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DOCTRINE OF CY-PRES

Introduction
Meaning of Cy-pres
Conditions for the Application of Cy-pres
Application of Cy-pres Regarding Money
Collected by Public Appeals
Conclusion
DOCTRINE OF CY-PRES
Introduction:
• If a non-charitable trust is initially ineffective or subsequently fails there is a
resulting trust to the settlor. In the case of a charitable trust the property can be
applied for another charitable purpose as close as possible to the original trust.
This scheme may be established by the court or the charity commissioners.
• Once property is effectively given to charity, then a resulting trust is no longer
an option- but cy-pres is. The cy-pres doctrine applies only to charitable trust.
For example, a ‘will’ simply leaves property ‘to charity’ or, perhaps, where fairly
specific instructions have been given which, when the gift comes into operation
are, for some reason, impossible to carry out.
• Cy-pres is an advantage enjoyed by charitable trusts. For other private fixed
trusts, the concept of resulting trusts operates. Where the particular object of
charity selected by the settlor: fails; or becomes impossible to perform; or
impracticable to perform; or illegal to carry out or may not exhaust the whole
fund, the trust need not fail if the cy-pres doctrine could be applied. In that case,
the funds will be applied to objects as near as possible to the settlor’s intention.
See the case of AG v Lim Poh Neo (W) & Ors [1976] 2 MLJ 233- where the
court held that a gift of a burial ground to a clan was a good charitable gift. Here
the gift failed due to government acquisition of the land, the proceeds of the
acquisition was held to be cy-pres.
DOCTRINE OF CY-PRES

Meaning of Cy-pres:
• Cy-pres (French word), originally meaning something like ‘as near as
possible’. Cy-pres means the application of funds for other purposes
which are so near or as near as possible to the settlor’s intention. Cy-pres
applies exclusively to the operation of charitable trusts.
• By the doctrine of cy-pres, a charitable trust which, at the initial stage,
proves impossible or impracticable, or becomes so subsequently, may not
fail if the court can apply the property to some other charitable purposes
‘as nearly as possible’ to the one originally intended. (See the case Re
Cunningham [1914] 1 Ch 427)
• It is important to note that to apply the cy-pres doctrine to a failed
charitable trust, the court will look at the intention of the settlor, which
must be towards a general charitable purpose. If the intention of the
settlor towards a specific charitable purpose and it is impossible to
execute it, the cy-pres doctrine cannot be applied and the gift fails
completely. (See the case of Re Wilson [1913] 1 Ch 314)
DOCTRINE OF CY-PRES

Conditions for the Application of Cy-pres:


• For the doctrine to apply two conditions must be fulfilled:
(a)The original purpose must be impossible or impractical to perform; &
(b)Donor must have shown a paramount intention to benefit charity/there
is general charitable intent.
• It is, therefore, important to address the two conditions from two
perspectives that is of initial failure/impossibility and subsequent
failure/impossibilty.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Before addressing the operation of the concept of initial failure or
impossibility, it is important to first of all address the issue of ‘general
charitable intent’. Hence, if you simply leave your property ‘to charity’ there
is no difficulty. You presumably have no specific wish as to how your
property is to be used- it is a matter of complete indifference to you whether it
goes to feed the starving in Somalia or to provide housing for the aged. Here
there will be general charitable intent.
• It should be noted that what a testator intended is often difficult to ascertain
and in assessing the breadth of the charitable intent the courts may have to
rely on very slight indications in the will. An often decisive factor is the level
of detail which the testator went into, the more the detail, the more likely the
intention was to make a gift for the particular purpose and, therefore, the less
likely a general charitable intent and thus there will be resulting trust.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Still in addressing the issue of general charitable intent, reference can be made to the
case of Re Wilson [1913] 1 Ch 314- where a testator who died in 1870, provided a sum
of money as a salary for a school-master, who was to teach at a school to be erected by
voluntary subscriptions from land owners in the neighbourhood. There was no
likelihood of such a school being established. The court (Parker J) held that it was
unable to find a ‘general charitable intent’. The particular purpose failed, and the gift
fell into residue (resulting trust). See also the case of Re Good’s WT [1950] 2 All ER
653- where the testator provided funds for the purpose of purchasing land, erecting
thereon “six more rest homes each consisting of a living-room, sleeping apartment (sic)
and usual outside domestic convenience all to be on the ground floor and all one
level”, and money for paying for the upkeep of the homes. The money was insufficient
for the purpose. The court (Wynn J) held that the language was so particular as to
exclude the possibility of finding a ‘general charitable intent’. The gift failed. The level
of detail here suggests a particular rather than a general charitable intent. See also the
following cases showing lack of general charitable intent: Cheang Tew Muey v
Cheang Cheow Lean Neo [1930] SSLR 58; Sir Han Hoe Lim v Lim Kim Seng [1956]
MLJ 142; and Tai Kien Luing v Tye Poh Sun [1961]MLJ 78.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Reference can also be made to the case of Biscoe v Jackson (1887) 35
ChD 460 while addressing the issue of ‘general charitable intent’ in the
context of initial failure or impossibility. In this case, a testator provided
that his trustees should set aside, out of such of his personal estate as
might by law be bequeathed for charitable purposes, a sum of £10,000
of which £4,000 was to be applied “in the establishment of a soup
kitchen for the Parish of Shoreditch, and a cottage hospital adjoining
thereto…” and the provision of various related services. It was
impossible to obtain the land necessary to carry out the provisions of the
will. The next-of-kin claimed the funds. The court held that the will
showed a ‘general charitable intention’. A scheme for the application of
the funds cy-pres was directed because the specified purposes were only
two methods of helping the poor of Shoreditch. The charitable intention
was general and not specific or limited.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Furthermore, in addressing the issue of ‘general charitable intent’,
reference could also be made to the case of Re Harwood (1936)- where
one gift was made in favour of Belfast Peace Society and another in
favour of the Wesbech Peace Society. The Belfast Peace Society had
never existed. The court allowed the application of the gift cy-pres
because only a general charitable intention could be attributed to a donor
who incorrectly identified the beneficiary of the gift. The other gift
could not be applied cy-pres. Accordingly, it is much easier to identify a
general charitable intention where a charity had never existed at all.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Having addressed the operation of ‘general charitable intent’ in the context of initial failure
or impossibility, it is equally important to point out that initial impossibility occurs when
property is given to a charitable institution which existed when the gift was made but
ceased to exist before the date of the gift took effect. It is not unknown for charities to
change their form. It may be that the original institution has amalgamated with another, or
it has been reconstituted under more effective trusts. Here, it is possible that the court will
decide that the gift is for the purposes of the charity and so the gift will not fail. See the
case of Re Faraker [1912] 2 Ch 488- where Mrs. Faraker, the testatrix, who died in 1911,
bequeathed a legacy of £200 to “Mrs Bailey’s Charity, Rotherhithe”. A Charity, known as
Hannah Bayly’s Charity, had been founded in 1756 by Mrs Hannah Bayly for the benefit
of poor widows who were resident in and parishioners of Rotherhithe. A scheme had been
made in 1905 by the Charity Commissioners which had consolidated this and a number of
charities of Rotherhithe. The funds were to be held upon various trusts for the benefit of
the poor of Rotherhithe, no mention being made to widows. No question was raised as to
the spelling of the name Bayly, and it was admitted that the testatrix referred to Hannah
Bayly’s Charity. The question was whether the legacy lapsed. The Court of Appeal held
that the original trust had not been destroyed, its work was being carried out by the
consolidated charities and so they got the money.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Still on the case of Re Faraker, it is important to note that if the gift is to a
charity which has been consolidated with other charities with similar
purposes under a scheme, the gift did not fail because the charity was still in
existence, only the machinery of it had changed.
• Regardless of what is reiterated above, the principle laid down in Re
Faraker would not apply in situations such as: (i) the charity is liable to
termination under its constitution (Re Stemson’s WT [1970] Ch 16) & (ii)
the gift is made for an aspect of the charity’s work which cannot be carried
out by the amalgamation. See the case of Re Lucas [1948] Ch 424- where
Lord Greene MR pointed out that the principle in Re Faraker would not
apply to cases where a gift was made for a particular aspect of the charity’s
work which was impossible to carry on after a scheme of amalgamation with
other charities. Thus, for example, if £10,000 was bequeathed to ‘X Charity
for the aged for the upkeep of their premises at Blackacre’ and no other
purpose, cy-pres would be impossible if the charity closed that home or the
lease of it expired and was not renewed.
DOCTRINE OF CY-PRES

Conditions for the Application of Cy-pres: (Continuation)


(1)Initial failure/impossibility
• In addition to the above issue or point, there is no lapse if
the gift is construed as a gift for the purposes of a named
institution rather than the institution itself. Thus, this
category differs from the principle in Re Faraker in that
here the charity has ceased to exist but its work is
nevertheless continuing and the gift is for the work of the
charity rather than the charity itself. Re Faraker was
concerned with the effect of administrative schemes on
charities.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• See also the case of Re Vernon’s WT- where the court held that although
the institution had ceased to exist, its charitable purpose had not, as its
work was being carried out at a hospital and a clinic by the Minister of
Health. Buckley J, in the course of his judgment, drew a distinction
between gifts made to charitable institutions which are incorporated and
charitable institutions which are unincorporated. He had this to say:
“Every bequest to an unincorporated charity by name without more
must take effect as a gift for a charitable purpose. No individual or
aggregate of individuals could claim to take such a bequest
beneficially… A bequest to a corporate body, on the other hand, takes
effect simply as a gift to that body beneficially, unless there are
circumstances which show that the recipient is to take the gift as
trustee”. This principle was not applied directly in Re Vernon’s WT
itself but in Re Finger’s WT [1972] CH 286 Goff J applied it to the facts
before him.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Still on the issue of initial failure or impossibility, reference could also be made to a situation
where a gift to a charitable institution which no longer exists or has never existed. It is
important to note that if you leave property to a charity which no longer exists, there is an
initial presumption that your intention is to benefit that particular institution. This presumption
can, however, be rebutted if it can be shown that your real intention was to promote the
purpose of the charity rather than the particular institution. Oddly enough, it is easier to show
‘general charitable intention’ where the charity has never existed than an identifiable charity
has ceased to exist. See the case of Re Rymer [1895] 1 Ch 19- where Horatio Rymer
bequeathed a legacy of £5,000 “to the rector for the time being of St Thomas’ Seminary for
the education of priest, in the diocese of Westminster”. The testator died in 1893. At the date
of the will St Thomas Seminary was in existence and provided education for priests for the
diocese of Westminster. But at the date of the testator’s death, the seminary ceased to exist,
and the students were transferred to a seminary near Birmingham. The question was whether
the legacy lapsed or whether it should be applied cy-pres. The court held that it was a gift to
that particular institution rather than a general gift for the education of priests, and
consequently, it could not be applied and so failed. The court further held that there was a
specific intention to benefit a seminary for priests that no longer existed. There could be no
cy-pres it was viewed as a gift to a particular body for a particular purpose.
DOCTRINE OF CY-PRES

Conditions for the Application of Cy-pres: (Continuation)


(1)Initial failure/impossibility
• In addition to the above, reference could also be made to the
case Re Spence (1979)- where there was initial failure of a
gift to a named old people’s home that had ceased to exist.
As the gift could not be construed as being to the old in the
area, there was no general charitable intention.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• It is equally important to address the issue of ‘mere impracticality’ in the
context of initial failure or impossibility. See the case of Re Laysaght
[1966] 2 All ER 888- where the testatrix provided funds (£5,000) to found
medical scholarships to be run by the Royal College of Surgeons. One of
the terms was that the awards were not to be made to Jews or Roman
Catholics. The Royal College refused to accept the gift on these terms so it
became impractical to carry out the trust. The court held that there was a
paramount charitable intention and so these offensive restrictions would
be deleted under cy-pres scheme. The court, therefore, deleted the
religious discrimination clause.
• Still on the court’s decision above, if compared with cases like Re
Wilson, in Re Lysaght- the deletion made very little difference to the
carrying out of the testatrix’s wishes. However, in Re Wilson the alteration
would have been radical with the money being used to benefit a different
school or education in general.
DOCTRINE OF CY-PRES

Conditions for the Application of Cy-pres: (Continuation)


