Topic 8 Charitable Trust PDF

lOMoARcPSD|18798365 Topic 8 Charitable Trust Equity and Trust I (Multimedia University) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by Darshanaa Tharmaraj ([email protected]) ...

lOMoARcPSD|18798365 Topic 8 Charitable Trust Equity and Trust I (Multimedia University) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 TOPIC 8: CHARITABLE PURPOSE TRUSTS INTRODUCTION  Purpose of establishment o benefit to the public but not merely certain individuals o not harmful (= certain and lawful ) to the human kind at the same time o not extended to the purpose of political aims  Preamble to the Charitable Act 1601 (= statutory of Elizabeth) o The particular purpose of a charitable trust must fall within the spirit and intendment of the Preamble o English Charities Act 1960 has come into force to repeal the above legislation, but it still preserve the reference to the Preamble through S.38 (4) of CA 1960 in case laws  Commissioners for Special Purposes of Income Tax v Pemsel: Lord Macnaghten has categorised charitable trust into 4 principal divisions based on the Preamble: o relief of poverty o advancement of education o advancement of religion o other purposes beneficial to the community There are disputes based on the benevolent and generous intention in a charitable trust: o trustee and next of kin of settlor (parents, siblings): next of kin will claim that the charitable trust is unenforceable so they are entitled to the property 1 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 o trustee and the tax department: peculiarity of a charitable trust enjoys the tax exemption HOWEVER, the categorisation should not a predicament (= difficult situation) to determine the purpose of an established charitable trust as the society is emerging with new norms. Thus, the principal divisions shall not be regarded as a static standard to adopt:  National Anti-Vivisection Society IRC provides purposes regarded in one age as charitable may be regarded differently in another age  can be categorised under the fourth heading as long as the settlor is able to prove that the trust is served beneficial to the community  Hasbury law: definition of charitable and charitable purposes o To be charitable, the purpose must have fulfilled certain tests, either fall within the  Preamble to the Charitable Act 1601  English Charities Act 1960  any one out of the four categories listed down by Lord Macnaghten (must be declared within ancient statue) o Besides, the charitable trust must be beneficial and available for a certain sections of community  A valid charitable trust should satisfy THREE elements: o public benefit o comply with the public policy o exclusively charitable 2 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  A trust will fail when there is no certainty of object. However, in a charitable trust, the trust will not fail when there is a clear intention on charitable purposes. To determine the object, the trustee will have discretion in distributing the property. Thus, a charitable trust needs not a strictly compliance to the certainty of object as it is not necessary to have a human beneficiary.  Sixth Schedule, Paragraph 13 of Income Tax Act 1967: income from religious institution established in Malaysia will be exempted from income tax as it is not for profit-earning  Local Government Act 1976 provides the exemption from rates o S.134: State Authority has the discretion to exempt the payment of rates from property for charitable purposes FIRST ELEMENT:  Must be beneficial to the whole community or some sections as PUBLIC BENEFIT to prevent the arrangement of charitable trust that only provide a little contribution to the society o not necessarily covering 100% of the community for each and every individuals within the society Circumstances that will nullify a charitable trust  Employment o Oppenheim v Tobacco Securities Trust Co Ltd F: Certain investments were held on trust where the education of the employee’s children, regardless of former or current employees. Thus, a question arose: whether such arrangement is considered as a charitable trust? H: At the first instance, COA held that the arrangement 3 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 was not a charitable trust since it was lacked with the element of public benefit. Although the company owned a big number of employees, but the trust was created only to benefit the employees in the particular company which tied with the employment nexus. In the appeal, HOL dismissed the appeal and provided that the trust is not charitable unless it is directed to public benefit for a section of society.  Blood nexus: family relationship between the settlor and the beneficiaries o Re Compton F: There was a trust set up for the education of the three specific descendants. H: The trust was lacked with quality of public trust when the beneficiaries were defined based on personal relationship. Thus, the arrangement was not a valid charitable trust but only a family trust.  However, this would not be applied in the context of trusts for the relief of poverty: o Re Scarisbrick Will Trust F: The testatrix directed that the residuary estate shall be held on trust for her sons and daughters when they are in need. H: The court held that the arrangement was charitable as it aimed to provide the relief of poverty which the exception is provided to the beneficiaries in an employment or blood nexus can still be entitled to the assistance of trust. SECOND  The court has the inherent jurisdiction to remove those 4 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 ELEMENT: components that offend public policy in order to allow the gift PUBLIC POLICY to remain valid, so that the charitable intention of testator can CONSIDERATION be carried out. This can be done through the doctrine of cy- pres.  