Cancer Council of Western Australia v Attorney General (WA)
[2016] WASC 297
•20/09/16
CANCER COUNCIL OF WESTERN AUSTRALIA -v- ATTORNEY GENERAL (WA) [2016] WASC 297
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 297 | |
| Case No: | CIV:1701/2016 | 8 SEPTEMBER 2016 | |
| Coram: | BANKS-SMITH J | 20/09/16 | |
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Approval granted for scheme pursuant to Charitable Trusts Act 1962 (WA) | ||
| B | |||
| PDF Version |
| Parties: | CANCER COUNCIL OF WESTERN AUSTRALIA ATTORNEY GENERAL (WA) |
Catchwords: | Wills Proceedings by trustee of trust Scheme of distribution Role of cyprés under statutory scheme Where purpose impracticable Where initial failure Whether general charitable intention required Charitable Trusts Act 1962 (WA) |
Legislation: | Charitable Trusts Act 1962 (WA), s 7, s 18 |
Case References: | Alacoque v Roache [1998] 2 NZLR 250 Attorney-General (NSW) v Perpetual Trustee Co Ltd [1940] HCA 12; (1940) 63 CLR 209 Burns v Minister for Health [2012] WASCA 267 Commissioner for Special Purposes of Income Tax v Pemsell [1891] AC 531 Eccles v The Salvation Army [2013] WASC 142 Future Revelation Ltd v Media Radiology & Nuclear Medicine Pty Ltd [2013] NSWSC 1741 Islamic Association of Wanneroo (Inc) v Al-Hidayah Mosque (Inc) [No 2] [2009] WASC 404 Penny v Cancer & Pathological Research Institute of Western Australia (1994) 13 WAR 314 Price v Attorney General (WA) [2014] WASC 430 Re McElroy Trust [2002] 3 NZLR 99 Re Pettit [1987] NZHC 110; [1988] 2 NZLR 513 Re Slevin [1891] 2 Ch 236 Re Tacon; Public Trustee v Tacon [1958] Ch 447 Re Tyrie (decd) (No 1) [1972] VR 168 Re Whitworth Art Gallery Trusts; Manchester Whitworth Institute v Victoria University of Manchester [1958] 2 WLR 181 Re Wilson [1913] 1 Ch 314 Shire of Derby-West Kimberley v Yungngora Association Inc [2007] WASCA 233 Taylor v Princess Margaret Hospital for Children Foundation Inc [2012] WASC 83; (2012) 42 WAR 259 The Joyce Henderson Trustee (Inc) v Attorney General (WA) [2010] WASC 60 The New Zealand Guardian Trust Company Ltd v Presbyterian Support (Upper South Island) [2015] NZHC 468 The Trustees of the Christian Brothers in Western Australia (Inc) v Attorney General of Western Australia [2006] WASC 191 Van Heerden v Hawkins [2016] WASCA 42 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
ATTORNEY GENERAL (WA)
Defendant
Catchwords:
Wills - Proceedings by trustee of trust - Scheme of distribution - Role of cyprés under statutory scheme - Where purpose impracticable - Where initial failure - Whether general charitable intention required - Charitable Trusts Act 1962 (WA)
Legislation:
Charitable Trusts Act 1962 (WA), s 7, s 18
Result:
Approval granted for scheme pursuant to Charitable Trusts Act 1962 (WA)
Category: B
Representation:
Counsel:
Plaintiff : Mr J O'Donnell
Defendant : Mr J F Bennett
Solicitors:
Plaintiff : Jackson McDonald
Defendant : State Solicitor for Western Australia
Case(s) referred to in judgment(s):
Alacoque v Roache [1998] 2 NZLR 250
Attorney-General (NSW) v Perpetual Trustee Co Ltd [1940] HCA 12; (1940) 63 CLR 209
Burns v Minister for Health [2012] WASCA 267
Commissioner for Special Purposes of Income Tax v Pemsell [1891] AC 531
Eccles v The Salvation Army [2013] WASC 142
Future Revelation Ltd v Media Radiology & Nuclear Medicine Pty Ltd [2013] NSWSC 1741
Islamic Association of Wanneroo (Inc) v Al-Hidayah Mosque (Inc) [No 2] [2009] WASC 404
Penny v Cancer & Pathological Research Institute of Western Australia (1994) 13 WAR 314
Price v Attorney General (WA) [2014] WASC 430
Re McElroy Trust [2002] 3 NZLR 99
Re Pettit [1987] NZHC 110; [1988] 2 NZLR 513
Re Slevin [1891] 2 Ch 236
Re Tacon; Public Trustee v Tacon [1958] Ch 447
Re Tyrie (decd) (No 1) [1972] VR 168
Re Whitworth Art Gallery Trusts; Manchester Whitworth Institute v Victoria University of Manchester [1958] 2 WLR 181
Re Wilson [1913] 1 Ch 314
Shire of Derby-West Kimberley v Yungngora Association Inc [2007] WASCA 233
Taylor v Princess Margaret Hospital for Children Foundation Inc [2012] WASC 83; (2012) 42 WAR 259
The Joyce Henderson Trustee (Inc) v Attorney General (WA) [2010] WASC 60
The New Zealand Guardian Trust Company Ltd v Presbyterian Support (Upper South Island) [2015] NZHC 468
The Trustees of the Christian Brothers in Western Australia (Inc) v Attorney General of Western Australia [2006] WASC 191
Van Heerden v Hawkins [2016] WASCA 42
- BANKS-SMITH J:
Introduction
1 The plaintiff seeks approval under s 15(a) Charitable Trusts Act1962 (WA) (Act) of a scheme to vary a charitable trust. The application is supported by the defendant, who exercises the Crown's duty as parens patriae to protect property the subject of a charitable trust.1
