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Equity & TrustsText, Cases, and Materials

Equity & Trusts: Text, Cases, and Materials (3rd edn)

Paul S. Davies and Graham Virgo
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date: 20 May 2022

p. 172p. 1735. Charitable Purpose Trustsfree

p. 172p. 1735. Charitable Purpose Trustsfree

  • Paul S DaviesPaul S DaviesProfessor of Commercial Law, University College London
  •  and Graham VirgoGraham VirgoQC (Hon) Professor of English Private Law; Senior Pro-Vice Chancellor (Education), University of Cambridge, Bencher, Lincoln's Inn.

Abstract

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter discusses the charitable trust — its definition and the consequences of its failure. A charitable trust is defined as a public trust for purposes that provide a benefit to the public or a section of the public and is a trust subject to supervision by the Charity Commission. A trust is only considered charitable if it is established for a purpose that the law regards as charitable. The purposes of the trust must be wholly and exclusively charitable otherwise the trust will be void. The consequences of the charitable trust failing depend on whether the failure occurs initially or subsequently. If the purpose fails initially and the settlor had a general charitable intention, the trust property can be applied for a similar charitable purpose through the application of a body of rules known as the cy-pres doctrine. If the purpose fails subsequently the cy-pres doctrine will apply automatically.

Central Issues

1.

A charitable trust is a public trust for purposes that provide a benefit to the public or a section of the public.

2.

Charitable trusts are heavily regulated and subject to supervision by the Charity Commission.

3.

A trust will only be charitable if established for a purpose that the law regards as charitable. There are a large number of charitable purposes recognized by statute, including the relief and prevention of poverty and the advancement of education and religion.

4.

When determining whether a sufficient section of the public is benefited, generally there must not be a personal nexus between the settlor of the trust and those who will benefit from it.

5.

The purposes of the trust must be wholly and exclusively charitable otherwise the trust will be void.

6.

The consequences of the charitable trust failing depend on whether the failure occurs initially or subsequently. If the purpose fails initially and the settlor had a general charitable intention, the trust property can be applied for a similar charitable purpose through the application of a body of rules known as the cy-près doctrine. If the purpose fails subsequently the cy-près doctrine will apply automatically.

1. The Essential Characteristics of a Charity

In Part II, we examined private trusts for individual beneficiaries. In Part III, we are concerned with trusts for purposes. The beneficiary principle requires there to be identifiable people who are able to enforce the trust.1 It follows that a trust for purposes will generally not be valid. One significant exception to this principle is that charitable trusts have long been recognized as valid even though they are trusts for purposes rather than for particular people. These express trusts are treated with special favour by the law because they provide a benefit to the public or a section of the public. Charitable trusts can usefully be characterized as public trusts since they promote purposes beneficial to the community,2 as distinct from trusts for people, which are private trusts because they provide benefits to private individuals. p. 174Charitable trusts operate in a very different legal, fiscal, and social context to private trusts. There are over 168,000 charities registered with the Charity Commission3 which have an annual income of nearly £77 billion.4 Equity has had a very important role in developing the law relating to the creation, definition, and operation of charities.

A charitable institution is defined by statute.

Charities Act 2011

1 Meaning of ‘charity’

(1)

For the purposes of the law of England and Wales, ‘charity’ means an institution which—

(a)

is established for charitable purposes only, and

(b)

falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities.

9 Interpretation

(3)

In this Act ‘institution’ means an institution whether incorporated or not, and includes a trust or undertaking.

Since a charity must be subject to the jurisdiction of the High Court it follows that the charity must be established under English law, even if the charitable purpose is to be fulfilled abroad.

The essential characteristics of a charity were recognized by Mummery LJ in Gaudiya Mission v Brahmachary:5

A charity does not have to take any particular legal form; it may be a trust or an undertaking; it may be incorporated or unincorporated. But it must satisfy both requirements for the definition in section 96(1).6 It must be ‘established for charitable purposes’. It will be noted that ‘charitable purposes’ is a defined term, meaning those ‘purposes which are exclusively charitable according to the law of England and Wales’;7 and it must be ‘subject to the control of the High Court in the exercise of the court’s jurisdiction with respect to charities’ …

Under English law charity has always received special treatment. It often takes the form of a trust; but it is a public trust for the promotion of purposes beneficial to the community, not a trust for private individuals. It is therefore subject to special rules governing registration, administration, taxation and duration. Although not a state institution, a charity is subject to the constitutional protection of the Crown as parens patriae, acting through the Attorney-General, to the state supervision of the Charity Commissioners and to the judicial supervision of the High Court. This regime applies whether the charity takes the form of a trust or of an incorporated body.

p. 175So charitable purposes can be satisfied without resorting to a trust device. For example, it is possible to incorporate a charitable company8 or to use an unincorporated association9 to effect a charitable purpose. Regardless of the type of legal mechanism that is used to implement a charitable purpose, the people who have the general control and management of the administration of a charity are called the ‘charity trustees’.10 The ‘charity trustee’ is strictly distinct from ‘trustees of a charity’, which refers only to the trustees of a charitable trust. If the mechanism for implementing a charitable purpose is not a trust, those people who control and manage the charity will still be called charity trustees, but they are not trustees of a charity. So, for example, the directors of an incorporated charity are charity trustees for the purposes of the Charities Act 2011, but are not trustees of the charity. This is generally a distinction of only technical, rather than practical, significance, since charity trustees are still subject to fiduciary duties and have administrative responsibilities in just the same way as they would if they were trustees of a charitable trust.

Whatever mechanism is used to effect a charitable purpose, an institution can be considered to be charitable only if three conditions are satisfied:

(1)

it must be established for a purpose that the law regards as charitable;11

(2)

its purposes must benefit the public or a sufficient section of the public;12

(3)

it must be wholly and exclusively charitable in both its purpose and operation.13

(a) Advantages of Being a Charitable Trust

A charitable trust has a number of advantages over private express trusts, as was recognized in The Independent Schools Council v The Charity Commission for England and Wales:14

Where a trust or corporation is a ‘charity’ … certain legal consequences follow. For instance, a charitable trust, unlike a private trust, can have perpetual duration; it is not, in legal jargon, subject to the rule against perpetuities; it is entitled to a number of favourable tax reliefs; and, of course, it is subject to regulation by the Charity Commission or other regulators and, possibly, intervention by the Attorney General. Charitable status also confers reputational benefits, with a consequential greater ability to raise funds.

More specifically, the advantages of a trust being charitable are:

(i) Whereas private trusts are subject to the perpetuity rule,15 so that they can last for only a limited time, charitable trusts can exist perpetually. However, the rules on vesting of property within the perpetuity period do operate in the same way for charitable trusts as for private trusts,16 so the property must vest in the charity within 125 years.17

p. 176(ii) Whereas, for private trusts, there are strict rules as to certainty of intent to create a trust, and certainty in defining the objects,18 the equivalent rules are much more flexible regarding charitable trusts. It is no objection that the trust fails to provide with reasonable certainty what are the charitable purposes for which the property must be applied;19 certainty of intention to apply the property for charitable purposes is sufficient, although the purposes must be wholly and exclusively charitable.20

If there is doubt as to the particular charitable purposes, the Charity Commission or the courts may prepare a scheme for the use of the property for particular charitable purposes. The courts will, however, generally seek to construe the trust document in a manner that avoids problems regarding the validity of the trust.21 In IRC v McMullen22 Lord Hailsham said:

[I]n construing trust deeds the intention of which is to set up a charitable trust … where it can be claimed that there is an ambiguity, a benignant construction should be given if possible.

For example, if a potential charitable trust can be construed in two ways, with one way making it charitable and effectual, and the other non-charitable and void, the courts will adopt the former construction, if at all possible, so as to ensure that property is used for the benefit of charitable purposes.

(iii) There are numerous tax advantages for charities and donors to charities. A number of the key charity cases that have reached the courts have involved disputes with HM Revenue and Customs as to whether or not a trust is charitable, with a decision that the institution is not charitable resulting in a significant tax liability. For example, the decision of the Upper Tribunal in The Independent Schools Council v The Charity Commission for England and Wales23 concerned the tests to determine whether independent schools fulfilled charitable purposes for the benefit of the public. If such schools lost their charitable status, this would have a significant financial impact on such schools through the imposition of tax liability.24

(iv) Where a private trust fails and there are still trust funds available, those funds will usually be returned to the settlor by means of a resulting trust.25 Where a charitable trust fails, however, the surplus funds will be applied for a similar charitable purpose, by virtue of the cy-près doctrine;26 cy-près means ‘as near as may be’. This is advantageous in that the creator of the trust and donors to it will know that, once property has been received by that trust, it will be used for charitable purposes even if the particular trust fails.

(b) Disadvantages of Being a Charitable Trust

There are also some disadvantages that arise from charitable status, such as restrictions on permitted activities and the application of funds. There are significant administrative and bureaucratic obligations imposed upon charities as well. All charities need to be registered by the Charity Commission, which can involve an administrative burden in establishing that the hallmarks of a charity are satisfied. Once registered, Part 8 of the Charities Act 2011 imposes strict duties on charity trustees to prepare annual p. 177accounts, to arrange for their audit, and to send annual reports to the Charity Commission on their activities. There are criminal penalties for failure to submit reports and returns.

2. Regulation and Supervision of Charities

There are a variety of mechanisms for regulating and supervising charities: (a) the Attorney-General, (b) the Charity Commission, and (c) the Tribunals and courts.

(a) The Attorney-General

The Attorney-General is responsible for enforcing the charitable trust in the name of the Crown.27 The Attorney-General acts as the protector of the charity and has been described as the ‘representative of the beneficial interest’.28 There is a need for the Attorney-General to intervene to protect the property of the charitable trust because no private person has a beneficial interest in the trust’s property.

(b) Charity Commission

The general administration of charities is carried out by the Charity Commission.

Charities Act 2011

13 The Charity Commission

(1)

There continues to be a body corporate known as the Charity Commission for England and Wales (in this Act referred to as ‘the Commission’).

(3)

The functions of the Commission are performed on behalf of the Crown.

(i) Objectives and functions of the Charity Commission

The Charity Commission has a number of identified objectives and functions.

Charities Act 2011

14 The Commission’s objectives

The Commission has the following objectives—

1. The public confidence objective

The public confidence objective is to increase public trust and confidence in charities.p. 178

2. The public benefit objective

The public benefit objective is to promote awareness and understanding of the operation of the public benefit requirement.29

3. The compliance objective

The compliance objective is to promote compliance by charity trustees with their legal obligations in exercising control and management of the administration of their charities.

4. The charitable resources objective

The charitable resources objective is to promote the effective use of charitable resources.

5. The accountability objective

The accountability objective is to enhance the accountability of charities to donors, beneficiaries and the general public.

15 The Commission’s general functions

(1)

The Commission has the following general functions—

1.

Determining whether institutions are or are not charities.

2.

Encouraging and facilitating the better administration of charities.

3.

Identifying and investigating apparent misconduct or mismanagement in the administration of charities and taking remedial or protective action in connection with misconduct or mismanagement in the administration of charities.

4.

Determining whether public collections certificates should be issued, and remain in force, in respect of public charitable collections.

5.

Obtaining, evaluating and disseminating information in connection with the performance of any of the Commission’s functions or meeting any of its objectives.

6.

Giving information or advice, or making proposals, to any Minister of the Crown on matters relating to any of the Commission’s functions or meeting any of its objectives.

(2)

The Commission may, in connection with its second general function, give such advice or guidance with respect to the administration of charities as it considers appropriate.

(3)

Any advice or guidance so given may relate to—

(a)

charities generally,

(b)

any class of charities, or

(c)

any particular charity,

and may take such form, and be given in such manner, as the Commission considers appropriate.

(4)

The Commission’s fifth general function includes (among other things) the maintenance of an accurate and up-to-date register of charities under sections 29 (the register) and 34 (removal of charities from register).

(ii)p. 179 The register of charities

The register of charities contains the name of every charity registered by the Charity Commission.

Charities Act 2011

29 The register

(1)

There continues to be a register of charities, to be kept by the Commission in such manner as it thinks fit.

(2)

The register must contain—

(a)

the name of every charity registered in accordance with section 30, and

(b)

such other particulars of, and such other information relating to, every such charity as the Commission thinks fit.

An institution that is included on the register is conclusively presumed to be a charity, save where the register is rectified.

Charities Act 2011

37 Effect of registration

(1)

An institution is, for all purposes other than rectification of the register, conclusively presumed to be or to have been a charity at any time when it is or was on the register.

If an institution is not registered it does not follow that it is not a charity, since the requirements for registration may have been satisfied, but the trustees may simply have failed to register the charity.30

By section 30 of the Charities Act 2011, all charities are required to be registered other than charities that are exempted by statute, charities with a gross income of less than £5,000, and certain charities with a gross income of less than £100,000 that are excepted from registration either by the Commission or under regulations made by the Secretary of State. Where a charity is required to be registered, it is the duty of the charity trustees to apply for registration.31 Charity trustees are also under a duty to inform the Commission if the charity ceases to exist or if there is a change in the charity’s trusts.32

The Charity Commission is required to remove charities from the register in certain circumstances.

p. 180Charities Act 2011

34 Removal of charities from register

(1)

The Commission must remove from the register—

(a)

any institution which it no longer considers is a charity, and

(b)

any charity which has ceased to exist or does not operate.

Anybody who might be affected by the registration of an institution as a charity, such as a testator’s next of kin, can object to its inclusion on the register or apply for it to be removed.33

(iii) Regulatory powers

The Charity Commission has various regulatory powers. For example, it can institute an inquiry with regard to a charity or a class of charities;34 it can give directions to the charity trustees to take particular actions in the interests of the charity;35 it can give advice to charity trustees relating to the administration of the charity or the performance of the trustees’ duties;36 and it can also sanction actions that are expedient in the administration of the charity, such as a particular application of charity property, even if the charity trustees do not have the power to take such action.37

(iv) Concurrent jurisdiction with the High Court

The Charity Commission has jurisdiction, which is concurrent with that of the High Court, as regards various matters,38 such as establishing a scheme for the administration of the charity; appointing, discharging, or removing a charity trustee; and transferring property. But the Charity Commission does not have jurisdiction to determine title to property, or to determine the existence or extent of any trust,39 and it should not exercise its concurrent jurisdiction if the matter is more appropriately adjudicated by the court because of its contentious nature, or because it raises special questions of law or fact.40

(v) Critique of the role of the Charity Commission

It has been suggested that the Charity Commission has not been exercising its powers appropriately in determining whether an institution is or is not a charity.41 The function of the Charity Commission is to apply the law as it has been developed by the courts and by Parliament, but it appears to be developing its own interpretation of those principles.

p. 181Luxton and Evans, ‘Cogent and Cohesive? Two Recent Charity Commission Decisions on the Advancement of Religion’ (2011) 75 Conv 144, 151

The Commission’s new approach is of concern because the Commission’s guidance and its own analysis of the law underpinning that document are not sources of law, but merely the Commission’s understanding of the law generally. The Commission however, which is a government department, relies on, and quotes extensively from, its own guidance and analysis as if these documents were entitled to the same regard as decisions of the higher courts; whereas the Commission’s guidance is produced for the limited purpose of assisting those not conversant with charity law … Worryingly, when this has been pointed out, … the Commission’s response has been simply to state that its decisions are ‘based on the application of existing charity case law and the Commission’s public guidance, which is itself based on case law’. … This demonstrates the Commission’s lack of awareness of the need for legal rigour when making a legal decision, such as a decision whether or not to register a body as a charity.

Instead of trying to pull itself up with its own boot straps, the Commission should be interpreting and applying the law on the particular facts of the application before it.

The courts have started to respond to such concerns, most notably by reviewing and in some cases rejecting the Charity Commission’s interpretation of the law, particularly its guidance on the interpretation of the public benefit requirement.42

(c) The Tribunals and Courts

The First-tier Tribunal and Upper Tribunal43 have jurisdiction to hear appeals and applications in respect of decisions, orders, and directions of the Charity Commission, such as a decision to register or not to register a charity, or to remove an institution from the register of charities. The Charity Commission or the Attorney-General may also refer matters to the Tribunals, including matters relating to the powers of the Commission itself and to the operation of the law of charity. The Tribunals have a potentially very important role in developing charity law, as illustrated by the Upper Tribunal’s decision relating to the charitable status of independent schools.44

Provision is made for the Charity Commission to apply to the High Court for directions relating to the administration of charities in certain circumstances, such as where an interim manager has been appointed by the Charity Commission to manage a charity.45 In Charity Commission for England and Wales v Mountstar46 the court considered when it would be appropriate for the court to give such directions. The case concerned whether it was appropriate for the interim managers to decide to discontinue an appeal against the decision of the Revenue to reject the claim of a charity, the Cup Trust, for gift aid. Snowden J said:47

p. 182

I … turn to the key question of whether the decision to discontinue the gift aid claims is one that a reasonable body of trustees, properly instructed, and ignoring irrelevant factors, could properly have reached.

In answering this question, the first and central issue is obviously the advice that has been given as to the merits (or otherwise) of the gift aid claims. … It is sufficient for present purposes that the advice should appear to be competent advice upon which the interim managers can properly rely. In the case of [this] advice, that test is passed with considerable ease. The analysis to the effect that the gift aid claims have negligible prospects of success is persuasive, and I do not think that there is anything in the submissions that I have heard from [counsel] that materially undermines it, or indicates that the interim managers should require it to be revisited.

Secondly, … in fulfilling the role of charity trustees, the interim managers do not have the freedom to ‘take a punt’ on speculative litigation, even if the charity has the funds to finance it. In fact the Cup Trust has minimal assets to play with, so that although the amounts potentially recoverable are large, given the advice that the gift aid claims have negligible prospects of success, it seems to me to be an entirely sensible requirement of the interim managers that the claims could only be pursued if there is no financial risk whatever to the charity in doing so …

In my judgment, the decision of the interim managers not to accept such funding and to discontinue the gift aid claims is within the range of decisions to which rational charity trustees could properly come.

It follows that, whilst the courts have the power to intervene when charity trustees make decisions, they will not do so where the decision is one which a reasonable trustee would have made.

(i) Charity proceedings

The tribunals have jurisdiction with respect to disputes relating to the internal or functional administration of a charitable trust, so-called ‘charity proceedings’.

Charities Act 2011

115 Proceedings by other persons

(1)

Charity proceedings may be taken with reference to a charity by—

(a)

the charity,

(b)

any of the charity trustees,

(c)

any person interested in the charity, or

(d)

if it is a local charity, any two or more inhabitants of the area of the charity,

but not by any other person.

(2)

Subject to the following provisions of this section, no charity proceedings relating to a charity are to be entertained or proceeded with in any court unless the taking of the proceedings is authorised by order of the Commission. …

(8)

In this section ‘charity proceedings’ means proceedings in any court in England or Wales brought under—

(a)

the court’s jurisdiction with respect to charities, or

(b)

p. 183 the court’s jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.

A person is ‘interested in the charity’ if they have an interest in securing the due administration of the charity which is greater than or different from that possessed by ordinary members of the public.48 Generally, such proceedings must be authorized by the Charity Commission and they will not be if they can be dealt with under the Commission’s own regulatory powers.

In Muman v Nagasena,49 Mummery LJ said:

This … is a trust for charitable purposes, and it is clear that there are now issues in the possession proceedings which relate to the administration of those trusts, namely: (i) who are the trustees of the charity; and (ii) who is the patron of the charity. There is a possible third issue as to who are the members. Those are matters of internal or domestic dispute and are not a dispute with an outsider to the charity. These are charity proceedings … That means that they cannot be continued without the authorisation either of the order of the Charity Commissioners or of a judge of the High Court of Justice, Chancery Division. No such authorisation has been obtained. To allow the proceedings to continue without authorisation would be to offend the whole purpose of requiring authorisation for the charity proceedings. That is to prevent charities from frittering away money subject to charitable trusts in pursuing litigation relating to internal disputes.

(ii) Judicial review

Decisions of the Charity Commission,50 and of certain charities that have the characteristics of a public body, may be examined by the courts through judicial review proceedings.

In Scott v National Trust,51 the National Trust had decided not to renew licences to hunt deer on some of its land. Members of various hunts affected by this decision, along with tenant farmers on the relevant land, sought a judicial review of this decision and also commenced ‘charity proceedings’. In holding that the claimants could bring charity proceedings but not an action for judicial review, Robert Walker J said:52

It is easy to recognise a public element in charitable institutions, and especially in a charitable institution which is regulated by Act of Parliament and is of such great national importance as the National Trust. Charitable trusts were being commonly referred to as ‘public’ trusts long before the expression ‘public law’ was in common use …

The questions of how the law should monitor charities, and of how the law should monitor those public officers and non-charitable bodies which are obviously amenable to judicial review, raise similar problems, to which the law has, it seems to me, provided similar although by no means identical solutions.

The way in which these entities exercise their powers and discretions may affect directly or indirectly many different sections of the public; and even members of the general public who are not personally p. 184affected financially or otherwise in any way, may still have very strong and sincerely held views about the rights or wrongs of decisions, whether by a charity or a local authority on a subject such as hunting. The court has jurisdiction to prevent misuse of public powers either by judicial review or (in the case of a charity) by charity proceedings …

Moreover, in each case there is a ‘protective filter’ … [which] is intended to protect public officers, public bodies and charities from being harassed by a multiplicity of hopeless challenges … The efficacy of the protective screen is, of course, enhanced by the need for the complainant to have a sufficient interest or an interest in the charity.

In this case the Devon and Somerset staghounds and the Quantock staghounds have been hunting deer on Exmoor and the Quantocks since long before the National Trust owned land there. Whether their activities are regarded as laudable or deplorable, the affidavit evidence makes out a strong case that they are an important part of the rural economy in contributing to deer culling, in providing a service in destroying and removing sick and injured beasts, and generally in deer management …

For those reasons I conclude that the plaintiffs in the originating summons proceedings have a sufficient interest … to bring charity proceedings …

I do not think it is helpful, or even possible, to consider the broad question of whether any charity, or even any charity specially established by statute, is subject to judicial review … But the National Trust is a charity of exceptional importance to the nation, regulated by its own special Acts of Parliament … It seems to me to have all the characteristics of a public body which is, prima facie, amenable to judicial review, and to have been exercising its statutory public functions in making the decision which is challenged.

However, it is well established that judicial review will not normally be granted where an alternative remedy is available … But it seems to me that Parliament has laid down a special procedure—charity proceedings in the Chancery Division—for judicial monitoring of charities, and that in all but the most exceptional cases that is the procedure which should be followed. A possible exception (and this is mere speculation) might be where a local authority held land on charitable trusts and questions about its dealings with that land were caught up with other questions about its dealings with land which it owned beneficially (though subject, of course, to statutory constraints). But I can see no good reason for making an exception in this case … it seems to me that the right course is for the plaintiffs to proceed with their charity proceedings—that is the originating summons—and that to have parallel judicial review proceedings would simply be wasteful duplication. I do not however, for myself, regard the protective filter and the need for a sufficient interest as matters of technicality, but (for reasons which I have tried to explain) as a sensible and necessary requirement in the public law field, including the law of public (or charitable) trusts.

A further restriction on the availability of judicial review proceedings was recognized in RSPCA v Attorney-General,53 which concerned the legitimacy of the charity’s policy of excluding existing members and preventing new members from joining if their reason for wishing to be members was to challenge the charity’s policy against hunting with dogs. It was held that an existing member of the charity who was then excluded would have locus standi to bring charity proceedings. An unsuccessful applicant for membership was not sufficiently interested in the charity to bring charity proceedings, but could also not bring judicial review proceedings because this would circumvent the statutory requirements of charity proceedings. Lightman J said:54

p. 185

The question raised is whether [the complainants] are able to bring judicial review proceedings if they do not have the necessary interest to bring charity proceedings. The answer to this question is in the negative. There is a serious question whether the Society is the sort of public body which is amenable to judicial review, most particularly in respect of decisions made in relation to its membership (consider Scott’s case (at 716)). The fact that a charity is by definition a public, as opposed to a private, trust means that the trustees are subject to public law duties and judicial review is in general available to enforce performance of such duties. There is therefore a theoretical basis for allowing recourse to judicial review. It is also true that the Society is a very important charity and its activities (in particular, the inspectorate and its prosecutions for cruelty to animals) are of great value to society … But in carrying out these activities the Society is in law in no different position from that of any citizen or other organisation. Unlike the National Trust, the subject of consideration by Walker J in Scott’s case, the Society has no statutory or public law role. All I will say is that, though theoretically and in a proper case an application for judicial review may lie, it would not (at any rate in any ordinary case) lie at the instance of disappointed applicants for membership whose interest was insufficient to meet the statutory standard for the institution of charity proceedings. The statutory standard is laid down as a form of protection of charity trustees and the Administrative Court would rarely (if ever) be justified in allowing that protection to be circumvented by the expedient of commencing (in place of charity proceedings) judicial review proceedings. That does not mean that a disappointed applicant for membership is without recourse, for he can complain to the Charity Commission or the Attorney-General and request them to take action.

3. The Definition of Charity

There was no formal definition of ‘charity’ in English law until the enactment of the Charities Act 2006, now consolidated in the Charities Act 2011. Before then, the definition of charity emerged through limited Parliamentary involvement, decisions of the courts, and, more recently, decisions of the Charity Commission as to whether or not to register a charity. The history of the definition of charity remains significant today because the new statutory definition builds on these earlier developments. As the Upper Tribunal observed in The Independent Schools Council v The Charity Commission for England and Wales:55

[T]he words ‘charity’ and ‘charitable’ have become terms of art. The legal concept of charity has developed incrementally, and not altogether consistently … The meaning which the law and lawyers give to ‘charity’ does not correspond entirely with the meaning of the word as ordinarily understood. It is important to remember that, in the proceedings before us, we are concerned with the legal concept of charity and not with the ordinary meaning of the word, although it is no doubt the case that ordinary concepts must inform the legal meaning, a meaning which is not frozen at some time in the past.

(a) The Preamble to the Charitable Uses Act 1601

The Charitable Uses Act 1601 featured a Preamble that identified a number of charitable objects. These proved to be highly significant to the subsequent development of the law of charity.

p. 186Charitable Uses Act 1601

43 Eliz. I, c. 4: The Preamble

Whereas Lands, Tenements, Rents, Annuities, Profits, Hereditaments, Goods, Chattels, Money and Stocks of Money, have been heretofore given, limited, appointed and assigned, as well by the Queen’s most excellent Majesty, and her most noble Progenitors, as by sundry other well disposed Persons; some for Relief of aged, impotent and poor People, some for Maintenance of sick and maimed Soldiers and Mariners, Schools of Learning, Free Schools, and Scholars in Universities, some for Repair of Bridges, Ports, Havens, Causeways, Churches, Sea-Banks and Highways, some for Education and Preferment of Orphans, some for or towards Relief, Stock or Maintenance for Houses of Correction, some for Marriages of poor Maids, some for Supportation, Aid and Help of young Tradesmen, Handicraftsmen and Persons decayed, and others for Relief or Redemption of Prisoners or Captives, and for Aid or Ease of any poor Inhabitants concerning Payments of Fifteens, setting out of Soldiers and other Taxes; which Lands, Tenements, Rents, Annuities, Profits, Hereditaments, Goods, Chattels, Money and Stocks of Money, nevertheless have not been employed according to the charitable Intent of the givers and Founders thereof, by reason of Frauds, Breaches of Trust, and Negligence in those that should pay, deliver and employ the same: For Redress and Remedy whereof, Be it enacted …

The Preamble was repealed by the Charities Act 1960, but, for a trust to be charitable, its purposes still had to fall within the spirit and ‘intendment’ of the Preamble. The effect of the Preamble was considered by Lloyd LJ in Helena Housing Ltd v The Commissioners for Her Majesty’s Revenue and Customs:56

The law as to the purposes that are charitable is notoriously difficult and unsatisfactory, partly because of its historical development. It is strange enough to find that reference needs to be made in the 21st century, well into the reign of Queen Elizabeth II, to the text of the preamble to a statute passed in the last years of the reign of Queen Elizabeth I, the Statute of Charitable Uses 1601, in order to find what categories of purpose should be regarded as charitable. It is all the more odd to do so when one realises that the 1601 statute was passed in order to reform the procedure for enforcing certain kinds of charitable uses, to the exclusion of others which, accordingly, although charitable were not mentioned in the statute or in the preamble. The most obvious exclusion is religious purposes, other than the repair of churches. As to the context and scope of the Act, see Gareth Jones, History of the Law of Charity 1532 to 1827, CUP 1969, page 22 and following. The list of purposes in the preamble may have a more ancient provenance. As Jones observes at page 25 footnote 2, the language of the preamble is in part remarkably similar to that of a passage in William Langland’s fourteenth century work The Vision of Piers Plowman, which mentions the repair of hospitals, roads and bridges, helping maidens to marry, helping the poor and prisoners, and providing education or training, and other causes reflected in the preamble.

The preamble was first used as a guide to the identification of what was or was not a charitable purpose in the case of Morice v Bishop of Durham, which is of seminal importance in this as well as in other contexts as regards the development of the law of trusts: (1804) 9 Ves 399 (Sir William Grant MR) and (1805) 10 Ves 522 (Lord Eldon) …

The issue in that case which is relevant for our purposes was whether a gift of residue to be applied ‘to such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of’ was valid as being confined to purposes that were charitable. The decision, at first instance and p. 187on appeal, was that objects of benevolence and liberality were not so limited, and that the gift therefore failed.

Sir William Grant stated the significance of the 1601 statute in the following words, which do not seem to have been based on any submissions made to him in the argument as reported, at 9 Ves 405:

‘Here [i.e. in Court] its signification [i.e. that of the word ‘charity’] is derived chiefly from the Statute of Elizabeth. Those purposes are considered charitable, which that Statute enumerates, or which by analogies are deemed within its spirit and intendment.’

If a particular purpose did not fall within the Preamble expressly or by analogy, it could not be regarded as charitable, even though it was beneficial to the public.

(b) The Four Heads of Charity

The next significant step in the historical development of charity law was the identification of four distinct heads of charitable purpose. In Commissioners for Special Purposes of Income Tax v Pemsel,57 Lord Macnaghten said:

‘Charity’ in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads. The trusts last referred to are not the less charitable in the eye of the law, because incidentally they benefit the rich as well as the poor, as indeed, every charity that deserves the name must do either directly or indirectly. It seems to me that a person of education, at any rate, if he were speaking as the Act is speaking with reference to endowed charities, would include in the category educational and religious charities, as well as charities for the relief of the poor. Roughly speaking, I think he would exclude the fourth division. Even there it is difficult to draw the line. A layman would probably be amused if he were told that a gift to the Chancellor of the Exchequer for the benefit of the nation was a charity. Many people, I think, would consider a gift for the support of a lifeboat a charitable gift, though its object is not the advancement of religion, or the advancement of education, or the relief of the poor. And even a layman might take the same favourable view of a gratuitous supply of pure water for the benefit of a crowded neighbourhood. But after all, this is rather an academical discussion. If a gentleman of education, without legal training, were asked what is the meaning of ‘a trust for charitable purposes’, I think he would most probably reply, ‘That sounds like a legal phrase. You had better ask a lawyer’.

In Scottish Burial Reform and Cremation Society v Glasgow Corporation,58 Lord Wilberforce clarified the definition of charity further:

On this subject, the law of England, though no doubt not very satisfactory and in need of rationalisation, is tolerably clear. The purposes in question, to be charitable, must be shown to be for the benefit of the public, or the community, in a sense or manner within the intendment of the preamble to the statute 43 Eliz. I, c.4. The latter requirement does not mean quite what it says; for it is now accepted that what must be regarded is not the wording of the preamble itself, but the effect of decisions given by the courts as to its scope, decisions which have endeavoured to keep the law as to charities moving according as new social needs arise or old ones become obsolete or satisfied. Lord Macnaghten’s grouping of the p. 188heads of recognised charity in Pemsel’s case is one that has proved to be of value and there are many problems which it solves. But three things may be said about it, which its author would surely not have denied: first that, since it is a classification of convenience, there may well be purposes which do not fit neatly into one or other of the headings; secondly, that the words used must not be given the force of a statute to be construed; and thirdly, that the law of charity is a moving subject which may well have evolved even since 1891.

The effect of these decisions is that a trust would be considered to be charitable if it were to fall within the spirit and intendment of the Preamble, but the four heads of charity identified by Lord Macnaghten provided a useful checklist with which to test whether the purpose was charitable. But it was also necessary to establish that the purpose was for the public benefit. Benefit was presumed59 for trusts for the relief of poverty and for the advancement of education and religion, although this presumption could be rebutted by showing that the particular charity was not for the public benefit.60 Benefit needed to be proved for a trust to fall within the fourth head of being another purpose that was beneficial to the community. Under each of the heads it was necessary to determine that the public or a sufficient section of the public was benefited. Different tests were adopted for the identification of the public for each head of charity.

(c) The Charities Acts 2006 and 2011

The Charities Act 2006, which came into force in 2008, provided, for the first time, a statutory definition of ‘charity’, albeit one that built on the previous law. The Charities Act 2011 came into force in 2012 and consolidated the various statutory provisions relating to charities into one statute, but without significantly adding to or altering existing law.

Charities Act 2011

2. Meaning of ‘charitable purpose’

(1)

For the purposes of the law of England and Wales, a charitable purpose is a purpose which—

(a)

falls within section 3(1), and

(b)

is for the public benefit (see section 4).

(i) Heads of charity

The Charities Act 2011 identifies thirteen descriptions of recognized charitable purposes. The purposes of a charity must satisfy at least one of these descriptions, although they do overlap and so a charity may satisfy more than one of them.

p. 189Charities Act 2011

3 Descriptions of purposes

(1)

A purpose falls within this subsection if it falls within any of the following descriptions of purposes—

(a)

the prevention or relief of poverty;

(b)

the advancement of education;

(c)

the advancement of religion;

(d)

the advancement of health or the saving of lives;

(e)

the advancement of citizenship or community development;

(f)

the advancement of the arts, culture, heritage or science;

(g)

the advancement of amateur sport;

(h)

the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;

(i)

the advancement of environmental protection or improvement;

(j)

the relief of those in need because of youth, age, ill-health, disability, financial hardship or other disadvantage;

(k)

the advancement of animal welfare;

(l)

the promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire and rescue services or ambulance services;

(m)

any other purposes—

(i)

that are not within paragraphs (a) to (l) but are recognised as charitable purposes by virtue of section 5 (recreational and similar trusts, etc.)61 or under the old law,

(ii)

that may reasonably be regarded as analogous to, or within the spirit of, any purposes falling within any of paragraphs (a) to (l) or sub-paragraph (i), or

(iii)

that may reasonably be regarded as analogous to, or within the spirit of, any purposes which have been recognised, under the law relating to charities in England and Wales, as falling within sub-paragraph (ii) or this sub-paragraph.

(3)

Where any of the terms used in any of paragraphs (a) to (l) of subsection (1), or in subsection (2), has a particular meaning under the law relating to charities in England and Wales, the term is to be taken as having the same meaning where it appears in that provision.

Some of these descriptors replicate previously recognized heads of charity, such as the advancement of education and religion. Others simply codify subsequent developments in the definition of charity, either through decisions of the courts or the Charity Commission, such as the advancement of culture or environmental protection. The Charity Commission has provided guidance on charitable purposes which gives examples of relevant purposes under each head.62

(ii) Public benefit

In order to be registered a charity must operate for the benefit of the public.

p. 190Charities Act 2011

4 The public benefit requirement

(1)

In this Act ‘the public benefit requirement’ means the requirement in section 2(1)(b) that a purpose falling within section 3(1) must be for the public benefit if it is to be a charitable purpose.

(2)

In determining whether the public benefit requirement is satisfied in relation to any purpose falling within section 3(1) it is not to be presumed that a purpose of a particular description is for the public benefit.

The effect of this provision is that all charities, new and existing, have to satisfy the test of public benefit. This is a test that has been developed over many years through the courts and is not a new test under the 2011 Act. The old presumptions of benefit have been abolished, which means that in each case an organization will have to demonstrate that its purposes do benefit the public. If this cannot be established then a new charity will not be registered and an existing charity will cease to be registered. Once a charity has been registered, charity trustees are under statutory duties both to ensure that the charity acts for the public benefit and to avoid making decisions that adversely affect the charity’s public benefit.

The Charities Act 2011 does not provide any definition of public benefit. That definition is derived from previous cases and decisions of the Charity Commission. The Charity Commission is required to produce guidance as to the interpretation of public benefit.

Charities Act 2011

17 Guidance as to operation of public benefit requirement

(1)

The Commission must issue guidance in pursuance of its public benefit objective …

(2)

The Commission may from time to time revise any guidance issued under this section.

(3)

The Commission must carry out such public and other consultation as it considers appropriate—

(a)

before issuing any guidance under this section, or

(b)

(unless it considers that it is unnecessary to do so) before revising any guidance under this section.

(4)

The Commission must publish any guidance issued or revised under this section in such manner as it considers appropriate.

(5)

The charity trustees of a charity must have regard to any such guidance when exercising any powers or duties to which the guidance is relevant.

