THE GARDEN CLUBS OF AUSTRALIA INCORPORATED v.EYRES

[2002] NSWSC 801

CITATION:	THE GARDEN CLUBS OF AUSTRALIA INCORPORATED v.EYRES [2002] NSWSC 801
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 4306/2001
HEARING DATE(S):	02/09/2002
JUDGMENT DATE:	6 September 2002
PARTIES :	The Garden Clubs of Australia Incorporated - Plaintiff Ann Eyres - Defendant
JUDGMENT OF:	Bryson J at 1

COUNSEL :	D. Davies SC - Plaintiff S. Reuben - Defendant
SOLICITORS:	M.F. Crawley - Plaintiff Butlers Law Group - Defendant
CATCHWORDS:	WILLS - construction - gift to voluntary association - "to the Garden Club of Australia to its Building Fund" - whether created trust or condition impeding decision to apply Building Fund to general purposes - held it did not - UNINCORPORATED ASSOCIATIONS - Gifts - validity - presumption of operation as gift to existing members - Bacon v. Pianta presumption - held that the gift was valid as a gift to existing members.
CASES CITED:	Income Tax Special Purposes Commissioners v. Pemsel [1891] AC 531 Grant v. Commissioner of Stamp Duties [1943] NZLR 113 Re Spehr [1965] VR 770 In re Verrall; National Trust for Places of Historic Interest v. Attorney-General [1916] 1 Ch 100 Thompson v. Federal Commissioner of Taxation (1959) 102 CLR 315 Leahy v. Attorney General for New South Wales [1959] AC 457 Bacon v. Pianta (1966) 114 CLR 634 In Re Goodson deceased [1971] VR 801 Public Trustee of New South Wales v. Attorney General for New South Wales (Powell J) 11 December 1984 (unreported) Misra v. Hindu Heritage Research Foundation (Young J) unreported 21 June 1996 Re Ulverston & District New Hospital Building Fund [1956] 3 All ER 154 Beggs v. Kirkpatrick [1961] VR 764 In re Ogden [1933] Ch 678 Re Recher's Will Trust [1972] 1 Ch 526 In Re Lapinsky's Will Trust [1976] 1 Ch 235 In Re Goodson deceased [1971] VR 801 In Re Coyne (1 February 1996) unreported
DECISION:	Declaration that plaintiff entitled to use Building Fund for general purposes: see [50]

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON J

FRIDAY 6 SEPTEMBER 2002

4306/2001 THE GARDEN CLUBS OF AUSTRALIA INCORPORATED v. ANN EYRES

JUDGMENT

1 HIS HONOUR: The plaintiff’s case raises for consideration whether there are any facts or circumstances, either in the meaning and effect of the gift in the will of the late Mr William Roy Ritchie or otherwise in the affairs of Garden Clubs of Australia or the plaintiff, which limit the dispositions which the plaintiff may make of money in the Building Fund.

2 The plaintiff holds money in several different bank accounts which are together known as The Garden Clubs Building Fund and claims a declaration that it is entitled to use these moneys for the general purposes of the plaintiff, meaning that it is not restricted to using them for construction or acquisition of a building or other premises. The Building Fund is the proceeds of many donations, all or perhaps almost all made by members over some years, together with bank interest. The Building Fund is held in four term deposits at the Commonwealth Bank of Australia. Three are term deposits at the Dee Why Square Branch and one is at the Maroubra Junction Branch. The total funds including interest to 30 June 2001 was $260,688.31. By far the largest donation was a gift of $100,000 made by the late William Roy Ritchie in his will dated 18 May 1989. Mr Ritchie died on 14 July 1989, and probate of his will was granted by this Court to Mr Gordon Crowle, who carried out his duties as executor and trustee, and later died, leaving a will which has not been proved; so there is now no legal personal representative of Mr Ritchie.

3 Mr Crowle paid the testamentary gift to The Garden Clubs of Australia, the predecessor of the plaintiff, on 9 March 1990 and since that date the funds have been maintained in a series of term deposits, designated “The Garden Clubs of Australia Building Fund” separate from all other donations, and represented by a term deposit in the Commonwealth Bank at Maroubra Junction of $179,518.19 at 30 June 2001. The account is still maintained and has accumulated further interest. At the most literal level the terms of cl.6 of the Will were exactly fulfilled; Mr Crowle paid the gift of $100,000 to The Garden Clubs of Australia and to its Building Fund; the gift went into the Building Fund and was regularly included by the Treasurer when reporting the amounts held in the Building Fund.

