Application of Paul James Edwards: Estate of the Late John McGregor Edwards

[2023] NSWSC 714

Supreme Court

New South Wales

Medium Neutral Citation:

Application of Paul James Edwards: Estate of the Late John McGregor Edwards [2023] NSWSC 714

Hearing dates:

5 June 2023

Date of orders:

27 June 2023

Decision date:

27 June 2023

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Judicial Advice given. Gift to be applied cy-près in favour of the second defendant. Costs paid out of the estate.

Catchwords:

EQUITY - Trusts And Trustees – judicial advice – Trustee Act 1925, s 63 – residuary gift by will to non-existent institution, Aboriginal Children’s Medical Research Trust – whether a gift of residue is a misdescription – whether the gift of residue fails for want of sufficient identification of an existing charitable body – whether the will exhibits a general charitable intention to be administered by scheme cy-près – intention of testator for gift be used for the purpose of medical research in respect of Aboriginal children – competing charitable organisations.

Legislation Cited:

Charitable Trusts Act 1993, ss 5(1), 6(1)(a), 9, 10

Trustee Act 1925, s 63

Cases Cited:

Connery v Williams Business College Ltd [2014] NSWSC 154

Cram Foundation v Corbett-Jones [2006] NSWSC 495

Estate Polykarpou; Re A Charity [2016] NSWSC 409

Graeme Philip White as administrator of the Estate of Josephine Agnes Virgona v Attorney General of NSW [2019] NSWSC 917

Hood as Executor of the Estate of Inez Irene Barbetti(Dec) v The Attorney General for Western Australia & Anor [2006] WASC 157

Morrison-Conway & Anor; Estate of the Late Judith Christine Walsh [2018] NSWSC 685

Public Trustee v Attorney General [2005] NSWSC 1267

Re Daniels (deceased) [1970] VR 72

Re Davis; Hannen v Hillyer [1902] 1 Ch 879

Re Estate of Brine (decd) [2021] SASC 54

Re Permanent Trustee Australia Ltd (1994) 33 NSWLR 547

Re Taylor (1888) 58 L.T. 538, 543

Taylor v Taylor (1910) 10 CLR 218; [1910] HCA 4

The Estate of Rand (decd), Re [2009] NSWSC 48

Texts Cited:

Dal Pont, Law of Charity (LexisNexis Butterworths, 2nd ed, 2017)

Category:

Principal judgment

Parties:

Paul James Edwards (First Plaintiff)
Monelita Hopfner (Second Plaintiff)
Attorney General of New South Wales (First Defendant)
Good to Great Schools Australia (Second Defendant)

Representation:

Counsel:
L Clarke (Plaintiffs)
R Bhalla (First Defendant)
D Barlin (Second Defendant)

Solicitors:
Duffy Law Group (Plaintiffs)
Crown Solicitor’s Office (First Defendant)
Legacy Law Pty Ltd (Second Defendant)

File Number(s):

2022/238325

Publication restriction:

No

Judgment

1. John McGregor Edwards (‘the deceased’) made a will on 9 July 2019 (‘the will’) and died on 26 June 2020. The deceased had two children, Paul James Edwards and Kim Elizabeth White (née Edwards). The will appointed the first plaintiff, Paul James Edwards, and the second plaintiff, Monelita Hopfner, as joint executors (‘the executors’). The will gave several legacies and divided the residue of the deceased’s estate between his children, several friends, and several charities. On 2 November 2020, a grant of probate was made by this Court.

2. The executors, as plaintiffs, seek the Court’s advice, opinion and direction under s 63 of the Trustee Act 1925 (NSW) in relation to one of the objects of these residual charitable gifts. The principal questions raised by the request for judicial advice include:

1. whether one of the named charities, being the Aboriginal Children’s Medical Research Trust, represents an existing identifiable charity;

2. whether, if the gift were to fail, the will exhibits a general charitable intention, such that the Court should now authorise a scheme cy-près to give effect to that general charitable intention; and

3. if so, whether the proper recipient of the gift is Good to Great Schools Australia or the Murdoch Children’s Research Institute.

3. These are proceedings “with respect to the administration of a charitable trust” and are therefore “charitable trust proceedings” within the Charitable Trusts Act 1993, s 5(1). The Attorney General of New South Wales, who has a right of appearance in charitable trust proceedings, was given notice of the proceedings and was made the first defendant.

4. In short submissions, the Attorney General authorised the bringing of the proceedings pursuant to the Charitable Trusts Act, s 6(1)(a).

5. The Court has been much assisted on this application by written and oral submissions made by Ms L. Clarke for the Executors, Mr R. Bhalla for the Attorney General and Mr D. Barlin for the second defendant.

6. These reasons first outline the principal background facts, then give a profile of the two charitable organisations that are candidates for the Court’s selection under a cy-près scheme, before dealing with the questions upon which the parties seek the Court’s advice and opinion. The facts were provided to the Court by way of submissions and several affidavits. The Court assumes the correctness of these facts.

The Deceased and His Testamentary Intentions

7. The deceased’s son, Paul, says that the deceased first began to talk about a group of three organisations as objects of his charitable interest as early as 1997. The three were “Dogs for the Blind”, the “Bill Crewes Exodus Foundation” and the “Aboriginal Children’s Medical Research Trust founded by Noel Pearson”, which the Court infers from Paul Edwards’ affidavit the deceased described in this way when he spoke about them. These three organisations, so described by the deceased, remained among his testamentary preferences when he made his will 20 years later.

8. When he first mentioned these three organisations to his son, Paul, the deceased was struggling financially because a builder that the deceased had engaged to build a house for him had become insolvent. This experience led the deceased to become more open with his son about his financial affairs and testamentary wishes.

