Purpose and Charitable Trusts Flashcards
(23 cards)
- What is a purpose trust?
Purpose Trust: trusts that cannot be construed for individuals and are instead for “purposes”. e.g grave/memorial
Irish and UK approaches differ, Ireland is stricter on validity, with few exceptions.
- Validity of Non- Charitable Purpose Trusts?
Uk more flexible than Ireland…
Not valid in IE due to:
(1) Lack of Human benificiaries
(2) Uncertain Nature
(3) Undue Duration and Inalienability
Why are Beneficiaries needed?
Morice v Bishop of Durham (1804) beneficiary “must be someone in who’s favour the court can decree performance”
Re Astors Settlement (1952) trustee not subject to obligation without someone who can enforce the right
Re Shaw (1957) “one cannot have a trust, other than a charitable trusts, for the benefit, not of individuals, but of objects”
-cases show difficult to oversee performance and are unclear…
What are the rules of Undue Duration and Inalienability?
Property should not be tied up for excessive/unknown time periods in Ireland.
Uk modernised this rule (125 years).. Charitable trusts are exempt from these rules in Ireland..
Mussett v Bingle (1876) building a monument permitted under trust but not maintaining monument for indefinite period.
LRC 62-2000 important to keep this rule so property can keep circulating
- Exceptions to Non-Charitable Purpose Trusts
Monuments/Tombs, Animals and Unincorporated Associations
MT: Maintenance for limited period
Animals: must be sufficiently certain and with specified duration e.g Re Kelly (1952) dog care for 21 years
Unincorporated: Club or Society, gift to leader of group permitted e.g Cocks v Manners (1871)
- Scottish Law Differs
Trusts and Succession (Scotland) Act 2024
S.50 supervisor of purposes trust given rights similar to a beneficiary
S.53 A “protector” oversees trustee actions, and requires consent before trustee can act
Tests for Charitable Trust and relevant act?
Subject to Charities Act
Test (1) Recognised charitable purpose under the act (2) Public Benefit
What constitutes a charitable trust (cases)?
Definition: Re Worth Library (1995) must fall under “spirit and intendment” of charitable uses act 1634
Must have charitable purpose
Pemsel (1891)
Relief of poverty or economic hardship
Advancement of Education/Religion
Other purpose benefitting community
These are outlined in Charities Act 2009 S.3 (1) and CA Amendment 2024 S.3 (1) elaborated on…
What are charitable purposes in Amendment and what is needed for them to be charitable?
CA Amendment 2024 includes more categories including but not limited to: health, conflict resolution, prevention of animal suffering and advancement of human rights.
CA 2009 S. 3 (2) A purpose shall not be a charitable purpose unless it is of public benefit
Charitable Trust - Poverty definition
Meaning of Poverty Ambigous/Vague but clarified in CA Amendment 2024 poverty includes not only absolute financial hardship but also relative deprivation
Previously, Re Coulthurst (1951) people who “go short”
Re Segelman Deceased (1996) need a “helping hand”. Also Public Benefit applied in this case even though it was family memebers.
Relief of poverty public benefit?
Approach to PB now stricter under CA S. 7 and 8…
Public Benefit may not apply “if all of the
intended beneficiaries of the gift or a significant number of them have a personal connection
with the donor of the gift.”
How does Advancement of Education work?
Re Shaw (1957) must be advanced/formal
Re Worth Library (1995) had broader interpretation e.g museum or theatre
- Education - Public Benefit (PB)
strict for public benefit
e.g Oppenheim v Tobacco Securities Trust Co. Ltd (1951) trust to educate children of employees and ex-employees, not charitable, private benefit due to company link.
Re Worth Library (1995) membership must not be due to link with one person
PB Costs of Access
UK: London Borough of Merton Council v Nuffield Health (2023) members only gym, ruled charity must show overall public benefit, doesnt matter if only one building differs.
Irish Approach: CA S.7 Limitations on beneficiaries: Restrictions must be justified and serve a legitimate charitable purpose.
Costs of access: Fees for services funded by the gift must not be too high, or they could limit who benefits.
Overall principle: Charitable gifts must be widely accessible and not unfairly restricted to a select group.
Advancement of Religion (PB) + Cases
S 3(4)CA 2009 “presumed, unless the contrary is proved,
that a gift for the advancement of religion is of public benefit”
Gibson v RCB (1881) must support religious functions, not just a person
O’Hanlon v Logue (1906) gifts for private masses are charitable
- Benefit to Community
S.3(1)(d) of the Charities Act 2009 - ‘any other purpose that it is of benefit to the community’
S.3(11) of the Act of 2009 - purpose that is ‘of benefit to the community’ includes purposes
which are specifically set out
Inc Council for Law Reporting - if purpose shown to be of suffi-cient benefit or utility to
community, prima facie charitable
How is community benefit measured in ireland?
Subjective Approach in Ireland when assessing if community is benefitted.
Re Worth Library (1995) intention of testator is paramount.
Charitable Spirit v Someone who is looking for a tax break
Gift for aged and sick + Sports
Gift for Aged and Sick: Barrington’s Hospital v Commissioner of Valuation (1957) charitable, there was fee paying patients but didnt detract from charitable purpose.
Sport and Recreation: Trusts to create some general activity / recreation area is fine but not to sporting organisations
(professional or amateur). different position in England - amateur sport recognised
Benefit of Animals and Political Purposes
Benefit of Animals: S 3 (11) Prevention of Suffering of Animals but must be PB e.g cant be your dog but include no other…
Political Purposes: Re Ni Brudair (1979) republicans, not valid S2 of CA
What is CY-Pres Doctrine?
Where gift made to charity, may be impossible or impracticable to give effect to intentions of
donor in precise terms intended
Distinction between where:
i) Gift fails ab initio (immediately) – where a general charitable intention is required, purpose or charity doesn’t exist
ii) Cases of subsequent failure – gift initially works but is impossible to carry out e.g charity closes.
If it fails in one of these, court can redirect it to a similar charitable purpose.
CY-Pres cases 1
Re Dunwoodie (1977) left gift to named charity but it no longer existed. testatrix showed general charitable intention (typoe of cause), so Cy-Pres applied and money was redirected to a similar cause.
Re Prescott (1990) named charity, no wider charitable intention inferred, controversial, can it be implied??
Subsequent Failure Cases
SF (Subsequent Failure) Re Royal Kilmainham Hospital (1966) stopped functioning as a charitable body, gift had been “absolutely and perpetually” made to charity, Cy-Pres applied.
Re Worth Library (1995) request to establish library, original way gift was used no longer possible, absolute and perpetual, but cy-pres was applied.
Cy-Pres Final
Legislative Reform - S47 of CA 1961 applied if original terms were unclear or if better use of charity property is possible/outdated purpose.
Representative Church Body v AG old purpose no longer effective, cy-pres applied…….
