|
OUTER HOUSE, COURT OF SESSION [2008] CSOH 116 |
|
|
P2625/06 |
OPINION OF LORD DRUMMOND YOUNG in the petition of RICHARD KEITH AUSTIN, WS; DONALD GILMOUR SUTHERLAND, CA;
DONALD BAIN, MB, BS; and FIONA AVRIL PATRICK, BA Com as Trustees of the R S
MACDONALD CHARITABLE TRUST
Petitioners; For Approval of a Scheme for the Variation of Trust Purposes
________________ |
Act: McNeill , QC
Alt: Dunlop , QC
[1] By
Deed of Trust dated
[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
(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.
[3] The Truster transferred to the Trustees the sum of £50,429.37, which was to be used to purchase 11,500 "B" Ordinary Shares of Macdonald Martin Distilleries Ltd. That company was a public company listed on the Stock Exchange, but it was controlled and substantially owned by the Truster and other related persons. In due course it became Macdonald Martin Distilleries PLC and subsequently changed its name to Glenmorangie PLC. In 1995 the Truster died and bequeathed to the Trust his entire personal shareholding in that company, which was then valued at £17 million. In 2004 the company was the subject of a takeover. Because it was the last remaining independent quoted company in the Scotch whisky industry there was keen competition for the shares, which were eventually sold at a price which was nearly three times the price when the Truster died. The result is that the Trustees now control very substantial assets; it is averred that these are greatly in excess of what the Truster could have contemplated when he set up the Trust in 1978.
The petition
[4] The Trustees have presented
a petition for approval of a scheme for the variation of the purposes of the
Trust. Answers have been lodged by the
Scottish Society for the Prevention of Cruelty to Animals (hereinafter referred
to as "the respondents"). The Trustees
aver that the Trust at its inception was modestly funded and that in ensuing
years they had no difficulty in operating it in accordance with the provisions
of the Trust Deed. During the period
since the death of the Truster, however, it is averred that the Trustees have
encountered increasing difficulty in dealing with the numerous applications
that are made to them for assistance.
They draw attention to the following difficulties:
(i) To be eligible for
assistance, an applicant must be a "charitable body"
"operating in
(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.
[5] The
Trustees further aver that they understand that a number of the charities
specifically named in the first section of Part I of the Schedule have
themselves broadened their objectors over the past 25 years. The Scottish Council for Spastics has changed
its name to "Capability Scotland". It
has also gradually extended the areas in which it is involved, including work
with recovering stroke victims. The
Trustees understand that it now supports children, young people and adults with
a range of disabilities and seeks to promote itself as Scotland's leading
disability organisation, providing a diverse range of services, including
community living, day and residential services, employment, respite and short
breaks, therapy, education and learning, family support and activities. Its facilities are important to many who have
wheelchair-bound needs. It is therefore
understood to carry out work beyond what might be characterized as abnormality
in upper motor neurone control. The
Trustees understand that the Royal Blind Asylum in its present work covers many
aspects of visual impairment, partial sight and substantially defective
vision. The Royal Scottish Society for
Prevention of Cruelty to Children now operates under the name "CHILDREN 1st". The Trustees understand that, instead of
concentrating on the policing of cruelty, it pursues a range of initiatives
aimed at breaking cycles of abuse, supporting families under stress, protecting
children from harm and neglect and promoting children's rights and
interests. The Trustees further aver
that the Scottish Society for the Prevention of Cruelty to Animals was
instituted in the 19th century principally to ensure the welfare of carthorses. It is understood now to be
[6] In the foregoing circumstances the Trustees have prepared a Scheme to vary the purposes of the trust. The principal changes effected by the Scheme are as follows:
(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
would be replaced by a requirement of material benefit to persons and/or
animals situated in
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.
[7] The Scheme is in the following terms; these reflect an amendment made at the bar. First, it is proposed that the second, general, section of Part I of the Schedule to the Trust Deed should be replaced by an extended provision. The existing wording is as follows:
"SUCH OTHER
CHARITABLE BODY operating in
(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
"(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.
[8] Secondly, the Scheme proposes that purpose (THIRD) of the Trust Deed should be replaced by a new provision. Purpose (THIRD) confers power on the Trustees in their discretion to pay or distribute any part or even the whole of the capital of the Trust Fund to or for the benefit of the named charities or the other charitable objects as they should think it, but subject to a declaration that the Trustees should endeavour to keep the Trust in being for so long as that is practicable. The new provision that is proposed is as follows:
"(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.
Procedure following lodging of petition
[9] The respondents lodged
answers to the petition, in which they submitted that the proposed changes to
the Trust represented a very broad widening of the scope of the original Trust
Deed. That applied in particular to the provisions
relating to neurodevelopmental or neurodegenerative disorders or disorders of
the nervous system, which were designed to replace the previous provisions
relating to the care and welfare of spastics and research into the causes or
prevention or treatment of spastic conditions.
On that basis, the respondents contended that the court should not
approve of the Scheme.
[10] In due course the respondents enrolled a motion that the petition and answers should be remitted to the Inner House. That motion was opposed. By the time when the motion came before the court it was clear that significant factual differences existed between the parties. These related in particular to the meaning of the references to "spastics" and "spastic conditions" in Part I of the Schedule to the Trust Deed. In view of these factual differences I concluded that evidence would probably be necessary; both counsel agreed with that assessment, although counsel for the respondent submitted that, if the petition were remitted to the Inner House, it could then be remitted to a Lord Ordinary to hear such evidence. I decided to ordain parties to lodge a joint statement of issues in order to clarify the matters in dispute between them, and thereafter to lodge affidavits dealing with the matters that were identified as being in dispute. I refused the motion for a remit to the Inner House in hoc statu. When the joint statement of issues and affidavits became available it was clear that there were significant factual differences between the parties. I accordingly decided that a proof before answer should be allowed on the petition and answers.
