Re Estate of Henry Brough Smith; Perpetual Trustee Company Ltd v Uniting (Victoria and Tasmania) Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S ECI 2018 01018

IN THE MATTER of the Will and Estate of HENRY BROUGH SMITH, deceased

- and -

IN THE MATTER of an application pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015

BETWEEN:

PERPETUAL TRUSTEE COMPANY LIMITED (as trustee of the Estate of the abovenamed deceased)	Plaintiff
v
UNITING (VICTORIA AND TASMANIA) LIMITED (ACN 098 317 225) & OTHERS (according to the attached Schedule)	Defendants

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JUDGE:	Cameron J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 October 2019
DATE OF JUDGMENT:	30 June 2020
CASE MAY BE CITED AS:	Re Estate of Henry Brough Smith; Perpetual Trustee Company Ltd v Uniting (Victoria and Tasmania) Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2020] VSC 378

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EQUITY AND TRUSTS — Charitable trust — Testamentary trust — Charitable institutions named in deceased’s will no longer in existence — Whether charitable purpose of those institutions continued through defendant charitable institutions — Whether defendant charitable institutions successors to institutions named in the will — Re Faraker; Faraker v Derell [1912] 2 Ch 488; Inre Lucas; Sheard v Mellor [1948] Ch 424; Sydney Homeopathic Hospital v Turner (1959) 102 CLR 188; Stratton v Simpson (1970) 125 CLR 138; Re Tyrie (No 2) [1972] VR 168; Re Vernon’s Will Trusts [1972] Ch 300; Sir Moses Montefiore Jewish Home v Howell & Co (No 7) Pty Ltd [1984] 2 NSWLR 406; Public Trustee v Cerebral Palsy Association of Western Australia (2004) 28 WAR 496; Australian Executor Trustees v Ceduna District Health Services Inc [2006] SASC 286; Australian Executor Trustees v Attorney-General for the State of South Australia [2010] SASC 348; Forbes v NSW [2010] NSWSC 1439; Re Coulson [2014] VSC 353; Melba Support Services Inc v Bell [2014] VSC 425; Re McHenry [2020] VSC 211 referred to.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R R Boaden	KCL Law
For the First and Second Defendants	Mr J McComish	Stewart Peters Lawyer
For the Third Defendant	Mr S P Newton	Neylon Legal
For the Fourth Defendant	Mr B Barr	HWL Ebsworth Lawyers
For the Fifth Defendant	Mr M C McKenzie	Cetrola Legal

SCHEDULE OF PARTIES

PERPETUAL TRUSTEE COMPANY LIMITED (as trustee of the Estate of HENRY BROUGH SMITH, deceased)	Plaintiff
v
UNITING (VICTORIA AND TASMANIA) LIMITED (ACN 098 317 225)	First Defendant
ORANA FAMILY SERVICES	Second Defendant
ANGLICARE VICTORIA	Third Defendant
CHILD & FAMILY CARE NETWORK INC	Fourth Defendant
CHILDREN AUSTRALIA INCORPORATED	Fifth Defendant

HER HONOUR:

What is this case about?

This is an application pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 for directions in relation to the distribution of income from the Henry Brough Smith Charitable Trust (the ‘Trust’).

The Perpetual Trustee Company Limited (the ‘Trustee’) seeks judicial direction as to whether the five defendant charitable organisations are entitled to take the benefit of income from the Trust, as continuation of or successors to the institutions originally named as beneficiaries in the trust instrument.

The Attorney-General has been informed of this proceeding and has not entered an appearance.

Background

Henry Brough Smith (the ‘Deceased’) died on 20 March 1969. The Deceased was a wool exporter who was known during his lifetime for giving charitable assistance to people in need. The Deceased left a will dated 16 September 1966 and a codicil dated 5 December 1967 (collectively, the ‘Will’). Probate of the Will was granted to the Trustee and Mr Joseph Hodgson on 31 July 1969. The Trustee is the sole remaining trustee of the Trust.

Pursuant to paragraph 9 of the Will, the residue of the Deceased’s estate was to be held on trust known as the ‘Henry Brough Smith Charitable Trust’. The Deceased directed that the income of the Trust be distributed as follows:

In each succeeding year after my death the net income of the said trust fund shall be paid and divided in equal shares between such of the organisations and institutions hereinafter named as shall for the time being be in existence and shall be “authorised charities” within the meaning of that expression hereinafter appearing.

The charities named in the Will are as follows (numbered for ease of reference):

1. Tally Ho Boys Village, Tally Ho
2. The Hospice for Elderly Men, 214 Arden Street North Melbourne
3.The Home for Elderley [sic] Ladies, Wesley House Wesley Church, Melbourne

4.        The Girls Memorial Home, 19 Station Street Fairfield
5.        Methodist Homes for Children, 87 Elgar Road Burwood
6.        St John’s Home for Boys, Rochester Road Canterbury
7.        St Paul’s Home for Boys, Newhaven Phillip Island
8.        Presbyterian Home for Boys, ‘Kilmany Park’ Sale
9.        Salvation Army Home for Boys, Elgar Road Box Hill
10.      Salvation Army Home for Boys, Bayswater
11.      Burwood Boys’ Home, Warrigal Road Burwood
12.      The Melbourne Orphanage of Windermere, 7 Butler Street Brighton
13.      Royal Children’s Hospital of Flemington Road Parkville
14.      Brotherhood of St Laurence, 67 Brunswick Street Fitzroy
15. Mercy Public Maternity Hospital Society, Clarendon Street East Melbourne

‘Authorised charity’ is defined in the Will as an organisation or institution which:

(i)is a charitable organisation or a charitable institution (as the case may be) in the technical legal sense of the word ‘charitable’; and
(ii)is within the State of Victoria

Paragraph 9 of the Will further directs that:

My trustees may from time to time enquire into the conduct activities and purposes of any organisation or institution named in this paragraph and if my trustees shall form the opinion that the said organisation or institution is not or is no longer an ‘authorised charity’ and that opinion is confirmed by the opinion of Senior Counsel of the Victorian Bar or by order of the appropriate Court no part of the income of the Henry Brough Smith Charitable Trust shall thereafter be paid or distributed to that organisation or institution until that organisation or institution shall establish by order of an appropriate Court that it is qualified to participate as an ‘authorised charity’ under this paragraph. While any organisation or institution mentioned in this paragraph shall not be entitled to participate in the payment and division of income under this clause the income of the said trust fund shall be paid and divided between the remaining organisations and institutions not so disqualified in equal shares between them.

There is no indication in the Will or elsewhere why the Deceased chose to leave funds for the benefit of the particular institutions named in paragraph 9.

Two named organisations, the Salvation Army Home for Boys, Box Hill (9) and the Salvation Army Home for Boys, Bayswater (10), are no longer in existence. Their entitlements are distributed amongst the remaining organisations.

Three named organisations, the Royal Children’s Hospital (13), Brotherhood of St Laurence (14), and Mercy Public Maternity Hospital (15) remain in existence. As there is no question concerning the existence of those charities, income of the Trust continues to be distributed to them.

By 2015, the remaining institutions (hereafter the ‘Named Institutions’) had each ceased to exist in the form that existed as at the date of the Will. The Defendant charities purport to continue the work of the Named Institutions. The Trustee sought advice from counsel in 2015 which cast doubt on the proposition that each of the Defendants was a continuation or successor to one or more of the Named Institutions. In 2016, the Trustee received further advice which suggested that the Defendants were entitled to receive distributions of income pursuant to the Will. In view of that conflicting advice, the Trustee made the present application to the Court.

The Trustee ceased making distributions to the Defendants in 2014. Funds that would otherwise have been distributed to the Defendants have been retained by the Trustee, pending the outcome of this application.

Claims made and orders sought

The Defendants each claim to have taken over the work previously carried on by, or to be successors of, one or more of the Named Institutions. As such, the Defendants submit that they are entitled to continue to receive distributions of income from the Trust. The Trustee seeks directions from the Court as to the entitlements alleged by each Defendant.

The First Defendant, Uniting (Victoria and Tasmania) Limited (‘Uniting’), claims to have taken over the work of, or be successor to:

(a)Tally Ho Boys Village;
(b)The Hospice for Elderly Men;
(c)The Home for Elderly Ladies at Wesley House;
(d)The Girls Memorial Home; and
(e)Presbyterian Home for Boys (collectively, the ‘Uniting Named Institutions’).

The Second Defendant, Orana Family Services (‘Orana’), claims to have taken over the work of, or be successor to Methodist Homes for Children. Orana was an unincorporated association and a body of the Uniting Church of Australia, which has since merged with Uniting. Any order in favour of Orana will now take effect in favour of Uniting.

The Third Defendant, Anglicare Victoria (‘Anglicare’), claims to have taken over the work of, or be successor to:

(a)St John’s Home for Boys; and
(b)St Paul’s Boys Home (collectively, the ‘Anglicare Named Institutions’).

