Magee & Thornhill v Ag

• Jurisdiction: Ireland
• Judge: Mr. Justice Vivian Lavan
• Judgment Date: 25 July 2002
• Neutral Citation: [2002] IEHC 87
• Court: High Court
• Docket Number: RECORD NO. 377/2000 Sp
• Date: 25 July 2002

[2002] IEHC 87

THE HIGH COURT

RECORD NO. 377/2000 Sp

MAGEE & THORNHILL v. AG

IN THE MATTER OF THE CHARITIES ACT1961–1973

AND IN THE MATTER OF SECTION 47 OF THE ACT OF 1961

AND IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 51 OF THE ACT OF 1961

BETWEEN

MOST REVEREND JOHN MAGEE AND VERY REVEREND ST. JOHN DEAN THORNHILL

PLAINTIFFS

AND

ATTORNEY GENERAL

DEFENDANT

Citations:

CHARITIES ACT 1961 S51

CHARITIES ACT 1961 S47

GOVERNORS OF ERASMUS SMITH SCHOOLS V AG & ORS 1932 66 ILTR 57

AG V BOULTBEE 1794 2 VES 380

THE TRUSTS OF THE RECTORY OF ST JOHN 1869 IR 3 EQ 335

CONSTITUTION ART 42.4

CROWLEY V IRELAND 1972 IR 241

CONSTITUTION ART 44.2.5

CONSTITUTION ART 44.2.6

EDUCATION ACT 1998

ROYAL KILMAINHAM HOSPITAL, RE 1966 IR 451

WORTH LIBRARY, RE 1995 2 IR 301

DELANEY EQUITY & LAW OF TRUSTS IN IRELAND 306

CHARITIES ACT 1961 S47(1)

EDUCATION (IRL) ACT 1892 S18

DELANY THE LAW RELATING TO CHARITIES IN IRELAND

CHARITIES ACT 1961 S47(1)(E)

CHARITIES ACT 1961 S47(4)(4)

PICARDA THE LAW & PRACTICE RELATING TO CHARITIES 3ED 392

CMRS FOR SPECIAL PURPOSES OF INCOME TAX V PEMSEL 1891 AC 531

SHAWS WILL TRUSTS, RE 1952 CH 163

Synopsis:

CHARITIES

Equity and trusts

Education - Property - Provision of educational facilities - Whether proceeds of trust could be applied cy-pres - Charities Act, 1961 (2000/377Sp - Lavan J - 25/7/2002)

Magee v Attorney General

Facts: The plaintiffs as trustees of a trust brought an application seeking to have the proceeds of sale of a trust applied cy-près. The application was brought pursuant to section 51 of the Charities Act, 1961 and the defendant was a party to proceedings as it was responsible for enforcing charitable trusts in the State. Originally the trust was founded to provide education for local Catholic males in Youghal, Co. Cork. The trustees sought to contend that the original purpose of the trust had been fulfilled and that the proceeds of sale of the trust could be applied cy-près to discharge part of the parish debt. The trustees contended that the two Catholic primary schools in the parish were entirely adequate to meet educational requirements. The defendant objected and contended that the proceeds of sale should be continued to be used for educational purposes as this was closer to the intention of the donor. The situation was complicated by the fact that in 1997 a cy-près scheme had been entered into by the trustees for the educational benefit of all children attending Primary or Secondary schools in Youghal.

Held by Lavan J in refusing the reliefs sought. By virtue of the cy-près doctrine where a donor’s charitable gift was found to be impossible to execute a scheme could be approved which was as near as possible to the donor’s intention. The primary rule to be observed in the application of the cy-près doctrine was that the intention of the donor must be observed as far as possible. The cy-près scheme entered into in 1997 had superseded the trust originally established and the trustees were bound by that agreement. The question that had to be asked was whether the advancement of educational facilities in all schools in the area was closer to the spirit of the gift than the discharge of a parish debt incurred in pursuit of enhancing the community. There was no evidence that the trustees were fulfilling their duties under the cy-près scheme of 1997. The application to sever the proceeds of sale of the property involved could not be severed from the 1997 scheme and the court could not grant the relief sought.

Mr. Justice Vivian Lavan

1 These proceedings arise out of an application by the plaintiffs to have the proceeds of sale of trust property applied cy-pres. The plaintiffs are trustees of a trust declared by a deed of conveyance executed in 1892. The defendant is responsible for enforcing charitable trusts and is being sued as the custodian of charities.