The Charity Commission, having undertaken a public consultation, published its guidance in January 2008.63 This identified two key principles of public benefit, namely (i) that there is an identifiable benefit and (ii) which is to the public or a section of the public, and a number of factors that need to be considered when determining whether this public benefit requirement is met. These principles and factors had purportedly been distilled from the myriad of cases on the interpretation of public benefit.

p. 191The validity of this guidance was considered by the Upper Tribunal in The Independent Schools Council v The Charity Commission for England and Wales.64 The guidance had been challenged on the ground that it contained errors of law in respect of the public benefit requirement as it applied to charities that charged fees for their charitable activities, specifically independent schools. Various aspects of the guidance were found wanting by the Upper Tribunal, either as being incorrect as a matter of law or as being ambiguous and obscure. Some aspects of the guidance were consequently withdrawn. The Charity Commission consulted on the publication of new guidance, which was published in 2013.65

Charity Commission, Public Benefit: the Public Benefit Requirement (2013)

The law relating to public benefit

The commission’s public benefit guidance is not the law on public benefit. The law on public benefit is contained in charities’ legislation and decisions of the courts.

The commission’s public benefit guidance is high level general guidance, written for charity trustees, to explain what the law says on public benefit and how it interprets and applies that law. …

Part 2: What ‘for the public benefit’ means

… There are two aspects of public benefit:

the ‘benefit aspect’

the ‘public aspect’ …

Legal requirement: In general, for a purpose to be ‘for the public benefit’ it must satisfy both the ‘benefit’ and ‘public’ aspects. However, if the purpose is to relieve or prevent poverty, different rules apply.66

The ‘benefit aspect’

The ‘benefit aspect’ of public benefit is about whether the purpose is beneficial.

Legal requirement: to satisfy the ‘benefit aspect’ of public benefit

a purpose must be beneficial (see part 3 of this guide)

any detriment or harm that results from the purpose must not outweigh the benefit (see part 4 of this guide)

The ‘public aspect’

The ‘public aspect’ of public benefit is about whom the purpose benefits.

Legal requirement: to satisfy the ‘public aspect’ of public benefit the purpose must

benefit the public in general, or a sufficient section of the public (see part 5 of this guide)

not give rise to more than incidental personal benefit (see part 6 of this guide)

p. 192

The commission’s decisions about public benefit

Each of a charity’s purposes must be for the public benefit.

Many charities have more than one purpose. Where that is the case, the commission will look at each purpose on its own to decide if it is for the public benefit. The public benefit of one purpose cannot be used to offset any lack of public benefit in another.

As the courts would, it will weigh up all the relevant factors and evidence to decide whether each purpose on its own:

is beneficial

benefits the public in general, or a sufficient section of it

In most cases this is likely to be clear.

The two aspects of public benefit can overlap. A factor can frequently be regarded as having an impact on both aspects.

Sometimes the commission might need to consider the relationship between what is beneficial and what is harmful, and public and personal benefit.

Some cases require fine judgment to consider whether all the factors, taken together, result in a purpose that is for the public benefit. The commission considers all cases in their own context. …

In rare cases where it is not possible for the trustees or applicant to put things right and the commission decides that the organisation’s purpose is not for the public benefit, this would mean that, in its view, the organisation is not a charity.

Where it decides this is the case for an organisation applying for registration, it would decline to register it.

Where it decides this is the case for an existing charity, the charity trustees will need to consider changing the purpose and should seek advice. …

In the very rare case where changing the purpose is not possible, the commission would have to remove the organisation from the register of charities. …

Part 3: Beneficial purpose

What is beneficial

Legal requirement: for a purpose to be charitable it must be beneficial in a way that is identifiable and

capable of being proved by evidence where necessary

not based on personal views

Providing evidence of benefit

In some cases the purpose is so clearly beneficial that there is little need for trustees to provide evidence to prove this.

For example, the trustees of an organisation whose purpose is to provide emergency aid in the context of a natural disaster would not need to provide evidence that the purpose is beneficial.

Where it is not clear that a purpose is beneficial, the commission may need to ask for evidence of this.

For example, the commission may need to ask for evidence of:

the architectural or historical merit of a building preserved under an advancement of heritage purpose

the artistic merit of an art collection displayed under an advancement of art purpose

the healing benefits of a therapy provided under an advancement of health purpose

the educational merit of a training programme offered under an advancement of education purpose

p. 193

Measuring what is beneficial

It should always be possible to identify and describe how a charity’s purpose is beneficial, whether or not that can be quantified or measured.

For example, developing a person’s artistic taste by viewing works of art can be beneficial even though it is difficult to quantify or measure.

Not beneficial

If it cannot be shown that an organisation’s purpose is beneficial (based on evidence that a court could accept where necessary) then it will not be a charitable purpose.

Part 4: Detriment or harm

How detriment or harm might affect the public benefit requirement

Legal requirement: a purpose cannot be a charitable purpose where any detriment or harm resulting from it outweighs the benefit.

Evidence of detriment or harm

The commission take detriment or harm into account where it is reasonable to expect that it will result from the individual organisation’s purpose. This will be based on evidence, not on personal views.

Where the benefit of a purpose is obvious and commonly recognised, there is an even greater need for evidence of detriment or harm to be clear and substantial, if it is to outweigh that benefit.

Part 5: Benefiting the public or a sufficient section of the public

The public

Legal requirement: for a purpose to be charitable it must benefit either

the public in general or

a sufficient section of the public

What ‘the public in general’ means

This means that all of the public can benefit from the purpose.

The benefit of the purpose is not limited to people with a particular need or who have to satisfy some other criteria.

If a purpose does not specify who can benefit, it will generally be taken to mean that it will benefit the public in general.

An example of a purpose which is for the benefit of the public in general is one which is concerned with conserving an endangered species.

What a ‘sufficient section of the public’ means

Legal requirement: a charitable purpose can benefit a section of the public, but the section must be appropriate (or ‘sufficient’) in relation to the specific purpose.p. 194

A sufficient section of the public are called a ‘public class’ of people.

There is not a set minimum number of people who have to benefit in order to be a ‘public class’.

Whether a section of the public is or is not a ‘public class’ is not the same for every purpose. What is sufficient for one purpose may not be sufficient for another.

Defining who can benefit on the basis of where people live

In most cases people living in any geographical area (local, national or international) will be a sufficient section of the public.

An example of circumstances in which it might not be sufficient is where the geographical area is too narrowly defined (such as people living in a few named houses)

The geographical area does not have to be in England and Wales. An organisation that is set up and registered in England and Wales can be a charity, even if its purpose is to benefit people entirely outside that area.

Defining who can benefit as people or communities with a particular charitable need

This is often a sufficient section of the public.

Defining who can benefit by reference to ‘protected characteristics’

Legal requirement: the Equality Act permits charities to benefit people defined by reference to a ‘protected characteristic’, provided the restriction of benefits to people having that characteristic is justified in relation to the purpose.

The following are ‘protected characteristics’:

age

disability

sex

sexual orientation

gender reassignment

marriage and civil partnership

pregnancy and maternity

race or nationality

religion or belief …

Defining who can benefit by reference to a person’s skin colour

Legal requirement: charities must not define their beneficiaries by reference to their skin colour. The law does not allow this.

Where a charity’s purpose defines who can benefit by reference to their skin colour, the purpose will be read as if that reference to skin colour did not exist.

Defining who can benefit by reference to a person’s occupation or profession

This can be a sufficient section of the public depending on the circumstances.

An example of a charity that could define who it benefits by reference to occupation or profession is a charity whose purpose is to relieve the sickness and disability of serving, former and retired teachers and their dependents.p. 195

Defining who can benefit by reference to a person’s family relationship, contractual relationship (eg employment by an employer) or membership of an unincorporated association

Legal requirement: in general, a charity must not have a purpose which defines who can benefit by reference to:

their family relationship

their employment by an employer

their membership of an unincorporated association

The law allows this only where the purpose is the relief (and in some cases the prevention) of poverty.67

Defining who can benefit by reference to other sorts of personal characteristic, such as their employment status

Whether this is a section of the public depends on the purpose that will be advanced and the specific circumstances.

For example, ‘people who are unemployed’ can be a sufficient section of the public where the purpose is the relief of unemployment or the relief of poverty. But it may not be a sufficient section where the purpose is to advance religion.

Deciding what is a ‘sufficient’ section of the public

This is decided on a case by case basis.

Decisions about this are informed by what the courts have or have not accepted in other cases.

For example, the courts will generally accept that a purpose benefits a sufficient section of the public if its beneficiaries are defined by:

where they live

a charitable need

a ‘protected characteristic’

Legal requirement: charities must not define their beneficiaries in the following ways as these will not benefit a sufficient section of the public:

a purpose which defines who can benefit on the basis of a ‘protected characteristic’ but which does not satisfy the requirements of the Equality Act

a purpose which defines who can benefit by reference to their skin colour

a purpose which defines who can benefit on the basis of a personal connection (unless the purpose is for the relief, and in some cases the prevention, of poverty)

a purpose which excludes the poor from benefiting – charity law recognises that ‘the poor’ is a relative term which depends upon the circumstances. However, ‘the poor’ does not just mean the very poorest in society and can include people of modest means

a purpose which is confined to a closed religious organisation

a purpose where all the potential beneficiaries (now and in the future) are named, such as an individual or individuals or a fixed group of individuals

a purpose where the number of people who can benefit (now and in the future) is numerically negligible (unless the purpose is for the relief, and in some cases the prevention, of poverty)

p. 196 a purpose which defines who can benefit in a manner which, when related to the purpose, is ‘capricious’ (eg wholly irrelevant, irrational or without good reason)

a purpose which benefits members of a mutual benefit society

(unless the purpose is for the relief, and in some cases the prevention, of poverty) a purpose which exists for the benefit of an organisation’s members only unless:

a sufficient section of the public can access those benefits by becoming members and

the membership is a suitable way of carrying out the charity’s purpose for the public benefit

A private (or ‘self-regarding’) members’ club generally exists for the benefit of its members only, and so cannot be for the public benefit. Even if it has an open membership, an organisation that is ‘inward-looking’, supported by its members for the purpose of providing benefits for the members, does not benefit a public class of people and so cannot be a charity. …

Part 6: Personal benefit

Legal requirement: a charitable purpose may only confer personal benefits if these are ‘incidental’ to carrying out the purpose.

What ‘personal benefit’ means

A ‘personal benefit’ (sometimes also called a ‘private benefit’) means a benefit that someone receives from a charity. That ‘someone’ might be an individual or an organisation.

What ‘incidental’ means

Personal benefit is ‘incidental’ where (having regard both to its nature and to its amount) it is a necessary result or by-product of carrying out the purpose.

The possibility that a purpose may provide incidental personal benefit does not prevent the purpose being for the public benefit. …

When establishing whether the public benefit requirement is satisfied, there are, therefore, two distinct principles that must be considered, relating to the identification of benefit and a sufficient section of the public. This had been confirmed by the Upper Tribunal in The Independent Schools Council v The Charity Commission for England and Wales:68

The courts have adopted an incremental and somewhat ad hoc approach in relation to what benefits the community or a section of the community. There has never been an attempt comprehensively to define what is, or is not, of public benefit. It is possible, however, to discern from the cases two related aspects of public benefit. The first aspect is that the nature of the purpose itself must be such as to be a benefit to the community: this is public benefit in the first sense … The second aspect is that those who may benefit from the carrying out of the purpose must be sufficiently numerous, and identified in such manner as, to constitute what is described in the authorities as ‘a section of the public’: this is public benefit in the second sense …

One result of this ad hoc development is that what satisfies the public benefit requirement may differ markedly between different types of allegedly charitable purposes. This is why caution must be exercised in applying authorities decided in one area of charity to another area.

p. 197These two key principles will be considered in turn.

(a) Identifiable benefit

The charity must provide a benefit that is capable of being recognized or described, but it need not be measured. The use of the word ‘benefit’ in the context of the public benefit test has sometimes caused confusion to the courts, since ‘benefit’ is sometimes used to describe the charitable purpose. An important distinction, therefore, needs to be drawn between two uses of the word ‘benefit’. A charitable purpose does need to be beneficial, but this is determined as a matter of law with reference to the heads of recognized charitable purposes and the spirit of the Preamble. On the other hand, ‘benefit’ for purposes of the public benefit test needs to be identified as a question of fact. The Upper Tribunal recognized this in The Independent Schools Council v The Charity Commission for England and Wales:69

A gift which fell within the express words of the Preamble might nevertheless fail to be charitable if the nature of the purpose was not such as to be beneficial to the community and so fell outside the spirit of the Preamble. Even a trust for the advancement of education in the form of a school would not have been charitable regardless of the form of education offered simply because it provided for a sufficient section of the community. In the well known example, a trust to train pickpockets would not be charitable; and that, we think, would be because such a trust would not be for the advancement of education within the scope or spirit of the Preamble …

One reason for holding the gift in [In re Hummeltenberg [1923] 1 Ch 237] (‘for training and developing suitable persons, male and female, as mediums’) not to be charitable was that the judge was not satisfied that the gift would or might be operative for the public benefit. As Russell J said, at p 241: ‘There is no evidence worthy of the name—nothing but vague expressions of opinions and belief, directed in the main to alleged powers of diagnosis and healing attributed to some mediums’ which was the basis on which the gift was said to have the requisite benefit. This absence of ‘public benefit’ was not related to the second aspect of the public benefit requirement (whether the benefit was directed to the public or a sufficient section of it); it was related only to the first aspect (whether the nature of the gift was such as to be a benefit to the community).

Similarly, in Re Shaw,70 George Bernard Shaw’s request in his will that his estate should be used to create a forty-letter alphabet to replace the existing twenty-six-letter one was not considered to be of any general utility to the public. The opinion of the testator or the donor of a gift that the public benefit test is satisfied is not relevant.

Any identifiable benefit will be balanced against any detriment or harm arising from the charitable purpose, so that if the detriment exceeds the benefit the public benefit requirement will not be satisfied. In The Independent Schools Council v The Charity Commission for England and Wales,71 the Upper Tribunal said:

The court, we conclude, has to balance the benefit and disadvantage in all cases where detriment is alleged and is supported by evidence. But great weight is to be given to a purpose which would, ordinarily, be charitable; before the alleged disadvantages can be given much weight, they need to be clearly demonstrated. There is, we think, a considerable burden on those seeking to change the status quo.

p. 198So, for example, in National Anti-Vivisection Society v IRC,72 it was held that the public benefit test was not satisfied where an organization sought to ban experimentation on animals, because the detriment to the public through adverse effects on medical research arising from such a ban outweighed the putative benefit arising from the welfare of the animals. As Lord Wright said:73

What [anti-vivisection] seems to do however is to destroy a source of enormous blessings to mankind. That is a positive and calamitous detriment of appalling magnitude. Nothing is offered by way of counterweight but a vague and problematical moral elevation. The law may well say that quite apart from any question of balancing values, an assumed prospect, or possibility of gain so vague, intangible and remote cannot justly be treated as a benefit to humanity, and that the appellant cannot get into the class of charities at all unless it can establish that benefit.

This case also illustrates how the interpretation of public benefit can change over time. A decision fifty years earlier74 had held that a society whose purpose was to stop experiments on animals was charitable, as being for a purpose that was beneficial to the community. By the time of National Anti-Vivisection Society, an awareness of the benefits to medical research arising from experiments on animals meant that a purpose of banning experiments on animals was no longer considered to be beneficial to the public.

In assessing the balance of benefits, it is also necessary to consider any private benefits that are received by people or organizations that are not beneficiaries of the charity. Such private benefits will not necessarily defeat the public benefit test, but they must be incidental to the fulfilment of the charity’s aims, such as where they are a necessary by-product of the fulfilment of those aims. It has been recognized that indirect benefits to the general public arising from the fulfilment of the charitable purpose may be relevant to the public benefit inquiry. This was considered in The Independent Schools Council v The Charity Commission for England and Wales:75

Given the very wide range of potential charitable purposes, it is obvious that some charities have purposes which have the primary effect of conferring direct benefits on certain individuals, while other charities have purposes which confer benefits on the public, whether individually or collectively, much more indirectly. An educational charity such as a school is a clear example of the first class of charity, while a charity for the advancement of animal welfare is a clear example of the second class. A trust for maintaining a bridge is somewhere in between: it is of direct benefit to those who use it but of indirect benefit to the relevant community. [Counsel] has put forward a terminology which we have found helpful in illuminating the subject and we adopt it in this judgment. It distinguishes the following three types of benefit. (1) Direct benefits: benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons as recipients of the main service which the charity provides. (2) Indirect benefits: benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons otherwise than as recipients of the main service which the charity provides. (3) Wider benefits: benefits other than direct and indirect benefits which are received by the community at large from the activities of the charity.

We recognise the cases do not use a consistent terminology to distinguish public benefit of different degrees. For instance, the term ‘indirect benefit’ is sometimes used to include both (2) and (3) in [the] classification.

p. 199The Upper Tribunal had to consider the relevance of indirect benefits in respect of the advancement of education. It was emphasized that the relevant benefit must relate to the charitable purpose, namely the advancement of education. Consequently, allowing members of the public to use the school’s facilities was held not to be a relevant benefit to the public, since it would not advance education. But other indirect benefits would be relevant to establishing the public benefit requirement, such as where students from the school are involved in community projects as part of the school’s citizenship education programme. Crucially, whilst the Upper Tribunal acknowledged the argument that education in independent schools might benefit the public because it takes students out of the State sector, it concluded that this would make little, if any, difference to the determination of an independent school’s charitable status. The Upper Tribunal stated:76

It might indeed be said … that the provision of private education is a considerable benefit to the community, in that each school takes students out of the state sector who would otherwise have to be educated at the expense of the state. Across the whole independent sector, that amounts to some hundreds of thousands of students.

There is obviously something in that point, although it must not be taken too far … We are therefore concerned with how, if at all, this factor would impact on the way in which a school must operate in order to be doing so for the public benefit. This comes down to whether this saving to the state justifies a lesser provision of public benefit than might otherwise be expected.

We think this factor would be likely to make very little, if any, difference. First, we anticipate that, even ignoring this factor, many schools would have no difficulty acting in a way consistent with their duties to act for the public benefit. For such a school, this factor does not provide much justification for requiring less of it than would otherwise be the case. Secondly, we have no idea how many schools would find it impossible or very difficult, ignoring the benefit to the state, to operate in a way which was for the public benefit. Nor do we have any idea of the number of schools within that class which would with comparative ease be able to operate in a way which was for the (lesser) public benefit if that factor could be taken into account. Accordingly, the suggested benefit to the state is highly speculative and the implicit suggestion that local authorities simply could not cope is not established.

(b) To the public

The benefit must be available to the public or to a section of the public. This is crucial in order to distinguish between public and private trusts. The policy of the law is clear: it is not appropriate for a settlor to obtain the benefits of charitable status through the mechanism of a trust where the beneficiaries are, in fact, a private group of people, such as the settlor’s close family or friends. Consequently, the class of actual and potential beneficiaries must be a ‘public class’. Although relatively small numbers are likely to benefit from a charity’s purpose, it is crucial that the opportunity to benefit be available to a sufficient section of the public. But the size of the class must not be numerically negligible77 and its members must not be linked by a contract or by a quality that depends on their relationship to a particular individual.78

The opportunity to benefit must not be unreasonably restricted, for example, by reference to geographical location. It does not follow that the benefit cannot be restricted to a particular area, but such a restriction must be reasonable. Restricting the benefit to people living in a particular town is likely to p. 200be acceptable, as constituting an appropriate section of the public, whereas limiting it to people living in a particular street will not, although this will depend on the particular aims of the charity. The public benefit test can still be satisfied even though the beneficiaries are abroad,79 but the charity must be registered in England and Wales.80

The opportunity to benefit must also not be unreasonably restricted by the ability of potential beneficiaries to pay fees. It does not follow that charities cannot charge for the services or facilities that they provide, such as charging school fees81 or fees for a private hospital,82 and they can even make a profit as long as this is reasonable and necessary to carry out the charity’s aims, such as by enhancing the facilities that are provided. In other words, the profit must be ploughed back into the charitable work.83 In Scottish Burial Reform and Cremation Society Ltd v Glasgow Corporation,84 Lord Wilberforce, in holding that provision of a cremation service was charitable, even though a fee was charged, said:

The company makes charges for its services to enable it, in the words of the joint agreed minute, to fulfil effectively the objects for which it was formed. These charges, though apparently modest, are not shown to be higher or lower than those levied for other burial services. In my opinion, the fact that cremation is provided for a fee rather than gratuitously does not affect the charitable character of the company’s activity, for that does not consist in the fact of providing financial relief but in the provision of services.

If, however, the charges restrict the benefits only to those who can afford the fees, it may follow that the benefits are not available to a sufficiently large section of the public. This is all a matter of degree, and the Charity Commission will consider all the benefits that are provided by a charity that charges fees, since there may be sufficient benefits available to people who cannot afford fees to satisfy the public benefit requirement. This has proved particularly significant as regards independent schools. The fact that fees are charged does not automatically render the school non-charitable, but it will be necessary for the school to show that sufficient benefit is provided to members of the public who are unable to afford fees, such as through the provision of scholarships and bursaries, for otherwise the poor will be excluded from the charity’s work.85

(c) Political objectives

An institution will not be charitable if its purposes are political. This is related to the identification of a benefit within the public benefit requirement. In Bowman v Secular Society Ltd86 Lord Parker recognized that:

a trust for the attainment of political objects has always been held invalid, not because it is illegal … but because the court has no means of judging whether a proposed change in the law will or will not be for the public benefit.

p. 201Even if there was evidence of the public being benefited by the change in law or policy, additional reasons have been identified as to why political purposes should not be charitable. Lewison J in Hanchett-Stamford v Attorney General 87 considered the dictum of Lord Parker and said:

However, this may be too dogmatic a view. In National Anti-Vivisection Society v Inland Revenue Commissioners [1948] AC 31 the House of Lords did evaluate the competing arguments for and against the abolition of vivisection; and came to the clear conclusion that the benefits to the public in terms of scientific and medical research outweighed the harm caused by the suffering of animals that vivisection necessarily entailed. A second reason that has been given is that law cannot stultify itself by holding that it is for the public benefit that the law itself should be changed; and that each court must decide on the principle that the law is right as it stands. This was the reason put forward by both Lord Wright and Lord Simonds in the National Anti-Vivisection Society case. A third reason is that if the courts sanction as charitable trusts with the purpose of changing the law, they would be trespassing on the role of the legislature, whose constitutional responsibility it is to evaluate the need for such changes. This was one of the reasons given by Slade J in McGovern v Attorney General [1982] Ch 321 and by Chadwick LJ in Southwood v Attorney General [2000] WTLR 1199. This last reason seems to me to be the most persuasive. But whatever the rationale, there is no doubt that the principle remains that a trust, one of whose purposes is to change the law, cannot be charitable.

An organization will be considered to be pursuing a political purpose not only where its main purpose is of a party-political nature, but also where it advocates or opposes a change in the law or policy, or decisions of central or local government authorities, either in England or abroad.88 Courts are unwilling to consider whether the pursuit of party-political purposes is for the benefit of the public because the law wishes to remain politically neutral.89

When determining whether a charity is pursuing a political objective, an important distinction needs to be drawn between those cases in which an organization’s main purpose is political, which prevents the purpose from being characterized as charitable, and those in which the political objective is merely incidental to the charity’s principal non-political purpose, which can still be characterized as a charitable purpose. Examples of using political means to further a non-political purpose include where the charity is campaigning for a change in the law for the benefit of those who are objects of the charity’s purpose, or where the charity seeks to raise awareness of a particular issue, or influence public attitudes and government policy or legislation. Such political activities are allowed because they are a means of furthering the organization’s charitable purposes, but without becoming the dominant means by which it carries out those purposes. The Charity Commission has provided guidance on campaigning and political activities:90

Campaigning and political activity can be legitimate and valuable activities for charities to undertake

However, political campaigning, or political activity, as defined in this guidance, must be undertaken by a charity only in the context of supporting the delivery of its charitable purposes. Unlike other forms of campaigning, it must not be the continuing and sole activity of the charity …p. 202

(1)

Campaigning: We use this word to refer to awareness-raising and to efforts to educate or involve the public by mobilising their support on a particular issue, or to influence or change public attitudes. We also use it to refer to campaigning activity which aims to ensure that existing laws are observed. We distinguish this from an activity which involves trying to secure support for, or oppose, a change in the law or in the policy or decisions of central government, local authorities or other public bodies, whether in this country or abroad, and which we refer to in this guidance as ‘political activity’. Examples of campaigning might include:

a health charity promoting the benefits of a balanced diet in reducing heart problems;

a refugee charity, emphasising the positive contribution that refugees have made to society and calling for Government to enforce existing legislation that supports the rights of refugees;

a children’s charity, drawing attention to the dangers of domestic violence and child abuse;

a human rights charity calling on a government to observe certain fundamental human rights, and for the practice of torture to be abolished;

a charity concerned with poverty and the environment campaigning against investment by some banks in fossil fuel extraction projects; or

a disability charity calling for existing legislation to be adhered to in order to ensure that all children with special educational needs receive the support they are entitled to in order to access learning …

(2)

Political activity: Political activity, as defined in this guidance, must only be undertaken by a charity in the context of supporting the delivery of its charitable purposes. We use this term to refer to activity by a charity which is aimed at securing, or opposing, any change in the law or in the policy or decisions of central government, local authorities or other public bodies, whether in this country or abroad. It includes activity to preserve an existing piece of legislation, where a charity opposes it being repealed or amended. This differs from activity aimed at ensuring that an existing law is observed, which falls under (1), Campaigning.

Political activity might include some or all of:

raising public support for such a change;

seeking to influence political parties or independent candidates, decision-makers, politicians or public servants on the charity’s position in various ways in support of the desired change; and responding to consultations carried out by political parties.

Although this guidance from the Law Commission summarizes the current state of English law accurately, the rule preventing charities from pursuing political purposes has been criticized as being outdated.91

Garton has said:92

When the House of Lords confirmed the prohibition of political purposes in the National Anti-Vivisection Society case it relied on scant authority, none of which was binding on it, and unconvincing justifications which fail to withstand serious scrutiny. In doing so, the House missed an important opportunity to recognise the numerous benefits of a politically active organised civil society with charities beating at its heart. The case continues to limit the extent to which charities can engage with political issues in England to this day.

p. 203Stevens and Feldman have also criticized the law on political purposes:93

Those cases which established that charitable status could not extend to purposes which are political belong to an earlier social era. The fundamental objection to according such status, namely that the law is incapable of judging whether a change in the law or government policy is good or bad, is plainly spurious. In a relativistic age and a mature democracy the law should be able to uphold as charitable objects which are diametrically opposed to each other, provided that they are for the ‘public benefit’ in the view of a sizeable body of adherents. Religious purposes which are diametrically opposed are already upheld as equally charitable. A Christian missionary organisation seeking to convert Muslims would be just as charitable as a Muslim organisation seeking to convert Christians. There is no reason why a body seeking to promote research into the benefits of vegetarianism should not be charitable alongside a body to promote research into the health benefits of meat consumption. As Lord Wilberforce observed in Scottish Burial Reform and Cremation Society Ltd v Glasgow City Corpn94 the law of charities is not static.

These commentators are right to emphasize that the reasons given for the illegitimacy of pursuing such objectives are unconvincing. Indeed, in National Anti-Vivisection Society v IRC,95 the House of Lords judged that a proposed change in the law, in the form of the abolition of vivisection, was not in the public interest because benefits to the public in terms of scientific and medical research outweighed the harm to animals arising from vivisection. It is not the case, therefore, that judges are incapable of determining whether a change in the law or government policy is good or bad. Also, the crucial distinction between political purposes that are a main objective of an organization or only incidental to a dominant charitable purpose is a distinction which can be very difficult to draw in practice. Consequently, there should be no objection to a charity pursuing political objectives in the sense that the charity is seeking a change in law or policy, whether at home or abroad. This has been recognized by the High Court of Australia in Aid/Watch Incorporated v Commissioner of Taxation,96 which concerned an organization that campaigned for effective Australian and multinational foreign aid policies, albeit not for a specific change in the law but to encourage public debate. This was considered to be for the public benefit. Similarly, in New Zealand the Supreme Court has recognized that a political objective can legitimately be a charitable purpose if it generates a public benefit.97

The pursuit of political objectives by a charity should only be qualified in two respects. First, a charity should not be allowed to pursue a political objective if the detriment to the public outweighs the benefit, as determined either by the courts or the Charity Commission. So, for example, a charity that seeks a change in the law in favour of racial or sexual discrimination should not be regarded as pursuing an objective that is beneficial to the public. Secondly, a charity should not pursue party-political objectives, since the benefits of charity law, particularly the fiscal advantages, should not be available in support of such purposes. It follows that there is no need for a special rule relating to political objectives; whether trusts for such purposes are charitable or not should be assessed in the normal way by reference to the public benefit criteria.98

But, as English law stands, where a main purpose of an organization is political, the trust will be invalid as a charitable trust. This is so even if there are other charitable purposes, because a charity’s p. 204purposes must be wholly and exclusively charitable.99 Where, however, the organization’s purposes might be carried out either in a way that is non-political or in a way that is political, the courts will adopt a benign approach to the construction of the purpose, and will assume that the trustees will act in a lawful and proper manner and not in a way that can be considered to be political.100 Such a trust may therefore be charitable, but it is important that the trust is then run exclusively for charitable purposes.

4. Charitable Purposes

(a) Prevention or Relief of Poverty

(i) Charitable purpose

Under the old law of charity, the first of the four heads of charitable purpose recognized in Pemsel’s case101 was the relief of aged, impotent, and poor people. This head has now been divided into the relief of the poor in section 3(1)(a) of the Charities Act 2011, with ‘relief of those in need’ now covered by section 3(1)(j).102 It is important to note that section 3(1)(a) covers both the relief and the prevention of poverty. These provisions may overlap.

‘Poverty’ is a relative term.103 In The Independent Schools Council v The Charity Commission for England and Wales,104 the Upper Tribunal recognized:

‘[P]oor’ does not mean destitute even in the context of a trust for the relief of poverty. Broadly speaking, and in the present context, a poor person is a person who cannot reasonably afford to meet a particular need by purchasing at the full cost price the service which it is the charity’s purpose to provide.

Poverty can extend to people of moderate means and may even include people who suffer only temporary financial hardship arising from a sudden change in their circumstances. In Re Coulthurst,105 a fund for the widows and orphans of officers of a bank whose financial circumstances were such that they were considered to deserve assistance was held to be charitable. In AITC Foundation’s Application for Registration as a Charity,106 the Charity Commission registered a charity to relieve poverty, need, hardship, and distress suffered by people who had invested in companies that had collapsed. These investors, possibly fewer than 300, might have been eligible for compensation, but only after an investigation had been concluded and liability determined and they would have suffered financial hardship in the meantime. In IRC v Oldham Training and Enterprise Council, a trust to set up the unemployed in trade or business was held to be charitable as being for the relief of poverty because, as Lightman J recognized,107 it was a

trust for the improvement of the conditions in life of those ‘going short’ in respect of employment and providing a fresh start in life for those in need of it.

p. 205In Re de Carteret108 the imposition of a minimum income qualification did not prevent a trust from being for the relief of poverty. The trust provided for the payment of ‘annual allowances of forty pounds each to widows or spinsters in England whose income otherwise shall not be less than eighty or more than one hundred and twenty pounds per annum’. In recognizing that the trust was charitable, Maugham J emphasized the fact that preference was to ‘be given to widows with young children dependent on them’. He said:

I should have hesitated to hold that it was a good charitable gift had it merely been for ‘widows and spinsters’; but I think that, in confining it, as I do, in effect, to widows with young children dependent on them, I am within the decisions to which I have referred.

Imposing a minimum income requirement is, however, surely incompatible with the notion of relieving ‘poverty’.

In Re Sanders’ Will Trusts, a trust to provide ‘dwellings’ for the ‘working classes’ was held not to be charitable because there was no requirement of being poor to benefit from it,109 whereas in Re Niyazi’s Will Trusts,110 a testamentary gift to construct a working men’s hostel in Cyprus was held to be charitable. This was considered to be different because, as Megarry V-C said:111

The word ‘hostel’ has to my mind a strong flavour of a building which provides somewhat modest accommodation for those who have some temporary need for it and are willing to accept accommodation of that standard in order to meet the need. When ‘hostel’ is prefixed by the expression ‘working men’s’, then the further restriction is introduced of the hostel being intended for those with a relatively low income who work for their living, especially as manual workers. The need, in other words, is to be the need of working men, and not of students or battered wives or anything else. Furthermore, the need will not be the need of the better-paid working men who can afford something superior to mere hostel accommodation, but the need of the lower end of the financial scale of working men, who cannot compete for the better accommodation but have to content themselves with the economies and shortcomings of hostel life. It seems to me that the word ‘hostel’ in this case is significantly different from the word ‘dwellings’ in Re Sanders’ Will Trusts [1954] Ch 265, a word which is appropriate to ordinary houses in which the well-to-do may live, as well as the relatively poor.

Has the expression ‘working men’s hostel’ a sufficient connotation of poverty in it to satisfy the requirements of charity? On any footing the case is desperately near the border-line, and I have hesitated in reaching my conclusion. On the whole, however, for the reasons that I have been discussing, I think that the trust is charitable, though by no great margin. This view is in my judgment supported by two further considerations. First, there is the amount of the trust fund, which in 1969 was a little under £15,000. I think one is entitled to assume that a testator has at least some idea of the probable value of his estate. The money is given for the purpose ‘of the construction of or as a contribution towards the cost of the construction of a working men’s hostel’. £15,000 will not go very far in such a project …

The other consideration is that of the state of housing in Famagusta. Where the trust is to erect a building in a particular area, I think it is legitimate, in construing the trust, to have some regard to the physical conditions existing in that area. Quite apart from any question of the size of the gift, I think that a trust to erect a hostel in a slum or in an area of acute housing need may have to be construed differently from a trust to erect a hostel in an area of housing affluence or plenty. Where there is a grave housing shortage, p. 206it is plain that the poor are likely to suffer more than the prosperous, and that the provision of a ‘working men’s hostel’ is likely to help the poor and not the rich.

Clearly, the determination of whether a gift is for the poor requires some very subtle distinctions to be drawn.

Sometimes, the creators of trusts have tried hard to squeeze their gifts within the charitable definition of poverty. For example, in Re Gwyon,112 the testator left a fund to provide certain types of clothing for boys in Farnham, subject to various conditions. The motive for this gift is unclear, but it was held not to be for the relief of poverty because the conditions did not identify clearly that the eligible boys had to be children of poor parents. Eve J said:113

The question is whether the testator has effectively created such a charity as he contemplated, a charity in the legal sense of the word. Is the object of his benefaction the relief of poverty, are the gifts for the benefit of the poor and needy? I do not think they are. Apart from residential and age qualifications, the only conditions imposed on a recipient are (1) that he shall not belong to or be supported by any charitable institution, (2) that neither he nor his parents shall be in receipt of parochial relief, (3) that he shall not be black,114 (4) that on a second or subsequent application he shall not have disposed of any garment received within the then-preceding year from the Foundation and that when he comes for a new pair of knickers or trousers the legend ‘Gwyon’s Present’ shall still be decipherable on the waistband of his old ones.

None of these conditions necessarily imports poverty nor could the recipients be accurately described as a class of aged, impotent or poor persons. The references to the receipt of parochial relief and to the possibility of last year’s garment having been disposed of show, no doubt, that the testator contemplated that candidates might be forthcoming from a class of society where incidents of this nature might occur, but although a gift to or for the poor other than those who were in receipt of parochial relief—that is, paupers—would be a good charitable gift, it does not follow that a gift to all and sundry in a particular locality and not expressed to be for the poor ought to be construed as evidencing an intention to relieve poverty merely because the testator is minded to exclude paupers. I think that according to the true construction of these testamentary documents the benevolence of the testator was intended for all eligible boys other than paupers, and I cannot spell out of them any indication which would justify the Foundation Trustees refusing an applicant otherwise eligible on the ground that his material circumstances were of too affluent a character. In these circumstances I cannot hold this trust to be within the description of a legal charitable trust.

(ii) Public benefit

The presumption that trusts for the relief of the poor are beneficial has been removed by the Charities Act 2011. It is now necessary to establish in each case that such trusts do satisfy the public benefit test. The old law remains relevant, however, in determining what the public benefit might be regarding trusts for the prevention of poverty or for the relief of the poor. The real significance of previous case law is the long-standing recognition that the test of public benefit is interpreted more liberally where the purpose is for the relief of the poor than for other charitable purposes, primarily because of the benefit to the State from poverty being relieved—which means that it is easier to justify allowing fiscal privileges to p. 207such charities. As a result, the ‘public’ requirement of public benefit might relate to a much smaller class of potential beneficiaries than is the case with the other heads of charity, such as poor relatives of the testator,115 or poor people from a small geographical area, such as a parish or town.116 Consequently, there can be a family connection between the creator of the charitable trust and the pool from which the beneficiaries are drawn where the charitable purpose is for the relief of poverty, when this would not be allowed for other charitable purposes. For example, in Re Scarisbrick117 it was held that a trust for the relations of the testator’s son and daughter who were in ‘needy circumstances’ was a valid charitable trust. Jenkins LJ said:118

[T]his is a trust for the relief of poverty in the charitable sense amongst the class of relations described, and, being a trust for the relief of poverty, is … not disqualified from ranking as a legally charitable trust by the circumstances that its application is confined to a class of relations (albeit a wide class), with the result that its potential beneficiaries do not comprise the public or a section thereof under the decisions to which I have referred.

