Re Marks; Letcher v Indian

Case •

[2017] VSC 665

•

1 November 2017
IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S CI 2016 03975

IN THE MATTER of the will of JOYCE MARY HATFIELD MARKS (also known as JOYCE MARY MARKS), deceased

-and-

IN THE MATTER of an application pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 for the determination of a question arising in the administration of the estate

MARY ELIZABETH LETCHER (as executor of the will and estate of Joyce Mary Hatfield Marks, deceased) Plaintiff
v  
MERRILYN JOY INDIAN First Defendant
-and-
ATTORNEY GENERAL FOR THE STATE OF VICTORIA Second Defendant

---

JUDGE:

McMillan J

WHERE HELD:

Melbourne

DATE OF HEARING:

15 August 2017

DATE OF JUDGMENT:

1 November 2017

CASE MAY BE CITED AS:

Re Marks; Letcher v Indian & Anor

MEDIUM NEUTRAL CITATION:

[2017] VSC 665

---

CHARITABLE TRUSTS — Where terms of will directed trustee to apply property for the purposes of displaying specified chattels and building rental units — Where ex-servicemen to benefit from rental units — Whether building rental units impracticable —Whether upon proper construction of will general charitable intention can be identified — Whether trust funds can be applied cy-près — Where no general charitable intention — Attorney-General (New South Wales) v Perpetual Trustee Co Ltd (1940) 63 CLR 209.

---

APPEARANCES:

 Counsel Solicitors
For the Plaintiff Mr S F McNab BJT Legal
For the First Defendant Mr R Boaden Harwood Andrews
For the Second Defendant No appearance

HER HONOUR:

Introduction

  1. Joyce Mary Hatfield Marks (‘the deceased’) died on 13 March 2015.  Probate of her last will, dated 28 February 2011 (‘the will’), was granted to the plaintiff on 11 June 2015. At that time the deceased’s estate was estimated to have a value of $1,301,812.

  1. By originating motion filed 28 September 2016, the plaintiff applied for a determination of a question arising in the administration of the deceased’s estate, pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 concerning the validity of certain trusts set out in the will disposing of the deceased’s residuary estate.

  1. By orders made 8 December 2016, the defendants were added as parties to the proceeding.  The first defendant is one of fifteen first cousins of who survived the deceased[1]  and she represents the interests of the deceased’s next of kin.  The second defendant joined the proceeding on the basis of his obligations regarding charitable trusts.[2]

    [1]While 15 first cousins survived the deceased, one of those first cousins died on 8 September 2015.

    [2]Morice v Bishop of Durham (1804) 9 Ves 399, 404; see Murdoch v A-G(Tas) (1992) 1 Tas R 117, 122.

  1. Specifically, the questions for determination are:

(1)       Does the gift contained in paragraph 3(d) of the will:

a.        create a valid charitable trust;

b.if so, can such trust and assets be applied as part of the trusts created by the balance of the words contained in paragraph 3(d) and (e) of the will;

c.if the words do not create a charitable trust is a valid non-charitable trust created; and

d.if the words create no valid charitable or non-charitable trust who is entitled to the said items?

(2)       Do the words in paragraphs 3(c), 3(d) and 3(e) of the will:

a.        create a valid charitable trust;

b.If the answer to (2)a is yes; does the trust operate for purposes associated with the provision of accommodation for rental purposes for single indigenous ex-servicemen, single ex-servicemen, widows of ex-servicemen and retired single or widowed people on  a non-profit basis;

(3)If the answer to (2)a is yes, which institutions would be the beneficiaries of the said charitable trust?

(4)If the purposes of the charitable trusts referred to in paragraph 2(a) above are not practicable; can the objects of the trust be applied cy-près and if so what body or individuals would be the beneficiaries under the trust?

(5)If the words of paragraphs 3(c), 3(d) and 3(e) create no valid charitable, or non-charitable trust who is entitled to the assets referred to in these paragraphs? 

  1. The focus of submissions was on question (4), namely, whether a possible charitable trust set out in clause 3 of the will could be applied cy-près. For the reasons that follow, the Court has determined that while clause 3 sets out a valid charitable purpose insofar as it seeks to provide assistance to ex-servicemen, it is impracticable to perform and cannot be applied cy-près, and the residuary estate passes to the deceased’s next of kin in accordance with s 53 of the Administration and Probate Act 1958.

Factual background

  1. The following factual summary is drawn from the uncontested evidence of the plaintiff. 

  1. The deceased was 85 years old when she died.  There is no formal record that the deceased was married or had children.  While in certain correspondence the deceased referred to having a husband, that correspondence also indicates that the deceased had separated from her husband and that he predeceased her. 

  1. In 1995, the deceased corresponded with Mr Hugh Morrow, a lawyer of the firm Dobson & Morrow (as it was then known), regarding the administration of the estates of both her and her mother.  In a letter of 19 November 1995, she identified a preference that the assets of both estates be used towards a naturopathic hospital rather than be divided between her first cousins.

  1. Later, in a letter dated 21 February 2002 in which the deceased set out certain instructions regarding her will, reference was made to the use of all money and income to build a private library and rental units on a property at 21–25 Melbourne Road, Brown Hill (‘the Melbourne Road property’).  The deceased provided some detail regarding her plans for the Melbourne Road property, identifying groups of people she would prefer the units be rented, including single returned servicemen or their widows, who was to design the development, the types of pets allowed in the rental units, and the trees to be retained.  A draft will, handwritten by Mr Hugh Morrow in or around 2002, reflects the instructions of the deceased in relation to the display of certain items and the construction of rental units.

  1. Mr Hugh Morrow died in 2007 and at that time his son, Mr Michael Morrow, a lawyer who then practiced in the same firm, received instructions to prepare a will in terms similar to the earlier handwritten draft.  On 28 June 2007, the deceased executed a will that, inter alia, directed her residuary estate be used to develop properties at the Melbourne Road property to provide for the display of certain chattels and to construct units for rental purposes, with the wish expressed that preference for tenancies be given to ex-servicemen.

  1. In an undated letter received by Mr Morrow in February 2009, the deceased identified that she was ‘drawing up a floor plan for a house to be built on the block’ and that she would be changing her will. Detailed reasons were then provided, including that the deceased wanted:

some houses built on the block to house special people.

Legacy who look after wives and children of deceased father killed at war are my first choice. If aboriginals amongst those, they have first preference. 

  1. The letter went on to state that the deceased’s first aim was to build a house on the block, divided into two, such that a caretaker would live in the front and she could live privately in the rear of the house.  In the context of a possible tax exemption, the letter stated ‘seeing that the block is intended for charitable purposes – land is tax exempt’.  The letter also identified the plaintiff as a new sole executor.