9. Paul Edwards’ deposes the following about his father’s mention of the “Aboriginal Children’s Medical Research Trust” in his affidavit:   

“My father mentioned the ‘Aboriginal Children’s Medical Research Trust’ by name and the fact it was run by Mr Noel Pearson. He had said to me on several occasions how he felt sorry that the “aboriginal kids were sick and dying in far North Queensland” and how he wanted to help them.”

10. Two factors point towards the likelihood of misdescription of organisations in the will. First, the deceased was unlikely to have been able to check the exact name of organisations that he wished to benefit in his will because he was not computer literate and was unable to use the internet or a smart telephone.

11. The second factor is that the will was prepared by a friend of the deceased, Reema Doueihi, who the Court understands does not claim any specialised legal training. The will is nevertheless a remarkably well-crafted instrument from the hand of a non-lawyer author. The will was based on the deceased’s hand-written and oral instructions. The will does not accurately identify the business names of several intended recipients of the gifts of residue. It would have been possible to identify them with precision, for example, by referring to their Australian Company Number (‘ACN’). Instead, the result was, slight misdescriptions of all the named recipient organisations and uncertainty about one of the named recipients.

12. The will disposes of the residue of the deceased’s estate at clause 9(c), as follows:

“(c)   To give the rest and residue of my estate between such of those beneficiaries as listed below and in such proportions who survive me and attain the age of 18 years provided always that should any of them not survive me to take under this my will leaving children who survive me and attain the age of 18 years then such children shall take by substitution and if more than one equally the share in my estate which their parent would otherwise have taken as follows:

(i)   To the GUIDE DOGS FOR THE BLIND 8/40 of the value of my residual estate;

(ii)   To the REV BILL CREWS, THE EXODUS FOUNDATION, Ashfield NSW 8/40 of the value of my residual estate;

(iii)   To the ABORIGINAL CHILDREN’S MEDICAL RESEARCH TRUST, c/o Noel Pearson, Cape York 8/40 of the value of my residual estate;

(iv)    To my friend MONELITA HOPFNER of 28 STEWART STREET, LITHGOW NSW, 6/40 of the value of my residue estate;

(v)   To PAUL JAMES EDWARDS my dearly beloved son not withstanding, he has been fitfully estranged since 2001, his address being 78 St Phillips Street, East Brunswick, Victoria, 6/40 of the value of my residual estate;

(vi)    To my estranged daughter since 1983, KIM ELIZABETH WHITE (NEE EDWARDS), c/o Paul J Edwards, 78 St Phillips Street, East Brunswick, Victoria, 1/40 of the value of my residual estate;

(vii)    To REVEREND FATHER OWEN GIBBONS, of St Marys Catholic Church, Mudgee, 1/40 of the value of my residual estate;

(viii)    To my friend, REEMA DOUEIHI of 80 Russell Street, Bathurst, NSW, 1/40 of the value of my residual estate;”

13. The will, at clause 9(d), provides:

“AND FURTHER PROVIDED THAT in the event that any of my beneficiaries does not attain a vested interest under the preceding trusts then my executor shall hold such share of my estate UPON TRUST to be divided equally between the beneficiaries of my estate and not in proportion to the respective bequeath.”

14. In places the will appears to use the expression “bequeath” in the sense of “bequest”. In cl 9(c)(iii) the will refers to the “Aboriginal Children’s Medical Research Trust, c/o Noel Pearson, Cape York”.

15. The plaintiffs have without success made extensive enquiries as to locating an entity with a name identical, or like, Aboriginal Children’s Medical Research Trust. It is common ground that there is no trust known as the “Aboriginal Children’s Medical Research Trust”.

16. The plaintiffs submit that the gift of residue under the will to the Aboriginal Children’s Medical Research Trust should be applied cy-près in favour of th“for the purpose of Aboriginal children’s medical research”. An alternative scheme, advanced by the second defendant, Good to Great Schools Australia, is that the gift should be applied in its favour “for the purposes of research with respect to medical issues that relate to Aboriginal Children”.

Good to Great Schools Australia

17. Good to Great Schools Australia, the second defendant, submits that the address contained within the will, that is “c/- Noel Pearson, Cape York” supports its contention that Good to Great Schools Australia is the entity being referred to when the will uses the expression Aboriginal Children’s Medical Research Trust.

18. Mr Noel Pearson is a co-founder and a Director of Good to Great Schools Australia, a company limited by guarantee and a registered charity with the Australian Charities and Not-for-Profits Commission. Good to Great Schools Australia was established in 1990 as Cape York Aboriginal Australian Academy Limited. On 4 October 2010, the organisation’s name was changed to Cape York Aboriginal Australia Academy, and, on 21 October 2014, its name was changed to Good to Great Schools Australia.

19. Good To Great Schools Australia operates in the Cape York area and is focused principally on the advancement of the education, health and wellbeing of children and young people in the community. As Mr Pearson deposes, Good to Great Schools Australia is,

“continually working on behalf of the children of Cape York in ensuring that they have better education, health and well-being so that they can mature into adults that that have strong capabilities and therefore more choices in life and live lives they have reason to value”.

20. At about the time of the making of the will, in July 2019, Mr Pearson says that he regularly spoke on radio and at community events about the need for more medical research into Aboriginal children’s heath, and the need to address specific health problems such as rheumatic heart disease. Whether the deceased heard these broadcasts is unclear.

