RSPCA v Sharp - Court of Appeal Judgment - Charity's Right to Protect Interests under Will

The Court of Appeal (Ld Neuberger MR, Patten LJ, Black LJ) has decided in favour of the charity in the RSPCA's appeal in the case of RSPCA v Sharp [2010] EWCA Civ 1474.

The case had caused some concern within the charity sector because of comments made in the first instance judgment which suggested that the charity had been wrong in principle to challenge the interpretation of the Will, and should, in effect, have accepted what it received "whatever the view as to the will" ([2010] EWHC 268 (Ch) at para 26).

The Court of Appeal has made it clear that this approach was wrong, charities being in no greater or lesser position than any other beneficiary under a Will, with the same right to challenge and to expect a correct interpretation and distribution from an estate.

The dispute The issue in dispute was relatively simple - there were two ways in which a Will could be interpreted. The executors interpreted it in such a way as to increase the amount received by themselves and the testator's brother, decreasing the amount in residue for the charity and causing inheritance tax to be payable on the estate. The charity challenged this interpretation, contending that the Will should be read as a whole, meaning that the pecuniary legacy to the executors and the brother was reduced by a gift of property to the executors, that no inheritance tax was payable on the estate and the gift of residue for the charity was thereby increased.

First instance At first instance, Peter Smith J considered it "clear" and "plain" that the executors' interpretation was correct, opining that the charity's interpretation could lead to potential results which were "so unlikely as to be incredible".

He went on to say that it was "a matter of regret in my view that this action was ever brought". The judgment implied that the RSPCA was somehow wrong to support an interpretation "the whole purpose and thrust" of which was "to raise its interest under the will by nearly 75%", before concluding:

"In my view the RSPCA whatever the view as to the will ought really to have considered that the residuary legacy that I have determined it is entitled to was generous and ample provision out of this estate. The impact of the arguments on the size of the bequest to the Deceased's brother was quite stark. This action has plainly caused distress to the Defendants and in my view ought not to have been brought."

This caused the judge to take the unusual step of awarding costs to the...