2 The application requires a consideration of s 7 of the Act and, in particular, the role and application of s 7(3)(a).
3 I have concluded that s 7(3)(a) does not prevent the scheme being approved in accordance with s 7(1), and the scheme should be approved. In summary, this is a case of initial failure of a gift but where a general charitable intention is distilled. Accordingly, the gift would not lapse or fail at general law as it would be saved by cy-près principles, to which regard may be had for the purpose of s 7(3)(a). Section 7(1) then becomes operative.
Terms of the will
4 By will dated 14 May 2007, the late Violet May Sands (testatrix) made various bequeaths. Clause 8 of her will provides, relevantly:
I GIVE, DEVISE AND BEQUEATH my vacant block of land situated at lot 550, 930 Albany Highway to the CANCER FOUNDATION OF WESTERN AUSTRALIA INC PROVIDED HOWEVER that the said vacant block be utilised for a research facility or a clinic for the treatment of cancer and to bear the name 'The Mavis Sands Clinic'.
5 Other specific bequeaths were made to named people and also other charitable organisations, including the Epilepsy Association and the Salvation Army.
6 By cl 9 of the will, the residue of the estate is to be divided equally between the plaintiff and the Heart Foundation.
7 The plaintiff has changed its name but was once known as the Cancer Foundation of Western Australia Inc and is the same entity.2
Land transferred
8 Probate was granted on 4 March 2014. The land identified in cl 8 of the will (Land) was registered in the name of the plaintiff on 29 October 2014. The Land is a vacant block.3 The plaintiff's position is that it currently holds the Land on trust for the purposes as set out in the will.4
Land impracticable for research facility or clinic
9 The plaintiff contends that it is impracticable to use the Land to build a research facility or clinic for the treatment of cancer.
10 Ms Susan Rooney, the Chief Executive Officer of the plaintiff, gave evidence by affidavit to the following effect:
(a) The plaintiff is not directly involved in building and managing research facilities or clinics. Its main focus is to provide funding to support cancer research, to promote public education for cancer prevention and to provide information and support for people affected by cancer.5
(b) The plaintiff has been funding research since 1963. It has a governance regime in place whereby a Research Grants Advisory Subcommittee assesses applications for funding, ranks applications and makes recommendations to the Board. Project grants must first undergo initial assessment for scientific merit by a panel of scientists convened by the National Health and Medical Research Council.6
(c) The plaintiff does not have the resources to build or manage a facility or clinic and does not consider the Land is well placed for such an investment: it is removed from the major hospitals where highly specialised research and treatment typically occurs and where clinicians engage in projects with the benefit of economies of scale.7
(d) It would be prohibitively expensive to build a clinic on the Land and to set up in opposition to existing research facilities, and then prohibitively expensive to run and maintain it. There are already other cancer research clinics and facilities in Western Australia, including the Harry Perkins Institute (at both QE II and Fiona Stanley Hospital), the Telethon Kids Institute, the Mount Hospital and research facilities within Edith Cowan University and St John of God Subiaco.8
(e) The plaintiff already owns and leases land sufficient for its own purposes.9
(f) The plaintiff considers that its funding is better spent working with existing research bodies and supporting existing infrastructure than attempting to create a new facility.10
The proposed scheme
11 The plaintiff submitted a scheme to the Attorney General under s 9 of the Act by which it could sell the Land and apply the proceeds for the purpose of research into cancer. In accordance with s 10A of the Act, the Attorney General has approved a scheme which deletes cl 8 of the testatrix's will and substitutes the following clause:11
I GIVE, DEVISE AND BEQUEATH my vacant block of land situate at Lot 550, 930 Albany Highway to the CANCER FOUNDATION OF WESTERN AUSTRALIA INC ('the Trustee') and I direct that the Cancer Foundation of Western Australia Inc (now the Cancer Council Western Australia (Inc)) be authorised to sell the said land by auction, tender or private treaty and, subject to the payment of all the costs and expenses of the sale and of the scheme, shall apply the net proceeds of sale (to be known as the 'Mavis Sands Bequest') for the purposes of research into the treatment of cancer.
