McLean v Attorney General of New South Wales & 2 Ors

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

2277/01 CHARLEY McLEAN v ATTORNEY GENERAL OF NEW SOUTH WALES & 2 ORS JUDGMENT 1 HIS HONOUR: William Joseph Liddell died on 12 April 1999. His last will was made on 16 December 1969. Probate of that will was granted on 3 December 1999 to William Sidney Mason, and Charley McLean. Mr Mason died before the present case was heard. 2 In the will, Mr Liddell gave his address as 52 Brown Street Cessnock. He described himself as a poultry farmer, and described his executors as being his brothers-in-law. He gave pecuniary legacies to his sisters and his brothers. The will then continued: "I give and bequeath the sum of one thousand dollars ($1,000) to the Cessnock branch of the Police and Citizens Boys' Club. I give devise and bequeath the rest and residue of my real and personal property, after paying all my just debts, duties and testamentary expenses, to the Cessnock District Crippled Children's Association to be used in the promotion of the school at Cessnock and activities associated with such school." 3 The residuary estate is worth of the order of $968,000. 4 This litigation arises from the fact that, at the date of the testator's death, no entity known as the Cessnock District Crippled Children's Association operated a school in Cessnock. Indeed, at the date of the will there was no entity known as the Cessnock District Crippled Children's Association operating a school in Cessnock. 5 In 1932 a body, which I take to be an unincorporated association, called the Newcastle & District Association for Crippled Children, was formed. In March 1934 a corporation, also called the Newcastle & District Association for Crippled Children, ("the Association") was registered as a non-profit public company, limited by guarantee. That corporation was registered under the Charitable Collections Act 1935, in September 1935. 6 Prior to 1946, an organisation which advanced the interests of what were then referred to as crippled children, existed in Cessnock. The evidence about its legal nature, and activities, is hazy in the extreme - it comes from a document which Mr Thurlow, an officer of the Association, prepared about 15 years ago, to give a history of the Association. That history was prepared from some minutes of the Association, and other records of the Association, which have since been destroyed. The history document records: "… it appears the Cessnock Children's Crippled group was a completely separate entity from this Association. The Supervisor surveyed the Cessnock region and found that this group provided little or no support for its members. The Newcastle & District Association for Crippled Children gradually began meeting various costs for crippled children in the Cessnock region. On the 11th November 1946 it was resolved to notify officers of the Cessnock Association that as their group had not functioned for some years, that at the expiry of 14 days the Chief Secretary department would be notified, recommending that the newly formed Branch in Cessnock of this Association be recognised under the C haritable Collections Act. This Branch was formed on 14th October 1946." 7 The organisation which had existed in Cessnock prior to 1946, did not, so it seems, make any opposition to the Newcastle & District Association for Crippled Children commencing operations in the Cessnock area. 8 From this material, it appears that, while there might have, prior to 1946, been an organisation called the Cessnock District Crippled Children's Association, one cannot even be sure that that is the correct name of that organisation. Nor does one know whether it was a voluntary unincorporated association, or had some form of legal personality. Whatever it might have been, it did not operate after 1946. 9 The Cessnock Branch of the Newcastle & District Association for Crippled Children was formed on 14 October 1946 That branch does not appear to have had any separate legal personality of its own. 10 Mr Thurlow's history records that "a spastic school at Cessnock was formed in 1950". I infer that this is the same entity which was known as the "Cessnock Crippled Children's School", which was started by the Cessnock Branch of the Association in a building known as Buffs Hall at Cessnock. In 1953 that school stopped operating at Buffs Hall, and moved to a new building, which the Association had built, in Darwin Street Cessnock. The land on which the Darwin Street School was built, was owned by Cessnock Council, and leased to the Association. 11 This school was still in operation when the testator made his will in December 1969. 12 On 23 April 1982 the Minister for Education wrote to Mrs Bartlett, who was then President of the Cessnock Branch of the Association, agreeing to a request, which the Association had made, for the Department of Education to assume responsibility for the operation of the school. By that time, it appears that the school was known as the "Cessnock Special School". 