5. Non-Charitable Purpose Trust PDF

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NON-CHARITABLE PURPOSE TRUSTS/ANOMALOUS CASES: Cases:           Re Khoo Cheng Teow (1933) MLJ 119 Phan Kin Thin v Phan Know Fung (1940) MLJ 44 Re Denley’s Trust Deed (1969) 1 Ch 373 Hong Kong Bank Trustees (S’pore) Ltd v Farrer Tan & Ors [1988] 1 MLJ 485 Morice v Bishop of ...

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NON-CHARITABLE PURPOSE TRUSTS/ANOMALOUS CASES: Cases:          

Re Khoo Cheng Teow (1933) MLJ 119 Phan Kin Thin v Phan Know Fung (1940) MLJ 44 Re Denley’s Trust Deed (1969) 1 Ch 373 Hong Kong Bank Trustees (S’pore) Ltd v Farrer Tan & Ors [1988] 1 MLJ 485 Morice v Bishop of Durham (1840) 9 Ves 399 Re Astor’s Settlement Trusts (1952) Ch 534 Mussett v Bingle [1976] WN 170 Re Dean (1889) 41 Ch D 552 Re Endacott (1960) Ch 232; (952) 2 All ER 562 Re Lipinski’s Will Trust [1977] All ER 33

Non-human beneficiaries-who will enforce the trust? Meaning of NCPTs: 

Trusts for non-charitable purposes and not being charities are generally void. So, they are generally unenforceable. o Morice v Bishop of Durham  This case concerned a gift upon trust for “Such objects of benevolence and liberality as the Bishop of Durham shall most approve of”.  There were no ascertainable beneficiaries.  Sir William Grant held that the trust failed and observed: “There can be no trust which this court will not assume control; from uncontrollable power of disposition would be ownership and not a trust.” o However, in Re Astor’s Settlement Trust  Lord Astor made in inter-vivos settlement for a number of non-charitable objects: (a) the maintenance of good understanding, sympathy and cooperation between nations; (b) the preservation of the independence and integrity of newspapers; and (c) the protection of newspapers from being absorbed or controlled by combines.  The Court held that the trusts failed as the objects were void for uncertainty.  Roxburg J ruled that the general principle was that gifts on trust must have a cestui que trust and the only exceptions were found in the cases of horses and hounds and graves and monuments as a concession to human weakness. No Court of Equity would recognize non-charitable purposes in a manner that it could not control. o Musset v Bingle  A gift for the building of a monument to the testator’s widow’s first husband was upheld as a trust of imperfect obligation. o In Re Hooper [1932] 1 Ch 38  A gift to trustees for the upkeep of graves and monuments for a period of 21 years was held to be valid.

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In Re Dean  The Court upheld as valid a bequest of an annual sum for the maintenance of the testator’s horses and hounds for a period of 50 years if any of the horses and hounds should live so long.  No attention was paid to the perpetuity period. In Re Thompson [1930] 1 Ch 203  Fox-hunting was upheld. In Re Lipinsky’s Will Trusts  The testator left his residuary estate to trustees for an unincorporated recreational association.  Held: Trust was valid as the beneficiaries were ascertainable. In Re Denley’s Trust Deed  The Court found that a valid private trust came into existence when land was given to be used as a sports field primarily for the benefit of employees of a specified company. Re Endacott  Held: The proposition that if these trusts should fail as trusts they may survive as powers, is not one which can be accepted in English law. Hong Kong Bank Trustee (Singapore) Ltd v Farrer Tan and 5 Ors  The testatrix set aside large amounts of her property which covered a plantation in Holland Road which was used as a burial ground with a temple and other buildings erected on it. There was also $10,000 in cash.  The perpetuity period was that these properties were to be held “on trust for and during the lives of all the descendants of His majesty King George the Fifth living at the date of her death and a further period of 20 years from the date of the death of the last survivor of all such descendants.  All income received from the investments of these properties were to be used for the upkeep of the plantation etc. But the property was compulsorily acquired by the Govt on 14 Feb 1980. And the purposes of the trust could not be carried out.  In clause 11 of her will provided that should any legacy fail, then such property should fall into and form part of her residuary estate.  Trustees asked the Court on directions as to how to carry out the terms of the trust.  The High Court found that the trust declared in this will were purpose trusts which according to clause 11 of the will failed and the income which had accrued from the date of such failure fell into the residuary estate under clause 21 of the will for distribution. The trustees held the capital of the trust fund until the expiry of the trust period when the said capital would be divided into two halves and distributed one half each equally among the male descendants (from both the male and female lines of descent then living). Phan Kin Thin and Khoo Cheng Teow  Trusts for Chinese ancestral worship were upheld. Koh Cheng Sean v Syed Hassan [1930] 1 MC 180  Wakafs were upheld as valid as the English Rule Against Perpetuities which would have prevented the creation of a wakaf was not part of the law of

Johore and accordingly the deed of wakaf was not invalid or against public policy....