The Fourth Defendant, Child & Family Care Network Inc (‘CFCN’), claims to have taken over the work of, or be successor to Burwood Boys’ Home.

The Fifth Defendant, Children Australia Incorporated (‘Children Australia’), claims to have taken over the work of, or be successor to The Melbourne Orphanage, Windermere.

The Plaintiff filed submissions disputing the entitlement of Uniting to take funds directed to Presbyterian Home for Boys, which was subject to a 1993 cy-près scheme. Uniting has confirmed that it does not seek payments meant for Presbyterian Home for Boys before 2014. The plaintiff did not press this point in oral submissions.

Legal principles
Charitable trusts

Trusts for charitable purposes fill a unique niche within the law of trusts. In contrast to private trusts, which exist for the benefit specific named objects, a charitable trust is a trust for a specified purpose or purposes.[1] Such trusts are commonly referred to as ‘purpose trusts’. Unlike private trusts, a charitable or purpose trust does not depend upon certainty of object in order to be validly constituted, provided that there is a clear indication of a general purpose of charity. As was explained by Windeyer J of the High Court of Australia in Stratton v Simpson:

[E]very charitable trust is a trust for a purpose or purposes that are charitable, not a trust for a person or persons, although persons benefit from the fulfilment of the purpose. A body or organization which holds property upon a charitable trust and carries out the trust purposes is commonly called a charitable institution or a charity. It is really but the instrument for carrying a purpose into effect. Confusion can occur from want of remembering this…[2]

[1]Stratton v Simpson (1970) 125 CLR 138, 144 (Windeyer J).

[2]Ibid.

Like all trusts, a charitable trust also requires certainty of intention to create a trust and certainty of subject matter of the trust in order to be validly constituted. These matters are not in dispute in this application, as they are clearly set out the in the terms of the Will.

The parties proceeded upon the basis that the trust established by the Will was a charitable trust, which existed to benefit the charitable purposes associated with each named institution. That is consistent with the well accepted proposition that a gift to a named charitable institution will be construed prima facie as a gift for the purposes of that institution.[3] It was said by Kitto J, of the High Court of Australia, with respect to a bequest to a named hospital:

There is, I think a strong implication of an intention that, through the medium of the unincorporated association, the relevant income should be devoted to the purposes which that association announced by its rules and was serving by carrying on its hospital. Such an implication must often arise upon a gift to a body which exists for specific purposes of an altruistic nature, and especially where the name used in the words of gift fits indifferently an activity serving such purposes (as for instance a hospital) and the body which carries it on. In such a case, the use of the name is apt to conceal an omission to distinguish in thought between the one and the other, so that the name is really a portmanteau description signifying that the governing body is to be the recipient but is to take upon trust for the furtherance of the activity.
Not, of course, that a trust arises in every case of a gift to a body established for limited objects. The nature of the objects may have provided the donor with the motive for his gift, and yet the gift may be a beneficial gift entitling the body to apply the property as it sees fit within the scope of its powers as they exist from time to time. Property given to a company, for example, is not necessarily held on trust for the objects stated in the company's memorandum of association, nor is property which is given to a chartered corporation necessarily held on trust for application in accordance with the charter. But if the objects of a body are limited to altruistic purposes, it is as an instrument of altruism that it is likely to attract benefactions. Very often, to say the least, it will be a proper inference, when a gift is made to such a body, that the donor intends the gift to operate as a devotion of the subject property to the relevant purposes, and that the donee accepts it as such. Where that is the case all the elements necessary for the creation of a binding trust are present. Accordingly a gift which would be invalid unless it operates to create a charitable trust may be upheld because, when the objects of the body which is the donee are taken into consideration, an inference arises that the gift is upon trust for charitable purposes (or for charitable purposes and others which are no more than ancillary).[4]

[3]Re Vernon’s Will Trusts; Lloyd’s Bank Ltd v Group 20 Hospital Management Committee [1972] Ch 300. See also, Re Goodson [1971] VR 801.

[4]Sydney Homeopathic Hospital v Turner (1959) 102 CLR 188, 221–222.

Although the English authorities expressly distinguish between gifts to incorporated and unincorporated associations in this regard, such distinction has been rejected in Australian courts. In Sir Moses Montefiore Jewish Home v Howell & Co (No 7) Pty Ltd (‘Sir Moses Montefiore Jewish Home‘)[5] Kearney J of the Supreme Court of New South Wales reviewed the English authorities as well as the judgment of the High Court in Sydney Homeopathic Hospital and observed:

It thus appears that Kitto J saw no reason to distinguish between an unincorporated charity and one which was incorporated. So far as his Honour was concerned the important thing was that each had altruistic objects which could be called in aid of deciding whether or not a disposition was a gift or by way of trust.
I consider that this more refined analysis exemplified in the judgment of Kitto J is the proper approach, and I accordingly do not consider that the rule enunciated in the English cases is an automatic rule which operates in all circumstances. In my view a disposition to a charitable corporation is to be treated as having presumptively the necessary elements creating a trust, so that the disposition of such a charitable corporation takes effect as a trust for the purposes of the corporation rather than as a gift to it to be applied as it sees fit.[6]

[5][1984] 2 NSWLR 406 (‘Sir Moses Montefiore Jewish Home‘).

[6]Ibid, 416.

In this case, the distinction is largely academic as all of the Named Institutions were unincorporated institutions.

Continued existence of charitable purposes

It is well accepted that a charitable institution may continue to exist notwithstanding that the machinery through which that institution carries out its charitable purpose has changed. As this proposition is central to the issues in this case, it is pertinent to consider it in some detail, beginning with the English Authorities.

In Re Faraker; Faraker v Derell,[7] the Court of Appeal considered a gift made to a named charity for the benefit of widows, known as Hannah Bayly’s Charity. The will did not specify any particular charitable purpose associated with that entity to which the gift was to be applied. At some time prior to the testator’s death, Hannah Bayly’s Charity had been amalgamated with several other charities under a scheme instituted by the Charity Commissioners.
[7][1912] 2 Ch 488.

The Court of Appeal held that the gift had not lapsed. Despite change in machinery through which Hannah Bayly’s Charity operated, their Lordships held that it had never ceased to exist because the original charitable purpose remained. It was said by Farwell LJ:

Suppose the Charity Commissioners or this Court were to declare that a particular existing charitable trust was at an end and extinct, in my opinion they would go beyond their jurisdiction in so doing. They cannot take an existing charity and destroy it; they are obliged to administer it. To say that this pardonable slip (I use the word with all respect to the draftsman) has the effect of destroying the charity appears to me extravagant. In all these cases one has to consider not so much the means to the end as the charitable end which is in view, and so long as that charitable end is well established the means are only machinery, and no alteration of the machinery can destroy the charitable trust for the benefit of which the machinery is provided.[8]

[8]Ibid, 495.

In a similar vein, Kennedy LJ said:

The funds of Mrs. Bayly’s Charity of course exist, metamorphosed as they have been under the scheme, so far as regards the actual character of the fund in the sense of its being a fund distributable to widows only. The administration of those funds no doubt in this case exists; there are persons who under the scheme do administer this and other moneys for charitable purposes; but the question which I have felt some doubt about is, if the continuance — that word has been used throughout — of a charity is requisite, what is the essential thing to constitute the continuance of that charity as the subject of a charitable gift in a will? and it does seem, under the circumstances I have stated, at first sight, strange that this is a perfectly good bequest to persons who are administering a fund of which they are not bound to give one penny to a widow. The terms of the will no doubt are important, because it is not a gift to “Mrs. Bayly's Charity Rotherhithe for widows,” words which I should have felt it impossible to get over, when the persons who ask for it are a body created by a scheme of the Charity Commissioners, which has no special obligation to consider the claims of widows. But no case has been shewn to me in which an endowed charity has been treated as having, so to speak, lost its life by reason of the exercise of the perfectly competent authority under parliamentary sanction of the Charity Commissioners, or the equally competent authority of this Court, under which its funds have come to be applied somewhat differently to the way in which they were applied under the original foundation. This being so, I am unable to say that the contention which has found favour with Neville J. ought to prevail, and I therefore shall not differ from the Master of the Rolls and Farwell L.J. on this point. It seems to be the law, that an endowed charity, to whatever purpose its funds are devoted, if and so long as they are devoted to some charitable purpose under some duly authorized scheme, remains still existent so as to draw to it a sum of money given by a will for, presumably, the same purpose as the original charity.[9]

[9]Ibid, 496–7.

Inre Lucas; Sheard v Mellor[10] was a similar case to Re Faraker, in which the Court of Appeal again considered the status of a gift which had been made to a named charity, a home for crippled children. The named charity had closed before the date of the will. A scheme for the administration of its assets was made under the name of a new charity, which was established for a slightly different purpose of sending disabled children to holiday or convalescent homes. Lord Greene MR, giving the judgment of the Court of Appeal, held that the gift was properly construed as one for the general purposes of the charity, which had continued following its closure and reformation. His Lordship recited with approval the principle in Re Faraker:

It is settled by authority binding upon this court that so long as there are funds held in trust for the purposes of a charity the charity continues in existence and is not destroyed by any alteration in its constitution or objects made in accordance with law, as for example by a scheme under the Charitable Trusts Acts.[11]

[10][1948] Ch 424.

