The Public Trustee of Queensland as Executor of the Estate of Mary Agnes Ball, Deceased v State of Queensland and Ors

CHARITIES - CHARITABLE GIFTS AND TRUSTS - VALIDITY AND PRACTICABILITY - NON-EXISTENCE OF DONEE - where testamentary gift for charitable purpose - where donee ceased to exist prior to death of testatrix - whether gift lapsed

Attorney-General (SA) v Bray [1964] HCA 3; (1964) 111 CLR 402

Attorney-General (NSW) v Perpetual Trustee Co Ltd [1940] HCA 12; (1940) 63 CLR 209

Attorney-General (NSW) v Public Trustee (1987) 8 NSWLR 550

Guild v Inland Revenue Commissioners [1991] STC 281

Le Cras v Perpetual Trustee Co Ltd; sub nom In Re Resch's Will Trusts [1969] 1 AC 514

Re Broadbent, deceased; Imperial Cancer Research Fund v Bradley [2001] EWCA Civ 714

Re Faraker [1912] 2 Ch 488

Re Findlay's Estate: Tasmanian Trustees Limited v Launceston Girls' Home [1995] TASSC 156; (1995) 5 Tas R 333

Re Finger's Will Trusts [1972] Ch 286

Re Satterthwaite's Will Trusts [1966] EWCA Civ 3; [1966] 1 WLR 277

Re Sutherland, deceased. Queensland Trustees Limited v the Attorney-General [1954] St R Qd 99

Russell's Executor v Balden 1989 SLT 177

Sir Moses Montefiore Jewish Home v Howell and Co (No 7) Pty Ltd [1984] 2 NSWLR 406

Washington Hospital Center Health System v The Riggs National Bank of Washington DC 575 A 2d 719 (DC App 1990)

Mr K A Parrott for the first and fourth respondents

Official Solicitor to The Public Trustee for the applicant

The Crown Solicitor for the first and fourth respondents

[1] Mary Agnes Ball made her will in 1987 leaving her entire estate to her husband, if he survived her for 30 days and, if he did not, then in equal shares to:

"(a) ...the GUIDE DOGS FOR THE BLIND ASSOCIATION OF QUEENSLAND for the purposes of buying equipment for the said Association;

(b) ...the QUEENSLAND DEAF SOCIETY (INCORPORATED) for the purposes of buying equipment for the said society;

(c) ...the NORTH BRISBANE HOSPITALS BOARD whose Office is situate at...Herston Road Brisbane...for the purposes of buying equipment for the Royal Brisbane Children's Hospital..."

[3] "Royal Brisbane Children's Hospital" is an evident misdescription of the "Royal Children's Hospital" ("the Hospital").

[4] The North Brisbane Hospitals Board ("the Board") was incorporated in 1959 to operate public hospitals on the northern side of the Brisbane River, including the Hospital, then called the Brisbane Children's Hospital. In 1968, the Hospital's name changed to the Royal Children's Hospital. In 1982, a new board was created to operate the Hospital: the Royal Children's Hospitals Board. The Board continued to run other public hospitals until the Health Services Act 1991 abolished all Queensland hospital boards in 1991. There were later reorganisations.

[5] The testatrix died in 2007. The State Government was by then running the Hospital. That change in management accounts for this application, which concerns the effect of the selection of the Board to buy equipment for the Hospital.

[6] When Mrs Ball died, the Board no longer existed. But a bequest for a public hospital is a gift for a charitable purpose.[1] The Hospital was, it seems, functioning in 2007 much as it had 20 years earlier when the will was made. It still is. So there is no practical impediment to applying the gift to the specified purpose. Nor is there a legal obstacle to giving effect to Mrs Ball's concern to benefit the Hospital.

"The question of the failure of the disposition...arises where it is made to a corporation that...had ceased to exist...Where the existence of the particular organization is not of the essence of the gift, where the primary purpose of the testator was that the property should be applied to certain charitable purposes, the disposition does not fail."[2]

[8] Unless, therefore, the will is to be interpreted[3] as disclosing an intention that only the Board was to buy equipment for the Hospital, with the bequest to lapse if the Board could not, or would not, do so, the Court should put in place arrangements to achieve the charitable object.

[9] First, and foremost, the bequest was not an unqualified disposition in favour of the Board. Rather, it was expressly a gift to be applied exclusively for a specific charitable purpose. That is a distinct indication that the continuing existence of the Board and its function as the Hospital's operator were not seen by the testatrix as indispensable to the efficacy of her gift.[4]

[10] Secondly, nothing in the will nor in any extrinsic evidence suggests that Mrs Ball reposed special confidence in Board members or staff because of some association with the organisation. To the contrary, she chose a board that had not operated the Hospital for about five years by the time the will was made, which shows that she had neither a connection of a personal nature with members of the Board nor an informed appreciation of its undertaking.