13 In June 1984 Mrs Bartlett wrote to the Town Clerk of Cessnock City Council saying: "We wish to notify the Cessnock City Council that as soon as our children from the Special School are transferred to Cessnock Primary, the Crippled Children's Association will be continuing to use the School for the purpose of furthering the education and training of senior wards of our Association and other handicapped persons in the Cessnock community who are unable to work at the Sheltered Workshop because of their disability." 14 This use of the former school building was continued until March 1995, when the lease was surrendered to the Council. 15 The Cessnock Branch of the Association has its own president, secretary and treasurer (all honorary positions). It prepares its own profit and loss statements, which are then incorporated in the financial accounts of the Association. Those accounts of the Association as a whole are audited. 16 The Association changed its name to the Weeroona Association on 13 October 1994. Other Activities of the Association 17 The Association did far more than operate the school in Cessnock. Over the years it has carried out functions connected with providing a holiday home for disabled people, providing employment placement services for disabled people, providing surgical aids and equipment, transport, and counselling. It has, over the years, conducted a school in Hamilton. It has, on occasions, had branches in places other than Cessnock. Present Activities of the Association 18 The Memorandum of Association of the Association enables services to be provided to any person less than 21 years of age with physical or severe multiple disabilities. 19 It is possible for a disabled person to become registered with the Association. Children and young adults who are registered with the Association's Cessnock Branch presently attend 12 different schools (Cessnock Public School, Cessnock High School, Kurri Kurri Pre School, Kurri Kurri High School, Weston Public School, Cessnock TAFE, Mountview High School, Pelaw Main Public School, Lochinvar Catholic School, Ellalong Public School, St Patrick's Primary School (Cessnock) and Hunter Orthopaedic School (Newcastle)). 20 As well as these 12 schools, there are 17 other schools within the Cessnock City Council area. Under the present policies under which the public school system is administered in New South Wales, disabled children can attend mainstream schools. It would be expected that, at least at some times, children receiving assistance from the Association would attend these additional 17 schools. 21 The Association provides aids to children and young adults, needed for home and out of school times. It provides aids and support services needed to allow children and young adults to obtain access to school and community based programmes and facilities. Children and young adults with special needs may require a wide range of resources to meet their habilitation, education and transport needs, that are unable to be funded by the Department of Education and Training. The Association is often able to provide the assistance to enable these needs to be met. 22 While there is a State government programme called "Programme For Aids For Disabled People", which provides funding for the provision of wheel chairs, second skins, ramp access and some other matters, the Association's experience has been that State government's funds provided for this programme are exhausted within three or four months within the commencement of each financial year. 23 The type of services which the Association provides include: · Transport · Educational aids · Incontinence aids · Therapy · Information · Advocacy · An annual holiday at very little or in some cases no cost to themselves at the Association's holiday home · A referral service to the region's specialists · Free transport to and from the holiday facility and also to keep specialists' appointments · Free rail travel as required · Financial assistance in necessitous circumstances · Referrals to the various departments and associations for those with specific needs · Counselling service (in home) for member's families · Lending service of surgical aids and equipment to members, such as wheelchairs, walkers, commodes, crutches, shower chairs, etc · Facilities provided for orthopaedic technician to consult with families, make and measure surgical aids and equipment as prescribed by a specialist · Provision of funds for scholarships to enable members to remain in a High School to attain the HSC. 24 The area that the Association serves is bounded by the Hawkesbury River in the south and the Manning River in the north. Its western boundary passes through Singleton. 25 The scale of operations of the Association, and of the Cessnock Branch, can be gauged, in rough terms, from their financial accounts. The balance sheet of the Cessnock Branch of the Association showed that, as at 31 December 2000, it had assets, all liquid, of a little over $80,000. It also had an asset, valued in the books at $568, of "buildings - at cost", which is not further explained in the evidence. It expended less than $12,000, in the course of the year, on benefits, and payment of operating expenses. 