State Trustees Ltd v Attorney-General (Vic)
[2013] VSC 117
•22 March 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PROBATE LIST
No. 5536 of 2012
| STATE TRUSTEES LTD (ACN 064 593 148) | Plaintiff |
| v | |
| ATTORNEY-GENERAL FOR THE STATE OF VICTORIA | Defendant |
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JUDGE: | McMillan J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 February 2013 | |
DATE OF JUDGMENT: | 22 March 2013 | |
CASE MAY BE CITED AS: | Re Salvana; State Trustees Ltd v Attorney-General (Vic) | |
MEDIUM NEUTRAL CITATION: | [2020] VSC 117 | |
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CHARITABLE TRUST — Gift for preservation and conservation of native Australian flora and fauna — Trust for ‘advancement of education’ — Trust for purposes ‘beneficial to the community’ — Statute of Charitable Uses 1601, 43 Eliz 1, c 4, Preamble
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S. Marantelli | State Trustees Ltd, Legal Branch |
| For the Defendant | Mr R. McInnes, solicitor | Victorian Government Solicitor’s Office |
HER HONOUR:
Background
Victor Enrico Salvana (‘the deceased’) died on 15 December 1982, leaving a will dated 22 May 1969. Probate of his will (‘the will’) was granted to State Trustees Limited (‘STL’) on 19 August 1983.
By cl 4 of his will, the deceased left the residue of his estate on trust as follows:
a) to his sister, Alma, a life interest in what had been the deceased’s home at 9 Springvale Road, Nunawading;
b) to Alma and his brother, Louis, a life interest in the net income from the balance of the residuary estate;
c) upon the death of the survivor of Alma and Louis, the net income to his nephew, John, and his niece, Rita, for not more than 15 years from the death of the survivor of Alma and Louis; and
d) upon the expiration of the 15 years:
UPON TRUST to provide for the purchase or provision of an area of land in the Otway Ranges or the district known as the Little Desert or such similar area as my Trustee may deem appropriate to be used as a park or reservation or sanctuary for the purpose of the preservation and conservation of native Australian flora and fauna.
The deceased was survived by his sister, Alma, his nephew, John, and his niece, Rita. His brother, Louis, predeceased the deceased on 8 December 1974.
John died on 27 January 1987, Rita died on 21 July 1990 and Alma died on 28 August 2009, aged 102 years. The effect of this order of deaths in the family was that the gifts to John and Rita never took effect.
As at 12 February 2013, the residue of the estate comprised $948 687.67.
The Trustee’s Application
STL makes an application pursuant to rr 54.02(2)(a)(i) and (c)(i) of the Supreme Court (General Civil Procedure) Rules 2005, seeking:
a) a declaration that the gift of the residue ‘for the purchase or provision of an area of land … to be used as a park or reservation or sanctuary’, referred to in cl 4(b) of the deceased’s will, is a gift for charitable purposes; and
b) an order that the net residue of the deceased’s estate be distributed to the Australian Trust for Conservation Volunteers (ABN 93 006 058 135) (‘CVA’) for the purpose of purchasing or providing an area of land in the district known as the Little Desert to be used as a park, reservation or sanctuary for the purpose of the preservation and conservation of native Australian flora and fauna in accordance with the purposes and objects of the trust as set out in cl 4(b) of the deceased’s will.
The application is supported by the following affidavits:
a) three affidavits of Rebecca Ann Carroll-Bell, a solicitor employed by STL, affirmed 28 September 2012, 27 November 2012 and 23 January 2013; and
b) an affidavit of Colin John Jackson, the Chief Executive Officer and an ex officio member of the Board of CVA and Conservation Volunteers New Zealand, sworn 26 November 2012.
Is the Gift of the Residue of the Estate for Charitable Purposes?
The first issue to be determined is whether the gift for the ‘preservation and conservation of native Australian flora and fauna’ is a gift for charitable purposes.
The legal definition of ‘charity’ derives from the list of purposes found in the Preamble to the Elizabethan Statute of Charitable Uses 1601 (‘the Act’).[1] In substance, there are four categories of charitable trusts. These categories were described in Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531, 583 by Lord Macnaghton as follows:
’Charity’ in its legal sense comprises four principal divisions: 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 preceding heads.
[1] 43 Eliz 1, c 4.
