CHARITY LAW What is charitable?

Simrun Garcha reports on the charitable status and disposal of assets of a now defunct religious sect

he High Court’s recent (Prince), an Anglican clergyman decision in Buckley v Barlow who had become dissatisfed with T [2016] explored whether the mainstream doctrine. He was successful assets of a religious organisation that in establishing a community of had ceased to function by the middle followers in Spaxton, Somerset, who of the 20th century should be applied placed a considerable amount of faith in accordance with a cy-pres scheme in his teachings. for general charitable purposes or be While it was observed by the court treated as bona vacantia. that the description of the beliefs of The court considered an application the Agapemonite sect was a ‘litle for directions by the trustees of a trust rambling’, it is clear by references to relating to a plot of land in Stamford worshipping the Lord Jesus Christ and Simrun Garcha is a Hill upon which a church was built the Apostles Creed that their beliefs solicitor in the charities for the use of members of a religious were rooted in orthodox Christianity. and private client sect known as the Church of the Holy In assessing the sect’s religious department at Laytons Agapemony (the Agapemonites). The beliefs, the judge made reference to trust was declared by a document dated Prince’s pronouncements recorded 30 December 1892 (the trust deed). in the judgment of Notidge v Prince The Agapemonite sect ceased to exist [1860], which included Prince’s by the middle of the 20th century and declaration in 1845 that prayer was the church was leased to the Ancient unnecessary as well as a belief that Catholic Church before being sold to his spirit was extinct but his body the Georgian Orthodox Church in 2011. was inhabited by the Holy Spirit. This resulted in the trustees holding Prince claimed to be God’s witness net proceeds of £982,000 and they or instrument. sought the court’s directions as to how The sect became well known, these proceeds should be disposed of. often atracting considerable atention Interestingly, the Charity Commission for reasons other than the religious had previously decided that the beliefs of its followers. Prince arranged trust’s purposes were not exclusively for three of the men in the community charitable. to enter into what was referred to as Siting as a deputy high court ‘spiritual marriages’ with three wealthy judge in the Chancery Division sisters, enabling him to acquire control Andrew Simmons QC said that this over their assets. The Agapemonite sect case ‘raises some challenging issues was also associated with rumours of under charity law’ and it is likely to be sexual impropriety and exploitation, of interest to charity law practitioners. although the court acknowledged it ‘While this case does not The case deals with a wide range of was difcult to diferentiate the truth issues including whether the trust’s from exaggeration. decide new matters of purposes were exclusively charitable, Prince was succeeded by the principle, it is likely to be the conditions for applying the cy-pres Reverend Smyth-Pigot who was of interest to charity law doctrine and the application of the described by Andrew Simmons QC practitioners given that it Charitable Trusts (Validation) Act 1954. as ‘continuing in Prince’s fery, provides an insight into charismatic style’. He atracted a some complex issues.’ Background number of new followers to the sect, The Agapemonite sect was founded which resulted in a plot of land being in the 1840s by Henry James Prince purchased in 1892 in Stamford Hill.

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The purchase was funded by donations or were not to be treated as exclusively which held that two of the essential from the sect’s followers. charitable. atributes of religion were faith in a It appears that after Smyth-Pigot’s The following questions needed god and worship of that god. It was death in 1927, the sect in London ceased to be addressed in order to determine clear that the Agapemonite sect held to operate in the absence of another this: those beliefs. charismatic successor. The community While there was an argument in Somerset continued until the land t Were the trusts recognised by the that under Smyth-Pigot’s leadership and building were eventually sold to a law as charitable as being for the the sect crossed a line between local developer in 1962. The trustees of advancement of religion? eccentricity and blasphemy and this the 1892 trust deed leased the church should infuence the court’s decision, to the Ancient Catholic Church which t If so, were they held for exclusively it was found that the court should not continued to occupy it until 2008. charitable purposes? allow the delusions of either of the In 1965, the church was registered sect’s leaders to undermine the fact as a charity by the Commission as It is a well-established principle that the objects of the trust deed were being: that in order for the benefts ataching to promote the religious activities to charitable status to apply, the assets of a body of people who made up a … property held for the purposes held on trust must be applied for recognisable Christian sect. of the Religious Body known as objects which are charitable in law. The court noted that one of the the Church of the Son of Man, also It is not sufcient that assets are held Charity Commission’s reasons for known as Agapemonite Church primitives (the Ark of the Covenant).

In 2004, the Charity Commission It is not sufficient that assets are held on trust to be wrote to the trustees’ solicitors stating that the organisation had been wrongly applied both for objects which are charitable in law registered and its purposes had never as well as other objects which are not. been exclusively charitable. The church ceased to be a registered charity from 1 December 2004. on trust to be applied both for objects deregistering the organisation as a The issues before the court which are charitable in law as well as charity was that it appeared from p56 The court noted that the possible other objects which are not. of Picarda: The Law and Practice Relating ways of dealing with the proceeds In the event the trusts were to Charities that the Agapemonites of sale of the church had been exclusively charitable, the funds had been held in Notidge v Prince not referred to in the claimants’ Part 8 should be applied in accordance with to be a religious body. However, the claim form. As well as dealing with the doctrine of cy-pres. It was only if court concluded the statement in the the proceeds by way of a cy-pres it was found that the trusts were not frst edition of Picarda was too broadly scheme to be determined by the exclusively charitable that the other expressed. Charity Commission or by distribution possible ways of dealing with the It was found that the religious to the Crown as bona vacantia, the proceeds would need to be considered. purposes of the organisation were claimants had also included the charitable in law as the sect welcomed possibility of distribution to the Were the trusts recognised new members and was outward-looking. estates of the following groups: as charitable as being for the Accordingly, the court found that advancement of religion? there was no reason to displace the t the members of the sect in 1862; Turning to the question of whether presumption of public beneft in relation the trusts were regarded as to religious charities that existed prior to t the original trustees of the 1892 charitable, the court referred to the the Charities Act 2006. trust deed; overarching principle in charity law as demonstrated in Thornton v Howe Were the trust’s purposes t the donors of the funds used to [1862] that the courts do not pass value exclusively charitable? purchase the plot and build the judgements on diferent religions or on In determining whether the trusts church; and diferent sects within religions. were exclusively charitable, it was Drawing parallels to Thornton, it necessary to examine the terms of t the vendors of the plot in 1892. was noted that the fact that Prince’s the trust deed. There were 13 original claims were ‘foolish and delusional’ trustees of the trust deed, which Having observed that the options did not disqualify the trust from included a direction that if the number above would present considerable charitable status, provided it was of trustees fell to less than ten, new practical problems for the trustees in established with a view to extend trustees must be appointed to increase terms of tracing the correct recipients, the infuence of Christianity, which the number to thirteen. It is thought the court stated that the fundamental in the judge’s view was the case. that the focus on the number thirteen issue of importance was whether the Reference was also made to was a parallel with Christ and his trusts declared by the trust deed were Re South Place Ethical Society [1980], twelve apostles.

