Purpose Trusts
Charities Act 1961
Construction of gifts for mixed purposes.
49.—(1) Where any of the purposes of a gift includes or could be deemed to include both charitable and non-charitable objects, its terms shall be so construed and given effect to as to exclude the non-charitable objects and the purpose shall, accordingly, be treated as charitable.
(2) Subsection (1) shall not apply where—
(a) the gift takes effect before the 1st day of January, 1960, or
(b) (i) the terms of the gift make, or provide for the making of, an apportionment between the charitable and the non-charitable objects, and
(ii) the non-charitable objects are identifiable from an express or implied description.
(3) This section shall not, by its operation on any gift as respects the period from the 1st day of January, 1960, to the 24th day of September, 1960, entitle any person to reclaim any tax or duty paid or borne during that period, nor (save as respects tax or duty) require the objects declared by the gift to be treated as having been charitable so as to invalidate anything done or any determination given during that period.
Gifts for graves and memorials.
50.—(1) Every gift made after the commencement of this Act for the provision, maintenance or improvement of a tomb, vault or grave or of a tombstone or any other memorial to a deceased person or deceased persons which would not otherwise be charitable shall, to the extent provided by this section, be a charitable gift.
(2) Such a gift shall be charitable so far as it does not exceed—
(a) in the case of a gift of income only, sixty pounds a year,
(b) in any other case, one thousand pounds in amount or value.
Cases
In re Fossitt
[1934] IR 504
Meredith J.
I have come to the conclusion that the testator in this case did not mean that the sum of money obtained by the realisation of the propertyor the third share resulting from its divisionwas to be handed over to be held in trust for the purpose of the permanent upkeep of the Institution named. The whole of the sum might be spent in two or three years. Indeed, I am rather inclined to think that what the testator meant was simply that a capital sum should be paid over to the treasurer for the purposes of the Institution, the motive for the gift being stated, and that the treasurer could give a receipt for it. But, be that as it may, the trust is not such as to create a perpetuity.
Mr. Chadwick’s arguments and references were directed to the question of remoteness, which is a different question. See In re Kelly deceased: Cleary v. Dillon (2). No question of remoteness arises in this case.
I answer the questions as follows:No. 1, Yes; No. 2, No; No. 3, Pay the treasurer.
The defendant, Maud Fleming, appealed to the Supreme Court (3).
FITZGIBBON J. :
3 July
The question to be decided upon this appeal arises upon the ultimate bequest in the will of Homan N. Fossitt, who, after giving life interests, subject to two pecuniary legacies, in all his property to his sisters, Sarah Matilda and Mary, and to the survivor of them, declared that “after the death of my two sisters, Sarah Matilda Fawcett and Mary Fawcett, I will and desire that all my property of every description shall be realised to the best possible advantage and divided amongst the three following Societies, share and share alike, To the Orange Institution of Ireland for the upkeep of the Orange Hall, 10 Rutland Square, Dublin, To the Enniskillen Memorial Orphan Fund in connection with the Orange Institution, To Miss Carr’s Home for Destitute Children, Northbrook Road, Leeson Park, the official receipts of the legal Treasurer of the three above-named Societies to be considered a just discharge of the payment of their share of the above bequest.” The testator died on the 18th of July, 1913, and probate was granted on December 13th, 1913, to the two sisters, who were named executrixes. The assets were sworn for the purpose of estate duty at £3,489 7s. 5d., on which £83 1s. 5d. was paid for duty charged at 3 per cent. The two legacies amounted to £150.
Mary Fawcett, the surviving executrix and tenant for life, died on January 16th, 1933, and thereupon the estate of Homan Fossitt became distributable among the three named Societies.
A question as to the validity of the bequest of one-third of the estate “to the Orange Institution of Ireland for the upkeep of the Orange Hall, 10 Rutland Square, Dublin,”was at once raised, and the personal representatives of Homan Fossitt took out a summary summons, in which Maud Fleming, as personal representative of Sarah M. Fawcett, one of the statutory next-of-kin of Homan Fossitt, and the Trustees of the Orange Hall, as representing the Orange Order, were named as defendants.
The material questions were:(1) Is the bequest of one-third of the residuary estate of the above named Homan North Fossitt, after the death of the survivor of Sarah Fawcett and Mary Fossitt, to the Orange Institution of Ireland for the upkeep of the Orange Hall, 10 Rutland Square, Dublin, valid?
(2) Has the testator died intestate as to the reversionary interest in the said one-third?
Meredith J. answered the first question in the affirmative and the second question in the negative, and this appeal has been taken by the personal representative of the next-of-kin, for whom it has been contended by Mr. Chadwick that the gift is void for remoteness, inasmuch as it cannot be predicated of the fund that it must necessarily be expended within the period prescribed by law. Meredith J. based his decision upon two grounds:(a) “that the testator did not mean that the third share was to be handed over to be held in trust for the purpose of the permanent upkeep of the Institution named. The whole of the sum might be spent in two or three years”; and (b) “I am rather inclined to think that what the testator meant was simply that a capital sum should be paid over to the treasurer for the purposes of the institution, the motive for the gift being stated and that the treasurer could give a receipt for it. But, be that as it may, the trust is not such as to create a perpetuity . . . the question of remoteness is a different question. No question of remoteness arises in this case.”
The use of the words “permanent” and “perpetuity”and the reference to “the question of remoteness” by the learned Judge appear to me to indicate that he missed the real difficulty in the case, which arises upon the construction of the gift itself. A gift may be void for remoteness without being either “permanent” or “a perpetuity,” though it is true that the rule against remoteness is often infringed by attempts to create permanent or perpetual endowments in favour of objects which are not saved by being charitable.
The first thing to be done is to ascertain the intentions of the testator from the words of his will. “The rule,”said Lord Selborne C. in Pearks v. Moseley (1), “which has always been applied to cases of remoteness is this: You do not import the law of remoteness into the construction of the instrument, by which you investigate the expressed intention of the testator. You take his words, and endeavour to arrive at their meaning, exactly in the same manner as if there had been no such law, and as if the whole intention expressed by the words could lawfully take effect. I do not mean, that, in dealing with words which are obscure and ambiguous, weight, even in a question of remoteness, may not sometimes be given to the consideration that it is better to effectuate than to destroy the intention; but I do say, that, if the construction of the words is one about which a Court would have no doubt, though there was no law of remoteness, that construction cannot be altered, or wrested to something different, for the purpose of escaping from the consequences of that law. So understanding the rule, the first question in every case of this kind is that of pure and simple constructionwhat is the meaning of the words which the testator has used? What would their effect be, if there was no law of remoteness?”
In my opinion there is neither doubt nor ambiguity about the intention of the testator as expressed in the words of his will, “To the Orange Institution of Ireland for the upkeep of the Orange Hall, 10 Rutland Square, Dublin.” The testator did not impose upon the Institution an obligation to invest the capital of the legacy, and apply the income only to the upkeep of the Hall, but he certainly did intend that the legacy should not be applied otherwise than in the upkeep of the Hall, and I cannot adopt the view of the learned Judge that the gift was one of “a capital sum to be paid over to the Treasurer for the purposes of the Institution.” In my opinion any application of the capital or income of the legacy for any other purpose than “the upkeep of the Orange Hall, 10 Rutland Square,”would have been contrary to the intention of the testator as expressed in his will, and a breach of trust. I am not, however, prepared to hold that the application of the fund was limited to income only, and that the capital was to be preserved intact for all time. In my opinion it was the intention of the testator that the capital might be applied from time to time, if occasion should arise and the income of the fund was insufficient, towards the upkeep of the Hall, but I am satisfied that the testator contemplated the continued existence of the fund, in whole or in part, for an absolutely indefinite period, which might far exceed that fixed by law of a life or lives in being and twenty-one years after. One-third of his residue at the date of his death, the period to which we must have regard in considering the circumstances in which his will was made, amounted on the valuation of his estate for probate to something over £1,000, and I am of opinion that the testator, when making a gift “for the upkeep of the Orange Hall” intended that this money should be invested, and expended gradually, utilising only the income so long and so far as it sufficed, and the capital only when the income was insufficient, upon the upkeep of the Hall, over an indefinite period which might have been a very long one indeed.
If this be the true interpretation of the language of the testator, we have next to see whether it offends against the law as to remoteness. In In re Wood, Tullett v.Colville (1), a testator who was the owner of some gravel pits directed his trustees “to carry on my business of a gravel contractor until my gravel pits are worked out, and then to sell the said gravel pits and the freehold land on which the same are situate . . . and hold the proceeds of such sale in trust for such child or children of mine then living, and such issue living of any child or children then deceased, as shall, being a son or sons, attain the age of twenty-one years, or being a daughter or daughters, attain that age or marry,” with a residuary gift. At the date of the will there were six acres of gravel pits, and at the date of the testator’s, death all but half an acre had been worked out, and at the normal rate of progress this would have been exhausted in three or four years, but, as a matter of fact, owing to the employment of a smaller staff by the trustees, it was not worked out for six years. Kekewich J. held that as the pits might not have been worked out within the period prescribed by law both the trust for sale and the trust of the proceeds of sale were void for remoteness, and that the residuary gift failed. On appeal, before Lindley, Lopes and Davey LL.JJ. it was argued that the fact that the pits were worked out within six years from the death of the testator showed, and if not, that evidence was admissible to show, that it was clearly impossible that the working could continue for twenty-one years after his death. Other arguments, not material to this case, were addressed to the question of construction of the will. In dealing with the first point Lindley L.J. says (1):”Then arises the question, whether the fact that the pits were nearly worked out at the death of the testator, and that they were worked out about six years after his death, will exclude the operation of the rule against perpetuities. I think the law on this subject is correctly stated in Theobald on Wills (2) thus: ‘In applying the rule against perpetuities, the state of things existing at the testator’s death, and not at the date of the will, is to be looked at. But possible and not actual events are to be considered, and, therefore, if at the testator’s death a gift might possibly not have vested within the proper time, it will not be good, because, as a matter of fact, it did so vest’ . . . . The time for the sale of the gravel pits would not necessarily arise within the period of a life in being at the death of the testator and twenty-one years afterwards.” Lopes and Davey LL.JJ. delivered judgments to the same effect. In the present case who can say that the trust for the upkeep of the Orange Hall must necessarily come to an end within the period of a life in being at the death of the testator and twenty-one years afterwards?
In Kennedy v. Kennedy (3) a Canadian testator attempted, unsuccessfully, to create a trust, somewhat similar to that with which we are concerned, for the maintenance of his dwelling house in Toronto. He devised to his son James a dwelling house in Toronto with the chattels therein, subject to a provision in favour of each of the testator’s two named and living granddaughters, that she should be entitled to live in the said residence as a home so long as she should remain unmarried and to occupy the room she then occupied, and this right was made a charge upon the premises. He devised and bequeathed the residue of his estate to his trustees to be used by them, in their discretion, so far as it might go, to the maintenance of the house and premises bequeathed to his son James, with power to make sales of any real estate . . . and the proceeds of such sales to devote, in their discretion, to maintain the residence in the manner in which it had been theretofore maintained, with a provision in case it should be necessary to sell it, and a gift of the proceeds of sale. After an abortive action, in which a claim that the devise of the residue was void for vagueness was put forward by the heir at law of the testator, he instituted a second action in which he claimed that “the devise of the said residue for the purpose of maintaining and keeping up the house and premises bequeathed to the defendant James H. Kennedy was void for remoteness.” Teetzel J. held that the effect of the clause was to tie up the residue for an indefinite time for the purpose of the maintenance of the house, and that the gift infringed the rule against perpetuities and was void. The Supreme Court of Ontario by a majority (Meredith J.A. dissenting) dismissed an appeal, and James H. Kennedy appealed to the Privy Council, where the opinion of the Committee, Lords Atkinson, Shaw of Dunfermline, Moulton, and Parker of Waddington, was read by the last named. He says (1): “The chief question now arising for decision is whether any definite limit can be assigned to the duration of the discretionary trust affecting the testator’s residue. If no such limit can be assigned the trust is void as offending against the perpetuity rule. Their Lordships are of opinion that no such limit can be assigned. . . . The argument relied on before their Lordships was to the effect that, according to the true construction of the will, the trust was for the benefit only of the appellant and the two ladies who were entitled to use the dwelling house as their home, and therefore could only be exercised during the lives of those persons or the lives or life of the survivors or survivor of them. It is to be observed, however, that the trust is not to keep up a home for these three persons, but to keep up and maintain a dwelling house as kept up and maintained before the testator’s death. It is a trust which, if valid, would enure for the benefit of all persons for the time being interested in the dwelling house, and is by the testator himself contemplated as coming to an end only if the dwelling house be sold, an event which may not take place within the period allowed by the rule against perpetuities. The trustees, or a majority of them, are to determine, as occasion arises, the amount to be expended, and there can be no person entitled to determine the trust as long as there is any part of the trust fund remaining unexpended, provided the dwelling house is still unsold. Under these circumstances, their Lordships are of opinion that the trust offends against the perpetuity rule and is void.”That case bears a considerable resemblance to the present one, and the differences are certainly not in favour of the present respondents. There is no possible question of the period of maintenance or upkeep being confined to the lives of any named persons as in Kennedy v. Kennedy (1), and it is fairly certain that Homan Fossitt did not contemplate, and he certainly did not provide for, the possibility of the sale of the Orange Hall to whose upkeep he devised a third of his estate, and the testator in Kennedy v. Kennedy (1),in like manner as Homan Fossitt, had not limited the expenditure of his legacy to income only, a point which is made clear in the opinion of Lord Parker of Waddington.
Upon the ground therefore, that the fund was to be applied to the upkeep of the Orange Hall during a period which might outlast that allowed by the rule against perpetuities and that there can be no person entitled to determine the trust as long as there is any part of the trust fund remaining unexpended, I am of opinion that the trust offends against the perpetuity rule and is void.
It is right that I should state that there has been no suggestion that the gift can be sustained upon the ground that the object is charitable.
Moreover, looking at the circumstances as they existed at the date of the death of the testator, I have not taken account of the recent history of the Orange Hall, which is stated in the affidavit of one of the Trustees to have been forcibly occupied on March 25th, 1922, set on fire, and destroyed and rendered uninhabitable. It appears also that the premises were subsequently acquired by the Board of Works for Post Office purposes, and an undertaking was given to put them into “a stipulated condition of repair before handing them back to the Trustees of the Institution.” The premises are still in the occupation of some department of the Government of the Saorstát, and when, if ever, they will be restored to the Trustees of the Institution, is uncertain. It may well be that the period allowed by the rule against perpetuities will have expired long before the Trustees or the Orange Institution of Ireland are in a position to expend any of the legacy of Homan Fossitt upon “the upkeep of the Orange Hall, 10 Rutland Square, Dublin,” and I do not think the terms of the gift would be satisfied by expending the bounty of the testator upon the upkeep of a Government Post Office, or a Customs Clearing Depot.
In my opinion the appeal should be allowed and the first question in the summons should be answered in the negative, and the second question should be answered in the affirmative.
In re Mcnamara; Coe v. Beale
[1943] IR 373
Gavan Duffy J.
I hold that the gift of the house “Glenseskin” to the”Young Men’s Christian Association, Cork,” is a gift to the Young Men’s Christian Association established at Marlborough Street in the City of Cork, otherwise known as the Cork Branch of the Y.M.C.A.
On the preliminary question raised on behalf of the Attorney-General, I hold that the gift is absolute, but that it is in one respect accompanied by a non-charitable trust to use the place as “a rest and holiday home for Protestant men,” unless the Cork Branch of the Association finds it impracticable so to use the place; that is to say, the language must be construed as creating a trust, not as merely expressing a pious hope, in so far as the testratrix lays down a condition precedent to her alternative gift. I hold that the alternative gift of certain Dublin rents for the general benefit of the Young Men’s Christian Association, Cork, becomes effective only if it be found impracticable to use the house for the intended home. I hold that the question of impracticability falls to be determined as a fact, and upon adequate evidence, by the Cork Branch of the Association. I cannot, without further and much more explicit evidence than has been adduced, ascertain whether the user so intended by the testatrix has in fact been found impracticable, within the meaning of her will. I shall, accordingly, adjourn the matter for further evidence before determining the main question argued before me as to the charitable or non-charitable character in law of the gifts to the Cork Branch of the Association.
A further affidavit was then made by the said George Bird in which facts were stated showing that in view of the expenditure which would be necessary and the financial resources of the Association it would be impracticable for the Association to use the house Glenseskin as a rest and holiday home for Protestant men.
The case came before the Court again on June 10th when the following judgment was delivered:
GAVAN DUFFY J.:
I shall refer throughout to the Cork Young Men’s Christian Association as “the Association.” I have already held that the gift of the leasehold property known as”Glenseskin” is an absolute gift to the Association. I now hold further that that gift is a valid charitable gift; the reason is that the inspiration of the Association and itsraison d’être and the purpose which it has in view and works to achieve are essentially and entirely religious. The Association is devoted to the denomination of religion generally known as “evangelical”; I have no doubt that that species of religion belongs in law to the genus “religion.”I am satisfied on the evidence adduced in this action that the Association was founded for, and is being carried on to, the single end of promoting religion, that religion, among young men, so that such of the activities of the Association as display no directly religious features are undertaken and fostered solely as means to the furtherance of that charitable end. This gift requires no scheme.
I turn to the gift of the income from the Grafton Street and Parliament Street property of the testatrix in Dublin. I am satisfied on the evidence that it has been “found impracticable,” within the meaning of the will, to use”Glenseskin” as a holiday home for Protestant men. The will directs that the income of the Dublin property (that is, freehold rents) shall be applied for the general benefit of the Association “in the event of it being found impracticable to use ‘Glenseskin’ as such holiday home,”and that event has in fact occurred. The plan of the testatrix was, upon that event, to transfer her bounty, in respect of the rents in question, from an object which I have held to be non-charitable, the maintenance of the holiday home, to a charitable object, the general benefit of the Association, but at this point the rule against remoteness intervenes, to which I invited the attention of counsel on both sides.
The testatrix unfortunately failed to say or to indicate that the possible impracticability, which she foresaw, must be determined as at the date of her death or during the executor’s year or within any other specific period. She leaves the possible finding of impracticability at large, and I must take the will as I find it.
In my opinion, the will, upon its fair construction, would operate, at any time when the use of “Glenseskin” as the holiday home should be found as a fact to be impracticable, to divert the rents from their first purpose of maintaining that home to their second or alternative purpose of serving the general benefit of the Association.
If that be the true construction of the will, the testatrix was contemplating an event which might occur 25 or 50 or 100 years after her death; she was therefore contemplating an event too remote in law. It follows that the gift of the rents on that event, though it has in fact occurred already, for the general benefit of the Association is invalid, and that the residuary beneficiaries take the income which would have gone to the Association unless I am entitled to say that, because the gift for the maintenance of the holiday home is void, the will should be read as if it did not contain that invalid gift at all, so that the Dublin rents are to be treated as being given immediately to the Association for its general benefit, without any regard to the happening of an event which is in the circumstances quite illusory. I cannot, however, take that view; no authority has been cited to justify me for so reading the will, and authority to the contrary will be found in such cases as Attorney-General v. Gill (1) decided in 1726, and (though it is a very curious case) Brown v. Burdett (2).
It is, of course, settled law that a gift to charity cannot be made to take effect on an event too remote within the rule against perpetuities; see Gray on Perpetuities, 4th edn., pars. 594, 605, 606, 606.1, and 607.
I have been urged to save this devise on the principle of Hancock v. Watson (3), but I do not think that that principle applies here at all.
The residuary donees accordingly take the rents which ought to have gone to the Association. In my opinion, that gift, being a gift of portion only of the income, does not carry the property producing the rents, though the gift of the whole of the rents would have; see Co. Litt. 4b.
