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  • Unreported Judgment

Maher v Attorney-General

 

[2011] QSC 61

 

 

SUPREME COURT OF QUEENSLAND  

PARTIES:

FILE NO/S:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

DELIVERED ON:

2 March 2011

DELIVERED AT:

Brisbane 

HEARING DATE:

23 February 2011

JUDGE:

Philippides J

ORDER:

The orders of the Court are that:

1. On the proper construction of the will of BRIAN JOSEPH CRANLEY deceased dated 14 March 1979, the gift referred to in clause 5 is a gift of general charitable intention.

2. The gift in clause 5 of the deceased’s will is to be applied in accordance with the following scheme:

(a) that the said gift be paid by the applicant to the Corporation of the Trustees of the Order of the Sisters of Mercy for the purposes of Mercy Family Services and that receipt of the treasurer  or proper officer of the Sisters of Mercy be a sufficient discharge to the applicant;

(b) that the Corporation of the Trustees of the Order of the Sisters of Mercy hold the said funds on the terms imposed pursuant to this scheme;

(c) that the said funds be applied by the Corporation of the Trustees of the Order of the Sisters of Mercy for the charitable purposes of Mercy Family Services. 

3. The costs, of and incidental to this application be paid out of the estate of the deceased on an indemnity basis. 

4. All parties have liberty to apply.

CATCHWORDS:

Charities – Charitable gifts and trusts – validity and practicality – gift to charitable institution – institution ceasing to exist – whether gift lapsing – whether general charitable intent

Trusts Act 1973 (Qld), s 5, s 96(1), s 106(a).

Attorney-General (NSW) v Perpetual Trustee Co Limited (1940) 63 CLR 209

Public Trustee of Queensland v Attorney-General for the State of Queensland [2009] QSC 353

Public Trustee of Queensland (as executor of the Will of Margaret McNab Musson, deceased v Rutledge and others [2010] QSC 379

Re Tyrie, deceased (No 1) (1972) VR 168

SOLICITORS:

de Groots for the applicant

Crown Law for the respondent

PHILIPPIDES J:

Background

[1] The deceased died on 28 April 2010 having never married and without issue. He left a will dated 14 March 2009. The grant of probate issued by the Supreme Court confirming the deceased’s date of death and providing a copy of the deceased’s will is exhibited to the affidavit of Christine Mary Maher. The deceased’s will appointed his brother as his executor. However, the deceased’s brother predeceased the deceased.  The deceased’s will also appointed the members for the time being of the firm Corrs Chambers Westgarth as his substitute executor.  The applicant was at the date of death a member of the firm Corrs Chambers Westgarth and was authorised by the managing partner of Corrs Chambers Westgarth to obtain a grant representing the members of the firm and to conduct the administration of the deceased’s estate.  The grant of probate subsequently issued to the applicant as substituted executor.

[2] The administration of the estate has been completed save for the final distribution. The value of the estate of the deceased is approximately $554,000, consists of funds invested through the applicant’s solicitors’ trust account.

[3] Clause 5 of the deceased’s will provides for the distribution of the residue of his estate and states that the residue is to be held on trust for:

“the Mother-General or Sister in Charge for the time being of THE CORPORATION OF THE TRUSTEESE OF THE ORDER OF THE SISTERS OF MERCY in the State of Queensland for the religious charitable purposes of ST VINCENT’S ORPHANAGE situated at Nudgee, Brisbane aforesaid conducted by the said Corporation and I DECLARE that the receipt of the Mother-General or Sister in Charge or other proper officer for the time being shall be a good and sufficient discharge to my trustees.”

[4] As at the date of the deceased’s death the Corporation of the Trustees of the Order of the Sisters of Mercy was in existence, however the specific purpose for which the deceased intended his estate to be applied, being the purposes of St Vincent’s Orphanage, was not in existence.

History of St Vincent’s Orphanage

[5] The history of the institution of St Vincent’s Orphanage operated under the auspices of the Corporation of the Trustees of the Order of the Sisters of Mercy as deposed to in the affidavit of Sister Mary King may be summarised as follows:

St Vincent’s Orphanage at Nudgee operated under that name from approximately 1867 until 1935;

In or about 1935 an approach was made to the Sisters of Mercy by the State Children Department to alter the name of the Orphanage;

In or about 1935 a change of name from St Vincent’s Orphanage to St Vincent’s Home for Children was effected;

Over time there was a change in the understanding of best practices for children in care moving from dormitory style accommodation to smaller suburban home settings;

In the early 1992 various programs concerning the care of children operated by the Sisters of Mercy were incorporated in one organisation called Mercy Family Services;

The operations of St Vincent’s Orphanage and subsequently St Vincent’s Home for Children were incorporated into the new entity, Mercy Family Services.

[6] Accordingly, the original entity of St Vincent’s Orphanage has evolved into the current entity Mercy Family Services.

Submissions on behalf of the applicant

[7] The applicant submitted that Mercy Family Services were correctly be identified as the successor institution of the beneficiary named in the deceased’s will, being St Vincent’s Orphanage.

[8] The applicant sought the consent of the Attorney General to effect the distribution of the estate accordingly.  The Attorney General was unable to accept the proposal of an informal administration and, as such, the applicant requires the order of the court to validly effect the distribution of the residue of the estate thereby completing its administration. The Attorney-General has provided written submissions in which it indicates that the application of the executor is not opposed.

