Johnson v Johnson

[2022] NSWSC 44

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Johnson v Johnson [2022] NSWSC 44

Hearing dates:

1 December 2021

Decision date:

31 January 2022

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

1.   Declare that the gift of the late Kathleen Mary Johnson of her entire residuary estate by a testamentary perpetual trust as set out in clause 2 of her Will dated 4 June 2000 (the Will) is void.

2.   Declare that clause 7 of the Will does not operate to create a charitable trust.

3.   Declare that, by reason of the failure of the testamentary perpetual trust, there is a partial intestacy under the Will.

4. For the purposes of giving judicial advice to the executors pursuant to s 63 of the Trustee Act, advise that the executors of the estate would be justified in taking the steps identified in paragraphs 19 and 20 of the Amended Statement of Facts which forms part of Exhibit E on the present application.

5.   Liberty to apply for further directions from the Court in relation to any issues arising out of the administration of the above or implementation of the above.

6.   Order that the plaintiffs' costs of the summons be paid out of the estate of the deceased on an indemnity basis.

Catchwords:

CHARITIES AND NOT-FOR-PROFITS — Charitable purposes — Other purposes beneficial to the public — Gift for preservation of fauna and flora

SUCCESSION — Construction — Charitable gifts — Whether charitable

SUCCESSION — Trusts and trustees — Judicial advice, Trustee Act 1925 (NSW), s 63

Legislation Cited:

Charitable Trusts Act 1993 (NSW), s 23

Charitable Uses Act 1601 (UK)

Perpetuities Act 1984 (NSW)

Supreme Court Act 1970 (Cth), s 75

Trustee Act 1925 (NSW), s 63

Cases Cited:

Aid/Watch Inc v Commissioner of Taxation (2010) 241 CLR 539, [2010] HCA 42

Attorney-General (NSW) v Donnelly (1958) 98 CLR 538; [1958] HCA 1

Attorney-General (NSW) v Sawtell [1978] 2 NSWLR 200

Campbell v Sherwell [1999] VSC 508

Church of Foursquare Gospel (Australia) Ltd v New Hope Church Swansea Inc [2019] NSWSC 519

Crawford v Davidson-Crawford [2019] NSWSC 728

Downing v Federal Commissioner of Taxation (1971) 125 CLR 185; [1971] HCA 38

Duggan v White [2018] NSWSC 364

Estate of Aspasia Kandros [2019] NSWSC 757

Harmony - The Dombroski Foundation Ltd v Attorney General in and for the State of New South Wales [2020] NSWSC 1276

Hickey v Attorney General of the State of New South Wales [2021] NSWSC 772

IMF Australia Ltd v Sons of Gwalia Ltd (2004) 211 ALR 231; [2004] FCA 1390

Income Tax Special Purposes Commissioners v Pemsel [1891] AC 531

Morrison-Conway & Anor; Estate of the Late Judith Christine Walsh [2018] NSWSC 685

Re Ingram [1951] VLR 424; [1951] ALR 900

Re Wedgwood [1915] 1 Ch 133

State Trustees Ltd v Attorney-General (Vic) (2013) 301 ALR 798; [2013] VSC 117

Zetting v Müller [2017] NSWSC 659

Texts Cited:

Dal Pont, G E, The Law of Charity (3rd ed, 2021, LexisNexis Butterworths)

Heydon, JD and MJ Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths)

Category:

Principal judgment

Parties:

Francis Edward Johnson and Jennifer Ann McKeough as trustees for the Estate of the Late Kathleen Mary Johnson (Plaintiffs)
David Charles Johnson (First Defendant)
Greg Morris Johnson (Second Defendant)
Richard Johnson (Third Defendant)
Terry Johnson (Fourth Defendant)
Danny Johnson (Fifth Defendant)
Raymond Johnson (Sixth Defendant)
James Johnson (Seventh Defendant)
Lin Rosney (Eighth Defendant)
Brett Johnson (Ninth Defendant)
Davin Johnson (Tenth Defendant)
Nicole Doogue (Eleventh Defendant)
Nathan Johnson (Twelfth Defendant)
Robert John Johnson (Thirteenth Defendant)
Mary Kathleen Braaksma (Fourteenth Defendant)

Representation:

Counsel:
MJ Heath with MT McGirr

Solicitors:
MWA Lawyers Pty Ltd (Plaintiffs)

File Number(s):

2021/00273075

Publication restriction:

Nil

vv

Judgment

1. HER HONOUR: This is an application by summons filed on 24 September 2021 by the surviving executors and trustees of the estate of the late Kathleen Mary Johnson seeking declaratory relief in relation to the last Will of the deceased, that being the Will dated 4 June 2000 (the Will).

2. The procedural history that has led to the application for declaratory relief coming before me today commenced with an application for judicial advice which was heard by Rein J on 22 April 2021. His Honour gave reasons in a judgment delivered on 30 April 2021 and in those reasons, to which I will refer in more detail in due course, his Honour concluded that there were a number of matters which precluded him from being able to advise the executors that they would be justified in taking the steps upon which they had sought advice. His Honour set out (at [22] of the reasons) further steps that his Honour considered the executors would need to take, which included obtaining advice from counsel as to the questions set out in [22](1) of the reasons, and then once advice was obtained either amending the application for judicial advice or seeking to take steps in relation to the charitable trust.

3. Following his Honour’s first judgment, the executors obtained advice from Mr Heath of counsel and forwarded to his Honour’s associate a proposed amended summons with an agreed statement of facts (see Exhibit E on the present application). His Honour, on the papers, on 2 September 2021 gave advice that the executors would be justified in commencing proceedings seeking from the Court declarations to the effect set out in [3] of his Honour’s reasons.

4. The matter came before me in the application list on 26 October 2021 and on that occasion I directed that the Attorney General be notified of the matter (in circumstances where the issue that had been raised by Rein J in the context of the judicial advice application was as to whether a particular clause of the Will (cl 7) could take effect as a valid charitable trust, and where the Attorney General is the protector of charities).

5. The Attorney General was duly notified of the application. The solicitor for the plaintiff, Mr John McNamara, has deposed in his affidavit sworn 17 November 2021 to the notification of the Attorney General and the materials provided to the Crown Solicitor’s office in relation to the matter, which included, amongst other things, a copy of the judicial advice given by Rein J in the judgments of 30 April 2021 and 2 September 2021 and the written advice dated 2 August 2021 of counsel. The Attorney General was also provided by the Crown Solicitor’s office with a copy of earlier counsel’s advice to which reference had been made in Rein J’s judgment of 30 April 2021.

6. Following consideration of that material, the Attorney General, through the Crown Solicitor’s office, advised by email on 15 November 2021 that the Attorney General did not seek to be involved in the proceedings, on the basis that the Attorney General considered that the proceedings did not involve a charitable trust.

Background

7. The background to the present application is set out in the Amended Statement of Facts included as part of Exhibit E and is further set out in the judicial advice judgment given by Rein J on 30 April 2021. I will briefly record that background as follows.

8. The deceased’s last Will was dated 4 June 2000. The deceased, by that Will, appointed each of her nine children as her personal representative and, pursuant to cl 2 of the Will, gave her entire residuary estate to be held on trust by a testamentary perpetual trust to be held equally for her children and their descendants of lineal descent solely for their non-commercial and equal benefit (this being referred to in the Will as “The Family Trust”).

9. Clause 6 of the Will provided as follows:

The principal purpose of The Family Trust and the principal duty and obligation of its Trustee is to protect and keep our family farm at Bonville (“The Family Farm”) for the perpetual non-commercial enjoyment of my children and their descendants of lineal descent as their occasional place of special sanctuary, peace, quite [sic] enjoyment and family gathering and in this respect I direct the Trustee to always protect The Family Farm for this purpose including by way of such protection to not ever encumber The Family Farm and its attachments with debt related charges of mortgages whatsoever.

10. Clause 7 provided that the aforesaid purposes shall include the care and protection of native wildlife including in particular native birds.

11. Of the persons appointed in the Will as the deceased’s personal representative, all of the deceased’s children who survived the deceased renounced probate other than the two plaintiffs and Mr Anthony James Johnson. (Mr Anthony Johnson has since died.)

12. The deceased died on 4 September 2005. At the time of the deceased’s death her estate comprised a sum in respect of cash and shares and real property in Bonville, NSW.

13. After the deceased’s death the Coffs Harbour City Council gave approval for a private burial site on the Bonville property, which is located on what is now Lot 351. That approval was dated 7 September 2005.

