JOHN FLYNN, BRYAN MASSEY, LANCE TREMLETT, JAMBANA LALARA, ANDY MAMARIKA AND ANDREW WURRAMARA As Trustees of the GROOTE EYLANDT ABORIGINAL TRUST v PETER MAMARIKA AND RICHARD HERBERT as Representatives of the Umbakumba Community GERRY BLITNER, JABANI LALARA, TIMOTHY LALARA, BILLY LALARA, JONOTHAN WURRAMARRBA as Representatives of the Angurugu Community WURUBA WURRAMARA AND MURABUDA WURRAMARRBA as Representatives of the Bickerton Island Community AND THE ATTORNEY-GENERAL FOR THE NORTHERN TERRITORY OF AUSTRALIA No. 132 of 1995 Number of pages - 14 Trusts and trustees

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JOHN FLYNN, BRYAN MASSEY, LANCE TREMLETT, JAMBANA LALARA, ANDY MAMARIKA AND      
ANDREW WURRAMARA As Trustees of the GROOTE EYLANDT ABORIGINAL TRUST v PETER
MAMARIKA AND RICHARD HERBERT as Representatives of the Umbakumba Community
GERRY BLITNER, JABANI LALARA, TIMOTHY LALARA, BILLY LALARA, JONOTHAN
WURRAMARRBA as Representatives of the Angurugu Community WURUBA WURRAMARA AND
MURABUDA WURRAMARRBA as Representatives of the Bickerton Island Community AND
THE ATTORNEY-GENERAL FOR THE NORTHERN TERRITORY OF AUSTRALIA
No. 132 of 1995
Number of pages - 14
Trusts and trustees
COURT
IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA
MARTIN CJ

CWDS
  Trusts and trustees

HRNG
DARWIN, 20 March 1996
#DATE 20:3:1996
#ADD 30:5:1996

  Appearances not available

ORDER
  Determinations made.

JUDGE1
MARTIN CJ   In this matter the Court is asked to determine questions arising
in the execution of a certain trust.  The determinations are very important
not only for the plaintiffs, the current trustees, and any who may replace
them, but for practically the whole of the aboriginal population of Groote
Islandt and Bickerton Island which lie in the Gulf of Carpenteria, not far
from the eastern edge of the mainland of the Northern Territory.  The Court
has been requested to produce, by way of reasons and directions, a document
which can be readily referred to and understood by all concerned.  Bearing in
mind that the law which must be applied is mainly the common law evolved over
time in a society quite foreign to that of the aboriginals, and my lack of
instruction in concepts in aboriginal society that may have a relationship to
the relevant common law, my attempt to meet the wishes of the people, within
the constraints of judicial duty, may not be as successful as they may have
hoped.  However, I have attempted to proceed by way of straight forward
statements of the law, and how it ought to be applied in these particular
circumstances.  I have read all the background material supplied to me by
counsel for all parties and considered the many cases and extracts from the
standard texts put before the Court in argument by them.  I consider that I am
relieved of any requirement to analyse and discuss the relevant authorities,
since there is no sufficient area of doubt to warrant it.  There is as well a
degree of urgency in dealing with this case arising from difficulties within
the community pending resolution to the questions which arise, and the need to
provide determination of the questions so that the present trustees can set
about the application of trust funds which have for many years past supplied a
significant source of community sustenance and purchasing power.

AGREED FACTS
2.  The following facts are agreed as between the plaintiffs and the first
defendants for the purposes of these proceedings, and are not otherwise
reflected in the reasons.
    (1). Until contact with Europeans the
    Anindilyakwa-speaking aboriginal people have lived their
    traditional lifestyle on Groote Eylandt and Bickerton Island
    since time immemorial.  The Anindilyakwa language is the
    distinctive feature which sets this group apart from other
    aboriginal people.  The tribal groups or clans listed in
    clause 3 of the Trust Deed dated 7 March 1989 may be
    accepted for the purposes of these proceedings to contain a
    complete list of the Anindilyakwa-speaking tribal groups
    traditionally resident on Groote Eylandt and Bickerton
    Island and who enjoy native title rights in respect thereof.
    The members from time to time of these groups are referred
    to in these applied facts as "the Beneficiaries".  A clan is
    a grouping of people of common descent and who share
    spiritual affiliation to a particular area of land
    (including seas) and have responsibility for the land and
    sites with special significance on it.

