Membership was provided for thus:
"3. Any ex-service person shall be eligible for membership of the 'Trust'. Trustees shall have the power to appoint members who qualify as, as members of the 'Trust' on the direction of the committee."
47 By clause 4 there were to be three trustees, and provision was made for new trustees on death, resignation or removal to be nominated by the committee and appointed by the president under s 6 of the Trustee Act 1925. Provision for dissolution was as follows:
"14. The 'Trust' shall be dissolved in the event upon the vote of a two thirds (2/3) majority of the members present at a Special Meeting convened to consider such a question. Upon dissolution of the 'Trust', assets and funds of the 'Trust', after payment of all expenses and liabilities, then the remaining assets and funds of the Leichhardt-Lilyfield Ex-Service Memorial Trust shall be handed over to some registered or exempted charity or charities as a majority of the members present shall decide."
48 There was a further and to date last amendment on 16 December 1998 which modified the objects clause so as to provide for donations to appeals made in New South Wales and not nationally. The amendment provided for four trustees and not three as previously.
49 It is necessary that the Court be satisfied that the trust for which it is to order a cy pres scheme was validly constituted as a charitable trust. None of the many parties to the proceedings contended that the Charity is not a valid charitable trust, and it would not be possible to identify the persons or classes or persons who would have any interest in the property if it were established that it is not, because the property was acquired through transactions, probably largely donations of money, which occurred many decades ago and are no longer recorded. The identities and amounts of gifts and the circumstances in which they were made are now beyond all practical ascertainment. At all times the rules of the Hall Trust have provided for the property to go to some other charities or persons on dissolution, so that persons who made gifts should be understood as having intended to part with their gifts out and out, without reversion to donors in the case of failure. The only potential claimant whom I can see is the Crown, which would be entitled if the property became bona vacantia, and the Crown makes no such claim but seeks a remedy in which the validity of the charitable trust is assumed. It is still necessary for me to state reasons for treating the Charity as valid.
50 The question whether the objects in the 1941 Constitution were charitable depends upon the general law relating to charities, and judicial decisions establish that a trust for a memorial hall or public hall is a charitable trust within the fourth class of charities in Income Tax Special Purposes Commissioners v Pemsel [1891] AC 531 at 583, being a trust for an object for the advantage of the public. In Murray v Thomas [1937] 4 All ER 545 Clauson J accepted that the object of providing a memorial hall for use in two villages was charitable. See too In Re Spence; Barclays Bank Ltd v Stockton-on-Tees Corporation [1938] Ch 96 at 100-105. The High Court of Australia accepted that a hall or theatre to provide concerts for citizens of Launceston was a charitable object in Monds v Stackhouse (1948) 77 CLR 232. Although it should be taken that the hall was to be available for members of the Hall Trust the qualifications for membership in the 1941 Constitution are sufficiently wide to be a section of the public or an appreciably important class of the community, and should not be classed as a fluctuating body of private individuals. "All returned sailors, soldiers and airmen" points to a class closely similar to that which was held to be a class of the community in Verge v Somerville [1924] AC 496 at 506 (PC) and if there were otherwise room for doubt their cumulation with "residents in the locality who are interested in the purpose of the [furtherance] of the charity" would put the matter beyond doubt. On returned soldiers and their dependants as a section of the public see too Barby v Perpetual Trustee Co Ltd (1937) 58 CLR 316.
51 Trusts which provide benefits for members of armed services, or former members of armed services, or their dependants, are also upheld, irrespective of whether they act to relieve poverty, sickness or age, apparently because they encourage participation in armed service with consequent benefit to the community. A repatriation fund was treated as a valid charitable gift by the Privy Council in Verge v Somerville at 506, evidently on this principle; and the principle was stated more fully in the judgment of P W Street CJ in Eq at first instance; Somerville v Attorney General for the Commonwealth of Australia (1921) 21 SR (NSW) 450 at 461- 462. In Williams v Attorney-General (1948) 48 SR (NSW) 505 Sugerman J accepted (and it was not contested) that the purpose of providing comforts for members of the Australian Imperial Forces was a charitable purpose. A memorial hall for use by returned service persons should in my opinion be also be regarded as charitable. The objects adopted in 1944 of providing recreation and meeting rooms for returned men, and the similar objects with relatively small variations through several later amendments until and including 1991 are also clearly charitable and depart very little from the original objects, while the two forms of objects adopted in 1991 are both plainly charitable.
52 There is a profusion of available possible objects in these many constitutions, and although they do not vary greatly, it is necessary to decide which objects have effect in order to address in a clear way the question whether the objects have become impossible to attain or have ceased to be suitable and effective and to discern the spirit of the Charity which should be given effect in any scheme. The 1941 Constitution was in effect when Trust Land 1 and Trust Land 2 were acquired; or in the case of Trust Land 1, which appears to have been acquired earlier, that constitution is the best evidence available of the intentions of those who acquired it about the terms of the Trust to which it was to be subject. The objects clause speaks in terms of raising funds, but the land originally purchased and other land purchased with funds so raised must be understood to be impressed with the same trust as the funds.