Canada Trust v Ontario Human Right Commission F: In 1932, the testator created a trust for the purposes of providing scholarship at eligible institutions. The criteria of beneficiaries are listed as follows: o a white o a needy o a British parentage (both parents must be a British, but child can be borne abroad) o a protestant 新教 The selections was also based on physical, mental and moral qualities of the applicants. There were also priorities given to the children of teachers. The trust gave emphasis on the supremacy of white race and the importance of maintaining the Christian protestant religion. I: Whether the trust was void on the count of public policy? H: COA held that the gift had offended public policy and thus void. The main reason was because the gift was premised on notion of racism and religious to priority which contravened the contemporary public policy. Nevertheless, the court agreed that the trust could be saved by the court’s inherent jurisdiction (cy-pres) to bring the trust in accordance with public policy. This is because the court concluded that there was a general charitable intention on the part of the testator. And, the trust should be viewed to promote the leadership 5 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 through education. The settlor, who was a philanthropist 慈 善 家 , believed that education is the key to a stronger, more prosperous and peaceful world. Q: Why the court decided to exercise the jurisdiction? A: Although discrimination is considered to be an ugly feature of our society now, but the society in 1932 was a turbulent one which makes the periodical background during the setup of trust should be taken into consideration. Under such circumstance, it was reasonable for the testator to uphold the benefit of his nation, which is the white, for a stronger development through education. Thus, the discriminatory scheme that the settlor had chosen to promote education cannot defeat his general charitable intention.  The court in Canada Trust v Ontario Human Right Commission suggested that: As a matter of principle and policy, some restrictions in the context of promotion in education are not said to be against public policy. For instance, the promotion of education to women, aboriginal people, the physically and mentally handicapped or other historical disadvantaged groups. Thus, trust made for these groups of individuals would not be against public policy on the ground of discrimination.  S.9 (1) of the Government Proceedings Act 1956: Attorney General or at least two interested persons in the trust with the 6 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 obtain of written consent of AG is entitled to the local standi to initiate a suit. o elements of purposes for charitable trust must exist and fulfill within the description of public, religious, social or charitable purposes The application of such provision will arise in two circumstances: o there is a breach of charitable trust  AG has the discretion to sue o there is the need of court’s direction for administration of trust  two or more persons in the capacity of trustee are having an interest to file the suit after obtaining the consent from AG  it is not necessarily for the AG to have any fault done  the mechanism is set to let AG to be bound by the judgment of the court Q: Is the consent of AG important? A: YES, IT IS EXTREMELY IMPORTANT. AG plays an important role in safeguarding the institution of proceedings in an effective manner and preventing the trust fund being exhausted with unnecessary purposes. Mostly, the representatives of trustees will use the trust fund to defend themselves in the suit. Without the supervision of AG, the trust fund will be used in any random purposes that cause interruption to the nature of charitable trust. Since the trust is set up for the charitable purposes, the consent of AG can avoid 7 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 the waste of public resources, so that the fund can be reserved to the need. CASES: the compliance of S.9 (1) of GPA 1956 is mandatory  Lee Chick Yet v Chen Siew Kee F: In 1973, there was a trust deed made between the D1, D2 and the D3 who declared a piece of land in Kintar, Perak. They declared that they held the trust on behalf of a school after being registered as the trustees. A year later, they transferred the land to D4, D5, D6 and D7. The plaintiffs claimed that the purported transfer of the school was in breach of the trust. However, the defendants argued that the plaintiffs cannot take action without the written consent of the AG by virtue of S.9 (1) and (2) of GPA 1956 since the land was held on the exclusively benefit of the school. I: Whether the resolution of the board of management purporting to authorise the transfer was valid or made in fraud of the school? H: The court agreed with the argument of the plaintiff and asked them to comply with the requirement under S.9 (1) of GPA 1956 within two weeks. The issue will be discussed after the plaintiffs had obtained the written consent from the AG.  