Link: Case Summary Document
Citation: Supreme Court of Western Australia McKenna J
Acknowledgement:The Pemsel Case Foundation thanks The Australian Centre for Philanthropy and Nonprofit Studies for its contribution in the drafting of this Case Note.
This case dealt with the validity of a gift for charitable purposes. Barbara Grimes, who died in 2010, was a member of the Anglican Catholic Church in Western Australia. Tee, who had previously been a solicitor, was a priest in the parish of St Peter the Apostle in 2006. At that time, Tee assisted Grimes to prepare her will which was executed on 9 December 2006. Tee was the executor. The bulk of Grimes’s estate was left in two parts. One part was directed to the Synod of the Anglican Catholic Church in Australia (Western Australia) Incorporated (the Church), and the other also to the Church, but designated ‘for the use and benefit of’ Tee’s parish of St Peter.
In October 2010, there was a schism within the Anglican Catholic Church and Tee resigned from the church as a priest. As His Honour observed, this appeared to be why ‘the parties were originally unable to resolve their differences in Christian amity’. The Church commenced proceedings against Tee, as executor, for payment of the bequest. However, His Honour accepted that there were valid reasons for a delay in payment.
The main question before the court was whether the gift in the will, to the Church for the use and benefit of the parish, was for a charitable purpose and thus a valid disposition. Whilst there was no doubt as to the existence of the Church as a legal person in Australia, there was a question as to the continuing existence of the parish of St Peter. Had it ceased to exist with the resignation of Tee as priest? The parish had been constituted by the Archbishop of the Church, Archbishop Hepworth, as from 23 October 2005. Although all parishioners of the parish of St Peter had either left the Church or moved to another parish, evidence from the Regional Bishop for Western Australia, Bishop Entwistle, was that the parish of St Peter had not been dissolved.
His Honour found that there was no doubt that the gift to the Church for the use and benefit of the parish, was for charitable purposes as it was for the advancement of religion. Therefore the gift to the Church was valid. The second aspect of the gift was purposive: ‘for the use and benefit of the parish of St Peter’s Church’ created a trust with the Church as trustee. Was this trust a trust for charitable purposes? His Honour said that the cases on point were not easy to reconcile.
However, His Honour held that there was sufficient authority to reason by analogy that the trust was a trust for charitable purposes:
In considering Mrs Grimes'[s] intentions and construing the words she used, the context is important. The context includes the gift to the church under cl 3(1) an undoubted gift for charitable purposes…in my opinion, Mrs Grimes'[s] intention in cl 3(2) was for the advancement of religion, a charitable purpose. Construing her Will, I hold that she has validly achieved that purpose.
His Honour then went on to consider whether the trust would in any event be valid under section 102 of the Trustees Act 1962 (WA) (the Act). Section 102 of the Act provides that a mixed charitable and non-charitable trust should be given effect as if no non-charitable and invalid purpose was present.
The Church, as trustee, would, under section 102 of the Act, be required to administer the trust solely for charitable purposes and therefore the second part of the gift would be valid.
Thus, both parts of the gift in the will were held to be valid charitable gifts.
The case may be viewed at: http://www.austlii.edu.au/au/cases/wa/WASC/2012/46.html
Implications of this case
The gift to the Church as an incorporated entity is relatively straightforward. It was the second gift to the Church ‘for the use and benefit’ of a particular parish which raised the question of trust – the Court found that the Church as trustee had to use it for that purpose. Since charity is the only purpose which is valid under trust law, the Court had to determine whether that purpose was charitable.
A gift for the advancement of religion is a gift for charitable purposes: Commissioners for Special Purposes of Income Tax v Pemsel  UKHL 1. The validity of a gift to a trust for charitable purposes mixed with non-charitable purposes is more questionable – at general law this would not be valid, but that has been altered by statute. In this case, the Church submitted that there was no material difference between a gift to a diocese and a gift to a parish. His Honour ultimately agreed, but found that previous cases on the issue revealed very fine distinctions between validity and invalidity. The whole context of the gift was relevant, and here the whole context was charitable.