Supreme Court Rejects Claimant's Bid to Be Recognised as Trustee of Charitable Trust

The Supreme Court of NSW dismissed the claimant's application to be recognised as a trustee of a charitable trust, finding that the claimant was not validly appointed as a trustee under the Trustee Act 1925.

Supreme Court New South Wales

Medium Neutral Citation: [NAME] v Registrar General of New South Wales [2012] NSWSC 248 Hearing dates: 21 February 2012 Decision date: 21 February 2012 Jurisdiction: Equity Division Before: [NAME] Decision: Plaintiff's summons dismissed. Catchwords: EQUITY - trusts and [NAME] - death of [NAME] - purported appointment of new [NAME] - appointment invalid

EQUITY - trusts and [NAME] - application to court for judicial advice pursuant to Trustee Act 1925 must be by a trustee

REAL PROPERTY - torrens title - indefeasibility of title cannot validate an invalid appointment of trustee Legislation Cited: Associations Incorporation Act 1984 Charitable Trusts Act 1993 Real Property Act 1900 Trustee Act 1925 Cases Cited: [COMPANY] v [NAME] The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 Texts Cited: [NAME] and [NAME], Jacobs' Law of Trusts in Australia, 7th ed (2006) Category: Principal judgment Parties: [NAME] (Plaintiff) Registrar General of New South Wales (First defendant) Attorney General of New South Wales (Second defendant) [NAME] (Third defendant) [COMPANY] (Fourth defendant) Representation: Counsel: [redacted] [NAME] (Third and fourth defendants) [NAME] (Plaintiff in person)

Solicitors: [redacted] [NAME] (Second defendant) File Number(s): SC 2011/68579

EX TEMPORE Judgment 1These proceedings arise out of a transfer of land at Putty, New South Wales by [NAME] to [NAME] on 7 February 1918. The transfer was expressed as being "Upon Trust for the use of the residents of Putty for public, religious and social gatherings and for such other purposes as the said residents may from time to time determine" ("the Trust"): see page 25 of Exhibit A (all page references hereafter are to Exhibit A). At the same time, a caveat was lodged against any dealings inconsistent with the Trust: see page 30. It was a Registrar General's caveat which was the type of caveat utilised at that time and for many years afterwards. 2The land had built upon it a community hall. By 1983, all of the three named [NAME] had died, the last surviving trustee being [NAME]. 3In 1986, a meeting was held at the hall which was described as the first meeting of the [NAME], and the meeting purported to appoint as [NAME], the plaintiff in these proceedings, [NAME], the third defendant in these proceedings, and a Mr [NAME], who himself passed away some years ago. 4In July 1986, [NAME] and [NAME] were registered as proprietors of the land pursuant to application number W389434. There has apparently been tension in the Putty community over the years. In part, this may be due to the creation of the [COMPANY] ("[COMPANY]"), established in 1987 as an unincorporated association. In 2002 the [COMPANY] was incorporated pursuant to the Associations Incorporation Act 1984. The [COMPANY] is the fourth defendant in these proceedings. The Attorney General of New South Wales has been joined as the second defendant in these proceedings. 5The first defendant, the Registrar General of New South Wales, has filed a submitting appearance in the proceedings and has indicated through correspondence that he undertakes not to register any other person as the registered proprietor of the land until the conclusion of these proceedings: see Exhibit 3D1. 6Mr [NAME] commenced these proceedings by his summons, which is at page 2, tab 2 of Exhibit A. In those summons he seeks the following relief: "Relief claimed 1) By way of judicial advice for a declaration that on the facts and circumstances of the case that [NAME] and [NAME] hold the property described in the Title Folio 1/960250 upon Charitable Trust.

2) By way of judicial advice that the plaintiff is entitled to remain as registered proprietor of the said property.

3) By way of judicial advice that the plaintiff is entitled and obliged to retain Certificate of Title to Title Folio 1/460250 in his possession.

