These are notes on the beneficiary principle created in 2019. They follow a structured format which condenses the relevant case law, statutory provisions and academic opinion that are relevant to the topic to aid with exam revision.
The Beneficiary Principle: Charitable purposes:
Important to consider first whether the purpose is
charitable, since the two factors that make a trust
Definition: void do not apply to charitable trusts
Re Shaw’s Will Trust- Estate left to be applied to
A trust must have ascertainable beneficiaries the creation of a forty-letter alphabet, held not to
capable of enforcing its terms (a natural or legal be a charitable purpose and so the trust was void
person with the right to enforce the trust against as a non-charitable trust.
the trustees) Re Endacott- A gift of the testator’s estate to a
A trust for purposes will not be valid (Morice v parish council was not seen as charitable
Bishop of Durham) a trust which was set up for
‘’such objects of benevolence as the Bishop shall
approve of” which was held not to comply with the Alternatives to private purpose trusts:
beneficiary principle Motive cases:
Leahy v AG for New South Wales: What appears to be a purpose trust could be held
to be an absolute gift with the purpose being no
A gift can be made to persons, but it cannot more than the nonbinding motive for making the
be made to a purpose or to an object gift (Re Osoba)
Facts: A testator left his estate for his daughter for
Re Astor’s Settlement Trusts:
the remaining of her university education. When
A trust was created for the maintenance of good she finished university, the other children tried to
understanding between nations and the claim the remaining money
preservation of the independence of newspapers Held: The COA found that the testator’s intention
was held to be invalid as it violated the beneficiary had been to make an absolute gift to his daughter
principles. and the reference to education was merely an
expression of motive. Therefore, the daughter was
Perpetuity periods- The rule against inalienability: entitled to the whole of the property
Property must be vested in individuals within a
recognized period of time and if it might not vest
within that time, any interest in that property
might be void
It must be clear that a private purpose trust will
come to an end before the common law Re Denley Purpose Trusts:
perpetuity period of 21 years expires, or they will A purpose trust that would otherwise be void can
fall foul of the rule against inalienability be upheld if:
Perpetuities and Accumulations Act 2009 extended a) It is for the benefit of known or
it 125 years ascertainable individuals
b) The purpose benefits the whole class of
individuals and is not too vague
Non- Charitable purpose trusts are generally void for two c) The trust complies with the perpetuity
reasons: rules
In Denley, land was given on trust for a purpose
Need for identifiable beneficiaries:
(the employee’s use and enjoyment of a sports
Based on the beneficiary principle
ground) and it directly/indirectly benefitted
Certainty of purpose:
individuals so was valid
The purpose must be defined with reference to
In Re Abbot Fund-
clear concepts and the means by which the
Fund was raised for the maintenance and support
trustees are to attain the purpose must also be
of two disabled ladies.
prescribed with a sufficient degree of certainty
The trust could have been seen as an express
Leading case:
private trust with the beneficiaries being the two
Re Astor’s Settlement Trusts: ladies.
However, the trustees had a wide discretion as to
A trust was created for the maintenance of good how to use the money.
understanding between nations and the Consequently, the courts understood the trust as
preservation of the independence of newspapers being for the purpose of benefiting the ladies,
was held to be invalid as it violated the beneficiary rather than for the ladies themselves. Valid trust as
principles. they could enforce it.
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