A-G (NSW) v Donnelly

A-G (NSW) v Donnelly - [1958] HCA 1 - HCA 1958 case summary — Zoe

These are two appeals from a decree of Myers J. declaring the effect of two clauses of the will of the late Francis George Leahy of Harefield and Bungendore in New South Wales, grazier. The questions with respect to the provisions of the will with which the decree deals are whether they are valid either as charitable trusts or otherwise to any and what extent. The will in question was made on 16th February 1954 and the testator died on 11th January 1955. His estate, the net value of which was about £348,000, comprised several grazing properties and a block of flats in Goulburn. Testator left him surviving a widow and seven children all of whom are of full age. They are respondents in one appeal and appellants in the other. By his will the testator, after a bequest of £1,000 for the benefit of St. Joseph's Convent at Bungendore and a bequest of £1,000 to the Rector of the Passionist Fathers Mary's Mount Goulburn, gave specific bequests to two of his children and a nephew and made certain provisions in favour of one of his daughters. He then disposed of the whole of his real estate and the residue of his personal estate by devising and bequeathing it to his trustees upon trusts which the will proceeded to declare. Under the first trust his wife was entitled to occupy one of the flats in Goulburn so long as she should remain his widow and to use the furniture. Subject to that he devised the flats and the furniture to one of his daughters. He directed that his trustees should pay his wife an annuity of £750 and should refund to his wife the income tax upon the annuity. He then dealt with his grazing properties. In the first place he made provision as to a property known as "Elmslea". One of the appeals turns on that provision and it is better before setting it out to describe the other provisions of the will. The testator went on to deal with the homestead on the grazing property known as "Overdale" at Harefield and certain cultivation paddocks annexed to it. He directed his trustees to permit the order of nursing sisters known as "The Nursing Sisters of the Little Company of Mary" to use and occupy the homestead furniture and lands of "Overdale" for a period of ten years from his death upon condition that the property should be used for the care and comfort of the sick or the like in a manner which he indicated. At the expiration of ten years upon being satisfied that the provision had been fulfilled his trustees should be at liberty to convey the property to the order. If the trustees were not so satisfied they were directed to select some other order of nuns and offer the property to them on the same conditions. The will proceeded to make provision as to the rest and residue of his estate and this provision is the subject of the other appeal. It will be necessary to set it out later in terms. There follow certain powers: a power to continue the employment of the testator's secretary and accountant, a power to sell, a very full power of management and some incidental authorities.

[5]

The provision disposing of the residue is somewhat fuller but no more need be set out verbatim than the dispositive trust which is as follows: "Upon trust to use the income as well as the capital to arise from any sale thereof in the provision of amenities in such Convents as my said Executors and Trustees shall select either by way of building a new Convent where they think necessary or the alteration of or addition to existing buildings occupied as a Convent or in the provision of furnishings in any such Convent or Convents." The disposition goes on to give the trustees complete discretion as to the building or alteration or repair of premises and, what is more important, as to the order or orders of nuns who should benefit under the terms of the clause. It provides that the receipt of the Reverend Mother for the time being of the particular order of nuns or convent shall be a sufficient discharge for any payment under the clause. This provision was held bad by Myers J. on the ground that inasmuch as it included contemplative orders it went beyond the confines of a valid charitable trust. His Honour considered closely the possibility of applying s. 37D of the Conveyancing Act 1919-1954 N.S.W. and under that clause severing, so to speak, the intended objects of the provision and excluding the contemplative orders. The material parts of the section are as follows: "37d. (1) No trust shall be held to be invalid by reason that some non-charitable and invalid purpose as well as some charitable purpose is or could be deemed to be included in any of the purposes to or for which an application of the trust funds or any part thereof is by such trust directed or allowed. (2) Any such trust shall be construed and given effect to in the same manner in all respects as if no application of the trust funds or of any part thereof to or for any such non-charitable and invalid purpose had been or could be deemed to have been so directed or allowed." Myers J. came to the conclusion that the foregoing provisions could not be applied to save any part of the bequest by the exclusion from the operation of its general words of those contemplative orders whose life is outside the legal conception of charitable purposes. His Honour's reasons for this conclusion must be read in full to be appreciated, but in the end they come down to the view that the mischief to which the section is directed is the failure of trusts in which testators have shown an intention to benefit charity but which, because of the inclusion of non-charitable objects, have failed altogether and that the section cannot give effect to trusts irrespective of the intention of the testator but only conformably with it or part of it. "Accordingly", said his Honour, "the section only applies where a charitable intention appears from the trust itself, and the application of the whole fund to charity is one way of completely satisfying the intention of the testator. A trust for such purposes as the trustee should select would therefore not qualify under s. 37D because it shows no charitable intention." In conformity with this view the decree declared the provision as to the residue to be void. From this part of the order the Attorney-General has appealed.

[6]

It appears that within the Roman Catholic Church associations of religious women are divided according to canon law into two kinds of institutions, namely orders and congregations. In an order the members take solemn vows; in a congregation the members take only simple vows, whether perpetual or temporary. An order has for its objects the observance of one of four ancient rules: the Rule of St. Basil, St. Benedict, St. Augustine or of St. Francis of Assisi. The rules or constitution of a congregation which the members observe are not necessarily the same as the foregoing ancient rules or as rigorous. Strictly speaking, the term "nun" is applied only to religious women who take solemn vows while those who take simple vows are called "sisters". It appears, however, that the distinction between orders and congregations within the Catholic Church is strictly a canonical distinction and that it would not be known generally to the laity. It further appears that even among the clergy of the Roman Catholic Church the terms "order", "congregation", "nun" and "sister" are commonly used without discrimination and without the canonical distinction unless there is some cause for precision. In Australia about fifty associations of religious women of the Roman Catholic Church are represented, some only of which are orders properly so called, the remainder being congregations. It seems clear enough that when the will speaks of orders of nuns it includes congregations of sisters. There are included among the orders represented in Australia contemplative orders which are so called because their members are strictly enclosed in their convents and engage in no external work but devote their lives to contemplation and penance and other religious duties of prayer and reflexion. Since Cocks v. Manners [1] such purposes have been held to be outside what the law treats as valid because they promote what are considered legally to be charitable purposes. In Gilmour v. Coats [1] where the nature of the religious duties to which such orders are devoted is fully discussed, the conclusion that they were not charitable purposes in point of law was upheld as inevitable. It is convenient to refer to orders of this description as contemplative even if that word be inadequate as a description.

