Num Hoi, Pon-Su, Soon-Duc Society Inc v Num Pon Soon Inc [2001] VSC 363

"(i) the provision of a temple for the holding and maintaining of religious ceremonies, customs and observances attended by the said migrants and descendants; (ii) the provision of free accommodation for needy migrants or descendants as aforesaid travelling to or from the said Chinese counties; (iii) the provision of funds for the assistance of the sick and needy of, and for funerals and burials for, the said migrants or descendants."

12. By paragraph 5 of the further amended statement of claim, the plaintiff asserts that "[n]either the present legal owners nor the identity of any trustees (if any) of the property is known and in the premises the ... property [including the income and other investments] should be vested in the plaintiff to be held upon trust as aforesaid".

15. Here lies the heart of one aspect of the dispute. The defendants say that the identity of the trustee is known. It is the first defendant. Otherwise (as the defendants concede) the trust itself is much as the plaintiff describes it in the further amended statement of claim. According to paragraph 5 of the defence to that pleading, the property in Little Bourke Street "is held on a charitable trust by the first defendant for the benefit of migrants and the descendants of migrants from the Sam Yap districts of Num-Hoi (Nanhai), Pong-Yu (Punyu), and Soon-Duc (Shunte), such districts all being adjacent to the city of Guangzhou (Canton)". The trust, as paragraph 5 goes on to allege, came into existence following the conveyance on 10 February 1859 of the Little Bourke Street property to Mr. Lowe Kong Meng who "was at that time a prominent merchant in Melbourne and a leader of the Chinese community" in this city. He thereafter held the land in trust for the Num Pon Soon Club or Institution, an unincorporated body which he and other members of the local Chinese community founded "in order to assist the sick and needy members of that community, and in particular members of [it] whose origins lay in the Sam Yap districts".

18. The land was and remains general law land: it has never been brought under the Torrens system. In 1861 and the following year the Club's premises were constructed on it; and when Lowe Kong Meng died in 1888, his widow as his executrix conveyed the property to Chun Soon Kai, Chun Yul and Leong Sing. All three subsequently, by a deed executed on 31 December 1888, declared that they too held the premises as trustees for the Club. A copy of the deed is exhibited to an affidavit filed in this proceeding. It does not include a description of the purposes of the trust, but it does contain an acknowledgement that the trustees "will stand seised and possessed of the said land and hereditaments in trust only for the sole use and benefit of the said Club and its assigns".

21. So things continued, according to the defendants, for the next 108 years. Of course, other trustees succeeded those who took from Lowe Kong Meng's widow; but the Club continued to exist as an unincorporated association until its incorporation under the Associations Incorporation Act on 30 September 1996. Then, pursuant to s.8 of the Act, "the property of the former club or institution thereupon vested in the first defendant on trust for its charitable purposes": paragraph 5(xxiv).

24. Section 8 provides for the vesting, in an incorporated association upon incorporation, of "all property held by a person on trust or otherwise for or on behalf of the association or for any of its purposes". Where, if anywhere, the purposes of this trust are described is not revealed in the material available to me. As I have observed, the deed of 31 December 1888 does not assist, although in what seems to me to be a fine disregard for that which the instrument does not say, the defendants allege that it remains the only document "setting out ... the purposes for which the property is held".

27. Section 8 is relied upon not only by the defendants, but also by the plaintiff: see paragraph 7 of the further amended statement of claim. In an earlier paragraph (paragraph 4), however, the plaintiff (as I have noted at [3] above) alleges that the property is held upon a charitable trust. It is also alleged, in paragraph 5, that neither the legal owners nor the trustees are presently known and "in the premises the trust property should be vested in the plaintiff". This is followed, in the particulars under paragraph 5, by an assertion that the "members of the plaintiff are exclusively migrants or descendants of migrants from the Chinese counties of Num-Hoi, Pon-Yu and Soon-Duc" and that the purposes of the plaintiff include those described in paragraph [3] above.

30. The use of the expression "in the premises" at this point in the further amended statement of claim, before any reference to s.8, is puzzling. It does not follow that, simply because all the plaintiff's members are potential beneficiaries under, and its purposes correspond with those of, the trust, the Court could justify the appointment of the plaintiff as trustee.

33. It may be that the plaintiff would point to s.8 as overcoming this deficiency. Thus it makes sense (as a matter of pleading) for the plaintiff to allege, as it does in paragraph 7 of the further amended statement of claim, that (a) "[o]n 26 March 1998 the plaintiff was granted a certificate of incorporation under s. 7 of the Associations Incorporation Act" and (b) immediately before that date the trust property was held on trust for the Num Pon Soon Club. In these circumstances, by s. 8, "the trust property vested in the plaintiff" on 26 March 1998. But why delay a reference to this provision until after the use, in paragraph 5, of the expression "in the premises"?

