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Cases, Charitable trusts, Charitable Trusts, Charities, Directions, Trustee Act, Trusts, Variation

When is it ok to ask for directions?

Two recent decisions regarding directions in the context of charitable trusts provide some useful guidance regarding the parameters of s 66 of the Trustee Act 1956.  In line with the title to this blog – the conclusion reached is that it is permissible to ask for directions if lost, but not in circumstances where you know where you are but foresee a time when you might not.

In Re: University of Canterbury (Erskine Trust) the trustees sought to vary the Trust under s 32, 33 and 35 of the Charitable Trusts Act 1957 and also for directions under s 66 of the Trustee Act.  The variations sought related in large part to changes required to address the passage of time, the Trust having resulted from a charitable bequest to what is now the University of Cambridge from the estate of Mr Erskine who died in 1960.   Orders were made allowing the proposed variations.  The decision turned on its own facts but provides some useful consideration of the procedural requirements for variations of charitable trusts and the matters that will be taken into consideration.  Given the dearth of case law regarding the parameters of s 32(2) of the Charitable Trusts Act (and as observed at [44]) the decision provides useful guidance.

The application under s 66 related to a practical matter (a direction that it was permissible in accordance with the terms of the trust) for air fairs to be paid to companions travelling with Visiting Erskine Fellows (under a program that provides for visiting lecturers). It was accepted that this would make the program more competitive and would better allow for the late Mr Erskine’s wishes to be carried out.  Accordingly, the directions sought under s 66 were made.

By contrast in the matter of The Jocelyn Grattan Charitable Trust the Court declined to answer four hypothetical questions pursuant to s.66 of the Trustee Act.  The reasoning was expressed as follows:

  • there was no live dispute between the parties (by contrast this was not the case in New Zealand Maori Council v Foulkes, which is noted as constituting an authoritative statement of the law)
  • in the absence of a live dispute there are no facts to inform the question posed and thus are “abstract hypotheses”
  • it is intrinsic to the common law method that legal questions are determined through a factual prism
  • Judgments are always read with reference to facts.  When facts are removed ambiguity reigns.

References:

  • Trustee Act 1956, s 66
  • Charitable Trusts Act 1957, s 32, 33, 35
  • Re University of Canterbury (Erskine Trust) [2018] NZHC 2259
  • The Jocelyn Grattan Charitable Trust [2018] NZHC 2343
  • New Zealand Maori Council v Foulkes [2014] NZHC 1777

 

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