Negotiating the sacred in law: Regulation of gifts motivated by religious faith

Pauline Ridge

Table of Contents

Direct consideration of the donor’s religious motivations
Protection from exploitation
Priority given to competing values
Indirect consideration of the donor’s religious faith through the application of objective standards
Objective standards in legal doctrines and their application to donors of strong religious faith
The content of objective standards
Conclusion

Many people would be surprised to learn that they do not have unlimited power to give away their property as they choose. In fact, legal restrictions on gift giving operate upon gifts that take effect during the donor’s lifetime (inter vivos gifts) as well as upon gifts that operate only upon the donor’s death (testamentary gifts). Some of these constraints are readily comprehensible; for example, it makes sense that the law would seek to protect donors against improper exploitation by would-be donees. Other legal constraints upon gift giving, however, are more difficult to explain. Why is it, for example, the financial needs of the donor’s family may take precedence over the autonomy of the donor in relation to testamentary gifts?

This paper considers legal constraints on gift giving in relation to gifts motivated by strong religious beliefs. Such gifts are not unusual. They encompass gifts to those who share the donor’s religious convictions (gifts to one’s faith community or a spiritual leader or mentor, for example) as well as gifts to others because of the donor’s religious convictions (a gift to a charitable organisation or a will that is drawn up consistently with religious laws of succession, for example). What constraints are imposed by the law upon such gifts and, specifically, how does the law negotiate the ‘sacred’ in this process? The topic is an important one both for the light it may shed upon the limits of gift-giving autonomy in general, as well as for its specific relevance in a multicultural society such as Australia in which a diversity of religious faiths are practised. I have discussed such questions in more detail elsewhere; my aim in this chapter is to provide non-lawyers with an overview of the legal regulation of gifts motivated by religious faith.[1]

Paradoxically, these questions arise against a backdrop of purported non-intervention in religion by the law. It is often said that judges do not adjudicate upon questions of religious faith. So, for example, Gray J of the English Queens Bench recently refused to allow a defamation action to proceed as it would require him to decide a matter of doctrinal dispute (whether the claimant was a validly consecrated bishop or not).[2] Similarly, Australian courts have refused to adjudicate on the doctrinal disputes concerning ordination of women within the Anglican Church.[3] Although sometimes explained as due to the complexity of religious doctrine, in fact the refusal is public policy based: courts should not engage in a qualitative assessment of religious doctrine.[4] Murphy J, of the High Court of Australia, in deciding whether or not the Church of Scientology constituted a ‘religion’ for taxation exemption purposes explained it thus:

Religious discrimination by officials or by courts is unacceptable in a free society. The truth or falsity of religions is not the business of officials or the courts. If each purported religion had to show that its doctrines were true, then all might fail.[5]

The courts will only decide disputes occurring in a religious context if they raise legal questions not dependent upon a qualitative assessment of religious doctrine. Thus, property disputes arising out of church schism can be determined because the court simply applies the principles of property law.[6] The courts will even decide whether a set of beliefs and practices of a group constitutes a religion.[7] In doing so the court does not make a qualitative assessment of the purported religion except to the extent that parody or sham religions are not accepted.[8]

How, then, does this ‘hands off’ approach to matters of religious belief translate to the legal regulation of gift giving? Presumably legal regulation of gifts motivated by religious beliefs is possible because the motivations are seen as peripheral to the legal issue of the validity of the gift. The courts are not asked to directly evaluate the donor’s motivations and the legal principles that apply to religiously motivated gifts are the same as those that apply to all gifts. What is interesting is that in fact, the law does confront the religious faith of the donor (‘the sacred’) and pass judgment upon it in regulating gifts motivated by religious faith. This is done both directly—through protection from exploitation of religious belief and by prioritising other demands upon the donor’s property—and indirectly, through the use of objective standards in the relevant legal doctrines.

