Charities Flashcards
(76 cards)
Substantive requirements of an express trust
- A trust
- words used sufficient
- sham intentions
- trusts > gift
- trust > power of appointment
- trust > no trust (domestic & commercial cases) - Certainty of subject matter
- Trusts property (Re Ellenborough)
- which one if multiple? (Boyce)
- past property?
- segregated or intangible? - Certainty of object
- McPhail v Doulton (cardinal principle)
Fixed trusts –> Conceptual and Evidential
Burrough DTs–> Conceptual and Evidential
Baden DT–> Conceptual and Admin workability
POA–> Conceptual
Obstacles to validity of non-charitable purpose trusts
- Un-enforceability
- Uncertainty
- Perpetuity (last too long)
- Capriciousness (useless)
Morice v Bishop of Durham 1804
(Un-enforceability of non-charitable trust)
Facts: Left all personal property to Bishop “for such objects of benevolence and liberality as B in own discretion approves”
Invalid!
Starting point of human beneficiary principle (HBP):
Non-charitable trusts are invalid because by definition, they lack the only possible enforcement agent (a human B)
Is the Human Beneficiary Principle justified?
The notion that a human beneficiary is required for a valid trust has been challenged.
- Subsequent cases exist where private purpose trusts were held valid without a human B to enforce them
- Logically, only method of control is a B who can complain to courts for trustee failing to meet obligations under trust. But this assumption that this is the only form of control may be wrong –> residuary Bs.
Re Astor’s settlement 1952
Facts: Trust for “establishment of improvement of good understanding between nations, preservation of integrity of newspapers and promotion of free press”
- Not charitable
Held: Cannot have a trust for obligation without human to enforce it
3 exceptions noted: care of particular animal, maintenance of particular graces, saying masses for the dead.
Re Denley’s Trust Deed 1969
Challenged orthodox HBP:
“The land shall be maintained and used for purpose of recreation ground …primarily for the benefit of the employees of the company, and secondarily for benefit of such other persons as trustees may allow to use..”
Held: Valid (fell outside mischief of HBP)
- HBP confined to purpose/obj trusts which are abstract or impersonal.
- when trust expressed as purpose which is directly/indirectly for the benefit of individuals, not void.
- Contrast with Leahy which had an abstract purpose.
Le Lipsinki 1976
Challenged orthodox HBP
“for Maccabi association in memory of my late wife, to be used solely in work of constructing/improving buildings”
Held: Gift to an association with motive of providing a gift to the members who could choose what to do with it, as long as it fell within their rules
Oliver J: clear distinction between case where purpose is prescribed which is clearly intended for benefit of ascertained Bs- where they have power to make capital of their own, and the case where no B is intended or Bs not ascertainable
Re Grant’s will trusts 1979
Challenged orthodox HBP
“for the purposes of Labour Party HQ”
- Re Denley falls outside categories of purpose trusts as was merely a normal trust for individuals.
Why are non-charitable trusts uncertain?
- Purpose needs to be defined with sufficient certainty whereas in these cases there seems to be v wide terms and no purpose
- Re Astor: certainty problem even outside of enforceability
- Re Denley: Bs need to be defined with certainty
why are non-charitable trusts criticised for being perpetual?
Excessive duration:
- Unlimited time, so capital fund must be retained to continue producing income
- charitable trusts not subject to this restriction as they are in pursuit of worthy purposes whereas non-charitable will only be valid if within perpetuity period (21 years after death of last survivor of nominated persons).
In what situations has the HBP been challenged for capriciousness?
Brown v Burdett 1882
Trusts left property to trustees and demanded that upon death of the person, the Ts must do household chores etc.
Void as completely useless.
What is a charity?
List of charitable purposes in s3(1) CA 2011 replacing 1958 list of 4 purposes.
What are the privileges of a charitable status?
Tax privileges: stamp duty exemption, no corporation tax for charitable companies, no income tax (all £3billion/year)
HBP exemption: perpetual duration, not for 1 individual
Requirements for charities
- Must be for public benefit
- Not substantially political
- No profit distribution
- Purely and wholly charitable purposes
Public benefit requirement
s4 CA 2011
purpose falling within this req must be for charitable purpose. Not presumed to be of particular description
Independent Schools Council v Commission 2011:
- Nature of the purpose itself must benefit community
- those who may benefit from the purpose must be numerous and identified as “a section of the public”
What are the current categories of charity?
A) PREVENTION/RELIEF OF POVERTY
B) ADVANCEMENT OF EDUCATION + RESEARCH
C) ADVANCEMENT OF RELIGION
D) ADVANCEMENT OF HEALTH/SAVING LIVES
E) ADVANCEMENT OF CITIZENSHIP/COMMUNITY DEV
F) ADVANCEMENT OF ARTS, CULTURE, HERITAGE, SCIENCE
G) ADVANCEMENT OF AMATEUR SPORT
H) ADVANCEMENT OF HR, CONFLICT RESOLUTION/RECONCILIATION OR PROMOTION OF RELIGIOUS/RACIAL HARMONY, EQUALITY, DIVERSITY
I) ADVANCEMENT OF ENVIRONMENTAL PROTECTION/IMPROVEMENT
J) RELIEF OF THOSE IN NEED BY REASON OF YOUTH, AGE, HEALTH, DISABILITY, FINANCIAL HARDSHIP OR OTHER DISADVANTAGE
K) ADVANCEMENT OF ANIMAL WELFARE
L) PROMOTE EFFICIENCY OF ARMED FORCES OF CROWN OR EFFICIENCY OF POLICE/FIRE/AMBULANCE
M) ANY OTHER PURPOSES WHICH ARE
recognised as charitable by virtue of s5 or old law OR analogous to those above
PREVENTION/RELIEF FROM POVERTY
- Broad interpretation of ‘poverty’ (more than mere destitution)
Charity Commission: People in poverty means:
- Those who lack something in nature of a necessity which majority of population would regard as necessary for modest but adequate standard of living.
- Irrelevant as to whether eligible for state benefits
- Relief and prevention are generally interchangeable terms
Re Coulthurst 1951
Trust ‘to or for the benefit of [such persons] as the [trustee] shall in its absolute discretion consider by reason of … their financial circumstances to be most deserving of such assistance …’
Held: despite no mention of poverty, sufficient.
Re Sander’s Will Trust 1954
‘to provide dwellings for the working classes and their families’
Held: nothing pointing directly to poverty. not charitable
Re Niyazi’s Will Trust 1978
‘for the purposes of the construction of or as a contribution towards the construction of a working men’s hostel [in Famagusta]’
Look to general meaning: yes for poverty (just about- fine line)
Cawdron v Merchant Taylors school 2009
‘(1) paying for the education at the School of any son of an Old Merchant Taylor who has fallen in the war or who has been thereby disabled … or (2) assisting any relative of such Old Merchant Taylor as may be dependent upon him; and in every case the decision as to the eligibility of the candidate and the extent and method of the assistance to be in the sole discretion of the Committee’
Trust geared towards assistance so yes.
Re Gwyon 1930
‘for the purpose of providing boys … with knickers’
Held: not sufficiently geared towards benefit of poor.
Advancement of education
goes beyond formal, institutional education
Re Koettgen’s Will Trusts [1954]
‘for the promotion and furtherance of commercial education… typing, banking, modern languages etc’
Held: charitable (wide ambit- more than traditional institutional education)
