Meaning of "Public Hospitals"
35It is clear, and there was no dispute, that the trust of residue in the deceased's Will is a charitable trust. It is a trust concerning property held by the Plaintiff for the benefit of the community. There was also no dispute that it was a "class gift".
36The parties, in this case, agreed that the class of public hospitals comprises institutions or organisations existing, ascertainable, and capable of taking, at the date of death of the deceased. I respectfully agree.
37The question then is which entities fall within the description of "all public hospitals in New South Wales" as at the date of the deceased's death? Clearly, each must be a "public hospital" and it must be situated "in New South Wales".
38The only assistance provided by the deceased's Will itself as to the meaning of the term "public hospitals" is given by what follows, namely the words "for medical purposes or the purchase of medical equipment only". (The purpose referred to is identified elsewhere in the Will in relation to specific bequests to the Children's Hospital Westmead, the Burns Unit of Concord Hospital and the Royal Perth Hospital (Clauses 3(g), (h) and (i)).
39The term "medical" is commonly defined as relating to, or concerned with, physicians, or with the practice of medicine, including surgery. However, that word may limit simply the type of equipment able to be purchased.
40Otherwise, there is nothing in the Will that gives any guidance as to which hospitals were intended by the deceased to be included as residuary beneficiaries.
41There is a statutory definition of "public hospital" and "hospital" to be found in the Health Services Act, 1997 which was in force at the time of the deceased's death. In that Act, "public hospital" is defined in s 15 (see s 3 and Dictionary) as:
"(a)a hospital controlled by an area health service, or
(b)a hospital controlled by a statutory health corporation, or
(c)a hospital that is a recognised establishment of an affiliated health organisation, or
(d)a hospital controlled by the Crown (including the Minister or the Health Administration Corporation).
Note. Clause 2 of Part 2 of the Dictionary provides that a reference in this Act to a hospital controlled by a public health organisation or any other body or person includes a reference to a hospital that is conducted by or on behalf of such an organisation, body or person."
42 "Hospital" is defined in the Dictionary as:
"An institution at which relief is given to sick or injured people through the provision of care or treatment."
43Relevantly "an Area Health Service" is "an Area Health Service constituted under section 17 and specified from time to time in Schedule 1": s 8(1), s 3 and Dictionary.
44A "statutory health corporation" is defined as "a statutory health corporation constituted under section 41 and specified from time to time in Schedule 2": s 11(1), s 3 and Dictionary.
45An "affiliated health organisation" is "an organisation or institution that is an affiliated health organisation under section 62": s 13(1), s 3 and Dictionary.
46The Dictionary defines a "recognised establishment" of an affiliated health organisation to mean "a hospital or health institution of the organisation that is listed in column 2 of Schedule 3 next to its name".
47The "Health Administration Corporation" is defined as meaning "the Health Administration Corporation constituted by the Health Administration Act 1982": s 3 and Dictionary.
48I have earlier identified the area health services that existed at the date of the deceased's death.
49There is no evidence that the deceased was aware of the statutory definitions in existence at the time he made his Will or that he intended such statutory definitions to apply. It is to be noted that s 15 does not speak of "public hospitals" as "including" those identified.
50In the Australian Government Productivity Commission, in its December 2009 Research Report titled "Public and Private Hospitals", "public hospital" is defined to mean:
"A health care provider facility that has been established under state or territory legislation as a hospital or as a freestanding day procedure unit. Public hospitals are operated by, or on behalf of, the government of the state or territory in which they are established. Public hospitals provide hospital services free of charge to all eligible patients."
51To the extent that other cases are able to provide assistance in determining the meaning of either word, it is useful to refer to the decision of Allsop J (as his Honour then was) in Ambulance Service (NSW) v Deputy Commissioner of Taxation [2002] FCA 1023; (2002) 50 ATR 496 in which several of the cases are discussed. In that case, his Honour noted that decided cases identify legal issues affecting, or influencing, the answering of the question whether any given body falls within a phrase used (in that case "public benevolent institution") as a matter of popular or ordinary meaning at the particular time and that they illuminate the meaning of the phrase.
52His Honour discussed some of the earlier authorities in which the term "public hospital" had been considered. He wrote:
"[17] ...The Little Company of Mary (SA) Inc v The Commonwealth and The Memorial Hospital Incorporated v The Commonwealth (1942) 66 CLR 368 ... cases concerned the phrase "public hospital" in reg 32 of the National Security (War Damage to Property) Regulations (SR 1942 No 79), which exempted from the assessment of any obligation to pay contributions to the War Damage Fund, inter alia, fixed property or plant used primarily and principally as or in (a) a public hospital or (b) a public benevolent institution.