Letchumanan Nagappan v R Nadarajah The arrangement of charitable trust has involved the Mariamman temple in Batu Caves. The representative of AG was present in the court even though the AG was not named as one of the parties. The AG submitted that there was a total failure in compliance of the three preliminary requirements (at 8 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 least two interested person, prior written consent of AG and the suit being brought in the name of AG). Thus, the suit should not be allowed to proceed as the action was wholly misconceive and therefore failed. THIRD  must be wholly and exclusively for charitable purposes ELEMENT:  problem will arise when the trust is made for mixed purposes EXCLUSIVELY o Houston v Burns: mixture of charitable and non- CHARITABLE charitable purposes The court ruled that a gift for public benevolent or charitable purposes failed since the trustee had applied the fund on non-charitable purposes. Thus, the trustee shall exercise his discretion power in favour of objects that are exclusively charitable only. o Chichester Diocesan Fund and Board of Finance Inc v Simpson F: In the will, the testator has given his appointed executors the absolute discretion to select any charitable institutions for the contribution as long as the testator thinks proper for charitable or benevolent purposes. H: The arrangement of trust was also held to be non- charitable since the objects are benevolent but not charitable. The term ‘or’ has made no compulsory to the charitable character but for the executors to choose either one. The phrase is vague as it is not accurate in the expression of a charitable trust. Thus, the court has suggested the usage of ‘and’ to ensure that the fund is used in a charitable and benevolent purposes. 9 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 Necessary incidental rule: save the intended charitable trust  A gift would still remain as charitable if the non-charitable purpose is in substance not more than being incidental or ancillary to the main charitable purpose CASES  Neville Estates Ltd v Madden The social activities of a synagogue (Jewish congregation) was held to be ancillary to the religious activity. The primary and main charitable purpose is to provide religion advancement to the Jews. However, the court held that the social activities brought no effect to the validity of a charitable trust. Also, the court has drawn the distinction between purpose which is merely incidental and purpose which is subsidiary. To be a valid charitable gift, the gift may contain a non-charitable purpose which is incidental to its charitable purpose but not a non-charitable purpose which is subsidiary to its charitable purpose.  Re Coxen The provision of an annual dinner for the trustees when they should meet to discuss trust matters was regarded as merely incidental but not as the primary purpose of the charity.  Oxford Group v Inland Revenue Commission The gift in question was that in respect of supporting any charitable or benevolent associations. The court held that the charitable trust has failed as ‘benevolent’ was not an incidental purpose but a subsidiary purpose in relation to the main charitable purpose. The term ‘or’ used has suggested 10 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 benevolent to be one of the main purposes to trust, which is subsidiary to the charitable purpose. CLASSIFICATION A.  Re Coulthurst: definition of poverty RELIEF OF o does not mean destitution but a word of wide and POVERTY indefinite import o persons who have to ‘go short’ in the ordinary acceptation of that term due to the status of life  Ballarat Trustees Executors and Agency Co v FCT o The arrangement of trust is for the individuals who could not afford fees at private hospital was not considered as a charitable trust as the patients have no such necessitous circumstances. The patients can still go the general hospital to receive a cheaper price or even free of charge in medical treatment. o Crucial element: necessitous circumstances is an expression which is familiar in common law but not limited to cases which is extreme poverty. However, as conveying to notion in Oxford dictionary: having little or nothing to support oneself. The phrases of ‘poor’, ‘needy’ or ‘indigent’ cannot be selected to have the most precise description to define the expression of poverty. o The court held that necessitous circumstances will only come into existence when an individual has lack of financial resources not merely insufficient to obtain the 11 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 basic necessaries but also to maintain a modest standard of living in the Australian community.  Re Baddeley o A purpose of providing social and recreational facilities to members of the Methodist Church in West Ham was held not to extend to a ‘sufficient section of the public’. This is due to the trust only provided among a section of the members but not a section of the public which did not satisfy the public aspect o There may be a good charity for the relief of person who are not in grinding need of destitution which contains the need for a home, means to provide necessities or quasi-necessities in order to sustain a living, but not merely an amusement which promote a healthy lifestyle. CASES: successfully established with the charitable purposes  Shaw v Halifax Corporation o It was decided that a home for ladies in reduced circumstances was charitable  Re Young o A gift by testator – Roger Pilkington Young for the permanent aid of distressed gentlefolk was held to be charitable  Re Clarke o A gift to provide a nursing home for persons of moderate means was charitable 12 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  Re The AITC Foundation o A gift to relieve poverty among persons who have suffered financial loss in investing in spilt-level investment companies  Re Alsagoff Trusts o A gift for the burial and assistance for the poor and a gift for the maintenance for a relatives’ oil institution named Rubad Sadayat Medina  Re Gwyon: must fulfill the requirement of exclusively beneficial for the poor o There was a trust to establish a clothing foundation to