Eurella Community Services Inc v Attorney General for the State of NSW [2010] NSWSC 566 (31 May 2010)

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Eurella Community Services Inc v Attorney General for the State of NSW [2010] NSWSC 566 (31 May 2010)

Last Updated: 1 June 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Eurella Community Services Inc v Attorney General for the State of NSW [2010] NSWSC 566


JURISDICTION:
Equity

FILE NUMBER(S):
2008/281678

HEARING DATE(S):
21 September & 6 October 2009

JUDGMENT DATE:
31 May 2010

PARTIES:
Plaintiff: Eurella Community Services Inc
Defendant: Attorney General for the State of New South Wales

JUDGMENT OF:
Slattery J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Plaintiff: Mr M Meek SC
Defendant: Mr P Singleton

SOLICITORS:
Plaintiff: Emil Ford & Co
Defendant: Crown Solicitor's Office


CATCHWORDS:
EQUITY
trusts and trustees
charitable trust
plaintiff's property acquisition funded by public appeal
plaintiff claims to be absolute owner of property
Attorney-General alleges property held on trust for charitable purposes
issues as to whether plaintiff operating properly within charitable purposes
HELD
property held on trust for charitable purposes
scope of charitable purposes defined

LEGISLATION CITED:
Anti Discrimination Act 1977 (NSW)
Associations Incorporation Act 1984 (NSW)
Charitable Trusts Act 1993 (NSW) ss 7, 8, 9
Disability Discrimination Act 1992 (Cth)
Education Act 1990 (NSW) s 47

CATEGORY:
Principal judgment

CASES CITED:
Attorney-General for the State of Queensland v The Corporation of the Lesser Chapter of the Cathedral Church of Brisbane (1976) 136 CLR 353
BSH Holdings Pty Ltd v Commissioner of State Revenue [2000] VSC 302; (2000) 2 VR 454

TEXTS CITED:


DECISION:
Direct the parties to bring in short minutes of order within 14 days to give effect to these reasons. Those short minutes of order should provide for the future management of what issues remain for determination in these proceedings



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION


SLATTERY J

MONDAY 31 MAY 2010

2008/281678 EURELLA COMMUNITY SERVICE INC v ATTORNEY GENERAL FOR THE STATE OF NEW SOUTH WALES

JUDGMENT

1 HIS HONOUR: ‘Eurella House’ in Eurella Street Burwood has operated since 1953 as a centre to assist people with disabilities. The property on which Eurella House stands was acquired that year as the result of a successful public fundraising campaign by a number of community groups and individuals.

2 The story of Eurella House starts earlier than 1953. From about 1946 small community groups centred in the inner Western suburbs of Sydney met with a view to providing for the needs of their own children with disabilities and the children of others. The plaintiff, Eurella Community Service Inc, the registered proprietor of the land on which Eurella House stands, is the successor organisation of these groups. Throughout these reasons the expression “Eurella House” is used to refer to the property referred to in the plaintiff’s amended summons and the buildings erected on it.

3 From 1953 up to the present day the operations conducted at Eurella House evolved in response to changing requirements for the education and training of those being cared for by the facility. Despite these changes the education and training provided at Eurella House preserved many of the ideas of those with the foresight to found it in 1953.

4 Since 2000, differences have arisen between the plaintiff and the Attorney-General’s Department and the Office of the Crown Solicitor on several questions concerning Eurella House. The plaintiff has now approached this Court to resolve these questions.

5 The question for determination raised by the plaintiff’s amended summons and the parties’ submissions are:

a Whether the plaintiff holds Eurella House itself absolutely or whether it holds Eurella House on a charitable trust;

b If Eurella House is held on a charitable trust what are the purposes (conveniently described as “elements” in this case) of that trust; and

c Once those elements are defined and using them as a standard against which to measure the operations of the trust, whether or not the trust has failed.

6 Determination of these questions requires an introduction to the circumstances in which Eurella House was created and operated. First though the general nature of the issues that have arisen about the purposes or elements of the alleged trust must be identified.

7 No further step can be taken in these reasons without a note on the use of language. This judgment considers the organisation and work of many individuals over a sixty-year period in the field of the education and advancement of people with often quite severe intellectual or physical disabilities. During that period the language used to describe people receiving care in relation to such disabilities has changed almost beyond recognition. A choice must be made in the use of descriptive language in these reasons. These reasons use language of the actual period during which each document speaks over the whole sixty-year period. This case also involves inferences about events and people over fifty years ago. Investigation of that subject requires the use of then contemporary language. Some of the language from the first half of that sixty-year period now sounds quite foreign to modern ears but it must be used to assist in discovering the purposes of those who used it.

8 This Court has a policy of ensuring that its published judgments do not become vehicles for identity theft. This judgment does not publish the street addresses of properties or identification details of bank accounts or other assets, which might aid identity theft. If such details are required they may be obtained from the Court’s file.

The Issues about the Purpose of the Alleged Trust

9 The first question to be determined is whether the plaintiff holds Eurella House absolutely or on a charitable trust. The evidence relevant to this question is examined later in these reasons. If this question is decided adversely to the plaintiff then the Court must consider questions as to the purposes or elements of that charitable trust. If this question is decided in the plaintiff's favour questions as to the purposes or elements of the trust do not arise. As will be seen from the reasons below the Court determines that the plaintiff holds Eurella House on a charitable trust. Thus it will be necessary to examine questions as to the purposes or elements of that trust. It is convenient therefore to identify them here before the history of the transactions and events relating to Eurella House are recounted

10 The plaintiff's case is that if it does not hold Eurella House absolutely then the purpose of any charitable trust was originally and is now to provide a broadly defined educational and training facility for “retarded” or “sub-normal” children. The plaintiff further submits the activities now carried on at Eurella House fall within the terms of a trust so defined.

11 The Attorney General’s case is if a charitable trust is established that the trust is to be identified and defined by six separate elements closely related to the purposes of the trust. The Attorney-General submits as follows.

a) The property at Eurella House, or any replacement land and building was to be used as a “school”, a concept that should be flexibly understood so as to allow for vocational training and the social education of play but which necessarily involved running an educational facility that would be attended by its students on a day time basis (“the school element”).

b) Those attending the school as students were to be people with intellectual disabilities (“the intellectual disability element”).

c) The focus of the school was to provide for students aged from approximately 5 to 18 years of age, although the school could also cater for students of other ages (“the children element”).

d) The school was to focus on serving the municipalities of Ashfield, Burwood, Concord and Strathfield including their successor local government entities, or the residents thereof, although the school need not exclude the provision of services to other areas or their residents (“the residency element”).

e) The trust assets could be applied to other activities or purposes reasonably ancillary to or connected with its primary purpose (“the ancillary purposes element”).

f) The school was to be run by, and have an association with the Western Suburbs Branch of the Sub-Normal Children’s Welfare Association, which Association has since been reconstituted as the plaintiff, but that connection was dispensable (“the plaintiff connection”).

12 The plaintiff accepts that two of these six elements are elements of any trust. The plaintiff agrees that the trust was to be used as a school to be attended by students on a daytime basis, the school element. The plaintiff also agrees that the trust’s assets could be applied to other activities or purposes reasonably ancillary to or connected to its primary purposes, the ancillary purposes element. As there is no dispute about the school element and the ancillary purposes element, four issues about the purposes of the trust remain to be determined between the parties. The parties take the following contrary positions on these four issues.

13 (1) The Intellectual Disability Element – Intellectual or any Disability? The Attorney General contends for a narrower definition of the charitable purpose of the trust, contending that the children who could be educated using the Eurella House property should be children with an intellectual disability. The plaintiff contends for a broader definition that the children concerned may be those with intellectual and/or a physical disability.

14 (2) The Children Element – 5 –18 Years Old or Any Age? The Attorney General’s contention is that it is part of the definition of the charitable purpose of the trust that the uses of the property be as the Attorney General says “focused on or directed primarily at” children aged 5-18 years although not excluding other age groups. The plaintiff’s contention is that the trust property can be applied to cater for people of any age such that indeed it might for example be used for no one aged from 5 to 18.

15 (3) The Residency Element – Focus on the Inner West or No Residency Requirement? The plaintiff disputes that there is a residency element in the users of the trust asset, Eurella House. The Attorney General’s case on the contrary is that it is part of the definition of the charitable purpose of the trust that the property’s uses be focused upon and primarily directed to the benefit of residents of the Ashfield, Burwood, Concord and Strathfield municipalities or their successors “the inner west” although not excluding people from other areas.

16 (4) The Plaintiff Connection – Plaintiff’s Role Dispensable or Not? The plaintiff contends the definition of its charitable purposes required the trust to be administered by or connected to the plaintiff. The Attorney General contends that connection was dispensable.

