Charitable Trusts Flashcards
Charitable Trusts
What sections of what act govern?
S.2(1): For a gift to be charitable, it must be for “charitable purposes”
S.3(1): Subject to subsection (2), the following shall be a charitable purpose:
(a) The prevention or relief of poverty or economic hardship
(b) The advancement of education
(c) The advancement of religion
(d) Any other purpose that is of benefit to the community
However, these are only prima facie charitable. They must satisfy s.3(2):
S.3(2): A purpose shall not be charitable unless it is of public benefit
Charitable Trusts
What are the advantages of charitable trusts?
(i) If it fails, the court may invoke its cy-pres jurisdiction + apply it as
near to charitable purpose specified (ii) A charitable trust enjoys exemptions from certain taxes
Charitable Purposes
Commissioner for Special Purposes of Income Tax v Pemsel [1891]
- Lord MacNaghten identified 4 categories that were considered ‘charitable in nature’. Original test:
(1) Trusts for the relief of poverty (2) Trusts for the advancement of education
(3) Trusts for advancement of religion (4) Trusts for other purposes beneficial to the community - This test is largely, but not exactly, mirrored in the 2009 act: (i) it adds ‘prevention’ and ‘economic hardship to part one and (ii) they must be of public benefit also.
Charitable Purposes
Re Worth’s Library [1995]
- Keane J noted the court leans in favour of charities, thus will prefer a construction that gives effect to the testator’s desire to benefit a stated object rather than one that leads to a failure of the bequest.
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship
Re Gardom [1914]:
Gift to provide temporary residence for ladies of limited means held charitable.
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship
Re Coulthurst [1951]
- Trust for the benefit of the widows and children of the deceased officers of a bank, who, by reason of their financial circs, were the most deserving. Held charitable: it was for the relief of poverty
- Held poverty doesn’t mean destitution + can include ppl who have to ‘go short’: economic hardship!
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship
Re Sanders’ Will Trusts [1954
A bequest to provide housing for the “working classes” and their families resident in a certain district was not for the relief of poverty and thus not charitable.
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship
Re Segelman Deceased [1996]
- Gift to poor and need members of a class of the testator’s relatives. Held charitable: relief of poverty
- Evidence showed most members are able to meet day-to-day expenses but not affluent + need a helping hand sometimes to overcome unforeseen crises. Liberal approach to poverty here.
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship - Pre=2009 Public Benefit Requirement
General Rule?
The public-benefit requirement had almost vanished for trusts for relief of poverty. That said, a distinction was drawn between a gift to a specified poor person(s) and a gift to a class of poor persons. Only 2nd ok.
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship - Pre=2009 Public Benefit Requirement
Re Scarisbrick [1951]
- Trust for the benefit of such relatives of T’s kids who, in the opinion of the survivor of her kids, ‘shall be in needy circs’. Held that this was a charitable trust.
- This case says you can create valid charitable trusts for your relatives but it must be a class of persons
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship - Pre=2009 Public Benefit Requirement
Dingle v Turner [1972
- Trust fund for pensions to a co’s poor employees who were either 60+ or at least 45 but incapacitated
from earning a living. While only 600 employed on date, HOL accorded the trust charitable status.
Charitable Purposes - The Prevention or Relief of Poverty or Economic Hardship - Post=2009 Public Benefit Requirement
General rule?
The public benefit provision of the 2009 Act applies to this category so the above cases have been overruled
by legislation i.e. s.3: if personal connection bw donor + all or significant no of beneficiaries, not allowed.
Charitable Purposes - The Advancement of Education
Re Shaw [1957]
- Direction in will that residue of estate be applied to research into advantages of reforming the alphabet
- Held not charitable if object merely increase in knowledge: must combine with teaching or education.
Charitable Purposes - The Advancement of Education
Re Hopkin’s Will Trusts [1965]:
Gift to society devoted to locating the Bacon-Shakespeare papers. Held charitable as it was for the advancement of education.
Charitable Purposes - The Advancement of Education
Re Worth’s Library [1995] Ireland
- Gift of library to a hospital. Will stated only the physician, chaplain and surgeon were to have use of it
- HC: Education has been given a broad meaning so as to encompass gifts for for establishment of theatres, art galleries, museums, promotion of literature and music.