produce knickers (short trousers) for boy residents between 10 and 15 years old in a particular location. The court held that the trust was not charitable as the benevolent of testator was intended for all eligible boys. Thus, the gift might benefit children from more wealthy families as well as those coming from impoverished backgrounds. Legal poverty does not cover working classes who have not enough financial resources  Re Sanders o Money was given to provide dwellings for ‘the working classes and their families resident in the area of Pembroke Dock’ was not charitable because the term ‘working class’ was not exclusively reserved for the poor. Moreover, there was no general charitable intention to be inferred from the phrase in the will. 13 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  Re Niyazi Will Trust o A trust to build a working men’s hostel was held to be charitable on the basis that the very nature of a hostel was to provide temporary accommodation for those who could not afford lodgings elsewhere. In addition, the amount of money which had been left for the construction of the hostel dictated that the nature of the building would be modest and not suitable for more affluent members of society. o Megarry VC: The word ‘hostel’ has to my mind a strong flavour of a building which provides somewhat modest accommodation for those who have some temporary need for it and are willing to accept accommodation of that standard in order to meet the need. Take note that the so-called ‘workmen’ were really poor migrants living in harsh conditions. EXCEPTIONS: does not cease to be charitable although the trust is not beneficial to the public or a section of the public (arises within employment nexus and blood nexus)  Dingle v Turner: poor employees o There was a trust set up to pay for the pensions to those poor employees of the company. HOL affirmed that this was a charitable trust as it relieved the poverty among a particular description of poor persons. o The court also provided distinction between public 14 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 charitable trust and private trust: whether the gift was for the relief of poverty among a description of poor people in the society or a particular poor person in matter of construction. Although both trusts are created with the intention to relief poverty, but a valid charitable trust need to be relief to the poverty of a description of poor people in the society.  Re Segelman o Mr Justice Chadwick held that minors who became students would be likely to experience ‘relative poverty’ when money received from parents and any grants for which they might be eligible fell short of ‘their actual or perceived needs’ and thus a charity in support was allowed under this charitable heading.  Re Scarisbrick Will Trust: poor relations o There was a trust for the testator’s relations who were in needy circumstances. The court agreed that it was a valid charitable trust. B.  Preamble to the Statue of Elizabeth ADVANCEMENT o specifically provided for the maintenance of schools for OF EDUCATION learning, free schools, scholars in universities and education for orphans  Perpetual Trustee Co Ltd v Groth: gives a wide definition of the term ‘education purposes’ o Education purposes extended beyond the advancement of education in general or the propagation of the whole 15 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 body of human knowledge and trusts for the advancement of education in some particular field. (= encourage participation of learning) o The concept of education is not limited to the traditional way in absorbing knowledge through pure academic teaching in classrooms, but also including aesthetic education, musical education, acquisition of good manners or appreciation of fine arts Research: recognised as an important part in education but not all researches are charitable in nature  NOTE: expression should be the impartation of knowledge but not the accumulation of knowledge  McGovern v Attorney General o A trust for research will only be ordinarily qualified as a charitable trust when it fulfils three criteria:  the subject matter of the proposed research is a useful subject of study  knowledge acquired as a result of the research will be disseminated to others (no purpose of advancement if the research is to be kept )  the trust is for the benefit of the public or a sufficiently important section to the public o When there is a question to determine whether a bequest for the purposes of research is in charitable nature, the court will need to pay attention to any admissible extrinsic evidence which is available to explain the wording of the will in question or the 16 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 circumstances in which it was made (= external evidence is permitted to be adduced in order to dissect the trust deed)  Incorporated Council of Law Reporting for England and Wales v AG F: The main object of the council was the preparation and publication of law reports in order to provide essential study materials in the field of law, but not for the purpose of obtaining profit. H: The court held that this arrangement was for the advancement of education. Also, the trust also provided the maintenance of the library for any other learned subjects. The fact that the reports were used by members of legal profession for earning fees was regarded as incidental which does not detract the council’s object from the exclusively charitable character. Artistic and aesthetic education: although it is not conventional education which falls under the classic impression, but it helps to advance the development in human civilisation  Royal Choral Society