Tantau v MacFarlane

[2010] NSWSC 224

CITATION:	Tantau v MacFarlane [2010] NSWSC 224
HEARING DATE(S):	8 February 2010
JUDGMENT DATE :	25 March 2010
JURISDICTION:	Equity Division Probate List
JUDGMENT OF:	Ward J
DECISION:	1. Order under s 29A of the Probate and Administration Act 1898 that the will dated 3 February 2003 of the late Mona Alexis Fox (also known as Mona Alexis Brand) (who died on 1 August 2007), probate of which will was granted on 12 December 2007, be rectified by substituting for the word “Art”, in the description of the institution “Art Gallery of Victoria” in clause 3(c) of the will, the word “National”. 2. Declare that the gift to the National Gallery of Victoria under the will as so rectified is a valid gift for charitable purposes. 3. Declare that the National Gallery of Victoria has disclaimed the gift to it under the will as so rectified. 4. Direct the executors and trustees of the said will to take steps to identify a substitute trustee for the administration of the 'Len Fox Award'. 5. Declare that, in the event that a substitute trustee for the administration of the ‘Len Fox Award” cannot be identified within a reasonable time to be determined, the matter should be referred to the Attorney-General to establish a scheme for the administration of the gift cy-près in accordance with s 13 of the Charitable Trusts Act 1993 (NSW).
CATCHWORDS:	WILLS PROBATE AND ADMINISTRATION – principles of rectification and construction – acceptance and disclaimer of gifts – CHARITABLE TRUSTS – whether valid gift for charitable purposes – whether general charitable intention – cy-près schemes – half of residuary estate left to non-existent ‘Art Gallery of Victoria’ to create an annual painting award – HELD – rectification of will to refer to National Gallery of Victoria – valid disclaimer despite initial acceptance of gift due to misapprehension of conditions of gift – gift does not fail by reason of non-existence of ‘Art Gallery of Victoria’, by reason of disclaimer, for uncertainty or impracticality and is a valid gift for a charitable purpose – alternate trustee to be appointed to administer award
LEGISLATION CITED:	Charitable Trusts Act 1993 (NSW) Family Provision Act 1982 National Gallery of Victoria Act 1966 (Vic) Probate and Administration Act 1898 (NSW) Statute of Charitable Uses (1601) (England)
CATEGORY:	Principal judgment
CASES CITED:	Aljaro Pty Ltd v Weidmann [2001] NSWSC 206 Arnott v Leong [2009] NSWSC 187 Attorney-General for New South Wales v Adams (1908) 7 CLR 100 Bush v National Australia Bank Limited (1992) 35 NSWLR 390 Chesterman v Mitchell (1925) 24 SR (NSW) 108 Commissioner for Stamp Duties (NSW) v Carlenka Pty Limited (1995) 41 NSWLR 329 Commissioners of Income Tax v Pemsel [1891] AC 583 Commissioner of Taxation of the Commonwealth of Australia v Ramsden [2005] FCAFC 39 Construction Training Board v Attorney General [1971] 1 WLR 1301; [1971] 3 All ER 449 Corish v Attorney-General of NSW [2006] NSWSC 1219 Crystal Palace Trustees v Minister of Town and Country Planning [1951] 1 Ch l32; [1950] 2 All ER 857 Cummings v De Santis; De Santis v De Santis [2002] NSWSC 729 Doe on the demise of Jane Smyth v Sir George Henry Smyth, Bart (1826) 6 B & C 112; 108 ER 394 Donnolley v Clarke [2008] NSWSC 522 Guardhouse v Blackburn (1866) LR 1 P&D 109 In re Litchfield, Public Trustee v Millett [1961] ALR 750; (1961) 2 FLR 454 In re Lysaght [1966] 1 Ch 191 Incorporated Council of Law Reporting for England and Wales v Attorney-General [1972] Ch 73; [1971] 3 All ER 1029 Lady Naas v Westminster Bank Ltd [1940] AC 366 Lawson v Lawson NSWSC, unreported, 17 November 1997 Lewis v Lohse [2003] QCA 199 Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645; [1956] ALR 95 Long v Long; Estate of Ethel Edith Long [2004] NSWSC 1002 Lutheran Church of Australia South Australia District Incorporated v Farmer's Co-operative Executors and Trustees Ltd (1969) 121 CLR 628; [1970] ALR 545 McLean v Attorney General of New South Wales [2002] NSWSC 377 Menna v Jacobs; Re The Estate of Catherine Nolan [2004] NSWSC 1191 Miskelly v Arnheim [2008] NSWSC 1075 Narsi v Bhiudi; Estate of Kalyanji [2008] NSWSC 1160 Perpetual Trustee Co Ltd v Groth & Ors (1985) 2 NSWLR 278 Public Trustee v Attorney General of New South Wales (1997) 42 NSWLR 600 Public Trustee v Permanent Trustee Co Ltd [2003] NSWSC 556 Rawack v Spicer [2002] NSWSC 849 Re Boyd (deceased); Knowles & Anor v Commissioner of Inland Revenue [1966] NZLR 1109 Re Chanter (deceased) [1952] SASR 299 Re Cranstoun (deceased); Gibbs v Home of Rest for Horses [1949] Ch 523 Re Dupree's Deed Trusts; Daley v Lloyds Bank [1945] 1 Ch 16 Re Estate of Dyranda Prevosk [2004] VSC 537 Re Estate of Max Frederick Dippert [2001] NSWSC 167 Re Hodge: Hodge v Griffiths [1940] Ch 260 Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698 Re Lawton [1936] 3 All ER 378 Re Leitch (deceased) [1965] VR 204 Re Lowin: Perpetual Trustee Co Ltd v Robins (1967) 2 NSWR 140 Re Paradise Motor Co Ltd [1968] 2 All ER 625 Re Taylor; Martin v Freeman (1888) 58 LT 538 Re Young; Fraser v Young [1913] 1 Ch 272 Royal Choral Society v Commissioners of Inland Revenue [1943] 2 A11 ER 101 Royal North Shore Hospital of Sydney v Attorney General for New South Wales (1938) CLR 396 State Trustees Ltd v Wheeler & Ors [1998] VSC 115 Stephens v Stephens [2007] FamCA 680 The Cram Foundation v Corbett-Jones and Anor [2006] NSWSC 495 The Trustees Executors and Agency Co Ltd v Zelman Memorial Symphony Orchestra; Re Lloyd [1958] VR 523 Townsen v Tichell (1819) 3 B Ald 31 Williams v Milone [2004] NSWSC 576
TEXTS CITED:	G Dal Pont, Charity Law in Australia and New Zealand, Oxford University Press 2000 Professor Crago, "Principles of Disclaimer of Gifts" (1999) 28 Western Australian Law Review 65 Mortimer & Summucks on Executors, Administrators and Probate, 19th ed, Sweet & Maxwell, 2008 Theobald on Wills 16th edn. Sweet & Maxwell, 2001 Tudor on Charities, 7th ed, Sweet & Maxwell, 1984 Williams on Wills, 9th ed, Butterworths 2008
PARTIES:	Robyn Tantau (Plaintiff) Margaret MacFarlane (First Defendant) The Trustees National Gallery of Victoria (Second Defendant) Attorney-General of the State of New South Wales (Third Defendant)
FILE NUMBER(S):	SC 300334 of 2009
COUNSEL:	J Wilson SC (Plaintiff) J Needham SC (First Defendant) M Meek SC (Second Defendant) C Mantziaris (Third Defendant)
SOLICITORS:	Herd & Associates (Plaintiff) Wills & Estates Legal Service (First Defendant) Maddocks Lawyers (Second Defendant) I V Knight (Third Defendant)

- 44 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
PROBATE LIST

WARD J

THURSDAY 25 MARCH 2010

2009/300334 ROBYN TANTAU V MARGARET MACFARLANE & ORS IN THE ESTATE OF MONA ALEXIS FOX

JUDGMENT

1 This matter concerns the will of the late Mona Alexis Fox, who died on 1 August 2007. On 12 December 2007, probate of her last will (made on 7 February 2003) was granted jointly to the plaintiff and the first defendant.