Since the claim of the Asylum for Distressed Widows to £20 a year out of the Dublin rents is not contested, on the failure of the gift for the maintenance of the holiday home, I shall require no argument to uphold that claim. No scheme is necessary for the Dublin income.
In re McGwire; Gyles v. Glynn.
[1941] IR 33
Black J. 36
I feel I should deal with the legal problem in this case at some length. What I say now, if it is right, will shorten matters greatly should I have to decide an analogous question again. As an offset, I abstain from setting out the facts.
The will is prolix; in parts, some might think eccentric. Yet through its turgid literary style I can see large ideas striving to articulatesome behind the times; others perhaps in advance of them. The testator, like some orators, could not manage the long sentence without losing his way. One of his notions was that the Good Samaritan should not inquire of the poor or suffering what creed they held before proffering his help or even afterwards. He would have no mélange of the bias of sect and the spirit of charity.
In most of the cases to which I was referred or which I have discovered myself, there was simply a gift of disputed character, sometimes with, and sometimes without, a general residuary disposition. Less frequently there was a gift overnot two successively. As a rule, there was just a single condition in controversy; not, as here, a variety of conditions, some, in my view, raising quite different legal implications from others. This will, is, perhaps, of unique peculiarity. Lastly, on a certain view of the case, I am not sure that my task might not be complicated or even restricted by the judgment of Mr. Justice Johnston in In re McGwire’s Estate, Gyles v. Glynn (1) dealing with another aspect of the devise with which I am concerned. Whether the case could be brought within that category of authorities in which the cy-pres principle has been applied, even without any general charitable intention being presumed, was not, I think, argued. All parties seemed to me to treat the problem as one depending solely upon whether or not a general charitable intention could and should be presumed.
The principle was stated by Lord Eldon in Mills v.Farmer (2) to be that where a legacy is given so as to denote that charity is the legatee, the Court does not hold that the mode is of the substance of the legacy, but will effectuate the gift to charity as the substance, providing a mode for that legatee which is not provided for any other legatee.
There, two things are contrastedsubstance and mode. Where there is a particular charitable purpose, the test is whether that particular purpose is “of the substance”of the bequest. If it is, there is no general charitable intention.
Another test word is indicated by Parker J. in In re Wilson, Twentyman v. Simpson (3)the word “paramount.” If the paramount intention is general charity, a particular charitable purpose which proves impracticable may be disregarded. The words “paramount intention” appear in many of the modern judgments. As there used, I think “paramount”applied to “general charitable intention” means more than merely “superior in importance,” and connotes such a degree of dominance that the particularity is dwarfed into insignificance, and can be treated as not forming an essential part of the substance of the gift. Thus, the wearing of a black gown by a clergyman was eventually ignored in In re Robinson, Wright v. Tugwell (4), and in Brantham v.East Burgold (5) the impossibility of chanting psalms was not allowed to deprive the poor of the bread a testator had left money to distribute. Likewise, in In re Richardson’s Will (6) the stipulation in a bequest to provide lifeboats specifying a location that turned out inappropriate was sensibly treated as an unessential detail. The particularity of the devise I have to deal with is by no means subordinate in any degree comparable with the provisions that were disregarded in these cases.
In the pronouncements on this subject one finds a tendency to elaboration in the matter of nomenclature. Thus, we find “intention,” “purpose,” “object,” and “motive.”Amongst the adjectives we meet “primary,” “predominant,””paramount,” “subsidiary,” “underlying,” and “ulterior.”Parsimony in synonyms aids precision, as the French tongue exemplifies; and if none of these terms are synonyms, but all mark shades of meaning, one has to take care that the concepts they denote are clear-cut, and not nebulous and overlapping, in which latter case they would produce fog instead of clarity. Whatever refinement may be required in other cases, in the present case the classic simplicity of Lord Eldon’s pronouncement will suffice for me. I think its meaning is clear, although its application is often difficult. If, however, I were tempted to hazard a word of my own, I should select as a criterion the word “indispensable,”applying it in this way. If a testator indicates a particular charitable purpose, and if, having regard to the whole will, he must be presumed to have intended the carrying out of that particular purpose to be an indispensable condition of the entire bequest, then that particular purpose is, in Lord Eldon’s words, “of the substance of the legacy”; and if it fails, there can be no cy-pres application of the property in question based upon the doctrine of general charitable intention. Conversely, if the carrying out of that particular purpose is not indispensable in the above sense, even though it be obligatory so long as it is practicable, then a general charitable intention may be collected from the will as a whole, and, if it can be, cy-pres is applicable.
When inquiring whether in a given bequest a particularity which is found impracticable can be disregarded, I think I must ask myself whether that particularity was intended to be indispensable; by which is meant, not whether the testator so intended, but whether, having regard to the whole will, he must be presumed so to have intended. Again, to quote Lord Eldon “the question is not so much what was the intention, as what, in the contemplation of law, must be presumed to have been the intention”: Mills v.Farmer (1).
I have compared the words in the present will with those used in two parallel lines of caseson the one side, those in which a general charitable intention was found, and, on the other side, those in which it was not. I shall only refer to some of the many in each series, glancing at some points in which they differ from the will in the present case.
First, I take typical cases in which cy-pres was applied.
In Chamberlayne v. Brockett (1) the testatrix expressly began by declaring her intention to return her whole residuary estate in charity to God who gave it. The late Mr. McGwire used no such prefatory words, nor was the gift in question of his residue. Instead, there was a gift over, which was absent from the case just cited: In re Gyde (2) was very like Chamberlayne v. Brockett (1).
In Wallis v. Solicitor-General for New Zealand (3) there were strong prefatory words indicating, as was said, “an unconditional dedication to charity.” This distinctive factor was stressed by Sargant J. in Monk’s Case (4).
In In re Welsh Hospital (Netley) Fund (5) there was involved, not a will, but a fund raised by public subscription for “The Welsh Hospital.” Some of the money was raised by concerts and street collections. Obviously these contributors at least did not expect their money back, if and when, at the end of the war then raging, the hospital was closed down. It was natural to assume that substantial individual subscribers would equally intend to part with their money outright and unconditionally, and with the main object of benefiting sick and wounded Welshmen generally.
In the Attorney-General v. Price (6) the Court of Appeal was divided on the question of general charitable intention. But there the gift was by deed poll, which established a trust for a school for educational purposes, and then there was grafted on, so to speak, a declaration indicating an intention that the school should inculcate the principles of the Established Church of England. The trust, in fact, came into full operation and the school was carried on for many years in strict accordance with all the donor’s wishes. But eventually an Act of 1902 prevented the continuance of denominational instruction. Two out of three Judges reversed the Judge of first instance, and permitted the particular denominational purpose to be eliminated from the Scheme. It seems to me that a different view might have prevailed if the donor, instead of creating an unconditional trust in form in the first instance and then tacking on particular limitations, had conveyed the land expressly for erection thereon of a school in which denominational education should be given.
In Biscoe v. Jackson (1) there was a bequest for the establishment of a soup kitchen and cottage hospital for the parish of Shoreditch. It did not say “in the parish of Shoreditch,” and, in fact, land for the purpose could not be obtained in or near that parish. There was no gift over, and not even a gift of the residuary estate. The Court was able to infer that the establishment of a soup kitchen and hospital was not intended to be an indispensable condition of the bequest of £10,000 for a charitable purpose. This is, possibly, the case in which the leaning of the Courts towards charity was carried furthest, and in In re Wilson, Twentymanv. Simpson (2) Mr. Justice Parker suggests that in like circumstances he might have come to a different conclusion. At the same time, when a testator leaves £10,000 for establishing two such institutions, of which local charity would appear to be the sole object, using no words beyond the specification of the institutions that would indicate exclusive or particular interest in those institutions save as modes of charity, and making no provision for their proving impracticable and no gift of residuary estate, one can understand the reluctance of the Court to suppose that it was intended, in the events that happened, to divert the whole £10,000 from charity altogether.
Last in this series is In re Monk (3). Although some of the dicta suggest that cy-pres might have been applied in that case even without any general charitable intention, such a general intention was held to exist. Sargant L.J. gives several reasons, none of which seem to be applicable to the gift to the St. Vincent de Paul Society. First, in Monk’s Case (3), there was a transfer of the whole residuary estate to special “charity trustees.” Secondly, it was said there was “an immediate and unconditional gift” to the charity trustees. Thirdly, the gift did not wholly fail, but only partially, there being an undisposed of surplus. For the most part the trust had been in full operation for years. Lastly, such partial failure as there was, was by matter subsequent. There was no failure of a condition precedent.
It was said that no case could be cited in which a charity that had been actually in operation, but which later proved incapable of exhausting the whole fund, was defeated by a resulting trust for the donor or in case of a will for his heir or next-of-kin.
It is sufficient to adumbrate the facts in the above cases to show how different they were in many respects from the case I have to decide.
But now I must consider a few cases in that other series of typical cases in which the Courts refused to infer a general charitable intention. I think that these cases, like those which I have quoted from the opposite series, also have their own marked points of difference when compared with the case I am concerned with.
In Attorney-General v. Bishop of Oxford (1) a gift to build a church in a particular place might seem no more particular than a gift of a house and land already existing at a particular place, and the word “sanatorium” might indicate as particularized a use as the word “church,” But the other words of the original bequest to the St. Vincent de Paul Society suggest a charitable intent, which even if it be particular, seems to me much wider than a bald gift to build a particular church.
The same remark applies to In re White’s Trusts (2). I have compared this case minutely with Chamberlayne v.Brockett (3), which it closely resembles and which was decided differently. Like many other charity cases, they are not perhaps quite easy to reconcile; yet I think differences begin to emerge as one studies them. In the latter the charitable gift was itself a gift of residue, whereas in the former, after the charitable gift, there was a residuary gift. Moreover, in the latter there was a strong prefatory declaration that the testatrix could not depend on her relatives to spend the money, and felt right in giving it to charity.
Then I come to In re Wilson, Twentyman v. Simpson (4).That case involved a bequest to a schoolmaster as part of his salary. The schoolmaster could earn no salary till he got a school and the testator did not provide him with one, nor did anybody else. There were all sorts of particular directions as to how the school, which never came into existence, was to be conducted, but there was no indication that the testator was concerned about the endowment of education generally comparable with the profuse indications in Mr. McGwire’s will that he was deeply concerned about providing for the “sick and indigent of his fellow-countrymen.”
In re University of London Medical Sciences Institute Fund, Fowler v. Attorney-General (1) is a strong decision against general charitable intention. There, £25,000 was bequeathed to aid in carrying out a scheme to establish an”Institute of Medical Sciences” by the University of London. The necessary contributions from other supporters were not forthcoming. I can see that the testator there may well have been presumed to have had no idea of giving a penny of his £25,000 to medical, or indeed any other, charities in any event whatever, except on condition of his favourite scheme materializing. Beyond the specific bequest, there was nothing in his will to show any interest in any form of charity.
One of the most recent cases in this series is In re ffrench (2), decided by Mr. Justice Gavan Duffy last July. The learned Judge held there that there was no general charitable intention. The testatrix had devised Monivea Castle, Co. Galway, “to the Irish Nation,” as a home for aged and indigent teachers. Her will had one feature in common with the late Mr. McGwire’s, namely, that she, like Mr. McGwire, provided by a condition subsequent that the property in question should not be sold. That is not without importance; for a condition might be void as in restraint of alienation, and might yet be of value in throwing light upon the particularity of the testator’s charitable intention. Another feature common to both cases was the inadequacy of the provision made for the conversion and maintenance of the subject-matter of the gift. On the other hand, I find one marked difference between that case and this. Miss ffrench gave charity, as Mr. Justice Gavan Duffy said, no prominence in the will, putting it in the second place. All the emphasis was laid on the preservation of Monivea. In Mr. McGwire’s will I consider that the emphasis is strongly laid upon charity, and the preservation of Clonea, although insisted upon, appears to me to have held a secondary, albeit an important place, in the testator’s solicitude.
Finally, I come to the most apposite case of all In re Packe (3). It involved a gift of a cottage upon trust to use the same as a holiday home for certain clergymen, and in default of this, to be made over to some society for use for ladies or gentlemen of limited means. Both these particular purposes failed, and the Court was unable to infer any general charitable intention.
In Monk’s Case (1) Lord Hanworth said that the condition in In re Packe (2), as in In re White’s Trusts (3), and in In re Wilson (4), was a condition precedent. Curiously enough, in In re Forde, Attorney-General for Northern Ireland v.Forde (5), Mr. Justice Wilson said the gift in In re Wilson (4)failed by matter subsequent. For myself, I should have thought with Lord Hanworth that the condition was manifestly precedent in Wilson’s Case (4), as also in Packe’s Case (2).
If I look only to the words of the original gift, I cannot distinguish the condition in this case from that in Packe’s Case (2). There, the condition was that the premises were given “as a holiday home or house of rest”; here, it was that they were given “as a sanatorium.” Moreover, as if to leave no doubt about the force of the words “as a sanatorium” in the gift itself, the late Mr. McGwire reiterates the obligatory character of this user in various parts of his will, actually providing that if the Society should apply the property to any other purpose, it should forfeit all claim to it. This last proviso is a condition subsequent; but when linked up with the words “as a sanatorium” in the phrasing of the gift itself, it shows that the user prescribed was no mere suggestion, but a matter of obligation.
Is, then, the analogy between the conditions in Packe’s Case (2) and this case complete? Is it sound or only specious to say that it is? I think that depends upon whether in this case, as in Packe’s, there was no general charitable intention. The condition as expressed in the two cases is to me indistinguishable. But I cannot confine myself to the words in which it is expressed. I must look to the whole will. If that discloses a general charitable intention, it will show that the two conditions, though expressed in the same language, are really different in character, that is to say, the one absolute and the other qualified.
Wherever there is a gift for a particular charitable purpose there is always an implied condition that the particularity shall be given full effect, if practicable, however clear it may be that there is an underlying general charitable intention. The property must be applied “in the exact way” prescribed by the donor, and the cy-pres doctrine cannot be invoked unless and until that particular purpose becomes impracticable. (See In re Weir Hospital (6).) But
implied condition that the particular purpose must be effected is qualified by the implied words “if practicable.”On the other hand, in a case where there is no general charitable intention, the condition that the particular purpose shall be carried out is absolute. Hence, if a general charitable intention should be presumed in the present case, In re Packe (1) ceases to be relevant. If there is such a general intention, the gifts over do not seem to make any difference. If they are invalid or mere nullities they cannot do so. But assume them to be valid. There is no reason why a donor should not, if he choose, interpose another and alternative particular gift between the original particular gift and the eventuality that would call for cy-pres application. This alternative particular gift or gift over might itself, like the original particular gift which it would supersede, be a mere alternative mode of effecting the underlying general intention in favour of charity. The condition of its taking effect would be a qualified condition. The same might be the case with a third alternative particular gift or second gift over. All threethe original particular gift and the two gifts overmight be alike three successive alternative modes of effecting the general charitable intention, which would remain and be carried out cy-pres if and when the last of the gifts had failed, exactly as it would have been carried out if the original particular gift had failed and there had been no gift over.
The net question, then, is, should I presume here a general charitable intention? I have said I must look at the whole will. Counsel have contested this. They have certainly argued that I cannot draw a decisive deduction from the attempted gifts over. On this point, one passage in Mayor of Lyons v. Advocate-General of Bengal (2), gave me pause for a time. It reads:”The Court, when deciding whether the cy-pres doctrine applies, looks only to the particular gift, and if it finds charity to be the legatee, sustains the legacy as such, without regarding at this stage of the inquiry (whatever may be proper when a Scheme comes to be framed) the rest of the will.” In that case there were bequests to three separate charities in Calcutta, Lyons and Lucknow. Then there was a residuary bequest to all three.
It was conceded that there was a general charitable intention. The Calcutta bequest partially failed. It was urged for the Mayor of Lyons that there should be no cy-presapplication of the surplus in respect of which the Calcutta bequest had failed, on the ground that the residuary bequest itself was to charity. Why that fact should prevent thecy-pres application of the Calcutta surplus, I cannot see, and, be it said with respect, neither could the Privy Council. I think the passage in the judgment, which at first troubled me, simply means that when you find a particular charitable gift that fails, with a general intention in favour of charity behind it, you apply cy-pres at once without looking to anything beyond the gift that has failed; because, having already found a general charitable intention, that finding cannot be dislodged or the duty of cy-pres application affected by any further evidence of charitable intention in other parts of the will. I do not think it means that if you do not find evidence of a general intention in favour of charity in the words of the particular gift which has failed taken alone, you are not at liberty to look at other gifts and provisions in the will to see whether they may not indicate a general intention of charity underlying the gift that has failed. To construe it otherwise would, I think, be going contrary to the weight of modern authority, and I interpret it in the light of Lord Halsbury’s dictum in Quinn v. Leathem (1)that “every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found.” The same dictum is not without bearing upon another case also cited to me Hunter v. Attorney-General (2). I think this was used to suggest that an inference of general charitable intention could not be eked out, so to speak, by general prefatory words or other gifts, or that at least it must amount to anecessary implication from the whole will. In that case the House of Lords reversed the Court of Appeal upon a vital point affecting the construction of wills.
I can see a marked difference between presuming that a charitable gift was intended where no charitable purpose was expressed or necessarily inferable from the words used, and presuming a general charitable intention where a particular charitable intention is conceded. The former presumption would be of the unusualI think I might say, the unnatural; the latter presumption is of something neither unusual nor unnatural. For example, if, as in Hunter v. Attorney-General (2), a testator leaves money to purchase advowsonsin itself a non-charitable purpose
and it he has the arrière pensée of thereby advancing evangelical opinions, one would expect him to say so, and not to leave it to the hazard of judicial speculation as to “what he was driving at”if I may use the phrase of Lord Justice Lindley in the Court of Appeal (1). It would seem unnatural for a normal testator, who meant to leave money to charity, to express the gift in words denoting an ordinary non-charitable purpose and to give no inkling in his will that his real object was something radically different from what his words would ordinarily convey. If the Court were to presume such an unexpressed intention, it would be presuming the unusual and improbable, and would, in fact, as Lord Halsbury and Lord Davey said, be making the testator’s will for him. Hence, the implication of an unexpressed charitable purpose, being an inference of the improbable, must be, in the words of Lord Shand, “a necessary implication.”
The position is quite different when it is a question of presuming a general charitable intention, after a particular charitable intention has become obvious. It is not unusual or unnatural, but it is in fact most common, for a testator to leave money for a particular charity, and to have at the same time in mind, but to leave unexpressed, an underlying general charitable intention. The reason is plain. Even when a testator has the most general intention in favour of charity, he usually has also a particular institution, or scheme, or mode of charity, in mind, which he prefers and prescribes, without thinking it necessary to add any words that expressly, or even by necessary implication, show that he has that underlying intention. In such cases, the Courts frequently presume that he had that intention, when the will as a whole indicates that it is a reasonable, even if not a necessary, implication; for it is only a presumption of what is neither improbable nor infrequent. I have enlarged upon this view, because Hunter’s Case (2) was strongly relied on in argument. I think the type of presumption sought in that case and the type I am asked to make here are essentially different in character.
What I have to look at here is “the whole scope and intent of the will,” as Kay L.J., expressed it in In re Taylor, Martin v. Freeman (3). In certain types of cases a general charitable intention has been presumed on grounds falling short of that necessary implication demanded in a case like Hunter v. Attorney-General (2). Thus, where there is a gift to a charity that never existed at all, the general intention has been inferred from other and quite distinct gifts in the same will. In re Maguire (1) is an example. In In re Davis, Hammen v. Hillyer (2), Buckley J. says that in such cases the Court “leans in favour of a general charitable purpose, and will accept even a small indication of the testator’s intention as sufficient to show that a purpose, and not a person, was intended.” A “small indication”is a very different thing from the “necessary implication”required in cases where Hunter’s Case (3) applies.
