Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

2014  paper:  
7
...
’

Students should demonstrate a general awareness that the Charities Act 2011 applies here – and
that in order to be valid charitable trusts, there needs in each case to be a charitable purpose (CP)
(defined in the Act but not conclusively), public benefit (PB) (no longer presumed) and the clause
must be wholly and exclusively charitable
...
Clearly relief of poverty is a valid CP
...
3 – and does not need to be destitution (Re Coulthurst, Re
de Carteret)
Potential problem with personal nexus (Re Compton, Oppenheim)
...
So
no public benefit? Not necessarily - Trusts for the relief of poverty can be an exception to this rule
(Re Scarisbrick; Dingle v Turner), even post statute
...
If the
purpose is secondary to the main aim, it will be okay – but if they are equal aims, then the political
aim may defeat this clause – as not wholly and exclusively charitable (McGovern v A-G;HanchettStamford v A-G)
(c) Advancing religion is a long established head – but there is a new, broad definition of religion
under the Act
...
Traditionally, scientology has not been accepted as a religion
under English law (Re Segerdal) and has always been refused charitable status
...

The Supreme Court made reference to the broadening definition of religion under the Charities Act
2011 in reaching its decision
...
The class is limited to elderly women in Leicester
...
And to a section of the community
...
However, yoga could potentially benefit elderly women - especially if the aim is relief
for those in need because of age
...
In addition some students who were aware of it took it as authority for the fact that
Scientology is now a religion for Charity law purposes – it is not – the case was concerning
licensing a building for the solemnisation of marriages, but may be persuasive
...
   She  is  intending  to  
make  ample  provision  for  her  family  members,  but  she  is  concerned  also  to  leave  some  of  her  money  for  
the  good  of  the  wider  community
...
   It  will  be  available  to  local  residents  
only;    

(d)  

£500,000  to  my  trustees  to  establish  a  sanctuary  for  reNred  circus  animals,  and  to  campaign  against  
laws  that  permit  the  use  of  animals  in  circus  performances
...
 
The   majority   of   students   explained   correctly   that   in   order   to   be   charitable,   these   provisions   will   need   to  
have   an   exclusively   charitable   purpose   and   be   for   the   public   benefit   (PB)   –   as   per   case   law,   charity  
commission  guidance  and  the  ChariNes  Act  2011
...
    Not   all   students   paid   full   a\enNon   to   the   fact   that   they   were   asked   not   only   to  
advise  as  to  charitable  status,  but  also  suggest  soluNons  to  possible  problems
...
       
(a)     the   purpose   here   could   be   relief   of   poverty
...
  661   and   Re   Cohen   [1973]   1   WLR   415
...
   Historically,  PB  was  presumed  for  relief  of  poverty  but  the  PB  
presumpNon  was  removed  by  the  2006  Statute
...
   Even  if  this  is  a  
large   group,   it   may   be   problemaNc,   because   there   is   a   personal   nexus   between   R   and   the   beneficiaries  
(Oppenheim)
...
     
Some  students  suggested  other  possible  headings  for  charitable  purpose,  which  is  always  acceptable  –  but  
few  who  did  so  realised  that  the  poverty  ‘excepNon’  re  the  personal  nexus  test,  would  then  no  longer  apply
...
 Even  where  all  the  beneficiaries  have  to  be  poor,  

Page 2 of 30

there  may  be  circumstances  in  which  the  restric0ons  on  who  can  benefit  are  either  so  limited  or  irra0onal  
as  to  outweigh  the  normal  public  character  of  the  relief  of  poverty
...
 
 
She   may   want   to   broaden   out   the   class   of   beneficiaries   to   a   class   of   persons   who   belong   to   a   certain  
profession/occupa0on,   to   be   more   certain   of   mee0ng   the   PB   requirement
...
         

(b)    This  sec+on  caused  the  most  problems  for  students
...
    Most   students   tended   to   analyse   the   clause   as   if   it   were   already   set   within   the  
provisions  of  a  will
...
   At  first  it  seems  that  
the   purpose   here   could   be   “   (j)   the   relief   of   those   in   need   because   of   youth,   age,   ill-­‐health,   disability,  
financial  hardship  or  other  disadvantage”  but  the  words  ‘who  wish  to  take  up  horse-­‐riding’  indicate  that  this  
might   instead   be   “(g)   the   advancement   of   amateur   sport”,   with   the   class   of   beneficiaries   being   people   over  
70
...
     
