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2023May/June Zone B
Question 1 Advise whether the following trusts in the will of Timon are charitable or otherwise valid: (a) £80,000 to my trustees to build a tennis court for use by the inhabitants of the village of Fenwick (where I was born); (b) £160,000 to my trustees so that the Fenwick Primary School can organise day trips for the children of teachers at the school in gratitude for the hard work of the teachers; (c) £320,000 to my trustees to campaign for the abolition of electric scooters in order to improve road safety; and (d) £640,000 to my trustees for the preservation of historical monuments. General remarks This question concerns the law of charities (Chapter 9 of the module guide) and the beneficiary principle, including the rule against purpose trusts (found in Chapter 3 of the module guide). It is important to note that this is not a single topic question: candidates should always expect a question to cover one or two related topics. Law cases, reports and other references the examiners would expect you to use Section 3 Charites Act 2011; IRC v Williams; IRC v Baddeley; Oppenheim v Tobacco Securities; Re Denley; AG v McGovern; Royal Choral Society v IRC; Re Endacott. Common errors A number of candidates wrote about the three certainties but there is no need to return to these basic issues in every problem concerning the validity of a trust. General statements about the law of charity also are not relevant in a question about specific provisions. Some candidates failed to identify that this question raised more than one ‘topic’. A good answer to this question would… establish the specific type of trust in issue: is it a purpose trust, a charity, a valid purpose trust under special rules? When each provision has been identified, cases can help establish whether the particular provision falls within (e.g.) charity, or the Re Denley exception. Poor answers to this question… tried to explain the entire law concerning the creation of trusts. They failed to identify the key issue and instead wrote generally about the beneficiary principle. Examiners are not able to give meaningful marks for generalised statements. Lack of case law is a serious disadvantage in problem questions of this type. Weak answers also just stated the answer, rather than explain it Student extract (c) £320,000 to my trustees to campaign for the abolition of electric scooters in order to improve road safety This trust does not fall precisely within any specific heads and there is a long_standing case law that restricts trusts for political purpose from being charitable. A trust which involves a change in the law would likely to be considered as political (McGovern v AG), hence not charitable. It is unlikely the case where political activity is ancillary. In National Anti- Vivisection Society v IRC such trust with ancillary political purpose was suggested as capable of being charitable. But in this case the campaign suggest a direct political action rather than a research, it aims to the political issue in its core (pushing amendment of the current regulation). Hence, it is unlikely to be a charitable trust. Also, if there is a charitable purpose, the court would
analyse if there is a public benefit (facts suggest that it will improve rod safety), and whether this benefit outweighs any detriments, e.g. the wider usage of electric scooters may improve the air quality because less people use cars, also it might be beneficial for tourism etc. If there are more negativity than benefits (as in National Anti-Vivisection Society v IRC) the court would not find the purpose for public benefit. As a private purpose trust, it lacks certainty of objects and beneficiaries (Morice). The Re Endacott case suggested that those exceptions are limited and this is not one of the ‘anomalous case’, and unlike Re Denley's factual beneficiaries are not clear. So the trust will be invalid. The good-willed aim, like in Re Astor case, will not be by itself sufficient to recognized the trust as valid (d) £640,000 to my trustees for the preservation of historical monuments. As for charitable purpose, this seems to be more like the situation as the one in the case in re Verrall. Also it may fall within the head of s. 3(1)(f). De minimus element of public benefit (availability to the public as in Neville Estates v Madden) is also likely to be present, because the case facts do not suggest that someone is to be excluded from the benefit. It is not clear which monuments are to be preserved, but if the trust is charitable, that uncertainty might not make it invalid. So the trust might be valid as charitable. But as non-charitable, the trust is likely to be invalid. Even those there are cases that allowed trust for maintenance of tombs and monuments (Re Hopper), this case does not provide a clear answer of what monument is to be preserved, so the case is similar to the one in Re Endacott (where even the purpose, ‘some useful memorial’ was not sufficiently clear to be upheld). Comments on extract This extract is from a question where the candidate scored a high 2:2 mark: it was close to a 2:1 mark. Part (c) is a reasonably good answer. It does not attempt to force the alleged charity into a type but recognises that the ‘trust does not fall precisely within any specific heads’ (although it would have been better to talk of the statutory section rather than ‘heads’ – Pemsel is no longer the governing law). The answer is a little too brief on whether this is a political purpose – the answer is stated rather than argued, which is why it does not make it to a 60 plus mark. There is good case law. Part (d) is less good – the candidate has seen the word ‘monument’ and thinks this might be a