JAMES BROWN MEMORIAL TRUST [2025] SASC 176

Applicant: JAMES BROWN MEMORIAL TRUST Counsel: MS P EWENS - Solicitor: LYNCH MEYER LAWYERS Hearing Date/s: 25/10/2024 File No/s: CIV-24-009152 B SUPREME COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. In the Matter of JAMES BROWN MEMORIAL TRUST [2025] SASC 176 Judgment of the Honourable Justice Stein 21 October 2025 STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - PARTICULAR CLASSES OF ACT - PRIVATE ACTS CHARITIES - CHARITABLE GIFTS AND TRUSTS - IN GENERAL - CONSTRUCTION CHARITIES - TRUSTEES OF CHARITIES - POWERS AND DUTIES - POWERS - POWER TO DIVERT PROPERTY TO OTHER PURPOSES James Brown Memorial Trust (“Trust”), the applicant, is a charitable trust initially established by the last will and testament of Mrs Jessie Brown and incorporated and perpetuated by Acts of Parliament in 1894 and 1990. The applicant seeks advice and directions as to whether it has the power to remunerate its trustees. Held (granting the application): 1. The Trust has the power to remunerate trustees for their services. 2. The Trust’s proposal for remuneration is reasonable. James Brown Incorporation Act 1990 (SA) ss 4, 5, sch; Administration and Probate Act 1919 (SA) s 70; Trustee Act 1936 (SA) s 91; James Brown Memorial Trust Incorporation Act 1894 (SA); Succession Act 2023 (SA) sch 4, referred to. -- 1 of 7 -- -- 2 of 7 -- IN THE MATTER OF JAMES BROWN MEMORIAL TRUST [2025] SASC 176 Civil: Application 1 STEIN J: The James Brown Memorial Trust (“the Trust”) was established in 1892 under the will of Jessie Brown in honour of her late husband, James. The terms of the Trust were to found and endow an institution, or institutions, and create funds as a memorial to James Brown, bearing his name, for the benefit, care, relief or maintenance of such of the destitute, or the aged, physically or mentally afflicted, or deserving poor of any class as the trustees deemed proper and expedient. The Trust is a registered charity and provides a range of aged care services. The Trust seeks orders that the trustees may be remunerated for performing their duties as trustees. 2 There are two issues for consideration. The first is whether the Trust has power to remunerate trustees. If the answer to that question is yes, the second issue is whether the proposed remuneration is reasonable. 3 I have determined that the Trust has the power and that the proposed remuneration is reasonable. Accordingly, I have determined to allow the application and make the orders sought by the Trust. Basis upon which orders are sought 4 The Trust has applied for directions as to management and administration of the Trust under s 5 of the James Brown Incorporation Act 1990 (SA) (“the Act”), s 70(1) of the Administration and Probate Act 1919 (SA)1 and s 91 of the Trustee Act 1936 (SA). 5 Section 70 of the Administration and Probate Act 1919 (SA) provided that the Court may allow any trustee to receive such commission or other remuneration out of the estate or trust property as is just and reasonable. Section 70 of the Administration and Probate Act 1919 (SA) applied to trustees by s 91 of the Trustee Act 1936 (SA). Section 5 of the Act allows the Trust or any two trustees to apply to the Supreme Court for advice or direction as to any matter connected with the management or administration of the Trust property or the construction of any document relating to the Trust or the Trust property. Background 6 In 1894, the James Brown Memorial Trust Incorporation Act 1894 (SA) was enacted to provide for the incorporation of the Trust and to prescribe the powers 1 Between the filing of the application and the delivery of this ruling the Succession Act 2023 (SA) entered into force, thereby repealing the Administration and Probate Act 1919 (SA). However, sch 4, cl 2 of the Succession Act 2023 (SA) states that “[a]ny proceedings commenced in the Court under a repealed Act that have not been finally determined before the designated day may be continued and completed under that Act as if this Act had not been enacted”. -- 3 of 7 -- [2025] SASC 176 Stein J 2 and functions of that Trust. In 1990, the Act was enacted which re-stated the purposes of the Trust and revised the powers and functions of the Trust. 7 The Trust’s balance sheet at the date of the application showed gross assets of $178 million and net assets of $117 million. At that date the Trust employed 586 people and had 44 volunteers. 8 As at the date of the application, the Trust owned and operated residential care facilities in Belair, Morphett Vale, McLaren Vale; retirement villages in Belair, Bellevue Heights, McLaren Vale, Woodside; and also provided subsidised home care packages to over 800 clients with a range of needs in districts ranging from Murray Bridge and Victor Harbor to Mount Barker and Belair. The Trust also provides affordable living accommodation at Crafers, Campbelltown, Clovelly Park, Findon and Mansfield Park. 9 The Trust has eight trustees who meet bimonthly. Trustees hold appointments as members of sub-committees. Trustees are required to have in depth knowledge of the complex laws and regulations relating to the environment in which the Trust operates and trustees have significant duties and responsibilities. The chair of the Board deposed to the significant period of time trustees are required to devote to address the substantial information provided before each Trust meeting and the need to engage in consideration of matters relating to the Trust outside of nominated meeting times from time to time. 10 The Trust’s operations have become increasingly more complex over time. 11 The chairman of the Trust deposed to awareness of plans by government to introduce new aged care legislation, strengthen aged care quality standards and introduce a new regulatory model. 12 The chair deposed to a belief that the Trust considers it is fair and reasonable that the trustees should be remunerated given the complexity of the Trust’s property, holdings and business dealings and the regulation of the aged care sector. Providing remuneration will assist the Trust in recruiting and retaining suitably qualified and experienced trustees. Powers of the Trust 13 The first issue for consideration is whether or not, properly construed, the Declaration of Trust allows for the application of Trust property to pay remuneration to trustees. 