Gregor v British-Israel-World Federation

1630/01 LEON GREGOR v BRITISH-ISRAEL-WORLD FEDERATION (NEW SOUTH WALES BRANCH) JUDGMENT 1 HIS HONOUR: The late Kenneth Dudley Nichols died on 3 January 1997. He left a Will made on 15 November 1995. That Will gave some substantial benefits in connection with an organisation called The British-Israel World Federation (New South Wales Branch). The particular provisions of the Will relating to that organisation are as follows: " 3. I GIVE free of all duties and taxes payable upon or as a consequence of my death all my right title and interest in my property situate at and known as Lot 530 Pulpit Rock Road, Blackheath to the governing committee of BRITISH-ISRAEL WORLD FEDERATION (NEW SOUTH WALES BRANCH) of 127 York Street, Sydney, New South Wales 2000 AND I DIRECT that this gift shall be used for the benefit of the Federation it being my wish that the said property be retained for the purposes of the Federation and, in particular, to provide a venue for conducting educational and service programmes and courses AND I FURTHER DECLARE it is my wish that the said property not be sold unless there be a unanimous decision of the governing body of the Federation but if a unanimous decision of the governing body cannot be obtained and at least a majority of the governing body are in favour of sale then it is my wish that a general meeting of members be called for the purpose and if two thirds (2/3) of the general body of members attending the meeting in person or by proxy who vote shall be in favour of sale it is my wish that the property shall be sold." " 5. I GIVE all my real and personal property of whatsoever nature and wheresoever situated not hereby or by any Codicil hereto otherwise disposed of to my Trustee to pay therefrom my debts funeral and testamentary expenses and all Probate and other duties and taxes payable upon or by reason of my death AND subject thereto my Trustee shall stand possessed of the residue thereof (hereinafter called 'my residuary estate') UPON TRUST to pay or transfer the same to the governing body or committee of the said BRITISH-ISRAEL WORLD FEDERATION (NEW SOUTH WALES BRANCH) to be used firstly for or towards the maintenance and development of the property known as Lot 530 Pulpit Rock Road, Blackheath and secondly for the general purposes of the said Federation, it being my wish that the capital of my residuary estate be preserved for the maintenance and development of the said property." " 7. I DIRECT that if any gift to any charity or other body under this my Will shall fail for any reason whatsoever then such gift shall not fail but my Trustee shall apply that gift to a charity in New South Wales which my Trustee considers most nearly fulfils the objects that I intend to benefit." 2 Probate of that Will of the late Mr Nichols was granted to Stanley Lawrence Baker. 3 The British-Israel World Federation (New South Wales Branch) is a company limited by guarantee. Bitter factional disputes arose within it. They led to Justice Austin making an order for the winding up of that company on the just and equitable ground. The circumstances which led his Honour to make that order are set out in the reasons for judgment in Gregor v British-Israel World Federation [2002] NSWSC 12, a judgment delivered on 29 April 2002. 4 The benefits which were given under Clauses 3 and 5 of Mr Nichols' Will appear to be of a value of half a million dollars or perhaps more. Stanley Baker did not administer the gifts arising under Clauses 3 and 5 of the Will, because he came to hear of the litigation, which Justice Austin ultimately determined on 29 April 2002. 5 Soon after Justice Austin had delivered that judgment, Mr Stanley Baker died. 6 There is before the court today a notice of motion which was filed by Mr David Baker, who is the son of the late Stanley Baker. That notice of motion seeks a grant of administration of the estate of the late Stanley Lawrence Baker for the sole purpose of concluding the administration of the estate of the late Kenneth Dudley Nichols. It seeks orders relieving Mr David Baker from any need to advertise, and from compliance with other provisions of the rules. 7 The application is made in circumstances where the late Stanley Baker left no Will, and no grant of administration of his estate has been sought. There are, it appears, a number of children of the late Stanley Baker in Germany, England, Scotland and Zimbabwe as well as Australia, and it has not been possible to obtain their consent to a grant of administration of Mr Baker's estate to Mr David Baker. 8 The application is one which has been brought in large part because the solicitor who had been advising Mr Stanley Baker felt a sense of responsibility to ensure that the administration of the estate of Mr Nicholls was not left in limbo as a consequence of the death of Mr Stanley Baker. 