4 The defendant Ms Ann Eyres is the residuary beneficiary under Mr Ritchie’s will, and she was joined as the defendant by an interlocutory order and took the part, essential for effective use of the declaratory order procedure, of the contradictor and opponent to the plaintiff’s case. For good order she should be appointed to represent Mr Ritchie’s estate for the purpose of these proceedings pursuant to Pt.8 r.14 of the Rules of Court.

5 The predecessor of the plaintiff was a voluntary association the existence of which can be traced to an inaugural meeting on 15 November 1950, when the association was named New South Wales Garden Club. The Association changed its name to The Garden Club of Australia on 15 February 1952. I refer to it as GCA. It has been a successful voluntary association, and has not employed staff. It acquired a number of branches and Affiliate Clubs over the years; its membership consisted partly of individuals but predominantly of local clubs. There have been many changes of membership as local clubs, most of which have themselves not been incorporated but have been voluntary associations, have become Affiliate Clubs, and from time to time some have gone out of existence or have separated from the plaintiff and its predecessor. The Annual General Meeting of 1968 elected a Federal Committee, being a committee of all committee members, to co-ordinate effectively the interests of the numerous clubs which were members. GCA adopted a written Constitution, it would seem for the first time, on 27 September 1983. The Club was incorporated and the plaintiff was formed under the Associations Incorporation Act 1984 (NSW) on 2 October 1992. The name of the incorporated club, when formed, was Garden Club of Australia Inc; this name was changed on 31 August 1998 to GCA Incorporated. This body is the plaintiff; there no longer is a voluntary association.

6 The 1983 Constitution was in effect at the time when Mr Ritchie made his will and also when he died and when his gift was paid to the Club by his executor. Clause 2 of the 1983 Constitution stated the objects of the Club in these terms:

Objects :
The objects of the Club are as set out hereunder:
(a) Friendship through gardens.
(b) To co-ordinate the interests of the garden clubs of the continent and to bring them into closer relationship of mutual helpfulness by association, conference and correspondence.
(c) To aid in the protection and conservation of our natural resources.
(d) To encourage civic beauty and roadside development.
(e) To study the fine art of gardening in all its aspects.
(f) To co-operate with other agencies furthering the interests of horticulture and conservation.
(g) The Club is non-political and non-sectarian.

7 Paragraph 3 dealt with membership; members were Affiliates, which were Garden Clubs and kindred organisations throughout Australia and nearby countries, and Subscribing Members, who were individuals; there was also provision for honorary life membership and for appointment of a Patron. The 1983 Constitution provided for membership of the Federal Committee (which was the management committee), and specified the powers of the Federal Committee by saying, in cl.4(a) “The Management of the Club shall be vested in a Management Committee …”. The Constitution also provided for an annual general meeting, for special general meetings, and for a number of formal matters. The Constitution did not refer to the Building Fund, or in express terms refer to any power to acquire a building or any project of doing so. I would not think that there was a need to confer a power of that kind expressly in the Constitution of a voluntary association. Clause 16 provided for amendment of the Constitution by a resolution passed by two-thirds majority of Affiliates present at general meetings. Clause 15 related to dissolution and was in these terms:

Dissolution :
(a) The Club shall be dissolved in the event of membership becoming less than twenty Affiliates or upon the vote of a three-fourths majority of Affiliates present at a Special General Meeting convened to consider such question.
(b) Upon a resolution being passed in accordance with paragraph (a) of this clause, all assets and funds of the Club shall, after payment of all expenses and liabilities, be handed over to such like body as a simple majority of the Affiliates at the Special General Meeting so convened, or at a subsequent Special Meeting, may decide.

8 The Constitution and Rules of the incorporated association show clearly that it is a continuation of the previous voluntary association. The objects are very similar; they are only slightly expanded. The membership qualifications and the provision for management by a Federal Committee obviously continue the previous arrangements. The Constitution of the incorporated association contains many more matters of detail about the functioning of the association than the 1983 Constitution. Clause 13(19) states the powers of the Federal Committee including express power to purchase and deal in real estate, in these terms:

13. (19) The Federal Committee has power to perform all such acts and do all such things as shall appear necessary for the proper management of the affairs of the Club, including -
(a) Power to invest or deal with any moneys of the Club as it may from time to time determine.
(b) Power to purchase, enter into leases either as lessor or lessee for any period of time, hire or otherwise acquire on behalf of the Club any land buildings rooms or other interest in real estate and to sell, let lease hire or otherwise dispose of the whole of any part of such interest in real estate.
(c) Power to borrow or to raise money on behalf of the Club and to offer as security such property of the Club as may be necessary to obtain such money and to execute any mortgage, debenture or other security required to record the same. Such instrument shall be executed under the common seal of the Club and shall be attested by the President, Treasurer and/or Secretary.

