Lutheran Church of Australia South Australia District Inc v Farmers' Co-operative Executors and Trustees Ltd

[1970] HCA 12

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Menzies and Windeyer JJ.

LUTHERAN CHURCH OF AUSTRALIA SOUTH AUSTRALIA DISTRICT INCORPORATED v. FARMERS' CO-OPERATIVE EXECUTORS AND TRUSTEES LTD.

(1970) 121 CLR 628

1 May 1970

Wills

Wills—Construction—Gift of "Commonwealth Bonds"—Whether inscribed stock passed—Admissibility of extrinsic evidence of description of property by testatrix when living. Wills—Delegation of testamentary power—Discretionary power to trustee to transfer property to named charity—No gift over—Validity—Whether an immediate trust.

Decisions

1970, May 1.
The following written judgments were delivered: -
BARWICK C.J. This is an appeal from an order of the Supreme Court of South Australia declaring the construction in certain respects of the will of Phillipa Stapleton formerly of 316 South Terrace, Adelaide. The deceased made her own will in the following terms:

"I revoke all other Will made by me and I appoint Farmers Co-Operative Executors and Trustee Adelaide S.A. whose registered office is situated at No. 11-13 Bentham St. Adelaide.

1. I desire that my remains be cremated and laid to rest in the Soldiers Cemetery Springbank. 2. I bequeath a pecuniary legacy of Two Thousand Dollars (2,000) to my Niece Margaret Evelyn Marsh of No. 10

Bentley St. Surrey Hills, Victoria.

3. I bequeath a pecuniary legacy of $600 to my brother Walter Roland Marsh of Mary St. (No. 64) Unley. 3. I bequeath a pecuniary legacy to Catherine Doreen Marsh (my sister) of $600.
4. I bequeath All my Commonwealth Bonds to Frank John Stapleton of 590 Cross Rd., Plymton S.A.
5. I bequeath a pecuniary legacy of Six Hundred Dollars each to David Bryce Stapleton and Richard Leigh Stapleton.
6. My Trustees have discretionary power to transfer any mortgages, and property, and Shares in Companies invested
in my name to the Lutheran Mission 20 Marborough St.
St. Peters, S.A. for building Homes for Aged Blind Pensioners after All expenses paid, and I desire that there shall be no subsequent adjustment or apportionment therefore between any of the beneficiaries under my Will." (at p631)

2. Two principal questions arose before the Chief Justice of South Australia upon the originating summons taken out by the respondent Farmers' Co-operative Executors and Trustees Limited for the construction of the will. The first question was whether or not Commonwealth inscribed stock for a face value of $12,500 was included in the bequest of "all my Commonwealth Bonds" to the respondent Frank John Stapleton. The second question was "whether the provisions of cl. 6 create a valid disposition or constitute a valid charitable trust or are void for uncertainty". An allied question asked was "whether the provisions of cl. 6 give the trustee a discretion limited to the time of payment or transfer or some other and what discretion". (at p631)

3. The learned Chief Justice answered the first question in the affirmative and with respect to the second question declared that the provisions of cl. 6 do not create a valid disposition and that the testatrix died intestate as to the whole of her residual estate. (at p631)

4. I have had the advantage of reading the reasons for judgment prepared in this appeal by my brothers McTiernan and Menzies jointly and those prepared by my brother Windeyer. I agree with all my brethren that the Chief Justice was right in the answer which he gave with respect to the bequest of the Commonwealth bonds. I also agree with my brother Windeyer that the evidence tendered before the Chief Justice as to the usage by the deceased of the word "bonds" to include her holdings in Commonwealth loans was admissible and I would wish to add nothing to his Honour's reasons for so thinking. (at p632)

5. However, I am unable to agree with the Chief Justice's view that cl. 6 of the will is void for uncertainty and that there is necessarily an intestacy. In my opinion, cl. 6 validly creates a special dispositive power, namely, a discretionary power to appoint the residuary estate, or perhaps any part of it, to the Lutheran Church of Australia South Australia District Incorporated for charitable purposes. (at p632)

6. The power of testamentary disposition given by s. 4 (1) of the Wills Act, 1936 (S.A.) is to devise, bequeath or dispose of property by a duly executed will. The exercise of the power involves the testator in himself making the disposition of his property in or by his will. As it has been said : "He cannot leave the disposal of his estate to others." But, as Lord Hardwicke said in Cook v. Duckenfield (1743) 2 Atk 562, at p 567 (26 ER 737, at p 739) : ". . . as has been truly said, a man may dispose of his estate by an actual disposition himself, or by empowering other persons to dispose of it, which equally disinherits the heir at law." Thus the creation by will of a general or special power of appointment constitutes relevantly a disposition of the property the subject of the power. Such powers, unless they be powers in the nature of a trust - being powers, necessarily involve a discretion whether or not to exercise the power. Some powers, in addition, may involve a discretion in the choice of the appointees. But to be validly created, the subject matter which can be appointed must be certain, even though there may be room for the donee of the power to choose which property within the certainly described properties he will appoint. Further, except in the case of charity, the possible appointees must be nominated by the testator with sufficient certainty. It is with respect to the last requisite that most of the decided cases have dealt. No such case has turned upon, what in my opinion is radical to the nature of a power of appointment not in the nature of a trust, namely the inherent discretion of the donee of the power to appoint or not to appoint. (at p632)

7. In Houston v. Burns (1918) AC 337 Viscount Haldane offered an explanation of the treatment by the law of the creation of a power of appointment as a disposition which defeats the claims of persons who would be entitled on intestacy. The case confirmed a long course of decision that "on the one hand the validity of a bequest for such charitable purposes as an individual should select and on the other hand the invalidity of a similar bequest for such public purposes as an individual should select". The particular will then under consideration left property "for such public, benevolent or charitable purposes in connection with" a named parish or neighbourhood. The words were read disjunctively and the gift, because of that construction, was held to be void. (at p633)

8. But though unnecessary to the decision, his Lordship in contrasting the position of a power to appoint to charity with other powers of appointment said of the testator (1918) AC, at pp 342, 343 :

"He cannot leave it to another person to make such a disposition for him" (i.e. a complete disposition of the beneficial interest) "unless he has passed the beneficial interest to that person to dispose of as his own. He may, indeed, provide that a special class of persons or of institutions invested by law with the capacity of persons to hold property are to take in such shares as a third person may determine, but that is only because he has disposed of the beneficial interest in favour of that class as his beneficiaries."

This view, the question of charity apart, would confine the creation of powers of appointment which could be regarded as testamentary dispositions to powers in the nature of a trust and to powers to appoint amongst a class, where it could be concluded from the terms of the will that the class obtained by the will a beneficial interest in the property the subject of the power. If this were the exclusive explanation of the validity of a power of appointment created by will, a power to appoint amongst a class with a gift over in default of appointment would seem to be excluded because the presence of the gift over denies the existence of a beneficial interest in the class. It may be that Sargant J. took this limited view of the creation of a power of appointment as a relevant disposition when he expressed the exceptions to the general rule that the testator must himself make his testamentary dispositions. In Re Hughes ; Hughes v. Footner (1921) 2 Ch 208, at p 212 his Lordship said :

"The general law on the subject is well settled, and is that the power of testamentary disposition is essentially a personal one and cannot be exercised by a will merely purporting to delegate to another the distribution of the testator's estate and the ascertainment of the objects of his bounty. But there are some real or apparent exceptions to or qualifications of this general rule. One is that of the creation of a general power which the donee may exercise for his own benefit, for such a power is equivalent to property. Another is that of the creation of a power of distribution amongst charities. A third is that of the creation of a power of selection amongst individuals or a class of individuals who are pointed out as the beneficiaries : see Houston v. Burns (1918) AC, at pp 342-343 ."

