Hirst Estate - Atkinson v Royal Alexandra Hospital for Children

[2010] NSWSC 613

CITATION:	Hirst Estate - Atkinson & Anor v Royal Alexandra Hospital for Children & Ors [2010] NSWSC 613
HEARING DATE(S):	8 June 2010
JUDGMENT DATE :	9 June 2010
JURISDICTION:	Equity Division Probate List
JUDGMENT OF:	Palmer J
DECISION:	Gifts declared valid; cy-pres scheme ordered.
CATCHWORDS:	SUCCESSION – WILLS – CONSTRUCTION – CHARITABLE TRUST – CY-PRES SCHEME – Gift to “Sydney Hospital” – whether gift to separately operating hospital known as “Sydney Hospital and Sydney Eye Hospital” – whether terms of gift now impracticable – whether cy-pres scheme should be ordered.
LEGISLATION CITED:	Area Health Services Act 1986 (NSW) Health Services Act 1997 (NSW) – s 41(1), Schedule 2
CATEGORY:	Principal judgment
PARTIES:	Jennifer Atkinson (First Plaintiff) Michael John Hetherington (Second Plaintiff) Royal Alexandra Hospital for Children (First Defendant) Southeastern Sydney & Illawarra Area Health Service (Second Defendant) Royal Flying Doctor Service of Australia (Third Defendant) Attorney General for New South Wales (Fourth Defendant)
FILE NUMBER(S):	SC 2009/290218
COUNSEL:	J.R. Wilson SC (Plaintiffs) D.E. Perrignon, Ms E. Weisske (First Defendant) P. Blackburn-Hart SC (Second Defendant) R. Horsley (Third Defendant) Ms T.L. Wong (Fourth Defendant)
SOLICITORS:	C.P. White & Hetherington (Plaintiffs) Makinson & d’Apice (First Defendant) Bartier Perry (Second Defendant) Buckworth Keady (Third Defendant) I.V. Knight, Crown Solicitor (Fourth Defendant)

2009/290218 Hirst Estate: Atkinson & Anor v
Royal Alexandra Hospital for Children & Ors

JUDGMENT

9 June, 2010

Introduction

1 The Plaintiffs are the executors of the will of Patricia Hirst who died in September 2008 leaving a will made in January 2008.

2 The Plaintiffs seek declarations as to the true construction of Clause 10 of the will whereby the deceased gave the residue of her estate upon the following trusts:

“(a) To pay thereout all my just debts, funeral and testamentary expenses including all probate, death and estate duties of whatsoever kind which may be payable in my estate or any way in consequence of my death.

(b) To pay one third of the balance to the ROYAL ALEXANDRIA HOSPITAL FOR CHILDREN (The Children’s Hospital at Westmead) in aid of that institution and for its general purposes and the receipt of the Treasurer or other authorised Officer shall be sufficient discharge to my Trustees.

(c) To pay one third of the balance, conditional upon the entire first floor of the Nightingale Wing being used for the Lucy Osburn-Nightingale Museum and all other occupiers having vacated such first floor within one month of the date of my death, to SYDNEY HOSPITAL in aid of that institution and for the purposes of an Accident and Emergency Centre and Intensive care facility adequate for a major emergency in particular to be applied for fitting out rooms, purchase of equipment and payment of specialist staff.

(d) To pay one third of the balance to ROYAL FLYING DOCTOR SERVICE OF AUSTRALIA in aid of that institution and for its general purposes and the receipt of the Treasurer or other authorised Office shall be sufficient discharge to my Trustees.

PROVIDED HOWEVER that should either or both of the said ROYAL ALEXANDRIA HOSPITAL FOR CHILDREN or SYDNEY HOSPITAL not be a separately operating hospital at the date of my death (or in addition in relation to Sydney Hospital, if the condition in sub paragraph (c) above is not satisfied) then such share or shares of the balances of my residuary estate shall be paid to the remaining beneficiary or if more than one the remaining beneficiaries equally under this clause 10.”

The gift to the Children’s Hospital

3 The first question is whether the gift to “The Royal Alexandria [sic] Hospital for Children” is valid according to its tenor. There is not, and never was at any relevant time, an institution answering exactly to that name but there is, and was as at the date of the will, a hospital called “The Royal Alexandra Hospital for Children” (“RAHC”) which also operates under the registered business name “The Children’s Hospital at Westmead”. Indeed, it was at this hospital that the deceased worked as a staff specialist in pathology until 1996.

4 It is clear that “Alexandria” in Clause 10 in the will is a misspelling for “Alexandra”; no party to these proceedings contends to the contrary.