  1. The deceased executed her last will on 28 February 2011. After revoking her former will and appointing the plaintiff as executor, the relevant clauses of the will provide as follows:

3.I GIVE DEVISE AND BEQUEATH the whole of my real and personal estate to my Trustee UPON the following trusts.

(a)       ….

(b)       ….

(c)TO RETAIN my properties at 21–25 Melbourne Road, Brown Hill for the purpose of the trusts hereinafter contained.

(d)TO SELL and convert into money such parts of the residue of my estate that do not consist of money, and which are not referred to specifically in this clause, and to stand possessed of the net proceeds of such sale and conversion and all monies forming part of my estate upon trust to apply the same both as to capital and income towards the development of my properties at 21–25 Melbourne Road, Brown Hill to provide for the display of my paintings, books, handmade china wedding bouquet with two buttonhole sprays, antique vases, sewing machine and other collectables, my jewellery and restored motor vehicle, together with a sufficient security system; and also to construct one bedroom and two bedroom units for rental purposes, the net income therefore to be used for the purposes of this trust. This trust shall be known as the “LESLIE HODGKISS TRUST”.

(e)IT IS MY WISH that in choosing tenants for the units a first preference shall be given to single indigenous ex-servicemen, then single ex-servicemen, or the widows of ex-servicemen, and then retired single or widowed people. The rents to be charged for the units and the tenancies shall be at the discretion of my trustees who through written instructions which I shall leave will be aware of my wishes, but in doing so the Trust shall not be run for profit.

  1. The deceased died on 13 March 2015.  She was survived by 12 maternal first cousins and three paternal first cousins, one of whom has since died.

  1. In the plaintiff’s probate application, the estate of the deceased comprised a property in Bayswater, estimated to be of the value $690,000, vacant land at the Melbourne Road Property, said to be worth approximately $450,000; and bank account funds of approximately $371,812.  The property in Bayswater has since been sold and the most up to date estimate of the value of the deceased’s estate is $2,054,330.

  1. The plaintiff states that after the estate is liquidated, she will be left with a fund of between $1,000,000 and $1,3000,000 to construct units on the Melbourne Road property.  A report from Leader Property Practice regarding the feasibility of the proposed development, commissioned by the plaintiff and dated 5 February 2017, drew the following conclusions based upon three scenarios: 

(a)   to build ten two-bedroom units and five one-bedroom units was not financially feasible,  as the estimated costs may result in a deficit;

(b)   with the available capital five two-bedroom units and two one-bedroom units could be built, but this would exhaust all but approximately $10,000 of the estate funds which would then be directed toward fitting out the units and as working capital; and

(c)    that five two-bedroom units and two one-bedroom units could be built, but a section of the property would have to be subdivided and sold in order to fund the development.

  1. Annual costs for operating the units were estimated at approximately $46,425, and the plaintiff has no evidence as to the demand for such accommodation.

  1. In the event that the proposed development is considered impracticable, the plaintiff also made inquiries as to institutions that supply housing to former members of the armed forces.  In this regard the plaintiff identified an institution known as ’Carry On Victoria’, the objects of which include relieving the need and distress of persons who are Australian citizens and members or former members of the armed forces of Australia, by means including the provision of housing or accommodation.  By letter dated 14 January 2017, Carry On Victoria has confirmed that it would accept the capital funds from the deceased’s estate. 

Submissions

  1. Written and oral submissions were received from the plaintiff and first defendant.  The submissions of the second defendant were contained in a letter to the Court dated 11 August 2017.  The second defendant did not oppose an order that the questions before the Court be answered in a specified manner, that manner reflecting the submissions subsequently made by the plaintiff.

Plaintiff’s submissions

  1. The plaintiff accepted that if the scheme as set out in cl 3 of the will is not charitable and cannot be applied cy-près, there will be an intestacy and under the applicable rules the surviving first cousins of the deceased will take.

  1. The plaintiff contends that paragraphs 3(e) and 3(d) establish a trust for purposes. Two purposes are identified: to provide for the display of various artefacts of the deceased, and to use the capital of the estate to erect one and two-bedroom units on the Melbourne Road property, letting them out on a non-profit basis to certain categories of ex-service persons as tenants. While it is conceded that the first purpose is not charitable, it is asserted that it can be severed from the latter charitable purpose. In this regard the plaintiff relies on s 7M of the Charities Act 1978, that section provides:

7M Inclusion of non-charitable purposes not to invalidate trust

(1)A trust is not to be held to be invalid by reason that some non-charitable and invalid as well as some charitable purpose or purposes is or are or could be deemed to be included in any of the purposes to or for which that trust directs or allows the trust funds or any part of the trust funds to be applied.

(2)A trust referred to in subsection (1) is to be construed and given effect to in the same manner in all respects as if no application of the trust funds or of any part of the trust funds to or for the non-charitable and invalid purpose had been or should be deemed to have been so directed or allowed.

…

  1. The plaintiff cited the comments of Phillips J in McCracken v Attorney-General (Vic)[3] regarding application of the provision. At issue in that case was whether a will that disposed of a part of the residuary estate ‘between such Christian organisations and societies’ created a valid charitable trust for religious purposes. His Honour determined that, prima facie, the relevant clause did not create a charitable gift as Christian purposes could extend beyond religious purposes. However, in accordance with the relevant predecessor to s 7M, s 138 of the Property Law Act 1958, the clause could be read down. [4]

    [3][1995] 1 VR 67, 81 (‘McCracken’).

    [4]Ibid.

  1. Phillips J referred to Downing v Federal Commissioner of Taxation.[5]  That was a case in which the High Court considered the validity of a trust for ‘the amelioration of the condition of the dependants of any member or ex-member of Her Majesty’s naval, military or air forces or the naval military or air forces of the Commonwealth’.  Walsh J (Menzies and Gibbs JJ agreeing) concluded that:

(1)On its proper construction the amelioration clause is confined to the assistance of those who are in need of assistance and are dependants of the persons in the classes specified…and, therefore, the purpose which the clause expresses is relief of poverty;

(2)If upon its proper construction the clause applies to all such dependants whether in need of assistance or not, its operation is confined by s. 131 to the amelioration of the condition of necessitous dependants (assuming that the clause does not state a purpose which is a good charitable purpose independently of the relief of poverty);

(3)The clause expresses purposes which include a charitable purpose, independently of the relief of poverty, namely, the purpose of ameliorating the condition of the dependants of the naval military or air forces of the Commonwealth, which is beneficial to the community and is within the fourth class in the classification in Pemsel’sCase[6].

[5](1971) 125 CLR 185 (‘Downing’).

[6]Ibid 202.

  1. Further, the plaintiff submits that the question of whether legislation will rescue the scheme is one of degree, in the context of the arrangement considered as a whole.[7]  It is asserted that the co-existence of the accommodation trust with a non-charitable trust, in relation to the display of the deceased’s effects, does not mean that the trusts relating to the units created by paragraphs 3(d) and (e) should be struck down.

