Part 3 Charitable Trusts Act 1957
Part 3 of the Act allows charitable trustees to seek approval to amend a charitable trust by proposing a “scheme” for the High Court’s approval. Section 56 of the Act provides that, for Part 3 Applications, the Court must be satisfied that “… the scheme is a proper one, and should carry out the desired purpose or proposal, and is not contrary to law or public policy or good morals; that the scheme can be approved under the Part of this Act under which the approval is sought; that every proposed purpose is charitable within the meaning of that Part of this Act and can be carried out; and that the requirements of that Part of this Act have been complied with in respect of the scheme …” The section is also relevant to the Attorney-General’s approval of Part 4 Applications.
The Re Radich decision in conveniently and succinctly summarises the statutory tests in section 56 for approval (all being satisfied in that case):
- Is it impossible, impracticable or inexpedient to carry out a trust’s original purpose?
- Is the proposed new trust (in the Re Radich case, or lesser amendments in other case) a charitable purpose?
- Will the new trust adhere as closely as reasonably possible to the intentions of whoever created the trust?
- Does the Attorney-General support the application or what is his view?
The Re Radich decision illustrates how charities whose purposes have passed their “use-by” date can be varied, but the costs of doing so may prove a hurdle for charities that are not financially well-endowed.
This is one of a series of notes on societies and charitable trusts by Mark von Dadelszen, a Hastings lawyer and author of Law of Societies, 3rd Edition, 2013. Mark’s email address is [email protected].