CHARITABLE TRUST II

Week 8

LAW 3331
SEM I 2021
DR ZATI ILHAM ABDUL MANAF
 CHARITABLE TRUST
1 INTRODUCTION & HISTORY

2 STATUTORY DEFINITION IN MALAYSIA

3 THE HEADS OF CHARITY

A RELIEF OF POVERTY B ADVANCEMENT OF

EDUCATION

C
ADVANCEMENT OF
RELIGION D OTHER PURPOSES BENEFICIAL
TO THE SOCIETY
ADVANCEMENT OF EDUCATION
 EDUCATION
RESEARCH ARTISTIC AND
AESTHETIC EDUCATION

EXTRA CURRICULAR POLITICAL AGENDA

ACTIVITIES

EDUCATION AND
SPORTS PUBLIC BENEFIT
Preamble to the English Statute of Charitable Uses 1601

The maintenance of…schools of learning, free schools

and scholars of universities; the education and
preferment of orphans;

Case Incorporated Council of Law of Reporting From England and

Wales v AG (1972) Ch. 73.
Principle Buckeley LJ :

“It now extends to improvement of useful branch of human

knowledge and public dissemination.”
SCOPE OF ADVANCEMENT OF EDUCATION

Case Re Hopkins [1964] 3 All ER 46

Principle The word ‘education’…must be used in a wide sense, certainly

extending beyond teaching, and the requirement is that, in order
to be charitable, research must either be of educational value to
the researcher or must be so directed as to lead to something
which will pass into the store of educational material, or as to
improve the sum of communicable knowledge in an area which
education may cover- education in this last context extending to
the formation of literary’s taste and appreciation.

The true extent of the scope of advancement of education has been the result
of case law.
Not restricted to just classroom or pure academic teaching.
‘RESEARCH’
Well recognized as an important part of education, but not all research is
necessarily charitable.
Guide in determining whether a given research qualifies as an advancement of education is
provided in the case of McGovern v AG [1982] Ch 321

A trust for research will ordinarily qualify as a charitable trust if, but only if:

The subject matter of the proposed research is a useful object of study; and

It is contemplated that the knowledge acquired as a result of the research

will be disseminated to others; and

The trust is for the benefit of the public, or a sufficiently important section of
the public;
 CASES (RESEARCH)

Name of Case Re Hopkins (1965) Ch 669

Testatrix gave one-third of her residue to the Francis Bacon Society

Facts Incorporated. The purpose was to ‘find the Bacon-Shakespeare
manuscripts’. The aim of which was to prove that Bacon was in fact the
author of the works generally attributed to William Shakespeare.

Whether the trust was charitable?

Decision

This purpose was educational because it was ‘of the highest value to
history and to literature’. Thus, the charitable trust was upheld.
 CASES (RESEARCH)
Name of Case Re Shaw (1957) 1 WLR 729

The will of the playwright, George Bernard Shaw, left money to:
Facts
i) Ascertain by inquiry how much time and money could be saved by a
new British alphabet of 40 letters;
ii) Translate ‘Androcles and the Lion’ into the new language and
advertise this by sending copies to public libraries. This is to show how
good the new alphabets are.
Ratio Harman J.

The research and propaganda enjoined by the testator seem to me

merely to tend to the increase of public knowledge in a certain respect,
namely, the saving of time and money by the use of the proposed
alphabet. There is no element of teaching and education combined with
this, nor does the propaganda element in the trust tend to more than to
persuade the public that the adoption of the new script would be a
good thing and that, in my view, is not education.
‘ARTISTIC AND AESTHETIC EDUCATION’

I protest against a narrow conception of education when one is

dealing with aesthetic education. In my opinion, a body of persons
established for purpose of raising the artistic state of the country is
established for charitable purposes.

Royal Choral Society v IRC [1941] 1 All ER 49

Whether the promotion of an artistic purpose is charitable requires examination of

facts (requires artistic merit)
 CASES (ART)
Name of Case Re Delius (1957)Ch 299

Widow of a composer – Frederick Delius gave her residuary estate for the
Facts advancement of Delius’s musical works

“.. To apply the royalties income and income form the residual trust fund
towards the advancement of musical works of my late husband..”
Ratio Roxburgh J.

I do not find it necessary to consider what the position might be if the trust
were for the promotion of the words of some inadequate composer.…I
need not investigate the problem, because counsel who have argued
before me have been unanimous that the standard of Delius’s work is so
high that the question does not arise in the present case.

If the education proposed appears a little strange, the court may deny
charitable status. Charitable status cannot be used to force the
testator’s eccentric views upon the public. This is regarded as mere
‘propaganda’
‘EXTRA-CURRICULAR ACTIVITIES’

Name of Case London Hospital Medical College v IRC (1976) 1 WLR 61

Facts
Issue which the court had to consider was involving the
status of a student union in a medical school.