    (2). On 15 May 1920 Groote Eylandt was gazetted as a reserve
    for aboriginals under the Aboriginals Ordinance 1918.

    (3). The first significant contract with European people
    came in 1921 when the Church Missionary Society established
    a mission at Emerald River on the western side of Groote
    Eylandt.  In 1943 this mission was relocated to Angurugu.

    (4). In 1946 Church Missionary Society of Australia and
    Tasmania became the registered proprietor of Mission Lease
    No. 18 which covered 200 sq miles in the north-western
    portion of Groote Eylandt.

    (5). In 1938 Umbakumba was established on the north-eastern
    tip of Groote Eylandt nearby to the flying boat base
    operated by Qantas.

    (6). On 7 November 1963 the Commonwealth of Australia
    gazetted the revocation of the reservation referred to in
    para2 above and proclaimed the Arnhem Land Reserve (which
    included Groote Eylandt) reserved for the use and benefit of
    wards under s6 of the Welfare Ordinance 1953-63.

    (7). In the early 1960s The Broken Hill Proprietary Company
    Ltd ("BHP") was prospecting for minerals on Groote Eylandt.
    An agreement dated 7 June 1963 was entered into between BHP
    and Church Missionary Society Trust Ltd ("CMS") to enable
    BHP to prospect and apply for mining tenements.  By letter
    dated 13 May 1965 from the Commonwealth Minister for
    Territories to BHP the understandings reached with BHP
    concerning BHP's operations at Groote Eylandt and which were
    not appropriate to be included in the proposed lease
    instruments were recorded.  They included a number of
    matters relating to the well being of the aboriginal
    inhabitants.  On 21 May 1965 BHP was granted Special Mineral
    Leases 5, 6 and 9 which it immediately transferred to a
    subsidiary company Groote Eylandt Mining Company Ltd
    ("GEMCO").  An agreement dated 17 November 1965 between
    GEMCO and CMS provided for the use of certain parts of
    Mission Lease No 18 and the terms upon such land could be
    used.  GEMCO was granted further Special Mineral Leases in
    1975 and subsequently.

    (8). By 1965 GEMCO had begun preparation for mining and
    shipment of manganese from Groote Eylandt.  The manganese
    mine is established on the western side of Groote Eylandt in
    close proximity to Angurugu.  The town of Alyangula was
    established to house GEMCO employees and for the development
    of port facilities.

    (9). Initially CMS paid royalty payments received from GEMCO
    to an unincorporated association known as Groote Eylandt
    Trust.  On 28 August 1969 Groote Eylandt Aboriginal Trust
    Inc. was incorporated to act as trustee of the Groote
    Eylandt Aboriginal Trust and has since received all royalty
    payments on behalf of the trust until the appointment of the
    present interim trustees on 2 March 1995.

    (10). On 26 January 1977 the Aboriginal Land Rights (NT) Act
    commenced which listed in Schedule 1 the Arnhem Land
    (Islands) including Groote Eylandt as Aboriginal Land under
    that Act.  The Deed of Grant for Groote Eylandt pursuant to
    the Act is dated 30 May 1980.

    (11). The Beneficiaries continue to live at Angurugu,
    Umbakumba and on Bickerton Island and various outstations on
    Groote Eylandt.  From statistics available it is apparent
    that:
    (a) There are approximately 1,200 Beneficiaries living on
    the island.
    (b) In 1992 infant mortality rates were approximately four
    times greater for the Beneficiaries in comparison with other
    Australians.
    (c) Statistics relating to education and employment
    demonstrate that the Beneficiaries are at a considerable
    disadvantage in comparison with other Australians as do
    those relating to income.
    (d) The number of Beneficiaries per dwelling in Angurugu was
    8.9 compared with less than 3 for other Australians living
    elsewhere.  The houses are not owned by the aboriginal
    occupiers and there is no government assistance for repairs,
    maintenance, acquisition of household white goods,
    appliances or furniture.
    (e) The disadvantage suffered by the Beneficiaries is
    reflected in the crime and imprisonment rate.

