Cypres Doctrine PDF

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My own notes on cypres prepared for Exam in May 2016...

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CYPRES DOCTRINE Introduction Where a charitable purpose trust would fail because the means chosen by a testator for its implementation are either impractical or impossible to carry out, the cypres doctrine can be applied. Cypres is a Norman French word, which connotes proximity, nearness or closeness as far as possible to something, in this particular case to the intention of a donor. Over the centuries the expression has been taken to mean ‘as nearly as possible.’ The cypres doctrine allows the court to direct that the trust property be applied to a purpose as close as possible to the one intended by the settlor. Cypres can save charitable trusts from failure at the outset, or from subsequent failure when carrying out the purpose becomes impossible or impractical. There are only two conditions to be satisfied for a cypres application of funds, namely: •

the impossibility or impracticality of carrying out the original charitable purpose, or a surplus of funds after the charitable purpose has been fulfilled; and

•

(b) the manifestation of general charitable intention by the donor as opposed to specific charitable intention.

Criticism When a private trust fails an ART arises, it is not obvious why, when a charitable trust fails, the court ought to be empowered to devote the trust funds to a new charitable purpose - (Garton 2007)

1. Preservation from failure at the outset This is the situation where the charity in question either never existed or existed before but has ceased to exist before the trustees could apply the gift to the charity in question. In both cases, the charitable trust will fail and the gift will either lapse unless the property can be applied cyprès. The cypres doctrine can operate to salvage a charitable trust from failure at the very outset because it is not to possible to further the charitable trust due to an impracticability or impossibility to carry it out. The court approached this question by considering whether the purposes, as stated by the settlor were capable of being achieved as compared from one where there is an element of undesirability too carry out the charitable trust. However a common exam mistake which students usually make in exams is a wrong application of this doctrine by erroneously assuming that the court can utilise this doctrine of cypres to convert a non charitable purpose into a charitable trust. The cardinal principle is that cypres can apply only to a purpose that is already a charitable one. It cannot be used as a legal roundabout/switch which enable the judge to guide the trust from the lane of an uncharitable to the lane of charitable. In order for the court to change the direction of the donor/testator, e.g. to redirect trust money intended for a charitable purpose that fails by applying the cypres doctrine or to delete some words to render the charitable purpose possible or practicable, the court must find that the donor has a general charitable intention (GCI). As its name implies, GCI refers to a general intention to benefit a charitable purpose rather than a specific intention to benefit a particular organization. If the intention was to benefit a particular organization which has completely ceased to exist, the court will not apply the gift cyprès as there would be no basis upon which the court to do so and if it did, it would be going against the wishes of the donor. It has also been held that in the case where a gift has been made to a charity which de facto never existed, then it is easier to infer and impute a GCI, than in the case where the gift was made to a charity which already existed before but which has now ceased to exist. This should be read in the light that if a donor gave a gift to something that in fact and in truth never existed, then the chance that he was not really interested about the fund going to a particular institution or obstinate that it should be carried out in a particular way but was intending to simply further the general purpose of the specific charitable cause can be greatly felt: Re Harwood

In Re Lysaght (1966) Buckley J interpreted GCI as: A general charitable intention…may be said to be a paramount intention on the part of a donor to effect some charitable purpose which the court can find a method of putting into operation, nothwithstanding that it is impracticable to give effect to some direction by the donor which is not an essential part of his true intention…In contrast, a particular charitable intention exists where the donor means his charitable disposition to take effect if, but only if, it can be carried into effect in a particular specified way, for example in connection with a particular school to be established at a particular place, Re Wilson (1913)…” The courts have employed cypres doctrine to justify striking out conditions on trusts which would have rendered it impracticable. The court will therefore give effect to some essential part of the testator’s intention by modifying the trust (non essential) to dispense with the impracticality and carry out the trust as nearly as possible to the intention of the testator if a GCI could be inferred. In Re Lysaght, an endowment of medical studentships at the Royal College of Surgeons was to be restricted to recipients not of the Jewish or Roman Catholic faith; the college would not accept the gift because the condition was contrary to their policy and spirit as to make the gift inoperable in that form. There was an impracticability and the charitable trust was applied cypres by the court regarding the condition as inessential element of the testator’s bequest (deleting same) and thus preventing it to fail .

Re Robinson: In Re Robinson, Lawrence J had to deal with a bequeathed fund to a church to which was attached a condition that a black gown should be worn in the pulpit unless this should become illegal. The wearing of the black gown, although not illegal, would be detrimental to the teaching and practice of evangelical doctrines and services in the church in question. Lawrence J had to decide whether a scheme which amputated that condition could be sanctioned as not going against the testator’s wish. A GCI was inferred and the trust was applied cypres. Lawrence J made following illuminating remark: “In my judgment, the condition as to the black gown is subsidiary to the main purpose of the bequest is sound.” He therefore held that to insist on that condition would have made the trust failed and came to the conclusion that although compliance with the condition was not impossible, it was impracticable and ought to be dispensed with. See also Re Woodhams (1981) for similar application.