This Court had occasion to consider the theoretical basis for the treatment of the creation of a power of appointment as a testamentary disposition in Tatham v. Huxtable (1950) 81 CLR 639 . Fullagar J. says (1950) 81 CLR, at p 649 :

"It seems quite consistent with legal principle to say that the creation by will of a general power of appointment (which has been said to confer the equivalent of ownership) is a testamentary disposition of property. It also seems consistent with legal principle to say the same of the creation of a special power of appointment among a class, where the class is described with certainty and (as in the normal case) there is, unless and until the power is exercised, a trust for the class or for persons who are to take in default of appointment. Where there is, as a matter of construction, no such trust, there does seem to be a departure from principle if we say that the creation by will of a special power to appoint among a class is a testamentary disposition of property, but to say so represents a natural enough 'latitude' of view, which is perhaps characteristic of a system which has never regarded strict logic as its sole inspiration. Unless, however, there is a class designated with certainty, to say that the creation of a power to select beneficiaries amounts to a testamentary disposition of property is not merely to relax the principle to meet an exceptional case but to deny the principle absolutely." (at p634)

9. It is not quite clear to my mind what Viscount Haldane meant in his speech in Houston v. Burns (1918) AC 337 by the expression "unless he has passed the beneficial interest to that person to dispose of as his own". Quite clearly, provided the property is specified and the beneficiary or beneficiaries identified or identifiable, the power to appoint can be given to a person who has no interest legal or equitable in the subject property. It may be he was referring only to a general power where the donee of the power was to appoint to himself as well as decide whether or not any gift should be made by an exercise of the power. Further, though prior to the decision of Houston v. Burns (4) the decided cases may not have included any instance of a power of appointment amongst a class which did not itself obtain a beneficial interest under the will creating the power, it would seem to me that later cases may indicate that his Lordship's explanation, if intended to be exhaustive, may not be wholly acceptable. (at p635)

10. The present case, apart from the fact that the purpose of the power is charitable, raises the question whether a power to appoint to a specified person who otherwise than by an exercise of the power receives no beneficial interest in the property the subject of the power is validly created by will. (at p635)

11. To consider the validity of the creation of the power in cl. 6 of the will, it must be assumed that no beneficial interest in any part of the residuary estate is created by the will itself in the trustee or in the person named as the object of the power. The testatrix has decided who the beneficiary of the described property may be. (at p635)

12. There is thus no uncertainty as to the beneficiary to whom the trustee may appoint the property. Difficulties which arose in such cases as In re Park; Public Trustee v. Armstrong (1932) 1 Ch 580 and In re Jones; Public Trustee v. Jones (1945) Ch 105 do not arise. Indeed, there are, in my opinion, no actual uncertainties involved in the matter at all. The identity of the trustee who is to be the repository of the power is quite clear, the property over which the power extends is quite certain, though it may be that the trustee has a discretion as to whether he will appoint the whole or only part thereof; and the object of the power both in the identity of the donee and in the charitable purpose to be served is certain. Consequently the case is also quite unlike Tatham v. Huxtable (1950) 81 CLR 639 where the majority thought the provision in the will there under discussion uncertain because the will provided no definite criteria for the ascertainment of the intended beneficiaries. The same may be said in relation to Houston v. Burns (1918) AC 337 , and other cases in which gifts have failed for uncertainty in the identity of the intended object of the power. (at p635)

13. Generally speaking, the will creating a special power of appointment upon its proper construction will have created a beneficial interest in the objects of the power in the property subject to it. But there may be a gift over in default of the exercise of the power. I have found no case in which the existence of the gift over has invalidated the creation of the power. That circumstance tends to indicate to me that provided the other certainties are present the absence of a beneficial interest created by the will in the objects of the power of appointment otherwise than by its exercise is not fatal to the validity of the power. When the property passes by virtue of an exercise of the power of appointment it does so as from the testator and not as from the donee of the power. This is a further circumstance which makes it difficult for me to accept the expression of opinion by Viscount Haldane to which I have referred as of universal validity. The view that a power may be valid, though no beneficial estate is otherwise given to the members of the class amongst whom the appointment may be made, can also be derived from In re Weekes' Settlement (1897) 1 Ch 289 and In re Combe; Combe v. Combe (1925) Ch 210 . In neither of these cases, one of which involved a power created by a settlement to appoint amongst a class and the other a similar power created by a will, was the validity of the power to appoint questioned though it was decided in each case that the class did not have any beneficial interest under the will apart from an exercise of the power of appointment. In neither case was there a gift over. Indeed, the judgments in each case seem to assume that an exercise of the power would have validly created beneficial interests in the appointees who otherwise had no beneficial interest derived from the instrument creating the power. Also Fullagar J. in the quotation I have made from his judgment in Tatham v. Huxtable (1950) 81 CLR 639 appeared ready to concede the validity of a testamentary power to appoint amongst a class to which no beneficial interest had been given by the will itself. In Bristow v. Skirrow (1870) LR 10 Eq 1 , the provision in the will of Sir John Chetwode namely, "to the same uses, upon the same trusts, and to and for the same intents and purposes as his (the testator's) wife might have declared, or should thereafter declare, with respect to the disposition of her residuary personal estate" (1870) LR 10 Eq, at p 2 and in default, ultimately for the next of kin of the testator, did not seem to Lord Romilly to be invalid. It was held in that case that in default of provision by the wife for the disposition of her residuary personal estate the property passed to the next of kin of the testator and not under the general residuary estate of his wife. (at p636)

14. For myself, I am of opinion that a bare power to appoint amongst a class, no member of which derives any beneficial interest under the will in the property the subject matter of the power, is a valid "disposition" or its equivalent for the purpose of the Wills Act. Such a power as was the subject of decision in In re Combe; Combe v. Combe (1925) Ch 210 could be described as a discretionary power as in that case there was no obligation to exercise it. Thus a discretionary power to appoint amongst an identified or identifiable class the whole or any part of a residuary estate, in my opinion, would be validly created though the will itself created no beneficial interest in any part of the residuary estate in the class. Indeed, as I have indicated, except in the case of a power in the nature of the trust, it is of the essence of the power of appointment that it is discretionary. (at p637)

15. I am unable to find any reason why a discretionary power to appoint to a named person should be in any worse case than such a discretionary power to appoint amongst a named class to whom no gift is made by the will. It does not involve, in my opinion, any uncertainty which could lead to the conclusion that for that reason it is void. It seems to me to satisfy the requirements of the Wills Act and the principle which has been derived from it that the testator should have identified the property and the person to whom he empowers his trustee to give it. A discretion vested in the trustee as to whether or not the gift is to be made does not amount, in my opinion, to allowing the trustee to make his will for him. The grant of such a power is a sufficient disposition for the purposes of the Act and should be regarded for relevant purposes as a disposition. In my opinion, therefore, the power to appoint the whole or any part of the residuary estate to the appellant is validly created by cl. 6. That the purposes to which the object of the power is to devote the property if appointed to it are charitable certainly does not require any contrary decision. Indeed, the fact that the object of the power is clearly charitable is, in my opinion, in itself a ground for holding the creation of the power to be valid. I shall return to this aspect in a moment. (at p637)

