In Fafalios & Ors v Apodiacos & Ors  EWHC 1189 (Ch), a disagreement arose between the trustees of the Greek Cathedral Cemetery Enclosures Trust, a charitable trust made in 1860 by a Declaration of Trust (“The Cemetery Trustees”)  and the trustees of the Greek Cathedral Trust established in 1888 (“The Cathedral Trustees”) . Both charities are linked to the Greek Orthodox Cathedral of the Divine Wisdom in London .
In 1935, the Cemetery Trustees had executed a declaration  which included this statement:
“NOW therefore the present Trustees hereby declare that all monies which now are or which from time to time may come to their hands from whatsoever source as Trustees of the said First, Second, Third and Fourth Grants and the said declaration of trust dated 31st December 1860 shall be held by them Upon trust to apply them in accordance with any Resolution that may be passed at a General Meeting of the Greek Community in London convened for the purpose by a clear majority of two thirds of the members present at such meeting and voting on such resolution.”
The declaration concluded :
“re: the community or brotherhood of the Orthodox Greek Church
“declaration of trust in respect of the Cemetery Trust.”
The Cathedral Trustees sought a declaration that any surplus funds of the Cemetery Trust were held by the Cemetery Trustees on trust for such charitable purposes as the assembly of the Cathedral may, by a two-thirds majority, resolve. In the alternative, they asked the court to make a cy-près scheme directing that any surplus funds be held on such terms . The Cemetery Trustees asserted that the assembly of the Cathedral had no right to tell them how the surplus funds of the Cemetery Trust should be dealt with. They accepted that a cy-près scheme was needed, but only to clarify who was entitled to be buried in the cemeteries which they controlled and not, as the Cathedral Trustees had suggested, to determine how any surplus funds should be used .
The problem arose because concerns were raised at the annual general meeting of the assembly of the Cathedral in 2014 that the surplus funds held by the Cemetery Trustees were in cash and had not been invested. The assembly passed a resolution directing that £200,000 should be transferred by the Cemetery Trustees to the Cathedral Trustees for investment. This was followed up in December 2014 and by a formal direction under the seal of the Cathedral .
The Cemetery Trustees declined to comply. They did not consider themselves bound to do so, they wished to retain control over their own funds and they were concerned that if they handed over the funds they might be diverted for other purposes such as the upkeep of the Cathedral . Further, they asserted that their predecessors had not had the power to make the 1935 Declaration and secondly that, in any event, the assembly of the Cathedral now was not the same as the body referred to in the 1860 Declaration of Trust and the 1935 Declaration as being the “Greek Community of London” . They accepted that a cy-près scheme was needed – given that the purpose of the Trust was to provide the burial of members of the Greek Community in London – to define the group of people who should benefit from the activities of the Cemetery Trust .
Deputy Judge Robin Vos set out the position as follows:
- As to the original 1860 Declaration of Trust, it was “clear that the trustees of the Cemetery Trust are required to apply whatever property they have, whether the original burial rights or any proceeds or any income from those burial rights, for the purposes of interment of members of the Greek Community in London” .
- Under the 1860 Declaration of Trust, the Cemetery Trust funds might be used only for the purposes of the interment of members of the Greek Community in London, subject to that overriding purpose, the Greek Community of London had the right to direct the Cemetery Trustees as to what their funds should be used for and how they should be administered and, absent any such direction, the Cemetery Trustees were free to deploy their funds as they saw fit, within the confines of the overriding purpose of using the funds for burial for members of the Greek Community in London .
- The 1935 Declaration did not contain any specific purposes and, in his judgment, was void and of no effect .
- The reference to “the Greek Community in London” (or “the Greek Community of London”) in the 1860 Declaration of Trust was a reference to what was now referred to as “the Brotherhood” in the current regulations of the Cathedral and which made decisions at what was now referred to as the Assembly .
- In accordance with the 1860 Declaration of Trust, the Assembly was entitled to give directions to the Cemetery Trustees in relation to the way in which the assets of the Cemetery Trust were used and administered, so long as those directions were in accordance with the overriding purpose of the burial of members of the Greek Community in London [131: emphasis added].
- It might possible to interpret the expression “Greek Community in London” as referring to any Orthodox living in London whether a member of the Cathedral or not, but it appeared that the expressions had been used interchangeably and there was a strong inference that the original purpose in acquiring a cemetery had been to provide for the burial of members of the Church .
- He therefore found that the expression “Members of the Greek Community in London” in the 1860 Declaration of Trust referred to members of the Cathedral, and because that body of persons still existed, there was no requirement for a cy-près scheme to describe a new class of beneficiaries [151-152].
- Given that, at the time of the 1860 Declaration of Trust, there was only one Greek Orthodox Church in London but there were now others, and given that the cemeteries controlled by the Cemetery Trust were available for the burial of members of any of those churches, that might make it appropriate for the Cemetery Trustees to apply for a cy-près scheme [153-154].
He concluded :
“155.1 The purposes set out in the 1860 Declaration of Trust apply to all of the assets held by the Cemetery Trustees including income, profits or proceeds from the sale of burial rights. The effect of this is that all of the funds of the Cemetery Trust must be used for the purposes of interment of members of the Greek Community in London (“the Purposes“).
155.2 The Greek Community of London is entitled to direct the Cemetery Trustees how the funds held by them should be spent and administered in furtherance of the Purposes.
155.3 The Greek Community of London is now represented by the Assembly of the Cathedral.
155.4 In the absence of any direction from the Assembly, the Cemetery Trustees are free to make their own decisions as to how the funds held by them should be spent and administered in furtherance of the Purposes.
155.5 It has not been shown that the circumstances justifying the making of a cy-près scheme have yet arisen. However, the Cemetery Trustees should consider carefully whether an application for a cy-près scheme is required once they are in possession of all of the relevant facts.”