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Topic 9- Purpose Trusts The Doctrine of Cy-pres (Types of initial…
Topic 9- Purpose Trusts
The Doctrine of Cy-pres
The Doctrine
The HC may exercise its cy-pres jurisdiction in respect of a charitable gift or trust only
The jurisdiction may be exercised if it is impossible or impractical to apply the property, which is the subject matter of the gift to the charitable purpose specified by the donor or settlor
Where the court exercises this jurisdiction, it applies the property cy-pres i.e. as near as possible to, the charitable purpose specified by the donor
Initial v Intervening impossibility
Initial impossibility: It it was impossible or impractical to apply the propery to the charitable purpose specified by the donor
on
the date on which the gift became effective
: Purpose trust= immediately invalid
: COURT WILL ONLY EXERCISE JURISDICTION IF IT CAN DISCERN A
GENERAL CHARITABLE INTENTION
Supervening Impossibility: trust's purpose became impossible after the date on which the gift became effective
Purpose failed after it came into existence
No need to look for general charitable intention, as it was there in the past, the trust was operative
It is just a matter now of redirecting it to something else as close as possible
Re Dunwoodie
: Murray J
There is an important distinction between a charitable trust which is initially impossible or impracticable
As regards former: the property involved will not be applied cy-pres unless the court finds that the testator had a general charitable intention
As regards the later, the court will direct cy-pres application whether or not a general charitable intention on part of testator can be found in the relevant will
Section 47, Charities Act 1961
47.—(1) Subject to subsection (2), the circumstances in which the original purposes of a charitable gift may be altered to allow the property given or part of it to be applied cy-près shall be as follows:—
(a) where the original purposes, in whole or in part—
(i) have been as far as may be fulfilled; or
(ii) cannot be carried out, or cannot be carried out according to the directions given and to the spirit of the gift; or
(b) where the original purposes provide a use for part only of the property available by virtue of the gift; or
(c) where the property available by virtue of the gift and other property applicable for similar purposes can be more effectively used in conjunction, and to that end can suitably, regard being had to the spirit of the gift, be made applicable to common purposes; or
(d) where the original purposes were laid down by reference to an area which then was but has since ceased to be a unit for some other purpose, or by reference to a class of persons or to an area which has for any reason since ceased, either to be suitable, regard being had to the spirit of the gift, or to be practical in administering the gift; or
(e) where the original purposes, in whole or in part, have, since they were laid down—
(i) been adequately provided for by other means; or
(ii) ceased, as being useless or harmful to the community or for other reasons, to be in law charitable; or
(iii) ceased in any other way to provide a suitable and effective method of using the property available by virtue of the gift, regard being had to the spirit of the gift.
Chershire Foundation in Ireland v AG
Laffoy J stated that s47(2) retained established common law requirement that a general charitable intention is an essential pre-requisite for cy-pres scheme
If cy-pres jurisdiction cannot be used then property held on resulting trust
Initial Impossibility
Initial Impossibility
A case involves initial impossibility if it was impossible or impractical to apply the property to the charitable purpose specified by the donor on the date on which the gift became effective
Before court will exercise cy-pres jurisdiction it must discern a
general charitable intention
on the part of the donor
If donor intended to benefit PARTICULAR CHARITABLE ORGANISATION AND NO OTHER= no charitable intention on his part
General charitable intention =may be discerned if
donor's paramount intention was to effect charity,
and he just chose a particular organisation through which to effect it
If court cannot exercise cy-pres doctrine
Property will be held on resulting trust for the testator's estate
General Charitable intention
Re Taylor
: If upon the whole scope and intent of teh will you discern
the paramount object of the testator was to benefit not a particular institution BUT TO EFFECT A PARTICULAR FORM OF CHARITY, INDEPENDENTLY OF ANY SPECIAL INSTITUTION OR MODE
, then although he may have indicated the mode in which he desires that to be carried out, you are to regard the primary paramount intention chiefly
Liberal interpretation
in
Re Lysaght
Facts: Testatrix had made a bequest of money to the Royal College of Surgeons of England in order to fund scholarships
Gift subject to following restrictions:
: Recipient had to be male, British, doctor registered in UK, not of Jewish or Roman Catholic Faith
Royal College of Surgeons refused to accept gift on these terms
Held: A general charitable intention may be said to be a paramount intention on the part of a donor to effect some charitable purpose which the court can find a method of putting into operation, notwithstanding that it is impracticable to give effect to some direction by the donor which is not an essential part of his true intention
