In January 2012 the trustee of a Manx estate sought direction from the high bailiff on the extent to which he must follow a testator's wishes where such wishes, if strictly followed, are impracticable. In his judgment, the high bailiff provided useful direction on will construction and the applicability of the Cy Pres Doctrine in the Isle of Man.
A testator left provision under Clause 8 of his will for a heritage centre and museum to be erected on a piece of land which he owned. Clause 9 of the will stated that the building and ongoing maintenance of the heritage centre and museum was to be funded by his residuary estate. The testator also provided under Clause 15 of his will that, if there were insufficient funds to construct and maintain the heritage centre and museum, the trustee was to pay his residuary estate to the Manx Museum and National Trust.
However, after the testator died, the trustee of the estate ran into difficulty when he sought permission from the planning office for the build. He was advised that it would be virtually impossible for planning permission to be granted on the piece of land in question.
This posed the following issues for determination by the high bailiff:
- Was it reasonable for the trustee to pursue a planning application?
- Did the impracticable nature of the gift (ie, the inability to erect a heritage centre and museum as described in the will) mean that the gift in Clause 8 would fail?
- If Clause 8 did fail, did Clause 9 also fail or could the trustee use the proceeds of the residuary estate to erect a heritage centre and museum elsewhere or fulfil the testator's wishes in some other way?
- Did Clause 15 fail due to the fact that there was a precondition regarding insufficient funds to erect and maintain a heritage centre and museum?
- If both gifts did fail, could the Cy Pres doctrine (which allows a court to amend the terms of a charitable trust as closely as possible to the original intention of the testator to prevent the trust from failing) apply to save either gift?
The high bailiff drew the following conclusions.
The trustee would be wasting estate funds in pursuing an application for a grant of planning permission which was totally illusive.
Due to the precise wording of Clause 8 – namely, that a particular piece of land was allocated by the testator for a heritage centre and museum site, the object of the gift was impossible and the gift failed.
Clause 9 also failed as the purpose of the trust – namely, the funding of the gift under Clause 8 – could not be fulfilled. This clause could not be considered as a standalone clause.
The trustee put forward submissions with regard to the applicability of the Cy Pres doctrine. The trustee argued that Clauses 8 and 9 should be taken as providing a general charitable intent. He provided proposals for a heritage centre and museum on an alternative site with the involvement of local commissioners. However, the high bailiff determined that these proposals would "extrapolate beyond the expressed wishes proposed by the testator in the will" and, therefore, the Cy Pres doctrine could not be applied.
When assessing whether Clause 15 would also fail, the high bailiff considered the fact that the testator had specifically required an assessment of the sufficiency of the funding for the purpose of the gift. Although the high bailiff accepted that a gift would not necessarily fail where funds are finite and maintenance of the charitable purpose, the high bailiff found that the residuary estate was likely to be exhausted within a short period of time. Therefore, the high bailiff concluded that there were insufficient funds to carry out the testator's wishes and that Clause 15 would apply.
The high bailiff's decision highlights the challenges of will drafting when anticipating eventualities that would prevent a testator's wishes from being carried out.
This case also highlights the care that must be taken when a testator wishes to leave gifts to charity. It is important to establish whether the gift is intended to be used for a 'general charitable purpose' or if certain conditions are to apply to the gift.
For further information on this topic please contact Nadine V Roberts at M&P Legal by telephone (+44 1624 695800), fax (+44 1624 695801) or email ([email protected]).