TRUSTS LAW: CHARITIES – TERM 2 WEEKS 8 & 9:

Overview of Charities Law in General:

 There are many categories of charitable trusts: (a) Relief of Poverty, (b) Trusts for the advancement of education, (c) Trusts for the advancement of religion, (d) Trusts
for other purposes beneficial to the community. (Pemsel’s Case 1891)
 Ch A 2011 has the effect of EXPANDING the categories of “charitable purpose” beyond those categories set out by case law.
 Categories remain BUT Category (d) has been replaced by a statutory list of purposes
 Statutory List of Purposes – 13 categories: Advancement of health or saving lives, Advancement of Citizenship or community development, Advancement of Arts,
Culture, Heritage OR Science, 4. Advancement of amateur sport, Advancement of human rights, Conflict Resolution or reconciliation or promotion of religious or racial
harmony or equality or diversity; Advancement of environmental protection OR improvement, Relief of those in need by reason of youth, age, ill-health, disability,
financial hardship OR other disadvantage, Animal Welfare

Brief Thinking Framework:

 Charities provide “welcomne relief” from compelxitiies of forming express private trusts and from implied trusts.
 We need to decide in what circumstances XYZ trust will be held as chsaritable.
 Subject Matter should be divided clearly between various different categories of charitable trusts  (1) Trusts for relief of poverty, (2) Educational Pourposes, (3)
Religious Purposes. (4) Trusts for other purposes beneficial to the community as listed in CHA A 2011 s3(1).

Approaches to Charities:

 Before 2006, charities lawyer was concerned to decide in 1 st place whether or not trust purpose in Q fell within one of 1 st 3 charitable purposes.. If not, attention to
be on whether or not it could fall within 4 th general head.

Context of Charities in British Life:

 With use of charities to perform these public functions is that there is NO DEMOCRATIC CONTROL over activities of charities like there is over activities of central G
OR local G.
 Good things about charities (laymen terms) – (1) Money is raised by taxation and (2) administered through an agreed, democratically accountable programme by
G agencies.
 But with charities  Tax exemptions  => People create tax avoidance structures by people who have no charitable intentions.

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  Legal Nature of Charity  A charity is an institution which acts in the public benefit, especially to relieve need or distress, or provide for communal services more
generally.
 Previously, Preamble of the Statute of 1601 significant, not now. Anyway Ch A 2011 development occurred regardless of Preamble in most circumstances and only
the last head of charity older cases are closely connected to defining what charitable purpose is by analogy with contents from that preamble=> WHOLE LONG
LIST!

CAT 1  Trust for the Relief of Poverty 

 “Poverty” means “something MORE THAN going short”, but does not require absolute destitution.
 Need not be broad section of the community which stands to benefit from the trust.
 Such trusts presumed to have “altruistic motivation” => Therefore enforceable as being charitable.
 Public Benefit Requirement   Subtle BUT significant alterations to the poverty charities in CH A 2011.
 But with the Public Benefit Requirement, it calls into question trusts for relief of poverty which will benefit only a small number of people, they were valid under
the old case law.

CAT 2  Trust for Advancement of Education 

 Need some institution to benefit from this or that purpose of trust is to generate research which will be published for the public benefit
 Educational charitable trusts   used as fronts for the provision of benefits to a private class of individuals
 So court developed requirement that there be sufficient public benefit, which requires that there is no personal nexus between people who stand to benefit &
settlor of trust.

CAT 3  Trust for Advancement of Religion 

 Must have sufficient public benefit

 Gilmour v Coates  Good example: Works done and prayers said by a cloistered order of nuns though religious would NOT be charitable in legal terms..
 Religion is concerned with “man’s relations with God” => Therefore excludes many modern new age religions and cults.

CAT 4  Trust for Other Purposes Beneficial to Community 

Definition of “Charitable Purposes” Under Ch A 2011

Ch A 2011’s role:

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  Ch A 2011 created 9 new categories of charities that had not been settled in case law
 Ch A 2011 marked a sea-change in the law, after Ch A 2006.
 Broaden type and number of charities in existence so that shrinking welfare state cold be supplemented by charitable activity in areas of perceived social need.
 Examples: Environment => New political priorities, Other new purposes => such as the acceptance of sport as potentially charitable activity => Resolved the
common law!!!

Meaning of “charity” as disclosing a charitable purpose:

 S1 Ch A 2011  charity is an institution: it can be a trust or company, which is established for charitable purposes only and falls to be subject to control of HC in
exercise of its jurisdiction with respect to charities.

Definition of Charitable Purposes in Ch A 2011:

 Charitable Purpose = s2(1) of Ch A 2011  (1) Must fall within list of purposes set out in s3(1) Ch A 2011 & (2) Public Benefit Test
 S3(1)(a), S3(1)(b), S3(1)(c) and S3(1)(m) make reference to pre-existing case law on charitable purpose.
 Reduced significance of Preamble in defining what charitable purpose is  Previously, Preamble of the Statute of 1601 significant, not now. Anyway Ch A 2011
development occurred regardless of Preamble in most circumstances and only the last head of charity older cases are closely connected to defining what
charitable purpose is by analogy with contents from that preamble.

Continued Validity of Charitable Purposes accepted in Common Law

 Ch A 2011 s3(1)(m)(i) that any purposes which would have been recognised as charitable purposes “under old law” will CONTINUE to be recognised as charitable
purposes.
 S3(1)(m)(i) Ch A 2011 that any purposes which are “recognised as charitable purposes” by s5 (recreational. Similar trusts) OR under the old law are recognised as
being charitable purposes under Ch A 2011.
 So categories under old law will STILL be regarded as valid charities even if not explicitly mentioned/ contained in s3(1) list.
 So any purposes which “may reasonably be regarded as analogous to, or within spirit of any of categories in Para (a) to (l) will be charitable purposes => as will any
types of trust which are analogous to, or within spirit of old charities law.
 So we need to know categories of charitable purpose which have been upheld by pre-2011 case law as the Ch A 2011 maintains their validity.

Statutory Test of “Public Benefit”

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  Must know case law to interpret this term.
 Ch A 2011 s2(1)(b)

Case Law  “Public Benefit”

Authority Name Oppenheim v Tobacco Securities Re Hetherington ICLR v AG

Trust (HOL)
Category of Charity Trust for the relief of poverty Trust for advancement of religion Charities created for general purposes
explored
Requirement for Public There could not be a public benefit if But Recent Case Law relating to advancement of Where a trust purpose removes the need for statutory or
Benefit  there was a connection OR nexus religion cases (esp), it is suggested if purpose could governmental action by providing a service voluntarily, then
between people who established possibly be interpreted to be for public the organization providing that service should be deemed to
charity and people who were benefit, or even if it could not be so interpreted but be acting for the public benefit and so to be acting charitably.
intended to benefit such that the nevertheless if trustees would operate trust so that
people who stood to benefit could there would be a public benefit in practice, then
NOT be said to constitute a section purpose can be considered for public benefit
of the public!

Holding HELD: NO PUBLIC BENEFIT between

children of employees who were to
benefit and the company which was
establishing trust.

