Armenian General Benevolent Union v Union Trustee Co of Australia Ltd

Armenian General Benevolent Union v Union Trustee Co of Australia Ltd - [1952] HCA 47 - HCA 1952 case summary — Zoe

[9]

No very definite description of distress or disadvantage is perhaps conveyed, but that is not necessary. As to age Long Innes J. says in Armstrong v. Attorney-General [3] that the majority of persons who have attempted to define the term orphan appear to hold the view that the state of orphanage is confined to minority and that the term orphans is not properly applicable to adults, though he himself would find some difficulty in holding that an adult was not an orphan. However, to speak of adults as orphans is felt by everyone to be an incongruous even though logical use of the word and there can be little doubt that the trust is for the benefit of young people, minors, who are bereft of their fathers. The testator must have known that the class which he wished to benefit by the trust was very numerous and that the income of the relatively small property of which he was able to dispose would serve only as a means of benefiting a few orphans. It is evident therefore, that he contemplated an application of the income by the Armenian General Benevolent Union in a manner involving a discretion on the part of that body and a wide one: cf. per Maugham J., In re Robinson; Besant v. German Reich [1] . Sholl J., from whom this appeal comes, held the trust void for uncertainty. With respect we are unable to agree in this view. It has long been accepted doctrine that a charitable trust is never void for uncertainty in the object, a statement which of course, assumes that the object is charity. Jarman, vol. 1, 7th ed. (1930), p. 215. In Re Parker [2] Fullagar J. said, "Uncertainty of object will never defeat a charitable trust, but certainty as to the property made subject to the trust is, I think, just as essential to the validity of a charitable trust as to the validity of a trust for individual persons". In In re Gott; Glazebrook v. University of Leeds [3] , Uthwatt J. said "No doubt, when a purpose is stated, no charitable trust is created unless the purpose is certainly charitable, but, given that certainty, uncertainty as to the particular charitable purpose intended is, in my opinion, immaterial".

[23]

This is an appeal from an order of the Supreme Court of Victoria (Sholl J.) answering certain questions in an originating summons relating to the construction of the will of Haroutiun Garabet Balakian who died in Victoria on 28th October 1946. The will is dated 28th June 1946. It declares that the testator is domiciled in Victoria and desires the will to be construed and take effect according to the laws in force in that State. It appoints the Union Trustee Co. of Australia Ltd. executor and trustee and proceeds as follows - "I give devise and bequeath all my estate Real and Personal unto my trustee in trust to pay therefrom Firstly all my just debts funeral and testamentary expenses including Probate and Estate duties and Secondly to pay as from the date of my death out of the income of the remainder of my estate the sum of Seven pounds (£7) per month to my sister Madame Rosa N. Andriassion so long as she lives and as from the date of her death to pay the like amount to my niece Alice N. Andriassion daughter of my said sister so long as she lives and Thirdly to pay as from the date of my death out of the said income the sum of Five Pounds (£5) per month to my brother Hagope Garabet Balakian at present a resident of Bombay India. All these amounts shall be payable in full without any deductions for Probate or Estate Duties. I direct that a grave stone be erected on the grave of my late wife in the Eltham Cemetery Grave Number 116 at a cost of about Thirty pounds. I also direct that the whole of the net income from my estate be paid at least yearly to The Armenian General Benevolent Union of Number 432 Fourth Avenue, New York in the United States of America (hereinafter called "my Permanent Trustee") which Permanent Trustee shall make the monthly payments as provided in this my Will and use the balance if any of the said income for the benefit of the orphans whose fathers fought with the Russian Army against Germany and Japan in the World War which ended last year. Should my Permanent Trustee so desire it my Trustee shall sell to the best advantage but preferably by public auction my house and land at Eltham and the contents of such house and the whole of my then assets of my estate shall then be transferred to my Permanent Trustee. I authorise my Permanent Trustee to hold any assets of my estate (which are transferred to my said Permanent Trustee) in the same form of investment as they are held at the time of transfer or to invest any moneys available for investment at any time in any form of investment (selected by the Central Council of my Permanent Trustee) as trustees are by the laws of England or The United States of America for the time being in force authorised to invest trust moneys and shall form a fund (hereinafter called my "Permanent Trust Fund") and stand possessed of the same upon the trusts hereinbefore declared concerning the same but until my Permanent Trustee makes request as set out in this Will I give my trustee authority to retain any part of my estate in the same form of investment or asset as at the date of my decease. I declare that the receipt of the Secretary or of the Treasurer for the time being of my Permanent Trustee shall be a good and complete discharge to my Trustee for all moneys paid to my Permanent Trustee by my Trustee pursuant to the terms of this my Will and I further declare that my Trustee shall not inquire or concern itself in any way as to the disposal of my Permanent Trust Fund or the income therefrom by my Permanent Trustee".

