New South Wales Supreme Court CITATION : Cram Foundation v Corbett-Jones & anor [2006] NSWSC 495 HEARING DATE(S) : 24 October 2005 JUDGMENT DATE : 26 May 2006 JURISDICTION : Equity Division JUDGMENT OF : Brereton J DECISION : Order appointing representative of next-of-kin pursuant to UCPR, r 7.6. Declarations that gift in will is valid charitable gift, that plaintiff is successor of original trustee and holds on trusts of will, that gift over is void and that original purposes of trust are no longer suitable and effective method of using trust property. Order for implementation of cy pres scheme. CATCHWORDS : TRUSTS – Charitable trusts – Procedure – difficulty in ascertaining and finding next-of-kin – whether representative should be appointed - Trustees – corporation assumes charitable functions and assets and liabilities of unincorporated society – whether corporation is successor of unincorporated society - Charitable gifts – gift for charitable purposes "as a memorial" to testator's family – whether charitable – Perpetuities - gift to charity with gift over on failure of charitable purpose – whether gift over void for perpetuity – whether at common law grantor's possibility of reverter upon termination of determinable fee is affected by rule against perpetuities - Schemes – Cy pres – for supervening impossibility – where original purposes have ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust – supervening failure of charitable purpose in context of void gift over – where particular charitable intent only –- general charitable intention not required – absolute gift required - distinction between limited or determinable interest and conditional interest - where gift not one for a limited period or until the occurrence of a particular event, but absolute gift to charity subject to a gift over on void condition subsequent – gift takes effect unconditionally and absolutely - cy pres is available - scheme approved. Charitable Trusts Act 1993 (NSW), ss 9, 10, 23 Charities Act 1960 (UK) LEGISLATION CITED : Disability Services Act 1993 (NSW) Methodist Church Union Act 1929 (UK) Perpetuities Act 1984 (NSW), ss 3(1), 4(1), 14(2) Uniform Civil Procedure Rules (NSW), r 7.6 ANZ Executors & Trustee Co Ltd v Trustees for the Presbyterian Church of Australia (NSWSC, Waddell CJ in Eq, 12 June 1990) Attorney General for New South Wales v Fulham [2002] NSWSC 629 Attorney-General for Northern Ireland v Forde [1982] NI 1 Attorney-General v Cummins (1906) 1 IR 406n Attorney-General v Pyle (1738) 1 Atk 435 Bath and Wells Diocesan Board of Finance v Jenkinson [2001] WTLR 353 Cabouche v Ramsay (1993) 119 ALR 215 Dean v Dean [1891] 3 Ch 150 Gibson v South American Stores (Gath & Chaves) Ltd [1950] Ch 177 Hancock v Watson [1902] AC 14 Hixon v Campbell (1924) 24 SR(NSW) 436 Hopper v Corporation of Liverpool (1944) 88 Sol Jo 213 Mary Portington's Case (1613) 10 CoRep 35b Matthew Manning's Case (1609) 8 CoRep 94b, 77 ER 618 Newis v Lark (1571) 2 Plowd 403 Pearks v Mosely (1880) 5 App Cas 714 Perpetual Trustee Co Ltd v Gilmour [1977] 2 NSWLR 716 Perpetual Trustee Co v Williams (1913) 13 SR (NSW) 209 Re Baillie; Faithful v Sydney Industrial Blind Institution (1907) 7 SR(NSW) 265 Re Bawden's Settlement, Besant v Board of Governors of London Hospital [1954] 1 WLR 33n Re Blunt's Trusts [1904] 2 Ch 767 Re Bowen; Lloyd Phillips v Davis [1893] 2 Ch 491 Re Chardon [1928] Ch 464 Re Cooper's Conveyance Trusts, Crewsdon v Bagot [1956] 1 WLR 1096 Re Da Costa; Clarke v Church of England Collegiate School of St Peter [1912] 1 Ch 337 Re Essex County Roman Catholic Separate School Board and Antaya (1977) 80 DLR (3d) 405 Re Evan's Contract [1920] 2 Ch 469 CASES CITED : Re Flynn [1975] VR 633 Re Gage [1898] 1 Ch 498 Re Hanbey's Will Trusts [1956] Ch 264 Re Hardy, Nelson v Attorney-General [1933] NI 150 Re King's Trusts (1892) 29 LRIr 401 Re Lepton's Charity [1972] Ch 276 Re Lysaght Decd, Hill v The Royal College of Surgeons [1966] Ch 191 Re Moore (1888) 39 Ch 116 Re North Gower Township Public School Board and Todd (1968) 65 DLR (2d) 421 Re Peel's Release [1921] 2 Ch 218 Re Randell, Randell v Dixon (1888) 38 ChD 213 Re Sharp's Settlement Trusts [1973] Ch 331 Re Slevin, Slevin v Hepburn [1891] 2 Ch 236 Re Smith [1967] VR 341 Re Tacon [1958] Ch 447 Re Talbot; Jubb v Sheard [1933] 1 Ch 825 Re the Trustees of Hollis' Hospital and Hague's Contract [1899] 2 Ch 540 Re Tilbury West Public School Board and Hastie (1966) 55 DLR (2d) 407 Re Tyrie (No 1) [1972] VR 168 Re Tyrrell's Estate (1907) 1 IR 292 Re Ulverston and District New Hospital Building Trusts [1956] Ch 622 Re Wilmott, Uniting Church in Australia Property Trust (Vic) v Royal Victorian Institute for the Blind [1999] VSC 485 Re Wright [1954] Ch 347 Re Wright, Pillgrem v Attorney-General [1951] Tas SR 13 Siemenski v Brooks Nominees [1990] Tas SR 236 Wainwright v Miller [1897] 2 Ch 255 Williams v Attorney-General (1948) 48 SR(NSW) 505 Williams v The Perpetual Trustee Co Ltd (1913) 17 CLR 469 Zapletal v Wright [1957] Tas SR 211 The Cram Foundation (plaintiff) PARTIES : Jan Corbett-Jones (first defendant) Attorney General of NSW (second defendant) FILE NUMBER(S) : SC 2437/05 Mr G Blake SC (plaintiff) COUNSEL : Ms E Ford (sol) (first defendant) Mr R Lancaster w Ms N Bearup (second defendant) Russell McLelland Brown (plaintiff) SOLICITORS : Emil Ford & Co (first defendant) Crown Solicitor (second defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRERETON J 26 May 2006 2437/2005 The Cram Foundation –v- Corbett-Jones & Anor JUDGMENT 1 HIS HONOUR: Martha Ann Cram devised her property at 362 Crown Street, Wollongong to the trustees of the Wollongong and District Society for Crippled Children, for use as a home or hospital for crippled children as a memorial to the Cram family, subject to the proviso that should the property at any time cease to be used for those purposes, it thereupon revert to her next-of-kin at that time. 362 Crown Street is now vested in the plaintiff, The Cram Foundation, which claims to be the successor of the Society. The Foundation is also the proprietor of 360 and 364 Crown Street. For many years it conducted a residential facility for crippled children, and subsequently a nursing home for severely disabled children and adults, on the Crown Street properties. However, current NSW government policy requires such care to be provided through smaller group homes in the community rather than in large institutions, and the Foundation has implemented a transition plan to this end, in the light of which it wishes to realise the Crown Street properties, and invest and apply the proceeds to provide accommodation, goods and other services to disabled persons in the Illawarra District. 2 The Foundation brings these proceedings to establish a scheme for the administration cy pres of 362 Crown Street. The proposed scheme has been prepared in consultation with representatives of the second defendant, the Attorney General, who considers it to be an appropriate application of the trust property, and who consents to the orders sought. The first defendant, Ms Corbett-Jones, who has been proposed as a representative of the next-of-kin of the deceased, has filed an appearance, but did not appear at the hearing to oppose the relief sought. However, in accordance with the Court's request, made at a directions hearing on 29 July 2005 by Campbell J, the Attorney General, while emphasising that he had considered the issues and maintained the view that the Court ought to make the orders sought, has made submissions reflecting the arguments which might have been advanced on behalf of the next-of-kin, had they appeared as active contradictors. 3 The issues are:- 1. Should Ms Corbett-Jones be appointed to represent the next-of-kin? I conclude that she should; 2. Was the gift of 362 Crown Street to the Society a valid charitable gift? In my opinion, it was; 3. Is the Foundation the successor of the Society? I conclude that it is; 4. Is the gift over void for perpetuity? I conclude that it is, because the event that triggers the gift over might occur outside the perpetuity period, although if the gift to the Society were one for a limited period or until the occurrence of a particular event, the estate's possibility of reverter would not infringe the rule; 5. Has there been a supervening failure of the trust? I conclude that the original purposes have ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust, so that, if otherwise appropriate, it should be administered pursuant to a cy pres scheme. 6. Does the testator's intention, evidenced by the (void) gift over, exclude cy pres ? I conclude that the gift was not one for a limited period or until the occurrence of a particular event, but an absolute gift to charity subject to a gift over on the happening of a condition subsequent, which condition being void for perpetuity, the grant took effect unconditionally; accordingly, the gift was absolute, cy pres is available and the scheme should be approved. Background 4 The deceased died on 5 October 1964, leaving a Will dated 16 November 1961, probate of which was granted on 15 March 1965. Clause 3 of the Will provided: I GIVE AND DEVISE my Residence "Froam" 362 Crown Street Wollongong (but not including furniture or household or personal effects) and the land on which it is erected having a frontage of approximately one hundred feet to Crown Street and running through to Urunga Parade to The Trustees of THE WOLLONGONG AND DISTRICT SOCIETY FOR CRIPPLED CHILDREN to be used by the said Society as a Home or Hospital for Crippled Children as a Memorial to the Cram family but subject to the proviso that should the property at any time cease to be used for these purposes it shall thereupon revert to my next-of-kin at that time in accordance with the laws of the State of New South Wales for the time being in force. 5 Clauses 4, 5 and 6 of the Will bequeathed other items of the deceased's property to named individuals and organisations, and clause 9 bequeathed the residue of the estate to four named nieces and nephews of the deceased, in equal shares. 6 The unincorporated Society named in the Will changed its name to the Illawarra Society for Crippled Children on 21 January 1964, some 9 months before the death of the deceased. 7 The executors of the Will transferred the Property to the trustees of the unincorporated Society in 1968. By a Deed of Trust made on 18 June 1968, the trustees declared that the land devised by clause 3 of the Will "shall be used only as a home or hospital for crippled children as a memorial to the Cram family …". By 1970, the trustees also held the adjoining property at 360 Crown Street, which had been acquired by the Society for the purposes of a school for disabled children. On 6 November 1973, the titles of 360 and 362 Crown Street were consolidated. 8 From October 1971 the Crippled Children's Centre, which included the Illawarra Children's Hospital, caring mostly for post-operative and orthopaedic patients, with occupational and physiotherapy departments, operated from 362 Crown Street, until increasing costs forced it to close on 7 December 1974. From 3 February 1975, the Hospital was reopened as a nursing home for intellectually disabled children, called Cram House Nursing Home, which provided accommodation for 26 children with intellectual disabilities aged between 1 and 31 years, and respite care for other children when beds were available. 9 The Illawarra Society for Crippled Children ("the incorporated Society") was incorporated on 7 March 1977. The incorporated Society assumed the purposes and functions of the unincorporated Society. On 15 March 1977, it accepted a transfer from the trustees of the unincorporated Society of all its assets and liabilities, and in particular the land at 360-362 Crown Street. Extensions to Cram House Nursing Home were opened in November 1983, on the land at 364 Crown Street, which the incorporated Society leased from 1 May 1978 and purchased on 5 January 1988. 10 On 8 October 1999, the incorporated Society changed its name to Cram Foundation and, on 18 May 2000, again (slightly) to The Cram Foundation. 11 New South Wales government policy is now to require care for the disabled to be provided through smaller group homes, rather than in large institutions. As a condition of continued funding of its services, the Foundation was required to implement a transition plan, meeting the approval of the Department of Ageing, Disability and Home Care. Under its Amended Transition Plan, approved on 27 January 2000 under the Disability Services Act 1993, the Foundation, between October 2002 and June 2003, transitioned to providing community-based accommodation and services for the former residents of Cram House, in five group homes which were purchased and modified by the Department, and which the Foundation operates under licence from the Department. The last residents moved from Cram House in June 2003, and, since then, the Foundation's administrative and clerical staff has occupied part of Cram House. 12 The Foundation now provides accommodation and various support services to children and adults who have complex physical and mental disabilities through group homes, located within the Shellharbour Local Government Area. This involves the provision of 9 professional registered nursing staff and 50 other staff trained or training in disability work, providing full health care, personal care and assistance in activities of daily living, maintenance of family relationships, assisting clients to live in the community, transport and day activity programmes. The Foundation also provides the specialist equipment required by each client, such as wheelchairs, trolleys and specially modified vehicles. There is no other non-government organisation operating in the Illawarra District, apart from the Foundation, which provides care for children or adults with high support needs. 13 The market value of the three properties at 360–364 Crown Street, Wollongong, as at September 2003, was $1.9 million. 14 The proposed scheme, to be called "the Martha Ann Cram Trust for assisting disabled persons in the Illawarra District" (or, in short form, "The Cram Trust"), of which the Foundation is to be the trustee, would empower the Foundation to sell, mortgage, lease or otherwise dispose of 360-362 Crown Street, and apply the net proceeds, to the extent that they are referable to 362 Crown Street, after costs, in payment into a separate trust account, to be invested and applied in providing accommodation, goods and other services to disabled persons in the Illawarra District, with power to gradually expend the capital sum even if the eventual result would be to utilise all the funds and bring the Trust to an end. Should a representative be appointed? 15 The deceased appears to have been born in 1880, the seventh of eleven children of James Cram (who died in 1919) and his second wife Alice (who died in 1914). There were also seven children of James Cram's first marriage to Sarah (who died in 1866). The Foundation's Chief Executive Officer has made inquiries, and has identified five descendants of the siblings of the deceased, including Ms Corbett-Jones. 16 Uniform Civil Procedure Rules 2005 (NSW) , r 7.6 provides that, in relation to proceedings concerning property the subject of a trust, where a class of persons may be interested in the proceedings, the court may appoint one or more of those persons to represent any one or more of them, but only if (a) the class or a member of it cannot, or cannot readily, be ascertained, or though ascertained, cannot be found; or (b) though the class or a member has been ascertained and found, it is expedient for the purpose of saving expense (having regard to all of the circumstances, including the amount at stake and the degree of difficulty of the issues) for a representative to be appointed for one or more of them. 17 The large number of siblings and half-siblings of the deceased inhibits the economical and expeditious ascertainment of her next-of-kin. I am satisfied that the class constituted by the deceased's next-of-kin cannot be ascertained and found readily, if at all, although some members of it can be; and although that some members of the class have been ascertained and found, I am also satisfied, notwithstanding that there is a substantial amount at stake and that the issues are not without difficulty, that it is expedient for a representative of the class to be appointed for the purpose of saving expense, having regard to the time which has passed since the death of the deceased, that the issue was considered but not litigated as long ago as 1965 (when counsel's advice on it was sought and obtained), and that the Attorney General has presented the arguments which might otherwise have been advanced by the next-of-kin. 18 Accordingly I am satisfied that it is appropriate to appoint Ms Corbett-Jones to represent the next-of-kin, pursuant to UCPR, r 7.6. Was the gift a valid charitable gift? 19 The bequest of the residence "Froam" at 362 Crown Street was to the trustees of the Society, to be used "as a Home or Hospital for Crippled Children as a Memorial to the Cram family". 20 The purpose of a home or hospital for crippled children is plainly charitable. While a gift for the purpose of a family memorial is not of itself charitable, the dominant aspect of this gift is the purpose of use as a home or hospital for crippled children. It is an incident of this that it serve as a memorial, but the substance of the gift's object is charitable. The circumstance that as an incident the property would stand as a memorial to the Cram family does not deprive it of its charitable character and purpose. 21 In any event, even if the reference to a memorial would otherwise have denied charitable status to the gift, the charitable part of the gift would be saved by Charitable Trusts Act 1993 (NSW), s 23. 22 Accordingly, the gift of 362 Crown Street was a valid charitable gift. Is the Foundation the successor of the original Society? 23 On 21 January 1964, a Special General Meeting of the original unincorporated Society resolved to adopt a new Constitution. That new constitution is not in evidence. The minutes of the meeting (entitled "Minutes of the Special General Meeting of Wollongong & District Society for Crippled Children …") were confirmed at a meeting on 10 March 1964, the minutes of which are entitled "Minutes of a meeting of the Illawarra Society for Crippled Children …". There is a substantial consistency between the members identified as present (and apologising) at the meeting of 21 January 1964 and at the meeting of 10 March 1964. 24 An extraordinary general meeting held on 7 September 1965 - the minutes of which are entitled "Minutes of a meeting of the Illawarra Society for Crippled Children …" - resolved that the rules be amended by deleting the existing rules and adopting new rules. The Constitution and Rules adopted on that date commence by providing that the Society shall be known as "The Illawarra Society for Crippled Children". 25 A Deed of Trust dated 18 June 1968, by which Messrs Worland, Taylor and Rogers declare that they hold the land at 362 Crown Street, which was transferred to them by transfer of that date, upon trust for the Illawarra Society, on the trusts set forth in its Constitution and Rules, recites the relevant provision of the Will, and that on 21 January 1964 the name of the Society was changed to the Illawarra Society for Crippled Children. 26 From the consistency of the membership as recorded in the minutes, the change in the title of the minutes, the consistent use of the name of "the Illawarra Society" after that date, and the recital in the Trust Deed, I conclude that the adoption of the new constitution on 21 January 1964 involved changing the name of the original unincorporated Society to The Illawarra Society for Crippled Children. This was some nine months before the death of the deceased. 27 The gift in the Will was to a particular charitable institution named in the Will. Such a gift prima facie lapses if the institution has ceased to exist at the testator's death, but not if it is a gift for the purposes of the particular charitable institution and those purposes have been taken over by another institution which may be regarded as the successor of the first [Re Wright, Pillgrem v Attorney-General [1951] Tas SR 13; Re Tyrie (No 1) [1972] VR 168, 177; Re Flynn [1975] VR 633, 637]. No question of lapse arises in this case, because the institution named in the will had not ceased to exist at the date of death; the same institution continued in existence under a different name [Re Flynn [1975] VR 633, 638-639]. And even if the unincorporated Illawarra Society were considered to be a different institution from that named in the Will, it had plainly taken over the work and purposes of the original Society, and should properly be regarded as its successor [Re Tyrie, 177-178; Re Flynn, 639]. Accordingly, the gift did not lapse. 28 As has been mentioned, on 18 June 1968, Mrs Cram's executors transferred 362 Crown Street to Messrs Worland, Taylor and Rogers, who by deed declared that they held it upon trust for the unincorporated Society. Mr Guest was appointed as a new trustee, in place of Mr Taylor, on 26 May 1970. When the incorporated Society, having assumed the charitable purposes and functions of the unincorporated Society, accepted the transfer from the trustees of the assets and liabilities of 362 Crown Street, it succeeded to the trusts of the Will. The subsequent changes in the name of the incorporated Society have no effect on its legal status as a trustee. The incorporated Society – now, the Foundation - plainly took over the work and purposes, as well as the assets and liabilities, of the original unincorporated Society, and is properly to be regarded as its successor. Is the gift over void for perpetuity? 