The judgment states
The public gardens of Sydney are among the glories of our city. They are oases of recreation and research. Their staff are dedicated and skilled.
The Court has no doubt that the late Lorna May Backhouse (“Mrs Backhouse”) shared those sentiments. Her home was on the Old Bells Line of Road at Mount Tomah, not far from the Blue Mountains Botanic Garden at Mt Tomah (the “Mt Tomah Garden”), where she was a regular volunteer.
Mrs Backhouse died on 31 May 2010. By her will dated 4 January 1996, she left part of the residue of her estate to the plaintiff, Royal Botanic Gardens and Domain Trust (“RBGDT”), on trust to establish “The Lorna and Clive Backhouse of Mt Tomah Scholarship” to be awarded every two years to a member of staff at the Mt Tomah Garden (the “Scholarship Trust”). RBGDT received just over $1.1 million from Mrs Backhouse’s estate to form the corpus of the Scholarship Trust. With accumulated interest income, the current value of the Scholarship fund is approximately $1.3 million.
These proceedings were brought by RBGDT because it wishes to be able to award the scholarship annually and to more than one person in any year.
RBGDT and the defendant, the Attorney General of New South Wales, have agreed that, subject to the consent of the Court, an administrative scheme be ordered to give effect to RBGDT’s intention (the “Scheme”). Although the parties have agreed on the orders to be made, the administration of charitable trusts is a matter of public interest and it remains a matter for the Court to determine whether the orders should be made. These are the reasons why the Court is satisfied that the Scheme should be ordered. The Scheme is set out at the conclusion of these reasons as part of the orders of the Court. ...
RBGDT originally pressed for a cy-près scheme. Ultimately, the parties came to the view that there was real doubt whether it could be said that the Scholarship Trust could no longer be performed or that it had become impracticable. It followed that it was not clear whether there was a basis for the Court to order a cy-près scheme, either under its general jurisdiction or pursuant to s 9 of the Act. The parties’ concerns were well founded. However, because it is not necessary for me to decide, I do not express any view on whether a cy-près scheme could have been ordered.The judgment goes on -
An affidavit sworn by the director of Horticultural Management for RBGDT succinctly stated the reasons for these proceedings:
“Number of scholarships
29 The Backhouse Scholarship can only be awarded once every two years.
30 There are a limited number of staff at Mount Tomah Garden. They have professional commitments at the Mount Tomah Garden. They also have personal commitments. It is challenging for staff to be away from the Mount Tomah Garden for an extended period of time.
31 Therefore, a study trip is usually limited to one or two months. The cost of such a study trip is approximately $15,000.00 to $20,000.00.
32 The annual income from the Scholarship Fund would easily be able to finance more than one scholarship every two years.
33 If the Backhouse Scholarship could be awarded more often, more members of the staff would have an opportunity to use the Scholarship Fund, which would advance the knowledge in horticulture and/or plant physiology of more members of the staff. Cannot be used for group projects
34 The terms of the Backhouse Scholarship restrict the scholarship to one member of the staff.
35 A horticultural study trip usually involves a number of administrative and practical tasks such as collecting and collating seeds, plant specimens and other organic material, as well as other information. It is more practical if a number of persons travel together, rather than one individual.
36 In addition, the Mount Tomah Garden may be able to negotiate better access to host botanic garden staff, leading horticulturalists and other leading practitioners if there are a number of members of staff involved rather than one individual.
37 It would advance the knowledge in horticulture and/or physiology of plants of Mount Tomah Garden if the Scholarship Fund could be used to pay for a number of staff rather than one member of staff.”
The Scheme is a textbook example of maintaining the ends or purpose of Mrs Backhouse’s generous gift, but altering the means. Without intending by this observation to establish a legal test of general application, the Court has no hesitation in approving the Scheme because it has no doubt that if Mrs Backhouse’s views were able to be sought, she would express her satisfaction that her gift was to be used for the benefit of more people and more often to undertake the activities she wished to support. Approval of the Scheme will permit annual awards to be made and, if appropriate, to more than one person in any year.
There are only two matters concerning the orders the Court will make which require special mention.
First, it will be seen that the Scheme makes provision for the accumulation of income.
The Scheme originally presented for the Court’s consideration permitted RGBDT to mix the Corpus and the unspent income for the purposes of investment. However, it maintained the requirement for the Scholarship to be paid only from income. During the hearing I raised with the parties my concern that this approach might lead to administrative and accounting complications in keeping track of how the investment returns were to be treated from a mixed investment. Given further time to consider the matter, the parties have now adopted a different solution which, in my view, is a simpler one (see Clause 7(e) of the Scheme).
In my respectful view, there is a real public interest in ensuring that the administration of trusts such as those in relation to scholarships should be as straightforward as possible. Apart from the inherent advantage of ease of administration, it is also likely to ensure that the costs of administering such a gift are minimised. Simplifying such matters has at least two benefits. First, it may encourage other potential donors to make such gifts in the knowledge that as much as possible will be expended on the intended purpose rather than the administration of a gift. Second, it will also encourage organisations to be prepared to take such gifts. In many cases, such gifts are made to organisations which themselves are charities and whose administrative resources may be limited. The approach which the parties have now adopted in this case will be administratively simpler but still ensure that the Corpus is maintained.
Second, the orders include an order for the costs of the parties, including the Attorney General, to be paid out of the Scholarship Trust. Those costs will be payable as expenses or liabilities of the Scholarship Trust. In making the costs order proposed by the parties, the Court is satisfied that the Attorney General’s role in these proceedings was helpful, the Scholarship Trust itself is substantial, and the reason for the application arose from the consequences of the terms of the gift as provided by Mrs Backhouse. The Court is satisfied those circumstances make it appropriate for the Attorney General to receive his costs on the indemnity basis. In reaching this conclusion, I respectfully adopt and apply the decision of Leeming JA (sitting as a judge of this division) in Perpetual Trustee Ltd v Attorney General of NSW (Will of Hon G Nesbitt) [2018] NSWSC 1456 at [129]–[135].
