Ls 8, 9, 10 Charitable Trusts

Question 1

**Dingle v Turner [1972] AC

Answer 1

• Approach of the courts to ‘poverty’
• Facts
• The testator left part of his property on charitable trusts for the relief of the poverty of ‘the poor employees’ of a company. The appellant argued that it was not a charitable gift, and that the gift failed.
• Note: The poverty category is a ‘major exception’ to the rule on personal relationships (in this case the employer and employee) laid down in Oppenheim v Tobbacco Securites Trust.
♣ This is because academics such as Richard Edwards and Nigel Stockwell argue that allowing such trusts to exist relieves the rest of society for having to provide for poor people; as a result, there is ‘public benefit’ in a wider way.
♣ The general public benefit rule in the ‘poverty’ category is that ‘gifts for the relief of poverty among poor people of a particular description’ is charitable;’ gifts to particular persons, the relief of poverty being the motive of the gift; are not.
• Held
• The intention of the gift was to benefit the poor generally who fell within a certain description, rather than certain individuals. Since they were a ‘section of the public’, the gift was a charitable and did not fail. (Majority) The fiscal advantages obtained by making a gift charitable should not be taken into account in assessing its motives and charitable status.

Question 2

Re Coulthurst’s Will Trusts [1951] Ch 661, at 666 (more than “going short”)

Answer 2

• ‘Poverty’ is a subjective term and in this case, Sir Raymond Evershed indicated that it should be treated as such; ‘poverty, of course, does not mean destitution… it [means] persons who have to ‘go short’…due regard being had to their status in life and so forth’.
• The problem with this statement is that it appears to indicate that a millionaire who loses half of his income may be considered ‘poor’, in that he is unable to have the lifestyle he is accustomed to. Some limits were set to this by Lord Simonds in IRC v Baddeley…. Basically the gift that creates the charitable trust, whatever the definition of poverty accepted by the courts, must be for the poor and nobody else.
• Contrast Re Gwyon, where the trust was not limited to the poor and went to every child in the area, hence the trust failed.

Question 3

Re Cottam [1955] 3 All ER 704 (flats at “economic rents”)

Answer 3

• Facts
• A testator directed his trustees to transfer a trust fund to a corporation who should apply it for the provision of a flat or flats to be occupied by persons living within the boundaries of the country and ‘being in every case over the age of 65 years.’ He further directed that the flats should be let at economic rents and that the corporation should formulate such rules and regulation as it should think fit.
• Held
• The testator’s intention was to benefit aged persons of small means by the provision of homes of a cheap character let at rents which were within their capacity to pay; and that the gift constituted a valid charitable trust.
• Note: In this case the particular group of people was described –

*Joseph Rowntree Memorial Trust Housing Association Ltd V A-G [1983] 1 All ER 288
• Facts
• Housing Association wished to build self-contained dwellings for sale to the elderly. The court was asked whether such activity would be charitable in nature.
• Held
• The proposed schemes charitable. They were for the relief of the aged, and remained charitable even though individuals would benefit.

Although the gift was for the benefit of the specified class – individuals would also benefit. Peter Gibson J  rejected the objection that the gift were for the benefit of private individuals and not for a charitable class.
•	‘The schemes are for the benefit of a charitable class, that is to say the aged having certain needs requiring relief therefrom. The fact that once the association and the trust have selected individuals to benefit from the housing, those individuals are identified private individuals does not seem to me to make the purpose in providing the housing a non-charitable one any more than a trust for the relief of poverty ceases to be a charitable purpose when individual poor recipients of bounty are selected.’ 
•	Note: Again highlights the idea that the trust will survive as long as a class group is selected.

Question 4

Re Gardom [1914] 1 Ch 662 (“ladies of limited means”)

Answer 4

• A testatrix devised and bequeathed her real state and personal estate to the plaintiffs upon trust for the maintenance of a temporary house of residence for ladies of limited means. If at any time, such house should be considered unnecessary the money thus set apart was to be distributed by the trustees in yearly payments to such ladies as they might consider worthy of such assistance.
• Held
• The primary trust in the will was a good charitable trust of so much of the estate as might be necessary for the maintenance of the house, and the subsequent alternative bequests did not render it void for uncertainty.

Question 5

Spiller v Maude (1881) 32 Ch D 158 (“decayed actors”!)

Answer 5

• By deed of declaration a trust was declared that the trustees of the society should stand possessed of the existing and future trust fund upon the trusts and for the purposes expressed in the rules.
• JESSEL MR, after having gone through the rules of the society concluded that the whole fund was charitable, but that the particular charity had failed. He thought that poverty was clearly an ingredient in the qualification of members who were to receive the benefits of the society.

Question 6

Re Sanders’ Will Trusts [19541 Ch 265 (working classes not necessarily
impoverished)

Answer 6

• A gift for the provision of housing for the working classes was not charitable. A gift which includes persons who are not in need will be excluded.
• A testator provided that: ‘My trustees shall apply one equal third part of my residuary trust fund in any manner in which he in his absolute discretion considers to be in furtherance of my general charitable intention with regard to the disposal thereof, namely to provide or assist in providing dwellings for the working classes and their families…’
• The issue was to ascertain whether these provisions constituted a good charitable gift for the relief of poverty, or whether they failed for uncertainty –
• Held
• (1) that a gift for ‘the working classes’ was not a gift for the relief of poverty, as that expression did not indicate poor persons; as the expression did not indicate poor persons; Buckley J
• (2) that no general charitable intention could be inferred, notwithstanding the testator’s express use of that phrase, as it was referable only to the particular non-charitable purpose of erecting houses for the working classes.
• The case held that money given to provide dwelling for ‘the working classes and their families’ was not charitable because the term ‘working class’ was not exclusively reserved to the poor.

Question 7

Re Niyazi [1978] 1 WLR 910 (working men’s hostel in Cyprus)

Answer 7

• A trust to build a working men’s hostel was held to be charitable on the basis that the very nature of a hostel was to provide temporary accommodation for those who could not afford lodgings elsewhere. In addition, the amount of money which had been left for the construction of the hostel dictated that the nature of the building would be modest and not suitable for more affluent members of society.

Question 8

Re Gwyon [1930] 1 Ch 225 (clothing for boys, administered so as to be for
impoverished boys)

Answer 8

• A gift for the provision of ‘knickers’ (which were a type of short trousers) for boys, resident in a particular location was not held to be charitable as it could benefit children from more wealthy families as well as those coming from impoverished backgrounds.

Question 9

*Joseph Rowntree Memorial Trust Housing Association Ltd v A-G [1983] 1 Al
ER 288

Answer 9

• Housing association; sale of dwellings to aged persons; whether scheme charitable.
• Facts
o Housing association schemes to sell dwellings to aged persons may be charitable despite certain features in the schemes which indicate the contrary. Various charities wished to build self-contained dwellings for sale to the elderly on long leases in consideration of a capital payment. Five schemes were proposed which the Charity Commissioners doubted were charitable because they either (1) operated by way of contractual bargain; or (2) the benefits could not be withdrawn, or (3) the schemes benefited private individuals, or (4) the schemes were capable of producing a profit to the beneficiary.
• Held
o That all the schemes were charitable notwithstanding the objections because such schemes were for the relief of the aged. Peter Gibson J.

Question 10

**IRC v McMullen [1981] AC 1

Answer 10

• As with the meaning of poverty, the law takes a generous approach to the meaning of ‘education’, construing the term very broadly.
• This case concerned an attempt by the Football Association to set up a charitable trust to enable pupils at school and universities to play football and other sports.
• The HL
• Held that it was a valid charitable trust for the advancement of education. Lord Hailsham defined education as: ‘a balanced and systematic process of instruction, training and practice containing…spiritual, moral, mental and physical elements.’
• Note:
• So the advancement of education includes education both in schools and in places of higher education, including universities. Even trusts for fee-paying schools are charitable providing they are non-profit making. The term ‘education’ also covers the act of teaching itself: thus a trust for the payment of teachers would be charitable.
• Steps
• High Court
♣ Held the trust was not charitable because its object was merely the encouragement of games and sports and that object had not been made subservient to the advancement of education
• CA
♣ Upheld the HC’s view and added that it was a trust for the encouragement of games and sports which were not required to be enjoyed as part of a school or university curriculum.
• HL
♣ Allowed the appeal and said the appeal would be allowed for the following reasons:
• On the trust construction the word ‘thereby’ and the phrase which followed denoted an additional purpose of the trust rather than the mere encouragement to enjoy the games. Therefore, the purpose was not merely to organise the playing of association football, but also to promote the physical education and development of students as an addition to their formal education.
• On that construction the trust would be valid as a charitable trust because it was for the advancement of education and furthermore it was limited to students at universities and schools.