12 Under the Act, an application for court approval of a scheme must be advertised and persons wishing to oppose it may be heard. The obligation to advertise has been satisfied and no persons indicated to the parties or the court that they opposed the scheme or wished to be heard.12
13 At the first return of the application, and in light of some of the potential issues, I noted that there was no contradictor. Initially, the parties had not considered the application of s 7(3) of the Act and, at least on one view, it may have been that the Heart Foundation, as a party with an interest in the residue, may have wished to be heard. The parties then arranged for service of the application on the Heart Foundation. There are in fact two entities which answer the description of Heart Foundation, one being the National Heart Foundation of Australia (Western Australian Division) and the other being the National Heart Foundation of Australia. Both are registered as charities with the Australian Charities and Not-for-profits Commission and I was provided with evidence as to their charitable purposes.13 The court received confirmation that neither entity wished to be heard on the application.14
The relevant provisions of the Act
14 The question to be determined is whether the court is satisfied that it should approve the scheme.
15 Section 7 of the Act provides, relevantly:
(1) Subject to the provisions of subsection (3), where any property or income is given or held upon trust, or is to be applied, for any charitable purposes, and -
(a) it is impossible, impracticable or inexpedient to carry out that purpose; or
(b) the amount available is inadequate to carry out that purpose; or
(c) that purpose has already been effected already; or
(d) that purpose is illegal or useless or uncertain,
then (whether or not there is any general charitable intention) the property and income, or any part or residue thereof, or the proceeds of sale thereof, shall be disposed of for some other charitable purpose, or a combination of such purposes, in accordance with a scheme approved under this Part.
(2) Subject to the provisions of subsection (3), where any property or income is given or held upon trust, or is to be applied, for any charitable purpose, and the property or income that has accrued or will accrue is more than is necessary for the purpose, then (whether or not there is any general charitable intention) any excess property or income or proceeds of sale may be disposed of for some other charitable purpose, or a combination of such purposes, in accordance with a scheme approved under this Part.
(3) This section shall not operate to cause any property or income to be disposed of as provided in subsection (1) or (2) -
(a) if, in accordance with any rule of law, the intended gift thereof would otherwise lapse or fail and the property or income would not be applicable for any other charitable purpose; or
(b) if, and so far as, the property or income can be disposed of under section 16 of the Charitable Collections Act 1946.
(1) A scheme shall not be approved by the Court or the Attorney General under this Part, unless the Court or the Attorney General is satisfied that -
(a) the scheme is a proper one, that should carry out the desired purpose or proposal, and that is not contrary to law or public policy or good morals; and
(b) the scheme can be approved under this Part; and
(c) every proposed purpose is charitable and can be carried out; and
(d) subject to sections 10A(10) and 17, the requirements of this Part have been complied with in respect of the scheme.
17 The Attorney General reached the view that the achievement of the purpose in cl 8 of the testatrix's will is impracticable or inexpedient to carry out within the meaning of s 7(1). I agree with that view, taking into account the evidence as to the vast expense and resources which would be required to establish and maintain a new research or clinical centre and on a site removed from the large public and private hospitals where cancer research is currently carried out and clinical care provided. The benefits and efficiencies of consolidation of resources for such highly specialised work are obvious.