[9]

In the next place it will be noticed that among the orders the executors and trustees are to have an unfettered power of selection. We think that this means that they are to make their choice once for all, not from time to time. The choice is among the orders of nuns with the Christian Brothers added as a possible object of the choice. If the bodies over which the choice extends were all charitable within the legal meaning of that word the fact that the choice lay with the executors and trustees and that it extended over such a wide area could not affect the validity of the trust. That is the effect of the decision of this Court in Smith v. West Australian Trustee Executor & Agency Co. Ltd. [2] , a decision based upon the dicta in Blair v. Duncan [1] and Chichester Diocesan Fund and Board of Finance (Incorp.) v. Simpson [2] . Nor would we have thought if it were possible to construe the trust as one in favour of some definite body of persons to be chosen as beneficial objects of the trust that it ought not to be upheld as a valid power of appointment. The difficulty is however to construe the trust as one intended to place the chosen body in the position of beneficial owners of the land and the furniture to dispose of as the body should think fit. The trust is very briefly expressed but from its subject matter it appears to us to be clear that the trustees were intended subject to the power of sale to remain the repository of the whole legal title and to administer the trust by affording the enjoyment to the order of nuns or the Christian Brothers as the case might be who might be selected. The orders are not treated otherwise than as large congregations or orders by the Roman Catholic Church and subsisting under a canonical organisation the character of which the testator presumably did not understand nor regard as relevant. The argument that the gift can be regarded as valid independently of the law of charity is based upon the Irish cases which begin with the suggestion made by Christian L.J. in Stewart v. Green [3] which probably preceded Cocks v. Manners [4] . Of the Irish cases which followed illustrating successful and unsuccessful attempts to apply the same mode of construction it will suffice to mention In re Delany's Estate [5] ; Morrow v. M'Conville [6] ; Bradshaw v. Jackman [7] ; In re Byrne (dec'd.); Shaw v. Attorney-General [8] ; Munster and Leinster Bank v. Attorney-General [9] ; In re Keogh; McNamee v. Mansfield [10] ; In re Rickard (dec'd.); Harbison v. Meany [11] . We shall not analyse these cases but we think two comments upon them may be made namely, that they disclose not a little difference of opinion and in the second place that where this mode of construction applied it related to a fund or property that might be handed over to a particular body at an ascertainable place or in a more or less definite area. In England Wickens V.C. in Cocks v. Manners [12] decided that a bequest of a share of residue to "the Dominican Convent at Carisbrook (payable to the Superior for the time being)" and another to "the Sisters of Charity of St. Paul, Selly Oak near Birmingham (payable to the Superior thereof for the time being)" were valid as gifts to the members associated at those places. In In re Clarke; Clarke v. Clarke [1] Byrne J. upheld in similar manner a bequest to the committee for the time being of the Corps of Commissionaires in London to aid in the purchase of their barracks or in any other way beneficial to the corps. The corps consisted of about 2,600 former soldiers and sailors. His Lordship after reviewing the Irish cases said: "I think there is considerable room for argument; but it does seem to me that all the members of a society constituted as this one is could, if they so pleased, and unless the building of the barracks be a charity, deal with the funds intended for building or with the buildings just as they please. If it is a charity they could not deal with them as they please, but then the gift is perfectly good. If it is not a charity they could deal with them as they please, because there is nothing to prevent all the members of the association joining together to dispose of the funds or of the barracks" [2] . In In re Smith; Johnson v. Bright-Smith [3] Joyce J. construed a gift in residue for "the society or institution known as the Franciscan Friars of Clevedon, County of Somerset, absolutely" [4] as an absolute and immediate gift to the individual friars composing the society or institution at the testator's death and on that ground upheld it as valid. It appeared that at the date of the will and at the testator's death there was at Clevedon a society or community consisting of six Franciscan Friars who had taken monastic vows and this was the body to which the testator referred. No doubt there was little difficulty in a case of that description in construing the gift as one to designated persons. In In re Drummond; Ashworth v. Drummond [5] there was a devise and bequest of residuary real and personal estate to trustees upon trust for sale and conversion and subject to certain payments to stand possessed of the residue of the proceeds upon trust for the Old Bradfordians' Club, London, being a club instituted by Bradford Grammar Old Boys, and the receipt of the Treasurer for the time being of the club to be a sufficient discharge to the trustees. There was a codicil declaring that the object and intention of the bequest was to benefit old boys of the Bradford Grammar School residing in London or members of the club and to enable the committee if possible to acquire premises to be used as a club-house for their use. Eve J. said that he could not hold that a residual gift of realty and personalty to the Old Bradfordians' Club was a gift to the members individually. There was in his opinion a trust but there was abundant authority for holding that it was not such a trust as to render the legacy void as tending to perpetuity: In re Clarke; Clarke v. Clarke [1] . The legacy was not subject to any trust which would prevent the committee of the club from spending it in any manner they might decide for the benefit of the class intended. In his Lordship's opinion there was a valid gift to the club for such purposes as the committee should determine for the benefit of the Old Boys or members of the club. In In re Taylor; Midland Bank Executor and Trustee Co. Ltd. v. Smith [2] Farwell J. upheld a residuary disposition in trust for a bank staff association fund to be administered according to the constitution and rules that had been approved at a general meeting and any amendment thereof. The constitution and rules referred to were elaborate but under them Farwell J. was of opinion that the members of the association were entitled to deal with the fund as they wished and to direct the trustee to divide it among them, putting an end to the association by the constitution and rules, and although his Lordship thought that the trustee might have difficulty in determining what persons were members of the association, that that was not a material matter. His Lordship said "In my judgment, the decision in the case of In re Clarke [1] really covers this case because it shows that a gift to a fund for a voluntary body of persons may be perfectly valid unless the rules governing that fund or the purposes for which the institution was created prevent the members from dealing with it, both capital and income, in any way they please" [3] . The decision of Cohen J. as he then was in In re Price; Midland Bank Executor and Trustee Co. Ltd. v. Harwood [4] gave a like effect to a gift of a share of residue to the Anthroposophical Society in Great Britain to be used at the discretion of the Chairman and Executive Council of the society for carrying on the teachings of the founder, Dr. Rudolph Steiner. His Lordship quoted from the speech of Lord Buckmaster in In re Macaulay's Estate; Macaulay v. O'Donnell, reported in a note to In re Price; Midland Bank Executor and Trustee Co. Ltd. v. Harwood [5] . The passage quoted ended with a reference to In re Drummond; Ashworth v. Drummond [6] and to Carne v. Long [7] , a gift to a library at Penzance to hold for the use benefit and support of the library which was held a gift in perpetuity. Lord Buckmaster said: "These two cases illustrate exactly the point for consideration. If the gift is to be for the endowment of the society, to be held as an endowment, and the society is, according to its form, perpetual, the gift is bad, but if the gift is an immediate beneficial legacy, it is good" [1] . Lord Cohen construed the disposition before him as of the latter character. In In re Cain (dec'd.); National Trustees Executors & Agency Co. of Australasia Ltd. v. Jeffrey [2] Dean J. brought together these and other authorities, judicial and extra-judicial, and in the course of a helpful discussion pointed out some distinctions in the form of the gifts that have been considered to unincorporated non-charitable associations. Dean J. said: "Such gifts take various forms. Sometimes, as in the present case, the gift is to the society simpliciter, no reference being made in the terms of the gift to any purposes to be served; sometimes the will or other instrument expresses an intention that the association is to hold and apply the gift in accordance with its constitution and rules; sometimes, again, the instrument itself states the purposes for which the gift is applicable. From another aspect, a further distinction may be drawn between these bodies, such as clubs, which exist for the benefit of the members themselves, and those which are expressed by their constitution as intended to serve some other purpose" [3] . We are not here dealing with a disposition in favour of bodies existing for the benefit of the members themselves.