[11]Ibid, 426-7.

However, the Master of the Rolls also noted the distinction between a gift to a charitable institution generally, and a gift for a particular charitable purpose carried out by that institution, such as for the upkeep of particular premises.[12] In the latter case, a failure of that particular purpose is subject to the doctrine of lapse.
[12]Ibid, 427.

The Court of Appeal disagreed with the construction of the judge at first instance that the gifts were for a particular purpose. Rather, Lord Greene MR characterised the inclusion of an address in the description of the charity in the will as ‘just as necessary or desirable and just as appropriate, for the purpose of identifying the charity as for the purpose of identifying the particular home carried on as to the address’.[13] Had she intended the funds to be put to a specific purpose, his Lordship considered that the testatrix would have said so in the will.[14] Therefore, despite the change in mechanism through which it was exercised, the Court of Appeal considered that the general charitable purpose of the charity continued, such that the lapse rule had no application.
[13]Ibid, 428.
[14]Ibid, 429.

Re Vernon’s Will Trusts[15] concerned a gift to an incorporated charity, the ‘Coventry Crippled Children’s Guild’, which was dissolved before the testatrix’s death. Three years prior to dissolution of that charity, an unincorporated charity was established that performed all but one function of the incorporated charity. The unincorporated charity expanded its services to adults as well as children. Upon dissolution of the incorporated charity, its endowments and functions were not transferred to the unincorporated charity. Rather, those endowments and functions were transferred to the defendant Hospital Committee, who continued to provide services in the clinic and hospital formerly operated by the incorporated charity. A question arose as to whether the unincorporated charity or the Hospital Committee was the true successor to the incorporated charity.
[15][1972] Ch 300.

Mr Justice Buckley held that the gift did not lapse, but rather it took effect in favour of the Hospital Committee. His Lordship observed:

Such a charity, considered as a charity and apart from the mechanism provided for the time being and from time to time for holding its property and managing its affairs, could never cease to exist except by exhaustion of all its assets and cessation of its activities. A change merely in its mechanical aspect could not involve the charity ceasing to exist. The principle of the decisions in In re Faraker [1912] 2 Ch. 488 and In re Lucas [1948] Ch. 424 is, in my judgment, equally applicable to an incorporated charity of this kind as to a charity constituted by means of a trust. In such cases the law regards the charity, an abstract conception distinct from the institutional mechanism provided for holding and administering the fund of the charity, as the legatee, and so long as the charity as so conceived continues in existence the bequest will not lapse.[16]

[16]Ibid, 304.

His Lordship then went on to say:

[A]s in In re Lucas the bequest did not fail by reason of the physical home having been closed but took effect in favour of the charity in the new and different form into which it had been transmuted by an order of the Charity Commissioners, so by parity of reasoning, in my judgment, in the present case the bequest took effect at the death of the testatrix in favour of the charity then being conducted by the first defendant in unbroken continuance of the charity which at the date of the will was being conducted by the incorporated guild.[17]

[17]Ibid, 305.

The English authorities have been the subject of much consideration in the subsequent Australian cases. In Sir Moses Montefiore Jewish Home Kearney J observed:

The dispositions in the present circumstances are accordingly, in my view, properly to be regarded as gifts for the purposes of the homes rather than merely gifts to the homes themselves as entities. The effect of such decisions as Re Vernon and Re Finger is that while the purpose can be found to exist, the failure of the institution which is the vehicle through which such purpose is intended to be implemented, does not prevent the trust for such purposes being carried into effect…
A parallel approach arises from construing a disposition for charitable purposes through the medium of a particular charitable body as being one for augmentation of such body’s funds. It is established since the decision of the Court of Appeal in Re Faraker [1912] 2 Ch 488 followed by the Court of Appeal decision in Re Lucas [1948] Ch 424 that continued existence of the funds in some transposed form, for example, through another institution altogether or through one into which the original body has been amalgamated enables a general charitable intention for the application of such funds to be fulfilled.[18]

[18]Sir Moses Montefiore Jewish Home (n 5) 416–17.

The proposition was adopted by the Supreme Court of Western Australia in Public Trustee v Cerebral Palsy Association of Western Australia.[19] There, the Court considered a testamentary gift to the Spastic Welfare Association of Western Australia Inc, an incorporated charity. That charity was dissolved and its assets were transferred to the Cerebral Palsy Association of Western Australia. Barker J held that the prior Association had not ceased to exist, ‘in practical and charitable purpose terms’.[20] His Honour also considered that the second Association would in any event be considered a successor to the first, as there was virtual identity of the objects, operations and assets of the two Associations.
[19](2004) 28 WAR 496.
[20]Ibid, 507 [40].

Australian Executor Trustees v Ceduna District Health Services Inc[21] concerned a testamentary disposition to the operator of a retirement complex in Ceduna, South Australia. Before the testator’s death, that entity was dissolved and replaced with another institution that performed additional functions over a different geographical area to the named institution. Justice Vanstone considered that the difference in the objects of the two institutions meant that the replacement institution was not a successor to the named institution. Her Honour considered that the bequest to the named institution indicated that the charitable intention of the deceased was relatively narrow and had lapsed.[22] However, as was observed by Kourakis CJ in the later decision of the Supreme Court of South Australia in Australian Executor Trustees v Attorney-General (SA),[23] the issue of whether the bequest was, in substance, a gift for the charitable purpose of the named institution was not considered by Vanstone J.
[21][2006] SASC 286.
[22]Ibid, [28].
[23][2010] SASC 348, [65].

In Estate of Forbes v NSW,[24] Hallen AsJ considered a gift made to several hospitals. One of the recipients of the gift was the ‘Prince Henry Hospital of Anzac Parade Little Bay’. At the time the will was made, management of that hospital fell to the South Eastern Sydney Area Health Service, a corporate body established by operation of the Area Health Services Act 1986 (NSW). In 1997, the Health Services Act 1997 (NSW) was passed into law, which repealed and replaced the Area Health Services Act. The South Eastern Sydney Area Health Service was later amalgamated with another entity to form the South Eastern Sydney and Illawarra Area Health Service. Pursuant to the Health ServicesAct, the new health service was expressly prescribed to be a continuation of the same legal entity as the body which was in existence as at the date of the Deceased’s will. Hallen AsJ held that, although the Hospital named in the will had ceased to exist in its original form, the new area health service was a continuation of the service it replaced.[25] On that basis his Honour was of the view that the gift did not lapse or, if it did lapse, that the new service was the successor institution to that which was named in the will.
[24][2010] NSWSC 1439.
[25]Ibid, [26].

I was referred by all parties to this case to the decision of McMillan J of this Court in Re Coulson.[26] That case was an unopposed application under Order 54 concerning the construction of a gift to ‘Aglow Australia Pty Ltd’, an institution that had ceased to be in existence.[27] The administrator of the estate sought directions from the Court concerning, inter alia, whether the named beneficiary had ceased to exist or whether it continued in the form of an entity named ‘Aglow International Australia Ltd’. Her Honour held that the named institution had not ceased to exist and therefore the gift had not lapsed. Her Honour traversed the authorities discussed above before reaching the following conclusion:

From the abovementioned cases it is seen that, when it comes to charities, a simple dissolution and reincorporation may not result in the charity ceasing to exist. Incorporation in a particular jurisdiction or in a particular manner is merely the machinery by which the charity operates. If the charity organisation continues its work through a new body corporate, it may not have ceased to exist. This will depend on the objects and purposes, and arrangements upon dissolution, of the two organisations. This principle recognises that a charitable organisation may have conducted its charitable work continuously, yet made changes to its legal form depending on the vicissitudes of government regulatory policy or the benefits of incorporation in different jurisdictions. In such situations the charity organisation has not truly ceased to exist.[28]

[26][2014] VSC 353.

[27]Although not relevant for present purposes, the organisation named in that case had never in fact existed. McMillan J considered, however, that the deceased had intended to benefit an institution formerly known as ‘Aglow Australia Inc (QLD)’.

[28]Re Coulson (n 26) [43].

Justice McMillan traced the corporate history of the named beneficiary through another entity (Aglow Australia Inc (WA)) to Aglow International Australia Ltd. Her Honour also and noted an almost complete identity in the charitable objects of all three organisations. In those circumstances, McMillan J concluded that although the mechanics by which it operated had changed, the named organisation had not ceased to exist.[29] In the alternative, her Honour indicated her view that the lapse of the gift was saved by operation of one or more exception to the lapse rule.[30]
[29]Ibid, [65].
[30]Ibid, [68], [77].