14. After the deceased’s death, and prior to the grant of probate in respect of the Will, written advice was given by Mr Robert Colquhoun of Counsel to the effect that cl 6 of the Will contravened the rule against perpetuities insofar as the establishment of the testamentary perpetual trust was a non-ending trust. Mr Colquhoun advised that the Will contravened not only the rule against perpetuities at common law but also the alterations to the common law rule which came into force with the enactment of the Perpetuities Act 1984 (NSW). His opinion was that the way in which the Will was drawn (and I interpose to note that it does not appear to have been drawn by a solicitor and was witnessed by a Catholic priest and a plumber) creates an intestacy in relation to virtually the whole of the estate – that is, the whole of the estate except for the testamentary and funeral expenses – and that this meant that, for practical purposes, there was an intestacy.

15. Certain advice was given to the executors as to a proposal for the relevant parties to enter a deed of family arrangement and/or as to the incorporation of a company pursuant to which the executors could attempt to fulfil the deceased’s testamentary intention of creating a perpetual testamentary trust.

16. Mr Colquhoun also advised that there should be an application for administration of the Will rather than an application for probate. However, it appears that, when the application for letters of administration was made, the registry was not informed of the issue in relation to the validity of cl 6 of the Will and required the executors to obtain a grant of probate.

17. Probate was granted to the executors on 14 March 2008.

18. On 16 April 2008, the Bonville property was transferred by registered transmission into the names of the plaintiffs and the then third executor, Mr Anthony Johnson, as joint tenants.

19. Rein J noted that, in about June 2008, there was a meeting between the beneficiaries of the deceased’s estate, or a representative appointed by them, at the Bonville property to discuss and agree upon the maintenance of the estate and that, after that meeting, enquiries would be made as to whether the Bonville property could be the subject of a boundary adjustment application (though at the time it did not meet the requirements of the council for boundary adjustment).

20. On 12 February 2013, Anthony Johnson died. Following his death, Ms Jing Ming Li contacted the executors advising that she was Anthony Johnson’s widow and entitled to apply for appointment as administratrix of his estate.

21. The plaintiffs, in their capacity as executors of the deceased’s estate, entered into a deed dated 22 August 2014 with Ms Li pursuant to which, among other things, Ms Li was paid a sum of money representing, or agreed to be in full and final satisfaction of all claims she might have had in relation to Anthony Johnson’s one-ninth share as beneficiary of the deceased’s estate.

22. By registered notice of death dated 29 February 2016 the interest of the then third executor, Anthony Johnson, in his capacity as executor of the deceased’s estate, devolved to the plaintiffs by survivorship.

23. By way of a registered plan of subdivision dated 22 May 2018 and consequential boundary adjustments, the original lots comprising the Bonville property became known as Lot 351 and Lot 352. Both the deceased and Anthony are buried on Lot 351. There is also a house situated on Lot 351.

24. The plaintiffs have utilised their own funds and borrowed funds (primarily from beneficiaries of the deceased’s estate) in order to fund the ongoing maintenance costs of the original lots, boundary adjustments, the creation of easements, new plans and entitlements to the new lots and the payment of moneys to Ms Li pursuant to the deed entered into in settlement of her claim.

25. The application for judicial advice made to Rein J was as to whether the executors would be justified in selling Lot 352 to reimburse the costs incurred by the estate; to establish a sinking fund for the preservation and maintenance of Lot 351, including the ongoing maintenance of the private burial site; and to distribute any surplus funds from the sale of Lot 352, less costs and expenses, to the beneficiaries of the deceased’s estate, those being the three components of Question 1 (see below).

26. The application also sought judicial advice as to: whether the executors would be justified in distributing any surplus of the deceased’s estate, as if on intestacy (Question 2); whether the executors would be justified in entering into negotiations with the beneficiaries of the deceased’s estate, as if on intestacy, for an agreement to preserve and maintain Lot 351 for the memory of the deceased and the use by those beneficiaries (Question 3); and whether the executors would be justified in distributing and transferring Lot 351 to the beneficiaries of the deceased’s estate, as if on intestacy, in the event that they are unable to reach agreement with those parties for an agreement by way of a deed of family arrangement to preserve and maintain Lot 351 for the memory of the decased and the use by those beneficiaries (Question 4).