    (12). The trustees and the beneficiaries accept that when
    The Church Missionary Society of Australia, The Church
    Missionary Society of Australia and Tasmania, the members
    and office bearers of those organisations and Church
    Missionary Society Trust Ltd obtained rights under the
    Mining Ordinance (including any Permit to Enter or Authority
    to Prospect referred to in the Trust Deed or the agreements
    with BHP), negotiated with BHP and established the Trust,
    those organisations, entities and individuals at all times
    did so for the purpose of assisting the people of Groote
    Eylandt and Bickerton Island (who were then wards of the
    State) and not for obtaining any benefits for themselves.

THE TRUST DEED
3.  Pursuant to a Deed having affect from 25 May 1956, Church Missionary
Society Trust Limited ("the Settlor") established a trust fund for what were
called "Royalty" payments received and to be received by it, and appointed
Groote Eylandt Aboriginal Trust Incorporated ("the Trustee") to administer the
fund.  The fund has been supplemented by further funds in the intervening
years and the Trustee has accepted the same as additions to the trust fund.

4.  Recently, the Trustee was removed and the plaintiffs were appointed as
trustees of the trust fund.  It is anticipated that the Trustee may be
restored to the position as trustee of the fund.

5.  The terms of the Deed oblige the trustee (I use that term to cover
whosoever fills that role whether one or more than one), to hold and apply the
trust fund, including the additional funds accepted as additions to the trust
fund:
    - exclusively
    - for such charitable purposes (in the strict legal sense)
    - as may be served by the provision of money, property or
    other advantages
    - for the benefit, welfare and advancement
    - for all aboriginal persons who are permanently resident on
    Groote Eylandt or Bickerton Island
    - and who are members of any of twelve clans identified by
    name in the Deed (para4).

6.  Without limiting those purposes, the purposes of the trust include the use
of the trust fund and all other payments and donations for the:
    - education
    - benefit
    - welfare
    - comfort, and
    - general advancement in life of those aboriginal persons
    in such manner and to such extent and upon such terms and
    conditions as from time to time may seem expedient to the
    Trustee (para4(b)).

7.  There are a variety of powers of investment of the funds of the trust
conferred by the Deed, including, by way of unsecured loans to a person who is
one of the aboriginal persons described (para5(vi)).  That power is limited by
a requirement that not less than half of all Royalty payments be invested in
other forms of prescribed investment.

THE DIRECTIONS SOUGHT
8.  The plaintiffs seek directions pursuant to r54.02 of the Supreme Court
Rules as to:
    "1. Whether the Trustees of the Groote Eylandt Aboriginal
    Trust ("GEAT") are entitled to make distributions or grants
    of money to Clan groups or family groups:
    (a) without the imposition of conditions; and/or
    (b) supervision by the Trustees as to the expenditure of the
    money.

    2. If the Trustees are required to impose conditions upon,
    and/or supervise distributions or grants, what:
    (a) types of conditions are required to be imposed; and
    (b) level of supervision is required.

    3. Whether, and under what conditions, the Trustees of GEAT
    are entitled to make loans to the objects of the Trust.

    4. Which, if any, of the following expenditures can be
    lawfully classified as being of a charitable nature for the
    purposes of the Groote Eylandt Aboriginal Trust:
    (a)  grants for medical purposes;
    (b)  grants for funeral expenses;
    (c)  grants to the churches;
    (d)  grants for the aged and handicapped;
    (e)  grants for educational purposes;
    (f)  grants for the payment of electricity;
    (g)  grants for sport and recreational purposes;
    (h)  grants for local festivals;
    (i)  unconditional clan grants.