R  should  be  advised  that  PB  may  be  restricted  to  a  secGon  of  the  public,  but  the  benefit  must  relate  to  the  
charity’s  aims  (CC  guidance)
...
  Here   the   class   of   beneficiaries   is   not   an   easy   ‘match’   to   the   purpose,   as   the   number   of  
people  over  70  who  wish  to  take  up  horse-­‐riding  might  be  relaGvely  small
...
   The  
best  answers  emphasised  that  here  R  really  needs  to  clarify  want  she  wants  to  achieve
...
      The   reference   to   prayer  
indicates  a  belief  in  a  supreme  being  (South  Place  Ethical  Society)  which  is  broadly  defined  under  statute  (CA  
s
...
    It   is   permissible   to   restrict   PB   to   a   sec?on   of   the  
public,   but   the   opportunity   to   benefit   must   not   be   unreasonably   restricted   by   geographical   loca?on   (CC  
guidance)
...
    There   is   also   a   problem   in   that   PB  
must  be  capable  of  being  demonstrated  (Shaw,  Hummeltenburg)  and  involve  public  interac?on  (Gilmour  v  
Coates)
...
    Students   tended   to   answer   this   preKy   well   and   offered   generally  
sound  advice
...
       It  is  strongly  established  (McGovern  v  A-­‐G)  that  trusts  for  poli?cal  purposes  can  never  be  
 regarded  as  charitable
...
   R  should  be  advised,  though,  that  some  poli?cal    
campaigning  is  acceptable,  but  it  must  be  undertaken  by  only  in  the  context  of  suppor?ng  the  
delivery  of  the  charitable  purpose  (CC  guidance)
...
   
Most   students   picked   up   on   some   or   all   of   these   points
...
 Very  few  applied  this  to  the  facts  sa)sfactorily,  however
...
   Perhaps  banning  the  use  of  animals  in  circuses  could  be  detrimental,  in  that  it  might  curtail  the  
circus  business
...
     And  we  were  in  any  case  advising  R  to  drop  or  limit  the  campaigning  part  of  this  clause
...
   Students  who  answer  accordingly  should  be  rewarded  for  this
...
   No  need  for  complete  destitution  
–  as  per  Charity  Commission  guidelines  and  cases  such  as  Re  Coulthurst  [1951]  Ch
...
   Was  once  the  case  that  PB  was  presumed  for  relief  of  poverty  but  the  PB  
presumption  was  removed  by  the  Statute
...
   
Problem  here  is  a  personal  nexus  which  limits  the  number  of  people  bene>itting
...
   
However  re  poverty  –  there  has  been  an  exception  historically  (Dingle  v  Turner)  and  this  has  been  
upheld  since  the  Act  came  into  force
...
   
Still  a  problem  as  could  be  argued  that  not  exclusively  charitable  –  Could  be  resolved  by  reading  the  
second  part  as  just  part  of  the  >irst  (benign  construction  maybe)  –  or  since  she  is  alive  –  suggest  that  
she  limits  it  to  the  relief  of  poverty  only  as  this  is  the  only  ‘safe  bet’  in  terms  of  getting  around  the  
personal  nexus  problem  
Part  (b)  
Maybe  advancing  education  –  which  can  include  research  –  and  maybe  possible  to  >ind  another  head  
under  CA  s
...
   Students  
should  be  rewarded  for  thinking  creatively  here
...
 
Advice  might  be  to  frame  the  idea  more  broadly  so  as  to  fund  research  in  the  area  of  music  
Part  c  
Could  again  be  education  (e
...
 Re  Delius/  Royal  Choral  Society  v  IRC)  or  a  s
...
 
 
Students   should   note   that   his   is   a   similar   problem   to   that   in   IRC   v   Baddely
...
   
