Hilder v. Church of England Deaconess' Institution Sydney Ltd. and Ors

[1973] 1 NSWLR 506

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(Judgment by: Street C.J. in Eq.)

Hilder
v. Church of England Deaconess' Institution Sydney Ltd. and Others

Court:

Judge:
Street C.J. in Eq.

Subject References:
Real Property
Lease, under-lease and sub-under-lease of premises
Company being wound up owing rent under sub-under-lease
Merger of lease in fee simple
Competing claims of fee simple owner and under lessee for rent

Legislative References:
Real Property Act, 1900 - ss. 32 (3), 54 (3), 55.

Case References:
Mylne, In re - [1941] Ch. 204.

Judgment date: 6 June 1973

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Judgment by:
Street C.J. in Eq.

This is an originating summons seeking the determination of questions connected with the will of the late Sidney Charles Hilder. The testator died on 5th September, 1969, leaving a will dated 27th February, 1960. A number of incidental matters have arisen in respect of which ques tions are asked. As there is little doubt regarding those incidental matters, I shall confine these reasons to the portions of the will and the circumstances relevant to the principal matter in contest, namely whether two gifts of land are valid charitable trusts.

At the date of his death the testator owned a parcel of six acres of land in Camden known as "Hilsyde", being the balance of a parcel of 10 acres he had held at the date of the will. He disposed of this property in terms that I quote precisely verbatim: "My property known as Hilsyde Hilder Street Camden and the 10 acres of land on which it stands is to pass to the Deaconess' Institute controlled by the Church of England in the Sydney Diocese to be used as Home for retired Deaconesses Nurses or elderly woman."

He also at the date of his death owned another area of 9 acres, being the balance of a parcel of 30 acres that he had held at the date of the will. He disposed of this in the following terms, (I again reproduce the exact passage): "The remaining 30 acres of land at Hilsyde Camden is to be given to the Deaconess' Institute of Sydney Diocess for the use in providing homes for elderly people ..."

The evidence establishes that both at the date of the will and at the date of death there was in existence an unincorporated body known as The Church of England Deaconess' Institution Sydney. There is no dispute but that this unincorporated body is that to which the testator referred in these two gifts in his will. Its objects, as set forth in its constitution, are (and I quote or summarize the relevant provisions):

"5. The Objects of the Institution are:-

(a)

The training of women as Deaconesses Missionaries and for other forms of Christian work within the Church of England such women to engage in religious and charitable work in the Diocese of Sydney and elsewhere and for Missionary work in Australia and elsewhere.

(b)

To visit minister to and relieve the sick and destitute."

Subclauses (c) (d) (e) and (f) relate to the administration of particular homes conducted by the institution. Subclauses (g) and (h) are as follows:

"(g) To give secular and/or religious instruction or education wherever opportunity may offer.

(h) Generally to undertake and engage in all kinds of work of a religious or charitable nature."

Although I have quoted the objects of this institution, it is to be observed that the gifts made under the will are not made to this institution for the pursuit by it of its objects. The objects are thus not of major significance in the resolution of the present dispute. They do, however, denote the context or character of the administration, as distinct from the purpose, prescribed by the testator for the homes he intended to set up. They invest that context or character with a charitable aura. This is at least consistent with the gift being charitable-it is not necessary, in resolving the present contest, to attribute to the nature of the institution any greater significance than this. The purpose prescribed by the testator is the dominant element. This is, in the first instance, "to be used as Home for retired Deaconesses Nurses or elderly woman", and, in the second instance, "for use in providing homes for elderly people".

A preliminary attack is made upon the validity of the first disposition on the ground that it is said to be void for uncertainty in that (a) it is not clear whether the persons for whom the home is to be provided are to be of a particular religious persuasion, and (b) it is not clear whether the participle "retired" qualifies deaconesses, nurses and elderly women, whether it qualifies deaconesses and nurses, or whether it qualifies only deaconesses. I do not regard either of these matters as rendering the purpose void for uncertainty. I fail to see how the absence of a specification of religious persua- sion could introduce an element of uncertainty. On the second aspect of the challenge, although there are, clearly enough, arguments available touching upon whether "retired" qualifies one, two or three of the descriptions of persons mentioned, the resolution of these arguments or doubts can be under taken without the court being driven to the extreme of holding that the description of persons to enjoy this is so uncertain as to render the purpose void on that ground.

I turn, then, to the major point of contest, namely the argument presented to the effect that both of these gifts fail because they are not valid charitable trusts. It is clear enough that each gift is a purpose gift. Equally it is clear that each will fail unless the purpose is charitable, that is to say, unless the specification of purpose constitutes each gift a valid charitable trust.

