Veterans' Retirement Villages Ltd v NSW Minister for Lands [2006] NSWSC 1161 at [57], per Palmer J). In Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales (The Will of the Hon George Nesbitt) [2018] NSWSC 1456, Leeming JA reviewed the cases dealing with the requirement to have regard to the "spirit of the trust" (at [56]-[70]). At [63], his Honour referred to what was said by the Morritt LJ in Versani v Jesani [1999] Ch 219 at [24], including that: … the concept is clear enough, namely, the basic intention underlying the gift or the substance of the gift rather than the form of the words used to express it or conditions imposed to effect it. It is noteworthy that the phrase is used in section 13(1) only in contexts which require the court to make a value judgment.
Unlike a cy-près scheme, an "administrative scheme" is not directed towards altering the trust purposes. Rather, an administrative scheme enables the court to provide further and detailed machinery for the practical application of the trust property, where the stipulated means for the achievement or pursuit of the charitable objects have not been specified or are not sufficient for the practical application of the gift for the charitable purpose. Thus, Campbell J (as his Honour then was) said in Corish v Attorney-General's Department (NSW) [2006] NSWSC 1219 (at [9]) that: There is a clear conceptual difference between a cy près scheme and an administrative scheme for a charitable trust. It is the difference between ends and means. A cy près scheme can be directed when it is impossible or impractical to carry out the objects of the trust in all the details the settlor stipulated. An administrative scheme supplements and/or clarifies any provisions the settlor has stipulated concerning the manner in which the objects of the trust are to be pursued, when practical circumstances show that the settlor's stipulation (if any) of the means is inadequate or impractical.

(i) Have the purposes of the IH Trust ceased to provide a suitable and effective method of using the trust property?

The University's principal argument is that the requirements in the Trust Deed for the College to be managed by an "independent Board of Management" and that the College be "managed separately and apart from the University" have ceased to provide a suitable and effective method of using the property of the IH Trust, in circumstances where the requirements in the Trust Deed have given rise to confusion and practical obstruction of the statutory and other duties of the University in its supervisory role as trustee and in the carriage of its responsibilities to student residents.
The University acknowledged that the stipulation in the Trust Deed that the College must be managed and controlled by an independent Board of Management is one that is sufficiently connected with the original purposes of the IH Trust such that its variation must comply with the requirements of s 9 of the Charitable Trusts Act (noting that in Perpetual Trustee Company Ltd v Attorney-General of New South Wales Leeming JA concluded, relevantly, that where conditions of a trust related directly to the original purposes of the charity, a cy-près scheme was necessary), but submits that those requirements are satisfied in the present case. The Attorney accepts that it is open for me to reach that conclusion on the evidence before me, pointing to the tension between the requirement of independent management and control and the requirement that the University have ultimate responsibility for the College.
The spirit of the IH Trust is clearly to provide for the erection, establishment and administration of a place of residence for overseas and Australian students of the University. It is also clear that the stipulations as to independence from the University of the management of the College were considered to be of importance in furthering that objective.
There can be no doubt that there is a tension between the requirements of independent management and control on the one hand and the responsibilities and overall supervision of the University on the other. That is evident from the disputes that arose with IHL, disputes that I accept were time-consuming and costly for the University to manage, were costly for the IH Trust (as IHL deducted the expenses of the litigation from the Trust assets and those expenses have not been recouped from IHL, which as noted went into liquidation) and had the potential to impact upon student resident welfare.
The University points to the following matters in support of its submission that the IH Trust no longer provides a suitable and effective method of operating the College to the extent that it requires the College to be managed and controlled by an "independent Board of Management".
First, as already adverted to, that the concept of independence does not have a clear meaning and has been operationally problematic. The University says that this was at the heart of disagreements in the past between IHL and the University regarding the extent of IHL's duties and powers and the duties and powers of the University as trustee (and the material before me amply bears this out).
Second, that the College building is owned by the University as trustee; is located on the University's land and is connected to the University's utilities. Again, 'independent' operation of the College has led to difficulties in relation to key responsibilities such as fire safety compliance and accountability for general compliance activities.
Third, that the University is required to comply with a wide range of complex state and Commonwealth legislation which affects the operation of its student accommodation (which did not apply when the College was established in the 1960s).
Fourth, that the residents of the College are all students of the University, to whom the University owes obligations regarding matters of health and safety, student welfare and pastoral care. It is submitted that the unexplained requirement that there be "independent" management of the College creates risks to the framework of consistent and legally compliant care of the University's students.
Fifth, that it is necessary for the University, as trustee, to ensure that the assets of the IH Trust, including the building and accumulated reserves, are being properly maintained, spent/used and the subject of proper accounts; and that the requirement that there be an "independent" board of management on an ongoing basis creates a potential or actual obstacle to oversight of those assets by the University, in circumstances where the meaning of "independence" is unclear.
The University considers that, having regard to the University's considerable experience and expertise in managing student accommodation, it is in the best interests of the College and its residents for the College to continue to be managed directly by the University, through UNSW SA, on a permanent basis. It submits that the spirit of the trust will be furthered by the adoption of the management model set out in the proposed scheme (see below), without "any observable disadvantage" and that the requirements of s 9 of the Charitable Trusts Act have been met in relation to the substitution of the "independent Board of Management" with the management model set out in the proposed scheme.
I accept that the history of the disputes between the University and IHL (whatever the rights or wrongs of the various complaints that were made by the respective parties as to the conduct of the other) demonstrates amply that the uncertainty as to the meaning of the independent management requirement and the tension between it and the University's ultimate responsibility for the College gives rise to unworkability and means that the University is not in a position confidently to assume that it will be able to exercise its supervisory functions and responsibilities without hindrance or obstruction in the future. It is not a sufficient answer to this problem that IHL is no longer the manager of the College, because there will remain scope for similar disputes as long as the relevant terms of the IHL Trust contain that inherent ambiguity as to the meaning and scope of the requirement for independence of management and control.
Thus I am satisfied that the requirements of the IH Trust insofar as they relate to the independent management and control of the College have ceased to provide a suitable and effective means of using the trust property for the original purposes of the trust and that it is within the spirit of the trust to make variations to ensure the ability for effective management and control (with a degree of independence from the University) that allows the University to comply with its supervisory and other obligations.