18 Furthermore, the proposed scheme accords closely with the testatrix's intention in that the public will benefit from the application of the funds to cancer research.15 Such a purpose is clearly beneficial to the community, that being a recognised category of charitable purposes.16
19 But s 7(1) expressly operates subject to s 7(3). Section 7(1) cannot be viewed in isolation. The role of s 7(3)(a) of the Act became the main issue in the supplementary written submissions of the parties and at the hearing.
The debate: the role of s 7(3)(a)
20 On its face, s 7(3)(a) requires a consideration of rules of law that may result in the lapsing or failure of a charitable trust. Relevantly, one rule of law by which a charitable trust may lapse or fail is where there is an initial failure such that the purpose of the trust is impossible or impracticable to meet. Where such rule applies, the general law doctrine of cy-près may also apply to save the trust from lapsing provided a general charitable intention can be evinced. Therefore, as a matter of construction, it appears that cy-près principles are relevant in assessing whether a gift would lapse or fail for the purpose of s 7(3)(a).
21 However, whether or not this is the intended role and construction of s 7(3)(a) was the subject of detailed submissions from the parties. Expressed generally, the parties do not accept that s 7(3)(a) has any application in this case but say that if it does, its terms are not intended to retain any general law requirement to establish a general charitable intention. To understand and address the position of the parties, it is necessary to first consider the general law principles as to a cy-près scheme and then consider the statutory regime.
Cy-près: saving a charitable trust from lapse or failure at general law
22 The word 'lapse' in the context of charitable trusts signifies the return (or resulting back) of the beneficial interest in the property to the settlor (ie the trust lapses) or, where the settlor is deceased, to their residuary estate or distributed on intestacy, whichever is appropriate.17
23 A trust 'fails' if its purpose fails. Its purpose will fail if it is impracticable or impossible to fulfil.18
24 This may happen in a range of circumstances, but examples include where a gift is made to a charitable institution that has ceased to exist;19 where the land comprising trust property was impracticable for the purpose;20 and where the trust property is insufficient to carry out the identified purpose.21
25 There are various rules of construction which may save a trust from failure,22 but if they do not apply then the cy-près doctrine may step in to avoid failure and lapsing and permit an application of the property 'as near as' the intended purpose.23
26 In order for cy-près to operate, various elements must be considered.
27 First, the donor's gift must be directed to a charitable object. This involves consideration of the traditional categories of charitable purpose set out by Lord Macnaghten in Commissioners for Special Purposes of the Income Tax v Pemsel:24 the relief of poverty, the advancement of education, the advancement of religion or other benefits beneficial to the community. There must be an element of public benefit.
28 Second, that charitable object must have become impossible or impracticable to carry out (the 'triggers' for cy-près).
29 Third, in the case of initial failure of the charitable object, a general (as against specific) charitable intention must be established.25 The delineation between initial and subsequent failure is therefore important. The date for determining whether the failure is initial or subsequent is traditionally the date of the testator's death.26
30 There will be an initial failure if the purpose cannot be carried out at the time of the testator's death because of impossibility or impracticability. An example is where an institution intended to be benefited has closed down prior to the testator's death.27
31 There is subsequent failure where the gift had been made but the purpose subsequently fails, because, for example, after a period of time it can no longer be carried out. Unless the donor has expressly provided for what is to happen upon failure, then the property remains dedicated to charity and the court must apply it cy-près. There is no need to identify any general charitable intention.28
32 As to the manner in which the court determines whether there is a general charitable intention, the authorities are well known. It is matter of construction of the will, taking into account factors such as the level of particularity of the bequest, whether there are other charitable gifts and how the residue is to be applied.29
33 Fourth, it must be possible to propound a charitable scheme which is 'as near as' possible to the donor's intention.30
The statutory scheme - relevant cases
34 The Act was introduced in 1962. It followed the Report of the Committee on the Law and Practice relating to Charitable Trusts (1952) (Nathan Report) and a review by a law reform subcommittee of the Law Society of Western Australia. It was introduced against the backdrop of the introduction of the Charitable Trusts Act1957 (NZ) (New Zealand Act) and in effect adopted (relevantly) s 32 of the New Zealand Act.
35 In Taylor v Princess Margaret Hospital for Children Foundation Inc,31 Edelman J considered the history of s 7 and concluded that the doctrine of cy-près has been replaced in this jurisdiction by the statutory regime for schemes introduced under the Act. A scheme can only be propounded under the Act and not by the independent operation of cy-près.
