Green v Third Church of Christ, Scientist, Melbourne
[2006] VSC 39
•31 January 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 5213 of 2005
IN THE MATTER of the Will and Estate of ALBERT EDWARD SMITH
and
IN THE MATTER of an application pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 1996 for the determination of questions arising in the Administration of an Estate.
| ROBERT ANDREW GREEN and COLIN IAN PEIRCE (in their capacity as the Executor and Trustees of the Estate of ALBERT EDWARD SMITH, deceased) | Plaintiffs |
| V | |
| THIRD CHURCH OF CHRIST, SCIENTIST, MELBOURNE (an incorporated body incorporated pursuant to section 4 of Churches of Christ, Scientist, Incorporated Act 1958 No. 6439) and THE ATTORNEY-GENERAL FOR THE STATE OF VICTORIA | First Defendant Second Defendant |
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JUDGE: | Hollingworth J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 January 2006 | |
DATE OF JUDGMENT: | 31 January 2006 | |
CASE MAY BE CITED AS: | Green v Third Church of Christ, Scientist | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 39 | |
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Trusts – Charitable trusts – Whether gift of portion of residuary estate was held on trust for first defendant only – Held that charitable trust created for the benefit of all Churches of Christ, Scientist located in the Melbourne metropolitan area.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr R Boaden | Robert Green & Co |
| For the First Defendant | Mr S McNab | Patricia Duke |
| For the Second Defendant | Mr K Gregory (Solicitor) | Victorian Government Solicitor |
HER HONOUR:
This case concerns the interpretation of the will of Albert Smith, who died on 7 May 1992, and in particular the construction of clause 5(b) of his will dated 1 August 1990.
The proceeding is brought by the trustees of the deceased's estate. The first defendant is the Third Church of Christ, Scientist, Melbourne, whose treasurer from time to time is named as the trustee of the trust created by clause 5(b) of the will. The second defendant is the Attorney-General for the State of Victoria. Gayne Dawson, the sole person entitled to take under any intestacy under the deceased's will, did not wish to be a party to this proceeding.
The following life interests were created by clause 4 of the will:
(a) The property at 8 Wavenhoe Street, East St Kilda was directed to be held on trust for the use and enjoyment of Elizabeth Evans during her life, and in remainder the property falls into residue; and
(b) The property at 6 Wavenhoe Street, East St Kilda was directed to be held on trust for the use and enjoyment of Gayne Dawson during her life, and a sum of $50,000 was directed to be set aside to provide for the maintenance of this property, and in remainder this property and the balance of the $50,000 fund fall into residue.
The two life tenants are respectively now aged 81 and 65.
The residuary estate was dealt with by clause 5 of the will. Clause 5(b) gave one half of the residue:
“... to the treasurer for the time being of the THIRD CHURCH OF CHRIST SCIENTIST MELBOURNE of Glenhuntly Road Elsternwick in the said State to be applied for the general purposes of the
said THIRDCHURCH OF CHRIST SCIENTIST MELBOURNE[1]and I DECLARE that the receipt of such treasurer or other proper officer of the said THIRD CHURCH OF CHRIST SCIENTIST MELBOURNE shall be a discharge to my trustee for this gift."
[1]The words “said THIRD” had been typed in, but then deleted by hand and initialled by the testator and the witnesses.
That part of the residuary estate which was not subject to the life interests has already been distributed. Between 1992 and April 1995, a total of $215,000 was paid to the treasurer for the time being of the first defendant. The income earned on those funds has been applied for the general purposes of the first defendant.
Section 2 of the Churches of Christ, Scientist, Incorporation Act 1958 (“the Church Act”) incorporates as a body corporate having the name “First Church of Christ, Scientist, Melbourne” all persons who are members of the First Church of Christ, Scientist.
The preamble to the Church Act refers to the members of the Church as adhering to the six tenets of The Mother Church (being the First Church of Christ, Scientist, in Boston, USA), as enunciated by Mary Baker Eddy, and as set out in the 1st Schedule to the Church Act. It also makes reference to their adopting the principles of church organization, discipline and teaching laid down in the Church Manual of The Mother Church.
Section 4 of the Church Act lays down a procedure for the incorporation of other bodies, referred to in the heading to the section as "other Churches". That statutory procedure has been complied with by the first defendant. Upon incorporation, the first defendant acquired the same rights as the First Church of Christ, Scientist, Melbourne, including the right of acquisition, purchase, receipt, holding and enjoyment of real and personal property of any description and the exercise of powers, rights and privileges incident to a body corporate[2].
[2]Section 5 of the Church Act.
