South Eastern Sydney Area Health Service v Wallace

[2003] NSWSC 1061

Reported Decision: 59 NSWLR 259

Supreme Court

CITATION:	South Eastern Sydney Area Health Service v Wallace [2003] NSWSC 1061
HEARING DATE(S):	5/11/03
JUDGMENT DATE:	24 November 2003
JUDGMENT OF:	Burchett AJ at 1
DECISION:	Orders to be made for an application of the charitable gift in the Will cy-près in accordance with short minutes to be brought in.
CATCHWORDS:	CHARITIES - anomalous non-charitable "tomb trusts" - invalidity where the tomb is not part of a church and the trust is perpetual - rule against perpetuities - consequences for gift of surplus income to charity - exceptional rule where tomb trust is invalid - gift over to charity upon tomb falling into disrepair or where repair is in the opinion of the trustee "impracticable" - trustee bound to have that opinion if "tomb trust" invalid - whether trust to establish grave could be held valid though trust for its upkeep was void for perpetuity - whether gift to a charity (a hospital) took effect too remotely - whether gift to charity was a limitation on the failure or expectant on the determination of a limitation (the "tomb trust") that was void as a perpetuity- association with a prior invalid limitation distinguished from dependency or expectancy upon it - position where a gift is contingent upon alternative conditions some of which offend the rule against perpetuities but one does not - plaintiff's entitlement to charitable gift upon a cy-près order.
LEGISLATION CITED:	Perpetuities Act 1984 (NSW)
CASES CITED:	Allan, Re [1958] 1 WLR 220 Cambridge v Rous (1858) 25 Beav. 409; 53 ER 693 Canning's Will Trusts, Re [1936] Ch 309 Chamberlayne v Brockett (1872) LR 8 Ch 206 Chardon, Re [1928] 1 Ch 464 Coleman, Re [1936] Ch. 528 Coxen, Re; McCallum v Coxen [1948] 1 Ch 747 Curryer's Will Trusts, Re [1938] Ch. 952 Dalziel, Re (1943) 1 Ch 277 Davey, Re [1915] 1 Ch. 837 Dawson v Small (1874) LR 18 Eq 114 Durour v Motteux (1749) 1 Ves. Sen. 320; 27 ER 1057 Endacott, Re [1960] Ch. 232 Filshie, Re [1939] NZLR 91 Fisk v Attorney-General (1867) LR 4 Eq 521 Harvey, Re (1888) 39 Ch D 289 Jones, Re (1898) 79 LT 154 Kelly v Attorney-General [1917] 1 IR 183 Leahy v Attorney-General for New South Wales [1959] AC 457 Martin, Re [1952] WN (English) 339 Muir v Archdall (1918) 19 SR(NSW) 10 Norton, Re (1948) 64 TLR 582; Sub nom Re Norton's Will Trusts [1948] 2 All ER 842 Oldfield (No.2), Re [1949] 2 DLR 175 Pedulla v Nasti (1990) 20 NSWLR 720 Pettit, Re [1988] 2 NZLR 513 Pooley v The Royal Alexandra Hospital for Children (1932) 32 SR(NSW) 459 Porter, Re [1925] Ch. 746 Rogerson, Re [1901] 1 Ch. 715 Spehr, Re [1965] VR 770 Taylor, Re (1888) 58 LT 538 The Public Trustee v Nolan (1943) 43 SR(NSW) 169 Thomson v Shakespear (1860) 1 De G F & J 399 Tyler, Re [1891] 3 Ch 252
PARTIES :	South Eastern Sydney Area Health Service (Plaintiff) Beverley Phoebe Wallace and Donald Charles Lawrence Milham (1st Defendants) Attorney-General of New South Wales (2nd Defendant)
FILE NUMBER(S):	SC 3491/03
COUNSEL:	J. R. Wilson S.C (Plaintiff) No appearance (1st Defendants) J. Needham (Attorney-General)
SOLICITORS:	Deacons (Plaintiff) I V Knight Crown Solicitor (Attorney-General)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BURCHETT AJ