21. The Good to Great Schools Australia constitution identifies its objects as follows:

“(a)   to operate as an education organisation that operates schools and supports delivery of high quality, high expectations education through direct assistance to disadvantaged children in Australian schools including (but not limited to):

(i)    school-based literacy and numeracy programs as are available to middle class children in advantaged neighbourhoods;

(ii)   character development programs that support disadvantaged children to build the resilience they need to navigate through life making good decisions;

(iii)   school-based extracurricular programs as are available to middle class children in advantaged neighbourhoods;

(iv)   indigenous culture and language programs to affirm Aboriginal children’s rights to keep their culture, self-identity and social wellbeing;

(v)   supporting identification and treatment of the unique special needs of all students in a school;

(b)   to build education opportunities for disadvantaged peoples in Australia with the overarching aim of improving their employment and education prospects and contributing to breaking the nexus between welfare, poverty and social dysfunction;

(c)   to incorporate the CYWR Principles and practices into school operations which include (but are not limited to):

(i)   promoting parental responsibility of student attendance and school readiness (including child health and hygiene, nutrition and uniforms); and

(ii)   engaging individuals, families and communities in their children’s education; and

(d)   to build and advance partnerships with government and non-government agencies to assist with ‘closing the gap’ between the academic results of the best and worst performing students in Australia.”

22. Mr Pearson’s evidence traces out the complex relationship between indigenous health and indigenous educational attainment. He explains that relationship in the following passages and how Good to Great Schools Australia is especially well-placed as an agency to deal with indigenous health issues.

“7.   It is the view of GGSA that the institutional divide that separates health and education as issues is not how the needs of children practically play out in family life and nor are they separated in policy responses. It is critical that there is a holistic approach to meeting the needs of Indigenous children. I have observed a clear pattern that the extremely high number of Indigenous children who are removed from their families due to neglect or abuse risks are children who have the greatest combination of poor health, poor literacy and chronic absenteeism school. Poor health has the biggest impact and we constantly monitor, research and report on this.

8.   In 2019-2021, we undertook a study in Cape York using state government attendance data collected over 4 years to assess student health and wellbeing related non-attendance. Medical and health professionals, education experts and school practitioners, and over 300 parents, were interviewed as part of this study. Our study concluded that student and parent health issues had a significant impact on non-attendance and that targeted parental support and minor changes to the delivery of medical support could ensure treatment was provided more efficiently and effectively. Further that this would reduce student absences and ultimately improve the education and health outcomes of these students. Following this study, we developed an Intensive Case Management Attendance and School Readiness Model which has been in operation in two of those communities since. It has contributed to an improvement in student attendance in both communities and anecdotal evidence suggests that minor medial ailments are being treated more efficiently.

9.   GGSA will use the money from this legacy to fund components of our Health and Wellbeing strategy, particularly the research and evaluation components. For examples, one activity to be undertaken will be the team collecting weekly data on student participation, treatment inputs, health and wellbeing responses, and parent participation. The team will then use this data to assess the effectiveness of the program and produce a number of reports on their research which will in turn lead to improvements in the program delivery and provide the basis for lobbying on stakeholders to provide greater improvements to the delivery of health and wellbeing and education services for indigenous children. Ultimately, this research will be the first if its kind to be able to identify how health and education organisations can collectively tackle the health and wellbeing of vulnerable children who to date are not \ having their needs adequately met by either bodies. ”

23. Mr Pearson further explains Good to Great Schools Australia’s staff composition, research objectives and the funding and job descriptions of the positions of researchers and caseworkers as follows.

“11.   Research into health and wellbeing is an essential foundation for the work carried out by GGSA. We employ people to continually gather data on health and medical issues affecting Indigenous children in our community. I refer to paragraph 16 and annexure “D” in my previous affidavits. Annexed and marked “C” are three years of our Annual Information Statements, each of which refer, to “promoting parental responsibility of student attendance and school readiness (including child health and hygiene, nutrition and uniforms)”.

12.   The salaries of researchers and case workers (who are the researchers in the communities) amount to $665,000 and are the largest part (over 70%) of the budget for School Readiness & Community Health Research Budget for the year ending 30 June 2024. Annexed here to as Annexure “D” is an summary of that budget.

13.   I refer to the Senior Childhood researcher position description annexed here to and marked as Annexure “E”. In particular, it includes:

(a)   Helping schools track student health and wellbeing progress so they can deliver the resources and programmes suited to their individual needs;

(b)   Helping teachers track the many initiatives in and outside the classroom regarding health and wellbeing;

(c)   Helping school’s asses’ successes and improvement opportunities as the operate towards their health and wellbeing goals; and

(d)   Helping GGSA evaluate their own programmes, implementations and performance to enhance health and wellbeing.

14.   I refer to the position criteria for an Evaluation Researcher we employed in February 2022 where it requires “experience in leading and undertaking business and / or social policy related research” and says the role is to review wellbeing programmes and research methodologies for program evaluations. This is annexed hereto as Annexure “F”.

15.   I refer to the Community Health and Wellbeing Case Manager position description annexed hereto as Annexure “G”. Major functions of the role include:

(a)   Understand and communicate with local Health Service providers regards student health and wellbeing

(b)   Identify specific health and wellbeing issues regarding students, develop engagement strategy to initiate formal appropriate medical advice. ”

24. Finally, Mr Pearson explains Good to Great Schools Australia’s partnerships with health and medical organisations to further its work in a holistic manner integrating health and educational objectives for indigenous children:

“16.   From 2013 to 2023 our organisation has partnered with a number of health and medical organisations and Cape York communities to produce a number of studies, reports and submissions to government enquiries on the subject of indigenous education, health and wellbeing. This work is consistent with the Productivity Commission’s recommendations on how to improve education for indigenous students in remote areas effectively and holistically, through school-specific strategies tailored to meet the specific needs of First Nations students.”

