Question 3

Riana is a member of Karisma Club of IIUM, she asked her father to allocate some
fund for the club. Johan then allocated RM20,000 for the purpose of promoting the
students to be active in union involvement at university level. Whether, the trust
created by Johan is exempted from tax or not? Elaborate this concept as defined in the
Statute of Elizabeth

Under Statute of Elizabeth, it was stated the four heads of charity i.e. trust for the
relief of poverty, advancement of education, advancement of religion and other
purposes beneficial to the community. Each heads must involves element of public
benefit (except for relief of poverty), that is, it must benefit the whole community or
some section of it as opposed to a small group or private individual.

In this present case, the issue arise is whether the trust created by Johan is exempted
from tax or not. Thus, it is necessary to determine whether the trust created was
charitable or not under the Statute of Elizabeth. The preamble to the 1601 Act refers
to “the maintenance of schools of leaning, free schools and scholars in universities”
and ‘the education and preferment of orphans’. This category has grown to cover a
very wide range of educational such as cultural activities, research, fine arts etc.

Incorporated Council of Law of Reporting From England and Wales v AG,

Buckley LJ :
• ‘It now extends to improvement of useful branch of human knowledge and
public dissemination.’

Karisma club is a students’ unions which generally charitable and charitable status
derives from university/college. The trust created by Johan would fall under
advancement of education

London Hospital Medical School v Inland Revenue Commissioners

• the Inland Revenue were seeking to argue that the union was not charitable but
Mr Justice Brightman held that “A club which provides athletic and social
activities for its members is not per se charitable. Therefore the Union
standing alone is not charitable under the general law. But if the Union exists
solely to further, and does further the educational purposes of the medical
college, then, in my judgement, it is clearly charitable”

the mere fact that membership of student union may confer some benefit on the
members does not necessarily prevent the union from being a charitable body. The
test is whether the main object of the student union is the promotion and advancement
of education. In this present case, the purpose of the Karisma Club is to promote the
students to be active in union involvement at university level and it is for physical
education and development of student in the universities.
Question 4 : Trust for political purposes is not charitable. Explain.

A trust for political purposes can never be a charitable trust. The basis of the court’s
objection was explained by Lord Parker in Bowman v. Secular Society.

“ A trust for the attainment of political objects has always be invalid, not become it is
illegal, for everyone is at liberty to advocate or promote by any lawful means a
change in the law, but because the court has no means of judging whether a proposed
change in the law will or will not be for the public benefit”

The reason why no political purpose can be charitable were also put by Slade J. in
McGovern v. Att.- Gen :

The court will not regard as charitable trust of which a main object is to procure an
alteration of the law of the UK for one or both of two reasons : first , the court will
ordinarily have no sufficient means of judging as a matter of evidence whether the
proposed change will or will not be for the public benefit.
Secondly, even if the evidence suffice to enable it to form a prima facie opinion that a
chance in the law is desirable, it must still decide the case on the principle that the law
is right as it stands, since to do otherwise would usurp the functions of legislation”

For similar reasons the following purposes are to be regarded as political and
therefore not charitable; the furtherance of the interests of a particular political party;
the procurement of the change of law of foreign country; and the procurement of the
reversal of government policy or of particular decisions of government or other
authorities in this country or in foreign country.

(1) Express object to change the law :

• A trust which has one of its main objects a change in the law cannot be
charitable.
• Case : National Anti-Vivisection Society v IRC, a trust to abolish vivisection
was not charitable, as it required the repeal of the Cruelty to Animals Act 1876
in order to achieve its purpose.
• Case : McGovern v A-G, the trust was deemed to be non-charitable on the
ground that it required pressure on foreign governments to change their
policies.

(2) Political propaganda masquerading as education:

• If the objects of the body are directed to seeking to influence the attitude of
public by promoting a particular point of view, the purpose is one of
propaganda not education.
• Case: Re Hopkinson : Vaisey J, made clear that political propaganda
masquerading as education is not for public benefit. Additionally, the
testator’s object was not education in the proper sense of that word but
furtherance of his political views.
• Case : Re Koeppler’s Will Trust, a gift to “Wilton Park” which was a centre
for discussing matters od international relations with political themes but
 without getting involved in the political inclination of any party was upheld as
charitable.

• Therefore, a trust or body to educate the public in the aims of a particular

political party or in a particular ideology, is denied charitable status.

(3) Political purpose merely ancillary

• If several purposes are set out in the governing instrument, all of them must be
charitable if the body is to attain charitable status; the presence of even a
single political purpose will prevent the body’s objects ebing wholly and
exclusively charitable.
• If the court is able to treat the apparent political purpose not a purpsose at all,
but merely as a means of achieving the other charitable purposes, the trust or
other body will be charitable.
• Case : Re Scrowcroft : gift for maintaining a reading romm in Conservative
Club was charitable for the furtherance of Conservative principles and
religious improvement.
• Case : National Anti-Vivisection, the protection of animals form cruelty is a
charitable purpose but the court found that the main object of the society was
to abolish vivisection i.e to repeal the law. Therefore, the court held that the
society was not established for charitable purposes.