In Victoria, there are, in addition to the first defendant, the following seven Christian Science Churches:
(a) First Church of Christ, Scientist, Melbourne in South Melbourne; this is the only church in the Melbourne municipal area;
(b) Second Church of Christ, Scientist, Melbourne in Camberwell;
(c) First Church of Christ, Scientist, Monash in Clayton;
(d) First Church of Christ, Scientist, Ringwood in Ringwood;
(e) First Church of Christ, Scientist, Waverley in Mount Waverley;
(f) First Church of Christ, Scientist, Frankston in Frankston; and
(g) First Church of Christ, Scientist, Geelong in Geelong.
There is also one Christian Science Society at High Street, Northcote.
Outside Victoria, there are a further 20 Christian Science Churches, and eight Christian Science Societies.
The membership of the first defendant has been in decline over many years. On 11 August 2003, its members passed a motion to make immediate application to The Mother Church for the first defendant to become a Christian Science Society. On 24 November 2003, a further motion was passed for that application to be deferred. Thus the status of the first defendant is that it remains in existence, but it is likely that it will in the future cease to operate as a Christian Science Church and will, instead, become a Christian Science Society.
The role of a Society, as opposed to a Church, is described in a letter dated 1 June 2005, from the Associate Counsel to The Mother Church, which says in part:
“The basic difference between the two entities is organizational in that to become a recognized branch church, in contrast to a society, there must be at least 16 members, including at least one Christian Science Practitioner. Whether a church or a society, both entities conduct church services regularly at least once a week on Sunday and sometimes on Wednesday, which present the doctrines, philosophy and teachings of Christian Science. A bequest to either entity would be used to promote and extend the Christian Science religion.“
Notwithstanding the similarities in many activities, from a legal point of view, a Society is not a Church for the purposes of the Church Act or a body corporate.
The first defendant’s constitution contains the following provisions in the case of its disbanding:
“ARTICLE 11 DISBANDING THE CHURCH
Section 1
The procedure shall be as listed in "Guidelines for Disbanding a Branch of The Mother Church, Australia" or such similar statements as supplied from time to time by The Mother Church.
Section 2
Distribution of proceeds on hand at the time of disbanding or thereafter shall be in equal shares to the Christian Science Churches and Societies existing in Victoria as listed in The Christian Science Journal current at the date of disbandment subject to legal advice having first been obtained with regard to the then current legislation but in any case any recipient of proceeds upon disbanding shall be a not-for-profit organisation and in no case should the proceeds upon disbandment be distributed to any member or members except to the extent that such distribution represents reimbursement of any genuine expenses incurred by a member to a non-related third party or payment to satisfy an indemnity pursuant to Article 13 Section 4(f).
Doubts having arisen as to what effect the disbanding of the first defendant might have on clause 5(b) of the will, and whether Article 11 applies, the plaintiffs have commenced this proceeding. By the amended originating motion dated 24 March 2005, the plaintiffs seek answers to the following five questions:
“1. In the events that have happened, and on a true construction of the will of the testator does the gift contained in paragraph 5(b) of the will:
[clause 5(b) is set out]
Do these words create a valid charitable trust?
2. If the answer to question (1) is “yes”, bearing in mind that there is no Church of Christ, Scientist, Melbourne, does the trust operate for:
(a) The purposes associated with the Third Church of Christ, Scientist, Melbourne?
(b) The benefit of the Church of Christ, Scientist, in Melbourne generally?
(c) Both of the above?
(d) The purposes of the Church of Christ, Scientist, generally whether in Victoria or elsewhere?
3. If the answer to 2(a) is “yes” who would be the beneficiary cy pres in the event of the Third Church of Christ, Scientist, Melbourne disbanding?
4. If the answer to question (1) is “no”:
(a) Is the Third Church of Christ, Scientist, Melbourne a beneficiary of the trust if it is not in existence at the time the life interests created in clauses 4(a) and 4(b) of the will fall in?
(b) What other bodies or individuals are beneficiaries under the trust?
5. In the events that have happened, and on a true construction of the will, who is the trustee of the trust created by clause 5(b) of the will upon the life interests created by clauses 4(a) and 4(b) in the will falling in?”
The first question
In relation to the first question, which asks whether a valid charitable trust has been created by clause 5(b) of the will, all parties agree that the answer to this question should be in the affirmative. I agree with that, for the following reasons.
The residuary trust requires that the capital be used for the “general purposes” of the Church of Christ, Scientist, Melbourne. The question arises as to whether this is a charitable trust (as being for the advancement of religion), or whether being for general purposes it is a trust that is not strictly for charitable purposes as embracing non-charitable activities.
It is clear that this is a not a gift to the treasurer of the first defendant personally, or to any one church, or to the individuals of any particular church, but a gift for the purposes of the Churches of Christ, Scientist in Melbourne.
