The First Church of Christ Scientist, Brisbane, as Trustee v the Attorney-General for the State of Queensland
[2012] QSC 246
•6 September 2012
SUPREME COURT OF QUEENSLAND
CITATION:
The First Church of Christ Scientist, Brisbane, as Trustee v The Attorney-General for the State of Queensland [2012] QSC 246
PARTIES:
THE FIRST CHURCH OF CHRIST SCIENTIST, BRISBANE, AS TRUSTEE
(Applicant)
v
THE ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND
(Respondent)
FILE NO/S:
BS 2321 of 2012
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court of Queensland
DELIVERED ON:
6 September 2012
DELIVERED AT:
Brisbane
HEARING DATE:
15 May 2012
JUDGE:
Philip McMurdo J
ORDER:
Pursuant to s 106 of the Trusts Act 1973 (Qld) , the applicant is directed to administer the trust under which it holds the proceeds of sale of the properties, described in the reasons for judgment as the codicil properties, as a charitable trust for the purpose of the advancement of the religion of Christian Science in Queensland.
CATCHWORDS:
SUCCESSION – WILLS, PROBATE AND ADMINISTRATION – CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS – GENERALLY – GENERAL PRINCIPLES OF CONSTRUCTION – EFFECT OF CODICIL – where the testator left property to the applicant under his will – where the testator later executed a codicil to his will directing that certain properties be used for a specified charitable purpose - whether the codicil created a separate trust over the codicil properties as distinct from the residue of the will
EQUITY – TRUSTS AND TRUSTEES – CLASSIFICATION OF TRUSTS – where the applicant argues that the purpose of the trust created by the codicil properties is to further the cause of Christian Science – where the respondent argues that the purpose of the trust is for the relief from poverty – where the codicil recites that the properties are to be used ‘as a Home in connection with the said Church’ and at the trustees’ discretion - whether the trust was a charitable trust was a trust for purpose of the advancement of religion or for relief from poverty
Macquarie Dictionary 5th ed 2009
Picarda HThe Law and Practice Relating to Charities 4th ed Butterworths, London, 2010
Churches of Christ, Scientist, Incorporation Act 1964 (Qld), s 2, s 3
The Religious Educational and Charitable Institutions Act 1861 (Qld)Trusts Act 1973 (Qld), s 104
Hunter v Attorney-General [1899] AC 309, considered
Re Boning [1997] 2 Qd R 12, considered
Re James; Grenfell v Hamilton [1932] 2 Ch 25, citedRoman Catholic Archbishop of Melbourne v Lawlor (1934) 51 CLR 1, considered
COUNSEL:
A Wood for the applicant
M Maloney for the respondent
SOLICITORS:
Neumann & Turnour for the applicant
Crown law for the respondent
In 1935, a man called Thomas Reynolds died leaving most of his estate to the directors of the First Church of Christ Scientist, Brisbane. That property included several real properties in Brisbane, of which two are the subject of this case. They were affected by a codicil to his will and are here called “the codicil properties”. Over the years they were held at times by the church’s directors and at times by the church itself, until they were sold by the church in 1997. It now has the proceeds of sale which amount to more than $2 million.
The questions here concern the proper application of these funds. The church says that they are held by it under a charitable trust, the purpose of which is the advancement of religion and, more specifically, Christian Science which has been recognised as a religion in this context.[1] The Attorney-General contends that they are held under a charitable trust, the purpose of which is the relief of poverty.
[1] Picarda HThe Law and Practice Relating to Charities 4th ed Butterworths, London, 2010, p 100.
For some years the parties have been corresponding about a cy-près scheme which, in various forms, has been proposed by the church. But that cannot be progressed without a determination of the nature of the charitable purpose. Therefore the church has made this application, under s 106 of the Trusts Act 1973 (Qld) for directions by answering specific questions as set out in the Origination Application. Before going to those questions, it is convenient to discuss the history, beginning with the will made by Mr Reynolds on 11 March 1931.
Under that will, Mr Reynolds left the residue of his estate:
“To THE DIRECTORS of the FIRST CHURCH OF CHRIST SCIENTIST Brisbane aforesaid to be used by them for the sole purpose of furthering the cause of Christian Science in the State of Queensland only as shall be thought best absolutely.”