53 The Hall Trust was and is a voluntary association and the members may end their association whenever they decide to do so, and they may continue their association in whatever form they agree. In particular they may amend the rules of their association, if all or all who continue in association agree to the amendment; and this is so whether or not there is a power of amendment in their rules. However it is not open to them to alter the terms of any charitable trust to which trust property has become subject if the document which records the objects does not contain a power of amendment; and if there is a power of amendment, it must extend to amending the objects of the charitable trust. The decision in Free Church of Scotland v Overtoun; Macalister v Young [1904] AC 515 is a powerful illustration of the inability of a majority, short of unanimity, to alter the trusts upon which the property of a voluntary association is held, unless there is power which extends to altering the trusts: see Attorney General (NSW); Ex rel MacLeod v Grant (1976) 135 CLR 587 at 603 and 605 (Gibbs J.). After Trust Land 1 and Trust Land 2 had been impressed with the charitable trusts expressed in the 1941 Constitution it was not possible for the members, even unanimously, to alter those trusts by agreement among themselves, as those rules did not provide for amendment of the charitable objects, or for any other amendment. Land was held on trust for the objects stated in the rules which existed when it was acquired; it was not held on trust for the objects stated in the rules of the Hall Trust whatever they may become. In my opinion then Trust Land 1 and Trust Land 2 always remained subject to a charitable trust for the objects which appear from the 1941 Constitution, and those objects were not altered when the constitution of the Hall Trust was altered from time to time.
54 The instrument creating a charitable trust may, in concept, confer power on some person to alter the charitable trust. It would not be enough that the rules of a voluntary association which conducted a charitable trust contained a power to amend the rules; the power must extend to alteration of the charitable trust, and it would be a question of construction of the rules to ascertain whether the power extended so far. It would also be for consideration whether some purported alteration fell within the power; there may be limits relating to the purposes for which the power may be exercised, or limits to the nature of the amendment authorised, arising from the limits, wide as they are, to the concept of an amendment or in some other way from limits in the terms in which the power was created. It was contended by senior counsel for RSL Welfare that the amendment adopting the objects in the 1998 Constitution was ineffective because it went beyond the concept of amendment authorised by rule 7 of the 1962 Constitution, which had not been affected by intervening amendments. The submission was that the 1998 amendment went beyond amending the rules, to the extent of being an abandonment of the previous objects and a re-foundation of the Charitable Trust. The force of this submission is that the change in the objects was radical, departed from the elements of building a hall, holding land, conducting activities in Short Street Leichhardt and providing a memorial which until then had been central. This submission would only affect Trust Land 3, as Trust Land 1 and 2 were acquired under the 1941 Constitution which did not contain any power of amendment. While I find this submission attractive I will not come to a conclusion on it because of the impossibility in the circumstances of attaining the objects whichever version of the objects actually has effect for Trust Land 3.
55 The charitable trust created in 1941 did not confer power to sell the property on the Hall Trust; the only object in contemplation related to use of land in Short Street as a memorial hall. There were no trustees and no powers of trustees under the 1941 Constitution. Apart from an implied power to expend money for purposes incidental to the charitable objects, that constitution did not authorize distribution of funds by making donations to other charities, whether the funds were raised by sale of property or in any other way. It authorized distribution of funds to other charities in the case of dissolution of the Hall Trust, which was to happen on the membership falling below three persons or on the vote of a three-fourths majority of members at a Special Meeting; but there has never been any dissolution in accordance with rule 13 or in any other way, and accordingly nobody, whether Messrs Fulham and Kelly or anyone else, has ever had lawful authority to sell land, convert land into funds, or to distribute funds.
56 Trust Land 3 was acquired in 1969 when Hall Trust affairs were being conducted under the 1962 Constitution with the objects in that constitution. Those objects did not differ much in principle from the objects of 1941 except that they referred specifically to acquiring land and properties, rather than leaving that to implication, and they contained a specific object which included dealing with property including transferring buildings and dealing generally with land. There was a different dissolution clause, but as there has never been a dissolution this is not of importance. If the 1962 Constitution established the terms of the trusts of Trust Land 3, it certainly did not authorize Messrs Fulham and Kelly, or three trustees, to sell property without the authority of the members, and did not authorize Messrs Fulham and Kelly to distribute funds. It was argued before me that Trust Land 3 should be taken to be an accretion to the land already held on the trusts of the 1941 Constitution, and that I should infer that it was intended that it should be held on the same trusts. While this argument has considerable force I am inclined to think that the better view is that the persons controlling affairs in 1969 probably intended that land which they then acquired would be held on trusts established by the then current constitution, which had been in effect for seven years and under which any available funds had probably been raised. That is to say, for Trust Land 3, the objects of charitable trust upon which it was acquired and the spirit of the trust are to be ascertained from the 1962 Constitution. Notwithstanding that Trust Land 3 was contiguous with Trust Land 1 and 2, and that the three were later developed by building one club building on them, I do not think that it is correct to regard Trust Land 3 as an accretion to the land earlier held, and I do not regard authorities which incidentally refer to trusts to carry out improvements to existing buildings which were already the subject of other charitable trusts of any assistance.