2 Under her will, the deceased (after two gifts of individual pieces of artwork by the artist Emanuel Phillips Fox, her late husband’s uncle, and various small pecuniary legacies) left her residuary estate (valued, as I understand it, in the order of $800,000) in two equal shares – one half to the State Library of New South Wales (for the creation of a fund to establish an annual award to an outstanding Australian woman writing for the stage or screen, to be known as the Mona Brand Award) and the other half to the Art Gallery of Victoria (for the purpose of creating an annual award for a painting by an Australian artist of an Australian subject in sympathy with the works of E. Phillips Fox, to be known as the Len Fox Award). No difficulty arose with the first of the residuary bequests. It is with the second of the residuary bequests that problems have arisen.

3 First, there is no entity known as the “Art Gallery of Victoria” and, secondly, the entity which (for reasons on which I elaborate below) it is probable was the intended recipient of the second residuary bequest (the National Gallery of Victoria) has, following an initial acceptance of the gift, subsequently indicated its wish to disclaim the gift.

4 The plaintiff, Ms Tantau, has no interest in the outcome of this application. The first defendant, Ms MacFarlane, is one of the nieces of the deceased and was appointed on 21 September 2009 as the representative of the interests of the beneficiaries of the estate should the gift fail and fall to be administered on intestacy. She has permitted the plaintiff to act as sole executor in these proceedings.

5 The remaining parties to the proceedings are the second defendant, the Trustees of the National Gallery of Victoria (NGV) (the Council of which is a body corporate constituted by s 5 of the National Gallery of Victoria Act1966 (Vic)), seeking declaratory relief in relation to the disclaimer of the gift, and the third defendant, the Attorney General of the State of New South Wales, who has authorised the continuation of these proceedings as a charitable trust proceeding pursuant to s 6(2A) of the Charitable Trusts Act 1993 (NSW) and has been joined as a necessary party to the proceedings.

6 Broadly speaking, the NGV does not take any position in relation to the issues in contention between the parties but has made submissions as to the validity of its disclaimer of the gift. (Although no party contends that the NGV’s disclaimer of the gift should not operate as a valid disclaimer, Senior Counsel for the NGV (Mr Meek SC) has quite properly drawn my attention to the existence of doubt on the authorities in relation to this issue.) There is, however, a dispute as between the other parties as to the effect of such a disclaimer, assuming it is valid, as to whether it renders the gift void ab initio.

7 There is also a difference between the parties (other than the NGV) as to whether the process by which they say the gift should be read as a gift to the NGV is that of construction or rectification of the will (although it seems to be agreed that nothing ultimately will turn on this).

8 The more substantive dispute is between Ms Tantau and the Attorney General on the one hand (who agree that the gift is a valid gift for a charitable purpose and, if that need be established, that the gift is supported by a general charitable intention) and Ms MacFarlane, on the other hand, who contends that there is no charitable intention (particular or general) in the will, that the gift fails and that there is an intestacy.

9 There is also a difference of opinion as to the administration of the gift if it be found that it was a valid charitable gift. Ms Tantau says that, in light of the NGV's disclaimer, the gift should be administered cy-près. The Attorney General considers that the cy-près administration of the gift is necessary only if an alternative trustee for the administration of the Len Fox Award cannot be found.

Issues

10 The parties have formulated an Agreed Statement of Issues, which I set out below together with the conclusions I have reached on those issues:

1. Rectification : Whether the testamentary gift in clause 3(c) of the will to the ‘Art Gallery of Victoria’ should be rectified pursuant to section 29A of the Probate and Administration Act 1898 (NSW) so that

it reads as a gift to the NGV.

I am of the view that the will should be so rectified.

2. Construction : Alternatively to Issue 1, whether the gift should be construed as a gift to the NGV.

Given the view I have formed as to Issue 1, this question does not arise. However, had it been necessary to determine I would have concluded on balance that the will should be so construed.

3. Disclaimer : On the assumption that the will is rectified or construed as a gift to the NGV, whether the NGV has disclaimed the gift made to it under the will.

I am of the view that the initial acceptance by the NGV of the gift was based on a misunderstanding or misapprehension as to the conditions on which it was devised and that, there being no prejudice to any other occasioned by the retraction of the NGV’s acceptance, it is open to the NGV to disclaim (and it has validly disclaimed) the gift.

4. Failure of the particular gift : Whether the gift in clause 3(c) of the will fails,

(a) by reason of the non-existence of the ‘Art Gallery of Victoria’; or


(b) by reason of the disclaimer of the NGV; or

(c) impracticality, uncertainty or any other reason.

I am of the view that the gift does not fail by reason of any of the above; that there was no initial impossibility of the gift and that it was a valid gift for a charitable purpose. By reason of the subsequent disclaimer by the NGV, it is necessary for a new trustee to be appointed to administer the bequest.

5. General charitable intention and validity of charitable gift : Whether, notwithstanding any failure of the particular gift, clause 3(c) of the will,

(a) manifests a general charitable intention; and

(b) is a valid gift for charitable purposes.

I am of the view that the gift under clause 3(c) of the will, as rectified, is a valid gift for charitable purposes. Had it been necessary to determine, I would have found that clause 3(c) manifested a general charitable intention.

6. Cy-près scheme : In the event that the Court finds that the gift under clause 3(c) is a gift for charitable purposes, whether the Court should refer the matter to the Attorney General so that he may establish a scheme pursuant to s 13(1)(c) of the Charitable Trusts Act 1993 (NSW) for its administration cy-près under Part 4 of that Act.

This does not arise in view of my finding on issue 4 above. Only in the absence of a suitable alternative trustee would it be necessary for the gift to be distributed cy-près. If the issue were to arise (due to a failure to identify a suitable alternative trustee), then I would consider it appropriate for the gift to be administered cy-près.

7. Costs : The appropriate orders to be made in relation to the costs of the proceedings (as to which Counsel considered that submissions would more appropriately be made once judgment had been handed down on the above issues).

The costs orders are to be determined following submissions from Counsel.

