Charitable Purposes

Question 1

*Re Nottage [1895] 2 Ch 649

Answer 1

Case: £2000 left on trust for youth yachting association, with prize to be given, promotion of sporting activity is not charitable irrespective of any accompanying health benefits

Decision: “Its just a prize for a mere game”

cf Charities Act 2011, s.3(1)(g) Advancement of amateur sport

Question 2

*National Anti-Vivisection Society v IRC [1948] AC 31 (HL) (especially at 74)

Answer 2

Decision: Benefit to human outweighs harm to animals

Rules:

1. For relief of poverty, advancement of education and advancement of religion, the test of benefit to the community will be prima facie assumed unless the contrary appears cf Charities Act 2011
2. Changing legislation is not charitable and will fail on this ground (even where attempted changes to the law are ancillary to the main purposes: Bowman v Secular Society)

Question 3

*Gilmour v Coates [1949] AC 426 (HL)

Answer 3

Rule: Cloistered nuns where not for the benefit of the community as they lived in an enclosed place, didn’t work outside the convent and lived a life of meditation, fasting etc. Praying for the public at large not considered tangible benefit of the community although it is not the courts’ position to decide on the sincerity of a religious belief

Question 4

*Neville Estates v Madden [1962] Ch 832 (Ch)

Answer 4

Case: Religious observation of synagogue religious benefit

Question 5

*Re Pinion [1965] Ch 85 (CA)

Answer 5

Case: All contents of arts, paintings and furniture left on trust to be maintained as a museum for the public to view

Decision: None of the works were of any value so not beneficial to the public

Quote: “I can conceive of no useful object to be served in foisting upon the public this mass of junk. It has neither public utility nor educational value” (Harman LJ)

Question 6

*Re Resch [1969] AC 514 (PC) 537-545 (first issue only)

Answer 6

Case: Trustees upon trust to pay to sisters of charity for 200 years; Private hospital excluded hospital on the face of it; Did not want to make commercial profit so did offer reduced rate

Decision: Considered as providing benefit to the community despite being a fee charging institution

Rule: Fee charging institutions may satisfy public benefit test

Quote: “To provide, in response to public need, medical treatment otherwise inaccessible but in its nature expensive, without any profit motive, might well be charitable: on the other hand to limit admission to a nursing home to the rich would not be so. The test is essentially one of public benefit, and indirect as well as direct benefit enters into the account […]” per Lord Wilberforce

Question 7

*McGovern v Attorney General [1982] Ch 321 (Ch)

Answer 7

Decision: Amnesty International was considered not a charitable trust as it had a political purpose

Rule: Although a trust for the relief of human suffering and distress was capable of being of a charitable nature, within the spirit and intendment of the preamble to the Charitable Uses Act 1601, as being a charity of compassion, nevertheless, if the means of achieving that relief was by securing a change in the laws of a foreign country and that was a direct and main object of the trust, then the trust had a political purpose and was not capable of being charitable under English law, because the court had no means of judging whether the proposed change in the law of the foreign country would or would not be for the public benefit, either locally or internationally.

Question 8

*Church of Scientology’s Application for Registration as a Charity [2005] WTLR 1151; also available at http://www.charity-commission.gov.uk/library/start/cosfulldoc.pdf

Answer 8

t/d

Question 9

*ISC v Charity Commission [2011] UKUT 421, [2012] Ch 214 [158]-[165]

Answer 9

Case: Raises the issue of what benefit must be given to the poor, in order that a fee-charging institution can be considered a charitable institution

Decision: Private education is of considerable benefit to the community as it takes students out of the state sector who would have otherwise benefitted at the state’s expense; but “people in poverty must not be excluded from the opportunity to benefit”; “reasonableness” of provision

Rules:

1. Poverty does not necessarily mean ‘destitution’
2. Two fold test for public benefit - (1) nature of the purpose must benefit the community and (2) those who may benefit must be sufficiently numerous

Quote: “The courts have adopted an incremental and somewhat ad hoc approach in relation to what benefits the community or a section of the community. There has never been an attempt comprehensively to define what is, or is not, of public benefit. It is possible, however, to discern from the cases two related aspects of public benefit. The first aspect is that the nature of the purpose itself must be such as to be a benefit to the community: this is public benefit in the first sense […] The second aspect is that those who may benefit from the carrying out of the purpose must be sufficiently numerous, and identified in such manner as, to constitute what is described in the authorities as ‘a section of the public’: this is public benefit in the section in the second sense […]”

Question 10

Verge v Somerville [1924] AC 496

Answer 10

Quote: “The legal meaning and the popular meaning of the word ‘charitable’ are so far apart that it is necessary almost to dismiss the popular meaning from the mind as misleading before setting out to determine whether a gift is charitable within the legal meaning” per Lord Wrenbury

Question 11

Morice v Bishop of Durham (1804) 9 Ves Jr 399

Answer 11

Quote: “Every [non-charitable] trust must have a definite object. There must be someone in whose favour the court can decree performance.”

Question 12

Charities Act 2011, s.29

Answer 12

All charities must be registered with the Commission (unless very small

Question 13

Charities Act 2011, s.34(1)

Answer 13

Three grounds for removal:

1. Any institution the Commission no longer considers is a charity
2. Any charity which ceased to exist; or
3. Does not operate

Subject to objections: s.36

Question 14

Statute of Elizabeth 1601

Answer 14

Original legal term ‘charity’ - must fall within the ‘spirit’ of the statute…

• Prevention & Relief of Poverty: “the relief of aged, impotent and poor people”
• Advancement of Education: “schools of learning, free schools, and scholars in universities…education and preferment of orphans”

Question 15

Income Tax Special Purposes Commissioners v Pemsel [1891] AC 531

Answer 15

“If a gentleman of education, without legal training, were asked what IS the meaning of a ‘trust for charitable purposes’, I think he would most probably reply, “That sounds like a legal phrase. You had better ask a lawyer” per Lord Macnaghten

Question 16

Charities Act 2011, s.1

Answer 16

Meaning of “charity”

Question 17

Charities Act 2011, s.2

Answer 17

Meaning of “charitable purpose”

Question 18

Charities Act 2011, s.3

Answer 18

Charitable purposes

Question 19

Charities Act 2011, s.4

Answer 19

Public benefit requirement, no presumption that charitable purpose is for public benefit (however, critically analyse this considering the cases)

Question 20

2013 Commission Guidance on Public Benefit

Answer 20

The ‘benefit aspect’:

• a purpose must be beneficial - this must be in a way that is identifiable and capable of being proved by evidence where necessary and which is not based on personal views
• any detriment or harm that results from the purpose (to people, property or the environment) must not outweigh the benefit - this is also based on evidence and not on personal views

The ‘public aspect’

• benefit the public in general, or a sufficient section of the public - what is a ‘sufficient section of the public’ varies from purpose to purpose
• not give rise to more than incidental personal benefit - personal benefit is ‘incidental’ where (having regard both to its nature and to its amount) it is a necessary result or by-product of carrying out the purpose

N.B. Evidentiary basis: all benefit must be capable of proof through positive and factual evidence (and in doing so must satisfy public benefit requirement)

Question 21

Re Gardom [1914] 1 Ch 662

Answer 21

Rule: Poverty includes “limited means”

Question 22

Re Payne’s Estate (1954) 11 WWRNS 424

Answer 22

Rule: Poverty includes “needy”

Question 23

Re Cohen [1973] 1 All ER 889

Answer 23

Rule: Poverty does not include “deserving”

Question 24

Re Young [1951] Ch 344

Answer 24

Rule: Poverty includes “distressed gentle folk”

Question 25

Re Segelman [1996] Ch 171

Answer 25

Rule: Poverty may include minors being students and experiencing “relative poverty”

Question 26

Re Gwyon [1930] 1 Ch 255

Answer 26

Decision: Gift of trousers to boys in a particular area, do distinguishing whether to be for those who need the gift etc. so not charitable

Question 27

Re Niyazi’s Will Trusts [1978] 1 WLR 910

Answer 27

Case: Trust set up for the building of a hostel in Cyprus for working men, the purpose of this was to provide temporary accommodation to meant who could not otherwise afford lodgings; the building would not be “attractive to more affluent members of society” and there was a need in this area for people who needed assistance with lodgings

Decision: Trust offered service and relieved pressure from the state so was charitable for the relief of poverty

Question 28

Re Sanders [1954] Ch 265

Answer 28

Case: Money given to provide dwellings for the working classes and their families

Decision: Working class families not considered to be an identifiable class and not a specific section in the poor

Rule: Section of poor requires identifying in a particular way

Question 29

Harrogate Fair Trade Shop v Charity Commission (First-Tier, 27 March 2014)

Answer 29

Case: Argued that fundamental charitable in its selling of fair trade products

Decision: Primary purpose is trading and selling products; the fact that they are helping to relieve poverty is ancillary to their commercial purpose

Rule: Must show that primary purpose is to relieve poverty and that you are doing that through trade

Question 30

Re Buck [1896]

Answer 30

Rule: Poverty includes members of a friendly society

Question 31

Re Young [1955] 1 WLR 1269

Answer 31

Rule: Poverty includes fellow members of a club, who have “fallen on evil days”

Question 32

Dingle v Turner [1972] 2 WLR 523)

Answer 32

Rule: Poverty includes “poor employees” of a firm/company

Quote: “The phrase “a section of the public” is in truth a phrase which may mean different things to different people. In the law of charity judges have sought to elucidate its meaning by contrasting it with another phrase “a fluctuating body of private individuals”. But I get little help from the supposed contrast for as I see it one and the same aggregate of persons may well be describable both as a section of the public and as a fluctuating body of private individuals.” per Lord Cross i.e. benefit for the community must be general and not for private individuals

Question 33

Charity Commission Guidance 2013 on Relieving Poverty

Answer 33

• For the relief of poverty only need to show benefit aspect
• Illustrations of ‘relieving’ poverty: provision of items (either outright or on loan) such as furniture, bedding, clothing, food, fuel, heating appliances, washing machines, and fridges; payment for services such as essential house decorating, insulation and repairs, laundering, meals on wheels, outings and entertainment, child-minding, telephone lines, rates and utilities; the provision of facilities such as the supply of tools or books, payment of fees for instruction, examination or other expenses connected with vocational training, language, literacy, numerical or technical skills, travelling expenses to help the recipients to earn their living, equipment and funds for recreational pursuits or training intended to bring the quality of life of the beneficiaries to a reasonable standard.
• Illustration of ‘preventing’ poverty: provision of money management and debt counselling advice

Question 34

Charity Commission Guidance 2013 regarding access for poor to charities that normally charge for services

Answer 34

• Charitable educational establishments (eg schools, colleges, universities)
• Bursaries; access to their facilities by state school pupils; collaboration with non-fee charging schools
• Other charities that advance education and charities that promote the arts (eg theatres, concert halls, museums, art galleries)
• Concessionary tickets; performing in state schools; free lectures
• Charities that advance health or relieve sickness (eg charitable hospitals)
• Offering treatment for free or at a reduced rate; free access to specialised medical equipment
• Charities that provide residential care
• Funding, offered by local authority, to pay for a place in the care home; provide respite care
• Charities that advance heritage or environmental protection or improvement
• Offer free or reduced rate membership; produce free publications

Question 35

IRC v McMullen [1980] 1 All ER

Answer 35

Case:Trust set up to promote football in universities and schools, held to be charitable although at 1st instance it wasn’t

Decision: Held charitable for the advancement of education… not confined to formal setting… skills etc. such as Chess

Rule:

1. The concept of education is a “moving target” and should be understood as “a balanced and systematic process of instruction, training and practice containing both spiritual, moral, mental and physical elements” (Lord Hailsham)
2. Social welfare must encompass and element of deprivation (dissent thinks wrong benchmark)

Quote: “What has to be remembered…is that both the legal conception of charity, and within it the educated man’s ideas about education are not static, but moving and changing. Both change with changes in ideas about social values. Both have evolved with the years. In particular, in applying the law to contemporary circumstances it is extremely dangerous to forget that thoughts concerning the scope and width of education differed in the past greatly from those which are now generally accepted.” (Lord Hailsham, 890).

Question 36

Whicker v Hume (1858) 7 HL Cas 124

Answer 36

Rule: Education in every part of the world is charitable

Question 37

British Museum Trustees v White (1826) 2 Sim & St 594

Answer 37

Rule: Specific projects such as museums or a library are charitable

Question 38

Yates v University College London (1875) LR 7 HL 438

Answer 38

Rule: Scholarships can be a charitable purpose and charities can fund jobs

Question 39

Royal Society of London v Thompson (1881) 17 Ch D 407

Answer 39

Rule: Elite scholarships can be considered charitable

Question 40

Re Shaw [1957] 1 All ER 748

Answer 40

Case: A trust set up to investigate the potential of 40 letter alphabet

Decision: Not charitable purpose

Rules:

1. Harman J “if the object be merely the increase of knowledge, that is not in itself a charitable object unless it be combined with teaching or education.”
2. Cannot be for an immoral education purpose e.g. school for pick pockets

Question 41

Re Hopkins’ Will Trusts [1965] Ch 669

Answer 41

Case: Determining whether Shakespeare truly wrote is works

Decision: Wilberforce J, distinguishing Re Shaw:
“In order to be charitable, research must either be of educational value to the researcher or must be so directed as to lead to something which will pass into the store of educational material, or so as to improve the sum of communicable knowledge in an area which education may cover – education in this last context extending to the formation of literary taste and appreciation.”

Rule: Educational purpose if can be passed into the store of educational material

Question 42

Oppenheim v Tobacco Securities Trust [1951] AC 297

Answer 42

Rule: ‘Personal nexus’ test:
“These words ‘section of the public’ have no special sanctity, but they conveniently indicate (1) that the possible…beneficiaries must not be numerically negligible, and (2) that the quality which distinguishes them from other members of the community, so that they form by themselves a section of it, must be a quality which does not depend on their relationship to a particular individual…A group of persons may be numerous, but, if the nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes.” (Lord Simmonds)

Quote: Lord MacDermott (dissenting) on the Compton principle:
“a very arbitrary and artificial rule”
Should treat the matter “very much as a question of degree”

Question 43

Re Compton [1945] Ch 123

Answer 43

Rules:

1. Threshold for purpose benefitting a sufficient section of the public has higher threshold for education that poverty
2. As the Compton ‘personal nexus’ rule stands, it looks to “form rather than substance”. So, where a charity is established in favour of the public, but is de facto administered to a small class, this will satisfy the public benefit requirement.

Question 44

IRC v Education Grants Association Ltd (EGA) [1967] Ch 123

Answer 44

Rule: Employees of limited company not sufficient section of the public to satisfy public benefit test

cf Re Koettgen [1954] Ch 252 which shows inconsistent approach of the courts

Question 45

IRC v Baddeley [1955] AC 572

Answer 45

Rule? Another test? “Class within a class”

Question 46

Re Segerdal [1970] 2 QB 697

Answer 46

Decision: Scientology not religious as no evidence of a deity (historically religion given a narrow meaning of faith in God and Worship of god: Re South Place Ethical Society

N.B. Australian law where recognised: Church of the New Faith v Cmrs for Pay-Roll Tax

cf Now accepted that there doesn’t need to be a god but there needs to be expression of belief - unclear whether Scientology would be considered a religious place if applied now

Question 47

R (on the application of Hodkin) v Registrar General of Birth, Deaths, and Marriages [2014] AC 610

Answer 47

Rule: Considered to be a religious place where marriages can be held

Question 48

Commission Guidance 2008 on the Advancement of Religion for the Public Benefit

Answer 48

Commission outlined 4 characteristics of religious belief:
• …belief in a god (or gods) or goddess (or goddesses) or supreme being, or divine or transcendental being or entity or supernatural principle, which is the object or focus of the religion…
• …a relationship between the believer and the supreme being or entity [or principle] by showing worship of, reverence for or veneration of [it]
• …a degree of cogency, cohesion, seriousness and importance
• …an identifiable positive, beneficial, moral or ethical framework

Question 49

Funnell v Stewart [1996] 1 WLR 288

Answer 49

Rule: Fail helading was considered to have “sufficiently religious element” for religious purpose

Question 50

Thornton v Howe (1861) 31 Beav 14

Answer 50

Rule: Promote works of Joanne Southcoat who believed pregnant with next messiah considered religious purpose (satisfied public benefit and belief in supreme giving)

N.B. Careful with this

Question 51

Re Hetherington [1989] 2 All ER 129

Answer 51

Rule: Gift charitable as saying masses to the public so tangible benefit

Question 52

Approach of the Commission to Charities

Answer 52

• In Society of the Precious Blood cloistered nuns were recognised as charities (discuss tangible benefit)
• Preston Down Trust [2014] acted predominantly but not exclusively for the benefit of members so satisfied the public benefit requirements, subject to some changes to deeds of variation
• Approach of the Tribunal: balance the benefit and advantage where a case of determent is raised, by examining evidence before them as to the ‘public’ and ‘beneficial’ nature of the particular organisation

Question 53

IRC v Oldham Training and Enterprise Council [1996] STC 1218:

Answer 53

Case: OTEC was a government funded company limited by guarantee; object to help enterprise for people in Oldham; subsidiary to this support for local business; in this case stated charitable status may be granted where merely incidental benefit to individuals

Decision: Not granted as case is too remote

Rule: Advancement of citizenship or community development may directly or indirectly benefit specific individuals or business and not just the community

Question 54

ViRSA Educational Trust (1997) registered by Charity Commission but since removed (2009) [no information as to why it was removed]:

Answer 54

Case: Originally organisation established to offer training and guidance to local communities connected with rural economy; it could be a charitable purpose if it was helping the local community

Decision: Provided support generally and not specifically to those businesses; it it was specific then it would not be a charitable purpose as helped private individuals not the business at large
2009 struck of register so likely that no longer benefitted community at large and targeted funding towards the business

Rule: Advancement of citizenship or community development may directly or indirectly benefit specific individuals or business and not just the community

Question 55

Re Shakespeare Memorial Trust [1923] 2 Ch 398

Answer 55

Rule: Trust to promote works of Shakespeare charitable purpose for education (now advancement of arts, culture, heritage or science)

Question 56

Royal Choral Society v IRC [1943] 2 All ER 101

Answer 56

Rule: Choir is charitable purpose for education (now advancement of arts, culture, heritage or science)

Quote: “To form and maintain a choir in order to promote the practice and performance of choral works”

Question 57

Re Delius [1957] Ch 299

Answer 57

Rule: “For or towards the advancement…of the musical works of my late husband”, where the music is considered to be “worth appreciating” charitable purpose for education (now advancement of arts, culture, heritage or science)

Question 58

Re Shaw’s Will Trusts [1952] Ch 163

Answer 58

Rule: “Bringing of masterpieces of fine art within the reach of the people of Ireland” charitable purpose for education (now advancement of arts, culture, heritage or science)

Question 59

Re Dupree’s Deed Trust [1945] Ch 16:

Answer 59

Rule: Prize for entering Chess competition was charitable as mental agility and education; considered “slippery slope”
cf Charities Act 2011 s.3(1)(g) Advancement of amateur sport

N.B. Historically, cases for the advancement of sport were brought under the ‘education’ head of Pemsel. Where there was no link to the sport being of educational value, sport was not considered to be charitable.

Question 60

Charities Act 2011, s.3(2)(d)

Answer 60

Tells us that “sport” means sports or games which “promote health by involving mental skill or exertion”

Question 61

Charities Commission “Charitable Status and Sport” (2003)

Answer 61

Either not sports or public benefit:
Angling; Ballooning; Billiards, Pool and Snooker (surprising considering Chess decision); Crossbow; Rifle and Pistol Shooting; Flying; Gliding; Motor Sports; Parachuting

Question 62

Cambridgeshire Target Shooting Association [2015]

Answer 62

Decision: Primarily for the benefit of members, not the defence of the realm to which there was little or no connection; accepted there was mental/health but did not feel this was gained from actual activity of shooting

Question 63

Re Hadden [1932] 1 Ch 133

Answer 63

Rule: Facilities for recreation such as public park is charitable (recreation)

See s.5, CA 2011 in the interests of social welfare

Question 64

Guild v IRC [1992] 2 All ER 10

Answer 64

Case: Sports centre

Decision: Notion of deprivation explicitly dismissed

Rule: For social welfare requirement of improvement of conditions of life for the community at large generally

Question 65

Advancement of environmental protection or improvement

Answer 65

The Commission stresses that an organisation seeking status under this head must provide evidence to show that a particular species, land or habitat to be conserved is worth conserving. This evidence must be objective and authoritative.

Question 66

Joseph Rowntree Memorial Trust Housing Association v Attorney-General [1983] 2 WLR 284

Answer 66

Case: Building housing to sell to the elderly

Decision: Not necessarily within scope of s.3(2)(j) (Relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage
)

Rule: Relief is not synonymous with benefit

Question 67

Re Wedgwood [1915] 1 Ch 113

Answer 67

Case: Benefit for human outweighed the harm to the animals

Question 68

Charities Commission “Recognising Charitable Purposes” (2001)

Answer 68

Charities Act s.3(2)(m)

“In identifying a new purpose as charitable, we will, following the legal framework, need to be clear that there exists a sufficient correlation between those new purposes and purposes already accepted as charitable. While in most cases a sufficiently close analogy may be found, in others, an analogy may be found by following the broad principles which may be derived…from decided cases of the court or the Commission.”

Question 69

Charity Commission Guidance on the ‘reversal’ of public benefit (2008)

Answer 69

o High charges might restrict the opportunity to benefit to an insufficient section of the public (F10, p.22)
o Principle 2b: “Where benefit is to a section of the public, the opportunity to benefit must not be unreasonably restricted by georgraphical or other restrictions or by ability to pay any fees charged.”
o Principle 2c: “People in poverty must not be excluded from the opportunity from the opportunity to benefit”
o Requirement might be met inter alia by the provision of bursaries or assisted places (p.25)

Question 70

Charitable purposes and satisfying the public benefit requirement

Answer 70

Relief of poverty
• Must satisfy PB in the ‘first sense’ i.e. it must be beneficial.
• Recall the ‘poor relations’ cases – seems to be no requirement that the purpose confers that benefit on a ‘sufficient section of the public’ (PB in the ‘second sense’)
• N.B. this is a lower threshold of PB

Advancement of education
• Must satisfy PB in both the ‘first sense’ and the ‘second sense’
• It will not satisfy the PB requirement in the ‘second sense’ if there is a personal-nexus (Oppenheim)

Advancement of religion
• Must satisfy PB in both the ‘first sense’ and the ‘second sense’
• The purpose must confer a tangible benefit on a section of the community (Gilmour, Hetherington, etc)
• Consider the approach of the Commission in Preston Down Trust [2014]

Fee-charging institutions
• Must satisfy PB in the ‘first sense’ and the ‘second sense’
• Is the benefit direct or indirect? (Re Resch)
• Purpose must confer some benefit to the poor, and must do so in a way that is more than a ‘mere token’ (ISC decision)

Must be beneficial in a way that the law regards as charitable (National Anti-vivsection)
◦ If the political purpose is ancillary to the main charitable objects, it will be considered charitable

Consider alternative tests e.g. ‘Class within a class’ test (IRC v Baddeley)

Know the position of the Charities Commission:
o Guidance 2008
o Guidance 2013
o Decisions of importance from the Charities Commission:

Attorney General (Poverty Reference) case; 
•	ISC case; 
•	Preston Down Trust

Some questions to think about:
o Was there ever a presumption of public benefit?
o Is the Charity Commission acting beyond its authority?

Question 71

PQ STRUCTURE:

Answer 71

1. CHARITABLE PURPOSE
2. PUBLIC BENEFIT
3. EXCLUSIVELY CHARITABLE
4. POLITICAL
5. CY-PRES
   s. 62 applies with subsequent failure