[18] The members of the plaintiff association in the first case (the Little Company of Mary) comprised a congregation of nursing sisters of the Roman Catholic Church. The Little Company of Mary owned and conducted the Calvary Hospital in North Adelaide. The plaintiff in the second case (the Memorial Hospital Inc) carried on the Memorial Hospital, also in North Adelaide.
[19] The Calvary Hospital was established using money and property provided by the South Australian public and by the Little Company of Mary. The objects or purposes of the Little Company of Mary included the following:
(ii) To establish and carry on a nursing institution or nursing institutions.
(iii) In particular to establish and maintain a hospital or hospitals for the benefit of the public generally, irrespective of class or religious belief, and particularly to maintain the same for the poor and those of limited means.
[20] The Memorial Hospital was established in 1919 by the Methodist Church with gifts from members of the public of all religious denominations. It was under the control of the Methodist Church. Its objects were:
(a) To provide and maintain hospitals and rest homes for the medical and surgical treatment of patients and persons requiring hospital treatment.
(b) To perpetuate the memory and sacrifice of those who gave their lives in the Great War 1914-1919.
[21] Both hospital charged fees at varying rates. The staff of the Calvary Hospital included 35 sisters of the Little Company of Mary, but no discrimination ("of either class or religion": at 371) was made in the hiring of lay nurses or paid staff. Both hospitals were open to the public, irrespective of the faith of the patient. Neither hospital was carried on for profit and no person derived any monetary gain from the running of either hospital. Neither hospital had been declared a "public hospital" under s5 of the Hospitals Act 1934 (SA).
[22] Latham CJ placed emphasis on public control as a constituent of "public" in the phrase "public hospital". His Honour distinguished both hospitals the subject of the proceedings from the Mater Misericordiae Hospital in Waratah, New South Wales, which had been the subject of consideration by Jordan CJ in O'Connell v The Council of the City of Greater Newcastle (1941) 41 SR (NSW) 190 in connection with the rating exception in para 132(1)(d) of the Local Government Act 1919 (NSW), and which been held to be a "public hospital" by the Full Court in that case. Latham CJ noted (at 378-79) that whether any particular hospital was a public hospital was a question to be determined on the facts of each case and was a question on which prior cases were of little value as precedents. However, he pointed out (at 379) that in respect of the Mater:
The hospital was subject to the Public Hospitals Act 1929 (NSW): see s 4. As a hospital mentioned in the Third Schedule it was bound to submit to any inquiry into administration and management which the Hospitals Commission might think proper to make; it was subject to annual inspection; it was eligible for subsidy from public moneys; and the Commission could attach to the payment of any subsidy such conditions in respect of the maintenance, equipment, management, capital expenditure, building, or repairs to existing buildings as it might think fit (s 11). The hospital was bound to receive destitute persons without payment (s30 (6)). It would have been difficult to hold that a hospital subject in this degree to a Public Hospitals Act was not a public hospital within the meaning of another New South Wales statute. The Calvary and Memorial Hospitals possess none of the characteristics mentioned.
[23] Latham CJ then proceeded to answer the question before the Court by reference to the common understanding of the phrase in question. He said (at 379-80):
I therefore ask whether, in common understanding, these hospitals would be called "public hospitals." I find it difficult to believe that the patients in them would not be very astonished if they or their friends were told that they were in a public hospital. So also I conceive that the authorities of both the Roman Catholic Church and of the Methodist Church would receive with incredulity a statement that their respective institutions were public institutions and not simply and entirely church institutions. The question is not merely whether there is any charitable element in the conduct of the hospitals. There is such an element, but it is not very great. From the point of view of the community - the public in the ordinary sense - these are, I think, private institutions, controlled by churches which would naturally most strongly object to any claim that the public had any rights whatever in relation to the hospitals - whether as to management and control, or as to admission of patients, or as to utilization of funds, or as to disposition of property, or as to development or continuance of the hospital undertakings. The hospitals are not carried on for the purpose of discharging any duties owed to the public: cf Griffiths v Smith (1941) AC 170, at pp 178, 186, 206. The only element which, in these cases, points to the opposite conclusion, is to be found in the degree to which benevolent treatment is given, and this, though admirable, is relatively small. The hospitals are open to the public only in the sense that there is no exclusion of any specific class on religious or other grounds. But that may be said of most, if not all, private hospitals. Further, these hospitals are not conducted for the private profit of the members of the associations which own and control them. But the profits can be used and rightly used for church purposes as the churches concerned think proper. It cannot be said, as it appears to me, that the churches are bound to continue to apply the profits to hospital purposes. I think that these hospitals are, to borrow the words of Starke J in Public Trustee (NSW) v Federal Commissioner of Taxation (1934) 51 CLR 75 at p 100 private organizations conducted by or in connection with churches.