17 These reasons now return to an analysis of the history of the development of the trust. The parties and their legal advisers have provided detailed archival material, which has assisted the Court making findings in relation to this history. These reasons then decide the question whether the plaintiff holds Eurella House absolutely. They then analyse the four disputed elements of the purposes of the trust and make consequential findings.

Events Leading to the Establishment of Eurella House

18 From informal beginnings before World War II a structure for the work conducted at Eurella House evolved in several phases, commencing with the early coalescing of a group of like-minded people, the formation of a formal structure and then the acquisition of a permanent centre of operations at Eurella House itself.

19 Margaret Thompson was an early Australian pioneer in improving care for mentally handicapped children. After many years work in the field herself, in 1946 she hosted a meeting of parents of handicapped children at her home in Strathfield. This group formed itself in 1947 into the Society for the Welfare of Mental Deficients. This society claimed to equalize the public facilities available as between mentally handicapped children and children without such handicap. Later in the same year this group renamed itself the "Psycho Care Society" (“the Society”). The Society developed a function that in current times would be described as a "lobby group". It sought to improve government action and public services and facilities for mentally handicapped children.

20 In 1951 the Society found that its objects were compatible with a growing social movement of the period, the Sub-Normal Children’s Welfare Association (‘the Association”). Throughout Australia demand for better facilities for intellectually handicapped children had led to the formation of the Association as a nationwide body to which local branches could affiliate. Soon after the Association came into existence the members of the Psycho Care Society decided to become the Association’s Western Suburbs Branch (“the Branch”).

21 The objects of the Association are in evidence. The objects of the Branch are to be inferred from evidence as to what its members did. The principle object of the Association was, "Further the interests, train, educate and promote the welfare generally of sub normal children and ensure that they will be adequately and sympathetically cared for during their lifetime.” The Memorandum of Association of the Association set out many other objects of a practical kind that the Association would pursue to establish the rights of sub normal children as citizens, to present their special needs to relevant authorities and to distinguish them from the mentally ill. The Memorandum of Association does not define "sub-normal". It is addressed to an audience that understood the word.

22 Much later on 31 May 1993 the Branch incorporated under the Associations Incorporation Act 1984 (NSW) and reconstituted itself as the plaintiff, Eurella Community Services Inc. The plaintiff’s rules are the Model Rules under the Associations Incorporation Act 1984. The plaintiff's objects include “To further the interest and promote the emotional, intellectual and physical welfare of persons with intellectual disabilities” including providing early intervention services, employment training services, housing and residential services, assisting in obtaining supported employment services and occupational therapy counselling and rehabilitation services. Those objects further included providing "any facilities required by virtue of such intellectual disabilities" and "any other deeds which persons with intellectual disabilities may require". Other objects include "to assist or refer the parents and guardians of persons with intellectual disabilities with the care, education and training of such persons." Finally the objects were “to act as a trustee on behalf of persons with intellectual disabilities" and "to stimulate public awareness of an interest in the needs and welfare of persons with intellectual disabilities".

23 The earliest part of the post World War II evolution of the Branch was explained in a history of the Association written in 1984 by two participants in these early activities, Mr Fred Jackson and Ms Hazel Nelson. (Exhibit 1 Tab 4). This is how they described the period before 1946 and the formation of the Psycho Care Society and its objects, which were similar to those of the Association.

“A PERSONAL ACCOUNT OF THE BEGINNING OF THE SUB-NORMAL CHILDREN’S WELFARE ASSOCIATION by FRED L. JACKSON, WESTERN SUBURBS BRANCH [title page]

....

Inquiries in 1940 by my wife showed there was nothing being done for the intellectually handicapped child or adult under 80IQ and little for those over 80IQ by the Government, church or medical profession, despite the fact that one per cent of the population are so afflicted. The Lorna Hodgkinson Sunshine Home at North Sydney, the only one lie Crowle Home to-day, charged what the average person earned in a week and was only for the rich ten per cent of the population who own fifty percent of the wealth of the country.

A survey some years ago stated that of all handicapped people, four-fifths are retarded and one fifth represents spastic, deaf, dumb, blind, autistic etc. [p2]

....

Miss Margaret Thompson, principal, with her two sisters Jean and Katherine conducted Branxton Preparatory School, Homebush. Since 1925 she had taken an interest in and accepted a few retarded pupils in her school. Using a method similar to that by which Mss Helen Keller, American lecturer and author was taught, by placing Margaret’s hand on her face and throat to feel the vibrations she taught Margaret to speak, and then to read, write within limits, and count to 100, good for knitting which her mother had already taught her. [p3]

....

After World War Two Miss Thompson retired from teaching and her school was taken over by the Presbyterian Ladies’ College, Croydon. Her success in teaching Margaret to a further degree that other retarded children in the past, she said, inspired her to ask my wife and me to help her form an association for the general teaching and welfare of retarded children. From contacts in the Education Department, P.L.C. and Miss Hamilton, Child Psychologist at the Children’s Hospital Camperdown, she acquired addresses of parents of retarded children my wife and I were asked to visit and invited them to join us. Clergy were also visited to make contacts. [p4]

....

The Aims and Objects of the Psycho-Care Society of N.S.W. (1946) adopted were as follows:-

1.To contact parents or guardians of all sub-normal children and adults with the object of having their children or dependants trained in some occupation, no matter how simple, so that they can be not only cared for but gradually taught something that would be likely to occupy their minds and time, with the possibility of them becoming partially self-supporting.

2.To remove the burden of these children from the individual families that they belong to, so that the parents can continue to have and care for their normal children.

3.To see that these particular types of people are not classified as insane or handled by the Lunacy Department.

4.To approach the Education Department, with a view to having special teachers trained in the handling of sub-normal children, especially those under 50 intelligence quote, whereby they can be trained in occupational and speech therapy and elementary education.

5.To approach the Government and have special training schools similar to Glenfield in N.S.W. and Travaneer in Victoria, but to take and care for the children irrespective of their mental ability.

6.To arrange for their care, including medical attention from the cradle to the grave.

7.To establish pre-school clinics where their welfare and training may be directed from as early an age as possible.

8.To establish garden colonies where they may live in pleasant surroundings until decease of parents, or when home conditions are not conducive to their welfare.

9.To obtain from local and overseas sources latest ideas regarding treatment and training.

10. Where necessary, to manage estates and protect their financial interests.” [pp6-7]

....

Fred L. Jackson (signed)

Hazel Nelson (signed) 1984” [p18]

24 The Branch served the Western Suburbs of Sydney. The Branch and the Association were part of a wider movement throughout Australia that attempted to fill a gap in the care for children with moderate to severe intellectual disabilities. The parents of those children thought that their needs were not being addressed in the education system. Unless these children were cared for at home, psychiatric institutions were the only other available alternative accommodation for them at that time. Parents who did not want to face this unpalatable choice were motivated to join the Association.

25 As a report written in the 1980s explains, that the movement that created the Association led to greater government intervention to redress the inadequate facilities for mentally handicapped children.

“REPORT OF THE JOINT HEALTH-EDUCATION COMMITTEE ON THE HEALTH NEEDS OF INTELLECTUALLY AND MULTIPLY HANDICAPPED CHILDREN IN SCHOOLS

JANUARY, 1981

....

BACKGROUND TO THE PRESENT SITUATION

1.1 Prior to 1946, parents of children within the range of moderate to severe profound degrees of intellectual handicap had the choice of caring for their children at home or committing them to what was then known as a State Mental Hospital. This choice was not unique to parents in New South Wales but was one, which confronted parents of intellectually handicapped children throughout the world. Intellectual handicap was regarded as a medical problem and, in the public mind, was often confused with psychiatric illness. In the light of this, it was not surprising that institutional care was the only alternative to retaining an intellectually handicapped child at home. Society, at that time, had no expectation that schools or educational programs were appropriate to the needs of these children. Schools, therefore, were not involved with their care and management. A lone pioneering venture was the establishment of the Lorna Hodgkinson Sunshine Home at Gore Hill in 1928.

1.2 In 1946, a group of concerned parents established the “Subnormal Children’s Welfare Association” with the intention of sponsoring the establishment of Voluntary Association schools for intellectually handicapped children. The success of this initiative and that of other groups was such that, in 1974, there were some 85 Voluntary Association schools in New South Wales.

1.2.1 These schools are supported by State Government subsidies which cover the employment of teacher/supervisors for children between the ages of 4 years to 15 years 11 months and meet the costs of the conveyance of children to and from school each day.

Additional subsidies are paid by the Commonwealth Government for the employment of teacher/supervisors for children between the ages of 15 years and 11 months and for the employment of teachers’ aides (special). Commonwealth subsidies are also paid in respect of expenditure on capital costs of school buildings and the purchase of items of school equipment.