Children of employees did not

constitute a section of “the public”.
Effect of authorities Marks greater liability in courts in recent years when considering questions on charity.  Esp in relation to the “Public Benefit” Requirement

The Requirement for a Public Benefit: Distinguishing 2 lines of authority

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  Hard to reconcile all cases as cases are dependent on their own facts, some themes in relation to judicial attitudes to charitable purposes.
 Technical Public Benefit Requirement VS Other cases which are satisfied if there is some genuine charitable intention on settlor’s part.
 Courts’ attitudes are divided and purportedly, charitable trusts over the years consist of 2 approaches:
 APPROACH 1: APPLICANT ONLY NEEDS TO SHOW GENUINE CHARITABLE INTENTION FOR THERE TO BE A VALID CHARITABLE PURPOSE TRUST (DINGLE V TURNER) ,
OR
 APPROACH 2: APPLICANT DEMONSTRATE THERE IS NO PERSONAL NEXUS BETWEEN THE SETTLOR AND CLASS OF PEOPLE TO BE BENEFITED, BUT RATHER THAT
THERE IS A SUFFICIENTLY PUBLIC BENEFIT FROM TRUST’S PURPOSE BEFORE IT CAN BE A VALID CHARITABLE PURPOSE.(RE COMPTON)

The Meaning of these Approaches

(1) Something intrinsically charitable in creation of trust.  Consist of intrinsic merits of trust purpose which is proposed. Meaning if found only a small number
of people will take benefit from trust, court may still find it is a valid charitable trust if settlor’s intentions are genuinely charitable….  Approach 1

 What this means is that even if only a small number of people will take benefit from trust, court may still find it is a valid charitable trust  if the settlor’s
intentions are genuinely charitable.
 Also have cases where settlors have sought to win tax breaks which charitable trust attract by pretending to create charitable trusts when they are actually
intended to benefit people who are close to the settlor personally.
 ABUSE: the ability of settlors to use the charity as a scheme – to win tax breaks which charitable trusts attract by pretending to create charitable trusts which
are in truth intended ONLY to benefit people who are closely linked to the settlor personally…
 When an organization has charitable status => FREEDOM from most taxed paid by individuals & corporations. I.e. Free from income taxes both by individuals
and trusts. Most corporation tax paid by companies and unincorporated associations, free from capital gains tax, free from council tax and other local taxes.

(But note charities are subject to VAT)

Okay so if the charity is exempted from tax => Other taxpayers are subsidizing charitable sector (higher rates of tax than otherwise necessary).
Most tax efficient structure => organize Organisation X as a charitable company instead of a trust.
Trust => Trustee subjected to fiduciary duties & which would covenant to pay all its profits to charity, thus attracting tax relief.

 Because of such abuse, Approach 2 was developed.

(2) Effectively mathematical question of demonstrating that there is a predominantly public rather than a private benefit in purposes of that particular trust by
assessing the number of people who benefit from it.  Approach 2

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  Looks to see how trustees are actually running the trust and whether or not they are achieving sufficiently public, charitable effects/
 Defeating the kind of abuse that can arise from Approach 1.
 Defeating this kind of abuse of charitable status prompted some courts to require existence of public benefit to demonstyrate that settlot is not simply trying
to achieve tax breaks.

CORE RULE: YOU CANNOT EVER SET UP A CHARITY FOR PRIVATE PURPOSES.

CH A 2011 “PUBLIC BENEFIT REQUIREMENT”IS VERY CLEAR.

CASES THAT CREATED PUBLIC BENEFIT APPROACH CONCERNED WITH SHOWING SETTLOR’S INTENTION IS TO BENEFIT A SUFFICIENTLY BROAD CATEGORY OF THE
PUBLIC INSTEAD OF JUST ATTRACT TAX BENEFITS FOR A PRIVATE CLASS OF BENEFICIARIES.

E.g. Educational charities in which companies sought to acquire tax benefits for paying in the school fees of their employees’ children – Oppenheim v Tobacco Securities
Trust => the children of employees  => That group of people NOT considered as a sufficiently large proportion of public will benefit from trust.

The Special Features Of Charities

Trusts Law Advantages of Charitable Status Tax Advantages of Charitable Status
Are charities “trusts” at all? Triangle  Settlor- Trustee-Beneficiary: Advantages to Charities (see above part in PINK)
This typically does NOT apply!!

Charities do not need to fulfill the

traditional rules such as the 3 certainties.

BUT THERE IS A NECESSARY REQUIREMENT

TO CREATE A TRUST, NEEDING SOME
PERSON TO ACT AS A SETTLOR AND THERE
ARE TRUSTEE APPOINTMENTS TO
OVERSEE TRUST PROPERTY & PROMOTE
OBJECTIVES OF THE TRUST. => NEED THIS
NEXUS BETWEEN TRUSTREE AND
BENEFICIARY BECAUSE THERE IS NO
INDIVIDUAL BENEFICIARY.

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 AG sues in place of the beneficiaries to
enforce the purposes of the charity against
its trustees. Charities seek to benefit
individuals or groups of people  they are
NOT beneficiaries in trust law sense
because THEY DO NOT ACQUIRE
PROPERIETARY RIGHTS IN THE PROPERTY
HELD ON TRUST FOR THE CHARITABLE
PURPOSE.

Powers of trustees are DE FACTO more

wide ranging because they are not
susceptible to the direct control of any
beneficiary, only regulation by CC and
litigation brought by AG as though
beneficiary.

Charitable companies Company has SCP. Trust has no separate Advantages to the 3rd Charity recover tax paid by taxpayer from IR.
legal personality! A charitable company person Chairty would then pay tax deducted back to taxpayer
can receive profits. (typically offshore) as part of complex tax avoidance
arrangement.

Now, taxing statutes are read according to ordinary

principles of statutory interpretation, courts will not
view such tax avoidance arrangements artificially
anymore!
Formalities (which do not apply to Charities are exempt from fulfilling
Charity) formalities and issues of certainty before
an express private trust can be valid.
Charity VS Express Private Trust
(1) Rules as to perpetuities don't
apply to charitable trusts. Rules

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 against inalienability and
remoteness of vesting don't apply
to charitable trusts.

E.g. “to accumulate capital to relive

poverty in East End of London “

Charity, Charitable Trust   CAN.

Because the charity’s goal is to amass large
amounts of money, know-how and
property to achieve socially desirable
objectives. => ordinary principles of trusys
law cannot operate or else it will
FRUSTRATE the Charitable Intention

Express Private Trust  CANNOT. Void

due to perpetuity. The capital cannot be
locked up as it will make property
inalienable.

*There is an INHERENT TENSION between

these 2 kinds of trusts.

(2) Trusts Objects are valid despite

being for abstract purposes
provided that those purposes are
charitable within CH A 2011.
“Charitable Purpose”  Very
specific meaning….. NO NEED TO
SATISFY CERTAINTY OF OBJECTS
RULE AS ALONG AS THERE IS A
GENERAL CHARITABLE
INTENTION… CyPres Doctrine,

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 governing application of assets
where precise objects of any
charitable trusts are uncertain or
impossible to ascertain!

(3) Charity, Charitable Trust  The

trust only need to act by majority.
Rationale: Facilitate the use of
charity for charitable purpose.