[24] Starke J referred (at 385-86) to the elusiveness of the adjective "public". He said (at 386):
[T]he authorities establish that whether a hospital is public or private is, in the main, a question of fact and a question of degree in every case. It depends, not so much upon the manner in which the Calvary Hospital was established and is financed, as upon the character of the hospital and the nature of the services rendered...
[25] Whilst recognising, as relevant considerations, that the purpose of those who established and conducted the hospitals was for the care of the sick irrespective of background and religion, that the hospitals were not conducted for private profit and that the hospitals provided services of inestimable value to the people of South Australia, Starke J concluded that they were not "public hospitals". Speaking of Calvary (but equally applicable to Memorial) his Honour said (at 386):
The hospital was established by a private organization; it is not subject to the control or supervision of any public authority; the public have no right of admission - no trust or other right has been created in their favour and the patients are charged for their maintenance and treatment unless too poor to pay therefor. Apart from authority, I should not have thought that such a hospital would, in the ordinary and usual use of words, be described as a "public hospital", but the question is one of fact to be resolved upon a consideration of all the circumstances.
In my judgment, the Calvary Hospital, having regard to all the circumstances of the case, is not a "public hospital" within the meaning of the Regulations already mentioned. The facts which lead me to this conclusion are that the hospital was established and is conducted by a private organization, that it is not subject to the control or supervision of any public authority, that the public have no right of admission to the hospital, and, substantially, are charged for their treatment.
[26] In the reasons of each of Latham CJ and Starke J the lack of public control or some element of public control or supervision was a consideration in coming to a view, overall, as to whether the ordinary meaning of the phrase "public hospital" was satisfied. It was a discussion ending in the characterisation as a public hospital.
[27] Rich J dissented. He said the following in connection with the phrase "public hospital" (at 380-81):
No definition of the latter expression is given in the Regulations and in relevant judicial decisions as to the meaning of the word "public" judges have refrained from attempting an exhaustive decision. It is neither necessary nor desirable to do so. In every case which arises for determination a number of factors have to be considered, and none is an absolute criterion. "Public hospital" is not a precise or technical expression. In Hall v Derby Sanitary Authority (1885) 16 QBD 163 the question for determination was whether a certain orphanage was a public institution and A L Smith J, as he then was, lays it down simply that if a thing is not "private" then it is "public" [(1885) 16 QBD at p 173], recalling inevitably the definition of prose which we owe to Le Bourgeois Gentilhomme. The definition to which Darling J, as he then was, in Royal Masonic Institution v Parkes (1912) 3 KB 212 at p 216 refers, is to be found in Acte II, Scène VI: Le Maitre de Philosophie - "Tout ce qui n'est point prose est vers et tout ce qui n'est point vers est prose." In Seal v Trustees of the British Orphan Asylum (1911) 104 LT 424 at p 428 Hamilton J, as he then was, also adopts the language of A L Smith J in Hall's Case (1885) 16 QBD at p 173, who distinguishes "public" from "private" by regarding the purposes which the particular institution served. The observations of Hamilton J in Seal's Case (1911) 104 LT at p 428, as to the publicity and purposes of the orphanage institution he was then considering are very relevant in the same connection in this case.
