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The Pamphlet Collection of Sir Robert Stout: Volume 77

Judgment of the Court of Appeal

page 34

Judgment of the Court of Appeal.

The Respondents by virtue of a conveyance under the [unclear: Bishop] New Zealand Trusts Act 1858 and by divers appointments under the provisions of the Religious Charitable and Educational Trusts Ant 1856, have become trustees of a parcel of land containing 500 [unclear: acra] at Porirua Harbour originally granted by the Crown to [unclear: Geor] Augustus Lord Bishop of New Zealand and his successors upon the trust therein mentioned.

The grant in question is dated the 28th of December 1850 and is under the seal of the province of New Munster and the hand of the Governor Sir George Grey. The grant is as follows:—

"To all to whom these presents shall come.

"Greeting.

"Whereas, a school is about to be established at Porirua in the province of New Munster New Zealand, under the superintendent of The Right Reverend George Augustus Lord Bishop of New Zealand, for the education of children of our subjects of all races and of children of other poor and destitute persons being [unclear: inhabitan] of island in the Pacific Ocean, and whereas it would promote the objects of the said institution to set apart a certain piece or parcel of land in the neighborhood thereof, for the use and towards the maintenance and support of the same, which piece or parcel of land has by a deed from the natives been ceded for the support of the said school. Now know ye that we for us, our heirs and successions Zealand all that piece or parcel of land situate and being at the do hereby grant unto the said George Augustus Bishop of New entrance of Porirua Harbor in the province of New Munster New Zealand, and bounded on the southern side by a line running from Rocky Bay near Teti Bay, at an angle of ninety-nine degrees (99deg with the Magnetic Meridian till it intersects the base of the hills on the south side of the One Poto Creek, the foot of the hills forming the boundary from thence to the head of the creek; or the east by Porirua Harbour, and on the north and west by the sea, the contents being five hundred acres or thereabouts, and the boundaries being more particularly delineated on the plan drawn in the margin of these presents. Together with the rents issues and proceeds thereof. To Hold unto the said George Augustus Lord Bishop of New Zealand and his successors In Trust nevertheless, and for the use and towards the maintenance of the said school, so long as religious education, industrial training, and instruction in the English language shall be given to the youth educated therein or maintained thereat."

The grant is punctuated as above and not as in the priante case.

page 35

The Respondents commenced an action in the Supreme Court against the Solicitor-General. In their Statement of Claim they set out their title to the above-mentioned land. They allege that the Bishop of New Zealand expended money on the land for the purpose of improving it and rendering it fit for occupation and reproductive that the land has been let and that the Trustees have now in their hands about £6,480 the proceeds of rents accumulated. They allege however that they have not been able to cany out the trusts. First because the funds have never been sufficient to permit of their erecting the necessary school buildings and at the same time to have enough from interest on investments and rents to maintain the school as contemplated. Secondly because the Juvenile Maori population at Porirua has almost ceased to exist. They further allege that in consequence of their inability to carry out the trusts they approached the General Synod of the Church of England and that the Synod resolved that the trustees be authorised to apply to the Supreme Court for leave to apply the income of the fund and the rents in manner in the resolution specified. The Plaintiffs then alleged that they have embodied the terms of the resolution in a scheme filed in Court and ask that the rents and profits be applied in accordance with it.

There is no suggestion in the statement of claim that the school contemplated by the grant was ever established.

