A trust is an entity established by the equity that a court of equity can recognise. A “trust” can be defined as a relationship between a trustee and a beneficiary regarding a specific property. More specifically, a trust is present when the holder of a legal or equitable interest in the property is obligated, as recognised or enforced in equity, to maintain that interest for the benefit of others, or in this context, a trust for purposes which refers to some objective or purpose allowable by law.
“a “trust” which whilst not imposing a trust obligation as understood in private law, may fairly be described as a ‘statutory trust’ which bound the land and controlled what otherwise would have been the freedom of disposition enjoyed by the registered proprietor of an estate in fee simple”.
Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59 at [67]
There are multiple methods to establish charitable trusts. A charitable trust concerning land may be formed under private law via the unilateral action of its owner by a Will or deed that either transfers the land to a trustee for a charitable cause or declares the owner as a trustee for a charitable objective: for instance, Catholic Metropolitan Cemeteries Trust v Attorney General of New South Wales [2024] NSWCA 30 (CMCT) as noted by Leeming JA at [147 – 148].
It is important to consider the ways in which statutes interact with the law governing charitable trusts to highlight the crucial distinction relied upon by Parker J, which is the difference between charitable trusts recognised under private law and those for public purposes established by statute.
A charitable trust involving land may be established under private law through the unilateral decision of the owner via a deed that either transfers the land to a trustee for a charitable purpose or specifies that the owner holds the land as a trustee for such a purpose.
The two main methods for creating express trusts, including charitable trusts, are transfer and declaration of trust. Statutory provisions may, of course, empower the owner of the land, including Crown land, to carry out a grant that forms a charitable trust. The Sydney Necropolis Act 1847 exemplified this approach, though the land grants envisioned by this statute never took place.
On the other hand, the statute may also directly create a charitable trust recognised in equity. It may do so expressly. An example may be seen in s3 of The Sir Moses Montefiore Jewish Home Act 1927 (NSW), which states that
“the Body Corporate shall hold the said land freed and discharged from any trusts affecting the same but upon a charitable trust for the objects of the Body Corporate as specified in section five of this Act.”
Parker J notes that transfer and declaration of trust are the two main methods for establishing express trusts, including charitable ones. Moreover, charitable trusts may also be formed through statutes and recognised in equity, while “statutory trusts” can be created for public purposes that do not fall under the charitable category. It is unnecessary to explore that further here, as the relevant language establishing a trust is evident in the deceased’s Will.
Background
Daphne Bunn (the deceased) passed away on June 11, 2022, leaving an estimated $6.458 million estate. The deceased’s Will established a trust aimed at benefiting the Wesley Community Services Limited (the official legal entity operating under the name Wesley Mission – referred to as the plaintiff), appointing the trustee Stephen Anthony Smith (the first defendant) with the Attorney General of New South Wales (the second defendant). The Attorney General is the guardian of charities based on the principle of parens patriae. The Attorney General acts on behalf of the Crown to safeguard all assets of charitable trusts, one of the Attorney General’s prerogative powers.
Wesley Community Services Limited trading as Wesley Mission v Smith [2025] NSWSC 154
It is undisputed that the deceased aimed to benefit the Wesley Mission by using the property and its contents. The plaintiff filed a summons on 20 September 2024 seeking relief concerning the nature and meaning of the specific gift in cl 2 and other questions regarding the purpose and administration of the property.
The summons was revised on 13 November 2024, partly to remove a reference to a section of the Charitable Trusts Act 1993 (NSW) (CTA) and partly to request that the parties’ costs be covered from a specific fund related to the proceedings, specifically the proceeds from an expected sale of the property, rather than from the deceased’s estate as a whole.
The first defendant initially submitted a notice of appearance in October 2024 and later filed a notice of submitting an appearance on 17 January 2025, except concerning costs.Changes concerning costs and the Charitable Trusts Act 1993 occurred during the proceedings.
Charities Act 2013
The Charities Act 2013 (Cth) was implemented on January 1, 2014, marking a significant shift in Australia’s legal landscape governing charities. This legislation established clear statutory definitions for what constitutes a “charity” and a “charitable purpose,” addressing the ambiguities arising from over 400 years of case law before the Act.