    [7]Stratton v Simpson (1970) 125 CLR 138, 148.

  1. On the question of whether the trusts in the second part of paragraphs 3(d) and (e) are charitable, they are said to fall within the fourth head from Commissioners for Special Purposes of Income Tax v Pemsel,[8] being purposes for the general benefit and welfare of the community.  In this instance, the charitable purpose can be identified as the promotion of the safety and protection of the country.  As stated by Walsh J in Downing:

valid charitable trusts may be created for purposes relating to the welfare and to the assistance of ex-servicemen or of their dependants, as well as for the welfare and assistance of persons who are still serving members of the forces, if the purposes can reasonably be considered to advance the safety and security of the country. I am of opinion that a trust may be considered to tend towards that result by means of providing aid comfort and encouragement to the armed forces or a section of them, notwithstanding that those who will directly benefit from the trust are those who have ceased to serve or their dependants.[9]

[8][1891] AC 531 (‘Pemsel’s Case’).

[9]Downing (1970) 125 CLR 185, 200; see also Re Gray (1925) 1 Ch 362, 368.

  1. Courts have previously recognised gifts in this category, such as those relieving the financial need of ex-servicemen,[10] relieving the sickness of ex-service persons,[11]  and to associations that benefit ex-service persons and their dependants. [12]

    [10]Barby v Perpetual Trustee Co (Ltd) (1937) 58 CLR 316 (‘Barby v Perpetual’).

    [11]Somerville v A-G (Cth) [1921] 21 SR (NSW) 450, 462.

    [12]Re Bertling [1956] St R Qd 379, 388; Re Stable [1957] St R Qd 90; see also G E Dal Pont, Law of Charity (LexisNexis, 2nd ed, 2017) 242–3.

  1. If the Court does determine that the purpose contained in paragraphs 3(d) and (e) is valid, the plaintiff submits that given the uncertain financial viability of the development and evidence of general charitable intention, the funds can be applied cy-près. In this regard, the plaintiff raised five points.

  1. Firstly, the plaintiff contends that on the face of the will a general charitable intention can be identified.  While cl 3(d) sets out two purposes, the display of certain items and, almost as a separate matter, the construction of units, there is nothing to suggest that the units have to be constructed on the Melbourne Road property.  Moreover, the words ‘and also’, could also read ‘and additionally’. Clause 3(e) is said to evince a general intention that people in need should be benefitted.  Just how the units can be used for subsidised housing is left almost entirely in the hands of the plaintiff. 

  1. Secondly, it is submitted that the law treats charity generously, as identified in Barby v Perpetual[13]  and discussed in Re Findlay’s Estate. [14]  In the latter case, Cox CJ stated:

The policy which emerges from the different principles mentioned above is that the courts will, unless to do so would run contrary to the express or implied intentions of the testator, seek to ensure that a charitable gift, even though its immediate object is no longer in existence, or cannot practicably be carried into effect, will still be applied to a charitable purpose rather than pass by way of partial intestacy or to a residuary legatee, not being a charity.[15]

[13](1937) 58 CLR 316, 323; see also Re Bertling [1956] St R Qd 379, 388.

[14](1995) 5 Tas R 333; [1995] TASSC 156 (15 December 1995).

[15]Ibid [17].

  1. Thirdly, the instructions that Mr Morrow and his father received show a general charitable intention.  The deceased persisted with a desire to benefit ex-servicemen and, in her note in 2009, she identified that the block was ‘intended for charitable purposes’.  The scheme in the wording of cl 3 is loose, as the number of units to be built is not specified, and its administration and implementation is left largely to the trustee. It is said to be clear, however, that those who are to benefit are to be ex-servicemen or other suitable persons. The plaintiff relies upon Re Stable.[16]  At issue in that case, inter alia, was whether the devise of a property to ‘the Legacy Club of Brisbane absolutely to be used by them for the benefit of war orphans and widows’ evinced a general charitable intention. Jeffries AJ determined that it was the intention of the testatrix that the property be held in specie and be used by the Legacy Club in some way, in the nature of a home or institution.  That intention was found to be subordinate the testatrix’s main intention, ‘which was that the property be used for the benefit of war orphans and widows’.  In his Honour’s opinion:

[the testatrix] showed a dominant intention to create a trust which would be a general charitable trust; that was the dominant intention. Her subordinate intention was that the property be used in a certain way to carry out that general charitable intention. [17]

[16][1957] St R Qd 90.

[17]Ibid 112.

  1. The plaintiff also relies upon the leading High Court case, Attorney-General (NSW) v Perpetual Trustee Co (Ltd).[18]  There a testatrix devised the whole of her property, known as Milly Milly, ‘to be held by The Perpetual Trustee Co. for a training farm for orphan lads being Australian’.[19]  Dixon, Evatt, Rich and McTiernan JJ (Latham CJ and Stark J dissenting) all determined that the disposition had a general charitable purpose. In this regard, Dixon and Evatt JJ drew a distinction between:

    on the one hand, cases in which every element in the description of the trust is indispensable to the validity and operation of the disposition and, on the other hand, cases where a further and more general purpose is disclosed as the true and substantial object of the trust, which may therefore be carried into effect at the expense of some part of the particular directions given by the trust instrument.

    If there are insuperable objections, either of fact or law, to a literal execution of a charitable trust it at once becomes a question whether the desires or directions of the author of the trust, with which it is found impracticable to comply, are essential to his purpose.  If a wider purpose forms his substantial object and the directions or desires which cannot be fulfilled are but a means chosen by him…the court will execute the trust by decreeing some other application of the trust property to the furtherance of the substantial purpose…

    [I]n its application to cases where some particular direction or directions have proved impracticable, the doctrine requires no more than a purpose wider than the execution of a specific plan involving the particular direction that has failed. In other words “general intention of charity” means only an intention which, while not going beyond the bounds of the legal conception of charity, is more general than a bare intention that the impracticable direction be carried into execution as an indispensable part of the trust declared.[20]

    Their Honours continued:

    Almost all charitable trusts expressed with any particularity must tend towards some more general purpose. But to find that the trust as expressed is designed to achieve some further and wider end of a charitable nature is one thing. To find that the secondary and wider end is the dominant object to which the property is devoted is another and a further step. This step cannot be taken unless, from the nature of the trust, the provisions of the instrument and any circumstances which may legitimately be taken into account, the existence of such an intention may reasonably be inferred. For no definite presumption has been established in favour of a general charitable intention. At the same time the court leans, it is said, in favour of charity and is ready to infer a general intention. But little is therefore required as a ground for treating a wider purpose as the essential object of the trust.[21]

    [18](1940) 63 CLR 209 (‘Attorney-General (NSW) v Perpetual’).