29 The Perpetuities Act 1984 (NSW) commenced on 31 October 1984 and, with certain immaterial exceptions, does not apply to a will taking effect before that date [ss 3(1), definition of "settlement"; 4(1)]. As the Will was executed and the testatrix died many years before 31 October 1984, it is necessary to consider the common law rule against perpetuities. 30 The common law rule against perpetuities (or, as the authors of Jacobs' Law of Trusts, 6th ed (at [1081]), call it, the rule against remoteness of vesting) is that a future interest in property must vest, if at all, within the perpetuity period of "a life or lives in being" and 21 years thereafter. Under this rule, a gift over conditional upon an event which need not necessarily occur within the perpetuity period is void [Re The Trustees of Hollis' Hospital and Hague's Contract [1899] 2 Ch 540, 555 (Byrne J); Re Da Costa, Clarke v Church of England Collegiate School of St Peter [1912] 1 Ch 337, 342 (Eve J); Perpetual Trustee Co v Williams (1913) 13 SR (NSW) 209, 213-214 (Street J); Williams v The Perpetual Trustee Co Ltd (1913) 17 CLR 469, 485 (Barton ACJ), 495 (Isaacs J)]. Thus, where there is a gift for charitable purposes with a gift over to a non-charitable purpose, on the fulfilment of a condition which may occur outside the perpetuity period, the gift over is void, and the initial gift for charitable purposes is regarded as absolute and unconditional [Re Bowen, Lloyd Phillips v Davis [1893] 2 Ch 491; Re Baillie, Faithful v Sydney Industrial Blind Institution (1907) 7 SR(NSW) 265]. 31 However, there are conflicting views as to whether, where there is a limited or determinable gift (as distinct from a conditional gift – a distinction to which it will be necessary to return), a grantor's possibility of reverter is subject to the rule against perpetuities. It has been submitted that I should hold that the possibility of reverter is also subject to the perpetuity rule, but I have concluded that it is not. 32 First, the view that the rule against perpetuities does not apply to the grantor's possibility of reverter is sound in principle. The rule against perpetuities is concerned with the creation, and not the duration or termination, of interests, and does not invalidate a limitation which provides that an interest shall or may cease at a future date outside the perpetuity period [Wainwright v Miller [1897] 2 Ch 255, esp 261; see also Re Gage [1898] 1 Ch 498]. If a determinable fee terminates, then there will be an interest of which the settlor has not disposed. Any beneficial interest of which a settlor fails to dispose remains in the settlor under a resulting trust, ab initio, even if it is uncertain when, if ever, it will take effect [Charles Harpum, Malcolm Grant and Stuart Bridge, The Law of Real Property, 6th ed, 2000, [7-090]-[7-091]]. 33 Secondly, although several cases suggest that the perpetuity rule is applicable to the grantor's possibility of reverter, on examination their reasoning is not compelling. 34 In the Hollis' Hospital case, Byrne J recorded (at 549) a concession in argument that if the clause in question ought to be construed as a limitation or as creating a shifting use it would be void as infringing the rule against perpetuities, and held (at 555) that, taking effect as a condition, it was void for the same reason. However, as Isaacs J pointed out in Williams v Perpetual Trustee (at 495), while portion of the land conveyed was the legal property of Thomas Hollis, Snr and other grantors, the right of reverter was limited to the heirs of Thomas Hollis alone; thus this was not a true case of reverter to the grantor, as if on resulting trust, upon termination of a determinable fee; it was in substance a gift over. In Re Smith [1967] VR 341, Menhennitt J (at 346.26-29) described the concession referred to by Byrne J as a "decision", but as the context was a condition for re-entry and not a determinable grant, what his Honour said was obiter. 35 In Hopper v Corporation of Liverpool (1944) 88 Sol Jo 213, Bennett V-C expressed the opinion that if the rule against perpetuities applied to the possibility of reverter on a fee subject to a condition which may or may not happen, it must equally apply to the possibility of reverter on a fee limited to determine on an event which may or may not happen. But in my respectful opinion, this overlooks the circumstance that the perpetuity rule applies to the creation, not termination, of interests, and leaves unexplained what happens to the fee simple upon termination of a determinable fee. 36 In Siemenski v Brooks Nominees [1990] Tas SR 236, Zeeman J, with reference to Hopper v Corporation of Liverpool, the Hollis' Hospital case and Re Smith, said that though Hollis' Hospital and Hopper had been much criticised, he was persuaded he should follow Hollis' Hospital, concluding that "the respondent holds the fee simple free from any possible re-entry or reverter" – which reflects that his Honour approached the case as if it made no difference whether the specified event was a condition or a limitation, and did not consider whether it made a difference, save to observe that the view expressed in Morris and Leach on the Rule against Perpetuities, 2nd edn, (at 213) - that any decision that the rule against perpetuities applied was practically equivalent to a decision that determinable fees simple and fees simple subject to a right of entry for condition broken did not exist, or that there was no difference between them and a fee simple absolute - may be too extreme as, for example, an executory limitation on failure of issue on the part of a grantee would not offend the rule. That exception itself illustrates that there may be a difference between failure of an executory limitation, and fulfilment of a condition. 37 Thirdly, other authority favours the view that the rule against perpetuities does not apply to the grantor's possibility of reverter on termination of a determinable fee, even outside the perpetuity period. 38 In Williams v Perpetual Trustee, Isaacs J, though joining in dismissal of the appeal, expressly withheld assent from the proposition that a right of reverter unlimited in time was void for perpetuity (at 494-495), thinking that the question was "quite open to argument". His Honour referred to Attorney-General v Cummins (1906) 1 IR 406n (Palles CB) and Re Tyrrell's Estate (1907) 1 IR 292, 299 (Walker C), which took a view contrary to the Hollis Hospital case. 39 In Attorney-General v Pyle (1738) 1 Atk 435, Lord Harwicke LC held that the testator's heir had a valid possibility of reverter after a devise of land to a school "so long as it shall continue to be endowed with charity". 40 In Re Cooper's Conveyance Trusts, Crewsdon v Bagot [1956] 1 WLR 1096, there was a conveyance of land to trustees in fee simple upon trust for an orphan's home, and upon failure of that trust then for other purposes; while the second trust was void for perpetuity, the trust for the orphan's home terminated in accordance with the testator's intention, and there was a valid resulting trust for his estate. 41 Three cases concerning bequests of personal property hold that upon termination of a grant by a limitation, property falls into residue for the benefit of a residuary legatee regardless of when the determination occurs, even though a remainder to that legatee would be void for perpetuity [Re Randell, Randell v Dixon (1888) 38 ChD 213; Re Blunt's Trusts, Wigan v Clinch [1904] 2 Ch 767; Re Chardon [1928] Ch 464]. In such a case, the apparent "gift over" to the residuary legatee is not taken to be a provision which itself vests an interest in another person, but rather to indicate (superfluously) the reverter of the interest to the residuary estate [Re Randell, 218-219]. 42 Accordingly, in my opinion, principle and the balance of authority favours the view that, at common law, the grantor's possibility of reverter upon termination of a determinable fee is a vested interest, and is unaffected by the rule against perpetuities [see also Re Tilbury West Public School Board and Hastie (1966) 55 DLR (2d) 407, 412-416 (Grant J); Re Essex County Roman Catholic Separate School Board and Antaya (1977) 80 DLR (3d) 405, 408 (Klever J); Peter Butt, Land Law, 4th ed, 2001, [1272]]. [Under the Perpetuities Act, a possibility of reverter under a determinable interest is subject to the rule against perpetuities: s 14(2)]. 43 Here, the gift over is neither to the residuary beneficiaries under the will, nor even to the deceased's next-of-kin at the date of her death (who would be entitled on partial intestacy), but to the deceased's next of kin at the time when the property ceases to be used for the specified purposes. Even if a gift over to the next of kin as at the date of death might reflect, superfluously or otherwise, the operation of law on termination of a determinable gift (and there are difficulties with this where, as here, there is an express gift dealing with the whole of the residuary estate), the gift over to the next of kin when the specified event occurs does not; to the contrary, it is a true gift over, to persons who would not be entitled by operation of law on termination of a determinable gift, and whose entitlement is derived solely from the Will. As, for the purposes of the gift over, the trust property may cease to be used for the designated purposes after the expiry of the limitation period, those next-of-kin take a future interest upon an event that need not necessarily occur within the time allowed by the rule against perpetuities. It follows that the gift over is void, as the specified event might occur outside the perpetuity period. Has there been a supervening failure of the trust? 44 At general law, the power of the Court to direct a cy pres scheme for the administration of property given to charity arose if a gift to charity was impossible of performance at the outset, or if it subsequently became impossible of performance, and was limited to directing a scheme which carried out the testator's charitable intention as nearly as possible. However, the Charitable Trusts Act 1993 (NSW) provides as follows: 9 Extension of the occasions for applying trust property cy pres (1) The circumstances in which the original purposes of a charitable trust can be altered to allow the trust property or any part of it to be applied cy pres include circumstances in which the original purposes, wholly or in part, have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust. (2) References in this section to the original purposes of a charitable trust are to be construed, if the application of the trust property or any part of it has been altered or regulated by a scheme or otherwise, as references to the purposes for which the trust property are for the time being applicable. 