9 Clause 32 deals with funds and subcl.32(6) is in these terms:

(6) Subject to any resolution passed by the Club in general meeting, the funds of the Club shall be used in pursu[a]nce of the objects of the Club in such manner as the Federal Committee determines.

10 Clause 36 deals with surplus property on dissolution so as to adopt, as was mandatory, s.53 of the Associations Incorporation Act 1984. This is quite different to what had been provided for and from what could have happened under the 1983 Constitution.

11 Section 17 of that Act gives the plaintiff the rights, powers and privileges of a natural person, subject to restrictions referred to in s.18.

12 Section 15 has the effect of making the plaintiff the successor of GCA, and provisions of Schd.2 para.2 brought about the automatic transfer of assets and liabilities on incorporation, with the burden of any trust affecting assets transferred.

13 Before incorporation GCA was a large body of persons who were co-owners of all its property; they were contractually bound to each other by the 1983 Constitution to manage and use the property in accordance with the Constitution but in legal theory they were all co-owners and, if they agreed unanimously or if they altered the 1983 Constitution in accordance with its own alteration procedure, they could have disposed of any part of GCA’s property in any way they agreed; and they could have departed from the existing terms of the Constitution to do so. As a matter of right, they could all have agreed to split up the property among themselves, and pocketed the proceeds. They did not have to follow out cl.15 relating to dissolution; if they acted unanimously or followed the amendment procedure they could change the provisions of cl.15(b) about handing over assets to another like body, and in any event cl.15 provided for another method of dissolution if the numbers fell below 20, in which case there was no provision for handing over assets to another body. The full opportunity of the members to deal with property in this way would however be restricted if any particular piece of property was subject to a trust in favour of another person or persons, or to a charitable trust. I give these illustrations of what the members could do to show what their rights were; it does not seem that there was any practical possibility that the members would agree together to split up the property and pocket the proceeds, but as a matter of right, property of GCA, except for any property which was subject to a trust, was wholly at the disposition of the members acting together.

14 Mr Ritchie was a member of GCA of long standing. The address he gave in his will was at Bayview and he disposed of the villa in which he lived in Cabbage Tree Road, Bayview by a testamentary gift. He was a member of the Pacific Garden Club which it seems was active in or around Bayview and Newport and was an Affiliate of GCA, and he served as a member of the Federal Committee from 24 August 1978 to 22 September 1981, before the adoption of the 1983 Constitution. He remained active and interested in GCA affairs. He urged the Club to obtain permanent premises in a letter published in the Club’s magazine in August 1987 which referred to earlier endeavours to obtain suitable premises from 1980 onwards. By this time Mr Ritchie was one of the principal movers for the establishment of a permanent home for GCA and for the establishment of a building fund. A further letter from him on the same subject was published in the magazine of November 1988. He prepared a resolution dealing with the subject of premises, contemplating bringing it forward at the Annual General Meeting which took place on 17 August 1988, although he did not in fact move the resolution, but spoke at the meeting and endorsed acquisition of funds for building.

15 The minutes of the Federal Committee of 4 July 1988 contain a reference to funds for building. Under General Business is the following entry:

Re Building Trust Fund : This matter was discussed at length and the general consensus was that donations would not amount to very much. However if members so desired a special account, viz. “The Garden Club of Australia Trust A/C.” could be set up into which donations could be paid towards future acquisition of permanent headquarters of The Garden Club of Australia. It was thought that an original donation of $1000 be transferred to such an Account; included in this amount would be the $797.50 rec’d. from Perth Conv.

The minutes do not show any decision or conclusion on this subject.

16 The minutes of the Annual General Meeting of 17 August 1988 contain an entry under General Business, with a reference to Mr Ritchie which I mentioned earlier. Mr Ritchie attended as the registered delegate of the Pacific Garden Club. The passage is: (Ex A/F p.3).

The President advised that a Building Fund Investment Account had been opened with $1000 with the Commonwealth Savings Bank.
R. Ritchie of Pacific Club spoke on every journey having to have a first step. He suggested that Garden Club members might like to leave bequests for this Fund.
He felt sure that all members would be pleased that a Building Fund Account had been opened.

17 There is no record of a resolution of the Federal Committee or the Annual General Meeting that a Building Fund Account would actually be opened. What the President stated in her advice to the Annual General Meeting did not include a reference to a Building Fund Trust Account, or any reference to a trust.