26 The Association as a whole had, as at 31 December 2000, total assets of a little below $3,000,000. It expended, in the course of the year, a total of $216,601, made up of $14,471 in holiday home expenses, $94,932 in provision of assistance to disabled people and $107,198 in administration and finance expenses. Present Practices for Schooling of Children with Disabilities 27 Prior to the early 1980's it was rare for a child with either intellectual or physical disabilities to be enrolled in a mainstream school in the public school system. Special schools existed for students with disabilities, often run by charitable organisations. Since that time, the New South Wales Government has assumed responsibility for the education of students at these special schools, and the schools have either closed, or become government schools. It was as part of that process of change that the Cessnock Special School closed. 28 The court received evidence from Mr Brad Laughlan, who is the Special Education Consultant for the Maitland district of the Department of Education and Training. The Maitland district includes Cessnock. He has given evidence as follows: "Students who would have attended Cessnock Special School, if it still existed, would now be attending either Cessnock Public School (which caters for students aged from four years to 12 years), Cessnock High School (which caters for students aged from 12 years to 18 years), or South Street Special School (which caters for students aged from four years to 20 years). A small number of students who, in an earlier era would have attended the Cessnock Special School would now be "integrated" into the mainstream in various local schools. There are some 17 local schools. … The Department of Education and Training's current policy on enrolling children with special needs is that as much as possible, parents have a right to choose how their children are schooled. This is subject to the proviso that the child's educational needs can be met. Where children have an intellectual disability, parents generally have a choice as to whether the child is enrolled in a mainstream class (with support), in a supported class within a mainstream school or in a special school. Every effort is made to accommodate the parents' wishes. However, for some children with particularly high needs (be they medical, behavioural or therapeutical) their educational needs may better be met in a supported class or special school. In that case those children will be enrolled accordingly. In my experience the vast majority of children with disabilities (including intellectual or physical disabilities, mental health, autism, hearing or vision impairments) are enrolled in mainstream schools. However, there will always be a need for special schools, as these schools may more adequately cater to children with high or complex needs." 29 Mr Ian Scanlon is the Principal of Cessnock High School. He gives evidence that there are two support classes for disabled children at his school. One of them caters for students with mild intellectual disabilities and is called the IM class. The other caters for students with moderate intellectual disabilities and is called the IO class. There are currently 14 students in the IM class, and five students in the IO class. There are also sufficient IM students in mainstream classes to form another IM class. 30 Mr Scanlon says that if Cessnock High School were to receive from the estate money for the benefit of the students of those support classes, the money could be used for: "(a) hiring transport to reduce the impediments that make it difficult for students to go out and about and experience some broader cultural and social experiences; (b) providing scholarships to help students go out and gain further life skills and vocational training; (c) providing medical assistance for those students whose physical and other problems warrant medical attention (eg spectacles for socio-economically disadvantaged students); (d) purchasing more educational aids that are currently not available to students due to cost; (e) acquiring a larger, better equipped room so that students can enjoy what they have without being cramped; (f) establishing a supervised working enclave in the local area to provide students from the special classes with much needed vocational experiences; (g) constructing ramps to provide direct wheelchair access to the school's main entrance; (h) purchasing stair climbers or similar devices to provide wheelchair access to the school's stage and upper classrooms; (i) providing physiotherapy services for students who need them; (j) providing speech therapy for students who need it; (k) providing in-home support services to overcome problems faced by students (eg support services for students whose parents find reading difficult); (l) employing a teacher's aide for the IM class so that the students can receive the attention they need but currently do not receive." 