Cy Pres Flashcards
What is the definition of the cy pres doctrine?
French meaning ‘as near as possible’
Allows trust property to be salvaged where the purpose for a charitable trust has become impossible or impractical to carry out.
Rather than have the property return to the settlor by way of a resulting trust the court can approve of a scheme for amending the trust purpose for another charitable purpose which is as near as possible to the one chosen by the settlor.
What is the rationale behind the cy pres doctrine?
Biehler -
Provided that a clear charitable purpose has been expressed a gift should not be allowed to fail because the mode of effecting the intention, if specified, cannot be carried out or no longer provides the most useful and effective manner of applying the bequest.
What prerequisite is required for the court to exercise cy pres jurisdiction?
Biehler notes an important distinction between circumstances where a gift fails ab initio and cases of subsequent failure.
- if a gift fails ab initio the donor must have manifested a general charitable intention
- in cases of subsequent failure such an intention is not necessary so long as the donor has made an absolute and perpetual gift to a particular charity
What are the two types of failure which may result in the application of the cy pres doctrine?
1) Initial failure. A gift may fail ab inito, or from the outset.
2) Subsequent failure
How has the court interpreted general charitable intention?
1) Initial purpose must be charitable
2) Settlor must have charitable intention
Re McGwire
- Charitable intention may be collected from the will as a whole
Re Lysaght
- scholarship fund which discriminated against Roman Catholics and Jews so college would not accept the gift
- court removed the clause as the testratix’ paramount intention was to effect some charitable purpose and the discriminatory clause was not an essential part of this intention
Re Geary’s Trust
- if intention is misdescribed the court will not allow a charitable legacy to fail as a result but will endeavor to carry out the testator’s intention as nearly as possible
Approach to intitial failure due to a body not existing?
Re Prescott
- Charitable purpose of advancement of religion as the gift was to the Russian Orthodox church
- Body no longer existed upon her death
- No overall charitable intention, gift was only intended to benefit the named institution
Re Davis
- gifts to non existent charitable institutions will generally be found to have charitable intention
Re Spencer
- less so where the charitable institution did exist at the date of the will but ceased to prior to the death of the testator
Re Magrath v Queens University Belfast
- if the institution has been replaced by another carrying on identical work and functions the gift may be construed as a misdescription of the latter institution
Re Jordan
- most recent decision in this jurisdiction
- 4/5 to a memorial fund which was never set up, 1/5 to a charity which had been wound up prior to the death of the testator
- court found no general charitable intention and refused to go beyond the will as the words were not sufficient to infer a general charitable intention
What is the rule in relation to subsequent failures?
Cy pres jurisdiction will be exercised so long as there was an absolute and perpetual gift which was charitable.
Material date is date on which the will comes into effect.
What is the approach if it is no longer possible to carry put the specified purpose but there are still funds available?
Re Royal Kilmainham Hospital
- Hospital founded for the support of army members ceased to function when the Irish free state was founded
- 1961 Royal Kilmainham Hospital Act provided a scheme for some specified charitable purpose for the benefit of some classes of members of the defence force
- Court allowed for the funds to be applied cy pres to be used for the benefit of organisations of former defence forces and the British Army
- Held that if there is an absolute perpetual gift to charity, even though the trust is only for specific charitable purposes the subject matter is applicable cy pres upon the failure of the trusts
What if the specific charitable purpose is completed/ the requirements are fulfilled?
Trust of the Rectory of St John
- Surplus funds where the charitable purpose is completed, provided the gift is absolute and perpetual, can be applied cy pres
How has legislative reform affected the application of the cy pres doctrine?
s.47 of the Charities Act 1961
- set broader jurisdiction for cy pres in comparison to the stricter common law approach which did not allow charities flexibility where they though fund might be better applied
- provides circumstances in which the original purpose of charitable gift may be altered to allow the property to be applied cy pres
- cy pres may now be made where difficulties in implementing the original terms/ where more effective use of the trust might be made by framing an alternative scheme
How has s.47 of the Charities Act 2009 been used before the courts?
Representative Church Body v AG
- Gift of a collection of books in a library attached to the church
- Church wished to sell the books to use the proceeds to repair the church
- AG opposed on the grounds the books were an important cultural asset for Kilkenny
- Court held the original purpose of the charitable gift ceased to provide a suitable/ effective method of using the property and the spirit of the gift was to benefit the church which the sale would in fact do.
