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Charitable trusts, Charities, trust, Variation

The passage of time

Times change, and so do charitable purposes. The recent case of Re Otago Foundation Trust Board highlights that even a charity set up with the best of good intentions might run the risk of becoming moribund owing to societal changes.

The original trust was settled under the will of Robert Campbell in 1904. It left land and offices to be used to establish a home as a temporary residence for unmarried Presbyterian women, aged over 38 years and residing in Otago or Southland. Given the issues and thinking of the time, when older single women suffered significant economic disadvantages, a laudable sentiment.

By 1968 the Trust Board that was by now acting as trustee applied to vary the scheme because it “had become impracticable and inexpedient to carry out.” It seems there were too few people who qualified for assistance and the buildings were rundown and unsuitable. The Trust now became the “Campbell Convalescent Home Trust” and the Trust Board acquired new powers to sell property and to invest.

Even so, the Trust Board had ongoing difficulties carrying out the purposes of the Trust. Resolutions were passed allowing the house to be let to elderly people or invalids regardless of gender or religious denomination. By the present day the Trust had come to be “in a holding pattern”, with no applications since 2004.

The current application to the High Court under the Charitable Trusts Act 1957 therefore involved changing the name of the Trust to the simpler “The Campbell Charitable Trust” with very much broader charitable purposes, including assistance for Dunedin area residents in need of financial support and also support for students and educational purposes, in each case with priority for members of the Presbyterian Church.

Will the Trust Board be back in the Court in future in need of further changes? While it might be hoped not (assuming there will always be people in need of some sort or other), can it be ruled it out altogether? The simple fact is, as noted at the outset, times change. Notions of charity change just as charitable needs can change over time. The case of the Campbell will trust settled over a century ago for the accommodation of older Presbyterian women of Otago and Southland could not stand the test of time but, fortunately, demonstrates that the law provides mechanisms for adaptation so that a charity can remain not only relevant but also practicable.

While the facts of the case suggest that the considerations are esoteric at best, it provides a useful reminder when considering the Trust Bill’s proposed 125 years maximum duration that the longer a trust can last, the more care needs to be taken as to how the trust can practically operate over such a long period.

References:

  • Re Otago Foundation Trust Board [2018] NZHC 293

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