18 In the minutes of the Federal Committee meeting of 2 September 1988 under Business Arising is the following entry.

Building Fund . The Treasurer advised that owing to a technicality the Account is to be closed and re-opened as ‘Garden Club of Australia Building Fund’. The signatories to be the Treasurer or Assistant Treasurer with either the President or the Secretary.

It does not appear what the technicality was, and it is not now known what account is referred to as the closed account, or when it was opened and closed. Again there is no reference in the minute to its being a trust account, or to a trust.

19 The account spoken of in the minutes can be clearly recognised as Savings and Investment Account 2000 5019063 at the Pitt Street and Martin Place Sydney Branch of the Commonwealth Savings Bank of Australia, established by an initial deposit of $1000 on 20 September 1988. There is no reference to a trust or a trust account in the designation given to the account in the passbook. The name of the customer was shown in the passbook as “The Garden Clubs of Australia Building Fund”. GCA did not limit its freedom of action simply by giving the account that name, or by referring to the money as part of a Building Fund in reports to its Committee or to its members.

20 The Club magazine of November 1988 contained a letter from Mr Ritchie referring to the announcement at the Annual Meeting and commenting on the Building Fund in a way which greatly commended it. Among other things he said “And considerable amounts could accumulate each year if all members responded to an appeal to leave what they could to the Building Fund when making or amending their wills. I believe garden club members would respond to such an appeal.” In a letter of some length Mr Ritchie did not refer to the Building Fund as a trust account, or used the word “trust” or any expression indicating that he was of the view that a trust existed.

21 Thereafter the minutes of meetings of the Federal Committee usually included a report by the Treasurer of contributions to the Building Fund, sometimes by individuals but usually by Affiliated clubs. The Club magazine of May 1989 includes a letter from Doris Killian, Zone Director, Central Coast South, reporting that funds had been raised at a social function on 12 March 1989 for the Building Fund. A further report from Ms Killian in the Club magazine of August 1989 recorded further social functions at which money was raised for the Building Fund.

22 The magazine of May 1990 contained an item under the headline “Building Club Boost” which referred to $7000, proceeds of the 1989 Convention, having been deposited in the Building Fund and went on “We emphasise that all contributions to the Building Fund are deposited direct to the special account, and are in no circumstances available to the Federal Committee for any use other than acquiring premises by purchase or leasing as headquarters. All interest is accrued to the account.” This statement was published after Mr Ritchie’s death and after his donation had been paid to GCA. There can I think be no doubt that it is an accurate statement of what was then happening, and of what was then contemplated as the use to which contributions to the Building Fund would be put, in the intentions of the Federal Committee and according to the general understanding of donors and other members. The existence of these intentions and understandings could not however establish how a contribution of the Building Fund could be used in all future circumstances.

23 The terms of a letter written by Mrs O’Brien, then President, to the solicitor who acted for Mr Crowle on 25 May 1990 do not, in my opinion, tend to establish that the Building Fund account was held on any trust.

24 At no point after the first reference in the minutes in July 1988 is the Building Fund referred to in the context of a trust. This is so not only for the period during which Mr Ritchie made his will and his executor paid over the amount of the gift to the Association, but also for later times. There is no reference in any minute to a decision to create a trust of the moneys in the Building Fund, or to any statement by any donor that there was to be a trust of any particular gift. Indeed, apart from the words “Building Fund” in the minutes wherever the subject was referred to, and the name given to the Savings Bank Account there is no indication that the use of the money in the Building Fund was restricted in any way.

25 An important part of the context is that GCA and the plaintiff did not at any time have any highly specific project for acquiring any particular piece of property. Many possibilities were examined and pursued; these included the possibility, which was pursued for some years, of making a contribution towards construction of an administrative building in the Royal Botanic Gardens, Sydney, in exchange for an arrangement under which an office room or other premises in the building would be set aside for the plaintiff; this proposal never achieved any high state of definition. There were also many proposals under consideration for the use of office space in places such as heritage houses and the premises of other clubs, and for the acquisition of office space; but no mature and practicable arrangement ever emerged.

