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SUPREME COURT OF NEW ZEALAND

CHAIRMAN, COUNCILLORS AND INHABITANTS OF WAITEMATA COUNTY, AUCKLAND v INLAND REVENUE COMMISSIONER (NZ)

Perry, J

17 February, 11 May, 28 August 1970 - Auckland

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Perry, J    This is a case stated pursuant to s 25 of the Stamp Duties Act 1954 (Reprint 1964, vol 3 p 2241). It recites that the County purchased some 54 acres of land pursuant to s 380A of the Counties Act 1956 (Reprint 1969, vol 2 p 1077) and a further property containing three roods pursuant to s 374 of this Act. The County contends, but the Commissioner denies, that these transactions are exempt from conveyance duty under s 69(f) of the Stamp Duties Act as being "a conveyance of property to be held on a "charitable trust in New Zealand or elsewhere".

   I propose to examine the question of the second parcel first, namely, the purchase of the property containing some three roods which the County has purchased pursuant to s 374. This section reads as follows: "Council to maintain public offices-The Council may from time to time provide and maintain public offices (whether within or outside the county) with suitable furniture for the same for holding the meetings and transacting the business of the Council, and for the use of its officers, and for holding public meetings and for other purposes, and may purchase or rent land or buildings for that purpose, or may cause buildings to be erected on any land belonging to or leased by the Council, and may cause any such building to be added to or improved."

   The correspondence exhibited to the case stated shows that the property has been purchased for the purposes of establishing a branch office of the County of Titirangi. The County which is a large one, encompasses a wide-spread area making the provision of local branch offices very desirable.

   Mr Hamer, for the County, contends that the land will be held on a charitable trust and a well argued submission reviewed the earlier decisions on what are charitable trusts together with the later developments of this branch of the law. Mr Bridges, for the Commissioner, contends that the property was not conveyed to the County to be held by it on trust, and further, that even if it were so, then that trust is not a charitable trust. Assuming that the land is held on trust, is it a charitable trust? Is a public office "for holding the meetings and transacting the business of the Council, and for the use of its officers, and for holding public meetings and for other purposes …", a charitable purpose? In 1891 Lord Macnaghten classified charitable trusts falling within the Charitable Uses Act 1601(usually known as the Statute of Elizabeth I) under four headings in the well known decision of Commissioners for Special Purposes of the Income Tax v Pemsel, [1891] AC 531. The first three headings cover the relief of poverty, the advancement of education and the advancement of religion. The fourth heading was for "other purposes beneficial to the community not falling under any of the preceding heads".

   Mr Hamer concedes that if he is to succeed he must bring this public office within the fourth heading. There have been very many cases before the courts as to which trusts come within this heading and even in comparatively recent times, there has been considerable judicial discussion as to how one approaches the question of whether a trust is within or without this fourth heading. It has been always accepted that it may be within the classification if it is within the spirit and intendment of the preamble of the statute, but whether the class is now closed or not and how it should be ascertained whether it is in or out has been considered in a number of decisions: see the discussion in Tudor on Charities 6th ed, pp 74-83. However, the most modern approach to the question is set out in the decision of the House of Lords in Scottish Burial Reform and Cremation Society Ltd v Glasgow City Corporation, [1967] 3 All ER 215. At p 217 Lord Reid said: "It is not disputed that to be a charity they must show not only that their purposes are beneficial to the community but also that those purposes are within the spirit and intendment of the preamble of the statute of Elizabeth I."

   And later: "But the appellants must also show that the public benefit is of a kind within the spirit and intendment of the statute of Elizabeth I. The preamble specifies a number of objects which were then recognized as charitable. But in more recent times a wide variety of other objects have come to be recognized as also being charitable. The courts appear to have proceeded first by seeking some analogy between an object mentioned in the preamble and the object with regard to which they had to reach a decision. And then they appear to have gone further and to have been satisfied if they could find an analogy between an object already held to be charitable and the new project claimed to be charitable. And this gradual extension has proceeded so far that there are few modern reported cases where a bequest or donation was made or an institution was being carried on for a clearly specified object which was for the benefit of the public at large and not of individuals, and yet the object was held not to be within the spirit and intendment of the statute of Elizabeth I. Counsel in the present case were invited to search for any case having even the remotest resemblance to this case in which an object was held to be for the public benefit but yet not to be within that spirit and intendment. But no such case could be found."

