Unincorporated Associations Flashcards
UA definition
“As association of persons bound together by identifiable rules and having an identifiable membership” Re Koeppler’s Will Trusts
Trust for the purpose of an association is not a valid Re Endacott exception
Void
UA has no separate legal personalty
Leahy v AG for New South Wales
Courts will attempt to interpret the gift in the way that is the best reflection of the testator’s wishes
Re Recher’s WT
Gift for present members beneficially
Gift treated as being a gift to the individual members of the association - satisfies beneficiary principle and avoids perpetuity rules as gift vests immediately
Gift with no direction as to how it is to be used may take effect as a gift for present members beneficially
Cocks v Manners - no obligation to use gift for UA’s purpose
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
Leahy v AG for NSW
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
Re Grant’s WT
Contract holding theory
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
Contract holding theory is the prevailing view of upholding gifts to UAs
Artistic Upholstery v Art Forma - this approach will be used in absence of words purporting to impose a trust
Contract holding theory can be used whether the club is for the personal benefit of its members or for the benefit of others
Re Recher
If association lacks identifiable rules, this method will not be available
Re Recher
Contractual analysis was not available as nuns could not claim property for themselves on dissolution
Leahy
Re Recher states that a gift with a direction looks more like a purpose trust
Lipinski - direction is merely a motive for giving the gift and is not binding; purpose disregarded as motive rather than a limitation
Members must have control over the club’s assets under the club rules
Re Grant (local constituency of Labour party did not have internal control - no gift)
Only 2% external control - not enough to block - a minor degree of external control will not defeat the contract holding theory
Re Horley Town Football Club
Trust for present and future members
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
Rule against remoteness of vesting
Futre interests cannot vest in person at too remote a date in the future
Trust for present and future members will only really work if members are free to use property however they want, without limits
Re Grant
Ordinary purpose trust
Not a valid Re Endacott exception - will fail - Philippe v Cameron
Re Denley Purpose Trust
Courts may uphold PPT which confers a benefit on ascertainable individuals
Applied to a gift to a UA in Re Lipinski’s WT
Intention to create trust may be inferred by specific direction or limitation as to use
Lipinski
Intention - legacy refers to property being held on trust
Leahy
Intention - donation is made to ‘trustees’ of the association
Re Grant
Dissolution of UA
Assets generally hold on bare trust for members to be dealt with as provided for in the club rules
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
Re Recher; Re Lipinski
Persons who paid money to club for contractual quid pro quo or made outright donations had no rights to surplus assets
Re West Sussex Constabulary’s Widows Children
Contractual approach to division of surplus assets
Re Bucks Constabulary - distributed to current members on date of dissolution according to rules, or however they deem ‘appropriate’
There may be different levels of membership
Re GKN Bolts and Nuts - only full members would receive equal shares, irrespective of length of membership
Inequality ought to be recognised - young members got half a full member’s share
Re Sick and Funeral Society
Where there are no members left, surplus assets go to the Crown as bona vacantia
Cunnack v Edwards
Death of one of the two surviving members amounted to dissolution; sole surviving member could claim surplus assets
Hanchett-Stamford v HM AG