(1)Initial failure/impossibility
• Still on the issue raised above, see also the case of Nai Seng
Hiang & Ors v Trustees of the Presbyterian Church in
Singapore- where a settlor donated land to be held on trust ‘for
the purpose of Christian works evangelistic social or otherwise…
amongst and for the benefit of the children of all Hakka-speaking
Chinese in Singapore’. The issue was whether the trust was a
valid charitable trust. The court said that for a charitable trust to
be valid, the purposes of the trust must be exclusively charitable.
The word “social or otherwise” were more adjectives describing
“Christian works”. The trust was a charitable trust, and the
learned judge ordered a cy-pres scheme to fulfil the exclusive
charitable intent of the donor.
DOCTRINE OF CY-PRES

Conditions for the Application of Cy-pres: (Continuation)


(1) Initial failure/impossibility
• Furthermore, in addressing the issue of initial failure or impossibility that would give
rise to the operation of cy-pres doctrine, reference must be made to the question of
unincorporated association which no longer exists. Here we need to look into the issue
of whether the original body was unincorporated association which had no legal
personality, or a charitable corporation which did. Again, question or issue such as
whether the gift was for a particular institution or there was general charitable intent
and the gift was for its purpose. It seems that where no purposes are specified, where a
gift is to an unincorporated association which no longer exists there is a presumption
of general charitable intent as the association is seen as a trust for charitable purposes.
Where the gift is to a charitable corporation, there is a presumption of a particular
intent. See the case of Re Finger’s WT [1971] 3 All ER 1050- where a testatrix left
shares of her residuary estate to eleven named charities, of which two were the
National Radium Commission, an unincorporated charity, and the other to the National
Council for Maternity and Child Welfare, an incorporated charity. Both charities had
ceased to exist between the date of the will and the date of death.
DOCTRINE OF CY-PRES

Conditions for the Application of Cy-pres: (Continuation)


(1) Initial failure/impossibility
• Still on the case of Re Finger’s WT- The gift to the National
Radium Commission was held to be a gift for its purpose
and applied cy-pres. There was a presumption that the gift to
the National Council for Maternity & Child Welfare would
fail. In this case, however, the presumption was rebutted
because the will itself showed a general charitable intent
because, apart from a life interest to the testatrix’s mother,
the whole estate was given to charity. Cy-pres doctrine was
thus applied to the property.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)
(1) Initial failure/impossibility
• Also in addressing the issue of initial failure or impossibility in the context
of the operation of the cy-pres doctrine, reference must be to a situation
where there are several gifts not all of which are charitable. It is important
to note that if there is a gift for a private purpose, together with a number
of gifts for charitable purposes, can you say that there is a general
charitable because the private purpose bears a close relationship to the
purposes for which the charitable gifts were made? See the case of Re
Jenkin’s WT [1966] 1 All ER 926- where the testatrix directed that her
residuary estate be divided into seven equal parts. Six parts went to
charities concerned with prevention of cruelty to animals. The seventh was
to go to the British Union for Abolition of Vivisection-a purpose which, as
we have seen, is not charitable. It was argued that the seventh share should
be held on charitable trusts as the will showed a general charitable
intention. The court said no to the argument and Buckley J being moved to
say “If you meet seven men with black hair and one with red hair you are
not entitled to say that here are eight men with red hair”.
DOCTRINE OF CY-PRES

Conditions for the application of cy-pres: (Continuation)