Facts

11 The deceased’s late husband (Leonard Fox) was a nephew of the late Emanuel Phillips Fox, an Australian artist a number of whose works are held in the NGV’s collection (as itemised in an NGV listing which is Annexure C to an affidavit sworn 3 February 2010 of Ms Holly Stenning, the solicitor with the carriage of these proceedings for the Attorney General). Although described in these proceedings by Senior Counsel for Ms MacFarlane (Ms Needham SC) as a landscape artist, it seems that E. Phillips Fox also painted in the field of portraiture (as described in a paper prepared by the Senior Curator Australian Art of the NGV, which is Annexure D to Ms Stenning’s affidavit; E. Phillips Fox there being said to have combined an impressionist-oriented vision with an academic training and to be one of Australia’s most gifted colourists and figure painters).

12 The late Mr Len Fox published, apparently at his own expense, in April 1969 a booklet titled “E. Phillips Fox: Notes and Recollections” (a copy of which is Annexure F to Ms Stenning’s affidavit) and in 1985 a book titled “E. Phillips Fox and his family” (extracts from which comprise Annexure G to Ms Stenning’s affidavit) in which he expressed the view that there had seemed a danger that, fifty years after his uncle’s death, he might become to some extent a forgotten artist (and acknowledged his wife’s critical advice in relation to the book).

13 In early January 2003, the deceased contacted a solicitor, Mr Kenneth Herd, who had previously acted for Mr and Mrs Fox in relation to the preparation of a power of attorney, requesting assistance in the preparation of wills for herself and her husband. Mr Herd’s affidavit, affirmed 24 December 2009, set out the circumstances in which he became involved in the preparation of the couple’s wills.

14 Initially, Mr Herd gave some advice (contained in a letter dated 30 January 2003 a copy of which is Annexure A to his affidavit) as to certain pro forma wills which had previously been prepared and executed by each of his clients. He advised his clients that those pro forma wills had not been properly executed. It seems from his advice that, at that stage, the wills made no provision for any bequest to the ‘Art Gallery of Victoria’ or, for that matter, to the NGV.

15 After he gave his advice on the executed wills, Mr Herd was asked to advise on a handwritten draft will (or draft notes) prepared by the deceased (a copy of which document was Annexure B to his affidavit), the substance of which was apparently intended also to form the basis of Mr Fox’ will. Mr Herd attended on Mr and Mrs Fox together on a number of occasions for the purpose of advising in relation to the preparation of their final wills.

16 In her handwritten draft will/notes, the deceased had made various notes as to her ‘other property’. Significantly (for present purposes), in those notes the deceased referred both to a request she had made for her husband to consider bequeathing his half share of the proceeds from the sale of their jointly owned property to the initiation of an award of his choice in his name an award in her husband’s name (“perhaps involving the Art Gallery of Victoria, commemorating the life and work of his uncle Emmanuel [sic] Phillips Fox” (my emphasis)) and, in the context of a proposed bequest of an E. Phillips Fox sketch, to a painting by E. Phillips Fox, The Arbour, as being one possessed by the “Art Gallery of Victoria”. Both the NGV listing of works held by E. Phillips Fox, to which I have referred above, and the one page schedule of paintings exhibited in the NGV, which is Annexure D to Mr Herd’s affidavit, include a painting titled The arbour as a painting held in the NGV’s current collection and there is no suggestion that this was not the case as at 2003. (It was not suggested that the difference between the capitalisation of “ The Arbour” in the deceased’s notes and the use of the lower case in the title of “The arbour” in the NGV’s collection listing was of any significance. In this judgment I have used variously the form of the painting’s title as appearing in the relevant documents but have assumed that the title is correctly listed in Annexure A as “The arbour”. In my view nothing turns on the difference in usage.)

17 Also of relevance is a conversation to which Mr Herd deposes, which took place with Mr and Mrs Fox during the course of various discussions in relation to their wills. Mr Herd, who was not aware at the time of the name of the major art gallery in Victoria, says that in relation to the proposed bequest to an art gallery, he said words to the effect “so it’s not the ‘National’” or “not the National then”, at which point Mr Fox shook his head and Mrs Fox said “No not Canberra”. (my emphasis)

18 From the exchange in which the deceased linked the word “national” art gallery in Canberra, and the reference to “The Arbour” in the proposed draft will notes, as being a painting possessed by the Art Gallery of Victoria, it is clear that the deceased’s understanding as at the time her final will was being prepared was not only that a reference to the “National” gallery would be a reference to the National Art Gallery in Canberra (which she did not wish to be the recipient of the bequest) but also that the art gallery to which she did want to make a bequest of half her residuary estate was the art gallery in Victoria in which the painting “The arbour” is held. There is no dispute that the latter gallery is the NGV.

19 There is evidence that the deceased was aware of an association between the NGV and E. Phillips Fox. The NGV had commissioned the painting of The Landing of Captain Cook in Botany Bay by E. Phillips Fox in about 1901-2 and the NGV (properly so named) was referred to by Mr Fox in his 1985 book (in the foreword of which he acknowledged the critical advice of his wife). In paragraph 8 of the affidavit affirmed by Ms Tantau on 19 May 2009 (not read in her case but tendered by the Attorney General), Ms Tantau deposes in general terms to an awareness of the ‘connections’ both Mr and Mrs Fox had with the state of Victoria and with the NGV. Ms McFarlane, for her part, has deposed (in an affidavit similarly not read in her case but in part tendered by the Attorney-General) that she does not dispute that the intended beneficiary was the NGV (paragraph 16 of her affidavit of 27 March 2009).

20 Set out in full, clause 3(c) of the deceased’s will (which mirrored the corresponding clause in her husband’s will) is in the following terms:

"I GIVE DEVISE AND BEQUEATH to my Trustee the whole of my estate of whatsoever nature and wheresoever situate UPON TRUST to pay my funeral and testamentary expenses and debts and all death probate estate succession and other like duties payable in respect of my estate and the legacies specified in Clause 3(b) and (c) above and to hold the residue then remaining ("my residuary estate") UPON TRUST to be divided in two equal shares one equal half to be given to the State Library of New South Wales or to its designated administrators and Trustees for the purpose of the creation of a fund to present an annual award at a figure at the discretion of the said designated administrators or Trustees to an outstanding Australian woman writing for the Stage or Screen being known as the Mona Brand Award and the other equal half to be given to the Art Gallery of Victoria or its designated administrators and Trustees for the purpose of initiating and administering an annual award commemorating the life and works of Emmanuel [sic] Phillips Fox to be known as the Len Fox Award for a painting by an Australian artist of an Australian subject in sympathy with the works of Emmanuel [sic] Phillips Fox."

21 There is no suggestion that at any relevant time there was in existence a body known as the Art Gallery of Victoria. The NGV is established by s 4A(1) of the National Gallery of Victoria Act 1966 (Vic). It is operated by a Council of Trustees (s 13 of the Act). A Director of the National Gallery of Victoria is appointed by s 12(1) of the Act. The Director is the chief executive officer of the Council and has the control and management of the day to day affairs of the Council in accordance with the directions of the Council.

