In Re the Will of Rae, Deceased
[1991] TASSC 141
•4 June 1991
Serial No B27/1991
List "B"
COURT: SUPREME COURT OF TASMANIA
CITATION: In re the Will of Rae, Deceased [1991] TASSC 141;B27/1991
PARTIES: IN RE THE WILL OF JOHN ALFRED RAE, DECEASED
FILE NO/S: M352/1990
DELIVERED ON: 4 June 1991
JUDGMENT OF: Cox J
Judgment Number: B27/1991
Number of paragraphs: 9
Serial No B27/1991
List "B"
File No M352/1990
IN RE THE WILL OF JOHN ALFRED RAE, DECEASED
REASONS FOR JUDGMENT COX J
4 June 1991
By his Will dated 23 December 1959 John Alfred Rae of Ulverstone gave and bequeathed certain debentures to each of his nephew and two nieces and by clause 3(d):
"TO The Baptist Union of Tasmania one half of all the Electric Light Company (Brisbane) Debentures and which at present stands at One thousand pounds UPON TRUST to make available as the Deaconate or Local governing authority of the Baptist Church at Ulverstone aforesaid may require for the building and for furnishing of the projected (and now in part completed building of the new Baptist Church there both the income and the capital thereof from time to time."
By clause 3(e) he bequeathed:
"TO the Salvation Army Tasmania Property Trust one half of all the Electric Light Company (Brisbane) Debentures and which at present stands at One thousand Pounds UPON TRUST to make available from time to time both the capital and the income thereof as the Senior Officer in Tasmania for the time being of the said Salvation Army may from time to time determine for the purposes and objects in the Municipality of Ulverstone in Tasmania of the said Army's work there."
By clause 4 of his Will, he devised bequeathed and appointed all the rest of his estate to his trustees upon trust for the sale and conversion thereof and directed them to stand possessed of the net proceeds upon trust to pay his debts and other expenses including probate duties, to pay small legacies to three named beneficiaries, and by clause 4(b)(iv) to hold:
"The said balance of my Estate subject as aforesaid to pay to the Deaconate or Local governing authority of the Baptist Church at Ulverstone aforesaid for or towards defraying the cost of building and furnishing the now–in–part completed new Baptist Church at Ulverstone aforesaid and to hold whatever thereof (if any) is not required for such purpose as a Trust Fund to defray from time to time the cost of maintenance and repair of the said Church and furnishings or renewals of furnishings."
By clause 5 he authorised his trustees in their discretion to advance both interest on and capital of the legacies given to two of the beneficiaries then apparently still minors.
Since the testator's death in January 1960, the Church building at Ulverstone has been completed and the trustees have paid amounts to the respondent Deaconate for the purposes referred to in clause 4(b)(iv). The building of the Church did not exhaust the funds given and on 24 January 1967 the Pastor of the Church wrote to the trustees in the following terms:
"We wish to purchase chairs for use around the Church and its organisations within the Church buildings, from the funds of the Rae Estate.
The chairs would be purchased from the interest accumulated, since it is the intention of the Church to maintain and increase the Capital fund each year, and operate only within the amount of the interest additions, as much as possible. We would like the Capital amount, when all calls have been made in any one year, to stand at a minimum of 1% higher at the end of each year.
In view of this, will you please advise:
1 The capital at 31st. July 1966.
2The anticipated capital, when all current withdrawals by us, and other liabilities are met, at 31st. July 1967.
When we have these figures, we will know how many chairs we will be able to purchase, within the limitations we impose upon ourselves, as outlined above.
In all probability, we shall place the order early in June."
Since that time, the trustees have complied with that request, capitalising surplus interest from time to time, so that as at November 1990 when the affidavit material was filed, the corpus stood at $31,000.00, and interest in hand stood at about $5,500.00.
A large stained glass window in the Church was found to be in need of repair, leaking badly in wet weather, being supported by wooden frames which were rotten and with the glass cracking and falling internally. The Deaconate decided to replace it.
Affidavit material shows that the timber window frame was replaced with an aluminium frame and that red glass panes which depicted a large simple Cross were for the most part reused so as to again represent the Cross, though now slightly smaller, as a central feature of the window picked out against a background of natural grey coloured panes similar to the glass used when the window was first constructed. Though some new materials have been used the over–all effect of the stained glass window is substantially the same and the work involved can properly be described as maintenance and repair within the meaning of clause 4(b)(iv) of the Will. (See Lurcott v Wakely & Wheeler [1911] 1 KB 905; Wates v Rowland [1952] 1 All ER 470).
The cost of the repair of the window exceeding the amount of income in hand, this application has been brought to determine whether or not the trustees may have recourse to capital to defray that cost.
The purpose of the trust established under clause 4(b)(iv) was firstly to defray the cost of building and furnishing the then partly built Church. The trustees were authorised to expend the entirety of the fund, if necessary, in achieving that object. In the event that any balance remained, as in fact it did, the testator authorised its use to defray from time to time the cost of maintenance and repair of the Church and furnishings or renewal of furnishings. He made no distinction between capital and income for this purpose. His intention was, in my view, that these funds would be used to complete the Church for the purposes of worship and the other religious objectives of the congregation and to keep it in that condition. If he was content that the entirety of his funds should be used to complete the Church, it seems unlikely that he would have begrudged the use of capital if the income was insufficient to keep the Church in adequate repair. In my view, on the proper construction of the will, the trustees do have authority to have recourse to capital to meet the costs incurred in repairing the window.
The specific authority in clause 3(e) for the Salvation Army Property Trust as recipient of the bequest of one half of the debentures in the Electric Light Company (Brisbane) to expend the whole of that asset both capital and income for the purposes and objects of the Salvation Army's work in the Ulverstone municipality may have been thought necessary to avoid any suggestion that the Property Trust should keep the relatively modest capital intact in perpetuity. The same formula was used in clause 3(d), but the same explanation is unlikely, as unlike the bequest to the Salvation Army, the bequest to the Baptist Union was for a purpose limited in time, namely in order to complete and furnish the Church which at the date of the will was already partly completed and which might have been fully completed and furnished at the time of the testator's death. That bequest, if it did not lapse and fall into the residuary bequest comprised in clause 4(b)(iv) was expected to be availed of and expended in the immediate future after the testator's death. I find it difficult to understand why there was any reference to the gift under clause 3(d) being of both capital and income, but whatever the reason, it was quite unnecessary to refer to capital and income in the first part of clause 4(b)(iv) because the words "to hold whatever thereof (if any) is not required for such purpose" made it clear that the trustees had authority to expend the entire fund, both capital and income if necessary, in the construction of the Church and that, in my view, made manifest the intention that whatever did remain should likewise be expended in full if that were necessary to keep the premises in proper repair and properly furnished.
The letter of 24 January 1967 from the Pastor, if written with the authority of the Deaconate (as one would suppose) amounted to no more than a request to capitalise funds until otherwise instructed. It was a self–imposed limitation and did not have the effect of altering the trust established by the will.
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