non-charitable purpose trust. But, the purpose is the preservation of historic monuments, not a monument to the testator. It might be a cultural charity. The clear lessons are that the points must be argued; and the question read carefully. That would have turned this into a 2:1 answer. (a) £80,000 to my trustees to build a tennis court for use by the inhabitants of the village of Fenwick (where I was born): Issue: The main issue in this provision is whether the trust to build a tennis court for the inhabitants of the village of Fenwick qualifies as charitable. Rule: Charitable trusts must fall within one of the recognized categories enumerated in the Charities Act 2011, Section 3. Additionally, trusts for the benefit of individuals must satisfy the "beneficiary principle." Application: Building a tennis court for the inhabitants of a village does not fit precisely within any of the statutory charitable categories listed in Section 3 of the Charities Act 2011. However, it could potentially be considered charitable if it falls under the advancement of community participation in sports or the advancement of amateur sports, as suggested in IRC v Williams. Regarding the beneficiary principle, if the trust benefits individuals, there must be a sufficient
2022 Zone A
Question 1 Consider the validity of the following provisions contained in the Will of Thomas, who died in March 2022: (a) £100,000 to my trustees to build and maintain a pavilion on the Village Green in Oldhampton, the village where I lived, for so long as the law allows; (b) £50,000 to my trustees to be distributed equally among the children of my colleagues who worked with me at St Jude’s College. St Jude’s College has since closed down, but Thomas worked there from 2010 – 2020; (c) £200,000 to my trustees to be distributed in such shares as they see fit among those people who were students of St Jude’s College from 2010 to 2020; (d) £75,000 to my trustees for distribution among the inhabitants of Oldhampton within two years of my death, in such shares as my wife, Wendy shall decide, failing which any unspent money shall go absolutely to my own children in equal shares. Thomas has three children and Wendy tells the trustees that she wishes to distribute the money rather than give it to her children if at all possible; (e) £25,000 to my trustees to spend on any project that promotes peace and goodwill in the village of Oldhampton General remarks This is a problem question concerning the essential ingredients of a trust: certainties and the need for identifiable beneficiaries. Each limb of the problem carries equal marks and raises a different issue (although there is some overlap). Candidates should spend roughly equal time on each part. If it is relevant to use material used elsewhere in the question, a candidate can refer to the answer already given without repeating themselves. Note, however, that any overlap will be very slight. Chapters 5 and 10 of the module guide contain the relevant material. Law cases, reports and other references the examiners would expect you to use There are some cases which cover the topic as a whole: McPhail v Doulton; Re Baden (No.2); IRC v Broadway Cottages; Re Gulbenkian. Part (a): Re Denley; part (b): Broadway Cottages; part (c) McPhail v Doulton; Re Baden (No.2); Burroughs v Philcox; part (d): Re Astor. There are alternatives to
these but these are the common cases. Student extract
a) This appears to invite the discussion on charitable trust which previously was not defined
properly hence the Preamble to the Statute of Elizabeth 1601 and Pemsel's case (1891) played significant role, whereby categories such as advancement of education, religion, relief of poverty and others were recognised. For this to be considered a valid charitable trust, the requirements under S1 Charities Act 2011 must be complied with. That said, it must be for charitable purposes, for charitable purposes only, and according to S2(1)(b) charitable purposes must be for the public benefit and also must fall to be subject to the control of the High Court. On the facts, to build and maintain a pavilion on the Village
Green in Oldhampton, the village where Thomas lived, for so long as the law allows seems to be a charitable purpose falling under S3(1)(m) ie any other purposes which is to be read with S5 of the CA 2011. This seems to be for recreational purposes as seen in Brisbane City Council v AG for Queensland it is charitable to provide parks or similar places outdoor. In S5(1) CA 2011 it is stated that it is charitable to provide facilities for recreation or other leisure time occupation if the facilities are provided in the interest of social welfare. It's also expressly mentioned under S3(b)(ii) that the facilities must be present and available to the members of the public at large. This triggers the discussion on the requirement of public benefit. S4(2) expressly abolishes the common law 'presumptions' ie categories laid down in Pemsel's case are presumed to be charitable. To satisfy this requirement, per Independent School Case, it must be beneficial and the benefits must be to the public. The test in Oppenheim v Tobacco needs to be satisfied in that it cannot be numerically negligable [sic] and there cannot be personal nexus. On the facts, it is submitted that this requirement is satisfied as the pavilion will be available to be used by anyone in the village, or even anyone who visits the village hence not numerically negligible [sic]. Besdies [sic], it's indeed for chartiable [sic] purposes only per Chirchester Diocesion [sic] Fund and Board of Finance v Simpson. Also, presumed to be subject to the High Court. Hence, this is a valid charitable trust. It is worth noting that Thomas wanting the trust to be valid