22 The statutory functions of the Council include to control, manage and operate the NGV (s 13 of the Act). Its powers are specified, inter alia, in ss 13A, 14, 16, 17A, 17B and 18AA of the Act. References to the Trustees of the National Gallery are deemed to be references in favour of or for the uses or purposes of the Council (s 20 of the Act).

23 Mr Len Fox died on 3 January 2004 and his entire estate passed to Mrs Mona Fox. Some time in late 2007, after the death of Mrs Mona Fox on 1 August 2007, Mr Herd made contact with the NGV to inform the NGV of the bequest.

24 Evidence was given by affidavit in these proceedings by Ms Leigh Mackay, the Head of the Corporate Office of the NGV and Secretary to the Council, as to the circumstances in which the NGV ultimately came to disclaim the gift.

25 No affidavit evidence of either Ms Tantau or Ms McFarlane in the proceedings was read (the evidence for Ms Tantau being restricted to that of the deceased’s solicitor, Mr Herd). However, parts of an affidavit sworn by Ms Tantau on 19 May 2009 and an affidavit affirmed by Ms MacFarlane on 27 March 2009 were tendered and relied upon by the Attorney General (paragraph 8 and paragraphs 15 and 16 of the respective affidavits, admitted as Exhibit 2). Further, for the NGV, Mr Meek relied upon both those and certain other parts of the unread affidavits of Ms Tantau and Ms McFarlane as well as an affidavit sworn by Mr Herd on 20 May 2009) as identified in a letter dated 5 February 2010 from his instructing solicitors which was handed up to me as an aide-memoire. (So that there is no later confusion, the NGV relied, apart from the two affidavits of Ms Mackay, on paragraphs 5-13, 17 and pages 7, 10, 13, 15, 16, 18, 20, 21, 22, 24-27 of Ms MacFarlane’s affidavit of 27 March 2009; paragraphs 7-9, 11, 23 of annexure C and pages 11, 13 and 16 of Mr Herd’s affidavit of 20 May 2009; and paragraphs 10 and 15 of Ms Tantau’s affidavit of 19 May 2009; tendering those parts of the affidavits insofar as they were not otherwise formally read. For administrative convenience I note that those parts of the respective affidavits will be read as Exhibit 4.)

26 Part of the affidavit evidence of Ms MacFarlane on which Mr Meek relied was her evidence that, at a meeting with Mr Herd on 29 November 2007, Mr Herd had said that the NGV seemed to be "disinterested in the bequest" (paragraph 5, Ms McFarlane’s affidavit sworn 27 March 2009), and references made in correspondence passing between Mr Herd and others during early 2008 as to the reluctance of the NGV to accept the gift. (Mr Herd himself referred to the NGV’s attitude as an ‘apparent disclaimer’ in correspondence with Ms MacFarlane in September 2008.) However, there is no suggestion that there had been any final decision made by the NGV (or communication of any such decision) to disclaim the gift at that stage.

27 The doubt as to the NGV’s position in relation to the gift continued through to September 2008, when Mr Herd wrote directly to the Director of the NGV. Ms Mackay says that it was then that the bequest came to her attention for the first time. Ms Mackay responded to Mr Herd by letter dated 8 September 2008 letter (a copy of which is exhibit LM-2 to the affidavit sworn 3 February 2010 of Ms Mackay) to the effect that, in the Director’s absence, the matter was being referred to the “senior Curators of Australian Art and Contemporary Art for their consideration”.

28 In Mr Herd's affidavit sworn 20 May 2009 (not read in Ms Tantau’s case but paragraphs of which were relied upon by the NGV, as noted above), he deposes that at no time (up to this point) had he received correspondence from the NGV rejecting the gift; the only response from the NGV by that stage apparently having been in conversations with a Ms Judy Williams at the NGV in October and November 2007 (those presumably being the source of his opinion as to the initial reluctance of the NGV to accept the bequest).

29 On 25 November 2008, Ms Mackay, who was asked by the Director of the NGV to correspond on its behalf, wrote a letter to Mr Herd as follows:

We refer to previous correspondence regarding the Estate of Mona Alexis Fox and her generous bequest to the National Gallery of Victoria.

We are grateful to be a beneficiary of this Will and welcome this bequest.

The NGV is able to accept the gift and broadly give effect Mrs Fox's wishes so that the works in sympathy with the works of Emanuel Phillips Fox by Australian artists will be acquired. We would anticipate that we would use the bequest to introduce to the State collection naturalisation landscapes of living Australian artists. The funds will be spent on an annual basis until such time the funds under the bequest to the NGV has been fully expended.

The credit line for the acquisitions from this bequest will be:

‘Purchased as the winner of the Len Fox Award, (date)'
We look forward to receiving the funds from the estate.

30 From this letter it seems clear that Ms Mackay was of the understanding that the gift could be used for the purpose of acquisition of artwork (hence the reference to the “credit line for acquisitions” and the intimation that the funds would be used to acquire works in sympathy with the works of E. Phillips Fox until those funds were exhausted) and Ms Mackay has deposed that this was indeed her impression at the time (paragraph 6 of her affidavit sworn 3 February 2010).

31 I also note that this letter appears to have been more than a mere expression of an intention or ability to accept the gift, given the final sentence of the letter which anticipated receipt of the funds representing the bequest. This is confirmed by the fact that on 27 November 2008, Ms Mackay wrote to Ms MacFarlane’s solicitor, who had separately contacted the NGV pressing for confirmation of its position in relation to the bequest, advising of the NGV’s acceptance of the gift:

The National Gallery of Victoria (NGV) is grateful to be a beneficiary of the will. On behalf of the NGV I have written to Herd & Associates, who we understand are solicitors for the executors of the estate, to advise that the NGV is able to accept the gift.

32 As at 28 July 2009, the position of the NGV, as set out in paragraph 7 of Ms Mackay’s affidavit of that date, seems to have been that the NGV remained willing to accept the gift under clause 3(c) of the will “assuming the Court finds it was the intended recipient in the terms set out in the bequest”.

33 That no longer remains the position of the NGV. In fact, the position of the NGV is now precisely the opposite. The reason for this appears from Ms Mackay’s more recent affidavit of 3 February 2010, in which she explains that it was not until a telephone conference held with other parties to these proceedings on 24 August 2009 that it became clear to her “that the view of the other parties was that the gift was for the purposes of an annual award to an Australian artist rather than a gift which would enable the acquisition by the NGV of artworks which were sympathetic with the works of Emmanuel [sic] Phillips Fox”.

34 Having consulted with personnel at the NGV and having sought legal advice, Ms Mackay says that the NGV reached the “firm view” that it did not wish to be the trustee for an annual award “as NGV is primarily a collecting institution and not a promoter or awarder of prizes” (paragraph 9 of Ms Mackay’s affidavit).

35 By letter dated 19 November 2009, headed ‘Without Prejudice’, the solicitors acting for NGV confirmed their client’s instructions “that it wishes to disclaim the bequest in its favour in the Will of the deceased subject to agreement being reached as to payment of our clients costs of and incidental to the proceedings”. (A copy of that letter is Exhibit LM-4 to the affidavit of Ms Mackay sworn 3 February 2010.)