Decision
It was held that the union was charitable because its
purpose was to advance the purposes of the medical
school which was itself charitable (education).
‘POLITICAL AGENDA’
Trust for political purposes is not charitable. Therefore, trust for advancement
of education must not have any political agenda.

The abolition of religious tests, the disestablishment of the Church, the

secularization of education, the alteration of the law touching religion
or marriage, or the observation of the Sabbath, are purely political
objects. Equity has always refused to recognize such objects as
charitable..A trust for the attainment of political object has always
been held invalid not because it is illegal…but because the court has
no means of judging whether a proposed change in law will or will not
be for the public benefit.

Lord Parker in Bowman v Secular Society [1945] Ch 16

‘POLITICAL AGENDA’

Political propaganda masquerading as education is not

education for the purpose of charity.

Vaisey J in Re Hopkinson (1949) 1 All R 346

 CASES (POLITICAL AGENDA)
Name of Case Re Koepller’s Will Trust ( 1986) Ch 423
The will of Sir Heinrich Koeppler left money to a conference centre known
Facts as Wilton Park. The conferences were attended by representatives of
major western nations in order to exchange views on political, economic,
and social issues of common interest. The subjects discussed were
recognized academic subjects in higher education.
Ratio Held to be charitable.

Slade J.

The concept of education is now wide enough to cover the intensive

discussion process adopted by Wilton Park. The activities of Wilton Park
are not of a party-political nature. Nor, so far as evidence shows, are they
designed to procure changes in the laws or governmental policy of this or
any other country: even when they touch on political matters, they
constitute, so far as I can see, no more than genuine attempts in an
objective manner to ascertain and disseminate the truth.
‘SPORTS AS PART OF EDUCATION’
The law does not regard the promotion of any particular sport, for its own sake,
as charitable. However, it could be charitable if it is done within the scope of
advancement of education.

Physical education of young people in formal education can also be deemed

to be charitable.

E.g: Promotion of sports as educational in school and universities.

“No-one of sense could be found to suggest that between [the ages of 10-19] any boy can be
properly educated unless at least as much attention is given to the development of his body as is
given to the development of his mind...to leave 200 boys at large and to their own devices during
their leisure hours would not be educating, but would probably result in their quickly relapsing into
something approaching barbarism”

Re Mariette [1915] 2 Ch 284 (Bequest to provide courts and squash rackets at Aldenham School)
 CASES (SPORTS)

Name of Case
Re Dupree’s Deed Trust (1945) Ch 16

A prize was provided for an annual chess tournament for boys and
Facts young men up to 21 in the City of Portsmouth. A school teacher gave
evidence that chess was a game of skill and is educational.

Decision
Held: Evidence was accepted that the playing of chess had
educational value.

Not all sports could be regarded as contributing to the education of the

young, but judges could make decisions on whether a type of sport is
qualified for charitable status.
 CASES (SPORTS)
Name of Case
IRC V McMullen [1981] AC 1
Trust for the furtherance of education in schools and university in
Facts UK and encouraging and facilitating the students playing football
and other games and sports at such institution.

Decision A Valid Charitable Trust. Education is not restricted to classroom

teaching

Lord Keith:

A trust for the mere promotion of a particular sport or sports does

not qualify as charitable under this head. On the other hand, a gift
to a particular educational establishment for the purpose of
improving the sporting facilities available to the pupils there does
so qualify.
EDUCATION AND PUBLIC BENEFIT

General Principle: The benefits of a trust must be available ‘for the benefit of
the community or an appreciably important class of the community’ for the
trust to be a charity.

In the case of trusts for educational purposes the condition for public benefit must
be satisfied..
Oppenheim v Tobacco Securities Trust Co Ltd. [1951] AC 297

Tax avoidance tactic: Create trust for

the purpose of educating their
children.
 CASES (PUBLIC BENEFIT)
Name of Case
Re Koettgen’s Will Trust (1954) Ch 252
A testatrix instructed that her residuary estate should be held by her
Facts trustees ‘as a fund for the promotion and furtherance of commercial
education’.

Furthermore, ‘the persons eligible as beneficiaries under the fund shall

be the persons of either sex who are British born subjects and who are
desirous of educating themselves or obtaining tuition for a higher
commercial career but whose means are insufficient or will not allow
of their obtaining such education or tuition at their own expense’.
Moreover, ‘in selecting beneficiaries it is my wish that the trustees shall
give preference to any employees of J B & Co or any members of the
families of such employees’.
Issue
Whether the trust was in the public interest and therefore charitable.
 CASES (PUBLIC BENEFIT)

Name of Case
Re Koettgen’s Will Trust (1954) Ch 252
Valid.
Decision
Preference for employees of a particular company may be
acceptable, as long as the funds are offered to the general public
first. However if the majority of the charitable funds are given to the
children of company employees, it becomes unacceptable.
ADVANCEMENT OF RELIGION
 ADVANCEMENT OF RELIGION
1 MEANING OF RELIGION

2 APPLICATION IN MALAYSIA

3 ETHICS

4 PRIORITY AMONG RELIGIONS

5 PUBLIC BENEFIT
‘MEANING OF RELIGION’
1601 Preamble only refers to ‘the repair of churches’. However, cases have
shown that trust to promote Christianity are charitable in nature.