    [19]Ibid 222.

    [20]Ibid 225.

    [21]Ibid 227–8.

  1. In the circumstances, Dixon and Evatt JJ did not view keeping Milly Milly in specie as an indispensable part of the gift.  Rather, the dominant purpose of the gift was a more general charitable purpose: the training of orphan lads in farming.

  1. The fourth base upon which the plaintiff relies is that the deceased had no close relatives and made no provision for her first cousins in the will.  The plaintiff contends that, as such, the paramount consideration in the deceased’s mind was that her estate would be used for charitable purposes and not to be applied to distant relatives.

  1. The fifth and final point raised by the plaintiff on the issue of whether the funds can be applied cy-près is that the time to determine the failure of the scheme was at the date of the deceased’s death. It is asserted that in one sense the scheme was not doomed to fail at that time, but could be carried out with difficulty and considerable complication.  In this regard the plaintiff cited Re Tacon; Public Trustee v Tacon,[22] which held that the question of impracticability fell to be determined at the time of the testator’s death.

    [22][1958] Ch 447; [1958] 1 All ER 163.

  1. In the event that the Court does find that the deceased had a general charitable intention, the plaintiff submits that the capital of the deceased’s estate can be applied cy-près as provided in s 2 of the Charities Act 1978.  An appropriate application of the estate capital is said to be for the funds to be applied to be paid to Carry On (Victoria).

First defendant’s submissions

  1. Consistent with the plaintiff’s submissions, the first defendant agrees that a trust for the purpose of displaying the deceased’s personal effects is not charitable.  Further, citing Downing v Federal Commissioner of Taxation, the first defendant accepts that the second purpose, the welfare and assistance of ex-servicemen and their dependants, is a valid charitable purpose.

  1. The first defendant also accepts that the charitable purpose can be disentangled from the non-charitable purpose, in accordance with s 7M of the Charities Act 1978 and the relevant authorities, particularly Anglican Trusts Corporation of the Diocese of Gippsland v Attorney-General (Vic),[23] which applied McCracken.  In Anglican Trusts Corporation, Judd J determined that the expression ‘for use as a camp for the girls of the Gippsland Diocese of the Church of England and for such other purposes as the Council of the Diocese shall think fit’ contained two purposes.[24]  While creating a camp for girls was not considered charitable, the latter reference to ‘such other purposes’ could be saved by s 7M as the testatrix gave a ‘distinct or sufficient indication’ of her intention to benefit a charity.[25]  In the circumstances, the latter purpose was read down to only those purposes that were charitable at law.

    [23][2008] VSC 352 (11 September 2008) (‘Anglican Trusts Corporation’).

    [24]Ibid [13].

    [25]Ibid [20].

  1. The parties diverge, however, on whether paragraphs 3(d) and (e) of the will evidence a general charitable intention such that the funds can be applied cy-près.  The first defendant contends that the deceased’s intent is specific, and, as a consequence, the trust fails at the outset.  The trust does not ‘vest in charity’ as that phrase was used in Beggs v Kirkpatrick:

In determining what may properly be done with charitable funds which cannot be applied as contemplated by the donors, it is, as appears from the authorities, important to ascertain whether the charitable purpose has taken effect and subsequently failed, or whether the purpose has altogether failed to take effect.

In the former case where the fund may be considered to have once vested in charity, or been effectively dedicated to charity, there is strong authority for the view that the court has jurisdiction to direct an application cy près of funds belonging to that charity and that it is irrelevant to consider whether donations to it had been made originally for a specific purpose only, or with some more general charitable intention…In the latter case…where the charitable purpose has altogether failed, whether by reason of impracticability or otherwise, the trust is considered to have failed ab initio. As the law now stands, the consequence of such a trust failing ab initio is that subject to one qualification referred to hereafter, the funds must be returned to the donors unless it appears that the accomplishment of the particular purpose did not exhaust the charitable intention of the donor, and that his substantial intention was to advance some wider charitable purpose, although by means of the particular purpose. In such a case, the circumstance that the trust for a charitable purpose is incapable of literal execution according to its tenor is not fatal to the gift which may then be administered cy près by a Court of Equity. These are instances of a donor having, as is said, manifested a “general charitable intention”—an expression used to describe a charitable intention wider than the advancement of the particular purpose which has failed, although not necessarily ‘general’ as that word is commonly used.[26]

[26]Ibid 767.

  1. Similarly, Lindsay J explained in Estate Polykarpou; Re a Charity:

The necessity for finding a general charitable intention, rather than merely a particular one, arises from the circumstance that a particular charitable gift has become impossible, or impracticable, of performance before taking effect. Once property is effectively dedicated to charity, whether in pursuance of a general or particular charitable intent, it remains so dedicated, to the exclusion of private interests otherwise entitled[27].

[27][2016] NSWSC 409 (22 July 2016) [4] (citations removed).

  1. In distinguishing between a general and particular charitable intention, the first defendant relies upon Attorney-General (NSW) v Perpetual[28] and Royal North Shore Hospital of Sydney v Attorney-General (NSW).[29]  At issue in the latter case was whether a scheme expressed by the testator, involving an essay writing competition and biennial bequest, to promote, inter alia, the teaching of technical education in State schools, created a valid charitable trust that could be applied cy-près.  In determining that there was a general charitable intention Dixon J stated:

If the particular manner of advancing the three purposes or principles which the testator propounds is limited to an essay competition, the disposition does so fail. But, if a wider intention exists and that intention does not exceed the limits of legal charity, the gift may be administered cy-près by a court of equity as a good charitable disposition. The question whether the substantial intention of such provisions as those now in question is to advance the ultimate charitable purposes but by particular means directed or, on the other hand, the intention is confined to giving effect to the particular plan as the main or essential object in view is commonly said to be one of construction…But it depends less on the construction of language than upon an estimate of the relative importance attached to the particular and to the general by the author of the scheme. In most cases in which an elaborate scheme is directed of a charitable nature the testator has been animated by a desire to achieve some object which may be stated in wider terms than his detailed plan. But it is not legitimate to infer from the fact that his plan is a means to an end that the accomplishment of the end is his substantial purpose.[30]

[28](1940) 63 CLR 209.

[29](1938) 60 CLR 396 (‘Royal North Shore’).

[30]Ibid 428.

  1. The first defendant referred to a number of cases that applied the principles espoused in Attorney-General (NSW) v Perpetual and Royal North Shore.[31]In Uniting Church in Australia Property Trust v Royal Victorian Institute for the Blind[32] the testatrix bequeathed £10,000 for the purpose of purchasing or building a house to ‘hold upon trust as a home for such indigent old ladies in the City of Melbourne and its suburbs as may from time to time in their absolute discretion…be worthy of assistance’,[33] before providing that if the trust should fail, the funds should fall into the residue of her estate.  While the scheme operated for a number of years, it subsequently became impracticable to continue.  After referring to Attorney-General (NSW) v Perpetual Trustee, McDonald J determined that the relevant codicil disclosed a particular charitable purpose, ‘limited in nature’,  such that the trust failed.