v IRC The society was formed for the advancement of choral singing in London had being questioned whether it can be regarded as charitable purpose. The court protested against the narrow conception of education especially in aesthetic education. The formation of the society which aimed to raise the artistic taste of the country had fulfilled the education purpose. The 17 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 education of artistic taste is one of the most important aspects in the development of the civilised human being. The performance of a trained choir is designed to raise the music taste and giving the public an opportunity to appreciate this particular type of music which comprises the finest musical work. However, the recognition of artistic and aesthetic education has not suggested that all promotions for artistic purposes are for charitable purpose in advancing education. The court will examine the facts for each individual case.  Re Pinion F: The testator left his studio together with his collection of furniture, paintings and other objects. In his will, he directed his trustees to open a studio as a museum to display his collection. H: At the first instance, the court held that the arrangement was a charitable bequest. However, on the appeal, the evidence presented was overwhelming that collections for proposed exhibition has no value in education. The court described the collection as a mass of junk which the display would serve no useful purpose to the public. Furthermore, the testator made a gift of chattel to form a public museum failed to establish that the formation have the tendency to advance education in the appreciation of artistic and aesthetic. Q: What are the chattels? A: The court gave an example of 500 balls of strings could not have the tendency. In this case, the chattels were referred to the collection of furniture, paintings and other objects. The quality 18 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 of these chattels is not valuable enough to form consideration in the advancement of education.  Re Shaw F: A gift by the testator for the purposes of research and development of a 40-letter British alphabet and his translation piece of Androcles and the Lion into the new alphabet. H: The court agreed that the arrangement was a charitable gift but the works must be disseminated and educated to spread the content. Otherwise, the works would only be regarded as accumulation of knowledge. Sports: the promotion of sports take place in schools and universities  Re Mariette A gift for sports in the school has long been settled as charitable for the advancement of education. This is because sports has involved with the development of body as well as the mind of the students. Under this category, the education is especially concerned with the young will likely to receive a favourable judicial respond as compared to the old.  Re Nottage The testator had left £2000 on trust for the promotion of competition in a youth yachting association with prize to be awarded. The court held that the promotion of sporting activity is not charitable irrespective of any accompanying health benefits as it was just a prize for a mere game which did not involve any public benefit. 19 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  Re Dupree’s Deed Trusts A trust to promote the playing of chess is educational as it encourages the qualities of foresight, concentration, memory, ingenuity and provided intellectual stimulation.  IRC v McMullen The trust concerned an attempt by the Football Association to set up a charitable trust to enable pupils at schools and universities to play football and other sports. The House of Lords held that it was a valid charitable trust for the advancement of education as the evidence can be found in the age of pupils were within 17 to 22 years old which was youth education. Lord Hailsham defined education as a balanced and systematic process of instruction, training and practice containing spiritual, moral, mental and physical elements. The court emphasised that education should not be limited to formal instructions only, but to include the physical activities to achieve balance in every student. Education and politics: trust for the attainment of political object would be invalid. This is because the court has no means in judging whether a proposed change in the law will be for public benefit, but not due to political education is illegal. 20 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  Re Hopekinson Education should not be the meaning of ‘education’ within the Statue of Elizabeth by letting the reading of political propaganda to fall within the definition.  Molloy v Commissioner of Inland Revenue There was a society for the protection of unborn child with the objective to oppose the change of legislation pertaining to abortion. COA ruled that the main objective of the society was political hence failed to be charitable. The court also pointed out a trust with some political elements can be regarded as charitable trust if it could satisfy the requirements of advancement in education. Furthermore, the political object must be an ancillary or subsidiary to the main objective, the court would not nullify the validity of the trust. The element of public benefit: a question to be determined by the court but not the settlor  Education purposes in private schools would still be considered as charitable as long as the schools are not run for private profit  NOTE: a charitable trust will be considered void when it is against public policy even it fulfills all the requirements stipulated under the advancement of education (eg: training in prostitution, computer-hacking, money-laundering)  Re Hummeltenberg The charitable trusts for a spiritual organisation in teaching of spiritual mediums who could speak with the dead was not a charitable trust for the advancement of education since the 21 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 public benefit cannot be identified.  