Murdoch Children’s Research Institute

25. The charitable work of Murdoch Children’s Research Institute was explained by its Chief Operating Officer, Mr Gregory O’Brien. The Murdoch Children’s Research Institute was incorporated on 16 June 1998 and is a registered charity with the Australian Charities and Not-for-Profits Commission.

25. The objects of Murdoch Children’s Research Institute are:

“(1)   to undertake and promote research into the incidence and causes of birth defects and bodily afflictions and diseases of all kinds and in particular of infants and adolescents;

(2)   to seek and discover methods of preventing, reducing or curing birth defects and bodily afflictions and diseases of all kinds and in particular of infants and adolescents;

(3)   to undertake and promote medical and scientific research of all kinds and education in the methods and techniques of that research and the use of application of the result of that research;

(4)   to provide premises, laboratories, equipment and apparatus for the purpose of undertaking research;

(5)   to promulgate, commercialise and otherwise and make use of the results of that research;

(6)   to permit other persons to use any information or discovery resulting from that research;

(7)   subject to the Act to do all such other things and exercise all such powers, rights and privileges as a natural person may do or exercise.” (CB page 86-87)

27. In undertaking its objects, Murdoch Children’s Research Institute has established an Aboriginal Health Program to co-design, implement and evaluate strategies to promote health, wellbeing and equity for Aboriginal children, young people and families, including through several large-scale research projects. The mission of the Aboriginal Health Program includes:

“(1)   To establish a community-driven research program that will lead to sustainable, long-term improvement in health and wellbeing of Aboriginal children, young people and families.

(2)   To work in partnership with Aboriginal organisations and communities to co-design, implement and evaluate strategies to improve the health and wellbeing of Aboriginal children, young people and families.

(3)   To work in partnership with Aboriginal communities to co-design, implement and evaluate strategies to reverse the upward trends in mental health disorders, self-harm and suicide in children and young people.” (CB Page 87)

28. Mr O’Brien explains that Murdoch Children’s Research Institute has produced over 280 publications in relation to indigenous children’s health and is involved in several ongoing research projects. He gives examples of some of the recent publications resulting from these projects. These are a Child Resilience Questionnaire – Child, a Child Resilience Questionnaire (parent/caregiver report), a publication entitled “Her Tribe in His Tribe – Aboriginal Designed Empowerment Programs”, a multiphase study and report on the Aboriginal Women’s Experience of Partner Violence Scale, a report on healthcare experiences and birth outcomes, entitled “Results of an Aboriginal Birth Cohort”, a report, “Evaluation of an Online Health and Well-Being Program for Aboriginal and Torres Strait Islander People.”

29. The Murdoch Children’s Research Institute is currently engaged in several large-scale research projects relating to indigenous health and well-being entitled as follows, the Aboriginal Family Study, Healing for Survivors of Child Sexual Abuse in Aboriginal Communities, Corka – Bubs, Deadly Mums and Strong Families – connecting pregnant women with support for stress, yarndi and alcohol, and a Childhood Resilience Study to develop a better understanding of how trauma and stress impact on children’s health and well-being.

30. Mr O’Brien further explains that Murdoch Children’s Research Institute is currently funding PhD research for a thesis entitled “Understanding high mobility Aboriginal families, impacts on children’s health, social and emotional well-being, and what support is needed to foster positive child outcomes”.

31. Mr O’Brien explains that Murdoch Children’s Research Institute has been the recipient of multiple funding grants for additional children’s medical research from the National Health and Medical Research Council.

32. Mr O’Brien further explains that if the Court recognises Murdoch Children’s Research Institute as the recipient of the gift of residue in a cy-pres scheme that, the Murdoch Children’s Research Institute will reserve the funds for Aboriginal children’s medical research, such as that detailed in the preceding paragraphs.

The Summons for Judicial Advice

33. In their Amended Summons the Executors seek the following opinion, advice, and direction of the Court under Trustee Act s 63 and related relief as follows:

“(1) The opinion, advice, or direction of this Honourable Court pursuant to section 63 of the Trustee Act 1925 in relation to the proper construction of the will of the deceased, John McGregor Edwards executed 9 July 2019 ("the will"), and on the proper distribution of the Estate.

(2)   A declaration that the Executors are entitled to distribute, in accordance with the deceased's wishes, the gift of the late John McGregor Edwards in clause 9 (c) (iii) of the will to the Aboriginal Children's Medical Research Trust to an alternate charitable body namely be applied cy-pres to the "Murdoch Children's Research Institute" for the purpose of Aboriginal children's medical research.

in the alternative:

(3)   A declaration that the gift of the late John McGregor Edwards in clause 9 (c) (iii) of the will to the Aboriginal Children’s Medical Research Trust is void.

(4)   A declaration that 9 (c) (iii) of the will does not operate to create a charitable trust in the circumstances.

(5)   A declaration that, by reason of the failure of the trust there is a partial intestacy, and the Executors are entitled to rely upon Clause 9 (d) of the will to operate as a gift over clause.

(6)   A declaration that the Executors are entitled to distribute the gift in clause 9 (c) (i) of the will gifted to the “The Guide Dogs for the Blind” to “Guide Dogs NSW / ACT”.

(7)   A declaration that the Executors are entitled to distribute the gift identified in clauses 7, 8 and 10 of the will gifted to “Bernados Orphanages and Homes” to “Barnados Australia”.”

34. The Amended Summons also seeks an order that the costs of the application be paid out of the Estate on the indemnity basis.