Question 11

*Re Shaw [1957] 1 WLR. 729

Answer 11

• On purpose trusts, where creating a 40-letter alphabet and translating one of Shaw’s plays into it was regarded as having no value to the public and therefore was held as not charitable.
• Facts
• A testator by his will directed his trustee to stand possessed of his residuary estate funds.
• George Bernard Shaw left money for the development of a 40-letter alphabet and the translation of one of his plays into this new alphabet, Harman J, indicated that the mere acquisition of knowledge would not per se be a charitable one.
• Held
• The trust so declared failed; as (1) the objects, if regarded as tending to the increase of knowledge, were not thereby charitable unless combined with provisions for teaching and education, which elements were lacking. (2) the objects were not beneficial to the community in a way regarded as charitable by law; as trusts for advertisement, propaganda and research on a controversial matter could not be so regarded, but were rather analogous to trusts for political purposes.
• Concerned the will of Shaw, which provided that the residue of the estate should be applied to research the utility of the development of a 40-letter British alphabet in the place of the present one, and for the translation of his play ‘Androcles and the Lion’ into the new alphabet.
• Harman J held that the trust was not charitable, and that it failed on the beneficiary principle. The trustees were willing to carry out the testator’s wishes if they were permitted to do so. But the judge concluded: ‘I am not at liberty to validate this trust by treating it as a power. A valid power is not to be spelled out of an invalid trust.’

Question 12

*Re Hopkins [1965] Ch 669

Answer 12

• In contrast to the Re Shaw case, this case indicated that, it would be charitable provided it was of educational value to the researcher. The whole issue on the position of research as a charitable object has been further considered in McGovern v A-G.

Question 13

McGovern v AG [1982] Ch 321

Answer 13

• Slade J - on the matter on the whole issue of the position of research as a charitable object has been further considered and clarified – he stated:
• ‘ (1) A trust for research will ordinarily qualify as a charitable trust if, but only if (a) the subject matter of the proposed research is a useful object; ad (b) it is contemplated that the knowledge acquired as a result of the research will be disseminated to others; and (c) the trust is for the benefit of public, or a sufficiently important section of the public. (2) In the absence of a contrary context, however, the court will be readily inclined to construe a trust for research as importing subsequent dissemination of the results thereof. (3) Furthermore, if a trust for research is to constitute a valid trust for the advancement of education, it is not necessarily either (a) that the teacher/pupil relationship should be in contemplation, or (b) that the persons to benefit from the knowledge to be acquired should be persons who are already in the course of receiving ‘education’ in the conventional sense.

Question 14

**IRC v McMullen [1981] AC 1

Answer 14

• The case established two principles: (1) blasphemous libel consists only in profane attacks on Christianity, and not in reasoned criticism, (2) A denial of the truth of Christianity does not render a person or organisation unable to claim the benefit and protection of the civil law
• Facts
• A man name Charles Bowman died. His will bequeathed a portion of his estate to the Secular Society Limited, an Association incorporated under the Companies Act with the stated objet to ‘promote in such ways as may from time to time be determined, the principle that human conduct should be based upon natural knowledge, and not upon super-natural belief, and that human welfare in this world is the proper end of all thought and action.’
• Bowman’s next of kin disputed the validity of the gift to the society, arguing that the object of the Society were unlawful insofar as they constitute a blasphemous libel and therefore the gift was contrary to public policy and was invalid.
• Effect
• All five of the Lords agreed that blasphemy required an element of irreverence or profanity
• The gift was valid as being neither subversive of morality nor contrary to the law of blasphemy, nor did it create perpetuity.

Question 15

Bowman v Secular Society [1917] AC 406 – HL.

Answer 15

• Facts
o The Secular Society, Limited, was registered as a company limited by guarantee under the Companies Acts. The main object of the company was ‘to promote…the principle that human conduct should be based upon natural knowledge, and not upon super-natural belief, and that human welfare in this world is the proper end of all thought and action’.
• Held
o Assuming that this object involved a denial of Christianity,
1. that it was not criminal, inasmuch as the propagation of anti-Christian doctrines, apart from profanity, did not constitute an offence of blasphemy; and
2. That it was not illegal in the sense of rendering the company incapable in law of acquiring property by gift, and that a bequest ‘upon trust for the Secular Society Limited’ was valid.

Question 16

*Gilmour v Coats [1949] AC 426

Answer 16

• In this case it was held that – the principle that public benefit derives from the presence of religious people in the community inevitably implies that religious people who are isolated from the community cannot benefit it.
• Facts
• A gift was given to a small contemplative order of nuns. This community was cloistered and had no contact with the outside world.
• The HL held that the gift was not charitable. The necessary public benefit was not to be found in the prayers and intercession which the nuns made on behalf of the members of the public who requested it; this was held to be ‘manifestly not susceptible proof in a court of law’. Nor was benefit to be found in the edifying example set by the nuns’ spiritual life, nor in the fact that that religious life was open to any catholic woman who might choose it.
• The public benefit derived from religious charities is not the direct one of membership of a religious group nor the spiritual benefit which believers believe they derive from living a religious life. So… for a religious gift to be charitable the public must be able to derive a benefit from the presence of religious people in the community.

Question 17

*Re South Place Ethical Society [1980] 1 WLR 1565

Answer 17

• Case has been criticized.
• Facts
o To be a religious charity a society must believe in God; however, an agnostic ethical society may constitute an educational charity through the study and dissemination of ethical principles.
o The South Place Ethical Society existed for the study and dissemination of ethical principles and the cultivation of national religious sentiment, using the word ‘religious’ in a sense which excluded all supernatural belief. Its beliefs were agnostic, and an aspect of humanism and hedonistic Platonism. Amongst its activities were public lectures on serious and mainly intellectual topics, the publication of a monthly magazine, and weekly concerts of chamber music. The society claimed an extended definition of ‘religion’ for the purposes of registration as a charity, arguing that it did not need to be theist, but that any social belief in ethical qualities such as truth, love and beauty sufficed.
• Held
o Dillon J –
♣ Religion was concerned with man’s relationship with God, ethics with man’s relationship with man.
♣ Essential elements of religion were belief in and worship of God, and so, admirable though the society’s objects might be, they were not for the advancement of religion.
♣ However, the study and dissemination of ethical principles was charitable on the grounds of benefit to the community by the advancement of education.

Question 18

Royal College of Surgeons v National Provincial Bank [1952] AC 631

Answer 18

• Facts
o A testator who died in 1943, by her will directed certain moneys to be paid yearly to the treasurer of the Middlesex Hospital for the maintenance of the institute of pathology, which was part of its medical school, but directed that ‘should the Hospital become nationalized or…pass into public ownership’ there should be a gift over to the Royal College of Surgeons absolutely for its general purposes.
o The Hospital was nationalized, but under the terms of the relevant Act the medical school was not and its assets and liabilities were transferred to a new incorporated body.
• Held
1. That the event on the occurrence of which the testatrix had directed that the gift over in favour of the college should take effect had taken place, despite the fact that part of the property of the hospital as it existed previously had been exempted from nationalization;

Question 19

Re Resch’s Will Trusts [1969] AC 514 – Privy Council, Australia.

Answer 19

• There is no requirement to aid the aged and impotent as well as the poor, and one can even exclude the poor.
• A gift for the purposes of a hospital is prima facie a good charitable gift.
• If a bequest is made on trusts requiring it to be applied for a particular charitable purpose, it is immaterial that some of the general purposes of the recipient body may not be charitable.
• It is not a condition of validity of a trust for the relief of the sick that it should be limited to the poor sick.
• Facts
o An Australian testator bequeathed the income of part of his residuary estate to the Sisters of Charity, a voluntary association of women devoting themselves without reward to good works, for the purposes of a private hospital which they ran in Australia.
o Its patients were charged fees and at times there were surpluses of income over the expenditure but the hospital was not running for profit. Its essential purpose was to provide a type of medical and nursing care which a nearby public general hospital could not give. The poor were not excluded and sometimes patients were treated without payment or at reduced rates.
o On appeal to the PC, held that it was a valid charitable gift.

Question 20

IRC v City of Glasgow Police Athletic Association [1953] AC 380 (police
efficiency).

