Public Trustee v Attorney General & Ors

Statue of Charitable Uses 1601 (UK) Charitable Trusts Act 1993 LEGISLATION CITED : Health Services Act 1997 Health Services Regulation 2003

Public Trustee v Permanent Trustee Co Ltd [1999] NSWSC 722 Public Trustee v Permanent Trustee Co Ltd [2003] NSWSC 556 Re Carmichael (1936) St R Qd 196 at 209 Re Pettit [1988] 2 NZLR 513 In re Ovey; Broadbent v Barrow (1885) 29 Ch D 560 CASES CITED : Royal North Shore Hospital of Sydney v Attorney General (1938) 60 CLR 396 Attorney General (New South Wales) v Perpetual Trustee Co Ltd (1940) 63 CLR 209 Re Davis; Hannen v Hillyer [1902] 1 Ch 876 In re Resch's Will Trusts [1969] 1 AC 514 Dal Pont, Charity Law in Australia and New Zealand, Oxford University Press, Melbourne, 2000

Public Trustee - Plaintiff Attorney General of New South Wales - 1st Defendant Western Sydney Area Health Service - 2nd Defendant PARTIES : New South Wales Health Foundation - 3rd Defendant Northern Sydney and Central Coast Area Health Service - 4th Defendant Sydney South West Area Health Service - 6th Defendant

Mr P H Blackburn-Hart SC - Plaintiff COUNSEL : Mr M Evans - 4th Defendant

Teece, Hodgson & Ward Solicitors Shephard & Shephard Solicitors SOLICITORS : Legal Branch, NSW Department of Health Marsdens Law Group Patricia O'Farrell Solicitor