31 Ms Penelope Shepherd is the Principal of Cessnock Public School. She gives evidence that there are two classes at Cessnock Public School for children with disabilities, an intellectually mild (IM) class, and an intellectually moderate/severe class (IO/IS class). Children in the IM class have an IQ assessed as being within the range of 50-70. Children in the IO/IS class have an IQ assessed as being below 50. While children in both the IM class and IO/IS class are initially placed on intellectual capacity, many have other disabilities as well. Generally, the children that are in the IM or IO/IS classes do not have one form of disability alone. It is common for intellectual disabilities to lead to problems with gross motor co-ordination. 32 Ms Shepherd says that if any money were available from the estate for the Cessnock Public School, it could be used for: "(i) gross motor mats and blocks for muscle tone development, computers with specialised equipment (to allow students with limited motor skills to use computers), and education games and toys for the classroom; (ii) outdoor playground equipment and a sunshade for the existing equipment; (iii) transport for excursions, outings, extra curricular activities (such as riding for the disabled and swimming lessons), perhaps the purchase of a small bus and garaging; (iv) some upgrading of the building facility (at resent the Unit is housed in an old wooden demountable building and the facilities are only just adequate)." 33 As well, she says that generally, anything received could be used to make the learning environment more attractive and stimulating for the school's special students. 34 The South Street School is located in East Maitland. It is a school which is a continuation of a school founded by the Maitland Branch of the Sub-Normal Children's Welfare Association in 1963. It has eight classes, catering for students from 4 years to 20 years, who have moderate to severe intellectual disabilities. The students are drawn from four local government areas, namely Maitland, Singleton, Port Stephens and Cessnock. The South Street School tends to cater to students who need more support than can be provided, even in a specialist class in a mainstream school. Of the 46 students who currently attend South Street School, there are presently 12 students who live in the area surrounding and including Cessnock. 35 Mr Ian Hughes, the principal of South Street School, has given evidence that: "Any amount of money received from the estate the subject of these proceedings would be used directly to benefit students. The needs of each student vary and with the exception of two students all students require special transport to and from school. The school operates a small bus to give students access to community venues. Fundraising is currently underway to purchase a new bus, as the majority of students at the school cannot catch public transport and it is not possible to hire a bus that is suitable. (The cost of new bus is around $125,000 which includes a lifting hoist and wheelchair anchor points. About $30,000 has been raised so far.) The therapy needs of students are an integral part of all individual education plans, especially physiotherapy, occupational therapy and speech therapy. Therapy equipment is very expensive and always needed. The school has just moved to a new site in East Maitland and will be looking to update a great deal of equipment. There are a number of needs of the students for which provision is not made by government agencies, for example computerised and electronic communication devices for the students. The Department of Community Services and the Department of Education and Training sometimes provide standing frames and specialised equipment but funding is difficult to obtain. Hydrotherapy equipment, and lifting devices, would be useful, as the Department of Education and Training is committed to providing a hydrotherapy facility for the school. It would be of benefit to install a sensory room for students with cortical blindness and other sensory disabilities. This would cost around $30,000." 36 I should record that the affidavits of Messrs Laughlan, Scanlon and Hughes, and of Ms Shepherd, were each admitted subject to a ruling made under section 136 of the Evidence Act 1995, that no part of that affidavit was to be used for the purpose of construing the will. Construction of the Will - Which Organisation is the Intended Recipient? 37 The first question to be decided is whether the gift "to the Cessnock District Crippled Children's Association" is a misdescription for the (then) Newcastle and District Association for Crippled Children. 38 While it is more likely than not that an organisation called the "Cessnock District Crippled Children's Association" existed in the early 1940's, the evidence leads me to conclude that it had ceased operating well before the date of the testator's will. 39 Counsel for the next of kin submitted that there was no evidence that the "Cessnock District Crippled Children's Association" did not at some stage run a school, that there was no evidence that that group did not continue to run the school in 1969, and that the court should conclude that it was the school run by that organisation which the testator intended to benefit. 