    [31]Roman Catholic Trusts Corporation for the Diocese of Melbourne v A-G (Vic) [2000] VSC 360 (15 September 2000) (‘Roman Catholic Trusts v Attorney-General (Vic)’); Rechtman v A-G(Vic) [2005] VSC 507 (22 December 2005); Public Trustee v A-G (NSW) [2005] NSWSC 1267 (7 December 2005) (cases in which a general intention was found); Uniting Church in Australia Property Trustv Royal Victorian Institute for the Blind [1999] VSC 485 (2 December 1999); Re Tyrie [1970] VR 264 (cases in which a particular intention was found).

    [32][1999] VSC 485 (2 December 1999).

    [33]Ibid [3].

  1. The earlier case of Re Tyrie[34]  also involved a particular charitable intention.  There, the relevant disposition was £2,000 ‘to the Presbyterian Church of Victoria for the purpose of erecting a church at Green’s Creek in memory of the deceased members of the Tyrie family’.  Gowans J found that there was no wider and dominant purpose over the means described.[35]

    [34][1970] VR 264.

    [35]Ibid 267–8.

  1. According to the first defendant, eight separate criteria emerge from Attorney-General (NSW) v Perpetual[36] and Royal North Shore[37] in distinguishing a general charitable intent from a particular charitable intention.  Application of those criteria in the current circumstances is said to reveal as follows:

    [36](1940) 63 CLR 209.

    [37](1938) 60 CLR 396.

(a)   the expressed intention of the deceased is confined to giving effect to a particular plan, rather than a general plan intended to advance a broader charitable purpose.  There is no general intention to benefit ex-servicemen other than giving them preference in selection as tenants in the Melbourne Road units, if at all;

(b)   the court needs to find some expression of general charitable intention in addition to the stated particular charitable intention, and here there is none;

(c)    there needs to be something more general, to show that the impracticable intention is not an ‘indispensable part’ of the trust. In the circumstances, the building of the units is plainly ‘indispensable’;

(d)  the wider purpose must form the substantial object, and the particular plan a means for the attainment of that object.  The ex-servicemen in the will, however, are only benefited incidentally.  The express directions are the substantial and only object;

(e)   no more than ‘a purpose wider than the execution of [the] specific plan’ needs to be identified, however, there is no express or implied purpose wider than that of constructing units on the particular property, and giving preference to ex-servicemen;

(f)     the Court is guided by the trust instrument when identifying the substantial purpose of the trust – the arrangement of the testator’s ideas and his or her use of terms. On this criteria, the defendant points to use of the terms ‘and also’ as well as ‘it is my wish’, subsequent to the paragraph regarding the display of the deceased’s paintings and collectables.  It is submitted that properly construed, the will does not support any wider or dominant purpose;

(g)   to find that the trust is designed to achieve some further and wider end of a charitable nature is distinct from finding that that end is the dominant object to which the property is devoted. Even if a wider purpose can be identified, concluding that the further and wider end is the dominant object is a further step which cannot be taken in this case; and

(h)   no definite presumption has been established in favour of a general charitable intention. No matter how ready the Court may be to infer a general charitable intention, there must be some material from which that inference may be drawn, and in this instance there simply is none.

  1. Ultimately, it is submitted that the direction in the will is set out with considerable precision.  Everything is said to be premised on the Melbourne Road property being retained, and the trust does not envisage that the units can be built elsewhere.  On the most generous construction, the will contains the specific, namely the development of the property, and the general, to benefit ex-servicemen. The latter, however, cannot be said to dominate.  The dominant purpose is to apply the available funds to develop the Melbourne Road property as a sort of private museum.  The benefit to ex- serviceman is then expressed in precatory terms.  While this purpose is charitable, it cannot be moulded and applied cy-près because the purpose is specific and self-contained. Consequently, the trust is said to fail at the outset.

Is the evidence admissible?

  1. A preliminary issue is whether the extrinsic evidence exhibited to Mr Morrow’s affidavit, specifically the correspondence of the deceased received by Mr Morrow and his father is admissible.

  1. The plaintiff submits that the will is completely ambiguous on its face, such that the extrinsic evidence is admissible.  The first defendant agrees that the will is ambiguous, and that extrinsic evidence as to the ‘testator’s armchair’ is admissible.  It is contended, however, that the extrinsic evidence is of limited assistance where the principle task of the Court is to construe a will that is entirely ambiguous. 

  1. At common law, the task of the court when construing a will is to discover the testator’s intention by examination of the words used in the will, having regard to the will as a whole and in light of any admissible evidence.[38] Applicable legislation regarding the admissibility of extrinsic evidence is s 36 of the Wills Act 1997.  In accordance with that section, where there is uncertainty or ambiguity:

evidence may be admitted to assist in the interpretation of the language of the will, both where the uncertainty or ambiguity arises on the face of the will or in light of surrounding circumstances, although in the latter situation, evidence of the testator’s intention may not be given. [39]

[38]Fell v Fell (1922) 31 CLR 268, 273–6; Perrin v Morgan [1943] AC 399; see Re Staughton; Grant v McMillan [2017] VSC 359 (22 June 2017) [35] citing Re De Bruyn [2016] VSC 6 (22 January 2016) [11].

[39]Jepson v Bowman [2014] VSC 590 (5 December 2014) [12].

  1. In the present circumstances, it can be accepted that ambiguity arises on the face of the will regarding the multiple ‘trusts’ referred to in 3(c) and reference to the singular ‘purpose of this trust’ in 3(d), the units for ‘rental purposes’ and application of the net income from same, and the ‘wish’ that ‘first preference’ for choosing tenants for the units be given ‘to single indigenous ex-servicemen, then single ex-servicemen, or the widows of ex-servicemen, and then retired singled or widowed people’.  As such, it is appropriate to admit the extrinsic evidence. It is axiomatic, however, that the task of the Court remains construing the words of the will with reference to the instrument as a whole.

Is there a charitable trust?

  1. Creation of a charitable trust requires certainty of intention, certainty of subject matter, and identification of a charitable a purpose.[40]  That purpose must both fall within one of the four classifications of charitable purposes identified by Lord Macnaghten in Pemsel’s Case,[41]  and ordinarily, be beneficial to the public.[42]  The four purposes espoused in Pemsel’sCase are: ‘trusts for the relief of poverty, trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the proceeding heads’.[43]  To come within the latter category, a purpose must also be within the spirit of the Preamble to the Statute of Charitable Uses 1601.[44]

    [40]See Westlaw, Ford and Lee: The Law of Trusts (at 1 June 2017) [2000]; G E Dal Pont, Law of Charity (LexisNexis Butterworths, 2nd ed, 2017) 421.