27. At [18] of Rein J’s first set of reasons, his Honour stated that in his view Mr Colquhoun was correct to regard ccll 2 and 6 of the Will as void insofar as they pertained to a non-charitable purpose trust (although his Honour described those provisions as an attempt to create a perpetual trust rather than breaching the rule against perpetuities). His Honour went on to say that:

Mr Colquhoun was, in my view, correct to regard clauses 2 and 6 as void insofar as they pertain to the non-charitable purpose trust, although I would describe the provisions as an attempt to create a perpetual trust rather than breaching the rule against perpetuities. What was not addressed, however, was clause 7 which adds a secondary purpose to the proposed trust, a purpose which may well constitute a charitable purpose, namely, “the care and protection of native wildlife including in particular native birds” (see, eg, State Trustees Ltd v Attorney-General (Vic) (2013) 301 ALR 798 per McMillan J) and which will not be affected by the inclusion of purposes which are not valid: see s 23(1) of the Charitable Trust Act 1993 (NSW), which is in th following terms:

A trust is not invalid merely because some non-charitable and invalid purpose as well as some charitable purpose is or could be taken to be included in any of the purposes to or for which an application of the trust property or of any part of it is directed or allowed by the trust.

(his Honour there referring to s 23(1) of the Charitable Trusts Act 1993 (NSW)).

28. His Honour considered it essential, given the possibility that the Will had effect as a charitable trust, that consideration be given by the executors, properly advised, as to what course they should take and for counsel so to advise. It was in that context that his Honour listed, at [21] of his Honour’s reasons, a number of matters which his Honour considered would need to be taken into account if the Will disclosed a charitable trust, and set out at [22] the questions on which his Honour considered the executors needed to take advice.

29. I have referred already to the fact that there was advice given by Mr Heath of counsel. That advice is dated 2 August 2021 and it concludes by answering the questions posed by his Honour (at [21] of his Honour’s reasons) as follows:

30. As to whether the Will of the deceased evinced an intention to create a valid charitable trust, the answer given was no, because (whilst the terms of cl 7 were capable of being for a charitable purpose), on a proper construction of the Will and the proposed trust as a whole, it was not for a public benefit as a whole nor for a considerable section of the public, but rather for the specific benefit of the deceased and their descendants. The principal purpose of the trust was, in terms, to protect and keep the family farm at Bonville for the perpetual non-commercial enjoyment of the deceased’s children and their lineal descent as their occasional place for a special sanctuary, peace and quiet enjoyment and family gathering. Clause 7 was a secondary purpose to the principal purpose of the proposed trust, being an additional duty of the trustees in their administration of the trust, were it valid.

31. By reference to that answer, the questions in (b) and (c) did not arise, since they related to how the charitable trust would best be able to be established and implemented and whether Lot 351 could be included in the charitable scheme so that the graves could be accessible to family members.

32. As to question (d), counsel advised that, in his opinion, Lot 351 should not be sold to a company to be established with family members as shareholders, so that funds could be guaranteed for the estate to reimburse the executors for money expended by them. Counsel noted that the executors did not believe this to be the best option in the circumstances of the case, as they believed that an agreement could be reached with the beneficiaries.

33. The answer to (e) (as to whether the beneficiaries could reach agreement that the executors and others be recompensed for the monies they have expended, including payment out to Ms Li) was yes. Counsel was instructed that if Lot 352 could be sold (as, unlike Lot 351 it has subdivision and development potential) then such agreement could be reached.

34. As to the final question (f), counsel’s advice was, for the reasons set out in the opinion, that a charitable trust could not be established and therefore counsel advised that the course the executors should take to have the matter determined was to amend the summons so as to limit the questions upon which the executors sought judicial advice. The amended question was whether the executors were justified in treating the estate of the deceased as passing on an intestacy.

35. I have also noted that on receipt of that advice his Honour, on 2 September 2021, concluded that the executors would be justified in commencing proceedings seeking declaratory relief (and that is the summons presently before me).

36. The declarations that are sought in the summons before me are as follows: first, a declaration that the gift of the late Kathleen Mary Johnson (the deceased) of her entire residuary estate by a “Testamentary Perpetual Trust” (the Trust) set out in clause 2 of her Will dated 4 June 2000 (the Will), is void; second, a declaration that clause 7 of the Will does not operate to create a charitable trust in the circumstances; and, third, a declaration that, by reason of the failure of the Trust there is a partial intestacy under the Will and the Executors of the Deceased’s estate are entitled to take the steps identified in [19]-[20] of the Amended Statement of Facts filed in proceedings 2020/00194313.

