''Leahy v Attorney-General for New South Wales'' is an Australian and
English trusts law
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...
case involving a charitable trust, heard by the
High Court of Australia
The High Court of Australia is Australia's apex court. It exercises Original jurisdiction, original and appellate jurisdiction on matters specified within Constitution of Australia, Australia's Constitution.
The High Court was established fol ...
in 1958,
and the
Privy Council
A privy council is a body that advises the head of state of a state, typically, but not always, in the context of a monarchic government. The word "privy" means "private" or "secret"; thus, a privy council was originally a committee of the mon ...
in 1959.
[; ] The proceeding concerned the validity a gift to an unincorporated body, concluding that gifts in trust "cannot be made to a purpose or to an object" except for charitable circumstances.
Background
At the heart of the case was the
rule against perpetuities
The rule against perpetuities is a legal rule in the American common law that prevents people from using legal instruments (usually a deed or a will) to exert control over the ownership of private property for a time long beyond the lives of peo ...
, which is a common law rule that "no interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest". The rule against perpetuities does not apply to trusts that are purely charitable, or more accurately, to an immediate gift of capital to a charity, even though the trust may last forever.
[ (1979) 8(3) Sydney Law Review 620.] A gift to an identified class that contained both charitable and non-charitable bodies would be subject to the rule against perpetuities.
The effect of the common law rule was modified in NSW by section 37D of the ''Conveyancing Act'' which provided:
:(1) No trust shall be held to be invalid by reason that some non-charitable and invalid purpose as well as some charitable purpose is or could be deemed to be included in any of the purposes to or for which an application of the trust funds or any part thereof is by such trust directed or allowed.
:(2) Any such trust shall be construed and given effect to in the same manner in all respects as if no application of the trust funds or of any part thereof to or for any such non-charitable and invalid purpose had been or could be deemed to have been so directed or allowed.
[Inserted by the .]
A requirement for a charitable trust was that it must be for the benefit of the public. Gifts for religious purposes will only be charitable if they are to benefit the public and not merely the members of a religious group.
[ 011Queensland Judicial Scholarship 54.]
Facts
Francis Leahy was a wealthy Australian grazier who died in 1955 leaving a widow, Doris Leahy and 7 children. His estate was valued at
A£
The pound (Sign: £, £A for distinction) was the currency of Australia from 1910 until 14 February 1966, when it was replaced by the Australian dollar. As with other £sd currencies, it was subdivided into 20 shillings (denoted by the symbol s ...
348,000, comprising several grazing properties and a block of flats in
Goulburn
Goulburn ( ) is a regional city in the Southern Tablelands of the Australian state of New South Wales, approximately south-west of Sydney, and north-east of Canberra. It was proclaimed as Australia's first inland city through letters pate ...
.
Doris Leahy was left a life interest in one of the flats and specific bequests were made for some of the children. The majority of the estate was left upon trusts for various catholic orders. Clause 3 gave the trustees the discretion to select an "Order of Nuns of the Catholic Church or the
Christian Brothers". Clause 5 provided that the residue was to be used for a convent for an order of nuns selected by the trustees. The executors, Donnelly, Wright and Mullen, sought the guidance of the
Supreme Court of NSW
The Supreme Court of New South Wales is the highest state court of the Australian State of New South Wales. It has unlimited jurisdiction within the state in civil matters, and hears the most serious criminal matters. Whilst the Supreme Court i ...
whether these provisions of the will were void for uncertainty. The respondents to the application were Doris Leahy, the 7 children and the
Attorney-General of NSW,
Supreme Court of NSW
In the Supreme Court,
Myers J, upheld the validity of clause 3, holding that the selection of an order of nuns or the Christian Brothers was an immediate gift in favour of the body selected or its members, regardless of whether it was for a charitable purpose.
[''Donnolly v Leahy']
Reasons for judgment
per Myers J unreported 11 April 1957, pp 34-44. The trust established by clause 5 was a perpetuity and thus it was void unless its purposes were charitable.
Myers J held it was possible to identify every order of nuns falling within the class,
however some orders of nuns were charitable, while others were not.
Because the will did not set out a charitable intent, it was not saved by s 37D of the Conveyancing Act,
and accordingly the trust for the residue was void.