In In re Wilson (4), Parker J. says the question is “whether there is a paramount intention to be gathered from the will that the money shall in any event be applied for some more general charitable purpose.” Later, he says that in the case before him “there is nothing . . . in any other part of the will which throws any light upon the question.”This means that light upon the intention is to be gleaned from every part of the will. It also means, I think, that the general intention required is an intention as to the ultimate destination of the property in question. That is the meaning I place upon the words “paramount intention . . . that the money shall in any event be applied for some more general purpose.”
It was said by Sargant L.J., in In re Monk (5) that “the indication of a general charitable intention may arise from general prefatory words, such, for instance, as those in Wallis v. Solicitor-General for New Zealand (6), and Chamberlayne v. Brockett (7).”
Taking the late Mr. McGwire’s will as a whole, it has one dominating feature absent from all the wills in the cases I have referred to in which a general charitable intention was not presumed. It is absolutely permeated with expressions of charitable intentions.
The fact, however, that this will from end to end is redolent of disposition as well as predisposition in favour of charity is not inconsistent with the testator’s having had no general charitable intention in making the devise of Clonea House as a sanatorium to the St. Vincent de Paul Society. Neither is the fact that there is an attempted gift over to the Sisters at Berne, if the particular gift to the Society should fail, inconsistent with the testator’s having had such a general intention, even on the assumption that the gift over is free from inherent invalidity. The particular gift was appliedcy-pres notwithstanding such a gift over in In re Parish of Upton Warren (1), for instance, a case which seems to contrast with Christ’s Hospital v. Grainger (2).
I have, then, before me in this will two gifts over, first to the Sisters at Berne and then to the Swiss Government both for the sick poor of Switzerland. As both seem to be gifts over to what is clearly another charity, neither would be void by reason of the rule against perpetuities, which it has been decided does not apply where there is a gift over from one charity to another: In re Tyler, Tyler v. Tyler (3); Christ’s Hospital v. Grainger (2).
Whatever may be said against their validity for other reasons, and assuming them to be void, the very fact that the testator intended them to be effective in certain eventualities appears to me to make them valuable evidence of his intention as regards the ultimate destination of Clonea House. The words “as a sanatorium” do not appear in the gift over to the Sisters at Berne, which is, however, accompanied by conditions subsequent in purported restraint of alienation. The final gift over to the Swiss Government, also for the sick poor of Switzerland, seems to have no conditions or limitations of any kind attached to it. In my opinion, these two attempted gifts over combined, and particularly the last, taken in conjunction with the rest of the will, manifest a general intention that the property should in the final resort go to charity.
I think the entire testamentary provision made, or purporting to be made, in this will in relation to Clonea House and the accompanying lands was one single unified plan with a generable charitable background. All the gifts, or attempted gifts, dovetail into one another, and the wording regarding them overlaps. I am of opinion that I am justified in presuming that in his whole testamentary dealing with this property, the testator intended charity to be his legatee in the sense in which that phrase was used in the dictumof Lord Eldon, and that the gift to the St. Vincent de Paul Society “as a sanatorium” was only a particular mode of giving effect to that underlying general charitable intention. I am therefore of opinion that the property should be applied cy-pres in the events that have happened.
If in this case there were no gift over, but only the original gift to the St. Vincent de Paul Society which cannot take effect in accordance with the prescribed condition, the application would be cy-pres to that gift. This is expressly laid down in the Mayor of Lyons Case (4). There are, however, gifts over, or attempted gifts over. Even if these are asumed to have been originally valid gifts, but to have merely failed to be effective, the reasoning of Sir Montague Smith in Mayor of Lyons v. Advocate-General of Bengal (1), does not appear to me to mean that the property must primarily be applied cy-pres to the last gift that failed. The gift to the Swiss Government, which has been declined, would be very analogous to the gift declined by the President of the United States in New v. Bonaker (2). The property went into residue in that case because it was held impossible to settle a scheme for a foreign country and there was nothing to which the property could be applied cy-pres. I apprehend that property is applied cy-pres to the gift that failed because that particular gift gives the clue to the donor’s preference for the particular region in the general field of charity to which that particular gift belongs. But if there are three successive alternative particular gifts and all fail, it would seem to me that the region in the general field of charity to which the first of the gifts that failed belongs would be the one for which the testator showed his first preference, and that the property should, therefore, be applied primarily cy-pres to it. The cases show that in applying propertycy-pres, there is considerable latitude, everything depending on the facts. In Ironmongers’ Co. v. Attorney-General (3)property given for the redemption of British slaves in Barbary was applied cy-pres for education in England a different category of legal charity altogether from that to which the gift that failed belonged. The Courts can only do their best to keep as near to the testator’s reasonably presumed intention as is practicable.
Gavan Duffy J. 50
…
The law of cy-pres requires the Court to substitute a practical plan for a charity, as near as may be to the donor’s own wishes, where those wishes, as formulated by the donor, cannot be carried out, provided that the will discloses a “general charitable intention”; that time-honoured phrase is not always a happy one, for it has to do duty in widely different circumstances; it may suggest that, in order to save a gift for charity, the Court must find in the will some general words declaring the giver’s wish to dedicate the property in question to charity, whereas the tenor of the will or even the nature of the gift may be such as to prove that charity, and not the abortive plan expressed in the will, was uppermost in the donor’s mind; and the word “general” seems to me to obscure the duty of the Court to save for charity a gift made in terms for some very narrow and particular charitable purpose, provided that the wish behind the gift appears to be to give to charity; the older cases of this type are reviewed by Brady L.C. in Daly v. Attorney-General (1).
Miss ffrench did not declare any general charitable intention in her will, but I have to consider whether such an intention is to be inferred from the language that she used and the dispositions that she made. It is urged that such an intention must be implied from the fact that the gift is made to the Nation, but I must look into the matter much more closely than that argument would suggest.
One way to ascertain whether the will discloses the charitable intention for which I have to look is to inquire whether the whole gift in the mind of the donor depended upon the feasibility of giving effect to her directions: In re Wilson, Twentyman v. Simpson (2): in other words, whether the dedication of the residence to the specified charity was a condition precedent: In re Monk, Giffen v. Wedd (3);but I think I shall reach the same result if I direct my mind to the rather broader attack made here, the allegation that the will, far from showing charity as the paramount object of the gift, actually reveals the preservation of the Castle of Monivea and its extensive demesne and plantations, a non-charitable object, as the purpose on which Miss ffrench had set her heart, and the plan for the charity in the Castle as quite subsidiary. If that contention be borne out, the charitable gift fails and there is an intestacy. The fact is worth noting that, on the evidence adduced before me, Miss ffrench had no dependants to whom she was morally bound to leave an adequate competence, so that there was nothing to prevent her from devoting any part of her considerable fortune to charity, if she was minded to do so.
I cannot accede to the argument that, once I find a gift of a character recognised by law as charitable, I need go no further, but should at once declare that no difficulty presented by the particular plan outlined in the will can stand in the way of the gift, and that it must be made effective as nearly as possible in the way that the donor would have wished. In my opinion, the fact that poor persons were to benefit does not by itself prove that charity necessarily loomed in the donor’s mind, when she was penning the gift. This was the problem presented to Sir Richard Arden, M.R., nearly a century and a half ago in Attorney-General v. Whitechurch (1). There, a testator made a number of charitable gifts and devised four houses in London in trust for four poor men of a certain parish, to be chosen by the trustees, and gave a sum of £2,000 to provide a weekly allowance for each man and his wife and the survivor; the gift of the houses was illegal under the law of that time in England, but it was urged that the substantial purpose of providing for four poor men should be established by saving the £2,000 for charity; Sir Richard Arden, however, held, on the wording and conditions of that particular will, that the intention of the testator was to endow alms-houses and that there was no further general intention, so that the gift of the money failed with the gift of the houses. Yet the poor men were within a recognised category of charity. It is true that the claims of charity were not always approached in a benevolent spirit by the English Courts of the eighteenth century, and that the Attorney-General, making a claim for charity, is sure of a sympathetic hearing to-day, but the fundamental principles remain, and a similar decision was given in In re Packe, Sanders v. Attorney-General (2).
Analysing the will, in the search for the paramount intention which it may discover in regard to the gift in question, I find first, a gift to the Nation of the demesne of Monivea, and I find that the gift of the demesne is to carry the Castle, the bogs, the reclaimed lands and the plantations; so far there is no mention of charity, but the words of gift are coupled with the express condition subsequent, made by the testatrix, that no parcel of these remains of her former estate shall ever be sold, and the testatrix emphasises the condition by recording a “solemn promise” from all her tenants, to whom she had sold their holdings 37 years before, that the demesne should remain inviolate for at least a century; so its preservation was not an old woman’s fantasy, but a long-cherished dream; and the old trees must not be felled, so long as they can stand.
In the second place, after the larger and principal gift and after the condition, I find a direction (“I wish”) that the Castle of Moniveathat is the residenceshall be made a “home” for aged and indigent teachers or persons engaged in literature, painting, sculpture or music, ten in number and no more, so that they may find peace and comfort in their declining yearsclearly a charitable gift. Certain objects of art are to be sent to Monivea. And there is a bequest for the upkeep of the mausoleum at Monivea, where the testatrix and her father are buried, and its surroundings, and special care is to be taken of the chapel there and of the old trees; 16 Masses are to be said every year in the chapel for her father’s soul and her own.
Now, a highly significant feature of the gift of Monivea is the language selected by the donor to describe the trustees at three successive points at which she wants to mention them. First, the selection of the ten beneficiaries is to be”left to the trustees appointed by the Irish Free State Government to administer the estate of Monivea”; then the legacy for the mausoleum (£1.000) is to be handed over in trust “to those who shall have been chosen to look after Monivea”; and the only funds which can be drawn upon at all for the charity are left “in trust to those appointed by the Irish Free State Government to look after the estate of Monivea”; the testatrix, as it seems to me, leaves the Government in no doubt whatever as to the duty she is imposing upon the State of appointing a body of trustees to take care of her ancestral property.
Another curious feature is the inadequacy of the financial provision for the ten beneficiaries, a limit obviously ordained to ensure that the Castle should maintain its character and not become an institution. In fact the need of supplying money for the support of the ten residents is almost overlooked and that omission is strange, if the welfare of these worthy old people was the purpose, or a purpose, predominant in Miss ffrench’s mind; she leaves the residue of her funds at a London bank to the trustees who are to look after the estate of Monivea, in trust to use the income “for repairs at the Castle also of demesne walls and roads within the demesne and generally for the upkeep of the home” and to pay £16 a year for the Masses. The evidence is that these funds will not exceed £2,000, a very inadequate provision, if I construe “the upkeep of the home” liberally to include the maintenance of the old people, for whom no other fund is left by the testatrix, who probably overestimated the moneys at the bank. The Attorney-General has satisfied me that the condition of the residence is such that it cannot be used for the home without the expenditure of large sums on renovation and repair, and no such sums are available.
As to the testatrix herself, the evidence is that she was born in Brussels of Irish lineage, that she had Russian interests on her mother’s side, as some of her legacies show, that she spent nearly all her life abroad and died at the age of 73 at Harbin. It is agreed on all sides that she died domiciled in this State. Monivea had been the family seat for many generations and she inherited the place on her father’s death in 1896, afterwards receiving considerable sums on the sale of the agricultural portions of Monivea to the tenants. Her actual, personal contact with Monivea seems to have been slight, and I surmise that the intense interest she evinces in the place was due to family tradition, received from her father, who built the mausoleum. She signs the will “Kathleen ffrench of Monivea.”
On the intrinsic evidence from the will, to which the external data add little of relevance to my inquiry, there is really no doubt as to the paramount intention of the testatrix. For the Attorney-General it is urged that the selection of the Nation as donee suggests a charity of national importance in the eyes of the donor: Farwell J. in In re Ashton, Westminster Bank v. Farley (1) suggests that it is only in a case where the trust itself is not specified that the office of the trustees may be considered in order to ascertain the purpose of the trust; I need not go so far as that dictumin seeking the paramount intention; for the selection of the Nation as donee is open to the alternative, and in the circumstances more likely, explanation that the donor thought that the State would be the surest and most permanent repository of the trust to preserve Monivea. The whole demesne was given to the Nation to preserve, and only the Castle was destined for the charity; the charity is given no prominence in the will; it is put in the second place, introduced by a “wish” and very poorly endowed. On the other side, I have the record of the solemn promise for the inviolability of the demesne for 100 years, the devise of the old family estate on condition that it is retained for ever, the retention made as secure as an old lady’s foresight could make it by confiding the duty to the State, the special solicitude extended even to the ancestral timber, and the illuminating and repeated description of the trustees in terms showing that the donor regarded them as the guardians of her property. All these features and the striking contrast between the emphasis on the care and preservation of Monivea on the one hand, and, on the other, the small attention paid in the will to the charity, with little of that particularity which betrays the enthusiasm of a founder, create in my mind a strong impression and, I believe, not an unfair impression, that the state of mind behind the will was this:”If only the Government will perpetuate Monivea, I may as well have the Castle used for a suitable charity.”
I do not overlook the distinction, so clearly made by Mr. Justice Meredith in Governors of Erasmus Smith’s Schoolsv. Attorney-General (1), between motive and intention; I disregard the motive, which was very probably a natural family pride; I am concerning myself with the two purposes disclosed by the will and the preponderating importance of the one over the other.
I have no doubt, and I must hold, that the particular charity was a subordinate adjunct to the great object in view, and that the conservation of Monivea was the paramount intention of the testatrix, to which the conversion of the Castle into a home for ten deserving objects was ancillary.
There is, therefore, no case for cy-pres and the charitable gift fails.
The bequest of the art objects fails with the charity and the next of kin take the bank residue, except the £16 a year for Masses.
V. G.
In re Conner, Deceased
[1960] IR 67.
Haugh J.
The testatrix, Mary Leonora Conner, who died on the 2nd August, 1956, by her will, dated the 15th March, 1945, made the following bequest, among others:”One thousand pounds to the General Cemetery Company of Dublin to be applied for the maintenance and care of the family vault at Mount Jerome.”
She appointed the plaintiffs her executors. Mr. Moloney appeared for the residuary legatee, Susan Bridget Lucas, and Mr. O’Shaughnessy for the Dublin Cemetery Company. The deceased’s gross assets amounted to some £44,000.
Because of this bequest the plaintiffs have issued a summons in which two questions are asked and which in short are 1, whether this legacy of £1,000 is a valid charitable gift? and 2, if it is not a charitable gift, is it a valid non-charitable gift, or is it invalid or void as infringing the rule against perpetuities?
Counsel for all parties have agreed that the first question must be answered, “No.”
Mr. Matheson, for the plaintiffs, did not seek any particular answer, but awaited the direction of the Court. He did, however, draw my attention to the fact that this particular bequest differed from the bequests in all the leading cases on the subject, in that no reference was made by the testatrix to investment or income.
Mr. Moloney, for the residuary legatee, contended that this bequest infringed the rule against perpetuities, in that £1,000 properly invested should yield an income of about £60 per annum and, in ordinary circumstances, the capital sum would not be required to be touched within twenty-one years. In support, he cited three Irish cases Toole v.Hamilton (1), Roche v. M’Dermott (2), Morris v. Larkin (3) and a number of English cases.
One English case, referred to by counsel for both defendants, was In re Chardon ; Johnston v. Davies (4), in which a testator gave £200 to his trustees upon trust to invest it and to pay the income thereof to a cemetery company”during such period as they shall continue to maintain and keep” two specified graves “in good order and condition with flowers and plants thereon as the same have hitherto been kept by me.”
The decision of Romer J. was criticised in a later edition of Jarman on Wills, but, later again, was viewed with approval by the House of Lords.
At this stage I wish to make a brief digression. I can almost take judicial notice of the fact that the income on the sum of £1,000 would purchase about the same amount of flowers and plants in 1958 as the income on £500 would purchase in the year 1927. Yet the bequest in Chardon’s Case (4), with its investment and income clause and with the restrictive use of the income to be spent on flowers and plants only, was held to be a valid bequest. In the case before me there is no restriction as to how the money is to be spent, provided it is devoted to the care and maintenance of this family grave.
It seems plain to me that care and maintenance can well include, not only flowers and plants, but painting, repairing, and works of major or minor reconstruction. It may well happen that a sum of £60 (a year’s income) might not be sufficient to meet a demand for work of necessary repair or reconstruction, having regard to present-day prices.
Mr. O’Shaughnessy, on behalf of the Cemetery Company, began by stating that while he was instructed to seek only the order of the Court, he felt justified in making certain legal submissions, which can be summarised as follows:
That this was an outright bequest of the £1,000 to the defendants; there was no time limit and the sum vested on death. Therefore, the capital sum is not inalienable and if it can be resorted to, at any time, the bequest does not infringe the rule.
Mr. O’Shaughnessy pointed out that it was significant that, unlike all the authorities quoted, this clause in the testatrix’s will makes no reference whatever to capital investments, dividends, or income. He has submitted that I am being asked to read into the plain terms of the will words that do not appear thereinwords that she could have had written in, but did not: that if it was her intention that the £1,000 should be tied, and only income utilised, why did she not say so? Counsel further suggested that if his clients, during the next two years or twenty years, decided that some reconstruction was necessary to the vault and that an expenditure of £200 was thereby necessary, they would be entitled at any time to resort to the capital to discharge their obligations should the amount of accumulated income be below £200.
He asked that the will should be construed in the manner laid down in vol. 2 of Jarman on Wills, 6th ed., 1910, articles 8 and 16, at pp. 2209 and 2210words should be read in their ordinary sense, and the implication was that the testatrix and her legal advisers knew the law and appreciated that an express gift of income only might well be void and accordingly the bequest deliberately avoided any reference to income, inalienability or perpetuity, so as to ensure the validity of the bequest. That is a brief summary of Mr. O’Shaughnessy’s submissions.
I was strongly impressed by Mr. O’Shaughnessy’s submissions. I do not have to follow Chardon’s Case (1)or any case opened to methough I would follow Chardon’s Case (1) if necessary. They are all quite different. They all deal with investment and the application of income. The clause in this will clearly and expressly avoids any such reference I have no doubt whatever as to the way this question should be answered. The testatrix clearly, and in the plainest possible terms, bequeathed this sum of £1,000 to the defendant Company with one limitation only, that is, that it, the sum of £1,000, should be spent by them in the care and maintenance of this family vault at Mount Jerome and I can see nothing whatever in law, in equity, or in fact, that prevents them from resorting to the capital if, and when, they think it proper in their discretion to do so for the purposes mentioned in the will.
Accordingly, I answer the second question (which cannot be answered by a mere “Yes” or “No” by reason of the way it is framed) as follows:
“The gift is a valid non-charitable gift which does not offend against the rule against perpetuities or any other rule.”
National Tourism Development Authority v Coughlan
[2009] IEHC 53UDGMENT of Mr. Justice Charleton delivered on 17th February, 2009
1. Can a trust can be charitable when its subject matter is a set of scenic golf courses in Killarney? That is the question for decision in this case. The plaintiff promotes tourism in Ireland and owns the shares in the company that holds the land on which this facility is situated. The defendants are the trustees, holding the shares for the benefit of the trust objects. Three golf courses and a club house are the property involved. The documents to which I shall refer make it clear that part of the motivation in founding the trust was to preserve a stretch of countryside, amounting to around 400 acres, free from the short-sighted building programme of bungalows that has undermined the resource for tourism that Ireland’s landscape once widely represented. All the parties in this case are genuine. The plaintiff, in its previous statutory form, was Bord Fáilte Éireann and fulfilled the same function as is now apparent from its current name. The defendants are concerned and committed local people who have, on a voluntary basis, heavily involved themselves in the management of the trust. It is beyond doubt that the motivation of the plaintiff in setting up the trust was to have golf course facilities available for visiting tourists, who would be thereby be drawn to visit Killarney and to extend their stay in order to use, and perhaps to reuse, the three golf courses of outstanding quality that are the subject matter of this case. The trust in question has succeeded in preserving a small stretch of countryside. While all of this is clearly desirable, as a matter law, however, it does not necessarily mean that a trust facilitating such objects is charitable in nature.