On 1 July, Mr Reynolds executed a codicil to his will which stated:
“WHEREAS by my said Will I have left all the rest reside and remainder of my estate to the Directors of the First Church of Christ Scientist Brisbane to be used by them for the sole purpose of furthering the cause of Christian Science in the State of Queensland only as shall be thought best absolutely I NOW DIRECT that my real property and improvement thereon being [the codicil properties] … shall not be sold by the said Directors of the First Church of Christ Scientist but shall be retained by them and shall be used as a ‘Home’ in connection with the said Church and be available to such persons and on such terms and conditions as the said Directors shall in their absolute discretion think fit …”
I have emphasised the words upon which the Attorney-General relies in arguing that the purpose of the trust was the relief of poverty, by providing a place for people to live.
After probate of the will and codicil was granted, at the end of 1935 the various properties, including the codicil properties, were incorrectly transferred to the name of the church, rather than to its directors. Until 1964, when the church became an incorporated body under the Churches of Christ, Scientist Incorporation Act 1964 (Qld), the First Church of Christ, Scientist, Brisbane was a body or association incorporated by the grant of Letters Patent under the Religious Educational and Charitable Institutions Act 1861 (Qld) (rep). The Letters Patent constituted the persons from time to time holding the offices of president, clerk and treasurer to be incorporated by the name and style of First Church of Christ, Scientist, Brisbane. It can be seen then that the church by that name was distinct from the board of directors.
The church remained the registered owner until 1947 when, upon the application of the then directors of the church, this Court ordered that the properties be vested in them. In evidence here is the order which was made on 27 October 1947 in respect of the four properties which had been left under the will. This vested those properties in the directors “as Trustees with Power of Sale subject to the terms of the said Will and two Codicils”, although the codicil properties were not there specified. It appears that a further order was made in relation to the codicil properties. The order itself is not in evidence, but the summons which sought an order in identical terms to that made for the four properties under the will is in evidence here and I infer that an order was made in those terms.
On 3 December 1947, the church and the directors signed a Nomination of Trustees to alter the registered title of the codicil properties. According to that document, which was registered in 1948, the directors were appointed trustees:
“To hold the [codicil properties] … to be used as a home in connection with the first Church of Christ Scientist, Brisbane and be available to such persons and on such terms and conditions as said Directors shall in their absolute discretion think fit.”
The four properties which were left under the will were subsequently sold and the proceeds were applied towards the improvement of the codicil properties. On one of those two, there was constructed the building which became known as Reynolds House, which was used for accommodation for about six people who were members and adherents of the church. Reynolds House opened in 1961.
The other of the codicil properties was a building originally called Bona Vista and later called Buena Vista, providing hostel accommodation for up to 10 people. In the late 1980s it was converted into six residential units, for use by members of the church and adherents. It appears that it was later used for some short term rentals which were not so connected with the activities of the church.
In 1997 the codicil properties were transferred by the individual trustees to the church under dealing number 702027154. The consideration stated in the transfer was:
“For the purposes of recording a new trustee and pursuant to ‘Churches of Christ, Scientist, Incorporation Act 1964’.”
A schedule to that transfer contained the following:
“It is declared that the land shall be held by the trustee upon the following trusts, that is to say:
1.To hold the same to be used as a home in connection with the First Church of Christ, Scientist, Brisbane and be available to such persons and on such terms and conditions as the directors shall in their absolute discretion think fit.
2.The trustees shall have the power at any time to raise by way of mortgage over the said freehold land any moneys which may be required for carrying into effect the terms of clause 1 hereof.”
The properties remained in the ownership of the church upon that basis until their sale in late 2003.
One of the submissions for the church is that the terms of the trust of the properties at the time of their sale, and thereby any trust of the proceeds of sale, are to be found within that transfer in 1997. But if those terms could be different in their effect from those under which the directors had held the properties, there would be other consequences because the properties would have been conveyed by the directors inconsistently with the then trust. It is unnecessary to consider that possibility, however, because in my conclusion, the terms of this trust remained materially the same as provided for by the will and the codicil. I go then to those instruments.
As is common ground, the will left the residue of the estate upon a charitable trust, the purpose of which was the advancement of the religion of Christian Science. That residue would have included the two parcels which were subsequently the subject of the codicil. There is a question then arising about whether the codicil removed those properties from the charitable trust which was created by the will. As to that, the codicil is not in terms which at least plainly revoke the gift under the will of any of the property within the residue. Rather, the codicil recited the effect of the will upon the residue, before then expressing a direction with respect to the codicil properties. As the church submits, the language of the codicil was not that of revocation and re‑gifting.
