192596 Title: Captain Ahab died in 2005. His will included, inter alia, the following two gifts to the ‘Midlands Whale Watching Club’: a) ‘My house, Moby Villa, to be used as a headquarters for the Club; and b) A£160,000, to enable members to go on trips to watch whales in Antarctica.’ The Midlands Whale Watching Club is a non-charitable unincorporated association whose rules consist of the following clauses: 1) The main object of the club is to promote knowledge of whales and to campaign against any threats to their continuing survival by the provision of information through lectures and public meetings. 2) Membership shall be open to all who show a sufficient knowledge of whales in a written examination and pay an annual subscription to be fixed by an elected committee. 3) The Club shall attempt either to rent, or purchase, or otherwise acquire premises to act as a meeting place for members and as an information centre for the general public. No such premises had been found at the time of Captain Ahab’s death. Consider the validity of Captain Ahab’s gifts. [Area of law: Equity and Trusts – Gifts to unincorporated associations, Trusts for purposes.] In deciding whether the above dispositions can be classed as valid an examination of the beneficiary principle needs conducting to determine whether the club can be treated as beneficiaries. In some cases the beneficiary principle has not been satisfied but the courts have held the trusts to be valid. Examination of when the courts have taken this view is essential. A discussion on purpose trusts is also necessary. It is prudent to distinguish between charitable and non-charitable trusts despite the statement above that this is a non-charitable association. The rule against purpose trusts has been established in terms of the beneficiary principle. Sir William Grant MR in Morice v Bishop of Durham
 stated that Every trust must have a definite object. There must be someone in whose favour the court can decree specific performance. This was reaffirmed by Lord Parker in Bowman v Secular Society. In this case he made the comment that for a trust to be valid it must be for the benefit of individuals. Such difficulties caused by purpose trusts have led to the formation of the beneficiary principle. Under this principle the general rule is that there must be identifiable beneficiaries in order to create a valid trust. Purpose trusts offend against this as they lack anyone with locus standi to enforce the terms of the trust.
The beneficiaries should supervise the trusts as they are the persons most interested in their proper administration. The beneficiaries are best placed to bring any abuses to the attention of the courts. As the intention of the testator is to give the house to the beneficiaries as a meeting place it is necessary to consider perpetuity. Inclusion of property in a trust may prevent the most efficient use of that property and affect its marketability. Trust law addresses this by dictating that property may not be subject to a trust for an excessive period of time. Property that is part of a private trust must not be held on trust in excess of the perpetuity period. This has been defined as the duration of a human life at the date the trust was established plus 21 years.
The aim was to prevent purpose trusts from becoming perpetual trusts. Exceptions to this are allowed where the trust is for charitable purposes. Trusts that do not satisfy the beneficiary principle have been treated as invalid on many occasions. Roxburgh J held the trust invalid for offending against the beneficiary principle and for uncertainty of the purpose in Re Astor’s Settlement Trusts. In reaching his conclusion he referred to Re Wood and the comments of Harman J who asserted that a gift on trust must have a cestui que trust.
Roxburgh J held that none of the exceptions had been satisfied in Astor’s case and therefore the trust was void. A similar decision was reached by Harman L J in Re Endacott where he applied the beneficiary principle to a gift given by Albert Endacott to the North Tawton Devon Parish Council for a memorial of himself. It was held that such a gift created a non-charitable purpose trust and did not fall into the exceptions category. There are a few exceptions where the courts have upheld non-charitable purpose trusts despite the lack of beneficiaries. Harman L J discussed these exceptions in Re Endacott Harman L J and made the comment that there are decisions which are not really to be satisfactorily classified, but are perhaps merely occasions where Homer has nodded, at any rate these cases stand by themselves and ought not to be increased in number, nor indeed followed, except where the one is exactly like the other. It seems from this comment that Harman L J is not comfortable with the exceptions and is warning against the use of these to validate such trusts. Trusts that are regarded as exceptions can still become void if they offend against the perpetuity period. Such trusts are best regarded as trusts of imperfect obligation. Exceptions have been allowed where the application of the trust is for the care and maintenance of animals. Any trust that is created for the welfare of animals in general will be charitable. A trust for the maintenance of a specific animal cannot be classed as charitable but could be classed as an exception. In Pettingall v Pettingall a gift by the testator of A£50 per annum for the upkeep of his favourite black mare was upheld. Similar decision have been reached in Mitford v Reynolds where the gift was for the upkeep of the testator’s horses and Re Dean where the testator left his 8 horses and his house to his trustees. He charged his freehold estate with an annuity of A£750 per year for 50 years if they should live that long to be paid to the trustees for their upkeep.
