Re Frigo; ex parte Missionaries of the Sacred Heart
[2017] QSC 81
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- Unreported Judgment
- Re Frigo; ex parte Missionaries of the Sacred Heart[2017] QSC 81
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Re Frigo; ex parte Missionaries of the Sacred Heart[2017] QSC 81
Re Frigo; ex parte Missionaries of the Sacred Heart[2017] QSC 81
SUPREME COURT OF QUEENSLAND
CITATION: | Re the will of Egidio Benito Frigo; Ex Parte Missionaries of the Sacred Heart [2017] QSC 81 |
PARTIES: | RE THE WILL OF EGIDIO BENITO FRIGO EX PARTE MISSIONARIES OF THE SACRED HEART |
FILE NO/S: | BS No 2728 of 2017 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 15 May 2017 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 27 April 2017 |
JUDGE: | Martin J |
ORDER: |
|
CATCHWORDS: | EQUITY – TRUSTS AND TRUSTEES – EXPRESS TRUSTS CREATED BY WILL – DISPOSITIONS COUCHED IN PRECATORY TERMS – where the testator left the residue of his estate to a congregation within the Catholic Church – where the disposition was made to the congregation “as an educational institution” – where the Attorney-General intervening contends that the disposition was for a charitable purpose – whether the disposition was for a charitable trust or an absolute gift in favour of the beneficiary Byrnes v Kendle (2011) 243 CLR 253 CGU Insurance Ltd v One.Tel Ltd (in liq.) v Commissioner of Taxation (2010) 242 CLR 174 Commissioner of Stamp Duties v Jolliffe (1920) 28 CLR 178 Hammat v Chapman (1914) 14 SR (NSW) 416 National Trustees Executors and Agency Co of Australasia Ltd v O'Connor (1919) 27 CLR 60 Public Trustee v Young (1980) 23 SASR 239 Re Burton [1965] NZLR 712 Re Fairlie-Jones (2013) 116 SASR 172 Re Hamilton [1895] 2 Ch 370 Re Kipping [1948] St R Qd 247 Re the Will of Logan [1993] 1 Qd R 395 Re Will of Comstock; Comstock v Worrall [1918] VLR 398 Tito v Waddell (No 2) [1977] Ch 106 |
COUNSEL: | R M Treston QC for the applicant C Cater (sol.) for the Attorney-General intervening |
SOLICITORS: | Mullins Lawyers for the applicant G R Cooper, Crown Solicitor for the Attorney-General intervening |
- The Missionaries of the Sacred Heart (‘MSC’[1]) is an international congregation of priests and brothers within the Catholic Church. This application concerns the proper construction of the will of Egidio Frigo and whether he left property to MSC as a gift or whether it has been left subject to a charitable trust.
The terms of the will
- In his will, Mr Frigo made a number of small gifts, but this application is concerned with the disposition of his residual estate. In clause 8, he deals with a large property at Bunya called Yallambi, and another property at Lawnton. The relevant terms of the will are set out below.
- Mr Frigo died in 1984. In December 1985, Derrington J declared that the term “Mission of the Sacred Heart”, which appears in clause 8 of the will, should be construed as referring to “the Corporation of the Society of the Missionaries of the Sacred Heart”.
- The will is brief. It contains the usual direction about payment of debts and provides in clause 2:
“ … pay all my just debts … so that the whole of the amount thereof shall be paid from any monies shares and securities contained in my estate and from the proceeds of the sale of the following: –
- plant and equipment pertaining to my building business particularly all plant and equipment situated at Trinder Street, Ashgrove, Brisbane in the State of Queensland
- all plant and equipment items located at “Yallambi” with the exception of that equipment which my trustee considers necessary for the conduct and maintenance of the property as a farm together with my personal effects and the furniture
- the property situated at Trinder Street, Ashgrove aforesaid.”
- In clauses 3 and 4, some personal bequests and the reasons for them are set out.
- In clause 5, the testator directs his trustee “to dispose of my personal effects at her absolute discretion.”
- In clause 6, he directs that his trustee may purchase any assets from the estate if she so desires.
