Sharp v Attorney General of NSW

Declarations and orders

1. Following oral submissions, I made the declarations and orders proposed by the parties.
2. I indicated that I would deliver reasons for making those declarations and orders. These are those reasons. I have been greatly assisted by the written submissions I received from Mr White, who appeared for the Executors, and Mr Hochroth, who appeared for the Attorney General. Much of what follows is drawn, with gratitude, from those submissions (particularly those of Mr Hochroth).

The Will

1. By the Will, the Testator appointed the Executors as his "executors and trustees".
2. He also appointed Mr Luke Sciberras and Ms Marilyn Karet as his "literary or artistic executors" ("the Literary Executors"). The Testator directed the Literary Executors to: "…work with my testamentary executors in protecting my rights and copyright in relation to all my works and artworks of whatsoever nature and wheresoever situate with a view to promoting and advancing the purpose of the Trust created in Clause 4 below or other trusts created in substitution by this my Will."
3. The Will provided, in cl 3: "I have appointed the above persons as I have faith in them and their endeavouring to carry out my wishes and the objects of this my Will to ensure to the fullest possible extent that projects and works in which I have been involved and which are not completed at the date of my death will be continued and carried forward and that my home 'Wirian' will be retained and used as far as is practically possible and for such period of time as possible, as a place for carrying on these works and projects. I have expressed to my Trustees my wishes that 'Wirian' be a place where people can be educated not only in relation to art and artists but in my work, the as yet unrecognised significance of Luna Park and the work of Tiny Tim whom I regard as an under-appreciated artist. Should however it is [sic] the case that it is not possible or practical to retain the property 'Wirian' at [Bellevue Hill] then I DIRECT that the provisions of Clause 4 (b) do not apply and the provisions of Clause 4 (B) apply in its place."
4. And in cl 4: "4. I GIVE all of my estate to my Trustee: (a) to pay all debts, legacies, funeral and testamentary expenses and any death, estate or succession duties; and (b) to hold the balance remaining for the Trust to be established from these assets and known as the 'Street of Dreams Martin Sharp Trust' to carry out the objects and purposes of this my Will being the preservation of 'Wirian', the advancement of my work on Luna Park and Tiny Tim and the protection and continuance of my works. The trustee of that Trust is to be the presently constituted company Street of Dreams Pty Ltd the directors of which are to be one or more of my Trustees of this my Will as far as the constitution of that Company allows. The objects and purposes of the trust whilst here broadly stated are sufficiently described to allow my trustees to deal with my assets. In that regard I note the unfortunate and antagonistic relationship that has arisen over a number of years with my neighbour Cranbrook School and I direct my trustees not to deal with or favour that School in the administration of the trusts under this Will. Further, while I do have kind regard and respect for the Art Department at that school I would request that the school itself not continue to use my name in the presently described Martin Sharp art prize, consent for which was not given and should not be recognised or maintained. 4.(B) Should the above trust fail or not be able to be implemented by my trustees within two years of the date of my death I GIVE my estate to my trustees and literary executor and trustee to then manage and deal with my estate in conformity with the Trustees powers in Clause 5 below. I am aware that Wirian, the house and grounds at [Bellevue Hill] are expensive to maintain though that property is integral to my work and forms part of my work and its significance. I empower my trustees to deal with such Government and semi government organisations as may be willing and able to assist in carrying out or directly carrying out the purposes of the trusts herein and allow my trustees discretion as described below in best implementing my wishes for both Wirian and my works be that in assuming control and management of Wirian and its grounds and land as well as all improvements on that land excepting those items to be described as my works in Clauses 3 and 4 above and where there is some conflict or dispute as to interpretation of what constitutes such works my literary executor has authority to decide."
5. By the codicil, the Testator substituted the Executors and Literary Executors (together) to be trustees of the "Street of Dreams Martin Sharp Trust" in lieu of Street of Dreams Pty Ltd.

Does the Will create a valid charitable trust?