   Lord Upjohn, at p 220 said, after referring to Lord Macnaghten's fourth heading: "But it is familiar law that not every such purpose is charitable so, secondly, the appellant company must establish that it falls within the spirit and intendment of the preamble to the statute of Elizabeth I …." Lord Wilberforce at p 223 said: "On this subject, the law of England, though, no doubt, not very satisfactory and in need of rationalization, is tolerably clear. The purposes in question, to be charitable, must be shown to be for the benefit of the public, or the community, in a sense or manner within the intendment of the preamble to the statute 43, Elizabeth I, c 4. The latter requirement does not mean quite what it says; for it is now accepted that what must be regarded is not the wording of the preamble itself, but the effect of decisions given by the courts as to its scope, decisions which have endeavoured to keep the law as to charities moving according as new social needs arise or old ones become obsolete or satisfied. Lord Macnaghten's grouping of the heads of recognized charity in Pemsel's Case, supra, is one that has proved to be of value and there are many problems which it solves. But three things may be said about it, which its author would surely not have denied; first that, since it is a classification of convenience, there may well be purposes which do not fit neatly into one or other of the headings; secondly, that the words used must not be given the force of a statute to be construed; and thirdly, that the law of charity is a moving subject which may well have evolved even since 1891."

   I accept that the provision of a branch public office would be for the benefit of the public or the community. It is true that the community, or a section of the community which it is intended to benefit must be identifiable: see Tudor on Charities at p 71, but I assume that it will be for the particular benefit of the residents of that particular part of the County, and on the information supplied to me that is quite an important part of the County. But is that benefit in a sense or manner within the intendment of the preamble to the statute? It is true that here there is, of course, no direct statement in the preamble which would justify a construction in favour of the charity, but the question of whether it is within the spirit and intendment of the statute can be aided by looking at the preamble and the reported decisions for analogies in an endeavour to fit the proposal within the spirit of the statute or by considering the purpose of the gift, bequest or enactment relied upon against the background of these and applying the spirit and intendment approach.

   Lord Greene, MR, in Re Strakosch; Temperley v Attorney-General, [1949] 2 All ER 6, at p 8; [1949] 1 Ch 529 said, at p 538: "The benefit, as we understand it, does not have to be in any way ejusdem generis with the recited purposes, but it has to be charitable in the same sense." As Chitty, J, said in Re Foveaux; Cross v London Anti-Vivisection of the Counties Society, [1895] 2 Ch 501, at p 504: "After all, the best that can be done is to consider each case as it arises, upon its own special circumstances."

   After considering the matter fully, I do not consider that a public office of a County comes within the spirit and intendment of the statute. Counsel was not able to refer me to any decision directly in point, and the nearest Mr Hamer could get to it (no doubt in a search for any case having even the remotest resemblance-Lord Reid in the Scottish Burial Case, at p 218, supra) was the decision of Re Spence; Barclays Bank Ltd v Mayor of Stockton-On-Tees, [1937] 3 All ER 684; [1938] Ch 96, where Luxmoore, J, had held that the bequest of money for the purchase of land and the erection thereon of a public hall, to be presented when completed to the corporation, was a valid charitable gift. This decision has been criticized: see the discussion in Tudor on Charities at pp 109-110, because of the use of the words "public purposes", but whatever strength it has must depend on its application to the operation of that part of s 374 where it is provided that such public office may be used for holding public meetings and for other purposes. However, I regard this "holding public meetings" and the words "and for other purposes" as merely ancillary to the main purpose of public offices, and as insufficient to influence me in a consideration of the dominant object, ie, public offices. The emphasis on the main or dominant object is supported by the decisions Re Town and Country Planning Act 1947; Crystal Palace Trustees v Minister of Town and Country Planning, [1950] 2 All ER 857; [1951] 1 Ch 132, at p 141, and Auckland Harbour Board v Inland Revenue Commissioner (NZ), [1959] NZLR 204, Shorland, J, at p 209.

   A number of other purposes have been collected in Tudor on Charities at pp 85-6 under the heading of "Trusts for certain Purposes of General Public Utility and Beneficial to the Community" which, as the learned editors point out "… in modern times are not usually paid for out of trust funds provided by public spirited donors or testators, but by some public authority out of public funds which the authority is bound or entitled to apply for the purpose in question."

