Re Mason; State Trustees Ltd v The International Order of Freemasonry for Men and Women Le Droit Humain
[2021] VSC 775
•25 November 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUST, EQUITY AND PROBATE LIST
S ECI 2020 04210
| IN THE MATTER of the Will and Estate of ULAE ISOBEL MASON (also known as ULAE ISOBEL BOYLE), deceased | |
| and | |
| IN THE MATTER of an application pursuant to rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 | |
| BETWEEN: | |
| STATE TRUSTEES LIMITED (in its capacity as Executor of the Will and Estate of Ulae Isobel Mason) | Plaintiff |
| and | |
| THE INTERNATIONAL ORDER OF FREEMASONRY FOR MEN AND WOMEN LE DROIT HUMAIN | Defendant |
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JUDGE: | O’Meara J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 25 November 2021 |
CASE MAY BE CITED AS: | Re Mason; State Trustees Ltd v The International Order of Freemasonry for Men and Women Le Droit Humain |
MEDIUM NEUTRAL CITATION: | [2021] VSC 775 |
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CHARITABLE TRUST — Charitable gift — ‘Charitable organisation’ and ‘charitable purpose’ — Will providing for event where charitable purpose cannot be fulfilled – Question answered – Costs.
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | T Mah | State Trustees Limited |
| For the defendant | S F McNab | Mazzeo Lawyers |
HIS HONOUR:
A Introduction
Ms Ulae Isobel Mason died on 15 November 2003. In her lifetime, the deceased was devoted to the Freemasonry movement and, from March 1965, was a member of the Southern Cross Lodge in Richmond (the Lodge). She held several senior positions at the Lodge and became an honorary member in 1998. She remained an honorary member at the time of her death in 2003. At earlier times, she had been a member of several other lodges.
The deceased’s last Will is dated 30 January 2003 (the Will). Among other things, she bequeathed her house and land at 8 Glenthorn Avenue, North Balwyn as a residence for her friend, Mr Frank Puccini, during his lifetime.
Mr Puccini died on 17 April 2019. Upon that event, the Glenthorn Avenue property became a part of the deceased’s residuary estate and was sold in October 2019.
In respect of the residuary estate, clause 3 of the Will provides as follows –
AFTER paying my debts funeral and testamentary expenses and all probate and estate and other duties payable by my estate (whether actual or notional) to any State or Federal Authority in consequence of my death I GIVE my residuary estate to the following charitable organisations in equal shares absolutely:
(a)The ANIMAL WELFARE LEAGUE OF VICTORIA which conducts the Lort Smith Hospital for sick and injured animals at 24 Villiers Street, North Melbourne for its general purposes.
(b)The CYSTIC FIBROSIS ASSOCIATION OF VICTORIA INC. of 12 Claremont Street, South Yarra for its general purposes.
(c) The SALVATION ARMY (VICTORIA) PROPERTY TRUST to be used for its work amongst people in necessitous circumstances.
(d)The TRAVELLERS’ AID SOCIETY OF VICTORIA of 169 Swanston Street, Melbourne for its general purposes.
(e)The ORDER OF INTERNATIONAL CO-FREEMASONRY for the use of the SOUTHERN CROSS LODGE located in Darlington Parade, Richmond in the said State.
Clause 4 of the Will provides further that –
IN RELATION to the Charitable Dispositions in this my Will:
(a)I DECLARE that the receipt of the person authorised to receive the money on behalf of the organisation will be full and sufficient discharge to my Trustee AND will absolve my Trustee from seeing to the application of the gift,
(b)If the specific charitable organisation I have nominated in this my Will is not in existence at my death or ceases to exist thereafter or the charitable purpose I have described cannot be fulfilled, my Trustee will pay or apply this gift to such other charitable organisation or purpose which my Trustee considers in its absolute discretion most nearly fulfils the object I intend to benefit.
The charitable organisations named in clauses 3(a) to (d) have received distributions of residue under the Will.
The present issue concerns clause 3(e). Part of the issue arises from the fact that the Lodge was closed in December 2016.
In April 2020, the plaintiff made application to the Attorney-General for directions in relation to the gift purported to be made under clause 3(e). The Victorian Government Solicitor’s Office, on behalf of the Attorney-General, queried the ‘charitable purpose’ of the defendant.
On 27 July 2020, the solicitor then acting on behalf of the defendant asserted that the application to the Attorney-General should be withdrawn and that it was unnecessary to establish that the defendant is a ‘charitable organisation’. A further email on 2 September 2020 stated–
If, however, you are of the view that directions from the court are necessary then kindly provide me with a copy of the application and keep me informed of the hearing dates.[1]
[1]Exhibit ‘JB15’ to the affidavit of Jasmine Berger sworn 29 October 2020.