1. In construing the language of a will, the starting point is "the fundamental rule" stated by Viscount Simon LC in Perrin v Morgan [1943] AC 399 at 406, which is "to put on the words used the meaning which, having regard to the terms of the will, the testator intended": Hatzantonis v Lawrence [2003] NSWSC 914 per Bryson J at [6]; Parry v Haisma [2012] NSWSC 290 per White J at [52].
2. As James LJ said in the familiar passage from Boyes v Cook (1880) 14 Ch D 53 at 56: "You may place yourself, so to speak, in [the testator's] arm-chair, and consider the circumstances by which he was surrounded when he made his will to assist you in arriving at his intention."
3. By reason of s 32 of the Succession Act 2006 (NSW), if the language of a will is ambiguous, evidence (including of the testator's intention) is admissible to assist in its interpretation.
4. The court will endeavour to adopt a construction that will avoid an intestacy, so that, in ascertaining testamentary intention, the court will not presume that the testator meant to die intestate if, on a fair construction, there is reason for saying the contrary: Fell v Fell [1922] HCA 55; 31 CLR 268 per Isaacs J at 275-276, 279; G E Dal Pont and K F Mackie, Law of Succession, (2013, LexisNexis Butterworths) at [8.24], [9.4].
5. The Trust is created by cl 4(b) of the Will.
6. That clause states the "objects and purposes" of the Trust to be: 1. the preservation of Wirian; 2. the advancement of the Testator's work "on Luna Park and Tiny Tim"; and 3. the protection and continuation of the Testator's works.
7. The language of cl 4(b) is directed to the preservation of Wirian only in the context of the Testator's own works.
8. However, the objects of the Trust created in the Will must be determined by looking at the whole of the Will: Re Williams; Williams v Williams [1897] 2 Ch 12 at 18-19 per Lindley LJ. Thus, cl 4(b) must, in my opinion, be read in light of that part of cl 3 that I have set out at [17] above. That clause shows that the Testator intended a further "object" and "purpose" (he appears to have used those words interchangeably) of the Trust created in cl 4(b) of the Will to be that Wirian be preserved as a place where "people can be educated" not only in relation to the Testator's own work but also "in relation to art and artists" generally.
9. The key question in the present case is whether the Trust is for a recognised charitable purpose.
10. The four recognised heads of charitable trusts are those set out in the decision of Lord Macnaghten in The Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531 at 583, being trusts for the purposes of: 1. the relief of poverty; 2. the advancement of education; 3. the advancement of religion; and 4. other purposes beneficial to the community and not falling within a preceding head.
11. In my opinion, the Trust is one for the purpose of education. As Mr Hochroth submitted, in this context, "education" is construed broadly. Thus, in Lloyd v Federal Commissioner of Taxation [1955] HCA 71; 93 CLR 645 at 675, Kitto J said that education "is unquestionably much wider than mere book-learning, and wider than any category of subjects which might be thought to comprise general education as distinguished from education in specialised subjects concerned primarily with particular occupations".
12. The advancement of cultural and artistic appreciation may fall within the charitable head of education: see for example In re Town and Country Planning Act, 1947; Crystal Palace Trustees v Minister of Town and Country Planning [1951] Ch 132 at 140; Re Chanter (dec'd) [1952] SASR 299 at 302. This can include not only the teaching or training of artists but also the encouragement of additional artistic contributions: Perpetual Trustee Co Ltd v Groth (1985) 2 NSWLR 278 at 286. Thus, in Perpetual Trustee v Groth, a bequest for the Archibald Prize competition was found to be a valid charitable trust.
13. The purpose of the Trust in the present case is each of the matters set out at [25] and [27] above.
14. In my opinion, each of these is properly viewed as a charitable object. The preservation of the Testator's own work is, I infer, for the purposes of public exhibition and appreciation. The "continuation" of the Testator's work is, the material before me establishes, a reference to the artistic collaboration that occurred at Wirian during the Testator's lifetime. Continuation of these works is likely to encourage artistic creation and is thus to the public benefit. Education of the public in relation to art and the Testator's work is self-evidently charitable.
15. In addition to having a recognised charitable object, in order that a trust be a valid charitable trust it must be for the public benefit. The court will ordinarily presume that advancing education is for the public benefit, and will not attempt to weigh the respective merits of particular educational methods if the purposes are generally educational in their aim and scope: Re Shaw's Will Trusts; National Provincial Bank Ltd v National City Bank Ltd [1952] Ch 163 at 168. However, the court is permitted, for example, to consider the educational merit of a trust for exhibition of particular works: Re Pinion (dec'd); Westminster Bank Ltd v Pinion [1965] Ch 85.
16. In the present case, the merit of the opportunity to preserve the work in situ of a major Australian artist is obvious. In any event, the material before me, in the form of testimonials from leading figures in the Australian art scene, points to the merit and public benefit of preserving Wirian and its contents.
17. In those circumstances, on 22 October 2015, I made the following declaration: Declare that on a true construction of the will of the late Martin Ritchie Sharp dated 20 September 2012 and codicil thereto dated 21 November 2013 (collectively, the "Will"), the gift in cl 4(b) of the residuary estate to be held on a trust to be established and known as the 'Street of Dreams Martin Sharp Trust' (the "Trust") constituted a valid charitable trust for the purpose of the advancement of education, and specifically having the following objects: 1. the preservation of the house and grounds at XXX, Bellevue Hill, known as 'Wirian' as a place for carrying on the works and projects in which the testator was involved and which were not completed at the date of his death and as a place where people can be educated not only in relation to art and artists but in relation to the work of the testator, the significance of Luna Park and the work of Tiny Tim; 2. the advancement of the testator's work on Luna Park and Tiny Tim; and 3. the protection and continuance of the testator's works.

Do the trustees of the Trust have the power to sell Wirian?

