Between: Roman Catholic Archbishop of Melbourne
And: Lawlor & Ors
Between: His Holiness the Pope
And: National Trustees, Executors and Agency Co of Australiasia Ltd & Ors

Judges: Gavan Duffy CJ
Rich J
Starke J
Dixon J
Evatt J

McTiernan J

Subject References:
Charities
Gift to establish Catholic daily newspaper
Validity
Dependent relative gift
Taxation and revenue
Estate duty
Alteration of statutory order of application of assets
Contrary provision

Legislative References:
Property Law Act 1928 (Vic) No 3754 - s 131
Administration and Probate Act 1928 (Vic) No 3632 - s 33; s 34; s 163; Second Schedule, Part II
Estate Duty Assessment Act 1914 No 22 - s 35

MELBOURNE

Decision by:
McTiernan J

The testator made a specific bequest to the Roman Catholic Archbishop of Melbourne and the Roman Catholic Bishops of Ballarat, Bendigo and Sale "as a nucleus, to establish a Catholic daily newspaper." He also made a residuary gift "to the Hierarchy in addition to the bequest, already made, to establish a Catholic daily paper." The Archbishop and Bishops above mentioned are the Hierarchy of the Roman Catholic Church in Victoria.  

A preliminary question arises as to what is the effect of this residuary gift. It was contended that the trust affecting the part of the estate subject to the gift is created by the words "to the Hierarchy," and that the words which follow merely show that the testator intended to create another trust in addition to the trust to establish a Catholic daily newspaper. I do not agree. It cannot be supposed that the testator became unmindful that he made other bequests to the Hierarchy in addition to the bequest to establish the newspaper.

The true construction is, in my opinion, that the testator intended the gift of residue to augment the benefaction to the Archbishop and Bishops to establish a Catholic daily newspaper. The question which arises is whether the object of this gift is within the legal definition of charity. The object of the gift is a Catholic daily newspaper which is to be set up, with the aid of benefactions, by the Roman Catholic Archbishop and the Roman Catholic Bishops of the various dioceses of the Church in Victoria. The gift is immediately followed by a bequest to the same beneficiaries "to found a farm, or supplement those already secured, for the training of delinquent or orphan boys" and by a direction that the income from the two benefactions should be used "for Catholic education, or any good object the Hierarchy may decide, until sufficient funds are in hand, to found the daily paper and secure the farm." The farm is clearly not an undertaking to be conducted for private gain. The money to secure the farm will be provided, if at all, by benefactors but not investors. The newspaper, as I understand the trust, is not to be established to earn profits for those who subscribe the money to start it. The word "Catholic" in the trust now in question imports the Roman Catholic Church, that is the religious institution known by that name. The trust is imposed upon the Archbishop and Bishops in their character as the holders of offices in the Roman Catholic Church. It is therefore a trust for the establishment by the Hierarchy of a "Roman Catholic Church" newspaper. It is not a trust for the establishment of a newspaper, by a body of persons who are identified as the holders of certain ecclesiastical offices, to be used by them for such purposes as they think fit. The trust is more limited than a trust to establish a newspaper for Catholic purposes. I think that, upon its true construction, the trust is imposed upon the Hierarchy in their official character, and it is a trust for the establishment of a newspaper for the use or for the purposes of the Roman Catholic Church as a religious institution.  

In In re Schoales; Schoales v Schoales, ^[F89] Bennett J. held that a bequest "to the Roman Catholic Church for the use thereof" was a good charitable gift. That decision was founded on In re Barnes; Simpson v Barnes ^[F90] (see footnote to In re Schoales) in which Romer J. held that a gift of property "to the Church of England absolutely" is a good charitable gift. Romer J. said: ^[F91]

"I hold that this is a gift to the institution which ministers religion and gives spiritual edification to the members of the Church of England. If that be so, for what purposes is it given to the Church of England? It appears to me that it is obviously given for these very purposes which I have just mentioned-namely, for the purposes of religion and for giving spiritual edification, and so forth. That being so, I think without any question that the gift is a good charitable gift."

In McLaughlin v Campbell ^[F92] a bequest to trustees "for such Roman Catholic purposes in the said parish of Coleraine or elsewhere as they may deem fit and proper" was not a good charitable bequest. It was contended that the gift was valid because it must be taken to mean for the benefit of the Roman Catholic Church. FitzGibbon L.J. said (at p. 597):

"In his argument, Sergeant Dodd brought in the word 'Church' which is not in the will. If that word had been used, it would have been necessary to consider the sense in which the testator used it."

In the present case, I think that it is clear that "Catholic" imports the Church. The testator meant a newspaper of the Catholic Church. Holmes L.J. agreed, but not without some difficulty, that the bequest in McLaughlin v Campbell ^[F93] wa not charitable. He added: ^[F94]

"If, on the true construction of the will, I were to hold that Roman Catholic purposes are to be understood as the purposes of the Roman Catholic Church, I should not hesitate to decide that the legacy was to be used for teaching the doctrines of that Church, and supporting its worship and services, in which case it would be clearly charitable."