Justice McMillan repeated the her observations made in Re Coulson later that year in Melba Support Services Inc v Bell, in which case her Honour observed:

In circumstances where it can be established that the purpose of the new entity was the continuation of the previous legal entity or, alternatively, was the successor of the original organisation, then the charity organisation has not ceased to exist.
In this case, the purposes of the plaintiff are the same as the purposes of Melba Centre Inc, providing support services and assistance for individuals with disabilities, and the work of Melba Centre Inc and the plaintiff continue along the same lines. In the circumstances, Melba Centre Inc has not ceased to exist as it is only the mechanics by which the organisation operates that have changed, seemingly caused in this case by changes in government policy and the financial circumstances at the time of the change of name of the incorporated entity.[31]
[31][2014] VSC 425, [43]–[44]. See also Re McHenry [2020] VSC 211.

Effect of lapse of a charitable gift

In circumstances where a charitable institution has ceased to exist the prima facie position is that a gift to that institution has lapsed.[32] However, there are certain exceptions to that proposition. The principles were neatly summarised by Newton J in Re Tyrie (No 1) (‘Re Tyrie’) as follows:[33]
[32]See, GE Dal Pont, Law of Charity (LexisNexis Butterworths, 2^nd ed, 2017) 360-361 [15.4].
[33][1972] VR 168, 177-178 (citations omitted) (‘Re Tyrie’).

(1) A gift by will to a particular charitable institution simpliciter must be treated as a gift for the advancement of the charitable work or purposes of that institution…
(2) Nevertheless, a gift by will to a particular charitable institution (which I shall call “the named institution”), which at some time existed, but had ceased to do so in the testator’s lifetime, whether before or after the date of his will, ordinarily lapses… The reason for this general rule appears to be that by designating the named institution as the donee the testator has prima facie at least demonstrated an intention that the charitable work or purposes which he wishes to benefit are to be benefited through the instrumentality of the named institution and in no other manner… For convenience I shall hereafter refer to this general rule as “the lapse rule”.
(3)To the lapse rule there are the following three exceptions, so far as material for present purposes: -
(A) If at the testator's death there is in existence another institution which has taken over the work previously carried on by the named institution and which can properly be regarded as the successor of the named institution, and if the dominant charitable intention of the testator was wide enough to allow the gift to take effect in favour of that successor institution, then the gift will take effect in favour of the successor institution… For convenience I shall hereafter refer to this exception as exception (A).
(B) If upon the true interpretation of the will the testator intended that the gift should operate simply as an accretion to the assets of the named institution so as to become subject to whatever charitable trusts were from time to time applicable to those assets, and if after the named institution itself ceased to exist its assets remained subject to charitable trusts which were still on foot at the testator's death, then the gift will be treated as taking effect as an accretion to any property which was at his death subject to those trusts… For convenience I shall hereafter refer to this exception as exception (B).
(C) If in cases not falling within exceptions (A) or (B), the testator is nevertheless found upon the proper interpretation of the will to have had a dominant intention to benefit work or purposes of the kind which the named institution carried out, notwithstanding that the named institution itself might no longer exist at his death, and if it is practicable as at the death of the testator to apply the gift for the benefit of work or purposes of that kind, and in a way which is in all respects consistent with any other elements of the dominant intention of the testator (or to put it in another way, consistent with any indispensable or essential elements of his charitable intention), then the gift will be so applied by means of a cy-pres scheme. This is simply one aspect of the cy-pres principle… But although the existence of this third exception is well recognized… I have myself found no reported case where it has been applied in the case of a gift to a named charitable institution simpliciter… For convenience I shall hereafter refer to this third exception as exception (C).

Are the Defendants entitled to receive income from the Trust?
Uniting and Orana

Uniting claims to be a continuation of, or alternatively successor to, the Uniting Named Institutions. Orana, claims to have taken over the work of, and be successor to Methodist Homes for Children. Orana has since merged with Uniting, and they relied upon joint submissions filed 12 March 2019, with supplementary submissions filed 6 August 2019 and 8 November 2019.

Uniting’s primary submission is that the five Uniting Named Institutions and Methodist Homes for Children did not cease to exist, and therefore that the gift to those institutions has not lapsed. It is submitted that although there have been several changes to the machinery through which each of those institutions operates, the purpose for which the gifts were made continues through the current work of Uniting.

Uniting’s secondary submission is that, even if the Uniting Named Institutions have ceased to exist and the gift has lapsed, one or more of the exceptions discussed in Re Tyrie applies to preserve the charitable gift.

History of the Uniting Named Institutions
Tally Ho Boys Village

Tally Ho Boys Village was established as the ‘Tally Ho Boys Training Farm’ at Burwood in 1903. Tally Ho was not a separately incorporated institution, it was established through the (also unincorporated) Melbourne Methodist Services Mission (often referred to as the ‘Central Mission’). The Central Mission was an umbrella organisation that undertook charitable work on behalf of what was then the Methodist Church of Australasia.

The broad purposes of the Tally Ho Boys Training Farm were the relief of the poor, relief of human distress and the advancement of education. Those purposes were achieved by providing accommodation, school education, training in agriculture, pastoral support and family support to its residents.

Residents were often committed to Tally Ho’s care by the courts, or by parents who were unable to manage their children. Clients were referred to Tally Ho on a state-wide basis.

From at least 1912, Tally Ho was registered under the Neglected Children’s Act 1890 (Vic)[34] and received funding from the Victorian Government.
[34]The Neglected Children’s Act 1890 (Vic) was repealed and replaced by the Neglected Children’s Act 1915 (Vic).

From 1941, the structure of Tally Ho transitioned into a village of cottages which offered residents family life within a home environment. The name ‘Tally Ho Boys Village’ began to be used in or around 1963.

From 1974, Tally Ho began to establish additional homes away from the original site, in Blackburn, Burwood and Doncaster.

From 1976, Tally Ho began assisting young girls as well as boys and was renamed ‘Tally Ho Youth Services’.

Between 1984 and 1987, Tally Ho purchased additional homes in St Kilda, South Melbourne, East Burwood, Elwood, South Melbourne, Ferntree Gully, Mitcham and Dandenong. In 1986, the original premises at Burwood closed, as the organisation shifted towards a greater focus on providing social services for youths rather than residential accommodation.

In or around 1992, Tally Ho was renamed ‘Wesley Youth Services’. Changing community and regulatory standards regarding care for young children saw a shift away from large residential institutions to independent community based living.[35] As at 2015, Wesley Youth Services had 232 children in its care in Victoria.
[35]See generally, Children Youth and Families Act 2005 (Vic).

The Hospice for Elderly Men

The Hospice for Elderly Men was established as a night shelter on Lonsdale Street in 1894, under the auspices of the Central Mission. The broad purposes of the shelter were the relief of the poor, relief of the aged, and relief of the impotent. The shelter provided short term accommodation, food, work and recreation for single elderly men in financial need. The shelter’s clients were drawn from metropolitan Melbourne.

The shelter moved to George’s Lane in 1895, and to La Trobe Street in 1898.

The shelter began to be referred to as the ‘Hospice’ from around 1903.

In 1911, the Hospice relocated to new premises in Arden Street, North Melbourne. In 1948, that premises was renovated to provide residents with individual living, a hospital wing, a library and rest room. Further renovation in 1956 provided self-contained accommodation for residents.

In 1973, the Hospice for Elderly Men was renamed ‘Central Mission Men’s Residence’, and in 1978 it was renamed ‘Arden Lodge’.

From 1991, the Central Mission acquired several houses in Coburg and Ascot Vale. The purchase of those properties was a result of increased funding from the Commonwealth Government and a re-orientation of the Central Mission’s services towards assisting elderly men with independent, rather than institutional, living. Arden Lodge closed in or about 1992. From 1993, some forty residents of Arden Lodge were relocated into independent community housing.

The Home for Elderly Ladies at Wesley House

The Home for Elderly Ladies was established by the Central Mission in or around 1926. The broad purposes of the home were the relief of the poor, relief of the aged, and relief of the impotent. The home was located at Wesley House, Lonsdale Street and provided accommodation, community support and companionship for elderly women of limited financial means.

In 1974, the Home for Elderly Ladies changed its name to ‘Wesley Ladies’ Home’.

In 1978, the residents of Wesley Ladies’ Home were relocated to another residence in Coburg known as John Wesley Lodge and in 1980 the original premises at Wesley House fell out of use.

In or around 1991, the residents again moved to different premises in Coburg, known as ‘Irving Benson Court’. Irving Benson Court continues to provide self-contained accommodation and hostel support for elderly residents.

The Girls Memorial Home

The Girls Memorial Home was established by the Central Mission in 1921. At that time it was known as the Central Mission Girls Memorial Home. The purpose of the home was to provide relief to single, pregnant young women including accommodation, healthcare, antenatal care and other practical assistance. The home drew its clients on a state-wide basis, and some came from interstate.

