Western Australia now has the most rigorous and comprehensive charitable trusts legislation in the country, with the passage of new laws through the State Parliament.
The laws provide extensive investigative powers to ensure charitable trusts are managed in accordance with the objects of their trust deed, following the report into the Njamal People’s Trust (the Report).
The Report recommended a raft of reforms to the outdated 1962 legislation that previously governed charitable trusts.
The Charitable Trusts Act 2022 establishes the Western Australian Charitable Trusts Commission, which will be able to conduct investigations upon receiving a complaint about a charitable trust. The Commission can undertake investigations under significantly expanded powers akin to those of a Royal Commission.
Non-compliance with the Commission’s requirements to provide documents or information will attract a maximum penalty of $50,000 – a ten-fold increase to the previous penalty.
The Act provides new powers to require a person to attend and give evidence on oath or affirmation. It also enables the Attorney General to apply to the Supreme Court to seek orders removing a trustee or person involved in the administration of a charitable trust, to appoint a person as a trustee or to preclude a person from being involved in the administration of a charitable trust in certain circumstances.
The Act also makes changes to simplify the law that allows certain trusts or gifts for charitable purposes that could not be given effect to (such as through insufficient funds or nominating a charity that no longer exists), to instead be put to use for a charitable purpose that is as close as possible to the donor’s original intention.
As stated by Attorney General John Quigley:
“In WA, many charitable trusts are established for the purpose of advancing the interests of Indigenous communities and often hold tens of millions of dollars of Native Title settlement monies.
“After receiving numerous complaints from Indigenous groups that funds from the Njamal People’s Trust were being misused by the trustees or by others involved in the administration of the trust, I instigated a formal inquiry in relation to that trust.
“The report into the Njamal People’s Trust made a number of recommendations to improve laws governing charitable trusts, all of which have been implemented in the new Act.
“The new laws achieve a significant expansion of the powers of those investigating charitable trusts, as well as of the Attorney General and Supreme Court, in order to ensure that charitable trusts operate to further the interests of the communities they were designed to assist.
“These new laws give Western Australia the most rigorous and comprehensive charitable trusts legislation across Australia and in New Zealand.”
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