The evidence establishes that it is practicable to carry the purpose into effect, and this aspect can accordingly be placed aside.

The inquiry is cast back to the familiar preamble to the statute 43 Eliz. 1, c. 4, included in which preamble is a category "the relief of the aged impotent and poor people". It is now clear law that this category is to be construed disjunctively, notwithstanding the conjunctive word "and".

Reliance has been placed upon the decision of the Land and Valuation Court in New South Wales Nursing Service and Welfare Association for Christian Scientists v. Willoughby Municipal Council^[F1]. A question arose in that case as to whether a parcel of land was ratable. The issue to which the learned judge directed attention in one portion of his judgment was whether the trust upon which the Association held the land could be described, within the terms of s. 132 (1) (d) of the Local Government Act, 1919, as amounting to "a public charity". Else-Mitchell J. said^[F2]:

"It must be taken as established that the term 'public charity' is used in s. 132 (1) (d) in a technical sense in conformity with the equitable rules relating to charitable trusts; the decisions on this matter have been collected in McGarvie Smith Institute v. Campbelltown Municipal Council^[F3]. It is also clear that the ownership of land by trustees for a body which is a public charity or upon trusts which are charitable in the legal sense satisfies the requirement denoted by the phrase in the legislation 'land which belongs to any ... public charity' (Joyce v. Ashfield Municipal Council)^[F4]. Accor- dingly, the main, if not the sole, question upon which the claim for exemp- tion from rates depends is whether the trusts defined by the various documents to which I have referred constitute a dedication of the land and buildings thereon to charitable objects, or, more simply, whether the lands are held subject to a charitable trust.

... I do not think that there is a sound analogy between trusts for the relief of the aged and those for the relief of the impotent or sick. It is common knowledge that sickness can beset people in all walks of life, regardless of wealth, and the relief of sickness, as by the establishment and conduct of hospitals, therefore confers a public benefit. But age itself is not a disability- at least, not in modern times-unless it is accompanied by infirmity, disease, poverty, or some other factor which puts an aged person at a disadvantage as compared with other members of the community. Clearly, of course, a trust for the aged wealthy would not be charitable, and probably the same can be said of a trust for aged people who are in sound health. It seems to me, therefore, that before one can hold that a trust for aged people is charitable there must be some element, quality, or characteristic pertaining to the class of aged people, from or in respect of which relief ought in the public interest to be given: not only does this seem to me a matter of common sense and principle, but it is explicitly envisaged by the preamble to the Statute of Elizabeth which refers to 'the relief of the aged' and it needs little argument to show that the healthy and financially stable aged normally need no relief-at least, not simply because they have reached the minimum pensionable age under the Social Services Act. This is not to say that a trust for the aged will be charitable only if it is limited to the aged needy or the aged sick: there are other aspects of age in respect of which it may be for the public benefit to grant relief, for example, to provide domestic help, recrea tional facilities, or even some form of companionship to mollify a life of loneliness or isolation, but these should not be implied by the mere specifica- tion in a trust that it is to provide homes in the sense of separate residences for the accommodation of aged persons."

This decision was applied in a later decision of the Land and Valuation Court in Church of England Property Trust, Diocese of Canberra and Goulburn v. Imlay Shire Council^[F5], and it has been again followed as recently as last month in that court in Trustees of the Church Property for the Diocese of Newcastle v. Lake Macquarie Shire Council^[F6].

It is clear from the earlier portion that I have quoted from the decision in the New South Wales Nursing Service case^[F7] that this line of authority in the Land and Valuation Court cannot validly be distinguished upon the ground that it is confined to rating considerations, or to questions relative only to the Local Government Act. The learned judge has expressly applied to the Local Government Act what he has held to be the general equitable rules relating to charitable trusts, and this line of authority depends upon the basic proposition that a trust to provide homes for aged persons without more is not a valid charitable trust.

The critical aspect of this conclusion is that a trust making provision for the aged will not, on its face, be regarded as for the relief of the aged: in order to qualify as a charitable trust it is necessary, on this approach, for the trust to make provision for the needy aged. This approach requires that the court be able to identify as charitable the particular type of benefit conferred upon the aged by the trust. Specifically, on this approach, a trust to provide homes for the aged would not of itself be charitable-it would be necessary to

find an additional element such as poverty, need, or other adversity justifying a need for relief.