57 The evidence does not give an account of the buildings (whatever they were) which were on the three parcels of land when acquired, or of any hall or other structure later erected on those parcels of land before 1986. Leasing the land to the Club was a practical means of realizing the objects, as premises which were simply a meeting hall and no more could not be expected to be used with much intensity, whereas a club with its facilities, refreshments and amusements could be expected to be effective as a place of resort. It was asserted in correspondence in 1989 that the Club had erected very substantial club buildings over a period of about 40 years, that is from about 1949 on. Matter of detail relating to the land and improvements on it begins to be discernible in 1971 when the Club was incorporated. The Club probably existed and used the Hall Trust land as an unincorporated body for many years before 1971, and when incorporated continued to do so on some basis which is not clearly established in which rent was paid to the Hall Trust for the land and a meeting room was made available for the Hall Trust. Construction of a new clubhouse commenced in 1986 and was completed by 1990. It is said to have cost approximately $1,841,000. The affairs of the Hall Trust and the Club were conducted on the basis that the Club held a tenancy of the premises from the Hall Trust and paid rent. For a long time the rent was only at a very modest rate, and no written lease was granted until February 1996. As well as paying a very modest rent, the Club provided services and assistance to ex-servicemen, including some services on occasions when membership of the Club was not treated as necessary for attendance, and the Club made some donations of money to the Sub-Branch, and provided a room free of charge for use by the Hall Trust for its meetings and also for the Sub-Branch.
58 Mr Kelly, Mr Fulham (the first and second defendants) and Mr Ronald Hugh Wells were appointed trustees by a deed dated 19 November 1988 which was registered in the General Register of Deeds and took effect according to s 6 of the Trustee Act 1925. Their appointment appears to have taken place in accordance with the then current constitution of the Trust. In May 1989 Messrs Fulham Kelly and Wells became the registered proprietors of the land.
59 The May 1998 Constitution provided for three trustees. When it was adopted there were three trustees namely Mr Fulham, Mr Kelly and Mr Wells. At a meeting on 25 September 1998 Mr Wells' resignation was accepted and Mr Jones and Mr Flaherty were elected additional trustees; so the members appeared to have given their authority for there to be four trustees, and this apparent authority was acted on by a Deed of Appointment of new trustees on 11 December 1998. However it was not until 16 December 1998 that the constitution which allowed for four trustees was adopted. The deed has not been registered as the terms of s 6 of the Trustee Act 1925 require and hence the appointment is not effective: Retravision (NSW) Ltd v Copeland (Young J 8 October 1997 unreported). So far as appears the Deed was not registered by 27 April 2002 when the membership appointed another three persons as trustees. Even if the deed had been registered its effectiveness would be doubtful as it purported to give effect to an appointment of four trustees by the members at a time when the constitution only provided for three. In fact Mr Fulham and Mr Kelly continued to act as if they were the only continuing trustees; they did not explain their reasons but it seems that they may well have been right. If indeed they were the only trustees, that fact did not confer on them authority to do what they did.
60 Meetings of the members considered the sale of the land. On 23 December 1999 there was a unanimous decision of the members to sell the premises to the Balmain Leagues Club. However this sale did not take place and the Leagues Club withdrew from negotiations in January 2000. Otherwise there was never any decision by the members to sell the premises, and the auction sale which was in fact conducted on 16 March 2000 took place without members' agreement. Later a meeting of members ratified the sale. Part of the land was transferred to the purchaser Idameneo (No 123) Pty Ltd in April 2000 and the remaining part was transferred on 3 November 2000.
61 An Extraordinary General Meeting of the Trust, convened by Mr Kelly, was held on 29 July 2000 and a motion proposed by Mr Kelly for the dissolution of the society and distribution of its assets was defeated. At this time it appears that there were eight members. Attempts were made to convene meetings for various dates in August 2000, but no meeting took place. Then on 27 March 2001 Messrs Fulham and Kelly sent letters to members circulating a list headed "The Wish List", which set out names of charities to which they intended to distribute the funds of the Hall Trust. There are considerably more names on the list than there later were actual Recipients of funds. The amounts intended to be distributed to particular charities were not stated. Their letter said they proposed to proceed to distribution on 29 March 2001 in the absence of a Court order to the contrary.
