Barby v Perpetual Trustee Co Ltd
[1937] HCA 64(Judgment by: Latham CJ)
Barby
vPerpetual Trustee Co Ltd
Judges:
Latham CJRich J
Starke J
Dixon J
Evatt J
Case References:
-
Judgment date: 25 November 1937
Judgment by:
Latham CJ
This is an appeal from an order of Nicholas J. made upon an originating summons by which the court was asked to determine whether or not the testatrix, Elizabeth Kirby, died intestate as to her residuary estate (subject to certain provisions made in favour of annuitants and of her son) or whether, on the other hand, the residuary estate (subject as aforesaid) should be applied cy-près in accordance with a scheme to be settled. Nicholas J. held that the provisions of the will created a valid charitable trust. The decision of his Honour was, in my opinion, in accordance with the decision in the leading case of Commissioners for Special Purposes of Income Tax v. Pemsel [ [1] ], the trust falling within the fourth class of those set out by Lord Macnaghten as a trust beneficial to the community, as affecting a substantial class, and being of a public character. Nicholas J. referred to the case of Verge v. Somerville [ [2] ], which dealt with a not dissimilar trust and held that it was a valid charitable trust. The object of this proceeding is to determine whether there is a general charitable intention disclosed by the will to which effect can be given if the scheme provided in the will for carrying out the general intention shall prove to be impracticable, and the question therefore is whether the will discloses a general charitable intention so as to justify the formulation and application of a scheme cy-près . The will provides that the residue of the estate of the testatrix as to income and capital shall be applied for the relief of necessitous returned soldiers and their widows, children or grandchildren who may be in necessitous circumstances, that is, those only earning the basic wage for the time being or under and not possessed of more than £200, "in the manner and in accordance with the scheme following that is to say:" then follow a number of detailed provisions defining the returned soldiers and their descendants who are to be eligible to receive benefits under the scheme. These classes include members of the Australian Military Expeditionary Land or Air Forces who were personally actually in action during the war of 1914-1918, their widows, child or children, grandchild or grandchildren, born during their lifetime. The provision as to what is declared to be "necessitous circumstances" applies to all these classes of persons. A returned soldier must be a native-born Australian or else his father must have been born in Great Britain, Ireland or New South Wales. There is a direction that the trustees shall spend money in the purchase of virgin land unfenced and unenclosed in New South Wales and not less than fifty miles in an air line from the General Post Office at Sydney. The land is to be let at a peppercorn rent to persons within the scheme and the beneficiary must reside on and work the land. Further, there is a power to let and demise the premises even to the great-grandchildren of returned soldiers and of others who are let in under this scheme even though they are not in necessitous circumstances. The provision concludes by directing the trustee "to complete the distribution of the whole of my residuary estate both capital and income ... by transferring in fee simple without consideration to each of the then occupant or occupants of the lands so to be purchased ... and the remaining part of my estate to be converted into cash and such cash distributed between and amongst such then occupant or occupants." It will be seen that these provisions begin with a general statement of the intention of the testatrix and proceed with a set of detailed provisions as to the manner in which it is desired that the intention should be carried out. The principle of law applying to such a case as this is stated in Biscoe v. Jackson [ [3] ]. After referring to cases where the testator has plainly limited the application of his money by a particular and specific direction, Kay J. proceeds: "On the other hand, if you do see a general intention of benefiting a certain class or number of people, who come within the ordinary definition of objects of charity, and you find that the particular mode the testator has contemplated of doing this cannot be carried out, and you are convinced that the mode is not so essential that you cannot separate the intention of charity from that particular mode, then the court says there is a general intention of charity, and as the mode has failed, the duty of the court is, favouring charity as the court always does, to provide another mode than that which the testator has pointed out, and which has failed." The subject was also examined and the law stated by Parker J., as he then was, in In re Wilson [ [4] ] and by the Court of Appeal in In re Monk [ [5] ]. In the latter case In re Wilson [ [6] ] is considered, and it is pointed out that the cy-près doctrine was not applied there because the learned judge could not find any general and paramount charitable intention. I read from p. 204 of the report of In re Monk [ [7] ] a sentence which is important in relation to this case and which distinguishes In re Wilson [ [8] ] from other cases. The learned judge, it is said, "felt that it was not justifiable to infer a general intention from the particular directions, or to disregard the particularity of the gift, and to give effect to a general, as opposed to the particular intention, which latter was the only one expressed." If the only intention expressed is a particular intention from which a general intention cannot properly be inferred there is no room for the application of the cy-près doctrine. Here, however, there is a general intention expressed in the prefatory words which I have already read, that is, an intention of benefiting returned soldiers, their widows, children or grandchildren who may be in necessitous circumstances, as defined in the will. Therefore I agree with the decision of Nicholas J. that there is in this will a statement of a general intention followed by a direction as to a specific method of giving effect to the intention. In my opinion this is just the kind of case for which the cy-près doctrine has been devised and to which it should be applied.
Some doubt has been raised as to whether the final clause of the provisions which I have outlined is part of the charitable scheme. In my opinion plainly it is such a part, and to make that clear I think that an amendment should be made in the order, and that the words "the whole of" should be inserted before the words "the income and the capital of the residuary estate of the testatrix," where those words appear in the order.
In my opinion the judgment of the learned judge should be affirmed.