[28] For Rich J, the purposes served (rather than public control) were central. At 383-84 his Honour made this clear, significantly, in the light of the approach of Latham CJ referred to at [22] and [23] above. At 383-384 his Honour said:
"Public control" is not, in my opinion, an essential element in the definition of "public hospital." In any event the sections of the Associations Incorporation Act 1984 (NSW) to which I have referred show that the association, its rules and operations are subject to supervision by a public officer and a court. In this connection I concur in the interpretation of the expression "public hospital" occurring in a similar context in the Local Government Act 1919-1940 (NSW) by Jordan CJ in O'Connell v Newcastle Municipal Council (1941) 41 SR (NSW) 190; 58 WN 166, where his Honour says: - "I can see nothing in the phrase 'public hospital' nor in its immediate or general context to suggest that it is confined to hospitals which are subject to some form of public control (whatever is to be understood by this expression) and whose income and property are not at the disposal of any private authority. On the contrary, it is the purpose to which the hospital is directed, not the manner in which it is controlled, which determines whether it should be regarded as a public hospital" (1941) 41 SR (NSW) at p 193; 58 WN, at p 168. The terms and circumstances in which sick relief is given are material conditions. Public service is the discrimen - and publicity may be gauged by the extensiveness of an institution's operations (A-G v Pearce (1740) 2 Atk. 87 [26 ER 454]; Shaw v Halifax Corp (1915) 2 KB at pp 180 - 184). The admitted facts show that the hospital, having regard to its objects and operations, is carried on for the benefit of the community or an appreciably important class of the community (Verge v Somerville (1924) AC 496 at p 499) and "not for private gain but for the public good" (Seal v Trustees of the British Orphan Asylum (1911) 104 LT, at p 428). During the relevant period the profits from the hospital have been applied solely to the operations of the hospital. Par 19 of the case stated emphasises the fact that "the hospital is not carried on for purposes of profit; and no person derives any profit or monetary gain therefrom." Indeed, any diversion of the profits to other purposes whether religious or otherwise would bring the association within the prohibition contained in s 3 of the Associations Incorporation Act 1984 (NSW) and endanger its incorporation. Thus the hospital is clearly distinguishable from what is known as a private hospital established and carried on for private gain as a means of livelihood for the owners. And in my opinion the scope and operations of the hospital are sufficiently wide and large to make it a public hospital within the meaning of reg 32."
53I then turn to some other cases in which the meaning of the phrase "public hospital" has been discussed.
54In Re The Will and Codicil of Walter Padbury Deceased, Home of Peace for the Dying and Incurable v The Solicitor General [1908] HCA 72; (1908) 7 CLR 680, the High Court at 683 considered a residuary gift in the following terms:
"... the whole of such balance shall be divided into three equal parts one of which shall be paid or transferred to the said Diocesan Trustees of the Church of England in Western Australia, a second to the trustees for the time being of the hospitals and lunatic asylums in the said Colony to be divided among them equally and the third to the trustees of the poor houses in the said Colony."
55At first instance, Rooth J held that "government hospitals" were not entitled to share, and that the word "hospitals" signified:
"An unsectarian public charitable building supported in the main by voluntary contributions for the reception of sick poor for treatment medically or quasi-medically medicinally or surgically combined with such possibilities of outdoor life as would be calculated to make that treatment more effective and which is not maintained for private gain."
56From that order the Solicitor General appealed to the Full Court of the Supreme Court and, at the request of that Court, evidence was given by affidavit as to the hospitals and lunatic asylums existing in Western Australia at the date of the will. That evidence was given by reference to three classes of hospitals specified in the provisions of the Hospitals Act 1894.
57The Full Court opined that all institutions (including government hospitals) of the three classes that were in existence at the testator's death were entitled to share in the gift.
58The only question raised for determination on the appeal to the High Court was whether the institutions described in argument as "government hospitals" were entitled to share in the gift for the benefit of hospitals and lunatic asylums.
59The High Court held that the word "hospitals" included public hospitals existing at the date of the testator's death which had been proclaimed under the Hospitals Act, and hospitals then established which were governed by elected committees, whether assisted by contributions from the public revenue or not, but did not include hospitals which were wholly maintained at the public expense and were subject to the entire control of government officers.
60Griffith CJ, at 686, stated:
"The term "hospital" is not a term of art, and may have different meanings in different countries. In Australia it is commonly used to denote an institution for the medical or surgical treatment of persons suffering from bodily ailment or injury. Used without the adjective "private" prefixed, it commonly means a charitable institution of that kind, whether supported wholly, or in part, or not at all, by voluntary contributions. Other charitable institutions which are in some countries included in the term "hospital" are in Australia ordinarily called by other names. The evidence showed that in Western Australia, as the testator knew it, there were many institutions of the kind I have mentioned, some of which were managed by boards or committees of management, while others, although charitable institutions, were wholly maintained at the public expense and managed by government officers."
61Barton J, at 693-694, stated:
"As to the word "hospital," I see no reason to doubt that the testator employed it also in its ordinary sense as understood in Australia. He distinguishes between hospitals, lunatic asylums and poor houses, so that he seems to have taken hospitals to be for the bodily and not the mentally sick, and for the sick and not the merely poor. The sense in which the word is generally understood is, I think, that of an institution for those who, being sick or injured in body, are in need of medical or surgical aid. In this sense no doubt the testator used it."
