Kay v South Eastern Sydney Area Health Service

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5038/02 - KAY v SOUTH EASTERN SYDNEY AREA HEALTH SERVICE JUDGMENT 1 YOUNG CJ in EQ: The plaintiff is the executor named in the will of Marjorie Ellen Williams who died on 2 January 2002 having first made and published her last will and testament on 21 December 1998 probate whereof was duly granted to the plaintiff on 9 May 2002. 2 The will was a holograph will made on a will form. The principal provisions of it are as follows: "I appoint Stephen Kay ... to be Executor and Trustee of this my Will. & I expect him to carry out my orders without any changes and no one can contest it. I give Royal North Shore Hospital $10,000 for the Liver Department ... I give The Children's Hospital at Randwick $10,000 for treatment of White (and white is underlined twice) babies. I give the Blind Dogs $10,000 for dog pets for the elderly. I give the Pink Ladies at Ryde Hospital $5000 & my finished craft to sell in their shop ... My brother, his wife or any of their descendants are not (not is underlined twice) to get anything out of the house or 1 cent of any money. If Stephen Kay wants to sell the house he must sell it to a young White (white is underlined twice) Australian Couple for a reasonable price & not sell at auction or to a developer. If Stephen Kay does not want to handle this he can pay someone else to do so but not his solicitor as I don't like him. Stephen Kay is to get house contents & any money left after expenses have been paid. The money is in St Georges Bank & investments with Esanda Finance. Nothing in the house is to be sold. It is to be given to anyone who needs it or to charity, even Rotary for their garage sale but not the Smith Family or St Vincent de Paul. What no one wants is to go to the tip. So goodbye to anyone who is interested." 3 The deceased left her home at 18A Gaza Road, West Ryde, valued at about $400,000, $84,000 in the St George Bank, a car worth $1500 and about $43,000 of moneys with Esanda or in the St George Bank. 4 The executor has asked the Court to determine questions of construction of the will where he is doubtful, the doubtful points being the parts of the will that I have set out in italics above. 5 The first question is whether the gift to the "The Children's Hospital at Randwick" is a good gift. 6 The first problem is that there is no hospital by the exact name, The Children's Hospital at Randwick and as Children is spelt with a capital "C", prima facie, the testatrix meant a particular hospital. However, on the evidence there is only one hospital which could meet the testatrix's description and that is the "Sydney Children's Hospital" at Randwick operated by the first defendant corporation. 7 The main debate before me has been the significance of the words "white babies". 8 Submissions were put to me that that limitation on the use of the moneys was contrary to public policy. 9 The effect of this, according to Mr John Wilson, for the plaintiff trustee, was to invalidate the condition so that the money would pass to the first defendant unconditionally. 10 The argument of Miss Margaret Sneddon for the next of kin, the fourth defendant, was that the whole gift was destroyed and as there was no residue clause the $10,000 gift would lapse and fall into residue and thus go to her client on intestacy. 11 There was debate before me as to the significance of the Racial Discrimination Act 1975 of the Commonwealth Parliament and the Anti-Discrimination Act 1977 of the State Parliament. 12 It seems to me that a gift to white babies is not actually a gift which discriminates on the ground of "race" in the true semantic sense. However, as most legislation dealing with racial discrimination includes reference to discrimination on grounds of colour, the point is academic. 13 The perceived wisdom in the textbooks as exemplified by Williams on Wills 8th ed (Butterworths, London, 2002) para 9.38 is that a trust which discriminates against potential beneficiaries on the grounds of colour is not void as being contrary to public policy if the gift succeeds or runs foul of the relevant statutes. 14 The English case law backs up the statement in Williams. The leading authority is In re Lysaght [1966] Ch 191 where there was a gift for a scholarship for a male student, the son of a duly qualified British born medical man who was a British born subject but not of the Jewish or Roman Catholic faith. Buckley J, as he then was, distinguished between situations where the testator's true paramount intention was to effect a charitable purpose and where a condition was impracticable and situations where there was a particular charitable intent which the donor meant to take effect if and only if that condition could be fulfilled. His Lordship held that In re Lysaght the trust fell into the first category so that he could settle a cy-pres scheme for the charity when the relevant trustees would not accept office to operate the charity as the testator had set it out in his will. 15 The earlier case of In re Dominion Students' Hall Trustee [1947] Ch 183 is in the same line. Those cases do not assist in the present case apart from their getting rid of the possible odour of contravention of public policy because I would agree with Miss Sneddon's submission that the only sensible interpretation of the gift to the Children's Hospital is that white babies are an integral part of the gift and not just a particular method of implementing a general charitable gift. 16 In England, the way in which the problem of a gift which appears to be contrary to the spirit of the Racial Discrimination Act is handled is that s 34 of the Race Relations Act 1976 operates so that the gift may be used to confer life benefits on persons generally, the restriction as to colour being disregarded. 