- Held as only tiny part of library devoted to medicine, it’d strain the definition of ‘education’ too much and as only 3 people to have use of it, it wasn’t of ‘public benefit’.
Charitable Purposes - The Advancement of Education
Re Pinion [1964]:
Promotion of a collection of paintings was held not to advance education as the paintings were ‘atrociously bad’ and ‘worthless’
Charitable Purposes - The Advancement of Education
Re Delius [1957]
Promotion of the work of the composer Delius was held to advance education.
Charitable Purposes - The Advancement of Education
S.3(11)(k):
Identifies the advancement of arts, culture, heritage or sciences as being of benefit to the community. Pre-2009 cases thus no longer education, for advancement of community.,
Charitable Purposes - The Advancement of Education - Gifts to Advance Physical Education
Re Mariette [1915]
- Gift creating squash courts + athletics prizes at Eton college charitable.
Charitable Purposes - The Advancement of Education - Gifts to Advance Physical Education
IRC v McMullen [1981] NB
- Trust to ‘organise, provide or assist in the organisation of facilities to enable pupils at schools and universities in any part of UK to play association football + other sports + ensure due attention was given to PE + development of their minds’. Held charitable trust for the advancement of educ
Charitable Purposes - The Advancement of Education - Gifts to Advance Physical Education
Re Nottage [1895]
- Gift for perpetual trophy of rowing competition failed. Purely sport, no education.
Where the trust is to advance physical education in an educational institution, it can be charitable.
Charitable Purposes - The Advancement of Education - Gifts to Promote Self-Help Activities
Magee v Attorney General [2002]
- Gift to promote activities in a local community hall that primarily consisted of the running of self-help groups. Held chartable for the advancement of education.
Charitable Purposes - The Advancement of Education - Public Benefit Pre and Post 2009
Oppenheim v Tobacco Securities Trust [1951]
The public-benefit requirement has been applied strictly to gifts for the advancement of education
- Trust for education of children of employees of a group of companies. No. of employees: 110k +
- Held not a charitable trust as the class of beneficiaries didn’t constitute a ‘section’ of the community: beneficiaries must not be numerically negligible nor related/have a relationship w the individual.
Charitable Purposes - The Advancement of Education - Public Benefit Pre and Post 2009
Re Worth’s Library [1995]
- Keane J noted that the public benefit element must be present and, if the benefit extends to a section of the community only, the section must not be numerically negligible. Here only 3 people. No public benefit.
- The beneficiaries being related or connected to the testator is a ‘fatal defect’.
Charitable Purposes - The Advancement of Religion - Gift for the Purposes of Religion
Arnott v Arnott [1906]:
A gift for religious purposes and not more will be construed by the court as confined to such religious purposes as are in their nature charitable i.e. it is charitable
Charitable Purposes - The Advancement of Religion - Gift for the Purposes of Religion
Quinn’s Supermarket v AG [1972]:
Held ‘religion’ is not confined to Christian faiths.
Charitable Purposes - The Advancement of Religion - Gift to the Holders of Ecclesiastical Office
Donnellan v O’Neill [1870]:
- Gift to a cardinal absolutely for his own use and benefit not charitable: given in private capacity.
Charitable Purposes - The Advancement of Religion - Gift to the Holders of Ecclesiastical Office
Gibson v Representative Church Body [1881]:
- Gift to the chaplain of the Rotunda Chapel at the time of T’s death and his successor held charitable.
Charitable Purposes - The Advancement of Religion - Gift for the Celebration of Masses
These are dealt with by statute, describe this?
S.45(2) Charities Act 1961: Gift for the celebration of mass was a gift for the advancement of religion i.e. it was ‘conclusively presumed’ the purpose includes and will occasion public benefit. Repealed:
S.3(4) 2009 Act: It’s ‘presumed’, unless contrary is proven, a gift for advancement of religion is for
public benefit. So, for celebration of mass, it is presumed to be for public benefit until contrary shown.
S.3(10): A gift is not a gift for the advancement of religion if it’s made to an organisation or cult (a) the
object of which is making a profit or (b) uses psychological manipulation of followers/to get new followers
Charitable Purposes - The Advancement of Religion - Public Benefit Pre and Post 2009
Governed by statute?