10 Requirement for general charitable intention of donor (1) This Part does not affect the requirement that trust property cannot be applied cy pres unless it is given with a general charitable intention. (2) However, a general charitable intention is to be presumed unless there is evidence to the contrary in the instrument establishing the charitable trust. 45 Thus for cy pres to be available, it is no longer necessary that actual compliance with the original terms be impossible, and it is now enough that they have ceased to provide a suitable and effective method of using the trust property [Attorney General for New South Wales v Fulham [2002] NSWSC 629, [12]-[17] (Bryson J)]. The requirement to have regard to "the spirit of the gift" refers to the basic intention underlying the gift, as ascertained from the terms of the relevant instrument in the light of admissible evidence [Re Lepton's Charity [1972] Ch 276, 285A-B (Pennycuick V-C), a decision on s 13(1)(e)(iii) of the Charities Act 1960 (UK), from which s 9 is derived]. Thus, when directing a cy pres scheme, the Court acts in accordance with the spirit of the trust, to apply the property to the charitable purpose in a presently effective and practical way [Attorney General (NSW) v Fulham, [20]]. 46 Since June 2003, in the light of the history of Cram House and State Government policy, the original charitable purpose of "a home or hospital for crippled children" has at least ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust, within s 9(1) of the Charitable Trusts Act. Disabled children are no longer accommodated in large institutions, but supported in the community. If a scheme is not established, then the improvements, being a large purpose built hospital for the accommodation of severely disabled persons, could not be used by the Foundation for any significant or appropriate purpose, while the Foundation would remain liable for outgoings, maintenance, insurance and security. The Foundation continues to assist disabled children in the Illawarra District, but does so through the provision of accommodation in group homes, and various support services. It is the only non-government organisation operating in the Illawarra District in this field. 47 The original purposes stated in clause 3 of the Will have since they were laid down ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust. The circumstances present a clear case for the formulation and implementation of a cy pres scheme, if it is otherwise available. Does the testator's intention, evidenced by the (void) gift over, exclude cy pres? 48 It might be suggested that, in the light of the words of the proviso in clause 3 of the Will, administration cy pres would be contrary to the testator's intention. Does the gift over, though void, indirectly produce this result? General charitable intention not required 49 The starting point is that in the context of supervening (as distinct from initial) impossibility or impracticability, the availability of cy pres does not depend on a "general charitable intention". The principle that once property is effectively dedicated to charity, whether in pursuance of a general or particular charitable intent, the next-of-kin and residuary legatees are forever excluded, and no question of subsequent lapse can affect the matter so far as they are concerned, is well-established [Re Slevin, Slevin v Hepburn [1891] 2 Ch 236; Re Wright [1954] Ch 347, 362-3 (Romer LJ), 364 (Denning LJ); Re Ulverston and District New Hospital Building Trusts [1956] Ch 622, 636 (Jenkins LJ); Re Tacon [1958] Ch 447; Re Lysaght, Hill v The Royal College of Surgeons [1966] Ch 191, 208 (Buckley J)]. 50 While Charitable Trusts Act, s 10, reiterates the general law requirement that trust property cannot be applied cy pres unless it is given with a general charitable intention, that is so only in a case of initial impossibility. This is because, where it is initially impossible to implement the terms of the trust, no charitable trust has come into existence unless there is a general charitable intention. But where a charitable trust has been validly created, and afterwards implementation has become impossible (or, under the Act, ceased to be suitable and effective) as a result of supervening circumstances, a general charitable intention is not required: because the property has already been given to charity, and cannot be taken back [Hixon v Campbell (1924) 24 SR(NSW) 436, 441-442 (Maughan AJ); Williams v Attorney-General (1948) 48 SR(NSW) 505, 508 (Sugerman J); Re Wright, 362-3 (Romer LJ); Re Ulverston New Hospital Building Trusts, 635-7 (Jenkins LJ); Re Lysaght, 208 (Buckley J); ANZ Executors & Trustee Co Ltd v Trustees for the Presbyterian Church of Australia (NSWSC, Waddell CJ in Eq, 12 June 1990), pp 19-23; Attorney General for New South Wales v Fulham, [21]-[22] (Bryson J)]. 51 In this case, there was no question of initial impossibility or impracticability of the charitable gift contained in clause 3 of the Will. To the contrary, for many years, the property was used for the purposes specified in the gift. The impracticability or impossibility that has arisen is a supervening one, after the initially valid charitable gift had taken effect, as a result of changes in social policy. In those circumstances, it is unnecessary to search for any general charitable intention as a precondition to the availability of cy pres. Absolute gift required 52 However, cy pres is not available, even on a supervening failure, if the property has not been the subject of an outright gift: if the gift is a limited one, the property will instead be held upon a resulting trust for the donor or estate, or as otherwise directed in the original gift. For this purpose, the test is well-established, and is consistently stated in the cases, although they differ as to its application: where there is an absolute and perpetual gift to charity, with a gift over on cesser which fails for remoteness or some other reason, the original perpetual gift to charity remains; but where there is a gift to charity for a limited period, then the undisposed of interest reverts to the grantor. The question is whether, upon the true construction of the gift, the testator has given the property to charity, in perpetuity, subject to an executory gift in favour of the residuary legatee, or whether he has given it for a limited period, leaving the undisposed of interest to fall into residue [Re Bowen, Lloyd Phillips v Davis, 495-496 (Stirling J); Re Baillie, 268 (AH Simpson CJ in Eq); Re Peel's Release [1921] 2 Ch 218 (Sargant J); Re Cooper's Conveyance Trusts, Crewsdon v Bagot, 1102-1103 (Upjohn J); Bath and Wells Diocesan Board of Finance v Jenkinson [2001] WTLR 353, [65] (Evans-Lombe J)]. Upjohn J stated the test in Re Cooper's Conveyance Trusts as follows (at 1102): Where in terms an absolute and perpetual gift to charity is made with a gift over on cesser which fails for remoteness or for some other reason, the original perpetual gift to charity remains; but, on the other hand, where there is a gift to charity for a limited period then the undisposed of interest reverts to the grantor. The question to be answered was succinctly put by Stirling J in In re Bowen . He said: "The question which I have to decide, therefore, appears to me to reduce itself to one of the construction of the testator's will -- i.e., whether the testator has given the property to charity, in perpetuity, subject to an executory gift in favour of the residuary legatee, or whether he has given it for a limited period, leaving the undisposed of interest to fall into residue." In that case, and in the case in which Sargant J followed it, In re Peel's Release , the original beneficial gift was in express terms made perpetual. On the other hand, In re Randell and In re Blunt's Trusts were cases on the other side of the line, for the gift in each of those cases was expressed to be limited in duration. 53 Thus if, on the proper construction of clause 3, the gift for charitable purposes is for a limited period or until the occurrence of a particular event, after which the gift reverts to the residuary estate (by operation of law, rather than as a consequence of the provisions of the Will), then, as the estate's possibility of reverter does not infringe the rule against perpetuities, if the specified event has occurred (in that the property has ceased to be used for the specified purposes), the property would fall into residue, and cy pres would be unavailable. 54 It is in the application of the test, particularly in the context of gifts that are prima facie unlimited in time but are followed by clauses of defeasance, that controversy has arisen. On one view, of which Re Cooper's Conveyance Trusts is the exemplar, even where the gift is in the first place unlimited in time but is followed by a clause of defeasance or a power of revocation, it is a question of construction whether the donor intended to devote the gift to charity outright, or only for a limited purpose and period; and in considering that question of construction, the court may rely on a clause of defeasance, even though it is open to objection on the ground of perpetuity, to conclude that the gift was for a limited purpose and period. Upjohn J wrote (at 1102-1103): …Where, however, the donor uses language showing an intention that in some circumstances he contemplates a failure of the purpose or indicates that his gift is only to be for a limited time or purpose, then it becomes a question of construction, whether he has made an out and out or perpetual gift to charity or not, and that is not inaptly expressed by asking whether he has evinced a general charitable intention. Whatever language is used, however, the whole question is what are the donor's intentions, to be ascertained on a true construction of the relevant documents in the light of the relevant surrounding circumstances. Thus, even where the gift is in the first place unlimited in time but is followed by clauses of defeasance or powers of revocation, it is a question of construction whether a donor intended to devote his gift to charity out and out or in perpetuity or only for a limited purpose and period: see In re Talbot and Gibson v South American Stores (Gath & Chaves) Ltd , which I have already mentioned. In considering the construction of the deed, those two cases also make it clear that the court may rely on a clause of defeasance though that clause is open to objection on the ground of perpetuity. The Distinction between a Determinable Interest and a Conditional Interest 55 To understand the cases which address, and reach differing conclusions, on the issue, it is first necessary to appreciate the distinction between a determinable interest and a conditional interest. 