36. Be that as it may, the more important issue arises out of the plaintiff's claim that the trust property has vested, or should by declaration of the Court vest, in the plaintiff. The defendants' answer is that any such vesting is out of the question. It is precluded by the fact that (as the defendants assert) the property held in trust for the Num Pon Soon Club as at 30 September 1996 vested on that day in the first defendant, Num Pon Soon Inc. The plaintiff denies this. As I have explained above, it asserts its own entitlement to the property on the basis that the Club remained unincorporated until 26 March 1998. All the property in question, having until then been held in trust for the (unincorporated) real Num Pon Soon Club, passed on that day to its incorporated persona.

39. This, however, is not the only way in which the plaintiff formulates its case. Several alternatives are also postulated. One, put forward in paragraph 8 of the further amended statement of claim, is simply to the effect that if "the trust property did not vest in the plaintiff under s.8 of the Association Incorporation Act, then upon the basis that there is no trustee of the trust property, the trust property should be ordered to vest in the plaintiff upon the said charitable trust as aforesaid." The others, articulated in, respectively, paragraphs 10 and 12, are variations on the theme that, there being no present trustee, the plaintiff should be appointed to that position. It follows that, if the first defendant is presently the trustee, it should be removed.

42. In addition to these assertions, the plaintiff alleges (in paragraph 13 of the further amended statement of claim) that, if the first defendant is the trustee, it has by its conduct in breach of trust, forfeited its right to remain as trustee, and that the plaintiff should be appointed in its stead.

45. A further alternative, to be found in paragraphs 9 and 11 of the further amended statement of claim, is that "[i]n the premises the property passes to the Crown as bona vacantia, together with the said income and investments."

48. On the basis of these assertions, the plaintiff, in its prayer for relief, puts forward nine heads of claim. The first six of these are relevant for present purposes. They are:

"A. A declaration that the trust property is held upon a charitable trust for the benefit of any migrants or descendents of migrants from the Chinese counties of Num-Hoi, Pon Yu and Soon-Duc. B. An order vesting the trust property in the plaintiff upon the said charitable trust. C. Alternatively, a declaration that the trust property is vested in the plaintiff upon the said charitable trust pursuant to s.8 of the Associations Incorporation Act 1991. D. Alternatively, an order that the first defendant be removed as trustee of the said charitable trust (or of any charitable trusts to which the trust property is subject), and the plaintiff appointed in its place. E. Alternatively, an order that the trust property is held by the State of Victoria as bona vacantia. F. An order that the first, second, third, fourth and fifth defendants account to the plaintiff for any rents and profits received from the trust property."

52. The defendants have counterclaimed. Because (as they allege) the first defendant is the successor to the charitable trust formerly called the Num Pon Soon Club, they seek in their prayer for relief a declaration that the first defendant is the legal owner of the Little Bourke Street property and that this is held on trust for charitable purposes. The defendants also seek an order that the trust be effectuated by means of a scheme settled by the Court. A proposed scheme is set out in the schedule to the counterclaim.

55. Several issues are, accordingly, at the core of the present dispute. The first is whether the trust property passes to the Crown as bona vacantia. The second is whether, if it does not, the Court should appoint the plaintiff as trustee of the charitable trust created by either (a) Lowe Kong Meng, or (b) his widow, or (c) the three persons to whom the Little Bourke Street property was conveyed by her on 31 December 1888. An incidental question, seemingly not in dispute, is whether the trust was established on that day or in 1859. An assertion to the latter effect is made in the particulars under paragraph 4 of the further amended statement of claim. For their part the defendants (in the particulars under paragraph 5 of their defence) claim that the Little Bourke Street property was conveyed to Lowe Kong Meng on 10 February 1859 and that "at all material times during his life Lowe Kong Meng held the property as sole trustee for the Num Pon Soon Club."

58. Although both sides assert the existence of a trust, it is important in the context of this case to note (a) that its terms and purposes may in fact be a matter of doubt, (b) that both sides seek declarations designed, in effect, to confirm its existence and (c) that there is in the further amended statement of claim an allegation that, in the alternative, the trust property should go to the Crown as bona vacantia. Whether a trust was in truth ever established may in any event be a matter about which the Court should be independently concerned, whatever position the parties may take on this point.