The Documents
2. Three golf courses are involved here. All are of championship quality with sand based greens that allow them to be played in most weather conditions. They are the Killeen course, the Mahoney’s Point course and the Lackabane course. The original course was constructed by the fifth Earl of Kenmare in 1938. Killarney Golf Club Limited (“the company”) was incorporated at this time to hold these lands and the earl retained about 75% of the shares in that company. The club was, and is still, actually run by the Killarney Golf and Fishing Club, (“the club”) which is an unincorporated association subject to a rule book. In all that follows, the company remains responsible for maintaining the golf courses, the club house and buildings and making all relevant capital investment to maintain and improve standards. Killarney Golf Club Limited amended its memorandum of association in November, 1964 by adding a new objects clause which was:-
“To provide amenities and facilities at the tourist resort of Killarney and to develop tourist traffic at or to the same resort.”
3. In 1968, Bord Fáilte Éireann (the plaintiff, as then named) bought 125 acres of the estate of the Earl of Kenmare from his grandniece and successor, Mrs. Beatrice Grosvenor. The purpose of the plaintiff was to give the lands to the Office of Public Works so as to extend the national park in Kerry and to allow the road to be widened. The substantial part of those 125 acres was then provided to the company to allow a second golf course to be laid out in conjunction with the existing land held by the company. For this purpose a grant of £46,494 was given by Bord Fáilte to the company towards the construction costs of the new course. By inter-mingling the first golf course with the new land, clever design allowed the opening in 1971 of two 18 hole, par 72 courses. Later, a third course was added.
4. There was concern that under its then existing statutory powers, Bord Fáilte did not have the ability to hold shares in the company. Back in 1969, Mrs. Beatrice Grosvenor had agreed to transfer all of her shares in the company, with the exception of ten ordinary shares, to Bord Fáilte for the nominal sum of £360.75. Therefore, Bord Fáilte held around 73% of the shares in the company. Legally, these were held by a named employee on its behalf, Mr. Niall Miller. Concerns began to emerge, on a purely precautionary basis, about staff at Bord Fáilte holding assets on trust for it. Not being able, as it thought, to hold shares itself, Bord Fáilte proposed to dispose of them. Given the benevolent disposition of Mrs. Grosvenor, Bord Fáilte wrote to her to ask her whether there were moral obligations concerning the land which she might feel had arisen. The text of that letter dated 8th November, 1984, includes the following:-
“We are reviewing our involvement in companies, property, etc. As you know, we have a controlling interest in your Company’s shares. What would you and [the board of Killarney Golf and Fishing Club Limited] think about us getting rid of those shares?
Your views would be particularly relevant because we acquired the shares from you.
To avoid any misunderstanding I should say that this is not an offer to sell the shares. However, informal consultation with you will help us to arrive at a decision about them. The share transfer took place many years ago, and it would also be helpful if you would say whether, from your point of view, there were any understandings or agreements regarding the future of the shares.”
5. Having consulted with the board of the company, Mrs. Grosvenor replied by letter dated 14th November, 1984, in the following terms:-
“The Directors always understood that when Bord Fáilte held the majority of the ordinary shares, that the Golf Club property in Killarney would be protected permanently from any possibility of exploitation arising from private ownership. I personally unreservedly agreed with these sentiments and transferred my shares to Bord Fáilte for a purely nominal sum. I enclose photo copy of share transfer form herewith. Bord Fáilte representatives at the time in 1968 initiated this transfer of shares for the very reason expressed above . . . .
After [lengthy] discussion, the Directors agreed that I convey the following points to you. In view of the unexpected suggestion that Bord Fáilte might dispose of their ordinary shares in Killarney Golf Club Ltd., the Directors think that it would be essential that these ordinary shares be held in perpetuity by a type of trust possibly formed by the local ordinary shareholders.
Therefore, in order to avoid any possible complication that could arise in the future, it is imperative that Bord Fáilte acquire the ordinary shares held by [another shareholder]. Then a transfer of the … shares to the trust referred to above could be negotiated.”
6. There is nothing to suggest that the plaintiff disagreed with these sentiments in effecting what then happened. By letter dated 14th January, 1986, the plaintiff instructed its solicitors to set up a trust that would hold the relevant shares in the company in trust. In part, the letter read as follows:-
“Because we cannot own shares, they are held, as you know, by Niall Miller. Shares in Killarney Golf Club Limited are difficult to transfer because they must be offered to other shareholders. The shares held by Niall Miller cannot be held by others here. There are two examples of other shares in Killarney Golf Club Limited going to non nationals on the death of original shareholders. It is essential that our shares go from Niall Miller into the hands of a group of trustees that would hold them beneficially on our behalf and subject to a trust document.
We got the shares when we acquired land in Killarney to preserve it from undesirable development. It adjoined the golf course and we agreed with them to develop a second eighteen holes on it. Consequently, the trustees must undertake not to allow anything to happen to the golf course lands that would interfere with the property being used as a golf course. Specifically, the land must not be sold without the express prior approval of Bord Fáilte. It must be operated as a golf course and for no other use without our express approval.
Being a company limited by shares, Killarney Golf Club Limited can distribute dividends and, on dissolution, any surplus accrues to the shareholders. We do not want the shareholders to be able to wind up the company; distribute dividends or in any way liquidate the assets without our express prior approval. Particularly, we would not like our trustees to be able to sell their own privately held shares. That requirement may be difficult to accommodate.
We would like the trustees to be appointed for so long as they continue to be directors of Killarney Golf Club Limited. Their role as trustees should not be capable of being willed or devised in any way. Any vacancy should revert to Bord Fáilte for the appointment of another trustee.
Should the trust prove impossible to implement, or for any other reason be wound up, then the shares should revert to Bord Fáilte.
The directors of Killarney Golf Club Limited in their draft document indicated that they wished to purchase our shares from us for a nominal value. An essential point of difference between us that we will not sell our shares. Instead, we are prepared to vest them in directors acting as our trustees.”
7. The subject matter of the proposed trust was therefore the shares held, through an employee, by Bord Fáilte, in Killarney Golf Club Ltd., that controlled the land on which the club was and is situated and which included a portion of the lands acquired in 1968 and which were leased to the company by Bord Fáilte by virtue of an indenture dated 31st July, 1975. In part, that reads:-
“WHEREAS in pursuance of its powers and functions as Tourist Authority, the Bord has contributed, or intends to contribute, grants to the Company of the sum of £46,494 or thereabouts towards the development of the Company’s new 18 hole golf course and WHEREAS the Company have agreed to take from the Bord a Lease of certain of the Bord’s lands at Killarney when registration of the Bord’s title has been completed and WHEREAS the company have agreed with the Bord to enter into a Deed of Covenant and Charge with the Bord with the intent of maintaining the tourism and golfing amenities of the said new 18 hole golf course… the Company doth hereby covenant and agree with the Bord . . . to take out a lease from the Bord of the lands and premises…”
8. These were the assets, therefore, to be held pursuant to the trusts deed which was eventually drawn up on 4th May, 1987, in draft form, but which has, ever since that time, been acted upon as operative. That document records that Bord Fáilte Éireann is transferring its shares in the company to the trustees, whose successors are the defendants herein, subject to the conditions of the trust. In essence, therefore, the subject matter of the trust is the shares held by the plaintiff in Killarney Golf Club Limited. These conditions are set out in the trust deed as follows:-
“(1) The Trustees shall hold the said shares UPON TRUST to use their best endeavours to promote the present amenities of the Company for its members and visiting golfers in the spirit and manner as now exists and shall in so far as it is within their power ensure that the premises, buildings and courses of the club are maintained to their present high standards and improved whenever and wheresoever necessary.
(2) To pay and apply any dividends on the said shares or any proceeds whatsoever therefrom and howsoever received for the improvement of the Killarney Golf and Fishing Club being the Club operated by the company or in the event of same no longer being used for the purposes of a golf and/or fishing club to hold such dividends or proceeds UPON TRUST for such tourism objects as the Bord shall direct.
(3) To deal with and hold the shares strictly subject to and upon the terms and conditions as now set forth in the Memorandum and Articles of Association of the Company.
(4) Not to charge, encumber, alienate or otherwise dispose of the shares or any of them in any manner without the consent in writing of the Bord.
(5) Subject to condition 4 hereof, not to sell or otherwise dispose of the shares or any of them for any purpose which would cause the assets of the Company to be used for purposes other than those now within the powers of the Company and in particular, not to use the shares or the powers of voting derived therefrom for any commercial or profit making purposes other than those now authorised by the Memorandum and Articles of Association of the company…
(8) In the event of the Company going into liquidation or being otherwise dissolved, then the shares hereby settled and or the proceeds thereof shall revert to the Bord.
(9) The Trustees shall not dispose of any of their personal beneficial holdings of shares in the Company without the consent in writing of the Bord which shall not unreasonably [be] withheld and the intent at all times being that the lands and premises of the Company will be retained in use as a golf club and fishing club for the benefit of club members and visiting golfers.
(10) It is agreed by and between the parties hereto that the principal object of this settlement is to ensure [the] continuity of the present user of the lands and premises of the Company.
(11) It is agreed by and between the parties hereto that any breach hereof or of any of the terms hereof by the Trustees shall be brought to the notice of the Trustees by the Bord together with a request to rectify the said breach within a reasonable time, having regard to the nature of the said breach. If the Trustees fail to rectify said breaches aforesaid then the Bord shall be entitled to apply to the High Court for such remedies and order as the Bord shall deem fit.”
9. To these documents two further qualifications need to be made. The first is that on 29th April, 1986, in the course of discussions between Bord Fáilte and its solicitors with a view to drawing up the trust deed, as just quoted, it is recorded that the proposed trustees were uneasy with it being a condition of the trust that the amenities of the golf courses were to be preserved for its members and, as was then proposed, “tourists”. So, that word was to be replaced with the words “visiting golfers and anglers”. As it turns out, as the above quoted trust deed makes apparent, only “visiting golfers” were included. Secondly, after the execution of the trust deed the memorandum of association of the company was amended to substitute as objects of the company purely sporting activities, by way of the promotion of golf, tennis, croquet, bowls and badminton, in place of the prior memorandum of association operative as of the date of the trust deed which provided that the objects of the company were “to provide amenities and facilities at the tourist resort of Killarney and to develop tourist traffic at or to the same resort”. This was done for a tax advantage by legislation after the date of the trust deed.
10. Briefly, the situation as of the date of the trust deed was as follows. The statutory predecessor of the plaintiff, Bord Fáilte Éireann, had shares in Killarney Golf Club Ltd. and in addition held lands that were leased to Killarney Golf Club Limited. The shares were made the subject of the trust deed, just quoted. The main assets of the company are therefore the courses and buildings associated with golf, of which the main structure is the joint club house for the three courses. This club is run under the rule book by Killarney Golf and Fishing Club. The relationship of the members of the club is with the club, not with the company or the trust. Killarney Golf Club Ltd. permits the club to run the courses. Anyone joining as a golfing or fishing member does not buy shares in the company, but subscribes to the club. This is an expensive step. Anyone waiting to play as a visiting golfer pays a green fee, which is a kind of membership for a day. This is substantial too.
Tourism in Killarney
11. I am satisfied that tourism is the single most important industry in Killarney. This set of golf courses has been a major success in attracting tourists to the region. It has encouraged significant overnight stays in the area. There are about 40 hotels and hundreds of guesthouses in the immediate environs of Killarney and more than 20,000 bed places are available to visitors on any one night. Golf plays a particular role in the attractiveness of Killarney to many visitors. This club, apparently, has more visiting green fee payments than any other club in Ireland. In 1988, there were 35,000 persons visiting. In contrast, I am informed, the club has about 2,000 members. They are restricted as to teeing off times to approximately four hours per day. In 1988, 6,388 visitors were from the United States of America; 2,116 were from Germany; 2,392 were from France; 817 came from Sweden; about 1,000 came from Britain; 1,350 came from other foreign places and about 12,500 visitors were from Ireland. Even before the trust deed was executed, the existing courses had a proud record in hosting important competitions. When air travel became more common in the 1960s, visitor numbers at the course, because there was then only one golf course, caused such congestion of players on the fairways, and in the rough as well I would suppose, that plans were made to develop the facility into what now exists.
Construction
12. The rules of construction for a private legal document can be shortly stated. Firstly, the context in which a document was drawn up is always of importance in setting the scene within which the document is to be construed. This does not mean that extrinsic evidence becomes admissible with a view to contradicting the terms of a trust, contract or will. Rather, as is explained by Keane J. in O’Connell v. Bank of Ireland [1998] 2 IR 596 at 609 to 610, this is not a matter of evidence reinterpreting the document at all. Context elucidates those surrounding circumstances within which the document to be construed is to be placed. I quote from the judgment of Keane J. in that case:-
“…extrinsic evidence may be admitted, not strictly speaking as evidence of the intention of the testator, but rather of circumstances existing at the date of his death which he might have had in mind and which accordingly, might assist the court in the construction of the language used in the will. James L.J. in Boyes v. Cook [1880] 14 Ch. 53 said at p. 56:-
‘You may place yourself, so to speak, in (the testator’s) armchair and consider the circumstances by which he was surrounded when he made his will to assist you in arriving at his intention.’
Such evidence was admitted, not as direct evidence of the testator’s intention, but rather as circumstantial evidence which assisted the court in inferring what the testator’s intention was. Under this rule – sometimes referred to as “the armchair principle” – evidence could be adduced as to the testator’s knowledge of and relations with the different persons or institutions who claimed to be the object of a gift under his will.”
13. Secondly, a court is only entitled to construe a written document according to the intention that is therein clearly expressed. That rule overrides even the most powerful evidence that the settler or testator could not have actually meant what is plainly stated in the document. In Re Julian [1950] I.R. 57, the testatrix bequeathed a substantial sum of money in her will “to the Seamen’s Institute, Sir John Rogerson’s Quay, Dublin”. There were two institutions in Dublin which claimed that bequest. One belonged to a Christian denomination shared by the testatrix, but not the other. Moreover, the imparting of religious teaching by the competing clubs for seamen was exclusive. Despite unassailable evidence that the deceased lady knew and visited an institution called the Dublin Seamen’s Institute at Eden Quay in Dublin, which shared her religious persuasion, and had no interest in another institute on Sir John Rogerson’s Quay, the words she used meant that her bequest went to the institute, as she clearly expressed it, on Sir John Rogerson’s Quay in Dublin. Kingsmill Moore J. at pp. 65 and 66 added the following personal note to his judgment:-
“I regret having to give this decision, for the evidence which I have excluded, if I were allowed to take it into account, would convince me to a moral certainty that the testatrix intended to benefit the Dublin Seamen’s Institute… This is by no means the first – and, equally, certainly, will not be the last – case in which a judge has been forced by the rules of law to give a decision on the construction of a will which he believed to be contrary to the intentions of the testator.”
14. The rule is, therefore, that in construing a written contract or settlement, the intention of the parties should be ascertained from the words that they have used within the ascertained context. This rule was stated succinctly in Igote Ltd. v. Badsey Limited [2001] 4 IR 511 at 516, on behalf of the Supreme Court, by Murphy J. in the following way:-
“At the end of the day the rule as to construction and the context in which it is to be achieved is most succinctly expressed in the judgment of Keane J. (as he then was) in Kramer v. Arnold [1997] 3 I.R. 43 at p. 55 when he said:-
‘In this case, as in any case where the parties are in disagreement as to what a particular provision of a contract means, the task of the court is to decide what the intention of the parties was, having regard to the language used in the contract itself and the surrounding circumstances.’”
15. Thirdly, in attempting to find out what the expressed intentions of the testator or settler was, extrinsic evidence may be available to assist the court and such evidence is admissible in the event of an ambiguous construction arising on the terms of the written document. It is this ambiguity that makes extrinsic evidence admissible. Such extrinsic evidence, even if it exists, is not always of assistance since it can never be used to contradict any aspect of the document in express language, save when that language is ambiguous in the context of the document considered in its entirety. Moreover, the task of the court is always to put into effect the intention of the settler or testator as it is expressed in the document, and not to rewrite the document in accordance with what the court might desire to see expressed. This was put by Lord Upjohn In Re Gulbenkian’s Settlements [1970] AC 508 at 522 in this way:-
“It is then the duty of the court by the exercise of its judicial knowledge and experience in the relevant matter, innate common sense and desire to make sense of the settlers or parties’ expressed intentions, however obscure and ambiguous the language that may have been used, to give a reasonable meaning to that language if it can do so without doing complete violence to it.”
16. Where, on the other hand, that expressed intention does not exist or where the language used to express it may be capable of a number of interpretations, then extrinsic evidence is admissible as a guide to the intention of the settlor or testator.
17. Fourthly, in some contract situations a document is often drawn up in standard form with which the other contracting party may accept in full, or reject. In such cases, situations of ambiguity can give rise to a rule that the document is to be construed against the party drawing it up. This rule operates on the basis that the party which draws up a contract has both the intention to state its terms clearly and the ability to do so unambiguously. In the case of uncertainty as to the meaning of a provision, the court will tend to lean towards an interpretation which is reasonably possible in favour of the party who merely had the opportunity to read and accept the terms without amending them. Clearly, as this case does not concern a bilateral contract, that general rule is of no application here.
18. Fifthly, in documents it can happen that a term of art is used that has a particular meaning for the parties involved. Those who share a particular line of work may use a word within the terms of the meaning that is peculiarly applied between them. “Deep packet inspection” bears a particular meaning between computer analysts, and is different to what at first sight it may seem to mean. That is an instance. It can also be the case that a history of dealings between the parties shows why a particular word or phrase was used and how it was intended to have particular meaning. In this context, it is clear that the reference in Clause 1 of this trust document to “visiting golfers” should be read in the context of Clause 2 which refers to “tourism objects”, thereby including tourists who wish to play golf but excluding others who are merely sightseers, hill walkers, or picnickers.
19. Sixthly, it is sometimes said that the court leans in favour of a construction that will give rise to a charitable trust. I doubt that this principle is applicable in these circumstances. In Commission of Inland Revenue v. Oldham Training and Enterprise Council, T.L.R. 11th October, 1996, 69 T.C. 231 at p. 249, Lightman J. allowed an appeal by the Inland Revenue against a decision that a training and enterprise council was a charity. The Council gave advice on business skills, business start-up, providing grants in that regard, and giving training to the young and unemployed. According to the report: the litmus test for charitable status was whether that main object, read in the light of that subsidiary object, admitted the application of its funds and resources for purposes which were not charitable.
20. The learned judge concluded that an organisation which had as its objects the promotion of individuals engaged in trade, commerce or enterprise, and providing benefits and services to them, could not be regarded as charitable, regardless of the motive or the likely beneficial consequences for an increase in employment in that town. He, according to the report, added at p. 251:
“Reliance has been invoked by [Counsel for the body applying for charitable status] on the principle of construction that, where there is an ambiguity, a benignant construction should be adopted in favour of charity . . . [But] the principle only applies where a provision or a gift will be held void and fail unless held charitable…”
21. Moreover, the purpose of this rule is to give effect to an intention which would otherwise be defeated by a deed or will being interpreted against a construction which allowed for a charitable bequest. Objectively, therefore, the document has to be examined as to what intention is expressed in it and even though, as In Re Julian, a subjective intention points in another direction, clear words will defeat it. In Re The Worth Library [1994] 1 ILRM 161 at p. 193, Keane J. expressed the principle thus:-
“There is one other principle of general application to which I should refer. The court leans in favour of charities and, consequently, will prefer a construction which gives effect to the testator’s desire to benefit a stated object rather than one which leads to a failure of the bequest.”
