King v Attorney General for New South Wales

[2020] NSWSC 629

Supreme Court

New South Wales

Medium Neutral Citation:

King v Attorney General for New South Wales [2020] NSWSC 629

Hearing dates:

In Chambers and on the papers

Date of orders:

27 May 2020

Decision date:

27 May 2020

Jurisdiction:

Equity

Before:

Hallen J

Decision:

The Court:

 

1. Declares that, upon the true construction of the Will dated 1 September 2014 of Robert Kay Bassingthwaighte (“the deceased”) the gift of property in Clause 3 constitutes a valid charitable trust.

2. Declares that the original purposes of the said charitable trust (identified by reference to Clauses 4, 5, 6 and 7 of the deceased’s Will) have, since they were laid down, ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust.

3. Orders that the trust property be applied cy-près.

4. Orders that the following scheme be settled for that purpose:

(a) The funds to be held on the trust herein are the balance of the assets of the estate of Robert Kay Bassingthwaighte, after deduction of all fees and expenses incurred in obtaining the approval of the Supreme Court of New South Wales to this cy-près scheme, together with all reinvested funds (“the trust fund”).

 

(b) The Trustee shall be the University of Sydney.

 

(c) The trust fund shall be invested and managed by the Trustee on a perpetually endowed basis in accordance with the University of Sydney policy from time to time with respect to the investment and management of capital preserved trust funds.

 

(d) The Trustee shall apply the annual allocation from the trust fund to grant scholarships or fellowships named the Robert Bassingthwaighte Scholarship or the Robert Bassingthwaighte Fellowship to support research and study at the University of Sydney on religion or religious experience as related to aesthetics, creativity and the arts.

 

(e) The scholarships or fellowships shall be awarded after due assessment by the persons appointed for this purpose by the University of Sydney in the Faculty of Arts and Social Sciences or its successor.

 

(f) Any unapplied allocation in any financial year shall be carried forward for future Scholarships or Fellowships to be awarded.

 

5. Orders that the Plaintiff’s costs, calculated on the indemnity basis, of the proceedings, be paid, or retained, as the case may be, out of the trust property.

 6. Orders that the Defendant’s costs, calculated on the ordinary basis, of the proceedings be paid out of the trust property.

Catchwords:

CHARITIES – Trust established in testator’s will –Whether gift was for charitable purposes – administration and control by Court – Where parties agree that the trust property should be applied cy-près – Whether the statutory presumption of a general charitable intention applies – Presumption maintained – Whether the purposes of the trust had ceased to prove a suitable and effective method of using the trust property, within the meaning of s 9 of the Charitable Trusts Act 1993 (NSW) – New proposed scheme adopted – Costs, calculated on the indemnity basis awarded to the Plaintiff; costs calculated on the ordinary basis awarded to the Defendant

Legislation Cited:

Charitable Trusts Act 1993 (NSW), ss 6, 9, 10, Pt 3

Cases Cited:

Attorney General for New South Wales v Fulham [2002] NSWSC 629
Attorney-General (NSW) v Perpetual Trustee Co Ltd (1940) 63 CLR 209; [1940] HCA 12
Estate Polykarpou; Re a charity (2016) 16 ASTLR 400; [2016] NSWSC 409
Attorney General for New South Wales v Fulham [2002] NSWSC 629
Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (2017) 94 NSWLR 340; [2017] NSWCA 28
Hunter Region SLSA Helicopter Rescue Service Limited v Attorney-General of New South Wales (2013) 9 ASTLR 308; [2013] NSWSC 1749
In the matter of the New South Wales Rural Fire Service & Brigades Donations Fund; Application of Macdonald & Or [2020] NSWSC 604
Metropolitan Petar v Mitreski [2001] NSWSC 976
Northern Sydney and Central Coast Area Health Service v Attorney-General for NSW [2007] NSWSC 881
Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales (The Will of the Hon George Nesbitt) (No 3) [2018] NSWSC 1784
Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales (The Will of the Hon George Nesbitt) (2018) 17 ASTLR 126; [2018] NSWSC 1456
Re The Macedonian Orthodox Church Community ‘Saint Dimitrij Solunski’ Springvale Inc [2020] VSC 274
RSL Veterans’ Retirement Village Ltd v NSW Minister for Lands [2006] NSWSC 1161
The Trust Company (Australia) Limited as Trustee of the Kyle Williams Home Trust v Attorney General New South Wales [2011] NSWSC 323
Wallis v Solicitor-General for New Zealand [1903] AC 173