(ii) Should there be an order for the proposed scheme?

I turn then to the scheme proposed by the University after consultation with the Attorney (the Proposed Scheme).

Proposed amendments to the IH Trust purposes and machinery

The University points to cll 2 and 3 of the Proposed Scheme as restating and, in some respects, amending, the purposes and administrative machinery of the IH Trust.
Certain proposed amendments (as set out in the table provided in the University's written submissions) may be characterised as supplementing or clarifying the existing terms of the IH Trust and could, therefore, be dealt with by way of administrative scheme but the University accepts that some of the amendments (insofar as they relate to the original purposes of the IH Trust) may only be able to be dealt with by way of cy-près scheme and, therefore, must satisfy the requirements of s 9 of the Charitable Trust Act.
Turning to the particular amendments, I note as follows.

Clause 2.1 of the Proposed Scheme

The amendments to cl 2.1 clarify the original purposes of the trust by expressly confirming that: the purposes of the IH Trust arise in the context of a charitable trust for the advancement of education; those purposes include not only the erection, establishment and administration of the College, but also its operation and maintenance; and the trust purposes also include dealing with the Trust Fund for purposes that are ancillary or incidental to the main purposes of the IH Trust.
The University notes that administration of the College, being a purpose stated in the original Trust Deed, is apt to include the operation and maintenance of the College and says that the express reference in the trust purposes to the "operation and maintenance" of the College ensures that there is no doubt as to the scope of the purposes to which the trust assets can be applied by the University.

Clause 2.3 of the Proposed Scheme

The University says it is unclear what the words "completely self-contained" in the original Trust Deed mean. It is submitted that to the extent that those words suggest that the College should operate in a manner that is completely separate from and without connection to the remainder of the University, this is impractical and unlikely to have been the intention of the drafter; rather, that the intended meaning is given context by the remainder of the words in the sentence (which have been retained in the Proposed Scheme), namely, that the College should have its "own dining rooms and other necessary amenities and facilities".
The University relied upon an affidavit of Mr Ronald de Haan, the director of UNSW SA who, in his second affidavit sworn 24 January 2019, explains that there are interdependencies in University services that are provided for the benefit of the College and resident students (in relation to security, facilities management, information technology, marketing and human resources). It is submitted that there is no apparent benefit to College students for the College to be "completely self-contained", to the extent that this suggests that it should not be dependent upon the University for any services offered to residents of the College. For these reasons, it is submitted the words "completely self-contained" are surplusage and add nothing to the ongoing administration of the trust.
The University argues that the words "on its own site" could also cause confusion as to the legal basis upon which the IH Trust requires the University to hold any land upon which the College is constructed. In order to remove that uncertainty, it is proposed that the words "within land in the exclusive possession of the University" be inserted in their place.

Clause 2.4 of the Proposed Scheme

In this clause, the word "financially" has been inserted before the words "self-supporting" to clarify that this requirement relates to the College's financial objectives; namely, to generate revenues that exceed its expenses on an ongoing basis, as well as to generate sufficient funds to provide for the ongoing maintenance, renovation and restoration of the College building and facilities.