    5. What are the principles to be applied by the Trustees in
    the allocation of Trust funds between the various charitable
    purposes available pursuant to Clause 4 of the Trust Deed."

9.  These directions are sought bearing in mind an assessment made by the
plaintiffs as to the nature of certain payments made by the Trustee of the
kind referred to and the manner of payment of them.  The Trustee is not a
party to these proceedings, and whether the payments for the purposes
suggested were made, and whether in the manner suggested, has not been the
subject of any determination.  However, the Court is satisfied that the
trustees are genuinely desirous of obtaining guidance as to those matters for
their own purposes and because questions of a like nature have arisen amongst
the aboriginal persons referred to in the Trust Deed.

CONSTRUCTION OF THE TRUST DEED
10.  Most of the cases to which the Court was referred deal with the question
of whether a particular bequest or settlement created a charitable trust.
Here there can be no doubt about that.  What is in question is the purposes
for which the trust fund may be applied so as not to breach the duty of the
trustee to apply them for charitable purposes.

11.  The trust is a charitable trust.  The express words at para4 of the Deed
make it so. What are charitable purposes are to be decided in the strict legal
sense, as opposed to popular notions of what may be a charity or of a
charitable nature.  Guidance as to what may properly be regarded as charitable
purposes may be gleaned from the preamble to the famous 1601 Statute of Queen
Elizabeth I and the indications contained therein.  Reported cases may afford
a guide by way of analogy.  For the most part it is a matter of judgment.  As
a great many of the purposes referred to in the preamble of the Statute are
not relevant in this case, I will not trouble to set them out in full.

12.  In current usage, a charitable trust, in the strict legal sense, is one
for:
    The relief of poverty.  This is not confined to relief of
    destitution by providing the necessities of life.  It
    relates as well to the relieving of distress caused by lack
    of money, that is, of those who would otherwise go short or
    without.  Regard should be had to an acceptable minimum
    standard of living that is appropriate to the community.
    Gifts of cash to those in poverty to relieve need and
    distress fall within the purpose, unless it is shown that it
    does not have that affect.

    Advancement of education.  This is commonly regarded as the
    process by which persons, usually children and young adults,
    develop or have developed their intellectual, emotional,
    spiritual and physical powers and so become full
    participating and productive members of the community.

    Advancement of religion.  This includes the maintenance
    and spread of religious doctrine, the provision of
    facilities for worship and the support of persons who
    conduct worship or propagate religious teachings.  A
    gift to a church is prima facie charitable, but must be
    exclusively for a charitable purpose and not include any
    non-charitable purpose.

    Other purposes beneficial to the community and not falling
    into any of those particular categories.  These
    may relevantly include the following:
    - Relief of the disabled through whatever cause and
    including
    action directed to the cure of alcoholism and drug addicts.
    - Relief of the aged involving the application of funds for
    the relief of disabilities associated with the aged, whether
    in poverty or not.
    - Advancement of aboriginal culture involving the
    preservation, advancement and maintenance of traditional
    aboriginal culture (including spiritual beliefs) and way of
    life of the community.  It may be that this category is
    subsumed in or analogous to some other or others of the
    recognised categories, but in this case it is necessary to
    make it plain that having taken into account all the
    information before me, it assumes a distinct charitable
    purpose on its own account.

13.  Charitable trusts exist for the benefit of the public or a section of the
public as understood in accordance with the law. The section of the public
defined in the Trust Deed, being the aboriginal persons referred to, is a
section of the public for these purposes.  (That section of the public is
referred to as "the community").  The reference in para4 to the purposes of
the trust as including the use of the trust fund for the education, benefit,
welfare, comfort and general advancement in life of the community, is subject
to the requirement that the trust funds be applied for charitable purposes.
The funds are only to be used in such a way as will benefit the community as a
whole.  Use of the trust funds for the benefit of a particular aboriginal
person or persons (falling within the description contained within the Trust
Deed), which is not beneficial to the community, will be in breach of the
terms of the trust.  Those particular enumerated purposes do not extend or
override the primary and only purposes of the trust, that is, charitable
purposes; they are examples of the way in which the trust funds might be used,
provided always that every such use of those funds falls within what is a
charitable purpose in the strict legal sense.