Texts Cited:

William Henderson, Jonathan Fowles and Julian Smith, Tudor on Charities (10th ed, 2015, Sweet & Maxwell)

Category:

Principal judgment

Parties:

Julie King (Plaintiff)
Attorney General for New South Wales (Defendant)

Representation:

Counsel:
P J Muscat (Plaintiff)
J Davidson (Defendant)

  Solicitors:
Hunt & Hunt Lawyers (Plaintiff)
Crown Solicitor’s Office (NSW) (Defendant)

File Number(s):

2019/00396765

Judgment

Introduction

1. HIS HONOUR: This matter was in the Succession List on Monday 18 May 2020. On that occasion, Ms P J Muscat of counsel appeared for the Plaintiff and Ms J Davidson of counsel appeared for the Defendant, the Attorney-General for New South Wales. Both requested me to consider whether the determination of the proceedings could take place in Chambers without the need for a hearing.

2. In view of the present situation involving the COVID-19 pandemic, because I have received extremely helpful submissions from counsel (for which I am extremely grateful), because there is really no dispute about the facts of the case, or about the principles or their application to those facts, and because the Attorney-General has considered the matter and supports the application made and the orders sought by the Plaintiff, I have determined the matter in Chambers, on the papers, as requested by the parties and that an oral hearing is not necessary.

The Proceedings

3. The proceedings involve the estate of Robert Kay Bassingthwaighte (the deceased), who died on 19 August 2015, leaving a duly executed Will that he made on 1 September 2014. On 30 November 2015, this Court granted Probate of his Will to Julie King, the executor named therein. Ms King was a close and long-time friend of the deceased. She is the Plaintiff in the proceedings. The evidence suggests that the deceased did not leave any living family members.

4. Section 6 of the Charitable Trusts Act 1993 (NSW) (the CT Act) provides that charitable trust proceedings are not to be commenced in the Court unless (a) the Attorney-General has authorised the bringing of the proceedings, or (b) leave to bring the proceedings is obtained from the Court. The Court is not to give such leave unless satisfied that the Attorney-General has been given an opportunity to consider whether to authorise the proceedings or that the referral of the matter to the Attorney-General is not appropriate because of the urgency of the matter or other good cause.

5. In or about December 2019, the Solicitor-General for New South Wales, as delegate of the Attorney-General, authorised the commencement of these proceedings. The Attorney-General was joined as the Defendant in the proceedings, in his role as the protector of charities.

6. Lord Macnaghten considered, delivering the advice for the Board, in Wallis v Solicitor-General for New Zealand [1903] AC 173 at 181–182:

“It is the province of the Crown as parens patriae to enforce the execution of charitable trusts, and it has always been recognised as the duty of the law officers of the Crown to intervene for the purpose of protecting charities and affording advice and assistance to the Court in the administration of charitable trusts.”

7. For a further discussion of the role of the Attorney-General in such proceedings: see Metropolitan Petar v Mitreski [2001] NSWSC 976 at [10]–[11] (Hamilton J); Estate Polykarpou; Re a charity (2016) 16 ASTLR 400 at 409 [32]; [2016] NSWSC 409 at [32] (Lindsay J); In the matter of the New South Wales Rural Fire Service & Brigades Donations Fund; Application of Macdonald & Ors [2020] NSWSC 604 at [11] (Slattery J); Re The Macedonian Orthodox Church Community ‘Saint Dimitrij Solunski’ Springvale Inc [2020] VSC 274 at [3] (Derham AsJ); William Henderson, Jonathan Fowles and Julian Smith, Tudor on Charities (10th ed, 2015, Sweet & Maxwell) at pars 13-013–13-017, 13-023–13-028.

8. There is power conferred on the Attorney-General, by the CT Act, to establish schemes for trusts in cases where the value of the trust property affected by the scheme does not exceed $500,000. As will be read, the amount of the trust fund in the present case is slightly greater than that amount.

9. In these proceedings, now by amended Summons filed on 19 December 2019, the Plaintiff seeks a declaration in respect of the impracticability of execution of the trust having regard to the contents of Clauses 4, 5, 6 and 7 of the deceased’s Will (prayer one in the amended Summons); an order that a cy-près scheme be settled to administer the capital and income of the residuary estate of the deceased “for purposes as close as possible to those declared in clauses 4, 5, 6 and 7 of the will” (prayer 2); and orders for the costs of each of the parties, calculated on the indemnity basis to be paid out of the estate of the deceased (prayer 3).