5 The only other question as to the gift to RAHC is whether the hospital was a “separately operating hospital” at the date of the testatrix’s death.

6 The phrase “separately operating hospital” has caused difficulty in construing the gift to the “Sydney Hospital” because of the particular history of that institution, but no one contends that the words cause difficulty in relation to the gift to RAHC. There is no dispute that RAHC is a statutory corporation established by s 41(1) and Schedule 2 of the Health Services Act 1997 (NSW). It has its own administrative structure. Although it is situated adjacent to Westmead Hospital, it has no administrative relationship with that or any other hospital. In the light of those facts, no one submits that the condition to the gift to the RAHC has failed.

7 There will, therefore, be a declaration that the gift to the RAHC is valid according to its tenor.

The gift to the Sydney Hospital

8 There are two conditions to the gift to the “Sydney Hospital”. The first pertains to the use of the first floor of the Nightingale Wing. There is no dispute that that condition has been satisfied.

9 The only contest in this case has been as to whether “Sydney Hospital” was a “separately operating hospital” at the date of the testatrix’s death. In this regard, there is no dispute about the facts: the issue is what, in the light of those facts, the testatrix meant by the phrase.

10 There has been a hospital facility on the site of 8 Macquarie Street, Sydney, since 1816. The original hospital was known as “The Rum Hospital” because the building contractors agreed to build it in exchange for the right to import and sell rum in the colony. The official name of the building, however, was “Sydney General Hospital”.

11 In 1878, an ophthalmic ward was established in the hospital. By 1882, the ward had grown so large that it could no longer be accommodated in the existing facilities and it was moved to separate premises, first at Millers Point and then, in 1922, to a building in Woolloomooloo. That building became known as “The Sydney Eye Hospital”. However, the Sydney Eye Hospital remained as a department of Sydney Hospital, overseen by the Board of Sydney Hospital. The financial accounts of Sydney Hospital have always incorporated the financial position of the Sydney Eye Hospital as simply one of Sydney Hospital’s departments.

12 In 1894, a new hospital building was completed on the original Macquarie Street site and was officially known as “Sydney Hospital”.

13 In 1992, the Minister of Health announced the redevelopment of Sydney Hospital and the relocation of the Sydney Eye Hospital from Woolloomooloo back to the Macquarie Street site.

14 In 1994, when the testatrix made an earlier will naming as a beneficiary “Sydney Hospital”, the administration and operations structure of Sydney Hospital and the Sydney Eye Hospital were no different from what they had always been. The facilities at the Macquarie Street campus and at the Sydney Eye Hospital building were managed as one administrative unit by a general manager, who reported to the Deputy Chief Executive Office and Director of Operations of the Eastern Sydney Area Health Service. The Eastern Sydney Area Health Service was administered by a board in accordance with the Area Health Services Act 1986 (NSW).

15 New facilities were opened at the Macquarie Street site in 1996 and the facilities at the Sydney Eye Hospital were relocated there in 1997. Since 1 January 2005 the Sydney Hospital site in Macquarie Street has been within the South Eastern Sydney and Illawarra Area Health Service (“SESIAHS”). Within SESIAHS, the medical facilities on the Macquarie Street site have been known as “Sydney Hospital and Sydney Eye Hospital”. For the sake of convenience I will refer to these facilities as “SHSEH”, which is the abbreviation commonly used for those facilities within SESIAHS.

16 SHSEH has a General Emergency Department, open twenty-four hours a day, and an Eye Emergency Department, open seven days a week from 8.00am to 5.00pm. Signage on the site indicates separate entrances to these facilities, which function in contiguous premises within the same building on the site.

17 A key role of SHSEH is to be a centre of excellence in New South Wales in the provision of care to patients with eye injury or trauma. Accordingly, it is common to see in hospital literature published by SESIAHS reference to “Sydney Eye Hospital” rather than to “Sydney Hospital and Sydney Eye Hospital”, when the focus of the context is on the care of patients with eye injury or eye trauma. Nevertheless, SHSEH general emergency department accepts and treats a very substantial number of patients each year with illness or injuries not related to eye injury or trauma.

18 SHSEH is within the Northern Network of SESIAHS. As at the date of the testatrix’s death, SHSEH had a Medical Staff Council whose activities were confined to SHSEH. The administration of all medical facilities within SHSEH was conducted as a single management unit by a Director of Clinical Services and a Director of Nursing whose responsibilities included not only ophthalmology but all other aspects of medical treatment offered within SHSEH. For funding and administrative within the Northern Network of SESIAHS, SHSEH was regarded as a single hospital on its own campus. The administration of SHSEH as it was at the time of the testatrix’s death continues to the present.

