Lever v Attorney General of NSW

Supreme Court of NSW|2018-05-29|Before: Ward CJ

Background

The background to the present application is set out in the plaintiff's affidavit sworn 12 March 2018.
The deceased died on 17 October 2013. Probate of the deceased's will dated 4 October 2013 was granted by this Court to the plaintiff as executor of the estate on 14 January 2014.
Under the deceased's will, the deceased left her shares in a named company to a charity (the Mary Alice Foundation Ltd) (cl 4.2(a)); made certain specific gifts to two named beneficiaries (cl 4.3(a) and (b)); and then made provision for the residue of her estate. Part of the residue is to be distributed to various of her nephews and nieces (cl 4.4(b)-(g)), but the bulk (being 60%) is to be distributed, in accordance with cl 4.4(a) (which has been set out in full above), "to establish a trust in [the deceased's] name to benefit women and children in the United Kingdom".

Preliminary matters - jurisdiction and applicable law

Submissions

There is no dispute as to the Court's jurisdiction to entertain this application. Section 4(1) of the Charitable Trusts Act provides that: (1) This Act applies in respect of a charitable trust even though: (a) it was established outside New South Wales, or (b) the trust property is not situated in New South Wales, or (c) the trustees are not domiciled or resident in New South Wales.
The Charitable Trusts Act (s 3) defines a "charitable trust" as "any trust established for charitable purposes and subject to the control of the Court in the exercise of the Court's general jurisdiction with respect to charitable trusts".
However, as the Attorney General notes, a question arises on the present application as to the law to be applied by this Court, because the proceedings concern the proposed disposition of property to the trustees of a charitable trust formed by deed under the law of the United Kingdom; those trustees being persons domiciled in the United Kingdom.
The Attorney General submits that the validity of the gift under cl 4.4(a) of the will is to be determined by this Court applying the law of New South Wales.
The Attorney General argues that this Court is, essentially, determining whether the assets subject to the trust created by cl 4.4(a) can be effectively vested in the trustees in that capacity by the will: noting that the Hague Convention on the Law Applicable to Trusts and on their Recognition (1984), Article 4, does not apply to such preliminary questions (see M Davies, A Bell, P Brereton, Nygh's Conflict of Laws in Australia (9th ed, 2014, LexisNexis Butterworths) at [34.8]).
As the property in question comprises movable assets (funds invested in controlled moneys accounts) (see the plaintiff's affidavit sworn 12 March 2018 at [3] and Annexure A thereto), the Attorney General submits that the law of the testator's domicile is applicable to determine the effectiveness of the testamentary gift (see the rule in Mayor, Aldermen, and Citizens of Canterbury v Wyburn and the Melbourne Hospital [1895] AC 89).
In Wyburn, the testator, domiciled in Victoria, directed the trustees of his will to pay the mayor and corporation of the city of Canterbury in England the sum of ten thousand pounds for the purpose of buying land at Canterbury and erecting thereon a free library and reading-room for the working classes to be named after the deceased. The issue before the Privy Council was whether the testamentary gift was invalidated by an English (mortmain) statute which prohibited the gift of money by English wills for investment in land in England for charitable purposes, unless the gift was made by deed executed at least twelve months before the death of the donor. The Privy Council, on an appeal from the Supreme Court of Victoria, held that the English statute did not apply and said (at 96-97): At what point, then, of the transactions does the English law come in? Not between the Victorian testator and his Victorian executor. In their Lordships' view the English law will operate whenever a purchase of land for the charitable uses is effected, but no earlier. The assurance of that land must be made in accordance with the provisions of the [English statute]. Anybody may give money for such a purpose in the permitted mode. The testator might himself have bought land in Canterbury and have devoted it to charitable purposes quite lawfully. What he might do himself he might do through trustees, by giving money to trustees for the purpose of acquiring land in a lawful way. Is there anything to prevent him from ordering his executors to do the same thing? The answer is that his will is not affected by English law. It is a valid will binding on his executors; and a Victorian Court of Justice should direct them to perform their obligation.
Thus the Attorney General argues that the validity of the cl 4.4(a) gift to the trustees is to be determined by this Court applying domestic law; that question of validity incorporating the question whether a valid charitable trust is formed under the will.
The Attorney-General emphasises that the structure of the particular gift under the will is to delegate to the trustees the implementation of the purpose for which the gift is made. Although that purpose is to be implemented wholly outside this jurisdiction, and to be implemented for the benefit of a public (or a section of a public) wholly outside this jurisdiction, the Attorney General argues that neither of those matters is an impediment to the validity of the gift; noting that the focus for this Court is as to whether the gift is a valid charitable gift - not as to the implementation of the purpose for which the gift is made.
Reference is made to the statement by Professor Dal Pont (G E Dal Pont, Law of Charity (2nd ed, 2017, LexisNexis Butterworths) at [11.18]) that:: Whether or not a purpose to be performed in a foreign jurisdiction is charitable is determined by the concept of charity in domestic law, not by that concept as defined by the law of that foreign jurisdiction. Otherwise, the domestic court would need to pronounce on law outside its expertise.
Of course, as the Attorney General notes, this Court can apply foreign law if that law has been introduced into evidence before it and, in the absence of proof of the foreign law, can proceed on an inter-party agreement (as the Court did in Re Estate Polykarpou [2016] NSWSC 409 at [58]) or on the presumption that the foreign law is the same as the domestic law (see Damberg v Damberg (2001) 52 NSWLR 492; [2001] NSWCA 87 as to such a presumption).