for so long as the law allows is relevant to perpetuity period as a charitable trust can be perpetual and can exist for centuries which may possibly apply to Thomas' charitable trust which is a benefit of charitable trust, along with the fact that charities are exempt from income tax. (b) For a trust to be valid, there must be compliance with the substantive, formalities and constitution requirements. Under substantive, Knight v Knight states that there must be certainty of subject matter, object matter and intention. Since this question concerns with £50,000, there is no specifc [sic] formalities to be complied with and constitution is also not an issue here… As for certainty of object matter, on the facts since this is a fixed trust ie trustee is to follow the instruction strictly without exercising discretion which is to distribute the £50,000 equally among the children of Thomas' colleagues, the test is the complete list test per IRC v Broadway carriages. For fixed trust, both conceptual certainty and evidential certainty must be present (OT Computers Ltd), failure to draw up a complete list will render it void (Re Sayer). While prima facie it looks as if it is conceptually certain as the language used is clear, question arises as to what did he mean by children of colleagues who worked with him? Is it limited to the people who have worked with him throughout 2010–2020? Or is it that so long as they have worked together regardless of the period such as part- timers? Thus, it is submitted that it may not be conceptually certain as no explanation is provided on the facts which renders the fixed trust void. Besides, as for evidential certainty, it is stated that St Jude’s College has since closed down. Question arises as to whether it is possible to find out a complete list of colleagues from 2010–2020? The present candidate would rely on the case of Re Sayer where it's found to be difficult to keep accurate records of a company's ex-employees. That said, even if the trustees approach the ex-management of St Jude's College, a complete list may not be possible to be drawn out thus the trust will fail. Regardless, the trustees should be encourage[d] to
principles set out in Re Denley. Application: The provision for building and maintaining a pavilion on the Village Green is arguably a purpose trust. The use of the phrase "for so long as the law allows" implies a purpose rather than a charitable trust. In Re Denley, the court allowed a trust for the benefit of students of a private school, which suggests that this type of trust can be valid. However, the primary issue with this provision is the lack of certainty regarding the beneficiaries or objects of the trust. To be valid, a trust must have ascertainable beneficiaries, as established in McPhail v Doulton. The absence of any identified beneficiaries raises doubts about the validity of this trust. Conclusion: The provision for building and maintaining the pavilion is problematic due to the uncertainty regarding beneficiaries. While it aligns with the concept of a purpose trust, the lack of identifiable beneficiaries may render it invalid. (b) £50,000 to my trustees to be distributed equally among the children of my colleagues who worked with me at St Jude’s College. St Jude’s College has since closed down, but Thomas worked there from 2010 – 2020: Issue: The central issue here is the validity of the trust to distribute funds equally among the children of Thomas's colleagues from St Jude’s College. Rule: Trusts must satisfy the certainties of intention, subject matter, and beneficiaries. In this case, it is crucial to determine whether the trust creates a valid fixed trust, and if so, whether the beneficiaries are ascertainable. Application: This provision establishes a fixed trust, as it specifies that the funds are to be distributed equally among the children of Thomas's colleagues. Fixed trusts require certainty of intention and objects, typically tested by the "list test" from IRC v Broadway Cottages. However, St Jude’s College has since closed down, raising concerns about whether the beneficiaries are still ascertainable. According to Re Baden (No.2), beneficiaries must be ascertainable at the time of distribution. If the closure of the college renders the beneficiaries unascertainable, the trust may fail for lack of certainty of objects. Conclusion: The provision for distributing funds among the children of colleagues from St Jude’s College establishes a fixed trust but faces potential issues due to the closure of the college. Whether the beneficiaries remain ascertainable will determine the trust's validity. (c) £200,000 to my trustees to be distributed in such shares as they see fit among those people who were students of St Jude’s College from 2010 to 2020: Issue: The primary issue in this provision is the validity of the trust to distribute funds among students who attended St Jude’s College from 2010 to 2020. Rule: This provision presents a discretionary trust, and the key issue is whether it complies with the requirements for certainty of objects and intention, as per McPhail v Doulton and Re Baden (No.2). Application: A discretionary trust grants trustees the authority to distribute assets among a class of beneficiaries, as they see fit. To be valid, such trusts must satisfy the "is or is not" test from McPhail v Doulton, which requires that it can be determined with certainty whether each potential beneficiary is a member of the class. Additionally, there must be certainty of intention. In this case, the trust identifies the class of beneficiaries as those who were students of St Jude’s College from 2010 to 2020, which appears to be clear and ascertainable. However, further
