Gray v Australian Cancer Foundation for Medical Research; Estate Harold Boardman [1999] NSWSC 492 | Case summary

JUDGMENT 1 HIS HONOUR : Harold Boardman died on 28 October 1990. He made and published his last will and testament on 5 December 1984. Probate was granted to the plaintiff on 11 February 1991. 2 As far as is relevant to this case, all that need be said about Mr Boardman was that he was a builder and carpenter who diversified into a building supply business in the Manly Warringah area, and later moved up to Leura on the Blue Mountains. He, however, amassed a considerable sum of money and the evidence discloses that at present there is about $3.337 million, less the costs of these proceedings, in the estate. 3 Mr Boardman's will is relatively simple in form. The evidence shows that he had made an earlier will in 1979 and his wife Myra, sometimes known as Mabs, had made a similar will in 1979 by a now retired solicitor, Mr Whiting. Mr Whiting gave evidence that in both the 1979 wills he was instructed by Mr Boardman that one of the beneficiaries was to be "The Cancer Research Foundation". In the will of 1984 those exact words are also used, the will simply leaving 95 percent of the residue of Mr Boardman's estate to "The Cancer Research Foundation". 4 The plaintiff executor is a solicitor practising at Katoomba. After obtaining probate he asked the Court what he should do about distributing the 95 percent share of the residue because he was unable to find any body or any institution which had that name. 5 On 24 April 1995 I gave advice that he had no option but to commence the present proceedings, and that such proceedings should involve all possible charities who could claim, on the one hand, and representatives of the next of kin on the other. 6 These proceedings were commenced in 1995 following that advice, but it took quite a considerable time to gather information about the charities which might be claimants and the next of kin. The court papers show that the matter came before Santow J in 1997, and progress was reported. The next mention was at the end of 1998 when it was clear that even though it was possible that some other person or entity could come out of the woodwork, nothing much more could be done to ensure that all the charities and next of kin were before the court and the matter should accordingly be fixed for hearing. I then fixed it before myself and it was heard yesterday and today. 7 Accordingly, although a long period of time appears to have gone by since the probate was granted in 1991, the problems have been mainly in identifying the parties rather than fault with the executor or the court. 8 The questions which arise for decision are really three, namely: (1) Are any, and if so which, of the first, third or fourth defendants the body identified by the testator as his beneficiary? (2) If the answer to question 1 is no, does the will show a general charitable intention? (3) If the answer to question 2 is yes, how should the fund be deployed for cy pres. I will deal with each of those questions in turn. 9 (1) The first question really falls into two parts: (a) is there any body exactly described; and (b) is the term "The Cancer Research Foundation" a misdescription of any body? 10 There is no doubt at all that the prime duty of the Court is to construe the will and, if at all possible, identify the beneficiary whom the testator has wished to benefit. The Court does not approach this sort of problem on the basis of what is best for the community, or how a person knowing of the facts should leave his or her property. It is one of our basic rights as Australians to leave our money as we think fit, provided we comply with our duties to those dependent upon us, and it is up to the Court to ensure that the wishes of testators are carried out. 11 When a will has uncertainty again the Court goes to fairly considerable lengths to see if it can work out who was the intended beneficiary. In cases where there is no charity involved so that the uncertain share will fall into intestacy, it has been said that the Court should go to the length of indicating that it is impossible to identify the beneficiary before saying that the bequest fails for uncertainty; see for instance R v Newman [1967] VR 201, 203. The rationale of this is the presumption against intestacy; see Boys v Bradley (1853) 10 Hare 389, 397; 68 ER 978, 982. If there is a general charitable intention, the principle does not apply to quite the same extent. However, it is still a Court's primary duty to find out what the testator meant if at all possible. 12 Although wills speak from the date of death, when one is looking at questions of identity of the beneficiaries the court sits, as it were, in the armchair of the testator at the date of making his or her will and bears in mind the circumstances that the testator would have known at that date: Boyes v Cook (1880) 14 Ch D 53,56. In the instant case it must be remembered that the 1984 will was really a re- enactment in a different form of the 1979 will so one must also look back to what was in the testator's mind as he sat in his notional armchair in 1979. 13 It is necessary then to look briefly at the three claimants. The first defendant was incorporated on 18 June 1984 under the name Australian Cancer Foundation for Medical Research. It changed its name in the last four or five years to Australian Cancer Research Foundation. It was not in existence in 1979. The material shows that it was set up in early 1984 by a series of prominent people in the community and was gradually launched on to the community in 1984, 1985 and 1986. Accordingly, it could not have been in the testator's mind in 1979, nor probably even when he made his will in 1984. 14 The fourth defendant, the University of Sydney, has a group called The Melanoma Foundation. It was established by a resolution of the University Senate in November 1984. However, before gaining the status of a foundation by virtue of the resolution of the Senate, the group did exist and it had to do certain work and put forward some proposals so that it could gain that recognition. It did not, however, exist in 1979 and there is very grave doubt as to whether in 1984 the testator would have been aware of its existence. Its name also is quite different to the name used in the will. 15 However, there was some evidence that the testator suffered from a form of skin cancer in 1979, and there was a similar fund at that time known as The Bill White Cancer Research Fund or the Bill White Melanoma Research Fund. However, as the fund seems to have ceased at some date in the 1980s and the fourth defendant is not its successor, it is of very little relevance when considering questions of identity. 