In 1972, the home was re-named ‘Georgina House’.

In or around 1976, Georgina House began accommodating and offering rehabilitation services to women and children who were victims of family violence or who had been deserted.

In or around 1984, Georgina House again expanded its services to introduce an outreach programme. The original property was closed in or around 1986 and the institution instead operated from suburban houses at three different locations.

In or around 1991, the institution was renamed the ‘Georgina Programme’ and was targeted towards young people who were at risk of physical or sexual exploitation or homelessness. By 1993, several sites which accommodated young girls, and one site which accommodated young boys, had been established.

Presbyterian Home for Boys

The Presbyterian Home for Boys was established in 1923 as the ‘Kilmany Park Farm Home for Boys’ by the Social Services Committee of the Presbyterian Church of Victoria (an unincorporated association). The broad purposes of that institution were to provide relief to the poor, relief to human distress, and the advancement of education. Those purposes were achieved through the provision of accommodation, education, and training in farm work to boys over the age of ten years who required protective care.

Changing attitudes to the provision of child welfare services led to the closure of the home. The last resident left the home in December 1978.

By order dated 21 September 1993, this Court approved a cy-près scheme which directed how the proceeds of sale of the Kilmany Park property and various charitable bequests made to the institution were to be distributed. The scheme provided that the assets relating to the charitable work of Presbyterian Home for Boys vest in the Methodist Church (Victoria) Property Trust, and were to be applied towards the needs of disadvantaged young people.

Following the cy-près scheme, the Uniting Church continued its charitable work related to youth through an unincorporated association known as ‘Kilmany Family Care’, which operated in East Gippsland until 2002. The institution was thereafter named ‘Kilmany UnitingCare’ until 2010, and ‘UnitingCare Gippsland’ until 2016. Those institutions continued to provide community based youth services in Gippsland including foster care, family counselling, family day care, youth work, family support and financial counselling.

History of Methodist Homes for Children

Methodist Homes for Children began as a home for children established by the Wesleyan Methodist Church in 1888. The home was established as ‘Livingstone House’ in Carlton but moved to Cheltenham in 1891 where it became known as ‘Livingstone Home’. The broad purposes of the home were relief of the poor, relief of human distress, and the advancement of education.

From 1902, the institution came under the auspices of the Methodist Church of Australasia.

In 1934, the institution relocated to Cheltenham and became known as ‘Methodist Homes for Children, Cheltenham’.

In 1953, the institution again re-located to Burwood and became known as both ‘Orana’ and ‘Methodist Peace Memorial Homes for Children’.

From 1961 onwards, Orana began to shift away from exclusively providing institutional residential care. Orana began to provide consultation and counselling services for families with childcare difficulties, psychiatric help, day care services, and support for adoptive care and foster families.

In or about 1989, Orana relocated to Coolaroo and changed its name to ‘Orana Family Services’. The relocation occurred in order to address unmet social needs in Melbourne’s northwest.

In 2010, Orana Family Services changed its name to ‘Orana UnitingCare’.

In 2011, Orana UnitingCare ceased to provide residential care services, which were continued by Wesley Mission Victoria. Since that date, non-residential care services were provided by Orana UnitingCare and another unincorporated association known as Kildonan Uniting Care. Uniting, the First Defendant, has now taken over the work that was conducted by those organisations.

In 2012, Orana UnitingCare joined with UnitingCare Sunshine and Broadmeadows to form Lentara UnitingCare.

Changes to Uniting since the date of the Will

Since the making of the Deceased’s Will in 1966 there have been several institutional changes to Uniting. Uniting submitted that the result of these changes is that each of the Named Institutions discussed above continues to exist in the form of Uniting.

As observed, the Uniting Named Institutions and Methodist Homes for Children were established under the auspices of umbrella organisations associated with the Methodist Church and the Presbyterian Church, namely:

(a)the Central Mission of the Methodist Church, which conducted each of the Tally Ho Boys Village, the Hospice for Elderly Men, the Home for Elderly Ladies and the Girls Memorial Home. The Central Mission was re-named as the ‘Wesley Central Parish Mission’ in 1976;
(b)the Home Missions Department of the Methodist Church, which conducted Methodist Homes for Children; and
(c)the Social Services Committee of the Presbyterian Church, which conducted the Presbyterian Home for Boys.

On 22 June 1977, the Methodist Church of Australasia combined with the Presbyterian Church and the Congregational Church to form the Uniting Church in Australia, by operation of the Uniting Church in Australia Act 1977 (Vic) (the ‘Uniting Church Act’). Section 12(1) of the Uniting Church Act constituted the Uniting Church in Australia Property Trust (Victoria) (ABN 39 703 442 583) as a body corporate and registered charity.

By s 20(1) of the Uniting Church Act, all property that was formerly vested in the Methodist Church (Victoria) Property Trust or otherwise held on trust for the benefit of the Methodist Church was vested in the newly constituted property trust. Likewise, by operation of ss 4(1) and 4(2) of the Presbyterian Trusts Act 1979 (Vic) property which had been vested in trust for the Presbyterian Church before 20 December 1979 was deemed to have been vested in the property trust.

In 2001, Uniting was incorporated under its original name, Wesley Mission Melbourne Ltd (ACN 098 317 125). The two members of that entity are the Uniting Church in Australia Property Trust (Victoria) and its Tasmanian counterpart. Wesley Mission Melbourne Ltd was renamed as ‘Wesley Mission Melbourne’ in 2004, and as ‘Wesley Mission Victoria’ in 2009.

Upon incorporation, Wesley Mission Melbourne took over the work conducted by the Wesley Central Parish Mission. Clause 3.2 of the 2009 constitution of Uniting (then Wesley Mission Victoria) declared itself to be the successor to Wesley Central Parish Mission and was to assume the right, title, interest, assets and liabilities of its programs.

In 2015, the Uniting Church resolved to establish a single governance body under which to consolidate all community services functions of the Uniting Church in Australia. In 2016, Wesley Mission Victoria became ‘Uniting (Victoria and Tasmania)’, and finally ‘Uniting (Victoria and Tasmania) Limited’ in 2017. Schedule 1 to Uniting’s 2016 constitution expresses that Uniting encompasses, inter alia, the charitable work formerly carried out by Kildonan UnitingCare, Lentara UnitingCare (incorporating Methodist Homes for Children), and UnitingCare Gippsland (incorporating Kilmany Park Boy’s Home).

The current work of Uniting

The Affidavit of Gordon Harvey Linossier, CEO of Uniting, dated 19 December 2018 deposed that Uniting continues to provide services which continue the charitable purposes of the Uniting Named Institutions. Clause 1.1 of Uniting’s 2016 constitution states:

Principal Purpose
The Principal Purpose of the Company is to advance social welfare and public welfare so as to express God’s love and desire for justice for all people in accordance with the Basis of Union of the Church and the ethos of the Church by providing, without limitation, direct relief of disability, need, suffering, sickness, helplessness, poverty, misfortune and destitution.
The Company acts as an extension of the Church to implement the strategic directions of the Synod in the fields of social welfare, public welfare and community services.

Clause 1.2 of the constitution outlines the following ‘supporting purposes’ of Uniting:

Supporting Purposes
In support of the Principal Purpose, the Supporting Purposes of the Company include (without limitation) to:
1.2.1provide residential, non-residential care and support services for persons who are in need and to give public benevolent service;
1.2.2provide support and counselling to people in crisis including homelessness services, youth and children services, accommodation, disability services and emergency relief and to deliver such services in ways which promote human dignity;
1.2.3research community needs and advocate attitudes and actions which aim to lessen disadvantage, poverty and exclusion in the community; and
1.2.4do all lawful things consistent with, necessary or desirable to support and further the Principal Purpose.

Mr Linossier deposed that Uniting continues to provide services for the benefit of young people in continuation of the work of the Tally Ho Boys Village, the Girls Memorial Home, Methodist Homes for Children, and Presbyterian Home for Boys. Uniting provides the following services for the benefit of young people:

(a)counselling, mentoring and life skills development for youths experiencing personal or family challenges;
(b)out of home care for children who require a protective environment, including:
(i)home based foster care and kinship care, including a program which aims to build connections between foster children who have siblings;
(ii)adoption and permanent care; and
(iii)residential care.

As at December 2018, Uniting has provided foster care, residential care and kinship care services to 458 young people. Uniting has provided services to a further 40 children through its adoption and permanent care program.

Mr Linossier also deposed that Uniting continues to provide services for the benefit of elderly people, continuing the charitable purposes of the Hospice for Elderly Men and the Home for Elderly Ladies. Uniting provides the following services for the benefit of elderly people:

(a)low cost rental accommodation for seniors, including support for 17 individuals at Irving Benson Court in Coburg;
(b)home care packages, which allow elderly people in need of care to remain in their homes;
(c)quick response services proving in home care;
(d)social support through positive living groups and engaging day programs;
(e)short term care and support for elderly people at risk of homelessness; and
(f)respite care and other support for carers of elderly people.