[11] The issues identified by the parties were in summary as follows. First, the parties were in dispute as to the construction of the expressions "spastics" and "spastic conditions" as used in the Trust Deed. That involved consideration of the meaning of those expressions as they were used in or about 1978, and also determination of the proper equivalent of those terms in use at the present day. The respondents contended that those expressions referred specifically to cerebral palsy, and should be construed accordingly; the petitioners, by contrast, suggested that they had a more general signification in 1978, and that the equivalent at the present day would be wider than cerebral palsy. Secondly, the petitioners contended that they had experienced difficulties in the construction and application of the Trust Deed, and that the provisions of the deed should accordingly be varied by means of the proposed Scheme. The parties were in dispute as to the nature and significance of any such difficulties in the construction and application of the Trust Deed. That involved consideration of certain specific problems that were referred to by the petitioners, in particular: (i) the distribution of the whole of the income of the trust in each year through grants on an appropriate scale, in a situation where the total income of the trust had increased greatly; (ii) difficulty in responding to applications for assistance in view of the requirement that appropriate charitable bodies must have among their principal objects at least one of the objects stated in the general part of Part 1 of the Schedule to the Trust Deed (see paragraph [7] above); and (iii) difficulty in the construction and application of the words "operating in Scotland". The parties were in dispute as to the nature and significance of these difficulties. Thirdly, the petitioners submitted that the charities named in Part 1 of the Schedule to the Trust Deed had extended the sphere of their operations since 1978, and that it was accordingly appropriate that the general provisions of Part 1 should be extended in a like manner. The respondents contended that the terms of the present Trust were quite independent of the main beneficiaries, and any extension in the latter had no bearing on the issue of whether the Trustees had made out a case for variation of the trust purposes.
[12] The petitioners lodged affidavits from Mr R.K. Austin, WS, who
is one of the current Trustees and who acts as secretary of the Trust, and
Professor R.A. Minns, who is a consultant paediatric neurologist at the
Department of Child Life & Health in the
[13] I intend to begin by summarizing the evidence of Mr Austin as
disclosed in his affidavit. Thereafter I
will consider the law applicable to cases such as the present where trustees
seek to modify trust purposes by means of an application to the court. In the light of that discussion of the law, I
will consider the general position of the trust as disclosed by Mr Austin's
evidence and the documentary productions.
In doing so I will take account of the evidence of Mr Earley relating to
the respondents' present activities. On
that basis I will consider whether the petitioners have experienced practical
difficulty in responding to applications for funds because of the formulation
of the trust purposes, and also the question of whether the restriction to
bodies operating in
Evidence relating to management of trust
Mr RK Austin
[14] In his affidavit Mr Austin dealt with the history of the Trust and the manner in which it has distributed funds to beneficiaries. He referred to the increase in the value of the trust's assets, from an initial donation of £50,429.37 to £17,670,322 following the Truster's death in 1995 to in excess of £50,000,000 in 2006. During the early years of its existence payments were restricted to the named charities. Following the Truster's death, however, it attracted the attention of other charities which were seeking funding. Applications were received from a range of charitable organisations, of which some met the criteria in the Trust Deed and others did not. The Trustees began to notice that they were compelled to refuse a significant number of applications because the charitable objects of the applicants could not satisfy the principal objects criterion laid down in the second (general) section of Part I of the Schedule to the Trust Deed. It seemed to the Trustees that many of the applicants who were refused awards were capable of delivering benefit to those whose welfare and well-being the Trust Deed was intended to cater for. Legal advice was taken with regard to the application of the criteria in the Trust deed, but because of the principal objects provision that the Trustees found that they could not look at a range of applications from those dealing with people suffering from a range of disabilities rather than exclusively either spasticity or blindness; this problem applied in particular to research centres within universities.
[15] Between 1997 and 2004 the Trust's income rose from £345,130 to £441,852. Following the sale of the holding in Glenmorangie PLC in 2005, even on a conservative yield, future income was likely to be of the order of £1.5 million per annum. (The income of the Trust had in fact increased to £2.2 million in the year 2005/2006). The Trustees concluded that, in view of their experience of applications during the previous seven or eight years, they were likely to face major difficulties in dispersing the available income in a manner that would be consistent with good charity stewardship. They undertook a review of awards made in recent years. This disclosed that in the period from 2002 to 2004 the average award made had fluctuated between £19,000 and £24,000. The number of awards made each year was between 17 and 21. Mr Austin had undertaken a review of the basis of which a number of other leading trusts made awards. While it was difficult to make direct comparisons, it became obvious that even wealthy trusts (in particular, a trust that made grants of £7.3 million per annum and another that made grants totalling £30 million per annum) operated a policy whereby their average grants were less than £40,000 per annum. Those figures were supported by information available from major recipients. On the basis of Mr Austin's review, the Trustees were of opinion that the level of grants that they had made had been of an appropriate order. If grants were to remain at approximately that level, however, significant amount of income would be undistributed. The alternative was to increase awards to levels out of keeping with the general approach followed by major charitable trusts; that would involve average awards to individual charities of £60,000 or more per annum. In addition, support for large-scale projects was frequently offered on the basis of "matched funding", whereby the charitable applicant requires to convince two or more funders of the value of the project of which they are seeking funding.
[16] Mr Austin further explained that the Trustees had become
concerned at the definitions used in the statement of the Trust's principal
objects. In particular, the expressions
"spasticity" and "spastic conditions" were no longer used. In about 1997 the Scottish Council for
Spastics had changed its name to Capability Scotland, on the ground that the
term "spastic" was held to be pejorative.
At that time the Trustees accepted Capability Scotland's opinion that
spasticity was the same as cerebral palsy.