   In addition, I was referred to a number of decisions by Mr Hamer which I list (I have abbreviated the titles): Construction of a public library, British Museum v White, [1826] 2 Sim & St 594; provision of a recreation yard, Re Hadden; Public Trustee v Ware, [1932] 1 Ch 133; [1931] All ER Rep 539; provision of a public hall, Re Spence, [1937] 3 All ER 684; [1938] 1 Ch 96; gift to increase efficiency of armed forces: gift of plate to regimental mess, Re Good, [1905] 2 Ch 60; [1904-7] All ER Rep 476; provision of water supply, Jones v Williams, [1767] Amb 651; 27 ER 422; repair of walls and bridges, Attorney-General v Shrewsbury Corporation (1843), 12 LJ Ch 465; repair of conduits, Attorney-General v Dartmouth Corporation (1883), 48 LT 933; hospital, grammar school and free library, Re Allen; Hargreaves v Taylor, [1905] 2 Ch 400; prevention of sea encroachment Attorney-General v Brown (1818), 36 ER 384; [1814-23] All ER Rep 382; provision of a fire brigade, Re Workingham Fire Brigade Trusts; Martin v Hawkins, [1951] 1 All ER 454; public park, Re Battershall (1907), 10 OWR 933 (Can); statutory power to levy rates for street improvements, lighting, Attorney-General v Eastlake (1853), 68 ER 1249; encouragement of rifle shooting, Re Stephens; Giles v Stephens (1892), 8 TLR 792; afforestation, Re Bruce; Simpson v Bruce and Attorney-General, [1918] NZLR 16; fire prevention, Wanganui Borough v Wanganui Fire Board, [1919] NZLR 233; paying and lighting of a town, Attorney-General v Heelis, [1824] 2 Sim & St 67 ; playing fields and parks, Re Hadden; Public Trustee v Ware, [1932] 1 Ch 133; institution for incurables, Re Denton; Public Trustee v Denton, [1917] NZLR 263.

   After consideration of all these decisions and the preamble, I cannot feel that a public office of a County, even although beneficial to the community, is within the spirit and intendment of the preamble to the Act as a charity.

   I propose next to deal with the question of whether the land is to be held on a trust at all, because if the answer is in the negative, then the question of whether it is charitable or otherwise is only of academic interest. There are, of course, very many important decisions where property has been given or bequeathed to local bodies, either in general terms or specifically for a named purpose, and there can be no doubt that in such cases the local body will hold the property in trust. Very many of these decisions have been reviewed by the courts when they have had to consider whether the terms of the trusts are charitable or otherwise: see Tudor on Charities at pp 69-125. An example in New Zealand of a gift to a local body of land to be held in trust is Solicitor-General v Wanganui Borough, [1919] NZLR 763, where land was conveyed to a Borough Council on the disbanding of the volunteer fire brigade. An example of land being conveyed to a local body charged with a specific trust is Kaikoura County v Boyd, [1949] NZLR 233. Land may also be purchased with the intention that it should be held in trust as in the case of the purchase of Cliffords Inn: see Smith v Kerr, [1900] 2 Ch 511 and, [1902] 1 Ch 774. Cozens-Hardy, J, at p 520 said: "A charity may be created by purchase or by statute as well as by gift. The only test is this: Are the purposes for which the property is to be applied public and charitable in the view of the law?" See also the purchase by the Crystal Palace Trustees, supra, of the Crystal Palace land. Sim, J, delivering the judgment of the Court of Appeal in Solicitor-General v Wanganui Borough, supra, at p 773 said: "A trust may be created by any language sufficient to show the intention, and technical words are not necessary. A gift of property upon condition that it is to be applied in a particular way will create a trust: Attorney-General v Wax Chandlers' Co, [1873] LR 6 HL 1, at p 21, and a trust may be created where the word used is "trust", "intent", "purpose", "proviso", or "condition": Goodman v Saltash Corporation (1882), 7 App Cas 633, at p 642; [1881-5] All ER Rep 1076. A trust arises where the gift of property is so dedicated by clear and distinct words as to fix on the donee a fiduciary obligation to apply it for a special purpose: Cunningham v Foot (1878), 3 App Cas 974, at p 992. Is there, then, any such dedication in the present case?" But here the question of whether the land is held in trust cannot be gathered from any gift or bequest or a purchase with an obligation imposed on it, but must be gathered from the general statutory power given to the County to purchase the land.

