Kings v Bultitude & Anor

A charitable gift to an unincorporated religious association may be saved by a cy-près scheme where the institution has ceased to exist, provided the testator did not make the gift conditional on its continued existence and its charitable work remains capable of being carried on. Where the institution and its purposes end at the testator’s death, the gift has suffered initial failure. A cy-près scheme then requires a general or paramount charitable intention. The court must assess that intention from the will and the institution’s constitutional and practical character. A highly individual and doctrinally distinctive religious organisation may indicate that the gift depended on that institution. Funds held separately in the organisation’s name may be presumed to be held for charitable purposes and applied cy-près.

The claimant, the personal representative of Pamela Schroder, sought directions concerning the residue of her estate and assets associated with the Ancient Catholic Church known as the Church of the Good Shepherd. The will gave the residue to the person acting as trustee of the Church for its general purposes.

By the testatrix’s death, the Church had ceased operating, had no successor trustee or primate, and its small congregation had dispersed. The court had to determine whether the gift was valid, whether it had suffered initial or subsequent failure, whether it could be applied cy-près, and whether bank accounts, archives and other contents belonged beneficially to the estate or were held for charitable purposes.

Mrs Justice Proudman determined the claim at first instance.

1. The Church was capable in principle of receiving a charitable gift because it was established for the advancement of religion and involved public benefit within sections 2 and 3 of the Charities Act 2006.
2. The Church continued as an institution after Mr Schroder’s death, despite its departure from its formal constitution. The testatrix treated it as continuing in accordance with her own understanding of its beliefs and practices.
3. The Church nevertheless ceased to exist on the testatrix’s death. She was essential to its activities, the congregation did not continue meeting in the Church’s name, and its members went their separate ways. Cesser on death was equivalent to cesser immediately before death. It was therefore initial, rather than subsequent, failure.
4. The words referring to the Church’s then place of meeting did not make the gift dependent on the Rookwood Road building. However, the will and surrounding circumstances showed that the testatrix intended the gift to depend on the continued existence of the Church as a distinct institution. Its constitution and purposes were highly individual and doctrinally distinctive.
5. The will disclosed no general or paramount charitable intention. The gift therefore failed, and the residue passed on partial intestacy.
6. The bank accounts, although held in the Church’s name and kept separate from the testatrix’s accounts, were held for charitable purposes and were applicable cy-près. The archives and contents of the building had likewise been entrusted for Church purposes rather than given beneficially to the testatrix. The fifth issue was decided in favour of HM Attorney General.