As at December 2018 Uniting has provided services to 3,020 elderly people.

Are Uniting and Orana entitled to benefit from the Trust?

The Court considers that each of the Uniting Named Institutions, and the Methodist Home for Boys, has ceased to exist in the form that existed at the date of the Will, for the following reasons:

(a)At the time of the Will, each Uniting Named Institution provided care to a specific demographic of the community at a specific geographical location. It is necessary to delineate those specific charitable purposes from the broad charitable purposes attributed to each institution by Uniting and Orana. Although each institution served the broader charitable purposes of providing care and support to the young, destitute and the elderly, the specific charitable purpose of each institution was at the time of the Will tied to the institutional care services provided at each geographic location.
(b)By naming the specific institutions in the Will, the Deceased indicated that he intended his broader charitable intention to be carried out by benefitting the specific charitable purposes of the named institutions.
(c)Since the date of the Will, each Uniting Named Institution has closed. Tally Ho’s original Burwood premises closed in 1986, the Hospice for Elderly Men (then known as Arden Lodge) fell into disuse in or around 1992, the Home for Elderly Ladies at Wesley House fell into disuse in 1980, the Girls Memorial Home (then known as Georgina House) closed in 1986 and the Presbyterian Home for Boys ceased operations in 1978. The Methodist Homes for Children closed in 1989 when Orana moved to Coolaroo. Upon the closure of each institution, the specific charitable purposes carried out at each site ceased to exist. This is so notwithstanding the continuation of broader charitable aims by Uniting and its predecessor institutions.
(d)Although Uniting continues to provide support services for both young people and the elderly, those purposes are not carried out at the specific geographical locations or in the same manner as the institutions named in the Will. It cannot be said that differences between the charitable work of the Named Institutions and that of Uniting are mere changes to the mechanism through which the specific charitable purposes are carried out. The Named Institutions have not been dissolved and re-incorporated, their specific charitable purposes have not continued in some other guise. It would be a fiction to say that those institutions continue to exist.

The gift to the Uniting Named Institutions and Methodist Homes for Children ought nonetheless be preserved in favour of Uniting and Orana as a successors to those institutions pursuant to the first Re Tyrie exception, for the following reasons:

(a)Uniting has taken over the work previously carried out by the Uniting Named Institutions. Likewise, Orana has taken over the work previously carried out by Methodist Homes for Children. As observed, it is possible to trace both Uniting and Orana’s institutional history to those umbrella organisations which operated the Uniting Named Institutions and Methodist Homes for Children.
(b)As a reflection of community and regulatory standards, Uniting has moved away from an institutional model of care towards community based living and other non-residential support services. Taking those changes into account, there is broad practical identity between the charitable purposes of the Uniting Named Institutions and those of Uniting and Orana.
(c)Notwithstanding that the specific charitable purposes of the Uniting Named Institutions and Methodist Homes for Children have lapsed, the dominant charitable intention of the deceased is served by allowing Uniting to continue to take the benefit of the Trust as a successor institution.

With regard to the Presbyterian Home for Boys, Uniting is also entitled to the benefit of the Trust as the current embodiment of the Methodist Church (Victoria) Property Trust, pursuant to the cy-près order dated 21 September 1993. The Court accepts that, as in Re Faraker, the charitable work of that institution continued pursuant to the 1993 cy-près scheme.

Anglicare

Anglicare claims to be a continuation of, or alternatively successor to, the Anglicare Named Institutions. Anglicare relied upon submissions filed 14 March 2019, with supplementary submissions filed 8 November 2019.

History of the Anglicare Named Institutions
St John’s Home for Boys

St John’s Home for Boys was established in 1924 at 16 Balwyn Road, Canterbury under the auspices of the Anglican Church. The home was established in order to accommodate boys who had been removed from their families by court order, had been abandoned or had been orphaned. The home accommodated children full time in dormitory style accommodation.

In accordance with changing community views, from the late 1950s the service provided by the home shifted from dormitory style accommodation to a cottage system. From 1958, the home started accommodating young girls as well as boys. In 1969, the Anglican Synod changed the name of the home to ‘St John’s Home for Boys and Girls’.

Beginning in the 1970s St John’s transitioned to a system facilitating foster care, kinship care and residential care.

St Paul’s Boys Home

St Paul’s Boys Home was established on a 7 acre site at Newhaven, Phillip Island under the name ‘St Paul’s Training School’ by the Mission of St James and St John in 1928. The purpose of the home was to rehabilitate delinquent boys who had been removed from their homes by order of the court. Due to legislative changes and changing community attitudes, St Paul’s Training School closed in 1956.

In 1957 the premises at Newhaven became known ‘St Paul’s Home for Boys’. The home became an ‘approved children’s home’ under the Children’s Welfare Act 1954 (Vic). At that time the home began to accommodate boys who were in need of care due to their family circumstances.

The accommodation of boys at St Paul’s steadily declined during the 1970s due to a decline in institutionalised accommodation and changes in government and community attitudes. Residential accommodation on the Newhaven site ceased in 1979 however the property continued to be utilised as ‘St Paul’s Discovery Centre’, which provided disadvantaged children with camping and environmental experiences.

The property at Newhaven was sold by Anglicare in 2003.

Institutional changes to Anglicare since the date of the Will

Anglicare was established by operation of the Anglican Welfare Agency Act 1997 (Vic). The institution came into existence on 1 July 1997. The preamble to the Act explains:

(1)The Anglican Mission to the Streets and Lanes of Melbourne was established in 1886 by the Bishop of Melbourne as the Diocesan Mission to the Streets and Lanes of Melbourne.
(2)The Mission of St James and St John was established by Act of the Synod of the Diocese of Melbourne in 1919.
(3)St John’s Homes for Boys and Girls is the successor of St Martin’s Home for Boys which was established by resolution of the Synod of the Diocese of Melbourne in 1919, was opened in 1921 and was given a constitution in 1926 by Act of the Synod of the Diocese of Melbourne. By further Acts of Synod, the name was changed in 1940 to St John’s Home for Boys and, in 1969, to St John’s Homes for Boys and Girls. Anglicare is established by s 4 of the Act, with functions to be those defined in its constitution.
(4)The Anglican Mission to the Streets and Lanes of Melbourne, the Mission of St James and St John and St John’s Homes for Boys and Girls have agreed to the formation of a new Anglican agency and, on the basis of their past experience and achievements, to continue and extend their operations.
(5)In October 1996, the Synod of the Diocese of Melbourne approved a proposal for the establishment of a new Anglican welfare agency by Act of the Parliament.

Section 9(1)(a) provides that all property and rights of ‘unincorporated bodies’ vest in Anglicare. ‘unincorporated bodies’ is defined in s 3 as:

(a)       the Anglican Mission to the Streets and Lanes of Melbourne;
(b)       the Mission of St James and St John; and
(c)       St John’s Home for Boys and Girls.

Section 11 of the Act, which is relevant to St John’s, provides:

If—
(a) before or after the commencement of this Part—
(i)a gift, disposition or trust of property has been or is made or declared or is deemed to have been made or declared; or

(ii) a trust fund has been or is created—
(whether by deed, will or otherwise) to, in favour of, for the use of, or for the purposes of, an unincorporated body; and

(b) the gift, disposition, trust or trust fund takes effect, or may take effect, or the trust fund may be applied, on or after that commencement—
the gift, disposition, trust or trust fund does not fail only because of the provisions of this Act, but on or after that commencement—
(c)in the case of a gift, disposition or trust of property, takes effect as if made or declared to or in favour of the Agency for a purpose of the Agency that corresponds with, or is similar to, those purposes of the unincorporated body for which it was made or declared; or
(d) in the case of a trust fund, may be applied as if created in favour of the Agency for a purpose of the Agency that corresponds with, or is similar to, those purposes of the unincorporated body for which the fund was created.

Section 12, relevant to St Paul’s as a ‘named program’, provides:

(1) If, before or after the commencement of this Part—
(a)a gift, disposition or trust of property has been or is made or declared or is deemed to have been made or declared; or

(b) a trust fund has been or is created—
(whether by deed, will or otherwise) to, in favour of, for the use of, or for the purposes of, a named program and has taken effect before that commencement or may take effect or be applied on or after that commencement—
(c)in the case of a gift, disposition or trust of property, it does not fail only because of those purposes or this Act but has effect as if made or declared to or in favour of the Agency for a purpose of the Agency that corresponds with, or is similar to, the purposes for which it was made or declared; and
(d)in the case of a trust fund, it does not fail only because of those purposes or this Act but may be applied to or in favour of the Agency for a purpose of the Agency that corresponds with, or is similar to, the purposes for which the fund was created.

(2) In this section, "named program" means—
(a) the Darling Babies Home; or
(b)the Church of England Homes for Children, Brighton; or
(c)a program or service of an unincorporated body, or of a predecessor of an unincorporated body, that was carried on or provided for charitable welfare purposes before the commencement of this Part.