Determination

I accept the Attorney General's submission that the applicable law to determine the effectiveness of the gift in cl 4.4(a) is the law of the testator's domicile at the time of her death (which was New South Wales): this being a question as to the essential validity of a testamentary gift of movable property. The relevant rule of private international law is usefully summarised as follows (Lord Collins (General Editor), Dicey, Morris and Collins on the Conflict of Laws (15th ed, 2012, Sweet & Maxwell) at [27-045]): A will made by a person under no testamentary incapacity and duly executed or formally valid may nevertheless be invalid, or wholly or in part inoperative, because it contains provisions to which the law will not give effect. Thus, English law restricts accumulation for charitable trusts or which vest at too remote a date. … Such invalidity, arising from the nature of the bequest, is termed material or essential invalidity, and whether a will is or is not void wholly or in part on account of such invalidity depends upon the law of the country where the testator is domiciled at the date of his death.
I also note what is said in Nygh's Conflict of Laws in Australia at [38.27]-[38.28]: The validity of a gift to a particular beneficiary or legatee must … be regarded as a matter of essential validity. This includes questions such as whether … the gift complies with the requirements for making a charitable gift … The general rule is that such questions fall to be determined by the law of the domicile of the testator at the time of death so far as movables are concerned, and by the law of the situs so far as movables are concerned.
A question about the validity of the vesting of property in the trustees is a "preliminary issue", and the Hague Convention on the Law Applicable to Trusts and on their Recognition (as incorporated into Australian law) does not apply to it, as set out in Dicey, Morris and Collins on the Conflict of Laws at [29-012]: A distinction must be drawn between questions relating to the settlement, will or other instrument which operates inter alia to vest property in trustees, and questions relating to the validity and operation of the trust provisions contained therein. The Hague Convention [Hague Convention on the Law Applicable to Trusts and on their Recognition], and so the 1987 Act, does not apply to what it styles "preliminary issues," those falling into the former category. …
I therefore proceed to apply the law of New South Wales to the question whether cl 4.4(a) establishes a valid charitable trust. I turn then to the two issues for consideration.

Submissions

As to the delegation by the testator of the power to dispose of the property identified in cl 4.4(a) of the will, the Attorney General points to s 44 of the Succession Act, which provides that a power or a trust to dispose of property, created by will, is not void on the ground that it is a delegation of the testator's power to make a will, if the same power or trust would be valid if made by the testator by instrument during his or her lifetime; noting that the previous restriction on delegation of the power to select the beneficiaries to a testamentary trust did not apply to charitable trusts (see Tatham v Huxtable (1950) 81 CLR 639, 652-3 (Kitto J); [1950] HCA 56; Lutheran Church of Australia South Australia District Incorporated v Farmers' Co-operative Executors and Trustees Limited (1970) 121 CLR 628, 640 (Barwick CJ), 653-655 (Windeyer J); [1970] HCA 12; Blair v Duncan [1902] AC 37, 43 (Lord Davey), 45 (Lord Brampton), 49 (Lord Robertson)).
The Attorney General notes that in Perpetual Trustee Company (Limited) v St Luke's Hospital (1939) 39 SR (NSW) 408 this Court upheld, as valid charitable bequests, gifts of the income derived from the residue of the testator's estate to the treasurer of St Luke's Church of England Hospital, Darlinghurst to be used "for such general purposes in connection with the said hospital as the management or committee... may think fit" and also to the Anglican Archbishop of Sydney to be used "for the assistance of such poor parish or parishes as the said Archbishop in his uncontrollable discretion may think fit".
As to whether cl 4.4(a) manifests a charitable intention, the plaintiff submits that, while the objects of the charitable trust are very broad (the object being "to benefit women and children in the United Kingdom"), the law does not require there to be a specific purpose provided the purpose or object of the trust is charitable (referring there to Law of Charity at [6.4]; Smith v West Australian Trustee Executor & Agency Company Ltd (1950) 81 CLR 320, 324 per Latham CJ; [1950] HCA 32). The plaintiff notes that courts have assessed "benefit" to a foreign community by reference to what would be beneficial in the local community (referring to Law of Charity at [3.53]).
The plaintiff submits that a general charitable intention is to be presumed unless there is evidence to the contrary in the instrument establishing the charitable trust, pointing to s 10 of the Charitable Trusts Act. (That section is, however, concerned with the administration of cy-près schemes under the Charitable Trusts Act and with altering the general law rule that "proof of a 'general charitable intention' is the precondition for applying cy-près a charitable gift that fails for initial impossibility" (Law of Charity at [15.45]).)

