Estate of Enid Helena Ryan, Re [2013] QSC 203

SUPREME COURT OF QUEENSLAND CITATION: Re the Estate of Enid Helena Ryan [2013] QSC 203 PARTIES: THE PUBLIC TRUSTEE OF QUEENSLAND as Administrator of the Estate of ENID HELENA RYAN, deceased (applicant) v YOUNG ANIMAL PROTECTION SOCIETY INCORPORATED (first respondent) and OXFAM AUSTRALIA formerly, COMMUNITY AND ABROAD (second respondent) and WORLD VISION AUSTRALIA (third respondents) and ANGLICAN CHURCH PROPERTY TRUST DIOCESE OF SYDNEY in its own right and as trustee for the ANGLICAN CHURCH DIOCESE OF SYDNEY CHRISTIAN EDUCATION BUILDING FUND (fourth respondents) and BIBLE SOCIETY AUSTRALIA (fifth respondents) and ATTORNEY-GENERAL FOR QUEENSLAND (sixth respondent) and THE PUBLIC TRUSTEE OF QUEENSLAND AS TRUSTEE OF THE QUEENSLAND COMMUNITY FUND (seventh respondent) FILE NO/S: 5039 of 2013 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON: 7 August 2013 DELIVERED AT: Brisbane HEARING DATE: 31 July 2013 -- 1 of 5 -- 2 JUDGE: Philippides J ORDER: Order and directions as per initialled draft order COUNSEL: R T Whiteford for the applicant SOLICITORS: Official Solicitor to the Public Trustee for the applicant Crown Law for the sixth respondent Background [1] The deceased died on 29 October 2006, a widow and without children. Her last will is dated 8 December 1998. The nominated executors renounced and the Public Trustee obtained an Order to Administer on 19 April 2007. All that remains to complete administration of the estate is to set up certain charitable trusts, the pecuniary legacies having been paid and a family provision claim having been settled. [2] The applicant, the Public Trustee of Queensland, seeks a declaration that, upon the proper construction of the will of the deceased Enid Helena Ryan, the executor‟s discretion conferred by cl 7 thereof (as to the recipient of charitable gifts) is enlivened. Additionally, a direction is sought that the executor‟s proposed exercise of that discretion is proper. While the application for the declaration is made in the Court‟s inherent jurisdiction, the application for the direction is made pursuant to s 134 Public Trustee Act 1978. Provisions of the Will [3] Clause 5.11 of the will left the rent from her property at Goolwa, South Australia to friends for at least five years,1 then directed that: “… my Trustee is to sell the trust property and hold the proceeds for the Public Trustee of Queensland as Trustee for the Queensland Community Foundation … to be held UPON PERPETUAL TRUST called ENID HELENA RYAN TRUST FUND (the „Trust Fund‟) to apply the income of the Trust Fund as follows: (a) a 2/10 share TO the YOUNG ANIMAL PROTECTION SOCIETY INCORPORATED .. for the general charitable purposes thereof … (b) a 3/10 share TO COMMUNITY AID ABROAD … for the charitable purposes thereof … (c) a 3/10 share TO WORLD VISION OF AUSTRALIA … for the charitable purposes thereof … (d) a 2/10 share TO THE ANGLICAN DIOECESE OF SYDNEY for the education of male and female Priests and I EXPRESS A WISH without creating any binding trust or legal obligation that the money be especially utilised for the education of mature aged priests … If any share of my estate under sub-clauses (a) (b) (c) or (d) of clause 5.11 fails to take effect then that share is to pass to the part of the 1 The Goolwa property is under contract and the net sale proceeds are expected to be about $271,555. -- 2 of 5 -- 3 clause which does not fail and if more than one part does not fail then to those parts which do not fail proportionately.” [4] The residuary estate is valued at about $394,000. Clause 6 of the will provides as to the residue of the estate as follows: “I GIVE – The residue of my estate TO the Public Trustee of Queensland as Trustee of the Queensland Community Foundation .. to be held UPON PERPETUAL TRUST called the ENID HELENA RYAN TRUST FUND (the „Trust Fund‟) … to apply the income of the Trust Fund as follows:- (a) a 5/10 share TO THE ANGLICAN DIOECESE OF SYDNEY for the education of Priests and I EXPRESS A WISH without creating any binding trust or legal obligation that the monies be especially utilised for the education of mature aged priests. (b) a 3/10 share TO THE BIBLE SOCIETY IN AUSTRALIA, QUEENSLAND for