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Equity and Trust - Charities
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Comprehensive notes on Equity and Trust Law in the UK, on charities.
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Equity and TrustsRevision Notes
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A) THE LAW
Test of validity for charitable disposition (PQ structure)
1. Did the settlor or testator intend to benefit a recognised charitable purpose?
2. Is the purpose for the public benefit?
3. Is the purpose political?
4. Is the purpose wholly and exclusively charitable?
! Sometimes, the first two questions might overlap in terms of argumentation.
Room for argumentative manoeuvre
Despite the strict test, there is room for argumentative manoeuvre. This is identified in quotations
below
1. Lord Lawburn (Weir v Crum): “There is no better rule than that a benignant construction will be
placed upon charitable bequests.”
EXPLANATION: If you have someone trying to give to charity, the court, by all means, recognise that
settlor’s intentions. This idea of trying to give effect is known as benignant construction.
2. Lord Cross (Dingle v Turner): “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”
EXPLANATION: The courts have been quite stingy/ not very generous with using the word charity, finding
things valid as charities, because they attach to tax/fiscal privileges. When making assessing the public
benefit of the entity in question, we should not be thinking does if it deserves a tax benefit as well?
3. Lord Simmons (Gilmour v Coates): Charity law “has been built up, not logically, but empirically.”
Problem question analysis
1) Recognised charitable purpose:
Charities Act 2011: put the law concerning this on a clearer statutory footing. Section
3(1) is as follows:
a) Prevention or relief of poverty;
b) Advancement of education;
c) Advancement of religion;
d) Advancement of health or the saving of lives;
e) Advancement of citizenship or community development;
f) Advancement of the arts, culture, heritage or science;
g) Advancement of amateur sport;
, Equity and Trusts
Revision Notes
h) Advancement of human rights, conflict, resolution ...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...
! Pemsel’s case only had four features – the Act has decided to recognise what has been recognised in
case law; it added all sorts of things that didn’t used to be recognised; Parliament has been much more
generous and specific as to what will be seen as a valid charitable purpose. However, the law changes as
the years go on. For example, the human rights part.
s.3 (1) M: any other purposes:
This is a way for the courts to keep developing charities; recognition that charities are a constantly
evolving field.
(a) That are not within paragraphs (a) to (l) but are recognised as charitable purposes by virtue of
section 5 (recreational and similar trusts, etc.) or under the old law…
(b) 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… - similar.
(c) 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. – the old law remains valid and relevant.
“The law of charity is a moving subject which may well have evolved even since 1891 (when the
Pemsel’s case was decided)”., per Lord Wilberforce in Scottish Burial Reform and Cremation
Society Ltd v Glasgow Corp [1968].
Scottish Burial Reform and Cremation Society Ltd v Glasgow Corp [1968]: A trust to promote
cremation as a method of disposal was held charitable by the HL, as it was analogous to earlier cases in
which it has been held that trusts for the maintenance of graveyards were charitable.
! Even earlier cases which rejected a purpose being charitable can be overturned.
Funnell v Stewart [1996]: Hazel Williamson QC held that faith healing had ‘become a faith healing
had become a recognised activity of public benefit’ so as to be charitable, even though an earlier decision
had held that a trust to promote faith healing was non-charitable.
“A trust is not charitable and entitled to the privileges which charity confers unless it is with the
spirit and intendment of the preamble”, per Lords Simmonds in Williams Trustees v IRC
[1947].
Ambiguities exist in many of these charitable purposes recognised by Parliament . Some of them are
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