This was held to be a valid non-charitable trust by North J who rejected the beneficiary principle entirely stating that he did not assent to the view that a trust is not valid if there is no cestui que trust to enforce it. Re Dean would appear to offend against the perpetuity period despite this case being used as an authority for trusts for the maintenance of animals. The rationale behind the decision of North J would appear to be that he was judging the perpetuity period in respect of the life expectancy of the animal. This notion was rejected by Meredith J in Re Kelly who made the point that the perpetuity period should not centre on the life expectancy of the animal. He stated that there can be no doubt that lives means lives of human beings, not of animals or trees in California. The mostly commonly used form of trusts for the maintenance of a particular animal centres on property left by the testator for the benefit of his favourite animal. For the purposes of the trust the animal would also be classed as property. This would give the new owner of the animal prime responsibility for its welfare, and as such the failure of the trust would not lead to no one having responsibility to care for the animal. Exceptions have also been applied where money has been placed in trust for the maintenance of specific graves and monuments as well as saying masses for the dead.
The perpetuity period still needs to be satisfied to make such trusts valid. In some cases the courts have interpreted the saying of masses for the dead as charitable activities for the advancement in religion so long as the masses were celebrated in public as was the case in Re Hetherington. Trusts that do fall within the exceptions can be invalid if the purpose is deemed to be useless. An example of where this happened was in Brown v Burdett where the testator created a trust to block up all the rooms of a house for twenty years. A similar decision was reached in M’Caig’S Trustees v Kirk-Session of United Free Church of Lismore where a trust to erect bronze statues was void on grounds of public policy since it involved a sheer waste of money. In some instances where trusts fail because of uncertainty, perpetuity or illegality an automatic resulting trust can be established. The court found an automatic resulting trust in Re Osoba which involved a bequest to a testator’s widow for the training of the daughter and the maintenance of the aged mother. A resulting trust would not be created if the donors have parted with their money in exchange for tickets. Under the exceptions a non-charitable purpose trust can be treated as valid if it will benefit identifiable individuals who posses sufficient locus standi to enforce it. One such purpose trust deemed to be valid was Re Denley’s Trust Deed. In this case Charles Denley had transferred land to trustees to be maintained and used as a sports field for the employees of a company. Goff J held that although the trust was expressed to be for a purpose is was in fact for the benefit of individuals as they would benefit directly or indirectly from the carrying out of the purpose. He also stated that the employees were an ascertainable and certain class and would have locus standi to apply to the court to enforce the trust. This same principle has also been applied to unincorporated associations. A prime example of this is Re Lipinski’s Will Trusts where Harry Lipinski left his residuary estate to the Hull Judeans (Maccabi) Association in memory of his wife to be used solely in constructing new buildings for the association. It was concluded by Oliver J that this gift was directly for the benefit of the members of the association and could be construed as a gift to them as individuals. Having analysed the beneficiary principle and the exceptions it is possible to speculate on the courts decision in the above. If the trust had been specifically worded for the benefit of the whales the courts may well have taken the opinion that this is for the benefit of a specific class of animal and held this part of the trust to be for a charitable purpose. The association might also fall into the classification of being for educational purposes as one of the aims of the organisation is to give lectures to the general public to increase their knowledge of the whales. The advancement of education has been extended in some instances to include industrial training, research and the promotion of culture and sport. It may well be that the courts will deem that the association is involved in research of the whales and accord them charitable status. There appears to be a divide in the opinions of the court in respect of when such gifts can be read as charitable. In Re Nottage it was held that the gift of a prize for yacht racing was not charitable as it only served to promote the sport. By contrast in IRC v McMullen the promotion of sport in schools and universities was regarded as for the advancement of education since education includes spiritual, moral, mental and physical elements. Similarly in Re Mariette a gift to provide squash courts at a specific school was held to be charitable. To be recognised as charitable the purpose of the organisation must be for the public benefit. Charitable status has been formulated through case law.