The Solicitor-General in his statement of defence alleges that after the issue of the grant it was found impracticable to give effect to the trusts that no school was ever established at Porirua that none of the trusts mentioned in the grant have been performed and that it has been long since and now is impossible to carry out the original trusts prescribed by the grant. He goes on to allege further that the Executive Government are desirous that a scheme should be adopted to enable the land and the accumulations to be administered for educational purposes but that they were advised that by reason of the failure of the trusts the land and moneys have reverted to the Crown without any trust being attached to them and submits accordingly that the question should dealt with by Parliament and that the Court has no jurisdiction. If however the Court has jurisdiction and the Court considers it expedient to adopt a scheme he objects to the scheme proposed by the Plaintiffs and proposes an alternative scheme. The case was heard before the late Chief Justice, Sir James Prendergast on affidavits. There is practically no dispute as to the circumstances which led up to the issue of the Crown grant nor as to what had been done under the Crown grant. Any circumstances which led up to the issue of the Crown grant are manifestly inadmissable as evidence to contradict or vary the terms of the Crown grant although they may be relevant on the enquiry as to what scheme page 36 should be adopted. The affidavits filed in the Court below; and here are concerned mainly with the merits of the rival [unclear: schema] no facts otherwise material to the action are in [unclear: contest]. Honour considered that there was a general intention of [unclear: cha] shown in the grant that it did not revert to the Crown but that the trust could be administered by the Court cy-pres. He [unclear: decli] however to adopt either scheme and reserved the matter for [unclear: furth] consideration. An amended scheme supported by further affidavits was accordingly filed by the Plaintiffs and was submitted to the Court. After hearing an argument before His Honour the [unclear: pre] Chief Justice and Mr Justice Edwards this scheme with [unclear: certa] modifications was adopted by the Court. It is from the judgment of Sir James Prendergast and from the scheme adopted in [unclear: p]suance of it that the Solicitor-General appeals. We are of [unclear: opini] that the land and money have become the property of the [unclear: Cro] for two reasons.

In the first place we think the grant has become void on the ground that it sufficiently appears from the evidence that He Majesty was deceived in her grant. The grant does not state [unclear: in] many words what the consideration for it was but it [unclear: sufficie] appears from the grant itself that the grant was made in consideration of the facts set out in the recitals. The [unclear: recitals] that a school is about to be established at Porirua under the [unclear: sup] intendance of the Bishop of New Zealand "for the education of children of our subjects of all races and of children of [unclear: other] and destitute persons being inhabitants of islands in the [unclear: Pac] Ocean." The recitals further state "that it would [unclear: promote] object of the said institution to set apart a piece of land in the neighbourhood thereof for the use and towards the maintenance of support of the same" and that this parcel of land has been [unclear: cel] by the natives for the support of the school.

The recitals and limitations leave no doubt that the [unclear: land] granted by the Crown by reason of the representation that a school was about to be established at Porirua for the above-mention purposes and in consequence of the intended establishment of such school. The contemplated establishment of the school was the cause and the sole cause of the Crown making the grant. It is be observed that the grant is not made for the purpose of [unclear: foun] a school but for the purpose "of assisting" a school which is about to be established apart from the grant and which would of over require funds to be provided for its establishment other than the arising from the rents and profits of the land granted. [unclear: More] fifty years have elapsed since the date of the grant and no school of any kind has been established. All that has ever been done in the direction of the establishment of a school appears from the eighth, tenth, and twelfth paragraphs of Bishop Hadfield's [unclear: affi] page 37 In paragraph 8 he says "Bishop Selwyn expended on the land much more money than the then value. Money was paid to a Mr Servantes who occupied a house on it as compensation for the house and there were improvements effected on the land in clearing and fencing from the Porirua Harbour to the sea coast.'

In paragraph 10 he says "a schoolmaster was sent on to the land to make a beginning but the children attended so irregularly that he resigned. I was not at that time a trustee of the land but Bishop Selwyn consulted me as to the appointment of the schoolmaster and the commencement of the school."

In paragraph 12 he says "At the time of the gift land on the west side of Porirua Harbor was of small value and the 500 acres was not worth more than the money expended on it by Bishop Selwyn for the purpose of a building clearing the land and carrying a good fence across from the harbour to the sea coast and without making this expenditure the trustees could not have accumulated the funds now in their hands."

The late Chief Justice in his judgment in the Court below was doubtful whether the sending the schoolmaster took place before or after the grant and no date is fixed by Bishop Hadfield. We should say that it was probably after the date of the grant. It must have been however before the 24th of August 1859 the date Bishop Hadfield first became a trustee. But can it reasonably be said that merely to send a schoolmaster for a short time and then on his resignation to take no further steps amounted to the establishment of such a school as the recital in the grant contemplated was to be established or to the establishment of a school at all. The sending the schoolmaster was but a step towards establishing the school. It was evidently an experiment to ascertain whether it was worth while to establish a school there. The experiment failed and all notion of establishing the contemplated school was henceforth abandoned. This appears to us to bring the case within the principle that a grant by the Crown is void if the King be deceived inhis grant.