It was submitted on behalf of Anglicare that the effect of those provision is that the bequests to St John’s Home for Boys and St Paul’s Boys Home take effect in favour of Anglicare.

The current work of Anglicare

The affidavit of Susan Joy Sealey, Deputy Chief Executive of Anglicare Victoria, dated 19 December 2018 deposed that Anglicare continues to provide out of home care for Victorian youths. Anglicare’s mission statement, objects and functions are described in its constitution as follows:

3. Mission statement
The Agency exists to create a more just society by expressing God’s love through service, education and advocacy.
4. Objects
The objects of the Agency, to fulfil the Mission Statement in clause 3, are –
(a) the relief of poverty; and
(b)the welfare of children, young people and adults who are financially, emotionally or socially disadvantaged, with a primary focus on families; and
(c)the undertaking, carrying on or carrying out of any other charitable work or charitable purpose.
5. Functions and powers
(1)The functions of the Agency are –
(a)to provide services for the carrying out of its objects;
(b)in connection with and for the purposes of carrying out its objects –
(i)to undertake programs of education, research and planning;

(ii) to publish and disseminate information resulting from those programs.

(2)The Agency may –
(a)establish and maintain premises for the purposes of the provision of its services, including residential services;
(b)receive donations, bequests and grants;
(c)act as trustee;
(d)obtain financial accommodation and make investments;
(e)enter into agreements, arrangements, partnerships and joint ventures;
(f)receive and administer grants for charitable purposes connected with its objects;
(g)make grants for charitable purposes connected with its objects;
(h)employ staff;
(i)do all things necessary or convenient to be done for or in connection with the carrying out of its functions.

Ms Sealey deposed that Anglicare Victoria is currently Victoria’s largest provider of out of home care for children who are unable to live with their families. Each night Anglicare cares for approximately 500 children through foster care, kinship care or residential care.

Is Anglicare entitled to benefit from the Trust?

The Court considers that the Anglicare Named Institutions also ceased to exist since the date of the Will. However, Anglicare ought nonetheless take the benefit of the gift pursuant to the Anglican Welfare Agency Act 1997 (Vic), or as a successor institution, for the following reasons:

(a)As observed, the Deceased’s broader charitable intention was to be carried out through the specific charitable purposes of the institutions named in the Will. Those specific purposes were linked to the specific work of the Anglicare Named Institutions at their respective geographical locations, namely the provision of institutional care to boys in Canterbury and Newhaven.
(b)The specific purposes of the Anglicare Named Institutions at the date of the Will have ceased to exist. St John’s Home for Boys transitioned to a system of foster care in the 1970s and residential accommodation at St Paul’s Boys Home ceased in 1979. Both institutions have closed and moved towards more modern modes of providing community services through different entities associated with Anglicare. Those changes are not mere changes to the mechanism through which the specific purposes of the Anglicare Named Institutions are achieved nor were the Anglicare Named Institutions merely dissolved and re-constituted elsewhere.
(c)The effect of ss 9(1)(a), 11 and 12 of the Anglican Welfare Agency Act 1997 (Vic) is that gifts made to St John’s as an ‘unincorporated body’ and to St Paul’s as a ‘named program’ take effect in favour of Anglicare.
(d)In any event, Anglicare is properly considered a successor to the Anglicare Named Institutions. There is broad practical identity between the work carried out by those institutions and the modern work of Anglicare in caring for disadvantaged young people. The work carried out by Anglicare continues serve the dominant charitable intention of the Deceased.

Child and Family Care Network

The Fourth Defendant, CFCN, claims to be a continuation of the Burwood Boys’ Home. CFCN relied upon submissions filed 12 March 2019, with supplementary submissions filed 8 November 2019.

History of the Burwood Boys’ Home

The Burwood Boys’ Home was established in or about 1895, situated at 155 Warrigal Road, Burwood. In 1897, the stated aims of the home were to provide ‘shelter, warm beds, nourishing meals and an education to provide a future career path’. By 1902, the vision of Burwood Boys’ Home was to ‘give the boys an opportunity for a better future’. Boys were taught reading, writing and arithmetic as well as practical skills for working on the farm or in the garden.

Burwood Boys’ Home was incorporated under the Hospital and Charities Act 1890 (Vic) on 16 December 1908. The home was registered as a charitable institution under that Act on 1 February 1924. The stated purpose of the home remained to provide young boys with ‘shelter, warm beds, nourishing means and an education to provide a future career path’.

The registration of Burwood Boys’ Home was subsequently cancelled under s 38 of the Hospital and Charities Act 1928 (Vic) on 7 December 1936. The Home was re-registered sometime prior to 13 August 1937, however no precise date of re-registration was available in the evidence before the Court.[36] In or around 1937, the home was described as ‘an institution for orphans and distressed boys’.
[36]A copy of an article from The Herald Newspaper dated 13 August 1937 was exhibited to the Affidavit of Kevin Feeney dated 27 November 2018. That article referred to the re-registration of Burwood Boys’ Home by the Charities Board.

From 1 November 1972, Burwood Boys’ Home began to allow the admission of young girls as well as boys. In a 12 month pilot scheme, girls were admitted to the home to be cared for with their brothers. The siblings were housed together in one cottage as a family group. On 4 October 1976, the corporate name of Burwood Boys’ Home was changed to ‘Burwood Children’s Homes’ under s 40 of the Hospital and Charities Act 1958 (Vic).

On 27 September 1977, the objects of Burwood Children’s Homes were varied under s 52 of the Hospital and Charities Act 1958 (Vic). The following objects were removed:

(i)to conduct a denominational Christian home in Victoria for boys (orphans and otherwise) who are destitute, neglected or homeless.
(ii)to provide for the development in body, mind and spirit of boys admitted to the home.

Those objects were replaced with the following:

(i)to provide residential care and maintenance for the benefit of disadvantaged children and young persons in Victoria.
(ii)to provide for the moral, spiritual, physical, social and mental development of children and young persons under the care of the Homes.

On 27 July 1985, it was resolved that the property at Burwood be sold. Approximately one year later, on 22 July 1986, the corporate name of Burwood Children’s Homes was again changed under the Hospital and Charities Act 1958 (Vic) to ‘Child and Family Care Victoria’. Child and Family Care began offering non-residential childcare services which focused upon providing programs to support the entire family.

In November 1986, the Burwood facility was officially closed. All services were subsequently relocated to 583 Ferntree Gully Road, Glen Waverley.

On 22 May 1987, the corporate name of ‘Child and Family Care Victoria’ was changed to ‘Child and Family Care Network’. Child and Family Care Network offered non-residential childcare services at the Glen Waverley property which were focused upon interconnected support programs.

On 24 May 1988, royal assent was given to the Health Services Act 1988 (Vic), which repealed the Hospital and Charities Act 1958 (Vic). Section 173(1) of the new Act provided:

(1)An institution or other body incorporated under the Hospitals and Charities Act 1958 or any corresponding previous enactment and that is not incorporated under this Act continues to be an incorporated institution or body by reason of that Act or enactment until—
(a)       it becomes incorporated under any other Act or law; or
(b)       it has ceased to exist; or
(c)       30 June 1994—
whichever first occurs.

Child and Family Care Network was incorporated under s 7 of the Associations Incorporation Act 1981 (Vic) on 25 July 1991. Child and Family Care Network Inc registered its trading name, ‘Bestchance Child Family Care’ on 17 November 2006.

The current work of CFCN

The Affidavit of Kevin Feeney, CEO of CFCN, dated 27 November 2018 deposed that CFCN continues to provide a range of support services to Victorian youths.[37] The Statement of Purposes of CFCN, contained in the institution’s constitution and incorporated articles is as follows:

C.F.C.N. was established to provide a range of accessible support services for ‘at risk’ children and youth needing special support services in the areas of Welfare, Family Care, Counselling, Education and Training, Early Intervention Services, and/or any other service designed to strengthen and support the family unit.

[37]Mr Feeney swore a supplementary affidavit in the proceeding, dated 30 October 2019.

The Statement of Purposes also outlines the following specific purposes and functions:

(a)increase and develop the well-being of children, youth and families by responding to their needs;
(b)subscribe to principles which highlight the dignity of human beings and actively uphold and advance human rights without prejudice;
…
(e)be flexible and able to adapt to family needs, recognising that ‘family’ can be a complex concept in our society;
(f) ensure that critical decisions affecting the well-being of children, youth and families are taken in ways which allow participation of those involved;
…
(i) provide management and services as broadly as possible, acknowledging the shared rights and responsibilities of clients, parents, professionals and the community in the care and support of children, youth and families;
(j) ensure that all programs are planed with clear guidelines and areas of accountability;
(k)plan and deliver services that are flexible, creative and effective responses to identified needs, naming, promoting and conducting those services in ways that encourage the participation of people who would benefit from them;
…
(n)strengthen existing relationships and networks with potentially supportive individuals and groups within the community and Government at all levels…

Mr Feeney deposed that CFCN’s primary activities are education programs aimed at children with social, emotional and learning difficulties. CFCN provides particular services for ‘at risk’ children who require special support in the areas of welfare, housing, family care, counselling, education and training. CFCN now provides services across Melbourne, but remain principally focused upon the eastern and south-eastern suburbs.

