MEN'S CHRISTIAN ASSOCIATION AT LAUNCESTON AND SALVATION ARMY GIRLS' HOSTEL AT

(1995) 5 Tas R 333

Charities - Charitable purposes - Advancement of religion - Gift for the repair and maintenance of a church is a gift for charitable purposes. Statute of Elizabeth I (43 Eliz 1, C4), Tudor on Charities (6 ed), Mayor of Lyons v Advocate-General of Bengal (1876) 1 App Cas 91, referred to.

Charities - Charitable gifts and trusts - When applied cy-pres - Impracticability of object - Where gift fails - Potential beneficiary ceased to exist after the death of the testator - No partial intestacy or gift over to the residual legatee - Discretionary trust - Cy-pres scheme inappropriate. Re Tyrie, deceased (No 2) (1972) VR 168, Re Slevin; Slevin v Hepburn (1891) 2 Ch 236 and In re Woollnough (1953) Tas SR 25, distinguished.

Solicitors for seventh respondent: Rae and Partners

COX CJ By his will dated 8 May 1967 the testator, Mr Norman Arthur Findlay, a company director residing in Launceston, gave the whole of his estate to his trustees upon trust to pay a number of legacies, and after making provision during her lifetime for his spouse, directed that upon her death his trustees should hold his residuary estate upon trust to pay certain further legacies including (by cl18):

"TO pay to St Aidans Church of England Launceston the sum of

Two thousand dollars for such of the general church purposes

as are charitable in the legal sense TO pay to St Lukes

Hospital Launceston the sum of One thousand dollars and to

pay to the Launceston Girls Home the sum of One thousand

dollars".

"AFTER my wife's death my Trustees shall pay the income from

my residuary estate in such proportions at such times and in

such manner as my Trustees shall think fit to any one or more

exclusively of the others of the following bodies namely The

Launceston Girls Home the Crippled Children's Aid Society of

Launceston the Retarded Children's Association at Launceston

St Lukes Hospital St Aidans Church Building Fund the Young

Men's Christian Association at Launceston and the Salvation

Army Girls' Hostel at Launceston".

2. The testator died on 14 March 1968 and his widow died on 17 September 1992.

3. The trustees have issued a summons to determine whether any, and if so, what, institution nominated in cl19 is entitled at the discretion of the trustees to take the benefit of the income of the testator's residuary estate. On the return date of the summons it was made quite clear that each of the first, second, third, fourth and sixth named respondents (although some were now differently named) was accepted by the trustees as a potential recipient of a valid charitable trust and no directions were sought in respect of them. Their counsel accordingly withdrew. Problems arise in respect of the fifth named respondent "St Aidans Church Building Fund", and the seventh "the Salvation Army Girls' Hostel at Launceston" and these need to be resolved.

4. Dealing first with the potential gift to the "body" named as "St Aidans Church Building Fund" in cl19, it is clear as a matter of construction, having regard to the reference in cl18 to St Aidans Church of England Launceston as the beneficiary of $2,000 for such of the general church purposes as are charitable in the legal sense, that the Building Fund mentioned in cl19 was one in respect of that same church. It appears there is also a St Aidan's Church in Lindisfarne, but it would be obtuse to suggest that the testator who, on other evidence was a regular worshipper, Church Official and indeed benefactor during his lifetime of St Aidan's Launceston, intended to benefit any other church of that name than the one at Launceston. On the evidence there existed at the time of the testator's will and death a fund with the National Bank under the control of the church's Vestry and Council which was designated the "Building Fund". Its existence was regularly noted in the annual parish accounts. It was used for repairs and maintenance to the church buildings, as well as extensions to and developments of those buildings. In 1970 the building fund was closed and the proceeds applied to reduce the mortgage secured against the church's property. Thereafter building maintenance and additions were paid for from the general account of the church. In June 1989 the Parish Vestry decided to open an account with the trustees of the Anglican Diocese of Tasmania, the purpose being to build up a separate fund for long term building, maintenance and development. Regular monthly deposits were resolved to be made to it. In February 1992 an entry was created in the church's general account under the name "St Aidan's Building Fund" for the purposes of building projects and the funds thereafter spent from it recorded in the accounts.

