Equity and Trusts
Tutorial 9
Non-Charitable Purpose Trusts
Essential Reading
Virgo Ch 7
The leading case in which a non-charitable purpose trust was held to be void is Re Astor’s
Settlement Trusts. This involved a settlement to hold the shares of a company on trust for
various purposes, including the maintenance of good understanding, sympathy, and
cooperation between nations, and the preservation of the independence and integrity of
newspapers. The trusts were not charitable, either because they did not fall within any of the
relevant heads of charity or because the purposes were political and so not for (p. 189) the
public benefit. Consequently, being for non-charitable purposes, the trusts were void, since
there were no identifiable beneficiaries
In Re Astor’s Settlement Trusts, the non-charitable purpose trust was also held to be void
because the identified purposes were considered to be too uncertain. Similarly, in Morice v
Bishop of Durham, a trust for ‘such objects of benevolence and liberality as the Bishop of
Durham’ should approve was held to be void because the objects were uncertain.
The principle that a non-charitable purpose trust can be valid as long as identifiable
individuals are benefited can also be used to explain the validity of trusts in the earlier
decisions in Re the Trusts of the Abbott Fund and Re Gillingham Bus Disaster Fund.
TWO TIMES WHERE NON-CHARITABLE PURPOSE TRUSTS ARE VALID
1. Re Denley – direct or indirect benefit to ascertained individuals. Factual interest,
have locus standi to enforce the trust if necessary. Would not have been valid had
the trust have been abstract or personal.
2. Testamentary trusts of imperfect obligation – powers to act rather than obligations to
do so. The trust cannot be of indefinite duration and so must comply with that part of
the perpetuity rule, known as the ‘rule against inalienability’. 21 years.
i. CARE OF PARTICULAR ANIMAL - Re Dean, a trust for the maintenance of
the testator’s horses and hounds for fifty years, as long as they lived that
long, was held to be valid even though it was not charitable and nobody could
enforce it.
(ii) Trusts to erect and maintain monuments and graves - Trusts for the erection or
maintenance of tombs or monuments have long been regarded as valid, even though
they are not charitable because of the absence of any public benefit, but they must
still satisfy the perpetuity rule. So, for example, in Pirbright v Salwey, a trust to
maintain a grave and to decorate it with flowers was held to be valid, and in Re
Hooper, a trust for the care and upkeep of family graves and monuments was held to
be valid for twenty-one years only. It was held that, after the end of the perpetuity
period, any surplus money should be given to whoever was entitled to the residue of
the estate.
(iii) Trusts for the saying of private masses
Trusts for the saying of masses that the public are entitled to attend will be charitable. A trust
for the saying of masses in private will not satisfy the public benefit requirement to be a
, Equity and Trusts
charity, but will be valid as a non- charitable purpose trust if the perpetuity rule is not
infringed.
There have, however, been other testamentary dispositions that have been held to be valid
40
even though they involve non-charitable purposes. So, for example, in Re Thompson, a
legacy to promote and further fox hunting was upheld as valid on the basis that the legacy
could be paid to the legatee on him giving an undertaking that it would be applied as the
testator wished. Although this was a gift rather than a trust, the requirement of the legatee
giving an undertaking as to the use of the money is significant. Such an undertaking could
be required in the other anomalous cases, and was in fact required of the trustee in
Pettingall v Pettingall, in respect of a trust for the upkeep of the testator’s horse. Such an
undertaking could be enforced by the residuary legatees applying to the court if the
undertaking were breached or the fund were misapplied.
UNINCORPORTATED ASSOCIATIONS
Tricky legal problem here, simply because the association is not like anybody else: legally, it
is not a person. Enabling the property to be held on trust.
Definition – Burrell case.
‘two or more persons bound together for one or more common purposes, not being business
purposes, by mutual undertakings each having mutual duties and obligations, in an
organisation which has rules which identify in whom control of it and its funds rests and on
what terms and which can be joined or left at will. The bond of union between the members
of an unincorporated association has to be contractual.’
The key elements of this definition are that the association must be non- profit-making and
its members must be bound together by identifiable rules. i.e. amateur football club
In cases of doubt, judges have a tendency to adopt the mechanism that is most likely to
validate the transfer of property, although this is not always the case.
i. Charitable purpose trust?
It is possible that property that is to be used for the benefit of the unincorporated association
could be held on a charitable purpose trust, but only if there is a recognized charitable
purpose and if the trust is for the public benefit. With the recognition of the advancement of
amateur sport as a distinct charitable purpose, it will be easier to treat the property
transferred to sports clubs as being held on trust for the charitable purposes of that club. If
property appears to be held for charitable purposes, but the association has a rule that, on
dissolution, the property will be divided between the members themselves, this will negate
the charitable purpose, because the purpose is not exclusively charitable.
(ii) Non-charitable purpose trust?
Unincorporated associations were once considered to be an exception to the general
principle that non-charitable purpose trusts are void, but this exception was rejected by the
Privy Council in Leahy v Attorney-General for New South Wales.