56 A gift of property until the occurrence of some specified event which may never occur may be construed as a determinable fee simple, or as a conditional fee simple. A determinable fee is one which will automatically determine on the occurrence of the specified event (which may never happen), whereas a conditional fee is one which has attached to it a condition upon satisfaction of which (if ever) the grantee's estate is cut short, the essential distinction being that the determining event in a determinable fee itself sets the limit for the estate first granted, whereas a condition subsequent is an independent clause added to a limitation of a complete fee simple absolute which operates, if satisfied, to defeat it; thus in a determinable fee, the limiting circumstance is integral to the formulation of the duration of the estate, whereas in the conditional fee, the limiting proviso operates to cut short the estate before it reaches its normal span [Harpum, Grant and Bridge, The Law of Real Property, 6th ed, 2000, [3-062], [3-064]; in substantially the same terms as in earlier editions: Megarry and Wade, The Law of Real Property, 4th ed, 1975, 74-76; 5th ed, 1984, 67-70; see also Burn, Cheshire and Burn's Modern Law of Real Property, 13th ed, 1982, 341-348; Gray and Gray, Elements of Land Law, 2001, 294-298; Butt, Land Law, 4th ed, 2001, [821]-[824]; Bradbrook, MacCallum and Moore, Australian Real Property Law, 3rd ed, 2002, [2.41]-[2.43]; Preston on Estates, Vol 1, 49; Re Tilbury West Public School Board and Hastie, 410-411; Re North Gower Township Public School Board and Todd (1968) 65 DLR (2d) 421, 424; Re Essex County Roman Catholic Separate School Board and Antaya (1978) 80 DLR (3d) 405, 409-411]. 57 Although the distinction has been called "absurd" [Re Baillie, 268 (AH Simpson CJ in Eq), "extremely artificial" [Re Sharp's Settlement Trusts [1973] Ch 331, 340 (Pennycuick V-C)], and even "little short of disgraceful to our jurisprudence" [Re King's Trusts (1892) 29 LRIr 401, 410 (Porter MR)], there is in law a great difference [Re Moore (1888) 39 Ch 116, 129 (Cotton LJ)]. As has been seen, the distinction is of significance for the application of the rule against remoteness of vesting, when the specified event may occur after the expiry of the perpetuity period. There are other important differences: whereas occurrence of the specified event automatically determines the fee in the case of a determinable fee [Newis v Lark (1571) 2 Plowd 403, 413; Mary Portington's Case (1613) 10 CoRep 35b, 41b]; CoLitt 214b, 218a], in the case of a conditional fee it merely gives rise to a right of re-entry and unless and until that right is exercised, the fee continues [Matthew Manning's Case (1609) 8 CoRep 94b, 95b, 77 ER 618, 620; Re Evan's Contract [1920] 2 Ch 469, 472; CoLitt 214b; see generally Harpum, Grant and Bridge, The Law of Real Property, [3-066]. And where the condition in a conditional fee is void, the grant becomes unconditional [Hancock v Watson [1902] AC 14, 22; Zapletal v Wright [1957] Tas SR 211, 218; Perpetual Trustee Co Ltd v Gilmour [1979] 2 NSWLR 716, 720-721], whereas if a determinable grant is invalid, it is destroyed in its entirety [Re Moore, 130, 132; Zapletal v Wright [1957] Tas SR 211, 218; see generally Gray, Elements of Land Law, 295-298]. 58 The logical and conceptual difference between the two, namely that in the case of a determinable fee, the donor is defining and limiting what is being given, whereas in the case of a conditional fee, the donor is attempting to create a right, upon occurrence of the event, to take back what is otherwise given absolutely, was explained by Gummow J in Cabouche v Ramsay (1993) 119 ALR 215, (at 227.02-18): …a distinction must be drawn between the grant of an absolute interest with a condition subsequent which attempts to terminate the interest and the grant of a determinable interest. The distinction, in the words of Professor Williams in his article "The Doctrine of Repugnancy" (1943) 59 LQR 343 at 352, is "between a grant 'to A, but if he alienates then to B', where the gift over is void, and a grant 'to A until he alienates, and then to B', where the gift to A comes to an end if he purports to alienate it". Criticism has been levelled at this doctrine on the grounds that distinctions such as this are purely semantic: see, for example, the article by Professor Williams. However, the two cases described above are logically distinct and the difference between them is well-settled and fundamental. In the first case, the donor is attempting to take back something which he has given absolutely, something which is beyond his power. In the second case, the donor is merely defining the nature of that being given. It is necessary in each case to construe the instrument creating the proprietary interest in question to determine into which category the interest falls. 59 The manner of expression of the determining event in the gift is often determinative [Dean v Dean [1891] 3 Ch 150, 155], as Harpum, Grant and Bridge explain, in The Law of Real Property, at [3-065]: The distinction is therefore really one of words. The determining event can be incorporated into the limitation in such a way as to create either a determinable fee or a fee simple defeasible by condition subsequent, whichever the grantor wishes. The estate is determinable if the words limit the maximum period of time that it can endure. The limitation marks its bounds or compass. If the words define the event that will, if it happens, cut short the estate before it attains its boundary, they take effect as a condition. 60 Typically, words included in but qualifying the grant - such as "while", "during", "as long as", and "until" – create a determinable fee, whereas separate clause of defeasance - such as "provided that", "on condition that", "but if", or "if it happen that" - operate as a condition subsequent [Harpum, Grant and Bridge, The Law of Real Property, [3-064]; Burn, 346; Re Tilbury West Public School Board and Hastie (1966) 55 DLR (2d) 407, 410-411 (Grant J); Re Essex County Roman Catholic Separate School Board and Antaya (1977) 80 DLR (3d) 405, 409-410 (Klever J)]. Although these formulae may not be compelling - and the best guides, if available, are the name put to the interest in the document which creates it, and the consequences spelt out in it as flowing from the specified event (reverter to the grantor being indicative of a determinable fee, whereas a right of re-entry is indicative of a conditional fee) [cf Hopper v Corporation of Liverpool (1944) 88 Sol Jo 213, 214; Re North Gower Township Public School Board and Todd (1968) 65 DLR (2d) 421, 424 (Laskin JA)], they are too well established to be disregarded as significant indicators when they are all that is available. 61 Another relevant guide is that although words expressed as a condition may sometimes be intended to have effect as a limitation, as a rule they are not ordinarily so construed, in the absence of some reason why they should be construed as a limitation rather than as a condition [In re the Trustees of Hollis' Hospital and Hague's Contract [1899] 2 Ch 540, 549 (Byrne J), citing Sheppard's Touchstone, 7th ed. p. 124, note 16]. Supervening failure of charitable trusts in the context of a void gift over 62 Many cases have considered circumstances in which the stated purpose of a charitable gift has failed for supervening impossibility and there has been a void gift over; they differ as to whether the result is reverter to the estate, or an unconditional absolute gift to charity that can be administered cy pres. I shall summarise them chronologically before analysing the decisions. 63 In Re Randell, Randell v Dixon (1888) 38 Ch D 213, the testatrix had bequeathed £14,000 on trust to pay the income to the incumbent for the time being of a certain church "so long as" he should permit the sittings to be occupied free, and there was a direction that, in case any such incumbent should make any claim for and receive payment in respect of the sittings in the church, thenceforth the trust moneys should fall into and be dealt with as part of her residuary personal estate. Counsel for the incumbent argued that the testatrix had shown an intention to devote the sum to charitable purposes, and that if the particular purpose ever came to an end, a scheme would be settled for the application of the fund cy pres, but North J said (at 218): On the construction of the will, it is a charity for a particular limited purpose, and nothing beyond that is declared; as soon as that particular purpose comes to an end, the fund which was subjected to that particular trust falls into the residue of the estate; and it would do so just as much if there was no such limitation as this in the will, as it does when the limitation exists. 64 The opposite result was reached in Re Bowen, Lloyd Phillips v Davis [1893] 2 Ch 491, which involved bequests two sums of money to trustees upon trust to establish schools in certain parishes and to continue the same schools "for ever thereafter", with a declaration that if the Government should establish a general system of education, the trusts should cease and determine and the amounts of the bequests be dealt with as residue. Re Randell was referred to as showing that property could be given to charity for a limited period, however long, in which case the interest undisposed of, though it could not be the subject of a direct executory gift, would be left to devolve in accordance with law. Stirling J stated the issue (at 495-496) as follows: "The question which I have to decide, therefore, appears to me to reduce itself to one of the construction of the testator's will - i.e., whether the testator has given the property to charity, in perpetuity, subject to an executory gift in favour of the residuary legatee, or whether he has given it for a limited period, leaving the undisposed of interest to fall into residue". His Lordship concluded that on the true construction of the will there was an immediate disposition in favour of charity in perpetuity, and not for any shorter period, followed by a gift over if at any time the Government should establish a general system of education, under which the residuary legatees took a future interest conditional on an event which need not necessarily occur within perpetuity limits, so that the gift over failed. 