Subsequently, however, they received advice from doctors that the terms
"spastic" and "cerebral palsy" embrace a spectrum of disorders. In addition, it was necessary to make
provision for children born with multiple handicaps, who might fall within the
remit of both Capability Scotland and the Royal Blind Asylum and School. In addition, an application had been received
recently from the leading in neurological research institution in the
[17] In 2005 and 2006 the Trustees undertook a review of the future
operation of the Trust, including the definition of its objects. In the course of that review they identified
the difficulties described in the two preceding paragraphs. They further identified the difficulty in
dealing with applications made for assistance from charitable bodies that might
not be regarded as "operating in
[18] A further difficulty encountered by the Trustees was that the
charities named in the Deed of Trust had widened their range of charitable
activities beyond those stated in the "principal objects" provisions of the
Deed of Trust. Thus Capability Scotland
now offers support to those who had suffered strokes, and further declares that
it sees itself as the leading organization for the disabled in
[19] In conclusion, Mr Austin stated that the precise terms of the
Deed of Trust created an obstacle to the giving of charitable assistance to
bodies whose projects would otherwise appear to be Trustees to be within the
spirit of the Truster's provisions. In
the period from late July 2006 to
The applicable legal principles
[20] I was referred to a number
of well-known authorities on the power of the Court to sanction schemes for the
reorganization of public trusts, generally known as the cy-près jurisdiction. The
starting point is the speech of Lord Westbury in Clephane v Magistrates of
"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
[21] An exception to the foregoing approach occurs where property is
dedicated not to a general purpose of a public or charitable nature but to a
specific purpose, albeit of a public nature.
Thus in Young's Trustee v Deacons
of the Eight Incorporated Trades of Perth, 1893, 20 R 778, the income of
funds was to be applied in supplementing the salary of the schoolmaster of a
named school. When that school was
closed, it was held that the bequest failed as being impossible of
fulfilment. There was no general
charitable intention, and consequently no room for the application of the cy-près doctrine. Lord McLaren (at 786) pointed out that the
intentions of the truster as disclosed in the trust instrument must be
paramount; consequently there was no room for the principle of approximation in
such a case. If a general charitable
intention appears, however, funds donated to one charity can be transferred,
using the cy-près doctrine, to
another with similar objects. An example
is found in Glasgow Society for
Prevention of Cruelty to Animals v National Anti-Vivisection Society, 1915
SC 757, where a Scottish testatrix left a legacy to the petitioners, a Scottish
society for the prevention of cruelty to animals, the legacy to be devoted
towards the prohibition of vivisection.
The petitioners found it impossible, owing to differences of opinion
within themselves, to administer the legacy.
They accordingly sought the court's approval of a scheme which provided
for the division of the funds between two bodies dedicated to the prohibition
of vivisection. One of those bodies was based in
[22] In a number of cases decided since Clephane it is possible to detect a more restrictive attitude
towards the application of the cy-près
doctrine than was taken in that case.
One such is
"[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.
[23] Lord Sands, after reviewing a number of authorities, stated (at 212):
"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".
[24] Lord Blackburn (at 216) considered the nature of the nobile officium at some length, and expressed the view that it "embraces powers of a very wide description, although in practice it is only exercised in cases of 'necessity or very strong expediency'". In support of the proposition that the court may intervene on grounds of expediency apart from any question of necessity Lord Blackburn cited the case of University of Aberdeen v Irvine, 6 M (HL) 29; 7 M 1087. He then considered the specific question of powers of investment, and pointed out that, in the case under consideration, at the time of the testator's death land was regarded as a sound investment, whereas by 1932 it was far from being so. He concluded (at 219):
"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".
[25] In Glasgow Young Men's Christian Association, 1934 SC 452, the court was asked to authorize the application of the income of a capital sum in the hands of the petitioning trustees to the revenue purposes of the Association. In delivering the principal opinion, Lord Blackburn stated (at 458):
"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.
[26] Counsel for the respondents referred to
[27] In Scotstown Moor Children's Camp, 1948 SC 630, trustees who had operated a summer camp for needy and ailing children prior to the Second World War found that its operation was difficult after the war because food rationing prevented the receipt of gifts in kind. They presented a petition to the court seeking the transfer of the trust funds to the Boys' Brigade. The court continued the petition without approving of the prayer. Lord President Cooper stated (at 634):
"I wish once again to emphasize the point taken by Lord President Clyde in Glasgow Domestic Training School, that the jurisdiction which this Court exercises in relation to charitable trusts is not a general discretionary jurisdiction to divert the funds of charities from one object to another as we may think appropriate. We are not a charitable endowments commission clothed with subordinate legislative powers. The exercise of our cy-près jurisdiction is conditional and dependent upon our ability in the first instance to determine that the object or purpose of the charity has failed, or, where particular methods have been prescribed for the achievement of the object, that those methods have in altered circumstances become impracticable.
Now in this case... the object which is prescribed for this organization is to provide for needy and ailing children a holiday in the country, and no methods are prescribed for the achievement of that object. It would manifestly be competent for the association to achieve it in any practicable method they care to select. The question accordingly comes to be whether the petitioners can satisfy us that the object of their association has in a substantial sense failed, and I am bound to say that that seems to me to be an exceedingly difficult onus for them to undertake".
Lord Cooper went on to refer to the fact that similar camps operated in many parts of the country. It therefore could not be said that the trust purposes, which were widely drafted, had failed. The case is generally cited as authority for the proposition that mere difficulty in fulfilling a trust's objectives will not justify an application to the nobile officium. The case does not directly address the question of whether the test for the exercise of the nobile officium is strict necessity or expediency; while the Lord President refers in the passage quoted above to the failure of the object or purpose of the charity, he also refers to the possibility that the methods prescribed for the charity have in altered circumstances become impracticable. The latter statement appears to point to expediency rather than strict necessity. Nevertheless, it must be accepted that the case tends towards a restrictive construction of the court's powers in the exercise of its cy-près jurisdiction.