Held; General charitable intention on part of testatrix
to insist on enforcing discriminatory clause would defeat it
Instructions were not in his view an essential part or her true intention
Delany: Although this more liberal approach will be beneficial in circumstances where a good charitable trust might otherwise fail, it is not so justifiable where it appears to defeat the real intention of the donor
Restrictive approach
in
Re Prescott
Facts: testatrix made a bequest of her house to Dublin parish of the 'Russian Orthodox Church Abroad'
Directed if there were no parishioners or members of that church living in Ireland then it should be sold and the proceeds applied for the general purposes of that church in England
Issue: When she died, parish ceased to exist
Executor sought directions from court as to how he was to distribute proceeds of sale of house
Held; Gift failed because it was a gift to a body that did not exist at the time of making the will or at the time of the testatrix's death
Gift over, being dependent on the validity of this gift, also lapsed
NO EVIDENCE OF ANY INTENTION OTHER THAN TO BENEFIT THAT SPECIFIC BODY
Delany- views as restrictive in light of provision of the gift over in the will, which she suggests a more general charitable intention
More recently
in
Re Jordan
:
Facts; testator left 4/5 of his estate to a memorial fund which it transpired had never been set up and 1/5 to charity which had been would up after the will had been made but before testator's death
Held: White J said when the specific bequest in the deceased's will was examined, no general charitable intention discernible
0 Even if the courts lean in favour of a relaxed attitude as applied in Re Lysaght, would still no be sufficient
Court could not go beyond the will and words used were insufficient to infer general charitable intention
Types of initial impossibility
Gift to a charity that never existed
Re Davis
: Where you find a gift to a charitable institution which never existed, the Court, which always leans in favour of charity, is more ready to infer a general charitable intention
A body which existed at the date of the will but ceased to exist before testator died
Re Spence
: the court is far LESS READY to find a general charitable intention where the gift is to a body which is existed at he date of he will but ceased to exisT before the testator died or where the gift is for a purpose which, though possible and practicable at he date of the will has ceased to be so after testator's death
Amalgamation
Corbally v Representative Church Body
: Authority for proposition that if a named parish ceases to exist as a separate entity and amalgamates with another, a gift to the named parish may be applied to the purposes of the new unit
Misdescription
Re Geary's Trusts
: A court will not allow a charitable legacy to fail because of misdescription, but will endeavour to carry out testator's intentions as nearly as possible
Supervening Impossibility
A case involves supervening impossibility if it became impossible/ impracticable to apply the property to the charitable purpose specified by the donor after the date on which the gift became effective
DOES NOT HAVE TO DISCERN GENERAL CHARITABLE INTENTION BEFORE EXERCISING CY-PRES JURISDICTION
It had been in operation but something has caused it to ease
Suffices if the property was given absolutely and perpetually to charity
Re Royal Kilmainham Hospital
:
1684 King Charles II founded a hospital for the maintenance and support of old soldiers in his army and those of his sucessors
Hospital ceased to function after estab of Irish Free State
Government of reland assumed control of the buildings and land
Budd J noted it was not longer possible to fulfil founder's intentions
therefore available funds should be applied cy-pres but being used to benefit organisations of former members of the Defence Forces and the British Army
Budd J: No controversy if charitable gifts subsequently fail for want of objects
: if there is an absolute perpetual gift to a charity, even though the trusts declared are only for the accomplishment of a particular charitable purpose, the subject matter is applicable cy-pres upon failure of the trusts
Confirmed in
Re Worth Library
Re Trusts of the Rectory of St Johns
A trust was founded to provide for the maintenance of the choir and choral service at a cathedral church in Cork city
Surplus of funds in the trust after such provision made
Held:Party of the fund was nto required for the literal fulfilment of donor's intentions
Some of it could be applied cy-pres in the purchase of an organ for the church
This purpose was essential for carrying out donor's intention into effect
Doyle v AG:
Carroll J highlighted difficulty of staying as close as possible to the original purpose
Facts: funds set u to held a child with rare genetic skin disease and when she died it was proposed to distribute to 7 local charities
AG opposed on grounds the charities were not as near as poss to the original purpose
Carroll J - funds would have to be directed towards research etc on eh particular disease in order to comply with cy-pres doctrine