[14]

It is desirable first to deal with the construction of the trust. To begin with it is to be noted that it is a trust of real and personal estate. In the next place, whilst there is a power of sale which doubtless extends to the realty involved there is no trust for sale. Nevertheless the trust is to use the income as well as the capital to arise from any sale. Clearly enough this is of indefinite duration. But the word "amenities" does not define what is to be provided. It is an introductory description of purposes which are expressed by the words "either by way of building a new convent or the alteration of or addition to existing buildings occupied as a convent or in the provision of furnishings in any such convent or convents". These last words in fact define the amenities in the provision of which the money is to be expended. If it were not for the fact that convents of contemplative orders are outside the charitable purposes defined by law there would be no reason why the expenditure of money towards building a convent or altering or adding to it or providing furnishings for a convent should not be a charitable purpose. But the decision in Gilmour v. Coats [1] already mentioned puts it beyond controversy that the convents of contemplative orders fall outside the legal conception of charity. It is therefore clear enough that the trust of the residual real and personal estate would, apart from s. 37D, extend beyond what is charitable and could not be supported as valid. The trust is clearly one for purposes. In Bowman v. Secular Society Ltd. [2] Lord Parker of Waddington said: "A trust to be valid must be for the benefit of individuals or must be in that class of gifts for the benefit of the public which in the courts of this country are recognised as charitable in the legal as opposed to the popular sense of that term. Moreover, if a trustee is given a discretion to apply trust property for purposes some of which are and some are not charitable, the trust is void for uncertainty" [3] . See further Houston v. Burns [4] where the further point is made that a power to select among charitable and non-charitable purposes goes beyond any admissible exercise of the testator's testamentary power. It is therefore quite plain that if it were not for s. 37D the trust of residue for the purposes of providing amenities in convents must fail. If the simple dichotomy stated by Lord Parker in the passage cited remained unqualified it would be enough to say the reason is because this trust is not in favour of individuals but is for purposes and the purposes extend beyond the conception of charity. The tendency however has grown to assign as the ground of invalidity, even in the case of a trust for what can be nothing more than a purpose, that there is a direction to apply income so as to tend to a perpetuity or there is an uncertainty of purpose or that there is a delegation of testamentary power. In other words there is a tendency to add to or go beyond the simple view that there must either be a trust for individuals or for purposes which can be valid only when the purposes are charitable. If one turns to the text of s. 37D (1) it will be seen why the additional grounds of invalidity are relied upon by those attacking the trust. The opening words of that sub-section are: "No trust shall be held invalid by reason that some non-charitable and invalid purpose as well as some charitable purpose is or could be deemed to be included ". In support of the contention that s. 37D does not apply it is said that it is not simply because a non-charitable and invalid purpose is included that the trust is void. It is because the trusts are uncertain, tend to a perpetuity and involve a testamentary delegation. It appears to us that the direct and simple answer to this contention is that if the trust was wholly charitable none of these objections would be open and therefore it would be to hold the trust invalid for the reason forbidden by the section. It is clear enough that the uncertainties relied upon would not suffice to invalidate what otherwise would be a charitable trust. It is equally clear that reliance upon the tendency to a perpetuity or the direct application of the rule against perpetuities would be impossible were the trust admittedly for charitable purposes. The section therefore cannot be excluded because the trust extends beyond the conception of charity if in other respects sub-s. (1) of s. 37D is applicable. The question whether it is applicable in other respects depends upon the question whether the present is a case where some non-charitable and invalid purpose as well as some charitable purpose is or could be deemed to be included in any of the purposes to or for which an application of the trust funds is by the trust directed or allowed. Some light is of course thrown upon these words by sub-s. (2) which requires any such trust to be construed and to receive effect in the same manner in all respects as if no application of the trust funds to or for any such non-charitable and invalid purpose has been or could be deemed to have been so directed or allowed. There is no doubt a difficulty in saying precisely what is the ambit of the words "by reason that some non-charitable and invalid purpose as well as some charitable purpose is or could be deemed to be included in the purposes". Provided the convents comprised within the clause were all associations of religious women whose purposes were within the legal conception of charity none of the uncertainties relied on could have taken the trust outside that section nor could the fact that a complete discretion resided in the trustees have mattered. For this it is enough again to cite Smith v. West Australian Trustee Executors & Agency Co. Ltd. [1] . The difficulty to our minds lies wholly in the ambit of the word "convents". In cases where a purely abstract purpose is stated as, to take an extreme example, that decided by O'Bryan J. of In re Hollole (dec'd.) [2] it may be impossible to reduce the object to a charitable purpose because of the extreme width and uncertainty of the terms used. In that case a testator gave the balance of his real and personal estate to his trustee to be disposed of by him as the trustee may deem best. This was held to be void for uncertainty and to be outside the operation of s. 131 of the Property Law Act 1928 Vict. from which s. 37D was taken. But in the present case in both trusts there is reference to a distributable class which, while not exclusively charitable, is predominantly charitable in its character. Little difficulty has been felt in cases where there is a specific reference, whether in abstract or concrete terms, to something charitable with a specific reference to what is not charitable. Such cases are obvious. The difficulty has been felt in confining general words. It would be unsafe to deal with such cases without discrimination. In In re Belcher (dec'd.) [1] Fullagar J. had before him a direction to trustees to distribute income at their discretion among "Navy League Sea Cadets Geelong Branch or any other youth welfare organization male or female as in their wisdom they deem fit". His Honour had no doubt that the Navy League Sea Cadets Geelong Branch formed a charitable object but was of opinion that the words "any other youth welfare organization" went too far and could not be confined by the use of the statutory provision to charitable purposes. This view was possibly at variance with the Union Trustees & Co. of Australia Ltd. v. Church of England Property Trust [2] where Nicholas C.J. in Eq. gave a wide application to s. 37D, though his Honour stopped short of applying it to a gift of income to be applied for the benefit of any deserving female a member of the Church of England residing in a specified parish or attending the church whose income did not exceed a given amount in case of illness or otherwise. In Lloyd v. Federal Commissioner of Taxation [3] Fullagar J. referred to the fact that this decision had not been before him nor were certain papers in 14 A.L.J. 58; 24 A.L.J. 239; to which 29 A.L.J. 62 should be added. His Honour refrained from expressing any view as to what difference these citations might have made. In In re Ashton [4] the question of the meaning of the provision, which has been adopted in New Zealand, was reviewed in the New Zealand Court of Appeal by Gresson, Hay and Turner JJ. The bequest there to be dealt with was "to hand any surplus to the trustees of the Church of Christ Wanganui to help in any good work". Their Honours distinguished the decision in In re Hollole [5] and the decision in In re Belcher [1] but did not adhere to the view expressed in the latter decision that the section "will apply only where the testator has expressly indicated a distinct and severable class of charitable objects as among the possible recipients of his bounty" [1] . Doubtless the paraphrase may be too narrow or, at all events, be read too narrowly. It appears to us that what must be found in order to justify an application of the provision is a distinct or sufficient indication of an intention to authorise the application of the income or corpus of the fund or other property to what is clearly a charitable purpose even although the description which embraces the purpose is so wide that it may go beyond charitable purposes or there is associated with the description a description of non-charitable purpose or purposes capable of going beyond the legal conception of charity. But it is perhaps unsafe to generalise. For ourselves we should think that the conclusion of O'Bryan J. in In re Hollole (dec'd.) [2] was right on the ground that the wide general words "to be disposed of by him as he may deem best" did not seem necessarily to advert to any charitable object and were so vague as to be quite indeterminate and only embraced anything that lies within the legal conception of charity because of their indeterminancy. But in the present case it appears to us that the reference is prima facie charitable in the sense that it is known that most convents would be the object of legal charity. The words are distributive and it is plain that by restricting their application they may be restrained to charitable objects. This appears to us to be true both in the case of the trust of residue and of the trust of "Elmslea". In their partial operation as restrained under s. 37D these trusts are in our opinion valid. In the case of the trust of residue we think it should be declared that the operation of the trust is modified by the application of s. 37D of the Conveyancing Act 1919-1954 N.S.W. and so modified operates in the terms of the trust with respect, however, only to convents of orders or congregations the purposes of which are not contemplative only. A corresponding declaration should be made in relation to "Elmslea". This means that the appeal of the Attorney-General should be allowed and subject to a variation of the order the appeal of Mrs. Leahy the widow of the testator and her children should be dismissed. We think an order that costs of the appeals should be paid out of the estate would be proper.

