Charity Law

International Perspectives

Juliet Chevalier-Watts

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781317222033
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Organizaciones sin ánimo de lucro y benéficas

This work provides an analytical and comparative analysis of the development of charity law, as well as providing a critical commentary on a number of contemporary changes within the charity law field across a range of common law jurisdictions. The book follows earlier studies which cover a similar, and traditional, jurisdictional spread, but which are now dated. It further considers in detail charity law issues within Hong Kong and Singapore, about which there has been historically more limited charity law discussion. The area is growing in terms of practical legal and academic interest.

1 An introduction to charity law

This chapter introduces some of the concepts of charity law, which will provide the context and parameters for the following chapters. The chapter illustrates many of the interconnections, as well as some key differences, of the jurisdictions that are the focus of this book. The jurisdictions in question are England and Wales, Canada, Australia, New Zealand, Singapore, and Hong Kong.

A Introduction to charity law

Charity is an ancient concept, with its roots buried deeply in history. Charity is said to be a manifestation ‘of the better side of human nature’,¹ and is ‘no doubt as old as mankind itself’.² Undoubtedly charity means many things to many people, although in theory, its primary concern is alleviating poverty and the suffering of others. It may also provide and promote opportunities for others to better the human condition, as well as provide for social infrastructures for the well-being of communities. It even extends as far as pursuing aspects of religious worship. Nonetheless, while charity may have taken on many forms, legally speaking, it should be distinguished from benevolence and philanthropy. It has been argued that ‘benevolence’ should not be determined as being charitable at law because it has a ‘somewhat shadowy meaning’.³ Benevolent gifts have traditionally not been found charitable because they extend beyond that which is exclusively charitable.⁴ Indeed:⁵

A gift simply to ‘benevolent purposes’ is objectionable: a benevolent purpose may be (but is not necessarily) charitable. The same is true of gifts to philanthropic purposes, utilitarian purposes, emigration, and public purposes: they all go further than legal charity.

An example of such a void gift was found in Morice v. Bishop of Durham,⁶ where an estate was left to the Bishop for him to dispose of to ‘such objects of benevolence and liberality’.⁷ The Court stated, in relation to the concepts of benevolence and liberality:⁸

Do purposes of liberality and benevolence mean the same as objects of charity? That word in its widest sense denotes all the good affections, men ought to bear towards each other; in its most restricted and common sense, relief of the poor … Here its signification is derived chiefly from the Statute of Elizabeth (stat. 43 Eliz, c. 4). Those purposes are considered charitable, which that Statute enumerates, or which by analogies are deemed within its spirit and intendment; and to some such purpose every bequest to charity generally shall be applied. But it is clear liberality and benevolence can find numberless objects, not included in that statute in the largest construction of it … By what rule of construction could it be said, all objects of liberality and benevolence are excluded, which do not fall within the Statute of Elizabeth 1.

This illustrates the issues related to comparing charity with benevolence, and it seems rational to try to distinguish the two concepts entirely to ensure more clarity in charity law. It should be noted that the Statute of Elizabeth, to which the Court makes reference, is one of the key statutes relating to charity law, and it will be discussed in more detail later in the chapter.

Benevolence, therefore, is not the same as charity in legal terms because its terms are too uncertain, and may be too broad for the purposes of charity. What then of the notion of aligning philanthropy with charity?

Just as benevolence fails to align with charity at law, so too, generally speaking, does philanthropy. This is because the ‘word ‘philanthropic’ by itself is undoubtedly too wide’,⁹ and as a result, it ‘implies generality’,¹⁰ so will fall outside the construct of charitable purpose.

In the case of National Provincial and Union Bank of England, Limited v. Tetley,¹¹ Warrington LJ acknowledged that philanthropy is not charitable at law, although his Lordship appeared rather bewildered by this. He was ‘unable to find any principle which will guide one easily, and safely, through the tangle of the cases as to what is and what is not a charitable gift’.¹² Indeed:¹³

I confess I find considerable difficulty in understanding the exact reason why a gift for the benefit of animals, and for the prevention of cruelty to animals generally, should be a good charitable gift, while a gift for philanthropic purposes, which, I take it, is for the benefit of mankind generally, should be bad as a charitable gift. The gift for the benefit of animals, apparently, is held to be valid because it is educative of mankind, it being good for mankind that they should be taught not to be cruel but kind to animals, and one would quite agree with that. But if the benefit of mankind on that particular side makes that a good charitable gift it is a little difficult to see why any philanthropic purpose to benefit mankind on all sides is a bad one. But it is so; it has been so decided, and therefore the present case is, made very difficult, as every case is where there is no governing principle which can be applied.

However, it has been acknowledged now that England and Wales have begun to relax their approach to the concept of philanthropy, whereby the Charities Act 1992 stated ‘charitable institution’ means a charity or an institution (other than a charity) which is established for charitable, benevolent, or philanthropic purposes.¹⁴

Therefore, charity at law, as a concept, is complex and should be distinguished from the layperson’s notions of charity, which has resulted in some judicial criticism. As Lord Wrenbury noted, in Verge v. Somerville,¹⁵ the legal and popular meanings of charity are ‘so far apart that it is necessary almost to dismiss the popular meaning from the mind as misleading before setting out to determine whether a gift is charitable within the legal meaning’. Lord Macnaghten in Commissioners for Special Purposes of Income Tax v. Pemsel¹⁶ also illustrates this notion of disparate legal and popular meanings of charity:

No doubt the popular meaning of the words ‘charity’ and ‘charitable’ does not coincide with their legal meaning; and no doubt it is easy enough to collect from the books a few decisions which seem to push the doctrine of the Court to the extreme, and to present a contrast between the two meanings in an aspect almost ludicrous. But still it is difficult to fix the point of divergence, and no one as yet has succeeded in defining the popular meaning of the word ‘charity’.

His latter sentence, that ‘no one as yet has succeeded in defining the popular meaning of the word ‘“charity”’, generally speaking, still stands true to this day, as Hammond J (as he was) in D V Bryant Trust Board v. Hamilton City Council noted:¹⁷

There is no intrinsic legal definition of charity. As a matter of technique, Courts can only describe the attributes of charities.

There are some exceptions to this, however, one being Australia, which has now set out a statutory definition of ‘charity’ within the Charities Act 2013, which is discussed later in the chapter. Alongside Australia, England and Wales have also recently introduced a statutory definition of charity:¹⁸

Meaning of ‘charity’

(1)For the purposes of the law of England and Wales, ‘charity’ means an institution which–

(a) is established for charitable purposes only …

We will consider in more detail the notion of charitable purposes later on, but sufficient for this stage is that these two jurisdictions are unusual, in comparison with such jurisdictions as Singapore, Hong Kong, Canada and New Zealand, in setting out a statutory definition. What is clear however from these statutory definitions is that ‘charity’ may still be interpreted broadly, and as we will see in our journey through the concept of charity and charitable purpose, the statutory definition of charity may not offer as much clarity as one may have hoped.

The lack of clarity may also stem from the fact that charity law has ‘been built up not logically but empirically’.¹⁹ It has also been said that there is some degree of inconsistency when trying to rationalise the empirical development of charity law.²⁰ Indeed, in the slightly later case of Oppenheim v. Tobacco Securities Trust Co Ltd,²¹ it was said ‘[n]o one who has been versed for many years in this difficult and very artificial branch of the law can be unaware of its illogicalities’.²²

This ‘artificial branch of law’, with its ‘illogicalities’, has led, however, to a diverse range of activities being held as charitable, and being ...