Answer 20

• The HL was asked whether the taxpayer association was established for ‘Charitable purposes only’ so as to benefit from tax exemptions.
• The association promoted sporting activities among members of the Glasgow police.
• Held
o Though the purposes included charitable objects, they also included objects which were not charitable.
o Lord Normand: ‘what the respondents must show in the circumstances of this case is that so viewed objectively the Association is established for a public purpose, and that the private benefits to members are the unsought consequences of the pursuit of the public purpose…The private benefits to the members are essential. The recreation of the members is an end in itself, and without its attainment the public purpose would never come into view.’
o If an association has two purposes, one charitable and the other not, and if the two purposes are such and so related that the non-charitable purpose cannot be regarded as incidental to the other, the Association is not a body established for charitable purposes only.

Question 21

Re Wokingham Fire Brigade Trusts [1951] Ch 373 (fire brigade).

Answer 21

• The provision of a public fire brigade can be as much a public charitable purpose as the provision of a lifeboat, and the provision of a lifeboat has been held to be a public charitable purpose.
• Facts
o A voluntary fire brigade was maintained by donations and subscriptions. When the national fire service purchased the assets of the brigade and took over its functions, the question arose whether its funds, which represented the proceeds of sale of fire engines and various articles belonged to the members of the brigade, or ought to be returned to the subscribers, or were the subject of charitable trusts, or were bona vacantia.
• Held
o That the fire brigade was a non-profit making body formed for the public purpose of fighting fires in the district; this was a public charitable purpose; therefore, on the cessation of the brigade’s activities in 1942, the charitable trusts on which the funds were held did not fails and should now be applied by means of a scheme.

Question 22

Williams’ Trustees v IRC [1947] AC 447 - HL

Answer 22

• Charitable purpose; benefit to section of community.
• No trust can be charitable unless it is beneficial to the community in a way which the law regards as charitable.
• Facts
o A trust was established with the objects of promoting Welsh interests in London by social intercourse; discussing all questions affecting Welsh interest; fostering the study of the Welsh language by lectures; maintain a library of literature in the Welsh language or related to Wales.
o The trustees were empowered to maintain an institute and meeting place for the benefit of Welsh people in London with a view to creating a centre to promote ‘the moral, social, spiritual and educational welfare of Welsh people.’
• Held
o The trust was not exempt from income tax since the ground on which a charitable character was sought to be attributed to it was not that it was beneficial in a way which the law regards as charitable.

Question 23

Re Dupree’s Deed Trusts [1945] Ch 16 (arranging a chess tournament was educational – would not fall within the current head because of the mental skill involved)

Answer 23

• Facts
o By deed of gift, the donor had transferred shares to a bank and declared that the bank was to pay the annual income of the fund to the trustees nominated in the deed to be applied by them in promoting an annual chess tournament open to boys and young men under 21.
o The prizes, which were money prizes, were not to be paid in cash, but were to be applied for the benefit of the winners in the trustees’ discretion. There was evidence that the game of chess was regarded as of educational value, and was taught in some schools as part of the curriculum –
• Held
o Having regard to the restriction of the gift to a class of the inhabitants of a particular locality, the public and educational quality of the trustees, and the evidence as to the educational value of chess, the deed created a valid charitable trust.

Question 24

*IRC v Baddeley [1955] AC 572

Answer 24

• Use the decision here to identify whether a trust is charitable.
• Held
1. The trusts failed by reason of their vagueness and generality;
2. Supposing that the trusts would be valid charitable trusts if the beneficiaries were the community at large or a section of the community defined by some geographical limits, the trusts could not qualify as a charity within the fourth class in Income Tax Commissioners v Pemsel if the beneficiaries were a class of persons not only confined to a particular area but selected from within it by reference to a particular creed.

Question 25

*Guild v IRC [1992] 2 AC 310

Answer 25

• See above CA’s decision on sport – said the trust was not charitable.

*Guild v IRC [1992] 2 AC 310
• Charitable trusts; confirmed that recreational facilities open to the public could be valid charities.
• Facts
o Guild was the executor of the estate of James Russell, who left his estate ‘for the use in connection with the sports centre…or some similar purpose in connection with sport.’ The Inland Revenue held that the trust created did not constitute a charitable trust.
o The case was appealed to the HL.
• Held
o The HL held that recreational facilities counted as charitable trusts.
o Lord Keith, giving the sole opinion, applied the Recreational Charities Act 1958, which provides that recreational facilities providing ‘social welfare’ to people from social disadvantages or the general members of the public were appropriate charitable trusts.
o The question was whether the ‘social welfare’ element also applied to recreational facilities open to the general public – Lord Keith said –
♣ ‘I would therefore reject the argument that the facilitates are not provided in the interest of social welfare unless they are provided with the object of improving the conditions of life for persons who suffer from some form of social disadvantage. It suffices if they are provided with the object of improving the conditions of life for members of the community generally…The impact of this case was to confirm that the courts accepted the validity of recreational charitable trusts open to the public.’

