The cy-près doctrine in English law is an element of trusts law

English trusts law

English trusts law is the original and foundational law of trusts in the world, and a unique contribution of English law to the legal system. Trusts are part of the law of property, and arise where one person gives assets English trusts law is the original and foundational law of trusts in the...

 dealing with charitable trusts

Charitable trusts in English law

Charitable trusts in English law are a form of express trust dedicated to charitable goals. There are a variety of advantages to charitable trust status, including exception from most forms of tax and freedom for the trustees not found in other types of English trust. To be a valid charitable...

. The doctrine provides that when such a trust has failed because its purposes are either impossible or cannot be fulfilled, the High Court of Justice

High Court of Justice

The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...

 or Charity Commission

Charity Commission

The Charity Commission for England and Wales is the non-ministerial government department that regulates registered charities in England and Wales....

 can make an order redirecting the trust's funds to the nearest possible purpose. For charities with a worth under £5,000 and no land, the trustee

Trustee

Trustee is a legal term which, in its broadest sense, can refer to any person who holds property, authority, or a position of trust or responsibility for the benefit of another...

s (by a two-thirds majority) may make the decision to redirect the trust's funds. The doctrine was initially an element of ecclesiastical law, coming from the Norman French cy près comme possible (as close as possible), but similar and possibly ancestral provisions have been found in Roman law

Roman law

Roman law is the legal system of ancient Rome, and the legal developments which occurred before the 7th century AD — when the Roman–Byzantine state adopted Greek as the language of government. The development of Roman law comprises more than a thousand years of jurisprudence — from the Twelve...

, both in the Corpus Juris Civilis

Corpus Juris Civilis

The Corpus Juris Civilis is the modern name for a collection of fundamental works in jurisprudence, issued from 529 to 534 by order of Justinian I, Eastern Roman Emperor...

and later Byzantine

Byzantine Empire

The Byzantine Empire was the Eastern Roman Empire during the periods of Late Antiquity and the Middle Ages, centred on the capital of Constantinople. Known simply as the Roman Empire or Romania to its inhabitants and neighbours, the Empire was the direct continuation of the Ancient Roman State...

 law.

Trusts where the doctrine is applicable are divided into two groups; those with subsequent failure, where the trust's purpose has failed after it came into operation, and initial failure, where the trust's purposes are immediately invalid. Subsequent failure cases simply require the redirection of the funds to the nearest possible purpose, since there is no question of allowing the settlor

Settlor

In law a settlor is a person who settles property on trust law for the benefit of beneficiaries. In some legal systems, a settlor is also referred to as a trustor, or occasionally, a grantor or donor. Where the trust is a testamentary trust, the settlor is usually referred to as the testator...

's next of kin to inherit the money. Initial failure cases, however, require not just a decision on whether the purpose has failed, but also on whether the funds should be subject to cy-près or returned to the estate in a resulting trust

Resulting trusts in English law

Resulting trusts in English law are trusts created where property is not properly disposed of. It comes from the Latin resultare, meaning to spring back, and was defined by Megarry VC as "essentially a property concept; any property that a man does not effectually dispose of remains his own". These...

. This is decided based on the charitable intention of the settlor, something determined on the facts of each individual case.

Definition and origin

The cy-près doctrine is the idea that, where a charitable trust's purposes are impossible or cannot be fulfilled for whatever reason, the funds should be reapplied to purposes as close as possible to the trust's original goals. This is done through a formal application by the trustee

Trustee

Trustee is a legal term which, in its broadest sense, can refer to any person who holds property, authority, or a position of trust or responsibility for the benefit of another...

s, either to the High Court of Justice

High Court of Justice

The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...

 or the Charity Commission

Charity Commission

The Charity Commission for England and Wales is the non-ministerial government department that regulates registered charities in England and Wales....

. This doctrine originated in ecclesiastical law, the name coming as a contraction of the Norman French cy près comme possible (as close as possible), It was originally justified in an ecclesiastical way; charitable gifts were provided to secure entry into heaven, and if the charitable gift failed, this would not be guaranteed. If it was re-purposed, however, entry would be granted. The local bishop, therefore, would usually simply apply the gift to the nearest possible purpose to the testator

Testator

A testator is a person who has written and executed a last will and testament that is in effect at the time of his/her death. It is any "person who makes a will."-Related terms:...

's original goals.

There is some evidence to suggest that the doctrine is descended from Roman law

Roman law

Roman law is the legal system of ancient Rome, and the legal developments which occurred before the 7th century AD — when the Roman–Byzantine state adopted Greek as the language of government. The development of Roman law comprises more than a thousand years of jurisprudence — from the Twelve...