16. It was said in argument that the absence of a gift over in default of appointment rendered the attempted creation of the power void. The reason for this I find difficult to comprehend. Had the deceased added to cl. 6 the words "and in default of appointment, I give the whole of my residuary estate to my next of kin", it would seem to be conceded by this branch of the respondents' argument, and I would think, rightly conceded, that the power would have been validly created. But it is said that because the consequence of intestacy could only follow by operation of law upon the non-exercise of the power, the power is not validly created. I cannot think this a significant distinction. However important in some testamentary instruments the absence of a gift over may be in assisting a conclusion that a gift to the objects of a power should be implied, the absence of a gift over in this will, in my opinion, does not bear at all on the question whether the power of appointment itself is validly created by the will. (at p638)

17. As I think the power validly created, it follows that if the power is exercised, the property comprised in its exercise will pass beneficially to the appellant for the charitable purposes specified in the will. However, it was argued by the appellant that there was a gift by the will itself to the appellant for the stated charitable purposes. It is quite clear that there are no express words of gift in favour of the appellant. But two possibilities remain and each was relied upon by the appellant as supporting the conclusion that there was a gift by the will itself. First, it was said that the special dispositive power given to the trustee by cl. 6 was a power in the nature of a trust, so that the trustee is bound to exercise it. Secondly, it was said there is a gift by implication for the execution of which the discretionary power to transfer specific property is given. (at p638)

18. After due consideration, and with respect to those who hold a contrary opinion, I have reached the conclusion that there is no obligation upon the trustee to exercise the power given by cl. 6. The qualification of the power by the word "discretionary" seems to me to tell too heavily against the existence of any such obligation. I quite realize that in construing the will, we are to find the deceased's intention as expressed in her words in the will. The construction should be approached without any preconceptions in an endeavour to find in the language used the intention of the testatrix. In using the word "discretionary" she has used a word, the full import of which she may not have comprehended but which has a meaning in ordinary parlance. I can find no other meaning for the word, even as used by the deceased, than its ordinary meaning. That meaning to my mind denies the existence of the suggested obligation to exercise the power. As I mention later, I do not think that the word can be satisfied by confining its operation to the selection of particular property for transfer, or to the preference for transfer of property in specie rather than of realized proceeds or to some matter of timing in handing over the assets. Nor am I able to conclude that the power is in the nature of a trust from the existence of which a gift to the object of the power might be implied. (at p638)

19. Then, can the grant of the power itself imply the existence of a gift, the purpose of the power being the execution of the implied gift by the transfer of the property given? There seems to me to be much in the way of such a construction. In the first place, there is a question whether all the property the subject of the power is necessarily to be transferred if any appointment is made. Although not free of ambiguity, I am of opinion that the clause should be construed so that the subject matter of the power is all the mortgages, etc. remaining after all expenses have been paid. But, I concede the force of the view that the clause means to give the trustee power to appoint any, as distinct from all, the mortgages, etc. Secondly, the power could only be regarded as an intended means of executing an implied gift of the residuary estate by limiting the discretion of the trustee to the choice between a transfer in specie and a transfer of proceeds and to the timing of the transfer. But, in my opinion, the discretion cannot be so confined. It qualifies the nature of the power itself. The discretion extends to the decision whether or not the power is to be exercised. There is, in my opinion, no gift by the will to the appellant. (at p639)

20. I now return to express my reasons for thinking that because the object of the power is charitable the power of appointment for that reason alone is validly created. We are not concerned here with any question whether the will exhibits a general charitable intention. There is no suggestion that the specific charitable purpose named by the testator is incapable of execution. It is nominated, as I have said, with certainty. The intended trustee to effect the charitable purpose is specifically named and would appear to have an existence in the law. But even if it had not, there would be no necessity to search for a general charitable intention. If the trustee should exercise the dispositive power which the clause gives it, equity will see that the execution of the trust thus created does not fail at any time for want of a trustee to carry out the charitable work. Further, whilst the power is not in the nature of a trust so that the trustee must exercise it, equity would ensure that the trustee bona fide considers whether or not the power should be exercised, and that in doing so, proper considerations are in mind, and improper considerations excluded. The discretionary nature of the power does not mean that the discretion is absolute, in the sense that it can be exercised irresponsibly, capriciously or wantonly. The object of the power being a charity, though the power is not in the nature of a trust, would at least increase the Court's vigilance and probably narrow the area of the considerations which the trustee could properly entertain in deciding whether or not to exercise the power. (at p639)

21. But the question remains whether merely because the object of the special power is charitable, the power purported to be given by cl. 6 is validly created. In the list of exceptions aggregated by Sargant J. in the passage I have quoted "is the creation of a power of distribution among charities". See also for example Houston v. Burns (1918) AC, at p 343 . The exception must be wide enough to cover the power to appoint amongst charities which, though identified by the testator, receive no beneficial interest directly from his will in any of the property the subject of the power of appointment. This matter is discussed in a number of authorities but most clearly, and for the courts of Great Britain, most authoritatively, in Chichester Diocesan Fund and Board of Finance (Inc.) v. Simpson (Diplock's Case) (1944) AC 341 . All their Lordships acknowledged that a charitable purpose in the testator's provision in his will created an exception from the fundamental rule that a "testator must by the terms of his will himself dispose of the property with which he proposes to deal". Lord Simonds says (1944) AC, at p 371 :

"It is a cardinal rule, common to English and to Scots law, that a man may not delegate his testamentary power. To him the law gives the right to dispose of his estate in favour of ascertained or ascertainable persons. He does not exercise that right if in effect he empowers his executors to say what persons or objects are to be his beneficiaries. To this salutary rule there is a single exception. A testator may validly leave it to his executors to determine what charitable objects shall benefit, so long as charitable and no other objects may benefit."

Again, as in the case of other powers of appointment, the grant or creation of the power may include the ability to exercise or not to exercise the power. It may be that if a general charitable intention is present, the Court would ensure that charity in some form receives the property in question. But a power to devote the property to such a charitable purpose as the trustee may choose followed by a provision that in default of any appointment or to the extent to which any appointment shall not extend the property shall go to the next of kin would be a valid power of appointment. In such a case the trustee would decide whether or not there should be a charitable gift as well as who should receive the property if it was decided to make the gift. (at p640)

22. It is notable that in Chichester Diocesan Fund and Board of Finance (Inc.) v. Simpson (1944) AC 341 the power to appoint to a charitable purpose of the appointee's choice was involved. It was supported, as my quotation shows, merely because of the evident charitable purpose of the testator. A power to appoint to a named charity of the testator's choice must, in my opinion, be a fortiori. (at p640)

23. It thus appears to me that, with due respect to those who entertain a different view, the problem posed by the language of cl. 6 of this will is not answered merely by concluding that no complete gift to the appellant was effected by the will itself. So much being granted, the question remains whether the power given to the trustees was validly given as a special dispositive power, the exercise of which by the trustee would be enforced by a court of equity. (at p641)

24. In my opinion, for both the reasons I have given, such a power was validly given by the will. Although the questions of the originating summons are, perhaps, not artistically expressed, questions 2 and 3, in my opinion, do sufficiently raise the question whether the power is valid. There should be an answer to those questions declaring that the power given to the trustee is valid and that it is not void for uncertainty or for any other reason. (at p641)

McTIERNAN AND MENZIES JJ. Phillipa Stapleton left a holograph will in the following terms:

"This is my Last Will and Testament of me Phillipa Stapleton, of No. 316 South Terrace. Adelaide. S.A. I revoke all other Will made by me and I appoint Farmers Co-Operative Executors and Trustee Adelaide S.A. whose registered office is situated at No. 11-13 Bentham St. Adelaide.

