Royal North Shore Hospital of Sydney v Attorney-General (NSW) [1938] HCA 39; (1938) 60 CLR 396 (19 August 1938)

The Royal North Shore Hospital of Sydney Defendant, Appellant; and The Attorney-General for New South Wales and Others Defendants and Plaintiff, Respondents.

Dudley Williams K.C. (with him H. Mitchell), for the Attorney-General for the State of New South Wales.

This is an appeal from a decretal order of Nicholas J. whereby it was declared that "The Philip Muskett Biennial Bequest," a trust contained in the will of Dr. Philip Muskett, was a valid charitable trust, and that the trust had not failed by reason of the refusal of the Sydney Mechanics School of Arts to administer the bequest. The order referred the matter to the Master in Equity to settle a scheme for the regulation and management of the trust. The appellant contends that the trust is not a good charitable trust and that it is void as infringing the rule against perpetuities; and, alternatively, that the trust, as particularly declared in the will, has failed by reason of the refusal of the Sydney Mechanics School of Arts to administer the trust, that no general charitable intention appears in the will, and that therefore there is no power to direct the administration of the trust cy-près, with the result that the residuary estate, the subject matter of the trust, goes as upon intestacy.

By the will the testator provided that his sister Alice Muskett should receive the net income of his estate during her life, and, after making provision for certain gifts to charities, the testator then made provision for "The Philip Muskett Biennial Bequest." The will provided that what was called a notification fund should be established for the purpose of advertising the purpose and conditions of the bequest, the notifications to be controlled by the committee of the Sydney Mechanics School of Arts. The residue of the trust estate was left upon trust "to invest the same and apply the income in manner hereinafter mentioned for the perpetuation of an award to be termed The Philip Muskett Biennial Bequest." The testator declared that certain conditions "shall be observed" with respect to the conduct and management of the said award. Then followed a series of provisions for biennial essay competitions. Clause 3 of this part of the will contained the following provision:—"The objects of The Philip Muskett Biennial Bequest and the purpose of the essay shall be to popularize and promote the principles which I have always advocated in my published works writings or lectures namely:—1. The adoption of measures to prevent the deaths of so many Australian infants. 2. The improvement of the Australian national food habits. 3. The extension of the teaching of technical education in State schools." This provision was followed by a set of detailed provisions for essay competitions. The committee for the time being of the Sydney Mechanics School of Arts was charged with the carrying out of these conditions and with making awards of prizes. The essay was to be printed and was to be read in public by the writer of the prize essay. Clause 6 of the will was as follows:—"In making their award the committee shall have paramount regard to the object of the establishment of The Philip Muskett Biennial Bequest and subject to this primary desideratum, consideration shall be given to merit as shown in the following order of precedence:—(a) Literary excellence and style. (b) Confirmatory testimony of views held by bequestor. (c) Evidence of historical research into the causes which bring about national prosperity. (d) General proof of extensive reading."

The committee of the Sydney Mechanics School of Arts has refused to undertake the administration of the trust.

It was not contended upon the appeal that the fact that the trust moneys were to be applied in providing prizes for essays prevented the trust from being of a charitable character (See Chesterman v. Federal Commissioner of Taxation[1] and other cases cited by Nicholas J.). Nor was it contended that the fact that the prizes were to be given for the purpose of promoting principles held by a single person was fatal to the trust as a charitable trust (Thompson v. Thompson[2]—where the court upheld as valid the gift of an annual sum for "the best essays in statistics, politics or government, criticism and moral philosophy, &c., with reference to the doctrines mentioned in my writings on those subjects"). It was contended, however, that one of the objects of the trust, namely, No. 3, "the extension of the teaching of technical education in State schools," was non-charitable. If this were so then the gift would be void, because the trustees would be at liberty to apply the moneys towards the promotion of a non-charitable object, and in the absence of such a provision as that which is contained in sec. 131 of the Property Law Act 1928 of Victoria (as to which see Roman Catholic Archbishop of Melbourne v. Lawlor[3]), the whole gift would be void (Attorney-General for New South Wales v. Adams[4]; In re Tetley[5]).

This objection was based upon an argument that object No. 3 was essentially and necessarily political. It was contended that it was intended to promote, in the form of essays, propaganda for the extension of technical teaching in schools which are controlled by the State, and that therefore the execution of the trust would necessarily involve political propaganda for the purpose of changing, in the direction of extension, the policy of the Government of the State with respect to such teaching. Reference was made to the case of Bowman v. Secular Society Ltd.[6] (quoted by Dixon J. in Roman Catholic Archbishop of Melbourne v. Lawlor[7]): "The abolition of religious tests, the disestablishment of the Church, the secularization of education, the alteration of the law touching religion or marriage, or the observation of the Sabbath, are purely political objects. Equity has always refused to recognize such objects as charitable ... a trust for the attainment of political objects has always been held invalid, not because it is illegal, for every one is at liberty to advocate or promote by any lawful means a change in the law, but because the court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift." Reliance was also based upon Inland Revenue Commissioners v. Temperance Council of Christian Churches of England and Wales[8], where a trust which could be supported, if at all, only as a charitable trust was held to be invalid because it was instituted in the main for the direct purpose of effecting changes in the law and therefore for a political purpose (See also Bonar Law Memorial Trust v. Inland Revenue Commissioners[9]).