5. There can be no doubt that a gift for the repair and maintenance of a church is a gift for charitable purposes. Such a gift is specifically mentioned in the preamble to the Statute of Elizabeth I (43 Eliz 1, C4). The editors of Tudor on Charities (6 ed) state, at 43, that "the law favours all gifts the purpose of which is to build, endow, maintain or repair places of worship". Counsel for the Vestry submits that the will must be seen as either making a gift to something which does not exist as a legally recognisable entity (for the fund is only a fund and not a legal entity in itself) or else making a gift by way of accretion to a fund which exists for a particular purpose, namely the purpose of providing funds for the maintenance and construction of buildings for the use of the church. She submits the latter is the correct construction. I think this is clearly right. In Mayor of Lyons v Advocate-General of Bengal (1876) 1 App Cas 91 at 113 Sir Montague E Smith said:

"... the Court treats charity in the abstract as the

substance of the gift, and the particular disposition as the

mode, so that in the eye of the Court the gift

notwithstanding the particular disposition may not be

capable of execution subsists as a legacy which never fails

and cannot lapse." (Cited by Dixon and Evatt JJ in

Attorney-General (NSW) v Perpetual Trustee Company Limited

[1940] HCA 12; (1940) 63 CLR 209 at 224).

6. Accordingly I am satisfied that cl19 of the will expresses a valid charitable trust pursuant to which the trustees for the time being of the will have a discretion to pay or apply the income from the residuary estate in such proportions, at such times and in such manner as the trustees shall think fit for the purposes of the maintenance and construction of the buildings of St Aidan's Church at 20 Lanoma Street, East Launceston in Tasmania.

7. As to the Salvation Army Girls' Hostel at Launceston ("the hostel") the factual position is that at the date of the testator's death, the Salvation Army (Tasmania) Property Trust, established under the Salvation Army (Tasmania) Property Trust Act 1930 ("the Act"), operated a girls' hostel in Launceston, known as the Salvation Army "Tower House" Young Women's Hostel. The building was government owned but the hostel was run by the Salvation Army which provided a matron and sub-matron (at least). According to an affidavit sworn by a former sub-matron, Alice Lavinia Foster:

"3 The hostel was established to provide accommodation to

young women between the ages of 16 and 25. Most, if not all

of these young women were from country homes who had moved

in to the city of Launceston to obtain employment. Most of

the young women were telephonists and shop assistants. The

hostel was run as a home away from home for the young women.

4 The girls mostly paid board from their own incomes. They

made their own beds, cared for their own rooms and had meals

prepared for them on weekends.

5 One or two young women during my time at the hostel were

still at school and I believe that their board was paid by

their parents.

6 The girls were provided with share accommodation within

the hostel. There were only a couple of private rooms.

Some rooms contained two (2) beds and others contained up to

five (5) or six (6) beds. The girls were provided with

three (3) meals every day and supper at 8:30 pm each night.

7 At all times either the Matron or the sub-Matron was on

duty. While on duty the Matron or sub-Matron would perform

general supervision and administration, sometimes spending

time with the girls watching television, doing crafts or

playing table games.

8 With respect to the formal objectives of the hostel, I do

not know whether there were any written, but I believe the

Salvation Army Headquarters would have those written

objectives. To the best of my knowledge, the hostel was

established for working young women from the country aged 16

to 25.

They were not from any particular backgrounds and were all

from Tasmania. The staff were there largely to provide a

safe homely environment for the young women and parental

style guidance.

9 To the best of my knowledge the hostel was established

during World War II when a Salvation Army Officer was

appointed to run it as a hostel for young women from the

services (Army, Navy and Airforce). Even during those years

to my knowledge the hostel provided a homely environment

offering a substitute for parental care and guidance to the

young women."