61. It is in these circumstances that, on 20 April 2001, the defendants issued a summons seeking judgment pursuant to r. 23.01(1)(a) of the Rules of the Supreme Court in respect of the claims made in paragraphs 5 and 8 to 13 of the further amended statement of claim. As an alternative, the defendants seek an order that the specified paragraphs be struck out pursuant to r. 23.02(a). There is also an application for judgment, again pursuant to r.23.01(1)(a), in respect of the claims made in paragraphs 6 and 9 to 12. Finally, the summons seeks "[s]uch further or other relief as the Court thinks fit."

64. Rule 23.01(1)(a) provides, so far as is presently relevant, that where a claim in a proceeding does not disclose a cause of action the Court may stay the proceeding in relation to any claim or give judgment in relation to that claim. Rule 23.02(a) provides, again so far as is presently relevant, that where any part of a pleading does not disclose a cause of action the Court may order that the offending part of the pleading be struck out.

67. The defendants submit that the impugned paragraphs do not disclose a complete cause of action because the cause or causes of action that they imperfectly describe can only be instituted by the Attorney-General. He is required by long-standing convention to discharge one of the Sovereign's ancient duties: that of protecting, as parens patriae, property devoted to charitable uses. No other person, and certainly no private individual, may - at least until it becomes clear in a particular case that the Attorney has declined to perform this function - usurp the Attorney's role. But the Attorney-General is not the plaintiff, or even a plaintiff, in this litigation. Without him, the defendants submit, the relevant cause or causes of action must be but partially pleaded. It or they should be struck out accordingly.

70. I have some difficulty with the defendants' identification of the offending portions of the further amended statement of claim. Their summons discloses that they have no problem with paragraphs 1 to 4 and 7. If so, I do not understand why they quarrel with paragraphs 5 (in one case) and 6 (in the other). As I read the further amended statement of claim, paragraphs 5 and 6 are alternatives; that is, either one or the other joins paragraphs 1 to 4 with paragraph 7. It may be that the defendants read the words "in the premises" in paragraph 5 as suggesting that it and the succeeding paragraph stand alone. As I have already indicated, I am puzzled by the wording of paragraph 5; but the better view, I think, is that it should be taken as an alternative to paragraph 6.

73. Be that as it may, the real issue is whether in the first instance the Attorney-General alone has the power to institute proceedings of the kind presently before me. If so, the proceeding should, in my opinion, be stayed pursuant to the power given to me by the combination of r. 23.0(1)(a) and the catch-all request in the defendants' summons for "such ... other relief as the Court thinks fit." Despite submissions to the contrary by both parties, this is not a case in which the choice is between, on the one hand, a blanket refusal to intervene and, on the other, summary dismissal. The latter, as both sides pointed out in submissions, should only be ordered "in a clear case where the court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion" (General Steel Industries Inc. v. Commissioner for Railways[1]) and where "the claim is so manifestly hopeless that a trial would be a futility": Opat Decorating Services (Vic) Pty. Ltd. v. Jennings Group Ltd[2].

76. This, the plaintiff submits, is not such a case. The question, according to the plaintiff, is whether it has the requisite standing to initiate and continue to prosecute the proceeding without the intervention of the Attorney-General, and indeed before he has been invited to assume the plaintiff's office. The resolution of that question, the submission continues, involves arguable issues of fact and law. The claim cannot, therefore, be so manifestly hopeless that the trial would be a futility.

79. The plaintiff turns, for support on this point as on others, to Uniting Church in Australia Property Trust (NSW) and Another v. Monsen and Another[3]. That case arose out of the proposed merger between the Congregational Union of Australia, the Methodist Church of Australasia and the Presbyterian Church of Australia. The result was the Uniting Church of Australia and a large minority of dissatisfied Presbyterians. The defendants were two of them. The plaintiffs claimed the rights in the name "Australian Inland Mission" and other like names, all of which were formerly proudly Presbyterian. The defendants resisted. As part of this resistance, they sought the summary dismissal, or a stay, of the proceeding on the ground that the plaintiffs lacked locus standi. Rath, J. said, at 585:

"It may well be that, in the usual case, the propriety of joinder of parties may be appropriately determined as an independent issue, and should be so determined on an application made for that purpose. The reason is that, if the issues of fact and law are clearly defined, the proper parties to the resolution of those issues may be apparent. But where, as I think is the case here, the question of parties is, in some respects at least, related to substantive issues of law, in themselves arguable, then the proceedings should not be dismissed or stayed on the ground of misjoinder or non-joinder of parties, unless the defect as to parties is plainly demonstrable."