36 Although the expression of a wish to disclaim was expressly made on a without prejudice basis, and was subject to agreement being reached as to costs, it seems to have been treated by the parties (and indeed by the NGV) as a formal disclaimer of the gift (see paragraph 10, Ms Mackay’s 3 February 2010 affidavit).

37 The letter of 19 November 2009 set out the reasons for NGV’s wish to disclaim the gift, which I summarise as being that the NGV is a collector and exhibitor of artworks and not in the business of promoting and awarding prizes (a business which it seems to regard as of no benefit to it and likely to be of not inconsiderable expense in terms of administration); that there are not many artists of the description specified and there would be a good deal of effort involved in the administration of the award (“which is simply not a core objective” of the NGV); and that the functions of the NGV are primarily those contained in s 13(1)(a),(b) and (ca) of the Act and that none of its other related functions “are directed to arranging and awarding prizes for art”.

38 In relation to the last reason proffered for the disclaimer, I note that the first statutory function of the Council – to “control, manage, operate, promote, develop and maintain” the gallery and land – seems to me to be very broad and, insofar as administration of the proposed award might be thought necessarily to involve an element of promotion, operation or development of the gallery, this would seem to permit the NGV to accept and administer the present bequest. Further, the incidental functions of the Council include the provision of leadership in the provision of art gallery services in Victoria (g) and the carriage of such other functions as the Minister from time to time approves (h). Therefore, it does not seem to me that there was any statutory incapacity on the part of the NGV to administer such an award had it wished to accept the bequest. (It was submitted that if this were not the case this would come as some surprise to art galleries throughout the country.) Having regard to the breadth of the NGV’s functions, it does not seem to me that there is any initial impossibility affecting the gift, nor was this suggested by Mr Meek. It is very clear, however, that the NGV does not see the administration of an annual award of this kind as falling within its core objectives and does not wish to accept the gift.

Issues

Issues 1/2 Rectification/construction of will

39 Ms Tantau, by paragraph 1 of her Amended Summons, seeks an order that the deceased’s will be rectified. Paragraph 3 seeks a declaration that it be rectified in order to substitute the word 'Art’ in the expression 'Art Gallery of Victoria' in clause 3(c) of the deceased’s will with the word 'National’. That claim for rectification is not opposed by any of the defendants. It will fall to be determined under s 29A of the Probate and Administration Act 1898 (NSW) and the application was made within the time prescribed for such an application.

40 Paragraph 2 of the Amended Summons seeks a declaration that the deceased, in bequeathing one half of the residue of her estate to the Art Gallery of Victoria, intended such gift for the NGV. In his opening submissions, Senior Counsel for Ms Tantau (Mr Wilson SC) argued (on the basis that disclaimer operates from the date of death and makes the gift void ab initio) that the suit would best be conceived as a construction suit. In that regard, Mr Wilson referred to the claim in paragraph 2, though not expressed in the pleading to be in the alternative, as a claim for alternative relief (if rectification is not granted) in the nature of a construction suit and confirmed that Ms Tantau seeks a declaration that the deceased intended the gift to the “Art Gallery of Victoria” to be a gift for the “NGV”.

41 The Attorney General, who supports the approach of this suit as a rectification suit, in effect submits that this is a non-issue on the basis that whether the gift is rectified or construed, the result is the same, (namely that there is a gift to the NGV and that the NGV's subsequent disclaimer does not render the gift void).

42 As a preliminary issue as to the appropriate basis on which relief should be granted in relation to the reading of the will has thus squarely been raised, I address this issue first before turning to the agreed issues as stated.

43 The distinction between suits for construction and suits for rectification of a will was considered by Young J, as his Honour then was, in Re Estate of Max Frederick Dippert [2001] NSWSC 167 (at [20]) in terms of the evidentiary issues raised as between the respective kinds of suit.

His Honour said:

Before the merger of the courts, the principles quite clearly were that the Court of Probate had limited power of construing a will, the power to be exercised only so that the Court of Probate could carry out its tasks in ascertaining what was the last will of a free and capable testator and for dealing with questions of accounts of executors etc, see eg Re Hawksley’s Settlement [1934] Ch 384 and Re Fawcett [1941] p 85 … One of the principal reasons for confining the powers of the Court of Probate in construing wills in this way is because the evidence which is properly received by a Court of Probate a fortiori when a Court of Probate is considering a rectification case, ranges over a wide range of matters including declarations of intention and what the testator said to his solicitor. When a Court of Equity is construing a will the Court is confined to the words used by the testator plus the factual matrix in which the will was made. (My emphasis)

44 Thus his Honour observed that, even though now theoretically possible to include both questions in the one summons, it would usually be appropriate to deal with the matters separately. (In Re Dippert, questions of construction were postponed until after the grant.)

45 Counsel for the Attorney General, Mr Mantziaris, submits that, in this case, the only evidence on which the parties rely for the claim for rectification of the will but which would be excluded from consideration in a construction suit (on a strict application of the rules as to inadmissibility of extrinsic evidence of the deceased’s intention) is, first, the evidence as to the making of the deceased’s will at the same time as that made by her then husband (coupled with the evidence of the couple’s association with the NGV and the NGV’s maintenance and exhibition of the works of E. Phillips Fox) (to be found in the affidavit of Mr Herd of 24 December 2009, paras 3-10) and, secondly, the evidence of the executors as to the communications the deceased and her late husband had had with the NGV on the subject of his uncle’s work (to be found in those paragraphs of Ms McFarlane’s and Ms Tantau’s unread affidavits which were tendered by the Attorney General and admitted as Exhibit 2).

46 Otherwise, it is submitted that the evidence in favour of the deceased’s gift to the NGV would be admissible in either suit, that evidence being summarised as the association between E. Phillips Fox and the NGV (indicated by its commission to him to paint The Landing of Captain Cook in Botany Bay); the NGV’s extensive holdings of E. Phillips Fox paintings; and the description of The arbour as a painting possessed by the ‘Art Gallery of Victoria’ (in the handwritten draft of the deceased’s will).

47 In other words, Mr Mantziaris submits that a court of construction could construe clause 3(c) having regard only to the matters summarised in paragraph 46 above (as evidence of the surrounding circumstances in which the will is to be construed) and yet this would still be sufficient to permit a finding that the will should be read as a gift to the NGV.

48 As it seems to me that the strongest evidence in favour of reading the bequest as a gift to the NGV is the reference to The arbour (in the deceased’s handwritten draft will) as being a painting possessed by a non- existent art gallery (in light of the evidence that it is in fact possessed by the NGV), I am inclined to agree with Mr Mantziaris that it would not matter whether the relief sought was for rectification or construction of the will, if that evidence would be admissible in either event. That said, however, I think there is significance to be placed in the conversation to which Mr Herd deposes (which it is accepted would not be admissible on a construction suit) and that it might therefore be thought that the appropriate order (where both rectification and construction are sought and assuming both would be available and have the same result) is that which takes into account the most compelling combination of the admissible evidence – which in this case would be an order for rectification of the will.

49 In that regard, I note that where rectification and construction would produce the same result it may nevertheless be appropriate to order the rectification of the will (Rawack v Spicer [2002] NSWSC 849).