. The Corpus Juris Civilis

Corpus Juris Civilis

The Corpus Juris Civilis is the modern name for a collection of fundamental works in jurisprudence, issued from 529 to 534 by order of Justinian I, Eastern Roman Emperor...

makes mention of a process by which money given to celebrate a person's life in a way that violated the law would instead be redirected, and used on a purpose within the law. The justification is also highly similar: "[I]t would be unjust that the amount which [the testator] has destined to that end should revert to the heirs. Therefore, let ... an investigation be made to ascertain how the trust may be employed so that the memory of the deceased may be preserved in some other and lawful manner". The Byzantine Empire

Byzantine Empire

The Byzantine Empire was the Eastern Roman Empire during the periods of Late Antiquity and the Middle Ages, centred on the capital of Constantinople. Known simply as the Roman Empire or Romania to its inhabitants and neighbours, the Empire was the direct continuation of the Ancient Roman State...

 also used a system similar to cy-près when dealing with piae causae, charitable corporations, whereby if the corporation fell its possessions were to be transferred to the Papal treasury and spent on a purpose as close as possible to that of the original corporation.

Requirements

Prior to the Charities Act 1960, the situations in which the cy-près doctrine could be used were limited to when the trust's purpose was either impossible or impracticable. The 1960 Act, however, provides in Section 13(1) (now part of the Charities Act 1993) that cy-près can be applied where the original purposes have:
This definition was amended by the Charities Act 2006

Charities Act 2006

The Charities Act 2006 is an Act of the Parliament of the United Kingdom intended to alter the regulatory framework in which charities operate, partly by amending the Charities Act 1993.-Provisions:...

 to replace "the spirit of the gift" with "the appropriate considerations", which are defined as "(on the one hand) the spirit of the gift concerned, and (on the other) the social and economic circumstances prevailing at the time of the proposed alteration of the original purposes". In the case of extremely small charitable trusts (where the charity has an income of less than £5,000 and holds no land) the trustees may agree by a two-thirds majority to transfer the property to another charity, without involving the High Court or Commission. This is contained in Sections 74-5 of the 1993 Act. Once the decision is reached, public notice must be given, and the Commission informed.

Subsequent failure

The cy-près doctrine applies to two types of situations: subsequent failures and initial failures. Subsequent failures are where money has already been applied to a charitable purpose, and that purpose has failed. It does not allow the next of kin of the original donor to recover any money, as said in Re Wright: "Once money has been effectually dedicated to charity, whether in pursuance of a general or a particular charitable intent, the testator's next of kin or residuary legatees are forever excluded". The courts instead simply determine whether or not the reason for failure falls within Section 13, based on the basic intention underlying the original gift.

Initial failure

Cases of initial failure are where, rather than an established charitable trust failing, a gift has failed at the moment of its creation by having an invalid purpose. This raises different questions, as it is a matter of deciding "has the original charitable gift failed, and, if it has, can the money be applied cy-près or must it go on resulting trust to the settlor's estate"?

When deciding if a gift has failed, attention is first turned to the wording of the trust instrument

Trust instrument

A trust instrument is an instrument in writing executed by a settlor used to constitute a trust...

. The terms of such documents are taken literally; if a particular organisation or purpose is given, the settlor's intention is considered to be no wider or narrower than this. A different approach is used when dealing with cases like Re Faraker, which dealt with a situation where the charity named in the gift had been amalgamated with others. The Court of Appeal

Court of Appeal of England and Wales

The Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...

 held that the amalgamated charities were entitled to the gift, since the charity named effectively continued as part of the amalgamated one. Farwell LJ

George Farwell

George Farwell was an Australian novelist, freelance journalist, broadcaster and travel writer.-Early career:George Michell Farwell was born in Bath, Somerset, England. and educated at a number of different schools, ending with Forest School, Walthamstow, which he left at age 17...

 wrote that "in all these cases one has to consider not so much the means to the end as the charitable end which is in view, and so long as the charitable end is well established the means are only machinery, and no alteration of the machinery can destroy the charitable trust for the benefit of which the machinery is provided".

In Re Finger, Goff J made a distinction between gifts to incorporated bodies and gifts to unincorporated bodies. When a gift is to an unincorporated body, it must be treated, whatever the wording, as a gift to that body's purpose. This is because unincorporated bodies cannot possess things. If the body has ceased to exist but the purpose continues, the gift has not failed. Incorporated bodies on the other hand can possess property, and as such, as said by Buckley J in Re Vernon's Will Trust, "A bequest to a corporate body ... takes effect simply as a gift to that body beneficially, unless there are circumstances which show that the recipient is to take the gift as a trustee".

Once it has been decided that the gift has failed, the courts consider whether the gift may be applied cy-près. The gift must show charitable intention; that the settlor intended not just a gift to a particular (failed) purpose or organisation, but a more general charitable intention. This is something decided on the facts of each individual case, but some general principles are in place; external evidence is admissible to override any prima facie

Prima facie

Prima facie is a Latin expression meaning on its first encounter, first blush, or at first sight. The literal translation would be "at first face", from the feminine form of primus and facies , both in the ablative case. It is used in modern legal English to signify that on first examination, a...

interpretation that a gift is for non-charitable purposes, as in Re Satterthwaite's Will Trusts, and charitable intention can be found in cases where a non-existent charity is the recipient of the settlor's gift, as in Re Harwood.