1.3 In 1964, the N.S.W. Department of Education established, on an experimental basis, classes for moderately intellectually handicapped children at Chatswood and Strathfield. The success of these initiatives soon became evident and it was accepted that the Department would continue to provide for the education of moderately intellectually handicapped children. This led to the establishment of a number of public schools designated as Opportunity “F” schools for moderately intellectually handicapped children. These schools did not admit children with severe to profound degrees of handicap as it was considered that such children were unable to benefit from school programs conduced by qualified teachers. The care of these children was left to the Voluntary Association schools which, in the main, employed unqualified personnel to conduct programs.” [pp3-4]

26 The Branch’s first teaching facility was a room at the Burwood Police Boys Club which had been placed at the Branch’s disposal. The Branch first conducted a school at that site on 29 June 1951. There were only 9 children in the first class. But the need for more permanent premises for the school became obvious to Branch members and they started to look for a suitable site.

The Property and the Appeal

27 Branch members located a suitable property, Eurella House, in time for a Committee member, Mr Davis to report on it to a Branch meeting held on 8 June 1953. On 13 June 1953 contracts for the purchase of the property were exchanged with Messrs Hadley and Davis as the purchasers "for and on behalf of the Sub Normal Children's Welfare Association Western Suburbs Branch". The Branch paid the deposit of £25. The Branch committee resolved to inspect the property. Mr Hadley sought a loan from head office of the Association to assist in the purchase. His request was refused. The Branch moved quickly on the purchase. The Branch committee convened an extraordinary general Branch meeting on 22 June 1953 to endorse the committee's action in purchasing the property. This same extraordinary general meeting appointed Mr Hadley and Mr Davis as trustees for the purchase, as the Branch was an incorporated Association. The meeting also resolved to draw a cheque for £55 to cover stamp duty on the purchase of the property. The same meeting also decided to involve a local Rotary Club as it looked like a fundraising appeal would be necessary. Rotary members agreed to give their assistance to help fund the purchase of permanent premises. Rotary took responsibility for conducting a fundraising appeal aimed at the businesspeople of the district as is recorded in the Branch’s minutes.

28 The purchase of Eurella House was completed on 7 August 1953. Mr Hadley and Mr Davis were the registered proprietors. The property was mortgaged to the ANZ Bank. There is no direct evidence as to the source of the money paid to the vendor on settlement. It is likely that the balance of purchase price was borrowed until it could be raised by the public appeal and the mortgage discharged. The Combined Mayoral Appeal did not close until October 1953 when funds would have become available to pay down the ANZ Bank mortgage.

29 The Branch’s income and expenditure account for the year ended 31 December 1953 discloses an entry for the purchase of the Eurella House property for £5,581 together with entries for the purchase of furniture and equipment, legal costs on the purchase and maintenance and repairs to the property. Since the purchase of Eurella House the Branch has maintained the property at its own expense.

30 Whether it was organised by the Branch itself or by Rotary is unclear but the idea of Combined Mayoral Appeal within the municipalities of Burwood, Strathfield and Concord emerged the same month. Branch members had a conference with the three Councils on 18 June 1953 to discuss raising money to buy this property. The expressed need was to raise the sum of £6,000. If it did not generate the idea of a public appeal, this conference on 18 June 1953 confirmed the idea of a public appeal to achieve this money target. Representatives of the Association and Rotary were also present at this conference. The objects of the appeal were described in many different local print media of the time. These various descriptions often included the description that the appeal was to purchase the building and to provide “suitable education facilities for those subnormal children not at present accepted in departmental schools.”

31 One source of knowledge from which the purpose of the donations to the appeal may be inferred was what public figures said about the object of the appeal. These public figures had probably been involved in the conferences with Branch members and were working with them on the appeal. It is to be inferred that the leadership of these public figures influenced the decisions of those who donated. Their recorded words are also likely to reflect what Branch members and others were saying to potential donors at the time. A degree of co-ordination of the message to donors can be inferred from the well-organised nature of this campaign, which is conspicuous even at the dispassionate distance of more than fifty years.

32 The Mayor of Burwood was one leading figure in promoting the appeal. A local newspaper, The Recorder, published a speech he made in August 1953.

“Thursday, August 6, 1953

Recorder Aug 61953 [hand written]

Mayor of Concord Officially Opens Concord’s Appeal for Western Suburbs Sub-Normal Children’s Welfare Association

“During the last fortnight you have read the appeals made by Ald. Prowse (Mayor of Burwood) and Ald. Bailey (Mayor of Ashfield) for you to helop the combined Mayoral Appeal for financial help on hehalf of the Western Suburbs Sub-Normal Children’s Welfare Association, but do you really know what this Association is and why a public appeal is being made for a fund to buy a house costing £6000?” the Mayor said in his opening address.

Before we consider the answer to these questions, let your mind go back to the months before you own children were born. The anticipation of a healthy baby and the hopes for its future that were constantly in your mind, watching it grow into strong childhood, and then adolescence, helping it with its studies, and being proud of its prowess in sport.

In the majority of cases these hopes have been and will be realised, but what of the others who through no fault of their own and for reasons not even known to medical science, have found that their long awaited baby is what we now call “sub-normal” that is with an I.Q. of 65 or less.

For many years the majority of these children were kept to themselves, the sole care of their parents, as the slowness of their thought and actions made playing with other children out of the question and essential contact with other people was cut off, and they were left in a world to themselves.

Then a small group of parents though that if the afflicted children could be brought together for a few hours every day to “play”, “work” and go to “school” like their normal brother and sisters it might have a wonderful psychological effect on them.

This was tried and the result was so gratifying that just three years ago the Western Suburbs Branch decided to open a centre at Burwood, and they were given accommodation at the Police Boys’ Club, Burwood, which is now quite inadequate.

For some months the mothers organised the centre and when a fill-time teacher was available the mothers still carried on giving every assistance possible.

I feel that in know the history of the establishment of the Centre at Burwood I have been privileged to witness :”self-help” in its highest form and the fact that these children who were thought to [missing line] perform plays interchanging roles, justifies the purchase of a home that can be school, hostel and recreation centre, where mothers can leave their children in competent hands, knowing they are living a life as close to normal as it is possible for them to live.

The proximity of the home in Eurella Street to Burwood station and bus transport, its large grounds, good state of repair, and vacant possession, makes it most desirable form all points of view.

If I gave aroused your sympathy and admiration for this section of our community, will you remember the quotation: “There but for the grace of God go I,” and spread the news of the appeal wherever you go, enlisting others to do likewise.

A shilling from every resident of Concord would achieve our object, and all donations of £1 or over are deductable from income tax.

I do ask your help to assist those who cannot help themselves. Donations can be made direct to the Town Clerk.

S. SHRIMPTON, Mayor”

33 Burwood was only one of the three local government areas in the inner western suburbs to support the appeal. The Mayor of Ashfield wrote to all businesses and residents in the Ashfield municipality seeking donations. The public words he used to explain his purpose shed light on the message being conveyed to all donors.

“MAYOR OF ASHFIELD WRITES TO YOU

Aeroplane Press 30/7/53 [handwritten]

Mayor of Burwood, Ald. F. J. Prowse, last week appealed to residents and businessmen for donations towards establishing a centre in Burwood for the Western Suburbs Branch of the Sub-Normal Children’s Association.

The appeal, originally sponsored by Burwood Rotary Club, emanate from a meeting of the Mayors of Burwood, Ashfield, Concord, and Strathfield who agreed to make an all-out attempt to raise £6,000 to establish the project.

The “Aeroplane – Press” will give full publicity to the appeals of the four mayors.

Ald. Prowse, whose personal appeal we published last week, is highly pleased with the results.

In accordance with the assurance given, we now present to our 40,000 readers the personal appeal from the Mayor of Ashfield, Alderman H. Bally.

Ald. Bally writes:-

Dear Citizen,

Do you know that living in our midst are small children who are precluded from the benefits of receiving training through the State Education Department?

Young girls and boys, who come within the category of sub-normal, should not be condemned to spend what should be the happiest years of their lives without proper training and the joy of play with other children.

An appeal for children always strikes a ready response with Australians – and rightly so.

Let me tell you what we propose to do is to bring some gleam of brightness into the lives and happiness into the hearts of these children.

The Western Suburbs Branch of the Sub-Normal Children’s Association has paid a deposit to acquire a property at No. 2a Eurella Street, Burwood, for the purpose of a school and hostel for children in the Western Suburbs, which includes children from Ashfield Municipality.

A further £5,000 is required to acquire the property and £500 is needed for equipment.

Donations will be received at Town Halls in Ashfield, Burwood, Concord, and Strathfield. Donations of £1 or more are allowable deductions for income tax purposes.