[17]

The testator Francis George Leahy made his last will on 16th February 1954 and died on 11th January 1955. By his will he appointed the plaintiffs John Francis Donnelly, Clement Osborne Wright and John Bede Mullen his executors and trustees probate whereof was granted to them on 6th July 1955. By his will the testator bequeathed the sum of £1,000 to the Reverend Mother or person in charge for the time being of St. Joseph's Convent at Bungendore and directed that this sum should be invested by her and the income used in providing for the personal necessities of the nuns attached to such convent from time to time. He also bequeathed the sum of £1,000 to the rector for the time being of the Passionist Fathers Mary's Mount Goulburn and directed that this sum should be invested and used for the same purpose of the community of the Passionist Fathers and in the same manner as the before-mentioned bequest in favour of the Reverend Mother of St. Joseph's Convent at Bungendore. Subject to certain other pecuniary legacies, an annuity to his widow, and a specific devise to one of his daughters the testator gave devised and bequeathed the residuary estate to his executors and trustees upon certain trusts contained in a number of clauses of which it is only necessary to set out verbatim the provisions of cll. 3 and 5 which are the subject matter of the questions asked in the originating summons. Clause 3 provides: "AS TO my property known as "Elmslea" situated at Bungendore aforesaid and the whole of the lands comprising the same and the whole of the furniture contained in the homestead thereon UPON TRUST for such Order of Nuns of the Catholic Church or the Christian Brothers as my said Executors and Trustees shall select and I again direct that the selection of the Order of Nuns or Brothers as the case may be to benefit under this Clause of my Will shall be in the sole and absolute discretion of my said Executors and Trustees." Clause 5 provides - "AS TO all the rest and residue of my Estate both Real and Personal or whatsoever kind or nature and wheresoever situated UPON TRUST to use the income as well as the capital to arise from any sale thereof in the provision of amenities in such Convents as my said Executors and Trustees shall select either by way of building a new Convent where they think necessary or the alteration of or addition to existing buildings occupied as a Convent or in the provision of furnishings in any such Convent or Convents and I DECLARE that my said Executors and Trustees shall have the sole and absolute discretion of deciding where any such premises shall be built or altered or repaired and the Order or Orders of Nuns who shall benefit under the terms of this Clause the receipt of the Reverend Mother for the time being of that particular Order of Nuns or Convent shall be a sufficient discharge to my said Executors and Trustees for any payment under this clause." Clause 4 should also be shortly referred to. It relates to the homestead and other buildings on the testator's property known as "Overdale" situated at Harefield and four named paddocks comprising approximately 850 acres a portion of "Overdale". It directs his trustees to permit the Order of Nursing Sisters known as "The Nursing Sisters of the Little Company of Mary" to use and occupy the same for a period of ten years from his death and to have the income to arise therefrom either for the care and comfort of the sick or aged members of the said order or for the purpose of conducting therein a hospital on lines similar to that conducted by them in the city of Wagga Wagga and at the expiration of that period if his executors and trustees be satisfied that the property had been used in this manner to forthwith convey transfer and assign the property so devised to the said order of nuns provided however if the said order of nuns should decline to accept the bequest or his trustees were not so satisfied as aforesaid the testator directed his executors and trustees to select some other order of nuns and to offer the property to such order upon the same conditions and he directed that the selection of such order of nuns should be in the absolute discretion of his executors and trustees.

[19]

The reference in the will to orders of nuns is not self-explanatory but evidence was given by three Doctors of Canon Law of the Roman Catholic Church that within that Church associations of religious women are divided according to the code of canon law into two kinds of institutions named orders and congregations. An order is a religious organisation the members of which take solemn vows; a congregation is a religious organisation the members of which take only simple vows whether such vows are perpetual or temporary. The orders of nuns are divided into contemplative orders and active orders. Contemplative orders are so called because their members are strictly enclosed in their convents and engage in no external work but devote their lives to contemplation and penance. In the active orders the members engage in external works such as the performance of public services, teaching, nursing the sick, tending the poor and other like activities. There are in New South Wales three orders of nuns which are contemplative and a number of orders of nuns which are active. There are also a number of congregations which are not orders in the view of the canon law. The St. Joseph's Convent at Bungendore is a religious house of the Congregation of the Sisters of St. Joseph of the Most Sacred Heart of Jesus which carries on educational and other charitable work there and elsewhere. The Passionist Fathers of Mary's Mount Goulburn is a novitiate house of the Congregation of the Passion a religious institute devoted to penance prayer and preaching. The Christian Brothers is a congregation of religious men carrying on educational work in New South Wales. The Nursing Sisters of the Little Company of Mary is a congregation and not an order of religious women. The canon law provides certain formal procedures before approval is given to the establishment of an order or congregation of religious women. A congregation may commence as a congregation of diocesan right. But as it expands into a number of dioceses control of the congregation may be taken from the local bishop or bishops and vested directly in the Holy See when it becomes a Congregation of Pontifical Right. The approval of ecclesiastical authority has always been necessary to found an order or congregation. Records are kept in each diocese of orders and congregations which have received approval and only those bodies which have received such approval are recorded as orders or congregations. The Congregation of Religious, one of the Congregations constituting the Roman Curia has jurisdiction over the government discipline studies properties and privileges of all religious orders and congregations and keeps a complete record of all orders and congregations of both Diocesan and Pontifical Right throughout the world. As orders are no longer founded present regulations pertain to the foundation of congregations. The distinction between orders and congregations within the Catholic Church is strictly canonical distinction which would not generally be known to the laity and among the clergy and laity the terms "order" "congregation" "nun" and "sister" are commonly used indiscriminately without reference to that distinction when there is no call for canonical precision.