[28] More recent cases have demonstrated a less restrictive
construction of the court's powers. While the reported cases have generally
involved applications made under specific statutory provisions, I am of opinion
that the general approach taken in those cases is equally applicable to the nobile officium. In the cases it is recognized that both the
purposes and powers of public trusts must reflect changes in economic and
social conditions, and that consideration must in my opinion apply as much to
the powers that the court enjoys at common law as it does to the court's
statutory powers. In University of Glasgow, Petitioners, 1991 SLT 604, the petitioners
sought approval of a scheme under the Education (Scotland) Act 1980 which
provided for a significant extension of their powers of investment and the
amalgamation of future endowments received by them. The scheme was approved. Lord President Hope (at 606-607) reviewed the
authorities on extension of powers of investment under the Trusts (
"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.
[29] In Mining Institute of Scotland Benevolent Fund Trustees, Petitioners, 1994 SLT 785, the trustees of two public trusts established for the benefit of persons connected with the mining industry presented a petition under section 9 of the Law Reform (Miscellaneous Provisions) Scotland) Act 1990 for approval of a scheme for the amalgamation of the trusts; those trusts had themselves been constituted under schemes approved by the court in 1971. The scheme was designed to improve the administration of the trust funds, in a situation where the mining industry was in serious decline and the need for some categories of application of the trust funds was likely to decrease in future. Lord President Hope, sitting in the Outer House, held that the scheme for amalgamation of the trust was not competent under the 1990 Act, but he indicated that it could form the subject of a petition under the nobile officium. In relation to the latter jurisdiction, he made the following statements (at 786 and 787 respectively):
"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.
[30] It is apparent from the foregoing authorities that the attitudes taken by different judges to the powers of the court in the exercise of its cy-près jurisdiction have varied to a significant degree. In the 1980s and early 1990s, as Lord President Hope indicated in Mining Institute of Scotland Benevolent Fund Trustees, Petitioners, the tendency was towards flexibility of approach; it was not necessary to demonstrate that trust purposes had failed or were impossible of performance in order to justify the application of the cy-près jurisdiction; instead, the court was prepared to sanction schemes in cases where an alteration to the trust purposes was expedient, provided that the expediency was sufficiently compelling to justify the exercise of the court's jurisdiction. In my opinion this represents the current state of the law. No doubt it remains true that mere difficulty in performing the trust purposes is not enough by itself, and to that extent cases such as Scotstown Moor are quite consistent with the current approach. Nevertheless, the scale or range of difficulties faced by trustees in implementing trust purposes may be such that the case for amendment of those purposes is strong. In a compelling case, expediency is a sufficient ground for varying the purposes of a trust.
[31] In my opinion this is entirely in accordance with the statement
of the law in Clephane v Magistrates of
"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.
[32] A further consideration is in my opinion of considerable importance in considering the attitude that the court should take to the exercise of its cy-près jurisdiction. That jurisdiction applies to public trusts. In such trusts there is an element of general, public interest in ensuring that funds dedicated to providing public benefit are efficiently employed. That public interest extends beyond the mere wishes of the truster. It follows that trustees should not be tied strictly to forms of wording used by the truster, or particular administrative arrangements set up by him, if those forms of wording or arrangements get in the way of the rational application of the funds for the broad public objectives identified by the truster. While this point can be made as a statement of public policy, it also accords in my opinion with the view that would be taken by the majority of persons who dedicate funds to public purposes: the primary intention of such persons is to identify a particular area of need and to provide funds for satisfying that need; and if owing to social or economic changes the best means of satisfying that need should change, the trust purposes should change too, to ensure that the need that the truster has identified is properly addressed. That is, I think, precisely what Lord Westbury had in mind when in Clephane he distinguished between a charity and the means that are directed to the attainment of that charity.
[33] The respondents' position was that the cy-près jurisdiction, in cases where a public trust has taken effect, may only be exercised where the ends have largely or entirely failed or the means prescribed to achieve a particular object have become largely or entirely unworkable. Expediency of itself was not sufficient to justify variation of the objects of a trust. While those propositions are supported by certain of the opinions referred to above, they are contrary to other opinions, and in particular they are contrary to the most modern statements of the law, where strong or compelling expediency has been accepted as a sufficient basis for the exercise of the cy-près jurisdiction. In addition, I am of opinion that the respondents' position is contrary to the approach taken in Clephane. I accordingly reject that approach, and proceed on the view that strong or compelling expediency is sufficient to justify the exercise of the cy-près jurisdiction.
The present scheme
[34] As I have indicated, I
intend to consider the construction of the expressions "spastics" and "spastic
conditions" in the next part of this opinion.
That is a specific problem. At a
more general level, the petitioners have argued that they experience
difficulties in the construction and application of the present trust purposes,
and they have put forward the present Scheme, which is summarized in paragraph
[7], to deal with those difficulties.
Their difficulties are summarized at paragraph [4] above and spelled out
in more detail at paragraphs [14]-[19].
The critical question is whether those difficulties make out a
sufficiently compelling case of expediency for the variation of the trust
purposes. In considering this question I
am of opinion that the difficulties must be looked at cumulatively; a single
problem might be manageable, but a range of problems, even if none of them is
particularly serious in itself, may be enough to satisfy the test of strong or
compelling expediency. In the present
case I am of opinion that the test of strong or compelling expediency is
satisfied.
[35] It seems to me that the Trustees' problems arise from three main causes. The first, and perhaps most obvious, is the growth in the size of the funds under their control. This has led to corresponding growth in the income of the trust, and the result has been that larger and larger amounts must be distributed each year. It is accordingly essential that suitable recipients should be found for grants; it would clearly not be appropriate for the Trustees to accumulate income, and doing so would in any event merely postpone the problem of finding suitable beneficiaries. In this connection, I accept the evidence of Mr Austin (paragraph [15] above) that proper trust administration normally requires that funds should be distributed over a wide range of beneficiaries, and that individual grants should generally not exceed £40,000 in contemporary conditions. That means that an increased number of beneficiaries must be found; it is not desirable to deal with increased income merely by increasing the grants to individual beneficiaries.
