Wagner Nicky: Christ’s College (Canterbury) Amendment Bill — Second Reading 
Wagner Nicky: Christ’s College (Canterbury) Amendment Bill — Second Reading 
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NICKY WAGNER (National) 
: 
 I move  
That the Christ’s College (Canterbury) Amendment Bill be now read a second time 
. I thank the members of the Government Administration Committee and its chair the Hon David Parker for dealing with this bill so quickly and efficiently. The select committee reported back to the House on 10 September and recommended that the bill with amendments proceed. This was good news for the board of governors of Christ’s College and for the school itself as it cleaned up after the 4 September earthquake. 
Christ’s College which was established in 1855 is one of the oldest schools in New Zealand and has a cluster of beautiful heritage buildings in the centre of Christchurch. Luckily they have sustained only minor to moderate damage. Like many heritage buildings in Christchurch the damage has been mostly to chimneys and the gable ends of buildings. The school had done substantial earthquake strengthening in the past and the boarding houses which have been strengthened to 67 percent of the building code were undamaged. Several buildings will need further earthquake-strengthening work but that had already been planned and specialist workmen are now busy restoring some of the most intricate stone and slate work. The school is fully insured and will continue the repairs until all the buildings are restored. The boys although evacuated after the earthquake have returned to school and it is now functioning as normally as possible. 
The Christ’s College (Canterbury) Amendment Bill seeks to amend the Christ’s College (Canterbury) Act 1910 to remove difficulties in administering trust funds invested in the college. Over the past 155 years the college has received numerous bequests from various donors. The terms of some of those bequests require that the annual income generated by the funds be applied to specific purposes—for example the provision of prizes for certain subjects or sports or the provision of scholarships for pupils who meet those criteria. Accordingly the school holds the funds on trust to be applied for those specified purposes. 
However over the years the stated objects of a number of the trusts have become largely redundant. Also some of the trusts receive income that is either in excess of or insufficient for their needs. The board of governors’ submission to the select committee advised that of the 148 mostly small trusts that the board administers approximately 28 could not be administered because of changed circumstances. In the past when problems of implementation had occurred the board had engaged directly with the original donors to agree to a variation of purpose. In many cases variations had been agreed but nowadays many of the original donors have already passed away and even some of the agreed variations are in need of amendment. 
Trustees can apply to the High Court under the Charitable Trusts Act 1957 to approve a new trust purpose in certain circumstances. The new trust purpose must be as close as possible to the original one. The process involves the submission of a trust variation scheme to the Attorney-General who will report on the scheme to the court. There is also a public notification and objection process. However the college would need to make a separate application to the High Court for each trust variation and the board estimates that it would cost approximately $50000 each time. That is not practical when we consider that many trusts are small. One example is the Balfour Divinity Prize which was established in 1880 with a bequest of $100 for a gold medal to be awarded to the boy who passed the best examination in divinity in the four Gospels and Acts of the Apostles—in Greek! Other examples of bequests with redundant purposes include the 1919 gift to the college to provide bursaries for the sons of soldiers. They include the sons of those who had fallen or suffered as part of the New Zealand Expeditionary Force and the sons of members of various forces of the British Empire or who had served in the Great War. Another estate was left in trust to educate orphans from named Christchurch orphanages which no longer exist. Funds can now no longer be distributed from those trusts and are just accumulating to the benefit of no one. 
The select committee found that the amendment bill was generally consistent with the law related to charitable trusts and reported that the issues as described in the preamble were proved to its satisfaction. Similar problems have been identified by other organisations and have been addressed in legislation such as the Methodist Church of New Zealand Trusts Bill 2009 which was recently passed in this House. The select committee suggested that the Christ’s College (Canterbury) Amendment Bill use the wording from the Charitable Trusts Act which has an established body of case law supporting it. It recommended that clause 5 which proposes a new subsection to vary the proposed purposes of charitable trusts in certain circumstances be rewritten. It also suggested inserting a new subsection 4A in clause 5 which would allow the governing body to use for another purpose excess income from trusts that generate more than necessary for the donated purposes. That is consistent with the Charitable Trusts Act. 
Finally the committee was not comfortable with the term “for the benefit of the college” in case the functions of the college changed over time and then trust funds could perhaps be applied to non-charitable purposes. The committee therefore recommended amending new section 5(3) in clause 5 to require that trust funds be used for charitable purposes and that new section 5(4B) require that any new purpose be as close as reasonably possible to the purpose for which the property was given. 
The board of governors has always made it clear that the college wishes to and as a trustee must ensure that to the fullest extent possible the objects of the trust continue to be met and that the board’s approach to any variation of purpose would be as sympathetic to and consistent with the original purpose as possible. The board of governors has also assured the select committee that before exercising this power to vary the original purpose it will complete a detailed review of the trust to ensure that the original purposes cannot continue to be met fully. 
Again I thank the select committee for its thorough and thoughtful work. The bill as amended will solve the problems of dealing with numerous small trusts administered by the college. It contains enough checks and balances to protect those trusts and the Attorney-General still maintains his role as the protector of charities. He will still have general oversight and will be able to inquire into the trusts if he believes that the trustees at any stage overstep their powers. The committee has done an excellent job in reshaping this bill. It is good legislation and I commend it to the House.