37. I turn then to the matters raised on the summons before me. Notice has been given to all of the surviving beneficiaries of the present application and submitting appearances have been filed for each of the beneficiaries.

28. There are no active defendants in the proceedings.

29. I have also noted that the Attorney General was notified of the application and has advised, through the Crown Solicitor’s office, that the Attorney General did not seek to be involved. There was therefore no formal contradictor on the present application.

30. I was taken, in submissions, to a threshold issue which thus arises, namely, as to the absence of a contradictor and to the decision of Hallen J in Estate of Aspasia Kandros [2019] NSWSC 757 (Estate of Aspasia Kandros). There, his Honour noted the power under s 75 of the Supreme Court Act 1970 (Cth) to grant declaratory relief and the width of that discretionary power (see [31]-[33] of his Honour’s reasons).

31. His Honour referred to what was required in order for the Court to be satisfied that declaratory relief should be granted, by reference to what was said in Crawford v Davidson-Crawford [2019] NSWSC 728 (at [32]):

In order to obtain a declaration, a party must satisfy the requirements articulated in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581–582; [1992] HCA 10 per Mason CJ, Dawson, Toohey and Gaudron JJ:, namely that: there be a controversy between the parties for determination and not abstract or hypothetical questions; the person seeking relief must have a “real interest”; and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that [have] not occurred and might never happen” or if “the Court’s declaration will produce no foreseeable consequences for the parties”. Their Honours also stated (at 583) that “where a person’s rights or liabilities will or might be affected by the exercise or non-exercise of a statutory power following upon an inquiry, that person is prima facie entitled to be accord natural justice in the conduct of the inquiry”.

42. His Honour then went on to address the question as to the absence of a proper contradictor, noting that in IMF Australia Ltd v Sons of Gwalia Ltd (2004) 211 ALR 231; [2004] FCA 1390 (at [47]), French J, then sitting in Western Australia, had made reference to the requirement for a proper contradictor for jurisdictional purposes, and to the decision of Parker J in Zetting v Müller [2017] NSWSC 659 (Zetting v Müller) where his Honour noted that there was room for debate about whether the presence of a proper contradictor is an essential requirement before a declaration could be made, or was merely a matter of discretion.

43. Noted by Hallen J in Estate of Aspasia Kandros (at [40]), Zetting v Müller was referred to by Bell P in Church of Foursquare Gospel (Australia) Ltd v New Hope Church Swansea Inc [2019] NSWSC 519 (at [16]).

44. Reference is also made to what Hallen J said (at [36]), namely:

However, it has been pointed out that there is a difference between having an interest to oppose the granting of declaratory relief and, having that interest, and choosing whether or not to oppose the granting of that relief: Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; [2012] FCAFC 56 , at [14]; Hill v Dunn[2019] NSWSC 419 , per Henry J, at [44]. Indeed, there is no requirement that all defendants, in an action claiming a declaration, must oppose the relief claimed by the plaintiff: Oil Basins Ltd v Commonwealth of Australia (1993) 178 CLR 643; [1993] HCA 60, per Dawson J, at [14].

45. The plaintiffs here submit that the requirements for the grant of declaratory relief are satisfied. First, that there is a controversy (in that Rein J has raised the potential of a charitable trust arising from cl 7 of the Will and thus it is not an abstract or hypothetical issue) second, that the plaintiffs, as executors of the deceased’s estate, have a real interest in seeking the declaratory relief because it is material to the administration of the deceased’s estate by them; and, third, that the declarations will enable the finalisation of the estate which has been delayed for some time, with all parties having a relevant interest (having already submitted to the orders of the Court).

46. I am satisfied that it is appropriate to proceed in the absence of a formal contradictor in circumstances where the Attorney General has had the opportunity to intervene and has not done so (on the basis of his view that the Will does not create a charitable trust) and where the defendants have all filed submitting appearances.

47. I turn then to the issue of the first declaration that is sought, namely, that the gift of the entire residuary estate set out in cl 2 of the Willis void.

48. There appears to me to be no doubt that the perpetual testamentary trust sought to be established by the Will contravenes the rule against perpetuities and gives rise to an intestacy. I note that that was the conclusion Rein J reached when the judicial advice application was before his Honour, to which I have referred above.