[36] The second source of the Trustees' problems is that certain charities have changed their general approach to their work, in order to achieve their broad objectives more effectively. This is illustrated by several of the charities named by the Truster. Thus Capability Scotland, originally the Scottish Council for the Care of Spastics, provides assistance for the disabled generally. In particular, it provides help for those who have suffered strokes; these are not related to cerebral palsy or to "spastic conditions" in the traditional sense of the word "spastic". Nevertheless, the underlying practical problems faced by stroke victims are broadly similar to those of sufferers from cerebral palsy, and the work of the charity had been extended. The Royal Blind Asylum and School now provides care for children suffering from multiple handicaps. It is frequently found that blindness or sight impairment is one of a range of handicaps suffered by a child, and consequently the facilities provided for blind children must be capable of dealing with a number of different handicaps. The Royal Blind Asylum is also increasingly concerned with blindness and sight impairment in the elderly. Children 1st, formerly the Royal Scottish Society for Prevention of Cruelty to Children, has also changed significantly, in response to changed views about the best means of preventing children from suffering from harm and neglect. Previously its role was essentially one of policing; now, however, it attempts to create an environment where abuse is less likely to occur. It helps families under stress, tries to protect children from harm and neglect and helps children to recover from abuse. The SSPCA has changed its activities to some extent, and now devotes a greater proportion of its income to education about animals than was formerly the case. In each of these cases it can be seen that the individual charity has altered its activities to a greater or lesser extent in response to developing views as to how the fundamental objectives of the charity can best be achieved. In the Trust Deed there is no restriction to prevent the Trustees from supporting the named charities in spite of the extension of their activities. One of the important arguments made by the Trustees is that the intention of the Truster was that the Trustees should be able to benefit unnamed charities that carried out the range of charitable activities conducted by the named charities. I agree with this submission. It is a notable feature of Part I of the Schedule that the second section, dealing with unnamed beneficiaries, closely mirrors the objectives of the charities named in the first section, and I think that it must have been the intention of the Truster that the two sections should operate in parallel. I am accordingly of opinion that, if the named charities alter their activities in response to changing views as to how their broad objectives can best be realized, it is manifestly desirable that the Trustees should be able to benefit other bodies that fulfil the same broad objectives in a similar manner. Counsel for the respondents submitted that the objects of the present Trust were independent of the objects of the named beneficiaries. That is obviously correct as a matter of legal form. Nevertheless, it seems to me that the alterations in the objects of the named beneficiaries in recent years are a strong pointer to what is expedient for the second, general, section of Part I of the trust purposes. Those alterations reflect more general changes that have occurred in the medical and practical treatment of the conditions identified by the Truster and in the approach that is taken to such problems as the abuse of children and cruelty to animals. Those changes are equally pertinent to the Trust.
[37] The third area of difficulty encountered by the Trustees arises out of the way in which trusts set up to finance research are structured. These are typically development trusts set up by universities, and such trusts will normally cover a wide range of activities relating to the university, not merely research in the fields specified by the Truster. While the second section of Part I of the Schedule to the Trust Deed states that funds may be provided to a charitable body that "shall include amongst its principal objects" any of the specified activities, in the case of many university development trusts it is impossible to say that the named areas of research are "principal" objects. This is clearly a serious matter, because important research is carried out in universities and it would normally be expected that charities such as the present Trust would provide funding for such research. A similar point may apply to trusts set up to benefit hospitals. Professor Minns gave evidence as to his own practical experience of this problem. He had conducted a research project into retinal haemorrhage, and the project had received a grant from the Trust. There had been difficulties in finding a recipient for the grant; the problem was that the recipient had to be a charity that had as part of its constitution that it existed for carrying out research into, in this case, causes of blindness. Ultimately a charitable fund in the Eye Pavilion had become a conduit for the money. This example appears to me to illustrate the practical problems that are faced by the Trustees in making grants for research. It is clearly most undesirable that, whenever such a grant is made, a search should be required to discover some form of vehicle that can receive the award.
[38] I consider that the difficulties described in the three preceding paragraphs are serious. In my opinion they impede the Trustees' activities to a substantial degree, and they stand in the way of the rational distribution of the income of the Trust. In addition, I am of opinion that three other considerations identified by the Trustees are important; these are of a more specific nature. First, the expressions "spastics" and "spastic conditions" are outdated and cause serious practical difficulties, and a substitute formulation must be found; I deal with this matter below at paragraph [42] onwards. Secondly, in modern medical practice various forms of impaired sight are treated as blindness, and consequently the Trustees have equated the expression "blindness" as used in the Trust Deed with sight impairment. In my opinion they are right to do so, provided that it is the more serious forms of sight impairment that are dealt with and not, for example, ordinary short or long sight. Many such conditions cause serious handicap to the person affected; a good example of this is macular degeneration, which was specifically mentioned by Mr Austin in his affidavit. In my view it is clear that the Truster must have had such conditions in mind as well as total lack of sight; in ordinary usage such conditions would be equated with blindness. Nevertheless, it seems to me that it is desirable to make this clear in the trust purposes. Thirdly, the Trust Deed refers to "the prevention of cruelty to children" and "the prevention of cruelty to animals". In recent years, however, the approach taken to promoting the welfare of children has taken a positive form. Rather than merely preventing cruelty, charitable bodies such as Children 1st actively promote the welfare of children and provide positive assistance to children who are in danger or are suffering poor conditions or are at risk of physical, sexual or mental abuse. Similarly, the approach of bodies such as the SSPCA to the welfare of animals has taken a more positive form, with educational programmes becoming more important. In my opinion it is appropriate that these changes should be reflected in the provisions of the Trust Deed. Indeed, they provide an excellent example of the way in which charitable trusts require to keep abreast of changes in changes in the techniques used to achieve the broad objectives of a charity. In the light of all of the foregoing considerations I am of opinion that the test of strong or compelling expediency has been satisfied, and that the provisions of the Trust Deed should be modified, broadly in the manner proposed by the Trustees.