24 November 2003

3491/03 South Eastern Sydney Area Health Service v Wallace

JUDGMENT

1 BURCHETT AJ: This case has led the Court down a quite arcane by-way of the law. Since long before Shelley in Adonais declared that the dead Keats had “bought with price of purest breath a grave among the eternal”, testators have tried to purchase lasting tombs with the more ordinary currency of which they could dispose by their wills. So persistent has been the striving for this sort of immortality, despite rebuffs such as the dismissal of one attempt by Lord Hardwicke L. C, in Durour v Motteux (1749) 1 Ves. Sen. 320; 27 ER 1057 at 322; 1057 as “vain”, that it has produced two considerable anomalies in the law. Trusts for tombs have come to be recognised, provided they comply with the rule against perpetuities, notwithstanding “the fundamental rule that a trust, unless charitable, must have beneficiaries”: Leahy v Attorney-General for New South Wales [1959] AC 457 at 478 – 479, 484; Re Endacott [1960] Ch. 232 at 246; Pedulla v Nasti (1990) 20 NSWLR 720 at 722; Dal Pont on Charity Law in Australia and New Zealand at 84. Of course, if the tomb, or a monument, formed part of the structure or ornament of a church, there would be no anomaly, since the purposes of the church would be charitable. The second anomaly relates to the consequences of a tomb trust that is invalid because it does infringe the rule against perpetuities, as has been held to be the case in many of the authorities, as for example in Pedulla v Nasti; Pooley v The Royal Alexandra Hospital for Children (1932) 32 SR(NSW) 459; and Muir v Archdall (1918) 19 SR(NSW) 10. What I have described as the second anomaly is an exceptional rule, accepted by Jessel MR in Re Birkett (1878) 9 ChD 576 (at 580 – 581) as binding upon him although he thought it unsatisfactory, established by a line of cases known as the “tomb cases” which commenced with the decision of Wood V-C in Fisk v Attorney-General (1867) LR 4 Eq 521. This exceptional rule is neatly formulated, lettered (c), in a statement by Jenkins J (as he then was) in Re Coxen. McCallum v Coxen [1948] 1 Ch 747 at 751 – 752 in the course of a summary of the law applicable where “a fund or the income thereof is directed to be applied primarily to purposes which are not charitable and as to the balance or residue to purposes which are charitable”. Jenkins J said:

“[T]he result of the authorities appears to be: ( a ) that where the amount applicable to the non-charitable purpose can be quantified the trusts fail quoad that amount but take effect in favour of the charitable purpose as regards the remainder; ( b ) that where the amount applicable to the non-charitable purpose cannot be quantified the trusts both charitable and non-charitable wholly fail because it cannot in such a case be held that any ascertainable part of the fund or the income thereof is devoted to charity; ( c ) that there is an exception to the general rule in what are commonly known as the “Tomb cases” that is to say, cases in which there is a primary trust to apply the income of a fund in perpetuity in the repair of a tomb not in a church, followed by a charitable trust in terms extending only to the balance or residue of such income, the established rule in cases of this particular class being to ignore the invalid trust for the repair of the tomb and treat the whole income as devoted to the charitable purpose; and ( d ) that there is an exception of a more general character where as a matter of construction the gift to charity is a gift of the entire fund or income subject to the payments thereout required to give effect to the non-charitable purpose, in which case the amount set free by the failure of the non-charitable gift is caught by and passes under the charitable gift.”

That passage is set out as representing the law in Jarman on Wills volume 1 (8 ed, 1951) at 485 – 486, and is also accepted as authoritative in Theobald on Wills (15 ed., 1993) at 471 – 472.

2 In the present matter, the principle of the “tomb cases” falls to be considered in a rather peculiar context. Richard Charles Milham left at his death on 27 August 1970 (which was prior to the appointed day for the purpose of any relevant application of the Perpetuities Act 1984 (NSW)) an estate then valued at just under $100,000 which has since grown in value to more than $1.5 million. By his will made on 11 January 1963, he appointed Bryan Rush and Kevin Joseph Slocum, chartered accountants, to be his executors and trustees and devised and bequeathed the whole of his estate to them upon the usual trust for conversion, with power to postpone, directing them to hold the proceeds as follows:

“(a) UPON TRUST to pay thereout my debts funeral and testamentary expenses
(b) UPON TRUST to invest the residue after such payment in their names in any investments authorised by law for the investment of trust funds and to stand possessed of such investments and all parts of my estate for the time being unsold (hereinafter called my ‘residuary estate’)
(c) UPON TRUST as to the whole of the first year’s income to erect a small headstone and turf grave No. 873 in the Botany Cemetery in which I am to be buried and to stand possessed of the balance of the income of the first year and the income from year to year UPON TRUST that they shall apply the same in keeping the said grave No. 873 and my parents [sic] grave No. 379 in the said Botany Cemetery in good order and repair and I request that they will keep in good order and repair the grave and gravestones of my father and mother and of myself and will keep the lettering thereon legible and will cause the same to be recut from time to time for that purpose and I also request that Mrs N. M. Kerr be buried in grave No. 874 and that my Trustees keep this grave in good order and repair in conjunction with grave No. 873 AND I DECLARE that if at any time prior to the expiration of twenty one years from the death of the last survivor of the issue of His late Majesty King George VI living at my death the said graves or gravestones or either of them be not in good order and repair or the lettering be not legible or be not recut as aforesaid or if in the opinion of my Trustees or Trustee for the time being of this my Will it is impossible or impracticable to keep in good order and repair the said graves and gravestones then the balance of the said income and the whole of my residuary estate shall be paid and transferred to the Prince Henry Hospital Little Bay near Sydney to be applied by the governing body thereof for the refurbishing or providing new beds equipment or amenities for Ward 1 Block 2 of the said Hospital in memory of my wife Rose Annie Milham who died there on the Eighteenth day of December One thousand nine hundred and fifty-eight. “

3 Probate of the will was granted to the executors on 12 December 1972, and thereafter Bryan Rush, and two substituted trustees, retired from the trust or died. On 9 March 2000 Kevin Joseph Slocum, then the sole trustee, transferred the trust assets to the plaintiff, having formed the opinion that it was “impracticable to keep in good order and repair the said graves and gravestones” referred to in the will. The plaintiff is by statute the successor to the Prince Henry Hospital which did still exist and function as such at the time of the death of the deceased. It is presently being wound down, so that the refurbishing of the ward referred to in the will cannot be contemplated. If the gift to the hospital is otherwise good, the plaintiff seeks to have it applied cy-près for the purposes of an oncology ward (patients suffering from cancer, including Mrs Milham, were treated in Ward 1 Block 2 at Prince Henry Hospital) to bear her name in the Prince of Wales Hospital. The Attorney-General supports this course.

4 The anomalous validity, provided no perpetuity is involved, of a trust for the purpose of the maintenance of a tomb not forming part of a church does not affect this case. For the trust for the maintenance of particular graves in Botany Cemetery is expressed as a perpetual trust. It is true that, later in the will, the draftsman does advert to the rule against perpetuities, as is indicated by his use of a common device for the postponement of vesting for as long as possible in relation to the gift to the Prince Henry Hospital. But unless one of the contingencies to which that gift is subject were in fact to occur within the period stated, the trust for the upkeep of the graves would, if valid, continue forever. Therefore it seems to me this provision with respect to the graves cannot stand. Although Scott on Trusts (4 ed., 1989) volume IVA section 374.9 (and see also Re Spehr [1965] VR 770 at 773 –774) accepts the validity as a charity of “a trust to erect and maintain a monument to a person of note” (General Stonewall Jackson is given as an example), there is otherwise no doubt that such a gift is not charitable, so that it must comply with the rule against perpetuities; and even in the case of prominent persons, trusts of this kind have failed: Thomson v Shakespear (1860) 1 De G F & J 399 at 407 (a gift to establish and maintain a museum at Shakespeare’s birthplace was regretfully held by Lord Campbell, Knight Bruce LJ and Turner LJ agreeing in the result, to be perpetual in nature, and, as such, “a perpetuity [which] not being a charity [was] void”); Re Jones (1898) 79 LT 154 (a disposition for a monument to the philosopher John Locke held void on the same basis). Numerous cases support the view taken by Long Innes J in Pooley v The Royal Alexandra Hospital for Children at 463 – 464 that a “gift for building a monument or tomb, not forming part of the fabric or ornament of a church”, which the testator intends “should constitute a perpetual memorial”, is a gift that “fails as a perpetuity, not being a charity”. The decision of Long Innes J was followed by Needham J in Pedulla v Nasti. Accordingly, the provision in the will for the upkeep of the graves is void.