Case Interpretation of Religion

Bowman v Secular Society [1945] Ch 16
Church of the New Faith v Commissioner for
Pay-Roll Tax (VIC) (1983) 154 CLR 120
It would seem to follow that a trust for the
purpose of any kind of monotheistic theism
would be a good charitable trust.
For the purpose of the law, the criteria of
religion is two-fold:

1) Belief in a supernatural Being, Thing or

Principle
2) The acceptance of canons of conduct in
order to give effect to that belief
DEVELOPMENT OF THE LAW IN THE UK

Section 3(2)(a) of Charities Act 2011 (UK)

Departure from earlier interpretations in Bowman v Secular Society

and the case of Church of the New Faith v Commissioner for Pay-Roll
Tax (VIC) (1983) 154 CLR 120
POSITION IN MALAYSIA
Not following the interpretation by Lord Parker in the case of Bowman v
Secular Society, Malaysia has accorded charity status to polytheistic beliefs as
well.

1
Case AG v Thirpooree Soonderee (1874) 1 Kyshe 377
Decision Court held that the gift of land for the benefit of a Hindu Temple is
a valid charitable gift

Case Re Low Kim Pong’s Trust Settlement [1938] MLJ 119

2
Facts Gift exclusively for the establishment of a temple and its
endowment and the land including the land given for growing
fruit trees was a valid charitable gift
Decision McElwaine J:

There is no question that a gift to a temple is, in this colony, a good

charitable gift
‘MEANING OF ADVANCEMENT OF RELIGION’

To promote it, to spread its message ever

wider among mankind; to take positive
steps to sustain and increase religious
belief..’

Donovan J. in the case of United Grand Lodge of Ancient Free and

Accepted Masonns of England v Holborn Borough Council [1957] 1
WLR 1080
ETHICS?

Religion, as I see it, is concerned with man’s

relations with God, and ethics are concerned
with man’s relation with man. The two are not the
same

Dillon J. in the case of Re South Place Ethical Society (Barralet v AG)

[1980] 1 WLR 1565
 CASES (ETHICS)

Name of Case
Re South Place Ethical Society (Barralet v AG) [1980] 1 WLR 1565
The society had originally been a Unitarian chapel, but had changed
Facts in 1887 to an ethical society. ‘The object of the society are the study
and dissemination of ethical principles and the cultivation of a
rational religious sentiment.’ It held Sunday meetings and lectures, at
Conway Hall, which were open to public. The trustees asked the court
whether the society was a religious charity.

Decision The study and promotion of ethical principles is not religion but could
be educational and therefore qualify as charitable under the
education head or the fourth head.
 CASES (ADVANCEMENT OF RELIGION)

Name of Case
Karen Kayemeth Le Jisroel v IRC [1932] AC 650
An organisation set up to facilitate the settlement of Jews in Palestine
Facts and neighbouring lands was not considered as advancement of
religion
Ratio settling people in the Holy Land was not an exclusively charitable
purpose as advancing the Jewish religion as it involved considerations
which went beyond the religious and spiritual;

promotion of religion means the promotion of the spiritual teaching in

a wide sense and the maintenance of the doctrines on which it rests
and the observances that can serve to promote and manifest it - not
merely the foundation or cause to which it can be related
 CASES (ADVANCEMENT OF RELIGION)

Name of Case
Re Watson (1973) 1 WLR 1472
Gift in a will ‘for the continuance of the word of God as it has been
Facts maintained by Mr HG Hobbs and myself since 1942 by God’s
enabling..in propagating the trust as given in the Holy Bible. The group
consisted of just a few families in Suffolk. (undenominal Christians)
Ratio Despite expert evidence that the intrinsic worth of these teachings
were nil, it was accepted as charity.
 CASES (ADVANCEMENT OF RELIGION)
Name of Case
Thornton v Howe (1862) 31 Beav. 14

A trust for the publication of the writing of Joanna Southcote who

Facts claimed that she is a prophetess and was pregnant with a child by
the Holy Ghost and would give birth to the new Prophet. Her followers
called themselves ‘Southcottians’.

The trust was created by one of the followers.

Decision Valid religious charity.

The court does not make any distinction between one sect
(Christianity) and another. The court finds that although Joanna’s
works are incoherent and confusing, they are still written with a view
to extend the influence of Christianity
PRIORITY AMONG RELIGIONS

As between different religions, the law stands

neutral, but it assumes that any religion is at least
likely to be better than none.