65 Re Randell was applied in Re Blunt's Trusts, in which the testatrix gave to trustees such sum as would produce £20 per year, which she directed them to pay to the treasurer of a school organisation "so long as" they be carried on under conditions contained in their trust deed, but declared that the gift should be void in certain events. After her death, events occurred by reason of which the schools were no longer carried on under the conditions contained in their trust deed, and one of the avoiding events also occurred. Buckley J acknowledged the authority of Re Bowen but distinguished it and applied Re Randell, on the basis that there was no necessity to resort to the gift over, as it was to the residuary estate, where the property would have gone in any event if a limited gift failed. His Lordship said that it was permissible to have regard to the conditions of defeasance to see whether they had taken effect - but that was a result of the view that there was no necessity to resort to the gift over, as the "conditions" took effect as limitations on a determinable fee. 66 Re Bowen prevailed in the New South Wales case of Re Baillie, in which the testatrix gave her residuary estate to trustees upon trust for three charities, and directed that if any of the charities should apply to Parliament or the Court to vary the trusts, the trusts declared in favour of such charity should be void and pass to her next of kin. Counsel referred to Re Bowen and Re Randell, and the argument turned on the distinction between a gift limited until an event should happen, and an absolute gift followed by a defeasance if the event should happen. A H Simpson CJ in Eq said (at 268) that there were two classes of cases: (1) where there was an absolute gift in the first instance followed by a condition of defeasance, and (2) where only a limited interest was given in the first instance, which comes to an end. His Honour applied the test stated by Stirling J in Re Bowen, and held that the gifts were absolute gifts defeasible by a condition which failed for perpetuity. His Honour's description accords with the distinction between a conditional grant and a determinable grant, and was almost precisely reflected, years later, by Danckwerts J in Re Hanbey's Will Trusts [1956] Ch 264. 67 The next case, in which Re Bowen was again applied, and Re Randell and Re Blunt's Trust distinguished, was Re Peel's Release. Sir Robert Peel had granted and released land to trustees upon trust to permit the land "to be forever thereafter" used as and for a place for the instruction of poor children in the principles of the Church of England. The deed then provided that if by reason of any law or otherwise the release of the land, as to the charitable purposes intended, either not take effect, or, having taken effect, should afterwards cease or determine or be defeated, or, "the precise object of these presents being for the education of poor children in the principles of the Church of England, become prevented, then the trustees for the time being should stand seized for the land in trust for the settlor, his heirs and assigns. The school was built and carried on until 1920 when, the income of the fund being insufficient for the maintenance of the schoolmaster and schoolmistress, the school became practically derelict. The residuary legatees argued that although the clause of reverter was too remote and void for perpetuity, it operated indirectly and by way of construction to prevent any cy pres application of the trust property and to prescribe that it should be used for charitable purposes only so long as the selected denominational education could be given there; as this was now impossible, the indicated period of dedication had elapsed and there was a resulting reverter to the donor independently of the positive operation of the reverter clause. Sargant J concluded that a cy pres scheme must be directed, and explained that the ratio of Re Randell and Re Blunt's Trusts was that the original gift to charity was expressed to be for a limited period only, so that there was necessarily a reversion to the donor, whereas in the case before him the original gift was expressed to be perpetual: In the present case the original gift was expressed to be perpetual. There could, therefore, be no reversion left in the donor, and any interest could only come to him, as it was expressed to come, by a substantive gift operating by way of positive curtailment and destruction of the original gift. This curtailing and destroying gift being in itself bad in law, as it is acknowledged to be, there is not, in my judgment, any room for construing the document in a manner contrary to its expressed operation for the purpose of validating a prohibited limitation. 68 In Attorney-General for Northern Ireland v Forde [1932] NI 1, the testator gave a rent-charge to trustees for the upkeep of houses for the accommodation of, and for the maintenance of, widows of persons who had resided on his estates. Not all of the fund was required for those purposes. An application for administration cy pres of the trusts by the Attorney General failed, principally because the trust was not charitable. However, Andrews LJ (at 30), in agreeing with the Attorney General's submission that this was not a case of initial failure, but one in which a perpetual trust had come into actual operation - in which case (were it charitable) it could never cease - pointed out that except in the case of a limited (or determinable) gift, a gift of property to charity, once it took effect, remained forever charitable regardless of whether or not there was a general charitable intention: In my opinion once there is established and in operation a perpetual charitable trust, then the trust property remains always charitable, and funds subject to such charity cannot revert or result to the donor or his representatives. To hold otherwise would in my opinion to be to express our disapproval of In re Slevin, Slevin v Hepburn [1891] 2 Ch 236, Peel's Release [1921] 2 Ch 218, and In re Monk, Giffen v Wedd [1927] 2 Ch 197. Where a charity is in existence at the death of a testator the legacy, as Kay LJ puts it, by that very fact becomes impressed with charity which the residuary legatee cannot get rid of. As in the case of a legacy to an individual, lapse can only occur by failure of the object in the lifetime of the testator. A legacy given on a perpetual trust becomes the property of the charity; and on its ceasing to exist, tis property, quite independently of general charitable intention, falls to be administered by the Crown. No doubt, if, as in In re Randell and In re Blunt's Trusts , the gift to the charity was stated to be for a term or a limited period only, the principle which I have stated would not apply, for a reversion would be left in the donor. 69 In Re Hardy, Nelson v Attorney-General [1933] NI 150, the testatrix left a schoolhouse, together with a rent-charge for its maintenance, to trustees upon certain specific charitable trusts. Years later, the school was closed. Megaw J (at 157), following Re Bowen, Re Peel and Forde, held that although the trust was for a specific charitable purpose and disclosed no general charitable intention, there was no resulting trust to the testator's estate, and directed a cy pres scheme - albeit with reluctance given his feeling that by doing so the intention of the testator was not being carried out. 70 Thus Re Bowen and Re Peel were very much in the ascendant. However, Re Talbot, Jubb v Sheard [1933] 1 Ch 825 concerned a trust of the income of a sum to augment the salaries of ministers at a particular chapel of the United Methodist Church, with a proviso that if the United Methodist Church united or merged with another religious body the sum should be held on trust for the testator's nieces and nephews. There was a merger of churches including the United Methodist Church in accordance with the Methodist Church Union Act 1929 (UK). Maugham J, in a judgment which has been described as "not easy to follow" [per Upjohn J in Re Cooper's Conveyance Trusts; see also JD Davies, "Evading Charity Reform" (1961) 25 Conv (NS) 56, 72] held (1) that the proviso was void for perpetuity, (2) that, having regard to the will as a whole, it was a gift to effect a particular mode of charity in a case where there was no general charitable intent, with the result that, apart from the operation of the Act, there would be no ground for the application of the cy pres principle. His Lordship sought to reconcile Re Bowen and Re Peel with Re Randell and Re Blunt's Trusts, partly on the basis that in the first two cases the gift was expressly for a limited time, whereas in the latter two there were express gifts in perpetuity, and partly on the basis that there was no general charitable intention in the latter two cases. Applying Stirling J's test to a trust which contained no express gift for a limited time and no express gift in perpetuity, Maugham J said (at 902): The form of the gift, in my opinion, is such that, having regard to the will as a whole, it is a gift to effect a particular mode of charity in a case where there is no general charitable intent, with the result that, apart from the operation of the Act, there would be no ground for the application of the cy pres principle. 71 However, because the Methodist Church Union Act had the effect that the trust would continue, and the proviso - in view of the Act - was not an express limitation but only a clause of defeasance, which was void for perpetuity - and although the trust was for a particular kind of charity and disclosed no general charitable intent, it continued as modified by the Act. 72 Then, in Gibson v South American Stores (Gath & Chaves) Ltd [1950] Ch 177, the Court of Appeal (Evershed MR, at 201-202, with whom Asquith LJ at 203 and Wynn-Parry LJ at 203 agreed) allowed an appeal from Harman J directing a cy pres scheme, and held that a power of revocation reserved to the settlor of a trust established by a company for the relief of poverty amongst its employees and their families, even if it might be void for perpetuity, nonetheless showed that there was no general charitable intention, but a limited purpose, so that the surplus funds were not be applied cy pres, but reverted by way of resulting trust to the settlor. Reference was made to the circumstance that it could hardly be supposed that the company would intend to benefit, for example, the employees of its competitors. 73 In Re Bawden's Settlement, Besant v Board of Governors of London Hospital [1954] 1 WLR 33n, a settlement provided that the trustees should pay the annual income to nominated charities. A later clause provided that if any of the nominated charities should become amalgamated with other charities or institutions, the trustees may in their discretion pay the relevant share to the amalgamated charity or institution, or to such other objects (charitable or non-charitable) as were consistent with the testators intention. Danckwerts J (at 39) held that the gift over failed for perpetuity and concluded that there was an unlimited gift to charity and a defeasance clause that was void for perpetuity, so that the original trust remained unimpaired. 