[2] In the Trust Deed the Truster narrated that he was

"desirous of advancing and supporting the charitable objects and purposes of the charitable bodies mentioned in Part I of the Schedule annexed and signed as relative hereto (which charitable bodies are hereinafter called 'the said charities' which expression shall include not only the charitable bodies specifically named and design in the said Schedule but also such other charitable bodies as the Trustees acting hereunder may select in accordance with the provisions of the said Schedule)".

The material purposes of the Trust Deed are as follows:

"(SECOND) the Trustees shall pay the whole of the income of the Trust Fund to or among or apply the same for the benefit of such one or more of the said charities for the furtherance of its or their charitable objects as they shall in their sole discretion think fit and that in such shares or proportions and in such manner as they shall from time to time and determine, declaring however that the Trustees shall have power in their discretion should it seem advisable to them to do so to accumulate any part or even the whole of the income arising in any year and add the same to the capital of the Trust Fund, and (THIRD) the Trustees shall have power in their discretion to pay or distribute any part or even the whole of the capital of the Trust Fund to or among or apply the same for the benefit of any one or more of the said charities for the furtherance of its or their charitable objects as they shall think fit, declaring however that they shall endeavour to keep the Trust hereby constituted in being so long as it remains practicable for them to do so and that they shall for that purpose endeavour to preserve the capital of the Trust Fund intact, any disposal of capital being made only in exceptional circumstances as to which my Trustees shall be the sole judges".

Part I of the Schedule was in two sections. In the first section, six particular charitable institutions were named as objects of the Trust. These were named as follows: Scottish Council for Spastics; Royal Blind Asylum (Admin.); Royal National Life-Boat Institution; Royal Scottish Society for Prevention of Cruelty to Children; Scottish Society for Prevention of Cruelty to Animals; and Guide Dogs for the Blind Association. Thereafter, in its second section, Part I of the Schedule continued:

"SUCH OTHER CHARITABLE BODY operating in Scotland as shall include amongst its principal objects any of the following: --

(a) the care and welfare of spastics and/or the blind, or

(b) research into the causes for prevention or treatment of blindness and/or spastic conditions, or

(c) the prevention of cruelty to children, or

(d) the prevention of cruelty to animals".

It seems clear that in the second section of Part I the Truster was attempting to make provision for the fields of activity covered by the named charities, but to do so at a more general level, thereby giving the Trustees power to benefit other charitable bodies than those specifically named. The second section is, however, confined to charitable bodies which have among their "principal objects" one of the enumerated activities. For the petitioners it was submitted that this causes serious practical difficulties, and it is a matter to which I will return subsequently.

(i) To be eligible for assistance, an applicant must be a "charitable body"
"operating in Scotland". The Trustees and their advisers have been uncertain as to what "operating in Scotland" requires. They have also noted that certain applications, particularly related to research, might be in respect of work carried out outside Scotland but which would or might have the potential to benefit people living in Scotland.

(ii) The second section of Part I of the Schedule specifies that an eligible
charitable body must include one of the stated provisions "amongst its principal objects". The charities named in the first section of Part I have widened their range of charitable activities beyond those stated in relation to unnamed charities (see paragraph [5] below). There is no restriction in the Trust Deed to prevent the Trustees from supporting the named charities in their wider range of activities; nevertheless, the unnamed charities remain restricted to the narrower criteria stated in the second section of Part I. The Trustees suggest that the apparent intention of the Truster was that they should be able to benefit unnamed charities carrying out the range of charitable activities conducted by the named charities; it was not his apparent intention that the unnamed charities should be treated more restrictively. In relation to research, in particular, many projects come from universities and hospitals which are unlikely to have the criteria stated in Part I of the Trust Deed among their principal objects; those objects are invariably expressed in general terms.

(iii) The activities mentioned in the second section of Part I of the Schedule may
be only part of a group of objects of any particular charity.

(iv) Particular difficulties have been encountered with the references to "spastics"
and "spastic conditions". In earlier years the Trustees, in common with many others, equated spasticity with cerebral palsy. Nevertheless, spasticity is not a disease but rather a description of the movement of someone suffering from cerebral palsy or from a range of other conditions. Medical advice received by the Trustees has indicated the possibility that "spastic conditions" can be interpreted to relate to a range of diseases of the nervous system, including multiple sclerosis, motor neurone disease, ataxias and the after effects of strokes.

(v) The Trustees, on advice, have tended to equate "blindness" with sight
impairment; they are aware that persons are able to register as blind notwithstanding that they may have some level of impaired sight.

