Swaney v Austin Health
[2013] VSC 654
•21 NOVEMBER 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PROBATE LIST
No. S CI 2013 00888
| VINCENT JAMES SWANEY | Plaintiff |
| v | |
| AUSTIN HEALTH | First defendant |
| DEPARTMENT OF VETERANS’ AFFAIRS | Second defendant |
---
JUDGE: | BELL J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 NOVEMBER 2013 | |
DATE OF JUDGMENT: | 21 NOVEMBER 2013 | |
CASE MAY BE CITED AS: | Swaney v Austin Health | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 654 | |
---
WILLS AND ESTATE – construction of will – meaning uncertain or ambiguous – reference to extrinsic evidence – identity of beneficiary of gift to lost dogs’ shelter – whether gift for display of testator’s art and/or to provide cash prizes for art competition was for charitable purposes – identity of beneficiary of that gift – whether trust for charitable purpose survives presence of non-charitable purpose – whether gifts absolute – Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 54.02, Wills Act 1997 (Vic) s 36(1), Charities Act 1978 (Vic) pt 1B, s 7M.
---
APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Mr A Donald | Glenister Steinfort & Company |
| For the first defendant | Mr T Mah | Austin Health |
| For the second defendant | Ms E Tueno | Australian Government Solicitor |
HIS HONOUR:
Vincent James Swaney is the executor of the estate of George John William Duncan who died on 16 September 2011 leaving a handwritten will dated 2 September 2011. Mr Swaney applies, under r 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) for directions as to the construction of parts of that will.
By order of the court, Austin Health and the Secretary to the Department of Veteran Affairs were joined as parties to the proceeding as persons interested in the matters in issue.
The matters in issue have been defined by reference to ten questions which have been submitted for the court’s determination (see appendix). The parties agree as to the answers which should be given to the questions, with two exceptions.
The assistance of the court is sought in relation to the construction of the will in two particular respects:
(1) the meaning of the words ‘Thirty thousand dollars to the Lost Dogs’ Shelter, Villiers St. North Melb’
(2) the meaning of the words ‘The remainder donated to Repatriation for a possible gallery to display my art and/or a perpetual term deposit, the annual interest to provide cash prizes for winning paintings or art works entered in the annual Art Competition by T.P.I. Victorian adult war veterans’
In relation to the construction of the will in the first respect, there are two competing interpretations. The first, and in my view the intended meaning, is that the words refer to Animal Welfare League of Victoria, ACN 004 238 475, being the legal person operating under the name ‘Lort Smith Animal Hospital’ and situated at 24 Villiers Street, North Melbourne, Victoria. The second, and in my view the non-intended meaning, is the Lost Dogs’ Home at 2 Gracie Street, North Melbourne, Victoria.
It is not possible to identify the intention of the testator as to the meaning of these words from the language of the will alone. There is uncertainty or ambiguity on the face of the will. It is therefore permissible under s 36(1) of the Wills Act 1997 (Vic) to admit extrinsic evidence in order to assist in the interpretation of the will.
According to that evidence, the testator loved dogs. He left ‘$1000 to the person who will care for my dog’. He had a connection with the Lort Smith Animal Hospital. It is situated in Villiers Street opposite the Victorian Totally and Permanently Incapacitated Ex‑Servicemen and Women Association (‘the TPI Association’) with which he had a long association. He had no association with the Lost Dogs’ Home in Gracie Street.
Taking that evidence into account, I conclude that the words in the will should be interpreted to mean the Lort Smith Animal Hospital, ie the League as the operator of that hospital. Question 2 will be answered accordingly.
There is a question whether the gift to the League is an absolute gift. In my view we have here a clear and unambiguous gift in a specified amount in absolute and not conditional terms. Question 1 will be so answered.
In relation to the construction of the will in the second respect, it is first necessary to determine the meaning of the word ‘Repatriation’. That word is susceptible to a number of different interpretations.
Here too it is necessary to have regard to extrinsic evidence. That evidence reveals that the testator was a war veteran who had a long association with the Heidelberg Repatriation Hospital and, specifically, with the Story Writing and Art Competition which was conducted annually at the hospital for ex-servicemen and women. In using the word ‘Repatriation’ I think he was referring to that hospital. I note that it is located near to where he lived.