40 I do not accept that submission. 41 The evidence includes (as an annexure to the affidavit of Mr Thurlow, which was not subject to any restriction under section 136 of the Evidence Act 1995) a press/background paper issued in May 1995 by the Weeroona Association in connection with the Cessnock City Council taking over the school building previously operated by the Association. That document includes the following: "When there was seen to be a need for a school for handicapped/crippled children, a school was started in the Buffs Hall, with Mrs Maybey. Then, with Mrs Edna Harris at the helm, a small school building was erected in Darwin Street and was officially opened by Sir John Northcote in 1953. Council had given the land, and the school was built with the help of a generous donation from the Joint Coal Board and with money raised the hard way by the Committee and Ladies' Auxiliary with cake stalls, baby shows, catering, button days etc. The building had to be enlarged and a bus purchased to deliver pupils to the school from the Kurri Kurri and Cessnock areas. The Joint Coal Board again gave a generous donation towards the cost of the bus. Cessnock Apex Club then serviced, maintained and manned the bus." 42 The document which Mr Thurlow prepared, setting out the history of the Association, is one which gives an account of activities relating to the welfare of disabled people in the greater Newcastle district. It records activities conducted by other organisations, including the NSW Society for Crippled Children and the Far West Health Scheme, as well as the "Cessnock Crippled Children's group", which I have earlier mentioned. 43 Given the overall structure and concerns of this "History Of The Association" document, if there had been an entity, other than the Association, which ran a school for disabled people in Cessnock, I would have expected it to be referred to. Also, Mr Thurlow's, "History Of The Association" document records that the "Cessnock Crippled Children's group" was found by the survey to provide "little or no support for its members". If it was running a school, that report could not have been made with any semblance of accuracy. All the other evidence about the school run by the Association has a flavour of it being the only school for disabled students in Cessnock. 44 The Manager of the Office of Charities, of the Department of Gaming and Racing, replied, on 8 October 1999, to a letter from the executor "seeking information about the 'Crippled Children's Associations in existence located in the Hunter Valley particularly in the Cessnock District.'" The manager replied: "A search of the database maintained by the Office of Charities, Department of Gaming and Racing shows only one entry that appears to concern the association for which you seek information. The database shows an historical entry for the " Newcastle District Association for Crippled Children" ."

The database which was searched was sufficiently extensive to show that that Association was registered as a charity on 4 September 1934, that it was registered in the name of "Newcastle District Association for Crippled Children" , and that on 27 June 1995 it was granted a five-year authority to fundraise under the Charitable Fundraising Act 1991 . That the Department has no record of a "Cessnock District Crippled Children's Association" supports the inference that that Association never engaged in an activity as extensive as that involved in running a school. 45 As well, I draw some slight assistance from the fact that the gift is to "the Cessnock District Crippled Children's Association to be used in the promotion of the school at Cessnock …". - the use of "the", rather than "its" is consistent with there only being one school for crippled children at Cessnock. 46 Further, the next of kin have filed no evidence. The inference is open, on the basis of the material which I have already outlined, for the court to infer that the only school for children with disabilities in Cessnock was the school run by the Association. When the next of kin have it in their interest to establish that there was a school run by the "Cessnock District Crippled Children's Association", and have filed no evidence to demonstrate that there was such a school, I am entitled to draw more strongly the inference which is otherwise available. (Jones v Dunkell (1959) 101 CLR 298; Ho v Powell (2001) 51 NSWLR 572.) 