PUBLIC PURPOSE TRUST (ANSWER PATTERN FOR POVERTY, EDUCATION AND
RELIGION)
The clauses X, Y, and Z potentially depict public purpose trusts. To advise Z, for
each clause it will be determined that whether or not they are true charities by
referring to the categories identified by section 3 (1) and section 4 of the
Charities Act 2011 (CA, 2011). Furthermore, it will be assessed whether the
clauses are political in nature, exclusively charitable, and whether the cy-pres
doctrine is applicable or not.
STATE THE SECTIONS
Clause X (Poverty):
For clause X to qualify as charity or gain charitable status, firstly the character of
the purpose of this clause has to be charitable, secondly the purpose shall be of
public benefit and thirdly the purpose must be ‘wholly and exclusively charitable’.
The character of the clause seems to be charitable under section 3(1) (a) of the
Charities Act 2011 i.e. for the prevention and relief of poverty. In Charity
Commission for England and Wales v AG (2012) prevention was said to include
the causes whereas relief involves consequences of poverty. This would also have
been charitable before the act under Lord Macnaghten classification of what is
charitable in Income Tax Special Purposes Court v Pemsel.
It has to be noted that poverty does not mean destitution. It means that it is a
trust for those who would else ‘go short’ (Re Coulthurst) , and it is for this reason
that trust for ‘decayed actors’ (Spiller v Maude) and ‘ladies of limited means’ (Re
Gardom) were declared valid. Therefore, a charity can also be restricted to a
specific class or can be for an individual’s poor relations (Re Segerlman, Re
Scarisbrick) as long as it does not include those who might be categorised as not
poor and it does not name individuals (Dingle v Turner).
However, charity cannot be for the working classes as they did not necessarily
necessitate poverty (Re Sanders Will Trust) or for a class whose eligibility is not
limited to the poor man (Re Gwyon). Nonetheless, in Re Niyazi’s WT a trust for
charity was declared valid on the basis of working class having a serious shortage
of housing, however, Megarry VC has stated that trust was ‘desperately near the
border line’.
[Application to facts]
PUBLIC BENEFIT: The clause X character is though charitable(or not); however, its
purpose must also for public benefit under s.4 of CA 2011 which requires that the
purpose must be beneficial on the balance of probabilities i.e. the benefits of the
purpose shall outweighs it detriments (National Anti-Vivisection Society v IRC).
Furthermore s.4 (2) of CA 2011 excludes the presumption that any particular
purpose is charitable. Charity Commission for England and Wales v AG (2012)
came to the same conclusion while Briggs J in Catholic Care (Diocese of Leeds) v
Charity Commission) suggested that the statutory provision might have some
effect.
Secondly, the benefit must be not restricted to a private class. S.4 of CA 2006, and
s.14,15(2) and (3), and 17 of the CA 2011 require the Charity Commission to issue
guidance to the Charities and prospective charities on the public benefit
requirement. However, in Independent Schools Council the tribunal held the
determination of public benefit was always context sensitive [DO NOT
REPRODUCE THIS ALL, ONLY APPLY TO FACTS AFTER ONCE STATED].
The specific requirement for clause X to qualify the public benefit requirement is
that the trust will be declared valid as long as it does not contain names of the
individuals. Charity Commission for England and Wales v AG (2012) stated trusts
for relief of poverty are capable of being charitable even though it is limited by
relationship based on family, employment etc.
[Application to facts]
THIRDLY, IT IS TO BE ASSESSED WHETHER THE CLAUSE ENGAGES IN ACTIVITIES
THAT HAS A POLITICAL PURPOSE. IN GENERAL THE POLITICAL PURPOSES ARE NOT
CHARITABLE.
The trusts whose central purposes are involved a change in law, government
policy or administrative practice either in UK or abroad, were, political and thus
not charitable and “Trust purposes of an otherwise charitable nature do not lose
it mere because, as an incidental consequence of the trustee’s activities, they may
ensure to private individuals benefits of a non-charitable nature (McGovern v AG,
Slade J).
The Australian approach allows charitable purposes for political objects
(Aid/Watch Incorporation v Commissioner of Taxation).
Application to facts
Fourthly, A Charity must be exclusively charitable:
This means that charitable trusts may charge fees for their services, activities to
raise funds (Independent School Council Case). However, they are no allowed to
distribute profits.
In general profit making activities of charities are taxable at the same rates as any
other business as was held in the Oxfam v Birmingham City District Council.
