Schellenberger v Trustees Executors & Agency Co Ltd [1952] HCA 69; (1952) 86 CLR 454 (12 December 1952)

HIGH COURT OF AUSTRALIA

SCHELLENBERGER v. TRUSTEES EXECUTORS AND AGENCY CO. LTD. [1952] HCA 69; (1952) 86 CLR 454

Charities

High Court of Australia
Dixon C.J.(1), McTiernan(1) and Fullagar(1) JJ.

CATCHWORDS

Charities - Will - Trust for "beautification and advancement of the township of Bunyip " - Construction - Validity.

HEARING

Melbourne, 1952, October 31;
Sydney, 1952, December 12. 12:12:1952
APPEAL from the Supreme Court of Victoria.

DECISION

December 12.
THE COURT delivered the following written judgment:-
This is an appeal from a decision of Coppel A.J. in chambers on an p457)

2. The testator, who was a resident of Bunyip, a small country town in Victoria, made his will on 15th November 1941, and died on 8th January 1944. By his will he appointed the respondent company to be the executor and trustee thereof, and he devised and bequeathed the whole of his estate both real and personal to the company upon trust for his wife for her life. After her death he gave a sum of 1,000 pounds to the trustees of the Bunyip Mechanics' Institute for the purposes of the Institute, and a sum of 1,000 pounds to the trustees of the Bunyip Agricultural Society for the purposes of the Society. The will proceeded:- "And as to all other my estate to be known as the Emile Henry Shelley Trust in trust as to capital and income to be administered by my trustee as it in its absolute discretion shall decide for the beautification and advancement of the township of Bunyip aforesaid And my trustee may seek the advice of Frank Shelford Hodge, John Alfred Cock and George Brown Calderwood all of Bunyip aforesaid or the survivor or survivors of them.". The will concluded with a discretionary power of sale expressed to be given for the purpose of enabling the trustee to carry out the provisions of the will. (at p457)

3. The testator's widow died on 3rd June 1950. All debts, and the two legacies of 1,000 pounds, have been paid, and the respondent company has in its hands property of the value of about 9,600 pounds. The main question raised by the originating summons was as to the validity of the trust for the "beautification and advancement" of the township of Bunyip. It was argued for the next of kin of the testator that the trust was void for uncertainty. It was argued for the Attorney-General of Victoria that it was a charitable trust and valid. Coppel A.J. held that the trust was a good charitable trust, and against that decision the next of kin appeal. (at p458)

4. The learned judge appears to have attached some importance to the question whether the expression "beautification and advancement" should be construed - to use his Honour's own words - "conjunctively" or "disjunctively". His Honour thought that it should be construed "conjunctively". He said: "I think that grammatically the words express a single conception, and that any steps which are taken to put this conception into effect must be such as will both beautify and advance the township of Bunyip". The question is, of course, arguable, but, on the whole, we are of opinion that the other view is correct, and that anything which will either beautify or advance the township of Bunyip is within the terms of the trust. As a matter of meaning, the word "beautification" should be regarded as giving some colour to the word "advancement", with which it is associated. But, as a matter of construction, we think that the testator, who is devoting the whole of the capital and income of his residuary estate to the interests of the community in which he lives, should be regarded as contemplating the use of that whole for the fulfilment of two classes of purpose and the use of any part of that whole for either. This view is supported by the fact that, if the other view be adopted, the word "advancement" is really superfluous. For everything which will tend to the beautification of the township will tend to its advancement within the fair meaning of the words used by the testator, although not everything that will tend to its advancement will necessarily operate for its beautification. The provision of a public swimming pool for children is an example which occurs readily to one's mind. (at p458)

5. But, although the question of construction which we have been considering is obviously of great importance from the point of view of the administration of the trust, it has, in our opinion, no bearing on its validity. Whichever construction be adopted, we are of opinion that the right conclusion was reached in the Supreme Court, and that the trust is a charitable trust. (at p458)

6. We would regard it as plain that what the testator has in mind is the provision of physical things within a particular locality, which, because they have an element of beauty, or for some other reason, will tend to the general benefit or advantage of the small community dwelling in that locality, and so "advance" it as a community. Such trusts have been uniformly held to be charitable. They might indeed be said to afford an outstanding example of the fourth of Lord Macnaghten's four classes of charitable trusts and to fall very clearly within the "scope and intendment" of the preamble to the statute of Elizabeth I. They afford an outstanding example because in them we find a private person choosing to devote a part of his resources to what could fairly be regarded as a possible subject of public responsibility. Examples of trusts of this class which have been held to be charitable are Howse v. Chapman [1799] EngR 690; (1799) 4 Ves 542 (31 ER 278) (to the improvement of the city of Bath), Attorney-General v. Heelis (1824) 2 S & S 67 [1824] EngR 625; (57 ER 270) (for the improvement of the town of Bolton); Faversham Corporation v. Ryder (1854) 5 De GM & G 350 (43 ER 905) (for the benefit and ornament of the town of Faversham); Wrexham Corporation v. Tamplin (1873) 21 WR 768 (for the use and benefit of the borough of Wrexham), Mitford v. Reynolds (1842) 1 Ph 185 (41 ER 602) (words which were construed as meaning that the bequest was to be applied to "works - something to be constructed or established - for the benefit of the native inhabitants" of the city of Dacca in Bengal), Dolan v. Macdermot (1867) LR 5 Eq 60; (1868) LR 3 Ch App 676 (charities and other public purposes in the parish of Tadmarton), Re Allen; Hargreaves v. Taylor (1905) 2 Ch 400 ("general purposes for the benefit of the town of Kendal"; Re Bones; Goltz v. Ballarat Trustees Executors & Agency Co. Ltd. (1930) VLR 346 (the improvement of the city of Ballarat). In Theobald on Wills, 10th ed. (1947), pp. 277, 278, are cited a number of other decisions in which the trust has been of a more specific character than is conveyed by such general words as "benefit" or "improvement" or "advantage", e.g., for providing a water supply to a town or for repairing bridges in a town. A good example of this latter class of case is Monds v. Stackhouse [1948] HCA 47; (1948) 77 CLR 232 . Such cases provide examples of what may be comprehended within more general words, such as are found in the present case. An example of a gift for the beautification of a locality in a particular way is to be found in Grant v. Commissioner of Stamp Duties (1943) NZLR 113 . Johnston J. thought it clear that the gift was charitable. (at p459)

7. Mr. Voumard's main argument for the next of kin was founded on a passage in the judgment of the Court of Appeal, delivered by Lord Greene M.R., in Re Strakosch; Temperley v. Attorney-General (1949) Ch 529, at pp 539-541 . The gift in that case was of an entirely different character from that with which we are now concerned, but, in the course of the judgment, the Master of the Rolls found occasion to refer to the somewhat controversial case of Re Smith; Public Trustee v. Smith (1932) 1 Ch 153 , in which a gift "unto my country England for - own use and benefit absolutely" (sic) was held by the Court of Appeal to be a charitable gift. In the course of the judgments in that case the line of cases cited above was discussed, together with the case in the House of Lords of Goodman v. Saltash Corporation (1882) 7 App Cas 633 , which is, of course, a leading case on the subject. The cases of Re Smith (1932) 1 Ch 153 and Goodman v. Saltash Corporation (1882) 7 App Cas 633 had also been discussed by Lord Simonds in Williams' Trustees v. Inland Revenue Commissioners [1947] UKHL 1; (1947) AC 447, at pp 459, 460 , in an opinion in which four other learned Lords concurred. In Re Strakosch (1949) Ch 529 the Master of the Rolls, speaking for the Court, expressed the view that the reasoning which lay behind the cases was "that where general words are used such as to benefit such and such a parish or 'my country' the law will construe these words as restricted to benefits which are charitable in law" (1949) Ch, at p 539 . His Lordship concluded:- "If we are right in holding that the principle laid down is that general words that money is to be applied for the benefit of a district or a country are construed as meaning for such purposes as are recognised by the law as charitable purposes, the principle has no application here where the purpose is expressed" (1949) Ch, at p 541 . (at p460)

8. Mr. Voumard said that both the word "beautification" and the word "advancement" comprehended purposes which were not charitable as well as purposes which were charitable, and he said that, while the word "advancement" was a general expression which could, in accordance with the passages quoted, be construed as including only such purposes conducive to the advancement of the community of Bunyip as were charitable, the word "beautification" expressed a specific purpose to which that passage could not be applied. By way of example of a "beautifying" project which would not be charitable, he said that the words would authorize the building of fine houses with fine gardens for the councillors of the local municipality, because these would tend to "beautify" the township. (at p461)

9. We are not able to accept this argument, and for two reasons. In the first place, we think that the words "beautification of the township", construed without the aid of any canon of construction, do not include such an example as that given. The real meaning of the testator is that physical things, having an element of beauty, shall be provided in the township for the edification and enjoyment of the local community as a whole and not for the benefit of private individuals. That appears to us to be a charitable gift. To extend the words used as Mr. Voumard suggested would be to take an unreal and far-fetched view. In the second place, if this were not so, we think that the word "beautification" would be just such a general word as the Master of the Rolls may be taken to have had in mind in Re Strakosch (1949) Ch, at pp 539-541 . Cf. the cases already cited of Howse v. Chapman [1799] EngR 690; (1799) 4 Ves 542 (31 ER 278) ; Attorney-General v. Heelis (1824) 2 S & S 67 [1824] EngR 625; (57 ER 270) ; and Faversham Corporation v. Ryder (1854) 5 De GM & G 350 (43 ER 905) . (at p461)

10. It is not necessary to consider whether s. 131 of the Property Law Act 1928 (Vict.) would apply so as to save the gift if it were otherwise invalid. The gift in question is, in our opinion, a charitable gift. (at p461)

11. The originating summons asked that, if the trust were held to be charitable, an order should be made embodying a "scheme" for the administration of the trust. Strictly speaking, the settling of a scheme by or under the authority of the court is only appropriate where a charitable trust has failed or where for some other reason there is to be a cy-pres application of the fund. The trustee in the present case, however, may well desire to submit to the court a question as to whether some proposed application of the fund will be within the terms of the trust. The order made by Coppel A.J. directed that the question of the settling of a scheme be reserved for further consideration. This order is not open to serious criticism, but it is perhaps preferable to delete par. 3 of the order as it stands, to substitute therefor the words: "It is unnecessary to answer this question", and then, after the representative order, to provide that the plaintiff and the defendant the Attorney-General have liberty to apply with regard to the mode of application of the residuary estate of the testator under the trusts of the will. (at p461)

12. The appeal should be dismissed, and the order varied in the manner we have indicated. We do not think that there is sufficient reason in this case for departing from the prima-facie rule as to the costs of an unsuccessful appeal. The appellant should pay the costs of the appeal. (at p462)

ORDER

Appeal dismissed with costs.