consideration is needed to assess the trustees' discretion and whether their powers are properly exercised, as per Re Baden (No.2). Conclusion: The provision for distribution among students from St Jude’s College establishes a discretionary trust with an ascertainable class of beneficiaries. However, the validity of the trust hinges on the proper exercise of the trustees' discretion. (d) £75,000 to my trustees for distribution among the inhabitants of Oldhampton within two years of my death, in such shares as my wife, Wendy shall decide, failing which any unspent money shall go absolutely to my own children in equal shares. Thomas has three children, and Wendy tells the trustees that she wishes to distribute the money rather than give it to her children if at all possible: Issue: The primary issue in this provision is the validity of the trust for distribution among the inhabitants of Oldhampton, with Wendy initially having discretion and, if unused, the funds passing to Thomas's children. Rule: This provision combines a mere power followed by a fixed trust. The key issues are certainty of intention, certainty of objects, and the potential application of the administrative unworkability doctrine. Application: Initially, Wendy holds a mere power to distribute the funds among the inhabitants of Oldhampton, which is subject to administrative unworkability if her discretion cannot be exercised. The trustees' role is purely ministerial. If Wendy exercises her discretion, the trust becomes fixed, and the funds must be distributed among the inhabitants as directed by Wendy. Certainty of intention and beneficiaries become critical at this stage. The crucial question is whether Wendy's discretion is legally valid. As per Re Astor, her discretion must not be "arbitrary, capricious, or unreasonable." Wendy's expressed intention to distribute the money rather than give it to her own children suggests that her discretion is valid. Conclusion: This provision combines a mere power followed by a fixed trust, subject to Wendy's valid discretion. The validity of the trust hinges on Wendy's exercise of discretion, which appears to align with legal principles. (e) £25,000 to my trustees to spend on any project that promotes peace and goodwill in the village of Oldhampton: Issue: The central issue here is the validity of the trust to spend funds on a project promoting peace and goodwill in the village of Oldhampton. Rule: This provision appears to be a non-charitable purpose trust, and its validity depends on whether it complies with the requirements for certainty of intention and subject matter, as outlined in Re Astor. Application: Non-charitable purpose trusts are generally invalid unless they fall within the "anomalous category" of trusts recognized in Re Astor. This category includes trusts that promote objectives that are so closely connected with the welfare of individuals that they can be seen as indirectly benefiting individuals. While the provision aims to promote peace and goodwill in the village, it lacks the direct link to individual welfare required by Re Astor. Thus, it falls within the category of non-charitable purpose trusts that are typically considered invalid. Conclusion: The provision for promoting peace and goodwill in the village of Oldhampton
for people to appreciate his own work and that his estate might thereby gain a benefit (royalties)? One might see mention of Re Shaw and Re Hopkins. Poor answers to this question… copied out the Charities Act 2011 as if this provided a solution to the problem. Poor answers omitted reference to case law and made firm conclusions without considering some of the uncertainties inherent in the problem. Weaker answers treated the question as if it was only about actually finding an answer (i.e. charity or not), instead of it being about the explanation and analysis. To a large extent, whether these are charities or not where the marks are earned – it is the reasoning that matters. Student extract Arnold's will seems to consider a number of purposes which might be considered to be 'charitable', which - if they are categorised as such – would attract favourable conditions such as being afforded 'tax breaks' by the government, which are put in place to encourage individuals and other legal entities to continue to give to society… The three main criteria that need to be met for charitable status to be afforded are that a charity must: • be 'wholly and exclusively' charitable • fall under at least one of the charitable ‘heads’ listed in the Charities Act 2011 • bThe first of these requirements means that the charity must not help those who are not in need, and this can obviously be interpreted differently by different individuals and this was shown in Chichester Diocesan v Simpson. Blair v Duncan also indicated that the courts are likely to be very strict about the use of words such as 'or' and 'and' to determine whether a purpose is wholly charitable. The charitable ‘heads’ are contained in the Charities Act and the most relevant of these to the case at hand are 'the prevention or relief of poverty', 'the advancement of education', 'the advancement of religion' as well as 'to benefit the public'. In the case of purpose 'a': providing religious services in the maximum security wing of Arrowmoor prison, this is likely to be considered under the head of 'advancement of religion'. In the case of Gilmour v Coats, the aims of a group of nuns who isolated themselves from the outside was considered to not meet the requirement of being of public benefit. The case of Neville Estates too involved a smaller class of people and the question was whether a provision designed to benefit the members of a synagogue could be considered to be charitable. It was held that because the synagogue was open to the public