Cross J in Neville Estates ltd v Madden (1962) Ch 832.

PUBLIC BENEFIT AND RELIGION

Although a religious charity provides benefits for the followers

of that religion, what benefits does it provide for the wider
society? It has to provide some, or it will not be charitable. The
public must have some access to the benefits of the religion.

It can be fulfilled in 2 ways:

1) Provide activities which are available to the public. (Re

Herington Gibbs v McDonnell (1989) 2 All ER 129.
2) The presence among the public at a place of worship have
been improved. (Neville Estates v Madden)
 CASES (PUBLIC BENEFIT)

Name of Re Hetherington Gibbs v Mc Donnell (1989) 2 All ER

Case 129.
A trust for the celebration of private religious rites to be
Facts performed in public can be benevolently construed to be
to be held as charitable. It does confer a sufficient degree
of public benefit and improves those who attend it.
Decision Thus a trust for the saying of masses in public for the souls
of “my husband, parents, sisters and myself” was upheld
as a charitable trust.
 CASES (PUBLIC BENEFIT)

Name of
Gilmour Coats [1949] AC 426.
Case
A trust of £500 for the benefit of Carmelite Priory convent
Facts at Notting Hill. The Priory was a community of strictly
cloistered nuns which devoted their lives to prayer,
contemplation and self-sanctification.

The nuns had no contact with the outside world

Decision
Lacked the element of public benefit.
OTHER PURPOSES BENEFICIAL TO
COMUNITY
OTHER PURPOSES BENEFICIAL TO
SOCIETY

ANTI-VIVISECTION SOCIAL SPORTING

AND RECREATION

PROTECTION AND BENEFIT

OF ANIMALS
‘OTHER PURPOSES BENEFICIAL TO SOCIETY

✓ Very wide category

✓ List is not exhaustive
✓ Trusts which the court have held charitable but does not come within the 3 other
heads

Test to be applied:

1) What the law treats as charitable and not what the testator
thought was charitable.
2) Need to be within the spirit and intendment of the preamble
3) Must be beneficial to the public
 ANTI-VIVISECTION
Name of Case Re Hetherington Gibbs v Mc Donnell (1989) 2 All ER
129.
A society claimed exemption from tax. The object was the suppression of vivisection.
Facts In England there was a strong lobby to stop the elements of experimenting on
animals
Decision Held: Society not established for charitable purposes

The Court considered two things:

A) The protection of animals from cruelty is a charitable purposes
B)Vivisection a necessary part of medical research : it will benefit the community

Lord Simmonds: In order to abolish vivisection it would be necessary to repeal the

Cruelty of Animals Act 1876 and replace it with a new enactment prohibiting
vivisection altogether.”
‘PROTECTION AND BENEFIT OF ANIMALS’

Trust for the welfare of animals generally are charitable unless it is made in
favour of a specified animal.

To ensure it fulfills the element of public benefit:

i) The intended animals must be useful to mankind; or

ii) It is done to promote public morality by reducing the pain and suffering
of animals
 CASES (ANIMALS USEFUL TO MANKIND)

Name of
London University v Yarrow (1857) 1 DE & G 72
Case
Decision Court held that a bequest ‘for the establishment of a
hospital in which animals, which are useful for mankind,
should be properly treated and cured, and the nature of
disease investigated, with a view of public advantage’
was charitable.
 CASES (REDUCE THE SUFFERING OF ANIMALS)
Name of Case
Re Wedgewood [1914] 1 Ch 113
Facts A testatrix by her will gave her residue upon trust to be applied for the
protection and benefit of animals
Decision There was a charitable trust. To promote public morality and prevent
cruelty to animal.

Lord Justice Swinfen Eady:

A gift for the benefit and protection of animals tends to promote and
encourage kindness towards them, to discourage cruelty, and thus
stimulate humane and generous sentiments in man towards animals.
 ‘SOCIAL SPORT AND RECREATION’
Name of Case
IRC v City of Glasgow Police Athletic Association (1953) AC 380

Facts The House was asked whether the taxpayer association was established for
‘Charitable purposes only’ so as to benefit from tax exemptions. The
association promoted sporting activities among members of the Glasgow
police.
Decision Though the purposes included charitable objects, they also included objects
which were not charitable.

Lord Normand: ‘what the Respondents must show in the circumstances of this
case is that so viewed objectively the Association is established for a public
purpose, and that the private benefits to members are the unsought
consequences of the pursuit of the public purpose and can therefore be
disregarded as incidental. That is a view which I cannot take. The private
benefits to members are essential. The recreation of the members is an end in
itself, and without its attainment the public purpose would never come into
view.
TO BE CONTINUED-
CYPRES DOCTRINE