However, in 1974 the hostel closed owing to the government's unwillingness to undertake necessary repairs to the property and a fall in demand for this kind of residential accommodation. The Salvation Army does, however, undertake welfare work for families and young girls through a welfare centre in Launceston. This centre, known as the Launceston Family Support Services ("the Service"), has been operating in Launceston since 1883. It offers assistance and support to individuals, including young women and families who are in crisis and/or emergency situations which they are not able to cope with on their own. The manager of the Service, Mr Isaac, deposed (inter alia):

"8 Such individuals and families may be assisted in a

number of ways, such as:

a) financial and other counselling;

b) food or food vouchers;

c) clothing;

d) energy costs;

e) furniture;

f) travel assistance within Tasmania;

g) referrals to other welfare groups.

...

16 The clients of the service are most commonly:

a) those who have experienced family breakdown;

b) victims of crime;

c) homeless persons;

d) those having difficulty with a drug or alcohol dependent

partner;

e) those experiencing drug and alcohol problems themselves;

f) those with mental health problems;

g) the unemployed;

h) single parents;

i) any other person in need."

8. In a later affidavit, commenting on Mrs Foster's affidavit to which I have referred, he made the following comparison in respect of the Service:

"(a) The service has many clients who are young women

between the ages of sixteen and twenty five;

(b) Some of these young women are from country homes who

have moved into the city of Launceston to obtain employment;

(c) Some of the young women clients of the service are

employed - mostly on a part time basis;

(d) Some of the young women clients of the service are

young women who have come in from the country to continue

their education;

(e) Some of the young women clients of the service have

required assistance from the service while they search for

work. Our assistance to them in this regard is not

continuing assistance. The service does however help in

appropriate ways while the search for work is ongoing;

(f) While most of the service's clients are from the

greater Launceston area, some have come in from the country

or have recently come from interstate."

9. It also appears from the evidence that the Salvation Army has, since 1945, run a hostel in Hobart called "Maylands" which provides substantially the same kind of accommodation and support for young females as the Launceston hostel did prior to its closure. The majority of girls catered for come from the Hobart area but some come from other parts of Tasmania, including Launceston.

"18 Whenever by any will, deed, or other instrument, or by

any gift or disposition of property, any property, real or

personal, has been or is devised, bequeathed, given,

granted, released, conveyed, transferred, assigned, or

appointed to, or has been, or is declared or directed to be,

held upon trust for the benefit of the Salvation Army in

Tasmania, or of any of its funds, or any department of its

work, or of any branch, corps, auxiliary, or institution

thereof, or shall be or become receivable by, or payable to

or for the benefit of, the Salvation Army in Tasmania, or

by, to, or for the benefit of any such fund, department,

branch, corps, auxiliary, or institution

(a) the said will, deed, or other instrument, gift, or

disposition aforesaid shall be construed, and operate and

take effect, as though the body corporate were named

therein;

(b) the acknowledgment or receipt of the trustees, or of

any person or persons authorized, in writing, by the

trustees, for any such property shall be a sufficient

discharge therefor; and

(c) all property, real or personal, so devised, bequeathed,

given, granted, released, conveyed, transferred, assigned,

or appointed, or declared or directed to be held upon trust

as aforesaid, shall, subject to the trusts of such will,

deed, or other instrument, gift, or disposition, and subject

to any direction to the contrary therein contained or

declared thereby, so far as the same are capable of taking

effect, be under the direction and control of the trustees,

and they may call for the transfer, conveyance, assignment,

or delivery thereof to the body corporate.

19 Whenever by any will, deed, or other instrument, or by

any gift or disposition of property made before, but not

taking effect until after, the commencement of this Act, or

by any will, deed, or other instrument, or by any gift or

other disposition of property made after the commencement of

this Act, any real or personal property has been or is

devised, bequeathed, or given to or for the benefit of the

Salvation Army in Tasmania, or to or for the benefit of any

of its funds, or of any department of its work, or of any

branch, corps, auxiliary, or institution thereof (other than

real or personal property devised, bequeathed, or given to

specific trustees upon trust for the Salvation Army, or for

any such fund, department, branch, corps, auxiliary, or

institution thereof), all such real and personal property

shall vest in the body corporate."