These decisions proceeded upon the view, which I think is correct, that where property is given for the use or purposes of the Church, the use or purposes specified are necessarily public and religious. (See also In re Bain; Public Trustee v Ross.) ^[F95] There is no suggestion that a daily newspaper could not form part of the equipment and means which the Church may maintain and use for the instruction and edification of the public. Indeed, in the present case there is evidence which is contrary to that suggestion. Father Power in his affidavit said:

"One of the means adopted by the Catholic Church for the maintenance and propagation of the Catholic Faith and the advancement of the Catholic religion is the promotion of daily newspapers and other publications of the kind in as many countries as possible. These newspapers are used for the advancement of Catholic religion by defining its attitude towards moral problems of the day, defining its teachings on matters of faith and morals, and correcting and counteracting misrepresentations as to the history of the Church and its attitude towards problems both past and present.

...

The publication of daily newspapers which are under the control of the Catholic Church is part of the action of the Church in the same way as the publication of religious books, the promotion of lectures and sermons etc., for the advancement in the world of the Catholic religion. It appears, therefore, that the publication of a Catholic newspaper is regarded by the Church as tending directly to the instruction and edification of the public in matters relating to the Roman Catholic religion"

(par. 2).

"A Catholic daily newspaper established in Victoria under the control of the Archbishop of Melbourne and the other Bishops whose Dioceses are in Victoria would thus be engaged in a work the purpose of which would tend directly to the instruction and edification of the public. It would not merely be a newspaper conducted on religious or high moral principles, but it would be a newspaper conducted for the direct purpose of the advancement of the Catholic religion, using similar means for that purpose as are used in sermons from the pulpit and in lectures from the public platform"

(par. 7).

The publication of a newspaper is a recognized medium which the Roman Catholic Church adopts and employs for exercising its public religious mission. The purposes of the Roman Catholic Church are public and religious. The newspaper for which the testator made the gift would be owned and controlled by the Church. The object of the present trust is to effectuate public and religious purposes by providing for the publication of a newspaper by the Roman Catholic Church in its character as a religious institution. (Cf. In re Delany; Conoley v Quick, ^[F96] at p. 647, lines 24-32.) The publication by the Church of an official organ as an instrument of its religious mission would disseminate its doctrines and spread the knowledge of its worship and services. (Cf. Thornton v Howe.) ^[F97] A newspaper published by the Church as an activity belonging to its religious mission would communicate the message of the Church to the reading public in as direct a way as a preacher conveys the message to the congregation present in a church. (Cf. Turner v Odgen.) ^[F98] If, for example, it communicated the times at which public worship would be held in the Roman Catholic Churches it would perform a service analogous to that of the Church bells. But it is unnecessary to describe in detail what would be the contents of a typical issue of the journal. The contents of the journal would be substantially religious in character, and would be determined by the purposes which the trust is constituted to effectuate. In my opinion this trust is "within the equity of the Statute of Elizabeth." (Cf. Hoare v Osborne; ^[F99] In re Pardoe; McLaughlin v Attorney-General.) ^[F100] "We must fall back upon the Statute of Elizabeth, not upon the strict and narrow words of it, but upon what has been called the spirit of it, or the intention of it" (In re Macduff; Macduff v Macduff, ^[F101] at p. 467, per Lindley L.J.). The trust is, in my opinion, within the third of Lord Macnaghten's enumeration of charitable trusts, namely, the advancement of religion. The trust satisfies the test stated by Lord Hanworth M.R. in Keren Kayemeth Le Jisroel Ltd v Inland Revenue Commissioners, ^[F102] at p. 477, where the Master of Rolls said:

"The promotion of religion means the promotion of spiritual teaching in a wide sense, and the maintenance of the doctrines on which it rests, and the observances that serve to promote and manifest it-not merely a foundation or cause to which it can be related."

As I have construed it, the trust is for religious purposes. (See In re White; White v White.) ^[F103] I think, therefore, that it is a trust for a purpose which operates directly for the advancement of religion, and as such is charitable. The trust does not fail as a charitable trust for the advancement of religion because the contents of the newspaper may, conformably with the trust, consist partly of secular news. The newspaper is the most valuable instrument of propaganda, because the popular craving for news draws a daily newspaper into almost every home. The publication of some secular news, if this was decided upon by the Hierarchy as a feature of the newspaper, might increase the circulation among their own congregation and outside it. But the terms of the trust require that this feature, if adopted, should be subordinate and ancillary to the institutional purposes and activities of the journal. (Cf. In re Hood; Public Trustee v Hood; ^[F104] Re Charlesworth; ^[F105] Young Men's Christian Association v Federal Commissioner of Taxation, ^[F106] at pp. 357, 360.)  

The result is that the trust in the present case is for a specific object which, in my opinion, is a legal charity. The trust therefore differs from that in Byrne v Dunne: ^[F107] Dunne v Byrne, ^[F108] which was strongly relied upon in order to defeat the present trust. In that case the bequest was in the following terms: "To the Roman Catholic Archbishop of Brisbane and his successors to be used and expended wholly or in part as such Archbishop may judge most conducive to the good of religion in his dioceses." Griffith C.J. said: ^[F109]

"For instance, it might well be said that a political propaganda for the purpose of procuring State endowment of churches or denominational schools, or the establishment of a newspaper conducted on religious or high moral principles, or the establishment of a contemplative order of nuns, would be purposes conducive to the good of religion. Certainly the Archbishop might reasonably think so. I do not at present see my way to deny such a proposition. But I do not think that either purpose would be a charitable purpose."

