Grade: A+ Course Prize Winner
Download 0.79 Mb.
|
- Navigate this page:
- Political Purposes
- Discriminatory Conditions
- Cy-Pres Doctrine
Charitable trusts47 If a person gives, devises or bequeaths property in trust for a charitable purpose that is linked conjunctively or disjunctively in the instrument by which the trust is created with a noncharitable purpose, and the gift, devise or bequest would be void for uncertainty or remoteness, the gift, devise or bequest is not invalid as a result but operates solely for the benefit of the charitable purpose. Blais v Touchet – (Nature of the trustee) Facts: The testator (a parish priest) appointed his bishop as executor and left him all his property for “such works as would aid the cause of the French Canadians of the Diocese.” The French definition of oeuvres was used as charity in the original letters probate but the translation by the court of appeal turned it into the more generic “works”. Issue: Was his bequest charitable? Ratio: a gift given to someone by virtue of their office may make a devisement charitable if said office would only use the trust for charitable purposes. The court may take comfort in a special trustee. Analysis: As always, the court constructs the will to meet its own definition of what it thinks reasonable. The court was loathe to add to the “over-technicality” that plagues the world of charitable donations, and it was determined that the testator could have only expected the bishop to use the funds for charitable purposes, especially as he as a French speaker used the word oeuvre not only in its literal connotation but also in its connotation as understood by a French person with a religious background. The court of appeal tried to construe it as a kind of gift merely to French Canadian parishioners which may be used for non-charity purposes, but this wasn’t upheld Holding: Charitable Trust Guaranty Trust Co v MNR Facts: The testator (a former doctor and member of the association) left in her will a disposition which would help the Medical Alumni Association of the UoFt to establish a student loan specifically for women going into med school. The trustee claimed it was an absolute gift and was therefore exempt from the estate tax. The Minister thought not. The trust itself was obviously one for charitable purposes, yet concern arose in the corporate charter of the association in that it allowed for some funds to be used for non-charitable purposes (upon dissolution). Issue: Is the medical alumni association exclusively chairitable such that it can take advantage of the avoidance of taxes? Ratio: Where any non-charitable purpose is incidental or ancillary or so construed that they only serve the exclusively charitable end, the charity will be upheld Analysis: The medical alumni association had a number of activities that it partook in, many of which did not seem to be at all charitable. Upon further inspection however, the factual matrix bore out that their behaviours were all designed to furthering charitable purposes. All of the activities such as the publishing of a newsletter, having dinners and networking events and generally attempting to gain more power and influence in the university were all held as being conducive to the furtherance of the charitable purposes (the advancement of education). The record bore out that their primary concern was the administration of funds and scholarships and the other objects of the association’s mission statements were not ends unto themselves. Note: Dissent not happy about this, said they weren’t charitable Holding: Charitable
Facts: Amnesty international was founded in order to oppose the detention of prisoners of conscience, oppose the death penalty, torture and other bad stuff. They won a noble peace prize in 1977 and declared a trust in which the funds would be used to further their organizational goals. The charity commission refused to register the trust due to the objects not being exclusively charitable. The trustees appealed and lost and appealed again Issue: Charitable Ratio: Even where exclusively charitable purposes may be found, if they represent a portion of a mandate that includes non-charitable purposes, the trust will be void. Where funds might be used for a “political purpose” akin to attempting to influence or otherwise persuade changes in law or reversals in policy to occur, the trusts will not be charitable Analysis: Amnesty International had a number of clauses which fell clearly within the preamble to the SoE, but clause B which considered putting pressure on governments both in the UK and abroad in order to change their laws could not be seen as charitable as, once again, the court has no way of proving whether it would be for the public good (although clearly it is). Here there is a clear moral element to their objectives, another issue which judges are loathe to adjudicate on. Note: It is worth pointing out that judges or administrative tribunals are probably pretty good at figuring out what is for the public benefit, especially here where they are protesting against really horrible stuff Holding: Non charitable Human Life International in Canada Inc v MNR Facts: Here, HLI had its charitable registration status revoked due to it not devoting substantially all of its resources to charitable activity. HLI’s held lectures, seminars and published stuff relating to pro-life initiatives. The minister hit them with the stone cold stunner, pointing out that their entire goal was an attempt to sway public opinion and that their objectives could not be justified under the advancement of education or other purposes beneficial to the community. Here, the HLI used the mass of their funds for political purposes (clearly not ancillary) and as such, was terminated Issue: Were their activities educational or beneficial to the community? Who bears the onus