62 By circulating these letters and forming the intention to distribute funds, not in accordance with any decision of members, and not after any dissolution, but in accordance with their own wishes, Messrs Fulham and Kelly departed from any kind of regularity in the conduct of affairs and in dealing with the assets. Under none of the many constitutions could assets be distributed to other charities without there first having been a dissolution; and there had not been one; and on no possible view of the powers of trustees were they in a position to effect a distribution without acting in accordance with a decision of members. Messrs Kelly and Fulham acted as if they were authorized to conduct all Hall Trust affairs; whereas they plainly were not, and they had not been able to obtain the approval of members for various projects, and they had not acted in accordance with a clear decision for the appointment of two other persons as trustees with them.
63 When Mr Jones received his copy of the letter of 27 March 2001 he spoke to Mr Cantrill of the Crown Solicitor's Office, to whom he had earlier given some information about Hall Trust affairs. Mr Cantrill contacted Mr Fulham who in a conversation gave Mr Cantrill an undertaking that moneys would not be dispersed. Mr Tudehope, solicitor, also on 30 March gave Mr Cantrill an assurance that Mr Tudehope would ask Mr Fulham not to pay out any money, and Mr Tudehope by letter of 12 April 2001 told Mr Cantrill that Mr Fulham and Mr Kelly, in accordance with an undertaking, had not made any distribution pending further discussions with the Crown Solicitor's Office. Notwithstanding these events Messrs Fulham and Kelly directed the bank to draw cheques in favour of a number of payees specified by them; the cheques were drawn various dates, 4, 15 and 25 May 2001 and distributed by them to the various Recipients. This happened in disregard of Mr Fulham's assurance to Mr Cantrill and of the undertaking confirmed by Mr Tudehope, without giving any information to Mr Jones, and at a time when it must have been fully known that authority to act in this way was under challenge and investigation.
64 On 7 June 2001 Mr Tudehope informed the Crown Solicitor's Office that he no longer held instructions and that the Crown Solicitor should deal with Mr Fulham; when the Crown Solicitor's officer Ms Barbaro telephoned Mr Fulham the following day he told her that the money had all been given away. Mr Jones was a signatory on the bank account, although it appears that two signatures were enough and that Mr Fulham and Mr Kelly could act without him. He attended the bank and attempted to stop the cheques, but as they were bank cheques, and had already been issued in accordance with signature instructions held by the bank, he was unable to stop them. It is said however that $63,513.20 is now held in an account for the Hall Trust, in a different bank.
65 Behind these events is a history of involvement of the Hall Trust in disputes and conflict extending back for about ten years before the sale. The Hall Trust resolved in a decision minuted on 21 October 1989 to take action to recover possession from the Club and then in 1990 commenced proceedings for ejectment against the Club. The proceedings were slow to progress and the responses to it appear to have included adverse action within the Sub-Branch against RSL membership of the Hall trustees. The litigation produced an agreement which was the outcome of a mediation conducted on 27 October 1992; but there was no real resolution of conflict. Difficulties developed in the use of the meeting room in the Club premises and Mr Fulham adopted the practice of holding meetings in his own home because (as he said) the room in the Club premises was bugged. In 1993 Mr Fulham maintained that the trustees were entitled to sell the premises and that they would set events in motion for the sale of the premises. The trustees in fact retained selling agents in June 1993, and soon afterwards the members of the Hall Trust decided to refuse to negotiate with the Club, and to give Notice to Quit.
66 Later in 1993 the Club commenced proceedings in the Equity Division claiming, in various forms, an equitable interest or entitlement to be granted some interest, leasehold or freehold, in the land or charge over it. There were various events of conflict and skirmish over occupation of the meeting room in the premises, including challenge to its being used by the Sub-Branch, a tussle over changing the lock to the room and a challenge, in a letter written by solicitors on behalf of the Hall Trust, to the Club's allowing the Sub-Branch to use the room which met a response in which the Sub-Branch challenged Mr Fulham's membership on the ground of conduct unbecoming a gentleman or a member. The Equity proceedings were heard before Mr Justice Young on 14 August 1995 and his Honour's judgment of 23 August 1995 had the effect of establishing that the only entitlement of the Club to the land was an entitlement to a further lease of 2 years to commence on 1 January 1996 at a commercial rent determined at $199,750 per annum. A lease was accordingly granted to the Club on 10 February 1996, but its effect was that at the end of 1997 the Club lost all entitlement to occupation of the Club premises and had no asset to represent its expenditure on the improvements. However occupation by the Club continued for some time, under arrangements which appear to have been made by the then trustees, until the Club passed into administration, then into liquidation and its liquidators gave up possession.
