The Executor and Trustee – More than mere words

Miriam Douglass died in May 2016. Miriam’s last will dated 29 September 1999 (the Will) appointed Elizabeth Paulsen and another person as executors and trustees. Elizabeth was left as sole executor and trustee following the renouncement as executor and trustee of the other person. Probate of the Will was granted to Elizabeth in October 2016.

The Will provided for the residue of the deceased’s estate to be held upon trust for “The Norman Anderson and Norman Memorial Trust” (“the Trust”) care of “The Royal North Shore Hospitals, St Leonards”,  “for its research into prostate cancer and breast cancer only”

The Will provided that if at the time of Miriam’s death that the Trust had ceased to exist the Trustees shall in their absolute and unfettered discretion choose a charitable organisation in New South Wales whose purposes are the same as or similar to those [of] the Trust and shall be at liberty to pay such moneys or transfer such securities to the said organisation as though it had been named in my will in lieu of the Trust.

The Trust was established by a person with a history of establishing trusts for the purpose of or related to, cancer research. Therefore the position as to the administration of the Will is not uncomplicated.

Elizabeth sought a declaration that the Trust had “ceased to exist” at the time of Miriam’s death; if the answer to the question is “yes”, can Elizabeth apply the residue of Miriam’s estate to the Garvan Institute of Medical Research (“Garvan Institute”) to be used for breast cancer and prostate cancer research only in the terms expressed by the Garvan Institute.

The Garvan Institute is a registered charity that has indicated to Elizabeth in a letter dated 13 December 2017 its willingness to hold the residue of the estate in an endowment fund named in Miriam’s honour and to ensure that all proceeds are used to fund research into prostate cancer and breast cancer only is a suitable substitute beneficiary.

The Northern Sydney Local Health District, which is responsible for the administration of the Royal North Shore Hospital joined the proceedings. The Attorney-General authorised the commencement of the proceedings but not the filing of a cross-claim by the Northern Sydney Local Health District(though the Attorney-General did not oppose its joinder as a defendant).

The Northern Sydney Local Health District submitted that the Norman Anderson and Norman Second [M]emorial Trust has not “ceased to exist”, it has simply been altered and now operates under the name of and in accordance with the provisions of the Norman Anderson and Norman Cancer Prevention Trust. In those circumstances, the proviso set out in the Will is not triggered; and the Royal North Shore Hospital can accommodate and comply with the restriction that the gift be “for its research into prostate cancer and breast cancer only”.

The Court ordered that as the Will itself contemplated the possibility that the named Trust would have ceased to exist at the time of death and made provision for what was to happen in that event. Hence there would be no question of the gift of the residue lapsing if the correct conclusion is that the First Trust has ceased to exist.

The Court decision allows Elizabeth to apply the estate’s residue to The Garvan Institute for the purpose of funding research into breast and prostate cancer only in the terms expressed in the letter from The Garvan Institute to her.