4) By way of interlocutory relief an order that the Registrar General of New South Wales be restrained until further order from entering the name of any other person as proprietor of property described in the Title Folio 1/960250 on the register." 7The Attorney General has cross-claimed in the proceedings the relief sought by the Attorney General as set out page 7 of Exhibit A: "Relief claimed 1) A declaration that there is no validly appointed trustee or [NAME] to the Trust created by Memorandum of Transfer A392482 on 7 February 1918.

2) A direction pursuant to s 13(2) of the Charitable Trusts Act 1993 that the matter be referred to the Attorney General for the Attorney General to establish a scheme pursuant to ss 13(1)(c) and 12 of that Act.

3) An order pursuant to s 71(1) of the Trustee Act 1925 that the property described in the Title Folio 1/960250 vest in the trustee or [NAME] appointed by the Attorney General pursuant to the scheme established by the Attorney General under the referral directed in para 2.

4) An order that the plaintiff deliver forthwith to the Attorney General, the Certificate of Title to Folio 1/960250 and all records relating to the administration of the Trust.

5) An order that the plaintiff pay the Attorney General's costs of the proceedings on a party party basis.

6) Such other orders as the Court sees fit." 8Mr [NAME] has, by letter, purported to resign as the trustee and he does not contest that he was ever validly appointed as trustee. 9Mr [NAME] accepts that he was not validly appointed pursuant to s 6 of the Trustee Act 1925 but contends that he is a trustee by virtue of the matters set out in paragraphs 9 to 19 of his affidavit sworn on 3 March 2011 to which I shall return in a moment. 10The Attorney General's position is that since no valid appointment of the trustee of the Trust has been made, the matter should be referred to him pursuant to s 13(2) of the Charitable Trusts Act 1993. 11Section 13 is in the following terms: "(1) The Attorney General may establish a scheme under this part: ... (c) in accordance with the referral from the court under subsection (2). ... (2) If the Court directs that a scheme for the administration of the Charitable Trust be established the Court may, by order, refer the matter to the Attorney General for the Attorney General to establish the scheme in accordance with the directions (if any) of the Court." 12The parties are agreed that the Trust established in 1918 was and is a Charitable Trust. 13The relief sought by [NAME] in the summons appears to be a hybrid of judicial advice and declaratory and injunctive relief, but I shall put that difficulty to one side, as [NAME] informed me that what he seeks is judicial advice pursuant to s 63 of the Trustee Act . In my view, that application is misconceived, in short, because the advice is in reality for determination on contested matters and [NAME] is not seeking advice as to whether he should or should not do something in order to gain the protection granted to a trustee from a suit at the hands of beneficiaries of the Trust: see [COMPANY] v [NAME] The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66. 14But there is an even more fundamental issue which is whether or not [NAME] is, in fact, a trustee at all. If he is not a trustee, he cannot seek relief under s 63 of the Trustee Act and he has no standing to bring these proceedings. [NAME] accepted the determination of his position as trustee was critical to the case he has brought and this was also accepted by [NAME] for the Attorney General; [NAME], for the third and fourth defendants submitted that the Court should determine that issue first. 15I set out paragraphs 9 to 19 of [NAME]'s affidavit sworn 3 March 2011: "9) By 1986, I observed that the Putty Hall had become significantly dilapidated and outstanding rates had accumulated. Following discussions with [NAME] (son of original donor), I sought advice from the Registrar General's Department as to how the legal title could be regularised. I there spoke to a person who introduced himself as a legal officer but whose identity I am unable to recall.

10) The thrust of the advice provided was that we should call a meeting of the [NAME] to elect new [NAME], minute the meeting, allocate the Certificate of Title and answer requisitions that the office of the Registrar General may raise.

11) I communicated the substance of that advice to [NAME] who, with her husband, played a prominent role in local affairs. A meeting of [NAME] was held on 8 February 1986 following a notice circulated to residents issued under the hand of [NAME] and [NAME] as fellow residents.