[39] This is, however, subject to one important exception. The second section of Part I of the Trust
Deed is confined to charitable bodies "operating in
[40] The respondents submitted that the objects of the trust had not failed and that means of achieving those objects had not become unworkable. For the reasons stated above, I am of opinion that this addresses the wrong test. Nevertheless, the respondents made other detailed submissions regarding the justification for altering the trust purposes. They submitted in particular that, although the income of the Trust was large, the requirements of the six named charities were also very substantial. The work of the respondents themselves was described in an affidavit given by their Chief Executive, Mr Stuart Earley, and I was informed, under reference to their accounts, that their expenditure in the year 2006 amounted to £9 million and their voluntary income to £3.4 million. The other named charities had expenditure in broadly comparable years that ranged from £7.3 million to £131 million. Their income from donations and legacies ranged from £223,000 to £37.5 million. Net income could obviously be augmented. Consequently, counsel submitted, it was difficult to see how it could be said that the Trustees had any practical difficulty in finding beneficiaries.
[41] I accept that there is some force in this argument. Nevertheless, I am of opinion that it must be rejected, for three reasons. First, the present income of the Trust, following the sale of the Glenmorangie sharers, appears substantially greater than the Truster would have contemplated when the Trust was set up. That of itself suggests that it would not be appropriate simply to divide the trust income among the named beneficiaries; they would receive more than the Truster expected. Secondly, I accept the evidence of Mr Austin (paragraph [15] above) regarding the level of grants typically made by large charitable trusts. This suggests that such trusts typically operate a policy whereby the maximum award made to any one beneficiary is limited to £40,000 per annum. That indicates a general view that very large annual payments should not be made to individual beneficiaries. Counsel for the respondents pointed out that these trusts, unlike the present trust, might lack named beneficiaries; she submitted that in a case involving named beneficiaries it might be appropriate to make larger awards. I accept that, where beneficiaries are named, it may be appropriate to make larger awards to those beneficiaries than to beneficiaries that have merely been selected by the trustees; the express choice of the truster is certainly a factor that trustees may take into account in determining the level of an award. For that reason, it might well be appropriate for the Trustees to exceed the level of award that is typically made by other trusts in relation to the named beneficiaries. Nevertheless, the third reason for rejecting the respondents' contention is still important. This is that the second section of Part I of the Schedule to the Trust Deed represents part of the Truster's overall wishes, and must be given effect. It is clear from the terms of Part I, taken as a whole, that the Truster intended not only to benefit the six named charities but also to provide funds for the general charitable objectives set out in the second section. These include research in specified areas, which is not, so far as I was informed, part of the work of the named charities. The Trustees would be failing in their duties if they did not give consideration to the application of income to achieve those objectives. Consequently it is not enough to say that the whole income of the Trust could be applied to the six named charities; the Trust has wider objectives, and the Trustees must consider these and give effect to them to the extent that they see fit.
The references to "spastics" and "spastic conditions"
[42] The parties were in agreement
that the references to "spastics" and "spastic conditions" were outdated and
should be replaced; they were in dispute, however, as to the significance of
those expressions. This in turn had a
bearing on the wording that should be used to replace those expressions. In summary, the respondents submitted that
the equivalent of spasticity was cerebral palsy, and that the new wording
should be restricted accordingly. The
petitioners, by contrast, submitted that the expressions, at least as used by
the Truster, had a wider signification, and that the new wording should refer
to the care and welfare of individuals suffering from neurodevelopmental or
neurodegenerative disorders 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 a
combination of these. Both parties
presented evidence on this matter, the petitioners from Professor Robert Anthony Minns and in the respondents from Dr
Colin Mumford.
Professor
Robert Anthony Minns
[43] Professor Minns gave
evidence through an affidavit and orally as to the meaning of the expressions
"spastics" and "spastic conditions". He
stated that spasticity may now be accurately defined as stretch-dependent
hypertonus which is abolished by posterior root section (by cutting sensory
input into the spinal cord). That
definition differentiated the condition from dystonia, or rigidity, which is not
affected by posterior root section. The
condition is reflected in an increase in muscle tone. There are two clinical types of spasticity,
phasic spasticity and tonic spasticity.
The former is often the first to appear in children with cerebral palsy;
the latter is responsible for contractions and deformity. Professor Minns further stated that
spasticity was not well understood by those without medical training. When in the 1960s and 1970s people referred
to "spastics", they were referring to cerebral palsy generally, not merely
children with spasticity. Cerebral palsy
is defined as a motor disorder affecting posture and mobility which is a
manifestation of non-progressive brain damage sustained during the period of
brain growth, or due to a developmental defect of the brain. The expression accordingly refers to children
with a range of different neurological abnormalities, not all of which are
spastic. In cerebral palsy clinics in
the 1960s and 1970s children were seen with cerebral palsy of any type, and
with neuromotor delay. Cerebral palsy is
restricted to the acquisition of brain injury or development brain disorder
during the first four to five years of life.
If similar injuries are acquired later; they are not considered to be
cerebral palsy. Nevertheless, such
conditions are treated in a similar way, and consequently today spasticity and
other problems with motor development are now thought of as motor
disorders. Many cerebral palsy clinics
are described as motor disorder clinics.
[44] Cerebral palsy is frequently associated with co-morbidities. These include visual perceptual abnormalities (12-20% of cases), epileptic fits, learning difficulties (33% of cases) and mental retardation (19-50% of cases). Behavioural and emotional abnormalities also commonly occur (34-58% of cases), as do speech disorders (25-80% of cases), and hydrocephalus also occurs (10% of cases). Children with global learning difficulties frequently have motor delay, and children who have regressive or degenerative neurological problems are likely to have spasticity and a degree of motor impairment. Thus such conditions produce problems similar to cerebral palsy. Although by definition cerebral palsy is a static pathology it has a dynamic clinical picture, in that there is increasing and changing disability, and the disabilities may become very much worse at puberty and adolescence.