[21]

The argument before us centered mostly on the appeal by the Attorney-General so that it will be convenient to dispose of that appeal first. Clause 5 specifies the amenities upon which the income and capital may be spent and confines the beneficiaries to orders of nuns. Within these limits the trustees have an absolute discretion to select the particular amenities upon which the money will be spent and the particular order or orders of nuns to benefit from the expenditure. The trust is one to spend the money for one or more specified purposes for the benefit of such an order or orders. The specified purposes are to provide amenities by building new convents or by altering and adding to existing convents or by providing furnishings in any such convents for the benefit of the selected order or orders. It was contended that this trust, unless wholly charitable, is void for uncertainty because the meaning of "amenities" is quite uncertain and it is quite uncertain what order or orders of nuns the testator intended to benefit. The testator had left it wholly within the discretion of his trustees to decide the extent to which the building of new convents or the alteration of or additions to existing convents or the provision of furnishings in such buildings could be regarded as amenities and to decide what was meant by the words "order or orders of nuns". It was contended that the trust was an attempted delegation to his trustees of the testator's testamentary power to make a will and therefore invalid unless it was wholly charitable. This principle has been stated in many cases of the highest authority. It will be sufficient to refer to what Lord Macmillan said in Chichester Diocesan Fund and Board of Finance (Incorp.) v. Simpson [1] : "My Lords, the law, in according the right to dispose of property mortis causa by will, is exacting in its requirement that the testator must define with precision the persons or objects he intends to benefit. This is the condition on which he is entitled to exclude the order of succession which the law otherwise provides. The choice of beneficiaries must be the testator's own choice. He cannot leave the disposal of his estate to others. The only latitude permitted is that, if he designates with sufficient precision a class of persons or objects to be benefited, he may delegate to his trustees the selection of individual persons or objects within the defined class. The class must not be described in terms so vague and indeterminate that the trustees are afforded no effective guidance as to the ambit of their power of selection: see Houston v. Burns [2] , per Viscount Haldane [3] ". The principle is illustrated by many cases, of which Morice v. Bishop of Durham [1] is an early example, relating to trusts which authorise the expenditure of trust funds at the sole discretion of the trustees for charitable or non-charitable indefinite purposes so that the trustees can spend the money wholly upon the indefinite purposes or in other words upon such purposes as they and not the testator select. Such a trust is not a proper exercise of testamentary power and fails for uncertainty. But the trust in cl. 5 would not fail on this ground. Neither the purposes nor the orders of nuns to be benefited are uncertain. Myers J. was of opinion that the expression "order or orders of nuns" meant orders in the strict sense and included all the orders existing at the date of the death of the testator anywhere in the world, so that the trustees in their discretion could spend the money on building new convents, etc., in any country. For the reasons already stated we are unable to give the same interpretation to this expression as his Honour. We are of opinion that the trust only authorises the building etc. of convents in New South Wales but that it includes congregations as well as orders of religious women. The trustees can therefore spend the money on providing new convents, etc. in New South Wales for congregations as well as orders which carry on their work in New South Wales. Both the amenities and the orders of nuns referred to in the clause are sufficiently defined and all that the testator has done is to give his trustees what is in effect a special power of appointment amongst them.

[26]

Apart from statute, therefore, cl. 5 would be void and the crucial question is whether the trust is saved by s. 37D of the Conveyancing Act 1919 N.S.W. as amended. The first two sub-sections of the section, which are alone material, provide as follows: "(1) No trust shall be held to be invalid by reason that some non-charitable and invalid purpose as well as some charitable purpose is or could be deemed to be included in any of the purposes to or for which an application of the trust funds or any part thereof is by such trust directed or allowed. (2) Any such trust shall be construed and given effect to in the same manner in all respects as if no application of the trust funds or of any part thereof to or for any such non-charitable and invalid purpose had been or could be deemed to have been so directed or allowed." Myers J., after referring to certain decisions relating to this section (Union Trustee Co. of Australia Ltd. v. Church of England Property Trust, Diocese of Sydney [8] ) and to two other practically identical sections, namely s. 131 of the Victorian Property Law Act 1928 (In re Belcher [1] ) and s. 2. of the New Zealand Trustee (Amendment) Act 1935 (In re Ashton [2] ), held that s. 37D was inapplicable to the trusts of residue because by them the trustees were authorised to apply the income and capital to purposes which were wholly non-charitable. He said: "In my view the statute was enacted to give effect to trusts not irrespective of the intention of the testator but conformably to it or at least to that part of it which contemplated the direction of the whole fund to charity. Accordingly the section only applies where a charitable intention appears from the trust itself, and the application of the whole fund to charity is one way of completely satisfying the intention of the testator. A trust for such purposes as the trustee should select would therefore not qualify under s. 37D because it shows no charitable intention. Nor, for the same reason would a trust for benevolent purposes. A testator who had benevolent purposes in mind would not necessarily have in mind benevolent purposes which are charitable, and it would be pure conjecture to hold that the devotion of the fund to purposes which were legally charitable would in fact satisfy the testator's intention. The mere fact that benevolence goes beyond charity shows in my opinion that a testator who creates a trust for benevolent purposes cannot necessarily be said to have had any charitable purpose in his mind at all. Similar considerations seem to me to apply to trusts for organizations described by general terms as a class. In this particular case the testator has, in effect, given the fund to such order or orders of nuns as the trustees might select. Some orders of nuns are charitable and some are not. It is true that the orders actually in existence at the date of his will and the date of his death or at any other time can be ascertained with complete accuracy. This, however, does not seem to me to distinguish this trust from any gift upon trust for organizations described as a class, because it is impossible to say that the testator had in mind orders which were in fact charitable. I cannot distinguish this from a trust simply for benevolent purposes. I do not think that it could be said that the application of this fund to orders which are in fact charities would be a complete satisfaction of any intention which has been expressed or is implicit in his will. As far as I can see, there is nothing to indicate that he had charitable orders in his mind at all. In the circumstances, therefore, I do not think that s. 37D applies "

[28]