5 Although the terms of the will involved in Pedulla v Nasti, like those that were held invalid in Pooley v The Royal Alexandra Hospital for Children, required the entire provision for the building and maintenance of the monuments there in question to be treated as one disposition which was wholly void, it is, of course, possible to have separate provisions with respect to the establishment of a grave and its subsequent maintenance. In Re Filshie [1939] NZLR 91 a trust for the erection of a monument was held valid, although provision for its maintenance conflicted with the rule against perpetuities and was invalid. In the present case, paragraph (c) of the will begins with a trust of the first year’s income for the purpose (as to part) of the erection of “a small headstone and turf grave”, and then continues with a provision which is separately expressed, as a matter of language, for the maintenance of that and two other graves. No special argument was addressed to the Court on this point, but I would interpret the initial provision for erection of a small headstone and turf grave as a separate trust not involving any perpetuity. It seems clear that the amount involved would, in any case, not be large.

6 The trust for the upkeep of the graves being void, what is the position with respect to the trust in favour of the Prince Henry Hospital? Except where a prior limitation is also charitable, a gift to charity to take effect in the future must take effect within the period allowed by the rule against perpetuities: Tudor on Charities (8 ed., 1995) 139; Chamberlayne v Brockett (1872) LR 8 Ch 206 at 211. In this case, the prior limitation is not to a charity, and its want of charitable purpose is part of the reason for its invalidity. However, the gift to the charity is made upon the fulfilment of any of several conditions the fulfilment of any of which must occur, if it is to occur at all, within the perpetuity period. That is because each of the conditions is governed by the opening expression of this part of the will “if at any time prior to the expiration of twenty one years from the death of the last survivor of the issue of His late Majesty King George VI living at my death”. It is true that the repetition of the word “if” in the expression “if in the opinion of my Trustees or Trustee for the time being” is not in strict accordance with the syntax appropriate for the expression of this meaning, but no other understanding of the will would make sense, and the more important feature of the syntax, in any case, is the grouping of the relevant opinion with the other conditions before the expression of the result of fulfilment of one of those conditions by the words “then the balance of the said income and the whole of my residuary estate shall be paid and transferred to the Prince Henry Hospital”.

7 If the conditions which would come into effect, according to the terms of the will, upon a failure by the trustees to carry out the requirements of the void trust be put on one side, there would remain for consideration the condition which depends upon the performance of the duty or power conferred upon them by the will to form an opinion. So far as concerns the conditions which might be fulfilled by a failure to perform the void trust, it may be, to use the word chosen by Harman J (as he then was) in Re Martin [1952] WN (English) 339 at 340, that there is some “subtlety” displayed in the authorities; cf, on the one hand, Re Dalziel (1943) 1 Ch 277 at 279 – 280 (I have cited the pages where the ratio decidendi appears to be expressed – the rest of the judgment relates to a “further question [which] was also fully argued”) and, on the other, Re Chardon [1928] 1 Ch 464; Re Tyler [1891] 3 Ch 252; and Re Martin. See also, as to Re Chardon, William O. Hart: Some Reflections on Re Chardon (1937) 53 L.Q.R. 24 et seq; The Upkeep of a Tomb [1950] L. Jo. 524; and the discussion of Re Chardon in the Canadian case Re Oldfield (No.2) [1949] 2 DLR 175 at 185-187. But the condition dependent upon the opinion of the trustees or trustee raises a question closely analogous to that which arose in ThePublic Trustee v Nolan (1943) 43 SR(NSW) 169, a decision of Roper J. In that case, the testator provided for a trust of his residuary estate, the income of which was to be paid during their lives to his brothers and sisters, and upon the death of the last survivor of them (as is set out at 170) his trustees were to pay to his nieces “who may be alive and unmarried at the date of the death of such last survivor of my said brothers and sisters…the sum of fifty-two pounds (£52) per annum so long as such niece is alive and unmarried and to pay the balance of the income from my said residuary trust estate…to the trustees of the National Art Gallery of New South Wales and upon the death or marriage of the last surviving unmarried niece I direct my trustees to stand possessed of my said residuary trust estate… and the income thereof upon trust to erect a carillon…and as regards any unexpended balance of my said residuary trust estate and should my trustees not deem it advisable or practicable to erect or join in erecting such carillon then as regards the whole of my residuary trust estate I direct my trustees to stand possessed of the same…upon trust for the trustees of the National Art Gallery of New South Wales… .” Roper J referred (at 173) to the provision that “should the trustees ‘not deem it advisable or practicable to erect or join in erecting the carillon’ then the whole of the fund is to be held on trust for the trustees of the National Art Gallery”. His Honour said:

“If by law the trustees of the will are not permitted to erect or join in erecting the carillon [which, of course, was the case, since the trust for that purpose was not a charitable trust and was therefore void] then it appears to me that they have no discretion but must ‘not deem it advisable or practicable’ to do so; and, therefore, must hold the whole of the fund for the trustees of the National Art Gallery. The effect of the will therefore would be if there were no interests prior to the carillon purpose that the interests [ scilicet interest] of the trustees of the National Art Gallery would be an immediate vested interest in the whole fund. The purported discretion of the trustees not being capable of being exercised against them their interest would not be an executory bequest but an immediately vested one.”