74 In Re Hanbey's Will Trusts, Danckwerts J (at 274) said that the distinction between Re Randell and Re Bowen rested on whether the initial gift was "intended in the first instance to be a perpetual charitable gift" - thus repeating the words of A H Simpson CJ in Eq in Re Baillie, and describing the distinction between determinable and conditional interests [JD Davies, "Evading Charity Reform" (1961) 25 Conv (NS) 56, 67]. 75 Reference has already been made to In Re Cooper's Conveyance Trusts, Crewsdon v Bagot, which concerned a conveyance to trustees their heirs and assigns "forever" in trust for the purposes of an orphan girls home and upon failure of that trust to the person or persons entitled to a particular mansion house. The gift over to the person entitled to the mansion house was void for perpetuity; the question was whether the trust property ought to be applied cy pres, or resulted to the trust of the donor. Upjohn J, following Gibson, held that although the gift over failed for perpetuity, it indicated that there was not an "out-and-out gift to charity" albeit to a particular charity or purpose (which he said was not inaptly described as a general charitable intention), but a gift which contemplated the possibility of failure and which was to be used only for a limited time or purpose. His Lordship expressed his conclusion in the following terms (at 1104): What, however, seems to me clear is that the donor desired the charity to continue only while it could be carried on as an orphan girls' home by the committee of management and subject to the general supervision of general meetings of subscribers as detailed in the schedule. When that particular charity came to an end, in my judgment, she evinced the clearest possible intention that the property was to go over to the non-charitable purpose mentioned in her will. She has said quite clearly that, on failure of the trusts, to be evidenced by these resolutions, then, "subject to the foregoing trust and to all acts and things done by virtue thereof," it is to be held upon the new trust, and she ends up her direction upon this matter by saying that the property is to be conveyed "accordingly and upon or for no other trust or purpose whatsoever." True, those concluding words have no dispositive effect, and in that sense are otiose, but they do confirm the view which independently thereof I should have formed, that the donor in this case is concerned and concerned only with an orphanage carried on upon the particular property by the particular bodies she has appointed in the schedule to carry it on. The moment that particular purpose comes to an end, the gift is to go over, and the donor has again made that intention as to the land and buildings abundantly clear by the language she has employed in rule 39. Accordingly, in my judgment, this is a case where the donor intended a gift to charity only for a limited time and for a limited purpose; that is to say, the time limited by the time for which the orphanage could be carried on. That period having come to an end, in my judgment, there is an interest in the donor remaining undisposed of; that is held upon trust for her estate by way of resulting trust, and I must declare accordingly. 76 In Re Smith, Menhennitt J (at 346) referred to Re Cooper as establishing that there may be a valid charitable gift for a limited time and for a limited purpose, and that in the event of the time elapsing or the purpose terminating, the charitable gift terminates (which is uncontroversial, as to a determinable fee), but his Honour did not decide whether in that case the transfer created a perpetual charitable trust or one for a limited period. Having held a proviso for re-entry void, his Honour suggested (at 348.15-20) that "even if on its true construction the valid charitable gift is for a limited period", the consequence would presumably be that upon termination of the charitable gift, the land would revert to the estate of the deceased – for which Re Cooper was cited. The suggestion is correct, if indeed it were a limited or determinable gift; but the proviso for re-entry is strongly in favour of its being a conditional, not a determinable, grant. 77 In Bath and Wells Diocesan Board of Finance v Jenkinson, two deeds provided respectively for the transfer of two lots upon trust for schools, with a proviso that if the relevant lot should cease to be used for the purposes of a school (for one and two years respectively), it should immediately revert in the settlors, as if there had been no such gift. It was common ground that the provisos for reverter were void for perpetuity. The rival contentions were, by the Attorney General for charity, that the deeds were intended to create an absolute and perpetual gift to charity with a gift over on the failure of the charitable purpose prescribed, and by the heirs of the grantors, that what was intended for a gift to charity for a limited period defined by the period during which the charitable purpose was capable of subsisting, which period having terminated there was a resulting trust for the grantors. Evans-Lombe J adopted Upjohn J's statement of the test and the approach, but noted that the outcome of Re Cooper was to be contrasted with Re Peel, and thought the two cases difficult to reconcile. His Lordship concluded that the deeds evinced an intention to transfer the land in trust in perpetuity for the purposes of a school, subject only to a condition for defeasance in the event of the trusts failing; the provisos for reverter being void for perpetuity the result was, as in Re Peel, that the charitable trusts were absolute. At [74], Evans-Lombe J said: It seems to me to be clear that the words used in the operative part of the 1849 Deed evince a clear intention by the grantors in that deed to transfer the Red Land upon trust in perpetuity for the purposes of a school subject only to a clause of defeasance in the event of the trusts upon which those trustees were to hold the land in question failing. The words used in the 1852 Deed are less emphatic, but it seems to me that the grantors under that deed have evinced a similar intention. Both provisos for reverter being, by common consent, void for remoteness, the result, in my judgment, is similar to that in Re Peel's release , namely, that the trustees under both deeds hold their possessory title to the Red Land and the Blue Land for charity upon the trusts of the two deeds but not upon trust for the successors of the grantors under those deeds or those now presently entitled under the trusts of the will of the first Duke. 78 In Re Wilmott, Uniting Church in Australia Property Trust (Vic) v Royal Victorian Institute for the Blind [1999] VSC 485, the trustees of the testator's residuary estate were directed to set aside £10,000, to pay from it up to £3,000 to purchase or build a house and transfer it to special trustees as a home for indigent old ladies in Melbourne, and to invest the balance and apply the income to the maintenance of the house and the indigent old ladies. Insofar as the trusts failed, the amount invested was to fall into residue. McDonald J found that there was a particular charitable intention only, that effect could no longer be given to that intention, and that, applying Upjohn J's approach, as the testator had contemplated the possibility that the charitable gift might fail at a time in the future and had made provision for what was to occur in such an event, there was no out-and-out gift to charity, but a gift for limited time and purpose. It is notable that there was a specific direction that on failure the amount invested revert to residue, which is indicative of a limited or determinable gift. 79 In my view, the cases to which reference has been made enable the following principles to be stated: 80 First, property that is the subject of an absolute gift to charity, once vested, remains with charity forever. If the particular charity or purpose to which it is given subsequently fails, a cy pres scheme will be directed. In this context, cy pres is available regardless of whether or not the donor had a general charitable intention [Re Slevin; Hixon v Campbell; Williams v Attorney-General; Re Wright; Re Ulverston and District New Hospital Building Trusts; Re Tacon; Re Lysaght; ANZ Executors & Trustee Co Ltd v Trustees for the Presbyterian Church of Australia; Attorney General for New South Wales v Fulham]. 81 Secondly, property that is the subject of a limited or determinable gift to charity reverts, upon termination of the gift, to the donor or his/her estate, unless there is a valid gift over [Attorney-General v Pyle; Re Randell; Re Blunt's Trusts; Re Cooper; Re Tilbury West Public School Board and Hastie]. 82 Thirdly, however, property that is the subject of a conditional gift where the condition is void is regarded as the subject of an unconditional, or absolute, gift [Re Bowen, Lloyd Phillips v Davis [1893] 2 Ch 491; Hancock v Watson [1902] AC 14, 22; Re Baillie; Zapletal v Wright, 218; Perpetual Trustee Co Ltd v Gilmour, 720-721]. 83 Fourthly, the true distinction between Re Randell and Re Bowen, and the cases that follow them, reflected in Stirling J's test, is the distinction between a limited or determinable gift, and a conditional gift, and not between a limited or particular charitable intention and an "out-and-out gift to charity". If the gift is conditional and the condition is void, then it matters not that the testator might appear not only to have had no general charitable intention, but even to have had a plainly and solely particular one. This requires elaboration. 84 As to the true distinction being determinable against conditional grants: In the cases in which cy pres was unavailable, there was a limited or determinable grant. Re Randell involved such a grant; in Re Blunt's Trusts, at least in respect of the gift "so long as" the schools be carried on under the conditions contained in their trust deed, the grant was limited or determinable, which is sufficient to explain the result; in Re Cooper it is implicit, in the finding of an undisposed of interest remaining in the testator, that the grant was limited or determinable; Re Wilmott too was a case of a limited (or determinable) gift. On the other hand, Re Bowen, Re Baillie, Re Peel, Forde, Re Hardy, Re Bawden's Settlement, and Bath and Wells Diocesan Board all involved what were found to be conditional gifts, in which the condition was void for perpetuity, with the result that the gift was unconditional, or absolute. Stirling J's statement of the test in Re Bowen, like Re Baillie and Re Hanbey's Will Trusts, identified the relevant distinction in terms which reflect that between determinable and conditional interests, and in Forde, Andrews LJ expressly recognised that a limited (or determinable) gift would have produced a different result. 