26 The present Federal Committee has a different view about what the interests of the plaintiff require to be done with the money in the Building Fund. The Committee feels that the plaintiff will never have enough money for Building Fund purposes. The number of Affiliate clubs has grown considerably since the bequest was received in 1990; there were then 320 clubs; there are now about 567. The administrative work is a full-time demand on volunteer staff, and in the view of the Committee there is a need to employ at least one person full-time to assist Committee members in carrying out their voluntary duty; and it is the view of the Committee that the level of demand on voluntary officers of retirement age is a danger to the continuance of the organisation. This view has led to the plaintiff’s wish to establish that the money which heretofore has been called the Building Fund, including the proceeds of Mr Ritchie’s testamentary gift, is at the disposition of the plaintiff without restriction to purposes relating to building or otherwise acquiring premises.

27 In my view there is no expression in the records of GCA and the plaintiff over the use for which the funds were collected which shows an intention to create or maintain a fund which was subject to any trust. There are a number of aspects of this view. Establishment of a trust account was expressly referred to at the meeting of 4 July 1988, but after that express reference was made, that was not the procedure which was adopted. There is nothing which can be recognised as an express declaration of trust or an expression of an intention to create a trust. If there could be any basis for the view that such an intention is to be implied, it can rest only on implications from the words “Building Fund” or on the reference to a Building Trust Fund in the initial consideration in July 1988 which did not lead to any decision. There is no expression which in any clear way could be understood to indicate for what purpose the Building Fund was set aside, apart from whatever indication is to be gathered from the words “Building Fund” themselves. Further the evidence generally shows that although many possible projects were considered, there never was any specific or defined project of building premises or acquiring premises, of freehold title, strata title, leasehold title or otherwise; much was investigated, but nothing which can be recognised as a defined project was ever adopted. Mr Ritchie did not ever refer to a trust fund, and he did not use language in his recorded participation in events which indicated a view that the Building Fund was a trust fund. This is significant because of the terms in which he made his bequest; if he intended that his gift would be an accretion to a trust fund which already existed, or to a fund which already existed which he thought was a trust fund, it might be right to conclude that the donation which he made became subject to a trust; but neither of these intentions is shown by the terms of his will.

28 I turn to address closely the terms of Mr Ritchie’s will. By cl.1 he revoked former wills. Clause 2 said “I APPOINT my brother-in-law Gordon Crowle (hereinafter called my “Trustee”) Executor and Trustee of this my Will”. By clauses 3, 4 and 5 he gave bequests of stated amounts of money to each of three named persons. These provisions were absolute gifts of stated sums and there was no reference to any trust in these clauses. Clause 6 is in these words:

I GIVE AND BEQUEATH the sum of One Hundred Thousand dollars ($100,000) to the Garden Club of Australia to its Building Fund AND I DECLARE that the receipt of the Secretary for the time being of the fund shall be sufficient discharge to my Executor for the moneys paid out under the terms of my Will.

29 By clause 7 he gave his villa to another named person, again as an absolute gift without any reference to a trust. Clause 8 freed the bequests from duties. Clause 9 was to the following effect:

9. I GIVE, DEVISE AND BEQUEATH the rest and residue of my estate to my Trustee UPON TRUST to sell … TO HOLD the net proceeds … upon trust to my niece ANN EYRES for her own use and benefit absolutely.

30 Clause 10 designated powers of the trustee.

31 The will expressly appointed Mr Crowle to be trustee and expressly created a trust in favour of Ms Eyre; and by contrast did not expressly create or refer to any trust in the context of the other five gifts in the will. This mode of expression is adverse to the conclusion that it was intended that a trust should be created by cl.6. The provision of cl.6 discharging the executor on payment to the Secretary of the Fund is an indication, although not a conclusive indication, that the application of the gift to any particular purpose was not an important consideration; this appears because the primary mechanism of supervision by the executor was neutralised. It is also I think notable that the gift is both “to the Garden Club of Australia” and also “to its Building Fund” and that there is not some more specific indication of purpose such as “for its Building Fund” “for the purposes of its Building Fund” or otherwise.

32 The evidence in the proceedings can be referred to in aid of the construction of the will for the purpose of identifying persons and things referred to; evidence established that GCA had a Building Fund and that Mr Ritchie knew of this, so that there can be no doubt what Fund he intended to refer to. It is also established that it was a characteristic of the Building Fund that no provision of the 1983 Constitution and no declaration of trust had imposed legal limits on the power of GCA to deal with the Building Fund in the same way as with its other property, and the Building Fund to which Mr Ritchie intended to refer must be taken to have this characteristic as the terms of his will do not show that he intended to create some new restriction. The evidence can also be referred to resolve any ambiguity which arises from the language of the will, but it has not been contended that there is any ambiguity and I see none.

33 In my opinion on a whole view of the words of the will it does not express, and does not convey the implication of an intention to create a trust of the sum $100,000 given to GCA.