9 The application is one which is an unusual one, and it does not follow the usual course for dealing with problems like the one which has arisen here, of a sole executor dying before he has completed administration of the estate, and leaving no executor of his own. The usual course in this situation would be to apply for a grant of letters of administration de bonis non of the estate of the late Mr Nichols. Usually, those sorts of grants are made on application by someone who has an interest in the assets which are unadministered, and upon proof of the death of the first executor, that there has been no grant of probate of the first executor, and that there are assets still unadministered in the principal estate. 10 There appeared before me today, Mr Boyle, solicitor. He acts for certain of the former directors of the British-Israel World Federation (New South Wales Branch). He informs the court that one outcome of the internal divisions which are catalogued in Justice Austin's judgment is that one group of members of the British-Israel World Federation (New South Wales Branch) have now formed a new company called British-Israelite Federation Limited, which seeks to carry on in New South Wales similar activities to those which the British-Israel World Federation (New South Wales Branch) formerly carried on. Mr Boyle contends that his client will be someone entitled, under Clause 7 of the Will, to the benefits given under the Will of Mr Nichols to the British-Israel World Federation (New South Wales Branch). 11 There is a provision in the memorandum of association of the British-Israel World Division (New South Wales Branch), which provides that if there are surplus assets on the winding up of the company, a particular course needs to be followed. That involves the surplus assets on winding up being transferred to a British organisation called the British-Israel World Federation unless the members resolve otherwise. Justice Austin records, at paragraph 16 of his judgment, that the evidence before him indicated that if the British body were to receive the assets of the Nichols estate, the British body would regard itself as a custodian trustee with the responsibility to see that an appropriate new body was formed to pursue the Federation's objects in New South Wales and then to transfer the assets to that new body. 12 There will be some difficulties of construction of Mr Nichols' Will, which will need to be solved before any decision can be made about the ultimate destination of those funds. There is a problem of construction of Clause 3, as to whether the gift is intended to be one to the members of the governing committee beneficially, or whether it is a gift which is given on trust for the corporation. There is a question of whether the gift for the benefit of the Federation is one which is for the Federation in its own right, or whether it is for the purposes of the Federation. If the latter, there is a question of whether those purposes are charitable, or not. 13 There are various wishes expressed in the Will; there is a question of whether or not any of those wishes are binding. There is a question of whether, if the gift is a charitable gift, it has now failed, and so should be settled cy-près. If yes, whether the appropriate way to do so is by the procedure in the Memorandum of the Company, under Clause 7 of the Will, or in the Court's inherent jurisdiction. There is a question of whether the power in Clause 7 of the Will is one which can be exercised by an administrator de bonis non. In giving this list of questions, I am not purporting to be exhaustive and indeed the list I have given might not pose the questions of construction in the best way. I list the questions for the purpose of making clear that whoever it is that is eventually vested with the administration of the asset, it will probably be necessary for that person to have the Will construed by the court, so that he or she will know what obligations he or she has concerning the assets of the Nichols estate. 14 The application, which is brought by Mr David Baker, is one which is consented to by the plaintiffs in the proceedings, which were before Justice Austin, and also by the liquidator of British-Israel World Federation (New South Wales Branch). 15 Notwithstanding that, it seems to me that it should be refused. There is a conventional way of making an application to deal with the situation that has now arisen, namely, by an application to the registrar for letters of administration de bonis non. Mr Boyle has indicated that one or more of his clients will probably make such an application. As well, counsel for the liquidator has indicated that the liquidator will give consideration to making such an application. 16 I decline to make any orders on today's application. The conduct of Mr David Baker in bringing this application is one which was a commendable attempt to solve an impasse to which no other way out appeared to him to be readily available. It is a matter of the technicalities of probate law, rather than as a result of any personal criticism of the stance that he has taken, that I have made the order which I have made. 17 I shall dismiss the notice of motion. **********

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