With all respect to his Honour we cannot reach the same conclusion. The genesis of s. 37D was s. 2 of the Charitable Trusts Act 1914 Vict. which became s. 79 of the Trusts Act 1915 and later s. 131 of the Property Law Act 1928. The text of the New South Wales section is the same as that of the Victorian section except that, in the New South Wales section, sub-s. (1) contains the word "purpose" after the word "invalid" and towards the end of sub-s. (2) substitutes the word "could" for the word "should" in the Victorian section. Section 2 of the Charitable Trusts Act was passed after the decision of Madden C.J. in In the Will of Forrest [1] where it was held that a large gift failed for uncertainty because it was a gift to objects some of which were charitable but others of which were non-charitable and indefinite and the trustees were given an absolute discretion to apply the whole or any part of the trust fund as they thought fit to the charitable or indefinite objects. It was held that the court could not sever the bad from the good and retain the charitable objects only so that the whole trust was void for uncertainty. In so deciding, Madden C.J. was but applying, as he was bound to do, the principle of law illustrated by such cases as Morice v. Bishop of Durham [2] where it was held that a purported gift by a testatrix of a legacy to the Bishop of Durham to be disposed of to such objects of benevolence and liberality as the bishop in his own discretion should most approve of could not be said to be given for charitable purposes. As the intention was too indefinite to create a trust, the residue was undisposed of. The first cases in which the Victorian section was applied were cases of this character: In re Griffiths; Griffiths v. Griffiths [3] ; In re Bond; Brennan v. Attorney-General [4] . In In re Bond; Brennan v. Attorney-General [4] a testatrix directed that certain property should be disposed of and given "to the blind and their children". It was held that the gift, though otherwise void for uncertainty, was by virtue of s. 79 of the Trusts Act 1915 valid as a charitable gift to the blind. Cussen J. said "I think that section should be given a construction, having regard to the very wide words used, which will validate this particular gift to the blind as though the words "and their children" did not appear in the gift" [5] . In In re Hollole (dec'd.) [6] O'Bryan J. refused to apply the Victorian section where the gift was "to my trustee and executor to be disposed of by him as he may deem best". With that decision we agree. One could not construe such a gift as including both a charitable and non-charitable purpose. It is not a trust of any purposes at all. It is quite indefinite and the only question that could arise would be that which his Honour decided, namely, whether or not the executor took the residue beneficially. In In re Belcher (dec'd.) [1] a testator bequeathed to trustees the income from certain property in trust "for the Navy League Sea Cadets Geelong Branch or any other youth welfare organization male or female as in their wisdom they deem fit". Fullagar J. held that the gift to the cadets was a charitable gift, but that the gift to "any other youth welfare organization" was void for uncertainty; the former gift was, and the latter gift was not, saved by s. 131 of the Property Law Act. His Honour said "Shortly expressed the criterion of the application of s. 131 is that there should be a trust which, apart from the section, would be invalid because some non-charitable, as well as some charitable, purpose is included in its terms the trust in question is (in my view of it) invalid simply because it is uncertain, and not because it includes non-charitable, as well as charitable, objects. In the case supposed by the statute there is an invalidity which not merely arises from the uncertainty of the objects but can be saved by the possibility of a constructional severance of the charitable from the non-charitable trusts. It will, I think, apply only where the testator has expressly indicated a distinct and severable class of charitable objects as among the possible recipients of his bounty. So it will apply where the gift is for "charitable or benevolent objects", but not where the gift is for "benevolent objects". So, where the gift is for "the X institution" (which is charitable) and "other worthy institutions", it will apply to save the gift for "the X institution" by excluding all other worthy institutions [2] ". Later, however, in Lloyd v. Federal Commissioner of Taxation [3] his Honour said: "I had to consider the validity and effect of the gift in question in In re Belcher (dec'd.) [1] in which I held that a gift to the Navy League Sea Cadets was a gift for charitable purposes, but that a gift to "other youth welfare organizations" was a gift for purposes which included non-charitable purposes. I then had to consider the effect on the actual gift made by the will of s. 131 of the Property Law Act 1928 Vict.. I concluded that the gift took effect as a gift of the income of the whole of the testator's interest in Belcher's Corner to the Navy League Sea Cadets. The correctness of this decision on the effect of the statute was, of course, in no way in question on this appeal. I think I should mention, however, that my attention was not called either to an article by Mr. E. H. Coghill " Mixed Charitable and Non-Charitable Gifts " [4] , or to the decision of Nicholas C.J. in Eq. in Union Trustee Co. of Australia Ltd. v. Church of England Property Trust, Diocese of Sydney [1] . I have not considered whether, if I had had these before me, I should have taken a different view, but I have thought that I ought to mention them, and to mention also two later articles by Mr. Coghill [2] , in the latter of which he cites the recent case in New Zealand of In re Ashton (dec'd.); Siddall v. Gordon [3] " [4] . In Union Trustee Co. of Australia Ltd. v. Church of England Property Trust, Diocese of Sydney [1] a testatrix devised certain realty to a trustee upon trust to use and apply the realty and the income thereof and the proceeds of any lease mortgage or sale thereof "in such manner and for such purposes relating to the work of St. John the Baptist Church of England at Ashfield as the Rector and Church Wardens for the time being of the said Church shall in their absolute discretion think fit". Nicholas C.J. in Eq. held that the gift was an absolute gift to an unincorporated body for defined purposes, and that, although the gift did not create a perpetuity and the unincorporated body was clearly defined, since the purposes, as defined in the will, for which the gift might be applied, were so vague that portion of it might be used for non-charitable purposes, the gift would have been invalid but for the operation of s. 37D of the Conveyancing Act 1919-1943; that by virtue of that section the application of the gift was restricted to charitable purposes and, therefore, that the gift was valid. In our opinion, in the passages cited from In re Belcher (dec'd.) [5] Fullagar J. placed too narrow a construction on the section, and Nicholas C.J. in Eq. was right when he said in Union Trustee Co. of Australia Ltd. v. Church of England Property Trust, Diocese of Sydney [1] : "It was contended before me that the section applied only to gifts in which charitable and non-charitable objects were mentioned separately or as included in separate classes such as "charitable or benevolent", and did not apply when the gift was directed or authorized in the one phrase to be applied to charitable and non-charitable purposes. In my judgment this limited interpretation is not justified by authority, or by the history of the section, or by the words used in it" [6] . The broader view of the section was adopted by the Full Supreme Court of New Zealand in In re Ashton (dec'd.); Siddall v. Gordon [3] . The New Zealand section is in the same words as the Victorian section. It was held that a residuary bequest in a will "to hand any surplus to the trustees of the Church of Christ Wanganui to help in any good work" was not a valid charitable trust and failed for uncertainty but that the words in the will, "to help in any good work", could be and should be, deemed to include both charitable purposes and non-charitable purposes; that, accordingly, s. 2 of the Trustee Amendment Act 1935, rescued the gift from invalidity as those words can be deemed to include a charitable purpose or purposes and some non-charitable and invalid purposes; and that the gift should be upheld with the qualification that the trust funds should be restricted to charitable purposes, so that the trust became one for any good and charitable work. Gresson J., said "the view I take is that the language of the section indicates that a broad rather than a narrow construction is to be adopted. It is not only when some non-charitable purpose, as well as some charitable purpose is included that the section is to apply; it is to apply equally when some non-charitable purpose as well as some charitable purpose could be deemed to be included It appears to me that the terms of the section have been deliberately widely expressed to cover cases where the language of the will does not expressly state purposes charitable and non-charitable, but uses such general language that both purposes charitable and purposes non-charitable may be deemed to have been included. It seems to me illogical to suppose that the Legislature intended the beneficent effect of the section to apply where purposes charitable and purposes non-charitable were definitely expressed, but not to apply where language was used which though not specifying with particularity purposes charitable and purposes non-charitable yet comprehended both categories" [1] .