17 However, the Australian legislation has taken a different tack. Both s 8(2) of the Racial Discrimination Act and s 55 of the Anti-Discrimination Act provide that a deed or will that confers charitable benefits on persons of a class identified by reference to any one or more of the grounds of discrimination referred to in the legislation is not affected by the Act. 18 As far as my researches go, and that of counsel, there have been no decisions on the interpretation of these provisions. Miss Sneddon did put an argument to me that s 8 of the Racial Discrimination Act did not apply to the present gift, but I cannot see how this case is not squarely within the words of the section. The section, obviously, recognises that generally speaking testators can be as capricious as they like and that if they wish to benefit a charity in respect of, or even of, a discriminatory group, they are at liberty to do so. 19 Accordingly, in my view, the gift is valid, it is a charitable gift because it is a gift to treat sick children in hospital. It is, of course, open to the hospital not to accept the gift but I would expect a more pragmatic approach would be that the receipt of a fund to benefit white babies would just mean that more of the general funds of the hospital would be available to treat non-white babies so that, in due course, despite the testatrix's intention things will even up. 20 I have also considered that the expression "white babies" might be void for uncertainty. There are a number of situations in the cases where general phrases have been used entitling or disentitling people from benefaction where the courts have indicated that even though the ordinary man or woman in the street might consider they know what the expression means, nonetheless, they are void for uncertainty. Thus In re Tarnpolsk [1958] 1 WLR 1157, Danckwerts J held it was impossible to give sufficient meaning to the phrase "a person of the Jewish race". 21 In In re Allen [1953] Ch 810 at 817 and 819 Lord Evershed MR held that the word "tall" would be vid for uncertainty if there was a gift to any of the testator's descendants who might be tall and the same result would follow if the gift was to a "pure blooded Englishman". 22 However, because of the conclusion I have reached on the principal point it is not necessary to consider what is a white baby, or whether the term is so vague as to be void for uncertainty. Accordingly, the collateral problem - as to the effect of the "white babies" part of the clause and whether it is void - does not have to be considered. Accordingly, I uphold that gift. 23 The second part of the will which causes problems is the gift to the blind dogs. Again no institution exactly answers the description in the will. Although there are two charities in Australia who provide seeing eye dogs, the material suggests that it is more likely than not that the testatrix meant the second defendant, Guide Dog Association of New South Wales and ACT, the evidence showing that that charity does have a particular program known as their "Pets as Therapy Program for the Elderly". There is no evidence that the competing charity has such a program. I should note that although both charities were duly served, neither appeared on the hearing of the summons leaving it to counsel for the trustee and to the court to construe the will. In view of the small amount involved, this is to be commended. 24 That leads me then to the final part of the will that I have italicised and the question is whether the plaintiff is entitled under the gift, "Stephen Kay is to get house contents & any money left after expenses have been paid" is a gift of the contents of the house plus money, or whether it is of a house as well as the contents and any money. 25 The parties would not be here if there were not some indications in the will in both directions. Looking at the will as a whole it is significant that the testatrix has not been particularly careful as to the use of commas and other punctuation marks. The punctuation marks do occur from time to time, especially the full stop, but commas are not always used where grammarians would have them used and it is sometimes used where they would not. 26 There is some case law as to the significance to be given as to punctuation or lack of punctuation in wills and it can be said, as Williams does in para 50.14, that whilst there are different views as to the importance of punctuation the prevailing view appears to be that one can be guided by the punctuation marks, or lack of punctuation marks in a will, see, for instance, Houston v Burns [1918] AC 337, 342; Re Jeffrey [1948] 2 All ER 131; Oppenheim v Henry which is reported in a note to Walker v Tipping (1852) 9 Hare 800, 803; 68 ER 740, 742 and Re Crocombe [1949] SASR 302, 304. 