Executor Trustee Australia Ltd v Jamestown District Homes for the Aged Inc - [2007] SASC 262

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
EXECUTOR TRUSTEE AUSTRALIA LTD v JAMESTOWN DISTRICT HOMES FOR THE AGED INC & ORS
[2007] SASC 262
Judgment of The Honourable Justice Anderson
13 July 2007
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - GENERALLY - GENERAL PRINCIPLES OF CONSTRUCTION - ASCERTAINMENT OF TESTATOR'S INTENTION AS EXPRESSED OR IMPLIED BY WORDS OF WILL
CHARITIES - CHARITABLE GIFTS AND TRUSTS - WHEN APPLIED CY-PRES - WHERE GENERAL CHARITABLE INTENTION - ASCERTAINMENT OF INTENTION
Testatrix left residuary estate for her sister and then for Belalie Lodge Homes for the Aged in the event of her sister pre-deceasing her - sister pre-deceased testatrix - Belalie Homes for the Aged not legal entity - Helping Hand legal owner of Belalie Lodge at time of death - whether testatrix intended to provide for the institution known as Belalie Lodge for its purposes - whether Helping Hand entitled to residuary estate.
Held: testatrix intended to provide for charitable institution known as Belalie Lodge and for its purposes - no lapse of gift to charitable institution - in the alternative, exceptions to lapse rule apply - application of cy-pres doctrine - Helping Hand entitled to residuary estate on trust for the purposes of Belalie Lodge.
Aged or Disabled Persons Care Act 1954 (Cth), referred to.
Re Tyre, deceased (No 1) [1972] VR 168; Re Hart, deceased (1972) 3 SASR 147; Re Constable [1971] VR 742, applied.
Australian Executor Trustee Ltd v Ceduna District Health Services Inc [2006] SASC 286, distinguished.
Re Pace (1938) 38 SASR 336; Re Daniels, deceased [1970] VR 72, considered.

EXECUTOR TRUSTEE AUSTRALIA LTD v JAMESTOWN DISTRICT HOMES FOR THE AGED INC & ORS
[2007] SASC 262
Civil
ANDERSON J.
Introduction

In this matter the plaintiff, the executor of the last will and testament of Edna Eileen Axford, seeks a declaration in relation to a particular clause of the will which provides as follows:
3.I GIVE the whole of my estate to my Trustee UPON TRUST TO PAY my debts and funeral and testamentary expenses and any duties payable in respect of my estate without any adjustment or apportionment of such duties AND TO HOLD the balance then remaining (hereinafter referred to as my residuary estate) for my sister NINA LEONY AXFORD absolutely provided she shall survive me and in the event that my said sister shall fail to survive me THEN for BELALIE LODGE HOME FOR THE AGED situate at Jamestown in the said State absolutely in memory of my late parents William Henry Axford and Lydia Lena Axford.
The last will of the deceased is dated 7 December 1994. The deceased died on 28 September 2005. Probate of the will was granted on 23 November 2005.
The declaration sought is whether upon a true construction of the will of Edna Eileen Axford deceased, the benefits that are provided in clause 3 of the will of the deceased should be paid to:
(i) Jamestown and District Home for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] SASC 262
Decision Date: 13 July 2007

CaseChat Overview and Summary

Executor Trustee Australia Ltd v Jamestown District Homes for the Aged Inc involved a dispute over the interpretation of a testamentary disposition in the will of Edna Eileen Axford. The testatrix left her residuary estate to her sister and, in the event that her sister predeceased her, to Belalie Lodge Homes for the Aged. However, at the time of the testatrix's death, the legal entity owning Belalie Lodge was Helping Hand Aged Care Inc, not Belalie Lodge Homes for the Aged. The central issue was whether the testatrix intended to benefit the institution known as Belalie Lodge for its charitable purposes and, if so, whether Helping Hand was entitled to the residuary estate on trust for those purposes.

The court had to ascertain the testatrix's intention regarding the charitable gift to Belalie Lodge. The legal questions revolved around whether the gift lapsed due to the change in the legal entity owning Belalie Lodge and, if not, whether the cy-pres doctrine applied, allowing the gift to be applied to a similar charitable purpose. The court considered the testatrix's clear intention to benefit Belalie Lodge, as evidenced by the consistent operation and naming of the institution over time, despite the change in legal ownership. The court held that the testatrix intended to provide for the charitable institution known as Belalie Lodge and its purposes. It concluded that there was no lapse of the gift to the charitable institution and, in the alternative, that exceptions to the lapse rule applied. The cy-pres doctrine was invoked to direct the gift to a similar charitable purpose. Consequently, Helping Hand was entitled to the residuary estate on trust for the purposes of Belalie Lodge.