it satisfied the requirement, and this is where the provision in Arnold's will might face a challenge. It will need to be determined whether the relevant wing of a specific prison can be considered to sufficiently meet the 'public' requirement in order for it to be considered as a charitable purpose. It is possible that because the prison is only a small part of the general public it might fail, but it is also possible that because the prison system is a public or government one this could be held to benefit the public… Purpose 'c', to provide education scholarships for the children of employees of the University of London, is already at an advantage as the provision of scholarships has historically been considered a charitable purpose and it definitely falls under the head to do with education and perhaps also that of prevention of poverty. However, the limitation to children of employees of the University of London might have some difficulties in meeting the 'public benefit' requirement. Although with education, it has been shown that a specific institution or a smaller class can be allowed to benefit, such as in Re British School of Archaeology. It might be thought that the emphasis is on the purpose being educational, as shown in IRC v McMullen, which can be contrasted with Re Pinion where the
resources in consideration were held to not be of charitable value. However, in Oppenheim v Tobacco, it was decided that an educational fund which would benefit over 100 000 people who were children of employees of a certain company was not charitable because of the requirement that beneficiaries had to be children of the employees… The last provision, 'e', to promote wider public appreciation of the literary merit of the testator’s books might be considered under the heads of education and the public benefit. The case most relevant here is that of Re Pinion where the resources were held to not be of charitable value. In the case of Re Hummeltenberg, however, the organisation was decided to have charitable merit. It seems here that what is most relevant will be the content of the testator's books. It will have to be decided whether his writings do in fact have charitable value. It should be noted that in the case of Re Pinion, the resources were considered to be rather ‘awful’ for lack of a better term and that usually donations to established museums and such institutions will be considered charitable e one which benefits the public Comments on extract This is an extract from the problem question on charities and it scored a lower, but very safe, 2:1 mark. (This is not all of the answer.) Notice how the candidate introduces the question; there is a short, accurate introduction to the topic and the student highlights the main issues that arise when considering whether a trust is charitable or not. The examiner is certain that the student understands how charitable trusts work. The student then goes on to apply the law to the particular facts of the problem in a clear and deliberate way. The problem is answered in the order set by the examiner, using the structure provided by the examiner. In respect of part (a), the student identifies the issue clearly and recognises that there is a tension between Gilmour v Coates and Neville Estates v Madden. The student does not waste time simply repeating the facts of these cases but identifies the key points and them reaches a defensible conclusion. In relation to part (c), the candidate appreciates that the main issue is one of ‘public benefit’, not the nature of the purpose. No time is wasted on a long analysis of whether education is charitable – it clearly is and a case is provided. The key case of Oppenheim is then discussed, with the student recognising that there was an issue because of the personal nexus revealed by the facts. An even higher mark would have been achieved if the student had asked what sort of personal nexus is prohibited – is it one between the donor and the class, or between the class themselves, or both? Oppenheim is not clear about this – but the extra marks are for recognising the issue, not resolving it. Part (e) is also generally well done, with good case law. Again, the answer could have been improved by a clearer conclusion – does the student think it is charitable or not? However, the use of case law is excellent, as it is throughout the problem. This will always secure good marks and the absence of case law will lead to a lower mark. Part (a) - Provision for Religious Services in Prison: Issue: Is providing religious services in the maximum security wing of Arrowmoor prison considered a charitable purpose, and does it meet the public benefit requirement? Rule: To be charitable, a purpose must fall under one of the "charitable heads" listed in the Charities Act 2011 and must be for the public benefit. The "advancement of religion" is one of the charitable heads. Application: The student correctly identifies and applies the relevant charitable head to the case. They reference the case of Gilmour v Coates, which dealt with a religious group that isolated themselves and did not meet the public benefit requirement. The student raises a valid concern