For the Attorney-General, it is argued that a further and distinct trust was created by the codicil. This argument emphasises that the codicil uses the expression “direct”, rather than some precatory words such as that the testator “desired” or “wished” the codicil properties to be used in this way. That submission is persuasive. The better view is that the codicil in this respect was intended to have some legal consequence rather than to be merely a statement of an unenforceable wish or desire. That being so, the alternatives are that there was a trust created over the codicil properties, distinct from that over the residue of the estate or that there was a conditional gift. As White J discussed in Re Boning,[2] courts are inclined to construe a will as giving rise to a trust rather than a conditional gift. And again, the codicil is expressed as a direction as to how the property is to be held and used, rather than in the language of a gift.
[2][1997] 2 Qd R 12 at 21-22.
Therefore, the codicil should be interpreted as creating a trust distinct from that created over the residue by the will. The task then is to identify the purpose or purposes of that trust. The church argues that the purpose remained the furthering of the cause of Christian Science. Again, it points to the fact that the codicil recited the terms of the will as to the residue of the estate and argues that the specific purpose was the provision of a “Home” but for the ultimate purpose of furthering the cause of Christian Science. That argument is supported by the words “in connection with the said Church …”. It is also supported by the fact that the codicil properties were to be held by the Directors of the First Church of Christ Scientist, Brisbane, rather than by trustees who are not acting in that capacity. Acting as directors of the church, they were bound to exercise their powers according to the objects of the church itself.
The submissions for the Attorney-General emphasise the judgment of Sir Owen Dixon in Roman Catholic Archbishop of Melbourne v Lawlor[3], where it was explained that not every pursuit which is undertaken by or for a church need have a purpose of the advancement of religion in the relevant sense. Dixon J said:
[3](1934) 51 CLR 1.
“A gift made for any particular means of propagating a faith or a religious belief is charitable; moreover a disposition is valid which in general terms devotes property to religious purposes or objects. But, whether defined widely or narrowly, the purposes must be directly and immediately religious. It is not enough that they arise out of or have a connection with a faith, a church, or a denomination, or that they are considered to have a tendency beneficial to religion, or to a particular form of religion.”[4]
Therefore, it is submitted, the use of this facility, the Home, must have had more than a “connection with the said church” for this to have been a valid charitable trust for religious purposes. The purpose of this trust must have been, as Dixon J described it:
“… The spread or strengthening of spiritual teaching within a wide sense, the maintenance of the doctrines upon which it rests, the observances that promote and manifest it.”[5]
[4](1934) 51 CLR 1 at 32.
[5]Ibid.
It is submitted for the Attorney-General that, at best for the church, this was a trust having several purposes of which one or more but not all were charitable purposes. This submission has some tension with the primary argument for the Attorney-General, which is that this was a charitable trust because its purpose was for the relief of the poor. But alternatively, the contention is that at least one purpose was to provide housing for adherents of this religion but not for the advancement of the religion itself. In cases governed by s 104 of the Trusts Act 1973 (Qld), a trust is not invalid as a charitable trust because it is for purposes some of which are non-charitable. However, s 104 was enacted after the creation of this trust so that it does not apply and there was no Queensland statute to the same effect prior to its introduction in the Trusts Act.
Turning to the Attorney’s principal argument, it is said that the word “Home” was used in the sense of this meaning of the word provided by the Macquarie Dictionary:[6]
“3.(oft. upper case) an institution for the homeless, sick, etc.”
[6]5th ed; 2009 at p 593.
It is said that this meaning is indicated by the economic circumstances in which the codicil was executed in 1931, at the height of the Great Depression. The purpose was to provide housing for the relief of the poor and the fact that this was to be provided under the management of the directors of this church was the only “connection with the said Church” which was involved.
Counsel for the Attorney-General anticipated the difficulty for this submission in the wide discretion that was given to the directors as trustees, in that the Home was to be “available to such persons and on such terms and conditions as the said Directors shall in their absolute discretion think fit”. To meet that difficulty, counsel cited Hunter v Attorney-General[7] as followed in Re James; Grenfell v Hamilton.[8] In the former case, Lord Davey described a class of case where:
“… there is a general overriding trust for charitable purposes, but some of the particular purposes to which the fund may be applied are not strictly charitable, or one of two alternative modes of application is invalid in law. In such cases the trust is good, and the court will give effect to the general charitable trust, but the trustees are restricted from applying the fund for the purposes or in the manner which are objectionable.”[9]
I accept that this passage provides some support for the Attorney-General’s argument. But it also provides some support for the interpretation which I favour, which is that this was a trust for the advancement of religion.
