Unincorporated Associations

Question 1

UA definition

Answer 1

“As association of persons bound together by identifiable rules and having an identifiable membership” Re Koeppler’s Will Trusts

Question 2

Trust for the purpose of an association is not a valid Re Endacott exception

Answer 2

Void

Question 3

UA has no separate legal personalty

Answer 3

Leahy v AG for New South Wales

Question 4

Courts will attempt to interpret the gift in the way that is the best reflection of the testator’s wishes

Answer 4

Re Recher’s WT

Question 5

Gift for present members beneficially

Answer 5

Gift treated as being a gift to the individual members of the association - satisfies beneficiary principle and avoids perpetuity rules as gift vests immediately

Question 6

Gift with no direction as to how it is to be used may take effect as a gift for present members beneficially

Answer 6

Cocks v Manners - no obligation to use gift for UA’s purpose

Question 7

Testator unlikely to have intended gift to individual members as:

• expressed to be ‘held on trust’, capital intended to be kept intact
• numerous beneficiaries spread across world
• subject matter was land - difficult to divide

Answer 7

Leahy v AG for NSW

Question 8

Gift to present members may apply where the name of the association is used as a convenient label or definition to describe a class e.g. dining club

Answer 8

Re Grant’s WT

Question 9

Contract holding theory

Answer 9

Takes effect as gift to present members of UA, satisfying beneficiary principle and perpetuity rules. Members hold the gift subject to the members’ contract, which comprises their mutual duties and obligations. Gift is treated as an addition to club funds and held in accordance with the rules of the club. When a member dies or resigns, his share accrues to the other members

Question 10

Contract holding theory is the prevailing view of upholding gifts to UAs

Answer 10

Artistic Upholstery v Art Forma - this approach will be used in absence of words purporting to impose a trust

Question 11

Contract holding theory can be used whether the club is for the personal benefit of its members or for the benefit of others

Answer 11

Re Recher

Question 12

If association lacks identifiable rules, this method will not be available

Answer 12

Re Recher

Question 13

Contractual analysis was not available as nuns could not claim property for themselves on dissolution

Answer 13

Leahy

Question 14

Re Recher states that a gift with a direction looks more like a purpose trust

Answer 14

Lipinski - direction is merely a motive for giving the gift and is not binding; purpose disregarded as motive rather than a limitation

Question 15

Members must have control over the club’s assets under the club rules

Answer 15

Re Grant (local constituency of Labour party did not have internal control - no gift)

Question 16

Only 2% external control - not enough to block - a minor degree of external control will not defeat the contract holding theory

Answer 16

Re Horley Town Football Club

Question 17

Trust for present and future members

Answer 17

Leahy - if gift was made to identifiable individuals, but they weren’t intended to take beneficially, they must take as trustees. Provided the class of beneficiaries is “ascertained or ascertainable” at the date of the testator’s death, it would be permissible to have a valid trust for the present and future members so long as it complies with the rule against remoteness of vesting

Question 18

Rule against remoteness of vesting

Answer 18

Futre interests cannot vest in person at too remote a date in the future

Question 19

Trust for present and future members will only really work if members are free to use property however they want, without limits

Answer 19

Re Grant

Question 20

Ordinary purpose trust

Answer 20

Not a valid Re Endacott exception - will fail - Philippe v Cameron

Question 21

Re Denley Purpose Trust

Answer 21

Courts may uphold PPT which confers a benefit on ascertainable individuals

Applied to a gift to a UA in Re Lipinski’s WT

Question 22

Intention to create trust may be inferred by specific direction or limitation as to use

Answer 22

Lipinski

Question 23

Intention - legacy refers to property being held on trust

Answer 23

Leahy

Question 24

Intention - donation is made to ‘trustees’ of the association

Answer 24

Re Grant

Question 25

Dissolution of UA

Answer 25

Assets generally hold on bare trust for members to be dealt with as provided for in the club rules

Question 26

Gifts to club members / for the purposes of the club generally accrue to their assets and so will be distributed as provided for in rules

Answer 26

Re Recher; Re Lipinski

Question 27

Persons who paid money to club for contractual quid pro quo or made outright donations had no rights to surplus assets

Answer 27

Re West Sussex Constabulary’s Widows Children

Question 28

Contractual approach to division of surplus assets

Answer 28

Re Bucks Constabulary - distributed to current members on date of dissolution according to rules, or however they deem ‘appropriate’

Question 29

There may be different levels of membership

Answer 29

Re GKN Bolts and Nuts - only full members would receive equal shares, irrespective of length of membership

Question 30

Inequality ought to be recognised - young members got half a full member’s share

Answer 30

Re Sick and Funeral Society

Question 31

Where there are no members left, surplus assets go to the Crown as bona vacantia

Answer 31

Cunnack v Edwards

Question 32

Death of one of the two surviving members amounted to dissolution; sole surviving member could claim surplus assets

Answer 32

Hanchett-Stamford v HM AG