The Heidelberg Repatriation Hospital was amalgamated with the Austin Hospital to form the Austin and Repatriation Medical Centre on 1 April 1995. The centre changed its name to Austin Health – the first defendant – on 30 April 2003. In accordance with the established principles of interpretation, the language of the will should be interpreted to specify Austin Health as the successor of Heidelberg Repatriation Hospital.[1] Question 4 will be answered accordingly.
[1]Re Tyrie [No 1] [1972] VR 168, 177-8 (Newton J).
There is a question whether the gift to Austin Health is a valid absolute gift to charity for specified purposes, or some other kind of gift.
As to whether the will makes an absolute gift to Austin Health for specified purposes, I think that it does. The language bequeaths the residue of the testator’s estate to Austin Health for specified purposes, ie for the display of his artwork and/or for a perpetual term deposit the interest from which is to provide cash for the specified kind of prize. In my view, in law it is an absolute gift for those purposes.
As to whether the trust created by the gift was for charitable purposes, it would be so if the purposes were for the relief of poverty, the advancement of education, the advancement of religion or for purposes beneficial to the public.[2] There are two parts to the gift in the present case and both must be considered against that test.
[2]Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531, 583 (Lord Macnaghten).
The first part is the gift for a gallery for displaying the testator’s art. Whether a gallery for the display of the testator’s art is a charitable purpose depends on the quality and artistic and aesthetic merit of that art.[3] The evidence establishes that the testator was a reasonably talented amateur artist. That is all. This is not sufficient to justify characterisation of the purpose as charitable. I am not persuaded that display of the testator’s art would be for the benefit of the public. This first part of the gift was not for a charitable purpose in my view.
[3]Re Elmore [1968] VR 390, 392 (Gowans J).
The second part of the gift is for a perpetual term deposit, the annual interest from which is to provide cash prizes for winning participants in the art competition specified. Gifts for prizes in public art competitions have been held to be charitable as for the advancement of education and the benefit of the public generally.[4] The art competition in the present case is also a public one. It is conducted by Austin Health at the Heidelberg Repatriation Hospital. In my view it too qualifies as charitable.
[4]Perpetual TrusteeCo Ltd v Groth (1985) 2 NSWLR 278, 288-9 (Powell J).
The first part of the gift is not charitable but the second part of the gift is charitable. Pursuant to s 7M(1) and (2) of the Charities Act 1978 (Vic), the trust created by the gift is valid in respect of the charitable purpose despite the presence of the non-charitable purpose.
I therefore conclude that, in relation to the art prize component of the gift, it was a valid absolute gift to charity for a specified purpose or purposes. Question 3 will be so answered.
Question 5(a) concerns the meaning of the words, ‘for a possible gallery to display my art’ and/or an art prize as specified. In my view, it is clear from the words used by the testator and the fact that he was a keen amateur artist that he intended the gift to be used for establishing a gallery to display his own art. But what does the word ‘possible’ mean? This is the first area of disagreement. The plaintiff submits the word ‘possible’ implies that a gallery to display the testator’s art was definitely to be established if it was practicable to do so. I cannot accept that submission. As submitted by the defendants, the word ‘possible’ and the words ‘and/or’ show that establishing such a gallery was to be at the discretion of the hospital, ie it could decide to do so or not to do so. Question 5(a) should be answered accordingly.
Question 5(b) concerns the meaning of the words ‘perpetual term deposit the annual interest to provide cash prizes for winning paintings or art works in the annual Art Competition by T.P.I. Victorian adult war veterans’. This is the second area of disagreement. There are two competing interpretations. The plaintiff submits that the words of the gift confine potential prize winners to Victorian members of the TPI Association. The defendants submit that the words of the gift confine potential prize-winners to war veterans originating or living in Victoria who are totally and permanently incapacitated.
The words in issue are uncertain or ambiguous and it is necessary again to have regard to extrinsic evidence. That evidence shows that for years the testator participated in the Story Writing and Art Competition. He was a frequent exhibitor and won a number of prizes. The competition is open to ex-servicemen and women generally, not only to members of the TPI Association.
In my view, the testator had this competition in mind when he made the gift. He was intending to bequeath a capital sum the interest from which would be used to supply money for cash prizes for winning exhibitors who were adult war veterans residing in or originating from Victoria and who were totally and permanently incapacitated. The words used, so interpreted, are sufficiently certain to create a gift for this specified and charitable purpose. The answers to questions 5(b), 6 and 7 will reflect that conclusion.