Under the Charities Act’s definition, a “charity” is an entity that operates on a not-for-profit basis and serves charitable purposes that benefit the public. Notably, the Act provides such entities must avoid disqualifying purposes and cannot include individuals, political parties, or government bodies.
Additionally, the Act broadened the scope of what qualifies as a “charitable purpose.” It now encompasses many activities, including promoting health, social welfare, culture, reconciliation, human rights, safety, and efforts to alleviate animal suffering and benefit the environment.
A purpose benefiting the public provides advantages to the public and is accessible to a significant segment of the community. The Act includes a presumption of specific purposes to fulfil this requirement. Conversely, it explicitly excludes entities that promote unlawful activities or engage in advocacy on behalf of political parties from classification as charities.
In line with these new definitions, updating the registration process for charities with the Australian Charities and Not-for-profits Commission ensures greater alignment with the revised legal framework, which aims to enhance clarity and consistency within charity law in Australia.
The Court held it is undisputed that the deceased aimed to benefit the Wesley Mission by using the property and its contents. The plaintiff, the official legal entity operating under the name Wesley Mission (referred to as plaintiff or Wesley), filed a summons on 20 September 2024 seeking relief concerning the nature and meaning of the specific gift in cl 2 and other questions regarding the purpose and administration of the property.
The summons was revised on 13 November 2024, partly to remove a reference to a section of the Charitable Trusts Act 1993 (NSW) (CTA) and partly to request that the parties’ costs be covered from a specific fund related to the proceedings, specifically the proceeds from an expected sale of the property, rather than from the deceased’s estate as a whole. The second defendant initially submitted a notice of appearance in October 2024 and later filed a notice of submitting an appearance on 17 January 2025, except concerning costs.
The property
Mr. Cannings, the Chief Financial Officer of the plaintiff, states that the property is in deplorable condition, uninhabitable, and “is not suitable for any of the activities conducted by the [p]laintiff.” Upon learning of the bequest in the decedent’s Will, Mr. Cannings arranged for the Wesley Mission Property Team to inspect the property. The team produced a report following an evaluation on 17 August 2022, dated 16 September 2022. It reached the following conclusions:
- The house’s configuration and challenging access significantly restrict its viability as a residential site for Wesley Mission staff or clients.
- Renovating the existing house would necessitate considerable structural modifications and would not resolve the difficult access from the street.
- Zoning limitations and the complicated site will hinder redevelopment prospects for a residence with access features in line with Wesley Mission standards.
- Recently, newly constructed homes on neighbouring lots have been built on multiple levels to capitalise on the site’s slope and views.
Mr. Tyndale, the Manager of the Property Department at Wesley Mission, examined the property around December 2022 and again on 8 February 2025 and verified the report’s contents; the property’s condition has declined since his previous assessment. He contends that the property remains unfit for occupation and would necessitate complete demolition and reconstruction to meet the habitation standards.
The Trust
The plaintiff’s primary relief focuses on interpreting the Will and managing the property. Key agreements before the hearing included establishing a charitable trust under the Charitable Trusts Act 1993, removing Mr Smith as trustee, and transferring the property to the plaintiff as the new trustee.
During hearings, counsel represented the plaintiff, while the first and second defendants presented submissions. The plaintiff provided multiple affidavits and a valuation report without objections to the evidence. The questions which the parties presented to the Court as agreed are:
- Whether the original purposes of the trust have, wholly or in part, ceased to provide a suitable and effective method of using the property concerning the spirit of the trust (Issue 1 -The trust purposes and their suitability)?
- Should the Court establish a cy-près scheme, and (if so) what the scheme terms should be (Issue 2 – Scheme and administrative matters)?
- The first issue raises questions about how ss 9 and 10 of the CTA apply to the facts of the case, and the second issue is consequential upon that. There are three issues regarding costs: a) which, if any, party should receive an order for costs; (b) the basis for payment of any such costs; and (c) the fund source of payment of any such costs.
- It is convenient to proceed by setting out the relevant terms of the specific gift clause before addressing the issues. The salient facts pertinent to the issues will appear below.
