THE PRIVY COUNCIL DECIDES

Auckland Star, Volume XXX, Issue 7, 10 January 1899, Page 5

THE PRIVY COUNCIL DECIDES

A QUESTION OF CHARITY.V^

NEW ZEALAND LOSES £13,000.

.The law lords of the Judicial Committee of the Privy Council—beyond whose fiat no colonial litigant can go —have just decided a rather interesting point of law by reversing the decisions of the Supreme Court of New

Zealand and the Court of Appeal in

the actions'of Mrs Isabella Dilworth and others versus the Commissioner of Stamps, the Commissioner of Land

and Income Tax. Most of. your readers may possibly be cognizant of the details of the case, but it may be well to recite them as briefly as possible.

Mr James Dilworvh, a native of Dimguniion, in tlie Province of Ulster, Ireland, who died in '94, .left the residue of his estate, £100,655, for the purpose of establishing1 an Institute to be called the Dilworth Ulster Institute, directing1 that a building, should be erected as soon as the trustees yeve satisfied that the net income of the institute would be £5,000 per annum, and then that as many boys, between the ages of three and eight, should be selected from the district of Auckland, New Zealand, and the'■ Province of Ulster, Ireland, as Ihe trustees were satisfied could be maintained, trained, and educated: The boys'were to be of sound bodily and mental health, being orphans of persons of good character, and other things being equal, preference was to be given to boys resident in or near the town of Dungannon, and they were to be selected by the Minister for the tiino being of. the Church of Ireland.

I There was also a provision to the effect that the boys be supplied with an outfit and sent out. to New Zealand that they were to be brought up in the tenets of the Chure.ii of Eng-

land, and that the Chaplain and teachers and other officials of the institute were to be members of the Church of England and to sign a declaration that they accepted and would maintain the 'principles of the Reformation accomplished by the Church of England in the Sixteenth Century of the Christian era.'

The trustees claimed exemption from death duties and from land and income tax on the bequest on the ground that it was a charitable bequest; but the Governments officials held that- the bequest to the Ulster Institute was a gift- to a sect or class and not- to a public institution, and therefore was not a. charitable bequest within the meaning of'the Charitable Gifts Duties Exemption Act, 18S3, and accordingly the bequest was assessed to the death duties to the amount of

£ 12,735 13/0, and to the land and income tax in £557 19/ S. The trustees appealed, but- the Supreme Court, and subsequently the Court of Appeal, came unanimously to the .same conclusion, whereupon the trustees' made a final appeal to the Judicial Committee.

The arguments in the case were heard before the Long- Vacation by Lords Watson, Hobhouse, and Davey, ami on Saturday the first-named delivered the Council's judgment. In the course of an exhaustive review of

the facts of the case, lie said the crucial question was whether the gift was a charitable bequest within the meaning- of the second clause of the Act of 1883. In their Lordships opinion it did not admit of reasonable doubt that the «yi.. to the Ulster Institute was a charitable one in the popular sense of the word, an.! it did not derogate from the charitable, nature of the. gift that the Institution was to be. managed by persons of a particular religious persuasion, or that its 'inmates were to be instructed in the tenets of the same sect, but. it was necessary that it Should be n public institution within the meaning of section 1 of the Act, as it was clear that the Legislature intended to exclude private ventures from the benefit of the Act.

Their lordships hnd come to the conclusion that the Ulster Institute was a public institution. It was designed to give free maintenance and education to the children of a section of the public, mid therefore ii anssyered Hip description of a public institution such as a school. ' The trustees had no personal interest in the bequest, which they held only for the benefit of the children of members of the public. The bequest was an educational endowment in perpetuity, and the beneficial intehest was nob vested in any private, person. Their lordships would therefore humbly'advise Her Majesty in both cases to reverse the judgment of the Supreme Court.

In each case the respondent mustpay to the appellants their costs of appeal. .;.,...

Most Xew Zealanders will. I imagine, ccme 1o the conclusion without much hesitation that their Lordships' judgment is right and proper even though it leaves the colonys exchequed the poorer by £13.294 13/2, and the costs of the litigation.