Regardless of the category, the concept of public benefit is a foundational requirement for a trust to be charitable. In the case of the first, second and third categories, the requirement of public benefit is presumed.[2] In the case of the fourth category, it must be proved. The fourth category recognises charitable purposes that do not fall within the first three heads of charity. It is a more indeterminate category, lacking a clearly discernible connecting theme.[3] The stated purpose of the gift must be within the spirit and intendment of the Preamble to the Act.[4] The classes of gifts that fall within the spirit and intendment of the Preamble are not closed.[5]
[2] National Anti-Vivisection Society v Inland Revenue Commissioners [1948] AC 31, 65 (Lord Simonds). See also at 42 (Lord Wright).
[3]Barby v Perpetual Trustee Co Ltd (1937) 58 CLR 316, 324 (Dixon J).
[4]Royal National Agricultural and Industrial Association v Chester (1974) 3 ALR 486.
[5] G E Dal Pont, Law of Charity (LexisNexis Butterworths, 2010) 20.
Counsel for STL submitted that the gift of the residue of the estate of the deceased fell within the second or the fourth category, or both categories, of charities — for the advancement of education, and for purposes beneficial to the community.
The Attorney-General for the State of Victoria, who represents charity, saw no reason to oppose the application. Counsel for the Attorney-General endorsed the submissions made by counsel for the applicant on the question whether the gift of the ultimate residue was charitable.
Purposes Beneficial to the Community
Counsel for STL submitted that the words ‘preservation and conservation of native Australian flora and fauna’ used by the deceased in his will demonstrated a clear testamentary intention to provide a purpose beneficial to the community and were within the spirit and intendment of the Preamble to the Act. In support of the former submission, counsel referred to what Dixon J said of the fourth category in Barby v Perpetual Trustee Co Ltd:
It is no more than a final class into which various objects fall that are not comprised in the first three classes, but are nevertheless charitable. It has been found impossible to give an exhaustive definition of what amounts to a charitable purpose, but the authorities indicate the attributes that are to be looked for. The gift must proceed from altruistic motives or from benevolent or philanthropic motives. It must be directed to purposes that are for the benefit of the community or a considerable section or class of the community. The purposes must tend to the improvement of society from some point of view which may reasonably be adopted by the donor. The manner in which this tendency may be manifested is not defined by any closed category. It is capable of great, if not infinite, variation. It may be by the relief of misfortune; by raising moral standards or outlook; by arousing intellectual or aesthetic interests; by general or special education; by promoting religion; or by aiming at some other betterment of the community. The purposes must be lawful and must be consonant with the received notions of morality and propriety.[6]
[6] (1937) 58 CLR 316, 324.
Counsel submitted that a gift for the ‘preservation and conservation of native Australian flora and fauna’ falls within the description of the fourth class by Dixon J in Barby v Perpetual Trustee Co Ltd. It was submitted that such a purpose was for the ‘the benefit of the community … [tended] to the improvement of society … [aroused] intellectual or aesthetic interests; [and provided] general or special education … by aiming at some other betterment of the community’.
In support of his submissions, counsel referred to a number of cases involving animal sanctuaries, the protection of animals and the environment: Re Wedgwood;[7] Re Ingram;[8] and Attorney-General (NSW) v Sawtell (‘Sawtell’).[9]
[7] [1915] 1 Ch 113.
[8] [1951] VLR 424.
[9] [1978] 2 NSWLR 200.
The protection or preservation of animals has generally been upheld as a charitable object. A classic statement of the benefit arising from animal protection or preservation is set out in Re Wedgwood, where Swinfen Eady LJ said:
A gift for the benefit and protection of animals tends to promote and encourage kindness towards them, to discourage cruelty, and to ameliorate the condition of the brute creation, and this to stimulate humane and generous sentiments in man towards the lower animals, and by these means promote feelings of humanity and morality generally, repress brutality, and thus elevate the human race.[10]
[10] [1915] 1 Ch 113, 122.
In Re Ingram, Smith J held that the purposes described in cl 6(a) of the will in that case were wholly charitable. Clause 6(a) read:
For the benefit of the public of Australia to preserve animals (being mammals) and birds indigenous to Australia but particularly to Victoria, and the indigenous flora that provides cover food and general conditions suitable for the life habits and preservation of such animals and birds.[11]
[11] [1951] VLR 424, 426–7.
