"To What Extent Should The Law Recognise Non Charitable Purpose Trusts?"

1460 words - 6 pages

Non-charitable purpose trusts can be defined as 'private trusts intended to benefit purposes rather than beneficiaries' . If the certainty of object is not qualified, then the trust usually fails because it is 'administratively unworkable', this is often the case therefore for trusts which are merely established for a particular purpose rather than for a specified human beneficiary.Purpose trusts have been established and largely defined in case law, namely Re Astor's Settlement Trust [1952] . An inter vivos trust was created by Lord Astor which had among its objects 'The maintenance of good understanding, sympathy and co-operation between nations, the preservation of the independence and integrity of newspapers, and the protection of newspapers from being absorbed by combines.' It can be seen that the trust has no human objects and is specifically for purposes and not individuals; 'A Trust to be valid must be for the benefit of individuals, which this is certainly not, or must be in the class of gifts for the benefit of the public which the courts in this country recognize as charitable in the legal as opposed to the popular sense of the term' . It was on these grounds that the trust failed.There seem to be five main reasons given for invalidity of purpose trusts, namely:- The "beneficiary principle"- Uncertainty (in the sense of lack of certainty of intention);- Impossibility (or impracticability in the administration of the trust);- Perpetuity; and- Public policy.The essence of a trust is that it is an obligation concerning property which is enforceable in the courts which will control the trustees and, in rare cases, even carry out the trust. There must thus be beneficiaries who can apply to the court to enforce their rights. It follows that a trust must be created for the benefit of persons but not for a purpose unless that purpose is charitable, for a purpose can not sue, but if it be charitable the Attorney General may sue to enforce it. It is therefore the beneficiary principle which will often be the deciding factor in whether a case is successful as a purpose trust or not. The leading case for the theory is that of Morice v. Bishop of Durham . The testatrix in this case had bequeathed all her property to the Bishop of Durham upon trust for 'such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of.' It was held that the trust was not charitable and could not stand as a private trust either because it had no specific beneficiaries and had been made purely for a purpose. 'Every other trust must have a definite object. There must be somebody in whose favour the Court can decree performance.' Sir William Grant MR. Administrative workability is also essential in that there is a certainty of who the trust is to benefit. Lord Eldon said this in Morice v Bishop of Durham: "As it is a maxim that the execution of a trust shall be under the control of the court it must be of such a nature that...

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