trust objects - purpose trusts

Question 1

Valid objects

Answer 1

• Trusts for Beneficiaries (Legal Persons)
  
  • Humans (as opposed to animals)
  • Companies
• Trusts for Purposes - Exceptions
  
  • Charitable Purposes
  • Non-Charitable Purposes

Question 2

general rule against purpose trusts

Answer 2

• Morice v Bishop of Durham: Beneficiary principle
• Re Astor, Roxburgh J: general rule, purpose trusts are void due to lack of enforcement

Question 3

Construction: purpose trust or gift with motive

Answer 3

Re Osoba: ‘[treat] the reference to the purpose as merely a statement of the testator’s motive in making the gift’

purpose trusts don’t have a beneficiary, so can’t be one

Question 4

Exception: charitable purpose trusts

Answer 4

• Bowman v Secular Society: A trust to be valid must be for the benefit of individuals . . . or must be in that class of gifts for the benefit of the public which the courts in this country recognise as charitable
• Regulation and enforcement → Charity Commission for England and Wales

Question 5

What is a charity

Answer 5

Nuffield Health: “charity is a legal term of art the definition of which, including the public benefit requirement, does not always accord with the general public understanding of what is and what is not charitable” (Lord Briggs and Sales)

Question 6

Charities Act 2011

Answer 6

s 1: Is it exclusively charitable?
certain that the trust is exclusively charitable (Chichester Diocesan Fund)
S. 2: Charitable purpose?
First, potentially charitable purpose from list in s 3(1)?
Second, is it for the public benefit?
S. 3 Potential Purposes?
Meanings? Statutory clarifications
Common Law except insofar as affected by legislation/Charity Commission guidance
S 4: Public Benefit?
No presumption.

Question 7

Certainty of object for charities

Answer 7

Only requirement in respect of certainty is for the purposes of the trust to be exclusively charitable: s 1, Charities Act 2011; Chichester Diocesan Fund and Board of Finance v Simpson.

Question 8

Duration of charities

Answer 8

Charitable Trusts may be Perpetual

Rule of Remoteness of vesting does still apply (subject to gift over from one charity to another): s2, Perpetuities and Accumulations Act 2009.

Question 9

Poverty

s3

Answer 9

Re Coulthurst: meaning of poverty = not destitution, just difficult financial situation (prevention or relief)

Question 10

Education

s3

Answer 10

• Re Shaw: does not need to be connected to an institution, but must be related to teaching and dissemination
• Re Pinion: ‘I can conceive of no useful object to be served in foisting upon the public this mass of junk. It has neither public utility nor educative value’ (Harman J)

Question 11

Religion

s3

Answer 11

Includes a religion which involves belief in more than one god or no god
Guidance by Charity Commission:
- ‘[Bjelief in a god (or gods) or goddess (or goddesses), or supreme being, or divine or transcendental being or entity or spiritual principle, which is the object or focus of the religion
- a relationship between the believer and the supreme being or entity by showing worship of, reverence for or veneration of the supreme being or entity
- a degree of cogency, cohesion, seriousness and importance
- an identifiable positive, beneficial, moral or ethical framework’

Regina (Hodkin): Scientology is not a religion for the purposes of charity law in the UK

Question 12

Commision Guidance - the ‘public aspect’

Answer 12

• The ‘public aspect’ of public benefit is about whom the purpose benefits.
• Legal requirement: to satisfy the ‘public aspect’ of public benefit the purpose must:
  
  • benefit the public in general, or a sufficient section of the public
  • not give rise to more than incidental personal benefit

Question 13

Independent Schools Council

s4 ‘public’

Answer 13

Independent Schools Council:

1. Benefit to the community
2. Sufficiently numerous and indentifiable (section of the public)

Question 14

Nuffield Health

s4 ‘public’

Answer 14

Site not eligible for rates belief and not for the public benefit as the membership fee excluded too many people

Question 15

IRC v Baddeley

s4 ‘public’

Answer 15

Only provided help to methodists or those who intended to become methodists

Question 16

Oppenheim

s4 ‘public’

Answer 16

Personal nexus rule: those who benefit from the charity must not be linked by family, common employer etc

Question 17

Dingle v Turner

s4 ‘public’

Answer 17

• Exception to personal nexus rule = poverty
• must be to a class of people

Question 18

s4 ‘benefit’

Answer 18

• any detriment or harm that results from the purpose must not outweigh the benefit
• Gilmour v Coats: no benefit to wider public, convent didn’t engage w wider community
  
  • praying not able to be proven in law
  • benefit only counts if it’s capable of proof

Question 19

Anomalous private exceptions

not to be added to

Answer 19

Re Endacott: concessions to human sentimentality, no more – only historical anomalies

• Re Dean: Maintenance of specific animals
• Re Hooper: Upkeep of graves and monuments
• Bourne v Keane: Private masses

Re Denley: exception, trust was purpose-oriented but benefitted an ascertainable class of individuals → AVOIDED BENEFICIARY PRINCIPLE ISSUE OF ENFORCEMENT