In conclusion, the court issued a formal declaration stating that the benefits provided by clause 3 of Edna Eileen Axford's will, intended for Belalie Lodge Home for the Aged, should be paid to Helping Hand Aged Care Incorporated on trust for the purposes of Belalie Lodge. The gift could not be used for general purposes or for other aged care facilities owned and operated by Helping Hand.

Orders

Orders of the court

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Background

Background to the litigation

The declaration sought is whether upon a true construction of the will of Edna Eileen Axford deceased, the benefits that are provided in clause 3 of the will of the deceased should be paid to:(i) Jamestown and District Home for the Aged Incorporated;(ii) Helping Hand Aged Care Incorporated; or(iii) Some other, and if so what, entity.Background At the time of the death of the testatrix, the institution known as Belalie Lodge Home for the Aged (“Belalie Lodge”) was owned and operated by the second defendant Helping Hand Aged Care Inc (“Helping Hand”). At an earlier point of time the legal entity that owned and operated Belalie Lodge was the first defendant, Jamestown District Homes for the Aged Incorporated (“Jamestown District Homes”). Between the time that the will was made and the date of death of the testatrix, Belalie Lodge continued to operate in the same way, and the only difference was the change in the legal ownership. Mr Edmonds-Wilson, counsel for Helping Hand, tendered a copy of the affidavit of Mr Brown dated 6 March 2007. Mr Brown is the Chief Financial Officer of Helping Hand. In his affidavit he states that for those persons living at or having connections with Jamestown, a reference to “Belalie Lodge” would be generally understood to be a reference to the aged care facility first established by Jamestown Homes in 1978. There is no dispute about this general understanding. Annexed to the affidavit of Mr Brown is the certificate of incorporation of Jamestown Homes. According to the affidavit of Rodney Brown, clause 2 of the initial constitution and rules of the Jamestown Homes states that the general object of Jamestown Homes was to provide accommodation for aged persons pursuant to the “Aged or Disabled Persons Homes Act”, by which I think he is referring to the Aged or Disabled Persons Care Act 1954 (Cth). The minute book of Jamestown Homes records that at a meeting on 25 April 1978 it was resolved that the home be called “Belalie Lodge”. The name “Belalie” has always been associated with the Jamestown area because the Belalie Creek runs through the town. Earlier the local government area encompassing Jamestown was called the District Council of Belalie. A local publication known as The Jamestown Journal periodically referred to Belalie Lodge in articles, according to the affidavit of Mr Brown. References to Belalie Lodge were contained under headings such as “Belalie Lodge News”, “Belalie Lodge” and “News from the Lodge”. Jamestown Homes is no longer the legal entity in control of the Belalie Lodge. Helping Hand has since acquired, by deed of gift, all of the assets of Jamestown Homes including the Belalie Lodge. In the deed of gift tendered during the trial, it states that:Helping Hand is an association incorporated under the Associations Incorporation Act 1995 (SA) as a welfare institution established by the Uniting Church in Australia for public benevolent purposes and has the like objects to those of Jamestown Homes.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

ANDERSON J

This is not a case of a gift to a non-existent body. However, if it were, it is my view that the principles of a cy-près scheme would apply. This is for two reasons. The first reason is that it is evident from an examination of the materials referred to that the testatrix’s intention was clear, namely, to leave a gift for the benefit of Belalie Lodge. The second reason is that such a gift is a gift for a charitable purpose. (See Re Hart deceased (1972) 3 SASR 147.)Conclusion Belalie Lodge comprises a building well known in the district, within which there is an infrastructure that provides services and facilities to the aged people of the Jamestown district. That is the institution known as Belalie Lodge. The intention of the testatrix was clear. In my view she wanted to leave the residue of her estate for charitable purposes associated with Belalie Lodge. Therefore, for the reasons given, the gift to Belalie Lodge should go to Helping Hand, as the legal entity administering the institution intended by the testatrix to benefit from the gift and to be applied for the purposes of Belalie Lodge only. It cannot be used for general purposes or for other aged care facilities owned and operated by Helping Hand. The formal declaration I make is as follows:I declare that upon a true construction of the will of Edna Eileen Axford deceased the benefits provided by clause 3 of the will to which the deceased has given her residuary estate to “Belalie Lodge Home for the Aged situate at Jamestown” are to be paid to Helping Hand Aged Care Incorporated on trust for the purposes of Belalie Lodge.

Ratio Decidendi

Legal Principle Established

Established by: ANDERSON J

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