    [41][1891] AC 531; See also Incorporated Council of Law Reporting (Qld) v Commissioner of Taxation (Cth) (1971) 125 CLR 659, 669; Royal National Agricultural & Industrial Association v Chester (1974) 3 ALR 486, 487.

    [42]Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297; see G E Dal Pont, Equity and Trusts in Australia (Thomson Reuters, 6th ed, 2015) 888 [29.55]; An exception exists regarding trusts for the relief of poverty, see South Australian Employers’ Chamber of Commerce & Industry Incorporated v Commissioner of State Taxation [2017] SASC 127 (31 August 2017) [97]–[118].

    [43]Pemsel’s Case [1891] AC 531, 583, quoted in G E Dal Pont, Equity and Trusts in Australia (Thomson Reuters, 6th ed, 2015) 885 [29.35].

    [44]G E Dal Pont, Law of Charity (LexisNexis, 2nd ed, 2017) 235.

  1. Where a charitable purpose has altogether failed to take effect, by reason of impracticability or otherwise, the trust will also fail ab initio unless a ‘general charitable intention’ can be identified.[45]  Here, ‘general’ is not used in its ‘loose’ sense.  Rather, identification of a general charitable intention requires consideration of the end to be achieved and any wider purpose beyond the particular plan detailed.  That wider purpose must be the dominant, or substantial object to which the property is devoted. If such a general intention is identifiable, the trust will be carried into effect and can be applied cy-près, albeit at the expense of any particular plan.

    [45]Beggs v Kirkpatrick [1961] VR 764, 767.

  1. At general law, impracticability includes circumstances where insufficient funds are available to carry out the charitable purpose,[46] or where the land made available is not appropriate for the specific purpose.[47]   Moreover, the Charities Act 1978 provides for occasions in which property may be applied cy-près, including where the original charitable purposes have ‘ceased in any other way to provide a suitable and effective method of using the property available’.[48]

    [46]Re Whitworth Art Gallery Trusts; Manchester Whitworth Institute v Victoria University of Manchester [1958] Ch 461; Re Goodson (deceased) [1971] VR 801.

    [47]A-G (NSW) v Perpetual (1940) 63 CLR 209; Re Gwilym (deceased) [1952] VLR 282.

    [48]Charities Act 1978 (Vic), s 2(1)(e)(iii); see eg Rechtman v A-G (Vic) [2005] VSC 507 (22 December 2005) [17].

  1. In construing a will, the court leans in favour of charity.[49]  This is evident in multiple respects: ‘if the text of a will is capable of a meaning which supports a finding of charity, that construction ordinarily should be adopted’;[50] the rule against perpetuities does not apply;[51] and ‘little is…required’ to infer a general intention such that a charitable trust can take effect.[52]  Such approaches are in addition to the general principle of construction that a court will, if possible, adopt a construction that avoids intestacy.[53]

    [49]Estate Polykarpou; Re a Charity [2016] NSWSC 409 (22 July 2016) [64].

    [50]Ibid citing Taylor v Taylor (1911) 10 CLR 218, 225, Hadaway v Hadaway [1955] 1 WLR 16, 19; see also G E Dal Pont, Equity and Trusts in Australia (Thomson Reuters, 6th ed, 2015) [29.45]. 

    [51]Barby v Perpetual (1937) 58 CLR 316, 323.

    [52]A-G (NSW) v Perpetual (1940) 63 CLR 209, 228.

    [53]Fell v Fell (1922) 31 CLR 268, 275.

Consideration

  1. The words of cl 3 indicate that the deceased intended to establish a trust.  Reference is made in cl 3(c) to the ‘trusts herein after contained’, and as provided for in cl 3(d), the net income from the rental units is to be used for the purpose of ‘this trust’, known as the ‘Leslie Hodgkiss Trust’.  The subject matter of the intended trust is the Melbourne Road property and the funds realised from sale of the deceased’s estate other those items specifically referred to in cl 3(d).

  1. As the parties have identified, cl 3 of the will is directed at two purposes associated with the development of the Melbourne Road property.  Firstly, to ‘provide for the display’ of certain chattels, and secondly, to ‘construct one bedroom and two bedroom units for rental purposes’, the deceased’s express wish being that in choosing tenants for those units, first preference be given to ‘single indigenous ex-servicemen, then single ex-servicemen, or the widows of ex-servicemen, and then retired single or widowed people’.  The rent to be charged is at the discretion of the trustees, but the intended trust ‘shall’ be run not for profit.

  1. The Court accepts, as the parties agree, that the first purpose — the display of the deceased’s personal chattels — does not fall within the spirit and intendment of the Preamble to the Statute of Charitable Uses 1601, nor does it have the requisite public benefit.  As such, it is not a charitable purpose.

  1. Turning to the second purpose, as the plaintiff submits and the first defendant concedes, trusts for the benefit of ex-servicemen or their dependants are capable of both falling within the fourth classification from Pemsel’s Case and having the necessary public benefit.[54]  The intention of the deceased as expressed in cl 3, to benefit single ex-servicemen and their widows in the form of accommodation provided on a not for profit basis, is a charitable purpose.

    [54]See eg Barby v Perpetual (1937) 58 CLR 316; Downing (1971) 125 CLR 185, 200–1.

  1. One point not considered in detail by the parties is the deceased’s use of the precatory words ‘it is my wish’ at the commencement of cl 3(e).  On one view such language, ordinarily associated with a moral obligation rather than imposition of a trust duty, prima facie, raises doubt as to the creation of a trust.[55] Precatory terms can, however, be considered as evidence of a general charitable intent,[56] and as Dal Pont has noted, courts have been prepared to infer an intention to impose a trust obligation where precatory words have been used.[57]

    [55]See eg Trustees of the Christian Brothers in Western Australia (Inc) v A-G (WA) [2006] WASC 191 (30 August 2006) [11]; McDonald v British-Israel-World Federation in NSW Ltd [2005] NSWSC 1026 (14 October 2005) [57].

    [56]Re Goodson (deceased) [1971] VR 801, 807; Public Trustee (Qld) v Queensland [2004] QSC 360 (19 October 2004) [10]; Roman Catholic Trusts v A-G (Vic) [2000] VSC 360 (15 September 2000) [8]; Rachael P Mulheron, The Modern Cy-près Doctrine (UCL Press, 2006) 81; see also G E Dal Pont Law of Charity (Lexis Nexis, 2nd ed, 2017) 388, 422.

    [57]G E Dal Pont, Law of Charity (LexisNexis, 2nd ed, 2017) 422.