1. I desire that my remains be cremated and laid to rest in the Soldiers Cemetery Springbank. 2. I bequeath a pecuniary legacy of Two Thousand Dollars (2,000) to my Niece Margaret Evelyn Marsh of No. 10

Bentley St Surrey Hills, Victoria.

3. I bequeath a pecuniary legacy of $600 to my brother Walter Roland Marsh of Mary St (No. 64) Unley. 3. I bequeath a pecuniary legacy to Catherine Doreen Marsh (my Sister) of $600.
4. I bequeath All my Commonwealth Bonds to Frank John Stapleton of 590 Cross Rd, Plymton S.A.
5. I bequeath a pecuniary legacy of Six Hundred Dollars each to David Bryce Stapleton and Richard Leigh Stapleton.
6. My Trustees have discretionary power to transfer any morgages, and property, and Shares in Companies invested
in my name to the Lutheran Mission 20 Marborough St.
St. Peters, S.A. for building Homes for Aged Blind Pensioners after All expenses paid, and I desire that there shall be no subsequent adjustment or apportionment therefore between any of the beneficiaries under my Will. I Witness thereof I have to this my last Will &Testament

set my hand this 28th day of January 1968. P. Stapleton L. A. Dowd Stella M. Dowd

Signed 1967. January 28th P. Stapleton." (at p641)

2. Upon an originating summons, Bray C.J. made the following declarations with regard to this will:

"(a) Commonwealth Inscribed Stock to the face value of $12,500 was bequeathed to the defendant Frank John

Stapleton by the said will ;

(b) the provisions of cl. 6 of the said will do not create a valid disposition ;

(c) the testatrix died interstate as to the whole of her estate excepting only that portion of the said estate comprising the specific legacies and bequests contained in cll. 2 to 5 inclusive of the said will ;

(d) there is in cl. 6 of the said will a 'specific direction . . . to the contrary' within the meaning of s. 46 (1) of the Succession Duties Act 1929-1967 ; there is in cl. 6 of the said will 'any different disposition' within the meaning of s. 35 of the Estate Duty Assessment Act 1914-1963." (at p642)

3. The questions for us are whether declarations (a) (b) and (c) are correct. As (c) derives from (b) there are really two questions, one relating to cl. 4 of the will and the other relating to cl. 6. (at p642)

4. We agree with the Chief Justice of South Australia that the description, in cl. 4, "All my Commonwealth Bonds" does include the Commonwealth inscribed stock which the testatrix had at the date of the making of her will and at the date of her death. His Honour has dealt fully with the authorities and all we wish to do, apart from expressing our agreement with his judgment on the point of construction, is to emphasize that this is not a case where the construction adopted departs from the strict meaning of technical words. "Commonwealth bonds" can in ordinary speech mean Commonwealth inscribed stock as well as bonds which are technically described as "treasury bonds" or "Australian consolidated treasury bonds" notwithstanding the distinction that there is between "stock" and "bonds" which many of the community do not recognize. It is hardly to be thought that this testatrix appreciated the technical difference between the two. The difference between "stock" and "shares" in a company is another difference of a like kind which ordinarily people disregard. It is difficult to imagine that the testatrix, knowing that she had investments in Commonwealth loans, wrote cl. 4 intending to distinguish between her treasury bonds and her Commonwealth inscribed stock. To her, no doubt, they were one and the same. We do not think it necessary to consider whether extrinsic evidence, which would go to support this conclusion, was admissible. (at p642)

5. The other question is troublesome because it is clear enough that the testatrix did wish to use the Lutheran Mission to provide homes for aged blind pensioners out of her property. We have, however, come to the conclusion that the Chief Justice of South Australia was correct in holding that there is no gift in cl. 6. The words "have discretionary power to transfer" do not constitute a gift and there is nothing else from which to extract an intention to give. Indeed, it seems to us that the words "discretionary power" negative a gift. A discretionary power to transfer in specic, by itself, is not a gift. Here there is nothing more. If the trustees were to exercise the discretionary power which the testatrix has sought to confer upon them by deciding not to transfer the mortgages, etc., the Lutheran Mission would have no claim to them or to the proceeds of their realization. This reveals that it is only by depriving the trustees of a discretion to transfer, and treating them as being under an obligation to transfer, that a gift can be inferred. To do this would be to contradict the language of the testatrix. Unfortunately the testatrix had left the fulfilment of her wish to the discretion of her trustees. She did not create a trust for a charitable purpose; she left it to her trustees to decide whether or not her property should go to charity. A case such as Smith v. West Australian Trustee Executor &Agency Co. Ltd. (1950) 81 CLR 320 , is clearly distinguishable. There it was held that there was a good charitable bequest because, by the terms of the will, the money had to go to charity. Here the property would not go to charity unless the trustees should so decide. If cl. 6 of the will were to be regarded as a testamentary disposition it would follow that a testator could delegate to his executor the power to decide whether part of his estate should be transferred to a particular person. Nothing can turn upon the unquestionable fact that a gift for the building of homes for aged blind pensioners would be charitable for the simple reason that the testatrix has made no such gift. Here there is no trust for charitable purposes, no general power of appointment, no special power of appointment. The words used simply leave it to the trustees to decide, at some time after the death of the testatrix, whether or not to establish a trust without provision for the period between the date of death and the constitution of such trust. (at p643)

6. This case does not require consideration whether or not the decision of Romer J. in In re Weekes' Settlement (1897) 1 Ch 289 , correctly departed from the existing current of authority; cf. Perpetual Trustee Company (Ltd.) v. Tindal (1940) 63 CLR 232, at pp 245-246, 257 and 262 . His Lordship did not there consider any point relevant to the determination of the question now before us. He was merely concerned with the construction of what was taken to be a valid special power of appointment among a class. Whether the power as construed was valid was not there in question, but, if it were, the cases on special powers are distinguishable from this case. We find support for the view we have expressed in the decision of this Court in Tatham v. Huxtable (1950) 81 CLR 639 . There what was insisted upon was that the testator should himself make what "amounted to a true testamentary disposition of property". See per Fullagar J. (1950) 81 CLR, at p 649 . His Honour said further:

"It is to be remembered that the ultimate basis of the rule lies in the Wills Act, which provides that every person may dispose of all his property by will but that no will shall be valid unless it is in writing and executed by the testator in a particular manner. It is inherent in the very nature of the power so given that it cannot be delegated or exercised by an agent for the testator, and it seems to me necessarily to follow that some powers of appointment, which would be perfectly good in any instrument other than a will, are ineffective in a will for the simple reason that they do not amount to a testamentary 'disposition' of property, or indeed to any 'disposition' of property at all."

