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Seminar 3 Charitable Purpose Trusts Objectives By the end of this tutorial you should be able to: 1. Critically analyse the recognised heads of charity and apply different heads to factual scenarios 2. Evaluate the concept of “public benefit” within the institutional framework of charities Textbook reading Virgo: Ch.6 Moffat: Ch.16 (in outline); Ch.17; Ch.18 (in outline) Cases Oppenheim v Tobacco Securities Trust [1951] AC 297 Dingle v Turner [1972] AC 601 Catholic Care (Diocese of Leeds) v Charity Commission for England and Wales [2010] EWHC 520 (Ch) The Independent Schools Council v The Charity Commission [2011] UKUT 421 Helena Partnerships Ltd v Commissioners for Her Majesty’s Revenue and Customs [2012] EWCA Civ 569 McGovern v Attorney-General [1982] Ch 321 The Human Dignity Trust v Charity Commission for England and Wales [2015] WTLR 789 Statutes Charities Act 2011 Perpetuities and Accumulations Act 2009 Articles M K Synge, Charitable status: not a negligeble matter (2016) Law Quarterly Review, 132, 303-317 P Luxton and N Evans, ‘Cogent and Cohesive? Two recent Charity Commission decisions on the advancement of religion’ [2011] Conveyancer 144 J Jaconelli, ‘Adjudicating on charitable status – a reconsideration of the elements’ [2013] Conveyancer 96 It would also be useful to look at the guidance issued by the Charity Commission on its website, for example, its guidance on public benefit: https://www.gov.uk/government/collections/charitable-purposes-and-public-benefit Questions

Q.1

Aisha is a wealthy Muslim woman and wants to use her money to help others. She has always felt that she should give back to society and particularly wants to help women. She proposes to make the following dispositions: a. £100,000 to help set up a foodbank for single mothers living in Birmingham who cannot afford to feed their children or food vouchers for all single women living in Birmingham. b. Half of her collection of books from her personal library for the use of her poor female employees, so that they can enjoy reading in their spare time. c. £50,000 to Muslim Women United (“MWU”), an organisation that campaigns to protect the rights of Muslim women. They will shortly be launching a campaign in the UK and throughout Europe to protect Muslim women’s rights to wear a full-face veil. d. £5,000 to help train Muslim women to become mediums so that they can communicate with the deceased. Advise Aisha as to the validity of her proposed dispositions and any changes you would suggest to her proposals.

 Need to have beneficiaries, they enforce the trust Charitable trust – charity’s commission enforce charity trust To establish a charitable trust: 2011 CA s3 (charitable purpose and public benefit), the purpose must be exclusively charitable a) s3 (1a) relief of poverty, second one didn’t specifically say whether it is for relief of poverty (single women, can be rich or poor) while first part is ok, may not fit the ‘relief of poverty’ requirement Helena partnership - housing to be provided for rental income, H – housing association, if they give $ for purpose of housing that’s it’s for the poor/relieve poverty, some of the house was for poor people but housing provision in itself not charitable purpose, (if they are provided for rich elite) HELD not charitable purpose (do not get relief from tax)  wasn’t just going to the poor, therefore didn’t fall under relief of poverty Doesn’t need to be really poor Re Coulthurst poverty doesn’t mean destitution, Re Gardom, just bcz you’re not the bottom level doesn’t mean you’re not poor Public benefit - An identifiable benefit must: Be beneficial to the public and Any detriment is outweighed by the benefit Yes beneficial as it provides free food to the women, certain class within a class, although narrowed down, sufficiently significant number of the public are benefitted, courts may tend to accept narrow group of people being beneficiaries, Dingle – only accept narrow group in the context of relieving poverty

Advice - Amending the second half part/or get rid of the second part b) for the use of collection don’t know which half and don’t know which book consists in the half (X certainty of subject matter here) London Wine on segregation [still need to look at three certainties] didnt segregate, but can bring out the case Hunter v Moss that it’s ok no to segregate it but the books are not identical and therefore not interchangeable, needs to segregate (London Wine) Palmer v Simmons (bulk), don’t know what half means(could mean half as in number/value/weight?) which charitable head? 3 (1(b) education/ (f) arts culture / (a) poverty?(as only targeted poor female employees, lifting them out of poverty?) Public benefit – work out how public benefit is conceived of when it falls on education Independent School // personal nexus  employee, contractual relationship In context of education scenario, personal nexus is a problem, but if it’s relief of poverty, personal nexus is not a problem Dingle v Turner (whether as a matter of construction the gift was for the relief of poverty amongst a particular description of poor people or was merely a gift to particular poor persons, the relief of poverty amongst them being the motive for the gift.)if we argue it under relief of poverty, whether having personal nexus or not would not matter Advice – say that it is for the relief of poverty c) 3 1(h) more on education if they are to let ppl know what their human rights are / 3 1(c) religion, political prupose McGovern non charitable seeking charitable status, what amounts to political purpose, e.g. campaign at the change of the law, trying to administrate change, seeking some sort of legislative change, re: human liberties trust, court said theyare working within the law, not seeking changes in law, therefore can fall under charitable purpose but here, more likely to be deemed as seeking change in law(human dignity trust) public benefit – still worth considering but hv problem w/ purpose Advice d) under which head? Isn’t one? Education (as you are training them to do sth), is it of public benefit? No, Re: Hummeltenberg, no evidence showing it was useful to the public X pb (1) must be exclusively for charitable purpose Under Charities Act 2011 Independent School councils – whether should have fiscal benefits, however cannot determine Aisha’s intention (whether or not to have tax breaks as benefits for setting up these dispositions) Pemsel – for relieving poverty/advancement of education/advancement of religion/other purposes not falling under the above heads [a,b,c, d unsure] Need to set up an institution established solely for charity purpose under s1 of CA 2011? (Morice)