16 The third defendant was incorporated by Act of Parliament in 1955. It existed as an unincorporated body from about 1952. It seems to have been referred to in the community generally simply as "The Cancer Council". There is some material before the Court in the annual reports of The Cancer Council from 1965 to 1967 that certain donations which it had received would be used as the nucleus of a cancer research foundation. The 1966/7 annual report notes that $1.2 million of donations were given for "the Research Foundation". The 1984 annual report noted there were various foundations within the Cancer Council of which some were devoted to research, but this really does not take the matter much further forward because most of the foundations seem to have, at least in brackets, the donor's name. 17 Whether there were some internal entries in the books of the third defendant and reference in its published annual reports to a cancer research foundation, there is no material at all that would show that that information was widely disseminated throughout the community, or that the testator ever became aware of it. Counsel for the other defendants say that the third defendant has never been known in the community by the name of "The Cancer Research Foundation", and that the highest the evidence goes is to say there were some internal reports which used that name, even though some of those reports were published to the public 18 There are some cases in the books where a short name for the charity concerned has been held sufficient. A mild example is Provost and Scholars of Queen's College, Oxford v Sutton (1842) 12 Sim 521; 59 ER 1233, where the name of the corporation was as I have just stated for the plaintiff, but the will referred to it as "Provost and Fellows of Queen's College". A more far reaching example is Gerhady v South Australian Auxiliary for the British & Foreign Bible Society Inc (No 3) (1986) 44 SASR 195 where the testator used short expressions for beneficiaries such as "British & Foreign Bible Society" and "New Guinea Mission Work" which Legoe J stated referred to the first defendant whose full name I have given, and to the Lutheran Church of Australia Inc which performed New Guinea Mission Work. 19 However, it seems to me in all the circumstances that the submissions of the defendants other than the third are correct; that this was not a case where the public generally or the testator would naturally refer to the third defendant as The Cancer Research Foundation. 20 Accordingly, in my view none of the bodies exactly meets the description, nor are the words "The Cancer Research Foundation" a misnomer of any existing body. 21 (2) No one argues against the will showing a general charitable intent. Accordingly, I need not discuss the question further. 22 (3) When a will shows a general charitable intent but for reason of uncertainty or otherwise the testator's exact purpose cannot be carried out, the Court of Equity orders that the trust be executed cy pres, ie, to use the words of Isaacs J in Attorney General for the State of New South Wales v Adams (1908) 7 CLR 100, 125, the Court makes an order to "...carry out the general paramount intention in some way as nearly as possible the same as that which the testator has particularly indicated without which his intention itself cannot be effectuated". In other words, the Court looks to see from the will what was the testator's intention and what were the means which the testator indicated should be used to effectuate the intention (see Phillips v Roberts [1975] 2 NSWLR 207 at 214 and 217) and then requires that the fund be used in that way. In that manner the testator's intention to benefit the charity can be carried out in as nearly as possible a way to that which he or she would have intended. In working out the cy pres scheme the Court has to move away from construing what the testator said in it and work out how best to effectuate his general charitable intention. 23 Each of the three claimants is quite clearly a very worthy body involved in valuable work in the community in connection with cancer. Each, however, is different. There is very detailed evidence before the Court as to their activities which it is unnecessary to summarise in depth. I will just give a pen picture of each. 24 The first defendant, the Australian Cancer Foundation for Medical Research represented by Mr Dempsey of counsel, concentrates on making substantial capital grants for the building of institutes and laboratories throughout Australia where research can be carried out. It considers that there is no other national organisation which regularly supplies capital funding or building refurbishment. Research is a very costly business, as Professor Lykke said, the cost of computerised research equipment is extraordinarily high and without such equipment Australian research workers are really working at bunsen burner level. Accordingly, the first defendant makes large capital grants of one million dollars or more in some cases so that laboratories can be fitted out for research. 25 The third defendant, the New South Wales State Cancer Council, for whom Mr DPF Officer QC and Mr J B Whittle appear, is the predominant charity in the cancer area generally. However, its charter goes far beyond research. The objects that are set out in the 1955 Act which incorporated it do concentrate on research aspects, both assisting research and co-ordinating the research of others. But it also has objects to assist in providing training in technical matters relating to the diagnosis and treatment of cancer, to foster education of the public with respect to cancer, to advise the Minister of any matter relating to cancer, and to provide hospital accommodation for the treatment of sufferers of cancer. 26 The fourth defendant, represented by Mrs D Stewart of counsel, is a much more focused body but its focus is on melanoma and skin cancers. It is, as I have said, a part of the University of Sydney, but only some of its research and other staff are paid by the University of Sydney, others by the Area Health Service, and yet others in other ways. 27 In a cy pres case it is necessary if possible to see what the testator had in mind because unless one does that one cannot determine what is as near as possible to the scheme he had in mind. 28 In the instant case there are only four words to indicate what the testator had in mind, The Cancer Research Foundation. I will briefly consider each of those words. 