Bacon v Pianta [1966] HCA 44

High Court of Australia McTiernan, Taylor and Owen JJ. Bacon v Pianta [1966] HCA 44

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.

Cur. adv. vult.

The Court delivered the following written judgment:—

Aug. 8 McTiernan, Taylor and Owen JJ.

By his will the testator gave and devised and bequeathed the whole of his estate both real and personal (after payment of his just debts funeral and 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 solely 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 at the time of his death and to a sum something slightly in excess of £8,000 at the date of the hearing of the suit out of which this appeal arises.

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.

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.) [1] many of them were referred to and reviewed and the guiding principles were restated. It was accepted that, as had been held in cases such as Bowman v. Secular Society [2] and In re Ogden; Brydon v. Samuel [3] , 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 [1] : "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 [2] ) 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 Commissionaires (see In re Clarke; Clarke v. Clarke [3] ) 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" [4] . 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 [1] and they were thought to lead to the conclusion which is stated in the last sentence of the passage which we have quoted.