Cannot have mixed purpose, all purposes must be charitable (Re Best) (2) must be for public benefit S2 CA 2011, two limbs (1) must be beneficial to public (2)must be available to the public at large or to sufficient section of the community n.b. Re Hummeltenberg – gift of training for spiritualist is not charitable purpose, D may fail, fail the objective assessment as no evidence shows that communication with the deceased will benefit the public however no common standard of what qualifies as benefit public – sufficient section, personal nexus, class within a class test Verge v Somerville – whether it is for benefit of the community or an appreciable important class of the community Personal Nexus  Oppenheim – must not be numerically negligible, education for employees/former employees, but must be a quality that does not depend on their relationship to a particular person [a, c seem ok, b unsure as relate to her employees] + not give rise to more than incidental personal benefit Q2.Towh a te x t e nt ,i fa ta l l ,i st h e r eaf u n c t i o n a ld e fin i t i o no ft he“ p u b l i c ”i nt h el a wo f c h a r i t i e s ? Se to u tt hec ur r e n tl a w( e . g .f a l lu n d e rs 3CA20 1 1,c o n t e x twh e r ei tc ome sf r o m,Pe ms e l ,s e t o u tr e l e v a n tp a r t st h a ty o un e e dt oh a v ep u b l i cb e n e fit ) Wh a td o e sf u n c t i o n a ld e fin i t i o nme a n ?( c o n s i s t e n ti n t e r pr e t a t i o n ? ) I nt e r p r e t a t i o no fs t a t u t e sa n dc a s el a w( d e fin i t i o nofp u b l i c ? ? )a st h e yg e tt a xb r e a ksf o rb e i n g ac h a r i t y ,t h e yn e e dt ofir s th a v eb e n e fit t e dt h ep u bl i cb e f o r eg e t t i n gfis c a la d v a n t a g e I si tf u n c t i on a lt h e n ? De a lwi t hd i ffe r e n th e a d si ndi ffwa y s( e . g .wh a ta mou nt st op u b l i cb e n e fitu n d e rp o v e r t ya n d e du c a t i o n ( p e r s o n a ln e xu s ) ) Opp e n h e i mc a s er eMi n o r i t yj u d gme n t ,‘ i tma t t e r st ha tt h e r ei sp e r s on a ln e x u s ,b u ti t ’ sn o tt he ma i nt h i n g ,wes h ou l dl o oka ts i z eo fc l a s sa n dt h ep ur p o s e s , ’ Di n g l e–c o u r ta p pr o v e dt h emi n o r i t yj u d g me n ti nt h ec o n t e x to fpo v e r t y ,mo r eg e ne r o us a pp r o a c h( b utu n d e rdi ffh e a d ? ) Fo re d uc a t i o n–i nde p e n d e n ts c h o o l ,c ou r t–fin ei fp pla r ep a y i n gf e e s ,b u ts ol o n ga sd o i n gt o b e n e fitt h ep u b l i cmo r ewi d e l y ,n o te n o u ghj u s tt ot a k et h eki d si n ,ne e dt oh a v eo t h e rb e n e fit s l i k es c h o l a r s hi p se t c Re l i g i o n–Gi l mo u rvCo at sa st h e ydo n ’ tg oo uta n db e n e fito t he r s ,t h e ya r eo nl yb e n e fit t i n g t he ms e l v e s ?Se l f d e pr i vi n g ?Co ur tn e e d spr o v ea st op r a y i n gb r i n g sp u b l i cb e n e fit ,v a gu et o s a yt h e yp r o v i dep u b l i cb e n e fit ,t h e ywe r es t a yi n gwi t h i nt he i ra r e a ? c o n f u s i n gd e fin i t i on ?Ha v ear e l a t i v e l yc l e a ri d e aun de re a c hh e a d ,bu tn o tar e a l l yc l e a r b r o a dd e fin i t i o n Th ep u b l i ca s p e c tb ywh i c hi tmus tb e n e fitt h ep u b l i ci ng e n e r a lo ras u ffic i e n ts e c t i o no fi t . Wh e t h e ras u ffic i e nts e c t i o noft h ep u b l i cb e n e fitma yde p e n do nt h es p e c i ficp u r p o s ea n di n

