Beneficiary Principle

kazzasingh's version from 2018-04-30 15:38

Beneficiary Principle

Question Answer
Morice v. Bishop of Durham (1805)There must be somebody, in whose favour the Court can decree performance.’
Re Astor’s Settlement Trusts [1952]‘A gift can be made to persons (including a corporation) but it cannot be made to a purpose or to an object'
Re Shaw [1957]Trust established to ascertain how much effort could be saved by replacing the 26 letter alphabet with a 40 letter phonetic ‘British Alphabet’. HELD: that ‘an object cannot complain to the court, which therefore cannot control the trust’. Also --> capricious!
Re Astor’s ST‘Purposes must be so defined that, if the trustees surrendered their discretion, the court could carry out the purposes declared’, and not merely ‘a selection of them arrived at by eliminating those which are too uncertain to be carried out’.
Brown v BurdettCapricious purposes --> blocking up the windows and doors of a house for 20 years.
M’Caig v University of GlasgowCapricious purposes --> the court refused to recognise a trust to erect various monuments to the memory of John Stuart McCaig, a wealthy Scottish banker.


Question Answer
Re Dean (1889)The upkeep of specific animals
Re Thompson [1934]The promotion of fox-hunting
Bourne v Keane [1919]The saying of Masses (if not charitable)
Mussett v Bingle [1876]Construction and maintenance of tombs and monuments

Methods for avoiding the prohibition against trusts for private purposes

Trusts for private purposes but with identifiable beneficiaries


Question Answer
Re BowesTrusts for private purposes but with identifiable beneficiaries --> testratix left money for the planting of tree on her estate (upon her death). Heirs inherited estate. They realised that if the trust failed, they would receive the money. They went to court and said that it was a private purpose trust (for planting trees) and hence it should fail. The court held that it was actually the owners of the estate that would benefit from the planting of trees (as trees would increase the value of the house).
Re Denley’s Trust DeedIf a trust ‘though expressed as a purpose, is directly for the benefit of an individual or individuals…it is in general outside the mischief of the beneficiary principle’.
Re Bowes [1896]; Re Denley [1969]Draft as a trust which is limited for a suitable perpetuity period and which, ‘ … though expressed as a purpose, is directly for the benefit of an individual or individuals’
Re Sanderson’s Trust (1857); Re Osoba, deceased [1979]Draft as an outright gift with an expressed ‘motive’
Re Tyler [1891]Draft as an outright gift to charity with an expressed ‘incentive’

Unincorporated associations

Question Answer
Neville Estates LtdAbsolute gift to the present members of the association as joint tenants --> any member can sever his share and claim it whether or not he continues to be a member of the association.
Neville Estates Ltd v. Madden and Others [1962]Absolute gift the present members of the association to hold subject to the contractual bond between them --> ‘…it may be a gift to the existing members not as joint tenants, but subject to their respective contractual rights and liabilities towards one another as members of the association. In such a case a member cannot sever his share. It will accrue to the other members on his death or resignation, even though such members include persons who became members after the gift took effect …’
Re Denley’s Trust Deed [1969]Gift on trust for the present and future members of the association for the duration of the perpetuity period --> a trust, though on one level expressed to be for a particular purpose (e.g. ‘to build a swimming pool for my employees to swim in’) might actually be construed as a trust for particular persons (e.g. ‘to build a swimming pool for my employees to swim in’).
Re TurkingtonGifts on trust for the present members of the association or club --> in this case, every member of the association was both a trustee and a beneficiary, with the result that the members were together able to bring the trust to an end under the rule in Saunders v. Vautier.
Re Grant’s WTDonations fail if capital is rendered inalienable in perpetuity --> the gift could not take effect as a gift to the current members of the new constituency party subject to their contractual rights and duties inter se, because the members were not free under the rules of their association to dispose of the property in any way they thought fit.
Re GKN Bolts v Nuts Sports and Social ClubThe club had ceased to exist, but only by virtue of the positive resolution of the members to sell the club’s sports ground. HELD: there are four situations in which an unincorporated association or fund should be regarded as having been dissolved or terminated: (1) in accordance with the association’s rules (2) by agreement of all persons interested (3) by order of the court in the exercise of its inherent jurisdiction (4) when the substratum, upon which the association or fund was founded, has gone
Re Lipinski’s Will Trusts [1976]L, who was active in the Hull Jewish community, gave the residual part of his estate ‘as to one half thereof for the Hull Judeans (Maccabi) Association in memory of his late wife to be used solely in the work of constructing the new buildings for the association and/or improvements to the said buildings’. The other half was one quarter for the Hull Hebrew School (Talmud Torah), and one quarter for the Hull Hebrew Board of Guardians. The next of kin challenged these provisions, questioning whether the gift to the association would not be void. HELD: bequest was to the association absolutely, so in fact they did not need to use it for buildings (only constrained by the contract). The purpose was within the association’s power to do, and it would be up to them to honour it.