The High Court proposed approving a scheme allowing the Cheshire Foundation in Ireland to use €2,794,114 in restricted funds alongside its general funds, after finding that combining them could help protect the charity’s services. The scheme was amended to cover only the funds itemised in its schedule.
In a judgment delivered on 28 October 2011, Miss Justice Laffoy considered the charity’s application under section 51 of the Charities Act 1961. The funds were held on trust for 20 of the 23 Cheshire Homes operated by the foundation. They came from bequests to named homes and local fundraising and donations for particular homes.
The charity said its services were funded mainly by the Health Service Executive, which provided more than 90% of its annual income. Its chair, Michael V. O’Mahony, stated in an affidavit that the directors believed the charity’s financial viability and ability to maintain services were at risk unless it could access the restricted funds. He said the funds would support central governance and management, financial, human resources, health and safety, and clinical functions.
The Attorney General had been served and entered an appearance, but told the charity’s solicitors that she would not take an active role or be represented in court.
The judge found that the restricted funds and the charity’s general assets were held for similar purposes. She also accepted the evidence that combining them would allow the funds to be used more effectively. In considering the “spirit of the gift”, she found that the bequests were intended to support the continued existence of the named homes and their services. For local donations and fundraising, she said it was reasonable to infer that donors intended to support the continued existence of the home in their locality.
The judge was satisfied that the proposed scheme respected those underlying intentions and that the general charitable intention required for a cy-près scheme was present. She therefore proposed making the order sought, with an amendment: the scheme’s “Trust Fund” would be restricted to the funds listed in its schedule, excluding funds that might be paid or transferred to the charity in the future. The scheme’s commencement date was to be the date the court order was perfected.
The judgment does not state that the order had already been perfected; it records the judge’s proposal to make it on those amended terms.