It was submitted on behalf of CFCN that those purposes are consonant with those provided by Burwood Boys’ Home at the date of the Will. Although the operations of CFCN have since expanded significantly, they still include the provision of services for disadvantaged young boys. On that basis, it is said, Burwood Boys’ Home did not cease to exist, but continues through the altered machinery of CFCN.

Is CFCN entitled to benefit from the Trust?

For the same reasons as those stated above with regard to the Uniting Named Institutions and the Anglicare Named Institutions, the Court considers that the specific charitable purposes of the Burwood Boys’ Home ceased to exist when it was closed in November 1986. The specific charitable purpose of the home at the date of the Will was to provide residence for orphans and distressed boys in the Burwood area. Those purposes ceased to exist when the property was sold and CFCN (then Child and Family Care) relocated to Glen Waverley. Around that time CFCN moved away from providing residential services to providing non-residential support.

However, the Court is satisfied that CFCN is properly considered as a successor institution to Burwood Boys’ Home. There is significant practical identity between the modern charitable activity of CFCN and that of the Burwood Boys’ Home, taking into account the evolution of social views on the care of young children. The dominant charitable intention of the deceased is served by CFCN continuing to take the benefit of the Trust.

Children Australia Incorporated

Children Australia submits that it is a continuation of or successor to the Melbourne Orphanage, Windermere. Children Australia relied upon submissions filed 12 March 2019, with supplementary submissions filed 8 November 2019.

History of The Melbourne Orphanage, Windermere

The Melbourne Orphanage was formed in 1851 by the Anglican St James Old Cathedral, Melbourne under the name ‘St James Orphan Asylum & Visiting Society’. The institution was incorporated in 1875 pursuant to the Hospitals and Charitable Institutions Act 1864 (Vic), at which time its name was ‘The Melbourne Orphan Asylum’.

Pursuant to s 54 of the Hospitals and Charities Act 1922 (Vic), in 1926 the institution adopted the name ‘The Melbourne Orphanage’, which is the institution named in the Will. In 1940, Parliament enacted the Melbourne Orphanage Act 1940 (Vic). The purpose of that Act was to extend the objects of the Melbourne Orphanage. Section 2 of the Act stated:

The objects of the Melbourne Orphanage are hereby extended so as to apply to destitute children whether orphans or not in all respects as they applied to destitute orphan children immediately before the commencement of this Act.

Section 3 of the Act provided for the application of existing funds to those extended objects:

All funds and properties of the Melbourne Orphanage shall, notwithstanding anything in any general or special trust created or arising before the commencement of this Act, be applicable to and with respect to destitute children whether orphans or not to the same extent and subject to the same conditions as those funds and properties were applicable to and with respect to destitute orphan children immediately before such commencement.

On 18 April 1967, after the Will came into existence but before the Deceased’s death, the name of the Melbourne Orphanage was changed to ‘Melbourne Family Care Organisation’. Between the date of the Will and the date of death the institution also moved away from its original premises in Brighton to establish some 14 family group homes in the Waverley area. The Annual reports for the years between 1963 and 1968 indicate that the move away from institutionalised care toward care in a family group home and foster home setting reflected changing community attitudes at the time. Notably, the Deceased continued to make regular donations to Melbourne Family Care Organisation prior to his death, despite the move away from the original purpose of the orphanage.

The annual reports disclose that at or around the date of the Deceased’s death the purpose of the Melbourne orphanage was to provide care and support for children and young people who were unable to live with their own families.

Between 1971 and 1983, Melbourne Family Care Organisation cared for between 30 to 74 children each evening. Beginning in 1977, a decision was made to phase down the number of residential care homes as community expectations transitioned toward a preference for foster care. In or around 1984, the number of foster care givers had grown to 131, and the number of family group homes had decreased to 9. On 8 April 1987, the institution was again renamed ‘Family Action’. Both changes were made pursuant to the Hospitals and Charities Act 1958 (Vic).

Family Action was incorporated under the Associations Incorporation Act 1981 (Vic) on 1 July 1992, becoming ‘Family Action Incorporated’. The institution was registered with the Australian Securities Commission on 21 June 1993.

On 30 June 1993, Family Action Incorporated changed its name to ‘Children Australia Incorporated’. On 1 July of that year Children Australia Incorporated amalgamated with Family Focus Incorporated and National Children’s Bureau of Australia Incorporated. The new entity was incorporated under the name of Children Australia Incorporated.

By 2000, Children Australia ran the largest foster care program in Victoria with 164 foster placements on any given day.

The last family group home closed in 2004.

The current work of Children Australia

The constitution of Children Australia lists its non-exclusive objectives as follows:

To provide a multi-disciplinary range of services which addresses the needs of children including but not limited to:
- provision of developmental, welfare, education and other services appropriate care, counselling accommodation and other support services to children when they are in crisis and unable to cope
- protection of children from neglect, physical and sexual abuse and any other forms of violence and deprivation
- provision of respite care, emergency care and other forms of substitute care for children where they are unable or where it is not possible or appropriate for them to live with their families
- provision of direct relief from poverty, sickness, suffering, distress, misfortune, disability, destitution or helplessness such as arouses compassion in the community.

To undertake research, education, information and advocacy to protect and enhance the rights of children including but not limited to:
- the publishing, promotion and dissemination of material that raises professional and public awareness and understanding of the issues that affect the lives of children
- the monitoring and evaluation of government policies and practices that impact on children and, where appropriate, calling for and working towards the necessary review and reform of policy, legislation and practice
- the establishment of cooperative links with other organisations or groups which work in the interests of children.

Children Australia continues to provide services across Melbourne, with services centres in Dandenong, Mitcham, Frankston and Mornington. Children Australia also provides services in country Victoria, the Australian Capital Territory, New South Wales and Queensland.

Mr Mark Powell, Chief Operating Officer of Children Australia, deposed that between 2005 and the present, the average number of children in foster care per night had grown to between 140 and 275. Mr Powell further deposed that:

Children Australia Inc continues to provide modern solutions to address the needs of children in need through its large foster care program for children, newborn to 18 years of age and through its participation in the out-of-home care working group. We continue to provide direct residential support to children and young people unable to be cared for by, or where it is not possible or appropriate for them to live with, their own families’.

Is Children Australia entitled to benefit from the Trust?

The Court considers that the specific charitable purposes of The Melbourne Orphanage, Windermere have ceased to exist, but that Children Australia ought nonetheless take the benefit of the gift as successor institution, for the following reasons.

(a)At the time of the Will, the specific charitable purpose of the Melbourne Orphanage was to provide residence to orphans and other destitute children in the Brighton area, as reflected in the terms of the Melbourne Orphanage Act 1940 (Vic). Those purposes ceased to exist when the institution moved away from its original premises in Brighton and ceased providing institutional care in or around 1967.
(b)That the Deceased continued to make donations to Melbourne Family Care Organisation until the date of his death does not alter the Court’s conclusion. There is no evidence that the Deceased knew of the connection between The Melbourne Orphanage and Melbourne Family Care Organisation, or that The Melbourne Orphanage, Windermere had ceased to exist. Had he known of those changes it is foreseeable that the Deceased would have made an alteration to paragraph 9 of the Will when he made his codicil in December 1967.
(c)Nonetheless, the Court is satisfied that Children Australia is properly regarded as a successor institution to the Melbourne Orphanage. There is an identity between the modern charitable activity of Children Australia and that of The Melbourne Orphanage, namely the care and protection of children and young people. As is reflected by his subsequent donations to Melbourne Family Care Organisation, which had already begun to transition to a modernised approach to care at that time, the Deceased’s dominant charitable intention is well served by Children Australia continuing to take the benefit of the gift.

Conclusion and orders

For the foregoing reasons, the Court will make the following orders:

(a)The gifts to Tally Ho Boys Village, The Hospice for Elderly Men, The Home for Elderly Ladies at Wesley House, The Girls Memorial Home, Presbyterian Home for Boys and Methodist Home for Children be applied to the First Defendant, as successor institution;
(b)The gifts to St John’s Home for Boys and St Paul’s Boys Home be applied to the Third Defendant, as successor institution;
(c)The gift to Burwood Boys’ Home be applied to the Fourth Defendant, as successor institution;
(d)The gift to the Melbourne Orphanage, Windermere be applied to the Fifth Defendant, as successor institution.
(e)All parties’ costs of the proceeding be paid from the Trust on a standard basis, to be taxed if not agreed.

[2020] VSC 378

30 June 2020