Cy-près When Charitable Beneficiary Has Ceased to Exist
1. Introduction
It is, I think, well-known that, in the case of an initial impossibility or impracticability if a testator evinces a general charitable intention, the court can redirect charitable gifts that might otherwise fail, under the cy-près doctrine.[1] It is also often thought that if the testator leaves property to a particular charity and that charity has ceased to exist before the testator’s death, that suggests that the testator did not have a general charitable intention and therefore the gift will lapse. However, that is not always so and there are cases both ways. The British Columbia Supreme Court addressed the issue in Re Weir Estate.[2]
2. Facts
The testator died in 2016, domiciled in British Columbia. Formerly, she lived in South Australia and in her will made there she left the residue of her estate equally to four animal welfare organizations in that state. Two of these organizations, the Anti-Vivisection Union (SA) Inc (“AVUSA”) and the Sandy Creek Dog Sanctuary (“SCDS”) had ceased to exist before she died. The other two, the Animal Welfare League of South Australia Inc “AWL SA”) and the Royal Society for Prevention of Cruelty to Animals (South Australia) (“RSPC SA”) still existed when she died. The named executor declined to act as executor, so the Public Guardian and Trustee (“PGT”) served as the administrator with will annexed.
The PGT learnt that an Australian court decision in 2021 had concluded that the SCDS was a commercial operation and not a charity. The PGT conducted research and discovered two charities that might qualify to take the shares of the two non-existent organizations. These were Human Research Australia (“HRA”), which is based in the state of Victoria and brings awareness to animal experimentation and promotes anti-vivisection campaigns, and the beneficiary RSPCA SA, whose primary purpose is the prevention of suffering and cruelty to animals, including the use of certain animal experimentation. Other possible organizations were either not charities or did not qualify for other reasons.
The PGT had already distributed $60,000 to each of the RSPCA and AWL SA.
3. Analysis and Judgment
The court found that the testator had a strong interest in animal welfare generally and was opposed to experimentation on animals for research purposes. It also found that the testator’s general intention was to benefit a charitable purpose. That being so, the court had jurisdiction to the distribute the failed gifts under the cy-près doctrine. It acknowledged that case law has held that gifts for the protection and benefit of animals are charitable. Cases have also held that gifts to charities outside Canada may be valid.
The court noted that some cases have concluded that if the testator makes a gift to a specific institution that no longer exists when the testator dies, that does not evince a general charitable intention, and the gift will lapse.[3] But Justice Ball noted that when a gift of residue to a charitable organization does not provide for a gift over if it should fail, the court may infer a general charitable intention that the gift should then be applied to a general charitable purpose.[4]
The court held that given charitable nature of AVUSA and its work in protecting animals, the testator evinced an intention to benefit an organization that has a similar purpose. That was not the case for the gift to SCDS, since it was held not to be a charity by an Australian court, a decision that the court should accept for reasons of judicial comity. That means that the gift to SCDS failed and passed to the estate of the testator’s heir-at-law. However, in the exercise of the court’s discretion, the gift to AVUSA should be divided equally between RSPC SA and the HRA.
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[1] In the case of a supervening impossibility or impracticability a generable charitable intention is not required and is indeed supererogatory, since the property is already vested in charity.
[2] 2023 BCSC 2278.
[3] Citing Eberwein Estate v Saleem, 2012 BCSC 250, and Re Ogilvy Estate, [1953] 1 DLR 44, 1952 CarswellOnt 329 (Ont HC).
[4] Citing Re Buchanan Estate, 1997 CarswellBC 2764, affirmed (1997), 44 BCLR (3d) 283 (BCCA); Re McGregor Estate, 2014 BCSC 896.
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Written by: Albert Oosterhoff
Posted on: September 9, 2024
Categories: Commentary, Wills
1. Introduction
It is, I think, well-known that, in the case of an initial impossibility or impracticability if a testator evinces a general charitable intention, the court can redirect charitable gifts that might otherwise fail, under the cy-près doctrine.[1] It is also often thought that if the testator leaves property to a particular charity and that charity has ceased to exist before the testator’s death, that suggests that the testator did not have a general charitable intention and therefore the gift will lapse. However, that is not always so and there are cases both ways. The British Columbia Supreme Court addressed the issue in Re Weir Estate.[2]
2. Facts
The testator died in 2016, domiciled in British Columbia. Formerly, she lived in South Australia and in her will made there she left the residue of her estate equally to four animal welfare organizations in that state. Two of these organizations, the Anti-Vivisection Union (SA) Inc (“AVUSA”) and the Sandy Creek Dog Sanctuary (“SCDS”) had ceased to exist before she died. The other two, the Animal Welfare League of South Australia Inc “AWL SA”) and the Royal Society for Prevention of Cruelty to Animals (South Australia) (“RSPC SA”) still existed when she died. The named executor declined to act as executor, so the Public Guardian and Trustee (“PGT”) served as the administrator with will annexed.
The PGT learnt that an Australian court decision in 2021 had concluded that the SCDS was a commercial operation and not a charity. The PGT conducted research and discovered two charities that might qualify to take the shares of the two non-existent organizations. These were Human Research Australia (“HRA”), which is based in the state of Victoria and brings awareness to animal experimentation and promotes anti-vivisection campaigns, and the beneficiary RSPCA SA, whose primary purpose is the prevention of suffering and cruelty to animals, including the use of certain animal experimentation. Other possible organizations were either not charities or did not qualify for other reasons.
The PGT had already distributed $60,000 to each of the RSPCA and AWL SA.
3. Analysis and Judgment
The court found that the testator had a strong interest in animal welfare generally and was opposed to experimentation on animals for research purposes. It also found that the testator’s general intention was to benefit a charitable purpose. That being so, the court had jurisdiction to the distribute the failed gifts under the cy-près doctrine. It acknowledged that case law has held that gifts for the protection and benefit of animals are charitable. Cases have also held that gifts to charities outside Canada may be valid.
The court noted that some cases have concluded that if the testator makes a gift to a specific institution that no longer exists when the testator dies, that does not evince a general charitable intention, and the gift will lapse.[3] But Justice Ball noted that when a gift of residue to a charitable organization does not provide for a gift over if it should fail, the court may infer a general charitable intention that the gift should then be applied to a general charitable purpose.[4]
The court held that given charitable nature of AVUSA and its work in protecting animals, the testator evinced an intention to benefit an organization that has a similar purpose. That was not the case for the gift to SCDS, since it was held not to be a charity by an Australian court, a decision that the court should accept for reasons of judicial comity. That means that the gift to SCDS failed and passed to the estate of the testator’s heir-at-law. However, in the exercise of the court’s discretion, the gift to AVUSA should be divided equally between RSPC SA and the HRA.
—
[1] In the case of a supervening impossibility or impracticability a generable charitable intention is not required and is indeed supererogatory, since the property is already vested in charity.
[2] 2023 BCSC 2278.
[3] Citing Eberwein Estate v Saleem, 2012 BCSC 250, and Re Ogilvy Estate, [1953] 1 DLR 44, 1952 CarswellOnt 329 (Ont HC).
[4] Citing Re Buchanan Estate, 1997 CarswellBC 2764, affirmed (1997), 44 BCLR (3d) 283 (BCCA); Re McGregor Estate, 2014 BCSC 896.
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