Cy-pres or sigh, pray?

September, 2010

Wills can sometimes be odd things. That is most likely because a will usually reflects the personality of its maker and, let’s face it, we’re all human. Sometimes we get some things wrong. Sometimes our ideas, no matter how well meaning, are impractical or just plain unacceptable. What happens when we get things wrong or include impractical or unacceptable ideas in wills? What does a charity do when a well meaning testator leaves it a bequest in a will, but attaches impractical or even impossible conditions to the bequest or gets the charity’s name hopelessly wrong? Never fear, cy-pres is here!

What is cy-pres?

Cy-pres (literally, “as near as possible”, the anglicised pronunciation being “sigh-pray” – or as one wag put it, “you sigh when you realise the testator has got it wrong, and you pray someone will fix it!”) is a doctrine which is applied when the strict terms of a will cannot be carried out. The application of the cy-pres doctrine is subject to certain conditions. Firstly, the testator must exhibit in his will a general charitable intention. Secondly, there must be impracticability in the fulfilment of the charitable intention of the testator. Thirdly, the condition of the gift that causes the impracticability must not be an essential term of the bequest. If those conditions are present and satisfied, then subject to the size of the bequest, the Attorney General or the Court may direct that the gift given for charitable purposes should be administered via a cy-pres scheme. That is, a scheme which is as near as  possible to the intention evinced by the testator in his will, but without the impractical or unacceptable aspect.

Impracticability of a bequest

An example of impracticability was dealt with by the Court in Re Lysaght (deceased), wherein a bequest was made to the Royal College of Surgeons for scholarships for students “not of the Jewish or Roman Catholic faith”. The Royal College of Surgeons was “unalterably opposed to accepting and administering a trust containing any provision for religious discrimination”. The Court agreed to a cy-pres scheme whereby the exclusion relating to Jewish and Roman Catholic students was deleted. In a recent case determined by Mr Justice Palmer in the Supreme Court of New South Wales (Hirst Estate: Atkinson & Anor v The Royal Alexandra Hospital for Children & Ors), the testatrix left a gift to “Sydney Hospital in aid of that institution and for the purposes of an Accident and Emergency Centre and Intensive care facility adequate for a major emergency in particular to be applied for fitting out rooms, purchase of equipment and payment of specialist staff ”. Sydney Hospital did not have an accident and emergency centre and intensive care facility, and had no plans to create one. Thus, the gift, as framed by the testatrix, was impracticable and could not be carried into effect. The Court accepted that the testatrix’s intention was charitable in nature, and ordered a cy-pres scheme in respect of the gift to Sydney Hospital, with such terms to be agreed between Sydney Hospital and the Attorney General.

Incorrect name of charity

Cy-pres schemes may also be ordered if the charity named in the will is not readily identifiable, for example, if it does not exist or if there are a number of charities with names similar to that to which the gift in the will is directed. However, just because a testator gets your charity’s name wrong in his will, it does not necessarily mean that you will require recourse to a cy-pres scheme. If there is a typographical error or simple misdescription and there is no real question as to the intended beneficiary’s identity and continuing existence, then the gift does not fail and there is no need for a cy-pres scheme. For example, in a 2009 case, the Supreme Court of New South Wales, having had appropriate evidence placed before it, was content to make a declaration that a bequest in a will to the “Tanganyika Refugee Service” (which did not exist and apparently never existed) be construed as being a bequest to the “Tanganyika Christian Refugee Service”, which did exist. This was a simple matter of will construction and the Court did not need to order a cy-pres scheme.

Conclusion

Thus, all is not necessarily lost just because a testator gets your charity’s name wrong or attaches impossible or impractical conditions to his gift to your charity. Needless to say though, a charity is much better off avoiding the angst and cost which can be caused when faced with these situations. Charities should do everything they can to ensure that their donors get their name right in their wills. They should also make their donors aware that gifts for the charity’s general purposes provide  invaluable flexibility in ensuring that funds are deployed when and where they are most needed. As is often the case, education is the key. Here, the education of donors and those who draft their wills may well be the key to reducing the need for sighing and praying.

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