of showing charitability? Ratio: The appellant has the onus of proof to show that the minister erred in their conclusion viz revocation. Where educational activities neither lead to formal training or improvement of a useful branch of human knowledge, it will not be held to be charitable Analysis: It was clear from the polemical character of their material that there was no real academic thought put into their works. All of their actions relating to “Education” were thinly veiled attempts at disseminating their own opinions on social issues in such a way as to sway public support. Ironically enough, they even held some “catholic” views that even catholic bishops didn’t support. They claimed that the minister should be estopped by virtue of past acquiescence, but of course, he can change his mind whenever he damn well pleases (more specifically, they didn’t rely on his silence and were in no way prejudiced, even enjoying the charitable status until its revocation). They also argued 2(b) freedom of expression under the charter. This didn’t fly as the tax registration has nothing to do with the ability to speak, it simply goes to whether you get exemption status or not. To allow the tax exemption here would be tantamount to the public subsidizing their speech. Even if they hold their views sincerely, the court can guarantee that it will not be for the public benefit if people are forced to pay for views they don’t believe in. Holding: Get rekt Discriminatory Conditions Canada Trust Co and Ontario Human Rights Commission (AKA – Re Leonard Trust) Facts: Colonel Leonard created a trust exclusively for “christians of the white race, of british nationality or parentage” with a max 25% scholarship to women. The trustee applied for advice on whether the trust violated S.1 of the Ontario Human Rights Code. At first instance, the judge held that public policy was not contravened by the terms of the trust and that the exclusively educational purposes were of public benefit. Issue: Did the trust contravene public policy? If so, what is the remedy? Ratio: Where a trust violate public policy, it must fail. Where the public policy violating provisions are not severable from the rest of the instrument, the instrument must be viewed as a whole in order to see whether it can be upheld. Analysis: While a number of the provisions of the Leonard trust simply set out who would be eligible for the trust (as a basic form of instructions), there were a number of provisos which spoke to the superiority of the White Christian race as being best suited for taking on the burden of spreading civilization. While public policy is an unruly horse, the social harm here was “substantially incontestable and [did] not depend on the idiosyncratic influences of a few judicial minds.” Obviously Leonard is free to dispose of his estate as he wishes, but the trust was so clearly founded on the racism and religious superiority ideals that it essentially serves to argue that one group is fundamentally better than another. While in law this might be wishy-washy, a number of groups came out and derided the trust, showing how offensive it was to normal populace members. As courts are generally not interested in seeing charitable trusts fail, they utilized the Cy-Pres power to excised the trust from its racist pax-britanica leanings, as well as the restrictions with respect to race, colour, creed or religion, ethnic origin and sex. This does not mean that other trusts may not “discriminate” in some way shape or form. They simply must not do so to the detriment of the public. Holding: Modified accordingly Re Ramsden Estate Facts: Eliza Ramsden left a gift in her will of a one half of the residue of her estate in order to set up a scholarship to give the income of her estate to protestant students. Unfortunately for the university, it was forbidden by its enabling legislation from managing such a trust as it was exclusively non-demoninational and non-political. Issue: Does the bequest violate the enabling legislation, and if so, can the court alter the trust such that it does not violate the act or public policy? Ratio: Where a gift violates an entities enabling legislation or objectives, it may be adjusted by Cy-Pres if it is exclusively charitable and does not void public policy Analysis: The gift here clearly voided the university legislation as it required a religious test in order to make sure that the student was actually protestant. The term “management” in the University Act was read broadly enough to include the administration of a trust. Here, the trust was for protestants but was not stained with the tinge of religious or ethnic superiority as show in Leonard Trust. As the trust was invalid but for an essentially procedural term, the court used Cy-Pres to force the university to find a suitable trustee that could administer the trust in its own terms. Holding: Varied accordingly University of Victoria Foundation v British Columbia (AG) Facts: Florence McConnell left 2/20ths of the residue of her estate to UVIC in order to create a bursary for a practicing Roman Catholic student in their 3rd or 4th year (1/20th) and a Roman Catholic who was interested in music, specifically the liturgical stylings of the RCC (1/20th). UVIC had not distributed any funds for fear of violating the human rights code, 90k was sitting unused. The will had no gift over, and there were no intestate to devolve the funds to. UVIC was seemingly not restrcited in its administration abilities Issue: Did the will trust violate public policy? (Specifically S.8(1) of the HRC Ratio: It is not offensive to establish a trust on discriminatory grounds. As long as there is a bona fide and reasonable justification for such discrimination, there should be no concern. Analysis: To allow for no discrimination would actually discriminate against other groups