47 Counsel for the next of kin urges upon me that I should conclude that the gift is not to the Association, or to its Cessnock Branch. In support of that, counsel for the next of kin point out that the entity named in the will has "Cessnock" in its title, while the Association does not - and, indeed, at the date of the will the Association had "Newcastle" in its title. Further, counsel for the next of kin point out that there are many connections with Cessnock apparent on the face of the will - the address of the testator, the gift to the "Cessnock branch of the Police & Citizens Boys' Club", that the name of the residuary beneficiary is "Cessnock District Crippled Children's Association", that the residuary gift is "to be used in the promotion of the school at Cessnock", and that one of the witnesses to the will adds, after his or her signature, "clerk, Cessnock". Counsel for the next of kin says that, when this will had such a strong local focus on activities connected with Cessnock, it would be taking a very long step to read the intended recipient of the gift as being a body which had "Newcastle" in its title. Further, counsel for the next of kin point out that the will was witnessed by a solicitor. That raises an inference, he says, that the will was also drafted by a solicitor, and one would expect a solicitor to exercise an appropriate degree of care about the drafting of a will. Further, the testator was himself a man from Cessnock, and it would be expected that he would know the organisation which were actually carrying out important activities in his own local community. 48 Even taking these matters into account, it seems to me that this is a case where the testator intended to refer to the organisation which was then conducting the school which crippled children attended in Cessnock. When there was only one such school in Cessnock, and when, whatever else the residuary clause might have meant, the testator was intending to promote that school at Cessnock, it seems to me most likely that the testator intended to refer to the Association. I also derive some support for this conclusion from the fact that the name the testator used, "Cessnock District Crippled Children's Association" is a name which is a highly descriptive one, and is apt to describe the activities then carried out by the Cessnock Branch of the Association. Is There a General Charitable Intention? 49 By the time of the testator's death, the Association had ceased to operate the school which it operated at Cessnock in 1969. Thus, the purpose for which the residuary estate was given to the Association could not be performed. In this situation, if there is a general charitable intention revealed in the will, it will be possible for the court to settle a cy près scheme. If there is no such general charitable intention, the residuary gift will fail, and pass on intestacy. 50 Section 10 of the Charitable Trusts Act 1993 provides: "(1) This Part does not affect the requirement that trust property can not be applied cy pres unless it is given with a general charitable intention. (2) However, a general charitable intention is to be presumed unless there is evidence to the contrary in the instrument establishing the charitable trust." 51 Section 4(2) of that Act says: "This Act applies to a trust created before or after the commencement of this section, except as otherwise provided by this Act." 52 When the testator died on 12 April 1999, the trusts set out in his will were created. It was only then that a legal obligation arose for the testator's property to be dealt with in the manner provided by his will. There is nothing in the Charitable Trusts Act 1993 to suggest that it does not apply to wills made before the commencement of that Act. 53 In Public Trustee v Attorney General of New South Wales (1997) 42 NSWLR 600, at 609, Santow J, said, concerning section 10 of the Charitable Trusts Act 1993: "The defendant submits that this section alters the common law in providing a presumption of a general charitable intention. This presumption, however, is not concerned with whether the intention is charitable, but rather whether it is general. At common law there is no presumption in favour of a general as opposed to a particular charitable intention, although little is required to find a wider charitable purpose as the essential object of a charitable trust: Attorney-General (NSW) v Perpetual Trustee Co (Ltd); Attorney-General (NSW) v Public Trustee . It must be correct, as submitted by the plaintiff, that s 10 is directed toward amendment of this rule only. There is nothing in the section which alters the requirement that before a general charitable intention becomes relevant, the court must find that the gift is for a charitable purpose." 54 In my view, this present gift of residue was for a charitable purpose. It seems to me that the gift itself recognises the possibility that the intended recipient might carry out activities other than "promotion of the school at Cessnock and activities associated with such school", and stipulated that, rather than the donee being able to use the gift for the full range of the donee's activities, it could only use it in the particular way just stipulated. 55 The Macquarie Dictionary gives the following meanings for "promotion". "1. Advancement in rank or position 2. Furtherance or encouragement 3. The act of promoting 4. The state of being promoted 5. Activity, esp in advertising designed to increase public awareness of, and hence the sales of a product." 