34 In my opinion the objects of GCA were plainly not charitable objects; when classified overall the objects were those of a social organisation which functioned in the interests of Garden Clubs and their members. This is no less so because some of the objects if pursued in a different way might well be held to be charitable as trusts for purposes beneficial to the community, the fourth category identified in Income Tax Special Purposes Commissioners v. Pemsel [1891] AC 531 by Lord Macnaghten at 583. There are elements similar to cases which have been held to fall within the fourth category, such as fostering fields of study, and beautification of parks and of public space and the charitable status of the National Trust in England: counsel referred to Grant v. Commissioner of Stamp Duties [1943] NZLR 113, Re Spehr [1965] VR 770 and In re Verrall; National Trust for Places of Historic Interest v. Attorney-General [1916] 1 Ch 100. The objects of GCA did not have sufficiently specific connection with pursuit of purposes beneficial to the community. The members of a particular association are not the public or a section of the public for this purpose; see Thompson v. Federal Commissioner of Taxation (1959) 102 CLR 315 at 321-322 (Dixon CJ). It follows that a more specific purpose of providing GCA with a building or premises would not be a charitable object either.

35 Gifts to unincorporated associations expressed in terms which could be read as making the gift conditional on applying the property to some purpose, or which appear to create trusts for the attainment of some purpose, have required close consideration by courts. Conditions or trusts can only be enforced in legal proceedings brought by persons interested in their performance; generally if there is no such person the condition or trust is invalid because it cannot be enforced, and Charities law is an exception under which limited classes of trusts for purposes can be enforced in proceedings brought by the Crown. Courts have evolved approaches to gifts to voluntary associations which favour the validity of the gifts and do not favour interpretations which would make application of property to non-charitable purposes a condition of a gift or trust of the property. The tendency to interpret the terms of gifts in ways which favour validity is likely overall to give effect to the true intentions of donors, who should be taken to have intended their gifts to be effective.

36 The judgment of the Privy Council delivered by Viscount Simonds in Leahy v. Attorney General for New South Wales [1959] AC 457, 101 CLR 611 contains, in the passages dealing with cl.3 of the late Mr Leahy’s Will at pp459-460, a comprehensive account of the case law to that time dealing with the effectiveness of gifts to voluntary associations and recognition of the intended donees as (on one hand) the present members or (on the other) as the association as a continuing body the rights of which the present members could not equate with their own. Difficulties flow from references in the terms of gifts to the purposes of associations, and to concepts of permanence or endowment which might be thought to show an intention to keep complete control and disposition of the property out of the hands of the existing members. The cases which his Lordship reviewed include some which far more clearly than cl.6 of Mr Ritchie’s will raised the question whether there was an intention to limit the gift to some particular purpose, such as the hypothetical case where there were the added words “for the benefit of the community” referred to at 478 or the words “for the general purposes of the association” also referred to at that page and found in In re Ogden [1933] Ch 678. There is no provision of the 1983 Constitution which would prevent the members existing at the time of Mr Ritchie’s death from dealing with any part of the property, both capital or income, and including the Building Fund, in any way they pleased, a case considered by Viscount Simond at 480. Nor is there any indication that Mr Ritchie thought or had reason to think of GCA as a perpetual institution, a difficulty of the kind considered at 482. It appears from the judgment of the Privy Council that if the property when donated is wholly at the disposition of the present members, consideration whether or not it is probable that they would exercise their rights by entirely disposing of the property or even by dividing it among themselves is irrelevant; what is important is their entitlement. The rules of such bodies usually contain a power of alteration and even if they do not can, at least as a matter of theory, be altered by unanimous decision.

37 The improbability that the members would actually distribute donated property among themselves is usually high, particularly if to do so were inconsistent with the rules of the unincorporated association. As it happens, on any reasonable conjecture of what a voluntary association might do with a building fund (and Mr Ritchie’s will referred to a fund, that is, retained money) it is likely that the fund would be completely expended and would go out of existence in some exercise in which a building or premises were constructed or acquired. The words used in the will with its reference to a fund are adverse to any reading in which the gift was a permanent or perpetual endowment, or in which GCA with its then membership was restricted by the terms of the Will in what it could do with the fund.