DUTIES OF A TRUSTEE
14.  The principle duties of a trustee in this case are:
    1. To acquaint himself with the terms of the trust deed.

    2. To execute the trust in accordance with its terms and the
    general law so as to benefit the community.  In the course
    of doing so it is permissible that members of the community
    share in the benefits through effect being given to a
    purpose to which the trust is directed.

    3. To protect the trust property.

    4. To exercise discretionary power in good faith, upon real
    and genuine consideration and in accordance with the purpose
    for which the discretion was conferred.

    5. Not to delegate any of the trustees powers or discretions
    to any person unless in accordance with the provisions of
    the trust Deed.

    6. Not to invest the trust funds in any manner which is not
    authorised by the trust Deed or statute.

    7. Not to deal with the trust property for his own benefit,
    or otherwise to profit from the trust.

15.  There are numerous provisions in the Trust Deed and in the general law
relating to the powers, discretions and duties of trustees.  The Trust Deed
contains provisions regarding liability of the trustee for errors,
forgetfulness, breach of duty or trust and arising from the exercise of
discretions.  These directions are given without regard to the possible
application of those provisions.

EXECUTION OF THE TRUST
16.  It is fundamental to the concept of a charitable trust that it be for a
purpose not a person, and that must be kept steadily in mind by the trustee at
all times.  It would be a breach of trust for any of the trust funds to be
paid to any person or persons within the community having the only affect of
increasing the property of that person or persons.  It is inconsistent with
the notion of a charitable trust that payment be made out of the trust fund to
a person for no reason other than that he or she is one of the community for
whose benefit the trust was established. Any such payment must be for a
charitable purpose, for the benefit of the community, not just the person who
receives the money.  For the same reasons, the trustee would be failing in a
duty to properly discharge the obligations placed upon them by the Trust Deed
if they simply paid money to a person who intended to distribute it, or a
portion of it, amongst other members of the community for no charitable
purpose.  Payment of money to a person, either directly or through another,
without the object of achieving a charitable purpose would be a breach of the
trust. Conferring a benefit on an individual or individuals within the
community by providing money out of the trust funds for any use to which that
individual or individuals may think fit to use it, is not to apply the funds
for a charitable purpose.

DELEGATION
17.  The trustee is responsible for deciding:
    - what payments are to be made out of the trust fund
    - for what charitable purpose they are to be made
    - by what means and to whom the funds are to be paid for
    that purpose.

18.  There are limited powers of delegation contained within the Trust Deed as
follows:
    "9. The Trustee shall not be bound in any case to act
    personally but shall be at full liberty to employ any
    agents, consultants, advisors, servants or other persons
    whatsoever to transact all or any business of whatever
    nature required to be done in the premises including the
    receipt and payment of money; and the Trustees shall decide
    the remuneration to be allowed and paid and all charges and
    expenses so incurred.

    10. The Trustees if at any time they are more than one shall
    act jointly but they may in writing delegate to any person
    or persons (including any Trustee) the exercise of all or
    any of the power or discretionary authorities hereby
    conferred on the Trustees, and may execute any powers of
    attorney or other instruments necessary to effectuate such
    purpose.

    11. The Trustee may delegate to committees of three or more
    persons (at least one of whom shall be a member of its
    Committee of Management), who shall have power to regulate
    and control their own proceedings some or all of its powers,
    discretions and authorities but who shall be at all times
    under the control of the Trustee and whose appointment may
    at any time be terminated by the Trustee.  Such Committees
    shall keep minutes of all decisions."

19.  At common law the general rule is that a trustee must not delegate his
duties or powers, not even to his co-trustees, but the delegation is allowed
where it is specifically permitted by the trust instrument or by statute.