S.45 CA 1961: conclusively presumed of public benefit. S.3(4) 2009: Presumed until contrary shown
Charitable Purposes - Purposes that are of Benefit to the Community
What section sets outa non-exhaustive list?
S.3(11) provides a non-exhaustive list of purposes of ‘benefit to the community’:
(1) The advancement of community welfare incl. the relief of those in need by reason of youth, age, ill-health or disability
(2) The advancement of community development including rural and urban regeneration
(3) The promotion of civic responsibility or voluntary work
(4) The promotion of health, including prevention or relief of sickness, disease or human suffering
(5) The advancement of conflict resolution or reconciliation
(6) The promotion of religious or racial harmony and harmonious community relations
(7) The protection of the natural environment
(8) The advancement of environmental sustainability
(9) The advancement of the efficient and effective use of the property of charitable organisations
(10) The prevention or relief of suffering of animals (note: does not apply to individual animals)
(11) The advancement of the arts, culture, heritage or sciences and
(12) The integration of the disadvantaged and the promotion of their full participation in society.
So must be (i) of benefit to the community and (ii) of public benefit.
Charitable Purposes - Purposes that are of Benefit to the Community - “Of Benefit to the Community”
General rule?
In deciding if a purpose not listed in s.3(11) is of benefit to community, courts look at pre-2009 case-law
Charitable Purposes - Purposes that are of Benefit to the Community - “Of Benefit to the Community”
Re Worth’s Library [1995] IRELAND - Subjective Test:
- Intention of testator is of paramount importance. If they believed it was of benefit to the community, then it’s regarded as such provided not illegal/immoral
Charitable Purposes - Purposes that are of Benefit to the Community - “Of Benefit to the Community”
Re Hummeltenberg [1923] ENGLAND – Objective Test:
- The question is whether a gift is operative for the public benefit is a question to be answered by the court
forming an opinion on the evidence before it.
Charitable Purposes - Purposes that are of Benefit to the Community - Relief of the Disabled (s.3(11)(a)
Re Dunlop [1984]
Age. Trust for founding of a home for ‘old Presbyterian persons’ held charitable
Charitable Purposes - Purposes that are of Benefit to the Community - Relief of the Disabled (s.3(11)(a)
Re Lewis [1955]:
Disability. Gift to 10 blind girls + 10 blind boys in certain area held charitable.
Charitable Purposes - Purposes that are of Benefit to the Community - Relief of the Sick and Maintenance of a Hospital (s.3(11)(a) and (d))
Barrington’s Hospital v Commissioner of Valuation [1957]
- Trust for care of sick or maintenance of a hospital held charitable. The fact there was a few fee-paying patients doesn’t change this unless predominantly/exclusively for well-off patients: not charitable
Charitable Purposes - Purposes that are of Benefit to the Community - Relief of the Sick and Maintenance of a Hospital (s.3(11)(a) and (d))
Gleeson v AG [1973]
Irish HC held Vincent’s private hospital as a charitable institution. Grey area.
Charitable Purposes - Purposes that are of Benefit to the Community - The Benefit and Protection of Animals (s.3(11)(j))
Re Wedgewood [1915]:
Gift to research to investigate more humane ways to slaughter animals charitable. Held gifts that benefit and protect animals and discourage cruelty are charitable.
Charitable Purposes - Purposes that are of Benefit to the Community - The Benefit and Protection of Animals (s.3(11)(j))
Re Wedgewood [1915]:
Gift to research to investigate more humane ways to slaughter animals charitable. Held gifts that benefit and protect animals and discourage cruelty are charitable.
Charitable Purposes - Purposes that are of Benefit to the Community - The Benefit and Protection of Animals (s.3(11)(j))
National Anti-Vivisection v IRC [1948]:
Abolition of vivisection not beneficial to comm: benefits humans
Charitable Purposes - Purposes that are of Benefit to the Community - The Provision of Recreational Facilities
Clancy v Commissioner of Valuation [1911]
- Hall built to soberness among poor + working classes of Sligo town. Used to play billiards+ take baths
- Pay fee for first entry, then make donations if can afford. Over half of the users made donations (NB)
- Held not exclusively for charitable purposes. If only poor used it, it could be for charitable purposes.