The money for the purchase of the home is required urgently in order that the project may be proceeded with. Delay in making your donation my defeat this proposal.

I commend this appeal to my fellow citizens of the Western Suburbs, confident in the belief that their compassion for these little sub-normal children will be matched by a generous desire to do something NOW to alleviate their present unhappy condition.

Yours faithfully,

H.M. Bally,

Mayor of Ashfield.”

34 The Branch also inspired action from Concord Council. The Mayor of Concord added momentum to the campaign. The Recorder also captured his words at a public meeting to launch the appeal in the Concord area.

“THE RECORDER

July 30 1953 [handwritten]

Western Suburbs Sub-Normal Children’s Appeal

At a public meeting held at the Concord Council Chamber on Monday night, ways and means were discussed by which money could be raised as Concord’s quota to the £6000 needed for the purchase of a school in Burwood for the Western Suburbs Sub-Normal Children’s Welfare Association.

....

It was resolved to ask the schools to support the appeal and to have collections of various kinds around the district. There is only one month in which to get our quota, so it is hoped that every citizen will do their part quickly to help this worthy cause.”

35 This public fundraising campaign raised the funds to acquire Eurella House. A Board member, Mr Fred Jackson's personal account of the period shows that the appeal raised a total of £5263. Of this sum Combined Rotary (the Mayor’s appeal) raised £3864, Burwood Police Division raised £1061, Rotary members raised £300 and the Eurella House auxiliaries raised £38.

36 The purchase of Eurella House was completed on 7 August 1953. It was conveyed into the names of Eric Bland Hadley and George Lewis Davis. The facility at Eurella House was opened on 24 October 1953.

37 From the first, Eurella House operated as a school for “retarded” or “sub-normal” children. The evidence from Mr. Sims about the children attending the school at that time is that “retarded” and “abnormal” children clearly included, “children whose intellectual and/or physical capacities were less than normal. It is artificial to draw a hard and fast line between the two: people with intellectual disabilities are often also burdened with physical disabilities.”

38 Shortly after it was opened, the site of Eurella House was provisionally registered as a school on 12 December 1955. This registration reflected the importance of one of its prominent functions.

The June 1958 Deed

39 On 11 June 1958 the leaders of the project had the foresight to create a trust deed to record trusts on which Eurella House was held. The June 1958 Deed provided as follows:

“THIS TRUST DEED made the eleventh day of One thousand nine hundred and fifty eight B E T W E E N ERIC BLAND HADLEY OF 8 Coventry Street Homebush in the state of New South Wales Civil Servant and GEORGE LEWIS DAVIS of 91 Burwood Road Concord in the said State Linotype Operator (Hereinafter called the “Original Trustees”) of the first part AND FREDERICK JAMES PROWSE Mayor of the Municipality of Burwood in the said State the said ERIC BLAND HADLEY and the said GEORGE LEWIS DAVIS (hereinafter called the “Trustees”) of the second Part AND THE WESTERN SUBURBS BRANCH OF THE SUB-NORMAL CHILDREN’S WELFARE ASSOCIATION (which said Association is a Company Limited by Guarantee duly incorporated under the Companies Act 1936-1955 and is hereinafter referred to as the “Association”) the COUNCILS OF THE MUNICIPALITIES OF ASHFIELD BURWOOD CONCORD and STRATHFIELD and the ROTARY CLUB OF BURWOOD (hereinafter called the “Founders”) of the third part WHEREAS the land and hereditaments more fully described in the Schedule hereunderwritten as “Eurella House” [address not published] Burwood in the said State (hereinafter called the “Home”) were originally purchased with moneys raised by the Founders for the purpose of establishing a home or school for sub-normal children to be managed and administered by the said Western Suburbs Branch of the Association AND WHEREAS the original Trustees are now and have been at all relevant times the Trustees of the said Branch and have been so appointed in accordance with its rules and pursuant to the Articles of Association and by-laws of the Association AND WHEREAS the Contract for purchase of the Home was dated the Thirteenth day of June One thousand nine hundred and fifty three and was signed by the original Trustees as purchasers “for and on behalf of The Sub-Normal Children’s Welfare Association Western Suburbs Branch” AND WHEREAS the Home was by Memorandum of Transfer dated the seventh day of August One thousand nine hundred and fifty three transferred into the names of the original Trustees and is held by them subject to a Mortgage Registered No. F 940752 in favour of the Australian & New Zealand Bank Ltd. NOW in consideration of the premises IT IS HEREBY AGREED AND DECLARED by and between the parties hereto AND THIS DEED WITNESSETH as follows: -

1. The original Trustees do hereby at the request of the Founders constitute and appoint the Trustees as Trustees of the Home and hereby covenant that they will transfer into their names without delay the Home to be held by the Trustees UPON TRUST in accordance with the provisions hereincontained.

2. The Trustees hereby covenant and agree that they will hold the Home in perpetuity as and for a Home and for a school for sub-normal children in conformity with the provision of this Trust Deed.

3. The Home shall at all times be used for the care education treatment maintenance benefit and welfare of sub-normal or mentally handicapped children as may from time to time be accepted into the Home and no question of religion Social Status colour or political views or the ability of the parents or guardians to contribute or pay for the care for any sub-normal child shall be taken into consideration in determining whether such sub-normal child shall be accepted into the home and receive or continue to receive any of the benefits provided by the Home.

4. Neither the Registrar General nor any purchaser Mortgagee or other person or Body dealing in any way with the Trustees shall be bound to enquire as to the propriety or necessity for any dealing or disposition in respect of the Home or shall be affected by Notice of any matter thing arising in connection therewith.

5. At all times hereafter there shall be not less than three (3) nor more that eight (8) Trustees and the Trustees hereinnamed shall continue to act as such until they shall respectively die resign or be removed or replaced pursuant to the provisions hereinafter contained AND the provisions of the Trust Deed shall be binding on every person who shall accept the office of or act as a Trustee hereunder. Until a properly Constituted Meeting of the Trustees resolves to the contrary the Chairman of the Trustees shall be the said FREDERICK JAMES PROWSE.

6. In each and every year hereafter commencing from the first day of July One thousand nine hundred and fifty eight there shall be held during the month of July or August on a date to be fixed by the Chairman of the Trustees of which not less than one calendar Month’s notice shall be given to each and every Trustee an annual General Meeting of the Trustees.

7. At each Annual General Meeting of the Trustees all the Trustees including the Chairman shall retire but they shall be eligible for re-appointment provided that no Trustee shall be reappointed and no new Trustee shall be appointed unless he shall prior to the Meeting be nominated in writing to act as such by one or more of the Founders AND IT IS HEREBY DECLARED that the Founders shall respectively have the power to nominate the following number of Trustees and no more that is to say: -

The Sub-Normal Children’s Welfare Association Western Suburbs Branch and the Council of the Municipality of Burwood each two (2) and the Rotary Club of Burwood and the Councils of the Municipalities of Ashfield, Strathfield and Concord each one (1).

8. The persons nominated as Trustees pursuant to Clause 7 hereof shall be the Trustees throughout the ensuing year and until their Successors shall have been regularly nominated and appointed and they shall forthwith elect from their number a Chairman of which he is present and who shall be entitled to a casting vote on any question upon which the voting among the Trustees is equal. The quorum at every meeting of the Trustees shall consist of not less than two (2) Trustees. The Trustees shall cause proper minutes to be kept of all their meetings. Any duly convened and constituted Meeting of Trustees at which a quorum is present shall have power to exercise all or any of the powers vested in the Trustees hereunder.

9. There shall be presented to each Annual General Meeting a written report by the retiring Trustees setting out relevant particulars in connection with activities of the Trustees in respect of the Home during the preceding twelve months ending on the thirtieth day of June in each year and there shall also be presented a properly audited balance sheet and Accounts for the same period.”

40 The 1958 Deed then provides machinery provisions for the appointment of officers, the approval of rules and by-laws, for the administration of Eurella House, the holding of meetings, the keeping of books of account, the maintenance of bank accounts, the power to raise funds, the duty to insure the property, the circumstances in which a trustee will vacate office and the power to delegate the exercise of the trustee’s powers. None of these provisions are of particular significance for these proceedings. Then the 1953 Deed continued:

“19. The management of the Home and conduct thereof for the purposes aforesaid shall until otherwise determined by the Trustees be vested in the Western Suburbs Branch of the Association which shall be responsible for the maintenance and upkeep of all buildings and improvements adequately staffed and pay all outgoings and running expenses in connection therewith and indemnify and keep indemnified the Trustees against all claims demands suits and actions of whatever nature and kind and however arising in connection with or arising out of or in relation to the Home and the conduct thereof.