11. Counsel for the hostel submitted that these sections operated to vest the gift in the body corporate and that as the body corporate has not ceased to exist, there is no question of lapse. Section 18, however, is only an aid to construction. The gift in this will to the Salvation Army Girls' Hostel at Launceston, which is clearly an "institution" of the Salvation Army for the purposes of s18, is to be construed as a gift to the body corporate for the purposes and work of that institution (cf In re Field (1951) Tas SR 16 at 20). The body corporate receives it subject to the trusts imposed by the will and not freed from any limitations thereunder. If the gift were made in perpetuity (as this is) but the trusts were not charitable, the Act could not cure that defect. So too, if the property is given to a particular institution of the Salvation Army carried on in a particular place, and it is construed to have been given for no other purpose, the gift will lapse and if the institution has ceased to exist prior to the testator's death, the Act cannot enable the body corporate to take the gift for the general purposes of the Salvation Army.

12. A gift by will to a particular charitable institution which at some time existed but had ceased to do so in the testator's lifetime, whether before or after the date of his will, ordinarily lapses (Re Tyrie, deceased (No 2) (1972) VR 168, Tudor on Charities 6 ed at 259 - 260). To this general rule, Newton J in Re Tyrie (supra) noted three exceptions (at 177-178):

"(A) If at the testator's death there is in existence

another institution which has taken over the work previously

carried on by the named institution and which can properly

be regarded as the successor of the named institution, and

if the dominant charitable intention of the testator was

wide enough to allow the gift to take effect in favour of

that successor institution, then the gift will take effect

in favour of the successor institution.

...

(B) If upon the true interpretation of the will the

testator intended that the gift should operate simply as an

accretion to the assets of the named institution so as to

become subject to whatever charitable trusts were from time

to time applicable to those assets, and if after the named

institution itself ceased to exist its assets remained

subject to charitable trusts which were still on foot at the

testator's death then the gift will be treated as taking

effect as an accretion to any property which was at his

death subject to those trusts.

...

(C) If the testator is found upon the proper interpretation

of the will to have had a dominant intention to benefit work

or purposes of the kind which the named institution carried

out notwithstanding that the named institution itself might

no longer exist at his death, and if it is practicable as at

the death of the testator to apply the gift for the benefit

of work or purposes of that kind, and in a way which is in

all respects consistent with any other elements of the

dominant intention of the testator then the gift will be so

applied by means of a cy-pres scheme."

13. On the other hand, a charitable bequest to an institution which comes to an end after the death of the testator but before the legacy is paid, does not lapse. In Re Slevin; Slevin v Hepburn (1891) 2 Ch 236, the Court of Appeal held that a valid charitable bequest to an orphanage existing at the death of the testator, but which went out of existence shortly thereafter before the legacy was paid, should be administered cy-pres. The Court said at 243:

"In the present case we think that the Attorney-General must

succeed, not on the ground that there is such a general

charitable intention that the fund should be administered

cy-pres even if the charity had failed in the testator's

lifetime, but because, as the charity existed at the

testator's death, this legacy became the property of that

charity, and on its ceasing to exist its property falls to

be administered by the Crown, who will apply it, according

to custom, for some analogous purpose of charity : Attorney-

General v Ironmongers' Co 2 My and K 576; [1840] EngR 425; 2 Beav 313 Cr and

P 208; 10 Cl and F 908; Wilson v Barnes 38 Ch d 507; Tyssen

on Charitable Bequests (440)."

14. The same principle was applied by Morris CJ in the case of In re Woollnough (1953) Tas SR 25 in relation to a devise of land for a particular charitable purpose, practicable at the time of the testator's death but rendered impracticable during the period of a life tenancy at the conclusion of which it was intended to be implemented.

15. The principle in Slevin's case was also applied and a cy-pres scheme authorised in Re Moon's Will Trusts (1948) 1 All ER 300 where the charitable gift to take effect after a life tenancy was practicable at the time of the testator's death, but thereafter became incapable of being undertaken.