High Court
The Attorney-General appealed to the High Court against the decision that the trust for the residue in clause 5 was void, whilst Doris Leahy and the 7 children appealed against the decision that bequest to an order of nuns or the Christian Brothers in clause 3 was valid.
The High Court upheld the validity of both clauses.
Williams,
Webb
Webb most often refers to James Webb Space Telescope which is named after James E. Webb, second Administrator of NASA.
It may also refer to:
Places Antarctica
* Webb Glacier (South Georgia)
* Webb Glacier (Victoria Land)
*Webb Névé, Victoria ...
and
Kitto JJ held that Myers J was correct in deciding that clause 3 was valid as being an immediate gift in favour of the body selected. They upheld the appeal on clause 5 holding that the trust for the residue was saved by s37D.
Dixon CJ and
McTiernan J held that both clauses would have been invalid however they were saved by s37D, holding that while the class was not exclusively charitable, it was predominately charitable in character. the effect of which was to exclude any non-charitable purpose & turn it into a wholly charitable trust.
Advice of the Privy Council
Doris Leahy and the 7 children were granted leave to appeal to the Privy Council. At the time there was no provision for dissent or separate judgments in the Privy Council. Instead the advice to the Queen was determined by a majority of judges who heard the appeal and one judge would be chosen to write the judgment. Decisions of the Privy Council tended to be expressed on narrow grounds, a tendency attributed to the need to reflect the agreement of the majority of judges.
Viscount Simonds
A viscount ( , for male) or viscountess (, for female) is a title used in certain European countries for a noble of varying status.
In many countries a viscount, and its historical equivalents, was a non-hereditary, administrative or judicial ...
delivered the judgment of the Privy Council.
The Privy Council affirmed the decision of the High Court, in part of different grounds. The Privy Council agreed with the decision of the High Court that clause 5 was invalid as a perpetuity but was saved by s 37D. A gift to the orders of nuns was an object so predominantly charitable that it was fair to assume the testator had a charitable intention.
[''Leahy v Attorney-General for NSW'' (1959) 101 ]CLR CLR may refer to:
* Calcium Lime Rust, a household cleaning-product
* California Law Review, a publication by the UC Berkeley School of Law
* Tube_bending, Centerline Radius, a term in the tubing industry used to describe the radius of a bend
* Cen ...
611.
In relation to clause 3 the Privy Council noted the "artificial and anomalous conception of an unincorporated society which, though it is not a separate entity in law, is yet for many purposes regarded as a continuing entity and, however inaccurately, as something other than an aggregate of its members".
The Privy Council held that clause 3 was not a gift to the individual members as the beneficial owners of the property. Instead clause 3 created "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"
for the reasons that :
# the bequest was expressed as being made to the order of nuns, rather than to any specified individuals;
# the members of the selected order may be very large, such that it was not easy to believe the testator intended to benefit the members of the order personally; and
# The testator could not have intended that the right of "immediate possession" over a homestead with 20 rooms could have been exercised by all the nuns in the order.
Clause 3 created a trust for the benefit of the people who would become members of selected order of nuns or Christian Brothers in the future. Because the orders of nuns included bodies who had a religious rather than charitable purpose the trust offended the rule against perpetuities. The Privy Council agreed with Dixon CJ and McTiernan J that the validity of the gift was saved by s 37D of the ''Conveyancing Act''.
Significance
The decision is commonly referenced in modern Australian law when dealing with issues surrounding bequests, gifts and the ability to contract of unincorporated associations.
The effect of excluding closed or contemplative religious orders was affected in Australia by the extension of the definition of a charity in 2003,
[.] to include non-profit public child care; self-help bodies with open and non-discriminatory membership; and closed or contemplative religious orders offering prayerful public intervention.
See also
*
English trusts law
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...
*
Purpose trust
A purpose trust is a type of trust which has no beneficiaries, but instead exists for advancing some non-charitable purpose of some kind. In most jurisdictions, such trusts are not enforceable outside of certain limited and anomalous exceptions, ...
Notes
High Court of Australia cases
Judicial Committee of the Privy Council cases on appeal from Australia
1959 in Australian law
1959 in case law
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