His Honour clearly enough regarded it as a departure from legal principle to treat as valid a special power of appointment in the absence of a trust in default of appointment. If, as Fullagar J. thought, a 'latitude' of view might justify treating such appointments as valid, it seems to us to afford no basis on which to treat an authority to dispose of the testator's property to a named person or institution as a true testamentary disposition of property. Such latitude of view would destroy the rule. Kitto J. said (1950) 81 CLR, at p 653 :

"It is a 'cardinal rule' to which a power of selection among charitable objects is the sole exception, that 'a man may not delegate his testamentary power. To him the law gives the right to dispose of his estate in favour of ascertained or ascertainable persons. He does not exercise that right if in effect he empowers his executors to say what persons or objects are to be his beneficiaries': Chichester Diocesan Fund and Board of Finance v. Simpson, per Lord Simonds (1944) AC, at p 371 . It is therefore necessary in all cases (other than charity cases) that the persons or objects to benefit under the will shall be, by the will itself, ascertained or made ascertainable. They may be made ascertainable by reference to a specified future event, including an act to be done by another person provided that that act does not amount to the making by one man of another man's will: Stubbs v. Sargon

(1838) 3 My &Cr 507, at pp 511-512 (40 ER 1022, at p 1024)

." (at p644)

7. It is no doubt the case that, had the provision in Caleb Diplock's will, under consideration in Chichester Diocesan Fund and Board of Finance v. Simpson (1944) AC 341 , been confined to charitable purposes instead of extending to benevolent purposes as well, it would have been sustained on exactly the same principle as Smith v. West Australian Trustee Executor &Agency Co. Ltd. (1950) 81 CLR 320 , i.e. that, by virtue of the testator's own disposition, there was a charitable trust. As Lord Porter said (1944) AC, at p 364 :

"The testator must make his own will and not leave his executors to make their choice of the objects of his bounty, subject to this, that a general gift to charity will be upheld." (The italics are ours.)

Here not only is there no gift to a charity; there is no gift to charity. There is simply no gift. Here the testatrix has purported to authorize her trustees, if they should think fit, to constitute a trust in favour of a named charity. As such an authority it must fail. (at p645)

8. Accordingly, we would dismiss the appeal. (at p645)

WINDEYER J. The testatrix, an elderly woman, wrote her own will. She obviously followed some model, perhaps an earlier will, which was couched in legal language. But, either because the model was defective or, more probably, because her copying was inexact and incomplete, she produced a will which is in parts debatably expressed. It is set out in full elsewhere. I need not repeat it. Counsel pointed to mis-spellings and minor verbal inelegancies. I do not think that anything turns on these. The only one of any significance is that Farmers' Co-operative Executors and Trustees Limited, which I shall call the trustee, was not in terms appointed by the will to be executor and trustee. The sentence is truncated, but the meaning is obvious from the name and nature of the company. Probate was duly granted to it. It is not questioned that the words "my trustees" in cl. 6 of the will refer to it, and that the whole estate of the testatrix devolved upon it as executor and trustee. (at p645)

2. There are two questions in the case. The first arises under cl. 4 of the will; the second under cl. 6. I shall deal with them in that order.

Clause 4. (at p645)

3. The question under cl. 4 is whether the bequest of "All my Commonwealth Bonds" carries the testatrix's holding of Commonwealth Government inscribed stock created pursuant to s. 4 of the Commonwealth Inscribed Stock Act 1911-1966 (which I shall for convenience refer to as the Act). At the date of her will, and at the date of her death, the testatrix possessed both "treasury bonds" and "stock" as defined in s. 3 of the Act. In my opinion her gift of "All my Commonwealth Bonds" comprised all the investments in Commonwealth loans which she had at her death. There have been decisions, one way and the other, upon like words in other wills. But we are not to decide this case by choosing among decisions by other judges as to what other testators meant by words used in other contexts. Those decisions may give some guidance. They may suggest the proper conclusion if the reasoning on which they were based be apposite and persuasive. But they cannot compel a conclusion or be treated as dictionaries. Some of them are obviously distinguished from this case. No one of them must be followed. We may gratefully find refuge from all these "authorities" in the judgments in the House of Lords in Perrin v. Morgan (1943) AC 399 , and there escape the constrictive discipline of verbal precendents. Out of much that their Lordships eloquently said, I quote two passages from the speech of Lord Simon. I set them out at length because they are so delightfully pertinent in the present case. The expression their Lordships had to consider was "money". Here it is "Commonwealth bonds". Each has, in common parlance, a wide as well as a restricted meaning. I quote first (1943) AC, at p 406 :

"My Lords, the fundamental rule in construing the language of a will is to put on the words used the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case - what are the 'expressed intentions' of the testator. In the case of an ordinary English word like 'money', which is not always employed in the same sense, I can see no possible justification for fixing on it, as the result of a series of judicial decisions about a series of different wills, a cast-iron meaning which must not be departed from unless special circumstances exist, with the result that this special meaning must be presumed to be the meaning of every testator in every case unless the contrary is shown. I agree, of course, that, if a word has only one natural meaning, it is right to attribute that meaning to the word when used in a will unless the context or other circumstances which may be properly considered show that an unusual meaning is intended, but the word 'money' has not got one natural or usual meaning. It has several meanings, each of which in appropriate circumstances may be regarded as natural."

And later (1943) AC, at pp 407, 408 :

"These wider meanings of 'money' are referred to in some of the reported cases as 'popular' meanings, in contrast to the 'legal' meaning of the term, but for the purpose of construing a will, and especially a home-made will, a popular meaning may be the more important of the two. The circumstance that a skilled draftsman would avoid the use of so ambiguous a word only confirms the view that, when it is used in a will, the popular as opposed to the technical use of the word 'money' may be important. I protest against the idea that, in interpreting the language of a will, there can be some fixed meaning of the word 'money', which the courts must adopt as being the 'legal' meaning as opposed to the 'popular' meaning. The proper meaning is the correct meaning in the case of the particular will, and there is no necessary opposition between that meaning and the popular meaning. The duty of the court, in the case of an ordinary English word which has several quite usual meanings which differ from one another is not to assume that one out of several meanings holds the field as the correct meaning until it is ousted by some other meaning regarded as 'non-legal', but to ascertain without prejudice as between various usual meanings which is the correct interpretation of the particular document." (at p647)

4. The expression "Commonwealth bonds" is not a technical term. It has no strict primary meaning. It can be used, and it is sometimes used, to mean treasury bonds as defined in the Act, as distinct from stock as there defined. It can no doubt mean too bonds issued pursuant to the Loans Securities Act 1919-1959 (Cth). These differ from both treasury bonds and stock: see Ervin v. Federal Commissioner of Taxation (1935) 53 CLR 235 . It can also denote "special bonds" as defined in s. 23E (3) of the Income Tax Assessment Act 1936-1937 (Cth). But we are not concerned with any particular kinds of bonds. The only question is whether we are to read the words "Commonwealth bonds" as including both inscribed stock and treasury bonds issued under the same Act and substantially equivalent as securities. The learned Chief Justice of South Australia said that the term "Commonwealth bonds" can, used in an ordinary sense, denote inscribed stock. That I consider is indisputable. Of course, what one accepts as an ordinary sense of a word or phrase must depend upon one's acquaintance with it in ordinary parlance and in writings that are ordinarily read and widely read. People who read newspaper reports of dealings and quotations on Australian stock exchanges must be aware of different descriptions of Commonwealth loans. Among the headings that anyone can read - depending upon the newspaper he consults - are "Government Bonds", "The Bond Market", "Australian Consolidated Securities", "Commonwealth Loans", "Loans", "Bonds". It is, I consider, entirely permissible for a judge, who has to take notice of the ordinary meanings of the words here in question, to be aware of and to notice these usages. Resorting to stock exchange nomenclature, when considering the meaning today of "Commonwealth bonds", seems no less justifiable than were Lord Simon's quotations from the Bible and from Tennyson for the meaning of "money" in 1943. The only significant legal distinction between stock and bonds issued in respect of subscriptions to the same loan is in the methods by which they are transferable: the former by an instrument of transfer in the prescribed form; the latter by delivery (s. 51c of the Act and s. 5 of the Treasury Bills Act 1914-1966 (Cth)). This does not affect testamentary disposition of either. The interest of a subscriber to a Commonwealth loan can, at his option, be recorded and authenticated by an inscription of stock or by the issue of a bond: and, by s. 51E of the Act, either is exchangeable for the other. (at p648)