   There are many sections in the Counties Act enabling the County to purchase land, and sometimes other forms of property, for specific purposes quite apart from the section now in question. For example, s 199 enables the County to provide parking places and transport stations and for that purpose it may "take, purchase, or otherwise acquire any land or buildings in or near to the County". Section 267 enables a Council to construct waterworks and from time to time to do all things necessary thereto, and the term "waterworks" includes "all lands, watersheds, catchment areas, reservoirs, dams, tanks, and pipes, and all buildings, machinery, and applicances of every kind acquired or constructed by the Council" for the purpose of conveying water. Section 290 enables the Council to light roads with electricity and to supply electricity and it is authorized to "acquire land and erect buildings …". Section 315 authorizes the Council to provide public baths, sanitary conveniences, and washing facilities, and for this purpose it "may purchase or otherwise provide all such land, buildings, appliances, and conveniences as are necessary …". Section 319 authorizes the Council to provide for the health, amusement, and instruction of the public, and for this purpose it may "Take, purchase, or otherwise provide and maintain land and buildings …". Section 321 enables the Council to apply the County fund for the establishment of "agricultural schools or model farms, the acquisition of land, and the construction or acquisition of all necessary buildings, implements of all sorts, and of livestock to be used for or in connexion therewith". Section 322 enables the Council to apply the County fund for the establishment of rifle ranges and "the purchase or other acquisition of any land necessary for the purpose". Section 335 enables the Council to provide market places "and for that purpose may acquire land and erect thereon all such buildings and provide all such things as are necessary …". Sections 341, 342 and 343 are all sections authorizing the Council to acquire land for the special purposes set out in those sections, namely to provide road metal and lime, stock dips and stock paddocks. Can it be said that whenever the Council acts pursuant to an enabling section such as these, that the land so acquired is to be held in trust?

   The Act envisages that some land may be held in trust by the County and some may be held by it, but not on trust, and if it is on trust, the trust may enable it to be sold, or there may be a prohibition against the sale of it. I set out s 170 as follows: "Council may sell or exchange lands vested in Corporation-

   "(1) Save as provided in subsection (3) of this section, the Council (pursuant to a resolution of the Council) may sell any land vested in the Corporation, or exchange any such land and in respect of any such exchange may give or receive any money for equality of exchange: Provided that public notice of the time and place of the meeting at which the resolution is to be submitted to the "Council and of the purport of the resolution (including the name of and number in the road in which the land is situated, or some other readily identifiable description of the land) shall be given not less than 14 clear days before the date of the meeting, but no such notice shall be necessary in any case where the land is sold to any person who is desirous of building a house thereon for the personal occupation of himself and his family or of occupying with his family and house already on the land.

   "(2) Where any land so sold or exchanged was at the time of the sale or exchange vested in the Corporation in trust for any particular purpose or purposes whether by or pursuant to any Act or any deed of trust or otherwise howsoever, all money received by the Council upon the sale or exchange shall be applied in or towards the purchase of other lands to be held for the same purposes as affected the lands disposed of, and all lands received in exchange shall be held for the purposes that affected the land given in exchange.

   "(3) Nothing in this section shall be deemed-

   (a) To authorise the Council to deal with any public reserve within the meaning of the Reserves and Domains Act 1953 otherwise than in accordance with the provisions of that Act:

   (b) To authorise the Council to deal with any land taken or otherwise acquired under the Public Works Act 1928 otherwise than in accordance with the provisions of that Act:

   (c) To authorise the sale or exchange of any land vested in the Corporation in trust for any particular purpose, if the sale of the land is prohibited by the instrument creating the trust.

   

"Notwithstanding anything in sub section (3) of this section, the Council, with the consent of the Minister and subject to such terms and conditions as the Minister thinks fit, may sell or exchange any land vested in the Corporation as an endowment for the general purposes of the County and not subject to any express prohibition or restriction as to sale or exchange. Nothing in sub section (2) of this section shall apply with respect to the proceeds of any such sale or to any land received on any such exchange."

   The position will then arise that if this land, or for that matter, any land purchased pursuant to the other sections of the Act which I have quoted, is regarded as being vested in the corporation in trust for the particular purpose or purposes stated in the enabling section, then that land or the substituted land purchased with the proceeds of sale, must for ever be held in trust for that purpose. If, in a practical way, it should be found that a branch office should no longer be required at Titirangi and the County should desire to sell the land, the difficulty will arise that as it is impressed with a trust, nothing would be gained by the sale of it and its redundant purpose would be perpetuated. I cannot think that this should be the law.