83. I have difficulty with the proposition that "where ... the question of parties is ... arguable, then the proceedings should not be ... stayed ... unless the defect as to parties is plainly demonstrable". The "question" or "defect" is either arguable or it is plainly demonstrable. To postulate that either can be both at once seems to me, with respect, to be dangerously like sophistry. This should be avoided. The courts have a duty to explain the law in terms which, so far as is possible, allow it to be applied with certainty.

86. In any event, the issue with which I am presently confronted cannot be side-stepped on the basis that the case can proceed before the issue is resolved. Here, it is not the claim so much as the identity of the claimant that is in issue. My role therefore requires a straightforward application to the alleged facts of the law relating to the initiation of proceedings in which a charitable trust is involved. If the result of this exercise is to the effect that the Attorney-General is the proper plaintiff, then I should so hold. I must decide the matter one way or the other. Degrees of satisfaction do not enter into it. As Rath, J. himself acknowledged in Uniting Church Property Trust v. Monsen (at 589) there are classes of proceedings "where the Attorney-General must sue as parens patria". The defendants submit that this is one of them. In these circumstances, I cannot allow the case to go forward on the basis that the defendants might or might not be right, but that (the question being "in some respects at least, relating to substantive issues of law, in themselves arguable") the litigation may proceed in the meantime without the Attorney-General although it may subsequently turn out that he is a necessary party. If he is indeed a necessary party then he should assume that responsibility before the case goes any further.

89. It is as a general proposition true that "[t]he Attorney-General is the only person who can really represent a charity and sue on its behalf": Strickland v. Weldon[4]. More particularly, it may be said that it is the Attorney-General who represents the beneficial interests, or in other words the objects, of the charity. Where these are the subject matter of the dispute, then it is both the duty of the Attorney-General to become involved and the duty of the Court to take such steps as will enable him or her to do so.

92. Of course, not all the disputes in which charitable trusts are involved will concern the objects of the charity. Thus, in Uniting Church Property Trust, the dispute was whether, under the arrangements devised for the division of property following the split in the Presbyterian Church, certain trust property passed to the new or remained with the old. In that case, there was (to adopt the words of Romilly, M.R. in the much earlier case of Ware v. Cumberlege[5]):

"... no question as to the conduct or management of the charity, but only whether the charity is entitled to a particular legacy or not. In those cases, the Attorney-General is rather in the nature of a trustee for those charities and the court prefers having before it the charities beneficially interested, for the purpose of putting their interests before the court in the light which they consider most favourable to them. In those cases I think it preferable that the charity itself should appear, rather than that the Attorney-General should represent it."

96. So it was that, having - at least for the purposes of the Uniting Church Property Trust case - avoided questions which are at once both arguable and plainly demonstrable, Rath, J. could say in that case, at 591:

"It seems to me that the Attorney-General is not a necessary party in proceedings in which an existing charity, whether incorporated or not, is seeking to recover property to which it claims to be entitled, or to protect property in which it claims an actual or contingent interest. The plaintiffs in this case are asking the court to make an order declaring their interest in certain names, and an order restraining the defendants from dealing with those names contrary to the interest so declared. In my opinion, such proceedings are plainly distinguishable from proceedings against trustees for the administration of a charitable trust, and it is not necessary that the Attorney-General should be a party, either as a plaintiff or defendant."

100. The plaintiff submits that the Uniting Church Property Trust case is plainly indistinguishable from the present proceeding. I disagree. In my opinion, the opposite is true. This is not a case in which established trustees argue whether certain property is the subject of one trust or another. Here, both parties assert that the Little Bourke Street property and associated assets are subject to a trust the identity of which is not in dispute. What is in dispute is the identity of the trustee. One of the litigants (the plaintiff) also puts forward an alternative: that the property belongs to the Crown. That litigant further asserts that, by acting in breach of trust, the first defendant has forfeited its right to remain as trustee. In my opinion, therefore, this case is one "against trustees for the administration of a charitable trust". It is true that, according to the plaintiff, the first defendant is not a trustee of anything. On the other hand, the defendants assert to the contrary. There is here, moreover, no certainty about the objects of the trust, and no question of an established trustee seeking to recover trust property. Rather, the plaintiff seeks a declaration that it is the trustee (in which case the first defendant is not) or, in the alternative, an order that the trust property is held by the State of Victoria as bona vacantia.