38 The judgment of the Privy Council appears to have been approved and followed by the High Court in Bacon v. Pianta (1966) 114 CLR 634 at 638. In Bacon v. Pianta the gift in the will was “I give, devise and bequeath the whole of my estate … to The Communist Party of Australia for its sole use and benefit.” Their Honours said at 638:

The difficulty in the case arises from the fact that The Communist Party of Australia is an unincorporated voluntary association. Cases dealing with the problem which arises from such a circumstance with respect to testamentary dispositions are numerous and some of them are, to say the least, not readily reconcilable. However, in the recent case of Leahy v. Attorney-General (N.S.W.) [1959] A.C. 457; (1959) 101 C.L.R. 611 many of them were referred to and reviewed and the guiding principles were restated. It was accepted that, as had been held in cases such as Bowman v. Secular Society [1917] A.C. 406 and In re Ogden ; Brydon v. Samuel [1933] Ch. 678, a gift to an unincorporated association operates, prima facie, as a gift to the individual members at the time when the bequest becomes operative. However, circumstances may appear which preclude this conclusion; it may appear that the disposition amounts to a trust for the benefit of both present and future members, or, that it is not for the benefit of individuals at all but stands revealed as a trust for some purpose or purposes disclosed by the terms of the bequest. In the former of these two cases the gift may well fail as infringing the rule against perpetuities and, in the latter case, it will fail unless the purpose is, in the legal sense, charitable. Indications sufficient to rebut the prima facie presumption may be found to some extent in the form which the gift takes, in the number and disposition of the members of the association, in the subject matter of the gift and in the capacity of the members to put an end to their association and distribute its assets.

39 In my opinion this passage states authoritatively the approach which should be taken to the validity of Mr Ritchie’s gift. To restate the test with particularity applicable to the present case, the test is whether the reference to the Building Fund, understood in context of the will and of the affairs of GCA which Mr Ritchie must be taken to have known, rebuts the prima facie presumption.

40 With the advantage of this authoritative statement, later consideration in English cases is not a source of law which I should apply. However, it appears to me that in Re Recher’s Will Trust [1972] 1 Ch 526 Brightman J made no significant departure notwithstanding his Lordship’s limiting view of the significance of Bacon v. Pianta; see 541-542. To my reading English decisions maintain a prima facie inclination towards constructions favouring validity. See In Re Lapinsky’s Will Trust [1976] 1 Ch 235. There has been further consideration in Australia in In Re Goodson deceased [1971] VR 801 (Adam J) and in Public Trustee of New South Wales v. Attorney General for New South Wales (Powell J) 11 December 1984 (unreported).

41 The contractual terms of the arrangements among existing members in the constitution of a voluntary association are not of much importance for ascertaining whether a gift to the association is intended to be a gift to the present members and hence valid, or a gift to a continuing body including future members and for that reason invalid as a perpetuity. (I set aside the unlikely case, which I have not seen in the Law Reports, of a gift which was expressly on condition of continuing observance of some provision of the present rules.) Whatever their present constitutional arrangements, the members can alter them although, depending on what the constitution says about alteration, they may have to act unanimously to do so. This consideration is remote from Mr Ritchie’s gift; he did not refer to the 1983 Constitution or require it to be complied with, and the 1983 Constitution does not refer to the Building Fund and does not limit what the association could do with its property, except in the limited case of cl.15(b), which itself was susceptible of alteration and would not stand in the way of a decision to distribute property without a dissolution.

42 Many other gifts were made to the Building Fund, all of them of much smaller order of amount than Mr Ritchie’s gift. The proceeds of these gifts with accumulated interest amounted on 30 June 2001 to $81,170.12 and were held in the three accounts at the Dee Why Square Branch of the Commonwealth Bank. A list of donations (Exhibit A/LL) compiled from receipt books shows that in the overwhelming number of cases the donors were Affiliate Clubs, although there were also significant donations by individual members, in some cases no doubt representing personal donations and in other cases proceeds of fund-raising social occasions or other ventures. Relatively large sums were raised from functions conducted by GCA itself including $7000 raised by the Biennial Convention in 1990 and $2000 raised by a Summer School in 1991; there were several other significant donations in the order of $1000, the majority of these being associated with the Central Coast Zone of clubs and the activities of Ms Doris Killian, and there were a number of donations by individual members, one of $918.67 but mostly in the order of $200 or less. The most recent donation was made in March 1994.

43 Before bringing these proceedings the Federal Committee canvassed Affiliate Clubs and known individual donors and Zone Co-ordinators and sought responses indicating whether the plaintiff’s claim was supported. The great majority of responses indicated support. Three Affiliate Clubs opposed the claim in correspondence and two of them requested a refund; two individual donors opposed the order sought and requested a refund. The replies from the objecting donors expressed understandable general dissatisfaction with the application of donations otherwise than to a building or premises, but did not embark on detailed exposition of facts surrounding their donations. None of them attempted to join in the litigation as a defendant; in view of the amounts of the donations involved this is readily understandable.