The charitable purpose in this case

The plaintiff submits that the gift in cl 4.4(a) falls within the fourth "head" identified in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531. In that case, as is well-known, Lord Macnaghten said (at 583): "Charity" in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads.
Professor Dal Pont (Law of Charity, [11.3]) writes: It is well established that, to come within the fourth head, a purpose must satisfy a "two stage" test: the purpose must be beneficial to the community; and it must fall within the spirit of the Preamble to the Statute of Charitable Uses 1601 [43 Eliz I, c 4].
The plaintiff submits that the gift clearly meets the two-stage test of being beneficial to the community and falling within the spirit of the Preamble to the Statute of Charitable Uses 1601 (43 Eliz I, c 4).
As to the breadth of the charitable purpose expressed in the gift, the plaintiff points to examples of charitable purposes such as: a gift for "the relief of distress in Europe in the manner indicated by the pastor for the time being of the said Lutheran Church, Eastern Hill" (Re Pieper, 43 (Smith J)); a gift "for the neurologically impaired and the communicatively handicapped" (Goldwyn v Mazal at [5]); and a gift for the "the general purposes" of an institution the principal object of which was the settlement of Jews in Israel (Re Stone (deceased) (1970) 91 WN (NSW) 704).
Clause 4.4(a) of the will identifies the community as "women and children" in the United Kingdom. The plaintiff notes that in Victorian Women Lawyers' Association Inc v Commissioner of Taxation (2008) 170 FCR 318; [2008] FCA 983, French J, as his Honour then was, held that the Victorian Women Lawyers' Association was charitable, as its primary purpose was to remove barriers and increase opportunities for women in the legal profession.
There, however, the question arose in the context of the determination as to whether the association in question was exempt from income tax on the basis that it was a charitable institution. Focus was placed by French J on the anti-discrimination objectives of the Association, by reference to which the Association was held to be an exempt charitable institution. In the present case, though the plaintiff notes that the object of The Ellie Trust would fall within the recognised charitable object of relieving human distress (pointing out that the purposes of the trust are similar to the purposes of the charity established in Re Twigger [1989] 3 NZLR 329, 339-40), that is not determinative of the question whether the testamentary gift is for a charitable purpose.
As an alternative submission, the Attorney General submits that it is not necessary to consider whether "women and children" per se are valid objects of a charitable trust, if the descriptors "women and children" serve only to identify a particular class of inhabitants within a locality (here, the United Kingdom), relying on cases where gifts to the people of a locality generally, or to a class of persons within a locality, can take effect as charitable gifts.
Reference is made to what was said by Professor Dal Pont (Law of Charity at [11.18]-[11.19]). The most recent edition of that work says: From the earliest times, courts have treated general words directing that money be applied for the benefit of a country or a district as evincing a charitable purpose. For example, a gift for the inhabitants of a town, or any particular class of inhabitants, has been construed as being limited to charitable objects. Courts have reasoned that, though no purpose is defined, the fact that the gift is directed to a locality imports the necessary element of public benefit, and so a "charitable purpose is implicit in the context". Where, however, a specific purpose is specified, the court must determine whether or not that purpose is charitable ... [footnotes omitted]
As the plaintiff notes, gifts to the general locality of the United Kingdom have been construed as valid charitable gifts: such as a gift "unto my country England" (held invalid at first instance (Re Smith [1931] 2 Ch 364), but that decision reversed on appeal: Re Smith [1932] 1 Ch 153) and a gift "to be … appropriated to the benefit and advantage of my beloved country, Great Britain" (Nightingale v Goulburn (1847) 5 Hare 484; 67 ER 1003 per Wigram VC; affirmed Nightingale v Goulbourn (1848) 2 Ph 594; 41 ER 1072).
In Re Harding (deceased) [2008] 2 WLR 361, a gift to "the black community of Hackney, Haringey, Islington and Tower Hamlet" was held to be a valid charitable gift. Lewison J articulated the principles applicable (at [15]-[16]) as follows: It is common ground that a trust for the benefit of a fluctuating body of individuals, such as the inhabitants of a locality, can only take effect as a charitable trust, if it has effect at all: Attorney General v Webster (1875) LR 20 Eq 483. It is also common ground that a private trust for such a large class as the black community in four London Boroughs would be so large as to make a private trust unworkable, and hence void: In re Baden's Deed Trusts [1971] AC 424 and R v District Auditor No 3 Audit District of West Yorkshire Metropolitan County Council [1986] RVR 24. The principles applicable in order to determine whether a gift such as the one I am considering creates a valid charitable gift are, I think, as follows. (i) The court leans in favour of making a testator's testamentary dispositions effective if possible within the limitations and in accordance with the principles of law: Re Smith [1932] Ch 153, 158. (ii) A