[11] Thirdly, reorganisations of utilities following dissolutions, through amalgamations and in other ways have characterised public administration in Queensland since the War. Against this notorious background, in 1987, a rational donor must have anticipated that an entity chosen to effect a gift for the Hospital might not be able to do so when eventually the will took effect.[5] And it is scarcely to be inferred that Mrs Ball wished that sick children should be deprived of her benefaction if the politics of another day merely put a different administrator in place of the Board.[6]

[12] The identity of the designated donee was not of the essence of the gift. The declared charitable purpose is what mattered to Mrs Ball. There has been a failure of the particular means by which the charitable purpose was to be effected. But there is no failure of that purpose as such. The gift has not lapsed.

[13] As there is no change of purpose,[7] there is no occasion for a cy-pres scheme.[8] All that is necessary is that the money be paid to a suitable person or entity to apply the funds to purchase equipment for the Hospital.[9]

[14] The Royal Children's Hospital Foundation, an incorporated organisation, raises funds for the Hospital and uses the money for purposes which would enable it lawfully to buy equipment for the Hospital with Mrs Ball's bequest. It is willing to commit the money to that object. The Public Trustee proposes that the money be given to the Foundation. The Attorney-General supports that suggestion. No one has suggested that Mrs Ball's objective might be better accomplished were the money paid directly to the State Government.

1. Declares that the reference to "the Royal Brisbane Children's Hospital" in Clause 3(c) of the will of Mary Agnes Ball, deceased, dated 16 July 1987 is a reference to the "Royal Children's Hospital";

2. Directs that the property the subject of Clause 3(c) of the will be paid to the second respondent, and that the receipt of the Treasurer or other proper officer of the second respondent be a sufficient discharge to the applicant; and

3. Orders that the costs of all parties of and incidental to this application be assessed, on an indemnity basis, and paid out of the deceased's estate.

[1] Re Sutherland, deceased. Queensland Trustees Limited v Attorney-General [1954] St R Qd 99; Le Cras v Perpetual Trustee Co Ltd; sub nom In Re Resch's Will Trusts [1969] 1 AC 514.

[2] A.W. Scott & W.F. Fratcher, The Law of Trusts, 4th ed (1989), Vol IVA s397 p 398, s397.3 p 424; Washington Hospital Center Health System v The Riggs National Bank of Washington DC 575 A 2d 719, 723 (DC App 1990); cf Sir Moses Montefiore Jewish Home v Howell and Co (No 7) Pty Ltd [1984] 2 NSWLR 406, 417; J.B.E. Hutton, "The Lapse of Charitable Bequests", (1969) 32 Modern Law Review 283, 286-288.

[3] See Re Finger's Will Trusts [1972] Ch 286, 295 F-G, 297 D-E; Re Broadbent, deceased; Imperial Cancer Research Fund v Bradley [2001] EWCA Civ 714, [20], [36], [49]; Attorney-General (NSW) v Public Trustee (1987) 8 NSWLR 550, 553-554.

[4] See, in the context of purpose rather than trustee identity, Attorney-General (NSW) v Perpetual Trustee Co Ltd [1940] HCA 12; (1940) 63 CLR 209, 225; Attorney-General (SA) v Bray [1964] HCA 3; (1964) 111 CLR 402, 422.

[5] cf Richard A. Posner, Economic Analysis of Law, 7th ed (2007), p 546.

[6] cf Russell's Executor v Balden 1989 SLT 177 (gift for a charitable purpose to a council which ceased to exist on statutory reorganization: "There is nothing in the will to suggest that the testator wished the...Council and no other body who might succeed them to administer the bequest...[I]f the testator had contemplated the possibility of the town council being brought to an end he would have preferred that his bequest continued to be administered by another suitably qualified body rather than that his charitable intentions should be defeated": Lord Jauncey at 180-181). See also Washington Hospital at 723.

[7] It is unnecessary to consider whether the will evinces a general charitable intent, although there are strong indications that it does, including that the gift is out of residue (In Re Goldschmidt, dec'd [1957] 1 WLR 524) and that the Hospital is one of several charities to benefit (In Re Satterthwaite's Will Trusts [1966] EWCA Civ 3; [1966] 1 WLR 277; Re Findlay's Estate: Tasmanian Trustees Limited v Launceston Girls' Home [1995] TASSC 156; (1995) 5 Tas R 333, [16]).

[8] Re Faraker [1912] 2 Ch 488, 495; J. Warburton, Tudor on Charities, 9th ed (2003) 11-019, p 416; Sir Moses Montefiore Jewish Home at 414; Scott on Trusts s 397.1, pp 409-410.

[9] See Russell's Executor v Balden at 180; Guild v Inland Revenue Commissioners [1991] STC 281, 283, 291, 295-296; Washington Hospital at 723; H.A.J. Ford & W.A. Lee, Principles of the Law of Trusts, [20380], pp 20-3055.