s o mec a s e sp e o p l el i v i n gi nas p e c i ficg e o g r a p hi c a la r e awi l lb es u ffic i e n t .I ti sa l s op o s s i b l e t od e c i d ewh oc a nbe n e fitb yr e f e r e n c et o“ p r o t e c t e dc h a r a c t e r i s t i c s ”s u c ha sa g e ,d i s a b i l i t yor r e l i g i o n .Th eCo mmi s s i o nwi l ld e c i dewh e t h e ras e c t i o no ft hepu b l i ci s“ s u ffic i e n t ”o nac a s e b yc a s eb a s i sa n dt he r ea r ed i ffe r e n tr u l e sf orpo v e r t yc h a r i t i e swh i c hma yn o tr e q u i r et he “ pu b l i c ”a s p e c to ft h et e s tt ob es a t i s fie d . Fu r t h e r ,a n yp e r s on a lb e n e fit sr e c e i v e ds h o u l db en omo r et h a n“ i nc i d e n t a l ”t oc a r r yi n go u ta c h a r i t y ’ sp u r p o s e .

Ea c ho fac ha r i t y ’ sp u r p o s e smu s tb ef o rt h ep ub l i cb e n e fit . Ma n yc ha r i t i e sh a v emo r et h a no n ep u r p o s e .Wh e r et h a ti st hec a s e ,t h ec o mmi s s i o nwi l ll o o k a te a c hp u r p o s eo ni t so wnt od e c i d ei fi ti sf o rt h ep u b l i cbe n e fit .Th ep u b l i cb e n e fitofo n e p u r po s ec a n n o tb eu s e dt oo ffs e ta n yl a c ko fp u b l i cb e n e fiti na n o t h e r . Ast hec o u r t swo u l d ,i twi l lwe i g hupa l lt h er e l e v a n tf a c t or sa n de v i d e n c et od e c i d ewh e t h e r e a c hp u r p o s eo ni t so wn : 

i sb e n e fic i a l



b e ne fit st h ep ub l i ci ng e n e r a l ,oras uffic i e n ts e c t i ono fi t

I nmos tc a s e st h i si sl i k e l yt ob ec l e a r . Th et woa s pe c t so fp ub l i cb e n e fitc a no v e r l a p .Af a c t orc a nf r e q u e nt l yb er e g a r d e da sh a vi n g a ni mp a c to nb o t ha s p e c t s . So me t i me st hec o mmi s s i onmi g h tn e e dt oc on s i d e rt h er e l a t i o n s h i pb e t we e nwha ti sb e n e fic i a l a ndwh a ti sh a r mf ul ,a n dp u bl i ca n dpe r s on a lb e n e fit . So mec a s e sr e q ui r efin ej u d g me n tt oc o n s i d e rwhe t h e ra l lt h ef a c t o r s ,t a k e nt o g e t h e r ,r e s u l ti n apu r p o s et ha ti sf o rt hep u b l i cb e n e fit .Th ec o mmi s s i o nc o n s i de r sa l lc a s e si nt h e i ro wn c on t e x t . I nt h ema j or i t yo fc a s e s ,i twi l lb ec l e a rt h a ta no r g a n i s a t i o n ’ sp u r p o s ei sf o rt h ep u bl i cb e n e fit . Wh e r et h i si sn o tc l e a r ,t h ec ommi s s i o nwi l ll e tt het r u s t e e sora p p l i c a n tf o rr e g i s t r a t i onkno w whe r ea n ydi ffic u l t i e sl i e . I nr a r ec a s e swh e r ei ti sn o tp os s i b l ef o rt het r u s t e e so ra p pl i c a n tt op u tt h i n g sr i g hta n dt h e c ommi s s i ond e c i d e st h a tt heo r g a n i s a t i o n ’ sp ur p os ei sn o tf o rt h ep u b l i cb e n e fit ,t hi swo u l d me a nt h a t ,i ni t svi e w,t h eo r g a ni s a t i o ni sn o tac h a r i t y . Wh e r ei tde c i d e st h i si st h ec a s ef o ra no r g a n i s a t i o na p p l y i n gf o rr e g i s t r a t i o n ,i two ul dde c l i n e t or e g i s t e ri t . Wh e r ei tde c i d e st h i si st h ec a s ef o ra ne x i s t i n gc h a r i t y ,t hec h a r i t yt r u s t e e swi l ln e e dt o c on s i d e rc h a n g i n gt h ep u r p o s ea nds h ou l ds e e ka d v i c e ....