Justice Slattery has handed down his decision In the matter of the New South Wales Rural Fire Service & Brigades Donations Fund; Application of Macdonald & Or [2020] NSWSC 604.

Before reading the details let’s put some myths to bed:

  1. Ms Barber did not bring this matter before the Supreme Court; the trustees of the NSW Rural Fire Service Brigades and Donations Fund did.
  2. The Trustees were not looking for permission to ignore people’s misplaced hopes that a donation to a trust created to support RFS brigades would somehow be used for other purposes; they were looking for ways to give effect to those hopes.
  3. There is no corrupt politician, lawyer or civil servant trying to squirrel the money away for their own purposes.
  4. This is not an example of lawyers getting in the way of peoples hopes; it’s an example of lawyers trying to find ways to accommodate those hopes.
  5. The law that says that if you set up a charity for a particular purpose you are only allowed to use the funds you receive for that purpose is not silly red tape. It stops corruption. It stops people telling people when they raise money that it is for one purpose and then using that money for another purpose. The RFS trustees never asked for money for any purpose other than those set out in the trust and never promised to use money in ways other than those permitted by the trust.
  6. The trustees cannot simply amend the trust deed to allow them to use money in other ways. That would be a breach of the trust given to them when people donated. It would also be contrary to the terms of the trust deed.
  7. Ms Barber did not set up a charity where she promised the money would go to other sources. She did not set up a charity. She did not collect money. She asked people to donate and they did. It was never her money. She never had any control over the money or the use that may be made of the money. The only clear intention that anyone expressed when they donated was that they wanted that money to go to the RFS Brigades and Donations Fund. They expressed that intention when they pressed the button on the fundraising page.
  8. Courts of law are there to apply the law. They are not at liberty to ignore it or change it just because some people, even many people, don’t like the result.
  9. This judgment is about the money raised via Ms Barber’s facebook appeal. It has nothing to do with the money raised by the Fire Fight Australia concert where Ms Barber was the host.  According to the concert website, donations to that event went to ‘the Foundation for Rural and Regional Renewal (FRRR) to help them support communities on the long road ahead by providing much-needed funding for locally identified needs throughout the recovery and rebuilding process’.

The judgment

This was an application by the Trustees of the New South Wales Rural Fire Service & Brigades Donations Fund seeking advice from the court on how they can spend $51m donated in response to a fund-raising request by celebrity Ms Celeste Barber.

The court’s jurisdiction was found in the Trustee Act 1925 (NSW) s 63 which allows trustees to approach the court for advice.  Where the court gives advice, and the trustee acts in accordance with that advice, then the trustee is held to have met his or her obligations to apply the trust for its proper purposes ([7]).

At [9] His Honour says:

The trustees ask the Court whether, in these circumstances outlined in their statement of facts, they are justified, in the proper performance of their powers and duties as the trustees, in applying the monies in the RFS Fund to any of the following four possible objects:

  1. paying money to other charities or rural fire services, whether in New South Wales or other Australian states or territories, to assist in providing relief to persons and animals affected by bushfires;
  2. setting up or contributing to a fund to support rural firefighters injured while firefighting, or the families of rural firefighters killed while firefighting;
  3. providing:

(i) physical health training and resources,

(ii) mental health training and resources, or

(iii) trauma counselling services,

to volunteer firefighters (as defined in Rural Fires Act, s 8), who require them in connection with performing the functions of the New South Wales Rural Fire Service, as defined by Rural Fires Act, s 9; or

4. setting up or contributing to a fund to meet the costs for volunteer rural firefighters, as defined in Rural Fires Act, s 8, to attend and complete courses that improve skills related to the volunteer-based fire and emergency services activities of the brigades, established under the Rural Fires Act.

Although Ms Barber may have originally set a target of $30000 she did not create a trust. She asked people to donate via PayPal. When they paid to PayPal it was received on the terms of the PayPal trust deed. They then distributed the money to the RFS Donations Fund in accordance with the PayPal trust deed, to be used by the RFS Donations Fund in accordance with its trust deed.

This was not a case where the RFS trust had been established to receive funds for a particular purpose and then raised more than was required for that purpose, nor was it a situation where ‘the charitable purpose [of the trust] is not sufficiently defined or because the designated objects or machinery do not exist’ ([54]).

