On failure of an express private trust usually the property results back to the donor or his estate on a resulting trust (Vandervell v IRC (1967)). In some circumstances a charitable gift will not result back to the donor but will be applied cy- pres to another charity with similar objects.
A vital distinction is between ‘initial failure’ and ‘subsequent failure’.
7.6.1 Initial failure
s Either the charity has ceased to exist before the gift becomes vested or has never existed at all.
s So A dies leaving his estate to a charity; if the charity ceased to exist before he died then there is initial failure.
s There must have been a general charitable intention on the part of the donor to benefit charity generally.
s If an association has been amalgamated with another charity or renamed the gift can be made to the amalgamated body without a cy- pres scheme (Re Faraker (1912)).
7.6.1.1 Ways of determining whether the charitable intention is general or not
s This can also apply to situations where a charitable entity is still in existence but refuses to accept the gift due to some restriction or limitation.
s If a general charitable intention is shown the restriction or limitation can be removed.
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7.6 CY-PRES DOCTRINE
What was the donor’s purpose in making the gift?
s Was it to benefit the particular institution only or for the general purposes of the institution?
Cases:
Re Rymer (1895)
The donor made a gift of £5,000 for the education of priests at St Thomas’s seminary. The seminary had ceased to exist at the time of the donor’s death.
Held
The donor’s purpose was to benefit that particular seminary and not the education of priests generally and hence the gift failed and went back on resulting trust to the donor’s estate.
Re Lysaght (1966)
The donor left sums of money to the Royal College of Surgeons stipulating that they were to be used for medical studentships though only for British- born men who were not of the Roman Catholic or Jewish religions. The college would not accept the gift on these terms. It was held that the donor had a general charitable intent to benefit medical training generally and hence the gift could be applied cy- pres without the religious restrictions.
s Reconciling the two cases:
s In Rymer the donor’s purpose went to the heart of the gift – the seminary had to be in existence;
s whereas in Lysaght the donor’s restrictions were merely ancillary to the primary purpose of training medical students (see also Re Wood-hams (1981)).
What is the structure of the organisation that the gift is given to?
s A charitable unincorporated association has no legal personality and the gift is construed as if it were for the association’s purposes rather than for the association itself (Re Vernon’s Will Trusts (1972)).
s (Note: do not confuse this with non- charitable unincorporated associations – see Chapter 5).
s As the purpose has not failed, the equitable maxim that ‘a trust will not fail for want of a trustee’ is relevant to direct the funds to a new trustee.
s Strictly, this is not a cy- pres scheme as cy- pres involves transferring the funds to a body with similar purposes. The purposes of the
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unincorporated association are still intact. There is thus no need for a general charitable intention here (Re Finger’s Will Trusts (1972)).
s Where the gift is made to a corporate charity the gift is for the charity beneficially and hence a general charitable intention must be proved but is unlikely except in exceptional circumstances to be found (Re Vernon’s Will Trusts (1972); Re Finger’s Will Trusts (1972) – where such circumstances were found).
Workpoint
s Consider the distinction between amalgamation as in Re Faraker and the scheme for the unincorporated charity in Re Fingers Will Trusts. In Re Faraker the amalgamated charity was far broader than what the testator intended.
s Would the Re Faraker construction be followed where the purposes of the amalgamated charity were fundamentally different than that intended by the donor? (See Re Roberts 1963).
Is the gift for a named institution or for a charitable purpose only?
s If the gift is for a named institution this has been construed as being for that institution only and hence no charitable intention is imputed.
Case:
Re Spence (1979)
Money was left for ‘the Old Folks Home at Hillworth Lodge, Keighley’, but the home ceased to exist before the donor died.
Held
Where the institution is correctly identified then there is no general charitable intention.
Workpoint
Is Re Spence too narrow a view?
s Why should describing the beneficiary specifically exclude a general charitable intention, especially if the purpose is commonly carried out by other institutions?
s How does this compare with the construction given to charitable unincorporated associations shown earlier?
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7.6 CY-PRES DOCTRINE
Has the charity ever existed at all?
s If it has then the above principles apply.
s Where, however, the charity has never existed the court is more likely to find a general charitable intention.
Case:
Re Harwood (1936)
A gift was given for the benefit of the Peace Society of Belfast. However, such a charity never existed and hence the court found a general charitable intention to promote the purposes of peace and permit a cy- pres application of the funds.
Sometimes a general charitable intention can be inferred by consider-ing the other gifts in the will of the donor.
s If the donor has also made a number of valid charitable gifts then it is likely that a general charitable intention will be found for the gift in dispute.
The donor left her estate to a number of different charitable institutions for animal welfare. One of these institutions did not apparently exist. The court held that taking into account the other charitable gifts the donor must have had a general charitable intention when making the gift and so it was applied cy- pres.
s Note: cy- pres will not be used to make a clear non- charitable gift into a charitable one. The court in Re Jenkins (1966) stated ‘if you meet seven men with black hair and one with red hair you are not entitled to say that there are eight men with black hair’.
7.6.2 Subsequent failure
This is where the charity ceases to exist after the death of the donor but before the funds are distributed. Here there is no need to establish a general charitable intention; the funds will be applied cy- pres.
s The relevant date in determining whether the failure is initial or sub-sequent is the date the trust is created even if the first part of the trust is non- charitable.
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Case:
Re Wright (1954)
The donor left property for an individual for life with remainder to charity. The relevant charity ceased to exist after the donor died but before the individual with the life interest died.
Held
The relevant date for determining initial or subsequent failure was when the trust was created – the death of the donor not that of the tenant for life when the charity became entitled in remainder.
The failure was therefore subsequent and the property could be applied cy- pres.
s In cases of surplus where a fund has been set up for a charitable purpose and the purpose is fulfilled any surplus will usually be regarded as subsequent failure and hence be applied cy- pres (Re Wokingham Fire Brigade Trusts (1951)).