gift to the inhabitants of a locality, without specifying a particular purpose for which the gift is to be applied, is a valid charitable gift: Re Smith ("my country England"). (iii) The same principle applies to a gift to a particular class of inhabitants within a locality: Mitford v Reynolds (1842) 1 Ph 185 (native inhabitants of Dacca); Goodman v Mayor of Saltash (1882) 7 App Cas 633 (freemen of the Borough of Saltash); In re Mellody [1918] 1 Ch 228 (schoolchildren of Turton). (iv) The rationale for this principle is that the court construes the gift as implicitly limited to charitable purposes: In re Strakosch, decd [1949] Ch 529, 539. This principle applies unless there is something in the gift to exclude it: Peggs v Lamb [1994] Ch 172, 195. I suspect that the reason for this principle is, first, that it is a way of saving a gift that would otherwise be invalid; and second, that an absolute gift for the inhabitants of a locality is likely to produce such a small dividend as to be an absurd intention to impute to a testator. (v) However, if an express purpose is stated, that purpose must itself be charitable; and a non-charitable purpose trust cannot be validated by localising the gift: Williams' Trustees v Inland Revenue Comrs [1947] AC 447. [Though see in the present case the operation of the statutory rule under the Charitable Trusts Act, s 23, and the ability of the Attorney General to order an administrative or cy-près scheme.]
The Attorney General submits that the principle regarding charitable gifts to the people of a locality (or a class of persons within that locality) are firmly established in the cases, referring to the following authorities: Goodman v Mayor of Saltash (1882) 7 App Cas 633 (House of Lords), 642-643 (Lord Selborne), 650-651 (Earl Cairns), 665 (Lord Watson) (charitable trust of a right of usage found in favour of the free inhabitants of ancient tenements in a borough); Verge v Somerville [1924] AC 496 at 499; 507 (gift "for the benefit of New South Wales returned soldiers"); In re Christchurch Inclosure Act (1888) 38 Ch D 520, 530-533 (trust expressed for the benefit of the current and future occupiers of cottages within a locality); In Re St Botolph Without Bishopgate Parish Estates (1887) 35 Ch D 142 (gift to trustees for the purpose of building a workhouse for the poor of a parish in the city of London); Perpetual Trustee Company (Ltd) v St Luke's Hospital, 423 (gift to Archbishop for the "assistance of … [a] poor parish or parishes"); Peggs v Lamb [1994] 2 WLR 1 at 19-22; [1994] Ch 172 (initial grazing rights of a borough's freemen over an area of land was a charitable trust; though further, later benefits in respect of a particular class did not constitute valid charitable trusts unless they were confined to charitable purposes); and Re Tree [1945] 2 All ER 65 (gift for the promotion of emigration of persons resident in a particular borough at a particular date and their descendants). See also the authorities to similar effect noted in Tudor on Charities, [1-162]-[1-164] and Law of Charity at [11.18]-[11.19]. In Tudor on Charities, the approach of the courts to gifts for the benefit of the inhabitants of a particular locality is explained as follows (at [1-161]) (emphasis added): [W]here in such a case no particular purpose was defined, the purpose was inferred to be charitable purposes for the benefit of the defined class; but where a particular purpose was specified which was not within the spirit and intendment of the Preamble to the Statute of Elizabeth I, the purpose, and hence the gift would not be charitable. That, it is respectfully submitted, is the correct explanation of the Saltash case and the line of cases which follow it.
Here, however, the relevant community is that of the United Kingdom. This gives rise to the issue as to whether a trust for a purpose that is to take effect in a foreign jurisdiction can be a valid charitable trust in this jurisdiction. The Attorney General notes that there is no rule of law that a trust for a purpose that takes effect in a foreign jurisdiction (for the benefit of the public of that jurisdiction) cannot be a valid charitable trust; and submits that the lack of a direct or indirect benefit to the public of the domestic jurisdiction does not prevent the charitable gift from being valid (referring to the decisions of the High Court, to which I have already referred at [6] above, in Kytherian Association of Queensland v Sklavos and The Armenian General Benevolent Union v The Union Trustee Co of Australia Ltd; and to Lander v Whitbread [1982] 2 NSWLR 530 (Supreme Court of New South Wales) (Holland J); In re Pieper, deceased [1951] VLR 42, 44 (Supreme Court of Victoria) (Smith J)). In In re Pieper, Smith J said (at 44): The fact that the manner in which the trust fund is to be used by the trustee, for the purpose stated in the will, is to be determined by a person other than the trustee, does not, of course, affect the validity of the trust; nor does the fact that the purpose of the trust is to be carried into effect in foreign countries; see, for example, In re Robinson [1931] 2 Ch 122.
There is, however, some divergence in academic consideration of this issue - see Law of Charity at [3.53]-[3.57]; JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths), [10-59]; [10-72]; and W Henderson and J Fowles, Tudor on Charities (10th ed, 2015, Sweet & Maxwell), [1-213]-[1-237] (though in regard to the last of those texts it must be noted that the English position is affected by statute). I consider this issue in due course.