political education in schools aligns with the statutory exclusions of political purposes under the Charities Act. They would emphasize that while education is generally charitable, it must not serve political purposes to be considered charitable. Part (c) - Education Scholarships for University of London Employees' Children: Issue: Does providing education scholarships for the children of University of London employees constitute a charitable purpose, and does it fulfill the public benefit requirement? Rule: Scholarships have historically been considered charitable, and education is one of the charitable heads. However, the public benefit requirement must still be met. The personal nexus between the settlor and the beneficiaries can be an issue, as seen in Oppenheim v Tobacco Securities. Application: The student correctly identifies education as a charitable purpose and provides a relevant case, Re British School of Archaeology, as support. They also bring up the potential issue of the personal nexus, as seen in Oppenheim, highlighting that the beneficiaries are employees' children. Conclusion: While the student does not explicitly state their conclusion, they grasp the relevant legal principles and provide a well-rounded analysis of the potential challenges for this provision. Part (d) - Providing Counseling Services for Children and Teenagers in Cambridge and Oxford: Issue: Is counseling services for children and teenagers in Cambridge and Oxford a charitable purpose, and does it meet the public benefit requirement? Rule: To be considered charitable, a trust's purpose must fall under one of the "charitable heads" listed in the Charities Act 2011, which must be for the public benefit. "The relief of need, particularly among the young" is a recognized charitable head. Application: o Case: The case of Oppenheim v Tobacco Securities is relevant. In this case, an educational fund intended to benefit over 100,000 children who were employees' children was not considered charitable because of the requirement that beneficiaries must be children of the employees. This case highlights the potential issue of a personal nexus, which can impact the public benefit requirement. o Statute: Reference to the Charities Act 2011 , especially section 3, is essential. Section 3 outlines the "charitable heads" and provides the legal framework for determining whether a trust's purpose is charitable. Jury Instruction: A judge would instruct the jury to assess whether providing counseling services for children and teenagers in Cambridge and Oxford aligns with the charitable head of "the relief of need, particularly among the young." The judge would emphasize that a trust's beneficiaries do not need to be the children of the settlor or donors, as seen in Oppenheim v Tobacco Securities, and that the focus should be on whether the services genuinely serve a public benefit, taking into account the geographic limitations in this case.
Part (e) - Promoting Literary Merit of the Testator's Books: Issue: Is the provision to promote wider public appreciation of the literary merit of the testator's books charitable, and does it benefit the public? Issue: Is the provision to promote wider public appreciation of the literary merit of the testator's books charitable, and does it benefit the public? Rule: Promotion of literary merit can be charitable if it falls under one of the charitable heads and benefits the public. The case law, like Re Pinion and Re Hummeltenberg , is cited. Application: o Case: Besides the cases mentioned, the student could refer to Re Gwyer. This case upheld a charitable trust for promoting the writings of an author as benefiting the public. It is relevant because it deals with promoting the literary work of a specific individual. o Statute: Mention Charities Act 2011 , section 3, which defines charitable purposes. o Jury Instruction: A judge might instruct the jury to assess whether the literary works of the testator genuinely hold literary merit and whether promoting them benefits the public. They should emphasize that promoting one's literary works may still be charitable if it meets the public benefit criteria.
2019 Zone A
Question 4 Charlie died recently. In his will, Charlie stipulated that his entire estate should be sold and the proceeds held in trust and invested, with the income to be used each year as follows: a) ‘£50,000 to be used to help my children and grandchildren should they become impoverished and otherwise to educate the British public on the need for food banks; b) the remainder to be used to further the purposes of the Brotherhood of St Linus.’ The Brotherhood of St Linus was a group of monks who lived a cloistered, self-sufficient life in a medieval hall house. Once a year, they opened the house to the public and invited people in to pray with them. The Brotherhood was dissolved five years ago and the house has been sold. Patty has been appointed as Charlie’s executor and seeks your advice regarding the validity of these trusts General remarks This was a problem question on charitable trusts, as discussed in Chapter 9 of the module guide. Law cases, reports and other references the examiners would expect you to use Charities Act 2011; Re Scarisbrick (1951); A-G v Charity Commission (2012); Re Hopkinson (1949); Gilmour v Coates (1949); Re Harwood (1936). Common errors Thinking that cy près applies to any case where a purported charitable purpose fails to qualify as such. Thinking there is a certainty of subject matter problem with ‘remainder of my estate’. A good answer to this question would… have noted that clause (a) appears to create a trust for the relief of poverty and the advancement of education, while clause (b) appears to create a trust for the
- The trust for educating the British public on the need for food banks may be political. In Re Hopkinson (1949), it was established that trusts for political purposes are not charitable. Thus, the validity of this purpose depends on whether it is primarily educational or political.
- Advancement of Religion :
- b) Charlie's trust clause (b) appears to be for advancing religion, a recognized charitable purpose. o Gilmour v Coates (1949) held that even a limited interaction with the public, such as one day a year, can provide a sufficient public benefit if the religious purpose is charitable.