36 Both s 7(1) and s 7(2) expressly exclude any requirement of a general charitable intention, but they must be read subject to s 7(3). There is some debate as to whether s 7(3)(a) of the Act and s 32(3) of the New Zealand Act preserve the rule that the non-existence of a general charitable intention will lead to lapse.
37 In Alacoque v Roache,32 the testatrix's gift was to a convent that had closed eight months before she died, causing a failure of the gift. The judge stated:
The whole of section 32 is subject to the preservation of the common law about lapse which applies to the case of charitable gifts where the stated purposes or objects are an indispensable part of the trust to which effect cannot be given - where, in short, there is no discernible general charitable intention.
38 As the court in Alacoque v Roache could not discern a general charitable intention, the gift lapsed to the next of kin.
39 In Re Pettit,33 a gift under a will was made to the Doctors Widow Fund, which was found to be a fictitious charitable organisation. Chilwell J said:
Because the Doctors Widows Fund never existed as an institution Mrs Pettit's bequest to it would lapse or fail and would not be applicable cy-pres for any other charitable purpose unless Mrs Pettit is attributed with a general charitable intention. If no, then the bequest lapses and the next of kin take. If yes, then s 32(1) applies.
40 There was a general charitable intention and this permitted the scheme to proceed under s 32(1).
41 In Price v Attorney General (WA),34 Chaney J considered the application of s 7(3)(a) of the Act and whilst accepting that in accordance with Taylor, the doctrine of cy-près has been replaced by the Act, held that where a charitable purpose underlies a gift which would otherwise lapse by reason of the non-existence of the nominated beneficiary, the former rule of law that such gifts would not fail because of the existence of a general charitable purpose continues to apply for the purpose of s 7(3).
42 Chaney J followed the approach in Re Pettit when considering the application of s 7(3) of the Act and did so because s 7 of the Act is based on and is virtually identical to s 32 of the New Zealand Act. As in Re Pettit, Chaney J was considering a scenario where the named institution did not exist. Price is authority, therefore, of this Court to the effect that the rule of law that the non-existence of a general charitable intention will lead to lapse in the case of initial failure is a rule of law to be taken into account for the purpose of s 7(3)(a), at least in the context of failure by reason of non-existence of a named institution.
43 More recently, in The New Zealand Guardian Trust Company Ltd v Presbyterian Support (Upper South Island), Gendall J said:35
To summarise, in cases of initial failure, where a paramount general intention is distilled, s 32(1) remains the appropriate vehicle for determining an application precisely because s 32(3)(a) does not apply. While there is a prima facie lapse, the cy-près doctrine steps in to save the gift, rendering the gift applicable 'for any other charitable purpose'. As a result, s 32(1) is not excluded by subs (3)(a) as both elements of the subs are not met. The common law is therefore relevant in determining whether s 32(3) applies. Where both limbs of s 32(3) are not satisfied, s 32(1) will operate; cy-près will save the gift precisely for this purpose.
44 Whilst the plaintiff noted that this court is not bound by New Zealand decisions, it is not unusual for courts in Australia to have regard to cases in New Zealand on analogous legislation, and particularly where the Australian legislation is based to some extent on the New Zealand legislation.36
Contrary views
45 Some writers have questioned whether it is intended that s 7(3)(a) operate to retain a requirement for general charitable intention.
46 For example, Ong says:37
Although the provision in s 7(3)(a) of the Act would appear to require a general charitable intention, it is suggested that effect should be given to the expression '(whether or not there is any general charitable intention)' which appears not only in s 7(1) but also in s 7(2) of the Act. It is true that s 7(3)(a) is in terms paramount to sub-ss (1) and (2) of s 7, but it would be extremely implausible to suggest that Parliament would twice specifically negate the requirement of a general charitable intention only to reinstate that requirement by using a general provision like s 7(3)(a). It appears legitimate to conclude that, in Western Australia, a scheme may be approved under s 7 even where the relevant particular trust does not embody a general charitable intention.
47 Dal Pont considers the interpretation provided in Alacoquev Roache is 'open on the words of the statutory provision' but queries whether that outcome represents the object of the legislation.38
48 Mulheron notes:39
[s 7(3)(a)] appears to re-introduce the requirement of a general charitable intent where the trust suffers from initial failure, for that is the 'rule of law' that applies in the case of initial failure. The drafting is odd, for why would the respective Parliaments of Western Australia and New Zealand specifically negate the requirement for a general charitable intent in (1), only to bring it back via (3)(a), which is expressed to be in paramount terms to (1)?
