Re McHenry; Thompson v Attorney General - [2020] VSC 211

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2019 03442

IN THE MATTER of the will and estate of ROBERT WILLIAM McHENRY, deceased

-and-

IN THE MATTER of s 2(1) of the Charities Act 1978

-and-

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

GRAEME PHILIP LANGFORD THOMPSON (in his capacity as executor of the will of the abovenamed deceased)	Plaintiff
v
THE ATTORNEY GENERAL FOR THE STATE OF VICTORIA	Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	24 April 2020
CASE MAY BE CITED AS:	Re McHenry; Thompson v Attorney General
MEDIUM NEUTRAL CITATION:	[2020] VSC 211

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EQUITY AND TRUSTS — Charitable trusts — Gift to charitable entity — Whether gift was for charitable purposes — Whether charitable entity ceased to exist — Lapse of charitable gifts — Whether there exists a successor institution to named charitable institution — Whether gift to be applied cy près — Re Tyrie, dec’d (No 1) [1972] VR 168; Re Coulson [2014] VSC 353.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S McNab	Saxbys Lawyers
For the Defendant	No appearance	Victorian Government Solicitor

HER HONOUR:

Introduction

William Robert McHenry died on 7 December 2015. Probate of the deceased’s last will and testament dated 23 December 2009 was granted to the plaintiff on 11 July 2017. The deceased had no spouse or children, he is survived only by his sister, Ms Elizabeth Buxton.

Paragraph 3(g) of the deceased’s will left the net residue of his estate to be held upon trust on the following terms:

[A]s to the balance of my Estate subject to the payment thereout of my debts my funeral and testamentary expenses and all probate duties and commissions to then divide the same into two parts or shares and to give GRAEME PHILIP LANGFORD THOMPSON barrister at law of Owen Dixon Chambers, 205 William Street, Melbourne in the State of Victoria the first part being 10% of the value of my Estate and the second part being 90% of the then value of my estate to the VICTORIAN ORGAN DONATION SERVICE.

The total value of the estate is approximately $944,310 as at 20 April 2020. After payment of specific legacies and liabilities of the estate, the value of the residue is approximately $850,000.

Prior to the execution of the will, the functions of the Victorian Organ Donation Service (‘VODS’) were subsumed by the Commonwealth Government Organ and Tissue Authority (the ‘authority’). At that time, VODS was renamed ‘DonateLife Victoria’.

The plaintiff’s application

The plaintiff, in his capacity as executor of the deceased’s estate, seeks declarations pursuant to rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 that the gift to VODS created a charitable trust and that the original purpose of that trust can no longer be carried out. The plaintiff seeks orders pursuant…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] VSC 211
Decision Date: 24 April 2020

CaseChat Overview and Summary

The case of Re McHenry; Thompson v Attorney General involved the interpretation of a charitable trust established by a testamentary gift. The dispute centred on the validity and application of the gift, particularly whether it remained for charitable purposes after the named charitable entity ceased to exist. The matter was heard in the Supreme Court of Victoria, with the Court of Appeal subsequently considering the case. The primary legal issues were whether the charitable gift lapsed due to the dissolution of the named institution and, if so, whether the gift could be applied cy près to a successor institution.

The court began by examining the terms of the gift and the nature of the charitable purpose. It found that the gift was intended for charitable purposes, but the specific charitable entity had ceased to exist. The court then turned to whether the gift lapsed or if it could be applied cy près to a similar institution. The court considered the principles established in Re Tyrie, dec’d (No 1) and Re Coulson, which outline the conditions under which a charitable gift may be applied cy près. The court concluded that there was a successor institution with similar charitable purposes, allowing the gift to be applied cy près.

The reasoning of the court was grounded in established principles of charitable trust law, particularly the need to preserve the charitable intent of the donor while adapting to changed circumstances. The court determined that the gift could indeed be applied cy près to a similar charitable entity, ensuring that the charitable purpose was not lost but rather continued in a new form. The court's decision emphasised the importance of maintaining the charitable intent of the donor, even in the face of changes in the charitable landscape. The final orders were made in favour of the respondent, confirming the application of the gift cy près to the successor institution.

Orders