Charitable Trust


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Charitable Trust

  2. 2.  At the end of the lecture, students will be able to:-1)Identify and list down the concept of charity.2)Distinguish and affirm the relevant principles thatconstitute charity.3)Differentiate between Private Trust and CharitableTrust.2
  3. 3.  Charitable trusts are public trust. The settlor/testator will create certain purposeswhich are so beneficial to the community at large. There is no formal statutory definition of charitybut its definition is important.3
  4. 4. a) Validityb) Cy prèsc) Tax and ratesd) Public enforcement4
  5. 5.  Since there is no statutory definition of charity,courts used the Preamble to the Statute ofCharitable Uses 1601 or sometimes referred asthe Statute of Elizabeth.5
  6. 6.  Whereas lands, chattels, money have beengiven by sundry well disposed persons, somefor the relief of aged, impotent and poor people,the maintenance of sick and maimed soldiersand mariners, schools of learning, free schoolsand scholars in universities, the repair ofbridges, port, haven, causeway, churches, seabanks and highways, the education andpreferment of orphans; the relief, stockmaintenance for houses6
  7. 7.  of correction; the marriage of poor maids; thesupportation aid and help of young tradesmen,handicraftsmen and person’s decayed; the reliefor redemption of prisoners or captives, the aid orease of any poor inhabitants concerningpayments of fifteens, setting out of soldiers andother taxes which lands, chattels and moneyhave not been employed according to thecharitable intent of the givers by reasons offrauds, breaches of trust and negligence.7
  8. 8.  Does not explain/define the word charity. Remedy abuses in the administration of charities. Purpose of the charitable trust will have to bewithin “spirit and intendment of the Preamble.”8
  9. 9. Lord Wilberforce:“The Appellant must show … that the public benefitis of a kind within the spirit and intendment of thestatute of Elizabeth.” Preamble recognised a number of object ascharitable.9
  10. 10.  The Statute of Charitable Uses 1601 wasrepealed by section 13(1) the 1888 Act. Section 13(2) preserved the preamble.10
  11. 11. Lord McNaughten summarised the scope ofcharity.“Charity in its legal sense comprises fourprincipal divisions ; trusts for the relief ofpoverty, trust for the advancement of education;trust for the advancement of religion; and trustfor other purposes beneficial to the community,not falling under any of the preceding heads.”11
  12. 12.  The Committees on the law and the Practicerelating to Charitable Trust 1952. Recommended new statutory definition of charity.12
  13. 13.  Repealed 1888 Act. Section 38(4): Any reference in any enactmentor document to a charity within the meaning,purview and interpretation of Charitable Uses1601, or of preamble to it, shall be construed asa reference to a charity within the meaningwhich the words bears as a legal term accordingto the law of England and Wales.13
  14. 14.  S96(1): ‘charity’ means any institution,corporate or not, which is established forcharitable purposes and is subject to the controlof the High Court in the exercise of the court’sjurisdiction with respect to charities. S97(1): ‘charitable purposes’ means purposeswhich are exclusively charitable according to thelaw of England and Wales.14
  15. 15.  Restated the categories of charity in simple andmodern language.15
  16. 16.  Govt decided not the promote a legislativedefinition. Scope based on decision of court and charityCommissioner.16
  17. 17.  Charity in its legal sense comprises four principaldivisions;1) Trust for the relief of poverty;2) Trust for advancement of education;3) Trust for advancement of religion; and4) Trust for other purposes beneficial to thecommunity.17
  18. 18. To be charitable a purpose must satisfy certaintests : it must either fall in the preamble to theancient statute of Elizabeth I ( sometimesreferred to as the Statute of Charitable Uses Act1601) or within one of the of categories ofcharitable purposes laid down by LordMacNagthen and derived form the preamble,and in the case of the fourth of those categoriesit must be within ancient18
  19. 19.  statute, either directly or by analogy with decidedcases on the same point, or it must have beendeclared to be charitable by some other statute. Inaddition, it must be for the public benefit, that is tosay, it must be both beneficial and available to asufficient section of community.19
  20. 20. Lord Wilberforce :1) Since it is a classification of convenience, theymay well be purposes which do not fit neatly intoone or other of the heading2) The words used must not be given the force of astatute to be construed3) The law of charity is a moving subject whichmay well be evolved even since 1891.20
  21. 21. Each heads must involves 2 elementsa) An element of benefit; andb) An element of public benefit (except for relief ofpoverty). The requirements of public benefit varies formhead to head. It must be exclusively for charitable purposes.21
  22. 22.  Oppenheim v Tobacco Securities Trust Co Ltd[1951] AC 297 : certain trust for the education ofchildren of employees of former employees ofBritish American Tobacco Co Ltd or any of itssubsidiary or allied companies. No CT22
  23. 23.  Charity Law in Malaysia derived from English Law. No equivalent of Charities Act 1960 or CharitiesAct 1993 in Malaysia. Sarawak: Charitable Trust Ordinance (Cap 102)deals with administration of charitable trust in thatstates.23
  24. 24.  ‘Charitable trust’: any trust or grant of, orendowment . . . for any religious, educational orother charitable purposes. It leaves the meaning of ‘charitable’ to judicialinterpretation.24