England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		12 January 2007

Mr Justice Lewison :

Introduction	1
Background	3
The possibilities	6
Absolute gift to Diocese of Westminster	8
Trust for the benefit of the CCC	13
Gift to the Diocese of Westminster on charitable trusts	15
As on an intestacy	28

Introduction

1. As she lay dying in St Bartholomew's hospital, Sister Joseph Harding made a will. It was written out for her in manuscript and she duly executed it on 25 March 2003. It said:

"I Sister Joseph Harding (Winsome Joy Harding) being of sound mind and aware of what I am doing, wish to revoke my last will and testimony made previous to todays date.

I am not satisfied with certain aspects of the contents of that said will which are contrary to my express wishes.

If I should die in the meantime before making another will it is my wish that everything I possess be taken over by the Diocese of Westminster to hold in trust for the Black community of Hackney, Haringey, Islington and Tower Hamlet."

2. The question is whether the last paragraph of the will created a valid testamentary gift and, if so, on what terms.

Background

3. Sister Joseph was born in Liberia and brought up in the West Indies. She entered a convent in the USA as a novice but was never finally professed. It seems she took private vows. In the 1970s Sister Joseph and Father Robson became involved in running the Caribbean Community Centre ("CCC") which was designed to provide a spiritual and community centre for the Caribbean people in North London. It operated from premises at 416 Seven Sisters Road Manor House London N4. The premises were provided free of charge by the Roman Catholic Diocese of Westminster. Working with the CCC was Sister Joseph's main lifetime work.
4. In 1981 Father Robson and Sister Joseph set up the Father Love Trust. At that time Father Robson and Sister Joseph owned a property known as 7 Brownswood Road in Stoke Newington which was rented to London University students; and the rents from which were donated to the Father Love Trust which in turn provided financial support for the CCC. Father Robson died in April 2000 at which time Sister Joseph had been diagnosed with cancer. Under his will he left his estate to Sister Joseph. Thereafter Sister Joseph had discussions with the Diocese with a view to giving them properties and passing over the running of the Father Love Trust.
5. On 4 November 2002 Sister Joseph made a will. It was professionally drawn. In that will she made legacies to certain family members; and left the residue of her estate to the Westminster Roman Catholic Diocesan Trust and other Trust funds administered by Westminster Roman Catholic Diocesan Trustees. The residue would have formed the bulk of her estate, which is valued at close on £870,000. It was that will to which she referred in her manuscript will of 25 March 2003.

The possibilities

6. The various possibilities canvassed by the claim form are that Sister Joseph's estate is held:

i) on trust for the Roman Catholic Diocese of Westminster absolutely;

ii) by the Roman Catholic Diocese of Westminster on charitable trusts;

iii) by the Roman Catholic Diocese of Westminster on trust for the Caribbean Community Centre;

iv) as on intestacy.

7. The argument in favour of the first and third of these possibilities was advanced by Ms Penelope Reed, who appears on behalf of the Financial Secretary for the Roman Catholic Diocese of Westminster. He is the administrator of the estate. While Ms Reed fairly put the arguments so that they should be before the court, she rightly stressed that the administrator's own position was neutral. The argument in favour of the second possibility was advanced by Mr Will Henderson, appearing on behalf of the Attorney General. The argument in favour of the fourth possibility was advanced by Mr Stephen Schaw Miller, appearing on behalf of Sister Joseph's niece and nephews, who would take in the event of an intestacy.

Absolute gift to Diocese of Westminster

8. It is common ground that the reference in the will to the "Diocese of Westminster" is a reference to the Roman Catholic Diocese of Westminster. The first step in the argument in favour of the interpretation that the will confers an absolute gift on the Roman Catholic Diocese of Westminster is that that the words "it is my wish" govern the manner in which the Diocese is to hold the property. In other words the will should be construed as meaning:-

"I give everything I possess to the Diocese of Westminster and it is my wish that they should hold it on trust for the black community of Hackney, Haringey, Islington and Tower Hamlets…"

9. The second step is that the words "it is my wish" should be construed as precatory words and as not imposing a trust. Ms Reed referred me to the decision of Hart J in Harrison v Gibson [2006] 1 WLR 1212 in which the judge said:

"The mere fact that the testator has used the words "in trust" is not in itself inconsistent with an intention on his part that his wife should be the absolute beneficial owner."

10. The effect of those words is a question of construction of the will as a whole. I cannot place quite as much weight on that dictum as Ms Reed for two reasons. First, the distinction that Hart J seems to have had in mind was that between "the "trust" which a layman might think results from the appointment of executors" on the one hand, and a limited gift on the other. Second, Hart J in fact decided that the words "in trust" in the will he was considering were incompatible with an absolute gift.
11. I do not consider that either of the two steps in this argument is correct. So far as the first step is concerned, it requires a re-ordering of the words that Sister Joseph actually used. The effect of the re-ordering is to downgrade the force of the phrase "in trust" which immediately follows the identification of the recipient of the gift. Second, there is nothing in the remainder of the will which displaces the ordinary meaning of that phrase.
12. I therefore reject the first possibility.