The leading case on point in modern times is Sawtell.[12] In that case, the deceased left the residue of her estate ‘to the preservation of native wild life (both flora and fauna)’ and directed her trustees to make donations to organisations concerned with the promotion of the preservation of wild life.[13] Holland J held that the gift had a charitable purpose and was a valid charitable trust in respect of both native flora and fauna. He considered that:
the use of the words ‘preservation’ and ‘native’ indicate more than a concern for animal welfare, namely, a concern for the welfare of the community in saving our indigenous wild life from being devoured up by the sometimes thoughtless and often greedy advances of mankind across the land.[14]
He also said that the word ‘preservation’ imported an intention to save native life from destruction or extinction[15] and took notice of the fact that the object of preserving ‘native’ Australian wild life was a purpose beneficial to the community.[16] Holland J held that the gift came within the spirit and intendment of the Preamble: ‘The aspects of public benefit … incidental to or as flowing from the preservation of native wild life have characteristics which match in spirit purposes stated in the Preamble’.[17]
[12] [1978] 2 NSWLR 200. See Campbell v Sherwell [1999] VSC 508 (15 December 1999) [20].
[13]Attorney-General (NSW) v Sawtell [1978] 2 NSWLR 200, 200.
[14] Ibid 220.
[15] Ibid 216.
[16] Ibid 209.
[17] Ibid 214.
Counsel for STL also referred to the decision of Re Green,[18] where the will provided for a gift to fund the purchase and establishment of a large and suitable area of land for the purpose of establishing native flora and fauna without hindrance. Anderson J held that the gift was not a charitable gift because the benefit to the community would not necessarily result from applying the gift to the indicated purpose.[19] His Honour followed Re Grove-Grady,[20] where it was held that a trust to provide an animal refuge in which animals were free to prey on one another without human contact was not for a charitable purpose.
[18] [1970] VR 442.
[19] Ibid 446.
[20] [1929] 1 Ch 557.
In Sawtell, Holland J concluded that since Re Grove-Grady was decided ‘there has been a radical change in the recognition throughout the world, and here in Australia, of value to mankind of the preservation of wild life in general’.[21] Of Re Green his Honour said that he was unable to agree with the conclusion and he declined to follow it.[22]
[21]Attorney-General (NSW) v Sawtell [1978] 2 NSWLR 200, 214.
[22] Ibid 219.
Finally, in Fellows v Sarina[23] the Court recognised the setting aside of land of high conservation significance ‘as a wildlife sanctuary [that] can be used by all my relations and their friends to picnic or camp thereon’[24] as charitable[25] and said:
a gift for the purpose of a wildlife sanctuary, can be a valid charitable trust in the technical sense, whether or not access by the public is permitted, since a gift for such a purpose, whether or not access by the public is permitted, can be a gift for a purpose which is both beneficial to the community and within the spirit and intendment of the Statute of Charitable Uses.[26]
[23] (Unreported, Supreme Court of NSW, Simos J, 9 May 1996).
[24] Ibid 3.
[25] The gift nevertheless ended up failing because the deceased failed to make provision for the cost of establishing and thereafter maintaining the sanctuary: ibid 18–19.
[26] Ibid 10–11.
In my view, the decisions in Re Wedgwood, Re Ingram, Sawtell and Fellows v Sarina reflect the modern law and Re Green and Re Grove-Grady do not.
The Advancement of Education
In respect of the second category, counsel for STL submitted that, although cl 4(c) of the will does not use the word ‘education’, it is important to look to the purpose of the gift to ascertain whether it has an educational purpose.
In the affidavit of Colin John Jackson filed in support of this application, Mr Jackson sets out in detail the education and conservation benefits to the public and the volunteers engaged by CVA.[27] These benefits are numerous and include the promotion and encouragement of educational camps, residential programs, leadership programs, study tours and training programs. CVA programs provide over 500 000 hours to community based conservation programs. All programs are open to all age groups, including the old, the young and the unemployed. They provide health based activities and educational training and awareness to improve the safety and management of programs. CVA also works with local communities and groups to build and enhance natural areas on both private and public land.
[27] Affidavit of Colin John Jackson sworn 26 November 2012, [64]–[70].
Conclusion
In my view, the gift of the residue of the estate of the deceased falls within both the second and fourth categories of the legal definition of ‘charity’ and is within the spirit and intendment of the Preamble to the Act.