Issues associated with supervision of the execution of the trust

Reference was also made in the Attorney General's submissions to issues that may arise in relation to supervision of the execution of the trust. In Camille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners [1954] 2 All ER 466 (affirmed by the House of Lords: [1955] 3 All ER 97), Evershed MR remarked (at 471) (emphasis added): It is … a significant characteristic of our system that to the Attorney-General representing the Crown, as parens patriae, belongs the right and duty of invoking the powers of the courts to secure the due execution of charitable trusts - a power and duty which postulate that the charitable institution itself should be subject to the jurisdiction of our courts. It is difficult to see how these principles or characteristics can have any application to a foreign institution conducting all its activities abroad.
However, the Attorney General submits that the question of administration of the trust does not here arise, since the Ellie Trust will be within the control of the Supreme Court of England and Wales and, once registered as a charity, the Charity Commission of England and Wales (referring to Gaudiya Mission v Brahmachary [1998] 2 WLR 175; In re Trusts of Will of Joseph (deceased) (1907) 26 NZLR 504). It is said that a charitable trust can be validly created notwithstanding the fact that it will operate in a foreign jurisdiction beyond the control of the Supreme Court (see the High Court's rejection of the argument that the inability of the domestic court to supervise the trust renders the trust invalid in Kytherian Association of Queensland v Sklavos at 70-71; see also Lander v Whitbread at 537-8, 542; Goldwyn v Mazal [2003] NSWSC 427 at [38]-[46]).