Clause 3.2 of the Proposed Scheme

The crux of the proposed amendments goes to this clause.
The Proposed Scheme provides for UNSW SA to carry out all of the functions involved in managing the College, with the advice and guidance of an external Committee. The role of the Committee will be to provide independent advice to the University on the management and day to day operations of the College and to act as a consultative forum to consider the views of current and past College residents. The Committee will be comprised of a representative from Rotary International (Rotary), the President of the College Residents' Society, a College alumnus, an employee of the University who is a member of the University's Student Life unit or successor department and a person nominated by the Council of International Students of Australia (CISA). Both Rotary and CISA have indicated their willingness to nominate a person to the Committee. The Committee will be required to meet at least four times during each academic year.
Under the terms of the Proposed Scheme, the University will be required to provide the Committee with such reports and information with respect to the management and operation of the College as the Committee determines that it requires to carry out its functions (cl 3.9). The University will be required to give real and genuine consideration to the advice or recommendations given by the Committee before taking any action or making any decision which concerns the College, but will not be bound by such advice or recommendations (cl 3.11).
Before presenting the Proposed Scheme to the Attorney General and the Court for approval, the University gave consideration to a range of alternative management models, including: incorporation of a new entity to provide full services to the College; incorporation of a new entity to provide limited services to the College; and engaging a third-party student accommodation provider.
Having regard to the implications of the alternative models for the governance of the College, student experience and cost, the University has concluded that the management model presented in the Proposed Scheme is substantially more advantageous than its alternatives (see the Affidavit of Ronald de Haan sworn 21 September 2018 at [62]-[67]). In particular, it is submitted that any model which assumes that the entity or third-party provider is "independent" from the University gives rise to significant potential that the service provider will take a different view to the University on what is meant by "independence". It is noted in the past, this led to disagreements of the type experienced with IHL.
The Attorney submits that the provisions in cll 3.1-3.11 of the proposed scheme, noting that there is a degree of tension between, on the one hand, the requirements that the College be "managed and controlled by an independent Board of Management" and that the College, be "managed separately and apart from the University" and, on the other hand, that the University has "ultimate responsibility for" the College that the proposed scheme does not seek to expunge the concept of "independence" altogether and that the provisions in cll 3.1-3.11 are to be read together with the remainder of the proposed scheme, including cl 2.3 which requires that the College be a separate facility and the express stipulation in cl 9.1 that the University act in good faith in furtherance of the purpose of the IH Trust are within the spirit of the IH Trust.
As to the requirement of independence, it is noted that: (i) only one of the five members of the Committee must be a University employee (cl 3.3); (ii) the Attorney can object to the inclusion of particular persons on the Committee in certain circumstances (cl 3.4); (iii) the Committee determines its own processes and procedures (cl 3.8); and (iv) the University must give real and genuine consideration to the advice and recommendations of the Committee (cl 3.11).

Proposed additions to the IH Trust purposes and machinery

The Proposed Scheme includes further detailed administrative machinery to assist with the management of the assets of the Trust, including the College building and lands. In particular, cl 4 of the Proposed Scheme confers express powers upon the University to effect improvements, alterations, additions or repairs to the College building and the land upon which it has been established.
In late 2017, the University made an application to the Court under s 81 of the Trustee Act, to obtain power to perform specified works to the College building, including the upgrading of the kitchen and other facilities. It is noted that if the Trust Deed had contained express powers of the type set out in cl 4 of the Proposed Scheme, this application would not have been necessary. It is practical and efficient for such powers to be granted to the University on the terms set out in the Proposed Scheme.

Conclusion

Accordingly, I make the orders sought by the University as to the proposed scheme.

Costs

The University, as trustee of the IH Trust, invokes its entitlement to indemnity costs in the exercise of its rights of exoneration or recoupment out of trust assets.
The Attorney seeks an order that his costs be paid from the IH Trust fund on an ordinary basis, having regard to the fact that the proceedings involve an application for a cy-près (and administrative) scheme (in which case the Attorney's presence and participation in the proceedings is required - see Ware v Cumberledge (1855) 20 Beav 503 at 510 -512; 52 ER 697 at 700-701 (quoted in Metropolitan Petar v Mitreski [2001] NSWSC 976 at [11]); and noting that the importance of the Attorney's presence and participation in proceedings that involve a consideration of the administration of charitable property was emphasised by Lindsay J in Estate Polykarpou; Re a charity [2016] NSWSC 409 at [32]. See also Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales (The Will of the Hon George Nesbitt) at [129]-[135]).
I considered that the costs orders sought by both the University and the Attorney were justified on the above bases.

Orders

For the above reasons, on 13 February 2019 I made the following orders: 1. Declare that the purposes of the UNSW International House Charitable Trust have ceased to provide a suitable and effective method of using the trust property, within the meaning of s 9 of the Charitable Trusts Act 1993 (NSW); 2. Order that the property of the UNSW International House Charitable Trust be applied and dealt with in accordance with the scheme set out in Annexure A to the Summons; 3. Vacate order 1 made on 17 April 2018 in proceedings no. 2018/00095224; 4. Order that the costs of the plaintiff be paid out of the assets of the UNSW International House Charitable Trust, on the indemnity basis; and 5. Order that the costs of the defendant be paid out of the assets of the UNSW International House Charitable Trust, on the ordinary basis.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 March 2019

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