5. Therefore, as in ordinary parlance the term "Commonwealth bonds" is frequently used to cover both treasury bonds and inscribed stock, and as the testatrix had no reason to distinguish between the two manners in which she held her investments in Commonwealth loans, I am satisfied that by cl. 4 of her will she effectually gave them all to Frank John Stapleton, her stepson. I thus agree with the conclusion of Bray C.J. on this aspect of the case. I would, however, add that I think his Honour need not have declined the reinforcement of his conclusion which is furnished by evidence of the way in which the testatrix was herself accustomed to use the term "Commonwealth bonds". This emerges from lists which she kept of her investments and from other documents, all in her own handwriting. In these her holdings of inscribed stock are sometimes called "Commonwealth bonds". Sometimes she used the term "Commonwealth loans" and used it to cover bonds. She did not use the terms "stock" or "inscribed stock" at all. Evidence of these facts was I think admissible. Clearly it is cogent. Of course extrinsic evidence is not admissible to contradict what a will unambiguously says. Every testator must be taken to have meant what he said. We were referred in the course of argument to the well-known and forceful statements to this effect of Lord Coleridge in Shore v. Wilson (1842) 9 Cl &Fin 355, at pp 525-526 (8 ER 450, at pp 517,518) . I take the governing principle to be as it has been stated, for well over a century, in Wigram on Extrinsic Evidence in aid of the Interpretation of Wills, at p. 8, as follows:

" . . . any evidence is admissible, which, in its nature and effect, simply explains what the testator has written; but no evidence can be admissible which, in its nature or effect, is applicable to the purpose of showing merely what he intended to have written. In other words, the question in expounding a will is not, - What the testator meant? as distinguished from - What his words express? but simply - What is the meaning of his words? And extrinsic evidence, in aid of the exposition of his will, must be admissible or inadmissible with reference to its bearing upon the issue which this question raises."

The evidence of the sense in which the testatrix habitually used the phrase "Commonwealth bonds" simply explains the meaning of the words she wrote in her will. She used an expression which is capable of a wide and of a narrow denotation. It can be a generic term comprising all Commonwealth Government securities created and issued pursuant to the Act; or it may be used to designate only a species of that genus. In these circumstances evidence that the testatrix commonly used the term in its generic sense was, I think, admissible when the question is - In which sense did she use the term when she herself wrote it in her will?

Clause 6. (at p649)

6. I pass now to cl. 6 of the will. It is convenient to set it out in full.

"6. My Trustees have discretionary power to transfer any mortgages, and property, and Shares in Companies invested in my name to the Lutheran Mission 20 Marborough St. St. Peters, S.A. for building Homes for Aged Blind Pensioners after All expenses paid, and I desire that there shall be no subsequent adjustment or apportionment therefore between any of the beneficiaries under my Will." (at p649)

7. There is no express residuary clause in the will. But cl. 6, both by its terms and from its position, obviously relates to property reamining in the hands of the trustee after all testamentary expenses and expenses of administration have been met, the pecuniary legacies provided and the Commonwealth bonds made over to the donee. The clause manifests an intention that all the legatees are to get their gifts in full and clear of any liability to contribute to expenses of any kind. That emerges clearly from the last sentence of the clause when the word "therefore" is read as "therefor", which would be the more usual spelling. It then means "for them", namely the expenses. That is a perfectly correct formal use of the word "therefor", especially in legal instruments: see the Oxford English Dictionary and Fowler's Modern English Usage. The word, however spelt, was no doubt in whatever model the testatrix had before her when she wrote her will. Given its proper legal sense, it causes no difficulry. The words commencing "all expenses paid" to the end of the clause have two results. First, they ensure that the burden of all expenses - and it is now conceded that these include death and estate duties - falls upon the residue in exoneration of the legacies. Secondly, they thus indirectly describe the property in respect of which the trustee is given a "discretionary power". That is, as I read the clause, the whole clear residue. I do not think that the words "any mortgages and property and shares" mean any such as the trustee may choose to give. They mean, I consider, any mortgages, property and shares remaining "after all expenses paid". That is their natural grammatical sense in the context. (at p650)

8. One thing is beyond question in cl. 6. The purpose to which the trustee is authorized, or required, to devote residuary property is a charitable purpose in the legal sense. "Building homes for aged blind pensioners" answers, as directly as could be, to the words in the Statute of Elizabeth, 1601 (43 Eliz. 1 c. 4 (Imp.)), "the relief of aged, impotent and poor people": see In re Lewis, decd.; Public Trustee v. Allen (1955) Ch 104 and cases there cited. A charitable trust is always a trust for a purpose, not for a person or persons. The will states a particular charitable purpose. The agent nominated by the testatrix to carry out that purpose is the Lutheran Mission at 20 Marlborough Street. This describes a readily identifiable activity of the Lutheran Church. The Mission is not itself a body corporate. That is of no significance. The testatrix obviously meant by the Mission those who direct the missionary activities or who can hold property for carrying out its charitable purposes. She made perfectly clear the purpose for which the Mission was to use her bounty. If those in control of the Mission were, for any reason, unable or unwilling to carry this purpose into effect, some other persons could be appointed trustees in their stead. This would not be, in a strict sense, an application of property cy-pres. It would be merely ensuring that a particular charitable purpose did not fail for want of a trustee to carry it out. The ultimate question is not, I think, really one of a general or a particular charitable intention. The purpose, as the testatrix expressed it, is precise, particular and apparently possible. It dominates, I think, the means for its execution: cf. Royal North Shore Hospital of Sydney v. Attorney-General (N.S.W.) (1938) 60 CLR 396 . (at p651)

9. The learned Chief Justice of South Australia held that cl. 6 failed for uncertainty, and that the residue of the estate devolved as on an intestacy. This, he said, was because the testatrix had not indicated in her will the persons who were to take her residuary estate, but had merely empowered the trustee in its discretion to devote it to a particular charity. This, his Honour regarded as an attempt by the testatrix to delegate her testamentary power. He said that if a testator "does attempt such a delegation the will fails for uncertainty". He then declared that:

"The provisions of cl. 6 of the said will do not create a valid disposition." "The testatrix died intestate as to the whole of her estate excepting only that portion of the said estate comprising the specific legacies and bequests. . . . "

In this Court counsel for the respondent next of kin, in supporting these declarations, said they mean that cl. 6 of the will was void; that the trustee has no power to devote any part of the estate to the charitable purpose mentioned; that the whole of the residue must go at once to the next of kin. As will appear, I cannot accept that as correct on any basis. (at p651)

10. The main question is whether the clause creates a mere power enabling the trustee, in its absolute discretion either to apply residuary property to the charitable purpose stated or to refrain from doing so, or whether, on the other hand, the testatrix gave to her trustee both commandment and power. In the one case the next of kin would have an interest in the residue, which however would be subject to the trustee not exercising its power in favour of the charity. In the other case the next of kin would be excluded; and the trustee would have a duty to devote the property to the charitable purpose stipulated, with a discretion only as to the times and the manner in which it would perform this duty. The question is one of the construction of the clause. That a provision must be construed to ascertain its meaning - and that its proper construction is debatable - does not mean that it has no certain meaning and is to be discarded for uncertainty. (at p651)