Determination

The foundation for the validity of the gift in cl 4.4(a), as noted above, is said to be the fourth "head" of charity identified in Commissioners for Special Purposes of Income Tax v Pemsel at 583 (see above at [39]). The established approach to cases in that category is to require that a valid charitable gift falling under the fourth "head" must have two features (see Law of Charity, [11.3]). First, the purpose of the gift must be beneficial to the community (and, in relation to that requirement, it is also here necessary to consider whether a gift that confers a benefit solely on a community in a country foreign to New South Wales can be held to be charitable under the laws of New South Wales) and, second, in order to come within the fourth "head", the purpose of the gift must fall within the spirit of the Preamble to the Statute of Charitable Uses 1601.
First, I turn to consider whether the gift in cl 4.4(a) is for a purpose which is beneficial to the community. I leave aside for the moment the divergence of views as to whether a gift that confers a benefit solely on a community in a foreign country can be held to be charitable under the laws of New South Wales.
In my view, the gift by cl 4.4(a) "to benefit women and children" is a gift for a purpose which is "beneficial to the community" (assuming for the present no issue as to the location of that community). I refer, in this regard, to Re Twigger (where a purpose of providing temporary and emergency accommodation for women and children who were the victims of physical, emotional, mental and sexual abuse was held to be charitable) (at 339). Although the gift in cl 4.4(a) is cast in broad terms, in my opinion the requisite public benefit is clearly present in a gift "to benefit women and children". Critical to that conclusion are the words "to benefit". I would interpret this as focussing on the enhancement of the lives or welfare of women or children (while noting the discussion in Re Smith [1932] 1 Ch 153 at 164-167 regarding the problems associated with charitable gifts in general terms).
Were that conclusion to be incorrect, I would have found (and again assuming no issue as to the location of the community) that a gift for the purposes of the inhabitants of a particular locality, with the corresponding inference being available that the gift is limited to charitable objects which benefit those inhabitants, was a valid charitable gift (on the principles in Goodman v Mayor of Saltash and the cases following it (which was a separate point on which the parties advanced submissions)).
It is then necessary, in relation to the first requirement under the fourth "head", to address the question whether the fact that this gift confers no direct benefit on a community in New South Wales precludes it from being a valid charitable gift under the law of New South Wales. As noted above, there has been a divergence of views on this point. I note the view expressed by the authors of Jacobs' Law of Trusts in Australia at [10-59] (emphasis added): [W]hen the law requires a trust to be for the benefit of the "public" or for a "public" purpose in order to be a charitable trust, the "public" referred to must be the local public - here, the public of New South Wales not the "public" of Bhutan or Romania. These difficulties have been grappled with to some extent in England in Camille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners, and, in Australia, in Re Lowin and in Kytherian Association of Queensland v Sklavos. … [This difficulty] can be met to some extent by a recognition - for "no man is an island" - that a trust to promote, say, music-writing in Romania is a benefit to those music-lovers in New South Wales who hear the result. Similarly, a trust for the relief of poverty in Bhutan fulfils the local sense of obligation to feed the world's poor. But this type of reasoning does lead to the result that not all activities which would, if local, be charitable, would be charitable if conducted abroad. A trust for the Australian Army, for example, is a valid charitable trust: "the setting out of soldiers" is a purpose specifically mentioned in the preamble to the Elizabethan Act. But a trust for the Iraqi Army would not be held to be a valid charitable trust.
However, against this must be set the decision in Lander v Whitbread. There, Holland J determined the validity of a testamentary disposition on trust "for the Government of the State of Israel for the advancement of education in that state".
The principal argument against the validity of the disposition was based on the decision of the New South Wales Court of Appeal in Re Lowin [1967] 2 NSWR 140. In that case, a testator, who died domiciled in New South Wales, established by his will a fund on trust for the purpose of awarding an annual prize for an orchestral composition. The primary judge held that the gift did not establish a valid charitable trust because the competition would be open only to Viennese or Austrian composers (Re Lowin [1965] NSWR 1624).
On appeal, the Court of Appeal (Wallace P and Holmes JA) rejected the primary judge's conclusion, saying (at 145): The crux of [the primary judge's] reasoning is that there must be found a moral sense in the New South Wales community amounting to a sense of obligation to assist those who have a "need", and that however one regards a trust for the composition of a musical work competed for by New South Wales or Australian residents as answering that description, if the competitors are confined to residents of a foreign country that sense of "need" or obligation is absent. We are unable to adopt the last step of this reasoning.
Their Honours then said (at 146): Music is of universal interest and its advancement and encouragement in Austria have we think a sufficient nexus with the benefit of a substantial section of our public to validate the trust in question.
Returning to Lander v Whitbread, it was there argued, in reliance on the passage from Re Lowin just quoted, that the gift for the advancement of education in Israel must fail unless there was a "discernible benefit of some kind to the community of the forum" (at 534). Holland J rejected this proposition as a matter of law, saying (at 535): The books are festooned with cases spanning more than two centuries of trusts for wholly foreign purposes which were treated or upheld as valid charitable trusts under the local law without any suggestion that benefit to the local community was an essential ingredient of validity or had to be apparent or proved before the trust could be upheld. If the purposes of the trust were of a kind that would be held to the charitable if applied within or for the benefit of the local community, they were considered under the local law to be equally charitable and enforceable if the benefit was directed entirely to a foreign community.
Holland J concluded that the fact that the charitable benefit would be conferred wholly outside of the jurisdiction did not preclude the trust established by the gift from taking effect as a valid charitable trust.
His Honour then considered whether the Court ought to have regard to considerations of supervision, noting that, in the case before his Honour, "if the fund is simply handed over to the Government of [Israel], supervision of its application will not be possible" (542). His Honour said (at 542): That precise kind of question was considered by Maugham J in Re Robinson [1931] 2 Ch 122, at 126. Maugham J having formed the view that it would be possible for the trustees to carry out the objects of the trust without the necessity for a scheme to be formulated or approved by the court. … There was evidence before him that, through its counsel, the German Government had informed the court that there would be no objection… to a statement being made on behalf of the German Government that the fund would be applied according to the wishes of the testator.
Holland J had received a document signed by the Ambassador of Israel to advise that the Government of Israel was willing to accept the assets upon the terms of the will. Holland J considered it appropriate to act upon that advice.
In the result, having expressly rejected the argument that "benefit to the local community was an essential ingredient of validity or had to be apparent or proved before the trust could be upheld" (at 535), his Honour upheld the gift for the advancement of education in Israel.
Holland J's decision was applied in Goldwyn v Mazal (at [46]) to hold valid a gift for the purpose of benefiting neurologically impaired and communicatively handicapped persons, though the trust was to be set up in Israel and administered there. Lindsay J also applied Holland J's decision in Re Estate Polykarpou (at [52]) to hold that a gift to the "Oprah Angel Network", a corporation incorporated in Illinois in the United States of America, was not invalid by reason only of the fact that its charitable purposes would be wholly carried out outside New South Wales.
Applying those authorities here, cl 4.4(a) establishes a valid charitable trust notwithstanding the fact that it will solely benefit (in a direct or tangible sense) a foreign community, being women and children in the United Kingdom. Were it necessary to discern a benefit to the local community of a trust for such purposes (as Jacobs' Law of Trusts in Australia suggests), my view would be that the example of philanthropy which is set to the local community by such a gift (and, by analogy with the illustration given by the authors in that text, the fulfilment by the establishment of such a trust of a local sense of moral obligation to enhance the welfare of women and children) would suffice.
Therefore, I conclude that the gift in cl 4.4(a) satisfies the first requirement in relation to the fourth "head".
The second question which arises in relation to the fourth "head" of charity is whether the purpose of the gift falls within the spirit and intendment of the Preamble to the Statute of Charitable Uses. I am satisfied that the gift "to benefit women and children" is broadly analogous, or capable of achieving similar objects, to the purposes listed in the Preamble, in particular, the relief of aged, impotent and poor people, the education and preferment of orphans, and the "supportation aid and help" for young tradesmen, handicraftsmen and persons decayed. Though none of those is identical to the purpose of the present gift, the purpose of relieving distress and enhancing the welfare of women and children is clearly within the spirit and intendment of the Preamble.
The Attorney General accepts that a delegation to the trustees expressed in terms as wide as "establish a trust ... to benefit women and children in the United Kingdom", assuming all other formalities were met, would provide sufficient authority to the trustees to create and select the "Ellie Trust" as the vehicle for the implementation of the trust purpose. The Attorney General accepts that cl 2.2 of the Ellie Trust Deed contemplates objects which are a subset of the trust objects identified in c 4.4(a) of the will and within the power delegated. Thus it is accepted that there is sufficient evidence to support the making of Order 2 on the summons.
For the reasons above, I find that cl 4.4(a) is a valid gift for a charitable purpose.