Although the court was presented with evidence of comment made by donors and potential donors.  At [18]-[19] His Honour said:

The Court has been given a selection of the many messages that were generated on Ms Barber’s Facebook fundraising page during the appeal, mainly from donors but also some from potential donors. The selection was directed at extracting messages posted to the page which indicated that a donor directed, expected, hoped or was concerned that a donation to the appeal would be applied to another charity or recipient that was not within the objects of the RFS Fund. The aim of this exercise was to survey the range of donors that might conflict with limits in the RFS Trust Deed.

… The sample of posts they selected vividly illustrate the sentiments and range of hopes and expectations of donors. be donors

But (at [58]-[61]):

Each of the donors made a payment to the PayPal Giving Fund by way of an internet facility with published terms that stated the effect of the donation. This is so despite what the donors may have hoped or intended might be done with the money. The donors should be taken to have intended to make the payment to the PayPal Giving Fund and should be taken to have intended that it be received according to the published terms…

The various public and perhaps private statements made by Ms Barber or any of the donors do not bind the trustees’ application of the funds that they have received from the PayPal Giving Fund. The terms of the RFS Trust Deed that establishes the RFS Fund binds the trustees.

Any funds received by the trustees in that capacity must be applied only for the purposes set out in the RFS Trust Deed. Any other application of the funds would be a breach of trust…

The issue for the court therefore was which, if any, of the suggested 4 objectives are consistent with the Trust Deed. The Deed itself provides that the purposes of the Trust. The Deed says (at [38]):

The purpose of the Trust is to pay or apply the income from the Trust Fund, and such parts of the capital from the Trust Fund as the Trustees at any time and from time to time think fit as follows:

(a)   to or for the Brigades in order to enable or assist them to meet the costs of purchasing and maintaining fire-fighting equipment and facilities, providing training and resources and/or to otherwise meet the administrative expenses of the Brigades which are associated with their volunteer-based fire and emergency service activities;

(b)   for Authorised Investments which are consistent with carrying out the purpose in paragraph (a) above;

(c)   to meet the reasonable costs of the current and continuing operation and management of the Trust.”

His Honour (at [64]-[70]) advised the:

… trustees of the RFS Fund that they cannot use the donated money to give to other charities, or to donate interstate, or to help people or animals affected by bushfires…

… donations to other charities for bushfire related purposes, such a payment would not be a payment “to or for brigades” established under the Rural Fires Act. Nor is it an “Authorised Investment” under the RFS Trust Deed. Such a donation cannot be characterised as an “administrative” cost of the RFS Fund. A donation to another charity would, as the trustees have submitted, be ultra vires to the purpose of the RFS Fund and a breach of trust.

As to animals affected by bushfires, nothing in the RFS Trust Deed, clause 2.3(a) would permit such a payment. Clause 2.3(a) permits payments “to or for the Brigades” and the payment is limited to “enable or assist them” to meet the costs of various stated objectives. None of those objectives, “purchasing and maintaining firefighting equipment and facilities”, or “providing training and resources” or “meet[ing] the administrative expenses of the brigades” includes giving assistance to animals affected by bushfires. The words cannot be made to such work. And neither the trustees nor the Attorney General submit that they can.

As to the making of payments for interstate rural fire services, the words of clause 2.3(a) are equally restrictive. The “brigades” is a reference to brigades established under the Rural Fires Act, which applies to brigades established or operating within this State: Rural Fires Act, s 9(1)(a). It would not be a permissible application of trust funds for payments to be made to rural fire brigades in other States or Territories of Australia.

There is an exception to this that arises under Rural Fires Act, s 43. Under that section an “interstate fire brigade” comes under the command of an officer in charge at the fire: s 43(1)(a) and is integrated in the command structure in that manner. In a command sense, the interstate fire brigades are integrated into the command structure of the brigades and it would be permissible for their administrative expenses to be met under clause 2.3(a).

As to using the fund to ameliorate the effects of fires upon people who are not members of the brigades, in the Court’s opinion that too cannot be justified on the words of clause 2.3(a). Firstly, the payments must be “to enable or assist the brigades” to meet the specified costs of the various objectives. One would not characterise payments to members of the wider community affected by bushfires as having the necessary association with the brigades.