[7][1899] AC 309.
[8][1932] 2 Ch 25 at 31-32.
[9][1899] AC 309 at 324.
As each of the arguments recognise, the words “in connection with the said Church” are important. In a sense it is the nature and scope of that connection which is in question. Those words, of course, must be considered in the context of the instrument as a whole. The recital as to the disposition of the residue of the estate under the will is important here, because it tends to indicate that it remained the testator’s intention to further the cause of Christian Science by the directors’ use of the relevant property as they thought best, but that to that ultimate end, they should be directed to use the codicil properties as a Home. In other words, the Home was to be used in connection with the church in that it was to be used for the sole purpose of furthering the cause of Christian Science. The fact that the directors were given such a wide discretion as to the terms and conditions of that use does not mean that they were empowered to use the Home other than for furthering that cause. In my conclusion, this is the preferable construction of the codicil.
What must now be considered is whether this trust created by the codicil was affected in its existence or its terms by any subsequent event. As discussed, the codicil properties became registered in the name of the church, rather than the directors, in 1935. Neither party suggests that this put paid to any trust created by the codicil. The church became the registered owner in consequence of, although not precisely according to, the codicil and whilst it remained the owner of the codicil properties, it was bound to apply them according to this charitable trust. But if that was not correct, there was then the change in the registered ownership in 1948, in consequence of the order which I have inferred was made in late 1947, vesting the properties in the directors. The Nomination of Trustees substantially followed the term of the codicil. It did use the word “home” rather than “Home”, but in my view that was inconsequential. The instrument did not contain the recital of the terms of the will as to the residue of the estate, as the codicil had recited. But that was not to say that the codicil was irrelevant. It remained relevant in ascertaining the terms of the trust because it is not to be inferred that the church and its directors meant to have these lands dealt with inconsistently with the terms of an existing trust, by the lands becoming vested in the directors upon different terms. Secondly, the Nomination of Trustees was pursuant to the authority granted by the court, which under the order made in 1947, vested the properties in the directors “subject to the terms of the said Will and two Codicils”. It appears then that the court made this order to overcome the irregularity of the property being in the name of the church rather than the directors. Therefore it was an order which was made to give effect to the codicil rather than to change its effect. The order did not constitute some determination of the present questions however.
I have mentioned that the church became incorporated under the Churches of Christ, Scientist, Incorporation Act 1964 (Qld). At one point in the lengthy correspondence between these parties, the church suggested that this Act had vested the codicil properties in the church absolutely, putting paid to the trust. Sections 2 and 3 of that Act provided as follows:
“2Certain Churches of Christ, Scientist, to be incorporated
(1A)The persons who are at the passing of this Act incorporated under the Religious, Educational and Charitable Institutions Act 1961, as First Church of Christ, Scientist, Brisbane, … shall cease to be so incorporated and all real and personal property belonging to or held in trust for the church in question and all rights and obligations shall be divested from such corporation and shall vest in the corporation of the members of such church constituted by this Act, …
…
3Property of the said churches
(1)All real and personal property belonging to or held in trust for First Church of Christ, Scientist, Brisbane, … or the executive board or any committee of any of the said churches whether for any special purpose or generally for the church in question, and whether held by the corporation constituted under the Religious, Educational and Charitable Institutions Act 1861, or by any other person, shall from and after the passing of this Act vest in the First Church of Christ, Scientist, Brisbane, … without the necessity for any conveyance, transfer, or other assurance of such property.”
(emphasis added)
The short answer to that point was that these lands were not real property “belonging to or held in trust for the church …”. They were held by the directors, not for the church but for a charitable purpose. I have referred to this point because it was raised in correspondence although I did not understand that it was amongst the arguments for the church at the hearing.
Then there was the transfer in 1997 by the directors to the church. Again the codicil is not to be disregarded in considering the effect of this transfer, because the directors as trustees did not have power to vary the terms of the trust. The 1997 instrument can be interpreted consistently with its being not a purported variation of a trust, but an instrument to effect the appointment of a new trustee under the same trust.
It follows that the church held the codicil properties, and now holds their proceeds of sale, upon the trust created by the codicil, which was a charitable trust for the purpose of the advancement of the religion of Christian Science in Queensland. The applicant is directed to administer that trust accordingly. That direction is sufficient to dispose of the present differences between the parties. It is unproductive to endeavour to express that conclusion in answer to the specific questions raised by the originating application. I will hear the parties as to any further orders upon this application, including orders as to costs.
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