Auckland’s Caughey Smith-Preston Charitable Trust providing care facilities for the aged has been run out of business by increased costs and private sector competition but is stuck with its traditional residential care model. The High Court ruled it would be a breach of Marianne Caughey Preston’s bequest to change the Trust’s activity.
Born in Ireland, Marianne died at Auckland in 1938 aged 87. She left a bequest creating a charitable trust valued at some $40 million dollars in today’s terms for care of the aged: cash, extensive property holdings and her shareholding in Auckland’s iconic department store Smith and Caughey. During her life, Marianne established and helped run charitable organisations helping poor of the city, particularly women. This at a time when there was no equivalent of contemporary taxpayer-funded social welfare.
The Trust’s most recent financial statements disclose a net worth of $48.6 million. Its major asset, a rest home and geriatric hospital on Remuera’s Upland Road in Auckland’s eastern suburbs, lies empty. The High Court was told Upland Road has incurred operating deficits since 1990. First constructed in the 1950s, with subsequent extensions, Upland Road cannot bear the additional costs now demanded by government for funding as a service providing hospital, palliative care and dementia services. Consumer preference is for aged-care facilities in the for-profit sector. The Trust, with its dated facilities, cannot compete. The Trust decided in 2017 to close Upland Road after recording a $3.76 million deficit for the preceding year.
With plans to sell Upland Road, the Trust asked the High Court if it could move out of residential care, instead providing ‘outdoor relief’ as practised by Marianne in her lifetime. Marianne was prominent in supporting non-residential, community-based, care for Auckland’s elderly: money, food, clothing and other means of support and care.
Justice Fitzgerald ruled the plain terms of the Trust created by her will and its overall scheme are for the provision of residential care. Marianne’s will states that if terms of the Trust cannot be fulfilled then then it is to be wound up and assets handed over to Auckland hospital ‘for relief of the aged and infirm’.
re Marianne Caughey Smith-Preston Memorial Rest Homes Trust Board – High Court (20.11.18)
19.007