Second issue: Appropriate orders for transmission of funds

As the trustees and trust are outside Australia, an order is required to transmit the funds to the United Kingdom (see, for example, Goldwyn v Mazal; and the discussion in Lander v Whitbread at 536-537).
The form of order was considered by Bryson J (as his Honour then was) in Goldwyn v Mazal. In substance, the Court orders that the gift may be paid to the proposed trustees on receiving a receipt in which the trustee acknowledges that it will apply the moneys received in accordance with the proposed trust. Bryson J explained the necessity for this order as follows, by reference to the gift in that case, which was made to a resident of Israel (at [26]): If [the plaintiff] paid the money to the trustee of a trust which already existed at the time of payment he would have protection under s 48 of the Trustee Act 1925 on paying the money to that trustee. He would not have any legal responsibility or potential personal liability for how the money was dealt with after he got a trustee's receipt. On the other hand, if he paid the money to [the deceased's niece, a resident of Israel, who was nominated as the trustee under the will] before a trust in Israel was set up, the plaintiff would be exposed to possible contentions that he was responsible for seeing that the purpose was carried out, to do which he would have to supervise the conduct of [the deceased's niece] in Israel and might have to bring some proceedings before the courts of Israel…
The plaintiff notes that, where the trustees are outside the jurisdiction, the practice is to transmit the fund to the trustee to be applied according to the terms of the trust without directing a scheme (Law of Charity at [14.15]). In Gaudiya Mission v Brahmachary, Mummery LJ explained (at 183): [T]he special charitable jurisdiction of the High Court to make a scheme is not exercised, or even regarded as exercisable, in a case of a charity which has been established, or which it is intended to establish, under a foreign legal system. In such a case, the foreign charity and those engaged in the administration of it, are beyond the control of the court.
As the Attorney General noted (see above at [53]), in a joint judgment in Kytherian Association of Queensland v Sklavos, McTiernan, Fullagar and Taylor JJ rejected an argument that the gift might be invalid because a scheme to administer the trusts was necessary and the court could not or would not direct a scheme for carrying out a charitable trust in a foreign country. The validity of the trust was not questioned.
I accept that the appropriate form of order is that the funds be paid to the trustees of The Ellie Trust. It is appropriate that the scrutiny of the validity of the charitable trust formed under the Ellie Trust Deed be left to the Charity Commission of England and Wales and the jurisdiction of the Supreme Court of England and Wales, in circumstances where the trust assets will be in England, and the trustees personally present there; and it would not be appropriate for this Court to make orders for the administration of an institution established in another country. In that regard, I refer to Gaudiya Mission v Brahmachary at 184, where Mummery LJ set out the following quotation (Mayor of Lyon v East India Co (1836) 1 Moo PC 175, 297-298 (Lord Brougham)): The objection, in the ordinary case, to administering a foreign charity under the superintendence of the court, is this: those who are engaged in the actual execution of it, are beyond the court's control, and those who are within the jurisdiction are answerable to the court for the acts of persons as to whom they can derive no aid from the court.