27 It depends on the way in which the testatrix had generally used punctuation in the will as to how much influence it has. In the instant case, it does not seem to me that punctuation is any great guide to me in working out whether I should put a notional comma between house and contents in the dispositive clause. 28 The matters that go towards reading the words "house contents" as if they were house and contents are that there is no residual clause in the will but the testatrix has tried to dispose of almost every piece of property she had. The rose dinner set, the finished craft work and a couple of other items specifically mentioned in the will have no commercial value, yet they must have had sentimental value to the testatrix and she made sure she disposed of them. She mentioned each and every other piece of her property and so Mr Wilson puts, it would be most unusual if she had not intended also to dispose of her major asset her house. 29 Furthermore, she mentions the house on at least two occasions in the will. This view is then reinforced by the presumption against intestacy. The presumption against intestacy is actually reinforced in the instant case by the reference to "my brother" is not to get anything out of the house or 1 cent of any money. This is a stronger expression than that which referred to certain other relatives who were merely not to get anything. The brother is the fourth defendant and the sole next of kin. Whilst the clause that the brother is not to get anything out of the house or 1 cent of any money, if very widely construed, would not remove from the brother his benefits under the law of intestacy, see Pedulla v Nasti (1990) 20 NSWLR 720, they do in my mind reinforce a presumption against intestacy. 30 However, in this will it may well be that the clause about the brother and his wife not getting anything out of the house, may refer to the final paragraph in the will in which anyone who needs anything out of the house can take it but even so, I think the flavour is that the brother is not to receive any benefaction. So it would be strange if the testatrix, who must have known her brother was her only next of kin, left the doorway open for him to take on intestacy. 31 The argument the other way includes focusing on the actual words used "house contents" and it is a phrase which means what is in the house rather than the house. The "any money left" again seems to suggest that there will be a sale of the house contents rather than a gift of the house. Then there are the words which appear immediately above it. "If Stephen Kay does not want to handle this (that is the sale of the house) he can pay someone else to do so." That would be quite unnecessary if it was intended that Stephen have the house. However, in the relevant paragraph there is a reference to "if Stephen Kay wants to sell the house". 32 Now that raises a problem whichever way one looks at it. Mr Wilson focuses on the word "wants" as meaning that the gift of the house must have been beneficial as, otherwise, the executor's wants would not matter at all but the other way of looking at it is that the word "wants" means a decision in all the circumstances that is appropriate and so it refers to executorship and that that is then reinforced by the ability to appoint an agent. 33 There is no power given expressly to the executor to sell. It is strange that the possible disposition of the house is put in the terms that it is. 34 In my view, the answer to this particular problem is that the testatrix was a lady who had very strong dislikes. She wanted to make sure that the solicitor, who as far as I know is not one of the solicitors involved in the present case, whom she did not like, did not make any money out of the transaction. Her command that if it is to be sold the house was to be sold to a young white Australian couple cannot be of any value at all except to indicate, for the purpose of the gift to the hospital, that she really did mean what she said by "white babies". This is because "young white Australian couple" must be an expression which is void for uncertainty because apart from the difficulties in working out what is a white couple, there are difficulties in working out what is an Australian - does it mean Australian by birth or a person who since has obtained Australian nationality? Does it mean that both members of the couple must be Australian? Does couple mean a couple of different sexes or does it include same sex couples, etc, etc, etc? There is far more room for uncertainty here than with the words "white babies". 35 If the gift, of course, is to Stephen outright then the proviso would be void as an attempt to restrain alienation after a fee simple: see Hall v Busst (1960) 104 CLR 206. To a great degree it is a matter of impression but, in my view, the submissions made by Mr Wilson are more likely to reflect the testatrix's desire that the gift of "house contents ..." passes the real property at 18A Gaza Road, West Ryde. 36 Accordingly I answer question 1(a) yes. Question 2(a) yes. Question 3(i) yes. Question 3(ii) no. Question 4 not applicable. 37 I make order 5 in the summons. I order that the costs of the plaintiff on the indemnity basis and the costs of the defendants be paid out of the estate of the late Marjorie Ellen Williams.

Last Modified: 04/14/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.