I think the true question in each case has really been whether the gift was for the relief of poverty amongst a class of persons, or rather … a particular description of poor, or was merely a gift to individuals, albeit with relief of poverty amongst those individuals as the motive of the gift, or with a selective preference for the poor or poorest amongst those individuals.

Similarly, in Re Segelman119 it was held that a trust for the benefit of the poor and needy members of a designated group of the testator’s family created a charitable trust. Chadwick J said:120

[M]ost members of the class are comfortably off, in the sense that they are able to meet their day-to-day expenses out of income, but not affluent. Like many others in similar circumstances, they need a helping hand from time to time in order to overcome an unforeseen crisis: the failure of a business venture, urgent repairs to a dwelling house or expenses brought on by reason of failing health. Further, the … class includes the issue of named individuals, many of whom are still minors. It is impossible to conclude that the minors have been selected because they are, or are likely to be, poor. No doubt, in common with most of their contemporaries, they will experience relative poverty as students. There will be periods when their income from grants or parental resources fails to cover expenditure on their actual or perceived needs. But they are not as a class ‘poor persons’ within any ordinarily accepted meaning of that expression. The conclusion that I draw from the evidence is that the testator selected the members of the … class on the basis that they were persons who might need financial help from time to time in the future—as had been the case, at least in relation to some of them, in the past—and that they were persons who, by reasons of ties of blood or affection, he would wish to help after his death, as he had done from time to time during his lifetime.

Wherever the line is to be drawn, it is clear that the present gift is nearer to it than that which the Court of Appeal had to consider in Re Scarisbrick [1951] Ch 622. The … class is narrower than a class of relations of every degree on both sides of the family. The question is whether the class is so narrow that the gift must be disqualified as a trust for the relief of poverty in the charitable sense … Is this properly to be regarded as a gift to such of a narrow class of near relatives as at the testator’s death shall be in needy circumstances?p. 208

The basis for disqualification as a charitable gift must be that the restricted nature of the class leads to the conclusion that the gift is really a gift to the individual members of the class. In my view, the gift … is not of that character. The gift with which I am concerned has, in common with the gift which the Court of Appeal had to consider in Re Scarisbrick, the feature that the class of those eligible to benefit was not closed upon the testator’s death. It remained open for a further period of 21 years. During that period issue of the named individuals born after the death of the testator will become members of the class. It is, in my view, impossible to attribute to the testator an intention to make a gift to those after-born issue as such. His intention must be taken to have been the relief of poverty amongst the class of which they would become members.

In Dingle v Turner,121 the House of Lords considered whether these ‘poor relation’ cases could be extended to ‘poor employees’.

Dingle v Turner
[1972] AC 601

The testator sought to create a trust fund ‘to apply the income thereof in paying pensions to poor employees of E. Dingle and Co Ltd’ who were aged or incapacitated. At the date of the testator’s death in 1950, the company had over 600 employees and there was a substantial number of ex-employees. It was held that the will created a valid charitable trust.

Lord Cross of Chelsea:

Your Lordships … are now called upon to give to the old ‘poor relations’ cases and the more modern ‘poor employees’ cases that careful consideration which, in his speech in Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297 at 313122 Lord Morton of Henryton said that they might one day require.

The contentions of the appellant and the respondents may be stated broadly as follows. The appellant says that in the Oppenheim case this House decided that in principle a trust ought not to be regarded as charitable if the benefits under it are confined either to the descendants of a named individual or individuals or to the employees of a given individual or company and that though the ‘poor relations’ cases may have to be left standing as an anomalous exception to the general rule because their validity has been recognised for so long the exception ought not to be extended to ‘poor employees’ trusts which had not been recognised for long before their status as charitable trusts began to be called in question. The respondents, on the other hand, say, first, that the rule laid down in the Oppenheim case with regard to educational trusts ought not to be regarded as a rule applicable in principle to all kinds of charitable trust, and, secondly, that in any case it is impossible to draw any logical distinction between ‘poor relations’ trusts and ‘poor employees’ trusts, and that, as the former cannot be held invalid today after having been recognised as valid for so long, the latter must be regarded as valid also. …

Most of the cases on the subject were decided in the eighteenth or early nineteenth centuries and are very inadequately reported, but two things at least were clear. First, that it never occurred to the judges who decided them that in the field of ‘poverty’ a trust could not be a charitable trust if the class of beneficiaries was defined by reference to descent from a common ancestor. Secondly, that the courts did not p. 209treat a gift or trust as necessarily charitable because the objects of it had to be poor in order to qualify, for in some of the cases the trust was treated as a private trust and not a charity. The problem in Re Scarisbrick’s Will Trusts [1951] Ch 622 was to determine on what basis the distinction was drawn. … The Court of Appeal … held that in this field the distinction between a public or charitable trust and a private trust depended on 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 among them being the motive of the gift. The fact that the gift took the form of a perpetual trust would no doubt indicate that the intention of the donor could not have been to confer private benefits on particular people whose possible necessities he had in mind; but the fact that the capital of the gift was to be distributed at once did not necessarily show that the gift was a private trust. …

Even on [the assumption that the ‘poor relations’ cases, the ‘poor members’ cases, and the ‘poor employees’ cases are all anomalous] the appeal must fail. The status of some of the ‘poor relations’ trusts as valid charitable trusts was recognised more than 200 years ago and a few of those then recognised are still being administered as charities today. … But the ‘poor members’ and the ‘poor employees’ decisions were a natural development of the ‘poor relations’ decisions and to draw a distinction between different sorts of ‘poverty’ trusts would be quite illogical and could certainly not be said to be introducing ‘greater harmony’ into the law of charity. Moreover, though not as old as the ‘poor relations’ trusts ‘poor employees’ trusts have been recognised as charities for many years; there are now a large number of such trusts in existence; and assuming, as one must, that they are properly administered in the sense that benefits under them are only given to people who can fairly be said to be, according to current standards, ‘poor persons’, to treat such trusts as charities is not open to any practical objection.

That the Charities Act 2011, as initially enacted in 2006, did not change the law on the interpretation of public benefit for charities for the relief of poverty was confirmed by the Upper Tribunal in Attorney-General v Charity Commission for England and Wales.123 The Upper Tribunal answered three questions that had been posed to it by the Attorney-General, as follows:

Question 2.1: Whether a trust for the relief of poverty amongst a class of potential objects of the trust’s bounty defined by reference to the relationship of the potential objects to one or more individuals is capable of being a charitable trust.

Answer: Yes

Question 2.2: Whether a trust for the relief of poverty amongst a class of potential objects of the trust’s bounty defined by reference to their or a member of their family’s employment or former employment by one or specified commercial companies is capable of being a charitable trust.

Answer: Yes

Question 2.3: Whether a trust for the relief of poverty amongst the members of an unincorporated association or their families is capable of being a charitable trust.

Answer: Yes

It follows that the public benefit test for trusts for the prevention or relief of poverty can encompass a potentially narrow class of beneficiaries and the fact that the class is defined by reference to a personal nexus, such as having a common relative or employer or being a member of the same club, will not prevent the test from being satisfied. This has been confirmed by the Charity Commission’s guidance on public benefit which was published in 2013.

p. 210Charity Commission, Public Benefit: the Public Benefit Requirement

Annex A: Different rules for poverty charities

What is required for a purpose to prevent or relieve poverty to be ‘for the public benefit’

Legal requirement: in general, for a purpose to be charitable it must satisfy both the ‘public’ and ‘benefit’ aspects of public benefit.

However, if the purpose is to prevent or relieve poverty, the position is different.

In the case of charities for the relief (and in some cases the prevention) of poverty the courts consider the public benefit requirement can be met by satisfying the ‘benefit’ aspect only. In these cases there is no separate consideration of the ‘public’ aspect.

Legal requirement: only charities with a purpose to relieve (and in some cases to prevent) poverty can define who can benefit by reference to:

their family relationship (that means their descent from one individual)

their employment by an employer

their membership of an unincorporated association

Legal requirement: a charity must not have a purpose which is for the benefit of named individuals, whether or not they are poor. This is so even if the motive is to relieve poverty and the named individuals happen to be poor.

Providing a service to people with a ‘protected characteristic’

In general, charities for the relief (and in some cases the prevention) of poverty may be able to benefit a more narrowly defined section of the public than may be the case for charities with other purposes.

Legal requirement: however, even in the case of ‘poverty charities’, where the purpose is to provide a service only to people defined by a ‘protected characteristic’ in the Equality Act (such as age, gender, disability, race) the requirements of the Equality Act must still be met. That means that limiting the service only to those people must be justified.

The Charity Commission’s statement that there is no separate consideration of the ‘public’ aspect of ‘public benefit’ goes too far, however, since there will be some cases where the class which might be benefited is so small that the trust is properly characterized as a private rather than a public charitable trust. ‘Public’ does need to be considered but, as always, this will depend on the context and the potential size of the class.

(b) Advancement of Education

(i) Charitable purpose

The concept of education has progressed a long way since the Preamble to the Charitable Uses Act 1601 identified ‘the maintenance of schools of learning, free schools and scholars in universities’ and ‘the education and preferment of orphans’. Buckley LJ has said that ‘Education’ is now:124

p. 211

regarded as extending to the improvement of a useful branch of human knowledge and its public dissemination.

Prior to the Charities Act 2006, education was widely interpreted to include the promotion of the arts and culture. This has now been separated from the advancement of education to form a new head of charity, along with the promotion of heritage and science.125 In the light of this, it is no longer necessary for ‘education’ to be given an artificially wide interpretation.

Various principles can be identified relating to the determination of educational charitable purposes. At its core, ‘education’ relates to teaching, including paying teachers,126 whether at home or abroad.127 But it is not confined to formal instruction in the classroom, and encompasses vocational training128 and practice containing spiritual, moral, mental, and physical elements.129

Education also encompasses research. In assessing whether the research is educational, the court will have regard to its aims and utility. In Re Hopkins’ Will Trust,130 the key issue was whether a gift to the Francis Bacon Society to identify evidence in support of his authorship of the plays attributed to Shakespeare was charitable. Wilberforce J said:131

Let me say at once that no determination of the authorship of the ‘Shakespeare’ plays, or even of any subsidiary question relating to it, falls to be made in the present proceedings. The court is only concerned, at this point, with the practicability and later with the legality of carrying [the testator’s] wishes into effect, and it must decide this, one way or the other, upon the evidence of the experts which is before it …

On this evidence, should the conclusion be reached that the search for the Bacon–Shakespeare manuscripts is so manifestly futile that the court should not allow this bequest to be spent upon it as upon an object devoid of the possibility of any result? I think not. The evidence shows that the discovery of any manuscript of the plays is unlikely; but so are many discoveries before they are made (one may think of the Codex Sinaiticus, or the Tomb of Tutankhamen, or the Dead Sea Scrolls); I do not think that that degree of improbability has been reached which justifies the court in placing an initial interdict on the testatrix’s benefaction …

[A] bequest for the purpose of search, or research, for the original manuscripts of England’s greatest dramatist (whoever he was) would be well within the law’s conception of charitable purposes. The discovery of such manuscripts, or of one such manuscript, would be of the highest value to history and to literature. It is objected, against this, that as we already have the text of the plays, from an almost contemporary date, the discovery of a manuscript would add nothing worth while. This I utterly decline to accept. Without any undue exercise of the imagination, it would surely be a reasonable expectation that the revelation of a manuscript would contribute, probably decisively, to a solution of the authorship problem, and this alone is benefit enough. It might also lead to improvements in the text. It might lead to more accurate dating.

Is there any authority, then, which should lead me to hold that a bequest to achieve this objective is not charitable? By [counsel] for the next-of-kin much reliance was placed on the decision on Bernard Shaw’s will, the ‘British Alphabet’ case (Re Shaw [1957] 1 WLR 729). Harman J held that the gift was not educational because it merely tended to the increase of knowledge … But the judge did say this at 737: ‘if the p. 212object be merely the increase of knowledge, that is not in itself a charitable object unless it be combined with teaching or education’; and he referred to the House of Lords decision, Whicker v Hume (1858) 7 HL Cas 124, where, in relation to a gift for advancement of education and learning, two of the Lords read ‘learning’ as equivalent to ‘teaching’, thereby in his view implying that learning, in its ordinary meaning, is not a charitable purpose.

This decision certainly seems to place some limits upon the extent to which a gift for research may be regarded as charitable. Those limits are that … it must be ‘combined with teaching or education’ … The words ‘combined with teaching or education’, though well explaining what the judge had in mind when he rejected the gift in Shaw’s case [1957] 1 WLR 729, are not easy to interpret in relation to other facts. I should be unwilling to treat them as meaning that the promotion of academic research is not a charitable purpose unless the researcher were engaged in teaching or education in the conventional meaning; and I am encouraged in this view by some words of Lord Greene MR in Re Compton [1945] Ch 123 at 127. The testatrix there had forbidden the income of the bequest to be used for research, and Lord Greene MR treated this as a negative definition of the education to be provided. It would, he said, exclude a grant to enable a beneficiary to conduct research on some point of history or science. This shows that Lord Greene MR considered that historic research might fall within the description of ‘education’. I think, therefore, that the word ‘education’ as used by Harman J in Re Shaw must be used in a wide sense, certainly extending beyond teaching, and that the requirement is that, in order to be charitable, research must either be of educational value to the researcher or must be so directed as to lead to something which will pass into the store of educational material, or so as to improve the sum of communicable knowledge in an area which education may cover—education in this last context extending to the formation of literary taste and appreciation (compare Royal Choral Society v IRC [1943] 2 All ER 101). Whether or not the test is wider than this, it is, as I have stated it, amply wide enough to include the purposes of the gift in this case.

On the other side there is Re British School of Egyptian Archaeology [1954] 1 WLR 546, also a decision of Harman J, a case much closer to the present. The trusts there were to excavate, to discover antiquities, to hold exhibitions, to publish works and to promote the training and assistance of students—all in relation to Egypt. Harman J held that the purposes were charitable, as being educational. The society was one for the diffusion of a certain branch of knowledge, namely, knowledge of the ancient past of Egypt; and it also had a direct educational purpose, namely, to train students. The conclusion reached that there was an educational charity was greatly helped by the reference to students, but it seems that Harman J must have accepted that the other objects—those of archaeological research—were charitable, too. They were quite independent objects on which the whole of the society’s funds could have been spent, and the language ‘the school has a direct educational purpose, namely, to train students’ seems to show that the judge was independently upholding each set of objects.

[Counsel for the next-of-kin] correctly pointed out that in that case there was a direct obligation to diffuse the results of the society’s research and said that it was this that justified the finding that the archaeological purposes were charitable. I accept that research of a private character, for the benefit only of the members of a society, would not normally be educational—or otherwise charitable—as did Harman J [1954] 1 WLR 546 at 551, but I do not think that the research in the present case can be said to be of a private character, for it is inherently inevitable, and manifestly intended, that the result of any discovery should be published to the world. I think, therefore, that the British School of Egyptian Archaeology case supports the Society’s contentions.

Wilberforce J’s suggestion that an attribute of research as a charitable object is that it is of educational value to the researcher is doubtful, especially because this would not appear to meet the public benefit requirement. Consequently, research should be considered to be educational only where it involves some element of dissemination of the results.

p. 213In Incorporated Council of Law Reporting for England and Wales v Attorney-General,132 a trust for the publication of law reports was considered to advance education because it assisted research into the law and disseminated knowledge of the law. As Buckley LJ recognized:

[I]n a legal system such as ours, in which judges’ decisions are governed by precedents, reported decisions are the means by which legal principles (other than those laid down by statutes) are developed, established and made known, and by which the application of those legal principles to particular kinds of facts are illustrated and explained. Reported decisions may be said to be the tissue of the body of our non-statutory law. Whoever, therefore, would carry out any anatomical researches upon our non-statutory corpus juris must do so by research amongst, and study of, reported cases …

The legal profession has from times long past been termed a learned profession, and rightly so, for no man can properly practise or apply the law who is not learned in that field of law with which he is concerned. He must have more than an aptitude and more than a skill. He must be learned in a sense importing true scholarship. In a system of law such as we have in this country this scholarship can only be acquired and maintained by a continual study of case law.

The service which publication of The Law Reports provides benefits not only those actively engaged in the practice and administration of the law, but also those whose business it is to study and teach law academically, and many others who need to study the law for the purposes of their trades, businesses, professions or affairs. In all these fields, however, the nature of the service is the same: it enables the reader to study, and by study to acquaint himself with and instruct himself in the law of this country. There is nothing here which negatives an exclusively charitable purpose.

Although the objects of the council are commercial in the sense that the council exists to publish and sell its publications, they are unself-regarding. The members are prohibited from deriving any profit from the council’s activities, and the council itself, although not debarred from making a profit out of its business, can only apply any such profit in the further pursuit of its objects. The council is consequently not prevented from being a charity by reason of any commercial element in its activities.

In Re South Place Ethical Society,133 the objects of the Society were ‘the study and dissemination of ethical principles and the cultivation of a rational religious sentiment’. In holding that this was a trust for the advancement of education, as well as being for other purposes beneficial to the community, Dillon LJ said:134

The first part of the objects is the study and dissemination of ethical principles. Dissemination, I think, includes dissemination of the fruits of the study, and I have no doubt that that part of the objects satisfies the criterion of charity as being for the advancement of education. The second part, the cultivation of a rational religious sentiment, is considerably more difficult. As I have already said, I do not think that the cultivation is limited to cultivation of the requisite sentiment in the members of the Society and in no one else. In the context the Society is outward looking, and the cultivation would extend to all members of the public whom the Society’s teachings may reach. The sentiment or state of mind is to be rational, that is to say founded in reason. As I see it, a sentiment or attitude of mind founded in reason can only be cultivated or encouraged to grow by educational methods, including music, and the development of the appreciation of music by performances of high quality. The difficulty in this part of the Society’s objects lies in expressing a very lofty and possibly unattainable ideal in a very few words, and the difficulty p. 214is compounded by the choice of the word ‘religious’, which while giving the flavour of what is in mind, is not in my view used in its correct sense.

In Living in Radiance’s Application for Registration as a Charity,135 an institution that provided information, services, and education about the science of meditation and peace education was not registered as a charity because it failed to add to the participants’ factual knowledge or skills base. The organization of conferences to discuss issues of public and international interest at which the participants learned from and instructed each other was, however, held to be educational in Re Koeppler’s Will Trusts.136 Slade LJ said:137

[T]he following salient points emerged from the evidence: (i) the conferences sought to improve the minds of participants, not necessarily by adding to their factual knowledge but by expanding their wisdom and capacity to understand; (ii) the subjects discussed at conferences were recognised academic subjects in higher education; (iii) the conferences operated by a process of discussion designed to elicit an exchange of views in a manner familiar in places of higher education; (iv) the conferences were designed to capitalise on the expertise of participants who were there both to learn and to instruct.

(ii) Public benefit
(a) Definition of the public

The requirement of public benefit has proved especially significant when determining whether trusts for the advancement of education are charitable, and will be even more so now that benefit can no longer be presumed.138 It has been in the context of this charitable purpose that the tax advantages of being a charity have proved to be particularly important, especially as regards whether independent schools should be treated as charitable. Also, employers might seek to provide tax-free benefits to employees by providing for the education of their children, but this will be effective only if a sufficient section of the public can be identified. This was the key issue in the leading decision of the House of Lords in Oppenheim v Tobacco Securities Trust Co Ltd.

Oppenheim v Tobacco Securities Trust Co Ltd
[1951] AC 297

The income of a trust fund was directed to be applied ‘in providing for … the education of children of employees or former employees of the British-American Tobacco Co Ltd … or any of its subsidiary or allied companies in such manner … as the acting trustees shall in their absolute discretion … think fit’, with power to apply the capital for the same purposes. The number of employees of the company and its subsidiary and allied companies exceeded 110,000. The question was whether the class to be benefited was a sufficient section of the public. It was held that, because the qualification to benefit was based upon a personal nexus between those who might benefit and the settlors, the class of beneficiaries was not a section of the public and so the trust was not charitable.

p. 215

Lord Simonds:

In the case of trusts for educational purposes the condition of public benefit must be satisfied. The difficulty lies in determining what is sufficient to satisfy the test, and there is little to help your Lordships to solve it.

If I may begin at the bottom of the scale, a trust established by a father for the education of his son is not a charity. The public element, as I will call it, is not supplied by the fact that from that son’s education all may benefit. At the other end of the scale the establishment of a college or university is beyond doubt a charity. ‘Schools of learning and free schools and scholars of universities’ are the very words of the preamble to the Statute of Elizabeth. So also the endowment of a college, university or school by the creation of scholarships or bursaries is a charity and none the less because competition may be limited to a particular class of persons. It is upon this ground, as Lord Greene MR pointed out in Re Compton [1945] Ch 123 at 136 that the so-called Founder’s Kin cases can be rested. The difficulty arises where the trust is not for the benefit of any institution either then existing or by the terms of the trust to be brought into existence, but for the benefit of a class of persons at large. Then the question is whether that class of persons can be regarded as such a ‘section of the community’ as to satisfy the test of public benefit. These words ‘section of the community’ have no special sanctity, but they conveniently indicate first, that the possible (I emphasize the word ‘possible’) beneficiaries must not be numerically negligible, and secondly, that the quality which distinguishes them from other members of the community, so that they form by themselves a section of it, must be a quality which does not depend on their relationship to a particular individual. It is for this reason that a trust for the education of members of a family or, as in Re Compton, of a number of families cannot be regarded as charitable. A group of persons may be numerous but, if the nexus between them is their personal relationship to a single [person] or to several [people], they are neither the community nor a section of the community for charitable purposes.

I come, then, to the present case where the class of beneficiaries is numerous but the difficulty arises in regard to their common and distinguishing quality. That quality is being children of employees of one or other of a group of companies. I can make no distinction between children of employees and the employees themselves. In both cases the common quality is found in employment by particular employers. The latter of the two cases by which the Court of Appeal held itself to be bound, Re Hobourn Aero Components Ltd’s Air Raid Distress Fund [1946] Ch 194, is a direct authority for saying that such a common quality does not constitute its possessors a section of the public for charitable purposes. In the former case, Re Compton, Lord Greene MR had by way of illustration placed members of a family and employees of a particular employer on the same footing, finding neither in common kinship nor in common employment the sort of nexus which is sufficient … It appears to me that it would be an extension, for which there is no justification in principle or authority, to regard common employment as a quality which constitutes those employed a section of the community.

Since there was a personal nexus the trust was a private trust which was void for perpetuity.

The decision of the House of Lords in Oppenheim appears to conflict with the later decision of the same court in Dingle v Turner,139 which concerned the provision of benefits by an employer for employees for the relief of poverty. Despite the existence of a personal nexus, the public benefit test was satisfied. The cases are distinguishable because they involved different charitable purposes, but why should this make a difference? In Oppenheim, Lord MacDermott dissented:140

The numerical strength of the class is considerable on any showing. The employees concerned number over 110,000, and it may reasonably be assumed that the children, who constitute the class in question, p. 216are no fewer. The large size of the class is not, of course, decisive but in my view it cannot be left out of account when the problem is approached in this way. Then it must be observed that the [beneficiaries] are not limited to those presently employed. They include former employees (not reckoned in the figure I have given) and are, therefore, a more stable category than would otherwise be the case. And, further, the employees concerned are not limited to those in the service of the ‘British-American Tobacco Co Ltd or any of its subsidiary or allied companies’—itself a description of great width—but include the employees, in the event of the British-American Tobacco Co Ltd being reconstructed or merged on amalgamation, of the reconstructed or amalgamated company or any of its subsidiary companies. No doubt the settlors here had a special interest in the welfare of the class they described, but, apart from the fact that this may serve to explain the particular form of their bounty, I do not think it material to the question in hand. What is material, as I regard the matter, is that they have chosen to benefit a class which is, in fact, substantial in point of size and importance and have done so in a manner which, to my mind, manifests an intention to advance the interests of the class described as a class rather than as a collection or succession of particular individuals. …

But can any really fundamental distinction, as respects the personal or impersonal nature of the common link, be drawn between those employed, for example, by a particular university and those whom the same university has put in a certain category as the result of individual examination and assessment? Again, if the bond between those employed by a particular railway is purely personal, why should the bond between those who are employed as railway men be so essentially different? Is a distinction to be drawn in this respect between those who are employed in a particular industry before it is nationalized and those who are employed therein after that process has been completed and one employer has taken the place of many? Are miners in the service of the National Coal Board now in one category and miners at a particular pit or of a particular district in another? Is the relationship between those in the service of the Crown to be distinguished from that obtaining between those in the service of some other employer? Or, if not, are the children of, say, soldiers or civil servants to be regarded as not constituting a sufficient section of the public to make a trust for their education charitable?

It was conceded in the course of the argument that, had the present trust been framed so as to provide for the education of the children of those engaged in the tobacco industry in a named county or town, it would have been a good charitable disposition, and that even though the class to be benefited would have been appreciably smaller and no more important than is the class here. That concession follows from what the Court of Appeal has said. But if it is sound and a personal or impersonal relationship remains the universal criterion I think it shows, no less than the queries I have just raised in indicating some of the difficulties of the problem, that the Compton [personal nexus] test is a very arbitrary and artificial rule. This leads me to the second difficulty that I have regarding it. If I understand it aright it necessarily makes the quantum of public benefit a consideration of little moment; the size of the class becomes immaterial and the need of its members and the public advantage of having that need met appear alike to be irrelevant. To my mind these are considerations of some account in the sphere of educational trusts for, as already indicated, I think the educational value and scope of the work actually to be done must have a bearing on the question of public benefit.

Finally, it seems to me that, far from settling the state of the law on this particular subject, the [personal nexus] test is more likely to create confusion and doubt in the case of many trusts and institutions of a character whose legal standing as charities has never been in question. I have particularly in mind gifts for the education of certain special classes such, for example, as the daughters of missionaries, the children of those professing a particular faith or accepted as ministers of a particular denomination, or those whose parents have sent them to a particular school for the earlier stages of their training. I cannot but think that in cases of this sort an analysis of the common quality binding the class to be benefited may reveal a relationship no less personal than that existing between an employer and those in his service. Take, for instance, a trust for the provision of university education for boys coming from a particular school. The common quality binding the members of that class seems to reside in the fact that their p. 217parents or guardians all contracted for their schooling with the same establishment or body. That the school in such a case may itself be a charitable foundation seems altogether beside the point and quite insufficient to hold the [personal nexus] test at bay if it is well founded in law.

Lord MacDermott’s approach to the identification of a section of the community commended itself to the judges in Dingle v Turner.141 Lord Cross said:142

Oppenheim [1951] AC 297 was a case of an educational trust and though the majority evidently agreed with the view expressed by the Court of Appeal in the Hobourn Aero case [1946] Ch 194 that the Compton [personal nexus] rule [1945] Ch 123 was of universal application outside the field of poverty it would no doubt be open to this House without overruling Oppenheim to hold that the scope of the rule was more limited. If ever I should be called upon to pronounce on this question—which does not arise in this appeal—I would as at present advised be inclined to draw a distinction between the practical merits of the Compton rule and the reasoning by which Lord Greene MR sought to justify it. That reasoning—based on the distinction between personal and impersonal relationships—has never seemed to me very satisfactory and I have always if I may say so—felt the force of the criticism to which my noble and learned friend Lord MacDermott subjected it in his dissenting speech in Oppenheim. For my part I would prefer to approach the problem on far broader lines. The phrase a ‘section of the public’ is in truth a vague phrase which may mean different things to different people. In the law of charity judges have sought to elucidate its meaning by contrasting it with another phrase: ‘a fluctuating body of private individuals.’ But I get little help from the supposed contrast for as I see it one and the same aggregate of persons may well be describable both as a section of the public and as a fluctuating body of private individuals. The ratepayers of the Royal Borough of Kensington and Chelsea, for example, certainly constitute a section of the public; but would it be a misuse of language to describe them as a ‘fluctuating body of private individuals’? After all, every part of the public is composed of individuals and being susceptible of increase or decrease is fluctuating. So at the end of the day one is left where one started with the bare contrast between ‘public’ and ‘private’. No doubt some classes are more naturally describable as sections of the public than as private classes while other classes are more naturally describable as private classes than as sections of the public. The blind, for example, can naturally be described as a section of the public; but what they have in common—their blindness—does not join them together in such a way that they could be called a private class. On the other hand, the descendants of Mr. Gladstone might more reasonably be described as a ‘private class’ than as a section of the public, and in the field of common employment the same might well be said of the employees in some fairly small firm. But if one turns to large companies employing many thousands of men and women most of whom are quite unknown to one another and to the directors the answer is by no means so clear. One might say that in such a case the distinction between a section of the public and a private class is not applicable at all or even that the employees in such concerns as ICI or GEC are just as much ‘sections of the public’ as the residents in some geographical area. In truth the question whether or not the potential beneficiaries of a trust can fairly be said to constitute a section of the public is a question of degree and cannot be by itself decisive of the question whether the trust is a charity. Much must depend on the purpose of the trust. It may well be that, on the one hand, a trust to promote some purpose, prima facie charitable, will constitute a charity even though the class of potential beneficiaries might fairly be called a private class and that, on the other hand, a trust to promote another purpose, also prima facie charitable, will not constitute a charity even though the class of potential beneficiaries might seem to some people fairly describable as a section of the public. In answering the question whether any given trust is a charitable trust the courts—as I see it—cannot avoid having regard to the fiscal privileges accorded to charities. As counsel for the Attorney-General p. 218remarked in the course of the argument the law of charity is bedevilled by the fact that charitable trusts enjoy two quite different sorts of privilege. On the one hand, they enjoy immunity from the rules against perpetuity and uncertainty and though individual potential beneficiaries cannot sue to enforce them the public interest arising under them is protected by the Attorney-General. If this was all there would be no reason for the courts not to look favourably on the claim of any ‘purpose’ trust to be considered as a charity if it seemed calculated to confer some real benefit on those intended to benefit by it whoever they might be and if it would fail if not held to be a charity. But that is not all. Charities automatically enjoy fiscal privileges which with the increased burden of taxation have become more and more important and in deciding that such and such a trust is a charitable trust the court is endowing it with a substantial annual subsidy at the expense of the taxpayer. Indeed, claims of trusts to rank as charities are just as often challenged by the revenue as by those who would take the fund if the trust was invalid. It is, of course, unfortunate that the recognition of any trust as a valid charitable trust should automatically attract fiscal privileges, for the question whether a trust to further some purpose is so little likely to benefit the public that it ought to be declared invalid and the question whether it is likely to confer such great benefits on the public that it should enjoy fiscal immunity are really two quite different questions. The logical solution would be to separate them and to say—as the Radcliffe Commission143 proposed—that only some charities should enjoy fiscal privileges. But, as things are, validity and fiscal immunity march hand in hand and the decisions in the Compton [1945] Ch 123 and Oppenheim [1951] AC 297 cases were pretty obviously influenced by the consideration that if such trusts as were there in question were held valid they would enjoy an undeserved fiscal immunity. To establish a trust for the education of the children of employees in a company in which you are interested is no doubt a meritorious act; but however numerous the employees may be the purpose which you are seeking to achieve is not a public purpose. It is a company purpose and there is no reason why your fellow taxpayers should contribute to a scheme which by providing ‘fringe benefits’ for your employees will benefit the company by making their conditions of employment more attractive. The temptation to enlist the assistance of the law of charity in private endeavours of this sort is considerable—witness the recent case of the Metal Box scholarships—Inland Revenue Commissioners v Educational Grants Association Ltd [1967] Ch 993144—and the courts must do what they can to discourage such attempts. In the field of poverty the danger is not so great as in the field of education—for while people are keenly alive to the need to give their children a good education and to the expense of doing so they are generally optimistic enough not to entertain serious fears of falling on evil days much before they fall on them. Consequently the existence of company ‘benevolent funds’ the income of which is free of tax does not constitute a very attractive ‘fringe benefit.’ This is a practical justification—though not, of course, the historical explanation—for the special treatment accorded to poverty trusts in charity law. For the same sort of reason a trust to promote some religion among the employees of a company might perhaps safely be held to be charitable provided that it was clear that the benefits were to be purely spiritual. … As I see it, it is on these broad lines rather than for the reasons actually given by Lord Greene MR that the Compton rule [1951] AC 123 can best be justified.

Lord Cross’s suggestion that the availability of fiscal privileges should be taken into account when assessing public benefit was not supported by three of the other judges in Dingle v Turner, one of whom being Lord MacDermott.145 So, where is the law left concerning the identification of public benefit for the advancement of education following Oppenheim and Dingle? Although it has been suggested that the consequence of the comments in Dingle is that Oppenheim must be treated as wrongly decided,146 those comments were obiter and nothing was said in Dingle v Turner to suggest that Oppenheim p. 219should have been decided differently. Oppenheim was subsequently followed in IRC v Educational Grants Association Ltd,147 although this was decided before Dingle v Turner. The Educational Grants Association Ltd was an association established for the advancement of education. It had a close relation with Metal Box Co. Ltd, and the bulk of its income came from that company. Much of the income of the Association was applied for the education of children of persons connected with Metal Box. It was held that the income was not applied for charitable purposes only. Salmon LJ said:

If a trust established for the purpose of making grants for the education of children of employees or former employees of Metal Box would not be established for charitable purposes only, it seems to me to follow, as the night follows the day, that annual payments applied for the purpose of educating the children of employees or former employees of the company are not applied for charitable purposes only. I do not mean that any child of a Metal Box employee is necessarily excluded from the ambit of this beneficence. If it had been shown, for example, that by chance a few such children had been amongst the members of the general public to have benefited from the grants, I should not have thought that this was in any way breaching the requirement that the annual payments must be applied for charitable purposes only. The trouble in this case is that when one looks at all the facts which have been recited by my Lords and which I need not repeat, one is driven to the same inescapable conclusion as was the judge, namely, that 75% to 85% of the annual payments were in fact not applied for the benefit of a sector of the public but for the benefit of children of employees or former employees of Metal Box as such.

If the facts of Oppenheim and Educational Grants Association were to arise today, it is clear that the personal nexus test would be applied to determine whether the beneficiaries constituted a sufficient section of the public. But in assessing this, it would be appropriate to have regard to the factors identified by Lord MacDermott in Oppenheim and affirmed by Lord Cross in Dingle v Turner. The fact that the creator of the trust is seeking to obtain tax advantages should also be regarded as a relevant factor; this is a legitimate motive for seeking charitable status, but cannot be regarded as a purpose in its own right. It is not appropriate for companies to use the law of charity to provide tax-free benefits to employees. This unacceptably confuses the public law of charity with the private endeavours of companies.

Although much of the discussion about public benefit in respect of the advancement of education has focused on the personal nexus test, it must not be forgotten that a factual benefit must be shown and that this benefit is available to the public or a section of the public, so even though there is no personal nexus it must still be established that the public benefit test has been satisfied.148 So, for example, if the charitable purpose relates to research, this needs to be disseminated and not restricted to the use of the researcher or to the members of a particular society.149

Where eligibility to obtain the benefits of the charity are restricted, this does not mean that the benefit is no longer available to a section of the public, as long as the restriction is reasonable and is not based on a personal nexus. So, for example, a scholarship to study at a particular school or university may legitimately be restricted to people from a particular town or to people who attain a certain level of academic achievement, but it cannot be restricted to relatives of the donor.

(b) Independent schools

A matter of long-standing controversy has related to the satisfaction of the public benefit requirement by independent schools, where school fees are paid. Charitable status is very important to such p. 220schools because it provides significant fiscal advantages. About 7 per cent of the school population in the UK attends an independent school, and their families pay an average fee of over £17,000 per year.150 Whether such schools satisfy both elements of the public benefit requirement was considered by the Upper Tribunal in The Independent Schools Council v The Charity Commission for England and Wales.

The Independent Schools Council v The Charity Commission for England and Wales
[2011] UKUT 421 (TCC); [2012] Ch 214, [111]

Educational trusts of an ordinary sort are seen as being for the public benefit in the first sense [of being beneficial] because of the value to society of having an educated population. It is no more and no less of benefit to the community in the case of a rich person than a poor person. Thus the trust in Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297 is properly to be seen as for the benefit of the community in the first sense; but it failed to be a charitable trust because it was a private trust lacking the necessary element of public benefit in the second sense [relating to the identification of the public or a section of the public]. Accordingly, if an educational institution such as we are concerned with fails to be for the public benefit because it is limited, either constitutionally or in practice, to providing benefits to the rich, this will be so because, and only because, it fails to be for the benefit of a sufficient section of the public.