   In the past it has been suggested that a local body holds its property as a trustee: see for example Attorney-General v Mayor of Brecon (1878), 10 Ch D 204, where Jessel, MR, at p 215 said: "In substance, whatever the words used were, the Municipal Corporations Act, 1835, reduced municipal corporations from the position of owners of property to the position of trustees of property." In Solicitor-General v Dunedin City Corporation (1875), 1 NZ Jur NS 1, and in Petone Borough v Lower Hutt Borough, [1918] NZLR 884, it was stated that a Council of a municipal corporation was practically a trustee for the ratepayers of the corporation property: see also Lysons v Commissioner of Stamp Duties, [1945] NZLR 738. In Lewin on Trusts 16th ed, at p 13, it is stated: "It is thought that a municipal corporation holds its corporate property upon trust to apply it for its public purposes and that a breach of this trust could be restrained by injunction at the suit of the Attorney-General. Any local authority may accept, hold and administer any gift of property, whether real or personal, for any local public purpose, or for the benefit of the inhabitants of the area, or of some part thereof …." These expressions, in my respectful opinion, do not mean that a corporation holds its property in trust (in the absence of a specific creation), but rather that being a statutory body it must carry out the purposes for which the legislature has created it. At most, it could be said to hold the property in a fiduciary capacity and not on a specific trust. A modern expression of his view is Prescott v Birmingham Corporation, [1954] 3 All ER 299; [1955] 1 Ch 210, where Jenkins, LJ, at p 235 said: "Local authorities are not, of course, trustees for their ratepayers, but they do, we think, owe an analogous fiduciary duty to their ratepayers in relation to the application of funds contributed by the latter."

   However, there are two New Zealand decisions which, in my view, place the matter beyond doubt. In the first of these Attorney-General v Bunny, II New Zealand Court of Appeal 419, the position of funds held by a provincial trustee was examined by Arney, CJ, when he, after referring to two decisions which he said might be thought to refer purely to the jurisdiction of the Court over a trust fund, said at p 438: "Were this the true view of the matter, these decisions would be inapplicable; for it is plain that the revenues of the Provinces of New Zealand are not, in the ordinary sense of the term, trust funds, nor are those who administer them, in the ordinary sense of the term, trustees. No Court could undertake the administration of such a trust, for it would be to assume the duties of a government." He continues: "But on any rational construction of the judgments of Lords Eldon and Redesdale, it will be seen that they proceed upon a wider ground than that of the existence, in the case before the House, of an ordinary trust. There is a sense in which every public officer is a trustee-a trustee, not necessarily of property vested in him, but of powers and functions. The public bodies before the Court in the two cases referred to, may or may not have had vested in them the legal right of property in the public funds which they administered. That is an entirely immaterial circumstance. Clearly, they were not trustees in the ordinary sense. Trustees in the common sense of the term may be removed by the Court for misconduct, but there could be no power in the Court of Chancery to remove members of either of the public bodies whose acts were in question, nor could the Court have undertaken the administration of either fund in the same way as it undertakes the administration of a private trust fund. In such cases the Court can do no more than correct abuses, and restrain the parties from exceeding the proper limits of their functions. The exercise of such a jurisdiction is entirely accordant with the principles on which the Court habitually acts."

   Later after referring to Lord Cottenham's decision in Frewin v Lewis (1838), 4 My & Cr 249, he quotes the learned law Lord as follows: "Public functionaries, or bodies incorporated by statute for a public purpose or the promotion of a public benefit, may not exceed the jurisdiction which has been intrusted to them by the legislature. So long as they strictly confine themselves within the limits of their jurisdiction, and proceed in the mode which the legislature has pointed out, the Court will not interfere to see whether any regulation or alteration which they make is good or bad; but if, under pretence of an authority which the law does give them to a certain extent, they go beyond the line of their authority, and assume to themselves a power which the law does not give them, the Court no longer considers them as acting under the authority of their commission, but treats them as persons acting without legal authority." and then he continues: "If the Supreme Court of New Zealand is by this information prayed, directly or indirectly, to undertake any single function belonging to the defendant as a public officer, it would be an answer that the revenues of a province are not a trust fund vested in the Treasurer as an ordinary trustee, and that the same can be administered only by the persons specially empowered by law in that behalf."

   It is true that this decision concerned a provincial government, but in those days a province, in population at least, was little larger if at all than many a local body today, and I can see no distinction at all between a local body such as a County created and empowered as it is by statute from a provincial government which was also created and empowered by statute.