(vi) Difficulty has been encountered in interpreting the phrase "the prevention of
cruelty" as regards children. The phrase is expressed in the negative. Nevertheless, the Trustees have found that many applications submitted to them are based upon charitable objects expressed in positive terms such as the promotion of the welfare of children or the provision of assistance to children in danger, in suffering, or having the prospect of physical, sexual or mental abuse. The trustees consider that supporting the promotion of such positive objects is likely to prevent or lessen the risk of cruelty or harm. Similar problems have been encountered by the Trustees with applications relating to the prevention of cruelty to animals.

The Trustees further refer to a number of other factors that affect the administration of the Trust; these are: the significant development of charitable work over the past 25 years; changing views on what might be seen as "handicaps" or "disadvantages"; and altering approaches to dealing with such potential "handicaps" or "disadvantages". On that basis the Trustees suggest that, whereas the charitable provisions might have been satisfactory when instituted, their precise terms now create an obstacle to the giving of charitable assistance to bodies whose objects would otherwise appear to be within the spirit of the Truster's provisions. These problems have become more acute with the greatly increased resources that are available to the Trustees.

(i) The objects of the trust would be restated to a record more appropriately with
current charitable practice in the spheres to which they relate.

(ii) The requirement that any potential beneficiary should have as one of its
principal objects an object set out in the Trust Deed would be removed.

(iii) The requirement that any potential beneficiary should operate in Scotland
would be replaced by a requirement of material benefit to persons and/or animals situated in Scotland.

In addition, the Trustees suggest the removal of the proviso to purpose (THIRD), to the effect that the Trustees should endeavour to keep the trust in being so long as that remained practicable and should for that purpose endeavour to preserve the capital intact. They aver that subsidiary provisions of the Trust, including that proviso, reflected the fact that the capital of the Trust would include shares in the family company. Following the takeover of the family interest in 2004 the reason for the proviso no longer exists, and it constitutes an unnecessary fetter on the ability of the Trustees to respond to requests for assistance which the Trust Funds are more than capable of meeting. Finally, the Trustees submit that, having regard to the size of the Trust Fund and current best practice in the administration of charitable organisations, the administrative powers of the Trustees should be set out in greater detail and in accordance with current practice.

"SUCH OTHER CHARITABLE BODY operating in Scotland as shall include amongst its principal objects any of the following: --

(a) the care and welfare of spastics and/or the blind, or

(b) research into the causes for prevention or treatment of blindness and/or spastic conditions, or

(c) the prevention of cruelty to children, or

(d) the prevention of cruelty to animals".

The proposed replacement wording is as follows:

"SUCH OTHER CHARITABLE BODY as provides any of the following benefits; but on condition that such body is resident, based in, or operating in Scotland, or, if not, that the application for any grant by the Trustees provides, or is intended to provide, a direct benefit for persons or non human living creatures in Scotland:

(a) The care and welfare of individuals suffering from neurodevelopmental or neurodegenerative disorders of genetic or other aetiology or from disorders affecting the nervous system resulting from specific incidents of trauma, poison or infection which result in damage to motor control, behaviour, communication or personality or from a combination of these;

(b) The care and welfare of individuals who are either blind or suffering from visual impairment;

(c) Research into the causation, or prevention or treatment and/or management, of the conditions set out in sub-paragraphs (a) and (b) above;

(d) The care and welfare of children and young persons under the age of eighteen years who have been or are in danger of being abused physically, sexually or mentally;

(e) The encouragement and promotion of welfare conditions for children whereby the likelihood of physical, sexual or mental abuse is reduced;

(f) The care and welfare of non human living creatures which are either in danger, facing danger, the victims of, or in danger of being the victims of, physical abuse;

(g) The encouragement of welfare conditions for non human living creatures with a view to the reduction of the likelihood of physical abuse".

It can be seen that the reference to "principal objects" in the existing wording has been removed, and replaced by a condition that the charitable body should provide benefits falling into one of the specified categories. In addition, the restriction to bodies operating in Scotland has been removed, and the four categories of charitable body specified by the Truster have been substantially expanded. The Scheme further provides that the wording of the existing purpose (SECOND) should be amended in such a way that it reads as follows:

"(SECOND) the Trustees shall pay the whole of the income of the Trust Fund to or among or apply the same for the benefit of such one or more of the said charities for the furtherance of its or their charitable objects as they shall in their sole discretion think fit and that in such shares or proportions and in such manner as they shall from time to time and determine, declaring however (i) that in respect of a charity other than unnamed charity, any grant shall be for a specific project providing one or more of the specified benefits and (ii) that the Trustees shall have power in their discretion should it seem advisable to them to do so to accumulate any part or even the whole of the income arising in any year and add the same to the capital of the Trust Fund".