Issue 1 -The trust purposes and their suitability
The deceased’s trust, intended initially for respite care for Wesley Mission staff and those in need, has become impractical after 30 years. The Court has the authority to implement a cy-près scheme. The trust’s spirit aims to assist those in need, including people experiencing homelessness. It is unfeasible to utilise the property for respite care without diverting resources from the plaintiff’s other programs. The proposed cy-près scheme suggests selling the Newport property, investing the proceeds, and using the income to fund four programs:
1. The Escaping Violence Payment Program (EVP) offers financial assistance to individuals leaving violent relationships.
2. Wesley Mission Short-Term Emergency Placement (STEP) for teenagers in foster care.
3. Wesley Mission Homeless Services for individuals facing homelessness.
4. Wesley Community Housing, focused on providing sustainable accommodation.
The EVP offers essential support by providing temporary housing and financial aid, aligning with the trust’s spirit. Wesley’s homeless services are backed by contracts with the Department of Community and Justice for additional resources.
Issue 2 – Scheme and administrative matters
Principles
Meek J summarised the history and principles concerning trust purposes and CTA relief in Green v Attorney General (NSW) [2023] NSWSC 1229; (2023) 413 ALR 575 at [75]-[108].
Impracticability
It is common for well-intentioned individuals, including those from the deceased’s generation, to have philanthropic aspirations for their assets, particularly a family home. This sentiment is entirely understandable. The family residence ideally suited the deceased for leisure activities with her spouse and, at times, a sanctuary from the pressures of their work life or, more generally, from life’s challenges.
“Beauty is in the eye of the beholder” is believed to have been first used in 1878 by Margaret Wolff Hungerford. However, a similar idea has been expressed even before 1878, as seen in Shakespeare’s play Love’s Labour Lost from 1597:
“Good Lord Boyet, my appearance, though modest, Does not require the lavish praise you offer: Beauty is determined by the observer’s judgement, Not merely articulated by merchants’ words.”
Love’s Labour Lost Act II scene 1
What the deceased considered a delightful or appealing place suitable for living or relaxation may not necessarily be appropriate for others in their situations. Meeks J accepted, based on the evaluations in the inspection report and Mr Tyndale’s affidavit, that the original intention of the trust—to provide “respite care for Wesley Mission staff and those in need under the care of Wesley Mission” for 30 years—has now become impracticable to fulfil. Acknowledging that the original intent of the trust has indeed become impracticable to execute, the Court would have the authority to direct a cy-près scheme under general law.
Unsuitability
Considering the initial and later identified purposes, the overall spirit of the trust was to support those in need, including homeless individuals under the care of Wesley Mission. According to the evidence presented and outlined in the case, utilising the property for respite care would necessitate diverting resources away from other Wesley initiatives to renovate the property, and even then, the challenging access would significantly restrict the property’s potential use. Consequently, I accept Mr. Farinha’s claim that s9 of the CTA applies here. The plaintiff made a similar submission.
Cy-près scheme
The plaintiff addressed the cy-près scheme in the following manner:
“3.8 Here, the four (4) programs proposed in prayer 7 of the Amended Summons are all programs currently conducted by the Plaintiff and (it is submitted) are aimed to benefit those that the Deceased herself intended to benefit (except the staff of Wesley Mission).
3.9 Each of those programs are “as near to the original purposes ofthe original purposes” as set out in the Deceased’s will. Expenditure by the Plaintiff of the nett proceeds of sale of the Newport property on those programs (excluding the staff), “would beeffective and suitable, having regard to the spirit of the trust.” [2025] NSWSC 154 at [47]
The second defendant’s arguments concerning cy-près were: the Company is seeking a cy-près scheme that would allow it to sell the Newport property, invest the net proceeds, use the income for any of four programs for 30 years, and then apply the capital to any of these programs.
The expected net proceeds are substantial; the property has been appraised at $1,250,000 according to a report dated October 13, 2023, amended on February 7, 2024, to reflect compliance with the expert code of conduct.
The proceeds would support the following programs:
- (a) The Escaping Violence Payment Program (EVP) offers financial assistance and brief case management to aid those attempting to escape a violent intimate relationship. The funding for individuals to help leave the violence sustainably, including temporary accommodation, residential tenancy bonds, furniture, and other essential needs. The program is in high demand, receiving approximately 1,000 inquiries per week, with 11,807 applicants determined to be eligible for support in 2024.
- (b) Wesley Mission Short Term Emergency Placement (STEP) is a 12-week foster care initiative that provides personalised care to teenagers aged 12–18.