- Cy près Doctrine :
- If any specified trusts are deemed non-charitable or fail, the cy près doctrine can direct the assets to a similar charitable purpose that conforms to the settlor's general charitable intent.
- General Charitable Intent :
- To invoke the cy près doctrine, it must be established that Charlie had a general charitable intent, not just an intent to benefit specific institutions. In Re Harwood (1936), gifts to named charitable institutions were treated as specific gifts. Application :
a) Relief of Poverty and Advancement of Education :
Charlie's trust clause (a) could be considered charitable to relieve poverty. However, the Charities Act 2011 and the case of A-G v Charity Commission (2012) have introduced stricter requirements for proving public benefit for non-relatives. The trust for education on food banks may have political elements, so its validity depends on whether its primary purpose is educational or political. Relevant Case Law : Re Scarisbrick (1951). This case established that a trust for poor relations could be valid as a charitable trust, provided the beneficiaries are sufficiently defined. Statutes : Charities Act 2011 : Section 4(2) introduced a stricter public benefit requirement for trusts for non- relatives, particularly those involving poverty relief. Judge's Instruction to the Jury : The judge should instruct the jury to consider whether the trust clause (a) meets the criteria for charitable trusts, including relief of poverty and advancement of education. They should also be informed about the implications of the Charities Act 2011, which imposes a stricter public benefit requirement on trusts for non-relatives. The jury should assess whether the trust, considering its potential political elements in educating the public on food banks, primarily serves educational or political purposes. issue 2: Education on Food Banks (Trust Clause (a)) Relevant Case Law : Re Hopkinson (1949). This case established that trusts for political purposes are not charitable. Whether educating the public on food banks is primarily educational or political is critical. Statutes : Charities Act 2011 : The Act provides the legal framework for charitable trusts in the UK. Scholarly Articles : "Defining Charitable Status: Balancing Public Benefit and Political Activity" by Ian Loveland: This article discusses the legal boundaries between charitable and political activities in the context of charitable trusts. Judge's Instruction to the Jury : The judge should instruct the jury to determine whether the trust for educating the public on food banks
primarily serves an educational or political purpose. They should be aware of the precedent set in Re Hopkinson (1949) and consider whether the trust clause (a) complies with the requirements of a charitable trust under the Charities Act 2011.
b) Advancement of Religion :
Charlie's trust clause (b) is likely charitable as it is for the advancement of religion. The fact that the Brotherhood of St. Linus interacted with the public once a year could satisfy the public benefit requirement, following the precedent set in Gilmour v Coates. Relevant Case Law : Gilmour v Coates (1949). This case established that even limited interaction with the public, such as one day a year, can provide a sufficient public benefit for trusts with a religious purpose. Statutes : Charities Act 2011 : The Act defines and regulates charitable purposes, including the advancement of religion. Judge's Instruction to the Jury : The judge should instruct the jury to assess whether the trust clause (b) for the advancement of religion complies with the requirements of a charitable trust under the Charities Act 2011. They should consider whether the limited interaction of the Brotherhood of St. Linus with the public once a year provides a sufficient public benefit, as established in Gilmour v Coates (1949).
c) Cy près Doctrine :
If either trust clause (a) or (b) is deemed non-charitable or fails, the court can apply the cy près doctrine to redirect the assets to a similar charitable purpose that aligns with Charlie's general charitable intent if such intent can be established. Conclusion : The validity of Charlie's trusts depends on whether they meet the criteria of charitable trusts, particularly the public benefit requirement. Clause (b), for advancing religion, is valid. However, clause (a) may face challenges due to the stricter public benefit test introduced by the Charities Act 2011, especially if the trust for education on food banks is considered political. To address any potential failures or non-charitable purposes, the cy près doctrine may be invoked if it can be established that Charlie had a general charitable intent. As the executor, Patty should seek legal advice and potentially apply to the court for guidance on the disposition of the estate if the trusts are found to be non- charitable or fail.
2018 Zone A
Alice died recently. According to her will , the residue of her estate is to be held in trust for so long as the law allows: a) to promote ice skating in the UK b) to construct and maintain a monument to the memory the great British figure skater Jennifer Nicks who died in 1980, and c) to improve the facilities of the Dibley Ice to Skating Club (DISC).
o The Preamble to the Charitable Uses Act 1601 establishes the nature of charitable purposes. o Morice v Bishop of Durham (1805) 10 Ves 522 mandates the public benefit requirement for charitable trusts. o Mussett v Bingle [1896] WN 170 sets a precedent for trusts concerning sports facilities to be charitable if they provide a public benefit.
- Testamentary Trusts: o Testamentary trusts may be recognized for private purposes if they meet specific criteria.