We thus locate the need to include the poor within the public benefit requirement in its second sense … we therefore reach the conclusion that the schools with which we are concerned do have purposes which are for the public benefit in the first sense …

We are concerned with whether the rich (by which we mean those able to afford the school fees) are a sufficient section of the community …

We conclude from our examination of the authorities that the hypothetical school addressed in … the reference (ie where the sole object of the school is the advancement of the education of children whose families can afford to pay fees representing the cost of the provision of their education) does not have purposes which provide that element of public benefit necessary to qualify as a charity. Such a school has purposes which therefore fail to satisfy the public benefit test under the [Charities] Act. (As we note later, such a school is in practice unlikely to exist.) …

This conclusion is based on the proposition that a trust which excludes the poor from benefit cannot be a charity. There is no case which decides that point, but we consider it is right as a matter of principle, given the underlying concept of charity from early times …

It is also implicit in our conclusion that it is correct to look beyond the beneficiary concerned to see if the poor are excluded. We would expect that very few of the children who attend private schools have their own resources to pay the requisite fees. It cannot, we think, be right to focus on the children themselves in addressing this issue. Although the students themselves are the direct beneficiaries of the education, they benefit … only because their families can afford to pay. Just as in Inland Revenue Commissioners v Educational Grants Association Ltd [1967] Ch 993 it was right to look beyond the children to their parents and so on to Metal Box in ascertaining whether there was public benefit, so too … it is right to look beyond the students to their parents or other family members paying the fees, to see whether the provision of benefit by the school is to a poor person.

It is one thing to treat a student and his family as the relevant entity for assessing whether the student is poor. It would be another thing to afford the same treatment to a student who had managed to acquire p. 221funding from a third party source. How that funding is to be brought into account in assessing whether the student is ‘poor’ will, in our view, depend on the source.

At one end of the scale, funding from an employer is received by the student as a purely private benefit which, we think, ought generally to be brought into account. The school could not rely on educating such students as providing a benefit to the ‘poor’.

At the other end of the scale, funding from a grant-making educational charity to a child in a family which is poor by any standard is a benefit received by the student not as a private benefit but as a result of the implementation by the grant-making body of purposes which are for the public benefit. It seems to us that the school ought to be able to treat the education of that student as the provision of direct benefit to a person who is ‘poor’. Of course, from the school’s point of view, it makes no difference to its finances whether the fees come from the family, a third party or a charity. But that is not the point; the point is whether the school is educating poor people and, in terms of the access to schools, which is a most important consideration from the perspective of the public, a poor person in receipt of a grant is none the less poor. The contrary view could produce startling results. Some schools have large endowments out of which they are able to provide significant numbers of substantial scholarships, thus enabling them to open up their access to persons who could not otherwise afford to attend the school, including ‘poor’ students … It cannot be right, we consider, that the school is unable to rely on its own provision of education to poor students receiving scholarships from such endowments as a direct benefit to persons who are ‘poor’ in the context of its own trusts and duties …

We now turn to consider a school which, as a matter of its constitution, can admit students whatever their ability to pay, but as a matter of fact (whether because of a policy of accepting only fee-paying students or because of some financial imperative) does not do so. The first question which then arises is whether such a school is established for charitable purposes only …

Where a school is, by its constitution, open to all, we consider that, generally speaking, it is established for charitable purposes only. That such a school is charitable may be made clear expressly by its constitution, for instance by stating that its purposes may only be effected ‘in a way which is for the public benefit’ or some such words. But even in the absence of such words, it will often be implicit that such a school will carry out its express purposes in a way which is for the public benefit …

It is in this context of activities that indirect benefits and wider benefits … fall to be taken into account as part of the public benefit requirement. Many, and probably most although not all, schools of the type with which we are concerned provide benefits other than education to those who pay full fees. Those benefits include some or all of the following: (a) provision of scholarships and bursaries; (b) arrangements under which students from local state schools can attend classes in subjects not otherwise readily available to them; (c) sharing of teachers or teaching facilities with local state schools; (d) making available (whether on the internet or otherwise) teaching materials used in the school; (e) making available to students of local state schools other facilities such as playing fields, sports halls, swimming pools or sports grounds; (f) making those last facilities available to the community as a whole.

Category (a) is a direct benefit. Categories (b) to (e) will be direct or indirect benefits, depending on the precise constitution of the school. They might also be wider benefits.

Category (f) is not a direct benefit or an indirect benefit or even a wider benefit in the sense in which we are using those terms …

When it comes to considering whether a school which is a charity is operating for the public benefit in accordance with its charitable purposes, the primary focus must be on the direct benefits which it provides. Scholarships or other forms of direct assistance to students are therefore important. Account can certainly be taken of other direct benefits such as those described in categories (b) and (c). Account can be taken of the benefits described in category (d) since they are clearly available to the whole community; however, it must be very doubtful whether much weight can be attached to a benefit which must p. 222be comparatively easy to provide at little cost and the effect of which seems to us, on the evidence we have, very uncertain.

… we consider that the benefits described in category (e) are to be taken into account in deciding whether a school which is a charity is operating for the public benefit.

We do not, however, consider that benefits of the sort described in category (f) can be taken into account. The fact that an ancillary activity may be a good thing for the school is not enough. The ancillary activity is not itself being carried out in fulfilment of the charitable purpose, namely the advancement of education.

… we have already decided that a school which is required by its governing instrument to admit only those whose families are able to afford fees is one which excludes the poor and is not therefore for the public benefit. It might therefore be asked why the provision of a number of scholarships to poor students could ever be enough to protect its charitable status. By analogy with Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297 and Inland Revenue Commissioners v Educational Grants Association Ltd [1967] Ch 123, it might be argued as follows: (a) a school for the rich is not charitable because the trust for that class, excluding the poor as it does, is not for the public benefit (just as the beneficiaries in Oppenheim’s case were not a sufficient section of the community); (b) a charitable trust which in fact selects beneficiaries by reference to their membership of such a class would not be operating for the public benefit (just as in the Educational Grants Association Ltd case the beneficiaries were selected from a class which was too narrow and the income applied to them was not applied for charitable purposes only); and (c) the provision of scholarships to some poor students does not turn the non-charitable application of funds to the rich into a charitable application for the benefit of the public. In other words, it is not possible to turn a non-charitable operation of the school into a charitable one by providing some benefits which are for the public benefit …

Propositions (a) and (b) do have considerable force in a different context. Consider an educational grant-making institution rather than a school. Clearly, such an institution would not be a charity if its constitution required it to provide grants only to a class which excluded the poor, e g, to reimburse school fees of those well able to afford them. But suppose that its constitution allows grants to be made to all, regardless of means, so that it can as easily provide a grant to the poor as to the rich. Suppose that, in a way similar to Educational Grants Association Ltd, it gives, say, 10% of its income to the poor but gives 90% to reimburse those same school fees. It would be an almost inevitable conclusion on those facts that the selection of those to receive the 90% was being carried out not for the public benefit but for the benefit of a class which excludes the poor. It would not be a proper implementation of the institution’s charitable objects.

But the schools with which we are concerned are in a very different position. Those schools cannot as easily admit one person as another. Who a school is able to admit depends on the financial state of the school, the size of its endowment and the way in which those running the school choose to prioritise expenditure—eg, on providing scholarships or keeping class sizes down by employing more staff—and the facilities which it provides. It is necessary for all of the schools to charge fees. They do not, it seems to us, choose the majority of their students because of a preference for students who have as a characteristic an ability to pay fees; they do so because they cannot afford not to choose such students. And, of course, the charging of fees does not, as we have seen, per se preclude charitable status.

These practical constraints on free selection mean that the position of schools is very different from the position of the association in the Educational Grants Association Ltd case. Indeed, the class of those able to pay fees is different in nature from the type of private class considered in Oppenheim’s case and the Educational Grants Association Ltd case. There is no nexus at all; there is simply a shared characteristic which necessarily excludes the poor. Thus those cases do not really lend any support to the argument.

… we return to what a school has to do if it is to operate for the public benefit. … Nobody has suggested that fee-paying schools are not entitled to charitable status provided that they do enough to promote access whether by way of scholarships, bursaries or other provision, but paying regard to the need to p. 223charge fees to operate at all. Nobody complains that the schools are educating fee-paying students; the concern is that they must be seen to be doing enough for those who cannot afford fees.

This is an important distinction, because it locates the failure to act in the public benefit as being the making of inadequate provision for access by and benefits for certain sub-classes of the potential beneficiary class, the whole class being the student community at large. It may be the case that if a school which fails to meet the public benefit requirement had instead made more provision for poor students that would have meant that there was room for fewer fee-paying students, so some fee-paying students may be said to receive their education at the price of the school’s failure to operate in accordance with its charitable objects. But it does not follow from that that the provision of education for the vast majority of fee-paying students is in any way beyond the school’s charitable objects. In other words, even a fee-paying student would be receiving benefits not as a member of some inappropriate class but as a member of the general body of potential beneficiaries … although we have just described the inadequate provision for the ‘poor’ as a failure to act for the public benefit, in a sense even that is not entirely accurate. Since provision of education to fee-paying students by a school with charitable status is, of itself, for the public benefit, a school making more than de minimis or token provision, could say that the entirety of its activities were for the public benefit. But for reasons given in the next paragraph, we do not consider that to be correct. Accordingly, when we refer to a school failing to act for the public benefit, we mean that it is making inadequate provision other than the provision of education to fee-paying students.

In relation to that, there is one point of principle which we can and should resolve. There are two mutually exclusive possibilities for assessing whether the public benefit requirement is satisfied. (1) The first is that the test is satisfied if the school provides some benefit for the poor which is more than a de minimis benefit, or a token benefit for the school to be able to point at in order, as it were, to cock a snook at the Charity Commission. The justification for this approach would be that it is the de facto exclusion of the poor which prevents there being the necessary element of public benefit so that once some benefit is provided for the ‘poor’ however small—provided that it is more than de minimis or a token benefit—all of the school’s activities, including education of fee-paying students can be taken into account as part of the public benefit provided. (2) The second approach is to apply a more fact-sensitive assessment. It is to look at what a trustee, acting in the interests of the community as a whole, would do in all the circumstance[s] of the particular school under consideration and to ask what provision should be made once the threshold of benefit going beyond the de minimis or token level had been met.

We consider that the second approach is correct. Each case must depend on its own facts. It is an approach which is not, we readily acknowledge, without difficulty of application and, of its nature, it makes it very difficult to lay down guidelines … it is necessary to look at the facts of each case and to treat the matter as one of degree: the process is one of reaching a conclusion on a general survey of the circumstances and considerations regarded as relevant rather than of making a single conclusive test.

The very nature of this approach means that it is not possible to be prescriptive about the nature of the benefits which a school must provide to the poor nor the extent of them. It is for the charity trustees of the school concerned to address and assess how their obligations might best be fulfilled in the context of their own particular circumstances. … Not all of the benefits which the school provides to those other than students paying full fees need to be for the poor. We see no reason why the provision of scholarships or bursaries to students who can pay some, but not all, of the fees should not be seen as for the public benefit. Provided that the operation of the school is seen overall as being for the public benefit, with an appropriate level of benefit for the poor, a subsidy to the not so well off is to be taken account of in the public benefit. It is certainly our view that in the right circumstances, remission of fees for an existing student who has become unable to meet any of the fees due to changed circumstances, should be seen as being not only for the public benefit but as a benefit provided to a person who has become ‘poor’ …

Although it is necessary that there must be more than a de minimis or token benefit for the poor, once that low threshold is reached, what the trustees decide to do in the running of the school is a matter for them, subject to acting within the range within which trustees can properly act. That is something p. 224entirely different from imposing on the trustees the view of anyone else about what is ‘reasonable’. In some circumstances, it may be that the trustees would be acting properly if they provided a quite modest benefit for the poor in excess of the de minimis level. The public benefit requirement applicable to the school would then be fulfilled; and in that context, we repeat that provision of education to the full-fee-paying students is itself for the public benefit.

It follows that whether a particular school had provided more than a mere token public benefit is a matter for the trustees to determine and will depend on the school’s particular circumstances.

(c) Political purposes

An otherwise valid purpose for the advancement of education will not be charitable if it involves political propaganda masquerading as education, since the trust will not then be exclusively charitable.151

We have already seen that a political purpose is one that relates to a political party, or to changes in law or policy.152 The dividing line between ‘neutral’ education in certain political principles and ‘partisan’ education in support of a political party is sometimes difficult to draw, but a trust for education about party-political principles or dogma will not be charitable. In Re Hopkinson,153 a trust was declared for the ‘advancement of adult education with particular reference to … the education of men and women of all classes (on the lines of the Labour Party’s memorandum headed “A Note on Education in the Labour Party” …) to a higher conception of social, political and economic ideas and values and of the personal obligations of duty and service which are necessary for the realisation of an improved and enlightened social civilisation’. In holding this not to be charitable, Vaisey J said:154

In my judgment, there are two ways of reading the [words in the trust instrument]. They may be read, first, as equivalent to a general trust for the advancement of adult education which, standing alone, would admittedly be charitable, the super-added purpose being treated merely as a rough guide to be followed or as a hint to be taken as to the kind of adult education which the testator had in mind, the strictly educational main purpose always being adhered to, or, secondly, they may be read as indicating that the first part is to be taken as a general direction and the second part beginning with the words ‘with particular reference to’ as the particular direction dominating the whole of the trust. The second of these alternative views seems to me to be the right one. I think that the particular purpose is the main purpose of the trust, that is to say, while every or any kind of adult education is within the discretion reposed in the residuary legatees, the particular purpose referred to is, so to speak, the overriding and essential purpose, on the nature of which the validity of the whole trust depends.

In Southwood v Attorney-General,155 a trust to advance the education of the public about disarmament was held not to be charitable because the main purpose was political, in the sense of seeking a change in government policy, and the court was not in a position to determine whether unilateral disarmament was for the public benefit. Chadwick LJ said:156

There is no objection on public benefit grounds to an educational programme which begins from the premise that peace is generally preferable to war. For my part, I would find it difficult to believe that any p. 225court would refuse to accept, as a general proposition, that it promotes public benefit for the public to be educated to an acceptance of that premise. That does not lead to the conclusion that the promotion of pacifism is necessarily charitable. The premise that peace is generally preferable to war is not to be equated with the premise that peace at any price is always preferable to any war. …

I would have no difficulty in accepting the proposition that it promotes public benefit for the public to be educated in the differing means of securing a state of peace and avoiding a state of war. The difficulty comes at the next stage. There are differing views as to how best to secure peace and avoid war. To give two obvious examples: on the one hand it can be contended that war is best avoided by bargaining through strength; on the other hand it can be argued, with equal passion, that peace is best secured by disarmament, if necessary by unilateral disarmament. The court is in no position to determine that promotion of the one view rather than the other is for the public benefit. Not only does the court have no material on which to make that choice; to attempt to do so would be to usurp the role of government. So the court cannot recognise as charitable a trust to educate the public to an acceptance that peace is best secured by demilitarization … Nor, conversely, could the court recognise as charitable a trust to educate the public to an acceptance that war is best avoided by collective security through the membership of a military alliance say, NATO …

[The trust’s] object is not to educate the public in the differing means of securing a state of peace and avoiding a state of war. [The trust’s] object is to educate the public to an acceptance that peace is best secured by demilitarisation. … It is because the court cannot determine whether or not it promotes the public benefit for the public to be educated to an acceptance that peace is best secured by demilitarisation that [the trust’s] object cannot be recognised as charitable.

It would have been different if the trust’s purpose had been more balanced and less partisan. For example, in Re Koeppler’s Will Trust157 the trust sought to educate the public in the differing ways of securing peace and avoiding war, but no particular political stance was adopted, and the trust was intended to facilitate genuine discussion and the trading of ideas. Slade LJ said:158

[I]n the present case, as I have already mentioned, the activities … are not of a party-political nature. Nor, so far as the evidence shows, are they designed to procure changes in the laws or governmental policy of this or any other country: even when they touch on political matters, they constitute, so far as I can see, no more than genuine attempts in an objective manner to ascertain and disseminate the truth. In these circumstances I think that no objections to the trust arise on a political score … The trust is, in my opinion, entitled to what is sometimes called ‘benignant construction’, in the sense that the court is entitled to presume that the trustees will only act in a lawful and proper manner appropriate to the trustees of a charity and not, for example, by the propagation of tendentious political opinions.

The identification of political purposes has been of particular significance as regards the operation of students’ unions of universities and colleges. Such unions are charities, since they have a charitable purpose connected with the advancement of education, by fostering and representing the interests of students to further the educational purposes of the university or college. They must, however, operate for the public benefit. Consequently, such organizations must not use their funds for political purposes. There is a fine line between what is and is not acceptable political campaigning by students’ unions.159 As a basic rule, if the campaigning relates to an issue that furthers the interests of the students in a way that assists in the educational aims of the university or college then it will not be a political purpose. p. 226But a student union was restrained from making payment to a publicity campaign against the abolition of free milk for school children160 and another was restrained from making payments to the National Student Committee to Stop War in the Gulf,161 since, in both cases, the campaign was not related to the interests of the students of those particular unions. In the latter case, Hoffmann J said:

The Student Union is an educational charity. Its purposes are wholly charitable and its funds can be devoted to charitable purposes only. Charitable educational purposes undoubtedly include discussion of political issues: A-G v Ross [1986] 1 WLR 252 at 263, per Scott J. There is, however, a clear distinction between the discussion of political matters, or the acquisition of information which may have a political content, and a campaign on a political issue. There is no doubt that campaigning, in the sense of seeking to influence public opinion on political matters, is not a charitable activity. It is, of course, something which students are, like the rest of the population, perfectly at liberty to do in their private capacities, but it is not a proper object of the expenditure of charitable money.

Funds could, however, be spent on campaigns to improve street lighting near the campus or to demonstrate against tuition fees, since this affects the interests of students as the beneficiaries of the charity.

(c) Advancement of Religion

(i) Charitable purpose

The recognition of the advancement of religion as a charitable purpose derives from nothing more specific than the inclusion in the Preamble to the Charitable Uses Act 1601 of ‘the repair of churches’. The concept of ‘advancement of religion’ has been expanded dramatically since then. When considering whether a charity’s purpose involves the advancement of religion it is important to consider the definition of both religion and advancement.

(a) Religion

Over the years, various charities relating to Christian denominations have been recognized as involving the advancement of religion, including the Church of England, non-denominational churches, the Roman Catholic Church,162 and the Unification Church.163 In Thornton v Howe,164 a trust for the publication of the works of Joanna Southcote was considered to be for the advancement of religion, she having claimed that she was with child by the Holy Ghost and would give birth to a second Messiah. A faith-healing movement has also been held to involve the advancement of religion.165 Other religions have been recognized as well, including charities relating to the advancement of Judaism166 and Islam.

The interpretation of ‘religion’ was widened even further by the Charities Act 2011.

p. 227Charities Act 2011
3.

(2) In subsection (1)—167

(a)

in paragraph (c) ‘religion’ includes—

(i)

a religion which involves belief in more than one god, and

(ii)

a religion which does not involve belief in a god.

It follows that trusts for the advancement of Buddhism, Hinduism, and Sikhism clearly involve the advancement of religion.

The Charity Commission has provided guidance on the interpretation of religion.

Charity Commission Guidance on Charitable Purposes (2013)

When considering whether or not a system of belief constitutes a religion for the purposes of charity law, the courts have identified certain characteristics which describe a religious belief. These characteristics include:

belief in a god (or gods) or goddess (or goddesses), or supreme being, or divine or transcendental being or entity or spiritual principle (‘supreme being or entity’) which is the object or focus of the religion

a relationship between the believer and the supreme being or entity by showing worship of, reverence for or veneration of the supreme being or entity

a degree of cogency, cohesion, seriousness and importance

an identifiable positive, beneficial, moral or ethical framework.

The courts have held that certain belief systems cannot be characterized as religious. So, for example, in Re South Place Ethical Society168 the objects of the Society were ‘the study and dissemination of ethical principles and the cultivation of a rational religious sentiment’. Dillon J, in holding that this was not for the advancement of religion,169 said:170

In a free country … it is natural that the court should desire not to discriminate between beliefs deeply and sincerely held, whether they are beliefs in a god or in the excellence of man or in ethical principles or in Platonism or some other scheme of philosophy. But I do not see that that warrants extending the meaning of the word ‘religion’ so as to embrace all other beliefs and philosophies. Religion, as I see it, is concerned with man’s relations with God, and ethics are concerned with man’s relations with man. The two are not the same, and are not made the same by sincere inquiry into the question: what is God? If reason leads people not to accept Christianity or any known religion, but they do believe in the excellence of qualities such as truth, beauty and love, or believe in the Platonic concept of the ideal, their beliefs may be to them the equivalent of a religion, but viewed objectively they are not religion. The ground of p. 228the opinion of the court, in the United States Supreme Court, that any belief occupying in the life of its possessor a place parallel to that occupied by belief in God in the minds of theists prompts the comment that parallels, by definition, never meet.

Although Dillon J indicated that religion required faith in a god and worship of that god, this is now inconsistent with the statutory definition of religion. But, even with the new definition, a trust for the advancement of ethical principles or humanism would not be a trust for the advancement of religion, since there still needs to be a belief in some form of supreme being or entity that is worshipped, venerated, or revered; but another head of charity might be relevant, such as the advancement of education. The Charity Commission has decided that the Temple of the Jedi Order is not a religion for the purposes of charity law.171 The Temple of the Jedi Order defined Jediism as ‘a religion based on the observance of the Force, the ubiquitous and metaphysical power that a Jedi (a follower of Jediism) believes to be the underlying, fundamental nature of the universe’. The Charity Commission did not consider this to be a religion since there was scope for it to be a secular belief system.

Is Scientology a religion? In 1999, the Charity Commission172 decided that the Church of Scientology should not be registered as a charity. It concluded that:

Scientology is not a religion for the purposes of English charity law. That religion for the purposes of charity law constitutes belief in a supreme being and worship of that being. That it is accepted that Scientology believes in a supreme being. However, the core practices of Scientology, being auditing173 and training,174 do not constitute worship as they do not display the essential characteristic of reverence or veneration for a supreme being.

In Australia, however, Scientology has been held to be a religion for tax purposes.175 It is likely that the effect of the wider definition of religion under the Charities Act 2011 will mean that Scientology might now be classed as a religion, since there is no longer any need for a belief in a supreme being. Scientology was so characterized by the Supreme Court in R (on the application of Hodkin) v Registrar of Births, Deaths and Marriages,176 for purposes of determining that a Scientology chapel was a place of worship and so could be registered for weddings. Lord Toulson said:177

I would describe religion in summary as a spiritual or non-secular belief system, held by a group of adherents, which claims to explain mankind’s place in the universe and relationship with the infinite, and to teach its adherents how they are to live their lives in conformity with the spiritual understanding associated with the belief system. By spiritual or non-secular I mean a belief system which goes beyond that which can be perceived by the senses or ascertained by the application of science. I prefer not to use the word ‘supernatural’ to express this element, because it is a loaded word which can carry a variety of connotations. Such a belief system may or may not involve belief in a supreme being, but it does involve p. 229a belief that there is more to be understood about mankind’s nature and relationship to the universe than can be gained from the senses or from science. I emphasise that this is intended to be a description and not a definitive formula.

Even though Scientology might now satisfy the charitable definition of religion, it will still be necessary to establish public benefit, which was a further reason why the Charity Commission refused to register it as a charity in 1999. It still has not been registered, presumably for that reason.178

(b) Advancement

The advancement of religion has been defined as taking positive steps to promote or spread religious belief.179 It was because freemasonry does not do this that it was held not to involve the advancement of religion.

United Grand Lodge of Ancient Free and Accepted Masons of England v Holborn Borough Council
[1957] 1 WLR 1080, 1090 (Donovan J)

Accordingly, one cannot really begin to argue that the main object of freemasonry is to advance religion, except perhaps by saying that religion can be advanced by example as well as by precept, so that the spectacle of a man leading an upright moral life may persuade others to do likewise. The appellants did not in fact advance this argument, but even if it were accepted, it leads to no useful conclusion here. For a man may persuade his neighbour by example to lead a good life without at the same time leading him to religion. And there is nothing in the constitution, nor, apparently, in the evidence tendered to the appeals committee, to support the view that the main object of masonry is to encourage masons to go out in the world and by their example lead persons to some religion or another.

When one considers the work done by organizations which admittedly do set out to advance religion, the contrast with masonry is striking. To advance religion means to promote it, to spread its message ever wider among mankind; to take some positive steps to sustain and increase religious belief; and these things are done in a variety of ways which may be comprehensively described as pastoral and missionary. There is nothing comparable to that in masonry. This is not said by way of criticism. For masonry really does something different. It says to a man, ‘whatever your religion or your mode of worship, believe in a Supreme Creator and lead a good moral life’. Laudable as this precept is, it does not appear to us to be the same thing as the advancement of religion. There is no religious instruction, no programme for the persuasion of unbelievers, no religious supervision to see that its members remain active and constant in the various religions they may profess, no holding of religious services, no pastoral or missionary work of any kind.

(ii) Public benefit

Before the enactment of the Charities Act 2011, all charitable trusts for the advancement of religion were presumed to be beneficial. Now, this has to be proven by evidence that is acceptable to the court; the faith of a particular religion that prayer and intercession will confer a benefit on the public is not p. 230sufficient.180 It seems that the concept of public benefit under this head is similar to that in the case of education, but not identical,181 since, whilst the pupils of an independent school may form a section of the public for the purposes of education, the same is not necessarily true of the members of a cloistered order in the context of religion. This was recognized by the House of Lords in Gilmour v Coats.182

Gilmour v Coats
[1949] AC 426

A gift was made in trust for a Carmelite Priory. The Priory was a community of strictly cloistered nuns, who devoted their lives to prayer, contemplation, penance, and self-sanctification. They engaged in no works outside the convent. It was held that the purposes of the Priory lacked the element of public benefit that was necessary to make them charitable.

Lord Simonds:

It is the established belief of the Roman Catholic Church … that the prayers and other spiritual penances and exercises, in which the nuns engage for the benefit of the public, in fact benefit the public by drawing down upon them grace from God, which enables those who are not yet Christians to embrace the Christian religion and those who are already Christians to practise Christianity more fully and fruitfully, and, further that the prayers and other spiritual exercises of the nuns are the more efficacious by virtue of the fact that they devote their lives with especial devotion to the service of God. It is this benefit to all the world, arising from the value of their intercessory prayers, that the appellant puts in the forefront of her case in urging the charitable purpose of the trust.

Nor is it only on the intercessory value of prayer that the appellant relies for the element of public benefit in their lives. For it is the evidence of Cardinal Griffin—and I do not pause to ask whether it is evidence of fact or opinion—that the practice of the religious life by the Carmelite nuns and other religions is a source of great edification to other Catholics—and indeed in innumerable cases to non-Catholics—leading them to a higher estimation of spiritual things and to a greater striving after their own spiritual perfection and that the knowledge that there are men and women who are prepared to sacrifice all that the worldly in man holds dear in order to attain a greater love of God and union with Him inculcates in them a greater estimation of the value and importance of the things which are eternal than they would have if they had not these examples before them. Here then is the second element of public benefit on which the appellant relies, the edification of a wider public by the example of lives devoted to prayer.

I will reserve for final consideration an argument which was not urged in the courts below; that the trusts declared by the settlement are beneficial to the public, in that qualification for admission to the community is not limited to any private group of persons but any person being a female Roman Catholic may be accepted, and therefore those trusts provide facilities for the intensified and most complete practice of religion by those members of the public who have a vocation for it …

I turn then to the question whether, apart from this final consideration, the appellant has established that there is in the trusts which govern this community the element of public benefit which is the necessary condition of legal charity …

I need not go beyond the case of Cocks v Manners (1871) LR 12 Eq 574 which was decided nearly 80 years ago by Wickens V-C. In that case the testatrix left her residuary estate between a number of religious institutions, one of them being the Dominican Convent at Carisbrooke, a community not differing p. 231in any material respect from the community of nuns now under consideration. The learned judge … used these words … (1871) LR 12 Eq 574 at 585:

‘A voluntary association of women for the purpose of working out their own salvation by religious exercises and self denial seems to me to have none of the requisites of a charitable institution, whether the word “charitable” is used in its popular sense or in its legal sense. It is said, in some of the cases, that religious purposes are charitable, but that can only be true as to religious services tending directly or indirectly towards the instruction or the edification of the public; an annuity to an individual, so long as he spent his time in retirement and constant devotion, would not be charitable, nor would a gift to ten persons, so long as they lived together in retirement and performed acts of devotion, be charitable. Therefore the gift to the Dominican Convent is not, in my opinion, a gift on a charitable trust.’

No case, said the learned Vice-Chancellor, had been cited to compel him to come to a contrary conclusion, nor has any such case been cited to your Lordships. Nor have my own researches discovered one. But since that date the decision in Cocks v Manners has been accepted and approved in numerous cases …

My Lords, I would speak with all respect and reverence of those who spend their lives in cloistered piety, and in this House of Lords Spiritual and Temporal, which daily commences its proceedings with intercessory prayers, how can I deny that the Divine Being may in His wisdom think fit to answer them? But, my Lords, whether I affirm or deny, whether I believe or disbelieve, what has that to do with the proof which the court demands that a particular purpose satisfies the test of benefit to the community? Here is something which is manifestly not susceptible of proof. But, then it is said, this is a matter not of proof but of belief: for the value of intercessory prayer is a tenet of the Catholic faith, therefore in such prayer there is benefit to the community. But it is just at this ‘therefore’ that I must pause. It is, no doubt, true that the advancement of religion is, generally speaking, one of the heads of charity. But it does not follow from this that the court must accept as proved whatever a particular church believes. The faithful must embrace their faith believing where they cannot prove; the court can act only on proof. A gift to two or ten or a hundred cloistered nuns in the belief that their prayers will benefit the world at large does not from that belief alone derive validity any more than does the belief of any other donor for any other purpose …

I turn to the second of the alleged elements of public benefit, edification by example. And I think that this argument can be dealt with very shortly. It is in my opinion sufficient to say that this is something too vague and intangible to satisfy the prescribed test. The test of public benefit has, I think, been developed in the last two centuries. To-day it is beyond doubt that that element must be present. No court would be rash enough to attempt to define precisely or exhaustively what its content must be. But it would assume a burden which it could not discharge if now for the first time it admitted into the category of public benefit something so indirect, remote, imponderable and, I would add, controversial as the benefit which may be derived by others from the example of pious lives. …

It remains finally to deal with an argument which, as I have said, was not presented to the Court of Appeal but appears in the appellant’s formal case. It is that the element of public benefit is supplied by the fact that qualification for admission to membership of the community is not limited to any group of persons but is open to any woman in the wide world who has the necessary vocation. Thus, it is said, just as the endowment of a scholarship open to public competition is a charity, so also is a gift to enable any woman (or, presumably, any man) to enter a fuller religious life a charity. To this argument which, it must be admitted, has a speciously logical appearance, the first answer is that which I have indicated earlier in this opinion. There is no novelty in the idea that a community of nuns must, if it is to continue, from time to time obtain fresh recruits from the outside world … It is a trite saying that the law is life, not logic. But it is, I think, conspicuously true of the law of charity that it has been built up not logically but empirically. It would not, therefore, be surprising to find that, while in every category of legal charity some element of public benefit must be present, the court had not adopted the same measure in regard to different categories, but had accepted one standard in regard to those gifts which are alleged to be p. 232for the advancement of education and another for those which are alleged to be for the advancement of religion, and it may be yet another in regard to the relief of poverty. To argue by a method of syllogism or analogy from the category of education to that of religion ignores the historical process of the law. Nor would there be lack of justification for the divergence of treatment which is here assumed. For there is a legislative and political background peculiar to so-called religious trusts, which has I think influenced the development of the law in this matter. Thus, even if the simple argument that, if education is a good thing, then the more education the better, may appear to be irrefutable, to repeat that argument substituting ‘religion’ for ‘education’ is to ignore the principle which I understand to be conceded that not all religious purposes are charitable purposes … Upon this final argument I would add this observation. I have stressed the empirical development of the law of charity and your Lordships may detect some inconsistency in an attempt to rationalise it. But it appears to me that it would be irrational to the point of absurdity on the one hand to deny to a community of contemplative nuns the character of a charitable institution but on the other to accept as a charitable trust a gift which had no other object than to enable it to be maintained in perpetuity by recruitment from the outside world.

Finally I would say this. I have assumed for the purpose of testing this argument that it is a valid contention that a gift for the advancement of education is necessarily charitable if it is not confined within too narrow limits. But that assumption is itself difficult to justify … if it can be imagined that it was made a condition of a gift for the advancement of education that its beneficiaries should lead a cloistered life and communicate to no one, and leave no record of, the fruits of their study, I do not think that the charitable character of the gift could be sustained.

This decision can usefully be contrasted with Re Hetherington,183 where the testatrix had left her estate to a Roman Catholic Church for masses for her soul. In holding that this was a charitable gift, Sir Nicolas Browne-Wilkinson V-C said:184

The grounds on which the trust in the present case can be attacked are that there is no express requirement that the Masses for souls which are to be celebrated are to be celebrated in public. The evidence shows that celebration in public is the invariable practice but there is no requirement of Canon law to that effect. Therefore it is said the money could be applied to saying Masses in private which would not be charitable since there would be no sufficient element of public benefit.

In my judgment the cases establish the following propositions …

(2)

The celebration of a religious rite in public does confer a sufficient public benefit because of the edifying and improving effect of such celebration on the members of the public who attend. As Lord Reid said in Gilmour v Coats at 459:

‘A religion can be regarded as beneficial without it being necessary to assume that all its beliefs are true, and a religious service can be regarded as beneficial to all those who attend it without it being necessary to determine the spiritual efficacy of that service or to accept any particular belief about it.’

(3)

The celebration of a religious rite in private does not contain the necessary element of public benefit since any benefit by prayer or example is incapable of proof in the legal sense, and any element of edification is limited to a private, not public, class of those present at the celebration …

p. 233

Where there is a gift for a religious purpose which could be carried out in a way which is beneficial to the public (i.e. by public Masses) but could also be carried out in a way which would not have sufficient element of public benefit (i.e. by private Masses) the gift is to be construed as a gift to be carried out only by the methods that are charitable, all non-charitable methods being excluded …

Applying those principles to the present case, a gift for the saying of Masses is prima facie charitable, being for a religious purpose. In practice, those Masses will be celebrated in public which provides a sufficient element of public benefit. The provision of stipends for priests saying the Masses, by relieving the Roman Catholic Church pro tanto of the liability to provide such stipends, is a further benefit. The gift is to be construed as a gift for public Masses … private Masses not being permissible since it would not be a charitable application of the fund for a religious purpose.

The provision of a stipend was beneficial since this would relieve the Church of part of its liability to pay priests, so there was a clear financial benefit to the Church which would enable its resources to be allocated elsewhere.

The interpretation of public benefit in Gilmour v Coats requiring engagement of the religious with the surrounding community was applied in Neville Estates Ltd v Madden.185 In holding that the trustees of a Jewish synagogue in Catford held land on charitable trusts, Cross J said:186

I turn now to the argument that this is a private, not a public trust … The trust with which I am concerned resembles that in Gilmour v Coats [1949] AC 426 in this, that the persons immediately benefited by it are not a section of the public but the members of a private body. All persons of the Jewish faith living in or about Catford might well constitute a section of the public, but the members for the time being of the Catford Synagogue are no more a section of the public than the members for the time being of a Carmelite Priory. The two cases, however, differ from one another in that the members of the Catford Synagogue spend their lives in the world, whereas the members of a Carmelite Priory live secluded from the world. If once one refuses to pay any regard—as the courts refused to pay any regard—to the influence which these nuns living in seclusion might have on the outside world, then it must follow that no public benefit is involved in a trust to support a Carmelite Priory. As Lord Greene said in the Court of Appeal [1948] Ch 340 at 345: ‘having regard to the way in which the lives of the members are spent, the benefit is a purely private one’. But the court is, I think, entitled to assume that some benefit accrues to the public from the attendance at places of worship of persons who live in this world and mix with their fellow citizens. As between different religions the law stands neutral, but it assumes that any religion is at least likely to be better than none.

But then it is said—and it is this part of the argument that has caused me the greatest difficulty: ‘but this is a case of self-help’ …

Generally speaking, no doubt, an association which is supported by its members for the purposes of providing benefits for themselves will not be a charity. But I do not think that this principle can apply with full force in the case of trusts for religious purposes. As Lord Simonds [in Gilmour v Coats] pointed out, the law of charity has been built up not logically but empirically, and there is a political background peculiar to religious trusts which may well have influenced the development of the law with regard to them.

The significance of the public benefit to trusts for the advancement of religion is especially well illustrated by the decision of the Charity Commission187 to refuse to register the Church of Scientology as a charity. The Commission found that the public benefit requirement was not satisfied because practice of p. 234the religion was essentially private, being limited to a private class of individuals and involving private activities of auditing and training.