22. Here, it seems to me, the situation is different. If this trust was not set up for a charitable purpose then the interested parties, the Golf and Fishing Club, the trustees and the company will, together with the plaintiff, reorder their affairs. It is not as if the expressed intention of a testator or settler is sought to be overturned in favour of a benefit to residuary legatees or the Revenue Commissioners. In any event, I do not see the principle to be of direct application here.
Rule against Perpetuities
23. A settlement by trust cannot take effect outside the period of the lives in being plus 21 years. A gift to a charity cannot be made to take effect on an event too remote within the rule against perpetuities; Re McNamara [1943] I.R. 372. A charitable trust, however, can be set up so as to act in perpetuity. To paraphrase St. Paul, all else must fall away but charity will always endure. The legal rule is that stated in Hunt v. McLaren [2006] EWHC 2386 (Ch) by Lawrence Collins J. at paras. 89 and 91:-
“The general rule is that a gift on trust must have a cestui que trust and must be for the benefit of individuals, unless charitable. It must have a definite object, and there must be someone in whose favour the court can enforce it. In general, in order to be valid, a non-charitable trust must have an ascertainable beneficiary in whose favour performance of the trust may be decreed: Maurice v. Bishop of Durham (1804) 9 Ves 399, 404; Leahy v. Attorney General of New South Wales [1959] AC 457, 478; Re Denley’s Trust Deed [1969] 1 Ch. 373. Consequently, trusts for purposes or objects are invalid, for a purpose or object cannot sue, but trusts for charitable purposes are valid because they are enforceable by the Attorney General. . .
Consequently, gifts to unincorporated associations are subject to (a) the rule against remoteness of vesting, which requires that the interests of the beneficiaries must vest within the perpetuity period; (b) the rule that, for there to be a valid trust, there must be a beneficiary or cestui que trust in whose favour performance of the trust may be decreed (“the beneficiary principle”); and (c) the general principle of trust law that the objects of the trust must be sufficiently certain.”
Charity
The definition of charity in law differs from that generally applied in the wider community. It may be thought among reasonable people that any disposition that wishes others well is charitable. This is not the sole criterion in construing a charity. As Lord Magnaghten commented in Commissioner for Special Purposes of Income Tax v. Pemsel [1891] AC 531 at p. 583:-
“No doubt the popular meaning of the words ‘charity’ and ‘charitable’ does not coincide with their legal meaning; and no doubt it is easy enough to collect from the books a few decisions which seem to push the doctrine of the Court to the extreme, and to present a contrast between the two meanings in an aspect almost ludicrous. But still it is difficult to fix the point of divergence, and no one as yet has succeeded in defining the popular meaning of the word ‘charity’. The learned counsel for the Crown did not attempt the task. Even the paraphrase of the Master of the Rolls is not quite satisfactory. It would extend to every gift which the donor, with or without reason, might happen to think beneficial for the recipient; and to which he might be moved by the consideration that it was beyond the means of the object of his bounty to procure it for himself. That seems to me much too wide. If I might say so without offence, under conceivable circumstances, it might cover a trip to the Continent, or a box at the Opera. . . . How far then, it may be asked, does the popular meaning of the word ‘charity’ correspond with its legal meaning? ‘Charity’ in its legal sense comprises four principle divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads.”
24. This trust cannot come under any category except arguably the last one. Here, the defendants plead that the trust allowing the golf course to be used by its members, in circumstances where any profits must be ploughed back into the golf courses and club house, and whereby it is available to those who travel to play golf as a major attraction, has had, and continues to have, a major benefit to the town of Killarney as a tourist facility which brings high spending visitors into the area which otherwise lacks substantial alternative employment. To join this club costs around €7,000; supposing one makes it up the waiting list. Thereafter annual membership is much less. For travelling golfers, the official website indicates green fess of around €100, but counsel tell me, and I have no reason to doubt it, that by booking in advance, or by playing at less busy times, a considerable saving on that may be achieved.
25. A powerful argument has been presented that this trust is charitable because, it is claimed that it was intended to be, and has in fact been, beneficial to the community in Killarney, and far more widely, and that it has resulted in the preservation of a lake vista that would otherwise have been churned up in ugly suburban-style development over the last twenty years. The intention of the plaintiff could only have been, it is asserted, to create a disposition that benefits tourism and the clear intention that emerges in the context of the correspondence between the late Mrs. Beatrice Grosvenor and the plaintiff evidences a marked determination to preserve the landscape.
26. The powers of the Irish Tourist Board which later became An Bord Fáilte Éireann and then the plaintiff were first established in the Tourist Traffic Act 1939. With a legal precision derived from the principle that organs of local government and statutory bodies can only exercise the powers conferred on them, s. 14 provides that the Irish Tourist Board may lawfully do any or all of the following things:-
“(a) assist, financially (including by way of loan) or otherwise, in the provision, extension, or improvement of accommodation for tourists;
(b) build, establish, equip, or operate hotels, guest houses, holiday hostels, holiday homes, youth hostels, and holiday camps or assist, financially (including by way of loan) or otherwise, in the building, establishing, equipping, or operating thereof;
(c) provide or assist, financially (including by way of loan) or otherwise, in providing services, sports, amusements, or other facilities which appear to the Board to be calculated to improve tourist traffic;
(d) improve and maintain amenities and conditions which appear to the Board to be likely to affect tourist traffic;
(e) engage in any kind of publicity in connection with tourist traffic;
(f) establish or assist in establishing any form of agency in connection with tourist traffic;
(g) provide or assist in providing schemes for the training of persons to do work which is wholly or mainly connected with tourist traffic;
(h) prepare and publish guide-books, itineraries, time-tables, and other publications for the benefit or assistance of tourists.”
27. These powers were amended, perhaps out of an abundance of caution, in s. 5 of the Tourist Traffic Act 1952, to include an ability “to accept gifts and donations” and to “assist, financially and otherwise, in the provision, extension or improvement of facilities and amenities, at tourist resorts and elsewhere, which appear to the Board to be calculated to improve tourist traffic”.
28. These statutory provisions underline the problem in this case. While the plaintiff clearly has as its principal object the promotion of tourism, this does not mean that tourism is a class of charitable trust beneficial to the community. Nor does it mean that anything done by the plaintiff to promote tourism, by way of a trust, a grant or a loan, in order to be beneficial to the tourist industry, is necessarily charitable. For instance, a grant to a small remote hotel to reconstruct its bedrooms so as to have bathroom facilities en suite may improve the reputation and tourist drawing potential of that area because a good quality hotel is available there. But that gift is not charitable because, as a matter of reality, it primarily benefits the commercial enterprise that runs the establishment. It is not solely for the general benefit of the community.
29. In Verge v. Somerville [1924] AC 496 at pp. 499 to 500, Lord Wrenbury stated:-
“To ascertain whether a gift constitutes a valid charitable trust so as to escape being void on the ground of perpetuity, a first inquiry must be whether it is public – whether it is for the benefit of the community or of an appreciably important class of the community. The inhabitants of a parish or town, or any particular class of such inhabitants, may, for instance, be the objects of such a gift, but private individuals, or a fluctuating body of private individuals, cannot. If this test is satisfied, is it necessary to find, further, that the class is confined to poor persons, to the exclusion of persons not poor? Is poverty a necessary element? In argument it was scarcely pressed that it is necessary, and after the decision in Goodman v. Mayor of Saltash 7 App. Cas. 633, it was not possible to maintain the general proposition that it is. A trust or condition in favour of the free inhabitants of ancient tenements in the borough of Saltash, in accordance with a usage whereunder they had the privilege of dredging for oysters, was there held to be a valid charitable trust, and, obviously, some of the inhabitants might not have been poor. The poor are not the only people who like oysters or the profits to be derived from their sale.”
30. It can, by times, be regarded as surprising the objects which the law regards as charitable, to the exclusion of others. In modern times the importance of exercise is widely recognised as conferring a benefit to general health. Thus, one would imagine, trusts for sporting objects would be held to be beneficial to the community. That is not how the law has regarded charitable dispositions for the promotion of any particular sport: Hunt v. McLaren [2006] EWHC 2386 (Ch) at para. 90. The case establishing this is In Re. Nottage [1895] 2 Ch. 649. There, a testator bequeathed a sum of money in trust to the Yacht Racing Association of Great Britain, so that every year a cup could be awarded to the most successful yacht of the season, the stated object being “to encourage the sport of yacht-racing”. Lindley L.J. at p. 655 stated:-
“It is a prize for a mere game . . . Now, I should say that every healthy sport is good for the nation – cricket, football, fencing, yachting, or any other healthy exercise and recreation; but if it had been the idea of lawyers that a gift for the encouragement of such exercises is therefore charitable, we should have heard of it before now.”
31. Lopes L.J. at p. 656, also rejected the argument that the trust could be charitable stating:-
“It is most difficult to draw a line separating charitable gifts from gifts not charitable; and the only safe course is to say that a particular class of gifts do not come within the definition of a charitable gift. I am of opinion that a gift, the object of which is the encouragement of a mere sport or game primarily calculated to amuse individuals apart from the community at large, cannot upon the authorities be held to be charitable, though such sport or game is to some extent beneficial to the public. If we were to hold the gift before us to be charitable we should open a very wide door, for it would then be difficult to say that gifts for promoting bicycling, cricket, football, lawn-tennis, or any outdoor game, were not charitable, for they promote the health and bodily well being of the community.”
32. It may be possible that this view might be revised at some stage, though the law on charities is, I understand, in the process of being partially codified by the Oireachtas. For the moment, however, I take these cases as a correct expression of the law. In addition, however, there are other principles militating against the argument of the defendants.
33. Tourism has never been held to be a charitable purpose. In Travel Just v. Canada (Revenue Agency) [2006] F.C.A. 343, a travel company applied for charitable status for revenue purposes. Reading the objects of the company it is clear that these were drafted expressly for the purpose of attracting the relevant tax exemption in Canada. They included the promotion of “ethical tourism” and to providing “information on socially and environmentally responsible tourism”. While the Federal Court of Appeal of British Columbia did not specifically exclude tourism as a possible charitable purpose, it has not being held to be such in any decided case.
34. With a view to testing what is or is not a charitable trust, it can be useful to have regard to cases that seem to be on the verge of decision making. In re Crystal Palace Trustees v. Minister of Town and Country Planning [1951] 1 Ch. 132, a body of trustees controlled a leisure centre and park of some 200 acres for the purposes of education and recreation and the promotion “of industry, commerce and art”. Danckwerts J. held that these objects were charitable since the facility, administered under the Crystal Palace Act 1914, reinvested any profit from the modest charges that it made and advanced the welfare of the public, and not just of a defined class such as artists, by its activities. At p. 142 he stated:-
“In those circumstances, it seems to me that the intention of the Act in including in the objects the promotion of industry, commerce and art, is the benefit of the public, that is, the community, and is not the furtherance of the interests of individuals engaging in trade or industry or commerce by the trustees. It appears to me that the promotion of industry or commerce in general in such circumstances is a public purpose of a charitable nature within the fourth class in the enumeration of charitable purposes contained in Pemsel’s case [1891] AC 531, 583.”
35. In Inland Revenue Commissioners v. Yorkshire Agricultural Society [1928] 1 K.B. 611, the defendant claimed a charitable purpose to its activity in holding an annual agricultural show and in the promotion of agriculture generally. The Court of Appeal held that the improvement of agriculture or the advancement of the industry of agriculture was a charitable purpose.
36. In some of these cases, no import is placed on the fact that membership of an organisation existing for a charitable purpose can be gained by paying a fee and that, in consequence, a small benefit might be obtained by members, such as free entry to the Crystal Palace grounds, or free entry to the Yorkshire Agricultural Society’s annual show. The fees in the decided cases, however, are modest. It seems to me that the line shades across towards consideration that a trust is not charitable in purpose the more exclusive a facility is for which that exemption is sought. Then, the wider public is less likely to be benefiting. In the Yorkshire Agricultural Society case, the reasoning underlying the decision as I read it is that the more exclusive the enterprise, then usually the less likely it is to have as its sole purpose the betterment of society in general.
37. A perhaps extreme case where a charitable object was found in respect of a trust was Tasmanian Electronic Commerce Centre Pty. Ltd. v. Commissioner of Taxation [2005] F.C.A. 439. The plaintiff was incorporated ostensibly to benefit the people of Tasmania through making electronic commerce part of the local economy. The memorandum of association of the plaintiff recorded that the objects of the company were to provide research and development facilities to help the Tasmanian business community to adopt electronic commerce; to liaise with government bodies in the promotion, research and development of electronic commerce; to disseminate information on electronic commerce; and to raise and manage funds for the purposes of the promotion of electronic commerce and to develop facilities that would assist the Tasmanian business community in that regard. In the course of his conclusions, Heerey J. made the following comments at para. 56 to 58:-
“Once it is accepted that assistance to business and industry can provide a public benefit of the kind which the law recognises as charitable, a proposition which does not seem to be in dispute in the present case, I do not see how the fact that individual businesses may benefit can be a disqualifying factor. On the contrary, if business in general is assisted, it seems inevitable that some firms at least will become profitable, or more profitable, as a result of that assistance. There would be no point in the exercise if this were not the case. It would be an odd result if an institution established to benefit business could only quality as a charity if the recipients of its benefits made losses or did no more than break even.
Presumably, some farmers in Yorkshire were able to make, or increase, profits as a consequence of the work of the Yorkshire Agricultural Society, but there was no suggestion that this militated against classification of the Society as a charity. Indeed it was common ground that the promotion of agriculture generally would be charitable…; the issue in the case was whether the fact that members of the Society received benefits would lead to a different result. In the present case it was not put that members of TECC, the Tasmanian Government and the University, receive any benefit.
It seems to me self-evident that benefits to Tasmania’s economy resulting in long term economic advantage to Tasmania will be a benefit to the Tasmanian public, and indeed to the wider national public. In a capitalist economy like Australia’s, a prosperous and productive private sector generates profits and creates employment which in turn raises incomes which individuals can either spend, creating demand, or save, creating capital for further investment. Either way, people can make a better life for themselves and their families. In a prosperous economy, more money can be raised by taxes to improve education, health and other essential public services.”
38. My basic problem in this case is that while a golf course is a nice facility, and can be, and is here, a tourist draw, a golf club is not there to benefit anyone other then its members and those who can afford to pay the green fees as visitors. Incidentally, a very small piece of countryside was also preserved when so much else has been submerged by field destruction and suburban building. In reality, under this payment structure, this facility is far more exclusive than joining in the work of a charity by paying a modest fee. It is also very hard on the case law to see that a golf course as a place for more sport can properly be the object of a charitable trust.
Conclusions
39. On the basis of the foregoing, my conclusions on the issue as to whether this trust enjoys charitable status are as follows:-
(1) The trust was set up by the plaintiff in order to benefit tourism in the Killarney area. This was to be done through having available in Killarney, a cluster of three golf courses around a club house which would be such a nature that those who travel to play golf, and those incidentally in the area, might be expected to prolong their stay so as to try out one of the courses by way of recreation.
(2) The manner in which the club interacts with the trustees who hold the assets of the golf courses contain elements that hint at a charitable purpose. Under the trust deed, dividends are not payable by the company to its shareholders. Rather, the profits of the club are used for the purpose of enhancing the facilities. In that regard, many improvements have been made in the last twenty years, including better services for playing under inclement weather and much improved club house facilities.
(3) By preserving the land on which the golf courses are situated free from typical Irish rural suburban development, some small portion of the countryside around Loch Lane in Killarney did not become subject to unsightly building and rural destruction that, however it has happened, has markedly diminished the character of much of the Irish countryside and its attractiveness to tourists.
(4) It is difficult to conceive of a trust for the purposes of tourism as being, of itself, of sufficient benefit to the community as to attract charitable status. Were tourism on its own to be recognised in law to be a sufficient basis, then any recreation, activity or attraction that would bring tourists into an area, or keep them there for a longer stay, would thereby assume charitable status. On an extreme level, therefore, if tourism were to be recognised as a category that is charitable because it benefits the community, every trust setting up a casino or a fun park would enjoy the benefits in law of charitable status. Moreover, a tourist enterprise is an economic enterprise.
(5) Sport has never been recognised to be an object of sufficiently wide benefit to the community as to enjoy charitable status. The law has traditionally regarded sport as a form of recreation and, in consequence, trusts and bequests for sporting purposes are not recognised as charitable.
(6) The object of a trust has to be exclusively for charitable purposes to determine its status as charitable. Almost any economic enterprise can be of benefit to the community. The fact that a community is gainfully employed; the fact that an enterprise, like a factory or hotel, is successful; the fact that people are in a position to pay their taxes, all have direct and indirect benefits for neighbourhoods and for the nation. Among the indicia of a charity, however, are that it is disinterested in commercial return for investors, is of genuine benefit to the community at large and, finally, that whatever benefit it dispenses is widely available to the community in the sense that it does not need to be bought into at exclusive levels of finance.
(7) Some bequests and trusts for charitable purposes could benefit tourism through their activities effecting good within the wider community. Thus, trusts preserving land as a park or as a landscape vista, or one setting up a fund whereby an annual attraction might be held that is of benefit to the community from the point of view of science, education or the advancement of industry generally, might be examples of this. Clearly, both the plaintiff and Mrs. Grosvenor foresaw what would happen to this land should it fall into private ownership and be exploited for commercial suburban development. That cannot be separated from their clear intention to use it as a golf course, as opposed to a public area, a matter specifically excluded by ensuring through the wording of the trust document that those who wished to wander the land or take refreshments on it were to be denied entry.
(8) The fact that a particular organisation controls a charitable trust is not necessarily an indication against, or in favour of, its charitable status. Nor is it detrimental to that status that for a modest membership fee, some aspects of the charitable activities of the trust would be immediately accessible by being paid for in advance. Examples of this include an annual membership fee which might allow access to annual agricultural show; membership of an organisation that allows free access to and free borrowing of scientific books from a hospital library; or an annual membership that dispenses with a small fee that otherwise might be paid each time a public park, or a large national park for preserving a rural vista, is accessed. It is clear from the case law that exclusivity, in the terms of the benefit to be conferred, is an indication against charitable status. The more particular the benefit the less likely it is that an enterprise is charitable.
(9) It does not help an argument in favour of charitable status that a facility is open to tourists for a high fee, or that tourists may travel to use it. A hotel may be open to those who choose to pay to stay there and its quality may be such, and its facility so lavish, and so famous, that tourists are widely attracted thereby to the area in which it is situated.
Result
40. Applying these observations to the current case, I fail to see the activity being carried on by the defendants as being anything other than sport and recreation. There is no question but that all parties are decent people who were at all times motivated towards the betterment of our society. Nor is there anything to suggest that the golf club, and the directors of the company, have done anything other than keep strict faith with their obligations. That, however, is not the issue. The subject matter of this trust is a golf course. That cannot be the subject of a charitable trust under ordinary circumstances; an exception that might arise could be the setting up of a trust for the use of a golf course by members of the army or by people with disabilities. Membership is, on the standards that are not defined but are clearly indicated by the case law, exclusive. The golf club certainly benefits the community and attracts tourist traffic but, no matter how it is analysed, it is still an ordinary golf club which you may join in order to avoid green fees and which, if you are visiting, whether from America or another part of Kerry, you may use in the ordinary way through paying a substantial sum in green fees by way of joining as a daily member. For these reasons, therefore, this trust cannot be a charitable one.