85 As to the distinction not being limited charitable intent against outright gift to charity: Although the use of particularity of intent, evidenced by void gifts over if the stipulated purpose fails, to construe a gift as limited or determinable, is apparently supported by Re Randell, Re Talbot, Re Cooper, Gibson, and Re Wilmott, it is difficult to reconcile with the other cases, and it is not easy to see why a provision which is held void as a matter of policy for perpetuity should indirectly be permitted to deny cy pres, when the rule is that a gift to charity once vested cannot be taken back, and that general charitable intention is not required. Re Randell, Re Talbot, Re Cooper, and Gibson are each affected by the incorrect use of concepts of general charitable intention – or rather the absence thereof – as being relevant to the availability of cy pres for supervening impossibility. 86 In Re Randell, reference was made to the absence of "devotion to general charitable purposes", and to the particular limited charitable purpose of the testator, to deny cy pres. But as has been seen, the fact that a charitable intent is limited, in the sense of being particular, is no objection to cy pres for supervening impossibility. 87 Maugham J's attempted reconciliation, in Re Talbot, of Re Bowen and Re Peel with Re Randell and Re Blunt's Trust, while proceeding partly on the basis that in the first two cases the gift was expressly for a limited time, whereas in the latter two there were express gifts in perpetuity, proceeded partly also on the basis that there was no general charitable intention in the latter two cases (see at 898.3, 899.7, 902.3). However, at the risk of repetition, general charitable intention is irrelevant to supervening failure. Moreover, the proviso in Re Talbot had all the hallmarks of a condition of defeasance rather than a limitation. Although the ultimate result was correct, I respectfully doubt the preliminary conclusion that, absent the Methodist Church Union Act, cy pres was unavailable. 88 In Gibson, Evershed MR appears to have accepted Maugham J's reconciliation of the cases in Re Talbot. In concluding that the trust was one for a particular purpose and a limited period, his Lordship again referred to the absence of general charitable intention. [As Davies has shown, the result may nonetheless be supported on the footing that the trust in Gibson was one which was intended to benefit a limited class of persons – employees of the company - which it must have been envisaged might with the passage of time cease to exist, so that there was material, other than particularity of intent or a mere gift over, which justified a conclusion that the grant was determinable]. 89 In Re Cooper's Conveyance Trust, the grant was found to be of a limited or determinable gift, despite the initial conveyance being expressed to be to "heirs and assigns forever", despite the trusts not being expressed to be limited in time, despite the testator's intention not being that upon failure the trust property revert to his estate but that it be the subject of a (non-charitable) gift over, and despite his Lordship's observation that, but for the gift over, it would hardly have been suggested that on failure of the original gift there was a resulting trust. Thus the void gift over was used to illuminate the testator's intention, so as to justify a conclusion, which would not otherwise have been reached, that the testator intended a gift to charity only for a limited time and purpose, and thus to leave an interest undisposed of in the testator's estate. Yet again, the reasoning of Upjohn J gives weight to the absence of a general charitable intent, and significance to the particular charitable intent of the donor. Although his Lordship acknowledged that Re Slevin and Re Wright established that, in the case of an initial out-and-out or perpetual gift to charity – even a particular charity or charitable purpose – it was (emphasis added) "in a sense irrelevant to consider whether there is a general charitable intention" if it failed after the gift had vested, his Lordship emphasised that this exception to the requirement for general charitable intention arose in respect of "property given absolutely and perpetually to charity". The effect of applying Re Cooper would be indirectly to require, if cy pres were to be available, if not a general charitable intention, then at least the absence of any attempt to provide for the possibility that the testator's particular charitable intention might fail; or, as Davies has put it, that although general charitable intent is not normally required for cy pres on supervening failure, it is where there is a purported gift over [JD Davies, "Evading Charity Reform" (1961) 25 Conv (NS) 56, 72-3]. 90 As Byrne J said in the Hollis Hospital case, while a condition may in some cases be intended as a limitation, it is not ordinarily so construed. And as Davies has proposed, the expression of a particular charitable purpose is neither a limitation, nor impliedly a period of time; and such a purpose does not become a period of time by the addition of a void gift over [See JD Davies, "Evading Charity Reform – a Re-examination of Determinable Charitable Gifts", (1961) 25 Conv (NS) 56, 72-73; [1967] ASCL, 402-403; Hubert Picarda, The Law and Practice Relating to Charities, 2nd ed, 1995, at 302-303; Tudor on Charities, 9th ed, [11-055]]. In short, particularity of charitable intent does not deny cy pres if the gift is absolute, and, as has been seen, property which is given to charity in the first instance, subject only to a void condition of defeasance, is nonetheless given absolutely. 91 Against those principles, I respectfully doubt that the grant in Re Cooper was any more a determinable or limited grant than were those in Re Bowen, Re Baillie, Re Peel and Re Bawden; the grant was in the first place absolute, albeit for a particular purpose, but subject to a condition of defeasance on failure of that purpose, which condition was void for perpetuity; the initial gift thus remained, absolute and unconditional; in those circumstances, as there was a valid initial gift to charity, the particularity of the testator's charitable intention was irrelevant. The construction of the gift in this case 92 In construing the will for the purpose of determining whether there is a determinable fee or a conditional fee, the potential consequences of remoteness are to be disregarded, except in the case of ambiguity and obscurity, as Lord Selborne explained in Pearks v Mosely (1880) 5 App Cas 714 (at 719): The rule which has always been applied to cases of remoteness is this: You do not import the law of remoteness into the construction of the instrument, by which you investigate the expressed intention of the testator. You take his words, and endeavour to arrive at their meaning, exactly in the same manner as if there had been no such law, and as if the whole intention expressed by the words could lawfully take effect. I do not mean, that, in dealing with words which are obscure and ambiguous, weight, even in a question of remoteness, may not sometimes be given to the consideration that it is better to effectuate than to destroy the intention; but I do say, that, if the construction of the words is one about which a Court would have no doubt, though there was no law of remoteness, that construction cannot be altered, or wrested to something different, for the purpose of escaping from the consequences of that law. 93 While it might be thought that the use of the word "revert" in clause 3 of the Will favours the view that the deceased intended to make a limited or determinable gift, two other indicators point firmly to the conclusion that, on its proper construction, clause 3 of the Will contained an absolute gift of the fee simple to the Trustees of the original Society subject to a condition of defeasance if the trust property ceased to be used for the trust purposes - that is, a conditional fee, and not a determinable fee. 94 The first is that the words "but subject to the proviso that", with which the gift over commences, are apt to create a condition subsequent as distinct from a gift for a limited period. They introduce a separate clause of defeasance, rather than being contained in and forming part of the grant. There is no expression of determinability within the grant, but a subsequent proviso for defeasance. 95 The second – which also deprives the use of the word "revert" of any significance which it otherwise might have - is that the gift is not to the residuary beneficiaries under the will, but to the deceased's next of kin when the specified event occurs. Thus it is not a true reverter at all. This also indicates an intention to make an alternative absolute gift if the condition attached to the initial gift occurs – rather than that the property revert to the testator's estate upon termination of a determinable grant. 96 Although I have reached this conclusion independently, I am comforted in it by the circumstance that when the Society sought advice as to the validity and efficacy of the gift in clause 3 in 1965, Mr K R Handley of counsel, as his Honour then was, in an advice dated 26 July 1965, concluded that the proviso in it took effect not as a determinable gift, but as a condition subsequent with a gift over which was void for perpetuity. Conclusion 97 Accordingly, I conclude that notwithstanding the absence of any express words of perpetuity, clause 3 of the Will on its proper construction contained a gift by the deceased of 362 Crown Street to the original unincorporated Society for a charitable purpose, namely as a home or hospital for crippled children, upon condition that if it cease to be so used it go over to the next of kin as at that time. The Foundation is the successor of the original unincorporated Society and holds 362 Crown Street upon the trusts of clause 3 of the Will. As the condition might be fulfilled outside the perpetuity period, it is void, with the result that there was an unconditional and absolute gift to charity. The original purposes stated in clause 3 of the Will have ceased to provide a suitable and effective method of using the trust property, having regard to the spirit of the trust. Accordingly, cy pres is available and appropriate. 98 I make an order in accordance with paragraph 1 of the Further Amended Summons. I make declarations in accordance with paragraphs 2, 3, 4 and 5 of the Further Amended Summons. I make orders in accordance with paragraphs 6 and 7 of the Further Amended Summons. I order that the exhibits be returned. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.