11. I shall come later to the question I have propounded as the main question, namely whether upon its true construction the clause is purely facultative or is imperative and facultative. I want first to say that what I do not understand is why it should be said that, if the correct reading is that the trustee has a mere power, it cannot now lawfully do what the testatrix expressly empowered it to do. To say that an express discretionary power to dispose of property for a specified charitable purpose means that the property cannot be so disposed of by the donee of the power, but must go to the next of kin, seems to me to defy the language. The result would be to remove all discretion from the trustee, and to frustrate altogether the charitable desire of the testatrix. Assuming that cl. 6 be read as conferring a bare power of disposition, not coupled with any trust or enforceable duty in favour of the designated charity, nevertheless, as I see the matter, the trustee could still lawfully allow the claims of charity to prevail. A discretionary power, given to a trustee as such, to act or not to act in a specified manner imposes a duty on the trustee at least to consider the matter and to decide deliberately whether or not to exercise the power. Lord Reid recently said, in In re Gulbenkian's Settlements (1970) AC 508, at p 518 : "A settlor or testator who entrusts a power to his trustees must be relying on them in their fiduciary capacity so they cannot simply push aside the power and refuse to consider whether it ought in their judgment to be exercised." If it is a mere power, the court cannot dictate to trustees whether it should be exercised, or not exercised. That discretion is committed to them. But, even in that case, the court is not entirely unconcerned; for if trustees having a purely discretionary power refuse to consider whether and how they will exercise their discretion, then the court will remove them and substitute new trustees - who will have the same discretion but who, it is hoped, will not be recalcitrant. That would not be a usurpation by the court of the discretion given to trustees. It would be merely a means of accomplishing its exercise one way or the other by dutiful trustees: Inland Revenue Commissioners v. Broadway Cottages Trust (1955) Ch 20, at p 35 . (at p652)

12. The court can also control the exercise by trustees of a discretionary power, by ensuring that their discretion is exercised bona fide, having regard to the purpose for which it was given. Thus an exercise of a power of appointment in a way designed to achieve some ulterior end, foreign to the real purpose and object of a power, is a fraud on the power and invalid: Vatcher v. Paull (1915) AC 372 ; and see In re Burton's Settlements; Scott v. National Provincial Bank Ltd. (1955) Ch 82 . It seems to me that this general principle must also be applicable where, as here, there is a power to apply property in furtherance of a particular charitable purpose. The trustee would not, I think, be justified in refusing to exercise its power in favour of the designated object and purpose with a view only to thereby benefiting the next of kin, who would take in default of the exercise of the power. Even if the power be a bare power with an absolute discretion to exercise it or not, still the only declared object is the charitable purpose, and this the trustee would have to consider. McTiernan and Menzies JJ. have said that the testatrix left the fulfilment of her wish to the discretion of her trustee. Assume that to be so. Surely it does not mean that the trustee cannot fulfil her wish. The clause in terms gives it full power and discretion to do so. As I have said, I cannot accept the proposition on which the judgment of the Supreme Court is founded, namely that the clause fails entirely. (at p653)

13. I do not question the rule that a person cannot by his will delegate to another person the choice of those who are to take his estate. However, it is a rule the strictness of which must be accommodated to, and qualified by, the well-established power of a testator of giving a dispositive power of appointment to, or among, specified objects of his bounty. The logical dilemma thus arising was strikingly brought to notice in 1953 in the article "Delegation of Will-Making Power" in the Law Quarterly Review, vol. 69, p. 334. But we must decide the question according to established doctrine, rather than by purely abstract reasoning. This case is not like one in which a testator gives, to someone who cannot himself take beneficially, a power to dispose of the estate, or of some specified part of it, as he, the purported donee of the power, wishes. Provisions of that sort fail. They have sometimes been said to fail for lack of certainty - see e.g. Yeap Cheah Neo v. Ong Cheng Neo (1875) LR 6 PC 381 - although the meaning of the words used seemed certain enough. Whatever be the explanation of invalidity in cases of that sort, the trustee in this case is not given a power to select whomsoever it wishes to enjoy the testator's estate. It is given a circumscribed power to transfer property for a particular charitable purpose. There is only one expressed object in favour of which the power is exercisable: and there is no gift over in default of its exercise. Counsel for the next of kin seized on the absence of a gift over as indicative that the power is invalid. But I do not see how that can be so. If the power be a bare power then, if it is not exercised, the next of kin will take. That I do not question. Whether it should be said that they are entitled subject to the exercise of the power, or that they take an interest defeasible upon its exercise, matters not. The latter is now the accepted manner of stating the interest of persons who are entitled under a gift over: see English cases cited in Halsbury's Laws of England, 3rd ed., vol. 30, p. 240. For a power of appointment to be valid there must be someone who satisfies the description of an object of the power. But a power to apply property to a specified charity, or to select among charities generally, can never in itself fail for uncertainty: Smith v. West Australian Trustee Executor &Agency Co. Ltd. (1950) 81 CLR 320 . (at p654)

14. The validity of a power of disposition given by will is not in my view to depend upon whether the will says expressly that if the power be not exercised the subject property is to go to the testator's next of kin or simply leaves this as an inevitable consequence of law. The result in the present case seems to me to be - always on the assumption that the power is a bare power - that if the trustee should decide to exercise the power - as it may well decide that, without any legal compulsion, it has a moral obligation to do - then it will hold the property upon the trust for charity. If, however, it, for some valid reason, declines to exercise the power, then - again always on the assumption that it is a bare power - it will hold the property upon trust for the next of kin. In saying that I follow what Lord Upjohn, then Upjohn J., said in In re Sayer; MacGregor v. Sayer (1957) Ch423, at p 437 . (at p654)

15. I fail to see that the power, regarded as a bare power, can be said to be invalid simply because of the absence of a gift over. The reasoning in the judgment I have just cited disposes of that. It is I think now too late for a court to declare a power in the nature of a power of appointment invalid as an attempted delegation of testamentary capacity. There is too much strong authority to the contrary. As long ago as 1894 Stirling J. treated it as axiomatic that a testator could effectually make gifts dependent upon the discretion of his trustee: In re Johnston; Mills v. Johnston (1894) 3 Ch204, at p 208 . (at p654)

16. No question was raised, nor do I think that any question could be raised in this case, of the rule against perpetuities. That can be a troublesome topic when, as here, the donee of a power of appointment is a body corporate, not a living individual, so that the will does not expressly limit the exercise of the power to the perpetuity period. However, the power here is exercisable in favour of charity, and there is, I think, an implication that if it be exercised at all it is to be exercised by the executor within a reasonable time from the death of the testatrix - a time which must be less than twenty-one years. Therefore the rule cannot be offended: Gray on Perpetuities,2nd ed. (1906), p. 379. (at p655)

17. The trustee is still in possession of the subject property. It could still exercise the power. But it has been held by the Supreme Court that it must not do so: that it has no discretion in the matter: that the subject property belongs beneficially to the testatrix's next of kin. That, with all respect to those who think so, seems to me to be erroneous. If the power be a bare power not coupled with any trust, I still cannot see why the trustee should be prohibited from doing what the testatrix expressly empowered it to do. To say that it, as executor, holds the residuary estate for the next of kin, and that if it does what the testatrix expressly empowered it to do, it will commit a breach of trust is to my mind a frustration of the will of the testatrix. I cannot read the words "discretionary power" as effectually removing all power and discretion from the trustee. (at p655)