Cross-Summons

35. In its Cross-Summons, the second defendant, Good to Great Schools Australia seeks the following declarations and orders:

(1) Declaration that the gift contained in clause 9(c)(iii) of the will of the late John McGregor Edwards dated 9 July 2019 is a gift for charitable purposes.

(2) Declaration that the proper recipient of the gift contained in clause 9(c)(iii) of the will of the late John McGregor Edwards dated 9 July 2019 is Good to Great Schools Australia, with the gift to be applied by Good to Great Schools Australia for the purposes of research with respect to medical issues that relate to Aboriginal Children.

(3) Further, and / or in the alternative to prayer 2, order by way of a cy-près scheme that the gift contained in clause 9(c)(iii) of the will be paid to Good to Great Schools Australia, and to be applied by Good to Great Schools Australia for the purposes of research with respect to medical issues that relate to Aboriginal Children.

(4)   Costs.

The Issues

36. The parties filed an Agreed Statement of Issues, as follows:

1. Whether the gift contained in paragraph 9(c)(iii) of the will of the late John McGregor Edwards dated 9 July 2019 and admitted to probate by the Supreme Court of New South Wales on 2 November 2020 (“the will”), described as “Aboriginal Children’s Medical Research Trust, c/o Noel Pearson, Cape York 8/40…” evidence a gift with charitable intentions?

2. If the answer to the question posed at (1) is “yes”, whether the presumption of a general charitable intention under section 10(2) of the Charitable Trusts Act is displaced by anything in the deceased’s will?

3. Whether the scheme cy-près advanced by the executors carries out as nearly as possible the general paramount intention of the deceased?

4. Whether the proper recipient of the gift contained in paragraph 9(c)(iii) of the will is Good to Great Schools Australia, with the gift to be applied by Good to Great Schools Australia for the purposes of research with respect to medical issues that relate to Aboriginal children?

5. If the answer to the question posed at (4) is “no”, then whether the Court ought to order by way of cy-près scheme that the gift contained in paragraph 9(c)(iii) of the will be paid to Good to Great Schools Australia for the purposes of research with respect to medical issues that relate to Aboriginal children?

6. If no scheme cy-près is approved, does the gift to the Aboriginal Children’s Medical Research Trust form part of a class gift to be divided amongst the other four charitable institutions referred to in the will, or does the gift fail, falling into residue?

37. This Agreed Statement of Issues conveniently guides the path of analysis followed in these reasons although it has not been found necessary for the Court to address each numbered question in order.

Applicable Legal Principles

38. Trustee Act s 63 provides that a trustee may apply to the court for judicial advice on any question “respecting the management or administration of the trust property or the interpretation of the trust instrument”. The High Court has definitively restated the principles governing making of Trustee Act s 63 applications in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 [2008] HCA 42; and see also, Re Permanent Trustee Australia Ltd (1994) 33 NSWLR 547.

39. Where a bequest has been made to a specific charitable institution, the first step is to identify the institution. Hasluck J explained this to be the primary step in Hood as Executor of the Estate of Inez Irene Barbetti (Dec) v The Attorney General for Western Australia & Anor [2006] WASC 157 at [25] – [27]:

“[25]   It appears from Picarda: The Law and Practice Relating to Charities (2nd ed) at 228 that where a legacy has been bequeathed to a specific charitable institution the first step is to identify the institution. It is usually only where an estate has named or described incompletely the institution intended to benefit that a point of construction may arise for the Court. A trivial error in the description of a charitable legatee does not matter, provided the intention of the testator is clear. Where there is an ambiguity, but the testator has described the institution which he intends to benefit as being in a particular locality, the legacy will, prima facie, go to an institution situated in the locality named, even though the name used is more like that of an institution in another locality. If a description in the Will applies equally to more than one institution, extrinsic evidence is admissible to resolve the latent ambiguity and to determine which institution the testator had in mind. Proof that the testator was interested in or had subscribed to a particular charity is also receivable.

[26] The learned author says also that there are inevitably cases where it is quite impossible to determine which of several charities the testator had in mind. In such cases the Court, by cy-pres application, divides the fund between the claimants in equal shares or otherwise. I note in passing that the cy-pres approach is supplemented by the provisions of the Charitable Trusts Act.

[27]   The decided cases establish that the prime duty of the Court is to construe the Will to determine, if it can, what was the testator's intention in making his disposition of the residue and to carry out his wishes so expressed: Daniels (dec), Re; [1970] VR 72 at 76. Construction of the terms of the Will alone may not be sufficient to determine the intended recipient of a bequest. When the beneficiary is inaccurately or ambiguously described in a Will, extrinsic evidence is admissible to clarify the testator's intention: Burns (dec), Re; [1969] WAR 97 at 100.”

40. There is support for the proposition that if the recipient of a charitable bequest is simply misdescribed in a will, the gift will not lapse and it is unnecessary to consider the possible application of the cy-près doctrine: Re Estate of Brine (decd) [2021] SASC 54 at [38] per Parker J, citing Professor G E Dal Pont in his Law of Charity, LexisNexis Butterworths, 2nd ed, 2017) [15.29], as follows:

If, on the evidence, the court is convinced that the donee institution rather than being non-existent, is simply misdescribed, there is no need to find a general charitable intention, and the cy-pres doctrine is irrelevant. This is because the court is not applying the gift to an object as near as possible to the donor’s purpose, but to the donor’s actual purpose. … The misdescription scenario can encompass where the same institution continues to operate but under another name … .

(Citations omitted)

41. In circumstances where an institution and its address are named in a will, the address may be considered as being only for the identification of the institution and as having no other significance: The Estate of Rand (decd), Re [2009] NSWSC 48 at [35].