10. The Plaintiff, the Attorney-General, and the University of Sydney (the organisation that agreed to carry out the purpose stated in the Will), all accept that a cy-près scheme is justified and that s 9 of the CT Act is available to the Plaintiff in the present case. It follows that as all are agreed as to the course to be followed, the Court should not lightly stand in the way of a regime which on its face achieves the charitable purpose: Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales (The Will of the Hon George Nesbitt) (No 3) [2018] NSWSC 1784 at [8] (Leeming JA).

The deceased’s Will

11. By his Will, the deceased gave the whole of his estate, on trust, to the Plaintiff “for the purpose of handing over my estate to the institution, organisation or foundation which undertakes to carry on the functions entailed in the End Purpose of this will”.

12. The “End Purpose” is described in Clause 4. It is focussed on the “establishment and ongoing activities of the Vivants Piliers Centre for research and development of arts-based religion, at Bracken Fern Road, Yandina, Queensland”. The “activities” are further itemised to include the maintenance and expansion of the Vivants Piliers Library, the maintenance and development of the Vivants Piliers Garden, and the establishment of a research-residency on the site of the Vivants Piliers Centre.

13. Clause 5 directs the transfer of the deceased’s estate to the University of Sydney or “any other educational organisation or arts institute or organisation or foundation, which agrees to carry out the End Purpose …”. The Clause vests absolute discretion in the Plaintiff, as the executor, to deem suitable the recipient institution, and to determine “suitable terms of any trust or other agreement established for this purpose”.

14. Clause 6 includes directions in respect of identified literary and artistic works and an identified website.

15. Clause 7 gives the Plaintiff, as executor, financial and managerial control and discretion “until such time as the Vivants Piliers property and estate are handed over to” the ultimate organisation, institute or foundation.

16. Clause 8 of the Will contains further powers to the Plaintiff, as executor.

17. In the Inventory of Property, attached to, and placed inside, the Probate document, the deceased’s estate was said to have an estimated, or known, value of $844,544. It was said to consist of real estate at Kulangoor (near Yandina), a town in the Sunshine Coast region of Queensland ($700,000), money in current accounts ($6,700) and investments ($12,183 and $125,659). (I have omitted the reference to cents.)

18. The Plaintiff gave evidence that the deceased purchased the Queensland property, comprising four acres, in about 1982. At that time, it was a remote area which did not have any public transport, sewer availability or other essential services. Over time, the deceased built a basic house on the front part of the property. By the date of his death, the house was very run down and neglected. The house was called “Vivants Piliers Garden”. There were no sculptures or artworks located in the garden, apart from a few items which the deceased had purchased from a nursery and painted. There was no “Vivants Piliers library”, and there were no rare books, images, or manuscripts. There was no centre, known as “Vivants Piliers … for research and development of arts-based religion”. During the deceased’s lifetime, the Queensland property was never used as a library, research centre or gardens.

19. The reference to “Vivants Piliers” appears to relate to part of a poem “Correspondences” in a volume of poetry “Les Fleurs du mal” (The Flowers of Evil), written by Charles Pierre Baudelaire, a 19th century French poet. The relevant passage is:

“La Nature est un temple où de vivants piliers

Laissent parfois sortir de confuses paroles …”

20. The passage means:

“Nature is a temple in which living pillars

Sometimes give voice to confused words …”

21. The Plaintiff sold the Queensland property in December 2017. The sale settled in May 2018. (The deceased’s Will contained an express power of sale in Clause 8(a) and Clause 8(g).)

22. The amount available for distribution (subject to costs) from the estate of the deceased is now estimated, by the Plaintiff, to be almost $562,000 (the trust fund). She states that, after the other estate assets were called in, various expenses, including substantial expenses in relation to the Queensland property were paid.

23. It is accepted by the Plaintiff that the estimated costs associated with establishing a library, research centre and gardens at the Queensland property would far exceed the trust fund. There is evidence from Professor Annamarie Jagose, the Dean of the Faculty of Arts and Social Sciences at the University of Sydney, who is responsible for the oversight and management of all teaching, learning and research conducted by the Faculty as well as its financial and administrative affairs.

