Downing v Commissioner Of Taxation

Downing v Commissioner Of Taxation - [1971] HCA 38 - HCA 1971 case summary — Zoe

[11]

The question thus raised is one of some difficulty. The terms of the clause contain no express reference to necessitous circumstances or to poverty. But an intention to provide for the relief of persons from poverty need not be stated in express terms. It may be implicit in a gift: see Union Trustee Co. of Australia Ltd. v. Federal Commissioner of Taxation [1] , and the cases there cited. The question is whether or not such an implication can be obtained from the words used in the clause with which we are now concerned. In my opinion it can. A person may be in need without being destitute. The word "poverty" and similar expressions, as used in the law in relation to charities, refer to persons who, although they may not be in abject poverty, are subject to some degree of financial necessity. That view accords with the view stated by Kitto J. in Ballarat Trustees Executors and Agency Co. Ltd. v. Federal Commissioner of Taxation [1] , and also with that stated by Vaisey J. and by the Court of Appeal in In re Coulthurst, deceased; Coutts and Co. v. Coulthurst [2] . In the latter case there was a discussion of the degree of need in which persons must be, in order that a gift for the purpose of assisting them financially may be held to be a gift for the relief of poverty. Evershed M.R. stated [3] that the word "poverty" was a word of wide and somewhat indefinite import and that it may not unfairly be paraphrased as meaning persons who have to "go short" in the ordinary acceptation of that term, due regard being had to their status in life. When the clause refers to the amelioration of the condition of dependants, I think it is right to regard those words, in their context as part of the whole trust which, in my opinion, has a character which is predominantly charitable, as indicating that the object of the amelioration clause is to benefit persons whose lot needs improvement. In coming to that conclusion I have considered such cases as Attorney-General (N.S.W.) v. Adams [4] ; Muir v. The Open Brethren [5] ; and in Re Gillespie (deceased) [6] , where somewhat similar questions, as to what will constitute a gift for the relief of poverty, were discussed. The question is always one of the construction of a particular gift or trust, upon which a conclusion can rarely be reached by considering decisions upon other gifts or trusts. Upon the view that I take of the meaning of the clause under consideration, any application of the property for the purpose stated in it would be an application for a charitable purpose. Once the purpose is seen to be the relief of poverty, there is no ground upon which it could be denied that the gift, so far as it may be devoted to that purpose, is valid as a charitable gift. The class of potential objects of benefit under the clause is not so small and is not of such a character that the requirements of a valid charitable trust for the relief of poverty would not be satisfied.

[13]

The conclusions which I have stated are enough to dispose of the appeal adversely to the appellant. They have the consequence that the Archbishop might lawfully apply any part of the property for "the amelioration of the condition" of dependants of members or ex-members of the specified forces, outside Australia. But if, contrary to my view, the clause upon its proper construction does not refer exclusively to dependants who are poor persons in the relevant sense, the intention is nevertheless sufficiently indicated, in my opinion, that its main object is to enable relief to be given to persons of the specified description, who are through poverty in real need of such relief. If the clause had stood alone as the sole description of the purpose for which the property was to be used, the trust, upon the assumption that it would have been proper to apply the property or part of it for the benefit of members of the specified class who were not suffering the disadvantages of poverty, would have been, I think, a trust answering the description, in s. 131 (1), of the trusts to which that section refers. The trust would have been one of which it could be said that some non-charitable and invalid purpose was or could be deemed to be included in the purpose for which an application of the trust funds, or part thereof, was by the trust directed or allowed. Therefore, in my opinion, the section would apply and effect would be given to the trust in the manner stated in sub-s. (2) thereof. The trust would be treated, upon the assumption as to its construction which is now being made, as if by its terms it allowed the application of the trust property for the amelioration of the condition of the dependants, whether poor or not, of any member or ex-member of the named forces and s. 131 would apply to render the trust valid as a charitable trust. If the views which I have stated as to the applicability of s. 131 to a trust, in which the purposes were stated solely in the terms of the amelioration clause, be correct, I know of no reason why that section should not apply likewise to a clause in the same terms, which constitutes only a part of the statement of the purposes for which the trust property may be used.