49. The real issue in the present case is as to whether a declaration should be made that cl 7 of the Will does not operate to create a charitable trust. I have set out cl 7 of the Will earlier in these reasons.

50. When Rein J raised the issue in the context of the judicial advice application,his Honour referred to the decision of McMillan J in State Trustees Ltd v Attorney-General (Vic) (2013) 301 ALR 798; [2013] VSC 117 (State Trustees v Attorney-General). There, the deceased left the residue of his estate on trust to certain persons for a life interest in part or all of the estate and then on the expiration of 15 years upon trust to provide for the purchase or provision of an area of land to be used as a park or reservation or sanctuary for the purpose of the preservation and conservation of native Australian flora and fauna. There, an application was made seeking a declaration that the gift or residue for that purpose was a valid gift for charitable purposes.

51. McMillan J referred to various decisions, including Re Wedgwood [1915] 1 Ch 133; Re Ingram [1951] VLR 424; [1951] ALR 900; and Attorney-General (NSW) vSawtell [1978] 2 NSWLR 200 (Sawtell), the last being a decision of Holland J in this Division. In Sawtell’s case, the relevant provision of the Will was as to the rest and residue of the estate, which was to be converted into money, and the balance (after payment of funeral and testamentary expenses, including death duties) was to remain for the preservation of native wildlife (both flora and fauna). His Honour noted in the reasons (at 203) that the question whether gifts favouring animals qualified in law as charitable had arisen in many cases and went on to consider the test for determining whether gifts of that clause satisfied the legal test of a charity.

52. His Honour concluded in that case that there was a valid charitable gift say (at 208-209):

The economy of language in expressing the purposes of the gift, and the generality of the description of objects to be benefited leave the present trust open to arguments such as were put on behalf of the defendants but, in my opinion, the words used here convey more than a mere intention to benefit wild life in vacuo. The testatrix required the funds to be devoted to the preservation of “native” wild life which must, I think, be interpreted as meaning wild life, both flora and fauna, indigenous to Australia. I would make no distinction between New South Wales and Australia because the testatrix was a resident of New South Wales. She was also an Australian, and I would read the expression “native wild life” as referring to flora and fauna native to the region of Australia, although it would make no difference to the validity of the gift if regionally only New South Wales was intended.

53. Relevantly, however, for present purposes, his Honour considered that, on the question whether the trust was shown to have purposes beneficial to the community (see at 209), the fact that its object was the preservation of native wildlife was of considerable significance in the Australian context because of the uniqueness of much of Australia’s native wildlife in the world of plants and animals. His Honour distinguished the situation where words used would convey no more than “a mere intention to benefit wildlife in vacuo”.

54. In State Trustees v Attorney-General, McMillan J similarly concluded that the residue of the estate of the deceased fell within both the second and fourth categories of the legal definition of charity and within the spirit and intendment of the preamble to the Elizabethan Charitable Uses Act 1601 (UK).

55. In relation to the fourth category, namely trusts for other purposes beneficial to the community not falling under any of the preceding heads, McMillan J considered that the deceased’s will demonstrated a clear testamentary intention to provide a benefit to the public, noting that there was increased public interest in the preservation of wildlife as increased urbanisation made it more difficult to see and appreciate a country’s flora and fauna. McMillan J also considered that the gift fell within the second category, the advancement of education.

56. In contrast, reliance is placed in the present case on the decision of Byrne J in the Supreme Court of Victoria in the matter of Campbellv Sherwell [1999] VSC 508 (Campbell). There, Byrne J concluded that a bequest which included the phrase “Should the building … ever be destroyed by fire or other cause, then I bequeath the land and insurance to the Geelong Field Naturalist Club to be kept in perpetuity for the Native birds”, did not fall within the description of a charitable purpose at law. His Honour said, (at [20]):

The purpose of permitting native birds to use the garden is likewise not charitable.

57. His Honour referred to the decision in Sawtell but distinguished it on the basis that the gift in Campbell’s case was not one for the preservation of bird life; rather, it more resembled a gift to benefit bird life in vacuo which, his Honour noted, had been accepted by Holland J as being non-charitable.

58. His Honour also considered that the gift of the garden for the purpose of charitable fetes, standing alone, was entirely unworkable and that, to uphold it, would be to impose upon the estate a burden out of all proportion to the benefit intended by the testatrix (see [22] on which reliance is here placed – see below).