The words in italics are added by the Scheme. They are designed to ensure that any grant made by the Trustees should be confined to the purposes set out in the second (general) section of Part I of the Schedule.

"(THIRD) the Trustees shall have power in their discretion to pay or distribute any part or even the whole of the capital of the Trust Fund to or among or apply the same for the benefit of any one or more of the said charities for the furtherance of its or their charitable objects as they shall think fit;".

Thirdly, the Trustees' powers are to be replaced by new provisions. Generally speaking, these reflect modern practice in the drafting of trust deeds for charitable and other public trusts.

Evidence relating to management of trust
Mr RK Austin

"Now, in both Courts this principle has prevailed, namely, that there shall be a very enlarged administration of charitable trusts. You look to the charity which is intended to be created, - that is to say, that benefit of the beneficiary, and you distinguish between the charity and the means which are directed to the attainment of that charity. Now, the means of necessity vary from age to age. Take a charity consisting, as it does here, of the relief of the poor. The condition of the country or the condition of the town at that time when the charity was created, may have dictated what were at that time very convenient means for the application of the particular charity. In the progress of society, and with a greater diffusion of wealth and the growth of population, the means originally intended may become inadequate to the end. And the Courts of Equity always exercise the power of varying the means of carrying out the charity from time to time, according as by that variation they can secure more effectively the great object of the charity, namely, the benefit of the beneficiary.

Now, it is perfectly true that you cannot substitute one charity for another. You may substitute for a particular charity, which has been defined and which has failed, another charity ejusdem generis, or which approaches it in its nature and character; but it is quite true that you cannot take a charity which was intended for one purpose, and apply it altogether to a different purpose."

Clephane must still be regarded as the leading case in this area of the law. Lord Westbury's statement of the law makes clear that a fundamental distinction must be drawn between the charity and the means of attaining that charity: a distinction between on one hand the broad objectives that a public trust is designed to promote, in the sense of tackling a particular social problem or promoting a particular form of activity, and on the other hand the means that are used to achieve those broad objectives. The broad objectives must remain intact; the means, by contrast, can be varied as circumstances change. The trust under consideration in Clephane, the Trinity Hospital, was for the relief of the poor. The premises occupied by the Hospital were sold to the North British Railway Company for the construction of Waverley Station and associated works, and the Council decided not to rebuild it but to provide outdoor relief to the beneficiaries. That decision was upheld. The broad objective, as Lord Westbury points out in the passage following that quoted above, was the relief of the poor in Edinburgh, and it was immaterial that that relief was provided not through the provision of accommodation but through the payment of an allowance to the beneficiaries. The case is in my opinion clear authority for the proposition that quite radical changes in the method of securing charitable objects may be permitted, provided that the basic objectives of the charity remain the same. That is so whether there is a failure of objects, in which case the funds may be transferred to another charity ejusdem generis, or whether the existing means have merely become an impractical way of securing the broad charitable objectives that the trust in question is designed to secure; in the latter case, a restructuring of the charity is possible.

"[T]he principle does not apply to cases in which -- there being neither failure of object nor obsolescence of method -- the changing circumstances of society have made the duties of the trustees and managers of the foundation much more arduous to perform and discouraging in their results."

In Gibson's Trustees, 1933 SC 190, the petitioning trustees sought changes to their powers of investment. The case was heard by the First Division with three consulted judges. It was held by six judges that the trustees already enjoyed the powers sought. Nevertheless, the judges expressed views on the propriety of granting enlarged powers of investment under the nobile officium. Lord President Clyde (at 198), following Scott's Hospital Trustees, 1913 SC 289, held that "the nobile officium cannot be competently used to vary the powers or directions of a charitable trust merely because the Court thinks that the variation would be expedient in the interests of the trust, but..., in order to make resort to the nobile officium competent, it must be shown that the variation is one which, in the circumstances, is necessary in order to prevent a failure or breakdown in the operation of the charity". Lord Justice Clerk Alness (at 204-205), by contrast, stated that Scott's Hospital Trustees should be reconsidered if necessary. In relation to the exercise of the nobile officium, he quoted More's Notes on Stair (in relation to Stair's Institutions, IV. iii. 22) to the effect that the nobile officium "will never be exercised except in cases of necessity, or a very strong expediency, and where the ordinary procedure would provide no remedy". Lord Anderson (at 210) expressed a similar view, that mere expediency may suffice.

