Charities CA 2011

Charities CA 2011

1. Recognised Charitable Purposes s.3(1)

   • Original definition in Preamble of 1601 Statute - four heads identified in Pemsel
     • However extended in 2011 Act
   • POVERTY
     • Defined relatively but wider than just destitution:
       • 'go short upheld in Re Coulthurst
         • 'decayed actors' Spiller v Maude
           • Can be limited to classes e.g. 'poor employees' Dingle v Turner
             • 'Poor relations' Re Scarisbrick, Re Segelman
           • Hackney: not beneficial as 'discourages thrift' thus the looseness of the poverty definition can be problematic/misused - PB?
       • However housing for 'working classes' not sufficiently restricted to the poor Re Sanders
         • But working mens' hostel ok: Re Niyazi
   • EDUCATION
     • Criteria in McGovern v AG
       • 1. Useful subject of study
         • 2. Knowledge disseminated
           • 3. Benefit of public
             • Alphabet rejected in Re Shaw, but 'real Shakespeare' accepted in Re Hopkins
           • Law Report v AG
         • However limits on research
         • Chess tournament: Re Dupree
           • Sport facilities at school/uni IRC v McMullen 'Spiritual, moral, mental and physical elements'
             • Reverses Re Nottage (sport (equipment) not charitable)
     • Distinguish from political propaganda: Re Hopkinson (rejected) but debate/exchange views accepted: Re Koeppler
   • RELIGION
     • Pre-Act defined as: faith in a god + worship of that god (Re South Place Ethical Society, agnostics)
       • Extended to multi/non-deity faiths - worship required?
         • Church of Scientology recognised as religion but refused charitable status: Hodkin (attempted to change status by gaining marriage licence?)
           • Re Simson a gift to a vicar for parish work was upheld but rejected in Farley v Westminster bank as the parish work in the latter was not limited to work which fell within the charitable scope of the vicar's office
     • PB satisfied if public has access to religion 'mix with fellow citizens' Neville v Madden Cloistered nuns rejected (Gilmour v Coats) but public masses for family members accepted (Re Hetherington)
     • The assessment of public benefit of different religions in order to determine charitable status could breach Article 9 (freedom of religion) of the ECHR
   • ETC
     • Arts: expert evidence used, merit test composer Re Delius but Re Pinion failed open to public but no benefit ‘mass of junk’.
     • HR: political trust cannot be a valid charitable trust (McGovern Amnesty) applies to all heads as PB difficult to ascertain and inappropriate if agenda conflict with government policy – fine line!
       • However, permitted if ancillary (secondary) to the main purposes or for educational/awareness raising
     • Animal: general not specific (settlor’s pet cat not charitable!) Before limited to working Yarrow now PB as ‘enhancing public morality, making us better people’ Re Wedgewood, Re Grove-Grady gift for animal sanctuary failed as public excluded.
     • However, must have health benefit to satisfy Amateur Sport

2. For a purpose not a person

   • Exempt from Certainty of Objects (no beneficiaries) Morice v Bishop of Durham
     • Regulated by Charity Commission and enforced by Attorney-General
       • Cannot create legal rules, recommendations/recognitions subject to court's decision
   • Precedes welfare system
   • Tax exemption
   • Rule against perpetuities (evighet) N/A

3. Public Benefit s.4

   • or some section of it: Re Scarisbrick Cannot name individuals: Cayman Islands v Wahr-Hansen
     • Criteria in Independent Schools Council v CC:
       • 1. Purpose must actually be beneficial 2. Must be of benefit to public (not private or artificially restricted section)
         • Exception victims of disaster but millionaire not entitled to relief of flooded rose garden, Penner) so victim must be within a charitable head - and cannot exclude the poor (i.e. cancer hospice for millionaires satisfies first but not second sense) Guards against specific private individuals benefiting.
   • Oppenheim v Tobacco Securities Trust Payment for the education of children of (ex-)employees failed as section of public not wide enough as membership determined by personal nexus class restricted by family relationship or employer thus insufficient PB, as intention to advance education vs gift to particular individuals with their education in mind (distinguishing chartable and private trusts)
     • Although, some preference for private class may be accepted if limited to 75% Re Koettgen but failed in Metal Box 76-85% as charitable trust should be defined by operation for PB not potential. However, personal nexus test N/A under poverty head where only the first sense needs satisfying (A-G v CC), as it matters not if the class of potential subjects are poor relatives (Re Scarisbrick, Re Segelman) or employees (Dingle v Turner), upheld. PB acceptance level?
       • Independent Schools Council v CC Private schools charge fees, but tax exempt although exclusive as limited section can access – PB? ‘not for the judges to judge if all they do is charitable as long as charitable purposes within their realm e.g. scholarships’ Since under education criteria, not poverty, as improving education is beneficial to community as whole regardless of which group that benefits, but difficult judgment to justify and peculiarly English. Private hospital in Re Resch upheld as charitable since poor people not excluded although exclusive, indirect benefits: freed up NHS
         • What constitutes public benefit will vary and depend on context of each case but all charities must be capable of establishing PB (it will not henceforth be presumed that ‘a purpose of a particular description’ is for the public benefit), but Hackney in Charities and public benefit states that this change is superficial, that these sections have not altered the meaning of ‘benefit’ and that CA only offers change in the administration of charities and presenting no new powers to the CC in declaring new substantive law as their guidance is still not binding.
           • Crossover to Fusion debate?
     • “It is for the appellant to show that it is a charity. This cannot be a valid charitable trust unless it is of a public character, i.e., for a purpose directed to the benefit of the community or a section of the community. The appellant must therefore satisfy the court that that class of employees defined is in fact to be considered not as a private class but as a section of the public.”

4. Cy-près s.6

   • Power that allows gift to be varied so failing charitable trusts that cannot be applied to the purposes intended by the settlor go to related charities, provided that original purpose was charitable, otherwise returned on resulting trust to testator's estate/Crown.
     • Courts look for general charitable intention (Re Lysaght removed restriction on women, Jews) Two types of failure: initial (gift's purposes fail before gift taken effect) and subsequent (failure in carrying out gift's purposes after gift has taken effect or charities merged: Re Faraaker) where cy-près operates automatically

5. Exclusively Charitable Purposes

   • non-profit The construction of gift or trust must clearly be made for charitable purposes: 'worthy causes' held void as not limited to ECP (Re Atkinson), use of and/or crucial in determination: 'or' succeeds in Re Best but failed in charitable or benevolent purposes in Morice v Bishop of Durham 'and' fails (Re Macduff)
     • However if also carries out incidental non-charitable purposes is not necessarily fatal: depends on degree/circumstances (AG v Ross) and overall charitable aim (Re Coxen). Charities that relieve poverty must still have ECP, Re Gwyon failed as it did not exclude boys who were not poor.