Express Private Trust  Trust is

that organized in that the trustees
don't need to be act
unanimously!

**** The Rule Against Finding a Charity for Political Purposes

Factors which may negate a finding of charitable status  Need for Charitable Intention, BUT NO POLITICAL PURPOSES.

A) Sufficient Intention to create a charitable Trust on settlor’s part needed before a trust can be deemed charitable.

This issue comes about when there are drafting problems/ vagueness presented in the Trusts Instrument.
General Terms  The Court will find there to  Courts tended to disallow ostensibly charitable purposes if there has been some failure to disclose a
be a charitable purpose when they find one. purpose which is exclusively charitable.
(Re Hetherington), (ICLR v AG)  Re Diplock : “benevolent, charitable and religious purposes” => benevolent is not necessary charitable.
 So if settlor leaves 2 purposes behind and one not charitable, trust may NOT BE HELD VALID AS CHARITY.
 Re Koeppler : HELD  Even where a gift is expressed in vague terms, it would be interpreted as having been
charitable=> Court will tend to find trusts with genuine charitable intention valid wherever possible.
 Given court’s stance/ attitude, even where gift expressed in vague terms it will be interpreted as having
been charitable.
Need for exclusivity for charitable intention  You can’t have Settlor being confused as a charitable purpose with non charitable purpose.

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  A trust would NOT be a valid charitable trust just because can potentially be applied by its trustees for
charitable purpose OR alternatively for a non-charitable purpose. – Re MacDuff
 Re Diplock : “charitable OR benevolent purposes” => benevolent is not necessary charitable. The word “OR”
is a very good indicator of confusion for this example.
 Rationale for Court’s strict non confusion policy  Because it would be possible for trustees to apply
property either for charitable purposes OR potentially for some other purpose which is not charitable. 
THIS IS WHAT COURT DOES NOT WANT!
Case Law Illustration of these concepts. Literal reading of trust instrument –

How is the Trust Instrument being read and  St Andrew’s Lawn (Cheam) Tennis Club Trust (2012)  HELD that trust was an invalid private purpose trust
construed by the courts?! and not a charity. Members of trust played tennis happily and issue was whether or not trust was a valid
charity at all. Because of wording trustees could use funds for “any other purposes in connection with St
What kind of construction will the court make? Andrew’s Church”.

Instances where the trust provision too vague BUT courts can make more benign constructions too => Courts less likely to invalidate trusts on basis of lack of
but the court will interpret it in such a way that exclusivity of purpose than was the case in many older cases. – Re Hetherington and Guild v IRC
it is exlusively charitable? However this does not mean courts will accept charitable trusts that have no exclusively charitable purposes. ALL
COURTS ARE WILLING TO DO IS TO ACCEPT BOTH THAT THE UNDERLYING INTENTION CAN BE CONSTRUED AS BEING
But if artificial construction is made by court => CHARITABLE & TRUSTEES WILL BE REQUIRED IN PRACTICE APPLY TRUST PROPERTY SO AS TO MAKE IT OPERATE AS A
it presents a risk that the settlor’s original CHARITABLE TRUST – THAT IS BY APPLYING PROPERTY ONLY FOR STRICTLY “CHARITABLE” PURPOSES AND NOT ALSO
intention would be overridden by the court (Re FOR MORE GENERALLY “BENEVOLENT” BUT NON-CHARITABLE PURPOSES. (Re Diplock)
Harding)
Cases where settlor provided property be settled for “Charitable and other purpose”  More generally benign
Academic Critique made pertaining to the type construction  :
of construction made.
 Court could interpret word as connoting either trustees must administer trust in a charitable manner even if
some other incidental purpose is also to be achieved,
 OR other purpose MUST also be charitable OR at least not detract from underlying charitable purposes.
BUT where that provision is interpreted to mean trust need not have charitable purposes only as part of core goals, it will
be invalid as a charitable trust:

 Re Diplock  THE CHARITY FOUND TO BE ONLY ONE OF THOSE 3 PURPOSES IN WHICH BENEVOLENT DOES
NOT MEAN CHARITABLE.

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  There can be similar situations too where purposes were grouped to make them appear to be in the
alternative.

Court can do something more extreme: Re Harding  Notion: validating charitable testamentary gifts wherever
possible in relation to a purpose which is so broadly drafted that it could not have been possible to disclose an
exclusively charitable purpose!

Re Harding:

Property/ Bequest to be held “in trust for the black community of Hackney, Haringey, Islington & Tower Hamlets”  the
court made this purpose to be valid as charitable one by saying that to comply with S34(1) of Race Relations Act 1976,
specific ethinic limitation in bequest should be treated as having been removed => Bequest simply for the benefit of the
people of 4 large London boroughs.

BUT => Suggestion is that bequest SO BROADLY DRAFTED that it couldn't have disclosed a charitable purpose not did it
make clear what trustees would be and not permitted to do with Property.
Because, apart from notion this is for benefit of those people (more than 1 MILLION in all probability, there is nothing
either to tell us when the trustees have performed OR not performed their duty, nor that this is necessarily a charitable
use)

Artificial construction is made by court => it presents a risk that the settlor’s original intention would be overridden by
the court

Overall  How to achieve Sufficient Intention Trustees need to generate scheme for using property which would satisfy CC and / or the courts.
to create a charitable Trust on settlor’s part
needed before a trust can be deemed Settlor Part’s  To resolve drafting problems with trusts, just specify how trustees must behave in practice so as to
charitable? achieve purely charitable needs.

B) Political Purposes

It is beyond the court’s competence to go and determine if XYZ purpose would be for the benefit of the community. (ConAd Idea of separation of powers )
“I don’t care whether the political policy will eventually benefit people, so long as it is political => it will NOT BE ALLOWED as a charity.”

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 General Guide: Court will consider activities as being political if they involve campaigning for a change in the law.
Theoretical Outline & Certain Matters The court must assume law to be correct so court cannot uphold any XYZ purpose to be charitable if it promotes a change
in the law – National Anti-Vivisection Society
Political Purpose  the analysis of this subject
matter not as easy as it seems. Academic Critique: Weak response by court because surely judges can tae it upon themselves to go and interpret, limit
and extend statutes, or occasionally recommend creation of new statutes to shore up common law. => But this is merely
(See next column) the very nature of the common law system.

So, what this means is that court will look at There will be factual circumstances in which a charitable purpose is advanced for political ends.
EXTENT to which this political purpose is
involved in Organisation XYZ. Example 1  Charitable purpose to take care of poor elderly may push G to go and pursue elderly centric policies?

But it is common for charities to campaign for advancement of their cause as a COLLATERAL OBJECT to the charitable
purpose. General Guide: Court will consider activities as being political if they involve campaigning for a change in the
law.

However there will necessarily be a large range of activities which fall short of such campaigning but which go beyond
charitable objective pursuit.

Example 2  RSPCA’s goal is to change in law relating to animal testing  This in itself is an ordinary void piltiical
purpose BUT which does not call the charitable status of RSPCA into question just because that is one of its minor
objectives… RSCPA is still a charity because the anti vivisection attitues it holds – merely part of its activities…

Case Law Illustration & Development

Stance Case Authority Academic Critique
Strict Rule (National Anti-Vivisection Society v National Anti-Vivisection Society v IRC  type of political Theoretical problem: Whether court could decide that
IRC) campaigning undertaken was to procure change in law to benefit of 1 side of political argument (e.g. banning
completely ban Vivisection. vivisection > another?!!