In that connection, the plaintiff commenced this proceeding seeking the determination of a question pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015, namely –
In the event that has happened, and on the proper construction of clauses 3 and 4 of the Will, how should the gift in clause 3(e) of the Will be applied?
The plaintiff has filed and served –
(a) affidavit of Jasmine Berger sworn 29 October 2020, together with various exhibits; and
(b) written submissions dated 13 May 2021.
The defendant has filed and served –
(a) affidavit of Phillip James Hanson sworn 1 March 2021, together with various exhibits;
(b) affidavit of Ruth Doutch sworn 1 March 2021;
(c) affidavit of Judy Schuler sworn 1 March 2021;
(d) affidavit of Marion Olive Gilchrist sworn 1 March 2021; and
(e) written submissions dated 11 June 2021.
On 16 April 2021, the Court directed that subject to the discretion of the trial judge the hearing of the proceeding may be conducted on the papers.
B The positions of the parties
As between the parties, it is either accepted or not in dispute that –
(a) the reference in clause 3(e) to ‘The Order of International Co-Freemasonry’ should be read as a reference to ‘The International Order of Co-Freemasonry Le Droit Humain’ (the Order);
(b) on 21 January 2012, the Order changed its name to ‘The International Order of Co-Freemasonry for Men and Women Le Droit Humain’;[2]
(c) the Will – particularly clauses 3 and 4 – evinces a general charitable intention or purpose; and
(d) if it is no longer possible to give effect to the gift made by clause 3(e), it may be possible to distribute the gift to a charitable organisation with close links to the defendant.
[2]Exhibit ‘PJH5’ to the affidavit of Philip James Hanson sworn 1 March 2021.
Against this background, the plaintiff contends that the gift made by clause 3(e) was for a specific purpose – namely the use of the Lodge – and so may not now be given effect.
The plaintiff submits that it is directed by clause 4(b) to redirect the gift to another ‘charitable organisation or purpose’.
The plaintiff submits that the evidence does not reveal the defendant, strictly speaking, to be ‘charitable’.[3] It submits as follows –
26.It does not appear from the Defendant’s Constitution and the Defendant’s evidence that the Defendant is directly involved in any charitable work, nor is it directly involved in providing charitable works such as relief for the poor. At best, it encourages its members to donate to charities, and it also makes regular donations to charities from moneys collected from its members.
27.The Defendant’s main purpose appears to be directed at the betterment of its members. Its Constitution also sets out guidelines in relation to becoming a member.
28.To fall within the fourth category of charity in the Preamble to the Statute of Elizabeth the purpose of a trust must be of benefit to the public. However the trust must be of direct and general benefit to the public, and the mere fact that the purposes may tend to be of general utility is not sufficient.[4]
[3]Cf., Salvation Army (Victoria) Property Trust v Shire of Ferntree Gully (1952) 85 CLR 159, 173-175.
[4]Plaintiff submissions, [26]-[28].
In this regard, the plaintiff referred to observations made by Croft J in Rotary Club of Melbourne Inc v Commissioner of State Revenue[5] and submitted that the ‘private nature’ of the defendant’s focus means that its purpose is not analogous to the instances of charities in the Preamble.[6]
[5](2018) 58 VR 70, [36] and [47]-[48] (‘Rotary Club’).
[6]Plaintiff’s submissions, [29]-[30].
It follows, the plaintiff submits, that it is no longer possible to give effect to the gift purported to be made by clause 3(e). That said, it is submitted that the general charitable intention of the Will may be given effect via clause 4(b).
For its part, the defendant submits that as the successor to the Lodge the residue of the estate should be applied through the defendant to the use of other lodges affiliated with it.
If that not be the case, it is submitted that clause 4(b) is ‘an anti-lapse provision to prevent the failure of any of the five gifts in the residuary estate given in clause 3’.[7] In that regard, the defendant submits that the plaintiff must nominate a successor beneficiary and, in light of the deceased’s close links with Freemasonry, the gift should be applied to the use of a body or charitable purpose associated with the defendant and Freemasonry generally.
[7]Defendant’s submissions, [17].
In the course of its submissions, the defendant essentially concedes that it and the Lodge were or are not charitable in the legal sense, but says that it has ‘a related entity that conducts charitable activities in a legal sense’.[8]
[8]Defendant’s submissions, [11].
C Applicable principles
The task of a court when construing a will is to discover the deceased’s intention by examination of the words used, having regard to the will as a whole and in light of any admissible evidence.[9]
[9]Re Marks; Letcher v Indian [2017] VSC 665, [47] (‘Re Marks’).