- (c) Wesley Mission Homeless Services provides accommodation and assistance for individuals experiencing homelessness or at risk of becoming homeless in designated areas across New South Wales. It collaborates with families and individuals to identify support, obstacles to housing, pathways toward sustainable accommodation, and goal-setting away from homelessness. Some services operate shelters for individual adults in need of crisis accommodation.
- (d) Wesley Community Housing aims to offer “suitable, sustainable, and secure accommodation so that people can live independently, happily, and fulfillingly.”
Legal Principles on Cy-Près and the Charitable Trusts Act 1993 (NSW)
1. General Law and Statutory Jurisdiction
• The Supreme Court has common law and statutory authority to apply charitable trust property cy-près (i.e., as close as possible to the original intent).
• Under general law, this power arises when the original charitable purpose becomes impossible or impracticable.
2. Statutory Expansion of Cy-Près in NSW
• The Charitable Trusts Act 1993 (NSW) (CTA), which commenced on 15 April 1994, broadened the cy-près jurisdiction.
• The Act aimed to:
a) Codify and extend the Supreme Court’s role in managing charitable trusts.
b) Empower the Attorney General to establish cy-près schemes for failed charitable trusts.
3. Influence of the Charities Act 1960 (UK)
• The CTA was influenced by UK law and similar statutes in other Australian states.
• It expanded the definition of when a charitable trust is considered to have failed, including when it ceases to be a “suitable and effective” method of using trust property.
4. Key Provisions of the CTA
• Section 9: Expansion of Cy-Près Doctrine
• Allows modification of a charitable trust’s purposes if they are no longer a suitable or effective way to use the trust property.
• Section 10: General Charitable Intention
• Trust property can only be applied cy-près if the donor had a general charitable intent.
• A general charitable intention is presumed unless proven otherwise in the trust instrument.
General Observations on Cy-Près and the Charitable Trusts Act 1993 (NSW)
1. Early Judicial Consideration of Section 9
• The first mention of CTA s 9 was in Re Burns Estate (No 2) (1995), but without detailed discussion.
• The first substantive judicial consideration of s 9 occurred in Attorney General (NSW) v Fulham [2002] NSWSC 629, eight years after the Act commenced.
2. Key Features of Sections 9 and 10
• Applicability (s 4 CTA):
• Applies to charitable trusts regardless of their location, the domicile of trustees, or their creation.
• Does not exclude other statutory provisions on charitable trusts.
• Remedial and Beneficial Construction:
• Courts interpret s 9 broadly to ensure the effective use of charitable trust property (Hunter Region [2013]).
• The trustee can exercise their power proactively before a trust’s purpose becomes unsuitable or ineffective.
3. General Charitable Intention (s 10 CTA)
• A general charitable intention remains a requirement for cy-près application.
• However, s 10(2) presumes this intention unless the trust instrument provides evidence to the contrary.
4. Judicial Interpretation of Section 9
• In Fulham, Bryson J highlighted that s 9 significantly widens the Court’s ability to modify charitable trust monies cy-pres to a purpose that is similar to the now impossible purpose. – s9(1) Charitable Trusts Act 1993 (NSW).
• Courts determine cy-près schemes, considering practicality and an analogous application of trust property (Phillips v Roberts [1975]).
5. Contrast with General Law Principles
• At general law, cy-près is applied if the original trust purpose is impossible to fulfil.
• The Court’s role is to maintain the founder’s intent while adapting the application of trust property where necessary (Attorney-General v Sherborne Grammar School (1854); Attorney-General for NSW v Adams (1908)).
• CTA s 9 allows for modification before the trust purpose becomes unworkable.
Conclusion
The Charitable Trusts Act 1993 (NSW) expanded the traditional cy-près doctrine, allowing proactive modification of charitable trust purposes when they cease to be suitable or effective. Courts interpret s 9 broadly to ensure practical and beneficial application of trust property, contrasting with the stricter general law approach, which requires impossibility before intervention.
Issue 2 – Scheme and Administrative Matters
Principles
The court referred to its previous discussion in Green v Attorney General (NSW) [2023] NSWSC 1229 on the principles regarding trust purposes and charitable trust (CTA) relief.