Extrinsic materials
49 I have considered some of the parliamentary materials available at the time of the passing of the Act in order to assist in an understanding of the context and purpose of s 7(3)(a).40 The Minister's second reading speech of the bill that became the Act is helpful in this regard.41
50 In Taylor, Edelman J also referred to the Minister's second reading speech:42
In the second reading speech of the bill which became the Charitable Trusts Act 1962, the Hon Mr Guthrie, Member for Subiaco, said (see Hansard, Legislative Assembly, 1 November 1962, 2306):
'The doctrine [of cy-près] developed by the Courts of Equity has always been with us.
The purpose of this measure [the Charitable Trusts Act] is to put it into some statutory form … [The Nathan Committee] recommended a new cy-près doctrine to be superimposed upon the orthodox doctrine … Whilst we agree with the Nathan Committee in its comments in the need for reform we are not able to agree to a solution that would result in two cy-près doctrines in place of one. In our opinion this would add unnecessarily to the complexity of the law of this subject. Instead we recommend the adoption of the relevant sections of the New Zealand Charitable Trusts Act 1957.'
The effect of these sections [s 32 New Zealand Act] is as follows:-
(1) Whenever it is impossible, impracticable or inexpedient to carry out the original purpose or whenever the amount available is inadequate for that purpose, or whenever the purpose has been effected already, or when the purpose is illegal, useless or uncertain, the Court may permit the application of the property to some other charitable purpose as the Court thinks fit.
(2) Similarly where the money available for the original purpose is more than is necessary, the Court may authorise the using of the surplus for some other charitable purpose.
…
(3) Where there is an initial failure of the original purpose, it will still be necessary to show that the testator or the settlor manifested a general charitable intention. However, where the trust takes effect, but subsequently the original purposes fail, then there will be no need to show a general charitable intention. This is in accordance with the present law and makes no change. We had considered abolishing the need for a general charitable intention altogether on the ground that it is frequently difficult to establish and that the tests for establishing it tend to be highly artificial. However, we rejected this suggestion as it appeared to us that this would operate unfairly on the residuary legatees or the next-of-kin of the testator. It would mean that whenever a testator directed part of his estate to be applied for any purpose or object which happened to be charitable (whether the testator realised it was or not), then that portion of his estate would be forever lost to his family but would be seized by the Court and applied for the benefit of the public. We do not think we would be justified in recommending depriving next-of-kin of their expectations in these matters and so would persevere with the requirement of a general charitable intention where there is an initial failure of the charitable object. However these considerations do not apply where the trust has taken effect but failed subsequently, and in these cases we would follow recent case law which shows that no general charitable intention is necessary.
I would explain that where the charitable trust fails in the first instance, the next-of-kin are ready and available. If the trust fails it is simple to hand the trust over to them. But where the charitable object may fail a half-century later it may be difficult to find the next-of-kin. Those that exist would never have known the testator, and would have been in no way considered by him for his bounty. So there is sound justification for that distinction being drawn.
52 It is apparent from this extract that Parliament did proceed on the basis that there was an intention to retain the rule of law that in order to prevent lapse or failure, there is a requirement of a general charitable intention where there is an initial failure of the charitable purpose. The Minister distinguished between initial and subsequent failure, consistent with cy-près principles.
Conclusion as to continued operation of rule under s 7(3)(a)
53 Therefore, in my view, despite criticism that might be made of the drafting, as a matter of construction the rule of law as to a general charitable intention is preserved. On a plain reading of the provision, it is open to find that the rule is preserved. That conclusion is consistent with the purpose of s 7 (insofar as it is apparent from the second reading speech), is consistent with the approach in New Zealand and is consistent with Chaney J's analysis in Price (an analysis with which I respectfully agree).
The parties' arguments to the contrary
54 Various submissions were put by the plaintiff and the defendant as to why s 7(3)(a) has no application at all in this case or, if it does, it does not require any finding of a general charitable intention.
55 The plaintiff relies on extracts of texts, including some to which I have referred, in contending that the words, 'regardless of whether or not there is any general charitable intention' in s 7(1) and s 7(2) must be given paramountcy and s 7(3)(a) ought not be read so as to reintroduce such a requirement. However, for the reasons expressed above, I do not accept that contention. If there is unwarranted circularity or a surprising result flowing from the drafting of s 7, then that is a matter for legislative reform, rather than an artificially narrow construction.