  1. On the question of whether the charitable purpose regarding ex-servicemen can be disentangled from non-charitable purpose of displaying the specified chattels, s 7M of the Charities Act 1978 and the approach of Phillips J in McCracken v Attorney-General are applicable. Clause 3 provides a ‘distinct and sufficient indication’ for funds to be applied toward a charitable purpose, namely not for profit accommodation for


    ex-servicemen.  In any event, as the circumstances of the relevant cases suggest, such an indication is perhaps of greater significance where the Court is reading down an expression that extends beyond charitable purposes, such as ‘Christian purposes’, ‘the amelioration of the condition of the dependants’ or ‘other such purposes’, rather than disentangling two expressed purposes as here.  Without definitively determining the issue, such an approach would have greater significance in reading the phrase ‘retired single or widowed people’ in cl 3(e), as perhaps including only retired or widowed people in financial need.

  1. Although the charitable purpose regarding ex-servicemen can be disentangled from the non-charitable purpose, the Court accepts that it is impracticable to carry out. Specifically, the trust funds are insufficient to construct, fit out and maintain the units, and there is significant uncertainty as to the availability of tenants in the particular location. Although selling a portion of the Melbourne Road property to generate sufficient funds has been identified as an option, issues regarding cl 3(c) of the will specifying that the Melbourne Road property is to be retained are raised, and the option involves substantial financial risk.  The submission by the plaintiff that the charitable purpose may not have been impracticable at the date of the deceased’s death is rejected, as no evidence was adduced on this point and, prima facie, it is not clear how the relevant circumstances would have differed in 2015.

  1. Having concluded that a charitable purpose exists, albeit one that is impracticable, analysis turns to the more difficult question of whether the will evinces a general charitable intention such that the estate funds can be applied cy-près.

Is there a general charitable intention in the Will?

  1. Determining whether an expressed charitable purpose has a further and more general intention, which is the true and substantial object of the trust, has been described as ‘anything but easy’.[58]  Despite principles of construction leaning in favour of charity and against intestacy, a general charitable intention cannot be identified from the terms of the will, with reference to the instrument as a whole, and the admissible extrinsic evidence. This conclusion is drawn particularly on the basis of the following five factors.

    [58]A-G (NSW) v Perpetual (1940) 63 CLR 209, 225.

  1. Firstly, the terms of the will do not expressly refer to benefiting ex-servicemen or their dependants, other than the reference in cl 3(d) regarding preference for tenancies.  In the majority of cases, identified by the parties, in which a general charitable intent has been found, the relevant will adopts a more general statement of intention, which has then been elaborated upon in more specific clauses.  In Barby v Perpetual, for example, the testator expressed an intention to benefit necessitous soldiers, before detailing a specific plan. Latham CJ referred to this as ‘just the kind of case’ for application of the cy-près doctrine.[59]  Similarly, in Roman Catholic Trusts v Attorney-General (Vic), in a statement expressing the testator’s ‘fundamental and underlying intention’, land was devised on trust to be applied for orphan boys, with the subsequent wish that the land be used as a farm to train the boys in the cultivation of soil.  In Rechtman v Atorney General (Vic), general objects of a trust for educational purposes were set out in addition to specific provisions.  The will in Royal North Shore also involved identification of general objects in addition to details of a specific plan, and in Re Stable, the testatrix expressly devised her property to the Legacy Club of Brisbane absolutely, to be used for war orphans and widows, before expressing a desire that the property is to be conducted under the name of ‘Wintringham’.[60]

    [59]Barby v Perpetual (1937) 58 CLR 316, 323.

    [60]Re Stable [1957] St R Qd 90, 93.

  1. These cases can be contrasted with Uniting Church of Australia v Victorian Institute of the Blind,[61] in which funds were specifically set aside to purchase or build a house to hold upon trust for indigent old ladies and then to maintain the house, and Re Tyrie,[62]  where funds were bequeathed for the purposes of a church being built, followed by a desire that the church be available to all religious denominations for conducting services.

    [61][1999] VSC 485 (2 December 1999).

    [62][1970] VR 264.

  1. In the present circumstances, the only express statement of charitable intention is the preference for ex-servicemen to be chosen as tenants for the rental properties.  While a ‘fundamental and underlying statement’, or more general express statement of the testator’s intention is not necessarily required in order to identify a general charitable intention, it is of assistance in distinguishing any dominant, wider, end of the charitable purpose from the means to achieve such a purpose.  As Latham CJ noted in Attorney-General (NSW) v Perpetual (albeit in dissent):

by a process of abstraction it is always possible to disengage the [charitable intention] in the case of a particular gift and then to argue that the intention so discovered is an intention which is general and not particular in character. A gift for the relief of poverty in a particular village subject to precise directions limiting the benefits to be taken by individuals and the manner in which those benefits are to be conferred or enjoyed can accurately, but not completely, be described as a gift for poverty.[63]

Dixon and Evatt JJ similarly reasoned: ‘[a]lmost all charitable trusts expressed with any particularity must tend towards some more general purpose’.[64]

[63]A-G (NSW) v Perpetual (1940) 63 CLR 209, 216.

[64]Ibid 227.

  1. Without engaging in such process of abstraction, there is nothing in the will to suggest that the deceased intended a charitable purpose other than that particularised.  The only real indicator of a general charitable intention is to be found in the deceased’s note of early 2009 stating ‘some houses built on the block to house special people.  Legacy…are my first choice’.  This statement, however, remains referenced to ‘the block’, and cannot displace the terms and structure of the will.

  1. Secondly, the plan specified by the deceased is particular. In accordance with the first relevant clause, 3(c), the trustees are ‘to retain’ the Melbourne Road property for the purposes of the ‘trusts’. This is followed by the realisation of funds, including those from a separate property, to be applied toward the development of ‘my properties’, for the display of the chattels detailed, together with a sufficient security system, and also to construct the rental units specified to be one and two bedroom, run not-for-profit.  Preference for tenancies is then listed regarding four different classes of tenants. Although, as the plaintiff submits, the trustees are afforded a degree of discretion, that discretion is limited to the tenancies and the particular rent charged. The particularity with which the will is expressed is distinct from that in the will of Attorney-General (NSW) v Perpetual.  There, the intent to benefit orphan boys via a training farm was contained within one clause, the only express limit, found to be subsidiary, being that Milly Milly be used for such a purpose. No specific plan for the training was provided.

  1. Thirdly, even if a wider purpose to benefit ex-servicemen can be identified, supported by the extrinsic evidence, the will’s text and structure do not allow a finding that such a purpose is dominant, substantial or paramount.  The will, through the language ‘to retain’, ‘the development of my properties’, and ‘to construct’, emphasises as the first matter the development of the Melbourne Road property.  Separately, the deceased then expresses a wish that in choosing tenants first preference be given to ex-servicemen.  While the first defendant emphasised use of the phrase ‘and also’, to signify that the construction of rental units was subordinate to the display of the deceased’s chattels, this is not decisive.  Rather, the dominant intention of the deceased, as reflected in the structure and text of clauses 3(c), (d) and (e), was for the Melbourne Road property to be developed and retained for the purposes of a display and the construction of the rental units.  The language used is imperative, and the use of the property is specified before any reference is made to benefitting ex-servicemen.  That benefit is shortly expressed as a wish, tied to the Melbourne Road property in the form of subsidised rental accommodation.