8 The actual decision in The Public Trustee v Nolan was more complex than the passage I have cited from the judgment would suggest. That was because the last surviving unmarried niece, referred to in the dispositions prior to the carillon trust and the ultimate National Art Gallery trust, would not necessarily be a life in being for the purpose of the rule against perpetuities. Therefore, if the interest of the National Art Gallery could only become a vested interest, as Roper J put it at 173, “upon the exercise by the trustees of the will of a discretion to be exercised after the death or marriage of the last surviving unmarried niece, it would be too remote”. But he held that the “vesting of the gift in the trustees of the National Art Gallery [was] not dependent on the exercise of such a discretion”. He reached this conclusion because the gift for the carillon purpose was “void apart altogether from the rule against perpetuities” so that, subject to the earlier trusts, the trustees held the whole fund for the National Art Gallery, making its interest “a presently vested interest”. In order to understand his Honour’s reasoning, it is necessary to bear in mind that the rule against perpetuities would have been relevant to a vesting in interest if that could possibly have occurred, by reason of an exercise of the trustees’ power not to deem it practicable to erect a carillon, after the death of the last niece and therefore possibly after the expiry of the last relevant life in being and twenty one years. But what Roper J held was that the invalidity of the carillon trust meant the trustees could only ever deem one thing - that it was not “practicable” to carry out the carillon trust. When his Honour said, as he did at 173, that the gift for the carillon purpose was “void apart altogether from the rule against perpetuities”, it was the application of the rule against perpetuities by reason of the inclusion of a niece who might not be a relevant life in being to which he was referring.

9 As appears from the foregoing analysis, the foundation of the decision in The Public Trustee v Nolan was the view that the condition expressed by the words “should my trustees not deem it advisable or practicable to erect…such a carillon” could not possibly be fulfilled outside the perpetuity period because, the carillon purpose being invalid as a non-charitable purpose, the trustees were bound immediately to deem it not advisable or practicable to carry out that purported trust, with the result that the gift to the trustees of the National Art Gallery vested in interest independently of the prior limitation in favour of the testator’s nieces. The question is whether that reasoning is applicable to the present case.

10 In the will with which I am concerned, a condition of the Prince Henry Hospital’s interest vesting is “the opinion of my Trustees or Trustee for the time being [that]…it is…impracticable to keep in good order and repair the said graves and gravestones”. The trust expressed to be constituted for this purpose is no less invalid than the carillon trust to which Roper J referred in The Public Trustee v Nolan. In Re Norton (1948) 64 TLR 582 at 583 (this case is also reported sub nom Re Norton’s Will Trusts [1948] 2 All ER 842), Jenkins J said, of a provision in a will “for keeping in repair [certain] graves” not in a church:

“The consequence of its invalidity is that this passage in the will is ineffective, and the council [of a legatee charity] cannot lawfully make any provision for that purpose”.

11 So far as concerns the question of a vesting, by virtue of the opinion of the trustee, independently of any prior limitation avoided by the rule against perpetuities, this aspect of the reasoning of Roper J in The Public Trustee v Nolan was essential because of the rule that “every limitation on the failure, or expectant on the determination, or in defeasance, of a limitation void under the rule against perpetuities, is void”: Halsbury 4 ed., Vol 35 (reissue, 1994) section 1088. The “true explanation of the rule” is stated by Farwell J in Re Canning’s Will Trusts [1936] Ch 309 at 313, quoting earlier authority, in the following terms:

“It is settled that any limitation depending or expectant upon a prior limitation which is void for remoteness is invalid. The reason appears to be that the persons entitled under the subsequent limitation are not intended to take unless and until the prior limitation is exhausted; and as the prior limitation which is void for remoteness can never come into operation, much less be exhausted, it is impossible to give effect to the intentions of the settlor in favour of the beneficiaries under the subsequent limitation.”