[25]

Is the gift in favour of the orphans whose fathers fought with the Russian army against Germany and Japan in the world war which ended in 1945 a valid gift? Answer: No, the gift in the abovementioned will in favour of the orphans whose fathers fought with the Russian army against Germany and Japan in the world war which ended in 1945 is void for uncertainty nor is there any general charitable intention which should be executed cy-près. 2. If yea, what persons are comprised within the description "the orphans whose fathers fought with the Russian Army against Germany and Japan in the World War which ended" in 1945? Not answered. 3. Is the corpus of the said estate distributable only upon the death of the last of the persons designated in the answer to the second question or at some earlier and what time such as the time when the permanent trustee under the said will is satisfied that no person so designated can be found? 4. What person or persons are entitled to the corpus of the estate of the said deceased upon the death of the last of the persons designated in the answer to the second question or at the earlier time indicated in answer to the third question? Answer to questions 3 and 4: Subject to the payment of the annuities given by the said will of the testator and the provision in it as to the testator's wife's grave, the whole of the income and corpus of the residue is held in trust as from the death of the testator for the testator's next-of-kin ascertained as at the date of such death. 5. (a) Should the plaintiff pay to the defendant the Armenian General Benevolent Union or to some and what representative of such defendant (i) any and what part of the corpus of the estate of the said deceased; (ii) any and what part of the income of the said estate? (b) If any payment should be made by the plaintiff to the defendant Union or to some and what representative of the defendant Union (i) on whose receipt should such payment be made; (ii) should the plaintiff require some and what form of release or indemnity from the defendant Union or some and what person acting on its behalf? Answer to question 5. (a): No. The plaintiff should not pay to the defendant, the Armenian General Benevolent Union, any part of the corpus or income of the estate of the testator. (b) Not answered. His Honour then proceeded to order that it be referred to the Master to inquire and certify who were at the date of the testator's death his next-of-kin entitled to share in his residuary estate, and who is or are the legal personal representative or representatives of any of such next-of-kin who have since died.

[26]

The Armenian General Benevolent Union and the Attorney-General for the State of Victoria have both appealed from his Honour's answers to questions 1 to 4 and from his consequential order that there should be an inquiry as to the next-of-kin. The main contention of the Union is that, subject to the trusts of income to the extent to which these trusts are valid and to the direction to erect the grave stone, the Union is beneficially entitled to the residuary estate. It does not seek to impeach the validity of the orphan trust but submits that on the true construction of the will question 1 should be answered Yes and that question 2 should be answered that orphans include any person upon whom the Union is authorized by its constitution to confer benefits and whose father was killed upon active service with the Russian army against Germany or Japan in the world war in which hostilities ended in the year 1945 or whose father died prior to 28th June 1946 (that is the date of the will) as a result of injuries received upon such active service, and who at the time of his or her father's death was under the age of twenty-one years, and that such a person would remain an orphan so long as he or she was suffering economic distress attributable to the death of his or her father. The Attorney-General supports this construction of the orphan trust and also submits that if the learned Judge was correct in holding that this trust was too uncertain to be given direct effect he ought to have held that the income which was the subject of the gift should be applied to some charitable purpose cy-près and have directed a scheme to be settled for that purpose. Both appellants contest his Honour's opinion that if the orphan trust be valid the period of its operation is limited to the death of the survivor of the three annuitants. The Attorney-General contends that the Court should not allow the residuary estate to be transferred or the income thereof to be paid to the Union out of the jurisdiction without some inquiry to satisfy the Court that the Union is a fit and proper trustee to whom the income and corpus may safely be so transferred and paid whilst there are still in existence trusts of that corpus or income.