Oppenheim v Tobacco Securities Trust Co Ltd These words ‘section of the community’ have no special sanctity, but they conveniently indicate two points to satisfy the test of public benefit : o first, the possible beneficiaries must not be numerically negligible o secondly, the quality which distinguishes them from other members of the community It is for this reason that a trust for the education of members of a family cannot be regarded as charitable. A group of persons may be numerous, but, if the nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes. Lord Simonds remarked that the law of charity is pervaded with illogicalities as charitable institutions enjoy rare and increasing privileges. C. Definition of the term ‘religion’: two cases share a similar description ADVANCEMENT  Re South Place Ethical Society OF RELIGION Religion is the relationship between human being and the god. However, every individual has different understanding and believes towards god. Even, some individuals do not believe on the existence of god, but they do persist on the qualities of truth, beauty or love that might be a symbolic equivalent to 22 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 religion. Thus, the court concluded that the essentials attributes of religion are faith and worship. According to the Oxford Dictionary, religion is defined as o a particular system of faith and worship o recognition on the part of man of some higher unseen power as having control of his destiny and being entitled to obedience, reverence and worship  Church of the New Faith v Commissioner for Pay-Roll Tax For the purpose of the law, the criteria of religion are twofold: o belief in a supernatural being, thing or principal (faith) o acceptance of canons of conduct in order to give effect to that belief although canons of conduct which offend against the ordinary laws are outside the area of immunity, privilege or right conferred on the grounds of religion (worship by accepting the laws of the religion) The element of public benefit  Nevile Estates v Madden The court is entitled to assume that some benefit accrues to the public from attendances at places of worship of persons who live in this world and mix with their fellow citizens. Hence, the requirement of public benefit would normally be satisfied when the objects do involve the public or a section of public.  Gilmour v Coats The gift for the benefit of a Carmelite convent which housed 23 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 cloistered nuns who were involved in no external work and whose lives were devoted to prayers. It was argued that public benefits was served through the prayers and intersections of the nuns. HOL rejected the argument as such benefit was not manifestly proven in court. o doubted by the authority in Australia in the case of Crowther v Brophy F: A gift left to the priest upon trust for the saint and masses for the benefit of their soul. The people supposedly to be benefitted from this were dead. H: The court had applied the ‘test of success of intercessory prayer’ is an inappropriate rather the enhancement in the life , religious or otherwise, of those who find comfort and peace of mind in their resort to intercessory prayer is more appropriate consideration to adopt. The public edification inherent in celebration of the mass, being a central religion activity of many, productive in enforcing religious life for the substantial part of the community. This sufficient to prove public benefit even if not proven in the categorical sense. promotion of spiritual teaching  Re Hetherington The celebration of religious rights such as saying masses in the public sufficiently constitutes public benefit.  Re Foster There was a gift to relieve sick and aged Roman Catholic priests so that they can retire. Thus, the ministry of the church 24 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 can be taken place by the young and healthy ones to achieve efficiency. Although the trust was not directly allocated for the public, but the public get benefited with the efficient ministry of the church.  Re Banfield F: The Pilsdon Community House agreed that prayer, work and practical charity should be its supreme purpose. Also, it was opened to all faiths and creeds to carry out Christian work to improve the lives of those who needed such assistance H: The Court confirmed that such an organisation exists to further the work of God in a practical sense. Even, if a religious body does engage in ancillary activities that are not purely religious, this will not necessarily defeat its religious nature. As a result, the court stated that this Community House did advance religion and thus should be awarded charitable status Malaysian cases  AG v Lim Poh Neo The public benefit requirement was satisfied in respect of a gift of a burial grounds to the members of a clan since the clan formed a section of the community but not a mere group of individuals.  Re Law Kim Pong’s Trust Settlements F: The deceased had conveyed a 12 hectares of land to a Buddhist monk through a trustee with two purposes: for the 25 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 construction of temple to worship certain gods and the growing of orchard or other purposes which the monk or his successors think fit. After the construction of the temple, the local authority required a portion of the remaining land. The administrators claimed the land given was not a charity and void in the rule of perpetuity H: The court held that the whole purpose of the deed was a good charity since it served the public benefit for the Buddhists to have a place to worship.  