Question 26

Re Moss [1949] 1 All ER 495

Answer 26

• Russell LJ said that a gift in favour of animals depends for its validity on the question whether such a gift produces a benefit to mankind.
• The testatrix left legacies to a friend ‘for her use at her discretion for her work for the welfare of cats and kittens needing care and attention.’
• Held
o The present case passed the test, whether the gift in favour of animals produced some benefit to mankind, with honour. The care of, and consideration for, animals which through old age or sickness or otherwise are unable to care for themselves, are manifestations of the finer side of human nature, and gifts in furtherance of those objects are calculated also to develop that side and are, therefore, calculated to benefit mankind; that is more especially so where the animals are domestic animals. The gift was therefore a valid charitable gift.

Question 27

National Anti-Vivisection Society v IRC [1948] AC 31

Answer 27

• Where the main object of a society is to obtain an alteration of the law, such an object cannot be a charitable object, even if the society’s purposes might be otherwise regarded as charitable. Consequently, where the main object of an anti-vivisection society is to secure the repeal of the Cruelty to Animals Act 1876, and the substitution of a new enactment prohibiting vivisection altogether, the main object of the society is political, and for that reason the society is not established for ‘charitable purposes only’.
Lead case
Objects:
o To protect animals from research
o The HL decided that the purpose was not charitable.
o The HL said that the purpose was more political.

• A society having as its object the total suppression of vivisection is not ‘a body of persons…established for charitable purposes only’ within the Income Tax Act, so as to be exempt from income tax (a) because any assumed public benefit in the advancement of morals would be far outweighed by the detriment to medical science and research and consequently to public health, and (b) because a main object of the society was political in the promotion of legislation.

o This case is against testing against animals
o Lord Simmonds advances some arguments in favour of the rule
1. Political purposes generally require a change in the law – the courts are not in a position to establish by evidence in the law is for the public benefit
2. Judicial impartiality should be upheld (this argument might have some substance)
3. How can the attorney general advance arguments of things that are determined to be legal – the AT general has to give impartial advice even though he is maybe part of the government and some of that advice may not be liked by the government

Question 28

Southwood v AG (2000) 80 P & CR D 34

Answer 28

• The purposes of an organisation included to propose military arms – the CA rejected the argument that the argument was educational it held that the purpose was more than educational (important)
• Summary
o S appealed against the decision that the trust established by him and a colleague for the purposes of advancing the education of the public in militarism and disarmament could not be held to be charitable in law.
o S contended that the purpose of the trust was educational rather than political, and was concerned with the promotion of peace, which was clearly in the public benefit, hence it fell within the definition of charitable. Finding that there was no objection on public grounds, the court held that the trust could not be recognised as charitable, because S was not seeking to educate the public about the various ways of achieving peace, but to persuade them that demilitarisation was the best way, and it was for the government, not the court to promote one view over another.

Question 29

**The Human Dignity Trust v The Charity Commission for England and Wales [2014]

Answer 29

• Summary
o A company which had been established to support individuals whose human rights had been violated by helping them to litigate in both domestic and international courts so that superior constitutional rights could be interpreted and enforced did not have a political purpose preventing it from being registered as a charitable organization. The tribunal considered the correct legal test for deciding whether an institution was a charity, and the meaning of ‘human rights’ in the Charities Act 2011.

Question 30

*Oppenheim v Tobacco Securities Trust Co [1951] AC 297 (employees)

Answer 30

• A trust is not charitable unless it is directed to the public benefit. This is sometimes stated in the proposition that it must benefit the community or a section of the community. Negatively it is said that a trust is not charitable if it confers only private benefits.
• In the case of trusts for educational purposes the condition of public benefit must be satisfied.
• In determining what satisfies the test, the following considerations should be borne in mind:
1. A trust established by a father for the education of his son is not a charity;
2. At the end of the other scale the establishment of a college, university is a charity.
3. The endowment of a college, university or school by the creation of scholarships or bursaries is a charity.
4. Where the trust is not for the benefit of any institution, but for the benefit of a class of persons at large, the question is whether that class of persons can be regarded as such a ‘section of the community’ as to satisfy the test of public benefit.
5. The words ‘section of the community’ have no special sanctity, but they indicate:
1. that the possible beneficiaries must not be numerically negligible, and
2. that quality which distinguishes them from other members of the community must a quality which does not depend on their relationship to a particular individual.
6. Members of a family and employees of a particular employer are neither the community nor a section of the community for charitable purposes.