29 "The" connotes predominant or only, and the indication would seem to be that the testator wanted all his money to go to one body. 30 "Cancer" would seem to be a very wide word referring to all types of cancer. 31 "Research" is a wide word. Research may benefit the people of New South Wales even though it takes place somewhere else in the world. There was some reference in the evidence that the first defendant stops the brain drain of doctors from Australia by providing laboratories in which they can research in Australia and that whilst that brain drain is stopped its researchers are also able to operate and otherwise treat patients here in New South Wales. 32 The fourth defendant also says that although its prime focus is on melanoma and skin cancers, that in fact may give the clue to all cancers and accordingly it is involved in research on cancer generally, even though it has this primary focus. That is an argument which I can understand and is true up to a point. However, one always remembers that aspirin was discovered when the company was carrying out research into dye so there is a limit as to how far we can take the concept of research. 33 "Foundation". The word "foundation" normally connotes a body with funds contributing, usually in a capital way, to the endowment of educational or charitable work. It usually connotes a body that benefits other bodies rather than doing work itself. See Re National Foundation of Diarrheal Diseases (1957) 164 NYS (2d) 177, 178. 34 Putting those thoughts together of course, does not really get one very far. There is no one research foundation that could be called "The Foundation". All of the bodies are involved with cancer and with research. The first and fourth defendants are foundations without doubt. The third defendant is strictly not a foundation but it has considerable involvement in doing what foundations do, that is making capital and income grants available to others. 35 The Attorney General has a role in the community as the protector of charities. He has appeared in that capacity by Mr Davies of Senior Counsel and has indicated that in his view the fund should be split into three parts, one third going to the first defendant, one third to the third defendant, and one third to the fourth defendant. That is a solution that is not uncommon in charity cases; see for instance McCormack v Stevens [1978] 2 NSWLR 517, 519 and cases there cited. The plaintiff executor and Mr Packer of counsel for the next of kin agree this is the proper solution. However, the New South Wales State Cancer Council puts that it would not be appropriate to make that sort of order in the instant case. Mr Officer QC and Mr Whittle reminded me of what I said in Robinson v Psychiatric Rehabilitation Association - 24 November 1986, unreported, where I indicated that where one found in a particular area one predominant charity, then the sharing equal principle should not be implemented but that charity should take the lion's share. 36 However, this exception does not apply in the instant case because although the third defendant is the predominant charity in the area, it is not the predominant research charity. Accordingly, in my view the Robinson case is distinguishable. 37 There is then the suggestion that the fourth defendant should not share equally because it focuses on a particular form of cancer whereas the other bodies involve themselves with cancer generally and the testator seems to be focusing on cancer generally. I think there are two answers to that. The first is that research into melanomas is research into cancer and the results of that research may benefit cancer sufferers generally. Secondly, the evidence shows that of all the bodies, the fourth defendant was one which the testator actually knew existed and some of his friends were acquainted with the work of Professor McCarthy, who is the executive director of the fourth defendant. I consider that any argument against the fourth defendant participating is outweighed by these other factors. 38 Accordingly, in my view the draft order I make is that the fund be distributed equally between the three claimants. 39 Formally the appropriate orders would appear to be orders 1 to 3 in the draft orders handed up by counsel for the Attorney General which I will initial, date and place with the paper. (Counsel addressed on costs) 40 So far as costs are concerned, it is always a troublesome matter in charity cases. Unfortunately the law is so complex that it usually requires that the Court be assisted by senior members of the Bar who deem to involve themselves in a lot of research. The Charitable Trusts Act 1993 has fortunately removed a lot of similar trusts from the process and has allowed them to be dealt with administratively, but where there are large sums of money involved, such as in this case, there is always going to be an expensive piece of litigation. That is really the fault of the people who were involved in the preparation of the will, either the testator or the draftsperson rather than the charities or the Court, and that is why in charity cases usually the costs of everybody who has been reasonable about the matter come out of the fund because in one sense the testator has created the problem. On the other hand, the Court does not encourage people to be unreasonable or to be too greedy. 41 It has been put that because the next of kin conceded question 2 they should not get any costs after the date of the concession. However, it would appear from the bar table that Mr Packer, when briefed, gave his clients very sensible advice which probably cut half a day off the hearing and I should not penalise Mr Packer or his clients for acting in a very responsible way. 42 The other question is whether the third defendant, insisting on obtaining the whole lot under question 1 outlined above acted unreasonably and lengthened the matter. I do not think it did, or that, if it did, the costs were materially increased. 43 Accordingly, the proper order is, "4. The costs of all parties be paid out of the monies directed to The Cancer Research Foundation on the indemnity basis". So far as the exhibits are concerned, order 5 is that the exhibits be returned other than PX09 which should be retained in the court file. OOo

Gray v Australian Cancer Foundation for Medical Research; Estate Harold Boardman

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