Trust for the benefit of the CCC

13. As everyone agreed, the main difficulty with construing the will as creating a trust in favour of the CCC is that it is not what the will says. Sister Joseph was well acquainted with the CCC and if she had wished the CCC (and the CCC alone) to benefit from her will, she would surely have said so. Moreover it is not at all clear on the evidence what kind of entity the CCC is. It appears that it has some form of trust deed, although the terms of the deed are not in evidence. It is not a registered charity. If it is a non-charitable unincorporated association, there are difficulties in concluding that a gift either to the members of the association (whether absolutely or subject to the terms of any rules of the association) was intended.
14. I reject this possibility.

Gift to the Diocese of Westminster on charitable trusts

15. It is common ground that a trust for the benefit of a fluctuating body of individuals, such as the inhabitants of a locality, can only take effect as a charitable trust, if it has effect at all: Attorney General v Webster (1875) LR 20 Eq 483. It is also common ground that a private trust for such a large class as the black community in four London Boroughs would be so large as to make a private trust unworkable, and hence void: McPhail v Doulton [1971] AC 424; R v District Auditor No 3 Audit District of West Yorkshire MCC ex p West Yorkshire MCC [1986] RVR 24.
16. The principles applicable in order to determine whether a gift such as the one I am considering creates a valid charitable gift are, I think, as follows:

i) The court leans in favour of making a testator's testamentary dispositions effective if possible within the limitations and in accordance with the principles of law: Re Smith [1932] Ch 153, 158;

ii) A gift to the inhabitants of a locality, without specifying a particular purpose for which the gift is to be applied, is a valid charitable gift: Re Smith ("my country England");

iii) The same principle applies to a gift to a particular class of inhabitants within a locality: Mitford v Reynolds (1842) 1 Ph 185 (native inhabitants of Dacca); Goodman v Mayor of Saltash (1882) 7 App Cas 633 (freemen of the borough of Saltash); Re Mellody [1918] 1 Ch 228 (schoolchildren of Turton);

iv) The rationale for this principle is that the court construes the gift as implicitly limited to charitable purposes: Re Strakosch [1949] 1 Ch 529, 539. This principle applies unless there is something in the gift to exclude it: Peggs v Lamb [1994] Ch 172, 195. I suspect that the reason for this principle is, first, that it is a way of saving a gift that would otherwise be invalid; and second, that an absolute gift for the inhabitants of a locality is likely to produce such a small dividend as to be an absurd intention to impute to a testator;

v) However, if an express purpose is stated, that purpose must itself be charitable; and a non-charitable purpose trust cannot be validated by localising the gift: Williams Trustees v. IRC [1947] AC 447.

17. Since Mr Schaw Miller relied heavily on Williams Trustees v IRC, I should say a little more about it. The case concerned the charitable status of a trust created by the memorandum and articles of association of a company. The overall objects of the company were to promote Welsh interests in London. The principal object of the trust was to create a centre in London "for promoting the moral social spiritual and educational welfare of Welsh people and fostering the study of the Welsh language and of Welsh history literature music and art." The House of Lords decided that the property was not vested in the trustees for charitable purposes only, and consequently the company was not a charitable company. In reaching this conclusion Lord Simonds, with whom the other Law Lords agreed, said that the mere fact that a purpose is beneficial to the community did not make that purpose charitable. Towards the end of his speech Lord Simonds referred to the line of cases about gifts to localities and said (p. 459):

"But I would suggest that it is possible to justify as charitable a gift to "my country England" upon the ground that, where no purpose is defined, a charitable purpose is implicit in the context; it is at least not excluded by the express prescription of "public" purposes. Where the gift is localized but the nature of the benefit is defined, no reconciliation is possible except on the assumption that the particular purpose was in each case regarded as falling within the spirit and intendment of the preamble to the statute of Elizabeth, though I find it difficult to ascribe this quality to the benefit taken by the freemen of Saltash." (Emphasis added)

18. The benefit taken by the freemen of Saltash was a right to fish. That benefit is not, on the face of it, a charitable benefit, and that is why, in my judgment, Goodman v Mayor of Saltash is generally regarded as a difficult case whose application is not to be extended. Indeed, it seems to me that the nature of the benefit to which the freeman claimed to be entitled was the reason that caused Lord Blackburn to dissent in Goodman v Mayor of Saltash itself. Thus analysed, I do not consider that Williams Trustees v IRC gives Mr Schaw Miller the support that he needs.
19. Mr Schaw Miller argued that the reference in the will to the black "community" was itself the specification of an express purpose. The purpose was widely expressed in terms that could embrace non-charitable purposes, with the consequence that the gift fell within the second of Lord Simonds' categories. I do not agree. First, the phrase "the Black community" is no more than another way of saying, in modern usage, black people. Second, judicial usage does not suggest that a reference to "the community" negatives a charitable intention. In Re Mellody Eve J, in upholding the gift to the schoolchildren of Turton, described the gift as a gift "for purposes beneficial to a section of the community"; and described the schoolchildren themselves as "a very important section of the community". He did not appear to regard the use of this word as being incompatible with a charitable gift. In Peggs v Lamb the Attorney General submitted that:

"the trust [in question] was one for the benefit of the community in a particular area without the specification of any particular purpose with the consequence that the permitted purposes are limited to those within the spirit and intendment of the preamble."

