When a will appears ambiguous, or has the potential to be interpreted in more than one way, it can often lead to a dispute between the competing parties.
The recent case of British Camelids Limited v Brooke Hospital for Animals & Others is an example of how courts will decide disagreements over competing interpretations, particularly in the context of gifts to charities.
In this article, we explore how the courts approach resolving disputes over charitable legacies when the named beneficiaries have evolved, merged, or ceased to exist during the period between the will's creation and the testator's death.
What were the facts in British Camelids Limited v Brooke Hospital for Animals & Others?
Mrs Candia Midworth died in April 2022, leaving a will from September 1994. That will had been professionally prepared by a firm of solicitors.
Her will left various specific gifts to different friends. It was however the residuary legacy that was the subject matter of the dispute.
By Clause 6 of her will, and in the circumstances where one of the residuary beneficiaries had died, the residue was to be divided equally "for such of the following that exist at the date of my death and if more than one in equal shares absolutely".
Those that followed were five charities and one limited company: British Camelids, Brooke Hospital for Animals, Zoo Check Project, Liberty Campaign, Burstow Wildlife Sanctuary, and the limited company British Union for the Abolition of Vivisection.
By the time of her death, Mrs Midworth's Estate was worth just shy of £2m.
At the time the will was made, British Camelids Limited was a registered charity. Two of the remaining charity defendants had, since the time the will was made, altered their corporate structures to varying degrees.
Brooke Hospital, for example, was, at the time of the will, an unincorporated entity registered as a charity. However, in December 2000, a new limited company was registered, and incorporated as a charity. The previous unincorporated entity transferred all its assets and activities to the new charity and was itself removed from the register of charities in 2002.
The Zoo Check Project on the other hand was a limb of the Born Free Trust, not a standalone entity, and a similar situation arose with the Liberty Campaign and its relationship with the World Society for the Protection of Animals.
The final charity, the Burstow Wildlife Sanctuary had ceased to exist all together.
What were the issues for the court to decide?
In those circumstances, the court had to decide whether the gifts could pass to the "new" charities, or whether the gifts were only intended to take effect if those beneficiaries continued "in the same legal form".
The court also had to consider whether the gift to Burstow Wildlife Sanctuary failed, or whether it passed to some other charity that continued the same charitable purposes.
How did the court decide these issues?
As with any claim involving the interpretation of a will, the task for the court was, in essence, to:
"ascertain the intention of the testator as expressed in their will, when it is read as a whole, in the light of any extrinsic and admissible evidence."
There is a distinct thread of caselaw concerning disputes over legacies for charities. The law from those cases was neatly summarised in Dryden v Young.
Summaries from Dryden v Young
- To begin with, the court must establish whether the gift is to an entity in existence at the date of the will, and what that entity is.
- Where a specific entity can be identified in the case of a gift to an unincorporated charity, the starting point is the gift will be construed as a gift for the charitable purpose for which the charity holds its property. This is subject to any contrary intention indicated.
- Where such circumstances exist, but the charity in question has ceased to exist and there is no other entity carrying on its purposes, or has changed its purposes or has ceased to exist in its previous form but the purposes are carried on by a "continuation" entity, the gift will remain valid.
- Where a specific entity can be identified in the case of a corporate charity, the gift will be treated as a gift to the specific corporate entity and not a gift on trust for charitable purposes, again, subject to any contrary intention.
In the circumstances of the British Camelids Limited case, counsel for that charity argued the wording of the clause in question in the will was quite plain and that the claimant and fourth defendant (the limited company) should be the only ones to inherit. It was added that the gifts to charity were expressly subject to the condition that those charities continue in existence at the date of Mrs Midworth's death in order for those gifts to take effect.
Counsel for the other parties however took a different view. They argued that the will identifies the various defendants as beneficiaries, that they were named (save for changed charity numbers) and there was no doubt about the charities that Mrs Midworth intended to benefit.
This was not a case, it was argued, where the words in the will might have referred to a number of similar charities; the references to charity numbers and addresses should simply be construed as "aids to identification" rather than being part of the essence of the gifts themselves.
What did the court decide?
As can be seen from the facts and law outlined above, the court had to make specific decisions for each of the charities and legatees:
Brooke Hospital for Animals
At the time of the will, it was an unincorporated entity registered as a charity. As there was no question it was identified correctly, the gift was to be construed as being for its "charitable purposes" with the court finding that the words "that exist at the date of my death" could only be taken to refer to the charitable purposes, not the entity itself.
Because the hospital continued its charitable purposes, but via a different legal entity, the court ordered that the will should be read so as to make a gift of the share of residue to the new limited company (registered as a charity).
Born Free Foundation and the World Society for the Protection of Animals
For these charities, the position was slightly different. Both defendants had been charitable trusts or unincorporated associations at the date of the will, but by the time of Mrs Midworth's death, both were limited companies (registered as charities).
The difficulty was the names used in the will did not correspond with the unincorporated associations at the time of the will. As a result, the court found that Mrs Midworth clearly intended to benefit the particular charitable purposes of those two defendants, and accordingly concluded that the gifts should be construed as for the charitable purposes of those projects (but did not award the legacies to those entities directly).
Burstow Wildlife Sanctuary
Finally, the legacy to the Burstow Wildlife Sanctuary (which no longer existed in any form) was to be paid for the charitable purposes of that former charity, which could include the three other charities discussed above.
Our key takeaways from the case
This was a very unfortunate situation for all concerned, with no doubt a good portion of Mrs Midworth's Estate being used to pay multiple sets of legal costs in resolving the situation.
On a lot of occasions it might be said "litigation could easily have been avoided". But with the particular facts of this case it is easy to see how finding a resolution would have been difficult for the parties involved, particularly given various of the parties' status as charities.
It is difficult also to be overly critical of the drafting of the will. Care was taken to, correctly, identify legatees with reference to addresses and charity numbers. Unfortunately there was a slight lack of precision in a couple of examples, with particular projects being identified rather than a charity itself.
What really proved to be problematic however was that such a significant period of time passed between the will being made and Mrs Midworth's passing. Over nearly three decades it is not unusual at all for charities to change their structure, alter their purposes, merge, or cease to exist all together.
So more than anything else, perhaps this case serves as a reminder of reviewing one's affairs on a semi-regular basis, so as to make sure, amongst other things, any charitable giving can take effect as you intended. Fail to do that, and you could find your money being used to fund expensive litigation through the courts.
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.