(Other cases from notes in essay question)
Application to facts
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Clause Y ( Advancement of Education):
Trusts for advancement of education have been recognised as charitable under
s.3 (1) (b) of CA, 2011 and was also recognised long before the act as charitable
by Lord Macnaghten in Income Tax Special purposes Court v Pemsel.
STATE THE SECTIONS
Education has been dealt in a broader sense which does not only include
conventional class education (schools, colleges, universities and other such
institutions) but has been extended to museums (British Museum Trustees v
White), student unions (London Hospital Medical College v IRC) research, artistic
and aesthetic education (Royal Choral Society v IRC), , sport facilities provided in
schools for young (Re Mariette) and professional bodies as long as they advance
education (Royal College of Surgeons of England v NPB). It also covers the
promotion of culture (Re Delius) and dissemination of useful knowledge
(Incorporated council of Law Reporting v AG).
NOW ONLY DISSCUS RELEVENT CASES WHICH THE EXAMINER IS ASKING and
apply to facts
1. STUDENT UNION:
In Baldry v Feintuck the charitable status of student unions was confirmed
however devotion of the funds to political campaigns by the student unions on
the issues not related to the university education was not. The student union if
provides facilities to political clubs do not invalidate its charitable status.
2. RESEARCH SITUATIONS:
Doing useful research is charitable under advancement of education; however, it
is not entirely clear what can be interpreted as useful. Because in Re Shaw a gift
of funds to devote a research to form a forty letters of English alphabets was
declared not charitable while in Re Hopkins Will Trusts a gift towards finding of
evidence that Francis Bacon wrote the works attribute to Shakespeare was
declared valid. The reasoning was that such discovery was of immense
importance. It can be argued that the impact of having a forty letter English
alphabets might have been as important as Bacon-Shakespeare manuscripts’
towards the society.
In McGovern v AG Slade LJ has stated that a trust for research will ordinarily
qualify as a charitable if the subject matter of the research is useful subject of
study, the knowledge acquired thereby will be disseminated to others and the
trust is benefiting the public or a sufficiently important section of the public.
Furthermore, the court, in the absence of a contrary context, will construe a trust
for research as importing subsequent dissemination. The court must also pay due
consideration to any extrinsic evidence.
3. POLITICAL NATURE and EDUCATION (after giving education then at last
give this)
It must also be noted that production of propaganda is not advancement of
education. In Re Hopkins the trust for education of adults in the principle of
particular philosophy was declared invalid. While in Re Koeppler’s WT the
conferences that held to exchange the views on various political, economic and
social issues was declared a valid charity under education.
PUBLIC BENEFIT: The clause X character is though charitable(or not); however, its
purpose must also for public benefit under s.4 of CA 2011 which requires that the
purpose must be beneficial on the balance of probabilities i.e. the benefits of the
purpose shall outweighs it detriments (National Anti-Vivisection Society v IRC).
Furthermore s.4 (2) of CA 2011 excludes the presumption that any particular
purpose is charitable. Charity Commission for England and Wales v AG (2012)
came to the same conclusion while Briggs J in Catholic Care (Diocese of Leeds) v
Charity Commission) suggested that the statutory provision might have some
effect.
Secondly, the benefit must be not restricted to a private class. S.4 of CA 2006, and
s.14,15(2) and (3), and 17 of the CA 2011 require the Charity Commission to issue
guidance to the Charities and prospective charities on the public benefit
requirement. However, in Independent Schools Council the tribunal held the
determination of public benefit was always context sensitive [DO NOT
REPRODUCE THIS ALL, ONLY APPLY TO FACTS AFTER ONCE STATED].
The specific requirement for clause Y to qualify the public benefit requirement is
that the trust will be declared valid if it passes the ‘Personal Nexus Test’. The test
was given by the court in Oppenheim v Tobacco Securities. It states that if a class
is defined by personal nexus to someone, then that class is not a section of the
public. Lord MacDermott dissented and stated that the court must consider all
circumstances. In Dingle v Turner HOL accepted Lord Mac Dermott's criticism
though it was obiter in that specific case. Lord Cross (in HOL), however, consider
such education schemes similar to Oppenheim’s scheme, perhaps similar to
‘fringe benefits’ for employees that should not be subsidized by the tax payer.
THIRDLY, IT IS TO BE ASSESSED WHETHER THE CLAUSE ENGAGES IN ACTIVITIES
THAT HAS A POLITICAL PURPOSE. IN GENERAL THE POLITICAL PURPOSES ARE NOT
CHARITABLE.
The trusts whose central purposes are involved a change in law, government
policy or administrative practice either in UK or abroad, were, political and thus
not charitable and “Trust purposes of an otherwise charitable nature do not lose
it mere because, as an incidental consequence of the trustee’s activities, they may
ensure to private individuals benefits of a non-charitable nature (McGovern v AG,
Slade J).