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3924/04 PUBLIC TRUSTEE v ATTORNEY GENERAL OF NEW SOUTH WALES & ORS JUDGMENT 1 Madam Meh Tiap Rintoul, deceased, made her last will on 22 February 1989. She died on 24 August 1992 and letters of administration with the will annexed were granted to the plaintiff, the Public Trustee. 2 Madam Rintoul was a widow who was not in a de facto relationship at the time of her death. She was survived by her daughter, Margaret Langmaid who was the next of kin. Margaret Langmaid died on 21 December 1996 without leaving a will. The Public Trustee of Queensland was given an order to administer her estate. Margaret Langmaid was not in a de facto relationship at the time of her death and did not leave any issue. The Public Trustee of Queensland has not identified any next of kin. 3 The estate of Madam Rintoul has been the subject of proceedings in the court. In Public Trustee v Permanent Trustee Co Ltd [1999] NSWSC 722, Young J granted administration to the Public Trustee following a contested hearing. In Public Trustee v Permanent Trustee Co Ltd [2003] NSWSC 556, Davies AJ ordered rectification of Madam Rintoul's last will. By clause 3 she gave her daughter a house in West End, Queensland. Her daughter owned that house. Davies AJ substituted a house in Umina, New South Wales which had been the subject of a specific devise to the daughter in an earlier will of Madam Rintoul. 4 It is noted from the above judgments that Madam Rintoul who was a resident of Australia chose to make her last will in Malaysia. She was then 79. The will was prepared by a Malaysian firm of solicitors of which her husband had been a partner before he retired. It was written in English. Madam Rintoul was illiterate in both Malay and English. She spoke Malay well but she did not have the same facility with English. The Malay solicitors did not have access to her earlier will which had been prepared by Sydney solicitors. 5 In her earlier will, her daughter had shared Madam Rintoul's residuary estate. She was excluded from the gift of the residue in the last will. Davies AJ described Madam Rintoul's relationship with her daughter as difficult. 6 Attempts to locate friends or relatives of Madam Rintoul who might have spoken to her in relation to her intention in distributing her estate have been unsuccessful. 7 By her earlier will Madam Rintoul made charitable bequests of $2000.00 each to the Presbyterian Church, Woy Woy, to be used for general charitable purposes of the church, to the Salvation Army (New South Wales) Property Trust, to the Royal Blind Society of New South Wales and to the New South Wales State Cancer Council. 8 By her last will, as well as the devise of the house to her daughter, Madam Rintoul devised a house in Malaysia and her personal belongings in a safe deposit box to a specified Thai Temple in Malaysia. The residue of her estate was dealt with as follows: "5 I give the residue of all my property both real and personal whatsoever and wheresoever situate after the payment thereout of my funeral and testamentary expenses and death duties to those of the institutions named below in equal shares i) the Cancer Hospital in Sydney, Australia ii) the Presbyterian Church in Sydney, Australia iii) the Tuberculosis Hospital in Sydney Australia." 9 The Public Trustee commenced these proceedings for the determination whether, on the true construction of cl 5(i) and cl 5 (iii) of the last will, they did not lapse but contained a misdescription of an intended beneficiary, they lapsed but displayed a general charitable intention, or they lapsed and gave rise to an intestacy. In the event that a general charitable intention was displayed, an order was sought that a cy-pres scheme be settled. 10 Notification of the Public Trustee's intention to commence the proceedings was published widely. As a result, in addition to the joinder of the Attorney General of New South Wales, five other defendants were joined. Leave was subsequently given to the fifth and sixth defendants to withdraw. Agreement has been reached between the Public Trustee, the Attorney General, the third defendant, New South Wales Health Foundation and the fourth defendant, Northern Sydney and Central Coast Area Health Service. The second defendant, Western Sydney Area Health Service, was notified of the proceedings before me but chose not to appear. 11 Charitable trust proceedings are defined in the Charitable Trusts Act 1993, s 5(1) to include proceedings with respect to the administration of a charitable trust. Section 6(1) provides that charitable trust proceedings are not to be commenced in a court unless the Attorney General has authorised the bringing of the proceedings, or leave to bring the proceedings is obtained from the court. Section 6(2A) provides that any such authority or leave may also be given after charitable trust proceedings have been brought so as to enable the continuation of them. Section 6(2) provides that the court is not to give leave unless satisfied that the Attorney General has been given an opportunity to consider whether to authorise the proceedings. 12 The consenting parties join in seeking an order that I grant leave to the Public Trustee to bring these proceedings and I propose to do so. 13 There is no institution in Sydney called the Cancer Hospital. There is no institution in Sydney called the Tuberculosis Hospital. In the earlier will, Madam Rintoul gave a legacy to the New South Wales State Cancer Council. That organisation still exists and the first question is whether Madam Rintoul misdescribed the New South Wales State Cancer Council in her last will. 14 In my view she did not. The combination of gifts to the Cancer Hospital in Sydney and to the Tuberculosis Hospital in Sydney clearly indicates an intention to benefit institutions treating cancer and tuberculosis patients in hospital environments. 15 The next question is whether cl 5 of the last will displays a general charitable intention. A gift to what is thought to be a specified charitable institution that never existed must lapse unless it can be inferred that the testator intended to benefit a charitable purpose that enables the gift to be applied cy-pres (Re Carmichael (1936) St R Qd 196 at 209; Re Pettit [1988] 2 NZLR 513 at 546). 16 This is not a case of a gift to a particular institution that has ceased to exist. In such a case of particular charitable intention, the gift may lapse (In re Ovey; Broadbent v Barrow (1885) 29 Ch D 560). This is a case of gifts to non-existent institutions, and the question is whether Madam Rintoul had a particular charitable intention that failed or whether she had a general charitable intention that will enable the gifts to be applied cy-pres. 17 The process of distinguishing between a general and particular charitable intention is a question of construction of the will and the making of inferences about the testator's wishes from surrounding circumstances. In this case the evidence of surrounding circumstances is a minimal. In broad terms, a general charitable intention will be inferred if the designated failed mode of performance is not indispensable (Royal North Shore Hospital of Sydney v Attorney General (1938) 60 CLR 396 at 428-429; Attorney General (New South Wales) v Perpetual Trustee Co Ltd (1940) 63 CLR 209 at 227-228). 18 It is not an insignificant circumstance that the gifts in question were made along with the gift to the Presbyterian Church in Sydney. It seems to me that the purposes of the gifts were to treat cancer and tuberculosis patients in hospital and that was the dominant aspect of the gifts rather than a limited purpose of benefiting particular institutions: the dominant purposes were to treat hospital patients and not to benefit particular non-existent institutions. 19 I am fortified in this conclusion by the observation of Buckley J in Re Davis; Hannen v Hillyer [1902] 1 Ch 876 at 884 that where there is a gift to a charity that never existed at all, the court will lean in favour of a general charitable purpose and will accept even a small indication of the testator's intention as sufficient to show that a purpose, and not a person, was intended. 20 The purposes in question are charitable. The object of providing hospital care and treatment is a recognised head of charity, both by reference to the preamble to the Statue of Charitable Uses 1601 (UK) as a gift for the care of the impotent and for persons decayed and on the basis of a long line of authority upholding gifts for hospital purposes, or for the work of named hospitals, as charitable (In re Resch's Will Trusts [1969] 1 AC 514). A hospital must not be carried on for the purpose of making a profit for private individuals. But it may charge for services, provided the profits are not available to members or otherwise available for non-charitable purposes. A hospital may be publicly funded. But it must provide its services to the public, or a sufficiently large class of the public, to be considered of public benefit (Dal Pont, Charity Law in Australia and New Zealand, Oxford University Press, Melbourne, 2000, at 128-129). 21 I therefore conclude that the gifts in the cl 5(i) and cl 5(iii) of Madam Rintoul's last will do not lapse, contain a gift for a charitable purpose and display a general charitable intention. 22 The parties called in aid the Charitable Trusts Act 1993, s 9(1) which extends the circumstances in which a charitable purpose may be administered cy-pres. It is in the following terms: "The circumstances in which the original purpose of a charitable trust can be altered to allow the trust property or any part of it to be applied cy pres include circumstances in which the original purposes, wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust." 23 In my view, that provision does not apply to a gift to a non-existent institution. In such a case it is not a question of an original purpose ceasing to provide a suitable and effective method of using the trust property. Since the institution did not exist, the original purpose could not constitute a suitable and effective method of using the trust property that, subsequently, ceased to be so. Of this statutory provision, Dal Pont puts it thus at 323: "It is far more difficult to interpret its terms as applying to gifts to non-existent institutions, for in such cases it is artificial to say that the original purposes of the gift have ceased to provide a suitable and effective method of using the trust property. Hence, there are some grounds for concluding that the general law governing gifts to non-existent institutions continues to apply in New South Wales." 24 I have been invited to make a declaration in these terms: "The terms of the Will, particularly sub-clauses 5(i) and 5(iii), do not on their terms provide a suitable and effective method of using the trust property in terms of s 9 of the Charitable Trusts Act 1993 (NSW)."