Not clear where charities law draws the line  Q: Whether society’s political campaigning for the banning E.g. Trust to advance cancer cure research by animal
Judicial Creativity and Construction (again… of Vivisection would prevent its purposes from being testing advancement.
Recurring idea) defined as charitable.

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 If we say that trust has charitable status in law, we are
HELD: Society’s aims to be too political  to qualify as impliedly accepting a side of political argument => so,
charity because aim to change legislation is necessarily defence of current position is that law is outside politics.
political. BUT it is clear from effect of law is to favour some political
McGovern v AG  Amnesty International human rights points over others!!!
campaigning organization NOT charitable because it
campaigned for changes in laws of many nations.

Arguments for flexibility & where to draw the Bowman v Secular Society. HELD: Society whose CC suggested organization may supply info to G about
line => HOW TO APPLY!? predominant aim was not to change law could be change in law without losing its charitable status and
charitable even though its campaign for change to without this flexibility being built in law then many
To determine the application of this… Must legislation was merely a subsidiary activity … charities cannot disseminate impt info which only THEY are
look at the case circumstances. DEGREE.  able to amass.
Qns of degree whether a society seeks to Fictional E.g.: OK for University students union to discuss
change the law as its main focus OR whether it political matters, not invalid activity under charities law – There is a distinction between purposes or objects of a
espouses ends which incidentally require AG v Ross BUT not charitable purpose to campaign on charity and means by which it promotes those purposes
change in the law. (Bowman v Secular Society) political issue OR apply funds to organization formed to or objects – Hanchett-Stamford v AG (2008)
change law or public policy..
Court may consider fact that an organization does in fact
Webb v O’Doherty: Politically motivated purpose of pursue political objectives and so deny that organisation
national committee of students to apply pressure to stop charitable status OR contrariwise look to the charitable
1991 Persian Gulf conflict not charitable. means by which it promotes its objectives!!

CAT 1  Trust for the Relief of Poverty 

 “Poverty” means “something MORE THAN going short”, but does not require absolute destitution.
 Need not be broad section of the community which stands to benefit from the trust.
 Such trusts presumed to have “altruistic motivation” => Therefore enforceable as being charitable.
 Public Benefit Requirement   Subtle BUT significant alterations to the poverty charities in CH A 2011.
 But with the Public Benefit Requirement, it calls into question trusts for relief of poverty which will benefit only a small number of people, they were valid under
the old case law.

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  Anyway court will deny charitable status to those trusts who do not disclose genuine charitable intention (based on Dingle v Turner)

(1) Scope of Poverty Category  Case Law referred to “the relief of poverty” only but S3(1)(a) CH A 2011 provides to prevention or relief of poverty.
 Effect of change – prevent somebody from going into poverty VS dealing with poverty once it has happened  preventing
somebody from entering poverty now part of law.
 S3(1)(m)(i) recognised any purposes that were recognised under old common law before 1 April 2006 exists.
 Common scope of discussion  the poor relatives cases.

Leading Case: Dingle v Turner Dingle v Turner: Compton test not safe to use. Hard to render difference between a
private and public class. The term “public”  HARD TO DEFINE. So
Court is prepared to adopt Issue: Creation of trusts expressed to be for relief of impoverished using Compton test can resuilt in absurd results (Lord Cross)
PURPOSIVE APPROACH to relatices  should they be considered to be beneficial given nexus
charitable purposes genuinely between settlor and beneficiary? & suitable of trusts in modern “Mere body of fluctuating individuals” --: meaning if court says
concerned with relief of context? people who benefit just fluctuate then cannot be a sufficiently
poverty and make that trust large section of public to constitute a charity!
valid. => How court knows? “Poor Relatives” – OK. => doesn't mean just because family
Look at purpose of trust, who is members can benefit then whole trust is void. Logically, the public was itself a fluctuating body of private
gonna benefit? individuals.
“My poor relatives Fred Bob Joe” – CANNOT.
Assuming settlor’s intention genuinely charitable:
Facts: GBP 10K to pay pensions for poor employees.
E.g. 1) 125K Post Office workers and 150K people live in Kensington
Arguments presented: AGAINST pension payments under Re => Trust in favour of post delivery workers will have almost as
Compton and Oppenheim v Tobacco Securities because of nexus many people benefitted as accepted public class of inhabitants. –
between employer and employee & that poor relations cases an charitable trust
anomaly in development of core principle of no nexus so cannot be
validated by analogy. E.g. 2) Charitable trust to benefit Hackeny residents  Well the
people will die and live.
HELD: RE COMPTON PRINCIPLE NOT FOR UNIVERSAL
APPLICATION., COMPTON PRINCIPLE IN ITSELF INTELLECTUALLY
UNSOUND AND TRUSTS FOR RELIEF OF POVERTY NEEDED
DIFFERENT TEST FROM OTHER FORMS OF CHARITABLE TRUST
WHICH DID NOT REQUIRE A PUBLIC BENEFIT.

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 Old case  SHOW NO NEED PUBLIC BENEFIT REQUIREMENT .
(2) What is Poverty? This is a public policy matter. There is some degree opf subjectivity involved when we measure what poverty actually means. Q is how to
measure? Standard of poverty varies over the years.

No need poverty to be outright destitution.

No sense of time as to which those who are to benefit need to be in straitened circs.

Poverty may be subjective but law has set some guidance (see below).
Examples of Poverty **Joseph Rowntree v AG –

 Poverty need not necessitate outright destitution proof, it can encompass which exceeds simply going short.
 No need person benefitting to become entirely destitute but just that they were in highly straitened circs.
Poverty & 1601 Premable Joseph Rowntree v AG –

Preamble said “aged, impotent and poor” => HELD these 3 terms should be considered disjunctively so beneficiary need only to fit ONE
of these descriptions.
Poverty & Social Class Re Gwyon – boxers for rich and poor boys  CANNOT

Trust for provision of clothing for boys both rich and poor not valid.
No necessary requirement that boys in question be in proverty in the provision.
Court accepted $ would be applied de facto by trustees for benefit of poor boys only.
Purpose approach  by courts => lead to VALIDITY of numerous charitable trysts for relief of poverty which wold appeared to be
uncertain in their charitable intent.
(3) What is meant by relief of No need resolution of poverty, alleviation of poverty is good enough based on trust’s activities 
Poverty?
E.g. Opening of soup kitchen and giving soup / distributing good packages only for billionaires not going to work – there is nothing to
relief of poverty from billionaires as they no need soup / packages to relief poverty.

