On Friday 3 October 2025, Justice Bradley delivered the long-awaited judgement on the Catalyst litigation against The Presbyterian Church of Queensland in receivership.[1]
Significance of the Case
The case has significant implications for both the future of the Presbyterian Church of Queensland and other charities which have a letters patent issued pursuant to the Religious Educational and Charitable Institutions Act 1861 (Qld) (‘RECI Act’).
The case is significant for the Presbyterian Church of Queensland because of both the judgement debt and the implications for what property may be drawn upon to meet those debts.
This case is significant for charities with letters patents because:
- It provides much needed judicial commentary on an otherwise poorly understood form of incorporation; and
- It provides clarity on how letters patents hold property and how they operate.
The case and its implications are discussed further below.
Background
It is first important to understand that there is both an unincorporated association known as The Presbyterian Church of Queensland (‘the Church’) and its letters patent with the same name which was issued pursuant to in 1876 under the RECI Act (‘the Corporation’).
The Corporation held assets used by the Church’s aged care arm known as ‘PresCare’. Prescare had its own ABN, board, and governing constitution.
The Corporation entered into non-traditional finance arrangements with Catalyst entities which involved three parcels of land located in Townsville, Corinda, and Carina upon which the Corporation had (or constructed) residential aged care facilities. Each transaction involved a sale and leaseback of land, triple-net leases, finance arrangements, and buy-back options for each of the properties leased. The debt initially raised by these arrangements was in the vicinity of $100 million.
The Corporation was ultimately unable to meet its obligations under the Catalyst agreements which resulted in the termination or breach of those agreements. The PresCare debts to Catalyst resulted in the Corporation being put into receivership in 2021. The receiver for The Presbyterian Church of Queensland (‘the Receiver’) was tasked to, amongst other things, investigate and report back to the court on how the Corporation held its assets as that may determine what assets were available to meet the Catalyst debts.
Catalyst subsequently claimed against the Corporation for amounts owing under the finance arrangements, unpaid rent and outgoings, which is the subject of this case.
The Receiver claimed a number of defenses to Catalyst’s claims on the Corporation’s behalf.
Outcome
Other than Justice Bradley finding that a portion of unpaid rent claimed with respect to the Carina property was not payable, the Receiver’s defenses to the Catalyst claims were unsuccessful. The Corporation was found to be liable for approximately $32 million. Once costs and interest on the debt are accounted for, the amount will be much higher.
Most notably, both the Receiver and the Queensland Attorney General (‘Attorney’) argued that the properties in the Catalyst transactions were subject to special purpose trusts. It was contended in the alternative that the Corporation’s property was held on trust for charitable purposes of the Church.
Contrary to the Receiver and the Attorney’s submissions, the Catalyst entities argued that the Corporation did not hold its property on trust and that the property it held was vested in it absolutely.
The existence or non-existence of trusts was a significant factor because it might have implications for what property of the Corporation will or will not be available to meet the Corporation’s debts.
In relation to the specific purpose trusts, as there were no express declarations of trust, deed of gift, bequest or other trust instrument, the Attorney and the Receivers relied on the legal nature of the Church and the Corporation, and their dealings with the property as evidence of those trusts. Neither trust was successfully made out, and it was found the properties were held by the Corporation for the general charitable purposes of the Church. This conclusion was reached due to the legal nature of the Church and the Corporation (see below regarding letters patents).
Material factors in Justice Bradley’s rejection of the specific purpose trust included that:
- The Church’s objects were broad enough to encompass the more specific purpose trusts. Accordingly, there needed to be more unequivocal evidence of intent to establish the trust than what was produced by the Receiver and the Attorney General. In the absence of this evidence, a general-purpose intention must prevail. The absence of relevant trust instruments together with the fact that charities can use property for specific charitable purposes for a time without necessarily dedicating them to those purposes on trust was significant; and
- In practice, the Corporation did not consistently act as though there were specific purpose trusts over the relevant properties.
Key takeaway for the Church
We understand that PresCare and other general denominational assets have been sold either before or during receivership to meet the Corporation’s debts. However, the Corporation also holds other property (such as properties used by most Presbyterian congregations in Queensland and Fairholme College in Toowoomba) and as a result of the judgment, the receiver may look to whether these properties are available to meet the judgement debt.
Based on the reasoning in the judgement, it appears that unless the receiver can demonstrate that there are express special purpose trusts in existence for particular landholdings, those properties may be available to meet the judgement debt. This will be a question of fact and may differ between properties. There may yet be further litigation around this point when it comes to enforcement of the judgement.
Much of the decision and its implications turns on the unique history of the Church and how it conducted itself will not necessarily apply to other charities with similar structures.
Key takeaways for Letters Patents
The case clarifies a number of important matters with respect to letters patents:
- Incorporation of Officeholders
Letters patents are not corporations in the usual sense of the term. Instead, letters patents are the incorporation of certain officeholders of its associated unincorporated association as determined by the letters patent grant. There is perpetual succession of those officeholders thereafter and a common seal. In the case of the Corporation, the Moderator, Clerk, and the Treasurer of the Church were the officeholders. Whether or not the officeholders have the benefit of a corporate veil remains unclear.
- A Letters Patent is not the same as the Unincorporated Association
A letters patent (and their officeholders) is different to its associated unincorporated association (and its appointed governance boards and committees). The case found that the various governance boards of the Church did not have legal personality. - Letters Patents do not have a Constitution
Letters patent officeholders are appointed in accordance with its associated unincorporated association’s governing rules (in this case the Church). Letters patents have no constitution of their own, and how they operate is dictated by its associated unincorporated association’s governing rules. - There is always a Charitable Trust
A letters patent operates as a trustee for the charitable purposes of its associated unincorporated association and cannot own property or act in its own right. This is important because an unincorporated association cannot hold property or enter into contracts without acting via a trustee. Accordingly, a distinction always needs to be drawn between a letters patent and its associated unincorporated association, and property held by a letters patent must always be treated as charitable trust property rather than property held by a charitable corporation. - There can be Multiple Charitable Trusts
In addition to being trustee for its unincorporated association, a letters patent can also be trustee for other specific purpose trusts provided that those trusts are consistent with the purposes of the unincorporated association. However, as decided in this case, the usual elements of the establishment of a trust must be present for the relevant property to be held for specific purposes. There is no lower bar for establishing a charitable trust arising from the legal nature of a letters patent. A general purpose trust inference for property held by a letters patent will otherwise prevail. - Powers of the Letters Patent
The rights and powers of a letters patent are determined by the RECI Act and its letters patent grant. Subject to those limitations, a letters patent has the powers of a natural person subject to any limitation in its unincorporated association’s governing rules.
Conclusion
Noting what is at stake, the decision may yet be appealed.
It would be prudent for any charities with a letters patent to review their structure to ensure that it remains fit for purpose and that the way that it operates is well understood by both its board and executive.
The team at Vocare Law are specialist Not-for-Profit solicitors and have extensive experience advising charities with letters patent body corporates. Please don’t hesitate to contact our office on 1300-VOC-LAW / 1300-862-529 or email: enquiry@vocarelaw.com.au if you need assistance understanding your charity’s legal structure.
This article was written by Paul Neville (Senior Associate) and James Tan (Director).
**The information contained herein does not, and is not intended to, constitute legal advice and is for general informational purposes only.
[1] Catalyst Townsville SPV No 1 Pty Ltd v The Presbyterian Church of Queensland (receivers and managers appointed); Catalyst Corinda SPV No 2 Pty Ltd v The Presbyterian Church of Queensland (receivers and managers appointed); The Presbyterian Church of Queensland (receivers and managers appointed) v Catalyst Carina SPV Pty Ltd & Anor [2025] QSC 255. The case is accessible here: https://www.queenslandjudgments.com.au/caselaw/qsc/2025/255