For a purpose to be classified as charitable it must be beneficial in a way which is charitable and be shown to be available to the public or a sufficient section of the public and not merely to a private class of individuals. The courts have adopted a subjective assessment in deciding whether the benefit is for the community at large. The courts look at whether the donor thought that the purpose was beneficial to the public. In Re Foveaux a gift to the International Society for the Total Suppression of Vivisection was held to be charitable on the principle that the donor has considered it to be so. Similarly in Re Cranston Fitzgibbon LJ took the view that it would be charitable provided the purpose was one which the founder of the society believed to be to public advantage. Sometimes the courts have adopted an objective assessment as in National Anti-Vivisection Society v IRC where the courts chose not to follow the decision of Re Foveaux and declared the society non-charitable. Lord Simmons made the observation that Where on the evidence before it the court concludes that, however well-intentioned the donor, the achievement of his object will be greatly to the public disadvantage, there can be no justification for saying that it is a charitable object. In according charitable status the courts have to determine whether the benefit to the general public is too remote. It was held in IRC v Oldham Training and Enterprise Council by Lightman J that these objects were non-charitable because the benefits to the community conferred were too remote. The association would need to benefit a significant amount of the public for it to be classed as for the public benefit. The conclusion from the above would seem to be that the trust will be held to be valid even if it is not accorded charitable status as there are ascertainable beneficiaries and the disposition is for the benefit of the members of the club. The court may decide against awarding charitable status as the rules of membership limit the number of persons eligible to join and require a membership fee. It is likely that the courts would allow the house to be used as a meeting place for the association especially since the meetings will be open to the general public. The money left for the trips to see the whales may fail as it would only benefit a specific section of the public this being the members of the association.
However, the courts may allow this to be valid using the authorities Re Denley’s Trust Deed and Re Lipinski’s Will Trusts. Bibliography Pearce, R & Stevens, J, The Law of Trusts and Equitable Obligations, 2nd Ed, 1998, Butterworths Hayton, D J , Commentary and Cases on The Law of Trusts and equitable Remedies, 11th Ed, 2001, Sweet & Maxwell Cockburn, T, Harris, W, & Shirley, M, Equity & Trusts, 2005, Butterworths Ashburner, W, Principles of Equity, 2nd Ed, 1933, Butterworths Butterworths Holdsworth, W, History of English Law, 7th Ed, 1956, Mathuen & Co Ltd Slapper, G & Kelly, D, The English Legal System, 4th Ed, 1999, Cavendish Publishing Ltd Thomas, M, Statutes on Property Law, 8th Ed, 2001, Blackstone’s Table of Cases A.T.C. 442  T.R. 425 (1966) 110 S.J. 17 Aitken’s Trustees v Aitken 1927 SC 374 Attorney