- Clause 7 of the will provides:
“I give my house and property known as ‘Yallambi’ together with the contents and all adjoining land situate at Farm Road, Bunya, aforesaid to my Executrix upon trust for Laurence Hayden and Florence Claire Hayden for their lives or for so long as either one of them shall reside at the aforesaid property. I direct my trustee to maintain property situated at Paisley Drive, Lawnton, Brisbane in the State of Queensland to apply the income thereof towards the payment of rates, taxes, general upkeep and maintenance of the farm property ‘Yallambi’. Upon termination of the aforesaid life tenancy I direct that the property at ‘Yallambi’ and the property situated at Paisley Drive, Lawnton, shall become part of my residuary estate.”
- Clause 8 of the will provides:
“I give the residue of my estate to my trustee to:
- transfer the property known as ‘Yallambi’ and the property at Paisley Drive, Lawnton, together with the residue of my estate to the Mission of the Sacred Heart as an educational institution and that the income from the property situate at Paisley Drive, Lawnton, together with the residue of the estate be appropriated towards the maintenance and upkeep of the said property ‘Yallambi’.”
- The life tenancy concluded in November 2015.
The construction of clause 8
- The determination of this application depends upon the proper construction of clause 8. As with most exercises of construction, the relevant words must be read in context. Thus, the terms of clause 8 must be read in the light of the rest of the will.
“The task is to look at the whole of the will, as well as the testator’s circumstances, as a guide to the meaning of the language that the testator has used.”[2]
- If a testator wishes to create a charitable trust then words such as: “I declare that my trustee shall stand possessed of the residuary estate … upon trust for [charity]” are often used. Many formulae have been advanced for the determination of whether a trust has been created. For example: “ … whether in the circumstances of the case, and on the true construction of what was said and written, a sufficient intention to create a true test has been manifested.”[3]
- I observe that this is not a “home-made” will. In the application before Derrington J in 1985, there was evidence that the will had been prepared by a solicitor in accordance with the instructions he had received. This is a relevant consideration when considering the difference in the choice of words used in clauses 7 and 8.[4]
- The applicant draws attention to the difference in language used in the will where, for example, in clause 7 the life interest is created in the usual way by giving Yallambi etc. “to my executrix upon trust for Laurence Hayden and Florence Claire Hayden for their lives”. This should be contrasted with the words in clause 8 where no reference is made to a trust. Rather it directs his trustee to “transfer the property known as ‘Yallambi’ and the property at Paisley Drive, Lawnton, together with the residue of my estate to the Mission of the Sacred Heart as an educational institution …”.
- While the absence of words such as “upon trust” is important, it is not definitive. Its importance in the construction of the clause is elevated when compared to the presence of those words in clause 7. That difference is instructive. It shows a deliberate use of language designed to create a trust in one clause but not in another.
- Other terms which might be expected to be found in a will creating a trust are also absent. Subject to the words “as an educational institution” which I deal with below, there is no provision setting out the terms of the trust or the powers of the MSC as “trustee”.
- The direction to the executor is “to transfer” the property to the MSC. The executor is, for the purposes of that direction, a bare trustee whose only obligation is to transfer the property to the beneficiary.[5]
- There are two other parts of clause 8 which require consideration:
- What is the import of the words: “as an educational institution” which follow the reference to the applicant as recipient?
- What is the effect of the direction that the income from the Lawnton property be used for the maintenance and upkeep of Yallambi?
Is there a trust?