  1. As the submissions of the first defendant suggest, it is the development of the Melbourne Road property that is essential to the intended trust.  Everything is premised on the Melbourne Road property being retained and the will does not contemplate the rental units being built elsewhere.  In my view, construction of the will leads to the conclusion that the plans as particularised are indispensable, rather than the means to achieve a wider charitable purpose.

  1. This conclusion is supported by the extrinsic evidence. Both references that the deceased made to charitable purposes were in the context of the Melbourne Road property, and ‘all money and income’ was to be used to build on that property.  Moreover, the deceased provided details as to the construction of a private library to display her items, who was to design the development, the pets that tenants could have and which trees were to remain on the block.

  1. Fourthly, there is no presumption in favour of a general charitable intention.

  1. The fifth and final point of consideration is the precatory language of the charitable intent to benefit ex-servicemen.  As noted, precatory words are capable of indicating a general charitable intent.  Where such an approach has been adopted, however, the relevant will has tended to contain a statement of charitable intention in non-precatory terms, and the precatory language has been limited to the mode of giving effect to that intention. In Roman Catholic Trusts Corporation v Attorney-General (Vic), for example, land was bequeathed in imperative terms for the benefit of orphan boys, before the testator provided certain wishes as to the specific use of the land.  In another case, a share of an estate was bequeathed to the ‘Redcliffe Local Ambulance Committee’ (albeit no such committee existed), prior to a wish that a new ambulance be purchased.[65]  The case of Re Goodson (deceased),[66]  bearing some similarity with the current circumstances, also involved precatory language.  In that case, by cl 3 of her will, the testatrix devised a property to the Church of England to be used ‘as a home for refined elderly ladies’ before expressing her wishes as to how the home should be run, including that the when selecting refined ladies to live in the home the trustees ‘shall choose ladies…who have not come to be in reduced circumstances owing to drinking, gambling or bad living’.[67]  Adam J reasoned:

No doubt the distinction between a mandatory direction to a trustee and the expression of a wish in precatory terms may be of significance in deciding what should be regarded as subordinate and what essential…Were it a question whether the gift failed by reason only of its being impracticable to comply with one or other of the expressed wishes, then no doubt the use of precatory words would be material to the question whether compliance with such wishes was at the essence of the gift. [68]

[65]Public Trustee (Qld) v Queensland [2004] QSC 360 (19 October 2004).

[66][1971] VR 801.

[67]Ibid 805.

[68]Ibid 807.

  1. Similarly, in Re Tyrie, funds were bequeathed for the construction of a church, to be named after the testatrix’s family, prior to a desire being expressed that services of all religious denominations be conducted therein. Gowans J commented:

Having regard to the character of the immediate donee, the Presbyterian Church, and the language of the gift, I think the precatory words “It is my desire” were not intended to be imperative, and that, therefore, they are not to be regarded as forming an integral part of the purpose of the gift, although, as part of the context, they may throw some light on the intentions of the testatrix.[69]

[69]Re Tyrie [1970] VR 264, 266.

  1. In the present circumstances, the imperative directions of the deceased include building the rental units, but not the preference of ex-servicemen. Although the language and purpose of cl 3(e) of the will is read with that of cl 3(d), no attempt was made by the plaintiff to suggest that the wish of the deceased was imperative and as the matter was not argued by the parties, it is inappropriate to make such a finding. Consequently, prima facie, the wish of the deceased creates a moral obligation. Without conclusively determining the issue, in my view, a degree of doubt surrounds the identification of a general charitable intention, such that a trust consequently takes effect, primarily on the basis of a charitable intention primarily expressed as a moral obligation. 

Conclusion

  1. Construction of the will of the deceased discloses a charitable purpose, albeit expressed in the form of a particular plan.  That plan was impracticable to effect from the outset, such that the intended charitable trust could avoid failing ab initio only through identification of a general charitable intent.  The language and structure of the will, however, do not disclose such a wider, dominant charitable intent.  Rather, the essential element of the will is that the Melbourne Road Property be developed in the form of a private library to display certain chattels and the construction of rental units.  In such circumstances, the trust fails ab initio and cannot be applied cy-près. While such an outcome is not entirely satisfactory, the Court cannot apply the estate funds toward an organisation such as Carry On (Victoria) in circumstances where the will does not disclose that it was the deceased’s intention to leave funds for the general purpose of benefiting ex-servicemen. Consequently, the residuary estate is to fall to the deceased’s next of kin in accordance with s 53 of the Administration and Probate Act 1958.

  1. The answers to the questions the subject of this application are:

(1)       Does the gift contained in paragraph 3(d) of the will:

a.        create a valid charitable trust? No.

b.if so, can such trust and assets be applied as part of the trusts created by the balance of the words contained in paragraph 3(d) and (e) of the will? Unnecessary to answer.

c.if the words do not create a charitable trust is a valid non-charitable trust created? No.

d.if the words create no valid charitable or non-charitable trust who is entitled to the said items? To be applied in accordance with partial intestacy provisions.

(2)       Do the words in paragraphs 3(c), 3(d) and 3(e) of the will:

a.create a valid charitable trust? A valid charitable purpose exists, however, any trust failed ab initio.

b.If the answer to (2)a is yes; does the trust operate for purposes associated with the provision of accommodation for rental purposes for single indigenous ex-servicemen, single ex-servicemen, widows of ex-servicemen and retired single or widowed people on  a non-profit basis? The charitable purpose is preference in the provision of not-for-profit accommodation to single indigenous ex-servicemen, single ex-servicemen and widows of ex-servicemen.

(3)If the answer to (2)a is yes, which institutions would be the beneficiaries of the said charitable trust? Unnecessary to answer.

(4)       If the purposes of the charitable trusts referred to in paragraph 2(a) above are not practicable; can the objects of the trust be applied cy-près and if so what body or individuals would be the beneficiaries under the trust? No.

(5)If the words of paragraphs 3(c), 3(d) and 3(e) create no valid charitable, or non-charitable trust who is entitled to the assets referred to in these paragraphs? The next of kin take on partial intestacy.

---


Actions
Download as PDF Download as Word Document
Cases Cited

17

Statutory Material Cited

0

Stratton v Simpson [1970] HCA 45
Stratton v Simpson [1970] HCA 45
Barby v Perpetual Trustee Co (Ltd) [1937] HCA 64