Special Report
Privy Council Rules AgainstAttorney General Purported trusts not charitable and void forperpetuity
The Times of London
Attorney-Generalof the Cayman Islands v Wahr-Hansen
Where a memorandum of agreement providedthat income derived from a trust fund could be paid to "anyone or more religious, charitable or educational institution orinstitutions or any organizations or institutions operating forthe public good" the purposes were not exclusively charitable,and so the trusts declared there were not charitable and werevoid for perpetuity since there were no time limits for vestinginterests or the exercise of powers.
The Judicial Committee of the Privy Council (Lord Browne-Wilkinson,Lord Steyn, Lord Clyde, Lord Hobhouse of Woodborough and LordMillett) so held on June 26, 2000 in dismissing an appeal by theAttorney-General of the Cayman Islands from the judgment of theCourt of Appeal of the Cayman Islands allowing an appeal by therespondent, Even Wahr-Hansen, from Chief Justice Harre in theGrand Court of the Cayman Islands, who had decided that the trustsdeclared in the memorandum of agreement dated July 20, 1976, knownas the Continental Foundation, were valid.
Lord Browne-Wilkinson said that although there was a limited classof cases where gifts in general terms made for the benefit ofa named locality or its inhabitants were held to be valid charitabletrusts because the purposes were impliedly limited to charitablepurposes in the specified community, to apply the same principleto all cases where there were general statements of benevolentor philanthropic objects so as to restrict the meaning of thegeneral words to such objects as were in law charitable wouldbe inconsistent with the overwhelming body of authority whichdecided that general words were not to be artificially construedso as to be impliedly limited to charitable purposes only.
In the memorandum of agreement, organisations operating for thepublic good were not limited to organisations operated for thepublic good by charitable means. The memorandum of agreement manifestedan intention to establish general welfare trusts without confiningthose trusts to purposes which were in law charitable, and sothe memorandum was void.