20.  Paragraph 9 of the Trust Deed is limited to the appointment by the
Trustee of agents to do ministerial acts.  It is only that body, acting as
trustee, which may exercise the powers contained in para11 which relate to the
delegation of powers, discretions and authorities.  Para10 applies where there
is more than one trustee, such as the plaintiffs.

21.  In the case of an appointment of an agent to perform an act, as opposed
to exercising a discretion, the trustee must act in conformity with common
usage and as prudently as if acting for himself, and provided further that the
agent is employed in a matter which is within the ordinary scope of the
agent's business to perform.  A trustee is under an obligation to be diligent
in seeing that a duty given to an agent has been properly performed. There are
provisions in the Trustee Act granting power to trustees to appoint bankers
and solicitors as agents for particular purposes.

22.  The express provisions in the trust deed authorising the delegation of
the exercise of discretionary powers does not relieve the trustee of the duty
of exercising the care of a prudent man of business in the appointment and in
the supervision of the delegate.

23.  Whilst dealing with this question of delegation and agency, although it
does not strictly arise in these proceedings, it is nevertheless convenient to
mention the possibility that the payment of trust funds to a person for other
than charitable purposes may result in that person being responsible to the
community.  Where an agent, with notice of a trust, deals with trust money or
property coming into his hands in a manner or for purposes inconsistent with
the trust, or is otherwise a party to the commission of a breach of trust, he
is liable to the beneficiary in respect of money or property so dealt with, or
for such breach of trust.

INFORMATION ON WHICH DIRECTIONS ARE SOUGHT
24.  I turn now to set out the information forming the basis upon which the
trustees seek directions and my directions thereon:
    Clan Grants:  There are thus far identified 88 family
    groups from the community which belong to the original 13
    clans identified in the Trust Deed.  There may be other
    groups to be similarly identified.  The directions sought go
    to the question of payments which might be made to those
    groups as such, without regard to the purposes of the trust.
    Payments might be made to an individual on behalf of the
    group for distribution amongst the members of the group,
    including that individual, and within the unfettered
    discretion of that individual.

    Directions: Any grants made under this scheme of things
    would not be for charitable purposes.  The powers to appoint
    agents to act may be employed, for example, for the
    distribution of funds in accordance with a discretion
    exercised by the trustee, including as to the application of
    the funds and the recipient.  There is power to delegate the
    exercise of discretions.  In either of these cases the
    provisions of the Trust Deed must be strictly adhered to.
    It might be of assistance to the trustee if it received an
    application from a responsible person representing a
    particular group detailing the charitable purposes for which
    funds are sought from time to time where the proposed direct
    recipient of the benefit is a member of the group.  It would
    be open to the trustee in the exercise of discretion, taking
    into account other claims on the fund, to pay such portion
    of the trust funds as it determines to that person on his or
    her undertaking to distribute it in accordance with the
    charitable purposes approved by the trustee.  Any such agent
    or delegate must be accountable to the trustee who must
    exercise diligent supervision over him or her.

    Medical grants are proposed to provide patients and their
    escorts with transport to and from appropriate medical
    establishments.  A payment of approximately $100.00 for
    sundry expenses and the accommodation of both the escort and
    the patient for the length of the stay away from Groote
    Eylandt might be made.

    Directions: The relief of the disabled is a charitable
    purpose.

    Funeral grants are proposed following upon the death of a
    beneficiary of the trust. It is intended to provide a grant
    to the community so that the required ceremonial elders,
    relatives, coffin and flowers can be flown to Groote
    Eylandt.  Certain Aboriginal ceremonies are required to be
    performed upon receipt of the coffin.  Most of the flights
    must be taken with small air charter companies.  It is usual
    for food to be provided to visitors at the funeral.  The
    amount of these grants may vary depending on the importance
    of the deceased, the funds available in budget at that time
    and the cost of required services.  It would be usual for an
    upper limit of $10,000 to be applied for any one funeral
    grant.