Farwell J, however, made it clear that association with a prior invalid limitation was not the same thing as dependency or expectancy upon it. With regard to the particular will before him, he concluded (at 314):

“In the present case, if on the true construction of the will the gift of the personalty to the persons who take the real estate is dependent upon and ulterior to the trust which immediately precedes it, then that gift is clearly bad. If, on the other hand, on the true construction of this will, the gift of the personal estate is independent of the earlier trust although intended to be made subject to it, then, in my judgment, the trust for the persons entitled to the real estate is good, notwithstanding that there is intended to be imposed upon it a qualification which is itself ineffective, because the ultimate gift of the personal estate is not a limitation dependent upon or ulterior to the earlier trust.”

This decision was applied by Clauson J in Re Coleman [1936] Ch. 528, which involved a will establishing discretionary trusts in a share of residue for a son of the testator, W, during his life, and after his death, for any widow he might leave and for all or any of his children, after the death of his widow the share of residue being left upon trust for his children in equal shares. Clauson J held that although the discretionary trust in favour of W’s widow was void for remoteness, as he might marry a woman not born at the death of the testator, the ultimate trust in favour of his children being vested, and not contingent or dependent on the void trust, was valid. His Honour said (at 535), of Re Canning’s Will Trusts:

“That case is a crucial example of the principle that the mere fact that a limitation follows upon a prior void limitation is insufficient to invalidate it, where the operation of the limitation which it is sought to impeach is (on the true construction of the document creating the limitation and excluding for this purpose all considerations of perpetuity) wholly independent of the earlier trust, though intended to be made subject to it. Where, as in the present case, with which I am dealing, the limitation which it is sought to impeach creates a future interest which becomes vested in interest (though not in possession) within the limits of the rule against perpetuities and cannot in any event be subsequently divested by the operation of the earlier trust, it would be entirely inconsistent with the principle on which the decision in Re Canning’s Will Trusts proceeds to hold such a future interest to be adversely affected by the invalidity of the trusts which it follows, but of which it is wholly independent.”

This statement of the law was in turn applied by Danckwerts J in Re Allan [1958] 1 WLR 220, where trusts during the widowhood of a named person were followed by a provision that “[o]n the determination of the trusts hereinbefore declared” the estate should go in stated shares to two charities. It was held that the trusts during the widowhood were void both for uncertainty and under the rule against perpetuities, but that the gifts to the charities were gifts that vested in interest although they did not take effect in possession until the death of the widow.

12 Similarly, in Re Davey [1915] 1 Ch. 837 the Court of Appeal, having held a trust created by a will for the first son who shall attain twenty-one of any daughter of a named nephew of the testator to be void for remoteness, nevertheless considered to be valid a succeeding provision of the will:

“And in case of the death of the said [nephew] without leaving lawful issue as before mentioned Then as to the whole [of my residuary estate] Upon trust to pay thereout to the Treasurer for the time being of the Wesleyan Foreign Missionary Society…”.

Joyce J (with whom Lord Cozens–Hardy MR agreed, and Phillimore LJ generally agreed) said (at 844):

“If this limitation upon trust for the charities is to be read in any manner so as to mean simply in default of the preceding limitations taking effect, it is manifestly void [because so limited as to be dependent upon the previous limitation which is void as too remote]…. But in my opinion it ought not to be so read. We must construe the limitation as we find it, we may not alter the words. Especially is it not admissible to do this in order to make the limitation obnoxious to the rule against perpetuities and so void.”

Lord Cozens-Hardy MR, in agreeing, also added (at 846):

“I regard the fourth gift [the gift to the Wesleyan mission and another charity] as a new departure, an independent and alternative gift.”

13 In the present case, the gift to the hospital, far from being dependent or expectant upon the invalid trust, takes effect immediately to supplant the invalid trust by virtue of the opinion of the trustees or trustee, an opinion which, in accordance with the decision of Roper J, they must hold from the time the trusts take effect. That the opinion itself draws upon the rule invalidating a perpetual non-charitable trust of this kind does not detract from the conclusion that the charitable gift is dependent upon the opinion, whatever its basis, not upon the void prior limitation for the perpetual upkeep of the graves. Nor is that conclusion affected by the presence in the will of alternative conditions upon which, according to its terms, and apart from any question under the rule against perpetuities, the gift to the hospital could vest in interest. Those conditions are that “the said graves or gravestones or either of them be not in good order and repair or the lettering be not legible or be not recut as aforesaid”. It may be that conditions so framed derived from a muddled, or at any rate defective, attempt to adapt a form of trust taken from that, using similar language, which was given some effect in Re Martin. But even if these conditions are so related to the invalid trust as to be obnoxious to the rule against perpetuities, their presence does not taint the good condition on which the gift to the hospital depends. For it is stated in Halsbury (ibid) at section 1082:

“A single gift which is expressed to be limited contingently on one or other of two or more separate events, of which one is too remote under the rule and the other not, may take effect on the latter contingency, even though void so far as it depends upon the former.”

So, if the alternative conditions should be construed as dependent upon the invalid trust because they would be expected to arise only upon an insufficient performance of it, that would not affect the valid operation of the independent opinion to which I have referred.

14 The point has been raised in several of the authorities. In Cambridge v Rous (1858) 25 Beav. 409; 53 ER 693, there was a bequest to trustees for A for life, and after her decease to divide between her children when they should attain the age of twenty-seven, and in the event of A not leaving any children at her death, then over. A had no issue in fact, and it was held by Sir John Romilly MR (at 414; 695) that the gift over was not too remote because “the other branch of the alternative…is perfectly good”, although the first branch was void for remoteness. Where a will did not similarly differentiate, in Re Harvey (1888) 39 Ch D 289, Cotton LJ said (at 298):

”[T]he testatrix must herself have separated it so as to make it take effect on the happening of either of two events.”

And Fry LJ said (at 299):

“The true inquiry is whether the testatrix refers to one event or to two distinct events.”

That reasoning was applied by Morton J (as he then was) in Re Curryer’s Will Trusts [1938] Ch. 952, where he held that words in a will “on the decease of my last surviving child or on the death of the last surviving widow or widower of my children” adequately expressed alternative events, and that the addition of the words “whichever shall last happen” did not (as his Lordship said at 956) prevent an ultimate gift of capital being valid “if the death of the testator’s last surviving child happens after the death of the last surviving widow or widower of a child of the testator”, notwithstanding that the other alternative was void as a perpetuity.

15 By the terms of the will, the only disposition of the capital of the residuary estate is the disposition, upon fulfilment of one of the stated conditions, in favour of the hospital. But so far as the income is concerned, it is necessary to consider whether a problem is raised under either the first or the second of the principles summarised by Jenkins J in Re Coxen in the passage I have quoted earlier in these reasons, the second, where it strikes an instrument, being fatal as was lucidly explained by Kay J in Re Taylor (1888) 58 LT 538 at 542 and by Eve J in Re Porter [1925] Ch. 746. There will be no such problem if either the third principle, the exception established by the “tomb cases”, or the fourth principle, the general exception where the gift should be construed as including the income subject to the payments thereout required to give effect to the non-charitable purpose, has application in this case. In my opinion, both these latter principles apply.

16 As regards the construction question, this will does not simply provide for part of the fund to be laid out upon the invalid purpose and part upon the charitable purpose; conditionally upon the opinion which I have held the trustees were bound to reach from the outset, and subject only to the provision for “a small headstone and turf grave” which is in terms limited to the first year’s income, this will provides for the whole to go to the charity. Quite apart from my conclusion that the condition must be regarded in law as satisfied at the outset, the terms of the will certainly contemplate that it might be so satisfied, for the possible time of its satisfaction is expressed by the words “if at any time prior” to a date in the future. The words expressing the gift are then: “the balance of the said income and the whole of my residuary estate shall be paid and transferred to the Prince Henry Hospital” for the purpose specified. The word “balance” must comprehend the unexpended balance of the first year’s income and also all the income of subsequent years. Upon condition that the opinion be reached, the words “shall be paid and transferred to” suggest, as counsel submitted, that the gift had already vested in interest and was now to be vested in possession. Thus the case is like Kelly v Attorney-General [1917] 1 IR 183, where O’Connor MR held (at 190) that the entire gift was devoted to the final and valid charitable purpose, “subject to whatever may be required for the [non-charitable] purpose”. One of the bases of the decision of Jenkins J in Re Norton was a similar view (stated at 583) that “the testator has devoted the whole of the legacy to charitable purposes, and has then empowered the trustee of the legacy to apply a part of it to the particular non-charitable purpose of keeping in repair two specified graves”. His Lordship held the power to do so should “simply be ignored” and that “[a]ny amount which they might have spent on this object, had it been a valid charitable object, will be available for the general charitable purpose to which the legacy as a whole is subjected”.

