Emil Ford Lawyers

Scholarships and Prizes


When New South Wales politician, the Honourable George Nesbitt, signed his Will in 1939, clearly neither he nor his lawyer predicted the extent to which the religious climate in Australia would change over the next 79 years. Tensions between Protestants and Catholics would soften. The number of people identifying as Protestant and Catholic (or more broadly as Christian) would lessen.

The Will established a charitable trust, in part to fund the George and Adina Nesbitt High School Scholarships each year for the most proficient boy and girl “of Protestant parents who has entered [the Lismore Public] High School from a public school in the Richmond River District.” That is, the funds were only to be provided to the children of Protestants and, in particular, not to the children of Roman Catholics.

From Mr Nesbitt’s death in 1948 until 2004, Lismore High School received annual distributions from the trustee, Perpetual Trustee Company, for the scholarships. The School assessed the proficiency of year 12 students by reference to their UAIs (or earlier equivalents). Candidates had to apply and the form had to include a declaration that both parents of the student were Protestant.

In 2003, a parent of a child enrolled in the School challenged the eligibility of the recipient of the Adina Nesbitt High School Scholarship on the basis that, despite her declaration to the contrary, the student’s mother was not Protestant. The recipient was forced to hand back the $11,700 scholarship.

Between 2004 and 2009, scholarships continued to be awarded. However, in addition to providing a copy of their UAI ranking, candidates had to submit a pro forma application form and a statutory declaration from each of their parents to the effect that they were Protestant.

The last scholarships were awarded in 2010 in respect of the 2009 academic year. Thereafter, the trustee stopped awarding scholarships.

In 2017, the trustee asked the Supreme Court of New South Wales to remove the restriction that the boy and girl be of “Protestant parents”.

The trustee did not argue that the scholarships, or the conditions limiting distributions to Protestant children, were invalid as contrary to public policy. Indeed, in Australia “generally speaking testators can be as capricious as they like and … if they wish to benefit a charity in respect of … a discriminatory group, they are at liberty to do so.” Nor was it argued that the trust failed because it capriciously qualified an educational purpose by insisting on excluding Roman Catholics. Rather, the basis of the trustee’s application rested upon the unwillingness of the School to accept distributions from the trustee on the condition they be used only for the children of Protestants.

The Court asked two questions:

1.       Whether the removal of the condition alters the original purposes?

2.       Whether the original purposes have ceased to provide a suitable and effective method of using the trust property, having regard to the “spirit of the trust”?

In answer to the first question, the Court held that there is a general charitable intention – that of advancing education. The directions insisting on benefits being bestowed on Protestant children were “considerations” and “qualifications”, but not “essential” to fulfilling the overall charitable intention.

At first glance, it is hard to imagine what more Mr Nesbitt and his lawyer could have done to ensure the condition relating to Protestant children was not a “consideration” or “qualification” but “essential”. If the clauses setting out the scholarship trusts and conditions were not convincing enough, there is recurring language in Mr Nesbitt’s Will designed to ensure that the children of Roman Catholics do not receive any of the income from the trust!

However, the Court answered this question. It said it would have reached a different conclusion if Mr Nesbitt’s Will “conveyed in plain terms” that the condition was “an essential aspect of the gift”:

If say Mr Nesbitt’s Will had said “for the avoidance of doubt, if for any reason the School declines to abide by my wishes that scholarships must not be received by students whose parents are Roman Catholics, then all funds are to be given to the Red Cross”, then that would be a strong indication that the condition precluding receipt by the children of Roman Catholics was essential.

The Court was satisfied that none of the High School Scholarship trusts could be carried out because the Department of Education was unwilling to accept distributions on the conditions in Mr Nesbitt’s Will. The Court held that Mr Nesbitt’s purpose no longer provided a suitable or effective method of using the trust property. It ordered that the word “Protestant” be deleted from the trust.

Many schools have prizes and scholarships established in honour of past students and teachers, which are funded by their estates. Sometimes these people leave money or property in their Wills for the school’s “general purposes”. This is always simplest.

However, some willmakers want to benefit a particular area of the school’s life, such as sport, music or debating. For now, let us consider a very simple example of a former student of an all-boys school. His Will reads: “This scholarship is to be awarded each year to the most proficient year 12 boy”. Like Mr Nesbitt’s Will, this Will could have been made in the 1930s. Since then the school, like many all-boys schools, has become coeducational. The school may be unwilling to continue to award scholarships based on gender, especially if there is no equivalent for girls. The Court’s decision suggests that the gender condition is not an “essential” aspect of the gift.

However, if the former student’s Will said, “If for any reason the School declines to abide by my wishes that scholarships must only be received by boys, then all funds are to be given to the Boys Brigade New South Wales”, the gender condition is “essential”.

Therefore, the more detailed the willmaker’s directions about how their gift is to be applied, the less likely a court will be to impute a general charitable intention.

If you are dealing with a scholarship or prize with difficult conditions that you would like to change or would simply like to know more about schools and charitable trusts, please contact David Ford.


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