Ncpts GRID - NON CHARITABLE PURPOSE TRUSTS PDF

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NON CHARITABLE PURPOSE TRUSTS...

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NCPTS: trusts, which are for the purposes rather than the people BUT do not come within S.3(1) as a CP.

Beneficiary Principle: the general rule is “Every trust must be for the benefit of human beneficiaries”. MORICE V BISHOP OF DURHAM (1804): “There must be someone in whose favour the court can decree performance”. SOMEONE NEEDS THE RIGHT TO ENFORCE THE TRUST.

Rules against inalienability: A purpose trust is VOID if it is to continue beyond its perpetuity period. UNLESS IT’S A CHARITY.

RE KHOO CHENG TEOW (1982): “A life in being…plus 21 years” – supported by S.18 Perpetuity and Accumulations Act (2009) that states it is to be left to common law of this case. People trusts = S.7(2) PAA (2009) – 125 years and no longer.

Public Policy: purpose trusts will not be permitted if they go against PP. BROWN V BURDETT (1882): weird provisions left to look after house – court said no, there was no point doing it and therefore it was useless. MCCAIG’S TRUST (1915): money to built 11 statues of relatives – court said no, it clearly went against PP and the idea was a “little less than appalling”.

PURPOSE AS THE MOTIVE OF A GIFT: can save a trust if it a cannot be a PT. RE ANDREWS (1905): Motive was the education of 7 children – court held the surplus was theirs as the money was an absolute gift to the children. RE SANDERSON (1857): any remaining funds are to be disposed of / by way of gift otherwise it will be a R trust.

Always look at whether it’s a gift for the purposes of the ORG or for its members. If it is for the org, the problem is what happens to the money. If it goes to a chairman or a treasurer then that would make it a PURPOSE TRUST, but it wouldn’t fall in exceptions.

BP CASES: RE SHAW (1957): Harman J “One cannot have a trust, other than a CT, for the benefit, not of individuals but of objects”. RE ASTORS SETTLEMENT (1952): maintenance and understanding of good relations – TOO WIDE.

Upheld using the wording: RE HOOPER (1932) “So far as the trustees can legally do so…” PIRBRIGHT V SALWAY (1896): “So long as the law for the time being permitted”.

TOMBS, GRAVES AND MONUMENTS: RE HOOPER (1932): upkeep of family graves and a monument – VALID. SALWAY (1896): burial enclosure and flowers – VALID if in 21 years. RE ENDACOTT (1960): “Some useful memorial to myself” – INVALID, not funeral in character and went against PP. MUSSETT V BINGLE (1876): 2 gifts: money to build a monument and money to maintain it – building = VALID for 21 years, MT = INVALID, PP.

RE DENLEY (1968): Plot of land, land to be used for providing some sport recreation to the employees of a company. Problem was the personal nexus test binding them together. Court said that they were going to use the land and benefit from it + they weren’t entitled to the capital and therefore it was valid. RULE: “A trust, which, though expressed as a NC purposes, is directly or indirectly for the benefit of individuals so as to be enforceable”. RE GRANT (1980): discussed the case and what it means / how it applies.

CONTRACT HOLDING THEORY: GIFT TO MEMBERS SUBJECT TO CONTRACT: Contract will normally say the gift should be applied to the purposes of a UA. If someone leaves the UA, then the money goes to remaining members. Can be INWARDS or OUTWARDS looking. Rules around constitution: possibility to end the UA – some method of distribution and division of the assets if they are to end. RE RECHER (1971): Gift to London and Provincial Society by the time the trust was enacted, the London branch had closed and the assets were given to the wider national society – court said you cant do this. RE GRANT (1980): no way of ending a local government organisation and dividing the assets. Relevance of INTENTION: RE LIPINSKI (1976): Money left to Hull’s Judean Maccabi Association – with clear purposes for the money – court said it was VALID – purpose didn’t invalidate the gift. HOWEVER, UA weren’t bound by the purposes listed – as it was a gift. DISSOLUTION: If a UA is wound up, in absence of any rules to the contrary, surplus is divided up on a per capita basis. (RE HORLEY F.C (2006)). Alternatively, you can divide it up pro rata and give everyone his or her share.

HENCE, the general rule that if the B is an object – it is VOID – unless it falls under the exceptions to the rule.

The nature of the purpose can be relevant: RE HAINES (1952): Provision to look after a cat – it is accepted that cats will not live forever and therefore 21 years was sufficient – despite not stating it.

CARE OF SPECIFIC ANIMALS: PETTINGALL (1842): £50 to look after ‘favourite’ black mare – keep in park, remove shoes and not ridden – VALID. RE KELLY (1932) – Life in being of a human, not animal.

PRIVATE MASSES AND MISCELLANOUS: if there is money left to a public mass, then it’s a CP – if it is to a private mass, it falls under this exception (BOURNE V KEANE 1919). RE THOMPSON (1984): purpose was “defined, with sufficient clearnesss”.

GIFTS TO AN IA: An IA has legal personality (legal entity – like a human in the eyes of the law) – therefore a gift to an IA satisfies the beneficiary P. ISSUES ARISE WITH REGARDS TO UAs. CCO V BURRELL (1982): Justice Lawson “2 or more people, bound together by 1 or more common purposes, by mutual undertakings, each having mutual duties and obligations in an org, which has rules, which identify in whom control of it and its funds rests and on what terms and which it may be joined or left at will” – fairly formal body with rules that bind members BUT NO LP.

GIFT TO EXISTING MEMBERS: least important, seen as complex and can go on and on (NEVILLE ESTATES V MADDEN (1969). Looks most like a trust – despite being a gift. Applies if the Donor’s intention is for the gift to be held as an endowment for existing and future members – HOWEVER, can go on forever – partially remedied by S.7(2) PAA (2009) – lacks any real common law on it.

GIFT TO EXISTING MEMBERS AS JTs: Literally a gift to members themselves – VALID but any member can claim their share. BOWMAN V SECULAR SOCIETY (1917): “neither the gift nor the directions given impose in the donee, the character of the trust”.. If members are precluded from severing then it CANNOT be this gift. Relevance of INTENTION: do they have unfettered rights or for the purposes of the UA? CAN be inwards or outwards looking BUT more likely to be inwards. RE GRANT (1980): EXAMPLE: “A dining club, as long as it has limited rules and benefits are conferred to its member’s only. MANDATE THEORY: Not a well-developed theory but it is there – works like an agency relationship. CONSERVATIVE CENTRAL OFFICE V BURRELL (1982): Contributor gives recipient the mandate to use the property in a certain way. This creates a fiduciary relationship between the contributor and the recipient and also allows the contributor to stop any misapplication of the money....