[45] Understanding of spasticity and cerebral palsy has evolved over the years. In Professor Minns' opinion what was formerly referred to in the expressions "spastics" and "spastic conditions" has extended to include motor disorders, and refers to congenital and acquired neurological conditions in which a motor disorder, in the sense of abnormalities of posture and movement, or motor delay is the predominant feature, or is an accompanying feature of other co-morbidities; the latter include blindness, learning disorders and behavioural and speech disorders. Professor Minns produced a list of disorders which he described as "Possible (updated) guidelines" for the Trustees in relation to the current interpretation of the expressions "spastics" and "spastic related conditions". These included a range of different disorders, grouped into three categories: neuromotor disorders of childhood (which included cerebral palsy, but also disorders resulting from head injuries, strokes, spina bifida and other conditions), developmental disorders and degenerative or regressive neuromotor disorders (which differ from cerebral palsy in that the latter is static). In cross-examination Professor Minns accepted that his list was wide ranging, but he thought that at the present day it represented the range of disorders that might have been contemplated by the Truster's wording.
[46] At present, Professor Minns stated, a considerable amount of research was conducted on cerebral palsy, which resulted in a substantial number of articles in medical journals. So far as the care and welfare of those suffering from "spasticity" is concerned, all motor disorders now tend to be grouped together, because all children suffering from such disorders require similar help, in the form of physiotherapy, orthotics (the provision of splints), orthopaedic surgery, wheelchairs, bioengineering and remedial teaching. Finally, I should note that Professor Minns generally accepted the terms of Dr Mumford's affidavit, subject to one important exception: this was that he would not necessarily accept that the expression "spastic condition" referred to cerebral palsy; it would rather refer to "conditions with spasticity", which is not the same thing. He also did not accept that the Trustees' proposed replacement for the references to "spastics" and "spastic conditions" (found at paragraph (a) of the Schedule to the Scheme) covered the whole of his practice as a neurologist, or that it would include the effects of alcohol on the nervous system, unless that was a chronic problem; even then, it was not necessarily neurodegenerative.
Dr
Colin Mumford
[47] Dr Mumford gave evidence through an affidavit and orally as to the meaning of the expressions "spastics" and "spastic conditions". He stated that doctors use the word "spasticity" to describe an increase in muscle tone that affects different muscle groups to different extents and which is observed in patients suffering from a wide range of neurological diseases. That usage had not altered since 1978. Such a condition could result from a wide range of causes, but in every case the problem is with the upper motor neurones within the nervous system; there is disease in the brain or spinal cord as against the peripheral nerves, the nerve and muscle junction or the muscle itself. Spasticity is frequently observed in neurological conditions. It can occur as a legacy of a stroke, as part of multiple sclerosis, as part of motor neurone disease, in a range of other degenerative conditions that affect the central nervous system, and as a result of traumatic damage to the brain or spinal cord. The word "spasticity" used in this way is a medical term familiar to doctors, and describes the effects of a pathological process in the central nervous system. This characteristically results in a predilection for the involvement of certain muscle groups, a specific pattern of response to stretch with a resistance increasing in relation to the velocity of stretch, and manifestly exaggerated tendon reflexes.
[48] Earlier, however, the word "spastic" had been used specifically to mean an individual suffering from cerebral palsy. That usage had come to have a pejorative connotation in the latter part of the 20th century. It was that reason that a number of organisations, including the Scottish Council for the Care of Spastics, had changed their names; that body had become Capability Scotland. Dr Mumford further referred to a textbook, "Practical Neurology", by Professor W.B. Matthews (second edition, 1970). In this work the author wrote that the word "spastic" was then used almost universally, even in medical circles, to describe children with cerebral palsy. The indication was that the child had a neurological disability other than mental defect alone, that disability being non-progressive and due to malformation of the brain or injury sustained in early life. Dr Mumford thought that most medical practitioners would still tend to the view that a "spastic condition" was the condition of an individual who had been born with cerebral palsy, although he accepted that some doctors might take a different view. The uncertainty arose from the fact that the expression "spastic conditions" is not a term used in day-to-day parlance by medical practitioners. He thought that through to the early 1980s the term "spastic" was used to mean an individual suffering from cerebral palsy. At the time he began his medical training, in 1978, he had never heard the term applied to individuals suffering from the after-effects of a stroke, multiple sclerosis or motor neurone disease. Both in 1978 and today all of those conditions were recognised as discrete entities, and were relatively well understood, at least in terms of the clinical signs that would result from these conditions. They were recognised as being conditions which cause patients to exhibit "spasticity", but they were not referred to as "spastic conditions".
[49] Professor Minns was referred to Prof Mathews' textbook. He stated that the discussion there was very brief and reasonably superficial. That seems to me to be correct. Dr Mumford also indicated that Professor Matthews was dissatisfied with the concept of cerebral palsy, in that it did not indicate the cause of the condition and was used as a catch-all for a wide range of disease processes. In all the circumstances I do not think that the textbook greatly aids the construction of the Truster's wording.
[50] Dr Mumford further expressed the opinion that the scheme proposed by the Trustees involved a very broad widening of the scope of the original Trust Deed so far as it related to "spastics" and "spastic conditions". The scheme would effectively cover the entire range of day-to-day work of a clinical neurologist; it would include conditions such as multiple sclerosis, motor neurone disease, the inherited ataxias, dementias, meningitis, encephalitis, the legacy of head and spinal cord injuries and the effects of alcohol on the nervous system. In cross-examination he accepted that opinions could differ regarding the meaning of the expression "spastic conditions". That expression would not be used by a doctor, and it was impossible to be precise about its meaning. Dr Mumford further accepted that the expression "cerebral palsy" was not wholly precise in meaning; it covered a range of conditions with a variety of causes.