[29]

The question whether the Union takes a beneficial interest in the corpus is not easy to answer. Apart from the trust to pay the annuities, the only trust imposed upon the Union is the orphan trust. The general principle of construction is concisely stated in Halsbury, Laws of England, 2nd ed., vol. 33, p. 193: "Where property is given to a person upon trust, there is a presumption that the property is given to him entirely as a trustee and not to any extent beneficially. Where, however, the trust does not exhaust the whole beneficial interest in the property, this presumption can be rebutted by an indication in the instrument of disposition that he is intended to take the residue of it for his own benefit". There is a long line of decisions applying this principle with different results according to the particular facts right down to In re Rees; Williams v. Hopkins [2] . But these decisions are not of much assistance in the elucidation of the present will. This will is not completely in the class of home drawn wills because it shows some technical glimmerings but it is emphatically not the product of a skilled draftsman. In Croome v. Croome [1] in the Court of Appeal, Bowen L.J. said, "It is very difficult to justify to other minds the impression language makes on one's own mind; but, of course, the business of a judge is to act on the impression made on his own mind, and I can only say that those words do convey to me the impression, and an impression which is more than a mere guess, on which I am willing to act, and on which I seriously do act, in dealing with the property of others. They convey to me the distinct impression that it was the intention of the testator to give a beneficial interest to his brother". Fry L.J. said "It is difficult, no doubt, to express in words the exact impression which the language of a testator often produces on the mind; but the result of the language of the testator in this case is to convince me that he has given the real estate to his brother for a purpose which he does not contemplate as exhausting the whole - in other words, the whole legal interest is given, but it is not given for the purposes of express trust" [2] . In In re Foord; Foord v. Conder [3] , Sargant J., as he then was, after referring to Croome v. Croome [4] for the purpose of seeing the general spirit in which the Court deals with wills of this character, said, "I find that the Court is prepared to hold that there is a beneficial gift to the first taker on slight expressions and indications of intention. The indications there" (in Croome v. Croome [4] ) "were so slight that the judges of the Court of Appeal confessed that it was difficult to state in words reasons for the impression produced on their minds by the language of the testator's will". In Perrin v. Morgan [5] , Lord Atkin said, "No will can be analysed in vacuo. There are material surroundings in every case, and they have to be taken into account. The sole object is, of course, to ascertain from the will the testator's intentions". One of the material surroundings to which Lord Atkin refers is the provision for other beneficiaries in the will. In the present will the testator provides annuities for a brother and sister who are two of his next-of-kin and for the daughter of that sister, so that he must have considered the claims of his relatives upon his bounty but there is no other express gift to any of his next-of-kin. It would be natural to expect that any further benefits for his relatives would be expressly given. The will provides that the Union is to stand possessed of the fund (called the permanent trust fund) "upon the trusts hereinbefore declared concerning the same". The only trusts hereinbefore declared are trusts of the income of the fund. There are no trusts of the corpus. "Possessed" is a word strongly indicative of ownership. The Union is described as the permanent trustee and the fund as the permanent trust fund and in some contexts this might well be a decisive indication that the Union was to be a trustee of the fund and was not to take a beneficial interest. But this description of the Union appears to have been used to differentiate the permanent nature of the duties imposed upon the Union from the temporary nature of the duties imposed upon the company. It was probable that the direction to pay the annuities would endure for a considerable period as the first annuity is payable to the testator's niece after the death of her mother. It was also probable that the orphan trust would endure for a considerable period. In these circumstances it would not be unreasonable for the testator to describe the Union, on whom the trusts to pay the annuities and to provide for the orphans are imposed, as his permanent trustee to distinguish it from his initial trustee although he intended the Union to take an ultimate beneficial interest. Further the Union is a corporate body, the purpose of which is to carry out the philanthropic objects authorized by its constitution. These objects fall under three main heads: (1) to assist in the intellectual and moral development of the Armenian population and their country; (2) to assist Armenians with a view to ameliorating their material and economic position; and (3) to encourage any and all charitable works likely to bring about these results. A testator would naturally expect such an institution to preserve and invest a large sum bequeathed to it as a permanent fund and use the income for the furtherance of these objects and not immediately to expend the capital. The testator must have intended that the Union should have permanent possession of the trust fund after it had been transferred to it by the company. But the only trusts declared of the fund are trusts which do not exhaust the beneficial interest.