Re Kelly: Cleary v. Dillon
[1932] IR 255
MEREDITH J “The first clause in the testator’s will that the Court is asked to construe does not present any great difficulty thatI can see. The testator says: “I devise and bequeath all my stock (except those hereinbefore bequeathed to the said Catherine Duggan) and all my property in America, and the residue of my estate of every nature and kind wheresoever situated to my executors and trustees to be sold by them and converted into money.” The testator had given a number of pecuniary legacies, and he had specifically devised and bequeathed his several farms in Ireland to several persons, and had also bequeathed the stock on these farms to Catherine Duggan. Accordingly, as he expressly mentions all his stock, he excepts the stock which he had specifically dealt with. Hence the expression “the residue of my estate of every nature and kind wheresoever situated” obviously includes what remained over and above what had just been mentioned in the same sentence and the stock specifically bequeathed to Catherine Duggan and the farms that had been specifically devised and bequeathed. Here “the residue of my estate” describes the rest of the property that is to come into the hands of the executors and trustees, to be converted by them into money. So coming into their hands, the proceeds of the conversion, which comprises the said residue, all stock not previously bequeathed to Catherine Duggan, and all the property in America, are clearly applicable to the payment of the pecuniary legacies. The testator then adds “with the directions that my said executors and trustees shall divide the residue of my estate in equal shares between my first cousin Mary Cleary (Mamie) and my first cousins James Cleary and Catherine Cleary of Urard aforesaid, Doctor Thomas Cleary and Laurence Cleary and Patrick Dunne.” Here the testator is dealing with the beneficial interest, and “the residue of my estate” means the residue of what is converted into money remaining over after the payment of the debts, funeral and testamentary expenses and pecuniary legacies. As the testator is dealing with what has all been converted into money he appropriately leaves out the previous words “of every nature and kind.” The testator then adds, “and I appoint my said first cousins residuary legatees and devisees of this my will as tenants in common.” This addition is quite proper, and indicates the careful manner in which the will was drawn. The residue of what was contemplated as being converted into money might not be thought to include any of the farms specifically devised and bequeathed should any such devise or bequest fail. Consequently, to prevent any uncertainty, the cousins named are made residuary legatees and devisees. The expression, “the residue of my estate,” is not used in two different senses in a will simply because in two different connections it may denote different residues. In each case the expression naturally means “that which remains after what has previously been given is withdrawn,” Greville v. Browne (1857) 7 HLC 689, at p. 705. But in the case of the residue devised and bequeathed to the executors and trustees for the purposes of the will, the residue denotes what remains after the specific devises or bequests, whereas in the case of the residue given to the residuary legatees it means what remains after what the will had expressly or impliedly provided the executors and trustees should do with the residue of the estate coming into their hands. The present case is a fortiori to that of Thorman v. Hi/house 5 Jur. (N.S.) 563, which was cited to the Court. Question 1 (d) must, therefore, be answered in the affirmative, and questions 1 (a), (b) and (c) and question 2 need not be answered as 1 (d) covers the only point that arises.
The remaining question concerns the validity of the following bequest: “I leave one hundred pounds sterling to my executors and trustees for the purpose of expending four pounds sterling on the support of each of my dogs per year, and I direct that my dogs be kept in the old house at Upper Tullaroan aforesaid. Should any balance remain in the hands of my trustees on the death of the last of my dogs I leave same to the Parish Priest for the time being of the Parish of Tullaroan for masses for the repose of my soul and the souls of my parents, brothers and stepfather.”
Mr. Michael Comyn, for the plaintiff, contended that both the gift for the support of the dogs and the gift over, which is to take effect on the death of the last of the dogs, are void.
It will be more convenient to deal first with the gift of any possible surplus remaining over on the death of the last of the dogs. Here the question, so far as there can be any question, is strictly one of remoteness. If the lives of the dogs or other animals could be taken into account in reckoning the maximum period of “lives in being and twenty-one years afterwards” any contingent or executory interest might be properly limited, so as only to vest within the lives of specified carp, or tortoises, or other animals that might live for over a hundred years, and for twenty-one years afterwards, which, of course, is absurd. “Lives” means human lives. It was suggested that the last of the dogs could in fact not outlive the testator by more than twenty-one years. I know nothing of that. The Court does not enter into the question of a dog’s expectation of life. In point of fact neighbour’s dogs and cats are unpleasantly long-lived; but I have no knowledge of their precise expectation of life. Anyway the maximum period is exceeded by the lives even of specified butterflies and twenty-one years afterwards. And even, according to my decision – and, I confess, it displays this weakness on being pressed to a logical conclusion – the expiration of the life of a single butterfly, even without the twenty-one years, would be too remote, despite all the world of poetry that may be thereby destroyed. In Robinson v. Hardcastle (1786) 2 Bro CC 22, at p. 30, Lord Thurlow defined a perpetuity in these words: “What is a perpetuity, but the extending the estate beyond a life in being, and twenty-one years after?” Of course by “a life” he means lives; and there can be no doubt that “lives” means lives of human beings, not of animals or trees in California.
Mr. McGuckin, for the Attorney-General, contended that the rule does not apply in the case of charities, but Chamberlayne v. Brockett (1872) LR 8 Ch App 206, at p. 211, cited by Mr. Price, and Kingham v. Kingham [1897] 1 IR 170, dispose of that contention. For these reasons, I am clearly of opinion that the gift over of the unascertained surplus on the death of the last of the dogs is void for remoteness.
I come now to the question of the validity of the trust in favour of the testator’s dogs. The point that in this case there is no cestui que trust – for certainly the Court cannot recognise a dog as a cestui que trust – was treated as disposed of by In re Dean; Cooper-Dean v. Stevens (1889) 41 Ch D 552, and was not relied on. The trustees are ready and willing to apply the £100 for the support of the dogs, as provided by the will, and counsel expressly confined themselves to the question as to whether or not the legacy is void as tending to a perpetuity. I have had the advantage of reading the learned discussions in Mr. Gray’s valuable work on “Perpetuities” and in Jarman on “Wills,” but it is quite competent to counsel to refrain from raising a point on which eminent authorities differ – and I think they are well advised in so doing where the amount in dispute is so small – and, consequently, I shall deal with the question solely in connection with the perpetuity point.
Now, to begin with, I must refuse to read into the will an implied limitation to a period of twenty-one years or “for so long as the law permits.” It is well established that I must first construe the will independently of the rule, and, having so construed it, then determine if any of its provisions offend. But that does not prevent me, when I have impartially construed the terms of the will,from analysing a provision which is manifestly not good in its entirety, for the purpose of determining whether the entire provision does not include a severable part which does not offend. The provision may be for a single, entire and indivisible purpose, and be ab initio a provision for a perpetuity and nothing less. Or the provision may in essence be constituted by what, fully and explicitly stated, is a series of provisions each for a limited period, say a week, or a month, or a year, and the whole provision may only come to offend by reason of the series being carried on indefinitely or beyond the prescribed period, and not because the provision is ab initio a provision for the series as a whole and nothing less. The question is clearly one of construction of the precise terms of the will. No doubt the distinction may be a fine one, but it clearly exists and is a well recognised logical distinction, and, if the adoption of the distinction saves a provision for what is in itself quite lawful from total failure, it seems to me that the intentions of the testator are entitled to the benefit of the subtlety, and certainly the object of the rule is abundantly secure by the invalidation simply of so much of the total provision as offends. So far as a provision for expenditure in a particular way for a term of years is simply provision for expenditure in a particular way for a mere sum of years, I cannot see any reason why that sum should not be treated as a mere mathematical sum divisible in any required manner. Mathematically 50 years can be dealt with as 21 + 29 years, and a provision for 50 years as a series of provisions for 21 years with an additional provision for 29 years. Hence a provision for a term of years may always be split up into provisions for lesser terms, which are comprised in one sum total, unless the provision is qualitatively of such an integral character as to prevent a mere quantitative division. In the present case the trustees are given £100 for the purpose of expending the sum of £4 “per year” on the support of each of the testator’s dogs. As he would appear to have had four dogs the £100 would be exhausted in a very few years by the annual expenditure of the £16 per annum. Consequently, ifl am not to speculate on a dog’s expectation of life, I am actually definitely precluded from regarding the provision as one for the support of the dogs for life, though I have no doubt the testator hoped that the £100 would be sufficient to make such a provision. But the dogs might all die before the £100 was fully expended, and accordingly the testator made provision for the application of the contingent residue. It was only in that connection that there was any reference to the lives of the dogs, and there was no reference to any definite term. The provision is simply one for an amount, depending upon the number of dogs continuing to live, per year. The provision seems to me to be essentially one for successive annual expenditures, to be accounted for by the trustees at the end of each year. Each of these successive expenditures is what it is, independently of whether sufficient of the capital sum of £100 remains to provide for the future, and independently of whether I hold that any provision for expenditure in the twenty second and succeeding years is void. The dogs have to take their chance of expenditure year by year without the benefit of any policy of insurance.
Accordingly, unless coerced by authority, I shall hold that the provision for the expenditure on the support of the dogs per year is good for the twenty-one years succeeding the death of the testator, but that the possible provision for the twenty-second and succeeding years is void for remoteness. On this view the question of perpetuity in the primary sum does not arise. It is only certain possible future expenditures that are regarded as contravening the rule against perpetuity on the ground of remoteness.
In the majority of the cases of immediate interests which have been held void as tending to create a perpetuity the trust was for an integral purpose involving a perpetuity and for nothing less, and was therefore, ab initio for a perpetuity. The only authority in which the possibility of there being a complete trust for a limited period was considered is Small v. Tarley (1890) 25 LR Ir
388. Referring to Dillon v. Reilly (1875) IR IO Eq 152, Porter M.R. said: “It cannot be treated as a decision that in a case where words are used which purport to tie up property beyond legal limits the Court will from thence carve out a life estate, hold it good to that extent, and reject the rest.” But in that case what it was suggested to carve out was a life estate, for which severance there was no justification on the words of the will. The learned Master of the Rolls makes it clear in his judgment that the possibility of a severance must tum on the precise words of the will. The trust provided for an annual sum for saying masses for a mere term of years, and the suggestion that there was a complete and severable trust for each succeeding year, and therefore for the first twenty one years of the term, was not raised. The invalidation of the trust for the residue of the term would have in no way affected the trust for any of the preceding years. Some reason has yet to be suggested why what is compendiously described as a mere aggregate is not as divisible in law as it is in mathematics. Suppose the trust had been worded “for twenty-one years and for one additional year,” could the words “and for one additional year” have made the trust void? The suggestion seems to me absurd. For these reasons I adhere to the view that in the present case there is a valid severable trust for twenty-one years succeeding the death of the testator, provided any of the dogs live so long.”
Re Byrne
Shaw v. Attorney General
[1935] IR 782
MURNAGHAN J “Two appeals have been brought before the Court from determinations of Mr. Justice Johnston, made on the hearing of a Summary Summons.
This summons was taken out to obtain the opinion of the Court upon several questions of construction of the will of Daniel Byrne deceased. The deceased died on 12th May, 1934, within five days of the making of his will, having bequeathed certain legacies for charitable purposes. These legacies were pecuniary legacies of which the principal in amount was £1,000 to the Most Rev. Thomas Mulvany or other the Bishop for the time being of the Catholic Diocese of Meath for the new Cathedral Building Fund.
Sect. 16 of the Charitable Donations and Bequests Act, 1844, enacts “That after the commencement of this Act no donation, devise, or bequest for pious or charitable uses in Ireland shall be valid to create or convey any estate in lands, tenements, or hereditaments for such uses, unless the deed, will, or other instrument containing the same shall be duly executed three calendar months at the least before the death of the person executing the same, and unless every such deed or instrument, not being a will, shall be duly registered in the office for registering deeds in the City of Dublin within three calendar months after the execution thereof.”
This section does not apply to pecuniary legacies, but in the present case the testator, having appointed executors and declared that the same persons should be his trustees for the purposes of his will, and, after bequeathing legacies, charitable and non-charitable, continued:- “I devise unto and to the use of my said trustees all the real estate I die possessed of and I bequeath to them all the personal estate I may die possessed of, upon trust to sell and convert into money my said estates or such parts thereof as may be of a saleable or convertible nature and to get in the other parts thereof, and I empower my said trustees to suspend for such period as they shall think expedient the sale, conversion or getting in of my said estates and during the suspense of the sale, conversion or getting in to manage and order all the affairs thereof. And I declare that for the purposes of enjoyment and transmission under the trusts hereinafter contained my said estates shall be considered as money from the time of my death and the rents, dividends, interest, etc., respectively to accrue due after my death shall be deemed the actual income thereof applicable as such for the purposes of the said trusts until the actual sale or conversion of the said property. And as to the moneys to arise from the sale, conversion and getting in of my said estates and moneys I direct my trustees thereout in the first place to pay or retain all the expenses incident to the execution of the preceding trusts and powers and my debts, funeral and testamentary expenses and in the next place to pay the pecuniary legacies hereinbefore bequeathed and to invest the ultimate surplus with power from time to time in the discretion of my trustees to vary such investments.”
Now, these provisions of the will made a blended or mixed fund – the proceeds of realty and personalty – casting upon the lands portion of the amounts bequeathed to charitable purposes. It has been held in Sherlock v. Blake 10 Ir Jur NS 350 as well as in Beardwood v. Coates 18 WR 1154 that, if lands are directed to be sold and the proceeds applied for charitable purposes, sect. 16 of the above mentioned Act applies as it applies to a direct bequest of the lands for charitable purposes. These decisions have never since been called in question, and they have been recognised in Donnellan v. 0 ‘Neill and Others (1870) IR 5 Eq 523; Stewart v. Barton (1872) IR 6 Eq 215; Murland v. Perry
(1879) 3 LR Ir 135, and M’Dermott v. Attorney-General [1922] 1 IR 139. The principle was applied by Barton J. in Leonard v. Dowling [1916] 1 IR 359 and in a case like the present, where the legacies were paid out of a mixed fund, an order was made for payment pro rata, with the consequence that the portion to be borne out of the proceeds of land failed by reason of the statute.
For the Attorney-General it is now urged that the decision in Sherlock v. Blake was erroneous in principle and that the section was not intended by the Legislature to apply in cases where the land was directed to be sold. It will be observed that in the cases referred to various reasons have been put forward in support of the decisions, sometimes that notwithstanding the trust for conversion into money the charity might elect to take the lands in specie and accomplish what the statute was intended to prevent; sometimes the reason is stated more technically that the beneficial gift to the charity must be regarded as an equitable estate in the land. Mr. Gavan Duffy has sought to criticise such an exposition of the statute and argues that the object was to prevent land itself from being held in perpetuity, and that the section has no application when the land is directed to be sold.
Although land might not be held by corporate bodies without licence from
the Crown, there does not appear to have been in Ireland any restriction prior to the passing of 7 & 8 Viet., c. 97, upon the holding of land by trustees for charitable purposes. In England since the passing of 9 Geo. 2, c. 36, gifts of land or money to be laid out in the purchase of land to be held for charitable uses were declared void unless made more than 12 months before the death of the donor. This statute commenced with a preamble or recital as follows: “Whereas gifts or alienations of lands, tenements or hereditaments in mortmain are prohibited or restrained by Magna Charta and divers other wholesome laws as prejudicial to and against the common utility, nevertheless this publick mischief has oflate greatly increased by many large and improvident alienations or dispositions made by languishing or dying persons or by other persons to uses called charitable uses to take place after their deaths to the disherison of their lawful heirs.” Scotland was excepted from this Act and whatever may have been the causes which led to its adoption in England the scope of the Act was very wide. In more recent times the Legislature has made substituted provisions and instead of preventing “the disherison of heirs” has directed the land in many of the cases dealt with by the earlier statute to be sold and the money proceeds to be given to the charitable purpose: Mortmain and Charitable Uses Act, 1891 (54 & 55 Viet. c. 73). This latter statute did not, however, purport to deal with Ireland and we are left to deal with 7 & 8 Viet. c. 97, which has so far not been altered by the Legislature.
Mr. Gavan Duffy’s argument is based upon the proposition that the Legislature in 1844 had no object in view save to prevent the dedication of land in perpetuity and he complains that the Judges of the day imported notions derived from the English Act of George 2 as to the gifts of “languishing or dying persons” and “the disherison of their lawful heirs.” It is true, as he points out, that the section in question – sect. 16 – is interpolated in an Act which is for the maintenance of charities rather than their suppression. It follows sect. 15 which enables lands or goods to be given to the Commissioners of Charitable Donations and Bequests to be held for certain purposes in connection with the Roman Catholic religion, and an argument is based on the omission in sect. 16 of any reference to chattels. But if we take the simple case of a devise of land to A upon trust to sell and apply the proceeds to charitable purposes, the very words of the Act prevent any estate passing to the trustee, and the heir-at-law by force of the statute could recover in an ejectment. Further, where a devise is made to a trustee the equitable estate is to be regarded as well as the legal estate, and in my opinion the section by its terms destroys the equitable estate sought to be created in the circumstances dealt with by the statute. The statute did have an object in naming the period of three months before death, and it is not possible to harmonise Mr. Duffy’s proposition as to the object of the statute with this provision. In my opinion there is no just ground to suppose that the rule laid down in Sherlock v. Blake 10 Ir Jur NS 350 is wider than the statute intended. It is for the Legislature to say whether any alteration such as was made in England in 1891 should now be made.
The other appeal is concerned with the construction of the final clause contained in the will of Daniel Byrne, deceased. It reads:- “And I further direct my trustees to stand possessed of the said trust moneys or the stocks, funds and securities whereon the same shall be invested as aforesaid upon trust to pay the annual income to my nephew Gerard Shaw and my niece Aileen Shaw in equal shares during the term of their respective lives and to the survivor during his or her life. And after the death of such survivor as to as well the capital as the income of the said trust moneys, stocks, funds or securities for the absolute use and benefit of the Jesuit Order in Ireland.”
Both the persons entitled to the income are alive, but it has become necessary to determine whether the ultimate gift “for the absolute use and benefit of the Jesuit Order in Ireland” is valid or not. There is considerable property both real and personal subject to the trusts of the will and, if this ultimate gift is not valid, the heir-at-law and the next-of-kin will be entitled to this undisposed of property.
The Attorney-General contends that this ultimate gift is for the benefit of a charity, and in the circumstances of the case, if this view be the correct one, the gift would be good in so far as it is not derived out of land. Evidence has been given showing that many of the activities of the Jesuit Order are charitable in the legal sense as there is no doubt that much of these activities are either for the advancement of religion or for the advancement of education. Mr. Justice Johnston has, however, quoted from Jarman on Wills (Edit. of 1910), p. 474, the following passage, and there has been no real attempt to question or qualify the principles stated in the passage. It reads:- “Where property is given to trustees for purposes that are partly charitable and partly of an indefinite nature not charitable, so that the whole might be applied for either purpose, the gift is void.” I do not think it necessary to go through the evidence in detail but I am satisfied that the work of the Jesuit body, although largely charitable in the legal sense, is not so exclusively charitable in this sense that a gift may be considered as a charitable gift, if given for the purposes of the Jesuit Order in Ireland. I think it right to point out that the testator has not himself used the word charitable in this connection and it would be an undue strain upon the usual meaning of the words employed by him to say that the money has been devoted by him to a charitable purpose. ..
Mr. Justice Johnston has, however, held that this gift is void for uncertainty, and an appeal has been taken against this portion of the order by two named persons who have been appointed by the Court to represent the individual members of the Jesuit Order in Ireland. Evidence has been given by affidavit which shows that the Jesuit Order is world-wide and that the Order is organised into provinces – one being the Irish province. The material portions of this affidavit are quoted in the judgment of Mr. Justice Johnston as follows:- “The said Society is a religious body or association consisting of Catholic Priests, Scholastics (that is, those in course of training for the priesthood) and lay brothers and comprises about 447 members in Ireland. The members of the said Society are bound, or in the case of novices will be bound at the end of their novitiate, by the ordinary monastic and religious vows.” The learned Judge comments on this affidavit as not making clear whether or not lay brothers are bound by these vows. The affidavit then states the objects of the Society in detail and adds: “The members of the said Society are frequently referred to and known as the Jesuit Fathers or the Jesuits and the Society itself as the Jesuit Order.”