56 In my view, it is the second of these meanings, which the testator intended in the present will. So "promoting" a school for children with disabilities is clearly a charitable purpose. 57 There is only the sketchiest evidence which might assist the court in deciding what the testator meant by "activities associated with such school". Ms Joy Potts, who is currently the Chair of the Cessnock Branch of the Association, was in the period 1968 to 1971 a full-time teacher at the school. She says that persons aged from 3 or 4 to 21 attended; that the school devoted itself to the teaching of basic learning skills, cooking classes, music sessions, and sewing classes. The school was given a bus by the Association of Apex Clubs of NSW prior to 1969, which was used to collect children from, and return children to, their homes in the Cessnock area. 58 Even if, on the true construction of it, any part of the "activities associated with such school" were non-charitable, section 23 of the Charitable Trusts Act 1993 provides: " (1) A trust is not invalid merely because some non-charitable and invalid purpose as well as some charitable purpose is or could be taken to be included in any of the purposes to or for which an application of the trust property or of any part of it is directed or allowed by the trust. (2) Any such trust is to be construed and given effect to in the same manner in all respects as if no application of the trust property or of any part of it to or for any such non-charitable and invalid purpose had been or could be taken to have been so directed or allowed. (3) This section does not apply to any trust declared before, or to the will of any testator dying before, 1 January 1939, being the date of commencement of the Conveyancing, Trustee and Probate (Amendment) Act 1938." 59 Thus, even if there were to be some element of non-charitable purpose in the gift, it would be read down, pursuant to section 23, so as to make the gift a charitable one. 60 In these circumstances, the purpose for which the residuary estate was given to the Association was a charitable one. Thus, section 10 (2) of the Charitable Trusts Act 1993 gives rise to a presumption that there is a general charitable intention in the will, unless there is evidence to the contrary in the will. 61 Counsel for the next of kin pointed to a variety of factors which, prior to the enactment of the Charitable Trusts Act 1993, might have formed the basis of an argument that there was no general charitable intention expressed in the will. The first one was that there was no evidence of the constitution, or Memorandum and Articles of Association, of the body named in the will, and therefore it was not possible to say that it was a gift to a charitable institution for the advancement of the charitable work or purposes of that institution (cf Tyrie Deceased (No1)[1972] VR 168). That submission is correct. However, the purposes for which the recipient is to use the gift are charitable. 62 The fact that there is a legacy of $1,000 to the Cessnock Branch of the Police & Citizens Boys' Club is, the next of kin submit, of no assistance in concluding that there was a general charitable intention in the residuary clause. I do not accept this submission. In my view, the gift to the Cessnock Branch of the Police & Citizens Boys' Club can be seen as part of the more general aim of the testator to provide for young people in the Cessnock district. 63 The next of kin also pointed out that the residuary gift contained no provision, common in wills, to the effect that the receipt of some named office holder of the donee was a sufficient discharge. In my view, (and, as I understand it, counsel for the next of kin accepted this) that is a factor which counts in favour of there being a charitable intention, rather than in favour of the gift being an out and out gift to a named institution. 64 The next of kin also submit that the fact that this is a residuary gift is of no assistance in reaching the conclusion that there was a general charitable intention. If it were necessary to reach a positive conclusion there was a general charitable intention, by construing the will, I would not accept this submission. The testator is a man who never married, and had no children. The specific legacies to his brothers and sisters, contained in the first part of his will, were made to every one of his brothers and sisters. It seems to me that this is a case where the testator has considered the extent to which he wishes to benefit his family, and made express provision accordingly. In Attorney General for New South Wales v Barr (NSW Court of Appeal, 11 October 1991, unreported) Kirby P said: "Little is required in the language of the will for a court to treat a wider purpose as the object of the trust. This attitude is adopted out of respect for the wishes of the will maker, out of recognition of the considerations of change set out above and bearing in mind the fact that, if the will fails, those who benefit, in most circumstances, are relatives who have inferentially been considered by the will maker but rejected in favour of charity."