    Directions: The disposal of the dead is a purpose beneficial
    to the community.  Public ceremonies associated with
    funerals are often regarded as being such a benefit, and
    that may be particularly so in a relatively small section of
    the public, such as the community.  The maintenance of
    aboriginal traditional practices and custom in regard to
    burial of the dead is also a benefit to the community.

    Church grants are proposed to be provided to each of the
    local community churches at Angurugu and Umbakumba to assist
    church elders in organising church activities. Such a grant
    would be unconditional, to be used at the discretion of the
    elders of the church.

    Directions: These may be charitable if falling within the
    considerations relating to the advancement of religion.  A
    grant to church elders to dispose of as they see fit would
    not.

    Old aged/pensioner and handicapped grants are proposed to be
    made upon application from people of the community who
    require assistance and who are either elderly or
    handicapped.  Monies may be required to assist in purchase
    of wheelchairs, accommodation for handicapped members of the
    community living in special care centres in Darwin and to
    provide a vehicle to transport handicapped members of the
    community between their respective homes and health care
    facilities on Groote Eylandt.  Old aged grants may be given
    to elderly members of the community at the discretion of the
    trustee.

    Directions:  Provided these grants are for the relief of the
    disabilities of age and handicap, they would be charitable.
    A grant to an aged or handicapped person simply because he
    or she was aged or handicapped would not.

    Homeland grants are proposed to support the continued
    operation of the setting up of outstations.  People on
    outstations live away from the main residential centres and
    may use the money provided to purchase vehicles to move
    between the outstation and the centres.

    Directions: These would be charitable if made for the
    benefit of the community.  The provision of funds to
    individuals in poor circumstances for shelter, amenities and
    other necessities of life appropriate to the standards of
    the community, including means of transport, might be seen
    as being in relief of poverty.  There may be elements of the
    advancement of education and religion, as well as other
    charitable purposes being served.

    Education grants are proposed to be used to assist children
    travelling to and from school on the mainland and to provide
    the children with pocket money.  Adult education may be
    supported by payment for the purposes of transport to and
    from educational centres to attend sundry courses,
    accommodation, books, fees and pocket money.  These grants
    would not be made where the courses are supported by
    government or the educational institution.

    Directions: Education grants are for charitable purposes as
    being for the advancement of education and may be as well
    for the relief of poverty.

    Sport and recreation grants are proposed to be provided to
    the Sport and Recreation Officers at the Angurugu and
    Umbakumba Community Government Councils for the purpose of
    supporting sporting activities.  Some sport and recreation
    grants may be made directly to individuals or sporting teams
    to enable travel to events which are off Groote Islandt and
    Bickerton Island, including out of the Northern Territory.

    Directions: If the promotion of sport and recreation is for
    the benefit of the community it may be for a charitable
    purpose.  They may be regarded as for the advancement of
    education, particularly physical education or the
    enhancement of physical proficiency and efficiency.  For a
    member of the community, the ability to visit other places
    may be an important aspect in the advancement of education.
    The enhancement of physical well being could be for a
    charitable purpose.

    Anindilyakwa Land Council grants are proposed to provide
    funds to enable that organisation to support various
    projects under its control.  It is a Council incorporated
    pursuant to the provisions of the Aboriginal Land Rights
    (Northern Territory) Act.  The projects may include a
    program which is designed to assist officers to protect the
    environment.  The Council also assists people who are
    undertaking sea management studies in the Groote Eylandt
    area.

    Directions: These grants may be seen as for the benefit of
    the community by providing funds to employ members of the
    community and thus for the relief of poverty, and perhaps
    for the advancement of education and enhancement of the
    natural environment, all charitable purposes.

    Power and Water Authority grants are proposed to be made to
    pay for charges for electricity to households occupied by
    members of the community.  Payments may be made in
    conjunction with local community government councils which
    are initially responsible for the collection of funds to
    meet electricity accounts.  Until recently all electricity
    costs were met by government.

    Directions: Power and Water Authority grants may be
    charitable if for the relief of poverty.