The answers to the remaining questions are clear. The gifts in the will have not failed. Question 8(a) will be so answered and, consequently, questions 8(b) and (c) are not applicable. As the gift to Austin Health has not failed, question 9 does not arise. That gift creates a charitable trust within the meaning of pt 1B of the Charities Act. Question 10 will be so answered.
There will be orders giving answers to the questions as set out in the appendix.
APPENDIX
Questions for determination and answers
- Is the gift constituted by the words ‘I give the residue of my estate to such of the following beneficiary or beneficiaries as survive me and if more than one in equal shares’ – ‘thirty thousand dollars to the Lost Dogs’ Shelter Villiers Street, North Melbourne’ an absolute gift?
Answer: Yes.
- If the answer to question 1 is yes, is the identity of the person described as ‘the Lost Dogs’ Shelter Villiers Street, North Melbourne’:
(a)Animal Welfare League of Victoria ACN 004 238 475 being the legal person operating under the name Lort Smith Animal Hospital situated at 24 Villiers Street, North Melbourne, Victoria?
(b)The Lost Dogs’ Home ACN 004 789 726 being the legal person operating under the name The Lost Dogs Home situated at 2 Gracie Street, North Melbourne, Victoria?
(c)some other legal or natural person and if so, whom?
Answer: Animal Welfare League of Victoria ACN 004 238 475 being the legal person operating under the name Lort Smith Animal Hospital situated at 24 Villiers Street, North Melbourne, Victoria.
- Is the gift constituted by the words ‘I give the residue of my estate to such of the following beneficiary or beneficiaries as survive me and if more than one in equal shares’ – ‘the remainder donated to Repatriation for a possible gallery to display my art and/or perpetual term deposit, the annual interest to provide cash prizes for winning paintings or art works in the annual Art Competition by T.P.I Victorian adult war veterans’:
(a)a valid gift?
(b)a valid absolute gift?
(c)a valid conditional gift?
(d)a valid gift to charity?
(e)a valid absolute gift to charity?
(f)a valid conditional gift to charity?
(g)a valid absolute gift for a specified purpose or purposes?
(h)a valid absolute gift to charity for a specified purpose or purposes?
Answer: The gift is a valid absolute gift to charity for a specified purpose or purposes.
- Is the identity of the person described as ‘Repatriation’:
(a)the first defendant?
(b)the second defendant?
(c)the Repatriation Commission (as established by s 7 of the Repatriation Act 1920 (Cth) and whose existence was continued by s 179 of the Veterans’ Entitlements Act 1986 (Cth))?
(d)some other legal or natural person and, if so, whom?
Answer: The identity of ‘Repatriation’ is the first defendant.
- What is the meaning of the words:
(a)‘for a possible gallery to display my art’;
Answer: The words mean that the first defendant may or may not in its discretion establish a gallery for the display of the testator’s art.
(b)‘and/or perpetual term deposit the annual interest to provide cash prizes for winning paintings or art works in the annual Art Competition by T.P.I Victorian adult war veterans’?
Answer: The words mean that the first defendant, as an alternative to establishing a gallery for the display of the testator’s art, may hold the residue on trust to invest and pay the income as prizes to any entrants in the Story Writing and Art Competition winning first prize in any category and who are war veterans living in or originating from Victoria and are totally and permanently incapacitated.
- Is the reference to ‘the annual Art Competition’ a reference to the Story Writing and Art Competition?
Answer: Yes.
- If the answer to question 3(g) or 3(h) is yes, are the words referred to in each of paragraph 5(a) and 5(b) sufficiently certain to constitute a specified purpose or specified purposes so as to enable vesting of the gift?
Answer: Yes.
- If the gift to ‘Repatriation’ is a valid charitable gift:
(a)have the original purposes of the gift failed wholly or in part?
(b)are there circumstances in which the original purposes of the gift can be altered to allow the property given or part of it to be applied cy près?
(c)should the gift be the subject of a scheme for the application cy près of the property given?
Answer: The original purposes of the gift have not failed wholly or in part and the questions in paragraphs (b) and (c) do not arise.
- If the gift to ‘Repatriation’ is not a valid charitable gift or otherwise fails, to whom should the property forming that part of the residue of the estate be distributed?
Answer: The question does not arise.
- In respect of the gift to ‘Repatriation’, has a charitable trust been created within the meaning of s 2 or pt 1B of the Charities Act 1978 (Vic)?
Answer: Yes.
---
0
0