[33]

We are inclined to agree with his Honour that there is no general charitable intent but, assuming that there is none, we do not agree that a particular charitable intent can fail for uncertainty. There must be certainty as to the property that is subject to the trust. It must also be certain that the testator intended to devote that property to a charitable purpose. If these conditions are fulfilled the gift cannot fail for uncertainty although it discloses only a particular charitable intent. The exact point arose for decision in In re Gott; Glazebrook v. University of Leeds [2] , and Uthwatt J., as he then was, held that a charitable gift cannot fail for uncertainty whether the charitable intention be general or only specific. The correctness of that decision was challenged by counsel for the next-of-kin, but we are of opinion that it was right. His Lordship said, "No authority was cited to me which supports the proposition that certainty in the definition of an intended specific charitable purpose is necessary and the proposition appears to be wrong in principle and never to have been accepted in practice There is no practical reason why certainty of the exact ambit of a particular charitable purpose should be required, for the court has, as regards all charitable trusts, jurisdiction to settle a scheme for their administration - I am not referring to cy pres schemes - and it is settled practice that these schemes may deal, not only with methods of administration, but also with, and define, the substance of the trust" [1] . This statement is in line with the statement of Maugham J., as he then was, in In re Robinson; Besant v. German Reich [2] . His Lordship said "I should point out that a scheme directed by this Court in relation to gifts for charitable purposes is not necessarily or, I think, generally a scheme for the application of the fund cy pres. It is well known that a charitable gift in this country does not fail merely because there is an uncertainty as to the mode of carrying out the gift. In numerous cases of gifts for charitable purposes it is necessary to fill up a number of details in regard to which the testator or the donor has not described his wishes in clear terms. In such cases the gift does not fail, but the Court fills up the details of the donor's charitable intention by means of a scheme" [3] . See also In re Parker [4] . The orphan trust is a trust for a charitable purpose out of the jurisdiction. Of such a trust Maugham J. said in In re Robinson [5] , "It is abundantly clear that, whatever the construction which might have been placed upon the Statute of Elizabeth when that statute was passed in the forty-third year of that Queen's reign, for at least 200 years the Courts have been in the habit of treating the phrase "charitable purposes" as not confined to charitable purposes within this realm".

[35]

The purpose of the orphan trust is clearly charitable within the Statute of Elizabeth. It carries an implication that the orphans to be assisted are poor orphans not necessarily in the sense of orphans who are completely destitute but of orphans who would without the assistance, in the words of Evershed M.R. in In re Coulthurst dec'd.; Coutts & Co. v. Coulthurst [6] , "have to "go short" in the ordinary acceptation of that term, due regard being had to their status in life, and so forth". There is a considerable degree of certainty as to the orphans the testator intended to assist. They are described as the orphans of fathers who fought with the Russian army against Germany and Japan in the recent world war. An orphan may be a person who is bereaved by the death of his father or mother or both. In the present context the word naturally refers to a child who was bereaved by the death of his father in this war. While orphans are not necessarily confined to persons under the age of twenty-one years, the word most naturally refers to children who are in need of assistance through the loss of a parent. We are of opinion that the objects of the gift are the children in need of assistance of soldiers who fought and died in the Russian army. It is most likely that the testator intended to confine the gift to orphans of soldiers of the Armenian race. There are no express words in the will to this effect but it appears to be a fair inference to draw from the choice of the trustee. Certainly such children are included in the gift. The income available to provide for the orphans is only the income of a fund of £14,000 less the income required to pay the annuities and it would not be sufficient to benefit many orphans. Most of the orphans are within Soviet territory and it is probably impracticable to assist them at the present time. The affidavit of the secretary of the Union says that the Union has suspended its activities in Soviet Armenia owing to the deterioration in the relations between the Union of Soviet Socialistic Republics and the United States of America, but that it intends to resume these activities as soon as normal relations between the two countries are restored. No one could prophesy when this will be, but there may be some orphans who are this side of the Iron Curtain. It is impossible for the Court to say on the present evidence that the trust has failed because it has become impracticable to carry it out. If it becomes clear that it is impracticable the question will then arise whether there is a general charitable intent which can be executed cy près. But that question has not yet arisen. The testator has authorized the Union to remove his assets from the jurisdiction and no reason exists why effect should not be given to his wishes. In view of this provision in the will, it would not be proper for the Supreme Court or this Court to order that a scheme should be settled for the administration of the trust: In re Robinson [1] .

At a glance

Court

Decision date

Before

Source

Judgment (37 paragraphs)

Parties

Cited By (1)