20. In the event of the Home ceasing to function for the purposes of a Home anf (sic) for a school for sub-normal children as aforesaid or being wound up [illegible] and any property and other assets attaching thereto held by the Trustees in connection therewith after the discharge of all liabilities and payment of all expenses so far as the resources in the hands of the Trustees may extend shall become the property of and be transferred to such benevolent or charitable organisation or institution as shall be appointed by majority vote at a Meeting to be held as soon as possible after the happening of such event whereat there shall be in attendance a representative nominated and appointed by each of the Founders in writing and each Founder shall have power to nominate only one (1) representative for the purposes of such meeting.

21. The Trustees shall forthwith thereafter execute all documents and take all steps necessary to vest and transfer the Home and all such property and assets in the benevolent or charitable organisation or institution appointed under the last preceding Clause hereof.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands and affixed their Seals the day and year first hereinbefore mentioned.”

41 The first schedule to the June 1958 Deed gave a complete title description to the property on which Eurella House stands. The parties contended that much could be inferred about the trust from the terms of this 1953 Deed.

42 The June 1958 Deed was varied in April 1976. The amendments to the June 1958 deed are not of particular significance for the issues between the parties.

From the 1950s to the Present Time

43 In the 1960s new building work and refurbishment took place at Eurella House. The Branch needed additional funds for this work. A new fund raising appeal was instituted. The branch honorary secretary wrote to the local member, Mr Ben Doig, explaining the Branch’s fundraising efforts and seeking a government grant of the kind that had been given to other branches of the Association. The honorary secretary described the work of the Branch at Eurella House in the following terms

“As you know the Western Suburbs Branch of the Sub Normal Children's Welfare Association has been conducting a school, Eurella House, for sub-normal children for about twelve years in Burwood.

The Branch is autonomous for all practical purposes and it is solely responsible for the provision and maintenance of its premises and the expenses of training and caring for the subnormal children attending the school.

During the whole of its existence the two major anxieties of branch members, who are almost entirely parents of children attending, have been their inability to accommodate all the children seeking admission and the cost of running the school and maintaining the building, despite very considerable voluntary work by members."

44 The Ashfield, Burwood, Concord and Strathfield councils were re-enlisted in another fundraising appeal. The Mayor of Concord made an appeal for financial assistance and Ashfield Council approved a donation of £500. In a newspaper article from the time Alderman Spillane, the Mayor of Ashfield was quoted as noting “a growing list of children unable to be assisted because there is a lack of classroom and playground accommodation" at Eurella House. Alderman Spillane, who had been involved in the original appeal in 1953 said that "Eurella House has been catering for retarded children for the past 13 years”. He explained the object of this second appeal was to extend the facilities at Eurella House “ so that additional children may be admitted and those at present attending may receive additional help in several much-needed directions."

The Present Time

45 The passage of time changed the nature of the operations at Eurella House. By the early 1980s Eurella House had stopped functioning as a school for sub-normal children of school age. The two main programs now run by the plaintiff on the property are an early intervention program and day programs. These various programs require a little explanation. This description is drawn closely from the evidence of Mr Sims. There was no cross examination on this evidence. I accept it as correct.

46 The change at Eurella House away from a school for sub-normal children of usual school age occurred as a result of the passage of the Anti Discrimination Act 1977 (NSW). After the passage of that Act the NSW Department of Education commenced what was called an Assumption of Responsibility Program, which took over from many organisations such as Eurella House the responsibility for educating school-aged children with significant levels of disability. The process of the Department assuming responsibility took approximately two years from May 1983 through to May 1985. At the end of that two-year period Eurella House provided no more education to school-aged children. The service previously provided by Eurella became known as the Lucas Gardens Special School located in Queens Road, Five Dock.

47 A second major catalyst encouraging younger people with disabilities to integrate into the wider educational system was the passage of the Disability Discrimination Act 1992 (Cth). This legislation enabled children with disabilities to have access to non-government Independent Schools.

48 Since 1990 there has been little prospect that Eurella could be operated as a school. Its facilities do not satisfy the requirements for registration as a school under the Education Act 1990 (NSW) s 47.

49 Eurella currently runs two main programs at the property: an early intervention program designed for children from birth to 5 years with special needs – intellectual, physical, speech and behavioural; and day programs which are available to teenagers and other people who have completed their schooling and whose disabilities prevent them obtaining and maintaining suitable employment. Individually designed programs within a group program provide for the special needs of the younger children; for example, physical needs are addressed by programs providing for gross motor skills and fine motor skills, and speech needs are addressed by the provision of the speech therapist and a verbal and augmentative programs.

50 The early intervention program also develops social skills amongst the young children by addressing the issue of challenging behaviour and promoting appropriate social responses within the group. It is a requirement of the program that a parent of each child attends thereby ensuring that the training is also provided to the parents.

51 The day programs evolved over the years. In the late 1950s and early 1960s Eurella House also operated an “activity centre”, which had several features similar to the current day programs. The programs now provide various educational and training services including teaching communication skills, social skills, living skills such as shopping, cooking and cleaning, personal hygiene, computer access, individual goal setting, transportation skills, assistance to community facilities and vocational exposure.

52 Mr Sims’ evidence, which I accept, is that Eurella does not currently provide services to people with only physical disabilities.

Charitable Trust or Held Absolutely?

53 The first question for determination is whether the plaintiff holds Eurella House absolutely or on a charitable trust.

54 The plaintiff emphasises a number of factual matters in support of its argument that it holds Eurella House absolutely. First it submits that the property was purchased with a deposit from the Branch. The purchaser was the Branch. The trustees were referred to on the purchase only because an unincorporated Association could not hold the property in its own name. Secondly the plaintiff submits that the appeal for funds began sometime after contracts for the purchase were exchanged. Thirdly the appeals expressly mention that the Branch was to purchase the property. Fourthly there is no reference to any trust in the appeals and the creation of a charitable trust requires intention. Finally to be tax-deductible, gifts must have been made to the Branch. The Branch was, as the plaintiff is today, a public benevolent institution gifts to which were tax-deductible. The Branch could use such gifts for any purpose. The receipt of the donations is reflected in the Branch’s expenditure account for the year ended 31 December 1953 showing £6152 as coming from "Donations and Gifts".

55 To answer the question posed, it is necessary to decide whether the funds raised by the appeal in 1953 were “a gift to an institution impressed with a trust for the application thereof to particular purposes” or “ an absolute gift to such an institution as a result for instance of appeal by the institution for funds based on its need for moneys in order to carry out a particular project or purpose”: Attorney-General for the State of Queensland v The Corporation of the Lesser Chapter of the Cathedral Church of Brisbane (1976) 136 CLR 353, per Jacobs J at 371. Both sides put submissions about the application of Jacobs J’s reasoning in the Brisbane Cathedral Case to the present proceedings. The full passage from the Brisbane Cathedral Case follows. The passage is best understood by noting that the rebuilding of St Martin’s Hospital was said to be the relevant charitable purpose and the defendant corporation was the institution that received the funds from the public appeal.

“The questions which arise are first, whether St Martin's Hospital was a separate charity, and, secondly, if this question be answered in the affirmative, whether the lands were sold as alleged or were otherwise appropriated to the purposes of St Martin's Hospital, and, if so, the consequences thereof.

I turn to the first question, whether St Martin's Hospital is, as a result of the circumstances of its founding, a separate charity. It is true that where a body of persons, corporate or unincorporate, holds land or buildings beneficially and uses them for a charitable purpose, for example, a hospital which is charitable, it does not thereby dedicate or appropriate the lands in perpetuity for that charitable purpose. It is at liberty to discontinue or to alter the charitable uses or purposes because such a charitable use, unless a charitable trust has been declared, is a private, not a public, use. Thus the Lesser Chapter, if it were otherwise within its power, might conduct a hospital on lands owned by it and it might at any time cease to conduct that hospital and apply the lands to other purposes; for the lands are never impressed with the public charitable purpose.

However, the particular feature of the present case is that moneys raised from the public for the purposes of the hospital have been expended on the improvement of lands standing in the name of the corporation. That corporation happens to be a religious corporation and therefore its purposes are themselves primarily charitable, but that is not immediately relevant. What must first be determined is whether the funds which were raised for the rebuilding of St Martin's Hospital were a gift to the corporation impressed with a trust for the application thereof to particular charitable purposes or were an absolute gift to the Lesser Chapter as a result of an appeal by the Lesser Chapter for funds based on its need for moneys in order to carry out a particular project or purpose.

