Head 22: Reorganisation of Public Trusts

Question 1

Inverclyde Council v Dunlop 2005 SLT 967

Reorganisation of Public Trusts - ss.9 - 10 Law Reform (Misc Provisions) (S) Act 1990

Answer 1

 The council were the trustees of the Berk mire Trust who’s main asset was a public park
 The public park had become dilapidated, the pavilion had been damaged and it was beyond the means of the trust to repair it.
 The council then had the idea of leasing the pavilion out as a gym, who would pay rent.
 But it needed a change in purposes as charges could be made only for organised games (which would not cover paid activities at a leisure centre.)
 Had to apply to the court for a change in purposes and had to rely on s.9(1)(d)(iii) where “the purposes of the trust have wholly or partly ceased to provide a suitable use of trust assets”.
 This change was approved as it had regard to the spirit of the trust deed but not the original wording.

Question 2

Mining Institute of Scotland Benevolent Fund, Petrs 1994 SLT 785

(Reorganisation of Public Trusts - Cy-Pres)

Answer 2

 What was proposed was the amalgamation of two miner’s benevolent trusts.
 The petition was refused as the pleadings did not meet the reorganisation criteria. (the scheme did not conform with s.9 of the 1990 Act.)
 The court may have dismissed the petition on the statutory grounds but after this a cy-pres scheme was brought under common law principles and granted.

Question 3

R S Macdonald Charitable Trust Trs v SSPCA 2009 SC 6

Reorganisation of Public Trusts - Cy-Pres

Answer 3

 The trust deed was drawn up on the basis that the trust fund was only about a couple of million pounds worth of shares.
 Turned out that it due to astute advertising, the company took off and was bought out by one of the huge alcoholic conglomerates.
 The shares increased from being worth 2 million to being worth 600 million.
 This created great problems for the trustees as the trustees were limited to charitable things that were to be selected in Scotland and there simply was not enough selection in Scotland.
 THEREFORE the trust wanted to widen the scope to charities outwith of Scotland and widen the type of charity they could donate to.

The Petition was granted under Cy-Pres grounds.