There will, however, be circumstances under which a property might legitimately be held on
trust for the purposes of the unincorporated association, even though those purposes are
Tutorial 9
Non-Charitable Purpose Trusts
Essential Reading
Virgo Ch 7
The leading case in which a non-charitable purpose trust was held to be void is Re Astor’s
Settlement Trusts. This involved a settlement to hold the shares of a company on trust for
various purposes, including the maintenance of good understanding, sympathy, and
cooperation between nations, and the preservation of the independence and integrity of
newspapers. The trusts were not charitable, either because they did not fall within any of the
relevant heads of charity or because the purposes were political and so not for (p. 189) the
public benefit. Consequently, being for non-charitable purposes, the trusts were void, since
there were no identifiable beneficiaries
In Re Astor’s Settlement Trusts, the non-charitable purpose trust was also held to be void
because the identified purposes were considered to be too uncertain. Similarly, in Morice v
Bishop of Durham, a trust for ‘such objects of benevolence and liberality as the Bishop of
Durham’ should approve was held to be void because the objects were uncertain.
The principle that a non-charitable purpose trust can be valid as long as identifiable
individuals are benefited can also be used to explain the validity of trusts in the earlier
decisions in Re the Trusts of the Abbott Fund and Re Gillingham Bus Disaster Fund.
TWO TIMES WHERE NON-CHARITABLE PURPOSE TRUSTS ARE VALID
1. Re Denley – direct or indirect benefit to ascertained individuals. Factual interest,
have locus standi to enforce the trust if necessary. Would not have been valid had
the trust have been abstract or personal.
2. Testamentary trusts of imperfect obligation – powers to act rather than obligations to
do so. The trust cannot be of indefinite duration and so must comply with that part of
the perpetuity rule, known as the ‘rule against inalienability’. 21 years.
i. CARE OF PARTICULAR ANIMAL - Re Dean, a trust for the maintenance of
the testator’s horses and hounds for fifty years, as long as they lived that
long, was held to be valid even though it was not charitable and nobody could
enforce it.
(ii) Trusts to erect and maintain monuments and graves - Trusts for the erection or
maintenance of tombs or monuments have long been regarded as valid, even though
they are not charitable because of the absence of any public benefit, but they must
still satisfy the perpetuity rule. So, for example, in Pirbright v Salwey, a trust to
maintain a grave and to decorate it with flowers was held to be valid, and in Re
Hooper, a trust for the care and upkeep of family graves and monuments was held to
be valid for twenty-one years only. It was held that, after the end of the perpetuity
period, any surplus money should be given to whoever was entitled to the residue of
the estate.
(iii) Trusts for the saying of private masses
Trusts for the saying of masses that the public are entitled to attend will be charitable. A trust
for the saying of masses in private will not satisfy the public benefit requirement to be a
, Equity and Trusts
charity, but will be valid as a non- charitable purpose trust if the perpetuity rule is not
infringed.
There have, however, been other testamentary dispositions that have been held to be valid
40
even though they involve non-charitable purposes. So, for example, in Re Thompson, a
legacy to promote and further fox hunting was upheld as valid on the basis that the legacy
could be paid to the legatee on him giving an undertaking that it would be applied as the
testator wished. Although this was a gift rather than a trust, the requirement of the legatee
giving an undertaking as to the use of the money is significant. Such an undertaking could
be required in the other anomalous cases, and was in fact required of the trustee in
Pettingall v Pettingall, in respect of a trust for the upkeep of the testator’s horse. Such an
undertaking could be enforced by the residuary legatees applying to the court if the
undertaking were breached or the fund were misapplied.
UNINCORPORTATED ASSOCIATIONS
Tricky legal problem here, simply because the association is not like anybody else: legally, it
is not a person. Enabling the property to be held on trust.
Definition – Burrell case.
‘two or more persons bound together for one or more common purposes, not being business
purposes, by mutual undertakings each having mutual duties and obligations, in an
organisation which has rules which identify in whom control of it and its funds rests and on
what terms and which can be joined or left at will. The bond of union between the members
of an unincorporated association has to be contractual.’
The key elements of this definition are that the association must be non- profit-making and
its members must be bound together by identifiable rules. i.e. amateur football club
In cases of doubt, judges have a tendency to adopt the mechanism that is most likely to
validate the transfer of property, although this is not always the case.
i. Charitable purpose trust?
It is possible that property that is to be used for the benefit of the unincorporated association
could be held on a charitable purpose trust, but only if there is a recognized charitable
purpose and if the trust is for the public benefit. With the recognition of the advancement of
amateur sport as a distinct charitable purpose, it will be easier to treat the property
transferred to sports clubs as being held on trust for the charitable purposes of that club. If
property appears to be held for charitable purposes, but the association has a rule that, on
dissolution, the property will be divided between the members themselves, this will negate
the charitable purpose, because the purpose is not exclusively charitable.
(ii) Non-charitable purpose trust?
Unincorporated associations were once considered to be an exception to the general
principle that non-charitable purpose trusts are void, but this exception was rejected by the
Privy Council in Leahy v Attorney-General for New South Wales.
There will, however, be circumstances under which a property might legitimately be held on
trust for the purposes of the unincorporated association, even though those purposes are