18. What I have said so far is on the assumption that the power is a mere power. On that basis I would, for the reasons I have given, allow the appeal. But I go further now to ask: Is there a mere power, or is there not a trust power, exercisable as ancillary to an implied trust for charity? I quote here from the judgment of Lord Upjohn in a recent case, in the House of Lords, In re Gulbenkian's Settlements; Whishaw v. Stephens (1970) AC 508, at p 525 :

"Again the basic difference between a mere power and a trust power is that in the first case trustees owe no duty to exercise it and the relevant fund or income falls to be dealt with in accordance with the trusts in default of its exercise, whereas in the second case the trustees must exercise the power and in default the court will. It is briefly summarized in Halsbury's Laws of England, 3rd ed., vol. 30, p. 241, par. 445: '. . . the court will not . . . compel trustees to exercise a purely discretionary power given to them; but . . . will restrain the trustees from exercising the power improperly, and if it is coupled with a duty . . . can compel the trustees to perform their duty.' It is a matter of construction whether the power is a mere power or a trust power and the use of inappropriate language is not decisive."

I have come to the conclusion that, although the language may not be entirely appropriate, the testatrix intended that her residuary estate should be devoted to the charitable purpose she stated, and that to that end she empowered her trustee to make it over to the Mission if it were prepared to fulfil her object. (at p655)

19. The expression "a discretionary power" is common in legal writings. It appears frequently in textbooks; and it has often been used by judges, at least since, if not before, Lord Blackburn did so in Chambers v. Smith (1878) 3 App Cas 795, at p 815 . But it is not a technical term. A power may be called discretionary because the donee has an option whether to exercise it or not. Equally well, however, a power can be called discretionary when the donee has a duty to exercise it, but cannot be directed as to the manner in which he is to do so. The latter situation can occur when trustees have an unfettered discretion to select among the objects of a power or to determine in favour of an object to what extent and in what way they will exercise the power. Gisborne v. Gisborne (1877) 2 App Cas 300 is the classic example of a discretion of the latter kind. I am not convinced that the words "discretionary power" in this will merely confer upon the trustee power to do, or not to do, what the testatrix authorized. The words must be read in their context. I do not read them as meaning that the testatrix wished the trustee to decide whether or not it would make over her residuary estate to the charitable purpose she nominated. If a testator's will were to conclude simply,"I empower my trustee to transfer all the residue of my estate to X" (a person or a charity), I would think that, unless the context otherwise required, that would create a trust of the residue for X. The words would be enabling; but behind them would lie a duty. I am not persuaded that the addition in this case of the adjective "discretionary" to the facultative word "power" destroys the duty. The will, read as a whole, reflects I consider a wish that the power be exercised. The absence of any gift over in default of the exercise of the power strengthens this. The presence of a gift over would prevent a gift by implication to the object of the power. The absence of a gift over in this case is to my mind a strong indication that the testatrix meant the charity to be the object of her bounty. There is, I think, sufficient scope for the adjective "discretionary" if it be read as referring to the time and manner in which the power should be exercised, not as to whether or not it should be exercised. It imports indirectly a discretion to decide which assets should be realized to enable "all expenses" to be paid and legacies provided and which would remain capable of being transferred in specie to the charity. Secondly, it enables the trustee to transfer assets, at its discretion, as and when required for the building of homes. So regarded, the express discretionary power is in aid of an implied trust: cf. Tempest v. Lord Camoys (1882) 21 Ch D 571 and comments in In re Bryant; Bryant v. Hickley (1894) 1 Ch 324, at pp 330-331 . (at p657)

20. An analogy, not complete but nevertheless instructive, is to be found in what are often called "powers in the nature of trusts". These have usually arisen when a special power of appointment among a class of objects has been given without any express provision for a default of appointment and the donee of the power has died without exercising it. In such cases the non-exercise of the power of appointment and selection among the nominated class of objects does not necessarily prevent them benefiting. The court will construe the power as in the nature of a trust and the possible beneficiaries will be held entitled to the subject property in equal shares. This is a topic on which there has been a great difference of learned opinion. Is there an inflexible rule that the absence of a gift over suffices for the implication of a trust? Or is some further evidence of intention necessary? The question was alluded to and the conflicting opinions were cited by Dixon J. in Perpetual Trustee Company (Ltd.) v. Tindal (1940) 63 CLR 232, at pp 261-262 . His Honour said that "in the result textbooks generally seem to place the question upon a search for intention without formulating a clear and definite presumption or rule of construction". I add to the references there given the later discussion of the question by Harman J. in In re Perowne, decd.; Perowne v. Moss (1951) Ch 785 and the article "Powers" in Halsbury's Laws of England, 3rd ed., vol. 30, at pp. 210-211. The leading textbooks on wills, powers and trusts generally suggest that the doctrine of powers in the nature of trusts had its genesis in the decisions in Harding v. Glyn (1739) 1 Atk 469 (26 ER 299) ; Brown v. Higgs (1799) 4 Ves Jun 708 (31 ER 366); re-heard (1800) 5 Ves 495 (31 ER 700); affirmed (1803) 8 Ves Jun 561 (32 ER 473),(1813) 18 Ves Jun 192(34 ER 290). , and Burrough v. Philcox (1840) 5 My &Cr 72 (41 ER 299) . Cases since then have been numerous. Whether or not the rule can be extended from a special power of appointment among a class of objects to a special power to appoint to a single nominated object may, I realize, be questionable. However, in the present case I think that an over-riding intention to benefit the charity is plain, and that suffices. If the rule of construction, so often applied in relation to powers of appointment, be thought directly applicable, it merely strengthens what I think is sufficiently manifest. It seems apposite to quote one passage from the judgment of Lord Eldon in Brown v. Higgs (1803) 8 Ves Jun, at p 574 (32 ER 473, at p 478) :

"The principle . . . is, that, if the power is a power, which it is the duty of the party to execute, made his duty by the requisition of the will, put upon him as such by the testator, who has given him an interest extensive enough to enable him to discharge it, he is a trustee for the exercise of the power, and not as having a discretion, whether he will exercise it, or not; and the court adopts the principle as to trusts; and will not permit his negligence, accident, or other circumstances, to disappoint the interests of those, for whose benefit he is called upon to execute it."

In my opinion the testatrix by her will created by implication a charitable trust and gave an express authority to enable its performance. (at p658)

21. I sum up my views as follows:

(a) Clause 6 is not uncertain or invalid. It is a question of construction whether it creates a bare power or a trust power. (b) In my opinion the effect of the clause, read with the rest of the will, is that, after the expenses, including duties, have been paid and legacies satisfied, the residue of the estate is held by the trustee upon trust for the charitable purposes stated. (c) If this view be wrong and there is not trust for the charity, merely a power in the trustee to devote the property to this purpose if in its discretion it thinks fit so to do, then that power is still exercisable by the trustee; and it would commit a "fraud on the power" if, for some reason foreign to the object and purpose of the power, it failed to exercise it. (at p658)

22. I would allow the appeal and cross-appeal to the extent I have indicated, and substitute different declarations for those that the Supreme Court made. (at p658)

Orders

Appeal dismissed. Costs of all parties to be paid out of the estate. Those of the respondents as between solicitor and client.