67 An illustration of the state of internal conflict in the Hall Trust is that at a meeting on 4 December 1999 Mr Fulham, seconded by Mr Flaherty moved to dismiss Mr Jones as a trustee: this motion failed. A tape recording was made of proceedings at this meeting, but the tape and what it recorded were not available to members. Mr Jones in a stream of correspondence sought to obtain information about the tape recording, and about the terms of the auction sale including the price, observed that the sale was not in accordance with the members' decision of 23 December 1999 and generally tried to exert his position as a person who had been appointed by the members as one of the trustees, without obtaining any significant response or recognition from Messrs Fulham and Kelly. After the auction the Hall Trust at a meeting of members called on or about one day's notice passed a motion ratifying the sale. Mr Jones attempted to move for rescission but was unable to obtain co-operation in holding a meeting. A proposed dissolution was defeated at the Extraordinary General Meeting of 29 July 2000, and no resolved position for the conduct of Hall Trust affairs emerged. Various attempts to conduct the Annual General Meeting did not proceed and finally, on 19 August 2000, lapsed due to lack of a quorum. About August or September 2000 various members of the Trust sought to obtain the intervention of public authorities, including the Crown Solicitor and the Office of Charities of the Department of Gaming and Racing, which is the successor of the former Chief Secretary's Department.
68 With these events it appears to me that there was a complete and unresolvable breakdown in the affairs of the Hall Trust. Its affairs have not been conducted in accordance with its constitution, there has been no co-operation among its trustees, and attempts to obtain decisions of members on significant matters, or to hold an Annual General Meeting were unsuccessful. The unauthorized distributions by Messrs Fulham and Kelly are the most drastic of a long series of events which taken together show clearly that the Hall Trust has ceased to be means by which the affairs of the Charity could be conducted. This is not an organization in the hands of which trust property could safely be left. The original project of building a memorial hall and, by inference, using it for the benefit of ex-service persons has run its course over the decades and has been completely exhausted, and the means available for using the premises, namely the conduct of an RSL Club in them, have become ineffective with the failure and liquidation of the Club. Then two of the trustees have without authority sold the land, banked the proceeds and put an end permanently and irretrievably to attaining the objects for which the Hall Trust was first formed, which were specifically related to land in Short Street and to use of the land as a memorial hall by ex-service persons. The trust has not even been able to achieve its own dissolution. After the Hall Trust has had such a great fall it cannot be put together again. No use is available to which the funds of the Trust could be applied to attain its objects. In these circumstances there is in my judgment a complete proof that the attainment of the objects of the Hall Trust had become impossible; and there is a complete demonstration that the Court should not allow money subject to a charitable trust to remain under the control of the Hall Trust.
69 In the presentation of the case on behalf of the third, seventh, eighth and ninth defendants, who are related to the continuing Hall Trust, it was contended that the Attorney General had failed to take action necessary to thwart Messrs Fulham and Kelly when it was known that there was a risk that they would act in the way they did, and that it was not appropriate for the Attorney General to attempt to impose on the Hall Trust a scheme which would have the effect of endorsing breaches of trust and depriving the Hall Trust of its opportunity to determine its own future, including whether there should be a dissolution and if so what the distribution should be. Their position can be fairly summarised as being that the Hall Trust with its present membership and the trustees who were appointed on 27 April 2002 should, with the assistance of the Court, be put back in control of the funds or so much as can be recovered, and left to pursue their course in accordance with the constitution of the Hall Trust. Counsel for these defendants told me that he was instructed that they did not intend to contest resistance to refunding donations by Recipients which maintained that they had immediately spent money on buying capital equipment, or where the new trustees form the view that there has been a genuine change of position.
70 I do not accept criticism made in these submissions of the conduct of affairs on behalf of the Attorney General by officers of the Crown Solicitor. When late in March 2001 Mr Jones made the terms of Messrs Fulham and Kelly's letter to members with the enclosed "Wish List" known to Mr Cantrill, Mr Cantrill acted promptly, and obtained an assurance from Mr Fulham, reinforced soon thereafter by correspondence from a solicitor, which constituted reasonable grounds for acting on the basis that the distribution was no longer threatened or likely. Once it was known that it had been pointed out to Messrs Fulham and Kelly that what they were proposing to do was under challenge and assurances had been given by Mr Fulham and by a solicitor on their behalf, so that it was known that they had access to legal advice, the Attorney General and his officers cannot be reasonably be criticized for not taking some further steps such as urgently commencing litigation and seeking an injunction or the appointment of a receiver. In the face of undertakings not to make the distribution, it is unlikely that an immediate injunction would have been obtained. When it became known that the distribution had actually taken place the Crown Solicitor's officer acted rapidly, sought undertakings from the Recipients, and obtained them in a majority of cases. The miscarriage of Hall Trust affairs and the distribution of its money cannot on any reasonable basis be laid at the door of the Attorney General. Intervention by the Crown as protector of charities is not the first resort; members of the Hall Trust, particularly those whom the members had appointed as trustees, were the persons with the first and best opportunity to foresee and prevent wrong dealings with its property, and the ordinary workings of the Hall Trust in accordance with its constitution had broken down many months earlier; while the possibility that two trustees who were authorised bank signatories and who were estranged from other members might act on their own should have been clear enough to other members.