14 The Act provides that the Trust continues in existence under the same name as a body corporate with perpetual succession and a common seal and the legal capacity of a natural person. The Trust has the powers, functions and duties conferred or imposed by the Declaration of Trust.2 The Declaration of Trust is set 2 James Brown Memorial Trust Incorporation Act 1990 (SA), s 4. -- 4 of 7 -- [2025] SASC 176 Stein J 3 out in a schedule to the Act. The Trust is declared as a public charitable institution for the purposes of providing accommodation, hospital services and health and welfare services for the aged or infirm, or persons who lack sufficient means or who are otherwise in need of charitable assistance.3 All Trust property is held by the Trust on trust and, subject to the Declaration of Trust, may be applied by the Trust for any of the purposes of the Trust.4 15 Pursuant to the Declaration of Trust, the Trust is given power, among other things, to:5 • acquire and deal with real and personal property; • erect buildings on land; • establish and operate facilities and services to advance the purposes of the Trust; • open and operate bank accounts; • invest and borrow; • give security; • enter into contracts of employment and other arrangements; • to charge fees and recover out of pocket expenses; • to exercise any other powers contemplated by the Declaration of Trust or necessary or expedient for the fulfillment of its purposes. 16 The Declaration of Trust contains detailed provisions about the appointment and removal of trustees, the establishment of committees, the delegation of Trust functions, holding Trust meetings, record keeping and so on.6 The Declaration of Trust provides that no personal liability attaches to a trustee for acts or omissions in good faith and a trustee is not liable for debts and liabilities of the Trust.7 The Trust is able to make rules and regulations as it thinks fit in relation to the management of the business and the affairs of the Trust.8 17 The Trust is liable for any costs or expenses involved in insuring the trustees against risks associated with the performance of their functions.9 3 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 1. 4 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 2. 5 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 3. 6 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 8. 7 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cls 9 and 10. 8 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 12. 9 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 11. -- 5 of 7 -- [2025] SASC 176 Stein J 4 18 The Trust’s powers, functions and duties contained in the Declaration of Trust do not expressly include the payment of remuneration. However, the Trust has a range of powers in relation to Trust property which involve the use and application of Trust property and monies. These include to invest funds,10 to give security for the discharge of liabilities11 and to make donations and gifts,12 consistent with the Trust having broad discretion about how Trust property may be used and applied. The Trust has power to enter into contracts of employment, partnerships, joint ventures or other contracts or arrangements.13 The power to make payments from Trust property is necessarily incidental to, and implied within, the power to enter into such contracts or arrangements. The concept of an arrangement, in contradistinction to the other references within the clause (contracts, partnerships, joint ventures), connotes something less formal than a binding contract. In my view, that power is sufficiently broad to allow the Trust to enter into arrangements with trustees which provide for remuneration for their services and to pay such remuneration. 19 The Trust is also given a broad power to exercise any other powers that are contemplated by the Declaration of Trust or necessary or expedient for the fulfillment of its purposes.14 In my view, the application of Trust property to pay remuneration to trustees constitutes an exercise of powers contemplated by the Declaration of Trust because it contemplates the entry into contracts and arrangements with the potential that associated payments will be made from Trust property. I also consider the payment of remuneration to trustees is expedient for the fulfillment of the purposes of the Trust taking into account the complexity of the Trust’s operations, the nature of the services it delivers, the legal duties and responsibilities upon trustees, the regulatory environment in which the Trust operates and the need to attract candidates for trusteeship that possess sufficient skill and acumen to administer such complex operations. Proposed remuneration 20 The second issue is whether the proposed remuneration is reasonable. 21 The Trust has undertaken a survey of other similar not for profit aged care providers and considered the McGuirk Management Consultants 2023 Australian Board Remuneration Survey Report (“the McGuirk report”) collated from information provided by members of the Governance Institute of Australia. The Trust proposes the following remuneration amounts: 1. $30,000 for the chair per annum; 2. $22,000 for the deputy chair per annum; 10 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 3(1)(e). 11 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 3(1)(g). 12 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 3(1)(k). 13 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 3(1)(h). 14 James Brown Memorial Trust Incorporation Act 1990 (SA), sch, cl 3(1)(m). -- 6 of 7 -- [2025] SASC 176 Stein J 5 3. $18,000 for trustees per annum; 4. $3,000 additional for sub-committee chair position per annum; 5. $3,000 additional for sub-committee members per annum; 6. $500 per meeting attended for appointed members who are not trustees per annum; and 7. $2,500 as a professional development allowance per annum to each trustee. The Trust proposes those amounts will be regularly reviewed and increased in accordance with percentage rates of pay determined by the Fair Work Commission Annual Wage Review Decision. The Trust also proposes to undertake an external market review no more than every three years based on an evidence-based established benchmarking tool, including analysis of charities. 22 Given the assets of the Trust, the complexity of Trust operations and their size, I accept that the Trust’s position on remuneration of trustees is reasonable and consistent with the best interests of the Trust. Taking into account the information published in the McGuirk report and the filed material, I consider the proposed remuneration is reasonable. 23 Given the Trust is a charitable trust, I sought the Attorney-General’s views. I was informed on 1 October 2025 that the position of the Attorney-General was that, subject to the approval of the Supreme Court generally and specifically as to the deed the containing sufficient power to do so, the Board of Trustees be renumerated as requested. 24 I consider the proposed remuneration and proposal for the regular review of the remuneration to be reasonable. Conclusion and orders 25 I have determined to allow the application. 26 I order that the trustees of the Trust may be remunerated for performing their duties as trustees. The Trust may remunerate the trustees in accordance with the proposal set out in the affidavit of Mr Klenk filed in support of the Trust’s application. -- 7 of 7 --