Before considering these points in detail, it may be helpful to briefly describe the relevant law. Inter vivos gifts and testamentary gifts are largely regulated by separate bodies of judge-made law. The doctrines that regulate inter vivos gifts come mainly from Equity (the body of law initially developed by the Court of Chancery in England). The two equitable doctrines most relevant to gifts motivated by strong religious faith are equitable undue influence and unconscionable dealings. Testamentary gifts fall into the law of succession (a mixture of probate law, Equity and legislation). The most relevant doctrines are probate undue influence and the suspicious circumstances doctrine.

It is also possible to create a trust of the donor’s property for the benefit of whatever person (or, possibly, purposes) the donor chooses rather than make an outright gift of the property. The principles of trust law (which are also part of Equity) operate equally upon inter vivos and testamentary gifts. Finally, gift giving is also subject to legislative regulation. The legislation most pertinent to this discussion is family provision legislation which exists under different names in all Australian jurisdictions and only applies to testamentary gifts.[9]

Whichever source of law is used to regulate gift giving, the gift must be a significant one relative to the donor’s overall assets. For pragmatic reasons a gift will not be disputed in the courts (a costly process) unless it is sufficiently large to cause pain/outrage to the person(s) who otherwise expected to benefit; and legally, the relevant doctrines tend not to be activated by small gifts. With this background in mind then, how does the law negotiate the sacred in its regulation of gifts motivated by strong religious beliefs?

Direct consideration of the donor’s religious motivations

Protection from exploitation

The first way in which the law directly confronts the religious motivations of a donor is by protecting donors from exploitation of those motivations. The legal doctrine most relevant to inter vivos gifts in this context is equitable undue influence. Equitable undue influence is concerned with gifts arising out of a relationship of influence or potential influence. The doctrine developed in the late eighteenth century and some of the leading cases concern religiously motivated gifts. A presumption that ‘undue’ influence has been exercised over the donor arises upon evidence that:

  • a gift was made to a donor’s spiritual ‘leader’; and,

  • the gift is ‘so large as not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act…[10]

Alternatively, in place of the first requirement, a relationship of influence can be proved by evidence of the particular relationship, in which case the presumption is similarly activated once the second requirement is also proved. Once a presumption of undue influence arises (either automatically or because a relationship of influence is proved) then the gift is overturned unless the donee rebuts the presumption by evidence that no advantage was taken of the donor who in fact exercised a fully informed, free and independent judgment.[11] Whether the donor received independent advice regarding the gift is relevant to rebuttal of the presumption.

There is strong rhetoric in the equitable undue influence cases concerning the danger of spiritual influence. Spiritual influence was said to be ‘the most dangerous and the most powerful’ of all influences upon a donor or a party to a contract.[12] The following statement by counsel arguing a case at the beginning of the nineteenth century, whilst no doubt calculated to sway the court, nonetheless encapsulates the concerns of lawyers at the time:

What is the authority of a guardian, or even parental authority, what are the means of influence by severity or indulgence in such a relation, compared with the power of religious impressions under the ascendancy of a spiritual adviser; with such an engine to work upon the passions; to excite superstitious fears of pious hopes; to inspire, as the object may be best promoted, despair or confidence; to alarm the conscience by the horrors of eternal misery, or support the drooping spirits by unfolding the prospect of eternal happiness: that good or evil, which is never to end? What are all other means to these?[13]

Unsurprisingly, there is a string of English cases throughout the nineteenth and early twentieth centuries in which gifts motivated by strong religious beliefs, and generally involving fringe religious groups, were set aside.[14]

Importantly, equitable undue influence affects not only gifts that are the product of clear and deliberate exploitation of influence but also gifts where there is only the possibility of exploitation and where all parties have acted in good faith. The leading case of Allcard v Skinner, decided in 1887, illustrates this point. A novice Anglican nun (Miss Allcard) gave all her assets to the Head of her Order (her mother superior) as required by the rules of the Order. The property was used for charitable purposes of the Order. The English Court of Appeal stressed that all parties had acted with complete propriety; nonetheless the presumption of undue influence that arose automatically due to the relationship of Miss Allcard and her mother superior was not rebutted. Crucially, Miss Allcard had not received independent advice before making the gifts and could not be shown to have exercised a fully informed and free judgment, free of the influence of her mother superior. Thus, the doctrine is concerned with the potential for undue influence to be exercised and will err on the side of caution; gifts will be set aside if it cannot be conclusively proved that the donor acted free from undue influence.

Equitable undue influence continues to be applied today across a spectrum of religious faiths.[15] There have been five reported Australian cases since 1986 (all involving female donors). The donees have included a Baptist pastor, the leaders of a Hare Krishna community and the leader of a breakaway sect from the Church Universal and Triumphant.[16] It is not necessary that the donee be formally recognised as a spiritual ‘leader’; a recent Queensland case acknowledged the possibility of a bible study group leader being in a position of spiritual influence.[17]

I will return to the second requirement of equitable undue influence (that the gift is ‘so large as not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act’) below; however, it is also worth noting that this requirement limits the doctrine’s utility regarding ‘repeat offenders’. In other words, it is possible that a spiritual leader or mentor may abuse his or her position of influence with respect to many donors but in relation to relatively small gifts which do not activate the presumption. Equitable undue influence is concerned not so much with the regulation of spiritual leaders/mentors as such, as with undoing particular gifts; thus there is still the need for vigilance and appropriate self-regulation by religious groups. Codes of conduct for Christian churches are growing in popularity (partly because of a growing awareness of sexual abuse within churches) and these may include provisions regarding receipt of financial benefits.[18]

The related equitable doctrine of unconscionable dealings also may apply to inter vivos gifts motivated by strong religious beliefs. While equitable undue influence considers the relationship between donor and donee, unconscionable dealings looks more to the circumstances of the particular gift. If a donor suffers from a ‘special disadvantage’ relative to a donee, and if the donee knows or ought to know of that disadvantage it may be unconscionable for the donee to accept the gift. ‘Special disadvantage’ traditionally included conditions such as drunkenness, ill health, lack of education and poverty. The court considers whether there is a special disadvantage by comparing the relative abilities and conditions of the two parties to the gift. Strong religious faith—especially in the first flush of a religious conversion—may be characterised as a ‘special disadvantage’; that is, a person of strong religious convictions may be considered so vulnerable to exploitation that it is unconscionable for the donee to accept the gift knowing these facts. In this instance, the implication is that although the donor acted with autonomy the donee should not have benefited from their spiritual fervour without ensuring that they received independent advice. There are no decided cases in which unconscionable dealings has been applied to religious enthusiasm; however, this can be explained by the fact that the doctrine is not often applied by the English courts and is relatively recent in its Australian usage.

Interestingly, the law is not so concerned with the danger of exploitation of religious faith in relation to testamentary gifts. Two doctrines that protect against exploitation in relation to testamentary gifts motivated by strong religious faith are probate undue influence and the suspicious circumstances doctrine. Unlike equitable undue influence which is concerned with the potential for abuse of influence, probate undue influence requires proof that the donor was actually coerced into making a gift that did not represent their intention and desire at all.[19] Thus, in a case where the residuary beneficiary of a will (a Roman Catholic priest) was chaplain and confessor to the testator, a challenge to the gift on the basis of probate undue influence failed because there was no evidence of coercion:

No amount of persuasion or advice, whether founded on feelings of regard or religious sentiment, would avail, according to the existing law, to set aside this will, so long as the free volition of the testatrix to accept or reject that advice was not invaded.[20]

Because of this the doctrine of probate undue influence is notoriously difficult to establish.

The suspicious circumstances doctrine may be more helpful in overturning a testamentary gift motivated by religious faith. One requirement for a valid will is that the testator knew and approved of the will’s contents. If there are suspicious circumstances surrounding the making of the will, then the propounder of the will must prove knowledge and approval affirmatively. There is no limit on what may constitute a suspicious circumstance; one example is where the sole or major beneficiary assisted in the preparation of the will.[21] So, for example, in In the Will of Thomas Walsh the testator’s priest drew up the will in the testator’s last days and while he was seriously ill.[22] The whole of the estate went to projects associated with the priest. A’Beckett J found that the circumstances surrounding preparation and execution of the will cast doubt on the testator’s knowledge and approval of the will’s contents and he therefore refused probate.

Why is the law concerned about exploitation of religious faith in relation to inter vivos gifts but not to the same extent in relation to testamentary gifts? Elsewhere I have suggested that it is because the donor of a testamentary gift is, by definition, not impoverished by the gift and thus, there is no immediate and direct ‘victim’ of the gift: but that this is unsatisfactory because those who otherwise would benefit from the donor’s bounty are also affected.[23] More cogent reasons are that the succession doctrines developed during the mid to late nineteenth century when quite blatant lobbying of testators was socially acceptable, the difficulty of proving the circumstances of a will long after it was made and when the disaffected parties may not even have been present, and the different jurisdictional origins of the applicable law. It may be that equitable undue influence (which at present does not apply to testamentary gifts) will influence the development of the law of succession in the future.

Priority given to competing values

A second way in which the law directly confronts the sacred when regulating gifts occurs when other values are given priority over the autonomous expression of the donor’s religious faith. The clearest example of this is in relation to testamentary gifts where the law recognises a societal norm that the financial needs of one’s dependents must be catered for before one acts benevolently towards others. A distinction is drawn between a right of inheritance by the donor’s family (which is not recognised) and a right to provision for financial needs (which is recognised). Two cases illustrate the point. The first case, The Trustees of Church Property of the Diocese of Newcastle v Ebbeck, is authority that a donor may impose religiously motivated conditions upon a gift. That is, no one, other than the testator (and, presumably, the testator’s creditors) has any right to the testator’s property. In the words of Windeyer J of the High Court of Australia:

[A testator] may, if he wishes, provide that his property shall go only to persons of a particular religion. He may stipulate that a prospective beneficiary will be disqualified unless he renounce a particular faith…Furthermore, a testator may disqualify from participation as a beneficiary anyone who should marry a spouse of a particular religion, or not marry a spouse of a particular religion.[24]

This is a strong endorsement of the autonomy of a religiously motivated donor and confirms my comments in the introduction regarding the hands-off approach of law to religious faith; however, the second case, Wenn v Howard, shows that such autonomy must give way to the financial needs of a testator’s dependents.[25] In that case a testator deliberately excluded some of his children from his will because (it was said) they did not practise the Catholic faith. It was held by the court that this would not disentitle them to provision from the estate if financial need was established; in other words, there was no right to inheritance but there was a right to family provision and the latter overrode the autonomy of the religiously motivated testator.

Although the details of family provision legislation (also known as ‘testator’s family maintenance’) vary between jurisdictions, such legislation generally provides that testamentary gifts (and even gifts made shortly before the donor’s death) can be overridden to the extent that the financial needs of the donor’s immediate family and dependents have not been provided for. The Court may order that provision be made out of the deceased donor’s estate for the ‘maintenance, education or advancement in life’ of a family member or dependent.[26] To the extent that religiously motivated gifts may be overridden by court ordered family provision the law is prioritising the financial needs of the donor’s family over the autonomous expression of the donor’s religious faith. In some jurisdictions the court has power to determine which gifts under the will should bear the burden of a family provision order and this may further disadvantage religiously motivated gifts.

Protection from exploitation and legislative acknowledgement of the right of family members to financial provision from a deceased donor’s estate are two ways in which the legal regulation of gifts directly confronts the donor’s religious faith; but there are more subtle ways in which the law negotiates the sacred and this is by use of objective standards.