71 Messrs Fulham and Kelly filed submitting appearances and did not defend the proceedings or explain their conduct. The primary liability for misapplying the funds falls on them, and one result of adopting the scheme proposed by the Attorney General will be that they will escape claims for restitution, a protection which they in no way deserve. They have not attempted to defend their conduct, and it is obvious that they acted in breach of trust and did not have regard to their responsibilities as trustees of charity money. It is very unlikely that they are in a financial position to make good the large sums of money which they have lost. They have made a complete wreckage of the Hall Trust and its affairs and it would be very unfortunate if they were ever given similar responsibilities again.
72 A significant shortcoming of the proposed scheme is that it confers success on their unauthorized conduct and could be interpreted as approving of it, although that would on any reasonable view be a misinterpretation. Counsel for Mr Jones described the scheme as sweeping the problem under the carpet. He contended that it would offer a very bad example and an encouragement to delinquent trustees if what they did was in fact ratified. To me it seems that there may be some tendency of this kind, although trustees who saw any encouragement in the circumstances would be very few and very foolish, particularly if they knew anything of the complexity of the controversy and litigation which followed. Only very rarely would this factor outweigh the aversion which trustees should have to incurring large financial obligations if they do not comply with their duties. Very few trustees would find any encouragement in the decision I am asked to make, or would feel that they could rely on being retrieved from ruin by a cy pres scheme. The focus of the Court's attention is on the trust property and how it should be applied, and the impact on actual and potential defaulting trustees of any decision is an incidental matter. The evil example is unlikely to contribute to any further delinquent behaviour. If there had been any element of dishonest application of trust moneys I would not act so as to confer this incidental benefit on them; but there has not.
73 I see a number of significant disadvantages in the proposed cy pres scheme. There will be an entire defeat of the due workings of the affairs of the Hall Trust and the reasonable expectations of the persons involved that the Hall Trust would be administered according to its constitution and that members would have their due place in its affairs, with a proper opportunity to contribute to decisions relating to dissolution and distribution of its assets, and with due respect for their opinions and views and, it may be, recognition in society of their contribution. The cy pres scheme does not give the recognition which, in better circumstances, I would wish to give to the rights and expectations of other members of the Hall Trust. I do not disregard them, but their vindication is not the main focus of my attention.
74 One result which was achieved by the Charity was the presence in Short Street Leichhardt, visible for the community to see, of a building which kept up memory of the service and sacrifice overseas of members of the armed services, reinforced by activities conducted in the building. The distribution of funds in accordance with the cy pres scheme will not continue, with any of the same force, the function of the Hall Trust and its premises as a memorial. I was assured in the course of submissions by several Recipients of their intention to display plaques or otherwise memorialise the source of the benefaction; I welcome these assurances, but what they propose to do will not have the same force.
75 The distribution which the scheme would ratify will also have less effect than the pursuit of the objects formerly had to serve the interest and welfare of ex-service persons. The activities of one Recipient, Sydney Legacy, are well related to the interests and welfare of dependants of ex-service persons, others serve the interests and welfare of ex-service persons less directly, while all make contributions to the community which will benefit ex-service persons in the same way as the community generally. While the number of ex-service persons who served in world wars is now falling rapidly and those who remain are of advanced years, they still have needs and interests, and the balance of advantage towards their needs and interests is not as I would have chosen in better circumstances. Ex-Service persons who have served overseas in later conflicts continue to be numerous in the community. The balance is not redressed by the proposal to make the relatively small funds remaining a donation to the RSL Welfare Fund.
76 Another respect in which I find the proposed scheme less than satisfactory is that there is relatively little association between the charities to be benefited and the Leichhardt-Lilyfield District. Only St Columbas' School represented by the twelfth defendant Father Bui has a strong local association.
77 The position of the fifth defendants, who are the trustees of the RSL Welfare and Benevolent Institution, was to the effect that there should be a cy pres scheme in a different form in which the Recipients who have given undertakings and are in a position to return moneys donated are required to return the funds and the funds available should be distributed to RSL Welfare. Counsel for RSL Welfare did not ask the Court to make any scheme or orders under which there would be attempts to pursue Recipients who have spent the funds available.