Impracticability
While the deceased’s intent to use the property for respite care was well-meaning, the court found that the property was no longer suitable. Based on inspection reports and affidavits, it determined that continuing the trust’s original purpose had become impracticable. The court, therefore, had the authority to direct a cy-près scheme under general trust law.
Unsuitability
The trust aimed to assist those in need, including homeless individuals under Wesley Mission’s care. However, using the property for respite care would require significant renovations and divert resources from other Wesley Mission programs. The court accepted submissions that this triggered section 9 of the Charitable Trusts Act.
Cy-près Scheme
The court considered a proposal to sell the property and direct the proceeds to four existing Wesley Mission programs aligning with the deceased’s intent, excluding staff support. These programs included:
- 1. Escaping Violence Payment Program (EVP) – Provides financial aid for people leaving violent relationships.
- 2. Short-Term Emergency Placement (STEP) – A 12-week foster care program for teenagers.
- 3. Homeless Services – Provides crisis accommodation and pathways to stable housing.
- 4. Community Housing – Aims to provide secure and sustainable accommodation.
The court was satisfied that these programs were sufficiently aligned with the trust’s purpose, particularly in providing respite care and assistance to those in need.
Final Orders
The Court resolved the diluted wording of the cy-près scheme during the hearing, with input from both parties approving the sale of the property and distributing funds to the proposed programs.
Summary of the Judgment
Replacement of Trustee
The court found that the deceased intended Wesley Mission to be the trustee of the trust under the deceased’s Will. However, if there were doubts and the first defendant held the property as trustee, the Court should appoint the plaintiff. The court referred to Giurina v Giurina [2018] VSC 599, confirming its power to remove or replace a trustee under both its inherent jurisdiction (Letterstedt v Broers (1884) 9 App Cas 371) and s 70 of the Trustee Act 1925 (NSW). The test under the Trustee Act is whether it is expedient to appoint a new trustee, while under the court’s inherent jurisdiction, the focus is on the best interests of beneficiaries and proper trust administration (Miller v Cameron (1936) 54 CLR 572).
The court acknowledged that determining when executorial duties are complete is not always straightforward (Ford v Simes [2009] NSWCA 351). However, practically, the situation indicated that the defendant completed the executorial duties and held the property in some trustee capacity. Therefore, to give effect to the will and ensure the proper execution of the trust, the court ordered Mr. Smith’s removal as trustee without implying any wrongdoing on his part.
Costs
There were three key issues concerning costs:
1. Payment of Costs: The parties agreed that the trust should pay their costs. The Attorney General, who assisted the court, sought indemnity costs rather than having the costs borne by taxpayers (Perpetual Trustee Co Ltd v Attorney General (NSW) (2018) 17 ASTLR 126). The court accepted this request as reasonable and ordered payment of all parties’ costs from the trust fund.
2. Indemnity Basis: The parties agreed to award costs on an indemnity basis. The court found this appropriate, as the Attorney General’s role was similar to that of an executor, and there was no duplication of work.
3. Source of Costs: The court considered whether the costs should be borne by the entire estate or specifically from the property that was the subject of the proceedings. Referring to Reeves v Reeves (No 2) [2024] NSWSC 386 and s 93(3) of the Trustee Act 1925 (NSW), the court determined payment of costs from the net proceeds of the Newport property as the fundamental subject matter of the dispute.
The Court made the following orders concerning the Will of the late Daphne Bunn:
1. clauses 2(a) and 2(b) of the will created a charitable trust under the Charitable Trusts Act 1993 (NSW) (CTA).
2. under s9 of the CTA, the original trust purposes are no longer suitable or effective in whole or in part.
3. Remove the First Defendant as trustee and appoint the Plaintiff as sole trustee.
4. the Deceased’s interest in the Newport property vests in the Plaintiff.
5. the First Defendant takes all necessary steps to facilitate this vesting.
6. the trust administered cy-près, including:
• Sale of the Newport property and investment of the proceeds.
• Use the income from the invested capital to fund specific Wesley Mission programs for 30 years.
• After 30 years, the remaining capital and surplus income are applied to the same or successor programs.
7. Payment of parties’ costs from the net proceeds of the Newport property sale is on an indemnity basis.
8. liberty for parties to seek further orders if necessary.