1. As Mr Hochroth pointed out, two trusts are contemplated by the Will.
2. First, the Executors are to hold the Testator's estate on trust to pay all debts and expenses of the kind referred to in cl 4(a) of the Will.
3. Second, on implementation of the Trust under cl 4(b) of the Will, the trustees of that Trust (who, by reason of the codicil, are to be the Executors together with the Literary Executors) are to hold the balance of the Testator's estate on the terms of the Trust.
4. The Executors, in their capacity as trustees of the Testator's estate, do, in my opinion, have the power to sell Wirian. The conferral by the Testator on the Executors of that power is reflected in the Testator's statement in the last sentence of cl 3 concerning what is to occur should it be "not possible or practical to retain" Wirian. It is, in my opinion, implicit in those words that, if such circumstances existed (and there is no suggestion in the evidence before me that they do), the Executors would have the power to sell Wirian.
5. However, in relation to the powers of the trustees under the Trust, I see no basis to imply from the words in the Will a power to sell Wirian. On the contrary, one of the objects of the Trust, as I found them to be, is the preservation of the house and grounds of Wirian to carry out the works in which the Testator was involved.
6. As Mr Hochroth submitted, if it turns out that, for reasons not presently foreseeable, it does become necessary for the trustees of the Trust to sell Wirian, the appropriate course would be for those trustees to apply to the Court for cy-près orders permitting such sale.
7. For those reasons, on 22 October 2015, I made the following further declaration: Declare that on a proper construction of the Will: 1. prior to the establishment of the Trust, the executors and trustees named in the Will (namely Roslyn Sharp, Alexander Ramsey Sharp, John Barker and Angelica Frances Tremblay) have the power to sell the property known as 'Wirian' but such power may only be exercised if it is not possible or practical to retain the property; and 2. on the establishment of the Trust, the trustees of the Trust (namely Roslyn Sharp, Alexander Ramsey Sharp, John Barker, Angelica Frances Tremblay, Luke Sciberras and Marilyn Karet) have no power to sell the property 'Wirian'.

Ambit of the provision in cl 4(b) allowing "my trustees to deal with my assets"

1. The Executors sought judicial advice, pursuant to s 63 of the Act, as to whether the provision in cl 4(b) of the Will allowing the trustees to "deal with my assets" would permit the trustees of the Trust to use the assets of the estate for the following purposes (being those set out in question 9(C) in the Statement of Facts filed pursuant to Uniform Civil Procedure Rules r 55.1): "(i) to maintain, preserve, document, curate, conserve, protect and promote Wirian and the art works located at Wirian, (the Collection); (ii) to make Wirian or any part of it available for use of any of the following: a. a public gallery to exhibit the works of Martin Sharp generally and, more specifically, his work on Luna Park and Tiny Tim; b. a centre for research into Luna Park, the music of Tiny Tim and the work of Martin Sharp; c. a centre for research and/or workshop for, and a venue for, education and training for aspiring and/or established artists in any of the following disciplines: ● screen-printing ● popular music ● photography ● street art ● collage ● graphic art and d. a residence for artist-in-residence programs for writers, researchers, performers, musicians or artists. (iii) to enhance and maintain the Australia public's knowledge and understanding of the works of Martin Sharp and Tiny Tim and of Luna Park and the Collection through exhibitions, guided tours and seminars, including at Wirian; (iv) to make objects in the Collection available from time to time for public exhibition; (v) to retain the services of curators, volunteers or other persons with relevant skills; (vi) to establish relevant policies for the operation of Wirian; (vii) to meet or contribute to the costs associated with the maintenance of Wirian and the Collection (whether by way of rent, maintenance, conservation and up-keep, construction of buildings, refits or otherwise); and (viii) to do all such things as are incidental or conducive to the attainment of the objects and the exercise of the powers of the Trust."
2. In my opinion, each of these proposed uses of Wirian and the assets of the estate is consistent with the charitable objects of the Trust.
3. Accordingly, on 22 October 2015 I made this order: Give judicial advice to the Plaintiffs pursuant to s 63 of the Trustee Act 1925 that on a proper construction of the Will, each of the proposed uses of 'Wirian' and the balance of the assets of the Estate as set out at paragraph 9(C)(i)-(viii) inclusive of the Statement of Facts is consistent with the charitable objects of the Trust.

Can a corporate trustee of the Trust be appointed in lieu of the Executors and Literary Executors?

1. A new trustee may be appointed in place of a trustee under s 6 of the Act. This includes where a trustee desires to be discharged: s 6(2)(d). There is no limitation in the Will on who may be a trustee of the Trust under cl 4(b), and thus no reason why the trustee could not be a corporation. Indeed, given that charitable trusts are perpetual in nature (and the present charitable trust is clearly intended to be long lasting), a corporate trustee appears desirable.
2. The plaintiffs propose the establishment of a corporation limited by guarantee with objects consistent with the Will. This would appear to be an appropriate course.
3. Accordingly, on 22 October 2015 I made the following further declaration: Declare that the trustees of the Trust may appoint a substitute corporate trustee to administer the Trust in accordance with s 6 of the Trustee Act 1925 (NSW).

Costs

1. Finally, and by consent, on 22 October 2015 I made the following orders as to costs: 1. Order that the costs of the Plaintiffs be paid out of the assets of the estate on an indemnity basis. 2. Order that the costs of the First Defendant be paid out of the assets of the estate on the ordinary basis.

Amendments 03 November 2015 - Par 12 - references to "Mrs Massy-Greene" corrected to "Lady Massy-Greene". 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. Decision last updated: 03 November 2015