In terms of the fourth category, the deceased’s will demonstrated a clear testamentary intention to provide a benefit to the public. The deceased did not limit the ultimate use of the land set aside under the will to any one group or section of the community; the gift is without any limitation and may be enjoyed by the public at large. There is no eligibility criterion for who might enjoy the benefits of the gift. The fact that the deceased intended there to be a ‘park or reservation or sanctuary’ reinforces the conclusion that the gift was for the public benefit, as these contribute to public recreation and health.
Counsel submitted, and I agree, that today there is increased public interest in the preservation of wild life, as increased urbanisation makes it more difficult to see and appreciate a country’s flora and fauna.
As regards the second category, the advancement of education, I consider that members of the public will stand to gain a better appreciation of natural ecosystems by observing the natural environment of a park, reservation or sanctuary. The preservation and conservation of native flora and fauna, in areas set aside for that purpose and open to the public at large, constitute an educative purpose, since they promote the enhancement of public learning and knowledge.
Distribution of the Net Residue of the Deceased’s Estate
Pursuant to the deceased’s will, STL is given the power to ‘provide for the purchase or provision’ of the land ‘as my Trustee may deem appropriate’. The affidavits affirmed by Ms Carroll-Bell detail the enquiries and information obtained by STL in searching for a suitable organisation that could fulfil the deceased’s wishes. Ultimately, STL determined that CVA is the best organisation to use the trust funds in a way that will accord with the deceased’s wishes.
Mr Jackson of CVA states that, if CVA receives any funds from the estate of the deceased, it will be used to establish a sanctuary or reserve in the terms set out in cl 4(c) of the will within the Little Desert area.[28] He states that CVA has enlisted the support of Parks Victoria[29] and the Trust for Nature,[30] and both have agreed to assist CVA in the identification of an area of land to meet the deceased’s wishes.
[28] Ibid [48]-[63].
[29] Parks Victoria is responsible for the protection of the Little Desert National Park.
[30] Trust for Nature is a not-for-profit organisation that works to protect native plants and wild life in co-operation with private landowners.
Subject to the approval of the board of CVA, Mr Jackson listed two alternative uses for the bequest, first, the purchase and protection of suitable land in the region for the establishment of a new conservation reserve and, secondly, to extend the protected area within the National Park by linking up two parcels of land already owned by CVA adjacent to the Little Desert National Park — the ‘Little Desert Lodge’, comprising 117 hectares, and ‘Mallee Fowl wildlife sanctuary’, comprising 295 hectares. Both alternatives allow for reserve maintenance and ongoing protection, including the establishment of a conservation covenant to ensure the reserve or sanctuary is protected in perpetuity. Mr Jackson also stated that CVA would work in conjunction with Parks Victoria and Trust for Nature towards the general conservation and protection of the relevant area. If there are any funds remaining after the purchase and establishment of a sanctuary or reserve, then those funds will be spent in further conservation and preservation of the reserve, its flora and fauna. In addition, CVA will undertake fundraising activities to generate additional funds and resources for the reserve or sanctuary.
I am satisfied on the evidence that the proposed use of the funds by CVA will fulfil the deceased’s testamentary intention.
Accordingly, for the above reasons, I declare and order as follows:
a) The gift of residue referred to in cl 4(b) of the deceased’s will dated 22 May 1969, whereby the ultimate residue of the estate was to be held:
UPON TRUST to provide for the purchase or provision of an area of land in the Otway Ranges or the district known as the Little Desert or such similar area as my Trustee may deem appropriate to be used as a park or reservation or sanctuary for the purpose of the preservation and conservation of native Australian flora and fauna
is a gift for charitable purposes and is within the spirit and intendment of the Act.
b) Pursuant to rr 54.02(2)(a)(i) and (c)(i) of the Supreme Court (General Civil Procedure) Rules 2005, the entire net residue of the deceased’s estate be distributed to the Australian Trust for Conservation Volunteers (ABN 93 006 058 135) for the purpose of purchasing or providing an area of land in the district known as the Little Desert to be used as a park, reservation or sanctuary for the purpose of the preservation and conservation of native Australian flora and fauna in accordance with the purposes and objects of the Trust.
c) The plaintiff’s and defendant’s costs of and incidental to the proceeding be had and retained, or paid, out of the net residue of the deceased’s estate on a solicitor–client basis.
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