   The other decision which I adopt with respect is that of Shorland, J, in Auckland Harbour Board v Inland Revenue Commissioner, supra. In that case it was contended that all the property and assets of the Harbour Board were held on "charitable trusts" within the meaning of those words as defined by law and that the end result, the surrender to much of the leasehold interest, was a conveyance of property to be held on charitable trust in New Zealand and therefore, pursuant to s 69(f) of the Stamp Duties Act 1954, exempt from conveyance duty. It will be seen therefore, that the issues which were raised there are identical with the issue now before me. It is true that the contention there was that all the property and assets of the Harbour Board were so held, but the greater will include the lesser, and the same argument must be applicable where it is contended that an asset of the Board purchased through an enabling section is held on a charitable trust. Shorland, J, considered the question first, of whether the trust would be a charitable one if it were in fact a trust, and then proceeds to consider the question of whether the Board held its assets on trust at all. At p 210 he says: "That the Courts have power at the instance of the Attorney-General to control a public body by restraining it from undertaking purposes not authorized by its governing statute, or from applying its funds to unauthorized purposes is clear, and reference to authority thereon will be made later in this judgment. It is, in my opinion, established by authority later discussed that such power rests upon a broader basis than the finding that the assets and funds of such public authority are held upon a charitable trust. There are instances in the books in which particular funds held by a public authority, and even a municipal authority, have been held by the Courts to be held upon a charitable trust; but there is no reported case that I have been referred to, or that I myself have found, which has decided that all the assets and funds of a municipal or public body possessing powers of local government and charged with duties of providing and maintaining services for the public benefit have been held by the Courts to be assets and funds held upon a charitable trust. In those cases in which a particular fund has been held by the Courts to be held upon a charitable trust, the Courts could no doubt remove the trustee, or what is the same thing, remove the fund from the trustee and have it administered under its control; but the Courts could not, in my opinion, remove the assets and funds of a Harbour Board and itself undertake the functions and duties of a Harbour Board, for the simple reason that such functions and duties are by the statute law of the Harbours Act required to be held and administered by the Board deemed to be constituted under that Act, and elected by the electors of the relevant cities, counties, boroughs, towns, and town-board districts. In my view, the feature that the so-called trust could not be administered by the Court-because the Court could not possibly override a statute made by Parliament-is fatal to the appellant's case. It remains to deal with the suggestion that the fact that the Court has intervened and exercised control over statutory public bodies rests upon the basis that such bodies hold their funds upon charitable trusts. The old trilogy of cases, Attorney-General v Brown, [1814-23] All ER Rep 382; 36 ER 388; Attorney-General v Heelis (1824), 57 ER 270 and Attorney-General v Dublin (1827), 4 ER 888, are the foundation of the jurisdiction exercised in modern times in control of public authorities."

   He then cites the decision of Attorney-General v Bunny, supra, and some of the passages which I have already set out, and concludes: "As it is clear that the jurisdiction which has been exercised in New Zealand to restrain public authorities in appropriate cases does not rest upon the basis that they are assumed to hold their funds upon a charitable trust, but upon the broader basis so ably propounded by Sir George Arney, CJ, it follows that no support for the proposition that a Harbour Board holds its assets and funds upon a charitable trust can be drawn from the authorities cited in illustration of the instances in which this jurisdiction has been exercised."

   My view of the present issue is the same as that of Shorland, J, and I am not prepared to hold that the County holds this land purchased under s 376 as being conveyed to it to be held by it on a charitable trust.

   I now turn my attention to the other purchase namely, the 54 acres of land. This is purchased pursuant to the powers contained in s 380A of the Counties Act. Subsection (2) of this section shall apply with (2) of that section provides: "The Council may from time to time by agreement with the owner of any land within the county, purchase the land for commercial or industrial purposes, whether or not there are buildings on the land: Provided that the Council shall not purchase any land pursuant to the powers conferred by this subsection, unless it first gives notice in writing to the owner of the purpose or purposes for which the land is to be purchased." Subsection (3) enables the Council to subdivide or resubdivide the land so purchased for commercial or industrial purposes into suitable allotments for commercial or industrial purposes which it may sell or lease for that purpose. This section then provides that the proceeds are to be applied in the reimbursement of the purchase and development of the land and an administrative charge and the balance "may be applied for the purposes of any public work in the County." I assume that "may" in this regard is equivalent to "must" and that the County has an obligation so to apply the balance. "Public work" is defined as including "any public work within the meaning of the Public Works Act 1928" consequently it has a very wide definition indeed.