Re Haji Meera Hussain’s Will Trust The administration of Islamic law is a state matter which is within the scope of the Shariah court and the state government. Regardless of Muslim or non-Muslim, the applicable law in trust will only be civil law. F: The deceased owned a piece of land on which was erected with nine houses. All the houses were rented out to tenants. During his lifetime, the deceased had transferred and registered the property to himself as trustee for the benefit of his 18-year- old son, which was also the respondent in this case. However, the appellants (children of deceased from another marriage) claimed that the wakaf was void under Islamic law. Besides, the appellants pointed out that the respondent did not physically own the possession of the houses since all of them were rented out. H: The court held that the delivery of possession of the property by the deceased is an essential element to constitute a complete gift. However, in this case, the exception was 26 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 provided since the gift was from a father to a minor son, thus the delivery of possession was not necessary at all. The law would presume the holding of property on behalf of the minor. The intention of deceased to give the property to his son as gift was clear and unequivocal as the deceased had done all possible means to deliver the legal possession. Thus, although the procedures did not fulfilled wakaf under Islamic matter, but it would not constitute an issue as it was governed under civil law. D. Health, old age and impotence 性無能 : the category can be interpreted OTHER disjunctively. The court is adopting a liberal approach in reading to make the category broad enough to cater different nature of charitable trust that fall within the category  City of Hawthorn v Victorian Welfare Association The court held that gift to provide hospitals or similar institutions without distinction of the means of the patients has been held to be charitable. The gift had provided relief to impotence persons in the sense of relieving the needs arising from sickness or other disabilities of the patients.  Re Glyn’s Will Trust The gift provided housing facilities for the aged. The court agreed that the arrangement was for charitable purposes which benefited the community. The accommodation provided needs of protection for the aged in terms of safety, sanitary and decent with the care of professional nurses. Thus, the living environment would definitely be better than leaving an aged to live alone. 27 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 Hospitals as charitable institutions  Re Resch’s Will Trust F: 8 million dollar was given to a private non-profit making hospital or the general purposes of a hospital. The issue before the Privy Council was whether the purposes of the hospital were charitable? H: The court held that the arrangement could still be charitable although charges was made, provided that the poor was not exclusively excluded and the public benefit requirement was satisfied. The court explained the status of hospital as such: Generally, a gift for the purposes of the hospital is prima facie of a charitable gift. The provision of medical care for the sick is accepted as public benefit suitable to a track the privileges given to a charitable institution. Under two circumstances, the purposes of hospital will not be regarded as charitable:  operates a commercial enterprise  benefit is not available for a sufficiently large class of the public (especially the poor sick should be taken into consideration)  Re White’s Will Trust There was a gift to the hospital with the aim to provide a home of rest to the nurses. The gift was held to be charitable as the efficiency of the hospital will be increased which will benefit every patient in their visit. 28 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 Animals: a trust for specific animals is valid but non-charitable. Thus, I order to provide a valid charitable trust under such heading, the purposes must be made in general for a group of animals (eg: gift to Zoo Negara or conservation to endanger species).  Re Wedgewood: reason of trust must be made in general for animals The provision made can promote kindness and generous sentimental in human being to all the animals as a whole. Through the arrangement, feelings of humanity, morality and repressed mortality will be encouraged to evade the suffering of animals.  Murdoch v AG (Tasmania) The court in this case has distinguished a gift to a named veterinary surgeon ‘for the benefit of animals generally’ was held not to be a charitable trust because the trust was construed to be for the benefit of animals, rather than the public. The object of the trust is to prevent cruelty to the animals will be perceived as charitable as the term ‘welfare’ connotes public interest. The rationale is that in order to be charitable, the terms of a trust must be of benefit to humankind can be accepted when the prevention of cruelty to animals, the prevention of the destruction of species, imbalance within the with the attendant harm to animals are matters which enhance the life of humans. However, the position of law might be different when it requires valuable judgment 29 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  National Anti-Vivisection Society v IRC Vivisection: practice of using animals for experimental purpose or scientific research