The Crown is informed that something is going to be done and that a grant of land will assist what is going to be done. A grant is made in anticipation of this something being done and because it is going to be done. Then the thing is not done. The Crown is thus deceived in the consideration for the grant. The law is thus Bated in Berwick's Case 5 Co. 94 Bacon's Abridgement Prerogative F "It is a maxim that if the consideration which is for the benefit of the Queen be it executed or executory or be it on record or not on record be it not true or not duly performed or if prejudice may accrue to the Queen by reason of non-performance of it the letters patent are void." Again in Harris and Wing's case 3 Leonard at page 248 it is said "And in some cases, a consideration page 38 personal, if it be false shall destroy the patent, if it be future and executory as if the King grants land to J. S. ea intentione that be shall pay to J. D. £10. Now if he do not pay it the patent is void and the estate given by it void also."

In the present case the benefit that the Crown that is the State was to derive from the grant was the establishment of a school for the education of the Queen's subjects of all races. There is a distinction between considerations past and future the former may by erroneously stated and not necessarily avoid the patent but if the consideration is future and is not performed the patent will be avoided. (Viner's Abridgement Prerogative M.c. 89.) An apparent exception is where there is a lease from the Crown in consideration of a sum down and of a covenant to do certain things In such a case if the lessee does not do the things the lease is not void because the Crown had an action of covenant. Under the present grant if the school were not established the Crown would have no remedy either at law for damages or in equity to compel the establishment. Shortly the grant here was made upon the representation and in anticipation that an institution was to be founded and for the sole purpose of assisting such institution. No such institution has ever been founded. The Crown was therefore misled or to use the legal term "deceived" though of course there is not the slightest suggestion that there was any intention to deceive or mislead.