It is necessary to make clear this distinction between a gift to an institution impressed with a trust for the application thereof to particular purposes and an absolute gift to such an institution as a result for instance of an appeal by the institution for funds based on its need for moneys in order to carry out a particular project or purpose. The distinction is one which can be difficult in its particular application. Where the expressed purpose is not a charitable purpose the gift will fail if the purpose is held to create a trust unless the trust is found to be a private trust enforceable by the donor until the purpose had been achieved, but meanwhile revocable — the so-called trust of imperfect obligation where there is a resulting trust to the donor if the moneys are not expended. Such a gift may, however, be construed as an absolute gift motivated by the expressed intention of the institution. However, if the purpose of the gift is a charitable purpose, the charitable purpose will more likely than not impress the subject matter of the gift with a charitable trust.

A further distinction needs to be borne in mind. A trust to a charitable institution such as a church of money or property for the improvement of the fabric of the church or some other purpose will in many instances be fully performed once the moneys have been so expended. There is no separate continuing trust of the improvements. The trustees of that property can deal with it in accordance with their powers appertaining to that property. However, where the purpose of the appeal is itself charitable and particularly where the purpose is identifiably distinct from a particular need of the institution which makes the appeal, then the moneys raised and the product thereof will be impressed with a continuing charitable trust for the purposes for which the moneys are so raised and the trust will be enforceable at the suit of the Attorney-General.”

56 In my view the correct characterisation of the funds raised on the appeal for the acquisition of Eurella House is that the funds were a gift to the Branch impressed with a trust for its application to particular charitable purposes namely the acquisition and operation of Eurella House as a school for sub-normal and retarded children. The 1953 appeal funds were not raised as an absolute gift to the Branch based on its need for moneys to carry out a particular project. There are several reasons for this conclusion.

57 First, the evidence from the newspaper articles of the time as to what the donors were told strongly focuses the fund raising on the charitable purpose of purchasing and establishing a school at the Eurella House site. It is true, as the plaintiff submits, that many of the newspaper articles do refer to the plaintiff's acquisition of the site but read as a whole the material does not focus upon the Branch itself as the objective of the donations being sought. The only role the Branch is seen to play in the descriptive appeal material is as the vehicle for the implementation of the compelling purpose of setting up the school. There are multiple references in this material to “establishing the project”, “ establishing a centre” , that the funds were needed "for the purchase of the school” without direct reference to the Branch. The newspaper articles, recording no doubt what was being said to induce the donations, are not pitched to emphasise the Branch’s need for funds. Rather they are pitched to emphasise the community’s current need for this project to be fulfilled. The described role of the Branch is merely as the instrument by which the project will be fulfilled. Many of the references to the Branch merely give context to explain the means through which the purpose will be achieved. Jacobs J says in the Cathedral Church of Brisbane Case at 371 "if the purpose of the gift is a charitable purpose, the charitable purpose will more likely than not impress the subject matter of the gift with the charitable trust". In my view the charitable purpose of these 1953 appeal funds is readily discernible in exactly the place that one would expect to find it, in the surviving record of the acts of persuasion that elicited the donations to the appeal. It is true, as the plaintiff says that the mere fact that funds were garnered by public fund raising does not mean that they are impressed with a trust. Here the Court does not just look to the mere fact of public fund raising, but rather to the content of what was said to the donors.

58 Second, the appeal had a public character that went well beyond the single institution represented by the Branch. There was a combined Mayoral Appeal. Rotary were also involved. The fact of the Mayors were so readily asked and so quickly responded in a way that appeared to dominate the fund raising effort, demonstrates the public character of the appeal beyond one institution such as the Branch. The prominent role that these public authorities took makes it very difficult to characterise the appeal as “an appeal by the institution for funds based on its need for moneys in order to carry out a particular project or purpose": (emphasis added) per Jacobs J in the Cathedral Church of Brisbane Case at 371. This was not just an appeal by the Branch. The plaintiff indirectly recognises this difficulty and in its submissions skilfully attempts to characterise Rotary and the Councils as agents for the Branch. However that is not how the contemporary materials appear. In fact very little of the funds raised were raised directly by Eurella House auxiliaries.

59 Third, whatever the precise legal status of the 1958 Deed, it is evidence created within five years of the 1953 appeal as to the intentions of all involved in the fund raising in 1953. The trustees of the 1958 Deed had been involved in the events of 1953 and are unlikely to have acted inconsistently with their fundraising efforts five years earlier. I agree with the Attorney-General’s submission that in the 1958 Deed one finds expression of a charitable purpose not a trust for the benefit of the Branch itself. The 1958 Deed recites the fact that the money used to buy the property was raised for a purpose rather than for an organisation such as the Branch. The 1958 Deed recites that the 1953 intention was that the property was to be managed and administered by the Branch but does not say that the Branch was to be the owner or beneficiary of the property. The 1958 Deed notes that the trustees had been both trustees of the branch and of the property thereby distinguishing their roles and distinguishing the charitable purpose from the charitable organisation. For the future the deed also makes it plain that the property was being held in perpetuity for a particular purpose. The property is not being held subject to the usual broad discretions vested in a beneficial owner. The property was always to be used for the purpose stated. Upon any failure of the trust, the property was not to revert to the Branch. It was to be given to a charitable or benevolent organisation.

60 The Attorney-General seeks to rely upon a passage from Jacobs J's judgment in the Cathedral Church of Brisbane Case at 372 that the moneys raised and the product thereof will be impressed with a continuing charitable trust for the purposes for which the moneys are so raised "particularly where the purpose is identifiably distinct from a particular need of the institution which makes the appeal". The Attorney General argues that the Association and the Branch had many activities and objectives only one of which was Eurella House and its school. It is further argued that there is therefore a clear distinction between the Branch and Eurella House and therefore a distinction between money donated for the purposes of buying the property and money donated to the Branch. The plaintiff has blunted this particular argument by drawing attention to the distinction between the Association and the Branch and pointing out that the Branch conducted very little activity other than the school at Eurella House.

61 The plaintiff’s submission that the property was purchased with a deposit from the Branch failed to account for how little the Branch actually contributed compared with the support from the public appeal. Even though the appeal began after the exchange of contracts that does not strengthen the inference that the fundraising was for the Branch. The lack of reference to any trust in the appeal materials is not remarkable. Donors gave money directly to the Branch to gain a tax deduction but that is not an answer to the Attorney General's argument that when that money was received it was already impressed with a trust. Although the funds raised were used to repay the ANZ bank loan the stated purpose of the fundraising was more than just paying off this bank loan.

62 I conclude therefore that the funds raised for the purchase of Eurella House were impressed with a charitable trust.

63 It is now necessary to decide the terms of the charitable trust on which the plaintiff holds Eurella House. The parties are in dispute about the four elements of the purpose of the trust identified earlier in these reasons, the intellectual disability element, the children element, the residency element and the plaintiff connection element.

Intellectual Disability Element

64 The plaintiff accepts in its submissions that students with intellectual disabilities were included in the purpose of any trust created by the 1953 fundraising but argues that the purpose was described as being for students who were “retarded” or “sub-normal” an expression that included merely physical rather than intellectual disability.

65 The Attorney-General argues that part of the definition of the charitable purpose of the trust is that children educated there have an intellectual disability, even if they have other disabilities as well. The Attorney-General further argues that the trust does not include children without intellectual disabilities.

66 A column in local newspaper in 1953 refers to combined appeal to raise £6,000 so the Branch could ‘purchase a building and provide suitable educational facilities for those sub-normal children not at present accepted in departmental schools’. The plaintiff says this seems to imply children with various impairments, not necessarily intellectual. Further the plaintiff has tendered photographic evidence of children suffering from physical disabilities.

67 The plaintiff also argues that lack of express reference to intellectual impairment in much of the 1953 appeal promotional material supports the conclusion that benefiting such impairment was not a necessary ingredient of the decision to donate. At a surface level there is much force in this argument but it is necessary to examine the language of the time to test the argument. After all if the element of intellectual impairment (whether or not there is physical impairment as well) is buried in other language that was used during the appeal then, although not expressly identified, intellectual impairment may yet be a necessary component of the trust.

68 The language constantly used throughout the appeal of the class of children to be benefited is “sub-normal” and “retarded”. This language appears in most of the newspaper articles about the appeal. These terms were either not explained or, if they were their explanation has not survived. They had well accepted meanings at the time. Discovery of those meanings helps unlock the answer to the question about the intellectual disability element.

69 A 1958 Australian publication of the Association provides some of the best contemporary evidence of the meaning of these words in this context in the mid 1950s. Parts of the introduction and extracts from Chapters 3 and 19 are reproduced below. They are useful in revealing the meaning of both “sub-normal” and “retarded” as meaning intellectual or mental impairment. Reading the material it is difficult to extract any reference that could be construed as a description of mere physical disability.

“THE SUBNORMAL CHILD AT HOME

....

Published for THE AUSTRALIAN COUNCIL OF ORGANISATIONS FOR SUBMORMAL CHILDREN

....