56 The defendant emphasised that s 7(3)(a) refers to an 'intended gift'. The word 'intended' was said to import a temporal element, such that s 7(3)(a) has no operation if the gift has already vested. It was then contended that in this case, because the transfer of the Land had already been registered, the facts did not involve an 'intended' gift but a gift that had been given effect.
57 This argument conflicts with the plaintiff's submission that this is a case of initial failure,44 a submission I accept. Whether one considers the relevant date to be that of the testatrix's death (at which date the gift was impracticable) or the date when the Land was transferred but subject to the terms of the will (at which date the terms of the gift had been and continued to be impracticable), the result is the same. There is initial failure.
58 I consider the phrase, 'the intended gift' is properly read as simply a reference to the gift 'as intended by the testator'. There is no basis for a narrow interpretation, particularly in light of the Minister's express reference to the continued relevance of the rules with respect to both initial and subsequent failure.
59 The defendant also suggested Price potentially should be confined to cases where lapse results because an institution does not exist.45 I do not see any justification for confining it in that manner. A gift to a non-existent institution is but one example of lapse or failure where cy-près may operate. To be fair, the defendant appeared concerned to ensure that s 7(3)(a) is not taken to incorporate the doctrine of cy-près in some unlimited or independent fashion. But no-one is suggesting that is the case. The wording of s 7(3)(a) makes clear that regard must be had to any rule of law that would result in lapse or failure of a gift for charitable purposes and it is part of that exercise to consider whether the application of cy-près would apply in the particular circumstances to prevent such lapse or failure.
60 Finally, it was suggested that because there may be a question as to whether the cy-près doctrine continues to operate independently in New Zealand, reference to cases such as Re Pettit should be made with care. However, the court in Re Pettit did not rely on the former cy-près jurisdiction and I do not consider its value as a useful authority is diluted.46
Application of s 7(3)(a)
61 It then remains to apply s 7(3)(a) to the facts of this case.
62 As to the first limb, for the reasons set out above, I consider the trust purpose is and always has been impracticable. There is initial failure. Provided there is a general charitable intention, the gift will not lapse or fail.
63 In discerning whether there is a general charitable intention, a useful example is the High Court decision in Attorney General (NSW) v Perpetual Trustee.47 In that case a testatrix left her property known as Milly Milly 'to be held by her trustee for a training farm for orphan lads being Australians'. It was a large property suitable for sheep and wheat but impracticable as a training farm. The High Court held that the intention that Milly Milly should be the actual place of training was not an indispensable condition of the gift. The gift was dominated by the more general charitable intention of providing for the training of orphan boys in farming pursuits, and the giving of Milly Milly was a means of fulfilling that purpose.
64 I am satisfied that the testatrix had a general charitable intention to advance cancer research and treatment. Whilst it is true that she wished to have the proposed facility on the Land named after her, there is no evidence to infer that her primary or specific intention was to create a 'memorial' to herself.48 Further, the terms of her will, including cl 9 and its allocation of residue, provide for other charitable bequests, including to the plaintiff. It is open to take into account the terms of the will generally, including other charitable bequests, in inferring the nature of the testatrix's intention.49
65 As to the second limb, even if the gift lapsed, it would fall into residue and under the terms of the will, the residue was also to be applied to charitable purposes. I am satisfied that gifts to both the plaintiff and the Heart Foundation are for purposes beneficial to the community, that being a recognised category of charitable purposes.
66 Accordingly, the gift is saved and s 7(1) becomes operative.
67 I should add that both parties submitted, in the alternative to their primary submissions, that if regard was to be had to s 7(3)(a) and if it required a finding of general charitable intention, then I should find such intention on the facts (as I have done).
Section 18
68 It then remains to consider s 18 of the Act. I am satisfied that all of the elements of the provision are satisfied. The proposed purpose is charitable. The plaintiff has the expertise and governance in place to best ensure the bequest is applied to the intended purpose under the scheme. Accordingly, the scheme is approved.
1Islamic Association of Wanneroo (Inc) v Al-Hidayah Mosque (Inc)[No 2] [2009] WASC 404 [58] - [59].
2 Exhibit 1.
3 Affidavit of Susan Rooney filed 22 April 2016 [3] - [4].
4 ts 5.
