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Analyze the validity of the

following charitable trust which


has been created by Mariana:
i. RM10, 000.00 for the needs
of orphans of the deceased
Malaysian Royal Airforce officers.
(5 marks)
ISSUE:

• Whether the trust created on money amounting to RM10,000 for the


needs of orphans of the deceased Malaysian Royal Airforce officers
can be considered as charitable trust?
PRINCIPLE:
• The first element - charitable in nature (Lord Macnaghten’s classification)

• RELIEF OF POVERTY.

• not clearly defined in any provisions on the definition of ‘poverty’.

• It is not limited to destitution. It has a large meaning and it’s for the people to define it
according to the ordinary acceptance based on their status and so on. For example, the
term ‘poor’ can be confined to a group which is assumed to be in need of help.
• Commissioners for Special Purposes Income Tax v Pemsel [1891] AC 531
• Re Coulthurst [1951] Ch 661
CASE: Re Coulthurst [1951] Ch 661
• A trust fund was set up for a newly widowed women and the orphans of deceased bank officers. The
testator died after few years later and the bank applied to the Chief Inspector of Taxes to obtain his
recognition of the right of the Coulthurst Fund to exemption of its income from income tax on the ground
that it was applicable for charitable purposes only. However, the Chief Inspector replied that the trust was
not legally charitable. It was submitted by the testator’s widow, the plaintiff that this gift on its true
construction is not a valid charitable gift because it is not a gift for the relief of poverty. The defendant then
submitted that the trust fund constitutes a valid charitable gift where it is a gift for widows and orphans
prima facie objects of charity, who in his opinion that based on their financial circumstances, they deserved
to receive the gift and it can be constituted as charitable trust.

• The Court in this case held that this this purpose was charitable because the purpose relieved poverty under
s3(1)(a) Charities Act. The Court further stated that even today the status of 'widows and orphaned
children' suggests the possibility, or, perhaps, even the probability, of impecuniosity where in other words,
the class of widows and orphaned children directs one's mind to the idea of the relief of want or poverty.
• The second element - trust must be for public benefit.

• To establish a trust as charitable within this category, the purpose must be beneficial in which the law
regards it as charitable.

• In terms of trust for relief of poverty, the requirement of ‘public benefit’ does not apply in practical sense.

• However, a distinction must be drawn between a gift to a limited class and a gift to particular individual.

• CASE: Joseph Rowntree Memorial Trusts Housing Association v Attorney-General [1983] Ch 159

• The word ‘relief’ implies to the related person that have conditions as being aged, impotent or poor
person which really require alleviating or those person who could not alleviate or having difficulty in
alleviating the themselves in from their own resources.

• The third element - the trust must be wholly and exclusively charitable.
• The trust must not be divided or apply to a non-charitable purposes.
APPLICATION:

• Applying to the issue, the trust fund created by Mariana for the needs
of orphans of the deceased Malaysian Royal Airforce officers is
amounted to charitable trust because according to the case Re
Coulthrust, there are probability that the class of ‘orphans’ are in real
need of assistance in terms of financial situation.
• Thus the trust fund created for the needs of orphans can be considered
as charitable trust since it is within the definition of ‘poverty’.
CONCLUSION:

• The trust created by Mariana on money amounting to RM10,000 for


the needs of orphans of the deceased Malaysian Royal Airforce
officers can be considered as charitable trust.
ii. RM50,000.00 to M. Ramlee
Foundation for the purpose of
advancing the education of
classical and traditional
Malaysian music to international
level. (5 marks)
ISSUE:

• The issue is whether the trust created on RM50, 000 for the
purpose of advancing the education of classical and traditional
Malaysian music to international level can be considered as charitable
trust?
PRINCIPLES:
• The first element - charitable in nature (Lord Macnaghten’s classification)

• Advancement of education.

• The preamble to the English Statute of Charitable Uses 1601 has made specific reference to the
‘maintenance of the school of learning, free schools and scholar in universities’ and the education and
the preferment of orphans’.

• However, the concept of education for the purpose of charitable trust is not limited to classroom
teaching or pure academic teaching, but it extend beyond the advancement of education in general
where it includes the advancement of education in particular field such as artistic and aesthetic
education.

• It includes raising the artistic taste of the community.


• Commissioners for Special Purposes Income Tax v Pemsel [1891] AC 531
CASE: Royal Choral Society v Commissioners of
Inland Revenue [1943] 2 All ER 101
• The Royal Choral Society, is an unincorporated body and in connection with the Royal Albert Hall for
the purpose of providing choral concerts in the hall and generally for the encouragement and advancement
of choral singing in London.

• The appellant Society claimed for exemption from Income Tax on the grounds that the Society is body
of persons established for charitable purposes. It had been declined by the Inland Revenue Commissioner on
the grounds that the Society was not a body of persons established for charitable purposes only.

• They further argued that promoting artistic pursuits is not an educational purpose even though it may
be admirable.

• HELD: The Society was established for charitable purposes only and that it was entitled to exemption
from Income Tax. The Court further held that a body of persons established for the purpose of raising the
artistic taste of the country can be established as educational purposes as the education of artistic taste is one
of the most important things in the development of a civilised human being. Thus, the income and profit
received by the Society can be considered as charitable trust.
• The second element - public benefit.

• In terms of advancement of education, as long as it is not run for private


profit, regardless whether it is a private school, educational purposes are still
regarded as charitable purposes.

• The third element - trust must be wholly and exclusively charitable.

• The trust must not be divided or apply to a non-charitable purposes such as


for political purposes.
APPLICATION:
• Classical and traditional Malaysian music is one of the most important heritage in Malaysia.

• By promoting the classical and traditional Malaysian music to an international will broaden
musical knowledge of the people as well as preserving and enhancing the Malaysian classical and
traditional music.

• Secondly, the trust made by Mariana is for the public benefit as it will give huge impact to the
public on the education of music,

• Thus, it can be said that the trust fund of RM 50000 created by Mariana can be considered as
charitable trust since the purpose of advancing the education of classical and traditional music to
international level is one of the way to promote the artistic and aesthetic value of the music as well as
promoting and enhancing the music towards the music learners and also to the public.
CONCLUSION:
• All in all, the trust created by Mariana on RM50, 000 for the purpose
of advancing the education of classical and traditional Malaysian
music to international level can be considered as charitable trust.