There is a course of authority in England which runs counter to this approach. I need not refer to individual cases, it being sufficient to observe that they are cited in Tudor on Charities, 6th ed. p. 11, both in the text and in the footnotes. More specifically, in the Victorian Full Court in City of Hawthorn v. Victorian Welfare Association^[F8] Smith J. with whom in this regard Pape and Gillard JJ.^[F9] agreed, said: "But a gift made in relief of aged persons, in the sense that it is in relief of the needs arising from old age (such as the need for protection against the dangers and distresses incident to living alone), is, in my view, charitable, unless some limitation of the class of objects deprives it of that character. And it is not necessary, in order that it should be charitable, that those to benefit should be poor or impotent, as well as aged. Doubts have, it is true, been expressed upon this point, but the view stated appears to me to be clearly correct, both in principle and upon the authorities."

I should add a reference to a more recent decision of the Victorian Supreme Court- Re Goodson^[F10] in which it was not disputed that a trust of a house and land to be used "as a home for refined elderly ladies" would qualify as a valid charitable trust. (Cf. also the concession in Re Payling's Will Trusts^[F11] that "the provision of a home for aged persons is a charitable purpose".) The essential contrast between the approach in the English and Victorian cases and the approach in Land and Valuation Court cases is that in the English and Victorian cases a mere trust making provision for the aged can be accepted, without more, as charitable unless there is some additional limitation depriving such trust of a charitable character. For example, a trust expressly limited to wealthy aged, or a trust to provide for a luxury incompatible with an exercise in charity, could be affirmatively recognized as disentitled to fall within the prima facie charitable character of a trust merely making provision for the aged.

The decision of the Victorian Full Court in the City of Hawthorne case^[F12] was cited in the most recent of the cases in the Land and Valuation Court-the Trustees of the Church Property for the Diocese of Newcastle v. Lake Macquare Shire Council^[F13]. The learned Judge there said of the Victorian decision: "True it is that decisions in the Victorian Supreme Court have held that a trust for aged persons without more is charitable, but such a phrase must either be regarded as importing some additional disability, such as poverty or infirmity, or be subject to the qualification that in the adminis- tration of the trust only such aged persons as have some such disability are entitled to benefit thereunder. To state the position in another way, a trust for persons over the ages of 60 in the case of women or 65 in the case of men or of married couples one of whom is of either age, cannot be treated as a charitable trust; a trust in those terms certainly can be so administered as to benefit persons falling within the specification of age who have no disability which the law recognises as imparting a charitable character and that fact would, in my view, operate to deny to such a trust the quality of a charitable trust."

I regret to find myself in respectful disagreement with the line of authority in the Land and Valuation Court and in particular with this last quoted passage. The second of the two gifts in the present will presents the problem in its ultimate simplicity. This is a gift "for use in providing homes for elderly people". There is no specification of any additional qualification that the elderly people must fulfil in order to be entitled to enjoy benefits under this trust. Nor is there any limation imposed upon the administration of the trust which would meet the requirements of the last quoted extract from the judgment in the Diocese of Newcastle case^[F14]. The law as laid down in the line of authority in the Land and Valuation Court would deny to this gift, as well as to the earlier gift, the character of a charitable trust. I do not subscribe to this view of the law.

The trend of authority in England marks a developing acceptance of the proposition that a trust for aged persons is itself charitable. The court is entitled to recognize a clear tendency within the community to regard elderly people as being entitled to look to the public purse for assistance by virtue of their age alone. It is interesting to observe that in England a means test as a basis for entitlement to age pensions has been abolished. It may perhaps be more than coincidental that, concurrently with this trend of social awareness in England, the courts have tended towards disregarding the require- ment of poverty or adversity as being cumulative upon age in order to characterize a trust as charitable.

The court is entitled to recognize also a similar trend to social awareness in this country. I regard it as legitimate to note the currency, but not necessarily universality, of opinion that the means test as an element of entitlement to an age pension should be abolished. This reflects recognition within the com- munity that age, standing alone, and specifically age without the added element of poverty, justifies community acceptance of responsibility to provide from the public purse for the alleviation of all the informities that can be taken for granted as necessarily attendant upon increasing age.

These considerations have some relevance in supporting the conclusion that the trusts in the present will are charitable. I do not, however, base my con- clusion upon them. In my view there is a sufficient basis within the English and Victorian cases to support my taking the ultimate step of holding that the baldly stated second trust in this case ("for use in providing homes for elderly people") is a valid charitable trust. This conclusion also extends to the first trust.

Order accordingly.

Solicitors for the plaintiff (the widow of the testator, the executrix): Matthew McFadden, Somerfield & Co.

Solicitors for the first respondent (the beneficiary under the trusts): Roxburgh & Co.

Solicitors for the second respondent (representing the next of kin of the testator): C. P. White & Sons.

Solicitor for the third respondent (the Attorney-General in and for the State of New South Wales): R. J. McKay (Crown Solicitor).

O. M. L. DAVIES,

Barrister.