[51] Dr Mumford accepted that cerebral palsy might be treated in association with other disorders, and he was not aware of any clinics that dealt only with cerebral palsy. He accepted that the treatment of cerebral palsy and, for example, the consequences of traffic accidents that cause neurodegenerative changes was similar, despite the fact that the causes were wholly different.
Construction
of the Trust Deed
[52] I do not think that there
was any serious disagreement between Professor Minns and Dr Mumford as to
the medical aspects of the evidence.
Both agreed that the word "spasticity" has a specific meaning as a
medical term. Professor Minns
defined it as stretch-dependent hypertonus (increase in muscle tone) which is
abolished by posterior root section (by cutting sensory input into the spinal
cord). I did not understand Dr Mumford
to disagree with that definition. He
stated that spasticity denoted an increase in muscle tone that affects
different muscle groups to different extents, and that it is a feature that is
observed in patients suffering from a wide range of neurological
disorders. Professor Minns did not
disagree with that approach. It is accordingly
possible to hold that "spasticity" is a particular form of increase in muscle
tone, originating in the higher parts of the nervous system, which affects
different muscle groups to different extents.
It is not confined to any one neurological disorder, but is rather a
sign of a substantial range of such disorders.
[53] Nevertheless, the Truster does not use the expression "spasticity" but rather refers to "spastics" and "spastic conditions"; more precisely, the critical expressions are "the care and welfare of spastics" and "research into the causes or prevention or treatment of... spastic conditions". Those are expressions used by a layman; Professor Minns and Dr Mumford both agreed that they were not expressions that would be used in medical practice. In the 1970s the word "spastic" was in common usage, without any derogatory connotations. Dr Mumford thought that the word was used as a synonym for cerebral palsy, although he accepted that the expression "spastic conditions", at least, was one on which opinion could differ, and that the meaning of that expression, as used by a layman, was essentially a matter of speculation. Professor Minns thought that when in the 1960s and 1970s people referred to "spastics" they were referring to cerebral palsy generally, and not merely children with the spasticity; nevertheless, cerebral palsy could take a number of forms. He pointed out that in cerebral palsy clinics the children who were seen might have cerebral palsy or neuromotor delay arising out of brain injury. In addition, cerebral palsy was frequently associated with co-morbidities, which also required treatment.
[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.
[55] On that approach, I am of opinion that the resolution of the present case becomes much easier. The broad objectives that the Truster had in mind were the care and welfare of persons who suffered from cerebral palsy and perhaps a range of other closely related neurological conditions, and the promotion of research into such disorders. The clinics and other facilities that exist for the treatment of such disorders do not deal only with cerebral palsy, but rather with a range of motor disorders and other problems, including blindness and learning, behavioural and speech disorders, that typically occur with motor disorders. That was equally true in the 1970s. The reason for this is that all motor disorders are treated in the same way, even though their causes may differ; thus an individual who suffers from cerebral palsy and an individual who has suffered a neurological disorder as a result of a road accident will require similar treatment and facilities. In addition, to the extent that co-morbidities occur, it is clearly essential to treat them as well as the motor disorder. Consequently, when a charitable body that treats motor disorders acquires premises and equipment and takes on staff, it does so with a view to treating all types of motor disorders and the other complaints that typically occur with such disorders rather than confining its activities to cerebral palsy in the narrow sense.
[56] This is clearly illustrated by Capability Scotland, which was
agreed to be the principal charity operating in
[57] In my opinion it is clearly desirable that the Trust should be capable of benefiting such a charity; that is plainly at the heart of the broad objectives that the Truster had in mind. In addition, I am of opinion that it is clearly desirable that the Trust should be capable of funding research into exactly the same issues; once again it seems to me that in contemporary conditions that is the appropriate means of achieving the Truster's broad objectives. In these circumstances I am of opinion that the Trustees have demonstrated a case of strong or compelling expediency such as to justify the variation of the trust purposes in a manner that they propose. The precise wording put forward by the Trustees in the Schedule to the Scheme is as follows:
"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.
[58] The respondents' alternative position was that the references to "spastics" and research into "spastic conditions" should be construed as references to cerebral palsy, and any amendment of the trust purposes should be restricted accordingly. As I have indicated, I do not think that it is possible to be entirely certain that the Truster intended that his references to "spastics" and "spastic conditions" should be references to cerebral palsy; indeed, if that was his intention it is difficult to understand why he did not use the wording "cerebral palsy". More importantly, however, the institutions that dealt with cerebral palsy also dealt with a range of other conditions, and I think that the Truster's intention must have been to benefit such institutions across the whole range of their work, not merely activities that were restricted to cerebral palsy. That indicates that even when the Trust was set up the intention must have been to deal with a wider range of conditions. I accordingly reject the respondents' alternative argument.
Conclusion
[59] The Scheme prepared by the
Trustees also includes two further provisions: a power to pay or distribute
capital for the benefit of any one or more of the charitable beneficiaries; and
a restatement of the Trustees' powers, including their powers of
investment. Neither of these was opposed
by the respondents. Both are in standard
form; the powers, especially the powers of investment, can be regarded as
bringing the Trust into line with contemporary practice. In my opinion both of these aspects of the
Scheme satisfy the test of strong or compelling expediency.
[60] I therefore conclude that the prayer of the petition should be granted and that I should approve of the Scheme put forward by the Trustees for the variation of the trust purposes, subject only to the deletion of the wording that permits grants to be made to bodies that are not resident or operating in Scotland; that amendment is made for the reasons discussed at paragraph [39] above. I accordingly approve of the Scheme as set forth at paragraph [7] above, subject to the amendment of the opening wording of the second, general, section of the trust purposes to read 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:".
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.