2 The plaintiffs seek the following reliefs pursuant to Section 51 of the Charities Act,1961:

3 1. An order identifying the beneficiaries under the said trust. The benefit in question is the provision of a primary Catholic education for local male Catholics in Youghal. It is to be noted that charitable trusts are not subject to the same requirements relating to certainty of objects as private Trusts are. What is required is that the class must be defined with sufficient certainty to enable the trustees, or the court, to determine theoretically whether any given individual is or is not a member of that class.

4 2. A direction as to whether the said trust may be regarded as having been made by gift and if so identifying the donor of such gift.

5 3. A determination as to who are the present objects of the said trust.

6 4. A direction as to whether it may be appropriate to assume that the purpose for which the said trust was established have been accomplished or substantially met.

7 5. A direction as to whether it is appropriate that a scheme should be framed pursuant to Section 47 of the Charities Act,1961and, if so, the terms of which the said scheme should be framed: that is whether the residue of the donors gift is applicablecy-près.

8 6. A direction as to the application of the proceeds of sale of the trust property and as to whether the trustees are at liberty to utilise such proceeds in accordance with proposals outlined in the affidavit supporting the plaintiffs case.

9 7. Such further and other directions as may be thought fit.

10 The plaintiff's in the present case contend that the original purposes of the charitable trust in question have been fulfilled as there is adequate schooling for Catholics in the Parish of Youghal. They therefore seek to have the proceeds of sale of the remainder of the trust property appliedcy-près in an effort to discharge part of the Parish debt. The Attorney General objects to this as it is felt that the proceeds of sale should continue to be used for educational purposes which is closer to the intention of the donor.

11 The Law: where a gift is made to charity, it may turn out to be impossible or impracticable to give effect to the intentions of the donor in the precise terms which he intended. By virtue of thecy-près doctrine, where a donor discloses a clear intention to make a charitable gift, either in a deed of conveyance or in a will, which subsequently turns out to be impossible to execute, a scheme may be made for the application of the property for other charitable purposes as near as possible to those intended by the donor. As Meredith J. stated in Governors of Erasmus Smith's Schools -v- Attorney General (1931) 66 I.L.T.R. 57, at p. 61:

"Courts of Law adapt the statement of a charitable intention to suit altered circumstances and conditions with a view to giving effect to the real intention. Donors cannot be expected to provide expressly for more than the world and the times with which they are familiar."

12 At common law there can be no question of an applicationcy-près until it is clearly established that the purpose of the donor cannot be carried into effect (Attorney General -v- Boultbee (1794) 2 ves. 380, at p. 387). This area is now governed by Section 47 of the aforesaid Act of 1961 which allows acy-près order to be made in circumstances where there were difficulties in implementing the original terms or where more effective use might be made of the trust property by framing an alternative scheme. I note that although Section 47 aforesaid has caused substantial inroads to be made into the restrictive common law approach to thecy-près doctrine, it is still desirable and necessary to have due regard for the wishes of the donor so as to avoid the threat of making the practice of donating to charity a veritable shot in the dark.

13 Where the intention of the donor is perpetual and has been carried into effect but ceases to be practicable, there is the option of acy-près application. For example, where property has been given out to a particular charitable institution and the gift takes effect when the institution thereafter comes to an end, the property, belonging to the charity, will be applied cy-près. The courts involvement with cy-près applications normally only arises in the context of administering a charitable trust where the donor has not identified the way in which the trust fund is to be applied.

14 According to Halsbury's Laws of England (third edition, 1953) where the donor has specified a particular mode of application and that mode becomes incapable of being performed, the court can proceed as if the direction had never been expressed at all but only where the donor had a general charitable intention which transcended the particular mode of application prescribed. Conversely, in circumstances where the particular mode of application specified in the trust is the entire essence of the donors intention, then the Court has no power to direct any other charitable application in place of that which has failed. Assessing whether or not the particular mode of application is the essence of the donors intention may be facilitated by an examination of the language of the donor and or any special terms or conditions mentioned in the trust.

15 In seems to me that the primary rule to be observed in the application of thecy-près doctrine is that the intention of the donor must be observed as far as possible and regard must be had to the spirit of the gift. Thus, if the donor names a particular object which is capable of taking effect, any application cy-près that becomes necessary must be restricted within the limits of that object. The mode of application must as far as possible coincide with the donor's wishes. Thus objects which are very near the donors intention will always be selected in preference to those more remote.

16 In certain circumstances surplus funds may remain where a charitable purpose has been completed or where full provision has been made...