59. Reference is also made to the discussion of this issue in Dal Pont’s Law of Charity (3^rd ed, 2021, LexisNexis Butterworths) (at [11.34]):

The protection or preservation of animals has generally been upheld as a charitable object, even absent any express or even inferred reference thereto in the Preamble to the Statute of Charitable Uses. It is also acknowledged, in the federal sphere, by a separate charity ‘head’ under the Charities Act 2013 (Cth). It is not the animal content that bestows the quality of charity; the assumption of benefit to the community — that is, to persons and not animals per se — arguably stemming from animal protection or preservation is what attracts charitable status. A classic statement as to that benefit is found in Re Wedgwood:

A gift for the benefit and protection of animals tends to promote and encourage kindness towards them, to discourage cruelty, and to ameliorate the condition of brute creation, and thus to stimulate humane and generous sentiments in man towards the lower animals, and by these means promote feelings of humanity and morality generally, repress brutality, and thus elevate the human race.

60. I also note the observation by Professor Dal Pont at [11.39] to the effect that:

The prevailing generous approach to objects related to the preservation or protection of fauna (and flora) does not mean that all efforts directed to this end necessarily benefit the community and that there may be circumstances where any benefit is ephemeral at best or a proposed object may even be detrimental to the community.

61. The test to be applied when determining whether there is a valid charitable trust (as set out in Harmony - The Dombroski Foundation Ltd v Attorney General in and for the State of New South Wales [2020] NSWSC 1276 and Hickey v Attorney General of the State of New South Wales [2021] NSWSC 772) involves an examination of the objects of its constitution and the manner in which those objects were, or are, effected by its activities. This examination requires an holistic enquiry to discern the organisation’s purpose, not a separate analysis of each specific activity undertaken by the organisation. The focus is on whether the main object is charitable. It is also permissible for a charitable organisation to have objects that are incidental or ancillary to the main object.

62. In the above cases, reference was made to the decision of the High Court in Aid/Watch Inc v Commissioner of Taxation (2010) 241 CLR 539, [2010] HCA 42 (at [18] and [23]-[24]), where the plurality noted that the concept of charity, as understood by reference to the four categories in the preamble to the Charitable Uses Act 1601, is not static; rather, it evolves over time to accommodate new social needs and values.

63. Nevertheless, for a gift to be a valid charitable trust within the fourth category of the classification of charitable trusts taken from the speech of Lord Macnaghten in Income Tax Special Purposes Commissioners v Pemsel [1891] AC 531 (Pemsel) (at 583), it is necessary that the purpose be of a public nature in the sense that it be of benefit to the public or a considerable section of the community and that it be capable, if necessary, of being controlled by the Court.

64. In the present case, I draw no distinction from the fact that the wording of cl 7 refers to “care and protection of native wildlife”, rather than preservation of native wildlife as such. Nevertheless, cl 7 must be construed in the context of cl 6 of the Will which makes clear, in my opinion, that there was no public purpose contemplated by the care and protection of native wildlife (since the principal purpose of the proposed family trust and the principal duty and obligation of the trustee in accordance with cl 6 was to protect and keep the family farm for the perpetual non-commercial enjoyment of the children and their descendants and not for public benefit generally) nor is there any suggestion that it was to be made use of for scientific, academic or educational purposes. In the circumstances, I consider that the case is closer to that considered in Campbell by Byrne J and that the purpose specified in cl 7 of the Will was a secondary purpose (in effect ancillary to the principal purpose) and contemplated the protection or care of bird life in vacuo, not in a charitable way.

65. Reference is also made in the advice by counsel to the executors to the operation of s 23 of the Charitable Trusts Act for the proposition that s 23 of that Act cannot convert a predominantly non-charitable gift into a valid charitable gift (citing Downing v Federal Commissioner of Taxation (1971) 125 CLR 185; [1971] HCA 38 (at 196) per Walsh J, with whom the other members of the Court agreed). Reference is also made to the discussion by JD Heydon and MJ Leeming in Jacobs’ Law of Trusts in Australia (8^th ed, 2016, LexisNexis Butterworths) (at [10-65]).

66. In the present case, the application of s 23 of the Charitable Trusts Act does not arise because I am satisfied that the secondary purpose set out in cl 7 is not a charitable purpose.