17 But, alternatively, Jenkins J also held in Re Norton (at 584) that the same result followed from an application of the “tomb cases”, that is, upon the third of the principles which he had set out in Re Coxen. In Re Norton (ubi supra) he said:

“That principle is [in Re Dalziel ] explained as being that a provision for the repair of a tomb is to be regarded as imposing only a moral obligation. I am therefore warranted in so regarding the provision here in question, even if it should be construed as imperative and not merely precatory in character. On this principle the merely moral obligation, being one which cannot be validly carried out, should simply be ignored, and the testator’s disposition in favour of valid charitable objects should be treated as extending to the whole of the subject-matter of the gift.”

The view expressed by Cohen J in Re Dalziel (at 281), that “the real foundation of the tomb cases is that the court felt itself able to construe the provision in the various wills as to the upkeep of the tombs as imposing only a moral obligation”, is also accepted in Halsbury vol 5 (2) (4 ed., 2001 reissue) at footnote 15 to section 54, where it is stated:

“The principle on which this class of cases is to be distinguished from the class…in which the charity took only the surplus after the amount necessary for the invalid object had been ascertained, and not the entire fund, is that the direction for the upkeep of the tomb created only a moral obligation.”

In addition to Re Dalziel, Halsbury refers to Re Rogerson [1901] 1 Ch. 715, where Joyce J (at 719) described the repair of a tomb as “a moral obligation”, citing the early case Dawson v Small (1874) LR 18 Eq 114 in which Bacon V-C said “the obligation to keep up the tombstones is merely honorary; but the obligation to give all that is not applied for the purposes first mentioned in favour of these poor people, is by no means honorary; it is a trust that must be executed.”

18 The explanation of the tomb cases as resting upon a merely moral obligation is peculiarly consonant with the terms of the will in question in the present case. For although it does contain some language which, in a different context, would imply a normal trust, that language is immediately followed by the expression “and I request that they [i.e. the trustees] will keep in good order and repair the grave and gravestones of my father and mother and of myself…and I also request that Mrs N. M Kerr be buried in grave No. 874 and that my Trustees keep this grave in good order and repair in conjunction with grave No. 873”. This is plainly precatory language comparable to, though not identical with, that which led Jenkins J in Re Norton to hold that the repair of the tomb there in question did not trench upon the charitable purposes with which it was associated in the will he was considering. In my opinion, the same result follows here, and although this will is not precisely in the form of the wills involved in the line of “tomb cases” stemming from Fisk v Attorney-General, their principle does apply to it. That principle is stated in volume 5 (2) of Halsbury, previously cited, at section 54 in terms which can fairly be extended to the trusts of the will of Richard Charles Milham:

“Where a fund is bequeathed to trustees upon trust out of the income to keep a tomb not forming part of a church in repair, and as to the residue, surplus, balance or remainder, upon trust for charitable objects, the gift is construed as a bequest of the whole fund charged with a gift that fails, and not as a gift of the residue after a void gift, and accordingly the whole fund, including the amount necessary to satisfy the invalid object, is applicable to the valid charitable object.”

19 The remaining question is whether the plaintiff is entitled to the benefit of the gift to the Prince Henry Hospital. The plaintiff has been designated by statute as the successor of that hospital. Furthermore, the evidence makes it clear that the gift cannot be applied by the Prince Henry Hospital, as the will provides, “for the refurbishing or providing new beds equipment or amenities for Ward 1 Block 2 of the said Hospital in memory of my wife Rose Annie Milham who died there on the Eighteenth day of December One thousand nine hundred and fifty-eight”, because that ward’s functions are in the process of being transferred to the Prince of Wales Hospital. A cy-près scheme for the devotion of the bequest to similar purposes associated with an oncology ward at the Prince of Wales Hospital is proposed by the plaintiff and supported by counsel for the Attorney-General: see Tudor on Charities (8 ed., 1995) 391 et seq; Re Pettit [1988] 2 NZLR 513 at 546-547. In my opinion this is appropriate, and I shall make orders accordingly. I direct that the plaintiff bring in on a date to be fixed appropriate short minutes to reflect these reasons.

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Last Modified: 12/03/2003