IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE	
CIV-2023-409-182
[2023] NZHC 1527	

UNDER	Parts 3 and 5 of the Charitable Trusts Act 1957	
IN THE MATTER OF	W H Hargreaves Trust	
BETWEEN	DOUGLAS ALEXANDER McKAY
Applicant	

Hearing:	19 June 2023	
Appearances:	L C Elliott for Applicant	
Judgment:	19 June 2023	

ORAL JUDGMENT OF DUNNINGHAM J

[1]	The  applicant,  Douglas  Alexander  McKay,   is  the  sole  trustee  of  the   W H Hargreaves Trust (the Trust). He applies under s 33 of the Charitable Trusts Act 1957 (CTA) to vary the Trust’s mode of administration. He also seeks an order under s 52 of that Act that the reasonable expenses of an incidental to making the application are paid from the assets of the Trust.

[2]	The background to the application is summarised in the memorandum of counsel for the applicant. The Trust was established pursuant to the terms of the will of Mr William Hartley Hargreaves dated 16 August 1927 (the Will). The Will gave the directors of the Bank of New Zealand the power, among other things, to establish the Trust with the residuary funds in Mr Hargreave’s estate, upon the death of the last of Mr Hargreaves’, wife, son and daughter. The Trust was established in 1974 upon

RE McKAY [2023] NZHC 1527 [19 June 2023]

the death of Mr Hargreaves’ daughter and was registered with Charity Services pursuant to the Charities Act 2005 in 2008. However, on creation of the Trust, no trust deed was prepared. The trustee is instead exercising his powers and obligations pursuant to the Will, the Trusts Act 2019, the CTA, and the Charities Act 2005.

[3]	Pursuant to the Will, the trust funds were to be allocated to indigent widows of bank officers at the discretion of the Bank of New Zealand. By an order of the High Court dated 28 July 1989, the range of potential beneficiaries of the Trust was extended to include:

(a)	widows and widowers of officers of BNZ in financial hardship;

(b)	former officers and employees of BNZ in financial hardship;

(c)	officers and employees of BNZ in financial hardship; and

(d)	the dependents of any of the above in financial hardship.

[4]	The applicant applies for orders varying the Trust by:

(a)	Creating a formal trust deed, including clearly stated terms of the Trust. The trust deed is intended to modernise and codify the trustees’ duties and obligations in one place.

(b)	Providing powers of appointment and/or removal of trustees, and of specialist trust advisers.

(c)	Providing for a minimum number of trustees (two).

[5]	The applicant does not seek to amend the Trust’s purposes. The purposes remain substantively in the terms stated in the 1989 order.

[6]	A draft trust deed is provided with Mr McKay’s application and in his affidavit, Mr McKay sets out some of the difficulties with the Trust’s present mode of operation and administration. These include:

(a)	The trustees’ role and powers derive from the bare terms of the Will and the default position in the applicable legislation at the time. This has created difficulties for trustees in discharging their duties and exercising their powers consistently, efficiently and confidently.

(b)	The process  of appointing and removing trustees is  not  clear. On  Mr McKay’s understanding, there is no right conferred on trustees to appoint replacement or additional trustees under the Trusts Act. Therefore, who holds office is determined by those accepting appointment as director and those retiring.

[7]	The application has been referred to the Attorney-General as required by s 35 of the CTA and the Attorney-General has provided a report which is supportive of the application. It says, at [31]:

The purpose of Mr Mckay’s application has introduced basic, formalised mechanisms to effectively administer the Trust, which has been managed … to date in an ad-hoc way. It is evident, for the reasons Mr Mckay advances in his affidavit of continuity, clarity and confidence that the scheme will only aid Trustees in administering the Trust.

[8]	Under s 53 of the CTA, the Court is given the power to make an order approving a scheme proposed under pt 3 with or without modifications as it thinks fit. The Court must be satisfied that the criteria in s 56 of the CTA are met before approving a scheme under pt 3, being that:

(a)	the scheme is a proper one and should carry out the desired purpose of the proposal and is not contrary to law or public policy or good morals;

(b)	the scheme can be approved under pt 3 of the CTA;

(c)	every proposed purpose is charitable within the meaning of pt 3 of the CTA and can be carried out; and

(d)	the requirements of pt 3 of the CTA have been complied with in respect of the scheme.

[9]	There is ample authority for approving a new trust deed to facilitate the proper administration of the Trust1 and I am satisfied that this is such a case. Consequently, I am satisfied the scheme proposed by the applicant is a proper scheme which carries out the desired purposes of the applicant’s application and is not contrary to law, public policy, or good morals as is required under s 56 of the Act.

[10]	Accordingly, the application is granted on the terms sought, including as to the reasonable costs of making the application being paid, under s 52, from the assets of the Trust.

Solicitors:
Buddle Findlay, Christchurch

1	Re Neil Barr Farm Forestry Foundations [2014] NZHC 2324 and Re Estate of Gammack [2021] NZHC 86.