Royal North Shore Hospital of Sydney v. Attorney-general (NSW)60 CLR 396
(Judgment by: STARKE J)
Between: ROYAL NORTH SHORE HOSPITAL OF SYDNEY
And: ATTORNEY-GENERAL (NSW)
Extension of technical education in State schools
Bequest for essay
Failure of bequest
Judgment date: 19 August 1938
Dr. Philip Edward Muskett by his will established what he called the "Philip Muskett Biennial Bequest." It strikes me as a vain and worthless gift but the question is whether it constitutes a good charitable trust.
The objects of the bequest were to popularize and promote the principles which the testator had advocated in his published writings or lectures:(a) The adoption of measures to prevent the deaths of so many Australian infants. (b) The improvement of the Australian national food habits. (c) The extension of the teaching of technical education in State schools.
The will, after providing for certain charitable bequests and a notification fund which I shall mention later, directed the trustees of the testator's will to stand possessed of "my residuary trust fund" upon trust to invest the same and apply the income for the perpetuation of an award to be termed "The Philip Muskett Biennial Bequest." The bequest was to be competed for in the form of an essay in every second year after the year of the testator's death and was open to any person of Australian birth or who had resided in any part of Australia for more than half his life. The administration of the bequest was entrusted to the committee for the time being of the Sydney Mechanics School of Arts and it was required to make an award naming the winner of the competition having regard to various considerations set forth by the testator in his will.
Firstly, it was contended that the gift was invalid because the third object of the trust was not for a charitable but a political object (Bowman v Secular Society Ltd; [F38] Roman Catholic Archbishop of Melbourne v Lawlor [F39] ).
The third object of the trust is not for the attainment of any political object. It is not for the promotion of technical education in State schools by political means or activities. It aims at assisting a form of education carried on in State schools. As well might it be said that contributions toward the financial burdens of a State were political in object, yet they have always been regarded as charitable bequests.
The next contention was that the disclaimer of the trusts by the Sydney Mechanics School of Arts invalidated the bequest. It is impracticable to carry out the objects of the testator in the manner prescribed by him. It does not follow that the bequest is frustrated unless the breakdown of the machinery of the trust is such an essential part of the gift that the general purposes of charity cannot be distinguished and the machinery of the trust contains the only purpose intended or contemplated by the testator (Biscoe v Jackson [F40] ). "The authorities," said Parker J. in In re Wilson; Twentyman v Simpson, [F41] "must be divided into two classes. First of all, we have a class of case where, in form, the gift is given for a particular charitable purpose, but it is possible, taking the will as a whole, to say that, notwithstanding the form of the gift, the paramount intention, according to the true construction of the will, is to give the property in the first instance for a general charitable purpose rather than a particular charitable purpose, and to graft on to the general gift a direction as to the desires or intentions of the testator as to the manner in which the general gift is to be carried into effect. In that case, though it is impossible to carry out the precise directions, on ordinary principles the gift for the general charitable purpose will remain and be perfectly good, and the court, by virtue of its administrative jurisdiction, can direct a scheme as to how it is to be carried out. In fact the will will be read as though the particular direction had not been in the will at all, but there had been simply a general direction as to the application of the fund for the general charitable purpose in question. Then there is the second class of cases, where, on the true construction of the will, no such paramount general intention can be inferred, and where the gift, being in form a particular gift,-a gift for a particular purpose-and it being impossible to carry out that particular purpose, the whole gift is held to fail. In my opinion, the question whether a particular case falls within one of those classes of cases or within the other is simply a question of the construction of a particular instrument."
As the Sydney Mechanics School of Arts disclaims the supervision and management of the essay and award scheme contemplated by the testator, it is impossible to carry out those precise directions or to substitute any other institution for that chosen and particularly named by the testator. But the paramount general intention of the will is plain upon the words of the will, namely, to popularize and promote the three principles which the testator has always advocated. As these are charitable purposes the gift remains and is perfectly good. It may accordingly be administered cy-pr?by virtue of the administrative jurisdiction of a court of competent jurisdiction. A further contention was based upon the testator's direction as to the income of the residuary trust fund. One-third of the annual income of the fund was to be accumulated at compound interest, to the intent that such accumulations should be added to the corpus of the fund and become part thereof, and two-thirds of the annual income arising from the fund was devoted to the award mentioned in the will. It was conceded that charities were not excepted from the statutory provisions restricting accumulation. (See Conveyancing Act 1919 (N.S.W.), s. 31). But it was suggested that one-third of the income was, on the terms of the will, perpetually accumulated and never devoted to any charitable purpose.
It is a sufficient answer to the suggestion that the accumulations are added to the charitable fund, and two-thirds of the income of that fund are devoted to the testator's essay and award scheme. The income cannot be accumulated beyond the limit fixed by the Act. But the fund is charitable and in such a case the authorities warrant the proposition that a competent court may settle a scheme for the application of the accumulation beyond the prescribed limit (Martin v Maugham [F42] ).
The notification fund already mentioned may be here considered. The testator directed the trustees to set aside a sum of PD1,000 under the designation of the "notification fund" and apply the income towards the expense of the essay and award scheme. This income was supplemented by the addition annually of the sum of PD1 at the end of the first year from the appropriation of the fund and so on in arithmetical progression until the maximum income from the fund and the additions reached a level of PD100. The trustees of the will were authorized to entrust the insertion of the notification to the Sydney Mechanics School of Arts and to make the necessary payments to the treasurer for the time being of that institution. The School of Arts, as before stated, disclaimed the whole trust, and the direction of the testator consequently becomes impracticable in the manner contemplated by him. But, though the particular direction cannot be carried out, the notification fund is nevertheless for carrying out the general charitable purposes of the will. The gift, therefore, remains and may be administered cy-pr?
Lastly, there is a clause in the will which gives to the Sydney Mechanics School of Arts out of the Philip Muskett Biennial Bequest a sum of PD10, half to be devoted to the purchase of works of special utility for the reference library of the institution, and the other half for the general purposes of the institution. In my opinion the gift fails, either because it is part of the essay and award scheme which is now impracticable, or because it is a gift to the institution as the administrator of the fund, which position it now disclaims. But there is no intestacy; the gift is available for the general charitable purpose of the testator and may be administered accordingly.
Subject to variations which will be stated by the Chief Justice, the appeal should be dismissed.