In the second place if a school was at one time established to satisfy the terms of the grant it is admitted that it has long since ceased to exist. In such circumstances we think the estate granted has ceased to exist and that the Crown is entitled because upon the true construction of the Crown grant the estate in fee granted to the Bishop of New Zealand and his successors was in the nature of a conditional limitation determinable when religious education industral training and instruction in the English language ceased to be given in the school. When therefore such education his actually ceased to be given the estate of the bishop and his successors was determined. The law on the subject of limitations of this kind is to be found in Shepherd's Touchstone, Bacon's [unclear: Abri]ment, Fearne on Executory Devices, and Blackstone's Commentaries Shcppard page 125, says:—"The most apt and proper words no make a limitation of an estate are quamdiu, dummodo, [unclear: dun] quousque, si, and the like. And therefore if A grant lands to B to have and to hold to him and his heirs, until B go to Rome; or until he be promoted to a benefice, or until B pay to A or A pay to B £20 these examples by reason of the word heirs give determinable fees." So in Bacon's Abridgment Conditions H: "Proper words of limitation are dum, dummodo, quamdiu, donec, quousque ubicunque, usque ad, tamdiu, or so long as he shall pay such rent or page 39 be abbot or parson, etc.; and in these cases the law vests the estate in the party (i.e., the party entitled over) without entry or claim." Fearne (S. 34) says, "A special limitation is a qualification serving to mark out the bounds of an estate, so as to determine it, ipso facto, in a given event, without action, entry, or claim, before it would or might otherwise expire by force of or according to the general limitation." And again (S. 41), "A direct limitation is a restriction couched in words which directly express a limit to the quantity of the interest created; as, to A, during etc., or till etc., or whilst etc., or so long as etc." Blackstone (vol. 2, p. 155) says, "When an estate is so expressly confined by the words of its creation, that it cannot endure for any longer time than till the contingency happens upon which the estate is to fail this is demoninated a limitation, as when land is granted to a man so long as he is parson of Dale, or while he continues unmarried, or until out of the rents and profits he shall have made £500 and the like. In such case the estate determines as soon as the contingency happens (when he ceases to be parson, marries a wife, or has received the £500), and the next subsequent estate, which depends upon such determination, becomes immediately vested without any act to be done by him who is next in expectancy." There is sufficient authority to show that there may be such a limitation where the gift is to trustees for charitable purposes although the period of limitation may possibly be so remote that no remainder executory devise or springing use could be limited after its expiration without being void as a perpetuity. In the case of the Attorney-General v. Pyle I. Atk 435. A testator devised a freehold messuage at Rumford to the charity school there and directed that the rents and profits should be applied for the benefit of the said school "so long as it Khali continue to be endowed with charity." Lord Chancellor Hardwioke said, "Where a sum of money is given to a charity so long as it shall continue to be endowed with charity, it is only given quousque, and when it ceases, if it is gift of real estate, it shall fall into the inheritance for the benefit of the heir, if personal, into the residuum." The Attorney-General v. Pyle was not cited in the two cases hereafter mentioned but they each rest upon the assumption that the law is as was laid down in that case by Lord Chancellor Hardwicke. In re Randell: Randell v. Dixon 38 C.D. 213 a testatrix bequeathed £14,000 to trustees upon trust to invest and to pay the interest to the present and future incumbents of a church so long as he and they permitted all the sittings to be occupied free. If, however, any incumbent demanded and received any payment for pew rents the trust moneys and interest were to fall into and be dealt with as part of the residuary estate. North, J. said "that there was a definite, particular, special charitable bequest which must have effect given to it so long as it lasts, and no longer, and that when it comes to an end there is no devotion to general charitable pur page 40 poses at all, the intention of the testatrix being completely the opposite. On the construction of the will, it is for a particular limited purpose, and nothing beyond what is declared; as soon any that particular purpose come to an end, the fund which was subjected to that particular trust falls into the residue of the estate." It does not do so however by virtue of the limitation over directing it to fall into the residue. The learned judge says it would fall into the residue just as much as if there were no such limitation in the will. The limitation is harmless and does not fail for perpetuity because it simply directs that the fund is to go in the way in which the law would make it go in the absence of any such direction. If there had been a direction that the fund should over in any other way the gift over would fail for perpetuity, In that case as well as in the case of there being no gift over at all the form would fall into the residue. The residuary legatees would take as part of the estate of the testatrix. The authority in re Randell (38 C.D. 213) is recognised by Stirling J. in re Bowen 93, 2 ch.491 to 494. The learned judge there says: "As property may be given for a charity in perpetuity it may be given for any shorter period however long;" and the interest undisposed of, even if it cannot be the subject of a direct executory gift, may be left to devolve as they law prescribes." For this proposition he cites at length in Randell. In the case before him the learned judge has as he [unclear: s] to decide whether on the true construction of the testator's will the testator had given the property to charity in perpetuity subject to an executory gift in favor of the residuary legatee or whether he had given it for a limited period leaving the undisposed of interest to fall into residue. The question in the present case is whether upon the true construction of the grant the intention of the Crown were to give the property to charity in perpetuity or to give it for a [unclear: peri] limited by the terms of the grant. In the latter event the case [unclear: image not readable] Attorney-General v. Pyle in re Randell, and in re Bowen show they effect will be given to such an intention. We think that [unclear: where] a grant from the Crown apt words are used for limiting the [unclear: durati] of a charitable trust the intention of the Crown must be that they shall have their ordinary legal effect. Here the grant is to the Bishop of New Zealand and his successors "in trust nevertheless and for the use and towards the maintenance of the said school of long as religious education, industrial training and instruction in the English language shall be given to the youth educated therein maintained thereat." The words "so long as" are recognised by every legal authority as words which are ordinarily used for limiting the duration of an estate and which have the effect of limiting it. We can see no reason whatever why they should not have these ordinary meaning applied to them in the present case. The grant is from the Crown and was made upon the faith that a particular school was about to be established and for the purpose of assisting page 41 in the support of that school. There is nothing unreasonable in such circumstances in the Crown limiting the trust created by the grant, for such period as the school carried out the purposes for which it was established. The question is whether the Crown has used apt words to limit the duration of the trust. The answer is that the Crown has used the exact words which, if it has been intended to limit the duration of the trust, would have been used. The alternate construction is that the Crown although as appears by the grant the possibility of the school ceasing to exist was contemplated at the time the grant was made, intended that in such an event the land should continue to be held by the Bishop and his successors in perpetuity for general and undefined charitable purposes. We think looking at the terms of the grant that no such intention can be presumed as against the Crown and further that any such intention is expressly negatived.