The trustees can set up a fund to assist injured or the families of deceased firefighters. The trust allows for money to be spent to provide resources to brigades. His Honour took the view that this included human resources ([74]-[74]).  At [75]-[78] His Honour said:

The definition of “rural fire services” in s 9(4) of the Rural Fires Act includes “the protection of persons from dangers to their safety and health, and property from destruction or damage, arising from fires in rural fire districts”: s 9(4)(b). The trustees can use the donated funds to give to brigades to address physical dangers created by the recent fires.

The trustees can use the money consistently with clause 2.3 of the trust deed (and the Rural Fires Act, s 9) to pay brigades to enable them to meet the costs of providing resources to protect persons from dangers to their safety and health arising from fires in rural fire districts. But as the trustees have submitted several conditions would apply to this use. First, the payment from the RFS Fund must still be to or for brigades for “resources”, which are to be used by the brigades. They may not be paid directly to the persons affected. Second, those resources must be used for “protection of persons from dangers to their safety and health”: within Rural Fires Act, s 9(4)(b). Third, that danger must “arise from fires”. The context of these words “arise from fires” is that the functions of the brigades are generally to prevent fires and in firefighting. The trustees submit their functions do not include the longer term remediation of the effects of fires. Dangers to safety and health arising from fires may well include the dangers caused by an immediate lack of shelter, food and water. The trustees could pay money to brigades in order for them to purchase and transport food and water to areas and people effected by fires, and to provide temporary accommodation to those who require it as a result of fires as the trustees have submitted.

… Even though it would not come within preventing and fighting fires (Rural Fires Act, s 4(a)), a fund to support the families of fallen firefighters would encourage people to volunteer to contribute to preventing and fighting fires and is permissible. In the Court’s view this is for two reasons. Clause 2.3 is aimed at supporting brigades in “providing…resources”. The Court has interpreted this as human resources. Clause 2.3(a) itself emphasises that all of the RFS Fund’s expenditure is associated with “volunteer based fire and emergency service activities”. The existence of a fund to provide longer term compensation for injuries suffered by firefighters, or to support the families of deceased firefighters is more likely to encourage volunteers. Unlike a service with a more formal command structure such as in the Australian Defence Force, the Rural Fires Act recognises this is a volunteer service comprised in large part of “volunteer rural firefighters”. Expenditure to support the process of volunteering to ensure those human resources are available is permissible.

At [80] His Honour said. That the trustees can ‘provide volunteer firefighters with a fund from which physical and mental health training can be provided, together with trauma counselling services’ and ‘Expenditure to return a firefighter to active duties is permissible under the RFS Trust Deed, as it provides “resources” to the RFS’.

The trustees may also ([81]) set up a fund ‘to meet the costs for volunteer rural firefighters to attend and complete courses that improve their skills related to the volunteer based fire and emergency services activities of the brigades’. They may also ([82]) ‘pay brigades in order to provide resources to provide that trauma counselling to firefighters who require it as a result of fires…’

Conclusion

The best conclusion is to repeat the questions the court was asked to consider and the court’s answers. These are set out in His Honour’s judgement at ([83]), I’ve added the emphasis to make the answers stand out:

The Court gives the following advice to the questions asked. Are the Plaintiffs justified in the proper performance of their powers and duties as trustees of the RFS Fund, in doing any of the following acts with respect to the monies contained in the RFS Fund (including the money donated to the fundraising appeal commenced by Ms Barber in January 2020 since paid to the RFS Fund)? The following are the acts in question:

a. paying money to other charities or rural fire services, whether in NSW or the other Australian States and Territories, to assist in providing relief to persons and animals affected by bushfires.

Answer: No.

b. setting up or contributing to a fund to support rural firefighters injured while firefighting, or the families of rural firefighters killed while firefighting.

Answer: Yes.

c. providing;

(i) physical health training and resources;

(ii) mental health training and resources; or

(iii) trauma counselling services,

to volunteer firefighters as defined in s 8 of the Rural Fires Act, who require them in connection with performing the functions of the NSW Rural Fire Service, as defined by s 9 of the Rural Fires Act.

Answer: Yes.

d. setting up or contributing to a fund to meet the costs for volunteer rural firefighters (as defined in s 8 of the Rural Fires Act) to attend and complete courses that improve skills related to the volunteer-based fire and emergency service activities of the Brigades, as defined in clause 1.1 of the RFS Trust Deed.

Answer: Yes.

It is now up to the trustees to spend the money in accordance with this advice.