20. Morritt J did not regard this submission as an oxymoron. On the contrary, he accepted it. I therefore reject the submission that the use of the word "community" takes the case outside the principle in Re Smith.
21. Mr Schaw Miller next fastened on the word "Black". This, he said, presented two insuperable difficulties. The first was that it was uncertain. Who was entitled to be considered a member of the "Black community"? What about a white spouse of a black person? What about a child of mixed race parentage? However, in my judgment Mr Henderson was right in saying that the class of inhabitants of a specified area need not be identified with the same degree of certainty as the beneficiaries of a private trust. As Sir William Grant MR said in Morice v Bishop of Durham (1804) 9 Ves Jun 399, 405:

"But it is settled, upon authority, which it is too late to controvert, that where a charitable purpose is expressed, however general, the bequest shall not fail on account of uncertainty of the object: but the particular mode of application will be directed by the King in some cases, in others by this Court."

22. And in Glazebrook v University of Leeds [1944] 1 Ch 193 Uthwatt J upheld a charitable gift, the meaning of which was (or was assumed to be) uncertain. If there is any uncertainty in the phrase, the uncertainty can nowadays be cured by a scheme.
23. The second suggested difficulty was that a gift for the benefit of the black community was contrary to public policy because it was discriminatory on racial grounds. There is no trace in previous authority of any such public policy. In Mitford v Reynolds Lord Lyndhurst LC upheld a gift for the benefit of the native inhabitants of Dacca. In the course of his judgment he said that:

"the term "the native inhabitants of Dacca" is used in contradistinction to the European inhabitants or the descendants of European inhabitants."

24. He did not regard this as inconsistent with a charitable gift. In Re Dominion Students' Hall Trust [1947] 1 Ch 183 Evershed J removed a "colour bar" from a trust deed by way of sanctioning a scheme. But he said in the course of his judgment that notionally there could be two complementary charities "one for white and one for coloured students". He did not regard these notional trusts as being incompatible with charitable objects.
25. Of course times have changed. But the remedy in cases where charitable benefits are to be provided to a class defined by colour is not to invalidate the gift completely, but to remove the reference to colour. This is the mechanism for which section 34 of the Race Relations Act 1976 provides. It says:

"(1) A provision which is contained in a charitable instrument (whenever that instrument took or takes effect) and which provides for conferring benefits on persons of a class defined by reference to colour shall have effect for all purposes as if it provided for conferring the like benefits—

(a) on persons of the class which results if the restriction by reference to colour is disregarded; or

(b) where the original class is defined by reference to colour only, on persons generally;

but nothing in this subsection shall be taken to alter the effect of any provision as regards any time before the coming into operation of this subsection.

(2) Nothing in Parts II to IV shall—

(a) be construed as affecting a provision to which this subsection applies; or

(b) render unlawful an act which is done in order to give effect to such a provision.

(3) Subsection (2) applies to any provision which is contained in a charitable instrument (whenever that instrument took or takes effect) and which provides for conferring benefits on persons of a class defined otherwise than by reference to colour (including a class resulting from the operation of subsection (1)).

(3A) Subsection (2)(b) does not apply to an act which is unlawful, on grounds of race or ethnic or national origins, by virtue of section 4 or 7.

(4) In this section "charitable instrument" means an enactment or other instrument passed or made for charitable purposes, or an enactment or other instrument so far as it relates to charitable purposes, and in Scotland includes the governing instrument of an endowment or of an educational endowment as those expressions are defined in section 135(1) of the Education (Scotland) Act 1962.

In the application of this section to England and Wales, "charitable purposes" means purposes which are exclusively charitable according to the law of England and Wales."

26. Section 34 (1) presupposes that an instrument is capable of being a charitable instrument (i.e. an instrument made for exclusively charitable purposes) even though benefits are conferred on a class of persons defined by colour. This presupposition gives no support to Mr Schaw Miller's submission that the whole gift is invalidated on public policy grounds. If Mr Schaw Miller were right, it is difficult to see that the section could ever apply. Mr Schaw Miller said that it could apply to a gift, for example, for the education of black persons, because a gift for education was independently charitable. I do not think that this meets the point, for two reasons. First, because if it is a fundamental objection to a gift that it discriminates on racial grounds, then the fact that the particular head of charity is specified ought not to matter. Second, because in the present case the gift is to be construed, conformably with the principle in Re Smith, as impliedly limited to charitable purposes. So just as in Mr Schaw Miller's example, the gift is independently a valid charitable gift, absent the reference to colour.
27. Accordingly, in my judgment the clause in Sister Joseph's will took effect as a gift to the Roman Catholic Diocese of Westminster on charitable trusts. The precise nature of the trusts can be dealt with by a scheme.

As on an intestacy

28. This possibility is necessarily excluded by my conclusion that the gift is a valid charitable gift.