From the view we have taken that the Court has no jurisdiction because the property is now vested in the Crown it is unnecessary to decide whether the Court would have had jurisdiction if the property had remained vested in the trustees upon trust for charitable purposes generally. As however the question was argued at length we think it well to express an opinion. If the true construction of the grant is that the land included is to be held by the Bishop and his successors in perpetuity for charitable purposes notwithstanding that the particular school has ceased to exist then in the absence of any special circumstances we think the Court has jurisdiction to approve of a scheme for the management of the trust property notwithstanding the grant is from the Crown.

The case of Wilson v. Barnes 38 C.D. 507 shows that where there was a grant from the Crown for a public charitable purpose—viz., the reparation of a sea dyke and in the course of time owing to the sea having receded there was no necessity to apply the fund to the particular object the Court directed a scheme. The authorities cited by Mr Bell on this point show only that the Court will not interfere with trustees acting under a charter which gives the trustees discretionary power. In the present case if the particular trust fails and there remains a trust for charitable purposes generally the trustees are bare trustees of the fund and of the land, and have no power to apply the rents and profits for any purpose whatever till they get a sufficient authority to do so. The Court by virtue of its general jurisdiction over property held by trustees for charitable purposes can give the trustees authority by approving of a scheme. Short of an Act of Parliament the Court is the only source from which the trustees can obtain authority. In the present case there are however circumstances which make the question of exercising the jurisdiction more difficult. The land as appears from the grant was ceded by natives to the Crown. Mr "Bell who appeared for the Solicitor-General the representative of page 42 the Crown made a statement at the Bar as from the Crown that the terms of the session by the natives were such as to preclude the administration of the gift otherwise than in the direct terms the grant and asked that such an allegation should be added to the fifth paragraph of the statement of defence. The Crown therefore asserts that it has duties towards the natives who ceded the land which could not be performed if the Court administered the trail cy-pres. This would place the Court in a considerable difficulty What the original rights of the native owners were what the bargain was between the natives and the Crown when the natives ceded the land it would be difficult if not impossible for this Court to in quire into even if it were clear that it had jurisdiction to do so.

The position appears to be somewhat as follows:—The Crown as parens patriae through the instrumentality of this Court sees that property devoted to charity shall be applied for the purposes of charity and that where no purposes are specified the Court as representing the Crown is to define the purposes. The Crown also as parenspatriae is under a solemn obligation to protect the rights of native owners of the soil. When therefore the Crown as parens patriae asserts that in that capacity it is under an obligation to natives in respect of a property can this Court representing the Crown as parenspatriae say to the Crown you shall not carry out this obligation but the property you have granted shall be devoted to charitable purposes to be determined by the Court irrespective of your obligations? We see great difficulty in holding that in such circumstances the Court could or ought to interfere. The now interference of the Court would not disturb any private rights The trustees, except so far as they have a claim on the fund for money expended, are bare trustees only. In the above circumstances it seems more appropriate that the matter should be dealt with by the Legislature than by this Court. This point however it is not necessary finally to decide. For the reasons we have given above we are of opinion that the funds and land have become the property of the Crown subject of course to any rights of the trustees against the fund in respect of moneys expended by themselves or their predecessors in title and that in consequence the Court has no jurisdiction to adept a scheme. The appeal must be therefore allowed and judgment be entered for the Defendants The costs of all parties here and in the Court below as between solicitor and client will be paid out of the funds in the hands of the trustees.