Phillips v The Royal Society for the Protection of Birds & Ors

A testamentary gift to an incorporated charitable body is ordinarily a beneficial gift forming part of its general assets. A separate charitable trust arises only where the will indicates that intention. A corporation remains in existence, and can take a legacy, until its formal dissolution; cessation of operations or removal from the charities register is insufficient to cause lapse. Where the gift subsequently fails because the named charity is dissolved, the court may apply it cy-près unless the specified mode was the only possible means of fulfilling the charitable intention. A successor provision referring to transfer of all assets requires substantial continuity of the former body’s activities, not merely the receipt of some assets.

The claimant, executor of Vera Gwendoline Spear’s estate, sought directions concerning a £65,000 testamentary gift to The New Forest Owl Sanctuary Ltd, described in the will as “The Owl Sanctuary Crow Ringwood Hampshire”. The charity had ceased operating, had been removed from the charities register, and was formally dissolved shortly after the testator’s death. The North Wales Bird Trust claimed the gift under a successor provision in the will, alleging that it had received the charity’s assets. The Attorney General argued alternatively that the gift could be saved for charity through a charitable purpose trust or the cy-près doctrine.

The issues were whether the gift was subject to a separate charitable trust, whether it had lapsed at the testator’s death, whether the successor provision applied, and whether the gift should instead be applied cy-près.

1. The successor clause. The clause referring to a body to which all the original charity’s assets had been transferred contemplated a successor substantially able to take over and carry on the transferor’s activities. It did not apply merely because the North Wales Bird Trust received some birds. The transfer process left substantial assets elsewhere, including vehicles and equipment, and did not result in the Trust taking over the former charity’s undertaking. The Trust therefore could not take the gift under clause 7.
2. No separate charitable trust. A gift to an incorporated body for its general purposes is prima facie a gift to that body beneficially. The will contained no indication that the recipient was to hold the money on a separate trust. The reference to general purposes reinforced, rather than displaced, that construction. The reasoning in Re ARMS (Multiple Sclerosis Research) Ltd [1997] 1 BCLC 157 supported that conclusion.
3. Lapse and corporate existence. The charity had not ceased to exist when the testator died. Although it was no longer functioning and the striking-off process had begun, it retained corporate legal personality until its formal dissolution. The gift therefore became the charity’s property on the testator’s death and did not lapse.
4. Cy-près. The gift was one of supervening, rather than initial, failure. Since the specified method was no longer available, the court could direct a scheme applying the funds as nearly as possible to the testator’s charitable intention. It was appropriate to direct the gift to the North Wales Bird Trust, given the similarity of its purposes and its care of a substantial part of the former collection. Counsel were invited to submit an agreed draft order.