50 The basis on which Ms Tantau, through her Senior Counsel, advances the relief described in opening as alternate relief over the claim for rectification was initially put by reference to the contention that disclaimer operates to render the gift void ab initio (a contention with which Mr Mantziaris takes issue, arguing that the fact of disclaimer of the gift does not have such a legal consequence in this case). During submissions in reply, however, it emerged that the real concern was as to whether the evidence would support a finding that the will should be rectified (and hence was a concern that the court not be led into error by the ‘weight of opinion at the bar table’ on the issue of rectification).

51 In that regard, Mr Wilson points to the fact that the deceased had specifically instructed her solicitor to prepare a will bequeathing half her residuary estate to a body known as the ‘Art Gallery of Victoria’, and had, by executing the will, approved its contents. In the absence (he submitted) of evidence that the deceased had intended to benefit a body known as the National Gallery of Victoria, it is said that there is not the requisite evidence of mistake to support a construction. The position articulated for Ms Tantau is thus that the deceased intended to nominate a body she identified as the Art Gallery of Victoria; that she did so and, hence, that rectification is not available. I consider this argument in addressing Issue 1 below.

52 Ms McFarlane concurs in the application for rectification, Ms Needham SC joining with Mr Mantziaris in contending that this is properly to be treated as a rectification suit. Ms Needham submits that it is sufficient for rectification if it is found that the deceased’s intention was to make the bequest to the art gallery in Victoria in which (among other of E. Phillips Fox’ works) The arbour was exhibited and that the will failed to carry out the deceased’s intentions due to her error regarding the name of that gallery. It is submitted by Ms Needham SC that this should be done even though there has been a disclaimer, as the will needs to be put in the form in which the deceased intended it to be. (However, where Ms Needham parts company with Mr Mantziaris is that she contends that the rectified gift fails, among other reasons, because it has been disclaimed by the NGV, a matter I consider later in these reasons.)

53 It seems to me that the appropriate course is to consider separately the claims for rectification and construction (which logically must, though not pleaded as such, be in the alternative) but that if both would be available then, for more abundant caution, to make an order for the rectification of the will.

Issue 1 - Rectification

54 Section 29A of the Probate and Administration Act 1898 (NSW) under which the application for rectification is made provides that:

29A(1) If the Court is satisfied that a will is so expressed that it fails to carry out the testator's intentions it may order that the will be rectified so as to carry out the testator's intentions.

55 In Re Dippert, Young J, as his Honour then was, explained the problems

which s 29A had been enacted to redress and said (at [17] - [18]):

The section has been construed so as to apply the basic principles of rectification worked out in contract cases. Accordingly, what one must look for is an error which has occurred in the transcription of the will or where one can see what the intention of the testator was but the words used have not fulfilled that intention . What one cannot do is to look at unforeseen circumstances and speculate what the testator might have done in those circumstances and then supply words to meet those circumstances. (My emphasis)
Thus in Mortensen v The State of New South Wales (NSWCA, unreported, 12 December 1991) Sheller JA said:
The Court’s discretion, assuming it is satisfied that the will is so expressed that it fails to carry out the testator’s intentions, is limited to rectifying the will in such a manner ‘as to carry out the testator’s intention’.
Thus where there is no evidence to show what the testator’s intention was in the event of certain things happening, the Court cannot rectify the will under s 29A.

56 At [34] Young J went on to say:

None of these cases [ Wesley v Wesley (1998) 71 SASR 1; Trimmer v Lax (Hodgson J - 9 May 1997, unreported) Green v Green (24 June 1998, Young J unreported] give any support to the proposition that one can rectify the will other than in cases where there is clear proof of the testator’s actual intention and that even if the evidence tends towards indicating what the testator would have intended had he or she considered the matter, that is not enough.

57 The principles governing an application under s 29A of the Probate and Administration Act 1898 (NSW) were outlined by Campbell J in Rawack v Spicer (at [26]). There, his Honour said:

Before the power of rectification can be exercised, the court must be satisfied both that the will was so expressed that it fails to carry out the testator’s intentions, and also what it was that the testator intended concerning the part of the will which is to be rectified. Even if the court is satisfied that a testator would not have wanted his property to go in the way that, in the events which have happened, a particular clause results in the property going, the court can rectify the will only if it is satisfied about what the testator actually intended to happen to his property in that particular event : Brian William Mortensen v State of New South Wales (New South Wales Court of Appeal, 12 December 1991, unreported); Re Estate of Max Frederick Dippert [2001] NSWSC 167 (Young J, 20 March 2001, unreported). " It is not enough for the Court to have the opinion that, if the deceased had considered the possibility, she probably would have provided in favour of [a named beneficiary]. What is required is an actual intention, which has miscarried": Trimmer v Lax (Hodgson J, 9 May 1997, unreported at 12). (my emphasis)

58 Mr Mantziaris notes that those principles have been applied in numerous later cases (citing Public Trustee v Permanent Trustee Co Ltd [2003] NSWSC 556, at [13]; Re Estate of Dyranda Prevosk [2004] VSC 537, at [17]; Menna v Jacobs; Re The Estate of Catherine Nolan [2004] NSWSC 1191, at [19]-[22]; Long v Long; Estate of Ethel Edith Long [2004] NSWSC 1002, at [8]-[10]; Narsi v Bhiudi; Estate of Kalyanji [2008] NSWSC 1160, at [45]-[46]; Donnolley v Clarke [2008] NSWSC 522, at [7]; and Miskelly v Arnheim [2008] NSWSC 1075, at [25]).

59 In contending that rectification is not appropriate, Mr Wilson describes the conversation Mr Herd had with the deceased and her husband as to the name of the art gallery as one in which “the deceased said that she did not want a body with the name "National" in it as the recipient”. Mr Wilson says therefore that this is not a case of there being a mistake by a solicitor in the preparation of the will; rather, that it is a case of the deceased mistakenly naming a beneficiary and adhering to that mistake when questioned about the name of the beneficiary by the solicitor.

60 Mr Wilson notes that the deceased gave written instructions for her will and that the will as executed on 7 February 2003 reflected those written instructions so far as clause 3(c) was concerned. Therefore, in the absence of suspicion attaching to the document as propounded, it is said that the deceased's execution of it must be taken as sufficient evidence of her knowledge and approval (Guardhouse v Blackburn (1866) LR 1 P&D 109 cited by Powell J in Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698, at 705).

61 Mr Wilson submits that, while there can be no doubt (and he accepts the court may be satisfied) that the will as expressed fails to carry out the intentions of the deceased, it is not to be overlooked that it was the deceased who nominated the beneficiary and that she adhered to the name of the beneficiary when discussing it with her solicitor. Hence, he says, the court could not be satisfied that the deceased intended something different to that which appears in the will.

62 For her part, Ms MacFarlane submits that this is a clear case for rectification. Ms Needham submits that the court can be satisfied to the proper standard that the will failed to "carry out the testator's intentions" since it is clear from the evidence that the deceased wished her gift to go to the institution which held other E. Phillips Fox paintings (and, in particular, I might add, The arbour).