78 Essentially the position taken by RSL Welfare was that its claim as an ex-service welfare organization related to the RSL has overwhelming primacy for consideration in a cy pres scheme for the Hall Trust, and that this should be recognized as far as is practicable, but accepting the limit that there should not be compulsion against charities which had expended funds before they were informed that the funds had been misapplied. Counsel for RSL Welfare submitted that if there were disputes I should require them to be mediated. I was referred extensively to the connections between the Hall Trust and various organizations connected with the RSL, of which there are many throughout the history of the Hall Trust, and to indications, both in purpose and in application, of the relation between the Hall Trust and benefits to ex-service persons. At times these submissions were expressed in terms of a claim of right, as if the claim of RSL Welfare was so overwhelming that the Hall Trust property should be regarded as belonging to RSL Welfare. This was an excessive position.
79 There is no reference in the 1941 Constitution to the RSL or to any welfare fund associated with it as a possible recipient, on dissolution or in any other circumstances. There was a very strong association from the beginning between the Hall Trust and the RSL, its Sub-Branch and related bodies. The opening correspondence in evidence shows that forming the Hall Trust and acquiring Trust Land 1 were initiatives taken by the Sub-Branch. In some later versions of the constitution the RSL or related bodies had prominent places, including provisions which at one time made officers of the Sub-Branch officers of the Hall Trust, and provisions which restricted membership by reference to the membership of or approval by bodies related to the RSL. There was also strong association in the prominent place which the RSL has had, throughout the life of the Hall Trust and before, in advancing the interests of ex-service persons. The association with the Club was particularly strong. The Club occupied the Hall Trust land for many years, paid rent which for many years was nominal, and provided the Hall Trust with meeting rooms; and when the Hall Trust had significant disputes and litigation the Club was its opponent. All these things give RSL Welfare a strong claim for consideration but they do no more than that and do not establish that giving the property to RSL Welfare will carry out the objects of the charitable trust as nearly as possible in the same way as was originally provided for.
80 The Hall Trust had strong associations with the Leichhardt-Lilyfield District, and of benefits to ex-service persons and other inhabitants of that District, which would not be continued if the available property were given to RSL Welfare, and the element of a memorial of overseas service would only be faintly echoed. In the 1941 Constitution provision for distribution on dissolution did not include any RSL charity and was not particularly directed to ex-service charities. While I do not think that a cy pres scheme ought to be modelled on any version of the dissolution clause, the cy pres scheme proposed by the plaintiff does not appear to me to depart from the spirit of the trust in so far as the 1941 dissolution clause is an expression of it. It was submitted that if the funds were properly administered on dissolution they would all be paid to the RSL under clause 14 of the 1962 Constitution. In my view the amendment which adopted clause 14 is of doubtful validity because it went beyond the alteration of an earlier clause relating to disposition of property to charities and operated instead to bar disposition on dissolution to any charity. In any event there has been no dissolution and no rights have arisen under clause 14.
81 In my view RSL Welfare has a strong claim for consideration when deciding what scheme should be adopted, but not an exclusive claim, and not a claim of such strength as to exclude considerations of practicality. Counsel for RSL Welfare submitted that it would not be proper to visit the consequences of yielding to the practicalities on RSL Welfare. This submission was formed on a basis of assumed entitlement which was not justified. Any entitlement of RSL Welfare would begin when favourable consideration by the Court brought RSL Welfare within the dispositions under a scheme, and there is no correct view in which any property which passes to another charity is lost to RSL Welfare.
82 One effect of what RSL Welfare proposes would be to produce an apparent inequity or unfairness among the Recipients; some would be called on, by calls which they may have grounds to resist, to refund moneys which they have kept available while others will not be called on or can be expected to have much stronger grounds for resistance merely because of the time at which they disposed of the money donated. The unfairness would, in my opinion, be more apparent than real, as all benefited from donations and none had a claim of right, the principle of selection by Mr Fulham and Mr Kelly was unauthorised and all but random, being rather fewer than the "Wish List" which they had composed, and the property when recovered from the Recipients would again be applied for charitable purposes. I do not regard apparent unfairness or inequity among Recipients as a significant matter.
83 In deciding what cy pres scheme to adopt I feel that I must yield to claims of practicability and expediency. I should avoid any decision which would produce or might tend to produce disputation over the recovery of donations, and avoid the attendant close examination of entitlements against Mr Fulham, Mr Kelly and (to the extent that they are insufficient) against Recipients, and I should in practicality avoid examination of the circumstances of particular Recipients to ascertain their obligation to make a repayment and their capacity to do so. If I set processes like those going I would be fairly certain to generate expense, delay, bad feeling and litigation, with diversion of energy and diminution of resources away from attainment of charitable objects; whereas under the plaintiff's scheme the funds pass immediately to worthy charitable objects. If the funds were left under the control of the Hall Trust, disputes and litigation would in my view be a fair certainty, and would continue the Hall Trust's long history of engagement in such troubles. Claims of practicality appear to me to require a course which will bring the unhappy history of the Hall Trust to a relatively early close with its funds in the hands of worthy charities.