62O'Connor J, at 696-697, wrote:
"Although it may become necessary for the purposes of construction to examine the language of the gifts to each of these classes of charity, we are in this case directly concerned only with the devise to hospitals. Whether or not a particular institution is a hospital, and comes within the class to which the Court may declare the will to apply, is a matter for inquiry in Chambers. I gather from the evidence that the hospitals which claimed to be within the testator's bounty may be separated into two general divisions. Those initiated, managed and maintained by private benevolence, such for example as the Home of Peace for the Dying and Incurable, in many cases aided by subsidy from Government, and those which are described as public hospitals. The latter are divided into three classes. First, hospitals proclaimed under the Hospital Act 1894, maintained partly by Government moneys and partly by voluntary subscription, managed and controlled by boards of management in part appointed by the Government and in part by subscribers in terms of the Act. Second, Hospitals not under that Act, but assisted and subsidised by Government, maintained partly by those subsidies and partly by voluntary subscription, and managed by committees or boards of management appointed by subscribers. Third: Hospitals instituted, maintained and managed entirely by Government, under direct departmental control. It follows from what I have said that, in my opinion, the hospitals privately managed and maintained, such as the Home of Peace for the Dying and Incurable, whether subsidised by government subscription or not, are within the testator's gift in all cases where the management responsible for application of the funds are trustees in the sense which I have explained. It follows also, that the first and second classes of public hospitals are included."
63In Public Trustee v Hospitals Commissioner of New South Wales (1939) 56 WN (NSW) 198, Long Innes CJ in Eq, dealt with a residuary gift that was to "The Public Hospitals in The County of Cumberland in the State of New South Wales in equal shares absolutely". His Honour noted at 198 - 200:
"Here the word "hospital" is preceded by the adjective "Public" and one question is what is meant by the word "public." Does it mean "general" in the sense of not being confined to patients suffering from one particular disease or class of diseases or injuries, or does that mean one that is available to the public generally or to a particular section of the public; or does it mean hospitals which are maintained by the public or State as opposed to those which are proprietary, or what are generally known as private hospitals?"
...
I do not intend to attempt to give an exact definition of the term "Public Hospitals" as used in this will, but merely to decide whether the particular institutions mentioned in the affidavits come within that term.
I may, however, state, that as Sir John Romilly M.R. said is Wallace v. The Attorney-General (5) - " of course no hospital which was not in existence at the date of the testator's death can have any share in the bequest."
The question for my determination is not what the testator intended to mean by the term "public hospital," for in the absence of any admissible evidence on that point to do so would be merely to speculate, but to determine which of the institutions in question were, in fact, public hospitals in the County of Cumberland at the date of the testator's decease. If I were permitted to speculate as to the testator's intention I should think it highly improbable that he intended to include, for instance, the Hospitals for the Insane.
I think that it is an essential characteristic of a hospital that medical or surgical services should be rendered, including in the term such services as are rendered by trained nurses during the period of convalescence; and I think further that in determining whether a particular institution is or is not a hospital, it is very material to consider the qualifications by which a person obtains admission to that institution; in other words whether the qualification is the need for medical or surgical treatment, or care of that nature, or, for instance, poverty.
Further, I am of opinion that unless "public" means "general" which, as I said before, has not been suggested in this case, I see no reason in this age of specialisation why a hospital which receives patients suffering from only one type of illness or disease should not be a public hospital, nor why an institution which treats diseases or infirmity of the mind or nerves which require medical attention and care should not be any less a hospital than one which receives patients suffering merely from bodily infirmities or injuries."
64His Honour then identified which "hospitals" he concluded fell within the term "public hospitals" and which did not.
65In considering the cases to which reference has been made, and construing the terms of the deceased's Will, the parties agreed that the term "public hospitals" will apply to institutions or organisations that have some, or all, of the following features, none of which is absolute:
(a) Admission is open, generally, to members of the general public, or the public of a particular locality or class, or a section of the public, irrespective of class, background, religious beliefs, or other grounds;
(b) Medical, or surgical, treatment of such persons suffering from bodily ailment, injury or disease is rendered; they may specialise in one form, or all forms, of illness, or sickness, mental or otherwise;
(c) They provide medical services for both 'acute' patients and 'elective' patients;
(d) They are maintained by the public, or that receive grants or subsidies from the State or Commonwealth, as opposed to ones which are proprietary, or which are generally known as a "private hospitals"; and whose objects and operations are carried on for the benefit of the community, or an appreciably important class of the community, and not for private profit or private monetary gain, but for public good;
(e) Their profits are not diverted but are applied principally to their own operations;
(f) Their affairs have some element of public control or supervision, such as by an area health service or a statutory health corporation;
(g) They are bound to submit to any inquiry into their administration that the State, or Commonwealth, might think proper to make;
(h) The word "hospital" is included in the name.
66Ultimately, in each case, it will be a question of fact and degree.