- Before I deal with those matters, I will consider the more general arguments advanced on behalf of the Attorney-General. The Attorney-General accepted that the construction advanced by the applicant was open, but went on to submit that the better view was that a trust was created. The argument commences with the contention that “courts have said that there is a strong presumption of an intention to create a trust in wills” and relies on Hammat v Chapman.[6] The decision in that case is not authority for that broad proposition. It is, like so many cases in this area, a case which depends upon the particular terms of the will. Unless the words used in a will are practically identical to those considered in another case, there is little to be gained from attempting comparisons.[7] Even where the words are “more or less similar” to those in the will at hand, the will must be construed within its own set of facts and circumstances.[8]
- The argument for the Attorney-General then proceeds with this assertion: “The onus is on those who seek to prove a contrary intention and strong evidence is required for the purpose.” It is not clear what the “contrary intention” is, but it seems that it is a reference to arguing that a will does not create a trust where the alleged settlor did not intend to create it. The authority cited in support of this contention is Commissioner of Stamp Duties v Jolliffe.[9] That decision considered the actions of a person who sought to avoid those provisions of the Queensland Government Savings Bank Act 1916 which prevented a person from having more than one account in the Bank, but allowed additional accounts in the same name if those accounts were held in trust for other persons. Mr Jolliffe had an account in his own name and, solely for the purpose of procuring interest which would not otherwise have been paid, opened another account in his name but declared that he did so as the trustee of his wife. Knox CJ and Gavan Duffy J held that Mr Jolliffe was not precluded from averring that he was not the trustee of the money in that account. The case was argued on the limited basis of “whether the effect of the Queensland Government Savings Bank Act 1916 and the written documents in evidence conclude the respondent from averring that he was not trustee of the money in question”. Their Honours went on to say that they were bound to assume for the purpose of the appeal that it was not the real intention of the respondent to make a gift to his wife, but that the money was placed in the account for the sole purpose of procuring interest which would not otherwise have been available to him.
- The Commissioner of Stamp Duties, in order to succeed, had to show that the money belonged to Mr Jolliffe’s widow and, therefore, formed part of her estate. In other words, the Commissioner had to show that a trust was created by the respondent in favour of his wife. The trial judge had found that the account had been created solely for the purpose of obtaining the additional interest. Knox CJ and Gavan Duffy J said:
“In our opinion the finding of Lukin J on the facts is an insuperable obstacle to the appellant in seeking to establish this proposition, which postulates that a trust was created by the respondent in favour of his wife. We know of no authority, and none was cited, which would justify us in deciding that by using any form of words a trust can be created contrary to the real intention of the person alleged to have created. In our opinion the law is accurately stated in Lewin in Trusts, 11th ed., at p. 85: “It is obviously essential to the creation of a trust, that there should be the intention of creating a trust, and therefore if upon a consideration of all the circumstances the Court is of opinion that the settlor did not mean to create a trust, the Court will not impute a trust where none in fact was contemplated.”[10]
- In what has been described as a powerful dissent,[11] Isaacs J, held that Mr Jolliffe had constituted himself as trustee for his wife. He said:
“In my opinion, shortly stating it, the actual words used are, in the circumstances, equivalent to the words “I hereby declare myself to be trustee for my wife.” If he had used those words, there would, as I read the cases, have been an end of the matter. There would have been an immediate transfer in equity of the property ...”[12]
“His claim in Court is that all along he was perpetrating what he must have known to be a fraud: that he all along had the secret intention of repudiating the trust he averred. If, after completely in form and for a purpose now effectuated, the law permits him to deny the effect of his explicit statement of trusteeship – to deny it, that is, as against his wife’s estate – merely because of his secret inconsistent mental attitude, then there is no security for any declaration of trust help ever formal and explicit.”[13]
- The decision is not authority for the contention advanced nor does the reasoning of the majority have any force. The reasoning of Knox CJ and Gavin Duffy J has been disapproved in Byrnes v Kendle.[14] Gummow and Hayne JJ (with whom French CJ agreed) said:
“What is important for the present case is that Jolliffe should not be regarded as retaining any authority it otherwise may have had for the proposition that where the creation of an express trust is in issue, regard may be had to all the relevant circumstances not merely to show the intention manifested by the words and actions comprising those circumstances, but to show what the relevant actor meant to convey as a matter of “real intention”.”[15]
- The parties had agreed that the only issue I needed to consider was whether or not a trust had been created. There were submissions made about the question of whether there might be a charitable gift, but I was told that, on the basis upon which the parties had agreed that this should be argued, I need not consider that matter.
- The following factors lead me to the conclusion that, had clause 8 concluded after the words “Mission of the Sacred Heart”, then there would have been no question but that the properties were to be a gift:
- The will was drawn by a solicitor.
- Clause 7 contains language which was clearly designed to create a trust.
- Different language is used in clause 8.
- Clause 8 requires the trustee to “transfer” the properties to the applicant.
