PART 6 continued
Charities BillPage 30
cy-près as if given for charitable purposes generally, unless the donor
makes a relevant declaration at the time of making the gift.
A relevant declaration is a declaration in writing by the donor to the effect that,
in the event of the specific charitable purposes failing, the donor wishes to be
given the opportunity by the trustees holding the property to request the
return of the property in question (or a sum equal to its value at the time of the
making of the gift).
(4) Subsections (5) and (6) apply if—
(a) a person has given property as mentioned in subsection (1),
(b) the specific charitable purposes fail, and
(c) the donor has made a relevant declaration.
The trustees holding the property must take the prescribed steps for the
(a) informing the donor of the failure of the purposes,
enquiring whether the donor wishes to request the return of the
property (or a sum equal to its value), and
if within the prescribed period the donor makes such a request,
returning the property (or such a sum) to the donor.
(6) If those trustees have taken all appropriate prescribed steps but—
(a) they have failed to find the donor, or
the donor does not within the prescribed period request the return of
the property (or a sum equal to its value),
section 63(1) applies to the property as if it belonged to a donor within section
63(1)(b) (application of property where donor has disclaimed right to return of
(a) a person has given property as mentioned in subsection (1),
(b) the specific charitable purposes fail, and
(c) the donor has not made a relevant declaration,
section 63(1) similarly applies to the property as if it belonged to a donor within
(8) For the purposes of this section—
“solicitation” means a solicitation made in any manner and however
communicated to the persons to whom it is addressed,
it is irrelevant whether any consideration is or is to be given in return
for the property in question, and
(c) where any appeal consists of—
solicitations that are accompanied by statements within
subsection (2)(b), and
(ii) solicitations that are not so accompanied,
a person giving property as a result of the appeal is to be presumed,
unless the contrary is proved, to have responded to the former
solicitations and not the latter.
For the purposes of sections 63 and 65, charitable purposes are to be treated as
failing if any difficulty in applying property to those purposes makes that
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property or the part not applicable cy-près available to be returned to the
(2) In sections 63 to 65 and this section—
references to a donor include persons claiming through or under the
original donor, and
references to property given include the property for the time being
representing the property originally given or property derived from it.
(3) Subsection (2) applies except in so far as the context otherwise requires.
In sections 63 and 65 “prescribed” means prescribed by regulations made by
Any such regulations are to be published by the Commission in such manner
as it thinks fit.
Any such regulations may, as respects the advertisements which are to be
published for the purposes of section 63(1)(a), make provision as to the form
and content of such advertisements as well as the manner in which they are to
The power of the court or the Commission to make schemes for the application
of property cy-près must be exercised in accordance with this section.
Where any property given for charitable purposes is applicable cy-près, the
court or the Commission may make a scheme providing for the property to be
(a) for such charitable purposes, and
(if the scheme provides for the property to be transferred to another
charity) by or on trust for such other charity,
as it considers appropriate, having regard to the matters set out in subsection
(3) The matters are—
(a) the spirit of the original gift,
the desirability of securing that the property is applied for charitable
purposes which are close to the original purposes, and
the need for the relevant charity to have purposes which are suitable
and effective in the light of current social and economic circumstances.
The “relevant charity” means the charity by or on behalf of which the property
is to be applied under the scheme.
If a scheme provides for the property to be transferred to another charity, the
scheme may impose on the charity trustees of that charity a duty to secure that
the property is applied for purposes which are, so far as is reasonably
practicable, similar in character to the original purposes.
In this section references to property given include the property for the time
being representing the property originally given or property derived from it.
In this section references to the transfer of property to a charity are references
to its transfer—
(a) to the charity,
Charities BillPage 32
(b) to the charity trustees,
(c) to any trustee for the charity, or
to a person nominated by the charity trustees to hold it in trust for the
as the scheme may provide.
In this section references to the original purposes of a gift are to be read, where
the application of the property given has been altered or regulated by a scheme
or otherwise, as referring to the purposes for which the property is for the time
Subsection (2) applies where a Royal charter establishing or regulating a body
corporate is amendable by the grant and acceptance of a further charter.
A scheme relating to the body corporate or to the administration of property
held by the body (including a scheme for the cy-près application of any such
may be made by the court under the court’s jurisdiction with respect to
charities even though the scheme cannot take effect without the
alteration of the charter, but
must be so framed that the scheme, or such part of it as cannot take
effect without the alteration of the charter, does not purport to come
into operation unless or until Her Majesty thinks fit to amend the
charter in such manner as will permit the scheme or that part of it to
(3) Subsection (4) applies where, under—
the court’s jurisdiction with respect to charities or the corresponding
jurisdiction of a court in Northern Ireland, or
powers conferred by this Act or by any Northern Ireland legislation
relating to charities,
a scheme is made with respect to a body corporate and it appears to Her
Majesty expedient, having regard to the scheme, to amend any Royal charter
relating to that body.