Charitable trusts exist to benefit a particular purpose, not a particular person or entity; and there needs to be a clear charitable intention that serves the public good.[10]
[10]Re Coghlan; Merriman v Attorney-General (No 2) [2020] VSC 668, [19]-[22] (‘Re Coghlan’).
Unless to do so would run contrary to the express or implied intentions of the deceased, the courts will 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.[11]
[11]Re Marks (n 9) [29].
The presence of a particular or ‘gift over’ provision may avoid any need to rely upon the doctrine of cy pres.[12]
[12]Coshott v Royal Society for the Protection of Cruelty to Animals (1996) 40 NSWLR 446 and Tasmanian Perpetual Trustees Ltd v Attorney-General (2015) 25 Tas R 379, [41].
D Consideration
The evidence shows that the deceased had a long connection with Freemasonry; in particular, the Lodge.
Plainly, the form of clause 3 of the Will suggests that the deceased – who was not a lawyer – believed that the Order was a ‘charitable organisation’ and that the Lodge was a ‘charitable purpose’.
That said, the Will appears to have been prepared by State Trustees and clause 4(b) operates to, in effect, save a gift if ‘the specific charitable organisation’ ceases to exist or the ‘charitable purpose’ cannot be fulfilled. In that context, I tend to think that when the expressions ‘charitable organisation’ and ‘charitable purpose’ were used in clauses 3 and 4, the deceased was using them in the legal sense.
It follows, in my view, that clause 3(e) could operate if the Order was a ‘charitable organisation’ and, more particularly, the Lodge was a ‘charitable purpose’ in the legal sense.
As I have noted, the Lodge closed in 2016.
I also accept the submission of the plaintiff and the apparent concession of the defendant that, on the evidence, the defendant is not a charitable organisation in the legal sense. It follows, it seems to me, that the purported gift for the use of the Lodge was not, strictly speaking, a ‘charitable purpose’.
Notwithstanding the above, the defendant contends that by clause 3.6 of what it describes as its constitution and in the evidence is titled the Australian Federation 2018 General Regulations (the Regulations), the defendant is the successor to the Lodge and prior to the death of Mr Puccini it had a contingent vested interest that became vested absolutely when he died in 2019.
In this regard, defendant contends that the deceased would ‘likely have been aware of clause 3.6’of the Regulations.[13] I am unable to accept that submission: the deceased passed away in 2003 and the Regulations in evidence are dated 2018.[14]
[13]Defendant’s submissions, [12]-[13].
[14]Exhibit ‘PJH6’ to the affidavit of Philip James Hanson sworn 1 March 2021.
In any event, I cannot accept the submission that the defendant had a vested interest in the gift and relevantly stands as the ‘successor body to the Lodge’. Any such interest could only take effect by operation of clause 3 of the Will, and, as I have indicated, the defendant was and is not a ‘charitable organisation’ and, more particularly, any use of the gift for the purpose of the Lodge was not, on the evidence, a ‘charitable purpose’.
In the circumstances, the charitable purpose of the gift cannot be fulfilled, albeit that the parties agree – and I accept – that the Will evinces a general charitable intention.
In this context, the terms of the Will provide what should occur in the event of a contingency of this kind and therefore obviate any need to rely upon the doctrine of cy pres. In that regard, clause 4(b) allows the plaintiff to pay or apply the gift ‘to such other charitable organisation or purpose which … most nearly fulfils the object I intend to benefit’.
On the evidence, it is clear that the deceased had a very long association with Freemasonry and, by clause 3(e), plainly intended to give effect to the charitable aspirations and operations of that movement – albeit in respect of the Lodge which, as I have noted, was not a ‘charitable purpose’ and is, in any event, now closed.
Nonetheless, the evidence reveals that the defendant has a related entity that conducts charitable activities in a legal sense and the plaintiff contends, and I agree, that distributing the gift to a charitable organisation with close links to the defendant would give effect to the deceased’s ‘charitable intention’ and ‘recognise her long association’ with the defendant.
To that end, the plaintiff requests the opportunity to confer with the defendant and, for its part, the defendant has indicated that it would welcome the opportunity.
In my view, the course outlined would give best effect to the evident charitable intention of the deceased.
E Conclusion
In light of the above, the question referred for the advice of the Court is answered as follows:
the gift in clause 3(e) of the Will should, via clause 4(b), be applied to a beneficiary that is a charitable organisation with close links to the defendant and Freemasonry.
In respect of the issue of costs, I accept that the form of clauses 3 and 4 of the Will made it necessary for the parties to seek the advice of the Court.[15] In that connection, subject to consideration of any submission to the contrary, I would propose to order that the costs of the plaintiff and defendant in connection with the proceeding be paid out of the bequest in clause 3(e) of the Will, each assessed on an indemnity basis.
[15]Re Coghlan (n 10) [45].
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