Submissions as to position if charitable gift fails

As noted earlier, the plaintiff addressed submissions as to the position in the event that the gift in cl 4.4(a) were to fail as a charitable gift. It is not necessary here to do more than summarise those submissions for completeness (since the conclusion I have reached is that the gift in question is a valid charitable gift).
First, the plaintiff notes that, in construing and interpreting wills, there is a presumption against intestacy (Arnott v Leong [2009] NSWSC 187 at [10]; 2 ASTLR 108; Tantau v Macfarlane [2010] NSWSC 224 at [70]).
Second, if the gift in cl 4.4(a) fails, the plaintiff submits that s 42(2) of the Succession Act applies because a partial intestacy is created by the gift failing and there is no provision that can save the gift by allowing it to accrue to part of the residue, nor is there a substitutional provision which can save the gift. Accordingly, it is submitted that the 60% of residue would pass proportionally to the other beneficiaries named in cl 4.4(b)-(f) (the nephews and nieces of the deceased and their respective spouses).
If s 42(2) were to be inapplicable, then Mr Hunt would be entitled on intestacy pursuant to Ch 4 of the Succession Act (the couple still having been married at the time of the deceased's death). As noted earlier, in accordance with the compromise of the family provision proceedings Mr Hunt has agreed in that event to direct the executor to pay that sum as a donation to the Mary Alice Foundation.
Given the earlier findings, it is not necessary further to consider this issue.

Conclusion

For the above reasons, I made the orders set out at [2] above.

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. Decision last updated: 07 June 2018

Eliz I, c 4) Succession Act 2006(NSW)

ecutor & Agency Company Ltd (1950) 81 CLR 320; [1950] HCA 32 Tantau v Macfarlane [2010] NSWSC 224 Tatham v Huxtable (1950) 81 CLR 639; [1950] HCA 56 The Armenian General Benevolent Union v The Union Trustee Co of Australia Ltd (1952) 87 CLR 597; [1952] HCA 47 Verge v Somerville [1924] AC 496 Victorian Women Lawyers' Association Inc v Commissioner of Taxation (2008) 170 FCR 318; [2008] FCA 983 Texts Cited: G E Dal Pont, Law of Charity (2nd ed, 2017, LexisNexis Butterworths) JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths) Lord Collins (General Editor), Dicey, Morris and Collins on the Conflict of Laws (15th ed, 2012, Sweet & Maxwell) M Davies, A Bell, P Brereton, Nygh's Conflict of Laws in Australia (9th ed, 2014, LexisNexis Butterworths) W Henderson and J Fowles, Tudor on Charities (10th ed, 2015, Sweet & Maxwell) Category: Principal judgment Parties: Julia Nina Lever (Plaintiff) Attorney General of NSW (Defendant) Representation: Counsel: JE Armfield (Plaintiff) C Mantziaris (Defendant)

Proceedings

The two principal questions for determination in these proceedings are whether: 1. upon the proper construction of the will, the testamentary gift in cl 4.4(a) is a valid gift for a charitable purpose; and 2. if so, the appropriate form of order to remit the funds the subject of the gift overseas.
Submissions were also advanced by the plaintiff as to the basis on which the funds the subject matter of the gift should be distributed if it were not to be held that there was a valid gift for a charitable purpose.
These being charitable trust proceedings within the meaning of s 5(1) of the Charitable Trusts Act 1993 (NSW), the Attorney General of New South Wales has authorised the proceedings pursuant to s 6(2) of the Charitable Trusts Act. The Attorney General appears in the proceedings in his capacity as the protector of charitable trusts. His standing so to do extends to circumstances in which the alleged charitable purpose is to take effect outside the jurisdiction of this Court (see Kytherian Association of Queensland v Sklavos (1958) 101 CLR 56 at 72; [1958] HCA 47; The Armenian General Benevolent Union v The Union Trustee Co of Australia Ltd (1952) 87 CLR 597; [1952] HCA 47). The Attorney General supported the plaintiff's claim for relief in the summons but also advanced submissions (to which I will refer in due course) on certain matters relevant to the determination of the plaintiff's application.

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