12) Although I was absent from that meeting (my apologies were tendered) I was one of three persons elected as trustee of the Putty Hall land by the [NAME] in attendance. The minutes reflect that at the same meeting the residents resolved to form the [NAME] which was to be the forerunner of the [COMPANY] ([COMPANY]).

13) I have been a financial member of both of those organisations since each was formed.

14) The minutes record the address of [NAME] to members of the Putty community where she states at para 5; "We intend tonight to discuss the hall's future, but before we can begin official business we have to firstly appoint new [NAME] and a new social committee."

15) The minutes reflect the new [NAME] were appointed by a gathering of [NAME] prior to the formation of the [NAME] solely as replacements for the deceased [NAME]. There is no suggestion the new [NAME] were appointed as [NAME] for the [NAME] subsequently formed.

16) I did not express any objection to my election as trustee, nor did I seek any remuneration. I have always been prepared to act in an honorary capacity from the time of my appointment.

17) The original Certificate of Title was eventually located and submitted to the Registrar General with whatever other documents were required.

18) Registration was effected on 14 July 1986. The register does not reflect anything other than the registered proprietors are [NAME] for the residents of Putty and for no other persons or organisations. The register contains only the endorsement: "Consequent upon the appointment of [NAME] and [NAME] as new [NAME]."

19) To the best of my knowledge, documents submitted included: (i) application for transfer, (ii) statutory declaration of [NAME], (iii) statutory declaration of [NAME], (iv) notice to [NAME] by [NAME] and [NAME], (v) address to [NAME] by [NAME], (vi) minutes of meeting 8 February 1986." (emphases removed) 16The general law in relation to the consequences of death of a trustee is set out in [NAME] and [NAME], Jacobs' Law of Trusts in Australia, 7 th ed (2006) at [1575], particularly in the passages: "Any trustee is clothed with the office of trustee and an estate in the trust property. Upon the death of a trustee, whether a sole trustee or one of a number of [NAME], the office does not devolve on the trustee's legal representatives. No one can legally execute a trust unless nominated so to do by the settlor or testator or appointed so to do by or by direction of such settlor or testator, by Act of Parliament or by the court. (Re Crunden and Meux's Contract [1909] 1 Ch 690 [see in particular pages 696 to 697].) Therefore, if the deceased trustee was the sole or last surviving trustee, the office, where the trust is an active trust, becomes vacant. The legal representative of such a deceased trustee has no power to act in the execution of the trust although, where there are no active duties to perform, the legal representative has power to transmit the property to persons absolutely entitled. (Robson v Flight (1865) 4 De GJ & S 608; 46 ER 1054)" 17There are five possible routes to the appointment of a trustee when one takes into account the general law and legislative intervention. They are: (1) the trustee is appointed by the deed or trust instrument; (2) the trustee is appointed by person nominated for the purpose of appointing new [NAME] or by instrument (see s 6(4)(a) of the Trustee Act); (3) where the legal representatives of the last surviving or continuing trustee appoint the new trustee (see s 6(4)(b)); (4) by the court; or (5) by the Attorney General pursuant to s 12(3) of the Charitable Trusts Act. 18Mr [NAME] meets none of these criteria. His alleged route of appointment is not one which is recognised at law, and it follows that he is not a trustee and he cannot seek judicial advice pursuant to s 63 of the Trustee Act. 19To the extent that [NAME]'s submissions rely implicitly on the effect of registration combined with the effect of s 42 of the Real Property Act 1900, I agree with the submissions of [NAME] and [NAME] that the effect of registration for the purpose of indefeasibility cannot validate, as between [NAME] and the Trust, an invalid appointment. 20It follows, in my view, that [NAME] is not a trustee and is not entitled to bring these proceedings as trustee whether for judicial advice or otherwise and accordingly, that his summons must be dismissed.

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