Recently Prolegis Lawyers acted for Achieve Australia Limited, a charitable organisation which assists people with intellectual disabilities, in relation to a bequest made to Challenge Foundation of New South Wales Limited to hold on trust for the activities of the Crowle Home in Ryde, which is now managed by Achieve but was formerly managed by Challenge.

Prolegis commenced the litigation on behalf of Achieve in the Supreme Court of New South Wales. Justice Ball made his decision on 25 June 2010, declaring that Achieve should replace Challenge as the trustee because:

• Any process through which Achieve would need to obtain access to funds by making an application to Challenge would result in overlap and delay and create an administrative burden, when time would be better spent on the welfare of residents of the Crowle Home with intellectual disabilities;
• Challenge Foundation would have little knowledge about the current needs of Crowle Home;
• There was a significant risk of conflict arising in future between Achieve and Challenge, of the following kinds:
  • Future litigation, which would likely reduce trust assets; and
  • There was a potential conflict of interest and duty by Challenge, who would receive any funds leftover if Crowle ceased to exist.

The case is a significant example of how the wording of a testator’s wishes is not always the final word on charitable bequests, particularly where unincorporated charitable organisations become incorporated or merge with others.

If you would like to talk about an issue that your charitable organisation is having with a bequest or the ramifications of a charitable organisation that is undertaking a corporate reconstruction, merger or amalgamation, we invite you to contact Anne Robinson of our office to discuss the matter further.