The lapse rule and exceptions

[9] The general rule is that where a testator has made a gift to a charitable body which has been ceased to exist prior to the testator’s death, as has occurred in this case, the gift lapses unless:

(i)the testator has shown a general charitable intention, or

(ii)there is another institution which can be considered to be the successor of the named charitable body. (see Re Tyrie, deceased (No 1) (1972) VR 168 at 177-178)

[10] Where a trust is found to be charitable it may be applied cy-pres (as near as possible to the original purpose).

[11] I accept the submission that on the plain meaning of the words used in clause 5 of the deceased’s will, a general charitable intention exists with the deceased’s wider purpose being to benefit the religious purposes of the Sisters of Mercy: see Attorney-General (NSW) v Perpetual Trustee Co Limited (1940) 63 CLR 209.

[12] In Public Trustee of Queensland v Attorney-General for the State of Queensland [2009] QSC 353, Ann Lyons J identified four exceptions to the lapse rule (see also Public Trustee of Queensland (as executor of the Will of Margaret McNab Musson, deceased v Rutledge and others [2010] QSC 379). Of relevance in this case are exceptions two and four:

  1. The second exception being if at the testator’s death there existed another institution which has taken over the work performed by the original body and can properly be regarded as the successor of the named institution, and the dominant intention of the testator was wide enough to allow the gift to take effect in favour of a successor institution, then the gift would take effect in favour of that successor institution. (This is not an instance of cy-pres but merely requires an order by way of administrative scheme that the money e paid to the successor institution.)
  2. The fourth exception being that upon a proper interpretation of the will, the gift is not made to a particular named charitable institution but is a gift to a particular charitable purpose, it may be upheld if that purpose remains capable of fulfilment.  There is no requirement that it be a true successor institution and a cypres scheme is not required.

[13] As mentioned, St Vincent’s Orphanage no longer existed at the time the testator signed his will.  The successor institution Mercy Family Services conducts its operations from the site of the former operations of the orphanage site at Nudgee.  I am satisfied on the basis of the material before the Court that it delivers the services formerly offered by St Vincent’s Home for Children, together with a further range of services designed to meet the needs of children young people and families.  Mercy Family Services also provides assistance to former residents of St Vincent’s Home for Children.  It is thus apparent that the Mercy Family Services operates similar and expanded care and housing services from the site as well as other sites around Brisbane.  Given that I am satisfied that Mercy Family Services is the successor institution, the second exception referred to above is met and the application should succeed.

[14] Exceptions 2 saves the deceased’s gift in clause 5 from lapsing such that the deceased’s intention of gifting his estate to charity can still be fulfilled by a direction of the Court that the funds be applied by the Sisters of Mercy for the charitable purposes of Mercy Family Services.

[15] Under section 96(1) Trusts Act 1973 (Qld), any trustee may apply upon a written statement of facts to the Court for directions concerning any property subject to a trust, or respecting the management and administration of that property or respecting the exercise of any power or discretion vested in the trustee.  The term “trustee” as defined in section 5 Trusts Act 1973 (Qld) includes a personal representative. Accordingly, the applicant, as personal representative of the deceased’s estate being a trustee for the purposes of the Trusts Act, is entitled to make application to the Court for directions pursuant to section 96.

[16] Further, pursuant to s 106(a) Trusts Act 1973 (Qld) the Court may, upon application under this section, by an order in respect of any charitable trust, give directions in respect of the administration of the trust.

[17] Pursuant to that provision the applicant seeks the order of the Court that the gift referred to in clause 5 is a gift of general charitable intention and that the gift in clause 5 of the deceased’s will can be paid by the applicant to the Corporation of the Trustees of the Order of the Sisters of Mercy for the purposes of Mercy Family Services on the basis that Mercy Family Services is a successor institution to St Vincent’s Orphanage which was named as the intended recipient of the funds and, as such, falls within the accepted exceptions to the lapse rule as recently affirmed in the decision of Public Trustee of Queensland v Attorney General for the State of Queensland as outlined above.

[18] In the circumstances, I make an order in terms of the draft order that has been filed with this application.

[19] The orders of the Court are that:

  1. On the proper construction of the will of BRIAN JOSEPH CRANLEY deceased dated 14 March 1979, the gift referred to in clause 5 is a gift of general charitable intention;
  2. The gift in clause 5 of the deceased’s will is to be applied in accordance with the following scheme:
  1. that the said gift be paid by the applicant to the Corporation of the Trustees of the Order of the Sisters of Mercy for the purposes of Mercy Family Services and that receipt of the treasurer  or proper officer of the Sisters of Mercy be a sufficient discharge to the applicant.
  2. that the Corporation of the Trustees of the Order of the Sisters of Mercy hold the said funds on the terms imposed pursuant to this scheme.
  3. that the said funds be applied by the Corporation of the Trustees of the Order of the Sisters of Mercy for the charitable purposes of Mercy Family Services.
  1. The costs, of and incidental to this application be paid out of the estate of the deceased on an indemnity basis. 
  2. All parties have liberty to apply.
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Editorial Notes

  • Published Case Name:

    Maher v Attorney-General for the State of Queensland & Anor

  • Shortened Case Name:

    Maher v Attorney-General

  • MNC:

    [2011] QSC 61

  • Court:

    QSC

  • Judge(s):

    Philippides J

  • Date:

    02 Mar 2011

Litigation History

No Litigation History

Appeal Status

No Status