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The trust deed provided that the as Re Schoales [1930] and Re Barnes religious purposes of the Agapemonite plot of land was purchased by the [1930] where the gifts to the ‘Church’ sect before turning to consider if the trustees ‘for and on behalf of the body resulted in the court construing the original gift to the organisation was of people hereinafter mentioned upon permissible objects as being limited ‘perpetual’ or for a limited time only. trust’. While there was no mention of to religious objects. Having considered the authorities on the Agapemonites by name, it is clear The court then turned to consider the distinction between perpetual trusts that the ‘body of people’ referred to the efect of the Charitable Trusts and those for a limited period, the court were in fact the Agapemonites. (Validation) Act 1954, which had concluded that the test was ‘inherently The trust deed went on to state the not been taken account of by the problematic,’ before turning to focus on body of people and the trustees must Commission, and noted that the efect the trust deed. allow any church, chapel or building of ss1 and 2 of the Act is that where It concluded that the trusts were which may be erected on the land to be a disposition made in an instrument indeed perpetual, pointing to the fact used by and for all the purposes of the taking efect before 16 December 1952 that there was no express limit on the body of people who worship Christ as is not exclusively charitable, it is to be trust’s duration and the primary trusts the Son of Man: treated as exclusively charitable if it were intended to apply ‘at all times would otherwise be invalid. The Act hereafter’ with a gift over taking efect … and believe in the Holy Ghost as applies to the present circumstances, only if the primary charitable trust having fulfilled the Gospel in ‘Brother given that the trust deed was made became impossible to perform. Prince’ and as being the covenant in 1862. Accordingly, the court held that head of the Dispensation of Judgment On the basis of the question posited the net proceeds of the church should introduced by Brother Prince whose in Ulrich v Treasury Solicitor [2005] be applied cy-pres in accordance with a scheme to be determined by the Charity Commission.

In determining whether the trusts were exclusively Conclusion for practitioners charitable, it was necessary to examine the terms of While this case does not decide new maters of principle, it is likely to be the trust deed. of interest to charity law practitioners given that it provides an insight into some complex issues, including an examination of what is regarded as teaching is contained in his writings regarding whether anyone would charitable for the advancement of ‘The Man Christ Jesus’ and ‘The Counsel legitimately object to an exclusively religion, and it explores the implication of God in Judgment’. charitable application, the court found of the Charitable Trusts (Validation) that no one could properly object to the Act 1954. The deed provided for a gift church and its proceeds of sale being Interestingly, the fact that the over that the trust premises be held applied exclusively for the religious claims of the Agapemonite sect in trust for the trustees for their own purposes of the sect. were foolish and delusional did use and beneft. The judge commented Accordingly, it was found that not disqualify a trust made for that the church was not held for the while the disposition in favour of the beneft of the sect from being Agapemonites as individuals but for the sect would be void as being a charitable for the advancement of the use of the purposes or the objects non-charitable purpose trust were religion, serving to reinforce the of that body of persons. it not for the 1954 Act, under the overarching principle in charity It was noted by the court that the provisions of the Act, the trust must law that the courts do not pass value actual terms of the trust deed failed be treated as a retrospectively valid judgements on diferent religions or to answer the questions regarding charitable trust in 1892. on diferent sects within religions. ■ whether the trusts were held for exclusively charitable purposes. The application of The court agreed with the Charity the cy-pres doctrine Re Barnes [1930] 2 Ch 80 Commission’s argument that the It is a well-established principle purposes of the sect were not that in circumstances where there Buckley v Barlow [2016] EWHC 3017 (Ch) exclusively charitable, as the trust is a failure of declared charitable Notidge v Prince deed could not be construed as trusts, but a charitable intent is (1860) 2 Gif 246 limiting the trusts to those objects apparent, the doctrine of cy-pres Re Schoales of the sect that were charitable in applies with the efect that the court [1930] 2 Ch. 75 law. As the trust deed referred to will direct the application of the Re South Place Ethical Society ‘all the purposes of the sect’ and property to some charitable purpose [1980] 3 All ER 918 ‘the objects of the said body in such which falls within the general Thornton v Howe manner as the trustees for the time charitable intention of the setlor. (1862) 54 ER 1042 being or a majority in number of such The court accepted it was no longer Ulrich v Treasury Solicitor trustees shall think ft’, the facts of the possible for the proceeds from the [2005] EWHC 67 (Ch) case were not analogous to cases such sale of the church to be used for the

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