But let’s say trust is soup kitchen that occasionally provides food to not impoverished people  trust will still be valid and not invalid
because the kitchen will give benefit for genuinely impoverished. BECAUSE IT WOULD APPEAR THERE IS A GENUINE CHARITABLE
INTENTION TO RELIEF POVERTY.
(4) What is meant by Added by CHA A 2011 s3(1)(a)  effect is remove requirement that people who are to be helped are already in poverty. So there will be

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prevention of Poverty? valid charitable trust for people who are GOING TO FALL into poverty meaning some action by creating charitable trust to prevent this is
OK.
(5) Limits of class of people Settlor can define limited group of people entitled to benefit form trust AND even show a nexus between intended beneficiaries.
taking a benefit?
(6)Is there a need for a public Trust for poverty relief no need to be for general public benefit so long as it goes beyond relief of poverty of a signle individual
benefit? – Dingle v Turner says beneficiary  just show more than private trust for fixed class of beneficaires can alr.
no need.
OK for people who are going to benefit to be linked or related to settlor.

DESPITE LINK BETWEEN POOR EMPLOYEES AN EMPLOYER – OK!!!!

Effect of Dingle v Turner, Joseph Rownwood v AG  Purpose of est home for elderly Presbyterians held to be sufficiently broad public
venefit although category of people to take benefit limited.

Facts of Joseph: Sheltered accd provided for elderly by a company Joseph Rowntree  charged occupants for accd and made accd
limited to elderly prebbs.

But let us say organization assumed responsibility for maintenance and management of many properties from local authority held not to
have exclusively charitable purposes as it conferred private benefits on individual tenants as part of activities.
(7) How to reconcile CH A 2011 READING 1  Ch A 2011 S3(1)(a) said must have public benefit under S4(1).
and keep old common law
approach for relieve of But Dingle v Turner said no need public benefit.
poverty?
Although on face of statue no exception, the old common law approach can be used – luckily S4(3) exists because we can say the
provision could be understoof to mean requirement for public benefit as applied in case law before CHA A 2006.

Public benefit req does not apply to relief of poverty trusts – CH A 2011 S4(3)

READING 2  Public benefit test must apply to poverty trusts as well + public benefit test should be the same as public benefit test
applied on authorities of charities law generally.

Poor Relations Cases – Re Scarisbrick  LINK between settlor and her own relatives does make finding of charitable purpose somewhat
eccentric. Genuine charitable intention relive poverty of people to whom somebody not morally obliged to provide for.

16
(8) What about charging for The charity can charge for services   no problem Charity receives rent for accommodation provided (Joseph Rowntree v AG) – OK.
services? Charities can trade in general terms and still have charitable status (ICLR v AG)
(9) What about links to the The class of purposes to be benefitted must not be defined by reference to proximity to settlor.
settlor: trusts for the benefit of
poor relatives? CAN? Settlor creates settlement …

“for the benefit of my two poor children” - CANNOT.

Relief of poverty for the benefit of the settlor’s poor relations would NOT affect its validity as a charitable bequest – CAN.

Re Scarisbrick -

“for such relations of my said son and daughters as in the opinion of the survivor of my said son and daughters shall be in needy circs”

HELD (CA):  Valid charitable trust  for relief of poverty of such persons

NOTE: Actusl wording of trusts matters and court will take purposive and sensible approach to such matters.

Line of cases wouldm be overruled if public benefit s2(1)(b) CH A 2011 interpreted as applying trusts for relief of poverty! Because of
settlor-beneficiary nexus!!!

CAT 2  Trust for Advancement of Education 

 Need some institution to benefit from this or that purpose of trust is to generate research which will be published for the public benefit
 Educational charitable trusts   used as fronts for the provision of benefits to a private class of individuals
 So court developed requirement that there be sufficient public benefit, which requires that there is no personal nexus between people who stand to benefit &
settlor of trust.
 IRC v Mullen (HOL) – access pt to what education is!
 Tax Avoidance cases where employers sought to benefit employees by using sham charities…
 Anyway court will deny charitable status to those trusts who do not disclose genuine charitable intention.

(1) What is Education?

Aspects: Cases & Examples:

17
Education in general terms  “Advancement of Education” – need NOT be academic only.
 Trust must not seek to make a profit out of education. (Like profits to be distributed in trading
company type)
Research, teaching, ideology  Re Hopkins: Bequest made to Francis Bacon Society which aims to prove Bacon was the works
generally attributed to Shakespeare.
There are certain activities which judges are more prepared to  Finding out whether Shakespeare truly wrote his works or not. HELD: Purpose was educational
accept. as it was of highest historical value to history and lit. & Research would be made public would
learn towards finding of charitable status => there must be some public benefit resulting from
Education definition has been expanded beyond teaching  it is the gift.
sufficient that research be carried out either for benefi tof research  So education can go beyond teaching, can be research too!
or with intention to be benefitted so long as there is intention that
research be published or make public… CONTRAST

Craftsmanship high quality is also OK.  Re Shaw: Bequest of George Bernard Shaw  Shaw left $$$ for research for the creation
development of new alphabet for all nations to understand no matter their Mother Tongue.
 HELD: Not charitable purpose – this involved propaganda. There’s no public benefit for this!!
Sport & Education Sport essential to development of you persons. OK. Charitable 

SPORT MUST BE LINKED TO FORMAL EDUCAITON IN ORDER FOR IRC v McMullen (HOL): Trust promote playing Association Football and playing and coaching of other
TRUST “X” INVOLVING SPORTS TO BE CHARITABLE. sports, so long as it is done within schools or other educational establishments  This
arrangements will be charitable.
CH A 2011  SPORTS IS GOOD IN GENERAL TERMS FOR NATION’S
HEALTH But sporting purposes will not in themselves be charitable.

E.g. Trust to provide a cup for yachting competition will not be charitable.
Business & Charity Take idea from top. The charity can charge for services   no problem Charity receives rent for
accommodation provided (Re Cottam) – OK.

Charities can trade in general terms and still have charitable status (ICLR v AG)

ICLR v AG: ICLR permitted registration as a charity. Because law reports are ESSENTIAL for the stuffy
of law, they must be considered as educational & valid as a purpose beneficial to the community
under the 4th head of charity.

18
 Publication of law reports and all other attendant activities fall within head of education in relation
to research function and contribution to education ordinary so called universities.
(3) The Public Benefit Requirement Public Benefit Requirement needed in CH A 2011, explicitly stated. BUT for charitable trusts cases
involving poverty relief, the public benefit requirement does not apply, or else there will be
INCONSISTENCY with previous case law in this area….. – CH A 2011 s3(1)(m)(iii)  any purposes
PUBLIC BENEFIT = SOMETHING THAT BENEFITS COMMUNITY + which are recognised as charitable purposes under old case law will continue to be recognised as
DIRECTED AT A SUFFICIENTLY LARGE SECTION OF THE charitable purposes => old case law WILL TAKE EFFECT for education cases. =>So does it mean all,
COMMUNITY CH A 2011 is doing is codifying law?!!

Older Cases: Giving property for relief of poverty constitutes charitable purpose in and of itself.

Newer Cases: Tax Avoidance Cases  Corporations sought to gain tax advantages for themselves &
their employees by creating trusts which had the form of charitable purposes but which were in
substance private trusts for employees’ benefit and families. 

* It is important in context of educational trusts to look beyond apparent purpose of the trust to
require some evidence that trust is intended to be run as a de facto charity. => THIS IS WHY
SUFFICIENT PUBLIC BENEFIT REQUIREMENT HAS EMERGED.