Gifts for the advancement of religion are treated as prima facie charitable if there is an element of public benefit present in the wording of the gift constituting the trust.
Gifts to named churches, denominations or church bodies are presumed to be limited to religious purposes unless there is evidence to the contrary[3].
[3]Hardey v Tory (1923) 32 CLR 592 at 595 per Higgins J; In re Turner [1930] SASR 223 at 226 per Richards J; Presbyterian Church (NSW) Property Trust v Ryde Municipal Council (1978) 2 NSWLR 387 at 404 and 408; In re De Vedas [1971] SASR 169 at 183 per Wells J.
The second question
In relation to the second question, which asks, for whose benefit does that trust operate, a number of possible options were raised before me, including:
(a)All of the Churches and Societies in Victoria;
(b)The Churches in the Melbourne metropolitan area;
(c)The Churches and Societies in the Melbourne metropolitan area; or
(d)The First Church in South Melbourne, being the only church in the Melbourne municipal area.
All parties agree that the words in clause 5(b) "Church of Christ, Scientist, Melbourne" refers to all of the Melbourne Churches of Christ, Scientist rather than any one church. In my opinion, that is so even without considering whether a rather indecipherable, handwritten annotation in clause 5(b) was intended to pluralise the word “Church” where it appears in the fourth line of that clause.
“Church”, in this context, means a body corporate incorporated in accordance with the Church Act. In my opinion it does not include Christian Scientist Societies, notwithstanding that some of a Society's activities resemble in some respects that of a Church incorporated under the Church Act.
I am satisfied that the reference to Melbourne is to be construed as a reference to the Melbourne metropolitan area and not the Melbourne municipal area. In the Melbourne municipal area there is only one Church of Christ, Scientist, and no evidence that the testator had any contact at all with that Church. Furthermore, had he intended to benefit only that Church, it seems to me unlikely that he would have appointed as trustee of the trust the treasurer of the first defendant, being a Church located outside the municipality but within the metropolitan area.
What then does the Melbourne metropolitan area mean, for the purposes of the will? There are currently five Churches (in addition to the first defendant) which are clearly within the Melbourne metropolitan area on any definition. But is the church located at Frankston within the Melbourne metropolitan area? In my opinion it is, for reasons which I will explain shortly. The concept of Melbourne metropolitan area is also relevant for future purposes, in that further Churches may well be established in the future in other parts of Melbourne, which may be entitled to benefit from the charitable trust.
In my opinion it is desirable that the Melbourne metropolitan area be described in such a way as to enable the trustee from time to time to ascertain whether a particular Church falls within that description or not. Accordingly I asked counsel to consider the question of the appropriate definition. After considering possible definitions, it is agreed that the definition of "metropolitan area" contained in s. 201 of the Melbourne and Metropolitan Board of Works Act 1958 is the most appropriate definition to adopt. That definition provides that “metropolitan area” means the area described in the 3rd Schedule; the 3rd Schedule then sets out a number of areas which fall within that definition. I note, in particular, that Frankston does fall within that metropolitan area and accordingly there are in fact at present six Melbourne metropolitan Churches in addition to the first defendant.
The remaining questions
Given my proposed answers to Questions 1 and 2, it will not be necessary for me to answer Questions 3 and 4 in the amended originating motion.
Question 5 relates to the identity of the trustee from time to time in the event that the first defendant is subsequently disbanded. It is agreed by all parties that before the first defendant disbands, if indeed it does so in the future, the treasurer at that time should appoint replacement trustees by deed under s. 41 of the Trustee Act 1958. Although the figure of three trustees has been suggested by counsel, I see nothing in the Trustee Act 1958 that requires such a number, and it does not seem to me, in the absence of submissions to the contrary, that it is appropriate for me to tell the current trustee how many replacement trustees he or she should appoint, save to observe that if more than one is appointed that it is likely to provide greater continuity than if only one trustee is appointed.
Orders
As far as the question of costs is concerned, all parties are in agreement that the costs of all parties should be paid out of the fund of approximately $215,000 currently held by the treasurer of the first defendant from proceeds distributed from the residue.
Accordingly I propose to make orders in terms of the general form of order which is before me. I will not read it into the transcript as it is quite lengthy. It has been typed up and handed to me by counsel and the only change to the typed version is in the answer to paragraph (b) of Question 2. I will read out the wording to that answer.
"Yes. Those of such churches situated from time to time in the Melbourne metropolitan area being the area defined by s. 201 and the third schedule of the Melbourne and Metropolitan Board of Works Act 1958, from time to time".
With the exception of that amendment, the orders I will make are in terms of the typed minute which I will initial and order to be placed on the file.
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