It is clear from these cases that both elements of public benefit need to be considered carefully, but they can often be established in the same way. Some benefit must be identified from the advancement of religion that cannot be too vague or intangible. The benefit from prayer or from edification by example will not suffice; there needs to be some direct engagement with the community. This will also satisfy the public requirement. So, for example, in Funnell v Stewart,188 it was held that a trust for faith-healing work was a valid charitable trust for the advancement of religion. Public benefit was established because, although faith-healing sessions were not advertised, they were open to the public; potential attendance by members of the public was sufficient to show public benefit. It was then assumed that such attendance would be beneficial, given the old presumption of benefit that applied under the head of charity of religion; there was no need to assess whether faith healing was effective. Since, today, benefit can no longer be presumed, it might now be necessary to assess the efficacy of faith healing to determine whether there is a public benefit, by considering both the numbers who attended and how many had been healed, or who had at least obtained solace from attending the sessions.

(d) Advancement of Health or the Saving of Lives

Charities Act 2011

3(2) (b) … ‘the advancement of health’ includes the prevention or relief of sickness, disease or human suffering;

Although advancing health and saving lives is a new head of charitable purpose, it has long been recognized as charitable. In particular, trusts for hospitals have been charitable for hundreds of years. This has included trusts for private hospitals, even though the patients had to pay fees for admission and treatment, as long as the hospital was not a commercial, profit-making concern. In Re Resch’s Will Trusts, such a trust was held by the Privy Council to satisfy the public benefit test.

Re Resch’s Will Trusts
[1969] 1 AC 514

A gift was made to St Vincent’s Private Hospital, which was a private non-profit-making hospital.

Lord Wilberforce:

St Vincent’s Private Hospital … was established and has since 1909 been conducted by the Sisters of Charity, a voluntary association or congregation of women, governed by their constitution under which they devote themselves without reward to good works. The Sisters also conducted in 1909 and still conduct the adjacent St Vincent’s Hospital which is a public hospital … The evidence shows that the reason for the establishment of the private hospital was to relieve the pressing demand of the public for p. 235admission to the general hospital which was quite inadequate to the demand upon it. Another reason was that there were many persons who needed hospital nursing and attention who were not willing to enter a public hospital but were willing and desirous of having hospital accommodation with more privacy and comfort than would be possible in the general hospital. The establishment of an adjacent private hospital would enable the honorary medical staff in the general hospital to admit for treatment under their care in the private hospital patients who were reluctant to enter the general hospital and were able and willing to pay reasonable and proper fees for admission and treatment in a private hospital. The private hospital has 82 beds as compared with over 500 in the general hospital. …

A gift for the purposes of a hospital is prima facie a good charitable gift … because the provision of medical care for the sick is, in modern times, accepted as a public benefit suitable to attract the privileges given to charitable institutions …

In spite of this general proposition, there may be certain hospitals, or categories of hospitals, which are not charitable institutions … Disqualifying indicia may be either that the hospital is carried on commercially, i.e., with a view to making profits for private individuals, or that the benefits it provides are not for the public, or a sufficiently large class of the public to satisfy the necessary tests of public character. Each class of objection is taken in the present case. As regards the first, it is accepted that the private hospital is not run for the profit, in any ordinary sense, of individuals. Moreover, if the purposes of the hospital are otherwise charitable, they do not lose this character merely because charges are made to the recipients of benefits … But what is said is that surpluses are made and are used for the general purposes of the Sisters of Charity. This association, while in a broad sense philanthropic, has objects which may not be charitable in the legal sense.

… whatever the Sisters of Charity may be empowered to do with regard to their general property, as regards the share of income of the residuary estate, given to them as trustees, they are bound by the trusts declared in the will under which any money received by them must be applied exclusively for the general purposes of the private hospital as above defined. As regards these purposes, it appears, from the evidence already summarised, that the making of profits for the benefit of individuals is not among them. The most that is shown is that, on a cash basis, and without making such adjustments as would be required for commercial accounting, a net surplus is produced over the years which in fact has been applied largely, though not exclusively for hospital purposes. The share of income given by the will must be devoted entirely to the purposes of the private hospital. The character, charitable or otherwise, of the general activities of the Sisters, is not therefore a material consideration …

Their Lordships turn to the second objection. This, in substance, is that the private hospital is not carried on for purposes ‘beneficial to the community’ because it provides only for persons of means who are capable of paying the substantial fees required as a condition of admission.

In dealing with this objection, it is necessary first to dispose of a misapprehension. It is not a condition of validity of a trust for the relief of the sick that it should be limited to the poor sick … As early as Income Tax Special Comrs v Pemsel Lord Herschell was able to say [1891] AC 531 at 571:

‘I am unable to agree with the view that the sense in which “charities” and “charitable purpose” are popularly used is so restricted as this. I certainly cannot think that they are limited to the relief of wants occasioned by lack of pecuniary means. Many examples may, I think, be given of endowments for the relief of human necessities, which would be as generally termed charities as hospitals or almshouses, where, nevertheless, the necessities to be relieved do not result from poverty in its limited sense of the lack of money.’

Similarly in Verge v Somerville [1924] AC 496 Lord Wrenbury, delivering the judgment of this Board on an appeal from New South Wales, pointed out that trusts for education and religion do not require any qualification of poverty to be introduced to give them validity and held generally that poverty is not a necessary qualification in trusts beneficial to the community … [The appellants] based their argument on p. 236the narrower proposition that a trust could not be charitable which excluded the poor from participation in its benefits. The purposes of the private hospital were, they said, to provide facilities for the well-to-do: an important section of the community was excluded: the trusts could not therefore be said to be for the benefit of the community. There was not sufficient ‘public element’ …

To support this, they appealed to some well-known authorities. [His Lordship referred to Jones v Williams (1767) Amb 651 and Re Macduff [1896] 2 Ch 451.]

Their Lordships accept the correctness of what has been said in those cases, but they must be rightly understood. It would be a wrong conclusion from them to state that a trust for the provision of medical facilities would necessarily fail to be charitable merely because by reason of expense they could only be made use of by persons of some means. To provide, in response to public need, medical treatment otherwise inaccessible but in its nature expensive, without any profit motive, might well be charitable: on the other hand to limit admission to a nursing home to the rich would not be so. The test is essentially one of public benefit, and indirect as well as direct benefit enters into the account. In the present case, the element of public benefit is strongly present. It is not disputed that a need exists to provide accommodation and medical treatment in conditions of greater privacy and relaxation than would be possible in a general hospital and as a supplement to the facilities of a general hospital. This is what the private hospital does and it does so at, approximately, cost price. The service is needed by all, not only by the well-to-do. So far as its nature permits it is open to all: the charges are not low, but the evidence shows that it cannot be said that the poor are excluded: such exclusion as there is, is of some of the poor—namely, those who have (a) not contributed sufficiently to a medical benefit scheme or (b) need to stay longer in the hospital than their benefit will cover or (c) cannot get a reduction of or exemption from the charges. The general benefit to the community of such facilities results from the beds and medical staff of the general hospital, the availability of a particular type of nursing and treatment which supplements that provided by the general hospital and the benefit to the standard of medical care in the general hospital which arises from the juxtaposition of the two institutions.

This is consistent with the Charity Commission guidance on Public Benefit,189 which emphasizes that any private benefits must be incidental to the fulfilment of the charity’s aims. It is also consistent with the analysis of incidental benefits by the Upper Tribunal in The Independent Schools Council v The Charity Commission for England and Wales.190

(e) Advancement of Citizenship or Community Development

Charities Act 2011
3. (2) (c)

… [this] includes—

(i)

rural or urban regeneration, and

(ii)

the promotion of civic responsibility, volunteering, the voluntary sector or the effectiveness or efficiency of charities …

p. 237Aspects of this new head of charitable purpose were previously recognized at common law with reference to the more general head of purposes that are beneficial to the community. But, as always, it is important to satisfy the public benefit requirement and to ensure that the purposes of the trust are exclusively charitable. The significance of these requirements is illustrated by IRC v Oldham Training and Enterprise Council.191 The objects of the Oldham Training and Enterprise Council (‘TEC’) included the promotion of vocational education; the training and retraining of the public; and the promotion of industry, commerce, and enterprise for the benefit of the public in and around Oldham. Lightman J said:192

It is a matter of general public utility that the unemployed should be found gainful activity and that the state should be relieved of the burden of providing them with unemployment and social security benefits …

Oldham TEC is an altruistic organisation, in the sense that no profit or benefit can be conferred on its members, and its raison d’être is to assist others; its objects clauses place stress on its overall objective of benefiting the public or community in or around Oldham; and it is substantially publicly funded, financed by government grants. Further, certain of its objects are indisputably charitable. The question raised is whether the remaining objects viewed in this context can and should be construed as subject to the implicit limitation ‘so far as charitable’. There is of course no such express limitation. In my judgment on a careful examination of the objects clauses no such limitation can be implied or is compatible with the range of benefits and of the eligible recipients of such benefits which it is the object of Oldham TEC to provide.

To ascertain the objects of an institution such as Oldham TEC, where the objects are comprehensively set out in a document, it is necessary to refer to that document (in this case the memorandum of association) and to that alone. It is irrelevant to inquire into the motives of the founders or how they contemplated or intended that Oldham TEC should operate or how it has in fact operated. To determine whether the object, the scope of which has been ascertained by due process of construction, is a charitable purpose, it may be necessary to have regard to evidence to discover the consequences of pursuing that object (see Incorporated Council of Law Reporting for England and Wales v A-G [1972] Ch 73 at 99 per Buckley LJ). What the body has done in pursuance of its objects may afford graphic evidence of the potential consequences of the pursuit of its objects.

Under the unamended objects clause, the second main object, namely promoting trade, commerce and enterprise, and the ancillary object, of providing support services and advice to and for new businesses, on any fair reading must extend to enabling Oldham TEC to promote the interests of individuals engaged in trade, commerce or enterprise and provide benefits and services to them … Such efforts on the part of Oldham TEC may be intended to make the recipients more profitable and thereby, or otherwise, to improve employment prospects in Oldham. But the existence of these objects, in so far as they confer freedom to provide such private benefits, regardless of the motive or the likely beneficial consequences for employment, must disqualify Oldham TEC from having charitable status. The benefits to the community conferred by such activities are too remote.

Since the objects as a whole were not exclusively charitable,193 it followed that the Council was not a charity.

(f)p. 238 Advancement of the Arts, Culture, Heritage, or Science

Before the Charities Act 2011 recognized this distinct head of charitable purpose, trusts for the advancement of the arts, culture, heritage, or science would be upheld as charitable only if they were considered to be for the advancement of education or for other purposes beneficial to the community. Today, such purposes do not need to be squeezed within the definition of education and are explicitly recognized as charitable purposes in their own right, but they must still satisfy the public benefit test.

When assessing the public benefit of trusts for such purposes, there must be some utility for the public in carrying out the particular purpose. So, where the trust purports to advance the arts or culture, it is necessary to consider whether it has any artistic merit. For example, in Re Delius194 a trust for the promotion of the work of the famous composer Delius was considered to be a charitable trust for the advancement of education. Roxburgh J said:195

It seems to me that in very truth the purpose [of this trust] is the spreading and establishment of knowledge and appreciation of Delius’s works amongst the public of the world … and the question is whether that purpose is charitable in the eye of the law? I can do no better in this connexion than to read certain passages from the judgment of Lord Greene MR in Royal Choral Society v IRC [1943] 2 All ER 101. There are, of course, certain points which necessarily occur to the mind in connexion with a musical composition. It might be suggested as regards some music, at any rate, that its purpose was limited to giving pleasure, and as regards all music it must be said that it gives pleasure. That is a feature about music. When I say ‘all music’, I mean all that can be truly called music. Indeed, a lot of pleasure is derived by some from something which can hardly be truly called music, but, at any rate, pleasure is a circumstance intimately connected with music. But that in itself does not operate to destroy the charitable character of a bequest for the advancement of the art of music. I adopt, with great satisfaction, the words of Lord Greene [1943] 2 All ER 101 at 104:

‘Curiously enough, some people find pleasure in providing education. Still more curiously, some people find pleasure in being educated: but the element of pleasure in those processes is not the purpose of them, but what may be called a by-product which is necessarily there.’

That seems to me to be all that need be said about the aspect of pleasure connected with the music of Delius …

I do not find it necessary to consider what the position might be if the trusts were for the promotion of the works of some inadequate composer. It has been suggested that perhaps I should have no option but to give effect even to such a trust. I do not know, but I need not investigate that problem, because counsel who have argued before me have been unanimous in the view that the standard of Delius’s work is so high that that question does not arise in the present case.

The point which has been made—and it is one of interest and importance—is, that first of all this trust is not a trust for the promotion of music in general but the music of a particular individual composer. That could not of itself vitiate the charitable nature of the trust, because, after all, aesthetic appreciation of music in a broad sense can only be derived from aesthetic appreciation of the works of a large number of composers. It is the aggregate of the work of a large number of composers which is the basis of the aesthetic appreciation, and, therefore, if it is charitable to promote music in general it must be charitable to promote the music of a particular composer, presupposing (as in this case I can assume) that the composer is one whose music is worth appreciating …p. 239

I cannot conceive that anybody would doubt that a trust to promote the works of Beethoven would be charitable, but the real strength of the point put in this case arises from the fact that this trust was created by the widow of Delius, and nobody would doubt that, amongst the many motives which actuated her, affection for her deceased husband was to be found. But one must be careful to distinguish motive from purpose, because motive is not relevant in these cases except in so far as it is incorporated into the purpose. Considering the purposes, it is possible to approach the purposes upon the hypothesis that their intention was … to enhance her husband’s reputation.

This is, of course, rather subtle. It is a question which is the cart and which is the horse, because, of course, the more aesthetic appreciation of Delius’s music is achieved the more Delius’s reputation will necessarily be enhanced. The two things fit together, and there is no doubt whatever that both objects have in fact already been to a large extent achieved. But, in my judgment, it is not fair to approach the problem from that point of view. I think that there is every reason to suppose that the testatrix took the view, and was well advised to take it, that if the work of Delius was brought before the public in an efficient manner, the aesthetic appreciation of the public would grow and, inherent in that growth, would be the enhancement of Delius’s reputation, which was in itself a desirable thing, and I for my part refuse to disentangle it. There is no reliable evidence on which I can disentangle it. What is quite clear to me is that these purposes would plainly be charitable if for the name ‘Delius’ the name ‘Beethoven’ were substituted and, in my judgment, they do not cease to be charitable because in this context the name is ‘Delius’ and not ‘Beethoven’.

That there may be cases in which the art or culture is not beneficial is illustrated by Re Pinion.196 The testator had provided in his will that his studio and contents, which included pictures, furniture, china, glass, and objets d’art, should be offered to the National Trust, kept intact in the studio, and displayed to the public. The Court of Appeal held that the trust was not for the advancement of education and was void. Harman LJ said:

It would appear that a gift to an established museum is charitable: see British Museum Trustees v White (1826) 2 Sim & St 594. In Re Holburne (1885) 53 LT 212 a gift to trustees of objects of art to form an art museum in Bath open to the public and a fund to endow it was held a valid charitable gift as being of public utility or benefit. No question was there raised as to the merit of the collection. It must have been agreed that such merit existed, for everyone assumed it, including the judge. I conclude that a gift to found a public museum may be assumed to be charitable as of public utility if no one questions it … Where a museum is concerned and the utility of the gift is brought in question it is, in my opinion, and herein I agree with the judge, essential to know at least something of the quality of the proposed exhibits in order to judge whether they will be conducive to the education of the public. So I think with a public library, such a place if found to be devoted entirely to works of pornography or of a corrupting nature, would not be allowable. Here it is suggested that education in the fine arts is the object. For myself a reading of the will leads me rather to the view that the testator’s object was not to educate anyone, but to perpetuate his own name and the repute of his family, hence perhaps the direction that the custodian should be a blood relation of his. However that may be, there is a strong body of evidence here that as a means of education this collection is worthless. The testator’s own paintings, of which there are over 50, are said by competent persons to be in an academic style and ‘atrociously bad’ and the other pictures without exception worthless. Even the so-called ‘Lely’ turns out to be a 20th-century copy.

Apart from pictures there is a haphazard assembly—it does not merit the name collection, for no purpose emerges, no time nor style is illustrated—of furniture and objects of so-called ‘art’ about which expert opinion is unanimous that nothing beyond the third-rate is to be found. Indeed one of the experts p. 240expresses his surprise that so voracious a collector should not by hazard have picked up even one meritorious object. The most that skilful cross-examination extracted from the expert witnesses was that there were a dozen chairs which might perhaps be acceptable to a minor provincial museum and perhaps another dozen not altogether worthless, but two dozen chairs do not make a museum and they must, to accord with the will, be exhibited stifled by a large number of absolutely worthless pictures and objects.

It was said that this is a matter of taste … but here I agree with the judge that there is an accepted canon of taste on which the court must rely, for it has itself no judicial knowledge of such matters, and the unanimous verdict of the experts is as I have stated. The judge with great hesitation concluded that there was that scintilla of merit which was sufficient to save the rest. I find myself on the other side of the line. I can conceive of no useful object to be served in foisting upon the public this mass of junk. It has neither public utility nor educative value. I would hold that the testator’s project ought not to be carried into effect and that his next-of kin is entitled to the residue of his estate.

Today the same decision would probably be reached with reference to the charitable purpose relating to culture and heritage, either because it would not meet the definition of the charitable purpose as a matter of law or, because it would not satisfy the public benefit test as a matter of fact.

Even if the trust does promote culture or heritage and is regarded as beneficial, it must still be shown that the benefit is available for a sufficient section of the public and that the purposes are exclusively charitable. So, for example, in Williams’ Trustees v IRC,197 a trust to maintain an institute and meeting place for the benefit of Welsh people in London, with a view to creating a centre to promote the moral, social, spiritual, and educational welfare of Welsh people, was held by the House of Lords not to be charitable. Lord Simonds said:198

[A] trust in order to be charitable must be of a public character. It must not be merely for the benefit of particular private individuals: if it is, it will not be in law a charity though the benefit taken by those individuals is of the very character stated in the preamble … I may however refer to a recent case in this House which in some aspects resembles the present case. In Keren Kayemeth le Jisroel Ltd v IRC [1932] AC 650 a company had been formed which had as its main object (to put it shortly) the purchase of land in Palestine, Syria or other parts of Turkey in Asia and the peninsula of Sinai for the purpose of settling Jews on such lands. In its memorandum it took numerous other powers which were to be exercised only in such a way as should in the opinion of the company be conducive to the attainment of the primary object. No part of the income of the company was distributable among its members. It was urged that the company was established for charitable purposes for numerous reasons, with only one of which I will trouble your Lordships, namely, that it was established for the benefit of the community or of a section of the community, namely, Jews, whether the association was for the benefit of Jews all over the world or of the Jews repatriated in the Promised Land. Lord Tomlin dealing with the argument that I have just mentioned upon the footing that, if benefit to ‘a community’ could be established the purpose might be charitable, proceeded to examine the problem in that aspect and sought to identify the community. He failed to do so, finding it neither in the community of all Jews throughout the world nor in that of the Jews in the region prescribed for settlement. It is perhaps unnecessary to pursue the matter. Each case must be judged on its own facts and the dividing line is not easily drawn. But the difficulty of finding the community in the present case, when the definition of ‘Welsh people’ in the first deed is remembered, would not I think be less than that of finding the community of Jews in Keren’s case.

p. 241If the validity of this trust as a charity were to be considered today, the public benefit might be identified because the class would not, presumably, be numerically small and would not be defined with reference to a personal nexus.199 Some of the purposes of the charity would also fall within the new head of advancing culture or heritage, especially since the trust sought to foster the study of the Welsh language, history, music, literature, and art. The problem, however, would still be that there were other purposes that were non-charitable, including providing a meeting place for ‘social intercourse, study, reading, rest, recreation and refreshment’. Since these purposes are not exclusively charitable,200 the trust would still not be treated as charitable.

(g) Advancement of Amateur Sport

Before the enactment of the Charities Act 2011, trusts for the provision of sporting facilities or the encouragement of sport were not charitable as such. But if the facilities or sporting activities were for pupils of schools or universities,201 or if the game was itself of an educational nature, the trusts would be for the advancement of education. With the recognition of the advancement of amateur sport as a charitable purpose in its own right, such artificial interpretation of other charitable purposes is not required.

The Charities Act 2011 has clarified the meaning of sport as follows:

Charities Act 2011
3.

(2) (d) … ‘sport’ means sports or games which promote health by involving physical or mental skill or exertion …

This encompasses team sports, such as football, and solo sports, such as athletics, but it would also encompass chess, because of the mental skill involved.202 Other games will be more borderline, such as darts, and these will involve careful assessment of the skill and exertion involved.

The public benefit requirement will apply in the normal way.

IRC v Baddeley
[1955] AC 572

Playing fields were held on trust for the recreation of members of a particular Methodist church. The House of Lords held that the trust failed to meet the public benefit requirement. Viscount Simonds said:203

Suppose that, contrary to the view that I have expressed, the trust would be a valid charitable trust, if the beneficiaries were the community at large or a section of the community defined by some geographical limits, is it the less a valid trust if it is confined to members or potential members of a particular church within a limited geographical area? …p. 242

Some confusion has arisen from the fact that a trust of general public utility, however general and however public, cannot be of equal utility to all and may be of immediate utility to few. A sea wall, the prototype of this class in the Preamble, is of remote, if any, utility to those who live in the heart of the Midlands. But there is no doubt that a trust for the maintenance of sea walls generally or along a particular stretch of coast is a good charitable trust. Nor, as it appears to me, is the validity of a trust affected by the fact that by its very nature only a limited number of people are likely to avail themselves, or are perhaps even capable of availing themselves, of its benefits. It is easy, for instance, to imagine a charity which has for its object some form of child welfare, of which the immediate beneficiaries could only be persons of tender age. Yet this would satisfy any test of general public utility. It may be said that it would satisfy the test because the indirect benefit of such a charity would extend far beyond its direct beneficiaries, and that aspect of the matter has probably not been out of sight. Indirect benefit is certainly an aspect which must have influenced the decision of the ‘cruelty to animals’ cases. But, I doubt whether this sort of rationalisation helps to explain a branch of the law which has developed empirically and by analogy upon analogy …

In the case under appeal the intended beneficiaries are a class within a class; they are those of the inhabitants of a particular area who are members of a particular church: the area is comparatively large and populous and the members may be numerous. But, if this trust is charitable for them, does it cease to be charitable as the area narrows down and the numbers diminish? Suppose the area is confined to a single street and the beneficiaries to those whose creed commands few adherents: or suppose the class is one that is determined not by religious belief but by membership of a particular profession or by pursuit of a particular trade …

More relevant is the case of Verge v Somerville [1924] AC 496. In that case, in which the issue was as to the validity of a gift ‘to the trustees of the Repatriation Fund or other similar fund for the benefit of New South Wales returned soldiers’, Lord Wrenbury, delivering the judgment of the Judicial Committee, said at 499 that, to be a charity, a trust must be ‘for the benefit of the community or of an appreciably important class of the community. The inhabitants’, he said, ‘of a parish or town or any particular class of such inhabitants, may, for instance, be the objects of such a gift, but private individuals, or a fluctuating body of private individuals, cannot.’ Here, my Lords, are two expressions: ‘an appreciably important class of the community’ and ‘any particular class of such inhabitants’, to which in any case it is not easy to give a precise quantitative or qualitative meaning. But I think that in the consideration of them the difficulty has sometimes been increased by failing to observe the distinction, at which I hinted earlier in this opinion, between a form of relief extended to the whole community yet by its very nature advantageous only to the few and a form of relief accorded to a selected few out of a larger number equally willing and able to take advantage of it. Of the former type repatriated New South Wales soldiers would serve as a clear example. To me it would not seem arguable that they did not form an adequate class of the community for the purpose of the particular charity that was being established. It was with this type of case that Lord Wrenbury was dealing, and his words are apt to deal with it. Somewhat different considerations arise if the form, which the purporting charity takes, is something of general utility which is nevertheless made available not to the whole public but only to a selected body of the public—an important class of the public it may be. For example, a bridge which is available for all the public may undoubtedly be a charity and it is indifferent how many people use it. But confine its use to a selected number of persons, however numerous and important: it is then clearly not a charity. It is not of general public utility: for it does not serve the public purpose which its nature qualifies it to serve.

Bearing this distinction in mind, though I am well aware that in its application it may often be very difficult to draw the line between public and private purposes, I should in the present case conclude that a trust cannot qualify as a charity within the fourth class in Income Tax Special Purposes Comrs v Pemsel [1891] AC 531 if the beneficiaries are a class of persons not only confined to a particular area but selected from within it by reference to a particular creed.

p. 243It followed that the charity was not valid because, being a class within a class, the public benefit test was not satisfied. Whether those who are entitled to benefit can be considered to be a class within a class, so that a sufficient section of the public is not benefited, is a matter of degree and judgment.

Specific provision was made by the Recreational Charities Act 1958 to treat the provision of recreation or leisure facilities as charitable if the facilities are provided in the interests of social welfare and for the public benefit. This statute has now been consolidated in the Charities Act 2011.

Charities Act 2011

5 Recreational and similar trusts, etc.

(1)

It is charitable (and is to be treated as always having been charitable) to provide, or assist in the provision of, facilities for—

(a)

recreation, or

(b)

other leisure-time occupation,

if the facilities are provided in the interests of social welfare.

(2)

The requirement that the facilities are provided in the interests of social welfare cannot be satisfied if the basic conditions are not met.

(3)

The basic conditions are—

(a)

that the facilities are provided with the object of improving the conditions of life for the persons for whom the facilities are primarily intended, and

(b)

that—

(i)

those persons have need of the facilities because of their youth, age, infirmity or disability, poverty, or social and economic circumstances, or

(ii)

the facilities are to be available to members of the public at large or to male, or to female, members of the public at large.

(4)

Subsection (1) applies in particular to—

(a)

the provision of facilities at village halls, community centres and women’s institutes, and

(b)

the provision and maintenance of grounds and buildings to be used for purposes of recreation or leisure-time occupation,

and extends to the provision of facilities for those purposes by the organising of any activity.

But this is subject to the requirement that the facilities are provided in the interests of social welfare.

(5)

Nothing in this section is to be treated as derogating from the public benefit requirement.

This has proved significant in treating community centres and church halls as charitable. Some of these will now be charitable by virtue of the formal recognition of the promotion of amateur sport as a charitable purpose, but, to the extent that these facilities are intended to be used for non-sporting activities, they might still be charitable by virtue of section 5 of the Charities Act 2011.

The operation of this provision is illustrated by Guild v IRC,204 where the House of Lords held that a town’s sports centre was charitable. The key issue was whether the facilities met the basic condition that p. 244they were ‘provided with the object of improving the conditions of life for the persons for whom the facilities are primarily intended’. Lord Keith of Kinkel said:205

The reason why it was said that this condition was not met was that on a proper construction it involved that the facilities should be provided with the object of meeting a need for such facilities in people who suffered from a position of relative social disadvantage …

The fact is that persons in all walks of life and all kinds of circumstances may have their conditions of life improved by the provision of recreational facilities of suitable character. The proviso requiring public benefit excludes facilities of an undesirable nature … I would therefore reject the argument that the facilities are not provided in the interests of social welfare unless they are provided with the object of improving the conditions of life for persons who suffer from some form of social disadvantage. It suffices if they are provided with the object of improving the conditions of life for members of the community generally.

(h) Advancement of Human Rights

This new charitable head includes a variety of charitable purposes.

Charities Act 2011
3.

(2) (h) the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity …

Some of these purposes had previously been recognized as charitable either by virtue of being for the advancement of education or for other purposes beneficial to the community. In Re Strakosch,206 however, a trust to appease racial feelings between the Dutch-speaking and English-speaking sections of the South African community was held not to be charitable because the scope of the gift was too wide and vague. The testator had provided a fund ‘for any purpose which in [the trustees’] opinion is designed to strengthen the bonds of unity between the Union of South Africa and the Mother Country, and which incidentally will conduce to the appeasement of racial feeling between the Dutch and English speaking sections of the South African community’. Lord Greene said:207

We realize the truth of the contention that the objects to which the gift is to be devoted are matters of great public concern both in the Union of South Africa and in the Mother Country. In particular the appeasement of racial feeling in the Union cannot but benefit all inhabitants of the Union, not merely the members of the two sections of the community expressly referred to. But the very wide and vague scope of the gift and the unrestricted latitude of application which its language permits make it impossible in our opinion to find that it falls within the spirit and intendment of the Preamble to the Statute of Elizabeth.

p. 245If the trust had been defined more clearly, particularly with reference to education, it might have been held valid. Similar problems as to the vagueness of the gift would arise in respect of the new charitable purpose under the Charities Act 2011.

One of the key difficulties relating to a trust for the advancement of human rights is that charities with such a purpose must not pursue political objectives, especially those that relate to seeking a change in law or policy either of this country or of a country abroad.208 There is a fine line between pursuing political activities as a means to a charitable end and pursuing purposes that are political in their own right. This is illustrated by McGovern v Attorney-General,209 which concerned whether a trust created by Amnesty International was charitable. The trust had various objects, including the relief of prisoners of conscience and procuring the abolition of torture. In holding that the trust was not charitable, since its main purpose was political, Slade J said:210

I now turn to consider the status of a trust of which a main object is to secure the alteration of the laws of a foreign country. The mere fact that the trust was intended to be carried out abroad would not by itself necessarily deprive it of charitable status …

I accept that the dangers of the court encroaching on the functions of the legislature or of subjecting its political impartiality to question would not be nearly so great as when similar trusts are to be executed in this country. I also accept that on occasions the court will examine and express an opinion upon the quality of a foreign law … In my judgment, however, there remain overwhelming reasons why such a trust still cannot be regarded as charitable … A fortiori the court will have no adequate means of judging whether a proposed change in the law of a foreign country will or will not be for the public benefit. Sir Raymond Evershed MR in Camille and Henry Dreyfus Foundation Inc. v IRC [1954] Ch 672, 684 expressed the prima facie view that the community which has to be considered in this context, even in the case of a trust to be executed abroad, is the community of the United Kingdom. Assuming that this is the right test, the court in applying it would still be bound to take account of the probable effects of attempts to procure the proposed legislation, or of its actual enactment, on the inhabitants of the country concerned, which would doubtless have a history and social structure quite different from that of the United Kingdom. Whatever might be its view as to the content of the relevant law from the standpoint of an English lawyer, it would, I think, have no satisfactory means of judging such probable effects upon the local community.

Furthermore, before ascribing charitable status to an English trust of which a main object was to secure the alteration of a foreign law, the court would also, I conceive, be bound to consider the consequences for this country as a matter of public policy. In a number of such cases there would arise a substantial prima facie risk that such a trust, if enforced, could prejudice the relations of this country with the foreign country concerned: compare Habershon v Vardon (1851) 4 De G & Sm 467. The court would have no satisfactory means of assessing the extent of such risk, which would not be capable of being readily dealt with by evidence and would be a matter more for political than for legal judgment. For all these reasons, I conclude that a trust of which a main purpose is to procure a change in the laws of a foreign country is a trust for the attainment of political objects … and is non-charitable.

Thus far, I have been considering trusts of which a main purpose is to achieve changes in the law itself or which are of a party-political nature. Under any legal system, however, the government and its various authorities, administrative and judicial, will have wide discretionary powers vested in them, within the framework of the existing law. If a principal purpose of a trust is to procure a reversal of government policy or of particular administrative decisions of governmental authorities, does it constitute a trust for p. 246political purposes …? In my judgment it does. If a trust of this nature is to be executed in England, the court will ordinarily have no sufficient means of determining whether the desired reversal would be beneficial to the public, and in any event could not properly encroach on the functions of the executive, acting intra vires, by holding that it should be acting in some other manner. If it is a trust which is to be executed abroad, the court will not have sufficient means of satisfactorily judging, as a matter of evidence, whether the proposed reversal would be beneficial to the community in the relevant sense, after all its consequences, local and international, had been taken into account …

I therefore summarise my conclusions in relation to trusts for political purposes as follows. (1) Even if it otherwise appears to fall within the spirit and intendment of the Preamble to the Statute of Elizabeth, a trust for political purposes … can never be regarded as being for the public benefit in the manner which the law regards as charitable. (2) Trusts for political purposes falling within the spirit of this pronouncement include, inter alia, trusts of which a direct and principal purpose is either (i) to further the interests of a particular political party; or (ii) to procure changes in the laws of this country; or (iii) to procure changes in the laws of a foreign country; or (iv) to procure a reversal of government policy or of particular decisions of governmental authorities in this country; or (v) to procure a reversal of governmental policy or of particular decisions of governmental authorities in a foreign country.

Seeking the release of prisoners of conscience was considered to be a political purpose, since it involved demanding the reversal of administrative decisions of governmental authorities, albeit abroad. Other purposes, such as relieving the suffering of needy prisoners of conscience, were held to be charitable, but since this was one purpose amongst others that were not charitable, the trust was not wholly and exclusively charitable. Although this case was decided before what is now the Charities Act 2011 recognized the new charitable purpose of promoting human rights, it would probably be decided the same way today because the law on the definition of political purposes has not changed.211 The significance of the recognition of the new charitable purpose is that it is now a legitimate charitable purpose to monitor human rights abuses, to seek redress for victims of such abuse, and to raise awareness of human rights issues, but a charity still must not cross the line and actively seek to procure changes in law or governmental policy as regards human rights issues. A consequence of the state of the law is that Amnesty International has been divided into Amnesty International, which is a registered charity with non-political purposes, and Amnesty International Ltd, which is not registered as a charity and which pursues political objectives.

(i) Advancement of Environmental Protection

This charitable purpose includes acting both for the protection and improvement of the environment.212

(j) Relief of those in Need

Although this is a new charitable purpose, relief of those in need used to fall within the purpose of relief of poverty. It follows from the creation of this new head that somebody can be in need even if they are not poor.

p. 247Charities Act 2011
3

(1) (j) the relief of those in need by reason of youth, age, ill health, disability, financial hardship or other disadvantage.

(2)

In subsection (1)—

(e)

paragraph (j) includes relief given by the provision of accommodation or care to the persons mentioned in that paragraph …

The courts previously considered the meaning of being in need ‘by virtue of age’.

Joseph Rowntree Memorial Trust Housing Association Ltd v Attorney-General
[1983] Ch 159

A scheme to build self-contained dwellings to be let on long leases to elderly people at 70 per cent of the cost of the premises, with the remaining expense being met by a State housing grant, was held to be a charitable scheme for the relief of old people, even though beneficiaries had to make a substantial financial contribution and, if they were to sell their lease, they could make a profit. Peter Gibson J said:213

[T]he plaintiffs do not submit that the proposed schemes are charitable simply because they are for the benefit of the aged. The plaintiffs have identified a particular need for special housing to be provided for the elderly in the ways proposed and it seems to me that on any view of the matter that is a charitable purpose, unless the fundamental objections of the Charity Commissioners to which I have referred are correct. To these I now turn.

The first objection is … that the scheme makes provision for the aged on a contractual basis as a bargain rather than by way of bounty. This objection is sometimes expressed in the form that relief is charitable only where it is given by way of bounty and not by way of bargain … [This] does not mean that a gift cannot be charitable if it provides for the beneficiaries to contribute to the cost of the benefits they receive. There are numerous cases where beneficiaries only receive benefits from a charity by way of bargain … Another class of cases relates to fee-paying schools: see for example Abbey Malvern Wells Ltd v Ministry of Local Government and Planning [1951] Ch 728 … It is of course crucial in all these cases that the services provided by the gift are not provided for the private profit of the individuals providing the services. …

If a housing association were a co-operative under which the persons requiring the dwellings provided by the housing association had by the association’s constitution contractual rights to the dwellings, that would no doubt not be charitable, but that is quite different from bodies set up like the trust and the association. The applicants for dwellings under the schemes which I am considering would have no right to any dwelling when they apply. The fact that the benefit given to them is in the form of a contract is immaterial to the charitable purpose in making the benefit available. I see nothing in this objection of the Charity Commissioners.

The second objection was that the schemes do not satisfy the requirement that the benefits they provide must be capable of being withdrawn at any time if the beneficiary ceases to qualify. No doubt charities will, so far as practical and compatible with the identified need which they seek to alleviate, try to secure that their housing stock becomes available if the circumstances of the persons occupying the premises p. 248change. But it does not seem to me to be an essential part of the charitable purpose to secure that this should always be so. The nature of some benefits may be such that it will endure for some time, if benefits in that form are required to meet the particular need that has been identified. Thus in Re Monk [1927] 2 Ch 197, a testatrix set up a loan fund whereby loans for up to nine years were to be made available to the poor. This was held to be charitable. No doubt the circumstances of the borrower might change whilst the loan was outstanding. If the grant of a long-term leasehold interest with the concomitant security of tenure that such an interest would give to the elderly is necessary to meet the identified needs of the elderly then in my judgment that is no objection to such a grant …

The third objection was that the schemes were for the benefit of private individuals and not for a charitable class. I cannot accept that. The schemes are for the benefit of a charitable class, that is to say the aged having certain needs requiring relief therefrom. The fact that, once the association and the trust have selected individuals to benefit from the housing, those individuals are identified private individuals does not seem to me to make the purpose in providing the housing a non-charitable one any more than a trust for the relief of poverty ceases to be a charitable purpose when individual poor recipients of bounty are selected.