Charitable Purposes - Purposes that are of Benefit to the Community - The Promotion of Tourism
National Tourism Development Authority v Coughlan [2009] NB
- Trust: ‘the promotion of tourism in Killarney by maintaining three golf courses there’ on basis gold was education and Killarney was a tourist venue and to prevent urban sprawl.
- Held indicia of charity: disinterested in profit, benefits community at large + widely available to comm
- Exclusivity indicates against charitable: more particular the benefit, less likely the enterprise charitable
- Held tourism has never been held a charitable purpose
- Here, you cannot say here you are disinterested in a monetary return: purpose of you seeking to get this charitable status is to benefit people that are members or can afford to pay green fees.
Charitable Purposes - Purposes that are of Benefit to the Community - The Promotion of Sport
National Tourism Development Authority v Coughlan [2009]
- Held importance of exercise is recognised as a benefit to general health… but not recognised by the law as charitable unless in conjunction w education. Recreational purposes alone not charitable.
Charitable Purposes - Purposes that are of Benefit to the Community - Political Trusts
Re Trusts of Arthur McDougall [1967]:
Trust for teaching political theory held charitable (education)
Charitable Purposes - Purposes that are of Benefit to the Community - Political Trusts
Re Ni Brudair [1979]:
Gift benefitting Irish Republicans between 1919-21 not charitable
Charitable Purposes - Purposes that are of Benefit to the Community - Political Trusts
McGovern v AG [1982]
- Gift to Amnesty International. Purposes included ‘to abolish torture or inhuman/degrading treatment which included putting pressure on foreign governments.
- Held this was a political and trusts that purport to procure changes in the law will not be valid charitable trusts. LRC recommended change in law (reflected in s.2)
Charitable Purposes - Purposes that are of Benefit to the Community - Political Trusts
s.2 of the act in this context?
Excluded body if is one body that promotes a political cause unless the promotion of that cause relates directly to the charitable purpose of that body.
Charitable Purposes - Purposes that are of Benefit to the Community - Public Benefit pre-2009
Bath & North Eastern Council v AG [2002]
Just because the purpose of a gift was beneficial to the community did not mean it was of public benefit
Held the purpose itself must be beneficial as one of public utility and must be available to a sufficient section of the comm (see Oppenheim for definition of section)
Charitable Purposes - Purposes that are of Benefit to the Community - Public Benefit pre-2009
IRC v Baddeley [1955]
- Trust to provide recreational facilities for Methodists in London did not satisfy public benefit req
- Held a class of persons may constitute a ‘section of the community’ in one category, but not in another
- Lord Reid dissented stating he didn’t believe they should vary.
Charitable Purposes - Purposes that are of Benefit to the Community - Public Benefit pre-2009
Dingle v Turner [1972]:
Whether beneficiaries constitute a section of the community is a question of degree + can’t be decisive of the Q whether the trust is a charity. Must depend on purpose of the trust.
Charitable Purposes - Purposes that are of Benefit to the Community - Public Benefit pre-2009
Re Worth Library [1995]
- Gift of library to hospital given charitable status under ‘benefit to community’ despite only 3 beneficiaries: of public benefit despite only 3 people: haven of quiet intellectual relaxation for the beneficiaries.
Charitable Purposes - Purposes that are of Benefit to the Community - Public Benefit pre-2009
R Independent Schools v Charity Commissioner for England and Wales [2012]
- Noted there can be no definition of public benefit as it changes so much over the years but it must involve a benefit to the community and must be a sufficiently numerous section of the public
Charitable Purposes - Purposes that are of Benefit to the Community - Public Benefit post-2009
Governed by statute, describe it?
S.3(3): A gift is not of public benefit unless
(a) It is intended to benefit the public or a section of the public
(b) where a benefit is conferred on a person other than in his capacity as a member of the public, any such benefit is reasonable in all of the circs and necessary for the furtherance of the public benefit.