44 The question of entitlement to repayment of a donation which is not applied to the contemplated purposes is susceptible of complexities arising from the exact circumstances of the particular donation; these complexities are illustrated in Misra v. Hindu Heritage Research Foundation (Young J) unreported 21 June 1996. I do not have detailed factual information about the circumstances of each of the small number of challenged donations, and in relation to the amounts involved such information is not reasonably to be expected. I must come to a conclusion on quite general considerations about the intention to be imputed to donors who were themselves members of or otherwise closely associated with GCA and made donations which were earmarked or designated for its Building Fund.

45 In my view, in the paucity of available information, there is nothing to displace the prima facie presumption that the gifts were intended to be absolute and were not conditional on actual achievement of some building project. For the relatively small gifts, in the order of $1000 or less, this conclusion is all the more likely to be right in view of the relatively small size of the donation; it does not seem at all likely that persons contributing to a collection of funds by attending a social event, or making a relatively small contribution, would have intended or should have imputed to them the intention that in some event or outcome they would be entitled to repayment. I would take the same view as was expressed by Young J in Re Coyne (1 February 1996) unreported; his Honour said “Generally speaking, when one sees a small unincorporated association which has collected moneys mainly internally for a relative[ly] vague purpose, the Court tends to the view that the moneys received by an organisation in such an appeal are an out and out gift to the association with the donees trusting the association that it will carry out the purpose, as opposed to impressing the moneys collected with some trust.”

46 As I see no room for the view that Mr Ritchie’s gift might have been intended to create a perpetuity I do not address the question, on which counsel made submissions, whether ss.16(3) of the Perpetuities Act 1984 would in that case save the gift.

47 On behalf of the defendant it was contended that the gift failed or alternatively was invalid from its inception in accordance with the principles in Leahy’s case and that for that reason there is a resulting trust of the amount of the gift to Mr Ritchie’s estate. I do not accept this submission because in my view the principles in Leahy’s case, as adopted in Bacon v. Pianta, create a prima facie presumption in favour of validity which has not been displaced. The defendant’s counsel also contended that the trust operating upon GCA has failed because of the total failure of the purpose for which the trust was constituted. In this connection he referred to Re Ulverston & District New Hospital Building Fund [1956] 3 All ER 154 and Beggs v. Kirkpatrick [1961] VR 764. I have not accepted this contention.

48 In Re Ulverston & District New Hospital Building Fund [1956] 3 All ER 164, to which defendant’s counsel referred me, funds had been collected, in some cases anonymously but in some other cases from identifiable donors, for a charitable object which was defined in a specific way; donors responded to an invitation to allocate gifts to one of several projects of building hospitals, and the donors in question had specified a hospital at Slough and by so doing had chosen against another proposal in which council of the charity could exercise discretion about which hospital was to be assisted. The project of erecting a hospital at Slough became impossible, it fell for decision whether those donors should be taken to have had a general charitable intention, and the Court of Appeal of England decided that they should not. In the present case there is no context of charities and no context of a decision favouring one specific project and disfavouring a more general project. In my respectful view the decision of the Court of Appeal is not of assistance in the present case where the matter for decision is whether or not any condition was imposed on the donation.

49 In my opinion Mr Ritchie’s will, on its true meaning, did not constitute any trust for any purpose relating to building, and was not subject to any condition requiring application of the gift to any particular purpose. There has not been a total failure of any purpose for which a trust was constituted or of any condition of the gift. The gift was a gift to GCA; the testator’s intentions were fully achieved when GCA became the owner of the money, and its further application for some purpose relating to building was not a purpose of the gift failure of which would produce a resulting trust. In any event there was no defined project of building or acquiring premises which could be recognised as a condition in sufficiently clear terms to be open to testing for achievement or failure. Further (if it should be important) I point to the literal fulfilment of the exact terms of the bequest by receipt of the gift and treatment of it as part of the Building Fund.

50 For these reasons I propose to make the declaratory order claimed. I have not yet considered costs.

51

Orders:

(1) Order pursuant to Pt.8 r.14 that the defendant be appointed to represent for the purposes of the proceedings the persons including herself interested in the estate of the late William Roy Ritchie.

(2) Declare that the plaintiff is entitled to use moneys in the Fund known as The Garden Clubs Building Fund for the general purposes of the plaintiff.

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Last Modified: 09/11/2002