63 Ms Needham submits that it is incorrect to say that the deceased did not want the gift to go to an institution with the name “National” in it. Rather, the evidence is simply that the deceased did not want the gift to go to the national gallery in Canberra. I accept that this is the thrust of the evidence given by Mr Herd of the relevant conversation.

64 Ms Needham further submits that the fact that the deceased herself was mistaken as to the name of the correct body is irrelevant. The deceased intended that half of her residuary estate should benefit the particular gallery in Victoria which held the E. Phillips Fox collection but was mistaken about the name. Ms Needham submits that the fact that the deceased "adhered to her instructions" in relation to the name of the institution does not change the fact that she had an intention to leave the funds in question to the National Gallery of Victoria. I agree.

65 Insofar as the court, on a rectification suit, applies the basic principles of rectification applied in contract cases (as observed by Young J in Re Dippert, at [17]), I note that in Commissioner for Stamp Duties (NSW) v Carlenka Pty Limited (1995) 41 NSWLR 329 (at 336 and 337), the fact that particular words were chosen but that they bore a meaning other than that which the parties intended, enabled the court to rectify the document. Sheller JA there noted with apparent approval that Brightman J, had held in In re Butlin's Settlement Trusts [1976] Ch 251 at 260-261 that rectification is available not only in a case where particular words have been added, omitted or wrongly written as the result of careless copying or the like but:

also … where the words of the document were purposely used but it was mistakenly considered that they bore a different meaning from their correct meaning as a matter of true construction. In such a case, which is the present case, the Court will rectify the wording of the document so it expresses the true intention: see Jervis v Howle and Talke Colliery Co Ltd [1937] Ch 67; Whiteside v Whiteside [1950] Ch 65 at 74 and Joscelyne vNissen [1970] 2 QB 86 at 98.

66 His Honour noted (at 344) the opinion of Hodgson J in Bush v National Australia Bank Limited (1992) 35 NSWLR 390 (at 406) that the preponderance of authority favoured the view that rectification will not be refused merely because the mistake is as to the legal effect of the words used rather than as to the actual words used (see also McLelland AJA at 345 and Mahoney AP at 332-3 in Commissioner for Stamp Duties (NSW) v Carlenka).

67 Here, it seems to me to be abundantly clear that the deceased (by reference to her draft will notes) mistakenly thought that the art gallery which owned The arbour was known as the Art Gallery of Victoria. It was to that gallery (whatever might be its correct title) that she intended the bequest to be made. In those circumstances the execution (even with the apparent approval of it contents that this entailed) of a document incorrectly identifying the gallery in question does not preclude rectification of the will.

68 I am satisfied that the will should be rectified to reflect the actual intention of the deceased, which was not carried out by the terms of her will due to an error in the identification of the gallery to whom the bequest was intended to be made.

Issue 2 - Construction

69 In Williams v Milone [2004] NSWSC 576 (at [16] - [19]), the Court set out the principles to apply on a construction suit:

[16] First, of course, the court leans against intestacy, if any other solution can reasonably be found. Secondly, the court only supplies words (other than in a rectification suit) where it is clear that words have been inadvertently omitted, and it is clear just what sort of words (though not necessarily the exact words) should be inserted; see for instance Butlin v Butlin (1965) 113 CLR 353.

[17] In Hope v Potter (1857) 3 K & J 206, 209; 69 ER 1083, 1084 Page Wood VC noted that there were two particular situations where words could be supplied. First, where there would otherwise be an intestacy and the Court can clearly and precisely see what words should be inserted (the obvious case is where the drafter had been clearly following some sort of precedent, and one could see by looking at the precedent where there had been an omission; see eg Phillips v Rail (1906) 54 WR 517), and secondly, where there had been a series of limitations and an obvious gap.

[18] The cases where words can be inserted go beyond that but, as the High Court made clear in Butlin, and, indeed, as it has been the rule for a long period of time, words can only be inserted if the court has complete conviction that they have been omitted; see for instance Towns v Wentworth [1858] XI Moore 526; 14 ER 794 (PC).

[19] In the 11th edition of Theobald on Wills at p 642 the learned editor JHC Morris said:
With regard to supplying words in a will, the rule seems to be that where the will as it stands is clearly inconsistent, so that the choice lies between rejecting some portion of it or supplying some words, whilst at the same time the latter course will make the will consistent the court will be justified in making the necessary addition.

70 As to the presumption against intestacy, in Arnott v Leong [2009] NSWSC 187 (at [10]), the Court said:

... [There is a presumption against intestacy, namely, that the will should, if possible, on a fair and reasonable construction, be construed so as to lead to a testacy rather than an intestacy or partial intestacy. In Fell v Fell (1922) 31 CLR 268 at 275-276, Isaacs J said:
"The mind never inclines towards intestacy; it is a dernier ressort in the construction of wills" (Lord Shaw in Lightfoot v Mayberry (1914) AC 782, at p 802). "In ascertaining the intention, I ought to a certain extent — we all know what the expression means — to lean against an intestacy, and not to presume that the testator meant to die intestate if, on a fair construction, there is reason for saying the contrary" (Buckley LJ in Kirby- Smith v Pamell (1903) 1 Ch 483, at p 489).

See also Hamersley v Newton (2005) 30 WAR 568, at 583 per Heenan J. In other words, where there is only a slight reason to favour one ambiguous construction over another, the Court will do so if that construction avoids intestacy, on the basis that it is closer to the deceased's intention than intestacy: Hyde v Holland [2003] NSWSC 733 per Austin J at [27]. It has been said that the presumption against intestacy "is not a strong presumption" Marks v Pope [2001] NSWSC 105 at [17] per Young J (as his Honour then was).

71 Here, if it is accepted (as I do) that the deceased’s intention was to make the gift to the particular art gallery in which The arbour was held, then there is no doubt as to the error which has been made or how the will should correctly be read. The word which has been omitted from the title of the recipient is “National” (and the word incorrectly added is “Art”).

72 In relation to the construction of the will, emphasis is placed by the parties on the deceased’s association with the NGV and her knowledge that the NGV had an extensive collection of E. Phillips Fox artworks, as making it likely that, when referring to “The” Art Gallery in Victoria, she intended not only that it be the major public art gallery of Victoria but also that it be the gallery which housed such a collection. That, taken with the presumption against intestacy, given the strength of the connections between the deceased’s late husband’s uncle and the gallery, of which the deceased was clearly aware, leads me to conclude on balance that, were the will not to be rectified to refer to the NGV, it should be so construed.

Conclusion

73 As to whether the will should be rectified or construed, where relief of both kinds would be available, I note that in Rawack v Spicer Campbell J said (at [25]):

It is possible for rectification of an unclear clause in a will to be granted ex abundanti cautela, where rectification makes clear the testator’s intention, even if the clause which the testator actually executed, on its proper construction, means the same as the clause as rectified: Application of Spooner: Estate JJ Davis (Hodgson J, 28 July 1995, unreported); Estate of Cross (McLelland CJ in Eq, 9 May 1996, unreported).

74 In those circumstances, and where I consider the stronger argument to be for rectification, that is the order which is in my view appropriate.

