The Northern NSW Helicopter Rescue Service is part of the Surf Life Saving helicopter operations. It wanted to expand its area of operations but, because if the way it is structured, the permission of the Supreme Court was required – Northern NSW Helicopter Rescue Service Limited v Attorney General of New South Wales [2023] NSWSC 515.
The issue was that the Northern NSW Helicopter Rescue Service Limited (‘Northern’) is registered with the Australian Charities and Not-for-profits Commission as a public charitable institution. Northern’s assets were held on trust to be used for the purposes of Northern as set out in its constitution. Northern, however, felt the terms of the trust were too limiting and no longer ‘a suitable and effective method of using the 2013 Trust property’ ([7]). Further (at [9]) ‘Northern’s management is of the view that the constraints placed upon the operation of the Trust by its current terms will jeopardise the financial viability of the Trust over the medium term’. Court orders were required to change the terms of charitable trust.
A useful summary of the position was set out at [16] where Robb J said:
It may be helpful if I provide the following brief conspectus of the history of the provision by Northern of helicopter surf rescue and other helicopter medical emergency services since the inception of the unincorporated part-time volunteer organisation. From its inception in 1975, the service was provided by the Newcastle Branch of Surf Life Saving Australia. It operated over part of the New South Wales Lower North Coast and Central Coast from Tea Gardens and Hawks Nest in the north to Catherine Hill Bay in the south. The organisation acquired a helicopter that was funded in part by a loan from Westpac and the proceeds of a public fundraising appeal. At around that time, the service also provided helicopter emergency medical services for the Ambulance Service of NSW. Over time, by reason of changes in circumstances, there has been an impetus for Northern to widen the area within this State in which it provides services. That has happened in part because of increases in Northern’s capacity and organisational competence, and the range of its helicopters, as well as the need for the provision of its services outside its original area of operations. However, increases in the area in which Northern has been permitted to provide its services have been constrained by the fact that a considerable proportion of its funds have been raised from communities in particular geographical areas within the State. In the manner that I will shortly explain, that has led to constraints being placed upon the areas in which Northern has been permitted to provide its services. However, for practical and commercial reasons, Northern has faced the need to grow and extend its area of operations, both to provide desirable services out of its current areas of operation and also to maintain its commercial viability. The purpose of the present application is to seek an order from the Court … that further extends the available potential areas of operation for the provision of Northern’s services, and gives Northern flexibility to extend the nature of its services, while maintaining an organisational structure that ensures that it applies charitable funds raised from the public in particular areas to the effective provision of its services to the people in those areas.
The helicopter service had an extensive history. Back in 1991 there had been litigation when ‘a group of Newcastle citizens complained to the Attorney General that funds that had been raised from the Hunter region, including through the “Angel One Helicopter Appeal”, should not be used for the benefit of a helicopter service based outside the Hunter region’ [18]). The result of that litigation was a declaration that the assets of Northern were to be held on trust ‘for the provision of a helicopter service in the Hunter Region’.
In 2000 an application was made to expand Northern’s region of operations and to allow them to operate from a base in Tamworth ([24]-[30]). In 2013 further orders were made extending Northern’s operations into Lismore. A new clause in the governing documents
… recognised the reality that, when it comes to the provision of emergency helicopter services, the necessity to give aid to persons in distress may require that the services be provided outside the permitted areas, so clause 2 provided that it would not be a breach of the terms of the Trust for Northern to provide its helicopter services, due to an emergency or otherwise, outside the Area or the Extended Area.
It was still the case that money raised in different areas, ie the Hunter, New England or Northern Rivers was to be allocated for the provision of helicopter services in those regions ([31]-[34])
The current application was to change the trust to allow Northern to operate anywhere in Australia ([51]) but still money raised in a particular region will, subject to some exceptions, be used to fund the service in that region ([61]). At [115]-[118] Robb J said:
Northern is presently dependent for 75% of its operating income on its contract with the Ambulance Service of NSW. ….
The position is that Northern’s financial viability now depends upon it being able to secure a new contract with the Ambulance Service of NSW, or additional or equivalent contracts for the southern area of New South Wales or other parts of Australia. Northern sees the need for it to be able to maintain its financial viability, generally, by being permitted to use its existing assets and facilities to provide services for reward outside its existing contracts.
Northern’s evidence is that, as it will probably have to compete in the tender process for new contracts with established private commercial organisations, it is necessary that its purposes should be expanded in advance by the making of [an order] …that permits Northern to tender for and, if successful, provide, the helicopter services … throughout Australia. Northern perceives that it is not a commercially viable course for it to submit tenders that are subject to the condition that Northern’s authority to provide the services required by the contract will be granted by … orders made by this Court after the date of the award of the contract. Nor will it be realistic for Northern to expect to be able to obtain from the Court …[an] order that permits Northern to enter into the contract between the time the tender is notified to the public and the time when tenders must be submitted.