[14]

It is not necessary to consider in this case to what extent s. 131 applies to earlier sections of the trust of the residuary estate. In Laidlaw's Case [1] , Dean J. examined each part of the trust and held that, but for s. 131, the inclusion of the references to any public benevolent institution or public benevolent society in Victoria and to the Lord Mayor's fund would permit the application of the property for purposes which were not in the legal sense charitable. In this case it does not matter whether those conclusions were correct or not and I express no opinion upon them. But if they were correct there is no reason, in my opinion, why s. 131 should not be applied to each part of the trust so as to confine its operation in order that no application of the property should be allowed for those purposes, included in the purposes described in that part of the trust, which are non-charitable. In this case there is but one trust of the residuary estate. There are not several trusts. It is a trust for such one or more of the nominated purposes as is or are selected by the Archbishop. In relation to every non-charitable purpose included in the nominated purposes, whether it is included as part of a composite expression or by means of a separate description, s. 131 may operate, provided that where a composite expression is used, it comprehends within it charitable and non-charitable elements which can be discerned and can be separated. In this way all that is non-charitable, whether mentioned separately or associated in one expression with a charitable purpose, may be in effect excised, leaving available only those purposes which are charitable. The opinions which I have just stated as to the operation of s. 131 are, in my opinion, in conformity with the interpretation of that provision and corresponding provisions in other legislation, which after a great deal of divergence of judicial opinion, has now been accepted. It is, in my opinion, in conformity with the decision of the Privy Council in Leahy v. Attorney-General (N.S.W.) [1] , in which the relevant part of the joint judgment of Dixon C.J. and McTiernan J. in Attorney-General (N.S.W.) v. Donnelly [2] , was approved. See also Stratton v. Simpson [3] .

[24]

The important case of Verge v. Somerville [3] , stands in the way of holding that no trust for the benefit of ex-servicemen can be a valid charity of the fourth class. In holding that a gift to the trustees of the Repatriation Fund or other similar fund for the benefit of New South Wales soldiers was a valid charitable gift, their Lordships stated the opinion [4] that it was not necessary, in order to support the gift, to find that it was charitable in the sense of assisting the needy. The appellant seeks to explain that case as warranting only the conclusion that it is a charitable purpose to re-establish servicemen in civilian life and submits that there is no basis in this or in other authorities for treating as charitable the purpose of providing any other types of benefit to ex-servicemen. It was said that a gift for the setting up again in civilian life of ex-servicemen could be regarded as analogous to "the maintenance of sick and maimed soldiers and mariners", mentioned in the preamble. But I am unable to agree that the re-establishment of ex-servicemen is analogous to the preamble in a way in which other forms of assistance to them cannot be, or that re-establishment (independently of indigence) should be placed in a special category governed by a special rule. Nor do I think it is fatal to the validity of a trust in which the object is indicated of assisting ex-servicemen, that an application of the fund for the benefit of their children or of their dependants is also permitted. It is to be noticed that although the gift in Verge v. Somerville [3] was "for the benefit of New South Wales returned soldiers" and did not mention their dependants, their Lordships referred [1] , to the Acts under which repatriation benefits were provided, and those benefits included the assistance of dependants. In In re Elgar (deceased) [2] , the primary object of the trust was the re-establishment of members of the forces but the trust allowed the trustees to apply the fund otherwise for their benefit or for the benefit of their children. It was held to be a good charitable trust. That decision was not challenged when an appeal on other grounds was brought [3] . In my opinion the decision was correct. It is in keeping with the generally accepted view that it is part of the responsibility of the community to care for the welfare not only of servicemen but also of their dependants.

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Decision date

Before

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Judgment (39 paragraphs)

Parties

Cited By (4)