Issue 3 Disclaimer

75 Two questions arise in this context.

76 First, was it open to the NGV, having advised of its acceptance of the gift, later to disclaim the gift (or is that disclaimer of no effect) and, secondly, as to the effect of disclaimer. I note that no party contends that the NGV has not in fact disclaimed the gift. However, as noted earlier, Mr Meek has quite properly raised the issue as to whether as a matter of law such a disclaimer is effective, ie whether it was open for NGV to do so, having already notified its acceptance of the gift.

Ability to disclaim after initial acceptance of gift

77 There is no doubt that it is open to a beneficiary to disclaim a gift made in its favour under a will, though it is said that generally the disclaimer must be absolute (not partial) in its operation. Mr Meek refers to Theobald on Wills, 16^th edn, Sweet & Maxwell, 2001, at paras 14 – 25 and Commissioner of Taxation of the Commonwealth of Australia v Ramsden [2005] FCAFC 39 (at [131]).

78 Once accepted, however, ordinarily a beneficiary may not retract that acceptance and disclaim the gift (Williams on Wills, 9^th edn, Butterworths, 2008, Vol 1, at para 46.4). Mr Meek submits that this ordinary position is subject to a number of qualifications or exceptions. In essence he argues, by analogy with cases in which a beneficiary has been permitted to retract a disclaimer of a testamentary gift if it can be shown that no prejudice is occasioned to another thereby, that the NGV should in this case be permitted to retract its acceptance of the gift. It is submitted that retraction of its acceptance of the gift should more readily be permitted in circumstances where the evidence shows that the acceptance was made under a misapprehension by the party now wishing to disclaim.

79 Mr Meek, in his written submissions, helpfully analysed a number of cases in which the principles regarding a change of position on the part of a beneficiary who had initially disclaimed a testamentary gift were considered. There are, however, relatively few cases in which a beneficiary, having accepted rather than disclaimed the gift in the first instance, later seeks to retract that acceptance.

80 The issue did arise for consideration in Re Hodge: Hodge v Griffiths [1940] Ch 260, where the gift of real property to the executor and sole residuary legatee under her will was subject to the payment of a weekly sum to the testatrix’s sister and a direction that on sale of the property a sum should be paid to the sister. Farwell J held that that the will created a personal obligation which was binding on the residuary legatee if he accepted the devise. His Honour found, on the facts, that the residuary legatee had accepted the devise and had undertaken the burden laid on him as devisee. Accordingly, the residuary legatee was held to be under an obligation, having sold the property some five years after the death of the testatrix (and having in the interim taken the benefit of the property and paid the sister the stipulated weekly sum after proving the will), to provide the sum as directed on the disposition of the property.

81 In that case, however, it is apparent that there was more than (as is here the case) a mere notification of acceptance of the gift; in Re Hodge the beneficiary had actually received and benefited from the gift for some time before purporting to disclaim. That, in my view, is a significant point of distinction from the facts in the present case.

82 More recently, the question arose in the context of a Family Provision Act 1982 application in Cummings v De Santis; De Santis v De Santis [2002] NSWSC 729. There, the beneficiary had been left an equal share for life in the net income from the property and had, since the death of the deceased, received income apparently produced from the business conducted on that property. (There was an issue as to whether the payments received by the beneficiary were in fact referable to the gift under the will but Macready AsJ was prepared to proceed on the basis that such payments might have been referable to the income payable under the gift.) At some time after the deceased’s death but before the Family Provision Act claim, the beneficiary made an affidavit deposing that she did not wish to accept the gift but in the conduct of the subsequent proceedings the position was taken by the beneficiary that there had been no disclaimer of the gift.

166 Mr Mantziaris submits that the NGV’s disclaimer creates a case of supervening impossibility rather than initial impossibility; that the charitable gift (as rectified or construed) was valid as at the death of the deceased (Re Leitch (deceased) [1965] VR 204, at 206), since the NGV existed and there is no evidence to suggest that its performance was not possible at that point in time; it simply being a case where at a subsequent point in time the nominated trustee (the NGV) refused to perform the trust.

167 For this reason, Mr Mantziaris submits that it is not necessary for the Court to find a general charitable intention before it orders a scheme and that, rather, all that is required is a finding that the initial gift to the NGV was for a charitable purpose. He contends that it must follow from a finding (of the kind which I propose to make) that the gift was for a charitable purpose that the interests of the next of kin are forever excluded, relying on what was said in Cram.

168 As I do not accept that the disclaimer by the NGV effected an initial impossibility, and I consider that the initial gift was for a charitable purpose not limited to a particular institution, the result must be, following the reasoning in Cram, that the residuary estate given to the NGV is a gift which has been given to charity and it is not necessary that there be found to have been a general charitable intention. (Had I found otherwise then I would have had held that clause 3(c) of the will did exhibit a general charitable intention and that the matter would have been suitable for referral to the Attorney General for distribution cy-près.) It follows that the gift will only fall for distribution cy-près if a suitable alternative trustee cannot be identified to accept the gift subject to the conditions placed thereon.

Issue 7 Costs

169 Ms Tantau, as executor, seeks her costs of the proceedings, being necessary costs in order to determine the issues surrounding the operation of the gift in clause 3(c) of the will. The Attorney General was a necessary defendant to a charitable trust proceeding and seeks his costs from the trust fund in the usual manner. Insofar as the NGV seeks its costs of the matter, the Attorney General considers that the NGV was joined unnecessarily (and says that it remained ‘ambivalent’ for a considerable time as to its participation in the proceeding) but the Attorney General takes no position on whether it should be awarded its costs of the proceedings. For Ms MacFarlane, it was submitted that issues of costs should be determined once the outcome of the principal claims was made known. Accordingly, I will list the matter for submissions on all costs issues at an appropriate time.

170 It will also be necessary on that occasion to consider the procedural directions to be made for the identification and appointment of asuitable alternative trustee in the place of the NGV to administer the bequest.

Orders

171 For the reasons set out above, I make the following declarations and orders:

1. Order under s 29A of the Probate and Administration Act 1898 (NSW) that the will dated 3 February 2003 of the late Mona Alexis Fox (also known as Mona Alexis Brand) (who died on 1 August 2007), probate of which will was granted on 12 December 2007, be rectified by substituting for the word “Art”, in the description of the institution “Art Gallery of Victoria” in clause 3(c) of the will, the word “National”.

2. Declare that the gift to the National Gallery of Victoria under the will as so rectified is a valid gift for charitable purposes.

3. Declare that the National Gallery of Victoria has disclaimed the gift to it under the will as so rectified.

4. Direct the executors and trustees of the said will to take steps to identify a substitute trustee for the administration of the 'Len Fox Award'.

5. Declare that, in the event that a substitute trustee for the administration of the ‘Len Fox Award’ cannot be identified within a reasonable time, to be determined, the matter should be referred to the Attorney General to establish a scheme for the administration of the gift cy-près in accordance with s 13 of the Charitable Trusts Act 1993 (NSW).

172 I will list the matter for directions as to the process to be undertaken in compliance with the direction made in 4 above and to hear submissions as to costs.

**********