General v Cocke  Ch. 414  2 W.L.R. 542  2 All E.R. 391 (1988) 85(14) L.S.G. 46 (1988) 132 S.J. 418 Attorney General v Ross  1 WLR 252 Bowman v Secular Society  AC 406 Brown v Burdett (1882) 21 Ch D 667 Conservative Central Office v Burrell  1 WLR 522 Cunnack v Edwards (1896) 2 Ch 679 Fine Lady upon a White Horse Appeal’s Application for Registration as a Charity  W.T.L.R. 59 Haworth v Inland Revenue Commissioners  S.T.C. 378 1974 IRC v McMullen  AC 1 HL IRC v Oldham Training and Enterprise Council  STC 1218 Leahy v Attorney General for New South Wales  AC 457 Lindsay’s Executor v Forsyth 1940 SC 568 M’Caig’S Trustees v Kirk-Session of United Free Church of Lismore 1915 SC 426 Mitford v Reynolds (1848) 16 Sim 105 Morice v Bishop of Durham (1804) 9 Ves 399 National Anti-Vivisection Society v IRC  AC 31 Neville Estates v Madden  3 All ER 65 Pettingall v Pettingall (1842) 11 LJ Ch 176 Pirbright v Salwey  WN 86 Re Beadle (Deceased)  1 W.L.R. 417  1 All E.R. 493 (1974) 118 Re Abbott Fund Trust  2 Ch 326 Re Ahmed & Co  EWHC 480 (2005-06) 8 I.T.E.L.R. 779 (2006) 156 N.L.J. 512 Re Astor’s Settlement  Ch 534 Re Baden’s Deed Trusts (No.1)  A.C. 424  2 W.L.R. 1110  2 All E.R. 228 (1970) 114 S.J. 375 Re Beadle (Deceased)  1 W.L.R. 417  1 All E.R. 493 (1974) 118 Re Broadbent (Deceased)  EWCA Civ 714  W.T.L.R. 967 (2000-01) 3 I.T.E.L.R. 787 (2001) 98(28) L.S.G. 44 Times, June 27, 2001 Re Buckinghamshire Constabulary Widows’ and Orphans’ Fund Friendly Society (1979) 1 WLR 936 Re Bushnell (Deceased)  1 W.L.R. 1596  1 All E.R. 721 (1975) 119 S.J. 189 Times, December 10, 1974 Re Carapiet’s Trusts  EWHC 1304  W.T.L.R. 989 (2002-03) 5 I.T.E.L.R. 125 Re Coates (Deceased)  Ch. 495  3 W.L.R. 959  1 All E.R. 26 (1954) 98 S.J. 871 Re Cranston  1 IR 431 Re Dean (1889) 41 Ch D 552 Re Denley’s Trust Deed  Conv 24 (Jaconelli) Re Drummond  2 Ch 90 Re Dunlop  N.I. 408 1984 Re Endacott  Ch 232 Re Foveaux  2 Ch 501 Re Gillingham Bus Disaster Fund (1958) Ch 300 Re Grant’s WT  3 All ER 359 Re Haines (1952) Times 7th November Re Hetherington  2 All ER 129 Re Hobourn Aero Components Ltd’s Air Raid Distress Fund (1946) Ch 194 Re Hooper  1 Ch 38 Re Horley Town Football Club  EWHC 2386  W.T.L.R. 1817 Re Kelly  IR 255 Re Kirkwood  A.C. 520  2 W.L.R. 136  1 All E.R. 76 (1965) 44 A.T.C. 442  T.R. 425 (1966) 110 S.J. 17 Re Lipinski’s Will Trusts  Ch 235 Re Mariette  2 Ch 284 Re McCullough  N.I. 73 Re Mills  1 W.L.R. 554  1 All E.R. 835 (1953) 97 S.J. 229 Re Murawski’s Will Trusts  1 W.L.R. 707  2 All E.R. 328 (1971) 115 S.J. 189 Re Nottage  2 Ch 649 CA Re Osoba (1979) 2 All ER 393 Re Printers & Transferrers Amalgamated Trades Protection Society (1899) 2 Ch 184 Re Rechers Will Trusts  3 All ER 401 Re Sayer  Ch. 423  2 W.L.R. 261  3 All E.R. 600 (1957) 101 S.J. 130 Re Segelman (Deceased)  Ch. 171  2 W.L.R. 173  3 All E.R. 676 Re Shaw  1 WLR 729 Re St Andrew’s Allotment Assoc.  1 All ER 147 Re Thompson  Ch 342 Re Vandervell’s Trusts (No 2)  Ch 269 Re Watson (Deceased)  1 W.L.R. 1472  3 All E.R. 678 (1973) 117 S.J. 792 Re Wedge (1968) 67 D.L.R. (2d) 433 Re West Sussex Constabulary’s Widows, Children and Benevolent Fund Trusts (1970) 1 All ER 544 Re West Sussex Constabulary’s Widows, Children and Benevolent Fund Trusts (1970) 1 All ER 544 Re Wood  Ch 498 Trimmer v Danby (1856) 25 LJ Ch 424 Table of Statues Charitable Uses Act 1601 Charities Act 1960 1