I decline to do so. 25 The Charitable Trusts Act 1993, s 10(1) provides that the Part of the Act in which s 9 and s 10 are found does not affect the requirement that trust property can not be applied cy-pres unless it is given with a general charitable intention. Section 10(2), however, provides that a general charitable intention is to be presumed unless there is evidence to the contrary in the instrument establishing the charitable trust. It is not clear whether that presumption is limited to the extended circumstances to which reference is made in s 9(1) or whether it is of general operation. I do not have to resolve this question because on common law principles I have found that a general charitable intention exists in the last will of Madam Rintoul. It follows that it is appropriate to settle a cy-pres scheme. 26 The little extrinsic evidence that is available establishes that Robert Humphrey Rintoul, the husband of Madam Rintoul, was admitted to the Royal North Shore Hospital in October 1978, at the age of 67. He gave his residence as the Umina house the subject of the gift to Mrs Langmaid in Madam Rintoul's earlier will, and he named Madam Rintoul as his next of kin. Mr Rintoul was admitted to Ward 8D, then a respiratory ward, that treated a range of respiratory conditions including tuberculosis and cancer. The diagnosis was of a squamous carcinoma of the lung that was inoperable. Mr Rintoul received radiotherapy treatment and was discharged to a nursing home in December 1978 where he died later that month. 27 Madam Rintoul was treated by the Central Coast Area Health Service Community Mental Health Service as an outpatient from later in December 1978. She was treated for depression and was seen at regular intervals until the end of 1989. Shortly after the date of Madam Rintoul's last will, the Community Health record has a note in which Madam Rintoul discussed the death of her son in Malaysia. She had just returned from attending her son's funeral. The note records Madam Rintoul's statement that her son had died from stomach cancer. 28 After a fall in February 1992, Madam Rintoul was admitted to Gosford Hospital where she underwent treatment for a post-reduction of an anterior dislocation of the right shoulder. She was admitted to Gosford Hospital again in August 1992 for treatment of injuries she sustained in a fall from a railway platform while attempting to retrieve her handbag. She suffered multiple injuries. She died as a result of those injuries later in August 1992. 29 These brief circumstances support a cy-pres scheme that benefits cancer patients of the Royal North Shore Hospital where Madam Rintoul's late husband was treated for cancer. That it was highly significant to her is supported by the history of depression and the death of her son from cancer. A scheme that applies the gift in cl 5(i) of her last will to the treatment of cancer patients in Royal North Shore Hospital is a gift to a purpose as near as possible to Madam Rintoul's expressed charitable purpose, in my view. 30 I will declare that in the circumstances that have happened it is appropriate that the subject matter of the gifts contained in sub-clauses 5(i) and 5(iii) of Madam Rintoul's last will be applied by way of scheme. So far as cl 5(i) of the last will is concerned, I will make an order that it be applied cy-pres to the Northern Sydney Central Coast Area Health Service to be used by Royal North Shore Hospital at the discretion of the Chief Executive of that service for the purpose of assisting in the care and treatment of persons suffering from cancer. 31 It is not so easy to give the effect to the presumed intention of Madam Rintoul in cl 5(iii) save that the scheme should provide for the treatment of tuberculosis patients in hospitals in the geographical area of Sydney. I propose, in that respect, to make an order that the bequest made in cl 5(iii) of the last will be applied cy-pres to the New South Wales Health Foundation for distribution to hospitals in the local government areas comprising the Central Sydney, Northern Sydney, South Eastern Sydney, South Western Sydney and Western Sydney Area Health Services as set out in col 2 of sch 1 to the Health Services Act 1997 as it stood on 31 December 2004, as modified by cl 39A of the Health Services Regulation 2003 but excluding hospitals in Lord Howe Island, Wollondilly and Wingecaribee local government areas, for the treatment by those hospitals for tuberculosis or for programmes for the treatment and prevention of tuberculosis administered by those hospitals. 32 I will also order that the costs of the plaintiff, the first defendant, the third defendant and the fourth defendants be paid on an indemnity basis from the estate of the late Madam Rintoul, and there be no order for costs in respect of the second defendant. 33 To those ends, I make orders in terms of paragraphs 1, 2, 4, 5 6, 7 and 8 of the order initialled by me, dated by me and placed with papers.

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