24. The University of Sydney also supports the scheme proposed by the parties to the Court. Professor Jagose gives the following evidence in an affidavit affirmed 11 November 2019:

“[6] I support this proposal on two distinct bases: first, on the basis of the University’s interpretation of the phrase ‘arts-based religion’; and second, on the basis of the University’s current management of its trust obligations with respect to endowed funds.

…

[9] To the best of my knowledge and belief, the University manages its endowment funds on a pooled basis within an investment common fund, as permitted by Schedule 2 of the University of Sydney Act 1989 NSW. The investment common fund is unitised to reflect and track the value of each co-mingled endowed trust. The return on invested funds accrues through a mix of income and capital growth. Each year, the University allocates a percentage (currently 4.5% and referred to by the University as the spending allocation) of the value of each discrete fund held within the common fund for spending on the specific purpose of the aligned trust. The current figure of 4.5% represents a current safe spending percentage nominated on advice from financial planning experts to enable the trust capital to be preserved after inflation. The returns achieved by this investment mechanism have over the last 10 years consistently exceeded return objectives.

[10] The University, as a public University established by statute, has an established framework in place for the administration of trust monies and the discharge of its obligation as a trustee of funds. This includes the University’s Gift Administration Policy, and its internal trust compliance programme. The University has a dedicated Trusts Office charged with assisting faculties to ensure that charitable funds held by the University as trustee are applied strictly with the trust conditions attaching to those funds. The University also has a business unit, Investment and Capital Management (ICM), which is charged with the responsibility of managing the investment of the funds that the University holds on trust.”

The Scheme proposed

25. The scheme proposed by the Plaintiff is set out in her affidavit sworn 29 April 2020 (the 29 April Affidavit) at par 24, and the affidavit of Professor Jagose at par 5. What is proposed involves the trust fund being invested, and managed, by the University of Sydney (in accordance with its relevant policy), with annual allocations to be applied for the grant of scholarships, or fellowships, in the name of the deceased, to support research and study at that University on religion or religious experience as related to aesthetics, creativity and the arts, as follows:

“The funds to be held on these trusts are the balance of the assets of the estate of the late Robert Bassingthwaighte after deduction of all fees and expenses incurred in obtaining the approval of the Supreme Court of New South Wales to this cy-pres scheme together with all reinvested funds (the "trust fund").

The Trustee shall be the University of Sydney.

The trust fund shall be invested and managed by the Trustee on a perpetually endowed basis in accordance [with] University of Sydney policy from time to time with respect to the investment and management of capital preserved trust funds.

The Trustee shall apply the annual allocation from the trust fund to grant scholarships or fellowships named the Robert Bassingthwaighte Scholarship or the Robert Bassingthwaighte Fellowship to support research and study at the University of Sydney on religion or religious experience as related to aesthetics, creativity and the arts.

The scholarships or fellowships shall be awarded after due assessment by the persons appointed for this purpose by the University of Sydney in the Faculty of Arts and Social Sciences or its successor.

Any unapplied allocation in any financial year shall be carried forward for future Scholarships in [sic] or Fellowships to be awarded.”

The relevant principles

26. There is no dispute that the proceedings relate to the “administration” of the trust identified in the Will of the deceased.

27. Then, the first question to consider is whether the gift made by the deceased (the End Purpose) is a gift for charitable purposes. If it is, the next question is whether upon its proper construction, the deceased’s Will manifests a general charitable intention so as to warrant, and require, the gift to be administered cy-près.

28. Section 10(2) of the CT Act establishes a presumption in favour of a general charitable intention, unless there is evidence to the contrary in the instrument establishing the charitable trust. In Attorney-General (NSW) v Perpetual Trustee Co Ltd (1940) 63 CLR 209 at 225; [1940] HCA 12, Dixon and Evatt JJ (in determining that the deceased’s Will contained a general, rather than a merely particular, charitable intention) expressed the principle as follows:

“The question is often stated to be whether the trust instrument discloses a general intention of charity or a particular intention only. But, in its application to cases where some particular direction or directions have proved impracticable, the doctrine requires no more than a purpose wider than the execution of a specific plan involving the particular direction that has failed. In other words ‘general intention of charity’ means only an intention which, while not going beyond the bounds of the legal conception of charity, is more general than a bare intention that the impracticable direction be carried into execution as an indispensable part of the trust declared.”