On the other hand, the respondent referred to Re Villers-Wilkes; Bower v. Goodman[10], where a trust to promote a bill to establish a new bishopric was held to be a good charitable trust. Reference was also made to the comments upon the dictum of Lord Parker[11] and upon Inland Revenue Commissioners v. Temperance Council of Christian Churches of England and Wales[12] to be found in Tudor on Charities and Mortmain, 5th ed. (1929), p. 41, and to Thompson v. Thompson[13] and Farrer v. St. Catharine's College, Cambridge[14], which were cases relating to the promotion, by means of the writing of essays, of educational activities in relation to subjects which had a political aspect. In re Hood[15] was relied upon as showing that Inland Revenue Commissioners v. Temperance Council of Christian Churches of England and Wales[16] was based, not upon the fact that the object of the trust was the promotion of temperance (that being an object which could be promoted by political activity), but upon the fact that the trust was "for the promotion of temperance mainly by political means, and therefore taken out of the class of charitable objects"[17]. (See a note upon the subject in the Canadian Bar Review, vol. 15, p. 566.)

In my opinion it is impossible to draw the strict line of demarcation for which the appellant contends. There are many objects, undoubtedly of a charitable character, which have or may have political aspects. For example, there are laws dealing with the establishment, maintenance and control of public hospitals for the sick poor. From one point of view any proposal for an extension of such hospital facilities may have a political aspect. The consent of the government or of a State official might be required before any such hospital could be extended or before a new hospital could be established, and possibly different officers might have different views as to the wisdom of a particular extension or establishment proposed.

But it can hardly be suggested that, because the subject of public hospitals is a matter which is dealt with by legislation and in respect of which a State government will normally have a policy, any trust for the benefit of such a hospital or for adding to the number of such hospitals or for increasing their activities is non-charitable for the reason that it is directed towards political activity. A trust for the purpose of political agitation would be invalid as a charitable trust. It is not difficult to suggest reasons of public policy which would prevent recognition by the law of the establishment in perpetuity of a trust for the promotion of a particular political object as such, or for the maintenance and advocacy during the indefinite future of the principles of a particular political party. Such trusts might become a public danger. But the words of Lord Sumner in Bowman v. Secular Society Ltd.[18] should not be regarded as making it impossible to establish a trust as a charitable trust merely because the subject matter of the trust might be associated with political activity. In view of the great scope and extent of modern legislation, it is difficult, if not impossible, to suggest any subject which might not at one time or another become a subject of political propaganda.

In Commissioners for Special Purposes of Income Tax v. Pemsel[19] the principal objects of charitable trusts were arranged in classes: (a) the relief of poverty, (b) education, (c) advancement of religion, together with a fourth head including a miscellaneous class described as "purposes beneficial to the community, not falling under any of the preceding heads." The relief of poverty is one of the commonest subjects with respect to which political activity is exercised. So also is education, and it needs but little acquaintance with history to be convinced that what has been regarded from time to time as the advancement of religion is a subject with regard to which acute and active political propaganda may take place. But these considerations have never prevented trusts falling within the three classes mentioned from being regarded as charitable trusts.

In this case one of the objects of the trust is to popularize and promote the principles which the testator has always advocated in his published works including—"the extension of the teaching of technical education in State schools." This is a trust for purposes of education and of extension of education. It falls within a well-recognized head of charitable trusts, and it cannot, in my opinion, be regarded as a trust to promote a particular object by political propaganda.

The next question arises out of the refusal of the committee of the Sydney Mechanics School of Arts to undertake the administration of the trust. It cannot be held that the refusal of the School of Arts to administer the trust has in itself the result of causing the trust to fail, unless, indeed, the management of an essay scheme by the School of Arts was an essential part of the charitable intention of the testator. This principle was applied in the leading case of Moggridge v. Thackwell[20]; see also In re Willis[21]; In re Wilson-Barkworth[22]; Re Lawton[23].

But it is argued for the appellant that the whole scheme is so bound up with its administration by the School of Arts that it should therefore be held that the trust fails. There is, it is said, no general charitable intention disclosed in the will, but only a particular charitable intention to be carried out by means of the School of Arts and not otherwise, with the result that the trust cannot be administered cy-près. If the trust should fail on this ground the residuary estate of the testator would pass as upon an intestacy to the hospital, which is the residuary beneficiary of the testator's sister, who was his sole next of kin.

The principle which is to be applied in resolving such a question was very clearly stated in Re Taylor; Martin v. Freeman[24] (quoted by Isaacs J. in Attorney-General for New South Wales v. Adams[25]): "If upon the whole scope and intent of the will you discern the paramount object of the testator was to benefit not a particular institution, but to effect a particular form of charity independently of any special institution or mode, then, although he may have indicated the mode in which he desires that to be carried out, you are to regard the primary paramount intention chiefly, and if the particular mode for any reason fails, the court, if it sees a sufficient expression of a general intention of charity, will, to use the phrase familiar to us, execute that cy-près, that is, carry out the general paramount intention in some way as nearly as possible the same as that which the testator has particularly indicated without which his intention itself cannot be effectuated." (See also Barby v. Perpetual Trustee Co. (Ltd.)[26] and cases there cited.)

In the present case I agree with the view of Nicholas J. that the paramount object of the testator was not to benefit the Sydney Mechanics School of Arts, but to provide for the popularization and promotion of certain principles. The testator provides in clause 10 of the will that, in the event of public dissatisfaction manifested in the press with the administration of the scheme by the School of Arts, his trustee may request the President of the Chamber of Commerce and other representative public men to administer the scheme. This provision answers, or goes far to answer, the contention that the intention of the testator was really an intention to benefit the School of Arts (See In re Stanford; Cambridge University v. Attorney-General[27]).

The will states in express terms that the objects of the trust and the purpose of the essay shall be "to popularize and promote" three principles. These are "general prefatory words" which indicate a general charitable intention (Cf. In re Monk[28]). The essay competition under the control of the Sydney Mechanics School of Arts is a means adopted by the testator for the popularization and promotion of these principles. Later in the will these principles are expressly referred to as paramount and primary. I have already quoted the provision of clause 6 which requires the committee in making its award to have "paramount" regard to the object of the trust, and subject to this "primary" desideratum to give consideration to certain features which are referred to as going to the merit of essays. It will be observed that the words "primary" and "paramount" appear in the words of Kay J. in Re Taylor; Martin v. Freeman[29].

Therefore it appears to me that the testator has expressly stated that he has a general intention of establishing a fund for the purpose of promoting certain principles, and has then gone on to provide a particular means of achieving this object. The means is not of the essence of the trust. If the particular means is impracticable, it is open to the court to frame a scheme cy-près for the attainment of the general objects mentioned in the will, namely, the promotion of the three principles mentioned. I am, therefore, of opinion that upon this part of the case the judgment of the learned judge was right, though the order should be varied to make it clear that the cy-près scheme to be settled should be directed towards the attainment of the objects mentioned and not necessarily to the attainment of those objects through a scheme of prizes for essays.

The appellant further contends that, even if the general provisions with respect to the bequest were valid, two particular provisions were invalid. The first of these provisions is contained in clause 8 (1) of the provisions relating to the bequest. It provides that the money available for the bequest shall (in part) be apportioned in the following manner:—"To the Sydney Mechanics School of Arts the sum of ten pounds half of which shall be devoted to the purchase of works of special utility for the reference library of the institution and the other half for the general purposes of the institution." The School of Arts is not a charity. If this gift were an independent gift not associated in any way with the "bequest", the School of Arts might be entitled to receive the capital sum representing the £5 payable every two years for the general purposes of the institution (Bowman v. Secular Society Ltd.[30]; Halsbury's Laws of England, 2nd ed., vol. 25, p. 83; Elton v. Sheppard[31]; In re Lawes-Wittewronge; Maurice v. Bennett[32]), the School of Arts not being a charitable corporation (Re Wright; Westley v. Melbourne Hospital[33]). But the gift of the other £5 every two years would be void as being non-charitable in character but involving the keeping of the corpus intact for an indefinite period (Thomson v. Shakespear[34]), and the subject of the gift would fall into the charitable fund, not passing to the next of kin as upon an intestacy (In re Rogerson; Bird v. Lee[35]). But the biennial gift of the £10 is, I think, essentially associated with the machinery devised by the testator for the management of the whole fund by the School of Arts. The money given is itself part of the "bequest." The gift cannot be regarded as a gift to the School of Arts independently of whether or not the school accepts the responsibility of managing the bequest. As the School of Arts has declined this responsibility the gift fails, its subject matter remains part of the charitable fund, and should be dealt with in the same way as the rest of the fund.

The second provision which is attacked is the following direction:—"I direct my trustee to accumulate one-third of the annual income arising from my residuary trust fund at compound interest to the intent that such accumulations shall be added to the corpus of my residuary trust fund and become part thereof." This provision is followed by a direction that the other two-thirds of the annual income shall be devoted to the purposes of the bequest in providing prizes, &c. It is clear that this direction for indefinite accumulation is contrary to the Thelluson Act (Conveyancing Act 1919 N.S.W., sec. 31). Such an accumulation could only be effective for a period of twenty-one years after the death of the testator (See sec. 31 (1) (a) (ii)). The testator died on 25th August 1909 and, accordingly, no accumulation could be made after 25th August 1930. The life tenant was alive during the whole of this period and therefore no accumulations have been made at all. The result is that the direction to accumulate is completely inoperative. Where, in the case of a charitable trust, such a direction fails for any reason, the result is not that the moneys directed to be accumulated pass as upon an intestacy. They are applied for the purpose of the charity and, if necessary (as in this case), a cy-près scheme will be settled (Martin v. Maugham[36]; and see In re Swain[37]).

The decretal order made by the learned judge should, in my opinion, be amended by altering the declaration that "a general charitable intention" is contained in the said will so as to declare that there is a "general charitable intention, namely, an intention to popularize and promote the following principles:—1. The adoption of measures to prevent the deaths of so many Australian infants. 2. The improvement of the Australian national food habits. 3. The extension of the teaching of technical education in State schools."

The parties agreed that it is not necessary in this case to have any inquiry as to whether the nature of the principles referred to in the will can be ascertained from the published works or lectures of the testator or whether his works are contrary to public policy or morals, and the part of the order which directs such an inquiry should be struck out. (It may usefully be observed that the principles for the promotion of which the charitable trust is founded are the three principles mentioned, and not any particular form of those principles advocated in the testator's works. The terms of clause 3 in the will make this clear.) The order should also be amended to make it clear that the reference to the Master is not for the purpose merely of appointing a manager of the trust in substitution for the School of Arts, and accordingly the "charitable trust" mentioned in the portion of the order relating to the settlement of a scheme should be referred to as "the charitable trust hereinbefore described." There should be a declaration that the direction to pay moneys to the Sydney Mechanics School of Arts for the purchase of books is void.

The parties have agreed that the costs of all parties should be paid out of the estate, those of the trustee of the estate as between solicitor and client, and there is no objection to making such an order in the present case.

Subject to the variations mentioned, the appeal should be dismissed and the judgment of Nicholas J. affirmed.

The testator, whose death occurred as far back as 1909, made elaborate provisions by his will for a public essay competition to be inaugurated after the death of his sister, which has recently taken place. A reading of the provisions makes it plain that they are inspired by a desire to promote objects to which, according to the testator, he had in his lifetime directed public addresses and writings of his own. The complicated scheme which he sets out in his will does not strike the mind as particularly well calculated to enlist public support for his ideas, although, no doubt, if it were faithfully carried out it would involve the periodical appearance before the public of the testator's name and works, which, however, we must take to be but a subsidiary or attendant incident of the scheme. But the plan cannot be faithfully carried out; for the body to which its execution has been intrusted by the will declines to have anything to do with it. We have to decide what is the consequence of this refusal on the part of the institution. I do not propose to restate the nature of the scheme, which sufficiently appears in the judgment under appeal and other judgments to be delivered in this court. The consequence, in my opinion, is not that the whole provision fails so that there is a lapse. I think that it appears from the nature of the testator's detailed directions that his main or primary object was to propagate the three principles to which he refers, namely, the diminution of infant mortality in Australia, the improvement of the dietary habits in Australia and the spread of technical education in State schools. The method by which he sought to accomplish his purpose was by establishing a biennial competition for a money prize for the best essay expounding these principles and by having the essay read to such audience as might be induced to attend by the absence of any fee for admission and the prospect of the proceedings closing early. The machinery he selected for carrying out this essay competition was the organization of the Sydney Mechanics School of Arts — the institution which has declined to perform the task. On the whole I think the main purpose was not dependent upon either the essay competition as the method or the Sydney Mechanics School of Arts as the machinery. There sufficiently appears, I think, a main purpose that the principles shall be propagated to which the selected mode of execution is not indispensable. But I think that the very elaborate directions to the Sydney Mechanics School of Arts show that its participation in the essay competition is made so much a part of the scheme that no independent intention can be imputed to the testator of establishing an essay competition unless it was inaugurated under the authority of the Sydney Mechanics School of Arts. I am, therefore, of opinion that the refusal of that body results in a failure of the essay competition but not of a gift for the main purposes I have described, i.e., the promotion of the three objects the testator has stated, if those purposes are, as I think they are, charitable. The only serious attack upon their character was based upon the contention that they are inseparable and that the extension of the teaching of technical education in State schools was a political object. This contention, I think, drives to an absurd conclusion a somewhat vague and indefinite but well-known objection to gifts for public purposes. When it is said that a gift for political purposes is not charitable it cannot be meant that the advancement of every public object even if religious, eleemosynary or educational ceases to be charitable if the State is concerned in or affected by the result. I cannot agree that the third of the income which is the subject of a directed accumulation is to be accumulated for no charitable purpose. I think that this third is stamped with the charitable purpose as well as the rest. The annuity of £10 a year given to the School of Arts is difficult to classify but it seems inseparable from the essay competition and resembles a gift to an executor made on the assumption that he does not renounce. I think that the institution must be taken to have rejected the benefit of the £10 when it rejected the burden of the essay competition.

Dr. Philip Edward Muskett by his will established what he called the "Philip Muskett Biennial Bequest." It strikes me as a vain and worthless gift but the question is whether it constitutes a good charitable trust.

The objects of the bequest were to popularize and promote the principles which the testator had advocated in his published writings or lectures:—(a) The adoption of measures to prevent the deaths of so many Australian infants. (b) The improvement of the Australian national food habits. (c) The extension of the teaching of technical education in State schools.

The will, after providing for certain charitable bequests and a notification fund which I shall mention later, directed the trustees of the testator's will to stand possessed of "my residuary trust fund" upon trust to invest the same and apply the income for the perpetuation of an award to be termed "The Philip Muskett Biennial Bequest." The bequest was to be competed for in the form of an essay in every second year after the year of the testator's death and was open to any person of Australian birth or who had resided in any part of Australia for more than half his life. The administration of the bequest was entrusted to the committee for the time being of the Sydney Mechanics School of Arts and it was required to make an award naming the winner of the competition having regard to various considerations set forth by the testator in his will.

Firstly, it was contended that the gift was invalid because the third object of the trust was not for a charitable but a political object (Bowman v. Secular Society Ltd.[38]; Roman Catholic Archbishop of Melbourne v. Lawlor[39]).

The third object of the trust is not for the attainment of any political object. It is not for the promotion of technical education in State schools by political means or activities. It aims at assisting a form of education carried on in State schools. As well might it be said that contributions toward the financial burdens of a State were political in object, yet they have always been regarded as charitable bequests.

The next contention was that the disclaimer of the trusts by the Sydney Mechanics School of Arts invalidated the bequest. It is impracticable to carry out the objects of the testator in the manner prescribed by him. It does not follow that the bequest is frustrated unless the breakdown of the machinery of the trust is such an essential part of the gift that the general purposes of charity cannot be distinguished and the machinery of the trust contains the only purpose intended or contemplated by the testator (Biscoe v. Jackson[40]). "The authorities," said Parker J. in In re Wilson; Twentyman v. Simpson[41], "must be divided into two classes. First of all, we have a class of case where, in form, the gift is given for a particular charitable purpose, but it is possible, taking the will as a whole, to say that, notwithstanding the form of the gift, the paramount intention, according to the true construction of the will, is to give the property in the first instance for a general charitable purpose rather than a particular charitable purpose, and to graft on to the general gift a direction as to the desires or intentions of the testator as to the manner in which the general gift is to be carried into effect. In that case, though it is impossible to carry out the precise directions, on ordinary principles the gift for the general charitable purpose will remain and be perfectly good, and the court, by virtue of its administrative jurisdiction, can direct a scheme as to how it is to be carried out. In fact the will will be read as though the particular direction had not been in the will at all, but there had been simply a general direction as to the application of the fund for the general charitable purpose in question. Then there is the second class of cases, where, on the true construction of the will, no such paramount general intention can be inferred, and where the gift, being in form a particular gift,—a gift for a particular purpose—and it being impossible to carry out that particular purpose, the whole gift is held to fail. In my opinion, the question whether a particular case falls within one of those classes of cases or within the other is simply a question of the construction of a particular instrument."

As the Sydney Mechanics School of Arts disclaims the supervision and management of the essay and award scheme contemplated by the testator, it is impossible to carry out those precise directions or to substitute any other institution for that chosen and particularly named by the testator. But the paramount general intention of the will is plain upon the words of the will, namely, to popularize and promote the three principles which the testator has always advocated. As these are charitable purposes the gift remains and is perfectly good. It may accordingly be administered cy-près by virtue of the administrative jurisdiction of a court of competent jurisdiction. A further contention was based upon the testator's direction as to the income of the residuary trust fund. One-third of the annual income of the fund was to be accumulated at compound interest, to the intent that such accumulations should be added to the corpus of the fund and become part thereof, and two-thirds of the annual income arising from the fund was devoted to the award mentioned in the will. It was conceded that charities were not excepted from the statutory provisions restricting accumulation. (See Conveyancing Act 1919 N.S.W., sec. 31). But it was suggested that one-third of the income was, on the terms of the will, perpetually accumulated and never devoted to any charitable purpose.

It is a sufficient answer to the suggestion that the accumulations are added to the charitable fund, and two-thirds of the income of that fund are devoted to the testator's essay and award scheme. The income cannot be accumulated beyond the limit fixed by the Act. But the fund is charitable and in such a case the authorities warrant the proposition that a competent court may settle a scheme for the application of the accumulation beyond the prescribed limit (Martin v. Maugham[42]).

The notification fund already mentioned may be here considered. The testator directed the trustees to set aside a sum of £1,000 under the designation of the "notification fund" and apply the income towards the expense of the essay and award scheme. This income was supplemented by the addition annually of the sum of £1 at the end of the first year from the appropriation of the fund and so on in arithmetical progression until the maximum income from the fund and the additions reached a level of £100. The trustees of the will were authorized to entrust the insertion of the notification to the Sydney Mechanics School of Arts and to make the necessary payments to the treasurer for the time being of that institution. The School of Arts, as before stated, disclaimed the whole trust, and the direction of the testator consequently becomes impracticable in the manner contemplated by him. But, though the particular direction cannot be carried out, the notification fund is nevertheless for carrying out the general charitable purposes of the will. The gift, therefore, remains and may be administered cy-près.

Lastly, there is a clause in the will which gives to the Sydney Mechanics School of Arts out of the Philip Muskett Biennial Bequest a sum of £10, half to be devoted to the purchase of works of special utility for the reference library of the institution, and the other half for the general purposes of the institution. In my opinion the gift fails, either because it is part of the essay and award scheme which is now impracticable, or because it is a gift to the institution as the administrator of the fund, which position it now disclaims. But there is no intestacy; the gift is available for the general charitable purpose of the testator and may be administered accordingly.

Subject to variations which will be stated by the Chief Justice, the appeal should be dismissed.

The questions upon which this appeal turns are, first, the validity of the provision for what the testator calls his "biennial bequest" and, second, the existence and disclosure in his will of a charitable intention wider and more general than the execution of the particular directions which the provision gives.

The testator, a medical man who died in 1909, had, according to his will, advocated three principles in the course of his publications and lectures. One was the adoption of measures for the prevention of Australian infantile mortality. Another was the improvement of the food habits of Australians. The third was the extension of the teaching of technical education in State schools. Subject to certain gifts and to a life interest in favour of his sister, who died in 1936, the testator directed that his residuary estate should be held upon trusts for purposes in which these principles played a part. His scheme was unusual, if not strange.

He appears to have been interested in the Sydney Mechanics School of Arts, a body incorporated by statute with objects described as "the intellectual improvement of its members and the cultivation of literature, science and art." His will requires that, after his sister's death, an award called the "Philip Muskett Biennial Bequest" shall be made in every second year for an essay written by a competitor who has spent at least half his life in Australasia. He provides that the objects of the "bequest" and the purpose of the essay shall be to popularize and promote the three principles mentioned. The "bequest" is to be administered by the committee for the time being of the Sydney Mechanics School of Arts, unless his trustee forms the opinion that there is "a persistent and unmistakable demonstration of public dissatisfaction expressed in the columns of the press with the administration of the committee." In that event his trustee may, in its discretion and so far as it thinks necessary, request "representative public men" to take over the administration. But, when the trustee thinks the necessary changes in the methods or personnel of the committee have been made, the administration of the "bequest" is to be restored to it.

The testator gives particular directions as to the maximum length of the essay, which he fixes at an ample measure, and as to the subsidiary qualities that are to be regarded as meritorious. But he says that the committee is to have paramount regard to the object of the "bequest," which he describes as the "primary desideratum." He then proceeds to direct a public reading of selected parts of the winning essay in the lecture hall of the School of Arts at a time and under conditions which he specifies with some particularity.

The funds for carrying out this plan are to be provided by his residuary estate in a manner which may be briefly described as follows. To begin with his trustee is to set aside £1,000 for what the testator calls a "notification fund." The income of this fund is to be used for notifying to the public or advertising the purpose and conditions of the "bequest," including, no doubt, the time and conditions of the biennial essay competition. The fund is to be supplemented by an annual subvention from the general residue, beginning with £1, and increasing by £1 a year; but it is not clear whether the amount is to be added to capital or income. The testator directs that one-third of the income of the general trust fund, i.e., the residuary estate, shall be accumulated and added to the corpus, and the remaining two-thirds of the income shall be devoted to the purposes of and incidental to the award as he sets them forth. He provides that £10 a year shall be given to the School of Arts, half of which shall be devoted to the purchase of books for the reference library and the other half to the general purposes of the institution and then, after meeting the expenses of publishing the winning essay and the general cost of carrying out the scheme, the balance consisting of at least two-thirds of the whole sum available for the purposes of the "bequest" for the particular year is to be awarded to the winner.

The validity of these provisions was attacked upon the grounds, first, that the perpetual or indefinite accumulation of one-third of the income meant that it and a corresponding undivided part of the ever increasing corpus was devoted to no person or purpose and, second, that one of the three principles to which the essay must be directed did not involve a charitable purpose, namely, the principle of extending technical education in State schools.

The first of these grounds raises a strange problem. The actual accumulation directed is controlled by the Thellusson Act and cannot take effect. But, if there be a sufficiently general charitable purpose impressed upon the fund, this would mean only a cy-près application of the part of the income the accumulation of which is directed. But the ground of attack denies the foundation upon which the operation of this principle rests. For the contention is that one-third of the income of the fund must always be turned back to increase the fund so that for ever one-third of the income will not reach the charitable purpose. Considered as a mere notional proportion, one-third of the income of the fund would appear to be destined to perpetual accumulation. But, if the intended fate of the actual sum representing one-third of the income of any given year is considered, it will be found that two-thirds of the income it produces in the following year goes to the purposes of the essay competition and one-third to the corpus. The income of this one-third for the next succeeding year is dealt with in the same way and so on indefinitely. The general nature of the provision shows that the sole intention of the accumulation is to create a large fund for the fulfilment of the testator's plan and a consideration of the ultimate use of the produce of each particular sum to be placed to corpus makes it clear that in the end the moneys to which it gives rise would be applied to that purpose.

In my opinion there is enough to satisfy the requirement that the purpose of the accumulations must be the fulfilment of the purpose said to be charitable. Accordingly, if in fact the objects of the provision are all charitable, the one-third part of the income, the accumulation of which is directed, might be applied cy-près.

But the second ground upon which the validity of the trust is attacked is that one of those objects is not charitable. No one disputes that the spread of technical education is a charitable purpose. Nor is it denied that the promotion of such an object by awards or rewards for writing essays is a valid method of fulfilling such a purpose. But the contention is that because, according to the testator's intention, it is in State schools that technical education is to be extended, his essay competition really amounts to the institution of a propaganda to influence the administration of State education and that this is a political, and not a charitable object.

The case law dealing with the distinction between charitable purposes and political objects is in an unsatisfactory condition, but the basal ideas upon which it rests may be seen. It is, of course, quite clear that any purpose which is contrary to the established policy of the law cannot be the subject of a good charitable trust. But there is a further consideration arising from the very nature of the doctrine by which charitable trusts are supported. Under all four heads of the well-known classification to which such trusts are referred, an essential element is the real or imputed intention of contributing to the public welfare. A coherent system of law can scarcely admit that objects which are inconsistent with its own provisions are for the public welfare. Thus, when the main purpose of a trust is agitation for legislative or political changes, it is difficult for the law to find the necessary tendency to the public welfare, notwithstanding that the subject of the change may be religion, poor relief, or education. When the subject matter is none of these and the case must fall under the fourth class, viz., that of undefined purposes for the public good, the difficulty becomes even greater.

Again, where funds are devoted to the use of an association of persons who have combined as a political party or otherwise for the purpose of influencing or taking part in the government of the country, it is evident that neither the good intentions nor the public purposes of such a body can suffice to support the trust as charitable.

But, in the present case, the main purpose is the spread of technical education. Under a system of State education those whom the testator doubtless regards as needing it are necessarily to be found in State schools. It is not his purpose to establish a means of affecting or interfering with government administration. No doubt he is seeking to mould opinion or spread doctrine on the subject of technical education. His purpose is to provoke the study of the subject and to propagate general views for the purpose of producing a widespread opinion coinciding with his own. But I do not think that his direction or purpose can fairly be regarded as coming within the objection that it is political in character. In my opinion none of the purposes of the essay competition is invalid.

But the committee of the Sydney Mechanics School of Arts has declined the performance of the task which the testator's plan imposes upon it. I think that its statement may be regarded as a renunciation or disclaimer. This raises the question whether the provision does not fail because it cannot be carried out by the means and in the manner chosen by the testator. In so far as his scheme depends upon the School of Arts undertaking its administration it must clearly fail. The first question, I think, is to inquire as a matter of interpretation how far his choice of the Sydney Mechanics School of Arts is an integral or essential part of his essay competition. After studying the provisions of his will, I have come to the conclusion that it discloses no intention of establishing his detailed plan of making an award biennially for an essay unless the committee of the Sydney Mechanics School of Arts undertakes the institution and control of the matter in the first instance. It is true that he provides for the possibility of public dissatisfaction with their control becoming so great that a change is necessary. But the clause in which he makes the provision is carefully guarded and the conditions prescribed are stringent. It seems clear that, except as a last resort he meant that the plan should not leave their control. The clause operates only after the essay competition has been established under the committee's control. He did not contemplate the establishment or inauguration of the plan by any other body or person. I do not think that it can be inferred that a plan into the details of which the nature and identity of the Sydney Mechanics School of Arts entered so much was intended to be carried out in the manner and form provided notwithstanding that the committee of that body refused to undertake it. Accordingly I am of opinion that, so far as the charitable purposes disclosed by the provision depend upon the establishment of the essay competition prescribed by the will, they must fail.

But it does not follow that the whole disposition fails so that there is an intestacy under which the next of kin would be entitled. If the particular manner of advancing the three purposes or principles which the testator propounds is limited to an essay competition, the disposition does so fail. But, if a wider intention exists and that intention does not exceed the limits of legal charity, the gift may be administered cy-près by a court of equity as a good charitable disposition. The question whether the substantial intention of such provisions as those now in question is to advance the ultimate charitable purposes but by the particular means directed or, on the other hand, the intention is confined to giving effect to the particular plan as the main or essential object in view is commonly said to be one of construction. No doubt it involves an ascertainment of the intention implicit in the testamentary dispositions. But it depends less on the construction of language than upon an estimate of the relative importance attached to the particular and to the general by the author of the scheme. In most cases in which an elaborate scheme is directed of a charitable nature the testator has been animated by a desire to achieve some object which may be stated in wider terms than his detailed plan. But it is not legitimate to infer from the fact that his plan is a means to an end that the accomplishment of the end is his substantial purpose. The question is whether, independently of the means he has chosen, he had any charitable intention. Sometimes the question is stated as a decision between regarding a particular plan as subordinate to the end and regarding it as the end in itself. Sometimes it is stated as an inquiry whether the particular means are essential or a necessary condition. Again, the question has been described as amounting to an inquiry whether the particular means prescribed should be considered as a direction engrafted upon a gift to a main purpose. But, however, it is stated, the matter to be considered is whether the will should be understood as meaning that the fund should be devoted to the attainment of the end, although the precise method directed should prove impracticable. In the present case it is clear that the testator attached great importance to the procedure which he had worked out for the propagation of his views after his death. I have had some hesitation in coming to the conclusion that his will discloses any wider intention. But, on the whole, I think that, notwithstanding the manner in which his desires are set out, it does sufficiently appear that they are the detailed means which he has thought out for the purpose of effectuating an object which he had set up. That object is the propagation of the opinions or views which he says he has advocated in his lectures and published writings with reference to Australian infantile mortality, Australian food habits and technical education in State schools. It does, I think, appear on the face of the provision that he has proceeded from these main purposes to a detailed scheme for their achievement. They are the chief, principal, paramount, or substantial purpose of his disposition. I am, therefore, of opinion that the so-called "bequest" may be carried out cy-près.

A small biennial sum of ten pounds is given to the Sydney Mechanics School of Arts and the gift raises a separate question. Does the gift fail as a result of the disclaimer? On the whole I think it does. It is given out of the money available for "The Philip Muskett Biennial Bequest." The gift takes its position in the will amongst the financial provisions for carrying out the essay competition. Part of it is given for the purchase of works of special utility for the reference library in the institution, and part for the general purposes of the institution. It is not easy to follow the train of thought embodied in the provision. Perhaps it was intended as a reward to the institution. But, however that may be, the testator appears to have regarded it as part of the scheme for the essay competition.

Subject to a variation of the decretal order, I think the appeal should be dismissed.

Decretal order varied by substituting for the fourth declaration therein the following declaration:—"(4) that there is contained in the said will a general charitable intention to popularize and promote the following principles:—1. The adoption of measures to prevent the deaths of so many Australian infants. 2. The improvement of the Australian national food habits. 3. The extension of the teaching of technical education in State schools": by striking out therefrom the order directing an inquiry whether the nature of the principles referred to in the will can be ascertained from the published works or lectures of the testator or whether his works are contrary to public policy or morals and the directions relating to such inquiry: by substituting for the order that the Master in Equity do settle a scheme as set forth in the said order the following order:—"that it be referred to the Master in Equity to settle a scheme for the regulation and management of the charitable trust hereinbefore described"; and by adding a declaration that the direction in the said will contained to pay to the Sydney Mechanics School of Arts the sum of ten pounds fails. Decretal order otherwise affirmed and appeal otherwise dismissed. Costs of all parties to be paid out of the estate of the testator, those of the trustee as between solicitor and client.

Solicitor for the respondent Attorney-General for New South Wales, J. E. Clark, Crown Solicitor for New South Wales.

[1] (1926) A.C., at p. 130; 37 C.L.R., at p. 318; [1923] HCA 24; (1923) 32 C.L.R. 362, at pp. 369, 371.

[2] (1844) 1 Coll. C.R. 381; 63 E.R. 464.

[3] [1934] HCA 14; (1934) 51 C.L.R. 1.

[4] [1908] HCA 51; (1908) 7 C.L.R. 100.

[5] (1923) 1 Ch. 258.

[6] (1917) A.C., at p. 442.

[7] (1934) 51 C.L.R., at p. 33.

[8] (1926) 42 T.L.R. 618; 136 L.T. 27.

[9] (1933) 49 T.L.R. 220.

[10] (1895) 72 L.T. 323.

[11] (1917) A.C., at p. 442.

[12] (1926) 42 T.L.R. 618; 136 L.T. 27.

[13] (1844) 1 Coll. C.R. 381; 63 E.R. 464.

[14] (1873) L.R. 16 Eq., at pp. 23, 24.

[15] (1931) 1 Ch. 240.

[16] (1926) 42 T.L.R. 618; 136 L.T. 27.

[17] (1931) 1 Ch., at p. 252.

[18] (1917) A.C., at pp. 452-467.

[19] [1891] UKHL 1; (1891) A.C. 531, at p. 583.

[20] [1803] EngR 572; (1803) 7 Ves. 36; 32 E.R. 15.

[21] (1921) 1 Ch. 44.

[22] (1933) 50 T.L.R. 82.

[23] (1936) 3 All E.R. 378.

[24] (1888) 58 L.T. 538, at p. 543.

[25] (1908) 7 C.L.R., at pp. 124, 125.

[26] [1937] HCA 64; (1937) 58 C.L.R. 316.

[27] (1924) 1 Ch., at pp. 77, 78.

[28] (1927) 2 Ch., at p. 210.

[29] (1888) 58 L.T., at p. 543.

[30] (1917) A.C., at pp. 440, 441.

[31] [1781] EngR 65; (1781) 1 Bro. C.C. 532; 28 E.R. 1282.

[32] (1915) 1 Ch. 408.

[33] (1917) V.L.R. 127; 38 A.L.T. 150.

[34] [1860] EngR 390; (1860) 1 DeG.F. & J. 399; 45 E.R. 413.

[35] (1901) 1 Ch. 715.

[36] [1844] EngR 784; (1844) 14 Sim. 230; 60 E.R. 346.

[37] (1905) 1 Ch. 669.

[38] (1917) A.C., at p. 442.

[39] [1934] HCA 14; (1934) 51 C.L.R. 1.

[40] (1887) 35 Ch. D., at p. 463.

[41] (1913) 1 Ch., at pp. 320, 321.

[42] [1844] EngR 784; (1844) 14 Sim. 230; 60 E.R. 346.

High Court of Australia

Royal North Shore Hospital of Sydney v Attorney-General (NSW) [1938] HCA 39; (1938) 60 CLR 396 (19 August 1938)

HIGH COURT OF AUSTRALIA