Part  d  
Aim  here  could  be  said  to  be  animal  welfare  (part  (k)  the  advancement  of  animal  welfare)  under  the  
statute  –  but  the  problem  is  with  a  political  purpose  –  which  will  cause  the  trust  to  fail  as  a  charity  if  it  
is  the  primary  purpose  (IRC  v  McGovern)
...
   Z  should  be  advised  that  the  current  wording  points  towards  a  primary  political  purpose  as  
campaigning  to  change  the  law
...
 Z  needs  to  reconsider  her  aims  here
...
e
...

An express trust must be a trust for persons
...
However there are
significant exceptions to this:
I
...
A prima facie trust for purposes, but identifiable persons who will indirectly benefit
III
...
e
...
g
...
e
...

•

Many charities are trusts – but other legal forms exist

- So who is the “enforcer” of Charitable purpose trusts?
• The beneficiaries = i
...
the beneficiary principle - humans
- The Attorney General
• The Charity Commission also has some control in charities
...
The trust must have a recognised charitable purpose
2
...
The trust must have wholly and exclusively charitable
purposes

Advantages of being a charitable trust

Independent Schools Council v The Charity Commission: Established that there were a number of
advantages in having a charitable trust:

• A charity trust unlike a private trust can have a perpetual duration i
...
no perpetuity rule
• It is entitled to a number of favourable tax reliefs
• Charitable status confers reputational benefits w/ a consequential greater ability to raise funds

Disadvantages of being a charitable trust

• There are restrictions on permitted activities and the application of funds
• Significant administration obligations imposed upon charities
- All charities need to be registered by the Charity Commission which can involve administrative
burden in establishing that the hallmarks of a charity are satisfied
...
What is a charitable purpose?

The Charitable Uses Act 1601 featured a Preamble that identified a number of charitable objects
...

Commissioners of Income Tax v Pemsel: The first modern statement of charitable purposes was set out in
the case of
...

II
...

IV
...

Lord Wilberforce stated: Courts "have to keep the law as to charities moving according as new ideas arise or
old ones become obsolete or satisfied
...

The Charities Act 2006 updated the Pemsel categories by creating 13 new headings - a charity may
overlap with one of the headings and so a charity may satisfy more than one of them
The impact of the Charities Act 2006:
• Continued validity of charitable purposes upheld by pre-2006 case law
• Extends the categories of charitable purposes form four to thirteen
• Removes the presumption of public benefit regarding poverty, advancing religion and
advancing education
• Requires Charities Commission to issue guidance regarding the public benefit requirement
...


Page 8 of 30

2
...
All charities now have to demonstrate they are for
the public benefit throughout its course
PB3 of the Charity Commission Guidance states that it is the trustees’ duty to report on how they have
carried out the charity’s purposes for the public benefit

No statutory definition of ‘public benefit’ under statute, so we have to rely on previous case law and the
Charity Commission guidance
...
They
identified two key principles of the public benefit which all charities (new and existing) must positively
demonstrate that they meet:
Identifiable benefit: The purpose must be beneficial
...

Available to the public: Must benefit the public or a sufficient section
...


Is it right that a non elective body have the power to decide what the law is and then enforce it?
Note successful challenge to guidance in Independent Schools Council v Charity Commission for
England and Wales [2011]: AG said we need clarity
...
It should be up to the charity trustees to decide on the best way to run their charity and
not for the Charity Commission to impose on trustees, its own ideas as to what is or is not the right
provision for situations they encounter
...
Held: No identifiable benefit and so was not allowed as a
charitable purpose trust
...

Re Hummeltenberg [1923]: Trust to establish a college to teach spiritual mediums failed because public
benefit could not be identified
...
The work of an established decompose for example
...
Held: Experts were in the opinion that the
collection was worthless and of no artistic merit
...

could not identify a public benefit, neither was it for the advancement of education
...
Held there
would be more public harm than public benefit in that because we get a lot of public research benefit from
harming our animals and so the trust was not for the public benefit
...
If the nuns had gone out to the public, the outcome would be different
Re Hetherington: Browne-Wilkinson V-C held that firstly the saying of masses foe the dead was
charitable as a religious purpose and secondly, that the public benefit was provided by he fact of the
masses being said in public
...

