LAW211 EQUITY AND TRUSTSEMINAR 4 ASSESSMENT

GROUP DKOOY WEI NEE (201128600), ROXY ONG JING XIAN (201135894),JOSHUA HO FUNG LYM (201128630), TENG YUN LIN (201143263),

KARPAGARASEE RAMAKSIHNAN (201142536), BOK CHONG ALVIN TAY (201051874)

‘The statutory definition of charity, now finally in force, will make little difference in practice.’

Discuss this statement by reference to both the new statutory definition of charitable purposes and also by the previous definition derived from the case law.

A. PRE-CHARITIES ACTS

Historically, the Church played an important role both in dealing with poverty and providing

education to people who were not wealthy enough to afford private tutors. Prior to the

codification by the Charities Act, there exist a debate on whether charity should take its

everyday meaning or if there ought to be a legal definition of charity distinct from. With the

enactment of Charities Act 2006, a statutory definition of charity was introduced1 alongside

other major changes to the law of charity.

This modern legal definition had its beginning in Lord Macnaghten’s speech in Income Tax

Special Purposes Commissioners v Pemsel.2 Here, his Lordship concluded that ‘trusts for the

relief of poverty; trusts for the advancement of education; trusts for the advancement of

religion; and, trusts for other purposes beneficial to the community, falling under any of the

preceding heads’ were accepted by the law as charitable. The heads of poverty, education,

and religion operated as ‘dogmatic assumptions which could not be challenged [in court]’

1 Jeffrey Hackney, ‘Charities and public benefit’ (2008) LQR 347, 348.2 ibid, 223.

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instead of being rebuttable presumptions.3 The only elbowroom the judiciary had then lied in

exercising judicial discretion in deciding whether a purpose truly ‘relieved’ or ‘advanced’

poverty or education and religion, respectively.

Lord MacNaghten’s fourth ‘catch-all’ category was one to permit the court greater discretion

as to what beneficial activity could constitute a charitable purpose; granting the court the

ability to take into account the ever-changing social needs. On this head, Lord Wilberforce

explained its broad use in Scottish Burial Reform and Cremation v Glasgow City Corp4 when

he held:

‘first that, since it is a classification of convenience, there may well be purposes

which do not fit neatly into one or other of the headings; secondly, that the words

used must not be given the force of a statute to be construed; and thirdly, that the

law of charity is a moving subject which may well have evolved even since

1891.’5

B. CURRENT LAW

The new list of charitable purposes now in force is laid out in the Charities Act 20116 which

essentially extends Lord Macnaghten’s initial list of classifications. This statutory extension

means that, in practice, there is no need to prove a certain classes of purpose7 that did not use

3 Charities Act 2011, s 3(1)(d) – (l).4 ibid, s 4; Robert Pearce and Warren Barr, Pearce & Steven’s Trusts and Equitable Obligations (6th edn, OUP 2015) 377.5 The Charity Commission, Charities for the Relief of the Poor (HM Charity Commission 2008) 8.6 Pemsel (n 2) 563 (Bramwell LJ).7 The Charity Commission, The Advancement of Religion for the Public Benefit (HM Charity Commission 2008), 11.

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to fit within the three dogmatically-assumed heads (for examples, amateur sporting and

animal welfare) are charitable. Further, the heads of poverty, education, and religion are also

given statutory footing. Finally, the ‘catch-all’ head is similarly featured within the same

statute.8 However, procedurally speaking, there remains the crucial test of public benefit that

must be fulfilled prior to qualification as charity.9

As neither the 2006 Act nor 2011 Act contained a definition clause pertaining to the

definitions of heads of charitable purposes, the common law remains relevant in this field.

There is therefore no material difference in the understanding of what constitutes heads that

existed prior to the Act. The head of poverty, for example, would still take the same

interpretation of Sir Raymond Evershed MR in Re Coulthurst is a person who has to ‘go

short’.10

The Charities Act 2011 added that purposes which is for the prevention or poverty. Prevention

of poverty has been considered by the Charity Commission in their current guidance, ‘the

prevention of poverty includes preventing those who are poor from becoming poorer and

preventing people who are not poor from becoming poor.’11 Blackburne J in Cawdron v

Merchant Taylor’s School held that relief could only be given to those who were in financial

need.12 This shows continued judicial flexibility in deciding whether each claim would fall

within a prescribed head, before and after the Act.