S.3(7): In determining if gift is of public benefit, must regard
(a) Any limitation imposed by donor on class of persons + whether its justified + reasonable and
(b) The amount of any charge payable for any service done in furtherance of the purpose of the gift + whether likely to limit no. of persons who’ll benefit from the gift
Limitation in (a) not justified if all / significant no. of beneficiaries have a personal connection to donor
S.2(2)(a): A person is connected with someone if that person is a parent, brother, sister, spouse, grandparent, grandchild, child, in a partnership with them, employer, body corporate (if controls it).
S.3(4): A gift for the advancement of religion is presumed, until contrary shown , to be of public benefit
S.49 CA 1961: Saviour for mixed trusts – Allows court exclude non-charitable + give effect to charitable part
THe Doctrine of Cy-pres
General description of the doctrine?
HC may exercise its cypres jurisdiction in respect of a charitable gift or trust only
- i.e. it is ONLY available where the original trust was for a valid charitable purpose (NB Exam)
- Exercised if it’s impossible or impractical to apply the property to the charitable purpose specified by the donor. The court applies the property cy-pres i.e. as near as possible to the charitable purpose specified.
The Doctrine of Cy-pres
General description of the doctrine?
HC may exercise its cypres jurisdiction in respect of a charitable gift or trust only
- i.e. it is ONLY available where the original trust was for a valid charitable purpose (NB Exam)
- Exercised if it’s impossible or impractical to apply the property to the charitable purpose specified by the
donor. The court applies the property cy-pres i.e. as near as possible to the charitable purpose specified.
The Doctrine of Cy-pres - Two Types of Impossibility
Describe the distinction made between the two types of impossibility?
We distinguish between initial and supervening impossibility as, before the court will exercise the jurisdiction in a case of initial impossibility, it must discern a general charitable intention on part of donor
(a) Initial Impossibility: If it was impossible or impractical to apply the property to the charitable purpose specified by the donor ON the date which the gift became effective (usually donor’s death). The trust’s purpose is immediately invalid.
(b) Supervening Impossibility: If it became impossible or impractical to apply the property to the charitable purpose specified by the donor AFTER the date on which the gift became effective, the trust’s purpose has failed AFTER it came into existence.
The Doctrine of Cy-pres - Exceptional case
Re Royal Hospital Kilmainham [1966]
- Cypres is confined to cases where the property is given with a general intention to charity but has one exception: where property is given absolutely and perpetually to a charity for a particular purpose and has vested in the charity the fund can be applied cypres irrespective of the donor’s intention.
The Doctrine of Cy-pres - Breadth of Doctrine
What section broadened its applicaiton?
S.47 Charities Act 1961 broadens the circs a court may exercise cy-pres: (i) original purpose has been fulfilled as far as pos (surplus property), (ii) it provides a use for only part of the property (iii) original purpose has been adequately provided for by other means or ceased to be charitable in purpose, etc.
The Doctrine of Cy-pres - Initial Impossibility
General approach to initial impossiblity?
Before a court will exercise its cy-pres jurisdiction, it must discern a general charitable intention. If the court can’t exercise the cy-pres doctrine, the property is held on resulting trust for the T’s estate
The Doctrine of Cy-pres - Initial Impossibility - General Charitable Intention
Re Taylor [1888]
- If T’s paramount object was to benefit not a particular institution but to effect a particular form of charity independently of any specific institute, then although he may have indicated the mode or specific organisation in which he desires it be carried out, you regard the paramount intention mainly.
- No intention if simply intended to benefit one organisation.
The Doctrine of Cy-pres - Initial Impossibility - General Charitable Intention
Re Lysaght [1966] Liberal interpretation of GCI
risky as defeats real intention of donor
- T left money to RCSI in England to fund scholarships w restriction: recipient must be male, UK born, son of UK doctor, not Jewish or Catholic. RCSE refused to accept the gift on those terms.
- Held there was a general charitable intention by T + to insist on enforcing the discrim clause would defeat it. Thus a cypres scheme was arranged under which the religious restriction was omitted
The Doctrine of Cy-pres - Initial Impossibility - General Charitable Intention
Re Prescott [1990] Restrictive
- T left house to Dublin ‘Russian Orthodox Church’ parish. Said if no members living in Ireland, sell the house and give proceeds to church in England. When T died, RO church didn’t exist in Dublin.