The fourth objection was that the schemes were a commercial enterprise capable of producing a profit for the beneficiary. I have already discussed the cases which show that the charging of an economic consideration for a charitable service that is provided does not make the purpose in providing the service non-charitable, provided of course that no profits accrue to the provider of the service. It is true that a tenant under the schemes may recover more than he or she has put in, but that is at most incidental to the charitable purpose. It is not a primary objective. The profit—if it be right to call the increased value of the equity a profit as distinct from a mere increase avoiding the effects of inflation, as was intended—is not a profit at the expense of the charity, and indeed it might be thought improper, if there be a profit, that it should accrue to the charity which has provided no capital and not to the tenant which has provided most if not all the capital. Again, I cannot see that this objection defeats the charitable character of the schemes …

In my judgment the trustees may provide accommodation in the form of small self-contained dwellings for aged persons in need of such accommodation by granting it to them in consideration of the payment to the trustees of the whole or a substantial part of the cost or market value of such dwellings in accordance with the schemes.

If, however, housing stock is provided both to those in need and others who are not in need, this will not be an exclusively charitable purpose.

Helena Housing Ltd v The Commissioners for Her Majesty’s Revenue and Customs
[2012] EWCA Civ 569; [2012] WTLR 1519

The claimant was a company that did not trade for profit and was a registered social landlord. Its object was to provide accommodation and assistance to house people for the benefit of the community, largely through the acquisition of a Council’s former housing stock, which it then refurbished and let. Since some of the housing stock was let to people in need but some was let to people who were not in need, it was held that this was not exclusively a charitable purpose. Lloyd LJ said:214

The real issue is as to the balance between public benefit and benefit to individuals arising from the undertaking of all or any of Helena’s objects. This type of issue has arisen in numerous previous cases, of p. 249which we were shown several. The argument was about whether or not the benefits afforded to individuals (often referred to as private benefits) were subordinate to the public benefit, so that the latter was to be seen as the real object of the relevant body.

Most charitable purposes provide particular benefits to individuals, whether to the poor person in need of support, the student in need of education, or the patient in need of treatment, to take a few obvious examples. That is the way in which the public benefit is provided.

Leaving aside the anomalous case of ‘poor relations’ and ‘poor employees’ trusts, public benefit is a prerequisite of charity, but the provision of particular benefits to particular individuals is justified as a way of providing benefits to the public by virtue of, first, the availability of the provision and, secondly, the selection of those who are to benefit on an objective basis which does not depend on any private or particular nexus of the beneficiary with the trust, the founder, the other beneficiaries or any given individual … So, in the case of Helena, the identification of those who were to occupy its accommodation would be decided (in many cases) according to the allocation policy previously used by the Council. This would not be limited to those in particular need, but there would be objective criteria of selection involving no private or personal element. …

Helena could not satisfy the requirements of charity. There are two reasons for this, which are separate but related.

First … the provision of housing without regard to a relevant charitable need is not in itself charitable.

An alternative way to the same conclusion is that, even accepting that there is an element, and a necessary element, of benefit to the community in the pursuit of Helena’s objects, there is also a substantial element of benefit to individuals, which cannot be regarded as only subordinate to the achievement of the benefit to the community. In its nature, the benefit afforded by the provision of housing to the person who is thereby housed is of an altogether different order, as it seems to me, to the benefit afforded by the construction or maintenance of a road, a bridge or a sea-wall, or the maintenance of a fire brigade or a lifeboat service. The former provides direct benefits to the occupants of the accommodation which far outweigh the degree of indirect benefit that other members of the community may derive from the existence of the housing stock. Accepting that it may be a good thing that a substantial housing stock in good condition should exist in the area of a community which is available for occupation by tenants, and that therefore a benefit to the community can be seen to be generated by the operations of a body such as Helena, I cannot accept that the private benefit which arises to those who occupy the accommodation is merely incidental or subsidiary to the public benefit afforded by the existence of the housing stock. It is a benefit for its own sake, not incompatible with benefit to the community, but not subordinate to it.

Of course some charitable operations … confer significant benefits on individuals. Hospitals provide one example, for the benefit of those who by reason of illness, accidental injury or otherwise, need medical treatment … I do not underestimate the importance of such benefits for the individual concerned. But it seems to me that the provision of housing accommodation for an individual or a family affords a benefit to that or those individuals of a kind which is quite different in its nature and importance from, for example, that of appropriate treatment in hospital. It is not by chance that the significance of housing to the person housed is recognised by the terms of article 8 of the European Convention on Human Rights. That seems to me to confirm my view that the provision of accommodation by way of housing confers an especially significant benefit on the person or persons so housed, and that this goes far beyond the degree of benefit that individuals may obtain from charitable operations which are justified as being within the fourth head of charity on the basis of general public utility …

I conclude that the provision of housing accommodation is, and can only be, a charitable purpose if it is justified as charitable in respect of the direct benefit provided. It can only be so justified if it is provided in order to meet a relevant need of the class eligible to occupy it.

(k)p. 250 Advancement of Animal Welfare

Before the enactment of the Charities Act 2006, trusts for the advancement of animal welfare could be charitable only within the fourth head of Pemsel’s case, being another purpose beneficial to the community. Now animal welfare is identified as a specific charitable head,215 although this has not significantly altered the law as regards the definition of the charitable purpose.216

Animal welfare has been held to include providing for the welfare of particular types of animal, such as cats,217 or providing for the welfare of all animals, which is the purpose of the Royal Society for the Prevention of Cruelty to Animals (RSPCA).218 It has even included improving methods of slaughtering animals.219 It does not include providing for the welfare of a particular animal, which might exceptionally be valid as a non-charitable purpose trust if a testamentary gift.220

It will still be necessary to show that there is a public benefit in advancing animal welfare. The benefit to the public has been described as indirect.221 In Re Wedgwood222 Kennedy LJ said:

A gift for the benefit and protection of animals tends to promote and encourage kindness towards them, to discourage cruelty, and to ameliorate the condition of the brute creation, and thus to stimulate humane and generous sentiments in man towards the lower animals, and by these means promote feelings of humanity and morality generally, repress brutality, and thus elevate the human race.

Even this indirect benefit to the public might be difficult to establish. So, for example, in Re Grove-Grady,223 a trust to buy land to provide a sanctuary for all creatures so that they would be safe from molestation or destruction by man, was held not to be charitable because there was no public benefit. Russell LJ said:224

So far as I know there is no decision which upholds a trust in perpetuity in favour of animals upon any other ground than this, that the execution of the trust in the manner defined by the creator of the trust must produce some benefit to mankind …

[Here] the residuary estate may be applied in acquiring a tract of land, in turning it into an animal sanctuary, and keeping a staff of employees to ensure that no human being shall ever molest or destroy any of the animals there. Is that a good charitable trust within the authorities?

In my opinion it is not. It is merely a trust to secure that all animals within the area shall be free from molestation or destruction by man. It is not a trust directed to ensure absence or diminution of pain or cruelty in the destruction of animal life. If this trust is carried out according to its tenor, no animal within the area may be destroyed by man no matter how necessary that destruction may be in the interests of mankind or in the interests of the other denizens of the area or in the interests of the animal itself; and no matter how painlessly such destruction may be brought about. It seems to me impossible to say that the carrying out of such a trust necessarily involves benefit to the public. Beyond perhaps hearing of the existence of the enclosure the public does not come into the matter at all. Consistently with the trust p. 251the public could be excluded from entering the area or even looking into it. All that the public need know about the matter would be that one or more areas existed in which all animals (whether good or bad from mankind’s point of view) were allowed to live free from any risk of being molested or killed by man; though liable to be molested and killed by other denizens of the area. For myself I feel quite unable to say that any benefit to the community will necessarily result from applying the trust fund to the purposes indicated in the first object.

In National Anti-Vivisection Society v IRC,225 a society that existed to suppress experiments on animals was held by the House of Lords not to be charitable due to detriment to the public outweighing benefit. Lord Simonds said:226

The second point is fundamental. It is at the very root of the law of charity as administered by the Court of Chancery and its successor, the Chancery Division of the High Court of Justice. It is whether the court, for the purpose of determining whether the object of the society is charitable may disregard the finding of fact that any assumed public benefit in the direction of the advancement of morals and education was far outweighed by the detriment to medical science and research and consequently to the public health which would result if the society succeeded in achieving its object, and that on balance, the object of the society, so far from being for the public benefit, was gravely injurious thereto. The society says that the court must disregard this fact, arguing that evidence of disadvantages or evils which would or might result from the stopping of vivisection is irrelevant and inadmissible.

The second question raised in this appeal, which I have already tried to formulate, is of wider importance, and I must say at once that I cannot reconcile it with my conception of a court of equity that it should take under its care and administer a trust, however well-intentioned its creator, of which the consequence would be calamitous to the community …

It is to me a strange and bewildering idea that the court must look so far and no farther, must see a charitable purpose in the intention of the society to benefit animals and thus elevate the moral character of men but must shut its eyes to the injurious results to the whole human and animal creation.

(l) Promotion of Efficiency of Public Services

‘Public services’ include the armed forces; the police, fire, and rescue services; and the ambulance services.227 Efficiency has previously been held to include physical efficiency. So, in Re Gray228 it was held that a trust to establish a fund for the benefit of a regiment of the army in order to promote sport, including ‘shooting, fishing, cricket, football and polo’, was charitable. Romer J said:229

[I]n my opinion it was not the object of the testator in the present case to encourage or promote either sport in general or any sport in particular. I think it is reasonably clear that it was his intention to benefit the officers and men of the [regiment] by giving them an opportunity of indulging in healthy sport. It is to be observed that the particular sports specified were all healthy outdoor sports, indulgence in which might reasonably be supposed to encourage physical efficiency …

But I am glad to find that there is an established principle enabling me to give effect to the gifts in the present case. This principle was established by Farwell J in Re Good [1905] 2 Ch 60 at 66, 67, a case that p. 252as far as I know has never been questioned in any way. In that case the testator gave his residuary personalty upon trust for the officers’ mess of his regiment, to be invested and the income to be applied in maintaining a library for the officers’ mess for ever, any surplus to be expended in the purchase of plate for the mess. According to the headnote of the report of that case it was held that the gift to maintain the library and to purchase plate for the officers’ mess, being for a general public purpose tending to increase the efficiency of the army and aid taxation, was a good charitable bequest …

In the case before Farwell J the efficiency was mental efficiency, and the only distinction between that case and the present case is that in the present case the efficiency is physical as opposed to mental efficiency. But it is obviously for the benefit of the public that those entrusted with the defence of the realm should be not only mentally but also physically efficient, and I think I am justified in coming to the conclusion that there is no difference between mental and physical efficiency for the present purpose.

(m) Other Beneficial Purposes

Other purposes will be considered to be charitable if they:230

(1)

have been recognized under existing charity law or under section 5 of the Charities Act 2011 concerning recreational trusts; or

(2)

they can reasonably be regarded as analogous to, or within the spirit of, the 12 purposes identified by the Charities Act 2011, or with the purposes recognized under existing charity law or section 5 concerning recreational trusts; or

(3)

they can reasonably be regarded as analogous to, or within the spirit of, the purposes that have been recognized under charity law as falling within paragraph (2) or this one.

This head operates as a safety net to ensure that charitable purposes can continue to be developed by analogy with the existing law of charity or with the heads recognized under the Charities Act itself. It is a long-standing tradition of charity law to develop charitable purposes in this way. For example, in Incorporated Council of Law Reporting for England and Wales v Attorney-General,231 the Court of Appeal held that the Incorporated Council was charitable both as a trust for the advancement of education and for other purposes beneficial to the community. Russell LJ said:232

I come now to the question whether, if the main purpose of the council is, as I think it is, to further the sound development and administration of the law in this country, and if, as I think it is, that is a purpose beneficial to the community or of general public utility, that purpose is charitable according to the law of England and Wales.

On this point the law is rooted in the Statute of Elizabeth I, a statute the object of which was the oversight and reform of abuses in the administration of property devoted by donors to purposes which were regarded as worthy of such protection as being charitable. The Preamble to the Statute listed certain examples of purposes worthy of such protection. These were from an early stage regarded merely as examples, and have through the centuries been regarded as examples or guideposts for the courts in the differing circumstances of a developing civilisation and economy. Sometimes recourse has been had by the courts to the instances given in the Preamble in order to see whether in a given case sufficient analogy may be found with something specifically stated in the Preamble, or sufficient analogy with some decided case in which already a previous sufficient analogy has been found. Of this approach perhaps p. 253the most obvious example is the provision of crematoria by analogy with the provisions of burial grounds by analogy with the upkeep of churchyards by analogy with the repair of churches. On other occasions a decision in favour or against a purpose being charitable has been based in terms upon a more general question whether the purpose is or is not within ‘the spirit and intendment’ of the Statute of Elizabeth I and in particular its Preamble. Again (and at an early stage in development) whether the purpose is within ‘the equity’ or within ‘the mischief’ of the Statute. Again whether the purpose is charitable ‘in the same sense’ as purposes within the preview of the Statute. I have much sympathy with those who say that these phrases do little of themselves to elucidate any particular problem. ‘Tell me’, they say, ‘what you define when you speak of spirit, intendment, equity, mischief, the same sense, and I will tell you whether a purpose is charitable according to law. But you never define. All you do is sometimes to say that a purpose is none of these things. I can understand it when you say that the preservation of sea walls is for the safety of lives and property, and therefore by analogy the voluntary provision of lifeboats and fire brigades are charitable. I can even follow you as far as crematoria. But these other generalities teach me nothing.’

I say I have much sympathy for such approach: but it seems to me to be unduly and improperly restrictive. The Statute of Elizabeth I was a statute to reform abuses: in such circumstances and in that age the courts of this country were not inclined to be restricted in their implementation of Parliament’s desire for reform to particular examples given by the Statute; and they deliberately kept open their ability to intervene when they thought necessary in cases not specifically mentioned, by applying as the test whether any particular case of abuse of funds or property was within the ‘mischief’ or the ‘equity’ of the Statute.

For myself I believe that this rather vague and undefined approach is the correct one, with analogy its handmaid, and that when considering Lord Macnaghten’s fourth category in Pemsel’s case [1891] AC 531 at 583 of ‘other purposes beneficial to the community’ … the courts, in consistently saying that not all such are necessarily charitable in law, are in substance accepting that if a purpose is shown to be so beneficial or of such utility it is prima facie charitable in law, but have left open a line of retreat based on the equity of the Statute in case they are faced with a purpose (e.g., a political purpose) which could not have been within the contemplation of the Statute even if the then legislators had been endowed with the gift of foresight into the circumstances of later centuries.

In a case such as the present, in which in my view the object cannot be thought otherwise than beneficial to the community and of general public utility, I believe the proper question to ask is whether there are any grounds for holding it to be outside the equity of the Statute and I think the answer to that is here in the negative. I have already touched upon its essential importance to our rule of law. If I look at the somewhat random examples in the Preamble to the Statute I find in the repair of bridges, havens, causeways, sea banks and highways examples of matters which if not looked after by private enterprise must be a proper function and responsibility of government, which would afford strong ground for a statutory expression by Parliament of anxiety to prevent misappropriation of funds voluntarily dedicated to such matters. It cannot I think be doubted that if there were not a competent and reliable set of reports of judicial decisions, it would be a proper function and responsibility of government to secure their provision for the due administration of the law. It was argued that the specific topics in the Preamble that I have mentioned are all concerned with concrete matters, and that so also is the judicially accepted opinion that the provision of a court house is a charitable purpose. But whether the search be for analogy or for the equity of the Statute this seems to me to be too narrow or refined an approach. I cannot accept that the provision, in order to facilitate the proper administration of the law, of the walls and other physical facilities of a court house is a charitable purpose, but that the dissemination by accurate and selective reporting of knowledge of a most important part of the law to be there administered is not.

Accordingly the purpose for which the association is established is exclusively charitable in the sense of Lord Macnaghten’s fourth category. I would not hold that the purpose is purely the advancement of education: but in determining that the purpose is within the equity of the Statute I by no means ignore the function of the purpose in furthering knowledge in legal science.

5.p. 254 Exclusively Charitable

(a) Inclusion of Non-Charitable Purposes

A trust can be regarded as charitable only if all its purposes are charitable.233 This means that the trust cannot have a mixture of charitable and non-charitable purposes. So, for example, if the purposes of a trust are described as being ‘charitable or benevolent’, this will not be exclusively charitable, because a benevolent purpose can be wider than the legal definition of ‘charitable purposes’, which would mean that the trustees would be able to apply trust funds for purposes that are not necessarily charitable. If, however, the trust provides for funds to be applied for ‘charitable and benevolent purposes’, this will be charitable, because any purpose must be charitable even if it is benevolent as well. Consequently, the validity of such trusts as charities will often turn on whether the words ‘or’ or ‘and’ are used. It follows that great care must be taken when seeking to draft a charitable trust.

Chichester Diocesan Fund and Board of Finance Incorporated v Simpson
[1944] AC 341

Caleb Diplock, in his will, directed his executors to apply the residue of his estate for such charitable institutions or ‘benevolent object or objects’ as the executors in their absolute discretion should select. The House of Lords held that the gift was void. Lord Simonds said:234

My Lords, the words for your consideration are ‘charitable or benevolent’. The question is whether, in the context in which they are found in this will, these words give to the executors a choice of objects extending beyond that which the law recognizes as charitable. If they do not, that is the end of the matter. The trust is a good charitable trust. If they do, it appears to be conceded by counsel for the appellant institution that the trust is invalid … My Lords, of those three words your Lordships will have no doubt what the first, ‘charitable’, means. It is a term of art with a technical meaning and that is the meaning which the testator must be assumed to have intended. If it were not so, if in this will ‘charitable’ were to be given, not its legal, but some popular, meaning, it would not be possible to establish the validity of the bequest. The last of the three words ‘benevolent’ is not a term of art. In its ordinary meaning it has a range in some respects far less wide than legal charity, in others somewhat wider. It is, at least, clear that the two words, the one here used in its technical meaning, the other having only, and, accordingly, here used in, a popular meaning, are by no means coterminous. These two words are joined or separated by the word ‘or’, a particle, of which the primary function is to co-ordinate two or more words between which there is an alternative. It is, I think, the only word in our language apt to have this effect. Its primary and ordinary meaning is the same, whether or not the first alternative is preceded by the word ‘either’.

My Lords, averting my mind from the possible ill effects of an alternative choice between objects ‘charitable’ and objects ‘benevolent’, I cannot doubt that the plain meaning of the testator’s words is that he has given this choice, and that, if he intended to give it, he could have used no words more apt to do so. Is there, then, anything in the context which narrows the area of choice by giving to the words ‘or benevolent’ some other meaning than that which they primarily and naturally have? And if so, what is the other meaning which is to be given to them? Let me examine the second question first. Since the test of validity depends on the area of choice not being extended beyond the bounds of legal charity, a meaning must be given to the words ‘or benevolent’ which retains them within these bounds. This result, it has p. 255been contended, may be reached by giving to the word ‘or’ not its primary disjunctive meaning but a secondary meaning which may, perhaps, be called exegetical or explanatory. Undoubtedly ‘or’ is capable of this meaning. So used, it is equivalent to ‘alias’ or ‘otherwise called’. The dictionary examples of this use will generally be found to be topographical, as ‘Papua or New Guinea’, but, my Lords, this use of the word ‘or’ is only possible if the words or phrases which it joins connote the same thing and are interchangeable the one with the other. In this case the testator is assumed to use the word ‘charitable’ in its legal sense. I see no possible ground for supposing that he proceeds to explain it by another word which has another meaning and by no means can have that meaning. I must reject the exegetical ‘or’. Then it was suggested that the words ‘or benevolent’ should be construed as equivalent to ‘provided such objects are also of a benevolent character’, that is to say, the objects must be charitable but of that order of charity which is commonly called benevolent. I think that this is only a roundabout way of saying that ‘or’ should be read as ‘and,’ that the objects of choice must have the two characteristics of charitable and benevolent. It is possible that a context may justify so drastic a change as that involved in reading the disjunctive as conjunctive. I turn then to the context to see what justification it affords for reading the relevant words in any but their natural meaning. Reading and re-reading them, as your Lordships have so often done in the course of this case, I can find nothing which justifies such a departure. It is true that the word ‘other’ introduces the phrase ‘charitable or benevolent object or objects’ and to this the appellants attached some importance, suggesting that since ‘other’ looked back to ‘charitable institution or institutions’, so all that followed must be of the genus charitable. There can be no substance in this, for in the phrase so introduced the word ‘charitable’ is itself repeated and is followed by the alternative ‘or benevolent’. Apart from this slender point it seemed that the appellants relied on what is called a general, a dominant, an overriding, charitable intention, giving charitable content to a word or phrase which might otherwise not have that quality. That such a result is possible there are cases in the books to show. Some of them have been cited to your Lordships, but here again I look in vain for any such context. On the plain reading of this will I could only come to the conclusion that the testator intended exclusively to benefit charitable objects if I excised the words ‘or benevolent’ which he has used. That I cannot do.

Similarly, a trust for ‘charitable or philanthropic’ purposes has been held not to be exclusively charitable,235 since philanthropic purposes are not inevitably charitable. A trust for a charitable institution ‘or one operating for the public good’,236 and a trust for ‘worthy purposes’ have been held not to be charitable.237 A trust for charitable and deserving objects was, however, held to be exclusively charitable,238 because the deserving objects would also have to be charitable. But it does not necessarily follow that the identification of two purposes that are connected by ‘and’ will be valid.239 For example, in Attorney-General of the Bahamas v Royal Trust Co.,240 a gift ‘for any purposes for and/or connected with the education and welfare of Bahamian children and young people’ was held to be void. ‘Welfare’ was considered too wide necessarily to be confined to a charitable purpose and the use of ‘or’, albeit as well as ‘and’, meant that the gift could be used for non-charitable purposes. These are harsh decisions, which are inconsistent with the general judicial attitude of benevolent construction of charitable trusts, with a view to uphold them if possible.

Although a trust for the benefit of a particular locality would not appear to be exclusively charitable, such trusts have been held to be valid charitable trusts, because they are benevolently interpreted as p. 256being confined to charitable purposes within the identified locality. In Attorney-General of the Cayman Islands v Wahr-Hansen,241 Lord Browne-Wilkinson said that these ‘locality cases’:242

are cases where the gift is made, for example, to a parish (West v Knight (1669) 1 Cas in Ch 134) or ‘for the good of’ a specific county (Attorney-General v Lord Lonsdale (1827) 1 Sim. 105) or for ‘charitable, beneficial, and public works’ (Mitford v Reynolds (1841) 1 Ph 185) or for ‘the benefit and advantage of Great Britain’ (Nightingale v Goulbourn (1847) 5 Hare 484) or ‘unto my country England’: Re Smith [1932] 1 Ch 153. In all these cases the gifts were held to be valid charitable trusts, even though the breadth of the words used, literally construed, would certainly have authorised the applications of the funds for non-charitable purposes in the specified locality. The courts have held that such purposes are to be impliedly limited to charitable purposes in the specified community …

There is a limited class of cases where gifts in general terms are made for the benefit of a named locality or its inhabitants. For reasons which are obscure, such cases have been benevolently construed. They are now so long established that in cases falling within the very circumscribed description of gifts for the benefit of a specified locality they remain good law. But they have been widely criticised and indeed have been said to be wrongly decided: see, for example, Michael Albery, ‘Trusts for the Benefit of the Inhabitants of a Locality’ (1940) 56 LQR 49. To apply the same principle to all cases where there are general statements of benevolent or philanthropic objects so as to restrict the meaning of the general words to such objects as are in law charitable would be inconsistent with the overwhelming body of authority which decides that general words are not to be artificially construed so as to be impliedly limited to charitable purposes only.

Although these are highly anomalous cases, they do exemplify the principle of benign construction of charitable gifts.243 It is unfortunate that this same benign construction is not adopted where the gift includes non-charitable purposes so that it could be assumed that the gift would be applied only for the charitable purpose.

(b) Consequences of Including Non-Charitable Purposes

Where the purposes of a trust are not exclusively charitable, the court may, on construing the language, reach one of several possible solutions.

(i) Void trust

The trust may be declared void, unless it can exceptionally be regarded as a valid non-charitable purpose trust.244 If the trust is declared void, the funds will be held on resulting trust for the settlor or testator’s estate.245 A consequence of the decision in Chichester Diocesan Fund and Board of Finance Incorporated v Simpson,246 that a testamentary gift to charitable institutions or benevolent objects was void, was that the testator’s next of kin could claim that the executor should have given the property to the next of kin rather than disposed of it in accordance with the purported trusts, which were void. This p. 257provided the basis of a claim by the next of kin to the gifts that had been made to various charities by the executor. The nature of these claims was complex and controversial.247

(ii) Incidental purposes

If the non-charitable purpose is incidental or subsidiary to the main charitable purpose, it will not prevent the trust from being charitable.248 This was recognized by Lord Millett in Latimer v CIR,249 a case concerning the charitable status of a trust fund for Maori claimants to pursue land claims. Lord Millett said:250

But the trustees are not obliged to apply the whole of the trust income as it arises. They may carry it forward and apply it in future years; and in so far as it is not wholly expended when the trust comes to an end any remaining balance is to be returned to the Crown. It follows that it cannot be said of any sum of income in the hands of the trustees that it will be applied for charitable purposes; it may be retained and ultimately become payable to the Crown. The ultimate trust in favour of the Crown is a substantial trust in its own right, and unless the Crown is a charity or holds on charitable trusts or the trust in its favour can be dismissed as merely ancillary or incidental to the primary trust to assist the Maori claimants its existence makes it impossible to contend that the trust income is applicable to exclusively charitable purposes.

Trustees of a charitable trust may be authorised to charge their own fees and expenses to the trust without causing the loss of the trust’s charitable status. It cannot be said to be a purpose of the trust to enable the trustees to charge fees and expenses; such expenditure may be justified only if it helps to further the trust’s charitable purpose, and may accordingly be classified as ancillary to that purpose.

Again, some trusts for charitable purposes cannot help but confer incidental benefits on individuals; they do not thereby lose their charitable status: Royal College of Surgeons of England v National Provincial Bank Ltd [1952] AC 631 provides a good example of this. The college was established to promote and encourage the study and practice of the art and science of surgery. The professional protection of members of the college (not a charitable purpose) was held to be ‘an incidental though an important and perhaps necessary consequence of the work of the college in carrying out its main object’.

The distinction is between ends, means and consequences. The ends must be exclusively charitable. But if the non-charitable benefits are merely the means or the incidental consequences of carrying out the charitable purposes and are not ends in themselves, charitable status is not lost. The residual trust in favour of the Crown in the present case, however, is neither a means of furthering the trust’s charitable purpose nor an incidental consequence of carrying out that purpose. The trust may never take effect, but if it does it will do so only after the primary trust has come to an end. It cannot be dismissed as merely ancillary or incidental to the trust’s charitable purpose …

Accordingly, the critical feature of the present case is that the ultimate trust is in favour of the Crown. Their Lordships cannot accept the trustee’s contention that the Crown is itself a charity, or that it holds all its funds to be applied exclusively for charitable purposes … like other public authorities … its money is applicable and is applied for numerous non-charitable purposes. It is true that these are public purposes rather than private purposes; but this means only that the government of the day considers it expedient to make public funds available for such purposes. …p. 258

Governments can and do make public money available for a variety of non-charitable purposes. All charitable purposes (with well known exceptions) are public purposes; but not all public purposes are charitable purposes.

The distinction between ends and means is illustrated by Re Coxen,251 where a fund was held on trust for medical charities, but provision was made for the payment of £100 for a dinner for those aldermen who attended a meeting to discuss the business of the trust; such persons would also receive a guinea each if they attended the whole of the meeting. This was held to be a valid charitable trust since the dinner and the payments were incidental to the main medical purpose of the trust, and might even be regarded as resulting in its better administration. In Incorporated Council of Law Reporting for England and Wales v Attorney-General,252 in holding that the activities of the Council were charitable, Buckley LJ said:253

The subsidiary objects, such as printing and publishing statutes, the provision of a noting-up service and so forth, are ancillary to this primary object [of publishing law reports] and do not detract from its exclusively charitable character. Indeed, the publication of the statutes of the realm is itself, I think, a charitable purpose for reasons analogous to those applicable to reporting judicial decisions.

In Attorney-General v Ross,254 a student’s union was held to be a charitable trust even though one of its objects related to affiliation to the National Union of Students, a non-charitable organization, since this was an ancillary purpose that helped the charitable purpose of furthering the educational function of the institution.

(iii) Severance

Exceptionally, where a trust’s purposes are not exclusively charitable, it may be possible to divide the fund into parts, so that some are applied to charitable purposes and the rest will either be held on a valid non-charitable purpose trust or on a resulting trust for the settlor or those entitled to a testator’s residuary estate. This solution will only be possible where the language of the trust instrument can be construed as directing such a division. For example, in Salusbury v Denton,255 a fund was to be used to found a school or to provide for the poor, and the remainder was to be used for the benefit of the testator’s relatives. It was held that the fund was divisible into two equal parts, with the first part being used for the charitable purposes and the rest for the next of kin. Severance was possible because the will contemplated division of the estate. In Re Coxen,256 Jenkins J recognized that severance will be appropriate where the amount applicable to the non-charitable purpose can be quantified, but where such quantification is not possible, the trust will fail completely.

(iv) Retrospective validation

In 1954, the Charitable Trusts (Validation) Act was enacted to provide that any charitable trust created before 16 December 1952 that was invalid because the fund could be used for non-charitable as well p. 259as charitable purposes, should be treated as though all the objects were charitable. Since this Act only applies retrospectively, it does not affect the general principle relating to modern trusts needing to have exclusively charitable purposes. But if the Act was able to validate old trusts despite the inclusion of non-charitable purposes, why could it not be applied prospectively? The failure to do so has been described as ‘logically indefensible’:257 if the law is unjust, then it should have been changed for all trusts.

6. Cy-Près

Where a charitable purpose fails because, for example, it is impossible or impracticable to apply funds for the identified charitable purpose or because that purpose ceases to be charitable, it is necessary to consider whether the trust should fail and the funds be returned to the creator of the trust by means of a resulting trust, or whether they might be applied for a slightly different charitable purpose by virtue of the cy-près doctrine. Where this doctrine operates it makes possible the application of funds to purposes as near as possible to those selected by the donor. The doctrine applies differently depending on whether the failure of the charitable purpose occurs before the trust commences or subsequently. Essentially, where there is an initial failure of charitable purpose, the property will be applied cy-près only if the donor can be considered to have an intention that the property should be used for the benefit of charity generally, rather than confined to the specific charitable purpose that has failed. Once, however, property has been applied for charitable purposes and there is a subsequent failure of those purposes, the property will be applied cy-près whether or not the donor had an intention to benefit charity generally. As Romer LJ recognized in Re Wright:258

Once money is effectually dedicated to charity, whether in pursuance of a general or particular charitable intent, the testator’s next-of-kin or residuary legatees are for ever excluded.

It follows that it is important to work out whether there has been a failure of charitable purpose and, if there has, whether it is an initial or a subsequent failure.

Where property is to be applied cy-près, the courts and the Charity Commission have the power to make schemes so that the property is applied for a similar charitable purpose.

Charities Act 2011

67 Cy-près schemes

(1)

The power of the court or the Commission to make schemes for the application of property cy-près must be exercised in accordance with this section.

(2)

Where any property given for charitable purposes is applicable cy-près, the court or the Commission may make a scheme providing for the property to be applied—

(a)

for such charitable purposes, and

(b)

(if the scheme provides for the property to be transferred to another charity) by or on trust for such other charity,

as it considers appropriate, having regard to the matters set out in subsection (3).

(3)

p. 260 The matters are—

(a)

the spirit of the original gift,

(b)

the desirability of securing that the property is applied for charitable purposes which are close to the original purposes, and

(c)

the need for the relevant charity to have purposes which are suitable and effective in the light of current social and economic circumstances.

The ‘relevant charity’ means the charity by or on behalf of which the property is to be applied under the scheme.

(a) Initial Failure of Charitable Purpose

(i) Initial failure

To establish an initial failure of charitable purpose, it is necessary to consider whether, at the time the trust is to take effect, the identified purpose is impossible or impracticable to fulfil. Even though a particular charity no longer exists in its original form, the court may find that the charitable purpose continues elsewhere, so that it has not failed and the cy-près doctrine will not be engaged. For example, in Re Faraker,259 the testatrix left £200 to ‘Mrs Bailey’s Charity, Rotherhithe’. A charity, known as Hannah Bayly’s Charity, had been founded in 1756 by Mrs Hannah Bayly for the benefit of poor widows in Rotherhithe. In 1905, the Charity Commissioners had consolidated various local charities including Hannah Bayly’s Charity with the amalgamated funds being held on trust for the benefit of the poor of Rotherhithe, but no specific mention was made of widows. It was admitted that the testatrix had intended to refer to Hannah Bayly’s Charity. It was held that, although Hannah Bayly’s charity no longer existed, its purpose continued in the consolidated charities, so the purpose had not failed. Farwell LJ said:260

In the present case there is no question of a cy-près execution. Nobody suggests that there has been a failure of poor widows in Rotherhithe, and unless and until that happy event happens there will be no case for any cy-près administration. What is said is this: the Commissioners have in fact destroyed this trust because in the scheme which they have issued dealing with the amalgamation of the several charities the objects are stated to be poor persons of good character resident in Rotherhithe, not mentioning widows in particular—not of course excluding them, but not giving them that preference which I agree with the Master of the Rolls in thinking ought to have been given. But to say that this omission has incidentally destroyed the Bayly Trust is a very strained construction of the language and one that entirely fails, because the Charity Commissioners had no jurisdiction whatever to destroy the charity. Suppose the Charity Commissioners or this Court were to declare that a particular existing charitable trust was at an end and extinct, in my opinion they would go beyond their jurisdiction in so doing. They cannot take an existing charity and destroy it; they are obliged to administer it. To say that this pardonable slip (I use the word with all respect to the draftsman) has the effect of destroying the charity appears to me extravagant. In all these cases one has to consider not so much the means to the end as the charitable end which is in view, and so long as that charitable end is well established the means are only machinery, and no alteration of the machinery can destroy the charitable trust for the benefit of which the machinery is provided.

p. 261As Cozens-Hardy MR recognized: ‘Hannah Bayly’s Charity is not extinct, it is not dead … it cannot die.’261

A charity will, however, be considered to have ceased to exist if its funds no longer remain in existence. In Re Slatter’s Will Trusts,262 a testatrix had left money for the work of a hospital in Australia treating tuberculosis, but the hospital had closed down before the testatrix’s death because tuberculosis had been controlled in the locality. Since the hospital had not left any funds to continue this purpose, it followed that there was an initial failure of the gift. Martin263 has criticized this decision on the grounds that the key question should not have been the continued existence of funds, but the continued existence of the charitable purpose, and presumably the purpose of eliminating tuberculosis continued elsewhere. It may have been significant, however, that the testatrix had left her estate to the particular hospital in Australia where her daughter had been treated for some years and had died, so that it could properly be interpreted as a gift to a particular institution rather than for the purpose of treating tuberculosis generally. As always in cases of this kind, the intention of the donor is vital and must be construed very carefully.

Where a bequest is intended to be for a particular charitable institution, rather than for the institution’s charitable purpose, and the institution has ceased to exist before the testator’s death, there will be an initial failure of the gift.264 This distinction between a gift to a charitable purpose and a gift to an institution is influenced by whether the intended recipient of the gift is an unincorporated or an incorporated charity. The significance of this distinction was recognized in Re Finger’s Will Trusts.

Re Finger’s Will Trusts
[1972] Ch 286

A testatrix left her estate to a number of charities, including the National Radium Commission, which was an unincorporated charity, and the National Council for Maternity and Child Welfare, which was an incorporated charity. Before the testatrix’s death, both these charities ceased to exist. It was held that the gift to the unincorporated association was valid as a trust for the purpose rather than the institution, whereas the gift to the incorporated charity failed since it was a gift to the institution rather than the purpose.265 Goff J said:266

If the matter were res integra I would have thought that there would be much to be said for the view that the status of the donee, whether corporate or unincorporate, can make no difference to the question whether as a matter of construction a gift is absolute or on trust for purposes. Certainly drawing such a distinction produces anomalous results.

In my judgment, however, on the authorities a distinction between the two is well established, at all events in this court. I refer first to Re Vernon’s Will Trusts [1972] Ch 300n where Buckley J said at 303:

‘Every bequest to an unincorporated charity by name without more must take effect as a gift for a charitable purpose. No individual or aggregate of individuals could claim to take such a bequest beneficially. If the gift is to be permitted to take effect at all, it must be as a bequest for a purpose, viz., that charitable purpose which the named charity exists to serve … A bequest to a named p. 262unincorporated charity, however, may on its true interpretation show that the testator’s intention to make the gift at all was dependent upon the named charitable organisation being available at the time when the gift takes effect to serve as the instrument for applying the subject matter of the gift to the charitable purpose for which it is by inference given. If so and the named charity ceases to exist in the lifetime of the testator, the gift fails: Re Ovey (1885) 29 Ch D 560. A bequest to a corporate body, on the other hand, takes effect simply as a gift to that body beneficially, unless there are circumstances which show that the recipient is to take the gift as a trustee. There is no need in such a case to infer a trust for any particular purpose. The objects to which the corporate body can properly apply its funds may be restricted by its constitution, but this does not necessitate inferring as a matter of construction of the testator’s will a direction that the bequest is to be held in trust to be applied for those purposes: the natural construction is that the bequest is made to the corporate body as part of its general funds, that is to say, beneficially and without the imposition of any trust. That the testator’s motive in making the bequest may have undoubtedly been to assist the work of the incorporated body would be insufficient to create a trust.’

As I read the dictum in Re Vernon’s Will Trusts, the view of Buckley J was that in the case of an unincorporated body the gift is per se a purpose trust, and provided that the work is still being carried on will have effect given to it by way of scheme notwithstanding the disappearance of the donee in the lifetime of the testator, unless there is something positive to show that the continued existence of the donee was essential to the gift …

Accordingly I hold that the bequest to the National Radium Commission being a gift to an unincorporated charity is a purpose trust for the work of the Commission which does not fail but is applicable under a scheme, provided (1) there is nothing in the context of the will to show—and I quote from Re Vernon’s Will Trusts—that the testatrix’s intention to make a gift at all was dependent upon the named charitable organisation being available at the time when the gift took effect to serve as the instrument for applying the subject matter of the gift to the charitable purpose for which it was by inference given; (2) that charitable purpose still survives; but that the gift to the National Council for Maternity and Child Welfare … being a gift to a corporate body fails, notwithstanding the work continues, unless there is a context in the will to show that the gift was intended to be on trust for that purpose and not an absolute gift to the corporation.

I take first the National Radium Commission and I find in this will no context whatever to make that body of the essence of the gift. …

In my judgment, therefore, this is a valid gift for the purposes of the Radium Commission …

I turn to the other gift and here I can find no context from which to imply a purpose trust. Counsel for the Attorney-General relied on Re Meyers [1951] Ch 534, but there the context was absolutely compelling. There were many gifts to hospitals and the case dealt only with the hospitals, and whilst hospitals are not identical, this did mean that all were of the same type and character. Moreover, not only were those gifts both to incorporated and unincorporated hospitals but in some of the corporate cases the name used by the testator was that by which the hospital was generally known to the public but was not the exact title of the corporation. In the present case there are at best three different groups of charities not one; they are not in fact grouped in the order in which they appear in the will, and the particular donees within the respective groups are not all of the same type or character. Further, and worse, two do not fit into any grouping at all, and for what it is worth they come first in the list. In my judgment, therefore, this case is not comparable with Re Meyers and I cannot find a context unless I am prepared—which I am not—to say that the mere fact that residue is given to a number of charities, some of which are incorporated and others not, is of itself a sufficient context to fasten a purpose trust on the corporation.

In my judgment, therefore, the bequest to the National Council for Maternity and Child Welfare fails.267

p. 263The reason for the distinction between incorporated and unincorporated charities is that the latter does not have a separate legal identity, so a gift to such a charity must be a gift for a charitable purpose rather than to the institution. If that purpose can still be fulfilled there has been no initial failure, unless the continued existence of the institution was essential to the gift. Where, however, a gift is to an incorporated charity, then, since such a charity has an independent legal existence, the gift will be to that body beneficially, save where it was intended to take as a trustee.268

Where a testamentary gift was made to a charitable company that entered into insolvent liquidation before the death of the testator, but, by the time the testator had died, the company had not been formally dissolved, there was no initial failure and the testamentary gift belonged to the company beneficially and so could be distributed among its creditors.269

(ii) General charitable intent

Where the charitable purpose fails before the commencement of the trust, the funds can be applied for a similar charitable purpose only if the donor had a general charitable intent. It must be shown that the donor was more concerned that the funds should be used for charitable purposes generally rather than concerned to benefit only the specific charitable purpose or institution that they had identified. If there is a general charitable intent the fund will be applied cy-près. If not, the fund will be held on resulting trust for the donor.

Identifying whether there was a general charitable intent requires careful construction of the trust documents and surrounding circumstances. For example, in Re Rymer,270 the testator left a sum of money to the rector of St Thomas’ Seminary for the education of priests in the diocese of Westminster in London. When his will was made, there was such a seminary that did educate priests in that diocese, but by the time of his death, the seminary had closed and its students had been transferred to a different seminary near Birmingham. It was held that the testator did not have a general charitable intent, and so the bequest lapsed and went to the residuary legatees. Lindley LJ said:271

You must construe the will and see what the real object of the language which you have to interpret is … I cannot arrive at the conclusion at which the Appellant’s counsel ask me to arrive, that this is in substance and in truth a bequest of £5,000 for the education of the priests in the diocese of Westminster. I do not think it is. It is a gift of £5,000 to a particular seminary for the purposes thereof, and I do not think it is possible to get out of that. I think the context shews it. I refer to the masses, the choice of candidates, and so on. If once you get thus far the question arises, does that seminary exist? The answer is, it does not. Then you arrive at the result that there is a lapse; and if there is a lapse, is there anything in the doctrine of cy-près to prevent the ordinary doctrine of lapse from applying? I think not. Once you arrive at the conclusion that there is a lapse, then all the authorities which are of any value shew that the residuary legatee takes the lapsed gift. We are asked to overrule that doctrine, laid down by Vice-Chancellor Kindersley in Clark v Taylor (1853) 1 Drew 642 and followed in Fisk v A-G (1867) LR 4 Eq 521. I think that the doctrine is perfectly right. There may be a difficulty in arriving at the conclusion that there is a lapse. But when once you arrive at the conclusion that a gift to a particular seminary or institution, or whatever you may call it, is ‘for the purposes thereof’, and for no other purpose—if you once get to that, and it is proved that the institution or seminary, or whatever it is, has ceased to exist in the lifetime of the testator, you are driven to arrive at the conclusion that there is a lapse, and then the doctrine of cy-près is inapplicable. That is in accordance with the law, and in accordance with all the cases that can be cited. p. 264I quite agree that in coming to that conclusion you have to consider whether the mode of attaining the object is only machinery, or whether the mode is not the substance of the gift. Here it appears to me the gift to the seminary is the substance of the whole thing. It is the object of the testator.

An example of a case in which a general charitable intention was identified is Biscoe v Jackson.272 £10,000 was left for charitable purposes, of which £4,000 was to be applied to establish a soup kitchen for the parish of Shoreditch and a cottage hospital adjoining it. After the testator’s death, it was not possible to acquire the land to carry out the provisions in the will. The will was, however, held to show a general charitable intent to benefit the poor of Shoreditch and so the money was applied cy-près for that purpose. Cotton LJ said:273

[I]s this to be considered as a legacy to a particular institution which cannot be carried into effect, or do we see here an expressed intention by the testator to benefit the poor of the parish of Shoreditch, pointing out a particular mode in which he desires that benefit to be effected? For if the latter be the true view, then if that particular mode cannot have effect given to it, the Court will take hold of the charitable intention to benefit the poor of the parish and will apply the legacy in the best way cy-près for their benefit.

… I think there is that general intention. It is very true that the testator leaves certain things to be done by the trustees to whom he is giving the sum of £10,000, and if that is to be considered as a gift to an existing institution, or as a gift for that purpose only, it has failed. But then, in my opinion, looking at this whole clause, we see an intention on the part of the testator to give £10,000 to the sick and poor of the parish of Shoreditch, pointing out how he desires that to be applied; and that particular mode having failed, as we must for the purposes of this appeal assume to be the case, then the intention to benefit the poor of Shoreditch, being a good charitable object, will have effect given to it according to the general principle laid down long ago by this Court, by applying it cy-près. If the will had said that the trustees must build the particular building within the parish of Shoreditch there might be some difficulty, but what the testator desires to do is to provide a particular kind of hospital and a soup kitchen for the poor of the parish of Shoreditch. To my mind that shows that he intends not that it is to be located in a particular place, though that would be a proper mode of giving effect to the particular directions contained, if a place in the parish could be found; but that it is for the benefit of the parish, that is of the poor in the parish of Shoreditch. The testator directs that this shall be done by providing them with soup in this kitchen, by providing them with relief in a cottage hospital, and then by a direction that there is to be a woman living in the hospital to look after the inmates in the hospital, and that a sum of money is to be paid to a medical man to attend to them; and then he directs his trustees ‘to apply the residue of such annual income towards the necessities and for the benefit thereof, and of the patients who shall from time to time be taken into such hospital in such manner in all respects as my trustees or trustee in their or his absolute discretion think fit’. Of course we have to determine what is the effect, looking fairly at the words used by the testator, to see what his intention was. To my mind the clear result is that he intended here to provide for the benefit of the poor, which is a good charitable bequest, and to provide for that primarily in the particular way he points out.

(iii) Defunct or non-existent charity

Whether property can be applied cy-près following an initial failure of purpose may turn on whether the particular charity that was identified by the donor is defunct or never existed, since this may affect p. 265whether a general charitable intent can be identified. The significance of this distinction is illustrated by Re Harwood,274 in which the testatrix left bequests to the Wisbech Peace Society and the Peace Society of Belfast. The Wisbech Peace Society had existed when the will was made, but it had ceased to exist by the time of her death. The Peace Society of Belfast had never existed. It was held that the gift to the Wisbech Peace Society could not be applied cy-près, but the other could. Farwell J said:275

The first question that I have to determine is whether a gift … ‘to the Wisbech Peace Society, Cambridge’ fails. The evidence is that this particular society ceased to exist in the testatrix’s lifetime. It is said that it is being still carried on as part of the work of the Peace Committee of the Society of Friends. The onus is upon them to show that they are the persons entitled to take. The evidence in this case is so unsatisfactory that I cannot say that that onus has been discharged.

That leaves the question whether there is any general charitable intent, so as to admit of the application of the cy-près doctrine. In that will there is a long list of various charitable societies including charities whose work is devoted to peace. It is said that as this is one of a long list of charitable legacies there is a general charitable intent. On the other hand, it is said that where there is a gift to a particular society, which once existed but ceased to exist before the death of the testator or testatrix, the gift lapses and there is no room for the cy-près doctrine … I do not propose to decide that it can never be possible for the Court to hold that there is a general charitable intent in a case where the charity named in the will once existed but ceased to exist before the death. Without deciding that, it is enough for me to say that, where the testator selects as the object of his bounty a particular charity and shows in the will itself some care to identify the particular society which he desires to benefit, the difficulty of finding any general charitable intent in such case if the named society once existed, but ceased to exist before the death of the testator, is very great. Here the testatrix has gone out of her way to identify the object of her bounty. In this particular case she has identified it as being ‘the Wisbech Peace Society Cambridge (which is a branch of the London Peace Society)’. Under those circumstances, I do not think it is open to me to hold that there is in this case any such general charitable intent as to allow the application of the cy-près doctrine …

Then there is the gift to the ‘Peace Society of Belfast’.

The claimant for this legacy is the Belfast Branch of the League of Nations Union. I am quite unable on the evidence to say that that was the society which this lady intended to benefit, and I doubt whether the lady herself knew exactly what society she did mean to benefit. I think she had a desire to benefit any society which was formed for the purpose of promoting peace and was connected with Belfast. Beyond that, I do not think that she had any very clear idea in her mind … At any rate I cannot say that by the description, ‘the Peace Society of Belfast’, the lady meant the Belfast Branch of the League of Nations Union; but there is enough in this case to enable me to say that, although there is no gift to any existing society, the gift does not fail. It is a good charitable gift and must be applied cy-près. The evidence suggests that at some time or other, possibly before the late War, there may have been a society called the Peace Society of Belfast. It is all hearsay evidence; there is nothing in the least definite about it, and it does not satisfy me that there ever was any society in existence which exactly fits the description in this case, and there being a clear intention on the part of the lady, as expressed in her will, to benefit societies whose object was the promotion of peace, and there being no such society as that named in her will, in this case there is a general charitable intent, and, accordingly, the doctrine of cy-près applies.

In drawing a distinction between defunct and non-existent charities, this decision has been described as ‘remarkable’.276 It is certainly difficult to see how the testatrix’s intention can be differentiated p. 266depending on whether or not the charity that she wished to benefit had or had not existed, since in both cases she had apparently intended to benefit a particular institution. There is, however, more likely to be an intention to benefit a particular institution if the institution once existed. The significance of the distinction between an institution once existing and never existing was considered further in Re Spence,277 in which a testatrix had left the residue of her estate for the benefit of the patients of the ‘Old Folks Home at Hillworth Lodge Keighley’. The home had existed but had closed by the time of her death. It was held that the gift could not be applied cy-près. Megarry V-C said:278

[Re Harwood was] concerned with gifts to institutions, rather than gifts for purposes. The case before me, on the other hand, is a gift for a purpose, namely, the benefit of the patients at a particular Old Folks Home. It therefore seems to me that I ought to consider the question, of which little or nothing was said in argument, whether the principle in Re Harwood, or a parallel principle, has any application to such case. In other words, is a similar distinction to be made between, on the one hand, a case in which the testator has selected a particular charitable purpose, taking some care to identify it, and before the testator dies that purpose has become impracticable or impossible of accomplishment, and on the other hand a case where the charitable purpose has never been possible or practicable?

As at present advised I would answer Yes to that question. I do not think that the reasoning of the Re Harwood line of cases is directed to any feature of institutions as distinct from purposes. Instead, I think the essence of the distinction is in the difference between particularity and generality. If a particular institution or purpose is specified, then it is that institution or purpose, and no other, that is to be the object of the benefaction. It is difficult to envisage a testator as being suffused with a general glow of broad charity when he is labouring, and labouring successfully, to identify some particular specified institution or purpose as the object of his bounty. The specific displaces the general. It is otherwise where the testator has been unable to specify any particular charitable institution or practicable purpose, and so, although his intention of charity can be seen, he has failed to provide any way of giving effect to it. There, the absence of the specific leaves the general undisturbed …

From what I have said it follows that I have been quite unable to extract from the will, construed in its context, any expression of a general charitable intention which would suffice for the moiety to be applied cy-près. Instead, in my judgment, the moiety was given for a specific charitable purpose which, though possible when the will was made, became impossible before the testatrix died. The gift of the moiety accordingly fails, and it passes as on intestacy.

Although Megarry V-C appeared to confirm the distinction between defunct and non-existent charities, his emphasis on the identification of particular and general purposes or institutions suggests that, where an institution is specifically identified to receive a bequest, there is less likely to be a general charitable intent even though the institution never existed. Certainly, in Re Spence itself, the identification of a specific charitable purpose meant that, since that purpose had failed, the bequest could not be applied cy-près, although that was a case where the institution had once existed.

There will, however, sometimes be circumstances where, despite the identification of a particular charitable purpose or institution that has become defunct, the court will still be able to find a general charitable intent. This is illustrated by the unusual facts of Re Finger’s Will Trusts,279 in which the gift to the National Council for Maternity and Child Welfare, an incorporated charity, had failed because the charity had ceased to exist by the time of the testatrix’s death. Although it was found that the gift was p. 267intended to be for the institution rather than for its charitable purpose, a general charitable intent was still identified. Goff J said:280

Farwell J [in Re Harwood] did not say that it was impossible to find a general charitable intention where there is a gift to an identifiable body which has ceased to exist but only that it would be very difficult …

In the present case the circumstances are very special. First, of course … the whole estate is devoted to charity and that is, I think, somewhat emphasised by the specific dedication to charity in the preface:

‘[A]nd after payment of the said legacies my trustees shall hold the balance then remaining of my residuary estate upon trust to divide the same in equal shares between the following charitable institutions and funds.’

Again, I am I think entitled to take into account the nature of the council, which as I have said was mainly, if not exclusively, a co-ordinating body. I cannot believe that this testatrix meant to benefit that organisation and that alone.

Finally, I am entitled to place myself in the armchair of the testatrix and I have evidence that she regarded herself as having no relatives.

Taking all these matters into account, in my judgment I can and ought to distinguish Re Harwood and find—as I do—a general charitable intention.

It is important to remember that the court is seeking to determine whether there was a general charitable intent on the part of the testator. Whilst the fact that a gift was intended to be for a particular institution is evidence that there was no general charitable intention, there may be other factors, such as those identified by Goff J, which may enable such an intention to be identified.

(iv) Charity by association

Where a donor makes a number of gifts to charities with similar purposes, but one of those charities does not exist, the court will be more willing to find a general charitable intention by virtue of its association with gifts to existing charities. So, for example, in Re Satterthwaite’s Will Trusts,281 the testatrix left her estate to seven animal charities, an anti-vivisectionist society, and the London Animal Hospital. No such hospital existed when the will was made. It was held that the gift that was purportedly made to the hospital could be applied cy-près because the testatrix had a general charitable intent in favour of animal welfare. Harman LJ said:282

If a particular donee were intended which cannot be identified, no general intent would follow. But when one looks at the whole of the residuary bequest, it seems plain that each share is intended to go to some object connected with the care or the cure of animals. That Anti-Vivisection has been declared not to be in law a charitable object is irrelevant. The society exists to save animals from suffering.

In Re Jenkins’s Will Trusts,283 however, the testatrix bequeathed her residuary estate to seven institutions, one of which was the British Union for the Abolition of Vivisection, which was not a charity p. 268because of its political purpose.284 The other six institutions were charities with purposes relating to animal welfare. It was held that the gift to the anti-vivisection institution failed because it was not possible to identify an intention that the gift for the non-charitable purpose should take effect as a gift for other charitable purposes simply because there were other charitable gifts, even though the non-charitable gift had a close relation to those other purposes. Buckley J said:285

There are cases in which, where property has been given to some charity which cannot be identified, the court has felt able to say … that in the context in which the gift is found it is clear that the testator or testatrix had a charitable intention in making the particular gift and intended to benefit not a particular institution but a charitable activity … However, the principle of noscitur a sociis [interpretation by reference to context] does not in my judgment entitle one to overlook self-evident facts. If you meet seven men with black hair and one with red hair you are not entitled to say that here are eight men with black hair. Finding one gift for a non-charitable purpose among a number of gifts for charitable purposes the court cannot infer that the testator or testatrix meant the non-charitable gift to take effect as a charitable gift when in the terms it is not charitable, even though the non-charitable gift may have a close relation to the purposes for which the charitable gifts are made.

In my judgment it is not possible for me in this case to come to the conclusion that the testatrix, when she made this gift to the first defendant for the express purpose of doing all that was possible to promote the passage of an Act of Parliament prohibiting vivisection, was really actuated by a charitable purpose to which the court could give effect by way of scheme.

The difference between these cases is that, in Re Satterthwaite, the testatrix intended to benefit an institution that did not exist, but would probably have been charitable had it existed; in Re Jenkins, the institution did exist, but it was not pursuing a charitable purpose. The general charitable intent was identified in Re Satterthwaite because of the close connection between the different charitable purposes. In Re Jenkins, a non-charitable purpose could not have been rendered charitable simply by virtue of its association with other charitable purposes.

The principle of construction of charity by association was analysed further in Re Spence,286 where the doctrine was not applied where the testatrix had made a bequest for the benefit of old people in a particular home that no longer existed and another for blind patients in another home that did exist. Megarry V-C said:287

The doctrine may for brevity be described as charity by association. If the will gives the residue among a number of charities with kindred objects, but one of the apparent charities does not in fact exist, the court will be ready to find a general charitable intention and so apply the share of the non-existent charity cy-près. I have not been referred to any explicit statement of the underlying principle, but it seems to me that in such cases the court treats the testator as having shown the general intention of giving his residue to promote charities with that type of kindred objects, and then, when he comes to dividing the residue, as casting around for particular charities with that type of objects to name as donees. If one or more of these are non-existent, then the general intention will suffice for a cy-près application. It will be observed that, as stated, the doctrine depends, at least to some extent, upon the detection of ‘kindred objects’ (a phrase which comes from the judgment of Luxmoore J in In re Knox [1937] Ch 109, 113) in the p. 269charities to which the shares of residue are given, in this respect the charities must in some degree be ejusdem generis [of the same kind] …

The court is far less ready to find such an intention where the gift is to a body which existed at the date of the will but ceased to exist before the testator died, or, as I have already held, where the gift is for a purpose which, though possible and practicable at the date of the will, has ceased to be so before the testator’s death. The case before me is, of course, a case in this latter category, so that [counsel] has to overcome this greater difficulty in finding a general charitable intention.

Not only does [counsel] have this greater difficulty: he also has, I think, less material with which to meet it. He has to extract the general charitable intention for the gift which fails from only one other gift: the residue, of course, was simply divided into two. In In re Knox and In re Hartley the gifts which failed were each among three other gifts, and in In re Satterthwaite’s Will Trusts [1966] 1 WLR 277 there were seven or eight other gifts. I do not say that a general charitable intention or a genus cannot be extracted from a gift of residue equally between two: but I do say that larger numbers are likely to assist in conveying to the court a sufficient conviction both of the genus and of the generality of the charitable intention …

Where the difficulty or impossibility not only afflicts the method but also invades the concept of the alleged general charitable intention, then I think that the difficulty of establishing that the will displays any general charitable intention becomes almost insuperable.

(b) Subsequent Failure of Charitable Purpose

Once a trust fund has been dedicated to a charitable purpose, the fact that the purpose then fails cannot destroy the charitable nature of the fund. The courts will find a similar charitable purpose and the fund will be transferred to it, regardless of whether the donor had a general or particular charitable intent. The only exceptions are where the creator of the trust has expressly provided for what should happen to the fund if the purpose subsequently fails, for example by providing that the property should be returned to the settlor, or to those entitled to the testator’s residuary estate, or passed to a third party.288

Where a testator has sought to create a charitable trust, the failure of the charitable purpose will be subsequent if it occurs after the testator’s death even though it occurred before the gift was vested in the charity. So, for example, in Re Slevin,289 the testator made a gift to an orphanage that was in existence at his death, but which ceased to exist soon afterwards and before the legacy was paid. It was held that the gift could be applied cy-près. Kay LJ said:290

In the case of a legacy to an individual, if he survived the testator it could not be argued that the legacy would fall into the residue. Even if the legatee died intestate and without next-of-kin, still the money was his, and the residuary legatee would have no right whatever against the Crown. So, if the legatee were a corporation which was dissolved after the testator’s death, the residuary legatee would have no claim.

Obviously it can make no difference that the legatee ceased to exist immediately after the death of the testator. The same law must be applicable whether it was a day, or month, or year, or, as might well happen, ten years after; the legacy not having been paid either from delay occasioned by the administration of the estate or owing to part of the estate not having been got in. The legacy became the property of the legatee upon the death of the testator, though he might not, for some reason, obtain the receipt of it till long after. When once it became the absolute property of the legatee, that is equivalent to saying that it must be provided for; and the residue is only what remains after making such provision. It does not p. 270for all purposes cease to be part of the testator’s estate until the executors admit assets and appropriate and pay it over; but that is merely for their convenience and that of the estate. The rights as between the particular legatee and the residue are fixed at the testator’s death …

In the present case we think that the Attorney-General must succeed, not on the ground that there is such a general charitable intention that the fund should be administered cy-près even if the charity had failed in the testator’s lifetime, but because, as the charity existed at the testator’s death, this legacy became the property of that charity, and on its ceasing to exist its property falls to be administered by the Crown, who will apply it, according to custom, for some analogous purpose of charity.

In Re Wright,291 the testatrix left her residuary estate, subject to a life interest, on trust for a convalescent home. When she died in 1933, the provision of such a home was capable of being carried out, but when the life tenant died in 1942, it was no longer practicable. The Court of Appeal held that the test of practicability of charitable purpose should be applied at the date of the testatrix’s death rather than when the funds became available on the death of the life tenant. This was because the former date was that on which the rights of the charity and the next of kin, who would take it if the gift to the charity failed, were ascertained. This was consequently a case of subsequent failure of the charitable purpose because the purpose had been practicable when the testatrix died and so the funds could be applied cy-près.

In Re Tacon,292 the time for determining the practicability of fulfilling the charitable purpose was clarified. It was held that, where the gift is vested but liable to be defeated on the occurrence of a particular event, it is not sufficient merely to consider whether the purpose was practicable at the date of the testator’s death; it is also necessary to consider whether it would be practicable at some future date. In that case, the testator had left his residuary estate to his daughter for life with remainder to her children, but, if she did not have any, part of the residuary estate was to be used to found a hospital. At the date of the testator’s death, the value of the residuary estate was sufficient to establish such a hospital. His daughter died childless thirty years later, by which time the value of the residuary share had fallen significantly, so that the charitable purpose was no longer practicable. It was held that, where the gift for the charitable purpose was vested but defeasible, it should be assumed that the gift would take effect at some time in the future. In the light of that, it was considered that, had the question of practicability in the future been assessed at the time of the testator’s death, the purpose would have been considered to be practicable because it would not have been anticipated that the value of money would have fallen in the meantime.

A charitable purpose will also be considered to have failed subsequently where the purpose has been fulfilled and there remains a surplus of trust funds. So, for example, in Re King,293 the testatrix left the residue of her estate for a stained-glass window to be installed in a church. The residue was over £1,000 and the cost of the window was about £700. It was held that the surplus of the estate could be applied cy-près towards the installation of another window in the church.

(c) Alteration of Original Charitable Purpose

Where the charitable purpose is subject to a condition that makes it impossible or impractical to achieve the main purpose, the court can, as part of its common law cy-près jurisdiction, remove the condition so that the main purpose can be achieved. So, for example, in Re Lysaght,294 the Royal College of p. 271Surgeons refused to accept a generous benefaction towards medical studentships because it was subject to a condition that meant that Jewish or Roman Catholic students were not eligible to receive studentships, a condition that the Royal College considered to be alien to the spirit of its work. It was held that, since the conditions relating to religious disqualification concerned the machinery of the trust and did not form an essential part of the donor’s intention to found medical studentships, a scheme was ordered whereby the Royal College held the bequest on trust, but without the offending condition which was not considered to be essential to the fulfilment of the donor’s dominant charitable intent. Altering the original charitable purpose was not available, however, at common law where the fulfilment of the purpose remained possible, but the purpose was simply not useful or convenient, such as where property was left for use as a hospital but for which purpose the site was not suitable,295 or where the purpose was outmoded or was provided for from other sources. The cy-près doctrine can now be applied in such situations by statute, with the relevant provision now to be found in the Charities Act 2011, which relaxed the requirement of impossibility and impracticability.

Charities Act 2011

62 Occasions for applying property cy-près

(1)

Subject to subsection (3), the circumstances in which the original purposes of a charitable gift can be altered to allow the property given or part of it to be applied cy-près are—

(a)

where the original purposes, in whole or in part—

(i)

have been as far as may be fulfilled, or

(ii)

cannot be carried out, or not according to the directions given and to the spirit of the gift,

(b)

where the original purposes provide a use for part only of the property available by virtue of the gift,296

(c)

where—

(i)

the property available by virtue of the gift, and

(ii)

other property applicable for similar purposes, can be more effectively used in conjunction, and to that end can suitably, regard being had to the appropriate considerations, be made applicable to common purposes,

(d)

where the original purposes were laid down by reference to—

(i)

an area which then was but has since ceased to be a unit for some other purpose, or

(ii)

a class of persons or an area which has for any reason since ceased to be suitable, regard being had to the appropriate considerations, or to be practical in administering the gift, or

(e)

where the original purposes, in whole or in part, have, since they were laid down—

(i)

been adequately provided for by other means,

(ii)

ceased, as being useless or harmful to the community or for other reasons, to be in law charitable, or

(iii)

ceased in any other way to provide a suitable and effective method of using the property available by virtue of the gift, regard being had to the appropriate considerations.

(2)

In subsection (1) ‘the appropriate considerations’ means—p. 272

(a)

(on the one hand) the spirit of the gift concerned, and

(b)

(on the other) the social and economic circumstances prevailing at the time of the proposed alteration of the original purposes.

Section 62 enables the original purposes of a charitable gift to be altered by the Charity Commission in certain circumstances to allow some, or all, of the donated property to be applied cy-près. The jurisdiction is significant, since it involves altering the original purposes of the gift to enable property to be applied in a different way from that intended by the donor.

The significance of section 62 is especially well illustrated by Varsani v Jesani.

Varsani v Jesani
[1999] Ch 219

A Hindu religious sect had split into two factions in 1984; one of which recognized the divine status of the successor to the sect’s founder whilst the other did not. Neither group could worship together in the charity’s temple. Both factions sought a scheme to divide the charity’s funds under what is now section 62 of the Charities Act 2011, but was then section 13 of the Charities Act 1993, on the ground that the original purpose of the charity, namely to worship in the temple, had ceased to provide a suitable and effective method of using the property, having regard to the spirit of the gift. It was held that the statutory jurisdiction applied, so a scheme for the division of the charity’s property between the two groups would be directed, even though the original purposes of the charity were neither impossible nor impractical. Morritt LJ said:297

Now the jurisdiction to make a cy-près scheme depends on whether the case falls within one or other of the paragraphs of section 13(1). The relevant test in this case is now whether the original purpose has ceased to provide a suitable and effective method of using the property, regard being had to the spirit of the gift.

In my view that test is satisfied in this case. First, there is no doubt what the original purpose of the charity was and is. It was and is the promotion of the faith of Swaminarayan according to the teachings and tenets of Muktajivandasji. Second, until the problems disclosed by the events of 1984 arose those original purposes were both suitable and effective as a method of using the property for both the majority and minority group were agreed on all relevant matters and therefore able to worship together in the temples provided by the charity. Third, the exposure of differing beliefs by the events of 1984 has produced a situation in which neither group is able to worship in the same temple as the other so that the minority group has been excluded from the facilities for the worship the charity was established to provide. Fourth, unless the impasse can be resolved as a matter of faith, so that both groups reunite to embrace the faith the charity was established to promote, the impasse will remain so long as the original purpose remains. Fifth, the impasse cannot be resolved as a matter of faith because the teachings and tenets of Muktajivandasji did not deal with whether a belief in a particular successor to Muktajivandasji or in the divine attributes of a successor were or are essential tenets of the faith … Thus the impasse and the original purpose of the charity go together. If the original purpose leads in the present circumstances to such an impasse then in my view it is self-evident that the original purpose has ceased to be a suitable and effective method of using the available property.

The court is enjoined by section 13(1)(e)(iii) of the Charities Act 1993 to have regard to the spirit of the gift … the basic intention underlying the gift or the substance of the gift rather than the form of the words p. 273used to express it or conditions imposed to effect it. It is noteworthy that the phrase is used in section 13(1) only in contexts which require the court to make a value judgment. Thus it does not appear in paragraphs (a)(i), (b), (e)(i) or (ii). Moreover, when it is used, in each case except one it appears in the context of suitability. The exception, paragraph (a)(ii), whilst not actually using the word ‘suitable’, requires a similar value judgment. The court is not bound to follow the spirit of the gift but it must pay regard to it when making the value judgments required by some of the provisions of section 13(1).

For my part I have no hesitation in concluding that the spirit of the gift supports the submission that the court should accept and exercise the jurisdiction conferred by section 13(1)(e)(iii), of the Charities Act 1993 by directing a scheme for the division of the property of the charity between the majority and minority groups. The choice lies between directing such a scheme for the benefit of all those who down to 1984 shared the belief for the promotion of which the charity was established and, no doubt, in many cases supported the charity financially as well, even though some of them may no longer do so, and requiring a substantial proportion of the trust property to be spent in litigation which can never finally resolve the problems which divide the two groups. I do not minimise the strength of feeling which arises in connection with disputes such as this. In such cases either or both groups often litigate in preference to permitting a benefit to be conferred on the other. But the spirit of the gift to which the court is to have regard is that which prevailed at the time of the gift when the two groups were in harmony.

Accordingly I would reject the submissions of both the minority group and the Attorney-General. First, it is not necessary to ascertain the precise limits of the purpose of the charity before deciding whether the case comes within section 13(1) of the Charities Act 1993. The purpose of this charity is clear; it is the promotion of the faith of Swaminarayan according to the teaching and tenets of Muktajivandasji. It is the expression of that purpose in the light of subsequent events which has given rise to the schism with the result that the original purpose has ceased to be a suitable and effective method of using the trust property. Second, it is not a necessary condition for the application of the section that the original purposes have become impossible or impractical, only that the circumstances come within one or other paragraph of section 13(1). Thus even if the inquiries sought were ordered and pursued and ultimately demonstrated that the minority group but not the majority group still embraced the relevant faith that does not now preclude the application of the section for the outcome of the inquiries would merely demonstrate that the original purpose was not impossible or impractical.

Chadwick LJ said:298

I agree with Morritt LJ that, if the underlying question which, if either, of the views now held by the majority group and the minority group respectively do truly reflect the teachings and tenets of Muktajivandasji in the circumstances which have arisen were to be resolved in favour of one group and against the other, the position would be that the original purposes had ceased to provide a suitable and effective method of using the property available by virtue of the gift. It is not, of course, the case that the property could not be used in accordance with the original purposes. Clearly it could be so used by the group who were found, on this hypothesis, to be the followers of the true faith. But to appropriate the property to the sole use of one group, to the exclusion of the other, would not—in a case like the present—be a suitable and effective method of using that property, regard being had to the spirit of the gift.

The need to have regard to the spirit of the gift requires the court to look beyond the original purposes as defined by the objects specified in the declaration of trust and to seek to identify the spirit in which the donors gave property upon trust for those purposes. That can be done, as it seems to me, with the assistance of the document as a whole and any relevant evidence as to the circumstances in which the gift was made. In the present case I have no doubt that the spirit in which property was given in 1967 p. 274was a desire to provide facilities for a small but united community of the followers of Muktajivandasji in and around Hendon to worship together in the faith of Swaminarayan. The original purposes specified in the declaration of trust—that is to say the promotion of the faith of Swaminarayan as practised in accordance with the teachings and tenets of Muktajivandasji—are no longer a suitable and effective method of using the property given in 1967, or added property held upon the same trusts, because the community is now divided and cannot worship together. Nothing that the court may decide will alter that. To hold that one group has adhered to the true faith and that the other group has not will not alter the beliefs of that other group. The position will remain that the community cannot worship together. To appropriate the use of the property to the one group to the exclusion of the other would be contrary to the spirit in which the gift was made.

It follows that there would be jurisdiction to make a scheme cy-près even if the underlying question which, if either, of the views now held by the majority group and the minority group respectively do truly reflect the teachings and tenets of Muktajivandasji in the circumstances which have arisen were to be resolved in favour of one group and against the other. Given jurisdiction, it would plainly be appropriate to make a scheme. To refuse to do so would be to perpetuate a position in which the property of the charity is no longer being used in a suitable and effective manner.

The alternative to a cy-près scheme was to conduct an inquiry to determine which faction followed the true faith; that faction could then have exclusive use of the temple. This was not considered to be a suitable and effective method of using the property, having regard to the spirit in which the donors had given property on trust for the purpose of promoting the faith of the sect by the community worshipping together.

Another example of the significant jurisdiction created by section 62 is Re Lepton’s Charity.

Re Lepton’s Charity
[1972] Ch 276

In 1715, the testator had left land on trust with £3 of the income each year to be paid to a Protestant dissenting minister in Pudsey, and the surplus was to be distributed to the poor and aged of the town. The land was sold. The question for the court was whether what is now section 62 could be used to vary the will and raise the annual payment to the minister to £100, in the light of the fact that when the trust was established the annual income was £5 and when the case was heard the annual income was nearly £800. A scheme was ordered to vary the will on the ground that regard should be had to the charitable purposes in the trust as a whole, in particular the relative value of the payment to the minister and the residue. Pennycuick V-C said:299

One must next consider whether in relation to a trust for payment of a fixed annual sum out of the income of a fund to charity A and payment of the residue of that income to charity B the expression ‘the original purposes of a charitable gift’ in section 13(1) should be construed as referring to the trusts as a whole or must be related severally to the trust for payment of the fixed annual sum and the trust for payment of residuary income …

It seems to me that the words ‘the original purposes of a charitable gift’ are apt to apply to the trusts as a whole in such a case. Where a testator or settlor disposes of the entire income of a fund for charitable purposes, it is natural to speak of the disposition as a single charitable gift, albeit the gift is for more than one charitable purpose. Conversely, it would be rather unnatural to speak of the disposition p. 275as constituting two or more several charitable gifts each for a single purpose. Nor, I think, is there any reason why one should put this rather artificial construction on the words. The point can, so far as I can see, only arise as a practical issue in regard to a trust of the present character. A trust for division of income between charities in aliquot [proportionate] shares would give rise to different considerations, inasmuch as even if one treats it as a single gift the possibility or otherwise of carrying out the trusts of one share according to the spirit of the gift could hardly react upon the possibility or otherwise of carrying out the trusts of the other share according to the spirit of the gift. The same is true, mutatis mutandis, of trusts for charities in succession. But in a trust of the present character there is an obvious interrelation between the two trusts in that changes in the amount of the income and the value of money may completely distort the relative benefits taken under the respective trusts …

Once it is accepted that the words ‘the original purposes of a charitable gift’ bear the meaning which I have put upon them it is to my mind clear that in the circumstances of the present case the original purposes of the gift of [the land] cannot be carried out according to the spirit of the gift, or to use the words of paragraph (e)(iii) ‘have ceased … to provide a suitable and effective method of using the property … regard being had to the spirit of the gift’. The intention underlying the gift was to divide a sum which, according to the values of 1715, was modest but not negligible, in such a manner that the minister took what was then a clear three-fifths of it. This intention is plainly defeated when in the conditions of today the minister takes a derisory £3 out of a total of £791.