The learned Judge gives the reasons which led him to hold that the gift was void for uncertainty. After commenting upon the facts of the case of Bradshaw
v. Jackman (1887) 21 LR Ir 12, he says:- “But this is a wholly different case. The gift is to the Jesuit Order in Ireland. The members of it reside both in Northern Ireland and in the Irish Free State. They have, so far as I know, no local habitation which is common to all and they consist of three different classes of persons – priests, novices and lay brothers – who, as I gather from Father Kieran’s affidavit, have widely different rights, duties and ecclesiastical status. There is in the will no expression of intention as to when the class of those who it is said are to benefit from the gift are to be ascertained, whether at the death of the testator or at some future period. There is nothing to indicate whether it is a gift to ‘members’ in a complete sense – that is, professed members – or whether lay brothers and scholastics are to be included as beneficiaries. Nor, indeed, is there anything to suggest whether members of the Order temporarily in Ireland, at a particular time, are objects of the testator’s bounty or not. The whole thing is so uncertain that I do not see how the Court could
carry out the bequest.”
Several of the matters thus referred to do not appear to me to lead to the
kind of uncertainty which makes a gift void at law. It is, in my opinion, settled that where a gift is to a class subsequent to life interests, in the absence of any indication to the contrary, the members of the class to take are to be ascertained at the death of the tenants-for-life or the survivor of them. Again, the amount dealt with is close upon £20,000 and, even if the number amounts to 447 persons entitled to share, there would be no difficulty in ascertaining these individuals. A gift to the crew of a ship or to members of a regiment could not be said to be void for uncertainty merely on the ground of the large number entitled to share. There are undoubtedly difficulties of construction in the other points dealt with by the learned Judge, but the Court can give a ruling as to the meaning of the words used by the testator although there are several plausible alternatives. To hold that a gift is void for uncertainty means that it is impossible for the Court to ascertain what the testator did intend.
If, by a gift for the absolute use and benefit of the Jesuit Order in Ireland, the testator meant his gift to enure for a continuing body whose existence has not received legal recognition, the gift would fail. If, on the other hand, he meant to divide his money amongst the individuals forming a class, I can see no legal objection to the validity of such a gift.
Members of religious Orders were formerly subject to legal disabilities under 10 Geo. 4, c. 7, and 7 & 8 Viet. c. 97, sect. 15. But, as Mr. Justice Johnston pointed out, all such disabilities were swept away by the Government of Ireland Act, 1920, sect. 5, sub-sect. 2:- “Any existing enactment by which any penalty, disadvantage, or disability is imposed on account of religious belief or on a member of any religious Order as such shall, as from the appointed day, cease to have effect in Ireland.” It is not necessary to discuss whether this Act of 1902 has been repealed or not, as in regard to the point before the Court
any repeal would not revive those enactments which were themselves repealed by the Government of Ireland Act, 1920.
Many authorities were cited stating the principle that gifts to a convent or religious or other body may be construed as gifts to the individuals associated together to form the convent or religious or other body: Cocks v. Manners (1871) LR 12 Eq 574; In re Clarke, Clarke v. Clarke [1901] 2 Ch 110; In re Smith, Johnson v. Bright-Smith [1914] 1 Ch 937. In the last mentioned case Joyce J. (at p. 948) remarks:- “So, in my opinion, a bequest to any un incorporated society or association not charitable is good because, and only because, it is treated as being and is a bequest to the several members of such society or association, who can spend the money as they please. If there should be any understanding, or even contract, between these persons as to how the moneys so derived, that is from legacies, are to be expended, that is something with which in the absence of any express trust or direction in the will the executors who pay the legacy have nothing whatever to do.”
I may pass by another class of case where the language used allows the Court to gather that the gift is for a charitable purpose, e.g., a gift for Masses in Bourne v. Keane [1919] AC 815. A number of authorities have also been cited, such as Stewart v. Green (1871) IR 5 Eq 470; Morrow v. M’Conville (1883) 11 LR Ir 236, where from the language used the Court has determined that the gift was not to individuals but for a quasi-continuing body not recognised by law. The language of the testator must in each case be the guide and even slight indications may lead to the real meaning of the testator. A recent case in England may illustrate the difficulties of ascertaining the testator’s meaning. In re Barclay, Stewart v. Barclay [1929] 2 Ch 173 dealt with a bequest to the Superior of the Jesuit Fathers at Farm Street, London, in which it was held in the first instance that the gift was an absolute gift to the Superior, but in the Court of Appeal it was determined that the language used led to the conclusion that a charitable gift for the maintenance of Farm Street Church was intended.
The legal principles involved are thus well settled, but it is a question of nicety to say which principle is applicable to the facts of this case. There is no difficulty in the language used by the testator which prevents it from indicating a beneficial gift to the members of the class indicated. Can it be said that it is unlikely that the testator would make such a gift? The brother of the testator was a member of the Jesuit Order in Ireland and the testator knew the practice of individual members of the Order in reference to legacies. In re Delany’s Estate (1882) 9 LR Ir 226 was a case determined by the Court of Appeal in Ireland and the gift in that case was “to the Sisters of Mercy at Bantry.” But it seems to me that on the point now under consideration the words of FitzGibbon L.J. are very applicable. He said (at p. 245):- “I decline to impute to ‘the Sisters of Mercy at Bantry’ the attributes of a corporate body, which they do not legally possess, merely in order to destroy the gift to them. At the same time, I see no reason to suppose that the testator imputed those attributes to them in any sense by which his gift would have been invalidated if his meaning had been more fully expressed.” If it be asked what is there in the will which indicates that the individual members of the community were not to take beneficially the suggested answer is based on the number of these individuals and the improbability that they would be given personal benefits. But the testator was making a disposition to take effect only upon the decease of his nephew and niece – a younger generation – and, if he wished to devote his money to the purposes of the Order, the end would be accomplished by a legal gift to all the members for their personal benefit in law.
In my opinion the ultimate gift is a valid gift of a non-charitable nature for
the benefit of a class. It is premature to determine what members the class consists of, and we have not before us the persons interested under the possible alternatives suggested. In my opinion the appeal must be allowed so far as it deals with the answer to Question 9, to which the answer is that the bequest of the remainder is not void for uncertainty. In that view Question 10 does not call for any answer.”
The only real theoretical difficulty with the approach as set out in Re Byrne is that any member who leaves the association can take his share with him unless he assigns it to the other members and a new member will have no share in the property. More recently in England an alternative theory has been developed which has found favour with the courts in that jurisdiction and which may well also prove to be the most suitable approach for the courts here to employ.
Leahy v Attorney-General for New South Wales
[1959] AC 457
VISCOUNT SIMONDS … What is meant when it is said [as it had been in the High Court] that a gift is made to the individuals comprising the community and the words are added ‘it is given to them for the benefit of the community’?If it is a gift to individuals, each of them is entitled to his distributive share (unless he has previously bound himself by the rules of the society that it shall be devoted to some other purpose). It is difficult to see what is added by the words ‘for the benefit of the community.’ If they are intended to import a trust, who are the beneficiaries? If the present members are the beneficiaries, the words add nothing and are meaningless. If some other persons or purposes are intended, the conclu sion cannot be avoided that the gift isvoid.For it isuncertain, and beyond doubt tends to a perpetuity.
The question then appears to be whether, even if the gift to a selected Order of Nuns isprima faciea gift to the individual members of that Order, there are other considerations arising out of the terms of the will, or the nature of the society, its organisation and rules, or the subject-matter of the gift which should lead the court to conclude that, though prima facie the gift is an absolute one (absolute both in quality of estate and in freedom from restriction) to individual nuns, yet it is invalid because it is in the nature of an endowment and tends to a perpetuity or for any other reason. This raises a problem which is not easy to solve, as the divergent opinions in the High Court indicate.
The prima facie validity of such a gift (by which term their Lordships intend a bequest or demise) is a
convenient starting point for the examination of the relevant law. For as Lord Tomlin (sitting at first instance in the Chancery Division) said in In re Ogden [1933] Ch 678, 49 TLR 341, a gift to a voluntary association of persons for the general purposes of the association is an absolute gift and prima facie a good gift. He was echoing the words of Lord Parker in Bowman’s case [1917] AC 406,442 that a gift to an unincorporated association for the attainment of its purposes ‘may … be upheld as an absolute gift to its members.’ These words must receive careful consideration, for it is to be noted that it is because the gift can be upheld as a gift to the individual members that it is valid, even though it is given for the general purposes of the association. If the words ‘for the general purposes of the association’ were held to import a trust, the question would have to be asked, what is the trust and who are the beneficia ries? A gift can be made to persons (including a corporation) but it cannot be made to a purpose or to an object: so also, a trust may be created for the benefit of persons as cestuis que trust but not for a pur pose or object unless the purpose or object be charitable. For a purpose or object cannot sue, but, if it be charitable, the Attorney-General can sue to enforce it. It is therefore by disregarding the words ‘for the general purposes of the association’ (which are assumed not to be charitable purposes) and treating the gift as an absolute gift to individuals that it can be sustained .
Re Denley’s Trust Deed
[1969] 1 Ch 373, Chancery Division
GOFF J: I think there may be a purpose or object trust, the carrying out of which would benefit an indi vidual or individuals, where that benefit is so indirect or intangible or which is otherwise so framed as not to give those persons any locus standi to apply to the court to enforce the trust, in which case the beneficiary principle would, as it seems to me, apply to invalidate the trust, quite apart from any ques tion of uncertainty or perpetuity. Such cases can be considered if and when they arise. The present is not, in my judgment, of that character, and it will be seen that the trust deed expressly states that,subject to any rules and regulations made by the trustees, the employees of the company shall be enti tled to the use and enjoyment of the land. Apart from this possible exception, in my judgment the bene ficiary principle of Re Astor’s ST [1952] Ch 534, which was approved in Re Endacott (dec’d) [1960] Ch 232, CA-see particularly by Harman LJ-is confined to purpose or object trusts which are abstract or impersonal. The objection is not that the trust is for a purpose or object per se, but that there is no beneficiary or cestui que trust …
Where, then, the trust, though expressed as a purpose, isdirectly or indirectly for the benefit of an indi vidual or individuals, it seems to me that it is in general outside the mischief of the beneficiary principle.
Re Astor’s ST, Astor v Scholfield
[1952] Ch 534
ROXBURGH J (after observing that it was common ground that none of the purposes offended the rule against perpetuities, and that none was charitable): The question upon which I am giving this reserved judgment is whether the non-charitable trusts of income during ‘the specified period’ declared by clause 5 and the third schedule of the settlement of 1945 are void. [Counsel] have submitted that they are void on two grounds: (1) that they are not trusts for the benefit of individuals;(2) that they are void for uncertainty.
Lord Parker considered the first of these two questions in his speech in Bowman v Secular Society Ltd [1917] AC 406 and I will cite two important passages. The first is [at 437]:
The question whether a trust be legal or illegal or be in accordance with or contrary to the pol icy of the law, only arises when it has been determined that a trust has been created, and is then only part of the larger question whether the trust is enforceable. For, as will presently appear, trusts may be unenforceable and therefore void, not only because they are illegal or contrary to the policy of the law, but for other reasons.
A trust to be valid must be for the benefit of individuals, which thisis certainly not, or must be in that class of gifts for the benefit of the public which the courts in this country recognize as char itable in the legal as opposed to the popular sense of that term.
Commenting on those passages [counsel for the trustees] observed that Bowman vSecular Society Ltd arose out of a will and he asked me to hold that Lord Parker intended them to be confined to cases aris ing under a will. But they were, I think, intended to be quite general in character. Further, [counsel] pointed out that Lord Parker made no mention of the exceptions or apparent exceptions which undoubtedly exist, and from this he asked me to infer that no such general principle can be laid down, the question is whether those cases are to be regarded as exceptional and anomalous or whether they are destructive of the supposed principle. I must later analyse them. But I will first consider whether Lord Parker’s propositions can be attacked from a base of principle.
The typical case of a trust is one in which the legal owner of property is constrained by a court of equity so to deal with it as to give effect to the equitable rights of another. These equitable rights have been hammered out in the process of litigation in which a claimant on equitable grounds has success fully asserted rights against a legal owner or other person in control of property.Prima facie,therefore, a trustee would not be expected to be subject to an equitable obligation unless there was somebody who could enforce a correlative equitable right, and the nature and extent of that obligation would be worked out inproceedings for enforcement. Thisis what I understand by Lord Parker’sfirst proposition. At an early stage, however, the courts were confronted with attempts to create trusts for charitable purposes which there was no equitable owner to enforce. Lord Eldon explained in Attorney-General v Brown (1818) 1 Swans 265, 290 how this difficulty was dealt with:
It is the duty of a court of equity, a main part, originally almost the whole, of its jurisdiction, to administer trusts; to protect not the visible owner, who alone can proceed at law, but the individual equitably, though not legally, entitled. From this principle has arisen the practice of administering the trust of a public charity: persons possessed of funds appropriated to such purposes are within the general rule; but no one being entitled by an immediate and peculiar interest to prefer a complaint, who is to compel the performance of their obligations, and to enforce their responsibility? It is the duty of the King, as parens patriae, to protect property devoted to charitable uses; and that duty is executed by the officer who represents the Crown for all forensic purposes. On this foundation rests the right of the Attorney-Generalin such cases to obtain by information the interposition of a court of equity …
But if the purposes are not charitable, great difficulties arise both in theory and in practice. In theory, because having regard to the historical origins of equity it is difficult to visualize the growth of equitable obligations which nobody can enforce, and in practice, because it is not possible to contemplate with equanimity the creation of large funds devoted to non-charitable purposes which no court and no department of state can control, or in the case of maladministration reform. Therefore, Lord Parker’s second proposition would prima facie appear to be well founded. Moreover, it gains no little support from the practical considerations that no officer has ever been constituted to take, in the case of non charitable purposes, the position held by the Attorney-General in connection with charitable purposes, and no case has been found in the reports in which the court has ever directly enforced a non-charitable purpose against a trustee. Indeed where, as in the present case, the only beneficiaries are purposes and at present unascertainable person, it is difficult to see who could initiate such proceedings. If the purposes are valid trusts, the settlors have retained no beneficial interest and could not initiate them. It was suggested that the trustees might proceed ex parte to enforce the trusts against themselves. I doubt that, but at any rate nobody could enforce the trusts against them. This point, in my judgment, is of importance, because in most of the cases which are put forward to disprove Lord Parker’s prop ositions the court had indirect means of enforcing the execution of the non-charitable purposes.
These cases I must now consider …
Let me then sum up the position so far. On the one side there are Lord Parker’s two propositions with which I began. These were not new, but merely re-echoed what Sir William Grant had said as Master of the Rolls in Morice v The Bishop of Durham as long ago as 1804 (9 Ves 399, at 405): ‘There must be somebody, in whose favour the court can decree performance.’ The position was recently restated by Harman JinIn reWood [[1949] Ch 498,501]: ‘A gift on trust must have a cestui que trust,’ and this seems to be in accord with principle. On the other side is a group of cases relating to horses and dogs, graves and monuments-matters arising under wills and intimately connected with the deceased-in which the courts have found means of escape from these general propositions … [These] may, I think, prop erly be regarded as anomalous and exceptional and in no way destructive of the proposition which traces descent from or through Sir William Grant through Lord Parker to Harman J. Perhaps the late Sir Arthur Underhill was right in suggesting that they may be concessions to human weakness or senti ment (see Underhill’s Law of Trusts and Trustees, 8th ed., p. 79 [10th ed., p. 97]). They cannot, in my judgment, of themselves (and no other justification has been suggested to me) justify the conclusion that a Court of Equity will recognize as an equitable obligation affecting the income of large funds in the hands of trustees a direction to apply it in furtherance of enumerated non-charitable purposes in a manner which no court or department can control or enforce. I hold that the trusts here in question are void on the first of the grounds submitted by ….enforce the trust. This is not altogether satisfactory, since the residuary beneficiary will not necessarily have any interest in enforcing it, but they were regarded as anomalous exceptions in Re Astor’s ST, and similarly in Re Endacott [1960] Ch 232, where a gift ‘to North Tawton Devon Parish Council for the purpose of providing some useful memorial to myself’ was held void by the Court of Appeal. Dean and Thompson were again regarded as anomalous and not to be extended. It is a pity, however, that the Court of Appeal did not take the opportunity to overrule them, as it is very difficult to know exactly what they stand for, or on what principle they operate or the basis on which they are enforced.
Re Shaw, Public Trustee v Day
[1957] 1 WLR 729,
HARMAN J: Can, then this project be upheld apart from charity? I feel bound to say at once that, as the authorities stand, I do not think I am at liberty to hold that it can …
Lord Parker of Waddington inBowman vSecular Society Ltd categorically states ([1917]) AC at p. 441): trust to be valid must be for the benefit of individuals_ .. or must be in that class of gifts for the benefit of the public which the courts in this country recognise as charitable …
In other words, one cannot have a trust, other than a charitable trust, for the benefit, not of individuals, but of objects. The reason has been often stated, that the court cannot control the trust. The principle has been recently restated by Roxburgh Jin Re Astor’s Settlement Trusts, Astor vScholfield (11952] 1 All ER 1067). where the authorities are copiously reviewed. An object cannot complain to the court, which, therefore, cannot control the trust, and, therefore, will not allow it to continue.I must confess that I feel some reluctance to come to this conclusion.I agree at once that, if the persons to take in remainder are unascertainable, the court is deprived of any means of controlling such a trust, but if, as here, the persons taking the ultimate residue are ascertained, I do not feel the force of this objection. They are entitled to the estate except in so far it has been devoted to the indicated purposes, and in so far it is not devoted to those purposes, the money being spent is the money of the residuary legatees, or the ultimate remaindermen, and they can come to the court and sue the executor for a devastavit, or the trustee for a breach of trust, and thus, though not themselves interested in the purposes, enable the court indirectly to control them. This line of reasoning is not, I think, open to me ..
I should have wished to regard this bequest as a gift to the ultimate residuary legatees subject to a condition by which they cannot complain of income during the first twenty-one years after the testa tor’s death being devoted to the alphabet project. This apparently might be the way in which the mat· ter would be viewed in the United States, for I find in Morris & Leach on the Rule Against Perpetuities (1956). atp.308, the following passage quoted from the American Law lnstitute’s Restatement of Trusts:
Where the owner of property transfers it upon an intended trust for a specific non-charitable purpose, and there is no definite or definitely ascertainable beneficiary designated, no trust is created; but the transferee has power to apply the property to the designated purpose, unless he is authorised so to apply the property beyond the period of the rule against perpetuities, or the purpose is capricious.
As the authors point out, this is to treat a trust of this sort as a power, for clearly there is no one who can directly enforce the trust, and if the trustees choose to pay the whole moneys to the remaindermen, no one can complain. All that can be done is to control the trustees indirectly in the exercise of theirpower. In my judgment, I am not at liberty to validate this trust by treating it as a power …
The result is that the alphabet trusts are, in my judgment, invalid, and must fail. It seems that their begetter suspected as much, hence his jibe about failure by judicial decision. I answer that it is not the fault of the law, but of the testator, who failed almost for the first time in his life to grasp the problem or to make up his mind what he wanted.
Re Tyler
[1891] 3 Ch 252, Court of Appeal
LINDLEY LJ:… Mr Justice Stirling has decided that the condition on whith the gift over is to take effect is valid, and the appeal to us is against so much of his order as declares.that the condition of repairing and rebuilding the family vault is a valid condition and binding _om the defendants, the London Missionary Society; the defendants asking that that may be reversed.