16. Where the gift was made with a general charitable intention, it is never allowed to fail (Tudor on Charities 6 ed at 243). If the mode of application is impracticable at the death of the testator, the gift will be carried into effect cy-pres. It has been held that in determining whether the intention is a particular or general charitable intention, the fact that the object is one of several charities having kindred objects included in a gift of residue is a matter properly to be taken into account as indicating a general charitable intention (In re Knox (1937) 1 Ch 109; In re Royce (1940) 1 Ch 514 and In re Whittaker (1951) TLR 955).

17. The policy which emerges from the different principles mentioned above is that the courts will, unless to do so would run contrary to the express or implied intentions of the testator, seek to ensure that a charitable gift, even though its immediate object is no longer in existence, or cannot practicably be carried into effect, will still be applied to a charitable purpose rather than pass by way of partial intestacy or to a residuary legatee, not being a charity. If the object is not in existence prior to the testator's death and does not fall within the three exceptions mentioned in Re Tyrie (supra) it will lapse, as indeed it will if it later proves impracticable and the court regards the testator's gift as one for a particular charitable purpose and none other. The three cases where a gift to an impracticable object is grouped with gifts to other charities having kindred objects, and where this has been taken to indicate the existence of a general charitable intention, are all cases where the lapse would have resulted in a partial intestacy or gift over to the residuary legatee. Had the hostel been the only object of the testator's bounty, then its entitlement to the residuary estate would have vested in interest at the death of the testator and it would have been appropriate, whether there was a general charitable intention or not, to apply it under a cy-pres scheme. As Morris CJ said in In re Woollnough (supra) at 30:

"The residuary legatee is forever excluded from any interest

in them" (that is the compensation moneys received for the

compulsory acquired land devised for the purpose which

failed by reason of its resumption) "not because there was

any general charitable intention but because it was a good

gift at the date of the death of the testator. The intended

recipient was there to receive it and did receive it."

However, the hostel is not in the same position. It is not absolutely entitled to anything under cl19 of the will. It is one of seven bodies or charitable objects which, in the absolute discretion of the trustees, may or may not receive some part of the annual income of the residuary estate. If its potential to receive such benefits lapses because it is no longer in existence, there is no partial intestacy or gift over to a residuary legatee (as was the case in In re Knox (supra); In re Royce (supra) and In re Whittaker (supra)). The income simply becomes distributable to one or more of the remaining six charities.

18. I do not see any of the above situations where the courts have sanctioned a cy-pres application as being applicable here. The situation is unlike Re Tyrie (supra) because the hostel ceased to exist after the death of the testator and not before. It is unlike In re Slevin (supra) because on the testator's death it did not take any absolute, although postponed, interest in the property. Even were a general charitable intention to be deduced from the wording of the will, it seems to me to be inappropriate to invite a cy-pres scheme to be submitted where there is no obligation on the part of the trustees to apply any funds to the scheme. But in any event, I think the better construction of the will is that the testator intended his trustees to determine which of seven particular bodies carrying out charitable purposes in locations in Launceston should, from time to time, and in the circumstances then existing, receive the benefit of his bounty and that should one of them cease to exist, or should such objects cease to be carried out, the class of potential recipients would be narrowed by the exclusion of that one. In the case of the hostel, it no longer exists. A similar establishment operates in Hobart and does cater for some girls from Launceston, but I think it unlikely that such an establishment was within the contemplation of the testator whose charitable intentions were not expressed to extend beyond Launceston. Although the Salvation Army commendably conducts many valuable charitable projects in Launceston, I think it is unrealistic to regard them as fulfilling anything like the same kind of purpose as the hostel for the accommodation of young girls named in the will. In my opinion the testator did not intend that should the hostel cease to function, the trustees should do anything other than make distributions, in their discretion, to one or more of the remaining bodies or objects named in cl19.

19. I shall hear counsel as to the precise order to be made.