[30]

In order that the section may operate some charitable purpose must be included in the purposes to or for which an application of the trust funds or any part thereof is by such trust directed or allowed. But the application of the trust funds or any part thereof need not be directed to a charitable purpose. It is sufficient if the trust allows them to be used for such a purpose. If some non-charitable or invalid purpose is also included or could be deemed to be included in the purposes to or for which an application of the trust funds or any part thereof is directed or allowed, the trust shall not be held to be invalid. Such a trust must be construed and given effect to in the same manner and in all respects as if no application of the trust funds or any part thereof to or for any such non-charitable and invalid purpose had been or could be deemed to have been so directed or allowed. In other words the non-charitable and invalid purpose is struck out of the trust and the trust must be construed and take effect as if it had never been included. In order that the section may operate the purpose to be deleted must be non-charitable and invalid. If the purpose is non-charitable but nevertheless valid the section has no operation. But once it is found that a trust directs or allows, or in other words requires or permits, the use of the trust funds or any part thereof for a purpose that is charitable and also for a purpose that is non-charitable and invalid the section operates. It may be that the words in sub-s. (1) "or could be deemed to be" should not be given too much significance. But at least they emphasise the wide scope of the section. They make it clear that the section applies if some non-charitable and invalid purpose as well as some charitable purpose could be deemed to be included in the purposes directed or allowed. They may have been inserted to ensure that where the trust is for such purposes as "benevolent purposes" or "philanthropic purposes" or "patriotic purposes" (expressions which have been held not to create valid charitable trusts because they are capable of including within their meaning purposes which are non-charitable as well as purposes which are charitable) the trust falls within the section. Such trusts would probably be validated by the section if it had not included these words because benevolent, philanthropic, and patriotic purposes do in fact include many purposes which are charitable as well as some purposes which are non-charitable, and there must be imputed to a testator who creates a trust for such purposes an intention to authorise the use of the trust funds for any purposes which are benevolent, philanthropic or patriotic whether they are charitable or not. But it is sufficient if a non-charitable and invalid purpose as well as some charitable purpose could be deemed to be included in any of the purposes for which the trust funds or any part thereof are authorised to be applied and there certainly could be deemed to be included in trusts for benevolent, philanthropic or patriotic purposes both non-charitable and invalid purposes and charitable purposes.

[31]

One can agree with his Honour that the charitable intention must appear from the trust itself if by this is meant that it is sufficient if the trust directs or allows the use of the trust funds or any part thereof for a charitable purpose. One can also agree with him that in order to satisfy the section the application of the whole fund to charity must be one way of completely satisfying the intention of the testator. But if the trust either directs or allows this to be done, the testator's intention will be completely satisfied if the trust funds are so applied and sub-s. (2) requires that the trust funds shall be applied in this and in no other way. But we must part company with his Honour where he says that in the case of a trust for benevolent purposes it would be pure conjecture to hold that the devotion of the trust funds to purposes which are legally charitable would in fact satisfy the testator's intention. If the trust directs or allows the trustees to spend the trust funds for purposes which include charitable purposes, how can it be said that the trust would not be completely satisfied by the expenditure of the whole of the fund for these purposes? But, be this as it may, the trust in cl. 5 clearly includes charitable purposes because the trustees are authorised to provide amenities for orders of nuns which are charitable and one way of completely satisfying the testator's intention would be to expend the whole of the trust funds in providing amenities for these communities alone. The trust in cl. 5 is therefore clearly within s. 37D. If the word "directed" stood alone the case would be clear enough. But the word "allowed" places it beyond doubt. "Directed" seems the more appropriate word where the trust itself requires the trustees to apply the trust funds for some non-charitable and invalid purpose as well as some charitable purpose, whereas the word "allowed" is more appropriate where the trust authorises the trustees in the exercise of their discretion so to apply them. It is difficult to understand what his Honour meant when he said "I do not think that it could be said that the application of this fund to orders which are in fact charities would be a complete satisfaction of any intention which has been expressed or is implicit in his will. As far as I can see, there is nothing to indicate that he had charitable orders in his mind at all". His Honour had already held that the testator, when he referred in cl. 5 to the order or orders of nuns who should benefit under its terms, intended the class to include both active and contemplative orders or in other words intended to authorise his trustees to spend the trust funds for charitable or non-charitable purposes, and to give his trustees an absolute discretion to spend the money wholly or partly upon either, from which it necessarily followed that expenditure wholly upon charitable purposes would be a complete satisfaction of any intention expressed in his will.

[46]

The other method is to refrain from giving the beneficial interest to any particular individual, and, instead, to create a trust for the application of the property for the desired purposes. It is only in relation to a disposition in this form that the law of charities has to be considered. It has to be considered because of the general principle that a trust must fail unless there is "somebody in whose favour the court can decree specific performance": Morice v. Bishop of Durham [1] . (I do not stay to consider the anomalous line of cases relating to the maintenance of animals and tombs, or cases like In re Thompson; Public Trustee v. Lloyd [2] which may need to be reconsidered in the light of the clear statement of the Court of Appeal that a valid power is not to be spelt out of an invalid trust: Inland Revenue Commissioners v. Broadway Cottages Trust [3] .) It follows from the general principle that there must be someone definitely pointed out by the will as an object of the trust, or someone to whom the law gives the same right of suit as if he were so pointed out. Only the Crown as parens patriae enjoys such a right, and it is a right in respect only of such trusts as are in the legal sense charitable. The second method of disposition therefore requires for its validity a restriction of the purposes to which the property may be applied, so that only purposes legally charitable are included. To that extent, but to that extent only, certainty in the objects of the trust is required. As to property which, consistently with the will, could be applied to non-charitable purposes, the absence of definite objects spells unenforceability and therefore invalidity. The cause of invalidity is not any failure by the testator to declare his intention clearly - he may in fact have done so with precision, though it is true that in many instances the description of purposes is vague and shadowy - but the fact that it is of the very nature of his intention that no person shall have an enforceable interest.