19 Mr Blackburn-Hart SC, who appears for SHSEH, submits that the reference to “Sydney Hospital” in the testatrix’s will is a shorthand reference to, or perhaps a misnomer for, the single institution more accurately known now as “Sydney Hospital and Sydney Eye Hospital”. He says that there can be no doubt that in 2008, when the testatrix made her will, she intended to refer to the institution conducted on the site in Macquarie Street and to all of the medical facilities it incorporated. He submits that the testatrix was a highly experienced medical practitioner with a fond association with SHSEH through her husband, who had practised there; she must have known that since 1997 SHSEH also included the medical facilities formerly conducted in the building known as the “Sydney Eye Hospital” in Woolloomooloo.

20 Accordingly, Mr Blackburn-Hart submits that SHSEH was, as at the testatrix’s death, and continues to be a “separately operating hospital” because it is a separately identifiable institutional facility, with management and administration separate from the management and administration of other hospitals within SESIAHS.

21 Mr Blackburn-Hart’s submission is supported by Ms T. Wong of Counsel, who appears for the Attorney General for New South Wales.

22 Mr Horsley of Counsel, who has argued the case most ably for the Royal Flying Doctor Service of Australia, submits that SHSEH is, and was as at the testatrix’s death, in reality two hospitals, one properly called “Sydney Hospital”, which administers to general patients, and one properly called “Sydney Eye Hospital”, which administers to eye injury and eye trauma patients and offers the facilities formerly conducted separately in the building at Woolloomooloo. He says that the testatrix intended to benefit only the hospital properly called “Sydney Hospital”, so long as it was operating separately from any other hospital. He says that the gift in Clause 10(c) of the will fails because “Sydney Hospital”, properly so called, is now operating under an administration which operates the Sydney Eye Hospital, properly so called, as well.

23 In support of his submission that there is a hospital properly called “Sydney Eye Hospital” Mr Horsley places heavy reliance on signage in the Macquarie Street site which shows both “Sydney Eye Hospital” and “Sydney Hospital”. He also points to the use of “Sydney Eye Hospital” without reference to “Sydney Hospital” in literature published by SESIAHS. Mr Horsley says that the demarcation of medical facilities must have been apparent to the testatrix and that she did not intend to benefit those facilities conducted by “Sydney Eye Hospital”.

24 I am unable to accept Mr Horsley’s submission. In my opinion, Mr Blackburn-Hart is correct in his submission that the testatrix intended to refer to one separately identifiable institution conducted on the site at Macquarie Street, including all of the various medical facilities which it offered. The evidence suggests that the testatrix’s greatest familiarity with that institution, through her husband, was during the period when a department of Sydney Hospital operated the building at Woolloomooloo known as “Sydney Eye Hospital”, so that the testatrix was probably accustomed to refer to the hospital in Macquarie Street with which she was familiar simply as “Sydney Hospital”, because it then had no other name. From 1997 onwards, however, the institution in Macquarie Street officially had a double-barrelled name, referring to the fact that the eye injury treatment facilities formerly provided at the Woolloomooloo site had been relocated to the Macquarie Street site.

25 There is no reason to suppose that the testatrix was unaware of this circumstance and that she did not know that all medical facilities within the Macquarie Street site were operated under the same management and administration. It is hard to believe that the testatrix would have wished, by her bequest, to bifurcate the institution conducted at the Macquarie Street site so that eye injury and trauma facilities would have to be hived off under separate management and administration if the other medical facilities offered at the site were to receive her benefaction.

26 In summary, I conclude that the reference in the testatrix’s will to “Sydney Hospital” is a reference to the one institution now more fully described as “Sydney Hospital and Sydney Eye Hospital”. I am satisfied that that institution operated separately from any other hospital institution as at the testatrix’s death and that it continues to operate separately.

27 The Attorney General submits that the terms of the gift to SHSEH are now impracticable because they require the money to be expended on “an Accident and Emergency Centre and Intensive Care Facility”. SHSEH does not have an intensive care unit. In December 2009 the New South Wales Health Department issued a plan for the provision of trauma services within New South Wales which made it clear that SHSEH will not have an intensive care unit in the foreseeable future.

28 Mr Blackburn-Hart now accepts that the terms of the testatrix’s gift to SHSEH are impracticable. No party disputes that the gift to SHSEH is charitable in nature and that a cy-pres scheme ought to be ordered.

29 I conclude, therefore, that the gift to SHSEH does not fail and that a cy-pres scheme should be ordered in accordance with terms to be agreed between SHSEH and the Attorney General.

30 I will stand the proceedings over for a short time to enable the parties to bring in Short Minutes of Order reflecting these reasons.

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