67. I accept the proposition, applying the test in Attorney-General (NSW) v Donnelly (1958) 98 CLR 538; [1958] HCA 1, that the terms of the trust do not indicate an intention by the deceased to authorise any income or corpus of the trust for the purpose set out in cl 7 and that this was simply an expression of the deceased’s desire that the trustees in their administration of the proposed (void) trust ensure the care and protection of native wildlife including native birds on the property for the deceased’s children and their descendants alone.

68. Accordingly, I am satisfied that a declaration should be made in terms of the declaration sought in prayer 2 of the summons, namely, that cl 7 of the Will does not operate to create a charitable trust. It follows then that there should be a declaration that, by reason of the failure of the testamentary perpetual trust, there is a partial intestacy under the Will.

69. I am asked to consider and make a declaration to the effect that the executors of the estate are entitled to take the steps identified in [19] and [20] of the Amended Statement of Facts. The following proposal is made in [19]:

Lot 352 of the new lots be sold to distribute any surplus funds from the sale of Lot 352 net of costs and expenses to beneficiaries of the Testatrix’s estate as if on intestacy;

The plaintiffs enter into negotiations with the beneficiaries of the Testatrix’s estate (as if on intestacy) for an agreement to:

reimburse the outgoings and;

preserve and maintain Lot 351 for the memory of the Testatrix and the use by those beneficiaries.”

70. Paragraph 20 seeks the judicial advice of the Court as to the following:

Whether the plaintiffs would be justified in selling Lot 352 of the new lots to distribute any surplus funds from the sale of Lot 352 (net of costs and expenses) to beneficiaries of the Testatrix’s estate as if on intestacy;

Whether the plaintiffs would be justified in distributing any surplus of the Testatrix’s estate, including Lot 351, as if on intestacy.

71. I have referred above to the fact that there was little money in the deceased’s estate on the deceased’s death and that the plaintiffs have, out of their own funds and from borrowings obtained from other of the beneficiaries, incurred considerable expenses to date in relation to the maintenance of the properties and the steps that have been taken in relation thereto. I note that there will also be costs that are required to be paid in respect of the applications that have been made to date.

72. Given the stance taken by the beneficiaries to date and the submitting appearances entered into by them, I am of the view that the plaintiffs would be justified in selling Lot 352 in order to distribute any surplus funds from the sale of Lot 352 (net of costs and expenses) to the beneficiaries of the deceased’s estate as if on an intestacy, and would be justified in distributing any surplus of the estate, including Lot 351, as if on an intestacy. I consider that the executors would be justified in entering into negotiations with the beneficiaries for an agreement in that regard.

73. I do not consider that I need to make a declaration that the executors are entitled to take the steps identified in [19] and [20]. I will simply say I think that they would be justified in so doing.

74. The plaintiffs submit that, ordinarily, their costs would be paid from the estate on an indemnity basis, citing Morrison-Conway & Anor; Estate of the Late Judith Christine Walsh [2018] NSWSC 685 (at [75]) but they also note the remarks that were made by Parker J in Duggan v White [2018] NSWSC 364 (at [31]).

75. In my opinion, it is appropriate for there to be an order for the costs of the executors to be paid out of the estate on the indemnity basis in circumstances where there was a need for the summons seeking the declaratory relief and where Rein J gave judicial advice that the executors would be justified in acting as they have in relation to the present application.

Orders

76. For the above reasons, I make the following declarations and orders:

1. Declare that the gift of the late Kathleen Mary Johnson of her entire residuary estate by a testamentary perpetual trust as set out in clause 2 of her Will dated 4 June 2000 is void.

2. Declare that clause 7 of the Will does not operate to create a charitable trust.

3. Declare that, by reason of the failure of the testamentary perpetual trust, there is a partial intestacy under the Will.

4. For the purposes of giving judicial advice to the executors pursuant to s 63 of the Trustee Act 1925 (NSW), advise that the executors of the estate would be justified in taking the steps identified in [19] and [20] of the Amended Statement of Facts (which forms part of Exhibit E on the present application).

1. Liberty to apply for further directions from the Court in relation to any issues arising out of the administration of the above or implementation of the above.

2. Order that the plaintiffs’ costs of the summons be paid out of the estate of the deceased on an indemnity basis.

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Amendments

04 February 2022 - Decision date

04 February 2022 - Decision date

Decision last updated: 04 February 2022