This was confirmed in Re Le Cren Clarke

RULE: Benefit must be appropriate to the aims

RULE: Benefit may be restricted to a section of the public, but the opportunity to benefit must not
be unreasonably restricted
...

Geographical or other restrictions
The people that benefit can be restricted to a geographical area provided it is not too small
...

IRC v Baddeley: A “class within a class” (e
...
bankers in a village) is unlikely to be a sufficient section
of the public
...

Someone wants to set up a charity for cancer patients in the north of Leicester, prima facie, it may seem as
a class within a class but that restriction is related to the aims of the charity
...

Or ability to pay any fees charged?
Where a section of community would not be able to pay the fees of the charity, it may not pass the public
benefit test
...
g
...


Page 11 of 30

RULE: People in poverty must not be excluded from the opportunity to benefit
Independent Schools Council v Charity Commission: It is up to the charity to put in place arrangements
to ensure people in poverty are not excluded from the opportunity to benefit
...
£100 a year provided for trustees to have an annual dinner and also be
given a guinea for every committee meeting they attend
...
The provisions in favour of the trustees personally were made to ensure the
better administration of the main charitable trusts
...
Each
court, when deciding on the validity of a gift, must decide on the principle that the law is right as it stands,
since to do otherwise is to usurp the functions of the legislature” I
...
It’s Parliaments job to change the law
and not a charities job to campaign to change the law
McGovern v A-G: “a trust for political purposes… can never be regarded as being for the public benefit
in the manner which the law regards as charitable
...

Bonar Law Memorial Trust v IRC [1933]: “To education adults on the lines of the conservative party”
...
Held: Equity looked to substance not
form and the Court stated that you cannot dress up political purposes under some other disguise
...

Webb v O’Doherty: This was created by the Student Union and so it would seem prima facie that the
charity was for the purpose of advancing education
...
This was not incidental to the Student Unions purpose of advancing education and so it was not
allowed
...

The law is however adapting to its times:
Recent decision of the Charity Tribunal in the Human Dignity Trust: The trust won its appeal against the
Charity Committee’s decision that it was political
...
Committee felt it was political because they tried to change laws, however the trust stated what
they were doing is actually just acting as support for people of human rights abuses and thus won the
appeal
...

There can be more than one charitable purpose
...
e
...

Re Coulthurst: Lord Evershed MR confirmed the point that “it is established that poverty does not mean
destitution”, He went on to say “[The term poverty is] of wide and somewhat indefinite import”
...
He seems to therefore assumes one is in poverty when they lose the level
of wealth they are accustomed to
...
This interpretation seems to be limitless
...

Re Sanders’ Will Trust: It was made clear that working class of itself did not equate to poverty
...

However in:
Re Niyazi’s Will Trusts: A gift for the construction of a working men’s hostel in Cyprus was upheld for
being for the relief of poverty
...

Re Gwyon: Court had to decide whether a testators detailed instructions in his will to leave all his
residuary estate to provide knickers for young boys, was charitable
...
Some stating that it has been reduced virtually to
vanishing point for charities
...


Page 15 of 30

Poor relations
Rationale: To make someone less poor relieves the burden from others
...


Poor employees
Dingle v Turner [1972], per Lord Cross: “Poor persons” to treat such trusts as charities is not open to
any practical objection” i
...
you can name a group of named relations
...
In relation to the personal nexus test, it was
stated that these persons must be employees of the same firm
...
This was confirmed by the Upper Tribunal in
Attorney General and Others v Charity Commission for England and Wales: The Upper Tribunal
confirmed that that the public interest test in relation to poverty still applied even after the Charities Act 2006
and so the decisions held in the cases above still remained valid for poverty
...
The reason for this is that relieving poverty has been considered by the
courts to be of such a public interest that a more narrowly defined class of beneficiary can still be a
sufficient section of the public
...


Includes Research
Re Shaw: George Bernard Shaw wanted to develop a 40 letter alphabet
...
Increasing knowledge of its own without some form of teaching is not enough to be an
advancement of education
...
However Wilberforce J suggested that
an attribute of research as a charitable object is that it is of educational value to the researcher
...

McGovern v A-G [1982], per Slade J: Research should be considered to be educational only if
1
...
It is contemplated that knowledge acquired will be disseminated to others
3
...
3(1)(f) - Advancement of the arts, culture, heritage and science
Re Delius: Promotion of the works of the composer of Delius was deemed to be charitable
Royal Choral Society v IRC [1943]: Choral works was charitable also, under the heading of education

Includes Physical Education
Note relevance now of CA 2011 s
...
Amateur sport has a category
of its own
...

Trust set up by the FA
...
At the time,
sport of itself was not a charitable purpose but the court upheld this as charitable because it was
educational: i
...
by helping physical health by promoting sport would also help mental wellbeing and
therefore be for the advancement of their education
...
Buckley LJ stated the Law Reports provided educational benefits not only to those actively
engaged in the practice of the law but also a wider crowd
...
Despite the large number to
benefit, the nexus between them was employment by a particular employer
...
So it failed the public
benefit test because of the private benefit - only for children of the employees of the former employees
this was despite the fact that there were a large number of employees
...
Had the trust been framed so as to provide for the education of the
children of those engaged in the tobacco industry in a named country or town, ti would have been a good
charitable disposition
...

This is taken up by Lord Cross subsequently in Dingle v Turner [1972]
...
This was decided
before Dingle v Turner
...
It had a close
relation with a company and the bulk of its income came from that company
...
It was held
a majority of the payments were in fact not for the benefit of a sector of the public but for the benefit of
children of employees or former employees of the company
...

Independent Schools Council v Charity Commission for England and Wales: The Upper Tribunal
considered this problem
...

- Scholarships or other forms of direct assistance to students are therefore important
- SEE JUDGMENT

Page 18 of 30

The advancement of religion
s 3(1)(c)
Although advancement of religion has long been recognised as a charitable purpose, the only reference to
religion in the Preamble to the Charitable Uses Act 1601 is to ‘the repair of churches’
...
This is reflective of s 3(1)(c)
...
Held: to be a charitable trust for
the purposes of advancement of religion
...

The new statutory definition made it clear that it is not limited to monotheist religions: s
...

In Australia however Scientology has been held to be charitable
...

It is likely that the statutory definition will mean that Scientology can now be classed as a religion, but it will
still be necessary to establish a public benefit which is a further reason why the Charity Commission refused
to register it as a charity
...
This is a new requirement that has not previously been recognised in the case law
...
This was because of the promotion of ethical code, relating primary to the
preservation of ancient monuments
...

The approach of the courts and the Charity Commission towards Scientology:
Lord Dennings describes scientology as ‘dangerous material’
R v Registrar General ex parte Segerdal: Goff described it as ‘pernicious nonsense’
...
However they are religious in Australia
...
This decision is
opening the door to scientology being more accepted and possibly recognised as religion for charitable
purposes
...
Held A belief
in the efficacy of prayer could not be proved to be a benefit, and edification by example was too vague and
intangible to consist a relevant benefit
...

However
Re Hetherington (Deceased): The testatrix left her residuary estate to a Roman Catholic church for assess
to be held for her soul
...
It was considered to be beneficial because the
priests who celebrated the mass were to be paid a stipend that would relieve the Roman Catholic church of
part of its liability to pay priests - i
...
financial benefit to the Church that would enable its resources to be
allocated elsewhere
...
This was
because the members of the synagogue spent time int he community, whereas the nuns were excluded from
the community
...
Public benefit was established because although faith healing sessions were not advertised, they
were open to the public
...

The benefit from prayer or from edification by example will not suffice
...

• It was also recognised there would be an indirect benefit to the State from the creation of private
hospitals, because the existence of such hospitals reduces the demand for beds of private hospitals however this is difficult to justify
...


The advancement of citizenship or community development
s 3(2)(c) - Includes:
(i) Rural or urban regeneration, and
(ii) The promotion of civil responsibility, volunteering, the voluntary sector or the effectiveness or efficiency
of charities
IRC v Oldham Training and Enterprise Council: Objects of the Council included the promotion of
vocational education and training, and the retraining of the public, which could also be characterised as
advancing education, and the promotion of industry, commerce, and enterprise for the benefit of the public in
Oldham
...
However the
Council also promoted trade, commerce and enterprise and professional support services and advice to new
businesses, which could involve promoting the interest of individuals, and so the Council provided private
benefits
...


The advancement of the arts, culture, heritage or science
It is necessary to consider whether there is any artistic merit in the specific purpose
...

Roxburgh J, in that case suggested that the music of the composer must be worth appreciating, which
suggests that if the trusts related to the work of an inadequate composer, the necessary benefit to the public
might not be identified
...

Held: Not charitable, because it was not educational
...
The quality of the work was described as ‘worthless’ and a ‘haphazard assembly of items’
...
Because the trust was not considered to fall within the spirit and
intendment of the Preamble
...

Some of the purposes of the charity would also fall within the new head of advancement of language, history,
music, literature and art
...
Since these purposes are not exclusively charitable, the trust still would not be treated as
charitable
...

Noteably, facilities or sporting activities if for pupils of schools or universities or if the game was itself of an
educational nature, the trusts would be for the advancement of education
...

There is the possibility for interrelationship of these provisions and s 5 recreational charities
...

“Mental skill”: Mental exertion can count
Re Dupree’s Deeds Trusts: Chess was found to be a charitable purpose for the advancement of amateur
sport
...

Current Charity Commission guidance:
The Charity Commission provided examples of sorts of charities and charitable purposes falling within this
description, such as:
• Charities advancing sports at a local club e
...
local football, rugby, tennis clubs etc;
• Multisports centres;
• Other organisations concerned with the promotion of a particular amateur sport or game
NOTE: This guidance is under review
(ii) Demonstrating a Public benefit under ‘advancing amateur sport’
RULE: Benefit may be restricted to a section of the public, but the opportunity to benefit must not
be unreasonably restricted
...
g
...
Here the trust provided that playing fields would be provided for members of a particular
Methodist church, it was held that the trust failed to meet the public benefit requirement, because the class
consisted of members of a particular church within a limited geographical are and so constituted a class
within a class
...
It is not irrational - any
member of the North Leicestershire community who suffered from cancer could benefit from the charity
...
This provided specific provision to treat the
provision of recreation or leisure facilities as charitable if the facilities are provided in the interest of social
welfare and for the public benefit
...

So where decilitres are intended for the use of non-sporting activities, they might still be charitable by virtue
of s 5 of the Charities Act 2011
...


NOTE: The beneficiaries do not need necessary to be socially disadvantaged - so long as intention is to
improve the lives of the people int hat community: This is demonstrated in Guild v IRC
...
The centre provided facilities for recreation and leisure occupation that
were available to the public at large
...


The advancement of Human Rights
s
...

Re Strakosch: A trust to appease racial feelings between the Dutch-speaking and English-speaking sections
of the South African community was held not to be charitable because the scope of the gift was too wide and
vague
...
This was under the old law however such problems as to the vagueness of the gift would arise in
respect of the new charitable purpose under the Charities Act 2011
...


Page 24 of 30

There is a fine line between pursuing political activities as means to a charitable end and pursuing purposes
that are political in their own right:
McGovern v A-G: This case concerned whether a trust created by Amnesty International was charitable
...
It was held that this was not a charitable trust because seeing
the release of prisoners of conscience was considered to be a political purpose through seeking the reversal
of administrative decisions of governmental authorities
...


The relief of those in need because of youth, age, ill-health, disability, financial hardship or other
disadvantages
Link with s 3(1)(a) - the Prevention or Relief of poverty
The rationale behind this heading is that somebody can be in need even if they are not poor
...
However the ‘public benefit’ requirement must still be in need in some way
...

‘By virtue of age’
Joseph Rowntree Memorial v A-G: A scheme to build self-contained dwellings to be let on long leases to
elderly people at 70% of the cost of the premises, with the remaining expense being met by a State housing
grant, was held to be a charitable scheme for the relief of aged people, even though beneficiaries has to make
a substantial financial contribution
...

A beneficiary profiting from such a trust fund was considered to be incidental to the charitable purpose
...

National Anti-Vivisection Society v IRC: The purpose of the society was to suppress experiments on
animals
...

There is a restriction on political proposes:
Hatchett-Stamford v A-G

Page 25 of 30

Re Grove-Grady: Indirect benefits to the public may be difficult to establish
...


The promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire
and rescue services or ambulance services
‘Efficiency’ - Held at common law to include physical efficiency
...

Re Good: A trust to buy and maintain a library for an officers’ mess was held to be a charitable purpose since
intended to improve the efficiency of the army
...

Lord Wilberforce stated in Scottish Burial Reform Society v Glasgow Corporation, we “have to ;eep the
law as to charities moving according as new ideas arise or old ones become obsolete or satisfied”
...


Page 26 of 30

3
...
e
...

Chichester Diocesan Fund and Board of Finance Incorporated v Simpson: Trust for “such charitable or
benevolent object as the executors may choose”
...
e
...
Held:
The trust was void, therefore was not exclusively charitable
...

Consequently, the validity of such trusts as charities will often turn on whether the words ‘or’ or ‘and’ are
used
...
This was put by Viscount Simon
LC
...
The use of ‘or’ as well as ‘and’ meant that there was the
option or the gift to be used for non-charitable purposes
...
You could quote Lord Hailsham in IRC v McMullen
...
He said where it can be claimed that there is an mbuitity, a benignant construction
should be given if possible
...
Persuade the court that the non charitable purpose is merely incidental to the charitable purpose
...
It resulted to the better running of the trust
...
Severance:
- This only applies exceptionally, where the interest are clearly apportioned i
...
if the word ‘AND’
is used in the gift as they must have intended some of it to go to the charitable purpose
...

- Perhaps the court could chop it in two and uphold the charitable purpose whilst voiding the noncharitable purpose
...
e
...

- Salisbury v Denton: Fund was supposed to be used to found a school for the poor and to provide for
the testators relatives
...
e
...

Lecture activity:
Helping people has to be more than minimal - Independent Schools Council case

Page 27 of 30

4
...

Cy-pres: For some other charitable purpose as near as possible resembling the original purpose
...


Cases of initial failure
i
...
where the charitable purpose fails before the trust commences
RULE: Need to show the settlor/testator had a general charitable intent
This means that the creator of the trust was more concerned that the funds should be used for a charitable
purpose generally rather than concerned to benefit only the specific charitable purpose that he or she had
identified
...
However after the testators death it was not possible to acquire land to
carry out the provisions in the will
...


Cases of subsequent failure
i
...
where the charitable purpose fails after the trust has been established, or has become capable of being
established
If this occurs, the fund will not be held on resulting trust for the settlor or those entitled to the testators
residuary estate
...

RULE: No need to show general charitable intent of settlor/testator
Re Slevin: The testator made a gift to an orphanage that was in existence at his death but which ceased to
exist soon afterwards and before the legacy was paid
...
If a company is
dissolved between the death of the testator and the date of payment, the legacy will still be available to the
company’s creditors because the right had accrued to the company on the testator’s death
...
When the testatrix died, it was no longer practicable
...
This was consequently a case of
subsequent failure of the charitable purpose because the purpose had been practicable when the testatrix died
and so the funds could be applied cy-pres
...

This requirement has been gradually relaxed by Statute (1960 onwards):
We can see this in the case of Re Lysaght: Here the Royal College of Surgeons refused to accept a generous
benefaction towards medial studentships because it was subject to a condition that meant that Jewish or
Roman Catholic students were not eligible to receive studentships
...
Held The religious disqualified concerned did not form an essential part of the
creators intention to found medical studentships, a scheme was ordered whereby the Royal College held the
bequest on trust without the offending condition
...


Page 29 of 30

STAGES TO ANSWERING CHARITABLE TRUSTS QUESTIONS:

1
...
and in doing so, analyse whether the disposition comes within one or more of the
charitable purposes laid down in the act, CA 2011
3
...
Is there clear public benefit? (other if it for poverty, do not really need PB)
5
...
g
...


Check there is no personal nexus - does not apply to poverty

7

---