The application of what is now section 62 in this case involved an expansion of the statutory jurisdiction, since there was no alteration of the original charitable purpose but only of the amount that could be paid to the minister. However, the amount that would otherwise be due was so derisory that this could be regarded as defeating the original charitable purpose.

Section 62 will be engaged only if the case falls within one of the recognized conditions for that provision to apply. But, even if it does not, the court can still rely on its inherent jurisdiction to amend the terms of the charitable trust. So, for example, in Re JW Laing Trust,300 in 1922 the settlor had transferred £15,000 worth of shares to be held on charitable trust, with the capital and income to be wholly distributed within ten years of his death. The settlor died in 1978. By 1982, the capital had not been distributed and was worth £24 million, with an annual income of £1.2 million. The trustee applied for a scheme to discharge it from the obligation of distributing within ten years of the settlor’s death. The application was refused under what is now section 62, because the obligation to distribute was an administrative provision and was not an original purpose of the charitable gift that related to the charitable objects for which the gift was to be applied. However, the scheme was approved in the exercise of the court’s inherent jurisdiction at common law, because the requirement as to distribution was considered to be ‘inexpedient’ in the altered circumstances of the charity since 1922. Peter Gibson J said:301

It is necessary to identify the original purposes of the gift. I venture to suggest that, as a matter of ordinary language, those purposes in the present case should be identified as general charitable purposes and nothing further. I would regard it as an abuse of language to describe the requirement as to distribution as a purpose of the gift. Of course, that requirement was one of the provisions which the settlor intended to apply to the gift, but it would, on any natural use of language, be wrong to equate all the express provisions of a gift, which ex hypothesi the settlor intended to apply to the gift, with the purposes of a gift. To my mind the purposes of a charitable gift would ordinarily be understood as meaning those charitable objects on which the property given is to be applied. It is not meaningful to talk of the p. 276requirement as to distribution being either charitable or non-charitable. The purposes of a charitable gift correspond to the beneficiaries in the case of a gift by way of a private trust. …

I confess that from the outset I have found difficulty in accepting that it is meaningful to talk of a cy-près application of property that has from the date of the gift been devoted both as to capital and income to charitable purposes generally, albeit subject to a direction as to the timing of the capital distributions. No case remotely like the present had been drawn to my attention …

In the result, despite all the arguments that have been ably advanced, I remain unpersuaded that such a gift is capable of being applied cy-près and, in particular, I am not persuaded that the requirement as to distribution is a purpose within the meaning of section 13. Rather, it seems to me to fall on the administrative side of the line, going, as it does, to the mechanics of how the property devoted to charitable purposes is to be distributed. Accordingly, I must refuse the application so far as it is based on section 13.

In my judgment, the plaintiff has made out a very powerful case for the removal of the requirement as to distribution, which seems to me to be inexpedient in the very altered circumstances of the charity since that requirement was laid down 60 years ago. I take particular account of the fact that this application is one that has the support of the Attorney-General. Although the plaintiff is not fettered by the express terms of the gift as to the charitable purposes for which the charity’s funds are to be applied, it is, in my view, proper for the plaintiff to wish to continue to support the causes which the settlor himself wished the charity to support from its inception, and which would suffer if that support was withdrawn as a consequence of the distribution of the charity’s assets. I have no hesitation in reaching the conclusion that the court should, in the exercise of its inherent jurisdiction, approve a scheme under which the trustees for the time being of the charity will be discharged from the obligation to distribute the capital within ten years of the death of the settlor.

This reliance on the court’s inherent jurisdiction can be justified on the basis that the condition did not affect the spirit of the gift and so can be distinguished from Re Lepton’s Charity, in which the statutory jurisdiction was engaged because the amount to be paid to the minister did affect the spirit of the gift.

Another example of the continuing significance of the court’s inherent jurisdiction is Oldham Borough Council v Attorney-General.302 In that case, land had been conveyed in 1962 to the Council on trust for use as playing fields. The Council wished to sell the land to developers for a substantial sum of money and to use the proceeds to buy other playing fields with much better facilities. It was held that the court could not authorize the sale under what is now section 62, because, even though the retention of the site was part of the original purposes of the charity, none of the identified circumstances under the statute applied. It was recognized, however, that the court had an inherent jurisdiction to authorize a scheme to sell charitable property and to reinvest the proceeds on the same charitable trusts. Dillon LJ said:303

[I]f the retention of a particular property is part of the ‘original purposes’ of a charitable trust, sale of that property would involve an alteration of the original purposes even if the proceeds of the sale were applied in acquiring an alternative property for carrying out the same charitable activities. If so, a sale of the original property could only be ordered as part of a cy-près scheme, and then only if circumstances within one or other of paragraphs (a) to (e) [of what is now section 62] are made out. The particular bearing of that in the present case is that the council accepts, and the Attorney-General agrees, that the circumstances of this charity do not fall within any of these paragraphs. If, therefore, on a true appreciation of the deed of gift and of section 13, the retention of the existing site is part of the original purposes of the charity, the court cannot authorise any sale … I have no doubt at all that the original purpose, in ordinary p. 277parlance, of the donor was, in one sense, that the particular land conveyed should be used for ever as playing fields for the benefit and enjoyment of the inhabitants of Oldham …

there are cases where the donor has imposed a condition, as part of the terms of his gift, which limits the main purpose of the charity in a way which, with the passage of time, has come to militate against the achievement of that main purpose. The condition is there part of the purpose, but the court has found itself able on the facts to cut out the condition by way of a cy-près scheme under the cy-près jurisdiction, on the ground that the subsistence of the condition made the main purpose impossible or impracticable of achievement: see Re Dominion Students’ Hall Trust [1947] Ch 183, where a condition of a trust for the maintenance of a hostel for male students of the overseas dominions of the British Empire restricted the benefits to dominion students of European origin; and see, also Re Robinson [1923] 2 Ch 332, where it was a condition of the gift of an endowment for an evangelical church that the preacher should wear a black gown in the pulpit. But unlike those conditions, the intention or purpose in the present case that the actual land given should be used as playing fields is not a condition qualifying the use of that land as playing fields …

There are, of course, some cases where the qualities of the property which is the subject matter of the gift are themselves the factors which make the purposes of the gift charitable, e.g. where there is a trust to retain for the public benefit a particular house once owned by a particular historical figure or a particular building for its architectural merit or a particular area of land of outstanding natural beauty. In such cases, sale of the house, building or land would necessitate an alteration of the original charitable purposes and, therefore, a cy-près scheme because after a sale the proceeds or any property acquired with the proceeds could not possibly by applied for the original charitable purpose. But that is far away from cases such as the present, where the charitable purpose—playing fields for the benefit and enjoyment of the inhabitants of the districts of the original donees, or it might equally be a museum, school or clinic in a particular town—can be carried on on other land.

Consequently, where the identity of the trust property was essential to the charitable purpose, the sale of that property could only be achieved under what is now section 62, because the sale of the property would involve the alteration of the charitable purpose. Where the identity of the property was not essential to the charity’s purpose, its sale could be authorized under the court’s inherent jurisdiction.

(d) Charity Collections

Where property has been given by a donor for a specific charitable purpose that fails initially, that property will be held on resulting trust for the donor.304 It could not be applied cy-près because, being for a specific charitable purpose, no general charitable intent would be identifiable. Where, however, the donor cannot be identified or found or they have formally disclaimed their right to have the property returned, the property is treated as if it were given for charitable purposes generally and can be applied cy-près.

Charities Act 2011

63. Application cy-près: donor unknown or disclaiming

(1)

Property given for specific charitable purposes which fail is applicable cy-près as if given for charitable purposes generally, if it belongs—p. 278

(a)

to a donor who after—

(i)

the prescribed advertisements and inquiries have been published and made, and

(ii)

the prescribed period beginning with the publication of those advertisements has ended,

cannot be identified or cannot be found, or

(b)

to a donor who has executed a disclaimer in the prescribed form of the right to have the property returned.

(2)

Where the prescribed advertisements and inquiries have been published and made by or on behalf of trustees with respect to any such property, the trustees are not liable to any person in respect of the property if no claim by that person to be interested in it is received by them before the end of the period mentioned in subsection (1)(a)(ii).

(3)

Where property is applied cy-près by virtue of this section, all the donor’s interest in it is treated as having been relinquished when the gift was made.

64 Donors treated as unidentifiable

(1)

For the purposes of section 63 property is conclusively presumed (without any advertisement or inquiry) to belong to donors who cannot be identified, in so far as it consists of—

(a)

the proceeds of cash collections made—

(i)

by means of collecting boxes, or

(ii)

by other means not adapted for distinguishing one gift from another, or

(b)

the proceeds of any lottery, competition, entertainment, sale or similar money-raising activity, after allowing for property given to provide prizes or articles for sale or otherwise to enable the activity to be undertaken.

(2)

The court or the Commission may by order direct that property not falling within subsection (1) is for the purposes of section 63 to be treated (without any advertisement or inquiry) as belonging to donors who cannot be identified if it appears to the court or the Commission—

(a)

that it would be unreasonable, having regard to the amounts likely to be returned to the donors, to incur expense with a view to returning the property, or

(b)

that it would be unreasonable, having regard to the nature, circumstances and amounts of the gifts, and to the lapse of time since the gifts were made, for the donors to expect the property to be returned.

(e) Charity Solicitations

Where property is donated in response to a particular charitable purpose that fails, the donor can be treated as disclaiming any interest in the property if certain conditions are satisfied.

Charities Act 2011

65 Donors treated as disclaiming

(1)

This section applies to property given—

(a)

for specific charitable purposes, and

(b)

in response to a solicitation within subsection (2).

(2)

p. 279 A solicitation is within this subsection if—

(a)

it is made for specific charitable purposes, and

(b)

it is accompanied by a statement to the effect that property given in response to it will, in the event of those purposes failing, be applicable cy-près as if given for charitable purposes generally, unless the donor makes a relevant declaration at the time of making the gift.

(3)

A relevant declaration is a declaration in writing by the donor to the effect that, in the event of the specific charitable purposes failing, the donor wishes to be given the opportunity by the trustees holding the property to request the return of the property in question (or a sum equal to its value at the time of the making of the gift).

(4)

Subsections (5) and (6) apply if—

(a)

a person has given property as mentioned in subsection (1),

(b)

the specific charitable purposes fail, and

(c)

the donor has made a relevant declaration.

(5)

The trustees holding the property must take the prescribed steps for the purpose of—

(a)

informing the donor of the failure of the purposes,

(b)

enquiring whether the donor wishes to request the return of the property (or a sum equal to its value), and

(c)

if within the prescribed period the donor makes such a request, returning the property (or such a sum) to the donor.

(6)

If those trustees have taken all appropriate prescribed steps but—

(a)

they have failed to find the donor, or

(b)

the donor does not within the prescribed period request the return of the property (or a sum equal to its value),

Section 63(1) applies to the property as if it belonged to a donor within section 63(1)(b) (application of property where donor has disclaimed right to return of property) …

(f) Small Charities

The Charities Act 2011 makes specific provision to enable trustees of certain small charities to determine their own cy-près application with the concurrence of the Charity Commission, as long as the charity has a gross income of less than £10,000, does not hold land on trust for charitable purposes, and is not exempt or a charitable company. The cy-près scheme might transfer all the charity’s property to another charity, or replace some or all of the charity’s original purposes, where they are no longer conducive to a suitable and effective application of the charity’s resources.305

(g) Critique of the Cy-Près Doctrine

At the heart of the cy-près doctrine is the distinction between initial and subsequent failure of purpose. On which side of the line a particular case falls will affect whether a general charitable intent needs to be identified. The recognition that no such intent is required where there is subsequent failure involves the elevation of a rule of evidence into a rule of law.306 This is because, in cases of p. 280subsequent failure, the old rule was that there was a presumption of general charitable intent, but this was a presumption that could be rebutted. Luxton has advocated a more rational approach to the cy-près doctrine:307

If the charitable purpose fails:

(a)

before it has taken effect (i.e. before the property has been applied to that purpose) … there is a presumption of resulting trust which can be rebutted by evidence of a general charitable intention or of an intention effectually to dedicate the property to charity; …

(b)

after it has taken effect but before the end of the perpetuity period … there is a presumption of effectual dedication to charity, which can be rebutted by evidence that the testator had no such intention not any general charitable intention …

At the end of the perpetuity period the property becomes effectually dedicated to charity as a matter of law … The charitable disposition is therefore absolute and free from determination; thus there can be no resulting trust and no claim by the next-of-kin; accordingly no general charitable intention need ever be sought for cy-près application …

The rewards to be gained from adopting this approach are rich; public policy is satisfied because the intention of the testator is important in the early years’ of the trust’s life but no further … All that is required is a recognition of the fact that the moment at which property becomes effectually dedicated to charity as a matter of law can now be shifted forward from the date of vesting in interest to the end of the perpetuity period.

Question

In her will, Alice left £100,000 to be held on trust for the benefit of any of the employees of Brico Ltd who (i) suffer financial hardship; or (ii) wish to study for a vocational qualification. Alice is the Chief Executive Officer of Brico Ltd, a company that she founded many years ago and that has employed no more than twenty people at any one time. Alice died in 2000. Brico Ltd was wound up in 2012. The trustees of the fund seek your advice as to what should happen to the trust fund.

Further Reading

  • Charity Commission, Guidance on Charitable Purposes (2013).
  • Dunn, ‘As “Cold as Charity”? Property, Equity and the Charitable Trust’ (2000) 20 LS 222.
  • Garton, ‘National Anti-Vivisection Society v Inland Revenue Commissioners’ in Landmark Cases in Equity (eds Mitchell and Mitchell) (Oxford: Hart, 2012) 529.
  • Getzler, ‘Morice v Bishop of Durham (1805)’ in Landmark Cases in Equity (eds Mitchell and Mitchell) (Oxford: Hart, 2012) 157.
  • Luxton, ‘Cy-près and the Ghost of Things that Might Have Been’ [1983] Conv 107.
  • Luxton and Evans, ‘Cogent and Cohesive? Two Recent Charity Commission Decisions on the Advancement of Religion’ [2011] Conv 144.
  • p. 281Synge, The ‘New’ Public Benefit Requirement: Making Sense of Charity Law? (Oxford: Hart Publishing, 2015).
  • Walton, ‘McGovern v Attorney-General: Constraints on Judicial Assessment of Charitable Benefit’ [2014] Conv 317.
  • For information about the Charity Commission and details of Commission publications including recent decisions, see the website: https://www.gov.uk/government/organisations/charity-commission.
  • Notes

    • 1 Morice v Bishop of Durham (1804) 9 Ves 399.

    • 2 Gaudiya Mission v Brahmachary [1998] Ch 341, 350 (Mummery LJ).

    • 3 Charity Commission, Charities in England and Wales—30 June 2018: http://apps.charitycommission.gov.uk/Showcharity/RegisterOfCharities/SectorData/SectorOverview.aspx.

    • 4 Charity Commission, Charities in England and Wales—30 June 2018.

    • 5 [1998] Ch 341, 349.

    • 6 Charities Act 1993. See now Charities Act 2011, s. 1.

    • 7 See now Charities Act 2011, s. 11.

    • 8 The Charities Act 2011, Pt 11, creates a new form of incorporation specifically for charities, called a ‘charitable incorporated organization’. This is not a company, but has some of the hallmarks of a company, such as limited liability.

    • 9 See Chapter 6.4, pp. 298–321.

    • 10 Charities Act 2011, s. 177.

    • 11 See Chapter 5.3(c)(i), pp. 188–9.

    • 12 See Chapter 5.3(c)(ii), pp. 189–204.

    • 13 See Chapter 5.5, pp. 254–9.

    • 14 [2011] UKUT 421 (TCC); [2012] Ch 214, [14].

    • 15 See Chapter 3.6, pp. 111–15.

    • 16 Re Lord Stratheden and Campbell [1894] 3 Ch 265. Also, a charity’s power to accumulate income is restricted to 21 years: Perpetuities and Accumulations Act 2009, s. 14(4).

    • 17 Ibid, s. 5. See Chapter 3.6(a), p. 113.

    • 18 See Chapter 3.2, pp. 67–74; Chapter 3.4, pp. 89–109.

    • 19 Moggridge v Thackwell (1802) 7 Ves Jun 36.

    • 20 See Chapter 5.5, pp. 254–9.

    • 21 IRC v Oldham Training and Enterprise Council [1996] STC 1218, 1235 (Lightman J).

    • 22 [1981] AC 1, 14.

    • 23 [2011] UKUT 421 (TCC); [2012] Ch 214, [14].

    • 24 See further Chapter 5.4(b)(ii)(b), pp. 219–24.

    • 25 See Chapter 8.3(c)(iii), pp. 399–401.

    • 26 See Chapter 5.6, pp. 259–80.

    • 27 Gaudiya Mission v Brahmachary [1998] Ch 341, 350 (Mummery LJ).

    • 28 Weth v A-G [1999] 1 WLR 686, 691 (Nourse LJ).

    • 29 See Chapter 5.3(c)(ii), pp. 189–204.

    • 30 Helena Partnerships Ltd v The Commissioners for Her Majesty’s Revenue and Customs [2012] EWCA Civ 569; [2012] WTLR 1519, [14] (Lloyd LJ).

    • 31 Charities Act 2011, s. 35(1).

    • 32 Ibid, s. 35(3).

    • 33 Ibid, s. 36.

    • 34 Ibid, s. 46.

    • 35 Ibid, s. 84.

    • 36 Ibid, s. 110.

    • 37 Ibid, s. 86.

    • 38 Ibid, s. 69(1).

    • 39 Ibid, s. 70(l).

    • 40 Ibid, s. 70(8).

    • 41 See generally Synge, The ‘New’ Public Benefit Requirement: Making Sense of Charity Law? (Oxford: Hart, 2015).

    • 42 See The Independent Schools Council v The Charity Commission for England and Wales [2011] UKUT 421 (TCC); [2012] Ch 214. See Chapter 5.4(b)(ii)(b), pp. 219–24.

    • 43 Charities Act 2011, Pt 17.

    • 44 The Independent Schools Council v The Charity Commission for England and Wales [2011] UKUT 421 (TCC); [2012] Ch 214. See Chapter 5.4(b)(ii)(b), pp. 219–24.

    • 45 Charities Act 2011, s. 78(5)(b).

    • 46 [2016] EWHC 876 (Ch); [2016] Ch 612.

    • 47 Ibid, [72].

    • 48 Re Hampton Fuel Allotment Charity [1989] Ch 484, 494 (Nicholls LJ) (interpreting the same provision as now occurs in the Charities Act 2011).

    • 49 [2000] 1 WLR 299, 305.

    • 50 See, for example, The Independent Schools Council v The Charity Commission for England and Wales [2011] UKUT 421 (TCC); [2012] Ch 214, Chapter 5.3(c)(ii), pp. 189–204.

    • 51 [1998] 2 All ER 705.

    • 52 Ibid, 712.

    • 53 [2002] 1 WLR 448.

    • 54 Ibid, 458.

    • 55 [2011] UKUT 421 (TCC); [2012] Ch 214, [14].

    • 56 [2012] EWCA Civ 569, [2012] WTLR 1519, [22].

    • 57 [1891] AC 531, 583.

    • 58 [1968] AC 138, 154.

    • 59 National Anti-Vivisection Society v IRC [1948] AC 31, 56 (Viscount Simonds). This presumption has been abolished by statute. See Chapter 5.3(c)(ii), p. 190.

    • 60 See e.g. Gilmour v Coats [1949] AC 426, discussed in Chapter 5.4(c)(ii), pp. 230–2.

    • 61 See Chapter 5.4(g), p. 243.

    • 62 Charity Commission, Charitable Purposes and Public Benefit (2013).

    • 63 Charity Commission, Charities and Public Benefit.

    • 64 [2011] UKUT 421 (TCC); [2012] Ch 214.

    • 65 www.gov.uk/government/publications/public-benefit-the-public-benefit-requirement-pb1.

    • 66 See Chapter 5.4(a)(ii), pp. 206–10.

    • 67 See Chapter 5.4(a)(ii), p. 210.

    • 68 [2011] UKUT 421 (TCC); [2012] Ch 214, [44].

    • 69 Ibid, [48].

    • 70 [1957] 1 WLR 729.

    • 71 [2011] UKUT 421 (TCC); [2012] Ch 214, [106].

    • 72 [1948] AC 31.

    • 73 Ibid, 49.

    • 74 Re Fouveaux [1895] 2 Ch 501.

    • 75 [2011] UKUT 421 (TCC); [2012] Ch 214, [37].

    • 76 Ibid, [205].

    • 77 A gift to a care home of thirty-three residents failed this test in Re Duffy [2013] EWHC 2395 (Ch). For criticism of this test see Synge, ‘Charitable Status: Not A Negligible Matter’ (2016) 132 LQR 303.

    • 78 Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297. See Chapter 5.4(b)(ii)(a), pp. 215–16.

    • 79 Re Niyazi’s Will Trusts [1978] 1 WLR 910.

    • 80 Gaudiya Mission v Brahmachary [1998] Ch 341.

    • 81 Independent Schools Council v The Charity Commission for England and Wales [2011] UKUT 421; [2012] Ch 214 (TCC).

    • 82 Re Resch’s Will Trusts [1969] 1 AC 514.

    • 83 IRC v Falkirk Temperance Café Trust 1927 SC 261.

    • 84 [1968] AC 138, 156.

    • 85 The Independent Schools Council v The Charity Commission for England and Wales [2011] UKUT 421 (TCC), [178]; [2012] Ch 214. See further Chapter 5.4(b)(ii)(b), pp. 219–24.

    • 86 [1917] AC 406, 442.

    • 87 [2008] EWHC 330 (Ch); [2009] Ch 173, [16].

    • 88 McGovern v Attorney-General [1982] Ch 321, 339 (Slade J).

    • 89 See the Charity Commission’s report on Campaigning and Political Issues Arising in the Run-Up to the 2017 General Election (2017).

    • 90 Speaking Out: Guidance on campaigning and political activity by charities CC9 (London: HMSO, 2008).

    • 91 Santow, ‘Charity in its Political Voice: A Tinkling Cymbol or a Sounding Brass?’ (1999) 52 CLP 255. But note the more liberal approach to the recognition of the advancement of human rights as a specific charitable purpose following the enactment of the Charities Act 2011. See Chapter 5.4(h), pp. 244–6.

    • 92 Garton, ‘National Anti-Vivisection Society v Inland Revenue CommissionersLandmark Cases in Equity (eds Mitchell and Mitchell) (Oxford: Hart, 2012), p. 555.

    • 93 Stevens and Feldman, ‘Broadcasting Advertisements by Bodies with Political Objects, Judicial Review, and the Influence of Charities Law’ [1997] PL 615, 622.

    • 94 [1968] AC 138.

    • 95 [1948] AC 31.

    • 96 [2010] HCA 42; (2010) 241 CLR 539. See Turner ‘Charitable Trusts with Political Objects’ (2011) 70 CLJ 504.

    • 97 Re Greenpeace of New Zealand Inc [2014] NZSC 105. See Harding, ‘An Antipodean View of Political Purposes and Charity Law’ (2015) 131 LQR 181.

    • 98 Walton, ‘McGovern v Attorney-General: Constraints on Judicial Assessment of Charitable Benefit’ [2014] Conv 317.

    • 99 See Chapter 5.5, pp. 254–9.

    • 100 Re Koeppler’s Will Trusts [1986] Ch 423, 437 (Slade LJ).

    • 101 Income Tax Special Purposes Commissioners v Pemsel [1891] AC 531.

    • 102 See Chapter 5.4(j), pp. 246–9.

    • 103 Re Clarke [1923] 2 Ch 407.

    • 104 [2011] UKUT 421 (TCC); [2012] Ch 214, [40].

    • 105 [1951] Ch 661.

    • 106 [2005] WTLR 1265.

    • 107 [1996] STC 1218, 1233. See further Chapter 5.4(e), p. 237.

    • 108 [1933] Ch 103.

    • 109 [1954] Ch 265.

    • 110 [1978] 1 WLR 910.

    • 111 Ibid, 915.

    • 112 [1930] 1 Ch 255.

    • 113 Ibid, 260.

    • 114 The Equality Act 2010, s. 193(4) states that a provision contained in any charitable instrument which provides for conferring benefits on people in a class defined by reference to colour shall be interpreted as conferring the benefits on the class without the restriction by reference to colour. See Gibbs v Harding [2007] EWHC 3 (Ch); [2008] Ch 235.

    • 115 Re Segelman [1996] Ch 171.

    • 116 Re Lucas [1922] 2 Ch 52.

    • 117 [1951] Ch 622.

    • 118 Ibid, 650.

    • 119 [1996] Ch 171.

    • 120 Ibid, 190.

    • 121 [1972] AC 601.

    • 122 See Chapter 5.4(b)(ii)(a), pp. 214–17.

    • 123 (2012) UKUT 420 (TCC); [2012] WTLR 521.

    • 124 Incorporated Council of Law Reporting for England and Wales v A-G [1972] Ch 73, 102 (Buckley LJ).

    • 125 See Chapter 5.4(f), pp. 238–41.

    • 126 Case of Christ’s College, Cambridge (1757) 1 Wm Bl 90.

    • 127 Manoogian v Sonsino [2002] EWHC 1304; [2002] WTLR 989.

    • 128 IRC v Oldham Training and Enterprise Council [1996] STC 1218, 1233 (Lightman J).

    • 129 IRC v McMullen [1981] AC 1, 15 (Lord Hailsham).

    • 130 [1965] Ch 669.

    • 131 Ibid, 675.

    • 132 [1972] Ch 73.

    • 133 [1980] 1 WLR 1565.

    • 134 Ibid, 1576.

    • 135 [2007] WTLR 683.

    • 136 [1986] Ch 423.

    • 137 Ibid, 436.

    • 138 Charities Act 2011, s. 4(2).

    • 139 [1972] AC 601. See Chapter 5.4(a)(ii), pp. 208–9.

    • 140 [1951] AC 297, 314.

    • 141 See Chapter 5.4(a)(ii), pp. 208–9.

    • 142 [1972] AC 601, 623.

    • 143 Report of the Radcliffe Commission, Cmd 9474 (London: HMSO, 1955), [54]–[60].

    • 144 See Chapter 5.4(b)(ii)(a), p. 219.

    • 145 Similar doubts were expressed by the Upper Tribunal in The Independent Schools Council v The Charity Commission for England and Wales [2011] UKUT 421 (TCC); [2012] Ch 214, [176].

    • 146 Hayton, ‘Dingle v Turner’ (1972) 36 Conv 209, 212.

    • 147 [1967] Ch 993.

    • 148 The Independent Schools Council v The Charity Commission for England and Wales [2011] UKUT 421 (TCC); [2012] Ch 214, [52] and [141].

    • 149 Re Hopkins’ Will Trust [1965] Ch 669, 681 (Wilberforce J). See Chapter 5.4(b)(i), pp. 211–12.

    • 150 Independent Schools Council annual census (2018): www.isc.co.uk/research/annual-census/.

    • 151 Re Hopkinson [1949] 1 All ER 346, 348 (Vaisey J).

    • 152 See Chapter 5.3(c)(ii), pp. 200–4.

    • 153 [1949] 1 All ER 346.

    • 154 Ibid, 348.

    • 155 [2000] 3 ITELR 94.

    • 156 Ibid, 111.

    • 157 [1986] Ch 423.

    • 158 Ibid, 437.

    • 159 See generally Chapter 5.3(c)(ii), pp. 200–4.

    • 160 Baldry v Feintuck [1972] 1 WLR 552.

    • 161 Webb v O’Doherty (1991) The Times, 11 February.

    • 162 See e.g. Gilmour v Coats [1949] AC 426.

    • 163 Popularly known as the ‘Moonies’.

    • 164 (1862) 31 Beav 14.

    • 165 Funnell v Stewart [1996] 1 WLR 288.

    • 166 Since the Religious Disabilities Act 1846.

    • 167 See Chapter 5.3(c)(i), p. 189.

    • 168 [1980] 1 WLR 1565.

    • 169 In the end, the Society was held to be charitable as being for the advancement of education and for other purposes beneficial to the community.

    • 170 [1980] 1 WLR 1565, 1571.

    • 171 www.gov.uk/government/uploads/system/uploads/attachment_data/file/578931/Temple_of_the_Jedi_Order_FINAL_DECISION.pdf.

    • 172 Church of Scientology (England and Wales), Charity Commission decision, 17 November 1999.

    • 173 This involves ‘a series of gradient steps that Hubbard [the founder of Scientology] developed to address past painful experiences …’.

    • 174 This involves the intensive study of scientology scripture.

    • 175 Church of the New Faith v Commissioner of Pay-Roll Tax (Victoria) (1982) 154 CLR 120.

    • 176 [2013] UKSC 77; [2014] AC 610.

    • 177 Ibid, [57].

    • 178 See Chapter 5.4(c)(ii), p. 233.

    • 179 United Grand Lodge of Ancient Free and Accepted Masons of England v Holborn Borough Council [1957] 1 WLR 1080, 1090 (Donovan J).

    • 180 Gilmour v Coats [1949] AC 426.

    • 181 Dingle v Turner [1972] AC 601, 625 (Lord Cross of Chelsea).

    • 182 [1949] AC 426.

    • 183 [1990] Ch 1.

    • 184 Ibid, 12.

    • 185 [1962] Ch 832.

    • 186 Ibid, 852.

    • 187 Application for Registration as a Charity by the Church of Scientology (England and Wales) (1999).

    • 188 [1996] 1 WLR 288.

    • 189 See Chapter 5.3(c)(ii), p. 196.

    • 190 [2011] UKUT 421 (TCC); [2012] Ch 214, [37]. See Chapter 5.4(b)(ii)(b), pp. 219–24.

    • 191 [1996] STC 1218.

    • 192 Ibid, 1234.

    • 193 See further Chapter 5.5, pp. 254–9.

    • 194 [1957] Ch 299.

    • 195 Ibid, 305.

    • 196 [1965] Ch 85.

    • 197 [1947] AC 447.

    • 198 Ibid, 457.

    • 199 See Chapter 5.3(c)(ii)(b), pp. 199–200.

    • 200 See Chapter 5.5, pp. 254–9.

    • 201 IRC v McMullen [1981] AC 1.

    • 202 See Re Dupree’s Deed Trusts [1945] Ch 16, which held that a chess tournament was educational.

    • 203 [1955] AC 572, 589.

    • 204 [1992] 2 AC 310.

    • 205 Ibid, 318.

    • 206 [1949] Ch 529.

    • 207 Ibid, 536.

    • 208 See Chapter 5.3(c)(ii)(c), pp. 200–4.

    • 209 [1982] Ch 321.

    • 210 Ibid, 336.

    • 211 See Chapter 5.3(c)(ii)(c), pp. 200–4.

    • 212 Charities Act 2011, s. 3(1)(i).

    • 213 [1983] Ch 159, 174.

    • 214 [2012] EWCA Civ 569; [2012] WTLR 1519, [74].

    • 215 Charities Act 2011, s. 3(1)(k).

    • 216 Hanchett-Stamford v Attorney General [2008] EWHC 330 (Ch); [2009] Ch 173.

    • 217 Re Moss [1949] 1 All ER 495.

    • 218 Tatham v Drummond (1864) 4 De GJ & Sm 484.

    • 219 Re Wedgwood [1915] 1 Ch 113.

    • 220 See Chapter 6.2(b)(i), pp. 289–90.

    • 221 Hanchett-Stamford v Attorney General [2008] EWHC 330 (Ch); [2009] Ch 173, [13] (Lewison J).

    • 222 Re Wedgwood [1915] 1 Ch 113, 122 (Kennedy LJ).

    • 223 [1929] 1 Ch 557.

    • 224 Ibid, 582.

    • 225 [1948] AC 31. See Chapter 5.3(c)(ii)(a), p. 198.

    • 226 Ibid, 60.

    • 227 Charities Act 2011, s. 3(1)(l).

    • 228 [1925] Ch 362. See also now the purpose of advancing amateur sport. See Chapter 5.4(g), pp. 241–4.

    • 229 Ibid, 365.

    • 230 Charities Act 2011, s. 3(1)(m). See Chapter 5.3(c)(i), p. 189.

    • 231 [1972] Ch 73. See Chapter 5.4(b)(i), p. 213.

    • 232 [1972] Ch 73, 87.

    • 233 Charities Act 2011, s. 1(1)(a) and s. 11.

    • 234 [1944] AC 341, 368.

    • 235 Re Macduff [1896] 2 Ch 451.

    • 236 A-G of Cayman Islands v Wahr-Hansen [2001] 1 AC 75 (PC).

    • 237 Re Atkinson’s Will Trusts [1978] 1 WLR 586.

    • 238 Re Sutton (1885) 28 Ch D 464.

    • 239 See e.g. Re Eades [1920] 2 Ch 353 (‘religious, charitable and philanthropic objects’ was not exclusively charitable).

    • 240 [1986] 1 WLR 1001.

    • 241 [2001] 1 AC 75 (PC).

    • 242 Ibid, 81.

    • 243 See Chapter 5.1(a), pp. 175–6.

    • 244 See Chapter 6.2, pp. 287–92.

    • 245 See Chapter 8.3, pp. 387–401.

    • 246 [1944] AC 341.

    • 247 See Chapter 19.3(d)(i), p. 965.

    • 248 See generally Gravells, ‘Charitable Trusts and Ancillary Purposes’ [1978] Conv 92.

    • 249 [2004] 1 WLR 1466.

    • 250 Ibid, [33].

    • 251 [1948] Ch 747.

    • 252 [1972] Ch 73. See Chapter 5.4(m), pp. 257–8.

    • 253 Ibid, 103.

    • 254 [1986] 1 WLR 252.

    • 255 (1857) 3 K & J 529.

    • 256 [1948] Ch 747, 753.

    • 257 Cross, ‘Some Recent Developments in the Law of Charity’ (1956) 72 LQR 187, 203.

    • 258 [1954] Ch 347, 362.

    • 259 [1912] 2 Ch 488.

    • 260 Ibid, 495.

    • 261 Ibid, 493.

    • 262 [1964] Ch 512.

    • 263 ‘The Construction of Charitable Gifts’ (1974) 38 Conv (NS) 187, 191.

    • 264 Re Rymer [1895] 1 Ch 19. See further Chapter 5.6(a)(ii), pp. 263–4.

    • 265 Although it was applied for similar purposes by virtue of the cy-près doctrine. See Chapter 5.6(a)(iii), pp. 266–7.

    • 266 [1972] Ch 286, 294.

    • 267 See Chapter 5.6(a)(iii), pp. 266–7 for the operation of the cy-près doctrine in this case.

    • 268 See Liverpool and District Hospital for Diseases of the Heart v A-G [1981] Ch 193.

    • 269 Re ARMS (Multiple Sclerosis Research) Ltd [1997] 1 WLR 877.

    • 270 [1895] 1 Ch 19.

    • 271 Ibid, 34.

    • 272 (1887) 35 Ch D 460.

    • 273 Ibid, 468.

    • 274 [1936] Ch 285.

    • 275 Ibid, 286.

    • 276 Re Finger’s Will Trusts [1972] Ch 286, 299 (Goff J).

    • 277 [1979] Ch 483.

    • 278 Ibid, 492.

    • 279 [1972] Ch 286. See Chapter 5.6(a)(i), pp. 261–3.

    • 280 Ibid, 299.

    • 281 [1966] 1 WLR 277.

    • 282 Ibid, 284.

    • 283 [1966] Ch 249.

    • 284 See Chapter 5.3(c)(ii)(c), pp. 200–4.

    • 285 [1966] Ch 249, 256.

    • 286 [1979] Ch 483. See Chapter 5.6(a)(iii), p. 266.

    • 287 Ibid, 494.

    • 288 Re Peel’s Release [1921] 2 Ch 218.

    • 289 [1891] 2 Ch 236.

    • 290 Ibid, 240.

    • 291 [1954] Ch 347.

    • 292 [1958] Ch 447.

    • 293 [1923] 1 Ch 243.

    • 294 [1966] Ch 191.

    • 295 Re Weir Hospital [1910] 2 Ch 124.

    • 296 See Re North Devon and West Somerset Relief Fund [1953] 1 WLR 1260.

    • 297 Ibid, 233.

    • 298 Ibid, 238.

    • 299 [1972] Ch 276, 285.

    • 300 [1984] Ch 143.

    • 301 Ibid, 149.

    • 302 [1993] Ch 210.

    • 303 Ibid, 219.

    • 304 See Chapter 8.3(a), pp. 387–8.

    • 305 Charities Act 2011, s. 268.

    • 306 Luxton, ‘Cy-près and the Ghost of Things that Might Have Been’ [1983] Conv 107.

    • 307 Ibid, 117.