Her Majesty may, on the application of the body corporate, amend the charter
accordingly by Order in Council in any way in which the charter could be
amended by the grant and acceptance of a further charter; and any such Order
in Council may be revoked or varied in the same manner as the charter it
The jurisdiction of the court with respect to charities is not excluded or
restricted in the case of a charity of a description mentioned in Schedule 5 by
the operation of the enactments or instruments there mentioned in relation to
(6) A scheme established for a charity of a description mentioned in Schedule 5—
may modify or supersede in relation to it the provision made by any
such enactment or instrument as if made by a scheme of the court, and
(b) may also make any such provision as is authorised by that Schedule.
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The Commission may by order exercise the same jurisdiction and powers as
are exercisable by the High Court in charity proceedings for the following
(a) establishing a scheme for the administration of a charity;
appointing, discharging or removing a charity trustee or trustee for a
charity, or removing an officer or employee;
vesting or transferring property, or requiring or entitling any person to
call for or make any transfer of property or any payment.
(2) Subsection (1) is subject to the provisions of this Act.
If the court directs a scheme for the administration of a charity to be
the court may by order refer the matter to the Commission for it to
prepare or settle a scheme in accordance with such directions (if any) as
the court sees fit to give, and
any such order may provide for the scheme to be put into effect by
order of the Commission as if prepared under subsection (1) and
without any further order of the court.
The Commission does not have jurisdiction under section 69 to try or
(a) the title at law or in equity to any property as between—
(i) a charity or trustee for a charity, and
a person holding or claiming the property or an interest in it
adversely to the charity, or
(b) any question as to the existence or extent of any charge or trust.
Subject to the following subsections, the Commission must not exercise its
jurisdiction under section 69 as respects any charity except—
(a) on the application of the charity,
(b) on an order of the court under section 69(3), or
(c) on the application of the Attorney General.
In the case of a charity whose gross income does not exceed £500 a year, the
Commission may exercise its jurisdiction under section 69 on the application
(a) any one or more of the charity trustees,
(b) any person interested in the charity, or
any two or more inhabitants of the area of the charity if it is a local
Subsection (5) applies where in the case of a charity, other than an exempt
charity, the Commission—
(a) is satisfied that the charity trustees—
(i) ought in the interests of the charity to apply for a scheme, but
(ii) have unreasonably refused or neglected to do so, and
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has given the charity trustees an opportunity to make representations
(5) The Commission—
may proceed as if an application for a scheme had been made by the
may not, where it acts by virtue of this subsection, alter the purposes of
a charity unless 40 years have elapsed from the date of the charity’s
a charity cannot apply to the Commission for a scheme because of any
vacancy among the charity trustees or the absence or incapacity of any
of them, but
such an application is made by such number of the charity trustees as
the Commission considers appropriate in the circumstances of the case,
the Commission may nevertheless proceed as if the application were an
application made by the charity.
The Commission may on the application of any charity trustee or trustee for a
charity exercise its jurisdiction under section 69 for the purpose of discharging
the applicant from trusteeship.
The Commission must not exercise its jurisdiction under section 69 in any case
(not referred to it by order of the court) which—
because of its contentious character, or any special question of law or of
fact which it may involve, or
(b) for other reasons,
the Commission may consider more fit to be adjudicated on by the court.
Before exercising any jurisdiction under section 69 otherwise than on an order
of the court, the Commission must give notice of its intention to do so to each
of the charity trustees except any—
that cannot be found or has no known address in the United Kingdom,
who is party or privy to an application for the exercise of the
(2) Any such notice—
(a) may be given by post, and
if given by post, may be addressed to the recipient’s last known address
in the United Kingdom.
If the Minister thinks it expedient to do so—
(a) in consequence of changes in the value of money, or
with a view to increasing the number of charities in respect of which the
Commission may exercise its jurisdiction under section 69 in
accordance with section 70(3),
the Minister may by order amend section 70(3) by substituting a different sum
for the sum for the time being specified there.
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If it appears to the Commission that a scheme should be established for the
administration of a charity, but also—
(a) that it is necessary or desirable for the scheme—
to alter the provision made by an Act establishing or regulating
the charity, or
to make any other provision which goes or might go beyond the
powers exercisable by the Commission apart from this section,
that it is for any reason proper for the scheme to be subject to
the Commission may (subject to subsection (7)) settle a scheme accordingly
with a view to its being given effect under this section.