AUTHORS’ NOTE

This book is about subnormal children, defined here as those children whose intellectual powers prevent them from really profiting from the kind of instruction given in an ordinary school or even in an opportunity or special school. They are the mentally retarded or trainable mental defectives who are best catered for in a Training Centre.

The book is primarily for parents, but we hope that by virtue of its practical suggestions it will be helpful also to teachers, social workers and others interested in the training and welfare of children afflicted with this, the greatest of human problems – misadventure of the mind.

January 1958” [p vi]

70 This definition of “sub-normal” at the beginning of the book is reinforced in a number of the practical chapters that follow. Chapter three deals with basic facts, as they were then understood about sub-normal children.

“THE SUBNORMAL CHILD AT HOME

....

CHAPTER 3

BASIC FACTS

Subnormal or Mentally Retarded

To save confusion and disappointment, it is as well for parents to know what professional workers mean when they refer to a child as subnormal or mentally retarded. In fact there are a number of different terms used in connection with children who are slow at learning and who do not progress in many things as other children do. Once such children were referred to as ‘mentally defective’, ‘feeble-minded’ or ‘morons’, but as our knowledge about such children improved and as society began to consider their rights and the feelings and attitudes of their parents, it was decided that such terms were rather inaccurate and too vague, besides being harsh and in a sense condemnatory.

Although these terms are still employed by some, there is a general tendency to use instead the terms, mentally retarded, mentally subnormal or slow-learning – these terms are broadly speaking more applicable and certainly they are kinder ones. But inasmuch as mental retardation or subnormality is a matter of degree, there is a great range in the mental capacities and levels or development of children so classed. We can distinguish three groups:

In the first group are those mentally retarded or slow-learning children whose slowness in development makes it difficult for them to keep up with their more normal schoolfellows. They are always at the bottom of an ordinary class in most subjects and find the going very heavy. They can learn to read and write and do simple arithmetic provided less is asked of them and they are taught more slowly with much repetition, and the use of concrete materials. They are sometimes called the dull and backward and are best taught in small groups in a special or opportunity class attached to an ordinary school.

Then there is the second group who are still slower in their development. They really cannot be taught in a special class or opportunity class because their training needs to be simpler and taken along even more social and practical lines. They are sometimes called the trainable mentally retarded or the subnormal. The latter word is used in a rather special sense, for we are all subnormal in some things – some of the cleverest people are quite subnormal when it comes to repairing mechanical things.

The subnormal or trainable mentally retarded represent a middle group of children many of whom do not learn to read of write with any degree of efficiency, but with the right training they can learn many practical things and they can become socially acceptable beings in the family and the community, even if they cannot read or write. ‘

Finally, there is the third group whose very poor mental capacity prevents them from becoming socially trained or independent to any useful degree. These are the idiots and imbeciles who are not really trainable, who cannot take any place in society and who are completely dependent. They are, therefore, best cared for permanently in residential institutions.

Each group as you see requires different treatment. Much of what is said in these chapters is for parents of the second group of children referred to earlier those who are trainable and many of whom attain a fairly high degree of independence.” [p14-17]

71 The strong impression gained from this material is that the expression "sub-normal" brings with it the ingredient of intellectual disability without it having to be otherwise identified. Thus when the promoters of the appeal were using the word "sub-normal" they were using this slightly euphemistic term to refer to intellectual disability.

72 Chapter 19 then deals with the occupational possibilities for sub-normal children.

“THE SUBNORMAL CHILD AT HOME

....

CHAPTER 19

OCCUPATIONAL POSSIBILITIES

An examination by O’Connor and Tizard¹ [p144 fn¹ The Social Problem of Mental Deficiency, by N. O’Connor and J. Tizard, Pergamon Press.] of the problems connected with the training and occupation of subnormal adolescents and adults has revealed encouraging information. These two research workers should that our present ideas on the employability of high-grade defectives are often inaccurate and misleading, an that such opinions arise from the out-of-date, non-functional and unpsychological provision for, and methods of training subnormals that all too frequently prevail in many communities.

Their reports of experiments on training and employability show that, while very few subnormals can be trained to do a skilled or semi-skilled job, at least three-quarters of high-grade stable subnormals can be trained by effective methods to participate successfully in a number of unskilled occupations for which they can be paid a modified wage.

A Sydney survey into the employment of ex-pupils of Glenfield Special School¹ [p145 fn¹ Reported in The Slow Learning Child, Vol. 3, No. 3, March 1957.] found that, of 28 people with IQs less than 55, 7 out of 10 men were successfully employed at the time of interview an all had attempted to work (two of the failures being due mainly to physical disability and psychotic symptoms). Of the women, only 5 out of 18 were ever given the chance to work and, of these, 3 proved capable of supporting themselves. Of the 10 men, 3 were living alone and coping adequately. Men’s jobs were:

storeman packer	assistant linotype operator
gardener	messenger
wardsman	cleaner
ice-delivery man	labourer

The women were employed in process work, packing and machining.

Finally, a most interesting and successful programme for severely mentally retarded children is described by Professor A. Jacobs of Columbia University [p146 fn¹ In The Slow Learning Child, Vol. 3, No. 2, November 1956 and the American Journal of Mental Deficiency, April 1956.] The training takes place in the Cincinnati Goodwill Industries rehabilitation centre where two special units have been developed, an occupational training centre and an opportunity work shop. Trainees are helped to find employment in the community, become employees of the Goodwill Industries plant, or remain terminal workers in the opportunity work shop. The experience, after two years’ operation of this project, suggests that some persons with IQs between 25 and 50 are capable of doing productive, remunerative and self-satisfying work, if properly trained in work habits, responsibility toward the job, and other factors. The types of work activity carried on in the occupational training centre and opportunity work shop are as follows:

A. Sub-contract jobs from outside industry

1. Mailing – stuffing, folding, sealing, sorting, collating.

2. Tag stringing.

3. Assembling and packaging.

4. Stapling.

5. Swatching – clothing, samples, advertising material.

6. Labelling.

7. Bench assembly.

8. Rubber stamping.

B. Jobs within the Goodwill Industries

1. Sorting – clothing, etc., donated to Goodwill.

2. Sewing – work aprons, buttons on cards, minor clothing repairs.

3. Painting – floral baskets resold to floral supply companies, small furniture.

4. Folding –- Goodwill bags which drivers distribute to homes.

5. Salvaging – nuts, bolts, screws, washers; by sizes, buttons from shirts, trimmings from felt hats.

A word of warning is necessary about these investigations lest they should raise unfounded optimism. They were carried out on selected groups and only show what is within the power of some subnormal children and adults, who have no gross physical handicap, are of stable personality and who have had the benefit of good home conditions and good training. We do not know, moreover, whether they represented all types of subnormality – whether, for instance, they included any Mongol children.¹ [p147 fn¹ There is also some most encouraging information on successful training of subnormal adolescents in the following numbers of Mental Health (National Association for Mental Health, London): Autumn 1942 : Agricultural Hostels for Defectives, Central Association for Mental Welfare, Autumn 1952 : The Education and Training of Mental Defectives at Darenth Park, J. K. Collies Laing, Autumn 1954 : A Rehabilitation Programme for Certified Mental Defectives, A. D. B. Clarke and A. M. Clarke (Psychological Department of Manor Hospital, Epsom.]” [pp144-147]

73 The plaintiff sought to answer the Attorney General's argument that caring for children with an intellectual disability is an element of the purpose of this charitable trust by tendering a series of photographs showing students at the school who only appeared to have physical disabilities. The difficulty with this approach is that it was very difficult to work out whether the subjects of the various photographs did not have an intellectual disability as well as their demonstrated physical disability. This kind of response from the plaintiff was ultimately inconclusive. All that it really showed was that children with physical disabilities were often included in the early work of Eurella House.

74 The other contemporary evidence shows the objects of the Association were clearly connected to mental rather than physical disability. The Branch’s prior names, the Psycho Care Society and the Society for the Welfare of Mental Deficients were wholly consistent with an interest in support for children with intellectual rather physical disabilities. The Branch’s affiliation with the Association confirms the consistency of its own objects with those of the Association. The origins of Eurella House were of students who had intellectual disabilities and whose parents wished to save them from classification for institutionalised psychiatric care.

75 Thus I conclude that, as contended for by the Attorney General the charitable purpose covers persons with an intellectual disability whether or not they also had a physical disability. But it does not cover students with only a physical disability and no intellectual disability.

The Children Element

76 The Attorney-General argues that the focus of the school was to provide for children aged approximately 5 to 18, although it could also cater for other ages. The plaintiff contends that the trust extends to children of all ages who by reason of disability were like children who never grew up.