who have been historically underprivileged. Denying them this kind of compensation is actually against equity concerns. Although certain religious groups have done better than others, the judge here found that restricting the class of recipients to a particular faith did not offend public policy or the human rights code Note: The judge found that no violation of the HRC occurred due to it being a private relationship between the beneficiary and the settlor. Although UVIC is a public entity, it is acting in this instance merely as a trustee. Holding: Administer trust as is. Cy-Pres Doctrine Re Stillman Estate (AKA Toronto Aged Men’s and Women’s Homes v Loyal True Blue and Orange Home) Facts: Mary Stillman set up a will wherein the residue of the estate would be paid 50% to the Toronto Aged Mens home with a gift over to loyal true blue and the other 50% would be paid to the Ontario Association for Retarded Children (now community living Ontario). The trust was having shortfalls so that beneficiary charities applied for modifications to pay them back for what was owed (738k) as well as to modify the investment structure so it could be viable in the long term. Loyal True Blue consented and the public guardian and trustee agreed to consent so long as the capital distributed to meet old obligations was just sufficient Issue: Can the court modify where no encroachment on capital is allowed? Ratio Cy-Pres can be used where the administration of the trust is no longer practicable and the continued administration would put the trust in jeopardy (Especially as a registrered trust) Cy-Pres is not limited solely to where the has been a complete failure of objects or purposes of a charitable trust. It can also be used when there is a failure or breakdown of the mode or manner of benefiting the beneficiaries Analysis: In order to maintain its status as a registered charity, the fund had to put out at least 4.5% of a return based on the FMV of the investment property within a 2 year period. As the trust was unable to meet its quota and had no ability to encroach on capital, it could only reach a range of 3.4-4.1%. If the court did not help in this instance, there would be a revocation tax which would further deplete the fund. Rather than adhere to the old will terms which forced the use of government bods, debentures and other low return investments, the trustee was given the ability to use a total return model with some discretion to raise investment yields over time. Holding: Modified down to a 4.25% payout rate. Rector, Wardens and Vestry of the Parish of Christ Church v Canada Permanent Trust Co Facts: Moseley left half of the net annual income from the residue of the estate to the church to be used for necessary repairs to the church. In the event that the construction of a new church occurred, he wanted the entire capital of the trust fund plus its income directed towards building the church. The church was a historic building and was not likely to be replaced. The Rectors argued that as they had no intention of building a church and the church was insured, the fund would sit dormant minus the repairs. Issue: Can a trust be varied when the event it contemplates is unlikely to happen? Ratio: What must be determined first is whether the charitable gift is impossible or impracticable of performance. If so, then there must be a search for the general charitable intent of the settlor to permit the court to use cy-pres. Where an outcome is unlikely, the church will not use Cy-Pres Analysis: Here, the church pointed out that while the current desire was not to build a new church, people could change their mind down the road. Further, the insurance might lapse, which would have the trust fund serve as a backstop in the case they actually need to build a new church. On top of all of that, the will was carefully drafted and the general intent was for a new church to be built eventually. The fulfillment of the purpose of the will is neither impracticable nor impossible, it relies entirely on choice. While the judge was sympathetic to the church in trying to secure funds to renovate the old church, it was clear that his intentions manifest in construction and in no other way. Holding: No Cy-Pres Lee v Board of Education of North Vancouver School District No.44 Facts: Jean Lee set up a memorial trust of which the BoE was the trustee. They were applying to be relievd from their duties while Lee’s daughter sought an injunction forcing them to stay on. The problem was that the capital of the trust was not able to make sufficiently large payments yearly and in perpetuity. Any payments would sufficiently deplete the fund of capital such that it would extinguish in approximately 10 years. The school board tried to accommodate but the daughter was clearly being unhelpful. The trust did not allow for variation of its terms. Issue: Is the legislation capable of varying the trust? Does the court need to exercise Cy-Pres? Ratio: S.3(3) and 3.4 of the Charitable Purposes Trust Preservation Act allow the court to make whatever orders necessary to advance the purpose or analogous purposes of the trust when the trustee is unwilling or unable to administer the trust. Alternatively, Cy-Pres would have been available as the administration of the trust had become a practical impossibility Analysis: Unfortunately, the funds at issue were simply too small to sustain the trust. While interest rates were high at its inception, they did not stay that way and even additional cash injections did not solve the problem. The judge assigned a new trustee as the daughter clearly hated the school and varied the terms to avoid the economic impracticability in order to keep the trust going Holding: Varied accordingly. L’Eveque Catholique Romain de Bathurst v New Brunswick (AG) Facts: The diocese sought permission to use the funds it