the charitable purposes thereof; (c) a 2/10 share TO the YOUNG ANIMAL PROTECTION SOCIETY INCORPORATED … for the general purposes thereof. If any share of my estate under sub-clauses (a) (b) or (c) of clause 6 fails to take effect then that share is to pass to the part of the clause which does not fail and if more than one part does not fail, then to those parts which do not fail proportionately.” [5] Clause 7 of the will provides: “If the gift pursuant to sub-clauses (a) (b) (c) and (d) of clause 5.11 and sub-clauses (1) (b) and (c) of clause 6 cannot for any reason take effect, then the Trustee shall in its absolute discretion select the charitable organisation or organisations in Australia which the Trustee considers most nearly fulfils the objects I intend to benefit PROVIDED ALWAYS that the Trustee shall not be bound to make a selection under this clause.” (Italics added) The Queensland Community Foundation [6] The Queensland Community Foundation (“QCF”) was established by Deed dated 4 February 1997 and designed to operate as a perpetual charitable trust. The Public Trustee is the trustee of the Queensland Community Foundation. Under cl 18(a) of the Trust Deed, the QCF can pay income from money it holds on trust only to “Designated Charities”, a term defined in cl 1 to mean charities which have tax office DGR 1 status. [7] The Anglican Church Property Trust Diocese of Sydney is the trustee of the Anglican Church Diocese of Sydney, which does not have DGR 1 status. However, the Anglican Church Property Trust Diocese of Sydney also is the trustee of the Anglican Church Diocese of Sydney Christian Education Building Fund, which fund does have DGR 1 status. It has undertaken to use money paid to it pursuant to the provisions of the deceased‟s will to educate priests, in accordance with the wish expressed in clauses 5.11(d) and 6(a) of the will. -- 3 of 5 -- 4 [8] The Bible Society in Australia, Queensland does not have DGR 1 status, but the Bible Society Australia operates funds with DGR 1 status. It has undertaken to use monies paid to it pursuant to the provision of the deceased‟s will for charitable purposes similar to those of Bible Society in Australia, Queensland in accordance with the wish expressed in cl 6(b) thereof. Clause 7 discretion [9] The issue identified by the applicant for determination is whether the gifts in clauses 5 and 6 to the charities without DGR 1 status fail and, pursuant to the provisions of the last sentence in those clauses, pass to the other charities named therein, or whether the executor can and should use the power under cl 7 to select charities similar to those which do not have DGR 1 status to receive the gifts. [10] I am satisfied that, for the following reasons advanced by the applicant, that the Public Trustee can and should use the power under cl 7. [11] Further, I note that clauses 5.11 and 6 do not make separate gifts to the QCF for each charity mentioned. Rather, the approach taken in each clause is that a lump sum is given to the QCF, which it must invest and pay the income therefrom to the various charities. As explained, in respect of the Anglican Diocese of Sydney and the Bible Society in Australia, Queensland, this cannot be done because of the lack of DGR 1 status. Of course, the QCF cannot partially disclaim the gifts. It must either accept them on all of their terms, or reject them: see Jacobs’ Laws of Trusts in Australia, 7 ed para [1516]. [12] However, although the last sentence in each of clauses 5 and 6 purports to make provision for failure of a gift of “any share of (the deceased‟s) estate”, strictly speaking, no part of the deceased’s estate passes under sub-clauses 5.11(a), (b), (c) and (d) or under sub-clauses 6(a), (b) or (c) of the will. That is because, as the applicant correctly submitted, each clause makes a gift of a part of the estate to the QCF for the QCF to hold on trust. The parts so given thereupon cease to be part of the deceased‟s estate and the income generated by the QCF‟s investment of the money gifted to it also is not part of the deceased‟s estate. That the deceased appreciated this is doubtful. As was submitted, she probably conflated her estate and the funds derived from investing what