Analysis
Vera Gwendoline Spear (the testator) died on 5 January 2007 leaving a will dated 29 August 1997 (the will). Apart from a specific bequest of the testator’s pet parrot the will left the entirety of the testator’s estate on trust to her executors to be divided in equal shares between the Royal Society for the Protection of Birds, the Peoples Dispensary for Sick Animals, Monkey World Ltd and ‘the Owl Sanctuary Crow Ringwood Hampshire’. The value of the deceased’s residuary estate was approximately £260,000. The claimant was the testator’s sole executor and sought directions as to the effect of the gift of a share of residue in her will to ‘the Owl Sanctuary Crow Ringwood Hampshire, the value of which was approximately £65,000. It was common ground between the parties that the organisation being referred to was the New Forest Owl Sanctuary Ltd (NFOS).
NFOS was a registered charity which maintained a collection of birds at a site in Crow, Ringwood in Hampshire which was formerly run by Bruce Berry. Mr Berry was one of several trustees of NFOS but took all decisions himself. NFOS ceased to operate in circumstances of some scandal following an undercover BBC report in June 2003 alleging cruelty to the birds kept by the charity. On 9 July 2003 the charity commissioner appointed an investigating officer pursuant to section 8 Charities Act 1993. The appointment of the investigating officer prompted the resignation of all of NFOS’ trustees, although two of them (not Mr Berry) were persuaded to stay in office to settle NFOS’ affairs. This was made difficult by the fact that Mr Berry assigned the leasehold premises on which NFOS operated to a Mr Talbot who refused to allow access to any of the approximately 240 birds housed on the site or any of NFOS’ other chattels held there.
The situation was settled by the transfer of over 100 of NFOS’ bird collection to Mr Talbot’s company. The remaining 137 birds were transferred to the estate of Mr Waterman in Cheshire, a situation arranged by a Mr Poole who became a trustee of NFOS. The remaining chattels of NFOS were left on its former site and are presumed to have been taken by Mr Talbot and his company. Following this, although some of the birds held at Mr Waterman’s estate were transferred to sites owned by NWBT or other organisations in agreement with NWBT Mr Waterman refused to allow access to a large number of them. Some 50 of them were sold or went missing from Mr Waterman’s estate. On 6 August 2005 NFOS made a gift of 17 of the remaining birds to NWBT but it is clear that this was not the entirety of the remaining collection. The Charity Commission subsequently approved the transfer of birds to NFOS and noted that further birds remained with Mr Poole and that they should be left with him. The remaining cash of NFOS was to be used to settle its legal fees. NFOS was removed from the Register of Charities on 17 August 2006 and was dissolved and removed from the register of companies on 6 February 2007, shortly after the testator’s death.
At the hearing the claimant took an entirely neutral position. NWBT argued that it was entitled to take under a clause in the will (clause 7) intending to pass the gift to NFOS to a successor or other body to which all of NFOS’ assets had been transferred. The Attorney General took a neutral position in relation to the successor clause but argued that if NWBT was not successful the gift to NFOS could be saved either on the grounds that the gift was a gift for NFOS’ purposes rather than NFOS itself or if it was a gift to NFOS absolutely on the basis of the cy-pres doctrine.
Held:
- (1) The NWBT’s submission that it took the gift to the NFOS by virtue of clause 7 of the will was not sustainable. The reference in that clause to a body to whom all the assets of NFOS had been transferred should be construed as is a body which as a result of that transfer was so far as NFOS could achieve it, in a position to substantially take over and carry on the activity of NFOS. Looking at the extended process by which the affairs of NFOS were brought to a close it could not properly be said that NWBT took over and carried on what NFOS had previously been doing. Even if clause 7 were to be looked at in a narrower fashion it could not properly be said that NWBT received all the assets of NFOS in the sense of all those owned by NFOS or even all those owned by NFOS at the date of the last delivery of 17 birds on 6 August 2005.
- (2) The gift to NFOS was an outright gift rather than a gift for its purposes. Prima facie a gift to an incorporated body is a gift to that body which forms parts of its assets to be applied for general purposes. There was no indication in the will other than that the testator intended that the bodies to which she made her gifts would be entitled to use them as they thought fit for their purposes.
- (3) At the date of the testator’s death NFOS was no longer functioning in any real sense. However, it continued to have a corporate legal personality which could in principle have been re-activated, allowing it to deal with its assets in accordance with its objectives. It could not, therefore, be said to have ceased to exist until its final dissolution. Accordingly, no event had occurred prior to the testator’s death which would have caused the gift to NFOS to lapse.
- (4). The testator’s gift to NFOS was a case of subsequent lapse. The gift was effective at the date of death to impress the funds with the charitable purpose intended to be given effect to through NFOS but which could not now be carried through in that manner by reason of NFOS having ceased to exist. In such cases unless the court finds that the particular method specified was the only possible way of giving effect to the donor’s charitable intentions it may direct that the funds be applied cy-pres. In view of the similarity of NWBT’s purpose to that of NFOS and the fact that it had taken over a significant part of the collection of bird’s formerly held by NFOS the gift in the will to NFOs would be directed to NWBT.
Continue reading "Phillips v RSPB & ors [2012] EWHC 618 (Ch)"