Question 5 : Determine on the nature of the trust

(i) Mee Lan left RM3000 for the maintenance of aged and poor people at
Gunung Ledang

Relieve of poverty

In the current situation, it would come under charitable trust which is trusts for
the relief of poverty. There’s no definition of poverty. Its meaning can only be
understood by examining the cases on the subject .

• Re Coulthurst’s Will trust : poverty means a persons who have to “go short” in
the ordinary acceptation of that term, due regard being had to their status of
life and so forth.

• In Re Alsagoff Trust, a gift for the burial and assistance of the poor and a gift
for the maintenance and provision of oil or other means of illumination for
Rubad Sadayat Medina (an institution for the relief of poverty) were both
upheld.

• Relief means a gift must relieve a need (such as clothing, shelter, food) which
the objects have a result of their condition (poverty)
• In Joseph Rowntree Memorial Trust Housing Association Ltd. Attorney
General, the word ‘relief’ was considered in the context of the aged. The
Association planned to construct small dwellings suitable for the elderly who
would be required to pay 70% of the purchase price and the remainder was to
 be subsidized by the Association. The scheme was construed as charitable
since there was a need to be relieved in the context of the aged. In the case of
Re Robinson, a gift for old people over 65 was considered as charitable.

• Public benefit? Trust for the relief of poverty are charitable even they are not
beneficial to the public .

(ii) RM888K to be applied for the benefit of the widows and orphaned
children deceased officers and deceased ex-officers of Polis Diraja
Malaysia (PDRM)(ATM).

For a gift to be charitable, it must satisfy the element of public benefit which
must be benefit the whole community or some section of it as opposed to a
small group or private individuals.

Applying to the present case, RM888K to applied for the benefit of the
widows and orphaned children of deceased officers and deceased ex-officers
of Polis Diraja Malaysia was not charitable because primary intent is to benefit
particular of person and no primary intent to reliev poverty amongs a
particular class of person.

(iii) All my residuary to all Kelab Burung Malaysia in Puchong and to my

favourite donkey at my ex-boyfriend’s house.

Other purposes beneficial to the community : Do not come within the other
three heads.

First Issue : Trust for all Kelab Burung Malaysia in Puchong.

• Trusts for a home for lost dogs, for the welfare of cats for humane
slaughtering for protection of animals form ill-usages, cruelty and
suffering are all charitable. trusts must either relieve suffering to
animals or must not restrict access to the public to view the animals.
• Gifts in favour of animal generally could be charitable, not however
on the ground that they benefit to the animal but on the ground that
they produced a benefit to mankind.
• Case : Re Wedgwood : A trust for protection and benefit of animals
was held to be charitable on this ground;
“ they tend to promote and encourage kindness.. and.. stimulate
humane and generous sentiments in man towards the lower animals
and by this means… promote feelings of humanity and morality
generally, repress brutality and thus elevate the human race”.
• Re Grove-Grady, a gift a society to provide refuge to animals and
birds, free from human molestation failed as lacking in public benefit
and not reducing cruelty to animals
.
⇒ Applying to the present case, a gift to all Kelab Burung
Malaysia can be said to be failed because there is lack of public benefit and
not reducing cruelty to birds
 Second Issue : whether trust to specified animals can be charitable trust?

• A gift for a specified animal or animals may be upheld as a valid non-

charitable trust.
• In Petingball v Petingball, an annuity of 50 Pounds to be applied in
maintaining the testator’s favourite blackmare was held valid.
• In the Re Dean, the court upheld a gift of 750 pounds per annum for
the period of 50 Years for the maintenance of testator’s horses and
hounds if they should so long live.

⇒ Applying to the present case, the gift to favorite donkey is

considered to be a valid non-charitable trust.

(iv) RM450,000 to David Siggam Society to be used for the annual celebration
of Deepavali at Batu Caves.

Advancement of religion
• Meaning of religion : Bowman v Secular Society,
“ any form of monotheistic theism will be recognized as religion”
• What about Hinduism? : AG v Thirpoore Soonderee
“Malayan Court recognized Hinduism as a religion and a gift of land
for the benefit of a Hindu temple was upheld as charitable”
• Meaning of advancement of religion : Utd Grand Lodge of Ancient
Free and Accepted Masons of England (Freemason), Donovan J :
“ advance religion means to promote it, to spread its message ever
wider among mankind, to take sustain and increase religious faith”
• Public benefit : Re Hetherington Gibbs Mc Donnell
“ A trust for the celebration of a religious rites is charitable because it
does confer a sufficient public benefit and improves those who attend
it”
⇒ Trust which was created by David Singgam to be used for annual
celebration at Batu Caves is charitable because this celebration are
available to the public and the presence among the public at a place of
worship have been improved.