- Held gift failed: gift to a body that did not exist at the time of making of will or her death.
- The gift over depended on the validity of this will, also lapsed. No evidence of any intention other than to benefit that specific body. Delany says this is restrictive as gift over suggested a more general CI
The Doctrine of Cy-pres - Initial Impossibility - General Charitable Intention
Re Jordan [2014] NB
- T left 4/5 of estate to memorial fund (transpired never set up) and 1/5 to charity wound up after will was made but before T’s death. Held when the specific bequest in the T’s will was examined, no general intention was discernible. In these circs, wouldn’t go beyond the will to infer a GCI.
The Doctrine of Cy-pres - Initial Impossibility - Types of Initial Impossibility
Re Davis [1902]
- Held where you find a gift to a charitable institution that never existed, the court, which always leans in favour of charity, is more ready to infer a general charitable interest than to the contrary.
The Doctrine of Cy-pres - Initial Impossibility - Types of Initial Impossibility
Re Spence [1979]
- Megarry VC held a court is far less ready to find a general charitable intention where a gift is to body that existed at the time of the will but ceased to exist before T died.
The Doctrine of Cy-pres - Initial Impossibility - Types of Initial Impossibility
Corbally v Representative Church Body [1938]
- If a named parish ceased to exist as a separate entity and amalgamates with another, a gift to the named parish may be applied to the purposes of the new unit.
The Doctrine of Cy-pres - Initial Impossibility - Types of Initial Impossibility
Re Geary’s Trusts [1980]:
Held a court won’t allow a charitable legacy fail because of misdescription.
The Doctrine of Cy-pres - Initial Impossibility - Types of Initial Impossibility
Re Dunwoodie [1977]
- T left her residuary estate on trust for Presbyterian church. Directed it be used to install bells.
- Didn’t install the bells. Held this was a case of initial impos as committee’s consent essential to trust
- However, there was a general intention to promote the church’s purpose: property applied cy-pres
The Doctrine of Cy-pres - Supervening Impossibility
General rule?
Before exercising its jurisdiction, it does not have to discern a general charitable intention as it’d been in operation but something caused it to cease. Suffices if the prop was given absolutely+perpetually to charity
The Doctrine of Cy-pres - Supervening Impossibility
Re Royal Hospital Kilmainham [1966]
- 1684 King set up RHK for support of old soldiers in army. Closed down after Irish free state. RHK
Act 1961 provided for set up of scheme for charitable purpose to some classes of the defence forces - HC noted it was no longer possible to fulfil the founder’s intentions thus the available funds should be applied cy-pres by benefiting organisation of former members of the Defence Forces + British Army
The Doctrine of Cy-pres - Supervening Impossibility
Re Worth’s Library [1995] RHK confirmed recently
- Held no gen charitable intention as T intended to benefit Dr Steven’s hospital only, but held it was an absolute gift to charity that only failed bc of supervening act of hospital closing so could be applied cypres
The Doctrine of Cy-pres - Supervening Impossibility
Re Trusts of the Rectory of St John [1869]
- Trust founded to provide for maintenance of choir + choral service at a church in Cork.
- Surplus of funds after done. Held that part of the fund was not required for the literal fulfilment of the donor’s intentions + thus some of it could be applied cy-pres to purchase an organ for the church.
The Doctrine of Cy-pres - Supervening Impossibility
Doyle v AG [1993]
- Fund set up to help a child w rare genetic skin disease. When she died, proposed to distribute to 7 local charities. AG opposed: charities were not as near as possible to the original purpose.
- HC ordered the funds be put towards research on the particular disease to comply w cypres doctrine
Non-Charitable Trust Exceptions - For the Erection or Maintenance of a Tomb or Monument
What statutes apply here?
S.50(1) CA 1961: Gifts for the provision, maintenance or improvement of tomb etc. will be charitable
S.50(2): Such a gift is charitable if it doesn’t exceed (a) if income only gift, £60 p/a (b) Other, £1k p/a
As the maintenance of a tomb/monument normally always exceed the amount in s.50(2), they continue to be treated as a non-charitable purpose trust. These trusts offends the beneficiary principle, thus it’s imperative the trust is sufficiently certain and complies with the rule against perpetual trusts/inalienability
Non-Charitable Trust Exceptions - For the Erection or Maintenance of a Tomb or Monument
Musset v Bingle [1876]
- Two gifts: first (£300) to be used to erect a monument to T’s wife’s first husband. The income from the second (£200) was to be used to maintain the monument. Court upheld the first gift only.