42. Where a bequest made in a will is made in favour of an organisation that has never existed, the gift will lapse unless it can be inferred that the donor intended to benefit a charitable purpose, in which case it is open to the Court to find a general charitable intention and to apply the gift cy-près: Public Trustee v Attorney General [2005] NSWSC 1267. If, however, the donor intended to benefit a specific or particular charitable purpose, the gift cannot be applied cy-près as this would be inconsistent with the donor’s intention: Morrison-Conway & Anor; Estate of the Late Judith Christine Walsh [2018] NSWSC 685 at [39].

43. The process of distinguishing between a general and a particular charitable intention is a question of construction of the will and, where permissible, by drawing inferences about the testator’s wishes from surrounding circumstances: Public Trustee v The Attorney General & Ors [2005] NSWSC 1267 at [17].

General Charitable Intention

44. Charitable Trusts Act, Part 3, ss 9-11 declares that the principles in relation to cy-près schemes developed at general law have become ineffective (s 9) and provides for a presumption of a general charitable intention to enable cy-près schemes (s 10), and for a statutory duty upon a trustee to secure the application of the property of a charitable trust “to secure its effective use for charitable purposes” (s 11).

45. The Charitable Trusts Act, s 10 provides that a general charitable intention will be presumed unless the instrument establishing the charitable trust contains evidence to the contrary:

10 Requirement for general charitable intention of donor

(1) This Part does not affect the requirement that trust property cannot be applied cy-pres unless it is given with a general charitable intention.

(2) However, a general charitable intention is to be presumed unless there is evidence to the contrary in the instrument establishing the charitable trust.

46. Little is required to establish a general charitable purpose. As a general principle, courts will lean in favour of charity, and upon the failure of a specific gift, courts will be ready to infer a general intention on the part of the will maker to provide a gift to charity: Connery v Williams Business College Ltd [2014] NSWSC 154 at [55].

47. Where a testator makes a gift to a non-existent body but from the description of the body in the will it may be assumed that the testator intended it to be a body carrying on a charitable activity, then a court of equity will lean in favour of finding a general charitable intention from the slightest indication in the will to save the gift from lapse: Re Daniels (Deceased) [1970] VR 72. In that regard, the Court will treat as significant the fact that the gift is interpolated between other charitable gifts: Re Davis; Hannen v Hillyer [1902] 1 Ch 879.

48. In Estate Polykarpou; Re A Charity [2016] NSWSC 409 at [4] Lindsay J concisely framed the question of inferring a general charitable intention in the following way:

“Expressed in more summary terms, the question might be framed as: Whether, upon the proper construction [of] her will, the deceased ‘dedicated’ the property the subject of controversy to charity. The necessity for finding a general charitable intention, rather than merely a particular one, arises from the circumstance that a particular charitable gift has become impossible, or impracticable, of performance before taking effect. Once property is effectively dedicated to charity, whether in pursuance of a general or particular charitable intent, it remains so dedicated, to the exclusion of private interests otherwise entitled: Cram Foundation v Corbett-Jones [2006] NSWSC 495 at [49]–[50], citing, inter alia, In re Slevin; Slevin v Hepburn [1891] 2 Ch 237 and In re Wright; Blizard v Lockhart [1954] Ch 347 at 362–363.”

49. In circumstances where a general charitable intention is found, it is open to the Court at general law to apply the funds represented by this failed gift cy-près to ensure that the intention of the testator is carried out as nearly as possible in a way that he would have intended: Re Taylor (1888) 58 L.T. 538, 543; Estate Polykarpou; Re A Charity [2016] NSWSC 409 at [104] – [105] per Lindsay J.

50. In Graeme Philip White as administrator of the Estate of Josephine Agnes Virgona v Attorney General of NSW [2019] NSWSC 917, Henry J said at [43] – [45]:

“[43]   The issue that remains to be determined is whether the proposed scheme to administer the gift to Frederic House carries out the general paramount intention of the deceased as nearly as possible.

[44]   If execution of the purposes of a charitable trust under a will has become impossible or impractical, the Court may direct a scheme for the promotion of objects that as close as possible (cyprès) give effect to the original trust purposes that the deceased herself selected: Bishop Irinej Dobrijevic v Free Serbian Orthodox Church, Diocese for Australia & New Zealand Property Trust [2015] NSWSC 637 at [426]; Phillips v Roberts [1975] 2 NSWLR 207.

[45]   Considerations of proximity to the original purpose, usefulness and practicability are all relevant to the choice of the cy-près scheme: Re Fitzpatrick (1984) 6 DLR (4th) 644.”­­

51. In oral submissions, counsel for the plaintiffs submitted that in circumstances where a gift is made to an entity that never existed, s 9 and 10 of the Charitable Trusts Act do not apply: Cram Foundation v Corbett-Jones [2006] NSWSC 495 at [50]. The question of whether s 10 applies to gifts to non-existent institutions remains an open question: Public Trustee v The Attorney General & Ors [2005] NSWSC 1267 at [25]; Morrison-Conway & Anor; Estate of the Late Judith Christine Walsh [2018] NSWSC 685 at [41].

52. The application of these principles to the will of the deceased produces a clear result.

Consideration

53. This is an apt case for the giving of Trustee Act s 63 advice. These proceedings relate both to the administration of the trust property and the interpretation of the trust instrument, namely the residuary gift in clause 9(c)(iii) of the will.

54. The residuary gift at clause 9(c)(iii) to the “Aboriginal Children’s Medical Research Trust c/o Noel Pearson, Cape York” fails. The evidence indicates that there presently does not exist and never existed any identifiable entity with the name identical, or similar, to the “Aboriginal Children’s Medical Research Trust”.