    Festival grants are proposed to support activities necessary
    to meet aboriginal traditional obligations.  Those grants
    may be made to support various festivals on Groote Islandt
    for the benefit of members of the community.  Support may be
    given by providing money towards food and the cost of
    chartering aircraft to fly people to the festival.  Festival
    grants would only be made where they provide support to the
    community in general.

    Directions: Festival grants may be charitable if for the
    advancement of education or religion or perhaps aboriginal
    culture.

    Ceremony grants are proposed to be given to enable
    aboriginal elders within the community to perform ceremonies
    which are culturally necessary, including house smoking and
    clearing a place of a curse.  The amount of these grants may
    be dependent upon what the responsible elder wishes to
    charge to perform the ceremony.

    Directions: Ceremony grants may be charitable if being for
    the advancement of religion or aboriginal culture.  The
    payment of reasonable fees for services is not contrary to
    the notion of a charitable purpose.

    Angarrumanja grants.  It is proposed that these grants be
    used to provide travel, accommodation, treatment, training
    and support to members of the community affected by
    substance abuse and to provide emergency assistance to
    victims of family violence, to purchase capital items not
    provided by government funding, and to provide money for
    food required in cases of emergency.

    Directions: Angarrumanja grants may be charitable being for
    the relief of the disabled.

    Loans to members of the community.  It is proposed that
    loans be made to members of the community for a variety of
    purposes, but normally to be associated with some form of
    commercial enterprise which may carry varying degrees of
    risk.  It is proposed that the terms of the loan be tailored
    to individual circumstances, including as to the charging of
    interest, the rate of interest and the terms of repayment.

    Directions: No distinction is made as to the purpose of the
    proposed loans.  If it is intended that they be for
    commercial purposes, that is, that the borrower shall be
    entitled to use the funds for his or her own benefit, then
    it falls to be considered under the investment powers and
    the general duties of a trustee.  There is a power to make
    unsecured loans to members of the community conferred by the
    Deed.  The power to make such advances was no doubt thought
    desirable so that members of the community might be assisted
    in providing for their personal, or business needs.  There
    are no interests in land vested in any member of the
    community on the islands, and thus the usual means of
    supplying security over land is not available to them.
    Whether the purpose of any proposed loan would provide
    anything tangible to serve by way of security depends on
    each case.  The power does not extend to the making of loans
    without regard to the duty to protect the trust funds.
    Further, the power does not necessarily extend to the making
    of loans on terms more advantageous to the borrower as a
    member of the community than such as would be extended to a
    person who is not a member of the community (if the power
    existed) whether as to interest or terms of repayment.  The
    trustees should exercise the same diligence and prudence as
    an ordinary prudent man of business would exercise in
    conducting his own business when considering the making of
    any such loan.  This means that if no security is available
    the trustee should most carefully consider the purpose to
    which the loan is to be put, see that it is applied in that
    manner, take into account the ability of the borrower to
    repay the loan and other considerations going to the
    assessment of his or her creditworthiness.  To the extent
    that monies are lost as a result of bad investments under
    this heading, they are lost to the purposes of the trust,
    and thus to the benefit of the community.

25.  The trust funds may be used for charitable purposes "in such manner and
to such extent and upon such terms and conditions as from time to time may
seem expedient" (para4(b)).  They may accordingly be applied by way of loan to
a member of the community for charitable purposes.  Since the funds can be
given there is no reason why they may not be lent, but the same considerations
apply as to a gift.  It may be that the charitable purpose can be achieved by
the provision of funds for a limited time.  The opportunity to recover the
funds lent is to the benefit of the fund and ultimately the community.  If
funds are lent, there is an obligation to enforce the terms of the loan, and
so that proper accounts are kept overdue loans should be properly supervised
and reviewed and if necessary written off in accordance with proper accounting
standards.

26.  The directions in each case are deliberately couched in general language.
That is because the information available is general. It is up to the trustee
to consider each proposal for the grant of trust funds on its own merits.