Question 31

*Re Koettgen’s Will Trusts [1954] Ch 252

Answer 31

• Facts
o By her will the testatrix directed that her residuary estate should be held by her trustees ‘as a fund for the promotion and furtherance of commercial education’
o ‘The persons eligible as beneficiaries under the fund shall be persons of either sex who are British born subjects and who are desirous of educating themselves or obtaining tuition for a higher commercial career but whose means are insufficient or will not allow of their obtaining such education or tuition at their own expense…trustees shall give a preference to any employees…or any members of the families of such employees…’
• Held
o The question of the public nature fell to be decided at the stage when the primary class of persons was ascertained; the will satisfied that requirement and the trust was of sufficient public nature.

Question 32

*IRC v Educational Grants Association [1967] Ch 993

Answer 32

• To get the exemption under the Income Tax, not only must a charity be established for charitable purposes only, but the income in question must be applied for charitable purposes only.

However, there is no necessary public element if there is a genuine intention to benefit; accordingly, there can be a valid charitable trust for poor relations and other poor persons who are in some way connected:

Question 33

Re Scarisbrick [1951] Ch 622 (relatives)

Answer 33

• A trust for ‘poor relations’, and such trusts are excepted from the general rule that the beneficiaries must not be defined by a personal connection. But there can be no charitable trust, even in the poverty category, where the persons to be benefited are specified individuals.
• The CA is bound to treat the ‘poor relations’ cases as anomalies or exception to the general rule which requires benefit to the public, or to a section of the public, as an essential characteristic of a valid charity. The ‘poor relations’ cases may be justified on the basis that the relief of poverty is of so altruistic that the public element may be inferred.

Question 34

*Dingle v Turner [1972] AC 601 (employees)

Answer 34

• Whether a trust for relief of poverty is charitable or not depends upon whether it is for the benefit of a particular description of poor people or is merely a gift to particular poor persons.
• D directed the trustees of his will to apply the income from £10,000 in paying pensions to poor employees of a limited company jointly owned by him. At the end of his death the company employed over 600 persons and there were many ex-employees. On appeal against the decision of the trial judge that the trust was charitable.

Question 35

*Neville Estates Ltd v Madden [19621 Ch 832

Answer 35

Those who were to benefit were to be methodist
o This was held not to be sufficient because this was a group within a group – it was limited to those who were methodist – so it failed
o The HL distinguished the fact that relief that a few might take advantage as opposed to something that not everyone will be entitled to benefit from
o So you must not have a class within a class

Question 36

**Re Hetherington’s Will Trusts [1990] Ch 1 (saying masses)

Answer 36

• A gift for the saying of Masses is prima facie charitable. By a holograph will, the testatrix left £2,000 to the Roman Catholic Bishop ‘for masses for the repose of the souls of my husband…and myself when I die.’ The will further provided for the residue to be given to a named church for that purpose. The administrator of the will sought a determination as to whether those gifts established valid charitable trusts.
• Held
o That the gifts were charitable as being for a religious purpose with the necessary element of common benefit.

Question 37

Funnell v. Stewart [1996] 1 WLR 288 (faith healing)

Answer 37

• For some years prior to the death of G (testator) had been associated with a small group that carried out faith healing sessions three or four times a week, and weekly religious services. While the faith healing sessions were open to the general public, entry to the religious services was confined to members of the group.
• In her will G bequeathed a significant part of her estate to two members S and A of the group and directed that ‘they shall use the same…to further the spiritual work now being carried on by us…’ The executors of G’s will issued a summons to determine whether the bequest to S and A was to be held by them on trust, and if so whether it was charitable.
• Held
o The trust was charitable because of the ‘spiritual work’ or faith healing work referred by G.

Question 38

*IRC v Baddeley [1955] AC 572

Answer 38

•	Land has been conveyed to trustees for the moral, social and physical well-being of a community. The court considered whether the trust was charitable in nature, where it was said that it confined the benefits to a class of people who do no constitute either the public or a relevant section of the public.
•	Held
It was not charitable, in particular that it failed for its vagueness and generality