"Accordingly, I reach the conclusion that the exercise of the nobile officium is justifiable -- (1) when it is necessary to the carrying out, in the circumstances of the time, of the main object of the founder; (2) when it is necessary in order to effect modification of particular instructions of an ancillary character which, while they may not altogether defeat the carrying out of the main purpose of the trust, are found, in the circumstances of the time, to occasion serious embarrassment or curtailment of resources, and thereby to militate against complete fulfilment of the main object of the trust".

Lord Sands went on (at 214-215) to review the manner in which the nobile officium had developed over time. He stated (at 215):

"Immense changes... have taken place within the last hundred years in countless ways. Is it unreasonable to suggest that this may be allowed to react upon the nobile officium and to sanction a somewhat freer exercise of it? Or must we say: 'This is not within the nobile officium as contemplated by Kames and Hailes, and by this consideration we are bound.' Respect for the pious founder does not discourage the more liberal view. If the pious founder could be a reincarnated and offered the choice between the nobile officium and a Parliamentary Commission, can there be any doubt as to what would be his choice?"

These remarks were qualified, however, by further statements that the nobile officium should not be used to rewrite a will or to depart from a specific condition imposed by the truster. Moreover, the court should not exercise its nobile officium without "great argument" or real anachronism. In this relation lapse of time and changes of customs and conditions, which the truster cannot have foreseen, are important considerations".

"I have already indicated my opinion that, in the case of a charitable trust, it is within our power to modify the directions of the testator on a matter which is subsidiary to the main purposes of the trust, if it appears to us to be expedient that we should do so. In my opinion it is expedient that we should do so in this case, for it seems to me that to hold that the trustees must continue to invest the trust funds in the purchase of land might, under present circumstances and before very long, make the trust unworkable".

"The Reporter is... in favour of the petition being granted, but he has very properly drawn our attention to the question whether it is not necessary for the petitioners to satisfy the Court that there is 'virtual impossibility of performance' before inviting the Court to exercise its nobile officium. In my opinion the decisions in the Prime Gilt Box Society and in the case of Gibson's Trustees established that, if the trustees of a charitable trust can satisfy the Court that the circumstances of the trust are such that the carrying out of the trust will be seriously hampered unless the powers craved are granted, then it is within the power of the Court to intervene. In other words, to save a charitable trust from wreckage it is not necessary for the Court to hesitate until the trust is actually upon the rocks. In the present case I am satisfied that the work of the Institute and the Association will be seriously crippled unless the petitioners are authorized to divert income of the building fund to revenue purposes, and I am accordingly of opinion that the prayer of the petition should be granted".

In the light of the last three cases, it can be said that a fundamental divergence of opinion existed as to whether expediency furnishes an adequate ground for the exercise of the nobile officium: the Lord Justice Clerk, Lord Sands and Lord Blackburn thought that it could; but the Lord President disagreed, considering that necessity was required.

"In the light of these developments it is appropriate for us now to say that this Court... is willing to grant suitable applications for the extension of investment powers of trustees, judging each application on its merits and without being constrained by the provisions of the Trustee Investments Act 1961..... And the importance of following the English example [where wider powers of investment had been sanctioned] is especially clear in this case in view of the fact that the provisions of the 1961 Act are seen as a barrier to the sound investment of the endowment pool, which is of sufficient size to justify the modern investment practices which are available to the petitioners".

This case demonstrates a clear desire on the part of the court to permit trustees to follow modern investment practice.

"Recent decisions of the court have demonstrated that, while at one time a strict approach was taken to this matter, the court is now willing to exercise its power in cases of strong expediency falling short of impossibility of performance. The flexibility of approach which is inherent in the nobile officium enables the Inner House to take full account of the circumstances of each case and to act in accordance with principle as each case requires".

"[I]t is clear that the petitioners are in a position to say that it is expedient, in view of the social and economic changes to which they refer and in the interests of the better management of the trust funds, that the schemes which were approved in 1971, should now be varied and the funds amalgamated into a single trust. It is a question of degree whether cases of this kind are sufficiently compelling to justify the approval of a cy-près scheme; applications which are based on averments of expediency should continue to be presented to the Inner House, so that they may be dealt with there in the exercise of powers available to the court under the nobile officium".