- Must have assumed the monument would be erected within 21 yrs after T’s death
- Second gift was void as it was perpetual in nature. £200 would never be touched: it was only the income from it that would be used to maintain the monument.
Non-Charitable Trust Exceptions - For the Erection or Maintenance of a Tomb or Monument
Re Endacott [1960]
- T’s residuary estate was left to a parish council ‘for purpose of providing some useful memorial to me’
- Held void for uncertainty: unspecified memorial. Shouldn’t add to exceptions to purpose trusts.
Non-Charitable Trust Exceptions - For the Maintenance of Particular Animals
Re Dean [1889]:
Trusts to maintain particular animals offend the beneficiary principle (opposed to relief of suff of animals)
£750 p/a for upkeep of T’s horses + hounds. Upheld as long as not to last for ‘’too long’’
Non-Charitable Trust Exceptions - For the Maintenance of Particular Animals
Re Kelly [1932]:
Upheld gift for upkeep of the T’s dogs but only for 21 yrs after T’s death.
Non-Charitable Trust Exceptions - Gifts to Unincorporated Associations that Advance/Promote a Non-Charitable Purpose
Conservative and Unionist Central Office v Burrell [1982]
Defined a UA as ‘2 or more people bound together for one or more common purposes, not being business ones, by mutual undertakings in an org that
has rules that identify who control it + its funds rests +on what terms + which can be joined or left at will
Non-Charitable Trust Exceptions - Gifts to Unincorporated Associations that Advance/Promote a Non-Charitable Purpose
What is the difficulty with this course and what are the two approaches generally adopted?
It’s not a company so doesn’t have a SLP so can’t own property. Can’t make a gift to it. If someone tries to make gift to UA with non-charitable purpose, such a gift is susceptible to two constructions:
(a) It is a gift to be applied to advance or promote the association’s non-charitable purpose
(b) It is a gift to the association’s members
Non-Charitable Trust Exceptions - Gifts to Unincorporated Associations that Advance/Promote a Non-Charitable Purpose
(a) It is a gift to be applied to advance or promote the association’s non-charitable purpose
Void unless:
(i) It’s for the benefit of an individual(s) so it satisfies bene principle: Re Denley’s Trust [1969]
(ii) It’s not too vague
(iii) It doesn’t offend the rules against perpetual trusts and inalienability.
Non-Charitable Trust Exceptions - Gifts to Unincorporated Associations that Advance/Promote a Non-Charitable Purpose - It is a gift to the association’s members
First construction: Stewart v Green [1871]
It may be construed as…
- (1) A gift to the individuals in the assoc on date of T’s death or alive on the date of the disposition
- (2) A gift to the association in its communal character of whomsoever it should from time to time and forever consist i.e. a gift to present and future members of the association.
- Court held the first would be good and effectual in law but the second would be utterly incapable of legal realisation as the community has no legal personality + is incapable of taking that in character.
Non-Charitable Trust Exceptions - Gifts to Unincorporated Associations that Advance/Promote a Non-Charitable Purpose - It is a gift to the association’s members
Second construction - Re Byrne [1935]
- T left residue to Jesuit Order Ireland. Held T’s intention to divide the money amongst individuals forming a class i.e. to benefit an ascertainable class. Not intention to benefit a continuing body.
Non-Charitable Trust Exceptions - Gifts to Unincorporated Associations that Advance/Promote a Non-Charitable Purpose - It is a gift to the association’s members
What is a potential issue in these cases and what case deals with it?
One issue: If a member left the assoc he could take his share of the property with him. Also, a new member wouldn’t have an interest in the property. This issue is overcome by the approach in
Neville Estates Ltd v Madden [1962]
- It may be a gift to existing members subject to their contractual rights+liabilities to each other. So member can’t sever share: it accrues to other members on death/resignation even ones became members after gift