A scheme settled by the Commission under this section may be given effect by
order of the Minister.
Subject to subsections (4) and (6), an order under subsection (2) is subject to
annulment in pursuance of a resolution of either House of Parliament.
In the case of a scheme which goes beyond the powers exercisable apart from
this section in altering a statutory provision contained in or having effect under
any public general Act, no order may be made unless a draft of the order has
been laid before and approved by a resolution of each House of Parliament.
Subject to subsection (6), any provision of a scheme brought into effect under
this section may be modified or superseded by the court or the Commission as
if it were a scheme brought into effect by order of the Commission under
(6) Where subsection (4) applies to a scheme, the order giving effect to it—
may direct that the scheme must not be modified or superseded by a
scheme brought into effect otherwise than under this section, and
may also direct that subsection (4) is to apply to any scheme modifying
or superseding the scheme to which the order gives effect.
The Commission must not proceed under this section without the same
application, and the same notice to the charity trustees, as would be required
if the Commission was proceeding (without an order of the court) under
But on any application for a scheme, or in a case where it acts by virtue of
section 70(5) or (6), the Commission may proceed under this section or section
69 as appears to it appropriate.
No expenditure incurred in preparing or promoting a Bill in Parliament is to
be defrayed without the consent of the court or the Commission out of any
money applicable for the purposes of a charity.
(2) Subsection (1) applies regardless of anything in the trusts of a charity.
(1) Subsection (2) applies where the Commission is satisfied that—
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the whole of the income of a charity cannot in existing circumstances be
effectively applied for the purposes of the charity,
if those circumstances continue, a scheme might be made for applying
the surplus cy-près, and
(c) it is for any reason not yet desirable to make such a scheme.
The Commission may by order authorise the charity trustees at their discretion
(but subject to any conditions imposed by the order) to apply any accrued or
accruing income for any purposes for which it might be made applicable by
such a scheme.
Any application of accrued or accruing income authorised by an order under
subsection (2) is to be treated as being within the purposes of the charity.
(4) An order under subsection (2) must not extend—
(a) to more than £300 out of income accrued before the date of the order,
(b) to income accruing more than 3 years after that date, or
(c) to more than £100 out of the income accruing in any of those 3 years.
Subsection (3) applies where, at any time after it has instituted an inquiry
under section 46 with respect to any charity, the Commission is satisfied—
that there is or has been any misconduct or mismanagement in the
administration of the charity, or
(b) that it is necessary or desirable to act for the purpose of—
(i) protecting the property of the charity, or
securing a proper application for the purposes of the charity of
that property or of property coming to the charity.
The reference in subsection (1) to misconduct or mismanagement extends
(regardless of anything in the trusts of the charity) to the employment—
for the remuneration or reward of persons acting in the affairs of the
(b) for other administrative purposes,
of sums which are excessive in relation to the property which is or is likely to
be applied or applicable for the purposes of the charity.
(3) The Commission may of its own motion do one or more of the following—
by order suspend any person who is a trustee, charity trustee, officer,
agent or employee of the charity from office or employment pending
consideration being given to the person’s removal (whether under
section 79 or 80 or otherwise);
by order appoint such number of additional charity trustees as it
considers necessary for the proper administration of the charity;
(c) by order—
vest any property held by or in trust for the charity in the official
require the persons in whom any such property is vested to
transfer it to the official custodian, or
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appoint any person to transfer any such property to the official
order any person who holds any property on behalf of the charity, or of
any trustee for it, not to part with the property without the approval of
order any debtor of the charity not to make any payment in or towards
the discharge of the debtor’s liability to the charity without the
approval of the Commission;
by order restrict (regardless of anything in the trusts of the charity) the
transactions which may be entered into, or the nature or amount of the
payments which may be made, in the administration of the charity
without the approval of the Commission;
by order appoint (in accordance with section 78) an interim manager, to
act as receiver and manager in respect of the property and affairs of the
The Commission may not make an order under subsection (3)(a) so as to
suspend a person from office or employment for a period of more than 12
But any order under subsection (3)(a) made in the case of any person (“P”) may
make provision, as respects the period of P’s suspension for matters arising out
of it, and in particular—
for enabling any person to execute any instrument in P’s name or
otherwise act for P, and
in the case of a charity trustee, for adjusting any rules governing the
proceedings of the charity trustees to take account of the reduction in
the number capable of acting.
This does not affect the generality of section 337(1) and (2).