55. This is not a case where the will, clause 9(c)(iii) makes a trivial misdescription of an intended recipient of a gift. An inference of trivial misdescription might be available if Mr Pearson had, for example, been associated with the conduct of a trust in Cape York that was solely devoted to medical research in relation to indigenous children. His evidence does not go that far. Good to Great Schools Australia has always had, as its name implies, a primary objective of advancing indigenous children’s education. Nor can it be said for similar reasons that the will, clause 9(c)(iii) describes an entity that has ceased to operate and was succeeded by another.

53. The gift will therefore lapse, unless it can be inferred that the testator intended to benefit a charitable purpose, in which case it is open to the Court to find a general charitable intention and to apply the gift cy-près.

54. The Court concludes that the residuary gift in clause 9(c)(iii) demonstrates a general charitable intention. The starting point is the presumption in Charitable Trusts Act, s 10: the will contains no evidence to the contrary of the implication of a general charitable intention. And apart from Charitable Trusts Act, s 10, a general charitable intention would be inferred here at general law.

55. The positive inference of a general charitable intention follows from the nature of the gift itself. The execution of what the testator had in mind must necessarily result in a benefit to the public. A trust for the purpose of the advancement of medical research is prima facie a trust for a valid charitable purpose: see, eg, Taylor v Taylor (1910) 10 CLR 218; [1910] HCA 4.

56. The inference of a general charitable intention also follows from the context of clause 9(c)(iii), which is placed with two other residuary gifts for clearly charitable purposes, the “Guide Dogs for the Blind” and “the Exodus Foundation”, all three of which the deceased had long considered and expressed as part of a group of his related charitable intentions. The gift to the “Aboriginal Children’s Medical Research Trust” is of 8/40ths of the residue of the estate. The two other accompanying gifts of residue to charitable objects are given equal portions of residue, of 8/40ths. All three of these gifts have an apparent priority in the testator’s consideration above the smaller gifts of residue to individuals, which range between 6/40ths and 1/40^th of residue.

57. As cl 9(c)(iii) of the will fails as a gift to an identifiable organisation but exhibits a general charitable intention, the Charitable Trusts Act s 11 places the plaintiffs under a duty to have the trust property applied cy-près and attracts the Court’s jurisdiction to order a scheme cy-près, to secure its effective use for charitable purposes, due to the inability to locate an entity with a name identical, or like, the Aboriginal Children’s Medical Research Trust.

58. In formulating a scheme cy-pres the Court must consider to which of the two institutions, Good to Great Schools Australia or Murdoch Children’s Research Institute, carries out as nearly as possible the general paramount intention of the deceased. The Court is satisfied that it does not have to look further afield, as both these organisations reflect important elements of the deceased’s charitable purpose.

59. The Attorney General submits, correctly in the Court’s view that the words of clause 9(c)(iii) demonstrate an intent that the gift be used for the purpose of medical research for Aboriginal children. Both Good to Great Schools Australia and the Murdoch Children’s Research Institute have claims to serve this purpose.

60. The form of words of clause 9(c)(iii) and the mention of Mr Noel Pearson’s name have some importance in profiling the deceased’s charitable intention in relation to Aboriginal medical research as associated with or centred in North Queensland. The words “Aboriginal Children’s Medical Research Trust” are bolded, as are the organisations referred to in clauses 9(c)(i) and (ii) and capitalised. In clause 9(c)(iii) the following words “c/o Noel Pearson, Cape York” are not bolded or capitalised. This is to be contrasted with the way that clause 9(c)(ii) places in bold letters and capitals the name of the Rev. Bill Crews, with the Exodus Foundation.

61. Counsel for the attorney general, Mr Bhalla, captured the central issue in his oral submissions. He submitted that this bolding and capitalisation implies that the most important element in the testator’s mind was the name of the organisation and the charitable purpose that is evidenced from that name and not the person who might form part of the address. He further submitted that in essence this matter will come down to the view that the Court takes as to what the words “c/o Noel Pearson, Cape York” mean and the significance that should be attached to them. He submits that if the Court formed the view that the name of the organisation is determinative, then the gift should be applied cy-pres to the Murdoch Children’s Research Institute for the purpose of aboriginal children’s medical research.

62. But Mr Balla also submitted that if the Court took the view that the abbreviation “c/o” meaning “care of” is an important indicator of the testator’s intention then that indicator would have to be weighed in the balance in formulating a scheme and reconciled with the fact that the primary charitable purpose of Good to Greater Schools Australia is education rather than medical research. The Court inclines to the latter view for the following reasons.

63. The deceased’s testamentary intentions show a pattern of benefiting charitable organisations associated with a philanthropic leader, who has significant responsibility for guiding the structure and ethos of the charitable organisation the deceased had selected. For example, the Exodus Foundation is not described in those terms alone in clause 9(c)(ii) but is associated with “Rev Bill Crews”. The association with such philanthropic leaders is an important element in the deceased’s selection of more than one of the charities in clause 9(c).

64. In the Court’s view, the reference to Mr Pearson in clause 9(c)(iii) cannot be either ignored, or reduced in importance because it is not bolded or capitalised, in comparison with the reference to Rev Crews in clause 9(c)(ii). The reference to Mr Pearson is present and was deliberately placed in the clause, as was the reference to Rev Crews, where no similar name appears in clause 9(c)(i). The differences in bolding and capitalisation between clauses 9(c)(ii) and 9(c)(iii) are not of great significance and probably only indicate that the deceased had greater confidence that Rev Crews was the controlling philanthropic personality associated with the Exodus Foundation than Mr Pearson was in relation to the Aboriginal Children’s Medical Research Trust.