(1)Initial failure/impossibility
• Still on the above issue i.e. if there were several gifts not all of which
are charitable, reference could also be made to the case of Re
Satterthwaite’s WT [1966] 1 All ER 919- where the testatrix announced
to an official of the Bond Street branch of the Midland Bank that she
hated the whole human race and that she planned to leave her entire
estate to animal charities. She apparently chose the nine organisations
using London telephone directory. She got seven out of nine right, but
the remaining two were anti-vivisection society and the gift failed but
what of the London Animal Hospital? No hospital of this name existed
but a vet who practiced under a similar name claimed the cash. The
court held that there was a general charitable intent and cy-pres doctrine
was applied as far as the gift to the hospital was concerned.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)\
(2) Subsequent failure/impossibility
• It occurs where a gift to a charitable institution has taken effect but the
institution ceases to exist shortly after it receives the gift. As these cases
involve property effectively given to charity, there is no question of
resulting trust. It is simply a matter of whether a cy-pres scheme can be
made. See the case of Re Slevin [1891] 2 Ch 236- where a testator by his
will bequeathed “the pecuniary legacies following” one of which was a
legacy of £200 to the Orphanage of St Dominic’s, Newcastle on-Tyree”.
That Orphanage was in existence at the testator’s death, but it came to an
end soon afterwards, and before the legacy is paid. The court held that the
gift took effect on the testator’s death and was a charitable gift that had
become impossible and so cy-pres doctrine was applied to the money.
• See also the case of Re King (1923)- where a gift was made to provide a
stained glass window in a church. On completion of the work, there
remained a residue of over £1,000. It was held that this surplus could be
applied cy-pres even though there was no general charitable intention
shown by the donor.
DOCTRINE OF CY-PRES
Conditions for the Application of Cy-pres: (Continuation)\
(2) Subsequent failure/impossibility
• See also the case of Re Robinson [1923] 2 Ch 332- where a testatrix
bequeathed £1,500 towards the endowment of an evangelical church in
Bournemouth, subject to various conditions, one of which was that a black
gown should always be worn by the preacher in the pulpit. On a showing
that the observance of this condition was likely to alienate the
congregation and to defeat the testatrix main object, Lawrence J deleted
the condition on the ground of impracticability.
• Note: The time for deciding whether there is an initial failure is at the time
of the gift. If the gift is possible at that time, but becomes impossible
before it is available for the charity, it still counts as a case of subsequent
impossibility. See the case of Re Wright (1954)- where the testatrix died in
1933 leaving her residuary estate to a tenant for life, the remainder to be
used to found a house for convalescent and impecunious gentlewomen. By
the time the life tenant died in 1942, it was impracticable to found the
home. The court found that dedication to charity occurred in 1933 and so
the gift could be applied cy-pres without the need of finding any
paramount charitable intent.
DOCTRINE OF CY-PRES

Application of Cy-pres Regarding Money Collected by Public


Appeals:
• In England cy-pres may also be applied where money is collected
by public appeals for charitable purposes and the purposes fail.
Sec 14 of the English Charities Act 1960 permits cy-pres to be
applied to gifts of such unknown or disclaiming donors. In
Malaysia, provisions were made under the Disposal of Public
Funds (State of Penang) Act 1961in respect of initial failure of
certain funds raised for specific public purposes. Under the Act,
the Governor in Council could, after taking into consideration any
views or objections by any person who had contributed to any of
the funds, by order provide for the disposal of the funds for the
purpose of building a Dewan Sri Pinang or for other specified
purposes similar to those which the funds were originally
established.
DOCTRINE OF CY-PRES
Application of Cy-pres Regarding Money Collected by Public Appeals:
• It is important to note that the position in Malaysia and England on
unidentified donors is different. The former law in England is followed in
Malaysia. In England, formerly the law was that unless one could show a
general charitable intention in the usual way the trustees were bound to
refund the money and if the donors could not be found the money had to be
paid into court to await the usually remote possibility that they would
reclaim it. This was indeed the result of Re Ulverston where an appeal was
launched for the building of a new hospital and insufficient funds were given
for the purpose. The Court of Appeal, held that a specific, not a general,
charitable intention had been manifested and the funds were therefore to be
held on a resulting trust for the contributors. But sec 14 of the English
Charities Act 1960 introduced many reforms as a result of which the
previous law was reversed by providing that donors in the circumstances
indicated, shall be deemed to have a general charitable intention; which
allows the funds to be applied cy-pres. The Act has retrospective effect. In
Malaysia, we still follow the decision of Re Ulverston. Thus, if the donors
remain anonymous, then the money goes to the Government as Bona
Vacantia.
DOCTRINE OF CY-PRES

Conclusion:
• Once a gift is effectively given to charity, resulting trust is
no longer an option. If the operation of resulting trust is
allowed, then that will defeat the good intention of the
testator. Hence provided the two conditions are satisfied i.e.
where the original purpose must be impossible or
impractical to perform coupled by general charitable intent,
the court or Charity Commissioners must establish the
existence of the cy-pres doctrine.