The essence of Northern’s submission is that it will cease to be financially viable if it is not awarded a new contract by the Ambulance Service of NSW when the current contract expires, unless it has been able in the intervening period to expand the area of its operations by entering into new contracts for the provision of helicopter services in New Service Regions, so that it can make its operations more financially robust. In short, Northern wishes to avoid the risk of extinction faced by all species who are dependent upon one source of sustenance, if that source is lost.
In short, Northern wanted to change its trust deed now, even though it is not currently tendering for contracts, so that they can take advantage of tendering opportunities that may arise in the future. The court agreed to make the type of orders sought, but the matter was adjourned to allow the applicant to draft appropriate changes to take account of factors raised by the judge and not discussed here.
Discussion
The case will be of interest for readers first to inform of the changes proposed by Northern. No doubt many readers of this blog live in areas serviced by Northern and no doubt many readers actually interact with Northern crews who deliver emergency air ambulance services within the regions. Those readers will be interested to know of Northern’s plans to expand as will people who may, in the future, work with Northern in any new areas of operation.
The other thing that I anticipate is of interest is the nature of a trust and the issues of corporate governance. The actions by Northern, over its history, show the complexity of these areas and that taking action is not simply a matter for a board to decide what is a good idea. This case shows how seriously the management of Northern and the courts, take the constitutional documents that govern their business. This is important for readers who themselves may be managing a company, particularly the very small, to realise how important it is to understand and comply with foundation documents.
Finally I have written about trusts before when Celeste Barber raised millions of dollars that went to the Rural Fire Service Donations Find – see Search Results for “celeste barber” – Australian Emergency Law. Many were upset that the funds could not be used to support other organisations and other states that had been affected by the 2019-2020 black summer bushfires. As in this case, the Supreme Court was concerned to protect the integrity of the trust and to ensure that funds held on trust are used only for the legitimate purpose of that trust – see Judgment from the Supreme Court regarding Rural Fire Service Donations Fund (May 25, 2020).
Here the court agreed that extending Northern’s area of operations, provided Norther could isolate the source of funds and use them as intended, would enhance and advance the purpose of the initial trust. The role of the Court, and the Attorney-General who appeared as the ‘protector of charities’ ([13]), was to ensure that trusts are properly managed and those that donate to charities are assured that the funds donated are to be used for the purposes for which they have been donated. This is not a fault in the law (as was suggested in 2020) but a significant public protection.
This blog is made possible with generous financial support from the Australasian College of Paramedicine, the Australian Paramedics Association (NSW), Natural Hazards Research Australia, NSW Rural Fire Service Association and the NSW SES Volunteers Association. I am responsible for the content in this post including any errors or omissions. Any opinions expressed are mine, and do not necessarily reflect the opinion or understanding of the donors.
Australian Emergency Law 
Hello A/Prof,
Thanks for discussing this case. It raises a question for me about extending a charitable purpose for commercial expansion.
I understand that there are requirements for establishing trust, such as; certainty of subject matter, intentions and objects. Furthermore, for a charitable trust, the trust must be established for a charitable purpose. Charitable purposes include; advancing health, education, religion, culture or social or public welfare, promoting or protecting human rights, and other purposes beneficial to the public.
I assume that in this case the Northern NSW Rescue Helicopter Service is advancing the community’s health in its area of operation. However, it would appear that the reason for the proceedings is to serve itself through financial security through diversification of its revenue stream. That would seem like a commercial objective rather than a charitable one.
Can you comment on why the courts would support a charitable trust to further commercial advantage? I would d have thought the ideal path here would be to incorporate and seek commercial contracts as a commercial entity.
Hi Marty, getting too far out of my area to comment. I do note that Northern is incorporated and holds some of its assets on trust as a hang over from its foundation (see [2] of the judgment). It became a charity on 3 December 2012. They operate a charitable trust ([4]). At [5] the judge says “for historical reasons, the terms of the Trust are incorporated in its constitution, rather than a separate trust instrument. Also for historical reasons, Northern originally acquired an unusual and cumbersome governance structure, whereby various government, community and industrial organisations had rights to be represented on its board of directors.” That is sufficiently complex for me to say that I cannot begin to understand what alternatives may have been open to Northern.
With respect to the statement ‘… the reason for the proceedings is to serve itself through financial security through diversification of its revenue stream. That would seem like a commercial objective rather than a charitable one.’ I’m not sure why you see that as a change. They want to be ensure their financial security in order but their purpose hasn’t changed, they want to meet their charitable purposes across a wider area?