Cayman Islands: Charity Law

Last Updated: 6 May 2008
Most Read Contributor in Cayman Islands, September 2018

INTRODUCTION

This is intended to be a brief summary of the basic principles of Cayman Islands' charity law. In the absence of any authority to the contrary, principles of Cayman Islands Charity Law are likely to follow English law principles.

DEFINITION OF CHARITY

English Charitable Uses Act 1601

There is no statutory definition of "charity". English case law has established four "heads" of charity. The purposes will be treated as charitable in that if they fall within one or other of those heads and are within the "spirit and intendment" of the preamble to the English Charitable Uses Act 1601. The purposes set out in that preamble (being examples but not the only objects of charity) are:

"The relief of aided, impotent and poor people, the maintenance of sick and maimed soldiers and mariners, schools of learning, free schools and scholars in universities, the repair of bridges, ports, havens, causeways, churches, sea-banks and highways, the education and preferment of orphans, the relief, stock or maintenance for houses of correction, the marriage of poor maids, the supportation, aid and help of young tradesmen, handicraftsmen and persons decayed, the relief or redemption of prisoners or captives, the aid or ease of any poor inhabitants concerning payment of fifteens, setting out of soldiers and other taxes".

The four "heads" of charity

It is generally accepted that the current statement of English law is set out by Lord MacNaghten in the 1891 case of Commissioners for Special Purposes of Income Tax v Pemsel, namely:

"Charity in its legal sense comprises four principle divisions; trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the proceeding heads".

A Cayman Islands' Grand Court decision (subsequently upheld by the Privy Council on appeal in Attorney General v Wahr-Hansen [2000] CILR 391) has held that this 1891 classification will apply in the Cayman Islands.

CHARITABLE ACTIVITIES

The law on what is charitable, within the four heads of charity is continually evolving to meet the changing needs of society. In the UK, the Charity Commission which is responsible for the registration and regulation of charities in England and Wales has a key role in defining what activities are to be considered charitable in the twenty-first century within the legal principles laid down by the Courts. To this end they are carrying out a review of the register of charities to consider, within the law, whether those organisations which currently benefit from charitable status should continue to do so and whether there is scope to develop further the boundaries of charitable status.

Further principles which can be extracted from English case law as applied by the Charity Commission are set out below.

Benefit to public

The four heads of charity each require that there should be a benefit to the public from the activities of the charitable body. In the case of the relief of poverty, there does not have to be a general public benefit: it can be limited to a very narrow section of the community. Public benefit will be presumed for the first three heads of charity but will have to be proved for the fourth.

Political purposes

Trusts for political purposes are non charitable, since the courts have no means of judging whether a proposed change in the law is for the public benefit or not. Political purposes include attempts to change the law by legislation and attempts to influence government policy. For example, in England the National Council for Civil Liberties and Amnesty International are not considered to be charitable. However, a body which exists for wider charitable purposes but incidentally puts pressure on the public and politicians may well be considered to be charitable. The Charity Commission have also recently indicated a willingness to register organisations which promote human rights either in England or abroad.

Religion

The head of religion now extends to any religious body so long as it is not morally subversive and its purposes are directed to the benefit of the public. Notably, the House of Lords in England has held that a trust for the contemplative order of nuns who did not leave their cloisters was not charitable, since there was no tangible benefit to the public involved.

Other purposes beneficial to the community

The fourth head of charity covers purposes not falling within the previous three categories but which are beneficial to the community in a way recognised by the law to be charitable.

Charity operating overseas

The English Charity Commissioners' previous view was that a gift under the first three heads of charity (namely, trusts for the relief of poverty; trusts for the advancement of education and trusts for the advancement of religion) may be charitable even though it may benefit foreign persons, institutions, cities or countries but a gift within the fourth (and more general) category (namely, trusts for other purposes beneficial to the community, not falling under any of the preceding heads) was not charitable if carried out overseas unless there is some benefit, albeit indirectly, to the local community. The Charity Commissioners now take the view that, in the case of an institution falling under the fourth head which operates abroad, one should first consider whether it would be regarded as a charity if its operations were confined to the UK. If it would, the Charity Commissioners consider that such an institution should be presumed to be charitable, even though operating abroad, unless it would be contrary to public policy to recognise it. The institution will not, however, be considered charitable if its objects are contrary to the laws of the foreign state in which it would operate. English law and practice as interpreted by The Charity Commission would be persuasive authority in the Cayman Islands.

CHARITY OUTSIDE THE CAYMAN ISLANDS

Section 71 of the Trusts Law (2001 Revision) states as follows: "A Trust shall not fail to qualify as a trust for charitable purposes only because those purposes may in part benefit the public or a section of the public outside of the Islands". To date, there has not been any Cayman Islands judicial interpretation of section 71 so it is not known whether or not the Cayman Islands courts could render void a trust for charitable purposes for the benefit in whole of the public or a section of the public outside of the Cayman Islands. Until such time as there is Cayman Islands judicial interpretation of section 71, it is recommended that a trust for charitable purposes benefits at least in part (albeit that such part may be nominal in nature) the public or a section of the public in the Cayman Islands.

 

Cayman Islands

Grant Stein, Partner
grant.stein@walkersglobal.com

Andrew Miller, Partner
andrew.miller@walkersglobal.com

Anthony Partridge, Associate
anthony.partidge@walkersglobal.com

Garry Mason, Associate
garry.mason@walkersglobal.com

London

David Whittome, Partner
david.whittome@walkersglobal.com

British Virgin Islands

Christopher McKenzie, Partner
christopher.mckenzie@walkersglobal.com

Hong Kong

Hugh O'Loughlin, Partner
hugh.oloughlin@walkersglobal.com

Dubai

Rod Palmer, Partner
rod.palmer@walkersglobal.com

Jersey

Peter Harris, Partner
peter.harris@walkersglobal.com

David Pytches, Associate
david.pytches@walkersglobal.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions