Equity and Trusts Exam Revision - Charitable Trusts
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Course
Equity and Trusts (M3027)
Institution
University Of Sussex (UoS)
Book
Principles Of Equity
2020 lecture notes providing a comprehensible guide to the law of charitable trusts. Includes notes on the key cases for each head of the 2006 and 2011 Charities Act. Then follows with an explanation of whether something is exclusively charitable, and how the public benefit requirement is satisfied...
Introduction
Is the Trust for a Charitable Purpose?
Statute of Elizabeth/Charitable Uses Act 1601
o Preamble lists purposes seen in law as charitable.
o ‘the relief of aged, impotent and poor people; the maintenance of sick and maimed
soldiers and mariners, schools of learning, free schools and scholars in universities
the repair of bridges, ports, havens, causeways, churches, sea-banks and
highways; the education and preferment of orphans; the relief, stock or
maintenance for houses of correction; the marriage of poor maids; the supportation,
aid and help of young tradesmen, handicraftsmen, and persons decayed; the relief
or redemption of prisoners or captives; the aid or ease of any poor inhabitants
concerning payment of fifteens, setting out of soldiers and other taxes.’
Mortmain and Charitable Uses Act 1888
o Specific purposes were re-enacted in this act.
Commissioners for Special Purpose pf the Income Tax v Pemsel
o Relief of poverty
o Advancement of education
o Advancement of religion
o Other purposes beneficial to the community
Is there a Public Benefit?
Before the Charities Act 2006/11 – a benefit to the public was almost always presumed to
exist under poverty, education, and religion. But the Charities Act 2006/2011 has removed
this presumption. It must always be asked whether there is a public benefit.
Charities Act 2011, s2
1. For the purposes of the law of England and Wales, a charitable purpose is a purpose
which –
a. Falls within s3(1) and
b. Which is for the public benefit (see s4)
S4
1. ..
2. In determining whether that requirement is satisfied in relation to any such purpose,
it is NOT to be presumed that a purpose, it is NOT to be presumed that a purpose of
a particular description is for the public benefit
3. In the Chapter, any reference to the public benefit is a reference to the public
benefit as that term is understood for the purposes of the law relating to charities in
England and Wales
Statute removes presumption of ‘public benefit’ but does not give guidance.
Charities Act 2011 Part 2 s17 requires Charity Commission to issue guidance
Charitable Heads
S3(1)(a) (Prevention) or relief of poverty – treated with immense generosity.
Re Coulthurst’s WT
o ‘…poverty does not mean destitution…’ per Lord Evershed.
Charity Commission –
o Poor means, ‘anyone who does not have access to the normal things in life which
most people take for granted’.
, o ‘Prevention’ of poverty could include debt management agencies.
Re Drummond
o Facts: Money was left to provide a contribution to the holiday expenses to work
people employed in the spinning department of a mill in Yorkshire. It was women
earning 15 shillings a week.
o Issue: Was this considered the relief of poverty.
o Held: They were not poor for the purpose of the charity.
Re Saunders – contrast – Re Niyazi
o Facts: Money was left to provide dwellings for the working classes and their families
resident in an area.
o Held: Not charitable.
Contrast
o Facts: Money was left to build a working men’s hostel.
o Held: It was borderline, but could be distinguished because only poor people would
be living in a hostel.
Re Gwynon – must not benefit the rich, even inadvertently.
o Facts: a fund which provided gifts to boys in Farnham.
o Held: It failed to exclude rich children so could not be a relief of poverty.
Joseph Rowntree case – the charging of fees per se does not preclude a finding that a
purpose is a charitable purpose
o Facts: Trust wished to build small self-contained dwellings for elderly people, to be
available on long term leases at 30% discount of market price. Beneficiaries also had
to pay service charge but did have to need that type of accommodation.
o Issue: Could this be a charitable purpose for relief of poverty if there was a charge?
o Held: Lord Justice Gibson looked at preamble of early statute, which mentions
elderly and relieving poverty. Paying for this does not have to be a bar to the
charitable purpose.
SEE ALSO – s3(1)(j) – the relief of those in need by reason of… financial hardship or other
disadvantage
S3(1)(b) Advancement of Education
Not limited to formal education – instruction, cultural advancement, industrial and technical
training, zoos, museums – also covers research
Charity Commission examples – educational prize funds, student unions, training for the
unemployed, physical and out-of-school education
Fees not a bar – so long as school not operated for profit
o Re Girls Public day School Trust – contrast – Abbey, Malvern & Wells Ltd
Incorporated Council for Law Reporting in England and Wales
o The publication of law reports was held to be a charitable purpose despite that only
lawyers use them, because anyone CAN use them.
o Education is not just about the acquisition of knowledge/education, it is also about
dissemination.
Research
o Re Shaw, Public Trustee v Day – “the research enjoined by the testator seems to me
merely to tend towards the increase of public knowledge… there is no element of
teaching or education” per Harman J
, o Re Hopkins – money left to Francis Bacon Society to search for manuscripts was
charitable.
S3(1)(f) Advancement of Arts, Culture, Heritage or Science
Re Shakespeare’s Memorial Trust
o A fund to establish Shakespeare memorial national theatre to keep plays of
Shakespeare in its repository etc…
o These were purposes for the advancement of education but would now be included
under this new title.
Re Choral Society –
o ‘a body of persons established for the purpose of raising the artistic state of the
country… is established for educational purposes, because the education of artistic
taste is one of the most important things in the development of a civilised human
being’ per Lord Greene.
Re Delius
o The wife of Frederick Delius, he left her his residuary estate for the purpose for the
advancement of the musical work of Frederick Delius. The court accepted without
question Delius’ work, and said this was charitable.
o Question arose about whether a particular artist is worth appreciating.
Re Pinnion
o Facts: Pinion left his studio and paintings to the National Trust to be opened as a
museum. If they don’t want it, to his executors to be used as a museum.
o Issue: There was a dispute whether this was a person whose work was worth
appreciating. To avoid making an open express judgment, the court appointed an
expert to evaluate the merits of the collection. The expert’s opinion was that it was
atrociously bad with no merit.
o Held: No useful purpose to be served.
McGovern v Attorney-General
See Charity Commission
S3(1)(g) Advancement of Amateur Sport
Sport per se not a charitable purpose Re Nottage
Re Dupree’s Trust –
o Facts: A gift for the annual promotion of a chess tournament.
o Held: chess is more than a mere game…
IRC v McMullen
o Facts: The Football Association wished to establish a charitable trust to provide
organised facilities which would encourage students to play.
o Initially purpose failed
o Held in HL: Trust was allowed: ‘…while the mere playing of games… was not
charitable; nor necessarily educational, the totality of the process of education
consisted in a balance between spiritual, morel, mental and physical elements… and
did not exclude pleasure in the exercise of skill…’ Lord Hailsham
Charity Commission – NOW recognise as charitable the promotion of community
participation in healthy recreation by providing facilities for playing particular sports…
o Requirements:
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