(6) The Commission—
must, at such intervals as it thinks fit, review any order made by it
under paragraph (a), or any of paragraphs (c) to (g), of subsection (3),
if on any such review it appears to the Commission that it would be
appropriate to discharge the order in whole or in part, must so
discharge it (whether subject to any savings or other transitional
provisions or not).
(1) It is an offence for a person to contravene an order under—
(a) section 76(3)(d) (order prohibiting person from parting with property),
section 76(3)(e) (order prohibiting debtor of charity from discharging
(c) section 76(3)(f) (order restricting transactions or payments).
A person guilty of an offence under subsection (1) is liable on summary
conviction to a fine not exceeding level 5 on the standard scale.
This section is not to be treated as precluding the bringing of proceedings for
breach of trust against any charity trustee or trustee for a charity in respect of
a contravention of an order under section 76(3)(d) or (f) (whether or not
proceedings in respect of the contravention are brought against the trustee
under this section).
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The Commission may under section 76(3)(g) appoint to be interim manager in
respect of a charity such person (other than a member of its staff) as it thinks fit.
An order made by the Commission under section 76(3)(g) may make provision
with respect to the functions to be discharged by the interim manager
appointed by the order.
This does not affect the generality of section 337(1) and (2).
Those functions are to be discharged by the interim manager under the
supervision of the Commission.
In connection with the discharge of those functions, an order under section
76(3)(g) may provide—
for the interim manager appointed by the order to have such powers
and duties of the charity trustees of the charity concerned (whether
arising under this Act or otherwise) as are specified in the order;
for any powers or duties specified by virtue of paragraph (a) to be
exercisable or performed by the interim manager to the exclusion of
(5) Where a person has been appointed interim manager by any such order—
section 110 (power to give advice and guidance) applies to the interim
manager and the interim manager’s functions as it applies to a charity
trustee of the charity concerned and to the charity trustee’s duties as
the Commission may apply to the High Court for directions in relation
to any particular matter arising in connection with the discharge of
(6) The High Court may on an application under subsection (5)(b)—
(a) give such directions, or
make such orders declaring the rights of any persons (whether before
the court or not),
as it thinks just.
The costs of an application under subsection (5)(b) must be paid by the charity
(8) Regulations made by the Minister may make provision with respect to—
the appointment and removal of persons appointed in accordance with
the remuneration of such persons out of the income of the charities
(c) the making of reports to the Commission by such persons.
Regulations under subsection (8) may, in particular, authorise the
to require security for the due discharge of the functions of a person so
appointed to be given by that person;
(b) to determine the amount of such a person’s remuneration;
to disallow any amount of remuneration in such circumstances as are
prescribed by the regulations.
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Subsection (2) applies where, at any time after it has instituted an inquiry
under section 46 with respect to any charity, the Commission is satisfied both
as mentioned in section 76(1)(a) (misconduct or mismanagement etc.) and as
mentioned in section 76(1)(b) (need to protect property etc.).
(2) The Commission may of its own motion do either or both of the following—
by order remove any trustee, charity trustee, officer, agent or employee
of the charity—
who has been responsible for or privy to the misconduct or
(ii) whose conduct contributed to it or facilitated it;
(b) by order establish a scheme for the administration of the charity.
The Commission may remove a charity trustee by order made of its own
(a) within the last 5 years, the trustee—
having previously been adjudged bankrupt, has been
having previously made a composition or arrangement with, or
granted a trust deed for, creditors, has been discharged in
respect of it;
(b) the trustee is a corporation in liquidation;
the trustee is incapable of acting because of mental disorder within the
meaning of the Mental Health Act 1983;
the trustee has not acted, and will not make a declaration of willingness
or unwillingness to act;
(e) the trustee—
(i) is outside England and Wales or cannot be found, or
(ii) does not act,
and the trustee’s absence or failure to act impedes the proper
administration of the charity.
The Commission may by order made of its own motion appoint a person to be
a charity trustee—
in place of a charity trustee removed by the Commission under section
79 or subsection (1) or otherwise;
if there are no charity trustees, or if because of vacancies in their
number or the absence or incapacity of any of their number the charity
cannot apply for the appointment;
if there is a single charity trustee who is not a corporation aggregate and
the Commission is of opinion that it is necessary to increase the number
for the proper administration of the charity;
if the Commission is of opinion that it is necessary for the proper
administration of the charity to have an additional charity trustee
because one of the existing charity trustees who ought nevertheless to
remain a charity trustee—
(i) is outside England and Wales or cannot be found, or
(ii) does not act.