8 ibid, 223.9 ibid, s 4; Robert Pearce and Warren Barr, Pearce & Steven’s Trusts and Equitable Obligations (6th edn, OUP 2015) 377.10 The Charity Commission, Charities for the Relief of the Poor (HM Charity Commission 2008) 8.11 Pemsel (n 2) 563 (Bramwell LJ).12 The Charity Commission, The Advancement of Religion for the Public Benefit (HM Charity Commission 2008), 11.

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While it used to be the case that advancement of religion applied to ‘the conversion of

heathens and heathen nations to Christianity’,13 the Charities Act 2011 has included

polytheistic and atheistic faiths within the understanding of advancement of religion.14 In

terms of not involving in belief in a God, the Charity Commission cited Jainism which

inspires followers to lead a better life instead of idolatrous worship, as an example.15

C. CONCLUSION: A PRACTICAL DIFFERENCE?

The codification of heads into the 2011 Act has made a difference in the interpretation of the

law. Scopes are wider now that more classifications have been added to the initial ‘Pemsel-

heads’ which ranges from health to the environment. It has also widened the scope of what

constitutes religion for the purposes of charity, i.e. the inclusion of faiths other than

Christianity.

However, it has also, in the realm of public benefit, increased some requirements that did not

use to be. Charities must now prove on the balance of probabilities that there is a genuine

public interest before being accorded the status of a charity. This has served, as parliament

had intended, as roadblocks to sham charities that seek to exploit fiscal benefits of a

charitable status.

It must be noted that the statutory definition of charitable purposes can be said to only act as a

guideline for the judiciary to determine the validity of charities due to the powerful and broad

13 ibid, 223.14 ibid, s 4; Robert Pearce and Warren Barr, Pearce & Steven’s Trusts and Equitable Obligations (6th edn, OUP 2015) 377.15 The Charity Commission, Charities for the Relief of the Poor (HM Charity Commission 2008) 8.

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catch-all Section 3(1)(m) of the 2011 Act. There is also no explicit mention of what each of

the Section 3(1) heads specifically refer. Therefore, case law continue to serve a fundamental

role in adjudicating charitable purposes.

In summary, although there is an academic difference behind whether the principle lies

in the common law or statute law, both these sources are primary sources of law. The

fact that neither Charities Acts of 2006 nor 2011 had negatived the preceding common

law heads of charitable purposes, further bolsters the view that the application of the

2011 Act that is currently in force would work in the shadow of the case law. Judicial

remains the mainstay feature in the determination of charitable in each case. Therefore, it

would be safe to draw a conclusion that there is negligible practical difference after the

half-hearted attempt at statutorily defining charity.

WORD COUNT: 1,090

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This is a really good answer to the essay question and is well-written. Good use of case law and legislation. Good explanation of ‘prevention’ and evidence of further reading. In order to improve, you could develop your arguments more. For example, has the new definition made a big difference? The case law already supported polytheistic religions before the legislation came into place. Does the statute not just consolidate the cases that already existed?

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BIBLIOGRAPHY

PRIMARY SOURCES

STATUTESCharities Act 2006

Charities Act 2011

CASE LAWCawdron v Merchant Taylor’s School [2009] EWHC 1722 (Ch), [2010] PTSR

507

Coulthurst, Re [1951] Ch 661 (CA)

Income Tax Special Purposes Commissioners v Pemsel [1891] AC 531 (HL)

Scottish Burial Reform and Cremation v Glasgow City Corp [1968] AC 138

(HL)

SECONDARY SOURCESHackney J, ‘Charities and public benefit’ (2008) LQR 347

Pearce R and Barr W, Pearce & Steven’s Trusts and Equitable Obligations

(6th edn, OUP 2015)

The Charity Commission, Charities for the Relief of the Poor (HM Charity

Commission 2008)

The Charity Commission, The Advancement of Religion for the Public Benefit

(HM Charity Commission 2008)

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Group B  METHODOLOGY

1. Kooy Wei Nee (201128600)

2. Roxy Ong Jing Xian (201135894)

3. Joshua Ho Fung Lym (201128630)

4. Teng Yun Lin (201143263)

5. Karpagarasee Ramaksihnan (201142536)

6. Bok Chong Alvin Tay (201051874)

On the first meeting (20 February 2016), the group had a discussion regarding the question

and everyone contributed their views in order to form a draft answer at the same time

appointing each person to account some parts of work:

Wei nee and Roxy- the first part of the question

Joshua (and Karpagarasee, after joining the group later) - the second part of the

question

Yun Lin- third part of the question

Alvin- assistance in consolidating and editing the group’s work

On 22 February 2016, we gathered at Sydney Jones Library in order to share our findings.

We went through our final essay together on our last meeting on 25 February 2016 and made

final edits. This log was made accordingly.

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