held in trust for purposes other than originally intended. Originally it was set up to train candidates for the priesthood. The fund had grown to over 4M but the annual expenses did not outpace the expenditures of ~57k. The church wanted to use the funds to compensate victims of sexual abuse. It wasn’t clear that the funds would be adequate to pay the victims, but they partitioned 1.5M to maintain the original trust fund. Issue: In the case of a “supervening impracticality” can the court invoke the Cy-Pres doctrine to set a trust against a non-enunciated cause Ratio: Where the primary purpose of a trust is satisfied and the funds are needed for other pursuits, the general intention of the settlor may allow the funds to be used for other pursuits if they reasonably would have been allowed by the settlor Analysis: Given that the testator set aside the fund for the betterment of the church and there will never be a time when the funds will not grossly outpace the desire of the original settlors purpose, the court can allow the funds to be used to avoid the financial demise of the church as the settlor would have wished. The church here attempted to mediate all disputes minus two in advance of litigation and the court look upon this favourably in addition to the fact that they wanted to let an independent arbitrator determine the proper payout for claims. Also, saving the church is itself a charitable purpose viz the advancement of religion. The judge found that the money would have been available to creditors in any event, yet this is unlikely to be true at the money was for training priests, not for the church itself by way of the trust. Legislation has since been enacted to make sure creditors don’t have access to specific charitable purpose trusts Holding: Allowed this set-up Royal Trust Corporation v Hospital for Sick Children Facts: Fred Warren left money to the Canadian Institute for the Blind, and a number of other people, including hospitals and churches with a 100 per month income from the residue to his brother Henry Warren. The remaining income would go to the nephews after henry Died. After all that, the capital and income would be given to the crippled children’s hospital in Toronto and Vancouver. Unfortunately, no institution exists or ever existed under that name. Issue: Should the gift fail for lack of specificity in the gift over (with residue to estate, would probably funnel its way down to who knows) or does the Cy-Pres doctrine apply Ratio: In the event of an initial failure of the trust wherein property does not vest, when there is a general charitable intention in the will with a specific charitable intention for a certain class and analogous class members exist, the Cy-Pres doctrine may be used to modify the trust on the analogous members behalf Analysis: At the time of his death, there were 5 hospitals and rehabilitation centres within Ontario that existed primarily for the benefit for crippled and sick children. The judge found that they fell within a general description of “Crippled Children’s Hospitals” such that the Cy-Pres doctrine could be used to give the funds to them accordingly. The individual groups had already agreed to a bequeathment schedule subject to the judges approval as well. There was an unfortunate matter where 19k came out of the estate against costs, but that was due to the negotiation taking place Holding: Agreed accordingly Re Buchanan [1996] BCJ No. 402 Facts: Buchanan left his estate to his mother. In the event that his mother died before him, the estate was to go to the “loyal protestant home for children” in New Westminster, BC. Unfortunately, not only was there no such place, but the place mentioned seemingly was for indigent homeless was closed. There was however an orphaned children home operated by the Loyal Protestant Association. In addition, the home at the time at the time of death. The institution donated funds that came to it to other institutions and associations often not directly involved in child welfare. Issue: is the money payable to the institution that didn’t exist in 1983, and if not, can cy-pres and the general charitable intent permit the estate to pay the funds elsewhere Ratio: A trust should not fail but for the inability to properly name the recipient of the trust property. If the trust property is not able to be used for the specific intended purpose of the settlor, a general charitable intention on the facts may allow cy-pres to be used. Analysis: On the facts, the judge found that, in the event that mom predeceased the son, the general intent was to help homeless and/or indigent children. As the actual Loyal Protestant association donated money to charitable purposes not in keeping with the specific purpose of the testator, the court found that so long as they tendered a plan which would be in keeping with the intent of the testator, the charitable objective still may be maintained. Note: Question can be raised about whether this is really Cy-Pres, technically it isn’t as they are really just trying to find the original intent, but because it will be varied slightly due to the factual matrix it most likely still is. Note: The association provided assistance to non-protestants, the relatives argued the settlor would have never approved of this. Too bad. Holding: Held in abeyance until LPA gives them a plan The Trustee Appointment, Retirement & Removal Trustee Act – S.27-37 Directory: wp-content -> uploads -> gravity forms -> 1-7d6c8355b7f07846e8789d85deabdb60 -> 2016 gravity forms -> Earl E. Klein Jr gravity forms -> Narrative of how the entry meets the award criteria – July 28, 2016 gravity forms -> Revonda M. Baldwin gravity forms -> Air Atlanta Icelandic November 2006 – Current 2016 -> Ip master Guide 1-7d6c8355b7f07846e8789d85deabdb60 -> Insurance Law can Download 0.79 Mb. Share with your friends:
|