29. As was written by Lindsay J in Estate Polykarpou; Re a charity at [4]:

“Expressed in more summary terms, the question might be framed as: Whether, upon the proper construction [of] her will, the deceased ‘dedicated’ the property the subject of controversy to charity. The necessity for finding a general charitable intention, rather than merely a particular one, arises from the circumstance that a particular charitable gift has become impossible, or impracticable, of performance before taking effect. Once property is effectively dedicated to charity, whether in pursuance of a general or particular charitable intent, it remains so dedicated, to the exclusion of private interests otherwise entitled: Cram Foundation v Corbett-Jones and Anor [2006] NSWSC 495 at [49]-[50], citing, inter alia, In re Slevin; Slevin v Hepburn [1891] 2 Ch 237 and In re Wright; Blizard v Lockhart [1954] Ch 347 at 362-363.”

30. In this case, the answer to the first question is not the subject of any dispute. Counsel for the Plaintiff submitted that:

“… while the will does contain a level of specificity as to the utilisation of the [Queensland] property, there is nevertheless an underlying – and overriding – charitable intention to be inferred that is general rather than merely particular.

The deceased’s ‘End Purpose’ appears on its face to encapsulate the advancement and promotion of research and development of an arts-based understanding of religion.

A trust for the purpose of religion is prima facie a trust for a valid charitable purpose. Further, a valid charitable trust for the promotion of religion can exist even though the religious beliefs to be promoted do not belong to any recognised religion or sect.” (citations omitted)

31. Counsel for the Plaintiff also submitted that “the general and paramount intention of the [deceased] can be taken to be the promotion of research, education and development of an arts-based conception of modern religion as set out in the deceased’s finished and unfinished works”.

32. Counsel for the Attorney-General put it slightly differently, submitting that the spirit of the trust was to provide “for the promotion of research, education and development of an arts-based conception’ of religion”.

33. The parties accepted that the subject gift is a gift of property to be held on trust for charitable purposes, and that the Will manifested a general charitable intention attaching to that gift, such that, the mode of performance of the trust having failed, the Court can, and should, order that a cy-près scheme be settled. Respectfully, I agree.

34. At common law, a cy-près scheme could be settled by the Court if satisfied that the original purposes of the trust stipulated by a testator or settlor “failed”, which meant that it had become impossible or impracticable to carry out: Attorney General for New South Wales v Fulham [2002] NSWSC 629 at [12] (Bryson J).

35. Section 9(1) of the CT Act provides:

The circumstances in which the original purposes of a charitable trust can be altered to allow the trust property or any part of it to be applied cy pres include circumstances in which the original purposes, wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust.

36. The section, on its face, presupposes the existence of a power to alter the purposes of a charitable trust in certain circumstances. It is no longer necessary that actual compliance with the original terms of the trust should be impossible. It is enough that those terms have ceased to provide a “suitable and effective method” of using the trust property. As Bryson J (as his Honour then was) observed in Attorney General for New South Wales v Fulham at [17]:

“The Court may alter the purposes of a charitable trust where the original purposes have ceased to provide a suitable and effective method of using the trust property; this is well short of a test requiring impossibility. Subsection 9(1) greatly widens the circumstances in which the Court may act and the influence which it may allow considerations of practicality to have.”

37. In Hunter Region SLSA Helicopter Rescue Service Limited v Attorney-General of New South Wales (2013) 9 ASTLR 308 at 317 [37]; [2013] NSWSC 1749, White J (as his Honour then was) at [37], wrote:

“In my view, s 9 can be applied proleptically. Section 9 is remedial and beneficial legislation and not to be narrowly construed. A construction of s 9 that the court could not make an order altering the original purposes of a charitable trust until those purposes have ceased to provide a suitable and effective method of using the trust property, even though it will then be too late to do anything about it, should not be adopted if an alternative construction is reasonably available. Section 9(1) does not purport to state exhaustively the circumstances in which the court can alter the original purposes of the charitable trust. The section says that the circumstances in which those original purposes can be altered ‘include’ circumstances in which the original purposes have ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trust. As the power can be exercised in those circumstances, it is only logical that it can also be exercised if it is shown that the original purposes will cease to provide a suitable and effective method of using the trust property having regard to the spirit of the trust.” (emphasis in original)

38. In Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (2017) 94 NSWLR 340 at 381–382 [196]–[197]; [2017] NSWCA 28 at [196]–[197], Payne JA (Ward and Gleeson JJA agreeing) explained the operation of s 9:

“Section 9 is engaged by three interacting criteria through which to consider the continuing utility of the original trust purposes:

First, the notion of ‘wholly or in part’;

Secondly, a ‘suitable and effective method’;

Thirdly, the requirement to have ‘regard to the spirit of the trust’.