F: There was a trust established for the purpose of abolishing vivisection and the testator argued that the trust should be charitable. H: HOL agreed that the argument made by this society was on moral justification. At the same time, the court pointed out that moral justification was not the only concern to be taken into consideration, but the court must decide whether the need of public benefit in the form of advancement in medical science and research before dealing with those moral objections. Thus, the gift was non-charitable because the abolishment of vivisection would require a change in law. However, the change in law lies in the hand of the Parliament. The gift can be concluded to be a political move instead of a charitable project. Political trusts: attainment for political purpose is always invalid  Bowman v Secular Society Ltd: The court explained that the invalidity is not due to it is illegal since everyone is free to advocate/ promote the change of law in any lawful means. The real reason is the court cannot judge whether a proposed change in the law is based on public benefit. Thus, the gift will fail to exist as a charitable trust. DOCTRINE OF CY-PRES 30 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  Function: steps in the save the charitable trust when some requirements are not satisfied o advantage enjoyed by a charitable trust as compared to private trust (resulting trust would be operated when one of the requirements failed) o trust will not fail when the doctrine of cy-pres is applied  Application: to interpret the object of trust as nearly as possible to conform with the settlor’s intention when the legal construction of the trust deed is illegal, impracticable, impossible or cannot exhaust the whole fund o intention of settlor must be towards a general charitable purpose, but not a specific one o NOTE: the application must not oppose with the public policy  To apply the doctrine of cy-pres, there are two conditions to be fulfilled: o general charitable intention of the settlor which can be dissected from the trust instrument o doctrine of impossibility Initial impossibility: occurs when the property is given to a charitable institution which existed when the gift was made but ceased to exist before the date the gift took effect  Re Wilson, Twentyman v Simpson The court structured out two circumstances: o there is paramount general intention but impossible to carry out the precise direction since the instructions are vague  the gift will be remained and perfected because the court can use the jurisdiction to direct the scheme on how the charitable purposes to be carried out  a new direction of trust fund will be proposed to achieve another similar charitable purposes so that the fund will not be wasted o there is no paramount general intention can be inferred from the trust 31 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365 instrument on the true construction of the will  no clear instructions on how the trust should be function would fail the trust  Canada Trust Company v Ontario Human Rights Commission: the doctrine of cy- pres should never be departed from the intention of testator. Through reading the instrument of trust, the court may determine the substantial, overriding, true or paramount intention. Thus, it is a necessary requirement for the court to read the trust instrument as a whole to find the general charitable gift, without adding any words to change the intention.  Singapore case: Re Valibboy Charitable Trust F: Through a will, the testator entrusted his trustee a certain amount of money to buy a piece of land for the building of schools or the maintenance of schools (madrasah) in India for religious instruction according to the discretion of the trustee. Also, the trust was also established for the education in English language. However, the Indian Ministry of Education had rejected the application which made the arrangement failed to be carried out. H: The court held that it was impracticable to give effect to the express object as stated in the will due to the rejection of Indian Ministry of Education. On the proper construction of the clauses in the will, the testator has shown a general charitable intention on the advancement of education: religious education and English education. Thus, by applying the doctrine of cy-pres, the trust was not completely failed which the fund can still use to build religious schools and continue English education in another ways. Supervening impossibility: occurs where a gift to a charitable institution has taken effect but the institution ceases to exist shortly after it receives the gift  not necessarily to show a paramount charitable intention 32 Downloaded by Darshanaa Tharmaraj ([email protected])  lOMoARcPSD|18798365  In Malaysia, the failed charitable trust will go to the Attorney General  Re Slevin F: This case was concerned with a legacy to an orphanage which was in existence at the testator’s death but the orphanage was discontinued shortly afterwards. The question was whether a charitable bequest to an institution which comes to an end after the death of the testator will fail for the benefit of the residuary legatee? H: The court held that the trust fund will be obtained by the government when the orphanage ceased to exist on the death of the testator, but not to the next of kin. Once the money is dedicated to the trust for charitable purposes, the property is said to be contributed to the society since the settlor does not expect the property to be returned. By applying the doctrine of cy-pres, the government will apply the trust on other charitable purposes. 33 Downloaded by Darshanaa Tharmaraj ([email protected])