Fictional Example: MegaCorp PLC set up trust:-

“to provide educational opportunities for young people in the UK”  trustees has unfettered
discretion to act as fit.

On the face of it is has genuine charitable intention, public benefit  BUT let us say $$$ is used to
defray school fees’ of rich employer’s children => Obviously, this CANNOT be a charitable trust.

2 kinds of arguments for the above example:

200,000 ordinary employees  Sufficiently large section of public  to enable trust to be a

charitable trust… (Dingle v Turner)

19
 Trust private de factor because $$$ applied only to those with nexus to settlor (Oppenheim v
Tobacco Securities)  So let us say 10% $$$ for people who have no connection, court mostly likely
going to say no public benefit & is a predominantly private trust. (IRC v EGA, Re Koettgan)  But
what about 50%!!! ?!! How to decide?!
The “personal nexus” test Leading Case – Oppenheim v Tobacco Securities Trust: it’s about the employees’ children education
thing.. , $$ to be employed. HELD: Not charitable trust as there was a nexus between those who
stood to benefit from trust and settlor of trust (The Tobacco Company)

Trust would have been void as a private trust on the basis that it lacked a perpetuities provision.
Argued however that the purpose was charitable and therefore that no perpetuities provision was
necessary. Re Compton followed by Lord Simonds  Need public benefit for education charities….

Whether those who stood to benefit = Sufficient Section of the community?!!

CONTRAST  Dingle v Turner didn't follow personal nexus test. OBITER  One should look at
substance of trust and evaluate its effects!

The in-between cases (Charitable Purposes __ %) Re Koettgen (1954)  HELD: There was a charitable trust where assets were applied 75% as a
priovate trust and only 25% for public benefit.
The court will not allow a de facto express private trust to pass of as
a charitable trust. – Re Koettgen IRC v Educational Grants Association (1967) While principle that you cannot have charitable trust
for private person’s benefit, it was held in IRC v EGA that trust was created with apparently
charitab;le purpose of holding property on trust “for the education of the children of the UK” .. In
fact trust was operated predominantly by trustees to provide funds for education of employees’
children of company Metal Box. Children (80%) and ostensibly charitable purposes (20%). HELD: NO
PERMISSIBLE EXEMPTION FROM TAX ON GROUNDS OF CHARITABLE STATUS ON THEE FACTS
BECAUSE TRUST WAS BEING RUN AS A DE FACTO PRIVATE TRUST.

How IRC v EGA addressed Re Koettgan ruling:

Re Koettgen being properly considered as a trust for a public class, within the definition of that

20
 public class. In Re Koettgen, trustees required by terms of the trust to give $ to public, but also
directed to prefer that part of public which also had a nexus with the settlor. Koettgen was an
attempt to mask express de factor private trust as a charitable one!!!

The status of independent school as charities (Controversial Matter) Controversy: Independent Fee-Paying Schools are charities. BUT they charge high fees for pupils to
 WHY? Because of the very nature of who independent schools attend => meaning only narrow amount of people can attend these fees !!!
mean to serve?!!!
Being treated by charities means Independent Fee-Paying schools get to reap tax benefits because
of charitable status, in spite of absence of any meaningful public benefit in their activities!!!

Independent Schools Council v CC: UT considered whether or not such independent schools were
concerned with charities that advance education in public benefit. => I.e. UT must consider if
independent schools provided a benefit that was directed at a sufficiently wife section of the
community to constitute a public benefit.

UT held any school established as charity before CH A 2006 would be taken to have established for
public benefit  AH says this ruling is wrong, operation of activities after registration as charity did
not comply with public benefit obligations, or meaning of public benefit in case law, new charity
regulator .. OR charity could have its charitable status withdrawn!!! Garton feels UT went too far.

Alastair Hudson’s suggestion to view the Independent School (4) Schools charged fees for pupils to attend cannot be charitable because poor people and
matter. He says focus should be on: their children excluded from education,
(5) While not essential that school must help poor, it can’t excluded people from getting
(1) Accessibility of schools to public. educational services.
(2) Provision of scholarships & etc to enable people whose (6) School admitted students regardless of ability to pay fees on bursaries are likely to be
children could not afford fees to attend. charitable because education was available to charities in general.

(3) Independent Schools receive tax breaks  irony is that

poorer people who cannot afford to send children to these
schools are paying taxes to benefit rich people attending
these schools => they get higher paying work more easily
than non independent school go-ers.. PARADOX!

21
Concluding Themes  Burden of proof lies on who?!! (1) Person arguing TRUST X is charitable must show trust will operate for public benefit.
(2) Onus is to disprove personal nexus between settlor and those people who will benefit from
trust
(3) Court seeks to construct / construe a truly charitable intention rather than proving OR
disproving r/s between parties. (Dingle v Turner)
(4) Genuine charitable intention  OK. BUT if it is to get tax free perk  CANNOT.
Current Stance regarding Oppenheim and Dingle (1) Oppenheim says fail personal nexus test => NO CHARITABLE TRUST.
(2) Court said no need to draw distinctions between different types of trust for poverty relief.
(3) Deciding on whether a group forms a section of public is all about a matter of degree in
which “mush must depend upon the purpose of the trust” – Dingle v Turner
(4) Section of public is all about DEGREE which very much depends on PURPOSE OF THE TRUST.
(5) Oppenheim  Recognising such a trust = Attract an undeserved fiscal advantage if it were
found to be charitable!!!!

CAT 3  Trust for Advancement of Religion 

 There must be public benefit from religious purpose !!! (All charities must be for public benefit – CH A 22(1)(b))
 Old Case Law  Religion is about worship of a deity. So public benefit is from diety worship.
 Effect of CH A 2011 is to EXPAND the concept of religion beyond case law focus on system of belief which believe in a God and into any “religion which does
not involve belief in a God.” Meaning it explicitly seeks to extend definition of religion by which don't need belief in a God. – CH ACT 2011 s3(2)(a)
 So today, the definition of what religion is, how do you actually view religion has changed.
 Must have sufficient public benefit
 Gilmour v Coates  Good example: Works done and prayers said by a cloistered order of nuns though religious would NOT be charitable in legal terms…=>
Because contemplative religious communities cannot benefit public by being cloistered away from public!
 Judge can only judge on tangible matters so need palpable public benefit for trust advancing a religion.
 Religion is concerned with “man’s relations with God” => Therefore excludes many modern new age religions and cults.

22
  Historical Background  Presence of head of charity results from historical administration of alms to the poor & education in local church parishes by church – in
consequence, English conception of charity has long been bound by religious devotion.

Old Case Law definition of “Religion”, Recent cases & the Whole Scientology matter. Re South Place Ethical Society 

RMB: A trust that advances religion ENJOYS TAX BENEFITS for its publicly beneficial HELD: Dissemination and stuffy of ethical principles held not to constitute religion.
tax activities. Ethics are concerned with man’s relations with man. Religion is about faith and
worship  Faith in a God & Worship of that God. System of belief in a God or
At what point does a belief system becomes religion? Promotion of spiritual teaching connected to such religious activity.
How we identify the creation of new religion?
Humanism is a form of atheism => OPPOSITE of religious purpose which may be
considered to lack presence of code of belief or code of living as it doesn't involve
any single system of belief but an unbelief instead.