I accept that it is appropriate to construe a will on the basis that the testator intends that it shall operate as he has said, rather than fail. Even so, I do not think a will should be construed on the basis that the testator was oblivious to the possibility that a provision in it might fail. Thus, it still seems to me that it is appropriate, when deciding whether the testator intended that, if the specific gift he had stated in the will could not be carried out then that gift would fail, that the people who would take upon such failure are people for whom the testator has already made a considered provision. 65 The next of kin also say that, in the residuary clause, the words "Crippled Children" occur as part of the name of the donee, not as part of the purpose for which the gift is given to that donee. While that is true, it seems to me that if one seeks to understand the purpose contained in the testator's words, it is that the residuary gift will be used to promote the particular school at Cessnock which is for the benefit of crippled children. 66 While I have recorded these submissions, and dealt with them according to their terms, it seems to me that they are not addressed to the real question which the court must face. The real question which the court must face is whether there is any indication in the will to displace the presumption of general charitable intention which arises from section 10. I can find no such intention in the will. 67 For these reasons, it seems to me that there is a general charitable intention contained in the will. Hence, it will be appropriate for a cy près scheme to be settled. What Type of Cy Près Scheme? 68 It seems to me that the testator's purpose had as an essential element of it that what he referred to as "crippled children" were not to be assisted across the whole range of activities which might improve their lot in life, but in those activities which were conducted in, or in association with, an organised educational institution, ie, a school. Further, the testator's intention was to assist, in that way, people in Cessnock and its immediately surrounding district. 69 In settling a cy près scheme, the court must consider what is now practicable, which can most closely carry out the testator's purpose. It seems that the Association's school at Cessnock accepted children across the range of disabilities. His purpose included assisting the type of child who can now be catered for in special classes at Cessnock Primary School and Cessnock High School, as well as children who need the more intensive type of facilities provided at the South Street School. It also seems to me that it was part of the testator's intention that the disabled children who benefited, would be disabled children who were being taught together, in a specially structured learning environment. This would not include those children who, now, are able to be absorbed into "mainstream" classes, whether at Cessnock Primary School, or Cessnock High School, or elsewhere. 70 I have given consideration to the fact that the South Street School draws on a much wider catchment area than just Cessnock and its immediate district, and that only about one quarter of the students at the South Street School come from Cessnock. However, I accept that it would be impractical to so organise the physical facilities, and professional services, provided at South Street School, so that preference was given to children who came from the Cessnock district. It seems to me that the only way in which it is now practical to provide special school services for those disabled children from the Cessnock district who need a special school, is to permit some of the residuary estate to be made available to South Street School, notwithstanding that the inevitable effect of so doing will be that some disabled children, from areas other than Cessnock and surrounding districts receive a benefit. Modification of the testator's original purpose, to this extent, when the testator's original purpose cannot be achieved fully, is, it seems to me, within the permissible scope of a cy près scheme. 71 Even though the Association was nominated as the donee of the residuary gift, its present activities are, it seems to me, in large part not within the scope of the residuary gift. However, it cannot be said that they are completely outside the scope of the residuary gift. The provision of transport to school is one function which was carried out in 1969 and would count as "activities associated with such school". It may be that it is feasible for the Association to provide that service now. 72 Now that the Association has ceased to run the school, I would not regard the fact that it was the original recipient of the gift as a reason for now making it a trustee of the totality of the funds to be administered under the cy près scheme. After all, the finding that there was a general charitable intention involves a finding that the identity of the recipient, (ie, the Association) was not fundamental to the purpose which the testator was seeking to achieve by making the residuary gift. 73 It may be, however, that there is some discrete activity, or set of activities, which could be administered by the Association, which provide activities associated with the schools which disabled students from the Cessnock district now attend, on which a part of the residuary estate could be settled. My preliminary impression, without having heard argument on this, is that, if any amount were to be so administered, it would be substantially less than 50% of the residuary estate. Whether any services provided to disabled children should, under the cy près scheme, be provided through the medium of the Association will depend on questions of practicality and efficiency, which the present evidence does not enable me to decide. On the other hand, it may be - and I express no view one way or the other - that it is better to appoint a single trustee of the whole fund, which has power to expend money for purposes which include some of the types of activities the Association now carries out, and leave it to the trustee to decide from time to time whether the most effective way of carrying out the trust is to use the Association as the medium for delivery of some of the services which are funded. 74 In all these circumstances, I think it would be appropriate to direct the first defendant to consult with the second defendant, and prepare a draft scheme, in light of these reasons for judgment, which I will then settle. Order

1 Declare that, on the true construction of the will made 16 December 1969 by the late William Joseph Liddell of Bellbird in the State of New South Wales, the beneficiary identified in the will as Cessnock Crippled Children's Association is a reference to the Cessnock Branch of the Newcastle and District Association for Crippled Children.

2 Declare that, on the true construction of the will and in the events which have happened, the gift of the residue of the estate of William Joseph Liddell to the Cessnock District Crippled Children's Association to be used in the promotion of the school in Cessnock and the activities associated with such school has failed, but that the will discloses a general charitable intention.

3. Direct the first defendant to prepare a draft cy près scheme to give effect to these reasons for judgment. **********

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