Lecture notes

Equity and Trusts: Charitable and Non-Charitable Purpose Trusts

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Module
Equity & Trusts

Institution
Cardiff University (CF)

This document provides a detailed lecture note on charitable and non-char trusts. It talks about charitable trusts and goes through examples and explains the area of law. Also, this doc outlines the Trusts of imperfect obligation (what they are, the categories and the appropriate cases for the cate...

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Uploaded on August 4, 2023
Number of pages 24
Written in 2022/2023
Type Lecture notes
Professor(s) Anon
Contains All classes

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Charitable and Non-Charitable
Purpose Trusts
Assessment support

TUTORIAL 3

Problem Question for exam!!

Exceptions to the beneficiary principle
Introduction

So far, we’ve looked at express private trusts – trusts created intentionally for the
benefit of a person/group of people

Now we’re moving on to look at express purpose trusts – trusts that have been
created for particular purposes (not for people)

Charitable and non-charitable purpose trusts is a separate topic with its own
question in the assessment

The problem with purpose trusts

“…there must be somebody, in whose favour the Court can decree performance”
(Morice v Bishop of Durham (1805) 10 Ves 522 (William Grant MR)

Express trusts must comply with the beneficiary principle – there must be
a living human beneficiary to enforce the trust

Examples: Morice v Bishop of Durham: a trust for ‘such objects of
benevolence and liberality as the Bishop of Durham in his own discretion
shall most approve of’ was void; Re Shaw [1957] 1 WLR 729: a trust for
introducing a new 40 letter phonetic alphabet was void

Where a trust does not comply with the beneficiary principle, the trust will be void
– the property will be held on resulting trust for the settlor OR will fall into residue

Lack of meaningful obligation where there’s no beneficiary

Charitable and Non-Charitable Purpose Trusts 1

, Uncertain or vague purposes

E.g. in Re Astor’s Settlement Trust [1952] Ch 534: trusts for varied
purposes including the maintenance of good understanding between nations
and the preservation of the independence and integrity of newspapers void
for 1) breaching beneficiary principle and 2) uncertain purposes

Could be resolved by better drafting!

They often do not comply with the perpetuity rules:

Express private trusts for people – property must vest within 125 years
(Perpetuities and Accumulations Act 2009)

Purpose trusts not subject to the same requirements – we’ll look at all we
need to know about perpetuities and purpose trusts in these lectures

Public policy concerns – capricious purposes e.g., Brown v Burdett (1882) LR 21
Ch D 667 CH D – trust for the purpose of boarding up the windows and doors of
a house for 20 years was void

The exceptions to the beneficiary principle

Charitable trusts – what are they?

Charity = institution for charitable purposes (s1 Charities Act 2011). A
charitable trust is one way of giving money to a charity (not all charities are

Charitable and Non-Charitable Purpose Trusts 2

, trusts, and you can create a charitable trust without giving the money to charity)

Charitable trusts are express public trusts – they are trusts for purposes that
benefit the public rather than individuals

Advantages of charitable trusts:

No need for ascertainable beneficiaries. They can be enforced by the
Attorney General/Charity Commission (an organisation with wide
responsibilities over charities)

Charitable trusts can last forever (though note that the property must vest in
the charity within 125 years)

Not subject to the rules on certainty of objects, but the purpose must be
certain and the purposes must be exclusively charitable (more on that in a
moment)

Tax advantages for charities

Requirements for validity

Charitable and Non-Charitable Purpose Trusts 3

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