But the newspaper which is the object of the present trust is a journal which, in my opinion, is to be used by the Church for carrying on the religious work of the Church. Its publication would operate directly to promote religion. The statement of the Chief Justice leaves open the question whether the specific object to which the testator in the present case has appropriated part of his estate is within the legal definition of charity. The statement of Russell J., as he then was, in In re Tetley, ^[F110] which was also relied upon to defeat the present trust, does not, in my opinion, cover the present case.

"Subsidising a newspaper for the promotion of particular political or fiscal opinions would be a patriotic purpose in the eyes of those who considered that the triumph of those opinions would be beneficial to the community. It would not be an application of funds for a charitable purpose."

It was held that such a purpose would not be charitable within the fourth of the divisions enumerated by Lord Macnaghten in Commissioners for Special Purposes of Income Tax v Pemsel, ^[F111] that is to say, purposes beneficial to the community not falling under any of the three previous divisions, namely, relief of poverty, advancement of education and the advancement of religion. The advancement of religion according to the tenets of the Christian religion is always presumed to be beneficial to the community. But political or fiscal opinions stand on a different footing. "A trust for the attainment of political objects has always been held invalid, not because it is illegal, for every one is at liberty to advocate or promote by any lawful means a change in the law, but because the Court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift" (per Lord Parker in Bowman v Secular Society Ltd). ^[F112]  

The objection that the gift is void for remoteness is disposed of by the following rule applicable to charitable gifts.

"Where there is an immediate and effectual gift to charity, no question of remoteness can arise, although the particular object will not necessarily take effect within any assignable limit of time, and may never take effect at all"

(Tudor on Charities, 5th ed. (1929), p. 76; Wallis v Solicitor-General for New Zealand, ^[F113] at p. 186).

The testator directs that the income from the benefaction is to be "used for Catholic education, or any good object the Hierarchy may decide, until sufficient funds are in hand, to found the daily paper." The gift for Catholic education is within the legal definition of charity. But charitable purposes are not as extensive as "any good object." No apportionment is made between the two purposes specified by the testator. The effect of the trust is that the Hierarchy has a discretion to apply the whole or any part of the income to purposes not within the legal definition of charity. It is well settled that such a gift is void. But the trust is clearly within the provisions of s. 131 of the Property Law Act 1928 of Victoria. By force of this enactment the trust must be construed and given effect to in the same manner as if it did not direct or allow the application of the property, subject to the trust, or any part thereof, to or for non-charitable and invalid purposes included within the trust. There is therefore a valid charitable gift of the income of the benefaction, at least for Catholic education.  

It follows from these conclusions that there is no intestacy as to the part of the estate which is given to the Hierarchy to establish a Catholic newspaper, or as to the income to be derived from that benefaction until the newspaper is founded. It was agreed at the hearing of the appeal that it would not be necessary to answer question 10 of the originating summons if it were held that the testator did not die intestate as to any part of his estate. But it has become necessary to deal with that question. One matter which arises for decision is whether the will has varied the order in which the Act directs the assets to be applied toward the discharge of the funeral, testamentary and administration expenses, debts and liabilities of the deceased. (Secs. 33, 34, and Part II. of the Second Schedule of the Administration and Probate Act 1928 of Victoria.) The primary fund for the discharge of these burdens is "property of the deceased undisposed of by the will, subject to the retention thereout of a fund sufficient to meet pecuniary legacies." According to the decision in In re Tong, ^[F114] the lapsed share of residue in the present case falls within that division. It has also been decided that assets in this division are the primary fund for the payment of pecuniary legacies as well as of the above-mentioned expenses, debts and liabilities (In re Worthington). ^[F115] But the statutory order in which the assets are applicable may be varied by the will.

It is unnecessary to quote again the clause which is relied upon to override the statutory order. It was contended that the effect of that clause is to vary the statutory order of administration by distributing over the whole of the residue the burden which, under the statute, has to be borne primarily by the undisposed of assets. The clause in question implies a reasonably clear direction that a specific part of the assets should be appropriated to meet what the testator describes as "probate," "any liability of mine" and "the cash bequests." But a will does not vary the statutory order in which the assets are applicable unless it discloses an intention that, as between the beneficiaries, the burden shall be borne differently from the manner provided by the Schedule (In re Worthington). ^[F116] This will, in my opinion, does not disclose any such intention.  

I have had the advantage of reading the review which my brother Dixon has prepared of the decisions governing the construction of ss. 33, 34, and the Second Schedule of the Victorian Administration and Probate Act 1928. I agree that the funeral, testamentary and administration expenses and pecuniary legacies should be borne primarily and entirely by the assets included in the lapsed gift of residue. I agree also with his conclusions as to the incidence of Victorian probate duty and Federal estate duty.  

I would allow both appeals.