103. In my opinion, Hauxwell & Anor. v. Barton-upon-Humber Urban District Council & Ors.[6] applied.is much closer to the present case than is Uniting Church Property Trust v. Monsen. In the former, the plaintiffs (two inhabitants of Barton-upon-Humber, Lincolnshire) issued an originating summons to which the Barton-upon-Humber Urban District Council and the local County Council were defendants. By the summons, the plaintiffs claimed, among other things, (a) a declaration that a local park had, since its conveyance to the first defendant by its former (private) owner, constituted a charitable trust of which the first defendant was the sole trustee; (b) a declaration that a strip of land forming part of the park, which the first defendant had conveyed to the second defendant for road-widening purposes, was still subject to the same charitable trust; and (c) an injunction to restrain either defendant from using any part of the park for any other purpose than as a public park or pleasure ground.

106. The defendants issued a cross-motion seeking, among other things, an order that the originating summons be struck out as disclosing no cause of action, or alternatively as being vexatious. In the alternative to the originating summons being struck out, the defendants sought an order that all further proceedings be stayed.

109. The matter came before Brightman, J. One of the issues which his Lordship had to decide was whether the plaintiffs had locus standi. The defendants contended that they did not. His Lordship agreed. Having held that there was before him a bona fide dispute about whether a charitable trust had been declared, the judge further held (at 450) that no one "save the Attorney-General is entitled to maintain an action against supposed trustees to establish the existence of a charitable trust".

112. Although all parties to the present litigation assert the existence of the same charitable trust, that existence may (depending upon the nature of the evidence) nevertheless fall for determination; and, in recognition of that possibility, the plaintiff seeks (as an alternative head of relief) an order that the trust property is held by the Crown. In any event, the plaintiff claims that the first defendant is a "supposed trustee". The links with Hauxwell are thus strong.

115. In my opinion, too, principle indicates that, if this proceeding is to be continued, it should be continued by the Attorney-General. It does concern (to repeat the words, quoted above, of the Master of the Rolls in Ware v. Cumberlege) "the conduct or management of the charity". This is necessarily a matter of public rather than private concern. So too is the question whether the relevant property should pass to the State. Likewise, so is the claim that a trustee of a charitable trust should be removed for breach of trust. And "[i]t is settled in our constitutional law that in matters which concern the public at large the Attorney-General is the guardian of the public interest": Attorney-General v. Independent Broadcasting Authority[7]. It is accordingly proper that, in cases such as this, the Attorney-General as the representative of the public decide whether the public interest is or is not served by the continuation of the litigation which the plaintiff has already begun.

118. The plaintiff submits that, because the summons of 20 April 2001 does not attack paragraphs 1-4 and 7 of the further amended statement of claim, it cannot be prevented from continuing to prosecute so much of its claim as is pleaded by those paragraphs. There is, however, a problem with this contention. It is that, by their defence to paragraph 4 of that pleading, the defendants raise the very issues with which the Attorney-General must be concerned. In this context, it is relevant to state that if, in the Court's opinion, the Attorney-General should be a party to the proceeding if it is to go forward, then the Court itself must intervene to order a stay whatever the wishes of the parties then on the record.

121. For these reasons, the entire proceeding should be stayed for such time as is reasonable for the Attorney-General to consider his position and (if he thinks it appropriate) to seek to substitute his name as plaintiff. In coming to his decision, "[h]e must act independently of any external pressure from whatever quarter it may come": Attorney-General v. Independent Broadcasting Authority[8]. But:

"In exercising his functions, the Attorney-General is not subject to the control of the courts. It was so laid down by Lord Halsbury L.C. in London County Council v. Attorney-General [1902] A.C. 165 at 169, when he said: '... but the initiator of the litigation, and the determination of the question whether it is a proper case for the Attorney-General to proceed in, is a matter entirely beyond the jurisdiction of this or any other court. It is a question which the law of this country has made to reside exclusively in the Attorney-General'."[9]

125. In the Independent Broadcasting Authority case, Lord Denning, M.R. (at 649) considered the position which would arise should the Attorney-General refuse to intervene in a proper case or unreasonably delay the making of the decision whether to intervene or not. There is no need for me to enter that arena. The proper course at present, it seems to me, is simply to order that the appeal be allowed, that the orders of the Master made on 27 June 2001 be set aside, and that the proceeding be stayed until the Attorney-General seeks leave to be substituted as plaintiff, or until further order. The costs of the appeal should be paid by the plaintiff.

[1] (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129 per Barwick CJ

[2] (unreported, 16.09.94, VSC per Byrne J)

[3] [1978] 1 NSWLR 575

[4] (1885) 28 Ch. D. 426 at 430, per Pearson J

[5] [1855] EngR 686; (1855) 20 Beav. 503 at 511; [1855] EngR 686; 52 E.R. 697 at 701

[6] [1974] Ch. 432

[7] [1973] 1 Q.B. 629 at 646-647 per Lord Denning, M.R.