- The clause contains no terms of any trust nor the powers of the MSC if it were a trustee.
The effect of subsequent words
- On that basis, I turn to consideration of the effect of the words: “as an educational institution” and the “direction” that “income from the property situate at Paisley Drive, Lawnton, together with the residue of the estate be appropriated towards the maintenance and upkeep of the said property ‘Yallambi’”. Do they, in effect, serve to convert the gift into a trust or something else?
- A well accepted principle was discussed in National Trustees Executors and Agency Co of Australasia Ltd v O'Connor,[16] where Rich J said:
“It is a well-known rule of construction that, if there be a clear gift, subsequent words in order to defeat such a gift must be reasonably clear or sufficiently certain (Randfield v Randfield) and it must not be forgotten that the court is “naturally in favour of vesting” (Re Litchfield; Horton v Jones). The question, then, is whether the subsequent clause in this will indicates with reasonable certainty the intention of the testator to cut down the absolute gift already made.”[17] (citations omitted)
- To similar effect is the statement by Macrossan CJ (with whom Mansfield SPJ and Sheehy J agreed) in Re Kipping:[18]
“Now, the law is clear that if there be a clear gift it is not to be cut down by anything subsequent in the will which does not with reasonable certainty indicate the intention of the testator to cut it down. That is a statement of the law by Lord Campbell, in the case of Randfield v Randfield … which is adopted by Griffith CJ in Peter v Shipway …”[19] (citations omitted)
- So far as the words “as an educational institution” are concerned, they should be read as little more than a description of the MSC. It was, among other things, such an institution. It can also be read as providing a reason for the making of the gift but it does not, with reasonable certainty, go so far as to dissipate the nature of the original gift.
- The words “income from the property situate at Paisley Drive, Lawnton, together with the residue of the estate be appropriated towards the maintenance and upkeep of the said property ‘Yallambi’” are in a different category. The property at Lawnton was the subject of the gift in the first part of clause 8. In this case, the direction to use the income is not directed to the trustee because the trustee has already been directed to transfer the properties to the applicant.
- The context of these words should be seen as constituting a request or suggestion or, perhaps, a demand. A demand, like the expression of a wish, desire or request, can be regarded as merely precatory.[20] As Hardie Boys J said in Re Burton,[21] “if words in a will are precatory only, effect cannot be given to them.”[22] Further, these words are not reasonably clear enough or sufficiently certain to cut down the absolute gift.
Orders
- I make the following orders:
- Upon the proper construction of the Will of Edigio Benito Frigo dated 1 October 1984, the applicant is beneficially entitled to the gift in clause 8 of the will and in respect of which it has all the powers of an absolute owner.
- The applicant’s costs of and incidental to this application be paid on an indemnity basis out of the deceased’s estate.
Footnotes
[1] This is the usual abbreviation used for the congregation. It comes from the Latin name of the congregation: Missionarii Sacratissimi Cordis.
[2]Public Trustee v Young (1980) 23 SASR 239 at 247.
[3]Tito v Waddell (No 2) [1977] Ch 106 at 211.
[4] See, for example, Re the Will of Logan [1993] 1 Qd R 395.
[5] For the duties of a bare trustee, see CGU Insurance Ltd v One.Tel Ltd (in liq.) v Commissioner of Taxation (2010) 242 CLR 174 at 182-183.
[6] (1914) 14 SR (NSW) 416.
[7]Re Will of Comstock; Comstock v Worrall [1918] VLR 398.
[8]Re Hamilton [1895] 2 Ch 370 at 373.
[9] (1920) 28 CLR 178.
[10] At 181.
[11] John Mowbray et al, Lewin on Trusts (Sweet & Maxwell, 17th ed, 2000) 81 n 6.
[12] At 192.
[13] At 193.
[14] (2011) 243 CLR 253.
[15] At 277.
[16] (1919) 27 CLR 60.
[17] At 69.
[18] [1948] St R Qd 247.
[19] At 254.
[20]Hammat v Chapman (1914) 14 SR (NSW) 416 at 418.
[21] [1965] NZLR 712.
[22] At 713, adopted by Gray J in Re Fairlie-Jones (2013) 116 SASR 172.