There is no doubt whatever that this condition, in one sense, tends to.aperpetuity.The tomb or value is to be kept in repair, and in repair for ever. There is also no doubt, and I think it is settled, that a gift of that kind cannot be supported as a charitable gift. But, then, this cas-e,issaid to fall within an exception to the general rule relating to perpetuities. It is common knowledge that the rule as to perpetuities does not apply to property given to charities; and there are reasons why it should not. It is an exception to the general rule; and we are guided in the application of that doctrine by the case which has been referred to of Christ’s Hospital v Grainger 1 Mac & G 460.It is sufficient for me to refer to the head-note for the facts. The bequest there was ‘to the corporation of Reading, Ol!’Certain trusts for the benefit of the poor of the town of Reading, with a proviso that, if the corporationof Reading should, for one whole year, neglect to observe the directions of the will, the gift should be utterly void, and the property be transferred to the corporation of London, in trust for a hospital in the town of London.’ It was argued that that gift over was invalid, and Lord Cottingham disposes of the argument in this way:
It was then argued that it was void, as contrary to the rules against-perpetuities.These rules are to prevent, in the cases to which they apply; property from being inalienable beyond certain periods. Is this effect produced, and are these rules invaded by the transfer, in a certain event, of property from one charity to another? If the corporation of Reading might hold the property for certain charitiesin Reading, why may not the corporation of London hold it for the charity of Christ’s Hospital in London? The property is neither more nor less alienable on that account.
Guided by that decision, and acting on that principle, Mr Justice Stirling held that this condition was a valid condition; and it appears to me that he was right. What is this gift when you come to look at it? It is a gift of £42,000 Russian 5 per Cent. Stock to the London Missionary Society. What for? It is for their charitable purposes. It isa gift to them for the purposes for which they exist. Then there is a gift over to another charity in a given event-that is to say, the non-repair of the testator’s vault. It seems to me to fall precisely within the principle on which Christ’s Hospital v Grainger was decided. A gift to a charity for charitable purposes, with a gift over on an event which may be beyond the ordinary limit of perpetu ities to another charity-I cannot see that there is anything illegal in this. Mr Buckley has put it in the strongest way he can. He says that, if you give effect to this condition, you will be enabling people to evade the law relating to perpetuities. I take it this decision will not go the length-certainly I do not intend it should, so far as I am concerned-thatyou can get out of the law against perpetuities by mak ing a charity a trustee. That would be absurd; but that is not this case. This property is given to the London Missionary Society for their charitable purposes. Then, there is a condition that, if the tomb is not kept in order, the fund shall go over to another charity. That appears to me, both on principle and authority, to be valid; and I do not think it is a sufficient answer to say that sucha conclusion is an induce ment to do that which contravenes the law against perpetuities. There is nothing illegal in keeping up a tomb; on the contrary,it is a very laudable thing to do.It isa rule of law that you shall not tie up property in such a way as to infringe what we know as the law against perpetuities; but there is nothing illegal in what the testator has done here. The appeal must be dismissed with costs.
FRY LJ: I am of the same opinion …Keeping the tomb in repair is not an illegal object. If it were, the condi tion tending to bring about an illegal act would itself be illegal;but to repair the tomb is a perfectly lawful thing. All that can be said is that it is not lawful to tie up property for that purpose. But the rule of law against perpetuities applies to property, not motives; and I know of no rule which says that you may not try to enforce a condition creating a perpetual inducement to do a thing which is lawful. That is thiscase.
Neville Estates v Madden
[1962] Ch 832
CROSS J: (on the holding of property by non-charitable unincorporated associations): I turn now at last to the legal issues involved. The question of the construction and effect of gifts to or in trust for unin corporated associations was recently considered by the Privy Council in Leahy v Attorney-Genera/ for New South Wales [1959] AC 457. The position, as I understand it, is as follows. Such a gift may take effect in one or other of three quite different ways. In the first place, it may, on its true construction, be a gift to the members of the association at the relevant date as joint tenants, so that any member can sever his share and claim it whether or not he continues to be a member of the association. Secondly, it may be a gift to the existing members not as joint tenants, but subject to their respective contractual rights and liabilities towards one another as members of the association.In such a case a member cannot sever his share. It will accrue to the other members on his death or resignation, even though such mem bers include persons who became members after the gift took effect. If this is the effect of the gift, it will not be open to objection on the score of perpetuity or uncertainty unless there is something in its terms or circumstances or in the rules of the association which precludes the members at any given time from dividing the subject of the gift between them on the footing that they are solely entitled to it in equity.
Thirdly, the terms or circumstances of the gift or the rules of the association may show that the prop erty in question is not to be at the disposal of the members for the time being, but is to be held in trust for or applied for the purposes of the association as a quasi-corporate entity. In this case the gift will fail unless the association is a charitable body. If the gift is of the second class, i.e. one which the members of the association for the time being are entitled to divide among themselves, then, even if the objects of the association are in themselves charitable, the gift would not, I think, be a charitable gift. If, for example, a number of persons formed themselves into an association with a charitable object-say the relief of poverty in some district-but if it was part of the contract between them that, if a majority of the members so desired, the association should be dissolved and its property divided between the members at the date of dissolution, a gift to the association as part of its general funds would not, Icon ceive, be a charitable gift.
Re Recher’s WT
[1972] Ch 526
BRIGHTMAN J: A trust for non-charitable purposes, as distinct from a trust for individuals, is clearly void because there is no beneficiary. It does not, however, follow that persons cannot band themselves together as an association or society, pay subscriptions and validly devote their funds in pursuit of some lawful non-charitable purpose. An obvious example is a members’ social club. But it is not essen tial that the members should only intend to secure direct personal advantage to themselves. The asso ciation may be one in which personal advantages to the members are combined with the pursuit of some outside purpose. Or the association may be one which offers no personal benefit at all to the members, the funds of the association being applied exclusively to the pursuit of some outside pur pose. Such an association of persons is bound, I would think, to have some sort of constitution; i.e., the
rights and the liabilities of the members of the association will inevitably depend on some form of con tract inter se, usually evidenced by a set of rules. In the present case it appears to me clear that the life members, the ordinary members and the associate members of the London and Provincial Society were bound together by a contract inter se. Any such member was entitled to the rights and subject to the liabilities defined by the rules. If the committee acted contrary to the rules, an individual member would be entitled to take proceedings in the courts to compel observance of the rules or to recover damages for any loss he had suffered as a result of the breach of contract. As and when a member paid his subscription to the association, he would be subjecting his money to the disposition and expend iture thereof laid down by the rules. That is to say, the member would be bound to permit, and entitled
to require, the honorary trustees and other members of the society to deal with that subscription in accordance with the lawful directions of the committee. Those directions would include the expend iture of that subscription, as part of the general funds of the association, in furthering the objects of the association. The resultant situation, on analysis, is that the London and Provincial Society represented an organisation of individuals bound together by a contract under which their subscriptions became, as it were, mandated towards a certain type of expenditure as adumbrated in r. 1. Just as the two par ties to a bipartite bargain can vary or terminate their contract by mutual assent, so it must follow that the life members, ordinary members and associate members of the London and Provincial Society could, at any moment of time, by unanimous agreement (or by majority vote if the rules so prescribe), vary or terminate their multipartite contract. There would be no limit to the type of variation or termin ation to which all might agree. There is no private trust or trust for charitable purposes or other trust to hinder the process. It follows that if all members agreed, they could decide to wind up the London and Provincial Society and divide the net assets among themselves beneficially. No one would have any locus standi to stop them so doing. The contract is the same as any other contract and concerns only those who are parties to it, that is to say, the members of the society. The funds of such an association may, of course, be derived not only from subscriptions of the contracting parties but also from dona tions from non-contracting parties and legacies from persons who have died.In the case of a donation which is not accompanied by any words which purport to impose a trust, it seems to me that the gift takes effect in favour of the existing members of the association as an accretion to the funds which are the subject-matter of the contract which such members have made interse, and falls to be dealt with in precisely the same way as the funds which the members themselves have subscribed. So, in the case of a legacy. In the absence of words which purport to impose a trust, the legacy is a gift to the members beneficially, not as joint tenants or as tenants in common so as to entitle each member to an immediate
distributive share, but as an accretion to the funds which are the subject-matter of the contract which the members have made inter se..
Re Grant’s WT
[1980] 1 WLR 360, [1979] 3 All ER 359, Chancery Division
VINELOTT J:… The question raised by the summons is whether the gift in the will of the testator’s real and personal estate is a valid gift, or is void for uncertainty or for perpetuity or otherwise; and if it is a valid gift who are the persons entitled to benefit thereunder.Before turning to this question, it will be convenient to explain what are in my judgment the prin ciples which govern the validity of a gift to an unincorporated association. A convenient starting point is a passage in the decision of CrossJ in Neville Estates Ltdv Madden [1962] Ch 832at849, which is often cited [VinelottJ quoted the passage set out above and continued:] This statement, though it may require amplification in the light of subsequent authorities, is still as I see it an accurate statement of the law.
In a case in the first category, that is a gift which, on its true construction, is a gift to members of an association who take as joint tenants, any member being able tosever his share, the association is used in effect as a convenient label or definition of the class which is intended to take; but, the class being ascertained, each member takes as joint tenant free from any contractual fetter. So, for instance, ates tator might give a legacy or share of residue to a dining or social club of which he had been a member with the intention of giving to each of the other members an interest as joint tenant, capable of being severed, in the subject matter of the gift. Cases within this category are relatively uncommon. A gift to an association will be more frequently found to fall within the second category. There the gift is to mem bers of an association, but the property is given as an accretion to the funds of the association so that the property becomes subject to the contract (normally evidenced by the rules of the association) which governs the rights of the members interse. Each member is thus in a position to ensure that the subject matter of the gift is applied in accordance with the rules of the association, in the same way as any other funds of the association. This category is well illustrated by the decision of Brightman Jin Re Recher’s Will Trusts [1972] Ch 526 .
..Two points should be noted.First, as Brightman J pointed out, it is immaterial in considering whether a gift falls within this category that the members of an association have not joined together for a social and recreational purpose, or to secure some per sonal advantage, but in pursuit of some altruistic purpose. The motive which led the testator to make the gift may have been, indeed most frequently will have been, a desire to further that purpose. It may be said that in that sense the gift is made for the furtherance of the purpose. But the testator has chosen as the means of furthering the purpose to make a gift to an association formed for the pursuit of that purpose in the expectation that the subject matter of the gift will be so used, without imposing or attempting to impose any trust or obligation on the members, or the trustees, or the committee of the association. Indeed, there are cases where the gift has been expressed as a gift for the purposes, or one of the purposes, of the association, and nonetheless has been held not to impose any purported trust …
In the recent decision of Oliver J in Re Lipinski [1976] Ch 235 the gift was ‘ … for the Hull Judeans (Maccabi) Association in memory of my late wife to be used solely in the work of constructing the new buildings for the association and/or improvements to the said buildings’. Oliver J said [1976] Ch 235 at 246-247:
If a valid gift may be made to an unincorporated body as a simple accretion to the funds which are the subject-matter of the contract which the members have made inter se, and Neville Estates Ltd v Madden [1962] Ch 832 and Re Recher’s Will Trusts [1972] Ch 526 show that it may, I do not really see why such a gift, which specifies a purpose which is within the powers of the unincorporated body and of which the members of that body are the beneficiaries, should fail. Why are not the beneficiaries able to enforce the trust or, indeed, in the exercise of their con tractual rights, to terminate the trust for their own benefit? Where the donee body is itself the beneficiary of the prescribed purpose, there seems to me to be the strongest argument in com mon sense for saying that the gift should be construed as an absolute one within the second category, the more so where, if the purpose is carried out, the members can by appropriate action vest the resulting property in themselves, for here the trustees and the beneficiaries are the same persons.
As I read his judgment, Oliver J construed the gift as one under which the members of the association could have resolved to use the property for some other purpose, or, indeed, have divided it amongst themselves. He said [1976) Ch 235 at 249:
There is an additional factor. This is a case in which, under the constitution of the association, the members could, by the appropriate majority, alter their constitution so as to provide, if they wished, for the division of the association’s assets amongst themselves.
That leads to the second point. It must, as I see it, be a necessary characteristic of any gift within the second category that the members of the association can by an appropriate majority (if the rules so provide), or acting unanimously if they do not,alter their rules so as to provide that the funds, or part of them, shall be applied for some new purpose, or even distributed amongst the members for their own benefit. For the validity of a gift within this category rests essentially on the fact that the testator has set out to further a purpose by making a gift to the members of an association formed for the furtherance of that purpose in the expectation that, although the members at the date when the gift takes effect will be free, by a majority if the rules so provide or acting unanimously if they do not, to dispose of the fund in any way they may think fit, they and any future members of the association will not in fact do so but will employ the property in the furtherance of the purpose of the association and will honour any spe cial condition attached to the gift.
Turning to the third category, the testator may seek to further the purpose by giving a legacy to an association as a quasi-corporate entity, that is to present and future members indefinitely, or by pur porting to impose a trust. In the former case the gift will fail for perpetuity, unless confined within an appropriate period; though if it is so confined and if the members for the time being within the perpetu ity period are free to alter the purposes for which the property is to be used and to distribute the income amongst themselves it will not, as I see it, fail on any other ground.In the latter case, the gift will fail on the ground that the court cannot compel the use of the property in furtherance of a stated pur pose unless, of course, the purpose is a charitable one. As Lord Simonds said in Leahy v Attorney General for New South Wales [1959] AC 457 at 478-479:
If the words ‘for the general purposes of the association’ were held to import a trust, the ques tion would have to be asked, what is the trust and who are the beneficiaries? A gift can be made to persons (including a corporation) but it cannot be made to a purpose or to an object; so, also, a trust may be created for the benefit of persons as cestuis que trustent, but not for a purpose or object unless the purpose or object be charitable. For a purpose or object cannot sue, but, if it be charitable, the Attorney-General can use to enforce it. …..It is, therefore, by disregarding the words ‘for the general purposes of the associ ation’ (which are assumed not to be charitable purposes) and treating the gift as an absolute gift to individuals that it can be sustained.
I have also been referred to the recent decision of Goff J in Re Denley’s Trust Deed (1969] 1 Ch 373 [see Chapter 3] …Goff J …held that the trust deed created a valid trust for the benefit of the employ ees, the benefit being the right to use the land subject to and in accordance with the rules made by the trustees. That case on a proper analysis,in my judgment, falls altogether outside the categories of gifts to unincorporated associations and purpose trusts. I can see no distinction in principle between a trust to permit a class defined by reference to employment to use and enjoy land in accordance with rules to be made at the discretion of trustees on the one hand, and, on the other hand, a trust to distribute income at the discretion of trustees amongst a class, defined by reference to, for example, relationship to the settlor. In both cases the benefit to be taken by any member of the class is at the discretion of the trustees, but any member of the class can apply to the court to compel the trustees to administer the trust in accordance with its terms. As Goff J pointed out [1969] 1 Ch 373 at 388:
The same kind of problem is equally capable of arising in the case of a trust to permit a number of persons-for example, all the unmarried children of a testator or settlor-to use or occupy a house, or to have the use of certain chattels; nor can I assume that in such cases agreement between the parties concerned would be more likely, even if that be a sufficient distinction, yet no one would suggest, I fancy, that such a trust would be void.
With those principles in mind, I return to the testator’s will …
Reading the gift in the will in the light of the rules governing the Chertsey and Walton CLP, it is in my judgment impossible to construe the gift as a gift made to the members of the Chertsey and Walton CLP at the date of the testator’s death with the intention that it should belong to them as a collection of individuals, though in the expectation that they and any other members subsequently admitted would ensure that it was in fact used for what in broad terms has been labelled ‘headquarters’ purposes’ of the Chertsey and Walton CLP. I base this conclusion on two grounds.First, the members of the Chertsey and Walton CLP do not control the property, given by subscription or otherwise, to the CLP. The rules which govern the CLP are capable of being altered by an outside body which could direct an alteration under which the general committee of the CLP would be bound to transfer any property for the time being held for the benefit of the CLP to the national Labour Party for national purposes. The members of the Chertsey and Walton CLP could not alter the rules so as to make the property bequeathed by the testator applicable for some purpose other than that provided by the rules; nor could they direct that property to be divided amongst themselves beneficially.
Brightman J observed inRe Recher’s Will Trusts (1972] Ch 526 at 536 that: ‘It would astonish a layman to be told there was a difficulty in his giving a legacy to an unincorporated non-charitable society which he had or could have supported without trouble during his lifetime.’ The answer to this apparent para dox is, it seems to me, that subscriptions by members of the Chertsey and Walton CLP must be taken as made on terms that they will be applied by the general committee in accordance with the rules for the timebeing, including any modifications imposed by the annual party conference or the NEC. In the event of the dissolution of the Chertsey and Walton CLP any remaining fund representing subscriptions would (as the rules now stand) be held on a resulting trust for the original subscribers. Thus although the members of the CLP may not be able themselves to alter the purposes for which a fund represent ing subscriptions is to be used or to alter the rules so as to make such a fund divisible amongst them selves the ultimate proprietary right of the original subscribers remains. There is, therefore, no perpetuity and no non-charitable purpose trust.But if that analysis of the terms on which subscriptions are held is correct, it is fatal to the argument that the gift in the testator’s will should be construed as a gift to the members of the Chertsey and Walton CLP at the testator’s death, subject to a direction not amounting to a trust that it be used for headquarters’ purposes.Equally it is in my judgment impossible, in particular having regard to the gift over to the national Labour Party, to read the gift as a gift to the members of the national Labour Party at the testator’s death, with a direction not amounting to a trust, that the national party permit it to be used by the Chertsey and Walton CLP for headquarters’ purposes.
That first ground is of itself conclusive, but there is another ground which reinforces this conclusion. The gift is not in terms a gift to the Chertsey and Walton CLP, but to the Labour Party Property Committee, who are to hold the property for the benefit of, that is in trust for, the Chertsey headquar ters of the Chertsey and Walton CLP.The fact that a gift is a gift to trustees and not in terms to an unin corporated association militates against construing it as a gift to the members of the association at the date when the gift takes effect, and against construing the words indicating the purposes for which the property is to be used as expressing the testator’s intention or motive in making the gift and not as imposing any trust. This was, indeed, one of the considerations which led the Privy Council in Leahy’s case [1959] AC 457 to hold that the gift’ … upon trust for such Order of Nuns of the Catholic Church or the Christian Brothers as my Executors and Trustees should select’, would, apart from the Australian equivalent of the Charitable Trusts (Validation) Act 1954, have been invalid.
I am, therefore, compelled to the conclusion that the gift of the testator’s estate fails, and that his estate accordingly devolves as on intestacy. I will make the usual order that the costs of the plaintiffs as trustees, and the defendants on a common fund basis, be taxed and paid out of the estate in due course of administration.
Re Harley Town Football Club
[2006] EWHC 2386, Chancery Division
COLLINS J: In Re GKN Bolts & Nuts Ltd etc Works Sports and SocialClub [1982] 1 WLR 774 … Sir Robert Megarry V-C said (at 776): “As is common in club cases, there are many obscurities and uncertainties, and some difficulty in the law. In such cases, the court usually has to take a broad sword to the prob lems, and eschew an unduly meticulous examination of the rules and regulations … ” …
In my judgment I should adopt the same approach as Sir Robert Megarry in taking a “broad sword” and applying fairness and common sense. In my judgment it does not make a difference that in the present case the Rules say in Rule 4 that the Club shallconsist of “members and temporary members”; or in Rule 5 provide that Associate Members will enjoy the same rights as full members except those relating to votingrights; or that Rule 15 gives a right to vote to “independently constituted clubs enjoying Associate Membership.”