Cy-pres doctrine

Cy-pres doctrine

1. What is cy-pres?

   • Sometimes, charitable trusts may be impractical or impossible to apply. This may be because the charitable purpose intended to benefit in the gift has ceased to exist or never existed at all.
   • Where the trust has failed, the courts will need to decide whether the funds should return back to the testator or whether they could be applied to another, similar charitable purpose.
   • The actions that the court will take depend on whether the failure of the trust failed initially or subsequently.

2. Initial failure

   • This occurs where the failure happens before the gift is vested.
     • Re Faraker
     • Re Harwood
     • For the gift to be applied cy-pres, it must be clear that the donor had a general charitable intention. It must be clear that donor had intention to benefit general charitable purpose rather than a specific purpose or institution.
       • Re Spencer
         • Where institute is named, there will no general charitable intention.
       • Re Rymer
       • Re Lysaght
     • Corporate and unincorporated charitable associations - application of cy-pres will differ
       • Corporate associations - association takes gift beneficially. General intention will need to be established.
       • Unincorporated association - No legal personality. Association takes gift as a gift for the purposes of the association. The equity maxim 'a trust will not fail for want of a trustee' will be applied, creating a new trustee for the funds. However, this is NOT cy-pres.
         • Re Finger's Will Trust
     • Section 18 CA 2006 - amended cy-pres. Courts or CC can now apply scheme to ensure charitable intention is passed on.
       • Courts/CC will take into consideration original spirit of the gift, economic and social considerations and the desirability of the gift to be transferred for another charitable purpose.
       • Much more broad and modern approach taken by the law.

3. Subsequent failure

   • This is where charity ceases to exist after the death of the donor but before the funds are distributed.
     • No need for general charitable intention
     • Re Wright
     • Re King
     • Re Slevin
     • Re Peel's Will Trust - where donor has included what should happen if a subsequent failure should occur in the trust instrument, cy-pres will not apply.
     • Charities Act 2006/2011 - s.62 - Property will be applied cy-pres where
       • Property can be made applicable to similar purposes
       • Original class of persons/areas has ceased to exist
       • Original purposes have been provided for or cease as being useless/harmful to community