Private Purpose Trusts and Unincorporated Associations Flashcards

Question

Re Osoba [1979] Trusts Limited by a Purpose

Answer 1

* Individual left property for purpose of education up to university level. Once daughter left university, what happened with the surplus of the property? * **Megarry tried to make a DISTINCTION between cases where the purpose has been fulfilled when B is DEAD and where B is still alive.** * When B is **dead**, the **purpose has been fulfilled** and so the remaining **property should go to S/S’s estate**. * Where B is still **alive**, *‘the major **purpose** of providing help and benefit… **can STILL be carried out EVEN AFTER the stated means have all been accomplished,**’* and so the gift should be seen as an **ABSOLUTE** **gift** to **B.** * BUT- **_ARGUABLE_ - *cf*. Penner!** * Talking about the vesting of property rights, and in this instance, this is decided by luck – whether beneficiary is dead or not – and this is not ideal.

Answer 2

* Unincorporated Associations require: * **2+ people BOUND together** for **COMMON PURPOSE**, THAT IS **NOT A BUSINESS PURPOSE**. (often have a benevolent purpose) * These people have **MUTUAL RIGHTS/DUTIES ARISING FROM A CONTRACT** BETWEEN THEM. * Organisation has **RULES** identifying **WHO CONTROLS/HAS FUNDS**, and the **terms** on which this control can be exercised (often a voting majority) * Can be **JOINED/LEFT** at will (you volunteer to enter into and leave the contract – you have freely accepted)

Answer 3

The court will try and decide which interpretation is the best reflection of what the testator presumable intended.

Answer 4

* Donor does not give the property to the UA, but to each individual member who are free to “pocket a share”. Could be: * through absolute gift * trustees holding property for members of the club, rather than club itself * **If interpretation applies, no issues with the beneficiary principle or perpetuity as property vests immediately in ascertainable individuals.** * **Cocks v Manners [1871]** – gift to a convent upheld in favour of individual nuns. Easy to do when its personal property/residuary of estate.

Answer 5

* Disposition of a very large farm being left for charitable and non-charitable causes. * Viscount Simonds identified 3 reasons why testator unlikely to have intended a gift to the individual members of those orders and these need to be considered: * **How legacy is worded** – testator does not often want to leave property to individuals but wants to ensure it is vested with the UA * **Type of property involved** – land is not very amenable to this sort of disposition; money or personal property is more likely * **How recipients of property can be classified** – left to nuns and brothers all over the world (thousands of people) so less likely to work

Answer 6

Supper Club theory’ - if you’re dealing with a relatively **small group of people who use a convenient label**, this disposition could work, e.g. supper club, book club

Answer 7

Nothing more than **adding property to the bare trust that already exists within a UA** **Legal title vested in one or several suitable people**, e.g. treasurer; **hold that property and it is then applied for current members of the UA subject to voting mechanism** or whatever rules of UA state **not subject to perpetuity** **as all the members have the right to collapse the trust and take the interest for themselves (Saunders v Vautier).** Therefore, trust can theoretically last forever which is why internal control is essential for the theory to work.

Answer 8

1. How is gift described – must be for **MEMBERS’ benefit** _not_ a purpose * **Re Lipinski** – left property to a non-charitable religious organisation, Hull Judeans. Wanted them to use property *“solely for the purpose of”* constructing new buildings and maintaining existing ones. Judge said even though it looks like a purpose, court can treat it like a motive as in **re Bowes**. 1. Members must have **INTERNAL CONTROL of property** (**Re Grant’s**) * **Re Grant’s** – chapter of labour party did not have internal control as they were subject to the executive branch of the Labour party and National Executive had power to override them. Therefore, disposition failed * BUT cf. **Horley Town FC (2006)** – Given away voting rights at AGM to other clubs in return for other rights, e.g. selling alcohol. Rights were only worth 2% so they couldn’t override or block member’s votes. Therefore, disposition was allowed. (**FOCUS ON EFFECT, NOT VOTING SHARE – MEMBERS HAVE TO BE FREE TO USE AS THEY WISH**)

Answer 9

Members of local Labour Part **did not have internal control** as they were subject to the executive branch of the Labour party and National Executive had power to override them. Therefore, **disposition failed**

Answer 10

Given away voting rights at AGM to other clubs in return for other rights, e.g. selling alcohol. Rights were only worth 2% so they couldn’t override or block member’s votes. Club maintained **internal control**. Therefore, disposition was allowed. (**FOCUS ON EFFECT, NOT VOTING SHARE – MEMBERS HAVE TO BE FREE TO USE AS THEY WISH**)

Answer 11

* A **trust for a non-charitable purpose**, which would otherwise be void because it falls outside the **Re Endacott** exceptions, **may nevertheless be upheld if the trust is expressed to be for the benefit of ascertainable individuals**. * Large piece of land turned over to employees and other groups of Mr Denley to be used as a recreational/sporting ground.

Answer 12

* **Beneficiaries must be ascertainable** * **Beneficiaries must have *locus standi* to sue** * BUT also note need a **valid perpetuity period** to be specified (up to 21 years or a life in being plus 21 years) * Note also that Denley had a **gift over** (following end of perpetuity period, property in question given over to a local charity). Courts like this because provides court with certainty - know what happens when it expires.)

Answer 13

**Denley Trust in all aspects apart from perpetuity period and so he turned it into a contract holding theory** **IF YOU HAVE SOMETHING THAT LOOKS LIKE A PPT BUT DOESN’T HAVE A PERPETUITY PERIOD, CAN TURN IT INTO A CONTRACT HOLDING THEORY)**

Answer 14

When an unincorporated association ends, property returns to its original source on resulting trust (use for **re Denley**) After the war ended, organisation no longer existed, trust finished, and members get contributions back under a resulting trust

Answer 15

* (1) First see **if any rules stating what happens to property when UA dissolved** - rules form a contract and the contract is paramount * (2) **If nothing in UA rules, then members should try to agree as how to distribute assets** – probably through vote * (3) I**f members can’t agree then can go to court**. * Generally, court will order equal division of assets (**Re GKN Nuts and Bolts Ltd Sports and Social Club**) * But IF there is something that suggests that unequal division should be made, court will follow that (**Re Sick and Funeral Society of St John’s Sunday School, Golcar**) * Look at things like voting rights