The powers of the Inner House have of course now been delegated to the Outer House; nevertheless, that does not appear to detract from the foregoing statements of principle, because the power exercised by a Lord Ordinary is delegated from the Inner House and the Lord Ordinary's decision may of course be reclaimed.

"Now, these buildings, such as they were, have been swept away...; and there is substituted for the buildings a large sum of money. Where is the necessity that that sum of money, constituting the property of the charity, should be dedicated to the use and service of the poor in the same manner as that in which, at the time of the foundation of the charity, it was considered that the end of relieving the poor might be best accomplished? If the end of relieving the poor can be better accomplished now by hiring dwellings for them, or by enabling them to get lodgings, or cottages, or a dwellings of their own, the substantial object will be accomplished; and, of course, it is palpable to every one, that if we allow, for example, the laying out of £10,000 in the erection of suitable buildings for the reception of the poor, the interest of that money will be so much money taken away from the number of pensions which might be given in outdoor relief. Whether it should be the one, or whether it should be the other, depends on the circumstances of the time, and on what constitutes a wise and prudent and discreet administration of the funds of the charity. And that administration may alter.... And thus it is that charity, in the eye of the Court, is not bound up to any obsolete and no longer beneficial mode of administration, but it may receive under these wise maxims, from time to time, that application and that administration of the fund which will best accomplish the great end in view".

Clephane is accordingly authority for the proposition that, against a background of economic, social and governmental change, it is pointless to confine public trusts to detailed purposes or powers that have become outmoded. In such a case, even a case of compelling expediency, a change of objects is permissible, provided always that the broad objectives of the trust remain constant.

Dr Colin Mumford

[54] On the basis of the foregoing evidence I am of opinion that the expression "spastics", at least, probably referred to children suffering from any form of cerebral palsy. Nevertheless, it seems clear that the Truster had in mind benefiting institutions that treated such children, and such institutions did not confine themselves to the treatment of cerebral palsy but rather dealt with a range of similar neuromotor disorders and a range of other conditions that were typically associated with such disorders. That is what the Scottish Council for the Care of Spastics did, and it is an express beneficiary. For this reason I do not think that it is possible to be certain as to what precisely the Truster had in mind. This difficulty is compounded when the expression "spastic conditions" is considered, because that is an expression that was probably not in common usage. Consequently, it seems to me that any attempt to give a precise meaning to the words used by the Truster would be essentially speculative. If the test for the application of the cy-près doctrine were necessity, in the sense that the objects of the trust had failed or its operation was impossible in practical terms, this might be a serious problem, because necessity must be tested against the precise meaning of the trust deed. I have held, however, that the correct test is one of strong or compelling expediency. On that approach, I do not think that an inability to determine the truster's precise meaning is of such great importance, for two reasons: first, the starting point is the broad objective that the truster had in mind rather than the precise details of his bequest; and secondly, the exercise performed by the court is to consider whether in the light of changed conditions there is a sufficiently strong case of expediency for altering the means whereby that objective is achieved. It is accordingly sufficient that the court should be able to form a view as to the general objective that the truster intended to achieve, and to consider how that objective can best be achieved in contemporary conditions.

"The care and welfare of individuals suffering from neurodevelopmental or neurodegenerative disorders of genetic or other aetiology or from disorders affecting the nervous system resulting from specific incidents of trauma, poison or infection which result in damage to motor control, behaviour, communication or personality or from a combination of these".

While that wording is wide, I am of opinion that it is clearly within the broad objectives that the Truster had in mind. As I have indicated, I do not think that it is either possible or necessary to attach a precise meaning to the expressions "spastics" and "spastic conditions"; for the reasons stated above they seem to me to indicate an intention to benefit institutions that treated a range of neuromotor disorders, of which cerebral palsy was the most important, and associated conditions. In my view the wording proposed does not go beyond that broad objective. Moreover, the wording proposed by the Trustees is supported by Professor Minns, who expressed the opinion that the wording used by the Truster would today be regarded as covering the range of conditions set out in his updated guidelines (see paragraph [45]); these in my opinion can be said to cover broadly the same area as the Trustees' proposed wording.

"SUCH OTHER CHARITABLE BODY as provides any of the following benefits; but on condition that such body is resident, based in, or operating in Scotland:".

The words ", or, if not, that the application for any grant by the Trustees provides, or is intended to provide, at direct benefit for persons or nonhuman living creatures in Scotland" are deleted.