***Gilmour v Coats LEADING CASE.

HELD (HOL): Mere religious observance was not sufficient to constitute a charitable
purpose unless there was some demonstrable public benefit. So, simply arguing
prayers of cloistered nuns will bring benefit to mankind was not considered to be a
valid charitable purpose for the advancement of religion. “Spiritual Benefit for
mankind” in the form of prayer is NOT going to count as public benefit.

Church of Scientology has been struggling to get recognition as a religion. 

Hubbard v Vasper; Denning said Church of Scientology – DANGEROUS. Church of
Scientology v Kaufman  Pernicious Nonsense.
Scientologists’ system of belief relates to belief that:

(1) Aliens whom they believe put us here millions of years ago and will return at
some pt in future &
(2) Belief in personal development through a number of “courses” of auditing which
resemble one-on-one counseling sessions.  No God in which adherents believe,
aliens not Gods, not immortal beings….

23
 Hard to charities law to accept Scientology as a religion because of old cases.

BUT however, in the family law case:

R (on the application of Hodkin) v Registrar General of Births, Marriages & Deaths
 Now, church of scientology accepted as a place of marriage under Places of
Worship Registration Act 1855 and Scientology does constitute as a religion for
marriage!!!

NOTE: Lord Toulson was careful not to decide any Qs on charities law but just accept
broad concept of religion which will not exclude genuinely held belief systems !

Effect of CHA A 2011 on meaning of religion in charities law. CHA 2011 s3(2)(a)  Religion will include religion which involves belief in “gods” 
Charities Law ultimately recognised multiple Gods so it caters to religion like
Hinduism.

Concept of religion – EXTENSION!

S3(2)(a)(ii)  More complex idea. Religion includes a religion that does not involve
belief in a God =-> Fits with Buddhism? Buddhism  for charitable purpoise without
need to show belief in God or Gods.

Why Buddhism is being discussed? Buddhism does not share a belief in a higher
being or beings that control the Universe.  This means it is hard for Buddhism to
fall under the “reverence for God” notion by Lord Denning – R v Registrar General Ex
p Segerdal : Denning J refused to register Scientologists’ premises (for marriage?).
He viewed Scientology as a philosophy not a religion!!!!

Cannot equate Buddhism with others  Other religions – Belief in a higher being OR
beings that control universe.

24
 Sense of Religion:

(1) Superhuman being  No need somebody to show existence of One’s God

but it would be reasonable to expect one to genuinely believe one’s “super
human being” did have the powers which one revered.

(2) Code of Living  Politically much broader + > Interesting! This is easier to
demonstrate in relation to groups of individuals, either living communally
in context of shared beliefs or coming together in some form of religious
activity  than it would be for individuals who adhered to entirely
individual beliefs of their own… => RMB: A Charity needs a public benefit
requirement……**Use many people (group) to show credible belief system
 Easier.
Drawing distinctions Again, CH A 2011 S3(1)(m)(i) – old case law charitable purposes recognised before
CH A 2006 recognised as charitable! => OLD CASE LAW WILL CONTINUE TO HAVE
EFFECT FOR PUBLIC BENEFIT TEST TO SUCH PURPOSES.

Thorton v Howe 

Q: Whether a trust to secure publication of writings of a woman who claimed to

have been impregnated by the Holy Ghost and to have been pregnant with New
Messiah will be valid as a charitable purpose of a trust.

HELD: Yes, valid charitable purpose trust. Because publication of such work would
be for public benefit. Publication => public use.

CONTRAST WITH

Gilmour v Coates  Carmelite nuns trusts case. Because of nature of order => nuns
cannot go round communicating benefit of order to others => Order contemplated
in private – Not charitable. Prayer – not public benefit.
How to assess public benefit ? Which types of activity constitute a “public benefit”? Neville Estates v Madden  Whether trust to benefit members of a Synagogue
could be charitable purpose. Whether members could be sufficient section of

25
Again  CRF to attitude of lawyers: Validate charitable trusts where possible, population for public benefit. Religious Observance practiced in synagogue in theory
stricter interpretations with express private trust.. open to public => Public Benefit satisfied 

Invalidate trusts in circs when there is some apparent incongruity in their creation! Re Hetherington  Trust to provide income for saying for masses in private. HELD:
No tangible benefit to public => Doesn't show public benefit. => NO Charitable
Purpose! BUT Browne-Wilkinson VC was prepared to say if masses took place in
public, then OK and court will recognise it as valid charitable trust.

Some conclusions on religion We are not so concerned by what other people themselves think about religion, but
rather how the law actually defines it.

Religion  Religious Observance itself not enough, must communicate to sections

of public.

So it is about whether if viewed objectively X can be treated as a RELIGION  Re

South Place Ethical Society

CAT 4  Trust for Other Purposes Beneficial to Community 

 Broader than CATS 1 2 3.
 Now CAT 4 will be valid under CH A 2011, S3 statutory list of charity categories.

Nature of 4th Head Purposes either analogous with examples cited in preamble to 1601 statue or
principles deriving from its decided cases.

Charity can collect profits BUT the profit cannot be collected for private means!!!

26
 Charities can trade in general terms and still have charitable status  Scottish
Burial v Glasgow Corp
Notion of Benefit Must know what “community” means!

Public Benefit Requirement => Generated litigation involving trusts advancement of

religion (public benefit notion of access to religious service) and education!
(whether it’s for people connected to settlor)

Must be tangible.

“Sufficient Benefit for Trust Purpose”  THIS IS THE Q TO ASK.

Notion of Community Must have sufficient benefit to the community  Cannot have a hidden express
trust.
Whether will a group be regarded as a community OR too narrow OR too selective
 ALL DEPENDS ON THE CONTEXT OF THE PROBLEM QUESTION SCENARIO. Community must be MORE THAN fluctuating body of private individuals  Dingle v
Turner …

Limiting class  see Oppenheim.

Leading Case : IRC v Baddeley – Settlor purported to create charitable trust to

provide facilities for religious services and instruction and for social and physical
training and recreation of Methodists in West Ham and Leyton of East London.
Benefitting Individuals Within Community Various defined classes accepted by courts to be suitably charitable.

It’s about underlying charitable purpose  FOR WHAT?!! Not just on applicant to Re Dunlop  trust to provide home for elderly Presbyterians OK, valid for charitable
prove sufficient constituency of public will benefit from trust ! purpose

Joseph Rowntree v AG  Rented accd fee paying elderly patients in sheltered accd
OK, valid charitable status!
Benefitting Civic Amenities of Community Civic amenity  provided for, enough to show trust fulfills a purpose not directed at
specific individuals. Charitable assistance given to people.

27
 Notion of community  greatly extended by some of case law.

Socially useful activities , Of Trust Character 

E.g. Rehabilitation of criminals, Drug users, Resettlement for Ex-Offenders

Remaining Purposes Beneficial to Community under CH A 2011. CH A 2011  What it does it to CLARIFY THE LAW  giving special categories as a
status or type of Charitable Trust in its OWN RIGHT.