It is textually clear that the requirements of s 9 involve a threshold lower than the general law cy-près requirement of impossibility or impracticality. The test is whether the original purposes of the trust have ceased to provide a suitable and effective method of using the property, in whole or in part, having regard to the ‘spirit of the trust’. The spirit of the trust is thus a broader conception than the original purposes of the trust. It is clear that the general law requirement for impossibility or impracticability of achievement of the trust purposes is no longer a condition precedent to the making of an order.”

39. The questions arising on the application of s 9 involve the making of value judgments: Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic at [214]–[215] (Payne JA).

40. As Payne JA cautioned, however, s 9 must be considered as a whole, and should not be artificially broken down into separate components: Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic at [195].

41. The purpose of the section is “to allow schemes to be ordered even if, strictly speaking, the trust purpose can in some way be carried out albeit not in an economic and most effective or beneficial way”: Northern Sydney and Central Coast Area Health Service v TheAttorney-General for NSW [2007] NSWSC 881 at [26] (Windeyer J).

42. As was written by Leeming JA in Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales (The Will of the Hon George Nesbitt) (2018) 17 ASTLR 126 at 144 [57]; [2018] NSWSC 1456 at [57]:

“There are two elements in this part of the statute. The first is the dilution of the traditionally strict test, seen in the words ‘suitable and effective’, which may be contrasted with ‘impossible or impracticable’. The second is the mandatory but metaphoric if not metaphysical consideration, the ‘spirit of the trust’. The latter words, which to a reader unfamiliar with the case law in this area might well be regarded as an unusual element in a statutory test, are best addressed first.”

43. In this case, the details of the trust established by the deceased’s Will are discoverable. The issue that arises concerns whether the trust, as detailed, can be effectuated.

44. The Plaintiff submits, and the Attorney-General agrees (as does the University of Sydney), that it was, from the outset, impossible or impracticable to effectuate the trust as detailed in the Will, given the nature of the Queensland property, what was envisaged by the trusts in the Will, and the size of the estate other than the Queensland property.

45. In determining whether the original purposes of the trust have ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust. It is to be noted that the Queensland property was never used in the way envisaged by the deceased in the Will during his lifetime. The Plaintiff’s evidence is that, while the deceased expressed some general intentions in relation to his “vision” for the Queensland property, no steps were taken by him to carry out that vision.

46. In The Trust Company (Australia) Limited as Trustee of the Kyle Williams Home Trust v Attorney General New South Wales [2011] NSWSC 323, the deceased left her property at Kyle Bay, George’s River, on trust to convert the same into a convalescent home for children. White J wrote at [19]:

“I think it can be inferred from the fact that the property has never been used for the purpose specified in the will, that from the time of the testatrix’s death it was impracticable to use the property and the trust funds for the stated purposes.”

47. In the present case, the evidence, overall, enables the finding that the Queensland property was never fit for the purposes stipulated by the deceased’s Will. Account should be taken, in this respect, of the nature and value of the estate generally and the evidence in relation to the likely costs associated with establishing a library, research centre and residence, and gardens.

48. Whilst I accept the submission, I am also satisfied that the threshold required to establish that the original purposes have ceased to provide a suitable and effective method of using the trust property for the purposes of s 9 of the CT Act has been established. In this regard, the original purpose, which must be determined at the time of creation of the trust (Free Serbian Orthodox ChurchDiocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic at [232] (Payne JA)), involved the maintenance and expansion of a library, garden and research centre at the Queensland property, those being the activities of the “Vivants Piliers Centre for research and development of arts-based religion” (see Clause 4 of the Will). Not only was the Queensland property never used as a library, research centre or gardens during the deceased’s lifetime, the deceased did not maintain a collection of rare books, images or manuscripts suitable for inclusion in a library, nor of sculptures or artworks. Finally, the estimated costs associated with establishing a library, research centre and gardens at the property exceeded the other assets of the estate by a considerable margin.