- Gifts to Unincorporated Associations: o Gifts can be bestowed upon unincorporated associations, with their validity contingent upon the nature of the association. Application:
a) Trust to Promote Ice Skating in the UK:
The first trust is charitable as it aims to advance amateur sport, a category explicitly included in the Charities Act 2011. Since ice skating is a recognized sport, this trust can potentially fulfill the public benefit requirement, as articulated in Morice v Bishop of Durham. Therefore, it is likely a valid charitable trust. Case Law: Case : In Re Nottage, it was established that a mere sport that lacks an educative motive is not considered charitable. Application : This case illustrates the distinction between sport for its own sake and sport with a beneficial purpose. The trust to promote ice skating is likely charitable as it aims to advance amateur sports, thus fulfilling the public benefit requirement. The judge might instruct the jury to consider the beneficial aspect of the sport and its alignment with the Charities Act 2011. Statutes: Statute : The Charities Act 2011, Section 3(1)(g). o Application : The Charities Act 2011 explicitly includes "the advancement of amateur sport" as a charitable purpose, which supports the argument for the trust's validity. The judge could instruct the jury to refer to this statute when evaluating the trust's charitable status. Judge's Instruction to Jury: The judge might instruct the jury to evaluate whether the trust to promote ice skating fulfills the criteria set out in the Charities Act 2011, particularly regarding the advancement of amateur sport. They should consider the public benefit aspect and how this trust aligns with the law and prevailing scholarship.
b) Trust to Construct and Maintain a Monument to Jennifer Nicks:
The second trust may not qualify as charitable since it does not inherently provide a public benefit. It is a testamentary trust for a private purpose. To assess its validity, it is vital to scrutinize whether it meets the criteria for a valid testamentary trust, drawing from precedents such as Re Lipinski's Will Trusts (1976) Ch 235. The central question is whether there is an intent to create a monument of public interest or for the benefit of a limited class of individuals. The court considered whether a testamentary trust for a specific purpose was valid. Application : This case is relevant as it concerns the validity of testamentary trusts. The judge might instruct the jury to examine the intent behind the trust and whether it serves a public or
private purpose.
c) Trust to Improve the Facilities of DISC:
The third trust does not fit the traditional charitable model, as it seems to be a gift to a specific entity, DISC. To determine its validity, it is essential to ascertain the nature of DISC and whether it qualifies as a valid gift. The trust's validity may hinge on whether DISC is regarded as an unincorporated association and whether it meets the criteria for such gifts. Hanchett-Stamford v A-G [2008] EWHC 330 (Ch) might provide insights. Case : Hanchett-Stamford v A-G [2008] EWHC 330 (Ch), in which the court evaluated a gift to an unincorporated association. o Application : This case is directly relevant regarding gifts made to unincorporated associations. The judge might instruct the jury to assess whether DISC qualifies as an unincorporated association based on the criteria discussed in this case. Statutes: Statute : No specific statute directly applies, as this trust involves a gift to an unincorporated association. In addition, it is crucial to consider the annual membership dues DISC members pay. While these fees do not directly impact the trust's validity, they may be relevant in assessing the broader context of DISC's operations. Conclusion: a) The trust to promote ice skating in the UK is most likely a valid charitable trust for advancing amateur sport. b) The trust to construct and maintain a monument to Jennifer Nicks may not be charitable. It could be considered a testamentary trust, subject to further scrutiny of its validity based on specific criteria. c) The trust to improve the facilities of DISC may be valid if DISC qualifies as an unincorporated association. However, additional investigation is necessary to determine its nature and eligibility for such a gift. The annual membership dues, while relevant, do not directly affect the trust's validity but may be considered in the broader context of DISC's operations. 2017 ZONE B Question 1 Bill died recently. According to his will, the residue of his entire estate is to be held in trust as follows: a) to provide training for soldiers; b) to provide uniforms for soldiers serving in Bill's old regiment; c) to encourage the government to increase military spending. Fred and Simon were appointed as the executors of Bill's estate and the trustees of his will trusts. They seek your advice concerning the validity of those trusts. Bill's old regiment was disbanded last year. Advise Fred and Simon. General remarks This problem question concerns charity, which is discussed in Chapter 10 of the subject guide and Chapter 13 of Penner. Law cases, reports and other references the examiners would expect you to use Charities Act 2011, s.3(1)(b) and (1): Re Harwood [1936] Ch 285; National Anti- Vivisection Society v Inland Revenue Commissioners [1947] UKHL 4, [1948] AC