   For his argument that this is a charitable trust, Mr Hamer relies on the decision of Crystal Palace Trustees, supra, and also on the requirement that the surplus funds are to be applied for the purpose of a public work. This decision seems to be the only one in which the question of commercial and industrial purposes has been considered. In that case the land on which the Crystal Palace had been erected was available for sale and a number of local bodies contributed to its purchase. The land was to be held by trustees upon a trust constituted by the Crystal Palace Act 1914. The trustees were to have the entire control and management of the Palace and the park as a place for education and recreation and for the promotion of industry, commerce and art. Danckwerts, J, said at p 140: "As regards the promotion of industry and commerce, the position is more uncertain, and I do not think that the Minister was unreasonable in having felt difficulty in finding such purposes to be charitable." However, he considered that the land was for the benefit of the public, that is, the community and was not prepared to accept a submission that it was for "the furtherance of the interests of individuals engaged in trade or industry or commerce by the trustees". On the question of whether its purpose was charitable, he seems to have used by way of analogy the decision of Inland Revenue Commissioners v Yorkshire Agricultural Society, [1928] 1 KB 611, where the Court of Appeal regarded the improvement of agriculture or the promotion or the advance of the industry of agriculture as a charitable purpose. Here, I have no doubt that the legislature has seen fit to give this power to a County and that it is to be used for the benefit of the public, or at least for a particular part of the community, namely, the residents of the County. The provision of commerce and industry in a County must have the effect of providing employment in industry and commerce for the residents of the County close to their homes and also a place where they can "shop" etc, and ultimately will have the effect of enabling land to be subdivided to provide homes close to such centres of commerce and industry and may in the future, have the effect of reducing the rates within the County generally. If this purchase had been one authorized by a specific enactment with the County constituted as a trustee, then the Crystal Palace decision, supra, would be a strong argument that the County as trustee would hold the land upon a charitable trust and one which I think I would find acceptable. It is a decision of a single judge, but an eminent and very experienced one, and Tudor on Charities, at p 101 remarks: "… there seems to be no reason why it should not be regarded as authority for the general proposition that the promotion of industry, commerce and art are all charitable purposes." However, again there is no specific statute, nor is the acquisition of the land the result of a gift or bequest for a charitable purpose, and I am therefore, compelled to consider whether there is a trust of the land in the same way as I had to consider that question in respect of the purchase under s 374. As I have stated in respect of that section, I do not regard the enabling sections of the Counties Act generally as constituting a trust of the land so purchased. When considering that section, I did point out the difficulty that land so purchased, if held in trust (or the proceeds of it) would have to be held on that charitable trust for ever. That argument has no place here because the section contains specific powers concerning the sale or lease of the allotments into which the land is to be subdivided. There is, however, the requirement that any surplus is to be invested in a public work. If I am to be influenced by this, then the question arises which public work, because it is clear on the decisions that it is not every public work which comes within the definition of a charitable trust and consideration must be given to each specific public work. Moreover, when dealing with s 380A and as to whether it constitutes a trust, there seems to me to be a further difficulty which arises under its subsection (7), namely, that the Council may from time to time raise a special loan under the Local Authorities Loans Act 1956 for the purpose of purchasing and developing the land. By s 45 of that Act the local authority may secure the repayment of the loan by appropriating and pledging as security, not only the "work, land, building, erection or other subject matter of the loan", but also a special rate made as security for the repayment of that special loan and any other property of the local authority and any revenues from any source and any funds and money. Does this not mean that if the County is holding the land as trustee, nevertheless it may pledge its other property and revenues for the repayment of the loan to buy and develop the land? This would be a most unusual situation for a trustee, namely, the ability to pledge its own and other assets for the purposes of a trust of a specific nature, an extraordinary mingling of the trust with the trustee's own assets.

   After considering the special features of s 380A, I find myself unable to find that they create a position different from the other enabling sections (particularly s 374) and that the consideration which I have given to the existence of a trust in respect of that section and the authorities of Attorney-General v Bunny, supra, and Auckland Harbour Board v Inland Revenue Commissioner, supra, have equal application here. I, therefore, answer the questions in the case stated by saying that the assessments are correct. I will hear Counsel on the amount of costs to the respondent if they are unable to agree on a figure.