once had been part of her estate. Accordingly, if the QCF is unable to accept the gift to it under cl 5.11 or cl 6 because it cannot pay the income therefrom to some of the charities mentioned in the sub-clauses, then, within the meaning of the will, a “share of (the deceased‟s) estate under (the) sub-clauses … fails to take effect.” [13] In these circumstances, there is an apparent inconsistency between the last sentences in clauses 5.11 and 6 on the one hand, and cl 7 on the other hand: (a) the last sentences in clauses 5.11 and 6 require failed gifts to pass to the beneficiaries whose gifts do not fail; (b) clause 7 gives the trustee a discretion to apply the failed gifts cy pres. [14] One possible way to reconcile the clauses is for cl 7 to be read literally, with the result that, due to the use therein of the conjunctive “and”, cl 7 is only activated if every gift in clauses 5.11(a)-(d) and 6(a)-(c) fails to take effect. Adopting that interpretation, the discretion conferred by cl 7 is not enlivened in this case. -- 4 of 5 -- 5 [15] However the word “and” can be read as “or”, when that is called for by the “general frame and context of the will” (Jarman on Wills, 8 ed, p 621), or “to avoid some obvious inconvenience or incongruity which would result from construing the word in its natural sense”: Re Hamilton, deceased [1953] St R Qd 48, 53. In the present case, unless the word “and” in clause 7 is read as “or”, there was the possibility of a partial intestacy if every gift in cl 6(a)-(c) of the will (that is, the residuary clause) failed and no general charitable intention is found which would allow those gifts to be applied cy pres. And while this has not happened, cl 7 is consistent with the deceased wanting to guard against the possibility of it happening. [16] It was submitted that while the will shows an obvious intention on the deceased‟s part to benefit charity and not her next of kin, as she included three clauses dealing with failed gifts, at the same time the deceased was at pains to avoid dying partially intestate. Accordingly, the general frame and context of the will favours the word “and” in cl 7 being read as “or”, and doing so avoids the obvious inconvenience and incongruity of a possible partial intestacy. [17] There is a further matter; in a professionally drafted will such as this, the court strives to give effect to all of its provisions and thus no provision is regarded as otiose unless it is impossible to give it any meaning, or unless giving it effect violates the overall scheme of the will: Construction of Wills in Australia, Haines, para [2.32]. [18] Construing the word “and” in cl 7 as “or” has the consequence that effect may be given to the last sentences in cl 5.11 and cl 6 as well as cl 7 in the following way: (a) if some of the gifts in clauses 5.11(a)-(d) and 6(a)-(c) fail, the trustee is empowered to, but not required to, exercise the discretion under cl 7 to apply the failed gift cy pres; (b) if the trustee decides not to exercise that discretion, the last sentences in cl 5.11 and 6 operate and the failed gift passes to the other beneficiaries named in the clauses. [19] Advancing that approach as the correct one, it was submitted by the applicant that the Public Trustee, as executor of the deceased‟s estate, has the power under cl 7 of the will to select a charity similar to the “Anglican Church Diocese of Sydney” and “The Bible Society in Australia, Queensland” to receive the income those entities were to receive. The Public Trustee submitted that this will be achieved if the Public Trustee selected: (a) The Anglican Church Property Trust Diocese of Sydney as trustee for the Anglican Church Diocese of Sydney Christian Education Building Fund to receive the gifts pursuant to cl 5.11(d) and 6(a) of the will; and (b) Bible Society Australia to receive the gift pursuant to cl 6(b) of the will. [20] There is no opposition to this from any party to that course, which was one which the Attorney-General supported. In my view that approach should be adopted. [21] In those circumstances, orders and directions in accordance with the draft submitted to the court were made when the matter came before the court on 31 July 2013. -- 5 of 5 --