CH A 2011  VERY GENERAL. What follows is a DICUSSION of each of new statutory

heads of charity in turn with reference to previous problems in case law where
appropriate and otherwise with suggestion as to possible future applications.

Statutory Heads under CHA A 2011 => (1) Subject of litigation and which statutes
seek to resolve, (2) Heads which new G initiatives w/o history of old case law.

S5  Recreational charities referred to.

S3(1)(m)(i)  Effect of giving old case law effect  (CRF above)

List of Categories:

(1) Advancement to health or saving lives  campaign for advancement for

improvement of public health OK, not campaigning advocating change in
the law.

(2) Advancement of Citizenship of Community Development  urban

regeneration, volunteering (CH A s3(10(h) and s3(2)(c)  (But subject to
judges’ interpretation  CHA A s3(1)(m)(i).

(3) Advancement of Arts culture heritage science

28
 (4) Advancement of Amateur Sport  recreational charities valid under old
case law… as charitable purposes only if they improved conditions of life of
people using them and either if they are available to all members of
population w/o discrimination or if they are available by reason of users’
youth age infirmity disability poverty or social and economic circs.. & CC
not going to challenge this.

(5) Advancement of human rights, Conflict Resolution or reconciliation or

promotion of religious or racial harmony or equality or diversity  Last
time these categories run risk of seeking change to the law. CHA A 2011:
Empowers organizations, clearly define what good purposes ought to be
deemed as charitable purposes.

(6) Advancement of environmental protection OR improvement s3(1) –

protection or improvement of environment – in public good.

(7) Relief of those in need by reason of youth, age, ill-health, disability,

financial hardship OR other disadvantage  show “NEED” element.

(8) Animal Welfare  Old cases: THREAD  there was a public benefit in
animal welfare if and only if there could be shown to be some moral
improvement to the human community by dint of treating animals better.
=> Hudson: Future case law on this area will show how humane/ civilized
UK society is.  benefit to community? Each case consider in own merits.

Case Law After 2006 Promotion of efficiency of armed forces of Crown.

Promotion of efficiency of police, fire rescue and ambulance services.
Recreational Charities

Effect of S5 CHA A 2011.

29
 Recreational Charities  Case Law IRC V Baddely  Recreation for restricted class of people in a specific geographic
area would not be charitable, Recreational charities Act 1958 introduced to bring
such purposes within heads of charity.

Part of common law generally expressed rust for recreation would not be charitable
 Re South Place Ethical Society

Charitable Purpose under Act to provide recreational facilities so long as facilities

are generally available to public OR they are needed by certain people who will use
them because of their youth or disability and so forth.

CFR - IRC v McMullen: Stricter approach  The playing fo football amongst young
people won’t improve lives and conditions of people’s lives…. It won’t remedy any
identifiable deprivation in those people!

Guild v IRC 1992  More liberal interpretation.

Bequest to “town council of North Beswick in connection with sports centre in NB or

some similar purpose in connection with sport”

Principal Q: Whether sports centre could be connected with social welfare (CHA A
2011 S1(1)) => HELD: Bequest showed testator’s intention to benefit sports centre
facilities available to public at large 
Recreational Charities  Statutory provisions (CHA A 2011 s5 effect) S5(2) CHA A 2011

-Recreational facilities must be provided under same term 1958 CH A s1(2)

EXCEPT (a) an d(b) preconditions for validity of charitable purpose…

CH A 2011  Restrictive Interpretation!?

Regulation of Charities

30
 Charities are regulated by CC – Ch A 2011 s6
 CC maintains register of charities – s9
 CC’s objectives = s7  (1) Increase public trust and confidence in charities, (2) Promote awareness and understanding of operation of public benefit requirement, (3)
Increase Compliance by charity trustee with legal obligations in exercising control and management of administration of charities, (4) Promote effective use of
charitable resources, (5) Enhance accountability of charities to donors, beneficiaries & general public.
 Objectives don't create any legal obligations on CC or legal rights in hands of people who are mentioned in s7, but rather anticipate CC will consider interests of these
people in their regulatory function.
 CC’s job is to decide whether Trust X or Company X has charitable purpose or not.
 CC can make investivtions into mismanagement of charities issue public collextion certificatres, disseminate information about its activities and advise G ministers.
 Charity Appeal Tribunal deals with activities and decisions of CC, appeal to HC – s8
 Detailed authorizations made to administration of charities!
 Changes made to Cy Pres Doctrine to the effect CC must bear in mind spirit of (1) original gift, (2) desirability of applying gift for purposes similar to original purpose &
(3) need for charity to be able to make a significant social or economic impact – s18.
 Changes can be made to remove trustees of charities – s19
 CC has power to direct application of charities’ property,

Public Benefit Test in The Law of Charities – What is its extent?

 Before Ch A 2006, quite rigid ? Honoured more in breach than observance?!


Authority Name Re Compton Dingle v Turner Oppenheim Re Guild v IRC Re Koettegen
Hetherintgton
Requirement for Public No personal nexus between Lord Cross found Class of Judges to validate charitable Trusts for tax purposes
Benefit  people who will benefit from problems with Re people taking genuine intentions when can be validated so
charitable trust & settlor of Compton’s benefit be they are able to do so. => long as they comply
that trust approach. “more than EVEN if it means effectively with chseities law..
fluctuating altering purpose of trust OR
Benefit must be available to (1) Approach body of requiring trustees to
sufficiently large section of predicated on private undertake to manage trust in
public outwith any direct cases that individuals” accordance with court’s
connection to the settlor. involved tax => directions so as to comply
avoidance Description of witg chsritirs law

31
 attempts. => entire general
Skewed toward public: No need to draft trust to
an open ended Fluctuating disclose public benefit BUT
benefit….. body of court may order trust to be
individuals?!!! performed! In compliant
(2) Large Section of manner.
public msut be
able to take
benefit even if
funds which are
to be raised by
charity are likely
to be small and
so no general
benefit of this
sort can be
attained – E.g.
Rare Disease
Research.

(3) May be nexus

between settlor
and those who
benefit. – But
number of
people who take
benefit would
be sufficiently
large section of
the population.

Essence of But this doesn't tell us much Lord Cross is saying

requirements? about the nature of the trust! there must be SOME

32
 => Only says settlor must act GENUINE
selflessly in line of providing CHARITABLE
some communal benefit. INTEREST ON
SETTLOR’S PART.

TRUSTS FOR RELIEF

OF POVERTY MAY BE
VALID, EVEN IF
THERE ARE ONLY A
FEW PEOPLE WHO
WILL TAKE A
BENEFIT FROM
TURST PROVIDED
THAT THERE IS A
GENUINE INTENTION
TO RELIEVE
PROPERTY.
Comparison between Compton only concerned with evidential question of
authorities demonstrating there is a predominantly public rather
than private benefit in purposes of a particular trust. =>
Intrinsic merits of trust purpose which is proposed?!!

VS

Lord Cross’s approach in Dingle v Turner => THERE

MUST BE SOMETHING INTRISNCIALLY CHARITABLE IN
CREATION OF TRUST => See how trustees are actually
running the trust & whether or not practical approach
achieves suitably public, charitable effects!

*Apply to relief of poverty cases?!!

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