The Australian approach allows charitable purposes for political objects
(Aid/Watch Incorporation v Commissioner of Taxation).
Application to facts
Fourthly, A Charity must be exclusively charitable:
This means that charitable trusts may charge fees for their services, activities to
raise funds (Independent School Council Case). However, they are no allowed to
distribute profits.
In general profit making activities of charities are taxable at the same rates as any
other business as was held in the Oxfam v Birmingham City District Council.
(Other cases from notes in essay question
Application to Facts
Clause Z ( Advancement of Religion) :
The clause Z seems to be charitable under s. 3(1) (c) as elaborated by s. 3 (2) (a)
of CA, 2011. This would also have been charitable under classification provided by
Lord McNaughton in the Pemsel case.
STATE THE SECTIONS
In Neville Estates Ltd v Madden as per Cross J stated that law of charities
assumes that any religion is better than none, but between the religions the law
stands neutral between religions.
DISCUSS ONLY RELEVENT CASES
1. Scientology:1
It was held to be a philosophy of existence and not religion therefore it
cannot be a charity (R v Registrar General ex Parte Segerdal). However, it
was held as religion is Australia in Church of the New Faith v
Commissioner for Payroll Tax. However, the Charity Commissioners
(1999) [UK] denied charitable status to scientology though accepted its
application for registration as charity.
It has to be noted that s. 3(2) has widens the definition of religion…Penner
asked it is not clear that there is anything to venerate or worship.
In Hodkin v Registrar General of Births, Deaths and Marriages (2013) the
church of scientology has been declared as religion for the purpose of
Places of Worship Registration Act 1855.
Amanda Taylor’s criticism…
……….
1
A religious system based on the seeking of self-knowledge and spiritual fulfillment through graded courses of
study and training. It was founded by American science fiction writer L. Ron Hubbard (1911–86) in 1955.
2. The Temple of Jedi Order…
PUBLIC BENEFIT: The clause Z, therefore, satisfies or does not satisfy that’s its
character is charitable(or not); however, its purpose must also for public benefit
under s.4 of CA 2011 which requires that the purpose must be beneficial on the
balance of probabilities i.e. the benefits of the purpose shall outweighs it
detriments (National Anti-Vivisection Society v IRC). Furthermore s.4 (2) of CA
2011 excludes the presumption that any particular purpose is charitable. Charity
Commission for England and Wales v AG (2012) came to the same conclusion
while Briggs J in Catholic Care (Diocese of Leeds) v Charity Commission)
suggested that the statutory provision might have some effect.
Secondly, the benefit must be not restricted to a private class. S.4 of CA 2006, and
s.14,15(2) and (3), and 17 of the CA 2011 require the Charity Commission to issue
guidance to the Charities and prospective charities on the public benefit
requirement. However, in Independent Schools Council the tribunal held the
determination of public benefit was always context sensitive [DO NOT
REPRODUCE THIS ALL, ONLY APPLY TO FACTS AFTER ONCE STATED].
Apply to FACTS:
The specific requirement is that a section of the public benefits is elusive. Because
in Neville estates v Madden the court stated that benefits can be accrued from
attendance at the places of worship of persons who live in this world and mix with
their fellow citizens. Secondly, there must be sufficient public engagement
(Gilmour v Coats).
APPLY TO FACTS:
THIRDLY, IT IS TO BE ASSESSED WHETHER THE CLAUSE ENGAGES IN ACTIVITIES
THAT HAS A POLITICAL PURPOSE. IN GENERAL THE POLITICAL PURPOSES ARE NOT
CHARITABLE.
The trusts whose central purposes are involved a change in law, government
policy or administrative practice either in UK or abroad, were, political and thus
not charitable and “Trust purposes of an otherwise charitable nature do not lose
it mere because, as an incidental consequence of the trustee’s activities, they may
ensure to private individuals benefits of a non-charitable nature (McGovern v AG,
Slade J).
The Australian approach allows charitable purposes for political objects
(Aid/Watch Incorporation v Commissioner of Taxation).
Apply to facts
Fourthly, A Charity must be exclusively charitable:
This means that charitable trusts may charge fees for their services, activities to
raise funds (Independent School Council Case). However, they are no allowed to
distribute profits.
In general profit making activities of charities are taxable at the same rates as any
other business as was held in the Oxfam v Birmingham City District Council.
(Other cases from notes in essay question
Apply to facts.
CY-PRESS DOCTRINE ONLY- IF APPLICABLE.