5 Rooney Affidavit [6].
6 Rooney Affidavit [7] - [8].
7 Rooney Affidavit [12].
8 Rooney Affidavit [12] - [13].
9 Rooney Affidavit [11].
10 Rooney Affidavit [12].
11 Rooney Affidavit, Annexure C.
12 Affidavit of Jamie O'Donnell filed 4 July 2016.
13 Affidavit of Jamie O’Donnell filed 9 August 2016.
14 Affidavit of Jamie O’Donnell filed 9 August 2016 [14]; Affidavit of Jamie O’Donnell filed 19 August 2016 [4].
15Penny v Cancer & Pathological Research Institute of Western Australia (1994) 13 WAR 314, 318 (Anderson J); The Joyce Henderson Trustee (Inc) v Attorney General (WA) [2010] WASC 60 [30] (Hasluck J).
16Commissioner for Special Purposes of Income Tax v Pemsell [1891] AC 531; Shire of Derby-West Kimberley v Yungngora Association Inc [2007] WASCA 233 [44] (Newnes AJA, Miller & Buss JJA).
17 Mulheron RP, The Modern Cy-près Doctrine: Applications & Implications (2006) 21.
18 Mulheron (30).
19Re Tyrie (decd) (No 1) [1972] VR 168, 177.
20Attorney-General (NSW) v Perpetual Trustee Co Ltd [1940] HCA 12; (1940) 63 CLR 209.
21Re Whitworth Art Gallery Trusts; Manchester Whitworth Institute v Victoria University of Manchester [1958] 2 WLR 181.
22 See examples as discussed by Mulheron (33 - 46). See Eccles v The Salvation Army [2013] WASC 142 (EM Heenan J), an example of the issue being one of construction, not lapse.
23 Mulheron (31).
24Commissioner for Special Purposes of Income Tax v Pemsell; Shire of Derby-West Kimberley v Yungngora Association Inc [44] (Newnes AJA, Miller & Buss JJA agreeing); Price v Attorney General (WA) [2014] WASC 430 [19].
25 See generally Dal Pont, Law of Charity (2010) [15.18].
26Re Tacon; Public Trustee v Tacon[1958] Ch 447, 453 - 454; Mulheron (72).
27Alacoque v Roache [1998] 2 NZLR 250.
28Re Slevin [1891] 2 Ch 236; Dal Pont [15.16].
29Re Wilson [1913] 1 Ch 314, 320 - 321; Attorney-General (NSW) v Perpetual Trustee (225 - 227).
30 Mulheron (86).
31Taylor v Princess Margaret Hospital for Children Foundation Inc [2012] WASC 83; (2012) 42 WAR 259.
32Alacoque v Roache (256).
33Re Pettit [1987] NZHC 110; [1988] 2 NZLR 513, 546.
34Price [13], [20] - [21].
35The New Zealand Guardian Trust Company Ltd v Presbyterian Support (Upper South Island) [2015] NZHC 468 [58] (Gendall J).
36Price [20]; and in a different context Future Revelation Ltd v Media Radiology & Nuclear Medicine Pty Ltd [2013] NSWSC 1741 [5].
37 Ong D, Trusts Law in Australia (2012) 428.
38 Dal Pont [16.9].
39 Mulheron (120).
40 In accordance with s 19 Interpretation Act 1984 (WA): see Van Heerden v Hawkins [2016] WASCA 42 [102], [125]; Burns v Minister for Health [2012] WASCA 267 [27] - [33].
41 Hansard, Legislative Assembly, 1 November 1962 (2305 - 2307).
42Taylor [57].
43 Hansard (2306 - 2307).
44 Plaintiff's further supplementary submissions, 5 September 2016 [21] - [24].
45 ts 18.
46Re Pettit (546). The plaintiff referred to Rickett C, 'Failure of Charities and the Conundrum of s 32' (2003) New Zealand Law Journal 59, 60. The court in Re McElroy Trust [2002] 3 NZLR 99 [15] held that the s 32 jurisdiction supersedes the common law doctrine; the court reserved it position on the point in Alacoque v Roache (256).
47Attorney General (NSW) v Perpetual Trustee (225 - 230) (Evatt & Dixon JJ). See also The Trustees of the Christian Brothers in Western Australia (Inc) v Attorney General of Western Australia[2006] WASC 191 (Murphy J).
48 A possibility considered and rejected in Attorney General (NSW) v Perpetual Trustee (229).
49Attorney General (NSW) v Perpetual Trustee (229).
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