Van Kerkvoorde v Moroney [1917] HCA 47; (1917) 23 CLR 426 (7 September 1917)

HIGH COURT OF AUSTRALIA

Van Kerkvoorde and Another Plaintiff and Defendant, Appellants; and Moroney Defendant, Respondent.

H C of A

On appeal from the Supreme Court of New South Wales.

7 September 1917

Barton, Isaacs and Rich JJ.

Knox K.C. (with him Edwards and Monahan), for the appellants.

Waddell, for the respondent, Moroney.

Knox K.C., in reply.

The following judgments were read:—

Sept. 7

Barton J.

The appeal is from an order of Mr. Justice Harvey, in which he declared the validity of three gifts of the testator, Van Kerkvoorde, in answer to three several questions in the originating summons. As to the first two, which relate to a percentage of the rents and profits of the real estate during the lives of the testator's widow and daughter respectively, the appeal is not persisted in, but the passages making these two gifts must be considered in construing the third. The latter operates on the termination of the life estates to the widow and daughter. It is a devise of the real estate to the general secretary for the time being in Sydney of the Socialist Labour Party on trust to convert it into money and to pay the moneys so arising "to the executive committee for the time being in Sydney of the said Party for such purposes and objects as the said executive may think fit in the interests of the said Party."

As this gift of the corpus is not to a charity the question arose whether it is valid, regard being had to the rules that the Court will not frame a scheme for the disposal of testamentary gifts for purposes which are not charitable, and that funds not given to a charity will devolve as undisposed of unless they are to be devoted to some fairly defined object. The argument before us was limited to the question of uncertainty. If it stood alone, that is, unexplained by the context or otherwise, one would be disposed to agree with the argument on that point. But in applying the gift to its subject matter we must have regard not only to the context but to the constitution of the Socialist Labour Party, which no doubt was properly before us. In that document the "object" of the "organization" is described to be "the establishment of a co-operative Commonwealth founded on the collective ownership of the land and means of production, distribution, and exchange," and the "methods" are the industrial and political organization of the workers, mental and manual, the distribution of socialistic literature, lectures on socialism, also political and industrial questions, and, "to attain our object—a co-operative Commonwealth—the election of socialists to Parliament (Federal and State) and municipal councils." A person before becoming a member is to answer satisfactorily certain questions before being nominated. There is a monthly subscription, and the general executive can make levies when authorized by a vote of the members of the Party. The general executive committee is to be elected by "financial" members. It is, inter alia, to exercise a supervising control over the work of the Party, to have power to suspend any of its officers for disloyalty to the movement, &c., and may itself be removed by general vote. The Party may own newspapers to advocate its principles.

The above excerpts from the constitution are sufficient to show the general nature of the body and its management. It is governed by rules; it consists of qualified subscribers, and its aims are definite.

The two gifts of percentages upon income during the life estates are "in trust for the Socialist Labour Party of Australia," that is to say, the body described. Considered with the residuary gift, they make clear the fact that the testator has built up his dispositions on a plan carefully thought out so as to provide for his widow and his daughter during their lives, to give assistance to the organized body year by year during the lives of those two relatives, and to give the corpus in remainder to the organized body, but only, as will be seen, while it pursues in substance the objects which have commended themselves to him in planning the future of his estate. It is those objects to which the fund is to be applied after the life estates, objects which must be adhered to if a gift over is to be avoided.

The gift of the corpus is to be paid to the executive committee really as agents for the Party, and the "purposes and objects" are defined by the constitution above quoted. The words "in the interests of the said Party" have not the effect of allowing the money to be spent otherwise than in accordance with its purposes and objects, but the manner in which it is to be applied to them is to be at the discretion of the general executive, so long as it keeps within them, and the general executive is responsible to the body of members.

That the testator was applying the proceeds of his property to well-defined purposes has become, I think, fairly clear. But there is more. The gift over to which I have referred is to take effect in the event of the Party as known at the date of the will amalgamating with any other body "having objects substantially different" from its objects "as formulated in the rules ... in existence at the time" of the will; or in case the same Socialist Labour Party should itself change its objects to objects substantially different from those it then held.

The testator makes the rules, i.e., the "constitution," his criterion, and thus puts beyond all doubt what is meant by "the purposes and objects" in the gift itself.

In the light of the rules and the context I think it is clear that the purposes of the gift are quite adequately defined, and that the body whom it is to advantage have so complete a beneficial interest that it would be in their power to exact the due performance of the trust. I think that there is a definite subject matter, and that there are beneficiaries who could legally demand enforcement. I am therefore of opinion that there is no uncertainty: see Grimond v. Grimond[1], Lord Halsbury's judgment; In re Clarke[2], and cases there cited; and In re Conn; Conn v. Burns[3]. It is in no sense the purport of the gift to commit to others the task of making his will for the testator.

I am of opinion that the appeal must be dismissed.

Isaacs and Rich JJ.

This appeal involves the validity of three testamentary gifts—two of income and the third of corpus. They are attacked for uncertainty. Harvey J. held them all good.

The objection as to the two gifts of income was not pressed, and they are not open to any real doubt. The question as to corpus is more difficult. The objection taken to it is that the discretion given to the executive committee is so wide as to be beyond the power of a Court to control and therefore you cannot class it as a trust. The will is so worded as to require careful consideration of all its parts, in order to see what the testator meant by the provision with which this case is immediately concerned.

The testator must be taken to have known the constitution and objects of the Socialist Labour Party of Australia. It has upwards of a hundred members, it has a secretary and an executive committee.

Reading the provision as to corpus in its setting—that is, with reference to the gifts of income, and the substitutionary gifts, and the direction as to inspection during the lives of the life tenants—it appears clearly that there is no uncertainty as to property, or as to objects in the sense of the persons to be benefited. The objects are what the testator calls the Socialist Labour Party of Australia. They are unincorporated, and the executive committee are official managers of the affairs of the Party, subject only to the control of the annual conference or a meeting of the financial members.

The only doubt that can arise is as to the "purposes and objects" to which the property is to be applied, and in the result the decision must turn on what the testator meant by the words "purposes and objects."

In Bathurst v. Errington[4] Lord Cairns said: "In construing the will of the testator ... it is necessary that we should put ourselves, as far as we can, in the position of the testator, and interpret his expressions as to persons and things with reference to that degree of knowledge of those persons and things which, so far as we can discover, the testator possessed."

Applying this rule, the intention of the testator is sufficiently plain. He was well acquainted with the Socialist Labour Party, he knew its "objects," and therefore its constitution; he refers to the rules, and so he knew what are called in its constitution and rules its "methods," which, as set out, may not improperly be called its "purposes" so far as purposes are not included in "objects"; he knew it had a secretary and an executive committee, and the functions of that committee. He obviously intended to benefit that society, which is called a Party and consists of recognized members but unincorporated, and fluctuating in personnel.

His will beyond question indicates that if the declared "objects" of the Party as set out in its constitution were to be substantially altered at the time he died, his gift should go in another direction. Consequently, those were the "objects" he meant to promote, and he did not intend to promote, and expressly refused to promote, any object substantially differing. Therefore it cannot be supposed that he was so inconsistent as to alter his gift if the society altered its objects, and yet expressly permit the executive to apply the gift to altered objects for the same society.

Then, on the death of the life tenants, the real estate is devised to the general secretary for the time being, upon trust to sell and pay the proceeds to "the executive committee for the time being in Sydney of the said Party." That is, the trust (which is the only thing called by him a "trust" in relation to the corpus) was to pay to the executive committee, not for their own benefit, but clearly as the official representatives of the Party. He did not mean that they were to receive the moneys as private individuals; or that he personally selected them; he deliberately allowed the society to select whom they pleased; the payment was to be to persons in whom, not he, but the Party had confidence. They took as official representatives rather than trustees, unless their powers under the will were wider than their duties to the Party. He did not refer to them as trustees. No doubt in a sense they take as trustees, but that is because they are bound to account to the Party whose executive committee they are, for the moneys they receive.

It would have been practically impossible to hand the money to the Party, a fairly numerous body, not incorporated. We can therefore well understand why the committee were selected by the testator as the manual recipients on behalf of the society. Then what are they to do with it? The will says "for such purposes and objects as the said executive may think fit in the interests of the said Party."

Remembering that the "Party" is a definite society of which each member is identifiable, that the testator insisted on the substantial retention of its declared "objects," and that he knew the relation of the executive committee to the general body, we conclude that the "objects and purposes" from which he permitted the committee to select were the "objects and methods" in the constitution.

Thus the ambit of discretion is limited to the "objects and purposes" of the society itself. These are wide, but have some limits. At all events, the provision does not leave the executive committee for the time being to arbitrarily choose any "object or purpose" it likes.

The test of uncertainty which will vitiate in such a case is laid down in Grimond v. Grimond[5]. There Lord Halsbury L.C. said the question was whether the testator had "left his directions so vague that it is in effect giving someone else power to make a will for him instead of making a will for himself." In saying that, the learned Lord was summarizing the effect of the previous authorities. In Doe d. Winter v. Perrat[6], in the House of Lords, Lord Brougham said: "The difficulty" (that is, the difficulty of construing the will so as to find sufficient certainty) "must be so great that it amounts to an impossibility." And in In re Roberts; Reppington v. Roberts-Gawen[7] Jessel M.R. said: "The modern doctrine is not to hold a will void for uncertainty unless it is utterly impossible to put a meaning upon it. The duty of the Court is to put a fair meaning on the terms used, and not, as was said in one case, to repose on the easy pillow of saying that the whole is void for uncertainty."

On the whole, we do not think that can be said of the present will; and we come to the conclusion that, broadly phrased as this gift of corpus is, the testator has sufficiently indicated that the Party is the object of his bounty, first, as to part of the income and, next, as to corpus, and that the executive committee for the time being are to hold only as the official representatives of the Party who are to be regarded as the real beneficiaries and owners of the fund, and to whom the committee is always bound to account. The case of In re Clarke; Clarke v. Clarke[8]—as to which see particularly the comments at p. 117 on the case of In re Clark's Trust[9]—and Conn's Case[10] are greatly in favour of the respondent's contention.

The judgment of Harvey J. was therefore right, and this appeal should be dismissed.

Appeal dismissed. Plaintiff to be at liberty to retain her costs out of the estate and to pay the costs of the other parties of this appeal out of the estate as between solicitor and client.

Solicitors, Crichton Smith & Waring.

[1] (1905) A.C., 124.

[2] (1901) 2 Ch., 110.

[3] (1898) 1 Ir. Rep., 337.

[4] 2 App. Cas., 698, at p. 706.

[5] (1905) A.C., 124, at p. 126.

[6] 6 M. & G., 314, at p. 361.

[7] 19 Ch. D., 520, at p. 529.

[8] (1901) 2 Ch., 110.

[9] 1 Ch. D., 497.

[10] (1898) 1 Ir. R., 337.