65. But the deliberate inclusion of Mr Pearson’s name and the area of Australia of Cape York, should be seen as important elements in the intent behind the gift. The Macquarie Dictionary definition of the expression “care of” is “at the address of”, which taken with Mr Pearson’s name and the region of Cape York tend to show that the testator wished to give preference to medical research for indigenous children in the Cape York area and Mr Pearson was the selected channel through which that intent should best be fulfilled.

66. To the extent that the deceased wished to give effect to his charitable intention of aiding Aboriginal children’s medical research he wished to do so through Mr Pearson and through an organisation that would be based in and focus upon Cape York indigenous children. This interpretation of the testator’s words is also consistent with the evidence of what the deceased said to his son about Aboriginal children “sick and dying in far North Queensland”. The testator’s gift can be seen as recognising that the specific medical and health needs of indigenous children in remote areas of Australia, such as far North Queensland, may be different from those in more urban areas.

67. This combination of words used by the testator in clause 9(c)(iii) shows an emphasis on research which could have a practical and direct effect in a particular region, rather than generalised or theoretical research. This consideration within clause 9(c)(iii) is consistent with the intent of the suite of charitable gifts in clause 9(c)(i)-(iii).

68. The schemes proposed by each of Good to Great Schools Australia and Murdoch Children’s Research Institute fulfil different parts of the deceased’s intention. The Good to Great Schools Australia proposal is weighted towards research addressing the medical health needs of indigenous children in the Cape York area. The Murdoch Children’s Research Institute proposal is more directed towards general medical research in relation to indigenous children throughout Australia.

69. The ordinary meanings of the words “research” and “medical” in the composite expression Aboriginal Children’s Medical Research Trust are important guides in the task at hand. The Macquarie Dictionary defines “research” as “diligent and systematic enquiry or investigation into a subject, in order to discover factual principles”. And “medical” means “of or pertaining to the science or practice of medicine”. The related definition of “health”, meaning “soundness of body; freedom from disease or ailment”, is the result of the application of the science of and the practice of medicine.

70. Research into the health and wellbeing of indigenous children is an essential foundation of the work carried out by Good to Great Schools Australia. It is part of that organisation’s holistic approach to getting children “school ready”. It has budgeted significant amounts for salaries for health research into diseases prevalent within the Cape York community. As Mr Pearson explains in his affidavit, these diseases are “presented by children in our schools”. He gives examples of how in the past research has identified serious auditory problems with many children resulting from such diseases and that identification of these symptoms has resulted in teachers using equipment to overcome the damage from the diseases. He explains that the Good to Great Schools caseworkers are “de facto medical researchers” who identify medical issues within the Cape York indigenous communities.

71. In addition to the evidence outlined above, Good to Great Schools Australia has, since 2014-15, conducted what could readily be described as medical research in relation to Aboriginal children. Between 2013 and 2023, Good to Great Schools Australia has partnered with a number of health and medical organisations and Cape York communities to produce studies, reports and submissions to government enquiries on the subject of indigenous education, health and wellbeing. Good to Great Schools Australia has received funding support from the Royal Flying Doctor Service to partner in the assessment of the special needs of First Nations students in Queensland’s indigenous communities and these assessments revealed, for example, that approximately one quarter of the students surveyed met the criteria for the diagnosis of intellectual impairment. This kind of research meets the description of “medical research”, but is research which is directed towards immediate health outcomes among Cape York indigenous children.

72. Mr Pearson has explained that should the Court approve a cy-pres scheme Good to Great Schools Australia “will use the money from this legacy to fund components of “our Health and Wellbeing strategy, particularly the research and evaluation components”, which are components that reflect the elements the Court has classified above as medical research.

73. The research proposed to be conducted by the Murdoch Children’s Research Institute should a cy-pres scheme be approved also undoubtedly qualifies as medical research. The research that the the Murdoch Children’s Research Institute would undertake is probably more academically rigourous than what is proposed by Good to Great Schools Australia. But it is research which does not have the practical connection with the medical needs of Cape York indigenous children that the Court has found is an important feature of the testator’s residuary gift in this case.

74. Accordingly for the reasons above, the proposal of Good to Great Schools Australia more adequately reflect the intention of the testator.

Orders

78. Upon an application under Trustee Act, s 63 the costs of the plaintiffs would ordinarily be paid out of the estate on the indemnity basis and the orders below so provide. The Attorney General’s costs would ordinarily be paid out of the disposition contained at cl 9(c)(iii) of the will, as that is the part of the estate in respect of which his intervention was necessary. Unless the parties wish to contend otherwise, the costs of the second defendant, Good to Great Schools Australia will be paid out of the estate on the ordinary basis.

79. Accordingly, and for the reasons given, the Court makes the following orders and directions:

1. The Court declares and advises that the plaintiffs would be justified in distributing, pursuant to Clause 9(c)(iii) of the will of the deceased, a gift to Good to Great Schools Australia (ACN 141 269 016) by way of cy-près scheme for the purposes of research into medical issues relating to Aboriginal children in the Cape York area.

2. Order that the costs of the plaintiffs be paid out of the estate on the indemnity basis.

3. Order that the costs of the second defendant be paid out of the estate on the ordinary basis.

4. Order that the costs of the Attorney General of New South Wales be paid on the ordinary basis and the burden of those costs is to be borne out of the assets that will comprise the disposition under the will the subject of declaration (1) above.

5. Grant liberty to apply in the event that any party seeks a different cost order and that liberty may be exercised within 56 days by writing to the chambers of Slattery J specifying what different cost order is sought and the Court will endeavour to deal with the matter by further directions given in chambers.

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Decision last updated: 27 June 2023