[49]

Clause 3 of the will adopts what I have called the first method. It describes large, but none the less quite definite, bodies of persons, and gives the whole beneficial interest in "Elmslea" absolutely to such of those bodies as the trustees select. There is a preliminary question as to the meaning of the expression "Order of Nuns", because the canon law of the Roman Catholic Church distinguishes between orders of nuns and congregations of sisters, reserving the first title for organisations which take solemn vows and the second for organisations which take simple vows. Myers J. attributed to the testator an observance of this distinction, but without, I think, a sufficient warrant. The evidence shows that it is not a distinction which is generally known to the laity, and that the terms "order", "congregation", "nun" and "sister" are commonly used indiscriminately, by laymen and clergy alike, when there is no call for canonical precision. The will itself, as I have already mentioned, contains in cl. 4 strong evidence that the testator himself was not mindful of the distinction. In my opinion the class of organisation from which the trustees may make their selection under cl. 3 includes, besides the Christian Brothers, all orders of nuns and congregations of sisters of the Roman Catholic Church. (I would add, whether they are represented in New South Wales or not: see Gleeson v. Phelan [1] ; but probably this is of no practical importance.) This construction makes the ambit of choice wider than his Honour considered that it was, but its scope is none the less definite to a degree. The disposition therefore does not fail for want of certainty in the range of objects eligible for selection: cf. Inland Revenue Commissioners v. Broadway Cottages Trust [2] . And although it is obvious that the testator was led to make the gift by a desire to assist the general purposes of the bodies to which cl. 3 refers, there is no attempt to impose any trust upon the body which the trustees select. That body will take immediately and absolutely, and may expend immediately the whole of what it receives. There is no attempt to create a perpetual endowment. Some suggestion was made in argument that such an attempt is to be discerned when cl. 3 is read with cl. 7; but when a body is selected by the trustees the property will be at home, and there is nothing in cl. 7 to prevent the body from insisting upon immediate and complete realisation and so terminating the powers which cl. 7 confers. The rules of the body may well place limits upon the uses to which the property or its proceeds may be put; but such rules, binding though they be upon the members inter se, do not affect the quality of the gift: it is an absolute gift to all the members, so that by unanimous agreement they might even divide it amongst themselves: In re Smith; Johnson v. Bright-Smith [1] . This being the case, there is no occasion to inquire as to the charitable or non-charitable character of the bodies amongst which the selection is to be made. As Lord Tomlin said of the gift in In re Ogden; Brydon v. Samuel [2] : "The validity of the gift does not depend upon its being charitable, but upon its being an absolute gift" [3] . To uphold it is in accordance with a long line of authorities, of which only a few need be mentioned: Cocks v. Manners [4] ; Van Kerkvoorde v. Moroney [5] ; Bowman v. Secular Society Ltd. [6] ; In re Cain [7] .

[54]

The section postulates a trust under which the trust fund or part of it must or may be applied to or for purposes of which one is a charitable purpose, and that because of that purpose the trust would be valid were it not that, in addition, "some non-charitable and invalid purpose" is included or could be deemed to be included. "Some non-charitable and invalid purpose" clearly means some purpose which is neither charitable nor for the benefit of any particular beneficiary either selected or to be selected. Some difference of opinion as to the scope of the section has emerged since its prototype was enacted in Victoria as s. 2 of the Charitable Trusts Act 1914 Vict.. Myers J. in the present case reached the conclusion that the section applies only where a charitable intention appears from the trust instrument, and the application of the whole fund to charity is one way of completely satisfying the testator's intention. His Honour considered that a trust for such purposes as the trustee may select, or for benevolent purposes, would be outside the section because no charitable intention would appear. This construction of the section is based upon the view that the mischief aimed at is that which is felt to exist when a trust, in the terms of which an intention to benefit charity is shown, is nevertheless defeated because an intention to benefit non-charitable purposes also is shown. A wider view of the nature of the mischief led Nicholas C.J. in Eq. to give the section a wider meaning: Union Trustee Co. of Australia Ltd. v. Church of England Property Trust, Diocese of Sydney [1] . Other learned judges who have considered the matter have taken some the one view, some the other. With all respect to those who prefer the narrower view, it seems to me that the words of the section give more support to the wider. The section asks, in relation to every trust which directs or allows an application of trust funds to or for purposes, (1) whether the purposes referred to include any charitable purpose, and, (2) if so, whether they include also, or could be deemed to include also, any non-charitable and invalid purpose. The answer, I think, must be yes to both branches of the question, whenever the description of the purposes comprehends, but is not certainly confined to, purposes legally charitable. If a charitable purpose and a non-charitable purpose are separately described, there is no difficulty. That is an obvious case for the application of the section; for the invalidity of the trust apart from the section may be said to be due to the fact that, there being no definite beneficiary, the charitable purpose which, if it stood alone, would save the trust, cannot save it because a non-charitable and invalid purpose "is included". If, on the other hand, there is a composite description of the purposes of the trust, the invalidating feature may be that a purpose which is neither charitable nor for the benefit of any particular beneficiary "is included", but alternatively it may be that (to use some words of Lord Davey in Hunter v. Attorney-General [2] ), "the description includes purposes which may or may not be charitable (such as "undertakings of public utility"), and a discretion is vested in the trustees" [3] . In the second case, it would not be incorrect to say that the trust is invalid because some non-charitable and invalid purpose "could be deemed to be included". It is difficult to see to what other case the words "could be deemed to be included" can possibly apply; and if, as I should conclude, those words show that that case was contemplated by the legislature when enacting the section and was intended to be within its application, the view must be untenable that the only case covered by the section is that in which an intention to benefit charitable purposes is separately disclosed. Against the view which I have described as the wider view an argument has been put by way of a reductio ad absurdum. The argument is that if the section applies whenever a dissection of the purposes which are made the objects of the trust would yield both charitable and non-charitable purposes, it must apply even to a case such as that which came before O'Bryan J. in In re Hollole (dec'd.) [1] , where there was a gift to a trustee "to be disposed of by him as he may deem best". The learned judge held that this gift was not saved by the section. In my opinion the decision was clearly correct, because the section applies only where the trust fund or part of it is directed or allowed to be applied for some designated purposes, the designation or designations extending into but also beyond the area of charity. The key to the section, I think, is to be found in the expression "included in any of the purposes to or for which" etc., considered with the fact that the section is dealing with cases of invalidity arising from the nature of those purposes. For the section to apply, purposes must be designated as the objects of the trust, and they must be purposes not for the benefit of definite beneficiaries. But I see nothing in the section to suggest that it means to discriminate between, on the one hand, cases where charitable purposes and non-charitable and invalid purposes are designated by separate descriptions and, on the other hand, cases where they are designated by a composite description.

At a glance

Court

Decision date

Before

Source

Judgment (57 paragraphs)

Parties

Cited By (1)