Many cases in which the charitable gifts are saved from failure at the outset concern testamentary gifts to charitable institutions or bodies that operated when the testator made his will but have since been merged with another or has quite simply ceased to exist and thus making it impossible at the outset to carry out the charitable purpose. (It changed form) It is a failure ab initio, i.e. at the outset, as the trust has not been effectively applied (trust asset not yet dedicated) since the charitable organisation is no longer in existence. Gifts may be made to particular named charities that no longer exist in their own right, but which purpose are carried out by other charitable societies as per Re Faraker (1912).

Re Faraker: In Re Faraker, there was a gift to ‘Mrs Bayley’s Charity, Rotherhithe’, which along with other local organisations have been consolidated into a trust for the poor in Rotherhithe. The CA held that the gift should go to the consolidated trust as it continued in the named charity. This is so even in the circumstance where, as in Faraker, the continuing charity has changed its purpose, the original charity was for poor widows and the consolidated charity was for the poor in general. This means that it could be the case in fact that no gift was or could ever be made to poor widows. Nevertheless it was held that by allowing the gift to be directed to the consolidated fund would allow the trust to be applied as ‘near as possible’ to the original intention of the donor.

This situation is where the particular charitable institution named to be the recipient of the gift no longer exists, the gift will not fail if on a true construction of the testator’s intentions he intended to create a charitable purpose and merely indicated that the designated institution could be seen as a trustee to enable his intentions to be carried out. (GCI) One interpretive approach by the court is that, since no trust ever fails for want of a trustee, the court will find another trustee to carry out the charitable purpose. However care must be afforded to distinguish between an unincorporated association and an incorporated body. According to Buckley J in Re Vernon’s WT, a GCI is more likely to be inferred in the case of a gift to an unincorporated charitable body than an incorporated one. “ Every bequest to an unincorporated charity by name without more must take effect as a gift for a charitable purpose…If the gift is to be permitted to take effect at all, it must be as a the bequest for a purpose…A bequest to a corporate body, on the other hand, takes effect simply as a gift to that body beneficially…there is no need in such a case to infer a trust for any particular purpose.”

Unincorporated Association Conservative Central Office v Burell (1982) per Lawton LJ: “…two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings, each having mutual duties and obligations, in an organization which has rules which identify in whom control of it and its funds rest and on what terms and which can be joined or left at will” This reasoning is inventive but unpersuasive. Most testators do not know whether the institutions to which they give are unincorporated or not. Secondly a testator hardly knows the distinction in law between a gift made to an unincorporated association and one made to an incorporated body. How can the court therefore assumed that in the former he would be deemed to have intended a GCI, made to carry out a particular purpose while a gift made to an incorporated association would be accreditation to its funds; how then can the law feel certain on these technical differences and used the distinction to discern the true intention of the testator’s while making such gift?

Despite the inherent defects supra, the distinction is accepted as good law and has been in operation in Re Finger’s WT (1972) Re Vernon and Re Fingers were both cited with approval in Re Koeppler WT to construe a gift to an unincorporated association as a charitable trust and not to be treated as a general accreditation to its fund. In Re Rymer (1895), the testator gave money to a particular seminary that once existed but which upon the demise of the testator ceased to exist. Although its current students were transferred to another seminary, the court held that the gift could not apply cypres as it was intended to that particular defunct seminary only and that there was no GCI. Re Harwood (1936) established something of a general rule that a gift to a particular charity that once existed, but is now defunct, is interpreted, unless there are indications to the contrary, as a gift for that body alone, disclosing no GCI. c/f with an organisation which never existed where GCI could be inferred.

In Re Spence, Megarry VC explained the rule’s rationale as follows: “ If a particular institution or purpose is specified, then it is that institution or purpose, and no other, that is to be the object of the benefaction. It is difficult to envisage a testator as being suffused with a general glow of broad charity when he is labouring and labouring successfully to identify some particular specified institution or purpose as the object of his bounty…”

2. Preservation from subsequent failure This is the situation when the charitable trust has been effectively carried out for a time, but then its purposes become impossible or impractical to carry out. The court takes the view that once assets have effectively been dedicated to charity, there can be no question of lapse and therefore cypres is automatically possible without the need to show a GCI: see Re Wright and Re King.

There is one type of event where the courts have dispensed with the need to prove GCI. These are cases of ‘subsequent failure’ – Mohamed Ramjohn: Cavendish Press. In Re Slevin, the testator left money to St Dominics orphanage in Newcastle. The orphanage existed at the date of the death but closed down soon after. It was held by Kay LJ that the fund no RT arose in favour of the testator’s estate.

According to section 13 of the Charities Act 1993, charitable assets could be applied cypres to existing trusts for purposes which were once useful but have now been adequately provided by other means, e.g. statutory services in a welfare state or there has been a surplus because of substantial income or inadequate income over the years to carry out the purpose....