84 Although there are a number of factors against my adopting the scheme in the terms put forward, and against my appearing to approve or ratify the misconduct of Messrs Fulham and Kelly, the strong claims of practicality induce me to adopt the Attorney General's proposed scheme. I am in a conflict between purity and practicality. It would not be open to me to adopt the course of simply gathering together those of the gifts which can readily be recovered; if I am to opt for purity, its pursuit ought to be complete. When I consider whether I should embark the trust property on a course in which it is collected together, Messrs Fulham and Kelly's resources are exhausted to compensate for their breaches of trust and the Recipients are pursued for whatever they may be obliged to repay of the balance, I find the sheer complexity and difficulty of that course very striking. If I adopted that course I would embark the trustees (whoever they are to be) responsible for the giving effect to it into a large and complex course of disputes, claims and probably of litigation, with the probability of complexity, delay and large expense.
85 Close analogy is of no assistance in formulating a cy pres scheme. It is not feasible to require the trust moneys to be applied to building another meeting hall for returned men, in Leichhardt or anywhere else; the passage of time and other social changes have ended the epoch when a project of that kind could have any vitality. No party has suggested that any such thing should be attempted. Attempts to follow the spirit of the Hall Trust in formulating a scheme must produce some scheme with objects which do not resemble the original purpose.
86 Once the charitable objects in the 1941 Constitution became impossible with the passing of the need for the hall and the disposition of the land, the indications available in the terms of the 1941 rules for the spirit of the charitable trust are very general; apart from the provision of a hall which had become impracticable, the dissolution clause shows contemplation that any registered or exempted charity selected by a majority of members is within the spirit of the Trust; the legislation to which the words "registered or exempted" alluded has been repealed, and the spirit of the Trust extends to any charity to which the public might donate funds.
87 I have given some consideration to whether I should direct that some part of the funds should be set aside and used for the maintenance of War Memorials, and I take notice that there are a significant number of War Memorials in the Leichhardt District, in public places and also in public buildings and schools, and there is a need to make funds available for expenditure from time to time on refurbishment and maintenance of these memorials. I have not however been able to find and I have not been referred to any authority in Australian law or in English law for treating a trust for the provision of a War Memorial, or any other memorial as a charitable trust. Judicial opinion positively supporting trusts for memorials relates to memorials which are otherwise of public utility such as public halls, or are aids to worship in churches. A dictum of Clauson J in Murray v Thomas [1937] 4 All ER 545 at 550B-D faintly supports the erection of a memorial in the nature of a cross as of itself a charitable purpose, but his Lordship did not cite authority or express a concluded view, and spoke in England where the establishment of religion may affect the concept of the public utility of erection of a cross. Cases referred to in Scott and Fratcher "The Law of Trusts" 4th Edition Volume IVA para 374.9 note 9 show that some courts in American States have gone further. Counsel for the plaintiff submitted that it was open to me to take the view that the provision of a War Memorial is a work of public utility and falls within the fourth class in Pemsel's case; I do not think that that is at all clear, provision of a memorial may well fall outside the relevant concept of public benefit, and it would not be appropriate for me to include a provision the lawfulness of which was doubtful in a scheme ordered by the Court. I express the hope that the Recipients will find some means of commemorating the gift and its relation to the trust for a memorial hall, but I do not intend to impose any controls on what they do.
88 By acting in this way I will produce some effects which I regret and would prefer to avoid. One is that the memorial element of the Hall Trust will all but disappear. Another is that less of the Charity's assets than I would wish to see will be applied to charities with objects specifically related to ex-service persons and their dependants. Another is that I would wish to see a greater relationship between the charitable purposes to which the funds are applied and the Leichhardt-Lilyfield District. Another disadvantage, which I recognize although it weighs less heavily with me, is that the members of the Hall Trust will be disappointed of the recognition and dignity associated with administration of the Hall Trust and power of decision over application of its funds. Another disadvantage is that Messrs Fulham and Kelly will escape from obligations from which they do not deserve to escape. I see these disadvantages, but in my judgment they are outweighed by claims of practicality and the need to resolve conflict, avoid more conflict, and apply the property to charitable purposes within the spirit of the original gift. Although the selection of the Recipients was more or less random and made by persons with no authority to make it, I am of the opinion that I should not embark the Court on an attempt to improve on the selection.
89 For these reasons I propose to make the orders sought. In my view this is not a case in which any person should recover an order for costs. The third, seventh, eighth and ninth defendants, who are now in control of the Hall Trust should in my view be entitled to be indemnified for their costs of the litigation out of the relatively small part of the funds which remain, and this will go in diminution of the funds available to RSL Welfare. If it is necessary to deal with this subject by an order as to costs I am prepared to do so.
90 ORDERS: