Bacon v Pianta [1966] HCA 44; (1966) 114 CLR 634 (8 August 1966)

HIGH COURT OF AUSTRALIA

BACON v. PIANTA [1966] HCA 44; (1966) 114 CLR 634

Will

High Court of Australia
McTiernan(1), Taylor(1) and Owen(1) JJ.

CATCHWORDS

Will - Construction - Gift to unincorporated voluntary association - Bequest to Communist Party of Australia - Whether legacy to each member - Validity of bequest.

HEARING

Brisbane, 1966, June 17, 20;
Sydney, 1966, August 8. 8:8:1966
APPEAL, and alternatively APPLICATION for special leave to appeal, from the Supreme Court of Queensland.

DECISION

August 8.
THE COURT delivered the following written judgment:-
By his will the testator gave and devised and bequeathed the whole of his testamentary expenses) to The Communist Party of Australia for its sole use and benefit. The testator died on 6th February 1963 and his estate consisted soley of personalty being, in the main, moneys standing to his credit in various bank accounts and moneys on fixed deposit. In all, his estate amounted to 10,794 pounds at the time of his death and to a sum something slightly in excess of 8,000 pounds at the date of the hearing of the suit out of which this appeal arises. (at p638)

2. The question for our decision is whether a bequest in the terms stated is valid or whether the whole of the estate passes to the persons entitled thereto as upon an intestacy. In the Supreme Court Hart J. was of opinion that the bequest was void and the appeal is brought from the order which, on that view, he made disposing of the suit. (at p638)

3. The difficulty in the case arises from the fact that The Communist Party of Australia is an unincorporated voluntary association. Cases dealing with the problem which arises from such a circumstance with respect to testamentary dispositions are numerous and some of them are, to say the least, not readily reconcilable. However, in the recent case of Leahy v. Attorney-General (N.S.W.) [1959] HCA 20; (1959) AC 457; (1959) 101 CLR 611 many of them were referred to an reviewed and the guiding principles were restated. It was accepted that, as had been held in cases such as Bowman v. Secular Society (1917) AC 406 and In re Ogden; Brydon v. Samuel (1933) Ch 678 , a gift to an unincorporated association operates, prima facie, as a gift to the individual members at the time when the bequest becomes operative. However, circumstances may appear which preclude this conclusion; it may appear that the disposition amounts to a trust for the benefit of both present and future members, or, that it is not for the benefit of individuals at all but stands revealed as a trust for some purpose or purposes disclosed by the terms of the bequest. In the former of these two cases the gift may well fail as infringing the rule against perpetuities and, in the latter case, it will fail unless the purpose is, in the legal sense, charitable. Indications sufficient to rebut the prima facie presumption may be found to some extent in the form which the gift takes, in the number and disposition of the members of the association, in the subject matter of the gift and in the capacity of the members to put an end to their association and distribute its assets. As was said of the disposition in question in Leahy's Case [1959] UKPCHCA 3; (1959) AC 457; (1959) 101 CLR 611 : "In the first place it is not altogether irrelevant that the gift is in terms upon trust for a selected order. It is true that this can in law be regarded as a trust in favour of each and every member of the order. But at least the form of the gift is not to the members, and it may be questioned whether the testator understood the niceties of the law. In the second place the members of the selected order may be numerous, very numerous perhaps, and they may be spread over the world. If the gift is to the individuals it is to all the members who are living at the death of the testator but only to them. It is not easy to believe that the testator intended an 'immediate beneficial legacy' (to use the words of Lord Buckmaster (1943) Ch, at p 436 ) to such a body of beneficiaries. In the third place, the subject matter of the gift cannot be ignored. It appears from the evidence filed in the suit that 'Elmslea' is a grazing property of about 730 acres, with a furnished homestead containing twenty rooms and a number of outbuildings. With the greatest respect to those learned judges who have taken a different view, their Lordships do not find it possible to regard all the individual members of an order as intended to become the beneficial owners of such a property. Little or no evidence has been given about the organization and rules of the several orders, but it is at least permissible to doubt whether it is a common feature of them, that all their members regard themselves or are to be regarded as having the capacity of (say) the Corps of Commissionaries (see In re Clarke; Clarke v. Clarke (1901) 2 Ch 110 ) to put an end to their association and distribute its assets. On the contrary, it seems reasonably clear that, however little the testator understood the effect in law of a gift to an unincorporated body of persons by their society name, his intention was to create a trust, not merely for the benefit of the existing members of the selected order but for its benefit as a continuing society and for the furtherance of its work" (1959) AC, at pp 485, 486; (1959) 101 CLR, at pp 627, 628 . We do not think that this passage was intended as an exhaustive catalogue of the matters which might induce a court to hold that the prima facie conclusion was displaced; they were matters which presented themselves for consideration in Leahy's Case [1959] UKPCHCA 3; (1959) AC 457; (1959) 101 CLR 611 and they were thought to lead to the conclusion which is stated in the last sentence of the passage which we have quoted. (at p639)

4. In the instant case it is, we think, impossible for a number of reasons to regard the disposition as effectively making a gift collectively to the existing members of The Communist Party of Australia at the time of the testator's death. In form, the gift is to The Communist Party of Australia for its sole use and benefit and, there being nothing to show that the testator knew that the organization was not a legal entity, this provides some, albeit slight, indication that he did not intend to make such an immediate gift. Indeed, it is reasonable to suppose that the testator was unaware of the difficulties which would be occasioned by the fact that, in truth, the designated beneficiary was an unincorporated body. When there is added to the form in which the disposition is made the fact that The Communist Party had an extensive membership throughout Australia and that its membership seems to have been subject to very substantial fluctuation from time to time the additional difficulty arises of regarding the disposition as a gift to those individuals throughout Australia who should happen to be members of the organization at the time of his death. Some indication of the extent of the membership of the Party and the fluctuations in membership may be gathered from the evidence although it dealt primarily only with changes in the membership during a period of less than two years after the testator's death. To the best of the defendants' knowledge - exact records not having been kept at the office of the Central Committee - the number of members of the Party in Australia at the testator's death was some 5,274 of whom 2,515 were residents of New South Wales, 1,375 residents of Victoria, 826 residents of Queensland, 295 residents of South Australia, 194 residents of Western Australia, 51 residents of Tasmania and 18 residents of the Northern Territory. Of the total number specified 420 ceased to be members by the end of 1965 by reason of resignation, death or expulsion and, in the same period, 776 persons became members. Further, we think, upon consideration of the 1961 constitution of the Party - which, so far as we can see, is entirely silent concerning property of the Party or its transmission - it is impossible to say that at the time when the bequest, if effective, became operative the members of the Party had any, or any practical, capacity to put an end to their association and to distribute its assets. In our view, the observations made in In re Macaulay's Estate (1943) Ch 435 , which were cited and commented upon by Viscount Simonds in Leahy's Case (1959) AC 457; (1959) 101 CLR 611 , and the reasons for the decision in the last-mentioned case, lead to the conclusion that the cumulative effect of these considerations compel us to dismiss the appeal. In our view, it would be quite artificial to hold that the bequest operated as a bequest beneficially to the existing members of The Communist Party of Australia and we are satisfied that the correct conclusion is that it was a bequest to the members, both present and future, in trust for the purposes of the Party. That being so the bequest was void and, accordingly, the appeal should be dismissed. (at p641)

ORDER

Appeal dismissed. Costs of both the appellants and the respondent as between solicitor and client to be paid out of the estate of the testator.