The Proposed Scheme

49. Since the Court is satisfied that the trust in the deceased’s Will was always impossible or impracticable, or, in any event, has ceased to provide a suitable and effective method of using the trust property, and that the deceased's will manifests a general charitable intention, the next question concerns the mode of effectuating the deceased’s intention.

50. In laying down a scheme, whilst it is not necessary for the Court to search for a charitable purpose “which in rigorous logic is as nearly as possible” the same as the one which has failed (Attorney General for New South Wales v Fulham at [18] (Bryson J)), the Court, nevertheless, must act in accordance with the spirit of the trust in the search for an appropriate analogous application of the trust property: Attorney General for New South Wales v Fulham at [20] (Bryson J); RSL Veterans’ Retirement Village Ltd v NSW Minister for Lands [2006] NSWSC 1161 at [57] (Palmer J). This is reinforced by the terms of s 9(1) of the CT Act.

51. The Plaintiff submits that the proposal to grant scholarships or fellowships in the name of the deceased to support research and study at the University of Sydney on religion, or religious experience, as related to aesthetics, creativity and the arts, is broadly consistent with the deceased’s paramount intention — and the spirit of the Will more generally — for the promotion of research, education and development of an arts-based conception of modern religion. It also accounts for the reality that the estate has now been liquidated and is in cash. The proposed scheme is appropriately connected to the amount to be held on trust.

52. The Attorney-General also submits that the Court could be satisfied that the scheme proposed satisfies this requirement, insofar as it will facilitate study and research on the subject of religion or religious experience “as related to aesthetics, creativity and the arts”. While such study or research will presumably not necessarily, or not only, involve “arts-based religion” (the term used in Clause 4 of the deceased’s Will), that term remains somewhat obscure, and the study and research that will be funded will evidently concern the intersection between religion and the arts.

53. I respectfully agree with the submissions made by both counsel.

54. Even though the Plaintiff, in the amended Summons seeks an order that each party’s costs, calculated on the indemnity basis, be paid from the trust fund, Leeming JA in Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales (The Will of the Hon George Nesbitt) at [129]–[134], noted that there was a “pattern of inconsistent orders” in relation to the ordering of the Attorney-General’s costs on the indemnity basis, and a lack of Australian authority on point. His Honour also wrote, at [130], that the Attorney-General’s position is entirely different from that of the trustee.

55. Having regard to the size of the fund in question, the Attorney-General seeks costs calculated on the ordinary basis out of the trust fund. There is no need for that order not to be made.

56. The grounds for the proposed declarations and orders sought by the parties are made out. I make the following declaration and orders which accords with the proposed declarations and orders agreed to by the parties:

1. Declares that, upon the true construction of the Will dated 1 September 2014 of Robert Kay Bassingthwaighte (“the deceased”) the gift of property in Clause 3 constitutes a valid charitable trust.

2. Declares that the original purposes of the said charitable trust (identified by reference to Clauses 4, 5, 6 and 7 of the deceased’s Will) have, since they were laid down, ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust.

3. Orders that the trust property be applied cy-près.

4. Orders that the following scheme be settled for that purpose:

1. The funds to be held on the trust herein are the balance of the assets of the estate of the late Robert Kay Bassingthwaighte, after deduction of all fees and expenses incurred in obtaining the approval of the Supreme Court of New South Wales to this cy-près scheme, together with all reinvested funds (“the trust fund”).

2. The Trustee shall be the University of Sydney.

3. The trust fund shall be invested and managed by the Trustee on a perpetually endowed basis in accordance with the University of Sydney policy from time to time with respect to the investment and management of capital preserved trust funds.

4. The Trustee shall apply the annual allocation from the trust fund to grant scholarships or fellowships named the Robert Bassingthwaighte Scholarship or the Robert Bassingthwaighte Fellowship to support research and study at the University of Sydney on religion or religious experience as related to aesthetics, creativity and the arts.

5. The scholarships or fellowships shall be awarded after due assessment by the persons appointed for this purpose by the University of Sydney in the Faculty of Arts and Social Sciences or its successor.

6. Any unapplied allocation in any financial year shall be carried forward for future Scholarships or Fellowships to be awarded.

5. Orders that the Plaintiff’s costs, calculated on the indemnity basis, of the proceedings, be paid, or retained, as the case may be, out of the trust property.

6. Orders that the Defendant’s costs, calculated on the ordinary basis, of the proceedings be paid out of the trust property.

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Decision last updated: 27 May 2020