Equity and Trusts - Object and Purpose Trusts Flashcards
Define power of appointment
A person has power to deal with property in a particular way but is under no obligation to exercise this authority
What is the certainty of object test for fixed trusts?
Complete list test
What are the requirements for the complete list test?
1- Comprehensive list of each and every beneficiary
2- Conceptual certainty
3- Evidential certainty
For the complete list test you need a comprehensive list of each and every beneficiary
IRC v Broadway Cottages Trust
What is the certainty of object test for discretionary trusts?
Given postulant test
What is the given postulant test?
It is possible to say whether any given postulant is or is not a member of the class of objects (McPhail v Daulton)
It is possible to say whether any given postulant is or is not a member of the class of objects
(McPhail v Daulton)
Which case set out guidance for the given postulant test?
Re Baden’s Deed Trust
Conceptual certainty is essential in the description of objects but it is unclear whether ‘don’t knows’ would mean failure of the given postulant test
Re Baden’s Deed Trust
If there are don’t knows, trust will fail
Stamp
Don’t knows will not necessarily mean failure of the trust. The burden is on the claimant to prove he is within the class of objects
Sachs
If there is a substantial number of people who can say they are within the class the trust will pass the test
Megaw
If the numbers of potential objects within a class is too large it may result in the failure of the trust due to administrative unworkability
West Yorkshire Metropolitan CC
If the purpose of a trust is capricious (irrational) it may fail
Re Manisty’s Settlement
The test for powers of appointment is the given postulant test
Re Gestner’s Settlement
You need identifiable human beneficiaries who can enforce the trust to satisfy the beneficiary principle
Morice v Bishop of Durham
Care/ Maintenance of specific animals
Re Dean
Care/ Maintenance of Graves/ Monuments
Re Hooper
Purpose trusts usually fail due to a lack of identifiable human beneficiary to enforce the trust
Re Astor’s Settlement Trust
What criteria are needed for Denley Trusts?
1- The purpose trust has ascertainable beneficiaries
2- It is directly for the tangible benefit of individuals
3- It does not offend the rule against inalienability
What criteria are needed for charitable trusts?
1- Charitable Purpose under s3(1) Charities Act 2011
2- Sufficient public benefit
3- Exclusively charitable
For public benefit to be sufficient, the numbers cant be negligible (cant be a class within a class)
IRC v Baddeley
Trusts for the relief of poverty have sufficient public benefit even if they only benefit a small class of objects
Re Scarisbrick
People benefiting cannot be connected by a personal nexus (e.g. all employees of the same company/ family members)
Oppenheim v Tobacco Securities Trust (employees) Re Compton (family)
Private schools cannot be charitable unless they help the less well off
Independent Schools Council v Charity Commission for England and Wales
General rule: political purpose is not charitable
Amnesty case
Define non-charitable unincorporated association
1- Group bound together for a common purpose
2- not being a business purpose
NCUAs do not have legal personality so cannot hold property in their names. There is therefore no identifiable human beneficiary to enforce the trust
Morice v Bishop of Durham
How does Re Reacher work?
1- Trust seen as outright gift to members
2- As an accretion to the associations funds
3- To be used in accordance with the association’s rules
What is the proviso to Re Reacher? (+ Authority)
Rules of the association must allow the members to dissolve it and share the funds between them for the gift to be valid (Re Grant)
If the legacy to a non-charitable unincorporated association is specified as a purpose trust, how should it be dealt with?
Re Lipinski:
1- Under Re Reacher; or
2- Under Denley
The rule against inalienability
Re Hooper
