With the best of intentions, charitable giving in a Will can sometimes present challenges.

In the case of Perpetual Trustee Company v The Corporation of the Synod of Diocese of Brisbane [2024] QSC 163, the Court was required to give guidance on how to interpret a charitable gift in the present day circumstances presented.

The deceased, Mr Sinclair, died in 1970 and appointed the applicant (now Perpetual Trustee Company Limited) as the executor and trustee of the Will. In his Will, Mr Sinclair gave his residuary estate on trust as follows:

“… to establish a fund to be known as the ‘EG Sinclair Church Extension Fund’ from which my trustees shall from time to time at their discretion and at the written request of such Churches pay the same equally in sums of One thousand dollars to the PRESBYTERIAN CHUCH OF QUEENSLAND and to the CHURCH OF ENGLAND IN QUEENSLAND to be applied to or towards the building in Queensland or in any island mission area of such Churches, new Church buildings including Sunday Schools and the like.”

Following a family provision claim by the deceased’s wife, the residuary estate available to be distributed by the applicant in the manner set out in this clause amounted to approximately $228,000 in the present day. The residuary of the estate was altered by the outcome of the deceased’s wife’s family provision claim, which involved a life interest. The deceased’s wife subsequently passed away in 2015.

Relevantly, there were two challenges for the applicant to overcome in distributing the estate in the manner directed; firstly, the benefit of $1,000 was a fairly low amount to see to the present day building costs of churches, and secondly that the Presbyterian Church of Queensland had been placed in receivership in May 2021.

The applicant, therefore, made an application to the Court to determine the construction of the clause and seek orders to alter the original purpose of the trust and allow the applicant to apply the fund cy pres either to the Anglican Church (which was presently involved in the building of new churches) or more broadly to the repair and maintenance of existing church buildings in Queensland.

Various positions were proffered by the interested parties, including the Attorney General (pursuant to s106 of the Trusts Act) as to the use of the fund, including:

• whether the application to the Court was premature on the basis that the appointment of a reciever for the Presbyterian Church was on an interlocutory basis;
• whether there should be a payment limit on the fund being disbursed;
• whether the fund should be applied to “renovations and upgrades” to churches, argubaly being more consistent with the spirit of the fund
• whether the fund should be applied to “repairs and maintenance” of churches
• whether there should be some assurance that any churches benefiting from renovations or upgrades would not then be sold
• whether the parties should wait until the recievership of the Presbyterian Church is resolved.

In considering the matter, the Court noted that the clause is to be construed as a charitable trust with the purpose being the advancement of religion. The Court noted section 105 of the Trusts Act and that it is not necessary for the actual compliance of the original terms be impossible; it is enough to have those original terms not be a ‘suitable and effective method of using the trust property‘ (para 15).

The Court accepted that the original terms no longer provided a suitable and effective method of using the trust property given the limitation of the amount to be used and that it was appropriate to deal with the matter now, rather than wait, in light of the applicant’s duties as the administrator of the estate. However, the Court did not consider it appropriate to permit that payment be only made to the Anglican Church on the basis that it would be in the ‘spirit of the trust’ which was intended equally for both the Presbyterian Church and the Church of England (now Anglican Church).

The Court resolved that the appropriate avenue would be to remove the payment limit, in light of the value of building works in the present day (compared to what the deceased would have considered $1,000 would achieve when making his Will in 1967). The Court also noted that the available fund, following indemnity costs for the Court application, would be approximately $150,000. The Court further resolved that the fund could be used to include renovations and upgrades as, again, this aligned more closely with the building of ‘new’ churches set out in the deceased’s Will, rather than mere repairs and maintenance.

Noting the position of the Presbyterian Church being in receivership, the Court considered that whilst the provisions of payments to them would be at risk if the funds were used to upgrade or renovate an existing church and then for that church to be then sold by creditors, “there would always have been risks, out of the control of the deceased, in terms of what became of any church property benefited by his gift under the will” (para 21). Whilst accepting this a relevant point to be raised, the Court held that paying the funds to the Anglican Church only would not be in the spirit of the trust.

You can read the whole case here.

As an estate planner, it is always an important aspect of talking with clients about their intentions to really stress test plans and what they could practically look like down the track. Whilst none of us have a crystal ball (and would we want one, really?), this is a good example of intentions that can be frustrated by the passage of time and circumstance; much of which we cannot control. Not only did the family provision claim change the course of this gentleman’s testamentary intentions, the mere passage of time and economic changes (to the cost of living and indeed construction of churches!) impacted the way in which his philanthropic intentions could be carried out and the options available to his appointed executor and trustee.