77 The evidence does not support the Attorney-General’s contention that Eurella House should maintain a focus for children aged approximately 5 to 18, namely children of school age. There are far too many evidentiary indicators that children both younger and older than this were an integral part of the school’s activities right from the beginning. But more importantly, no such restriction appears in the appeal promotion or the 1958 Deed. I find that the plaintiff is correct that the trust charitable purpose extends to children of all ages for the following reasons. Although the appeal promoters stated that the fundraising was “for the purpose of a school and hostel the children in the western suburbs” it cannot be inferred from such statements that the funds were raised with the central focus on serving the needs of children of school age (of 5 to 18 years). This is for at least two reasons. The first is that the purpose for which the appeal is promoted includes not just children at “school” but children in a “hostel”. No natural age restriction is implied by the provision of hostel accommodation. The same duality appears in the 1958 Deed itself in which the trustees agree that they will hold Eurella House “in perpetuity as and for a home and for a school for sub-normal children”: clause 2. The 1958 Deed required that the home shall at all times be used for “the care, education, treatment, maintenance, benefit and welfare of sub-normal or mentally handicapped children”. The expression of purpose here extends sufficiently beyond the borders of conventional schooling as to be incompatible with the provision of services principally to 5 to 18 year olds.

78 Second, the word “children” in the composite expression “sub-normal children” in the early 1950s was apt to embrace persons well beyond the age of 21. The idea that people described as “children” must be a class of persons under the age of 18 is not justified by the evidence in this case. The register of members of the Branch in 1953 identifies seven persons with disabilities over the age of 18 years. The enrolment record shows specific instances of enrolments of new “children” at Eurella House aged 21, 24, 27 and 44 years. For example in July 1959 there were 48 children at Eurella House of whom 31 were over 16 years. An early photograph of the property displays a sign saying “School for Retarded Children of All Ages”. A directory of facilities issued by the New South Wales Council for the Mentally Handicapped in 1966 described the facilities at Eurella House as, “the minimum age for attendance is four years with no upper age limit”. That general description is consistent with the enrolment records. A newspaper article in 1964 described Eurella House as being a school for retarded children with boys and girls aged 5 to 35 years.

79 Ald. Shrimpton, the Mayor of Concord publicly described Eurella House as “a home that can be school, hostel and recreation centre, where mothers can leave their children in competent hands knowing they are living a life as close to normal as is possible for them to live”. Ald. Shrimpton is here using the expression “children” for the purposes of the appeal in different terms to the Attorney-General’s argument. The appeal literature is consistent with the view that “children” means those who must be supervised at all times by parents or someone in the place of parents. It is not age specific or age focused. In this area of discourse one is called a child if one cannot look after oneself.

80 Finally, there are many photographs tendered in evidence clearly showing persons over the age of 21 in the Eurella House student body.

81 It is true as the Attorney-General submits that some of the appeal literature refers to benefits to “small children” and “young girls and boys”. But such expressions are certainly not used consistently.

The Residency Element

82 The Attorney-General argues that the school was defined to focus on serving the municipalities of Burwood, Concord, Ashfield and Strathfield or their successor local government entities such as Canada Bay or the residents of those local government areas. The plaintiff disagrees that the trust was limited by a formal restriction on serving those particular suburbs.

83 The Attorney-General’s contention is that the inner western suburbs of Ashfield, Burwood, Concord and Strathfield are “the geographical focus of the charitable purpose and it is part of the terms of the charitable trust that the property be used primarily for “intellectually disabled children living in (the inner west)”. There are a number of difficulties with the Attorney-General’s arguments here. The first difficulty is one of definition, what does the Attorney-General’s statement of the residency qualification really mean? The second difficulty is attempting to justify such a restriction based upon the available evidence. I will deal with each of these in turn.

84 The Attorney-General’s statement of the Residency Element is too diffuse to do any useful work in relation to this trust. It is difficult to know when the trust would pass or fail the Residency Element so defined. If it is part of the terms of the charitable trust that the property “be used primarily for” intellectually disabled children that criterion could be satisfied by any number of different regimes giving: preference to local students; excluding all children not from the inner west; excluding children not from the inner west so that the overall numbers of inner west children do not fall below 50% of all students or, at all times maintaining a policy of giving first preference to children from the inner west. All of these possibilities seem compatible with the notion that the property “be used primarily for” children in the inner west. There is no easy way of choosing among them. The vagueness of this concept attracts the conclusion that there is no Residency Element in the charitable purposes for Eurella House. To the extent there is a Residency Element it is probably satisfied merely by the Eurella House property being in Burwood which makes it more naturally attractive to children in the inner west and their parents.

85 There is very little in the evidence which would support the idea that there should be any restriction upon the residency of children using Eurella House over and above the existence of the trust property in Burwood. Merely because the Branch was involved in leading the appeals in 1953; that the Mayors of Ashfield, Burwood, Concord and Strathfield were involved; that the Mayor of Ashfield thought the facility would be “for children in the western suburbs” would not now justify a requirement that a particular minimum proportion of the students should come from the inner western suburbs. No such requirement appears anywhere in the trust deed or the public statements made during the public appeal in 1953.

The Dispensability of the Plaintiff Connection

86 The Attorney-General submits that the school was to be run by and have association with the plaintiff although that connection was dispensable. The plaintiff accepts that its involvement was a core element of the school’s identity but disagrees that its connection with the school was dispensable.

87 The close connection between the Branch (now the plaintiff) and the operation of Eurella House was created by the very fabric of the appeal in 1953. As Mr Fred Jackson’s history of the Branch declares, the connection started with the Branch committee deciding to place a holding deposit on Eurella House which Mr Jackson describes as “almost a crazy gesture, seeing we had no money, only faith and a challenge to help those less fortunate than ourselves.” The actual connection is the product of that original decision and the commitment of successive committees of the Branch and the plaintiff to continue to operate Eurella House. Although there is a connection, the hypothetical question whether it is dispensable is not one that the Court has to decide in the absence of an application to separate the plaintiff from the operations of the trust. The Attorney-General has invited the Court not to decide this question and that is the course that I will take.

88 Although this question does not have to be decided two observations about it are appropriate.

89 First, the current attempt of the parties to frame this question as an element of the charitable purposes of this trust is not sound. Who is or is not the administrator of the trust cannot readily be embedded into the definition of the charitable purpose. The trustee, and those that the trustee employs, are always able to be removed to protect charitable property or because of a risk associated with some incapacity of the trustee: Charitable Trusts Act 1993 (NSW) ss 7 and 8. All charitable trusts are trusts for purposes, not persons: BSH Holdings Pty Ltd v Commissioner of State Revenue [2000] VSC 302; (2000) 2 VR 454 at [9]. The parties’ approach seems inconsistent with the idea that a charitable trust is a trust for purposes.

90 Second, the plaintiff points to the recitals in the 1958 Deed that the property was purchased with funds on the basis it was to be managed and administered by the Branch. All the 1958 Deed does is to affirm who the trustees are for the time being. The 1958 Deed provides no support for the plaintiff’s position on this question. Clause 19 of the Deed only places the management of Eurella House with the Branch “until otherwise determined by the trustees”.

Conclusions and Orders

91 I have found that the plaintiff holds Eurella House on a charitable trust. I agree with the Attorney General’s submission that the issue for present consideration is not whether the trust has "failed" but whether the original purposes of the charitable trust, 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: Charitable Trusts Act s 9. This is decided by contrasting my findings as to the purposes of this charitable trust with the evidence as to the plaintiff’s current conduct of operations at Eurella House.

92 The Intellectual Disability Element. The plaintiff's evidence, the accuracy of which I accept, is that all the participants in both the Day Program and the Early Intervention Programme have some form of intellectual or mental disability. I have found that applying trust property for persons with a mental or intellectual disability is a required element in the original purposes of this charitable trust. The plaintiff is compliant with this element.

93 The Children Element. I have found that there is no element in the charitable purposes, that the uses of the property be focused on or directed primarily at children aged 5 to 18 years. This means that the plaintiff does not breach any requirement of the trust by using the property for both the Day Program and the Early Intervention Programme, which are principally directed at other than school-age children.

94 The Residency Element. I have found that this element may not be capable of adequate definition. In any event the plaintiff certainly complies with this element in its strictest sense by having a majority of students from the Western suburbs in both the Day Program and the Early Intervention Programme. But compliance with this element is achieved merely by Eurella House being situated in Burwood in the Western suburbs of Sydney. The charitable purposes do not require a particular proportion of students to come from the municipalities involved in the original appeal in 1953.

95 The Plaintiff Connection. This element is not currently in issue between the parties.

96 I do not understand there to be any current issue between the parties about the school element or the ancillary purposes element.

97 I direct the parties to bring in short minutes of order within 14 days to give effect to these reasons. Those short minutes of order should provide for the future management of what issues remain for determination in these proceedings

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LAST UPDATED:
31 May 2010