 Re Sayer  Ch. 423  2 W.L.R. 261  3 All E.R. 600 (1957) 101 S.J. 130
 Re Coates (Deceased)  Ch. 495  3 W.L.R. 959  1 All E.R. 26 (1954) 98 S.J. 871
 Re Wedge (1968) 67 D.L.R. (2d) 433
 (1804) 9 Ves 399
  AC 406
 Leahy v Attorney General for New South Wales  AC 457
 Re Ahmed & Co  EWHC 480 (2005-06) 8 I.T.E.L.R. 779 (2006) 156 N.L.J. 512
 Re Astor’s Settlement  Ch 534; Re Shaw  1 WLR 729
 Haworth v Inland Revenue Commissioners  S.T.C. 378 1974  Re Beadle (Deceased)  1 W.L.R. 417  1 All E.R. 493 (1974) 118  Re Osoba (1979) 2 All ER 393   Ch 534   Ch 498   Ch 232  Re Horley Town Football Club  EWHC 2386  W.T.L.R. 1817   Ch 232  Re Murawski’s Will Trusts  1 W.L.R. 707  2 All E.R. 328 (1971) 115 S.J. 189  (1842) 11 LJ Ch 176  (1848) 16 Sim 105  (1889) 41 Ch D 552  Re Osoba (1979) 2 All ER 393   IR 255  Trimmer v Danby (1856) 25 LJ Ch 424; Re Abbott Fund Trust  2 Ch 326  Re Hooper  1 Ch 38; Pirbright v Salwey  WN 86   2 All ER 129  (1882) 21 Ch D 667  1915 SC 426  Aitken’s Trustees v Aitken 1927 SC 374; Lindsay’s Executor v Forsyth 1940 SC 568  Re St Andrew’s Allotment Assoc.  1 All ER 147  Re Printers & Transferrers Amalgamated Trades Protection Society (1899) 2 Ch 184; Re West Sussex Constabulary’s Widows, Children and Benevolent Fund Trusts (1970) 1 All ER 544  Re Hobourn Aero Components Ltd’s Air Raid Distress Fund (1946) Ch 194  (1979) 2 All ER 393  Re West Sussex Constabulary’s Widows, Children and Benevolent Fund Trusts (1970) 1 All ER 544  Re Gillingham Bus Disaster Fund (1958) Ch 300; Re West Sussex Constabulary’s Widows, Children and Benevolent Fund Trusts (1970) 1 All ER 544  Re Buckinghamshire Constabulary Widows’ and Orphans’ Fund Friendly Society (1979) 1 WLR 936   Conv 24 (Jaconelli)  Re Kirkwood  A.C. 520  2 W.L.R. 136  1 All E.R. 76 (1965) 44 A.T.C. 442  T.R. 425 (1966) 110 S.J. 17  Conservative Central Office v Burrell  1 WLR 522; Re Printers & Transferrers Amalgamated Trades Protection Society (1899) 2 Ch 184   Ch 235  Cunnack v Edwards (1896) 2 Ch 679  Re Drummond  2 Ch 90; Neville Estates v Madden  3 All ER 65  Re Baden’s Deed Trusts (No.1)  A.C. 424  2 W.L.R. 1110  2 All E.R. 228 (1970) 114 S.J. 375; Re Grant’s WT  3 All ER 359  Charities Act 1960  Re Broadbent (Deceased)  EWCA Civ 714  W.T.L.R. 967 (2000-01) 3 I.T.E.L.R. 787 (2001) 98(28) L.S.G. 44 Times, June 27, 2001; Charitable Uses Act 1601  Re Thompson  Ch 342   2 Ch 649 CA   AC 1 HL   2 Ch 284  Fine Lady upon a White Horse Appeal’s Application for Registration as a Charity  W.T.L.R. 59; Gilmour v Coats  AC 426;  1 All ER 848  Re Bushnell (Deceased)  1 W.L.R. 1596  1 All E.R. 721 (1975) 119 S.J. 189 Times, December 10, 1974  Attorney General v Cocke  Ch. 414  2 W.L.R. 542  2 All E.R. 391 (1988) 85(14) L.S.G. 46 (1988) 132 S.J. 418   2 Ch 501  Re Rechers Will Trusts  3 All ER 401   1 IR 431  Re Vandervell’s Trusts (No 2)  Ch 269   AC 31   2 Ch 501   STC 1218  Re Watson (Deceased)  1 W.L.R. 1472  3 All E.R. 678 (1973) 117 S.J. 792  Re Horley Town Football Club  EWHC 2386  W.T.L.R. 1817   Conv 24 (Jaconelli)   Ch 235
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