In consider whether the potential beneficiaries of a trust constitute a section of the
public, it will necessary to assess the overall purpose of the trust and whether the
purpose itself confers a benefit on the public. Also whether the purpose of the trust is
the key consideration when assessing whether or nor the potential beneficiaries
constitute a section of the public.
A charitable trust aims to benefit the society at large or an appreciable section of it. A
charitable institution is established for charitable purpose only and s2 (1) of the
Charities Act 2006 (CA 2006) provide that a charitable purpose is a purpose which
falls within subsection (2), and is for the public benefit1. Section 2 (2) of the CA 2002
sets out all the purposes that amount to a charitable purpose. It must be noted that
each head involves two elements e.g. the purpose must be beneficial, such as the
prevention or relief of poverty, and there must be an element of public benefit, that is
to say, poverty being relieved or prevented in away which benefits the whole public
or a substantial part the pubic. For the purpose of this essay we will be discussing the
second element and whether the purpose of the trust is the paramount consideration
when assessing public benefit.
There is no statutory definition of public benefit within the Act and the definition will
continue to be determined by case law. As previously stated a purpose can only be
charitable if it is for the public benefit and there are two elements for the public
benefit requirement. Firstly, the purpose itself confers an identifiable benefit on the
public at large or sufficient section of the community2. Secondly the class of person
eligible to benefit constitutes the public or ‘an appreciably important class of the
community’3. For this we will be looking at different case law under the separate
categories of charitable purpose and assessing how public is decided by the courts.
The first category we will look at are trust whose purposes are political i.e. trust to
change the law. Lord Parker stated in Bowman v Secular Security that ‘a trust for the
attainment of political objects has always been held invalid, not because it is illegal…
but the court has no means of judging whether a proposed change in the law will be
for the public benefit or not’4. The leading case here is National Anti-Vivisection
Society v IRC, where the House of Lords held that public benefit from experimental
vivisection outweighed the detriment of cruelty to animals. The other reason National
Anti-Vivisection Society was non-charitable because total abolition of vivisection
required a change in the law and that this was therefore political5.
The first category we will look at advancement of education and arts, culture, heritage
or science in relation to public benefit and sufficient section of the community. In Re
Compton6, where the Court of Appeal held a trust ‘for the education of Compton and
Powell and Montage children ‘to be non- charitable and therefore invalid because the
class thus defined did not constitute a section of the public7.
1
Hanbury & Martin, Modern Equity, Eighteen Edition pg 423-424
Hanbury & Martin, Modern Equity, Eighteen Edition pg 451
3
per Lord Westbury in Verge v Somerville [1942] AC 496 at 499
4
[1917] AC 406 at 442
5
Graham Moffat, Trust Law , Forth Edition pg 982
6
[1945] Ch 123
7
Graham Moffat, Trust Law , Forth Edition pg 967
2
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Years later, in Oppenheim v Tobacco Securities Ltd8, which a trust to provide as the
trustees thought fit ‘for the education of children of employees or former employees
of the British-American Tobacco Ltd….or any of its subsidiary or allies companies’.
The number of employees of the company and the subsidiary and allied companies
exceeded 100,000. The House of Lords held that there was a personal connection
between the members of the class of beneficiaries and they did not constitute a section
of the public9. The trust failed. Lord Simonds held that to constitute a section of the
community for these purposes, ‘firstly the possible beneficiaries must not be
numerically negligible and, secondly, the quality that distinguishes them from other
members of the community must be a quality which does not depend on their
relationship to a particular individual’10. However Lord MacDermott in his dissenting
judgment concluded that a more appropriate test was ‘to treat the matter very much as
a question of degree’11. This view was given strong support in the later case of Dingle
v Turner12. Therefore in deciding whether to class of persons can be regarded as a
section of community, it must satisfy the personal nexus test laid down in Oppenheim.
In relation to a trust for charity of a private group we must look at the case of Re
Kottegen’s Will Trust13. This was a trust for the promotion of commercial education
among members of the public unable to acquire it at their own expense ; and a
direction given that preference to be given to the families of employees of a named
company in respect of a maximum of 75 percent of income. This was held to be
charitable14. We can see that in relation to education importance is put on whether the
beneficiaries constitute the public.
The next category we will look at is the advancement of religion, where it appears that
the courts have applied the test less stringently. In Neville Estates v Madden15, Cross J
held that charitable a trust to advance religion among members of the Catford
Synagogue even though the class was small; he considered that the members would
mix with their fellow citizens in the world, so that a benefit would accrue to the public
at large16. This shows that a trust may be charitable if it makes the religious activity
available to the public. Therefore a public benefit requirement will be satisfies by the
existence of some tangible benefit to the public as a whole. This case can be
contrasted with Gilmour v Coates17, which concerned a gift to a Carmelite Priory. The
Priory consisted of a community of 20 cloistered nuns who devoted their lives to
prayer and engaged in no external work. The House of Lords held that the purposes
were not charitable because they lacked public benefit. This could not be found in the
benefits conferred upon the public by the prayers of the nuns because such benefit
was not provable in the court of law18. We can see from that in order for there to be a
public benefit the activities of charity must involve in mixing with the outside
community and the benefit must be clear.
8
[1951] AC 297
Hanbury & Martin, Modern Equity, Eighteen Edition pg 459
10
[1951] AC 297 at 306
11
Graham Moffat, Trust Law , Forth Edition pg 968
12
[1972] AC 601
13
[1954] Ch 232
14
Hanbury & Martin, Modern Equity, Eighteen Edition pg 461
15
[1962] Ch 832
16
Graham Moffat, Trust Law , Forth Edition pg 972-973
17
[1949] AC 26
18
Hanbury & Martin, Modern Equity, Eighteen Edition pg 453
9
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The nest category we will look is in relation prevention or relief of poverty, where the
public benefit requirement is most relaxed. The test to be applied when deciding
whether the class of persons eligible to benefit constitutes the public, is the one stated
by the Jenkins LJ in Re Scarisbrick’s WT 19.the question is ‘whether the gift was for
relief of poverty amongst a class or persons, or ….particular description of poor
people or was merely gift to individuals as the motive of the gift, or with a selective
preference for the poor or poorest amongst those individuals20.
Another approach is the restrictive class within class approach as seen in the case of
IRC v Braddeley21. The persons eligible to benefit were Methodist resident of a
particular area22. Intended beneficiaries were a class with a class, they were
inhabitants of a particular area who are members of a particular church23. We can see
that where the benefit is not the public generally, any restriction must be reasonable.
As long as there are no inappropriate restrictions on the persons in the area who may
benefit. We can see here that with poverty the question is more with whether the
purpose of the charity and whether they are for the relief f poverty
In relation to poverty it would seem that the victims of a particular disaster may not
necessarily constitute a section of the public. A case to illustrate this is Re Gillingham
Bus Disaster Fund24, where a squad of marine cadets marching through a street, when
a bus, out of control struck them, killing 24 and injuring several others. A fund
launched was held on charitable because the purposes were not charitable purposes,
there being neither element of public benefit nor any section of the public.25 We can
see the public benefit is concerned with both the purposes and the section of the
public.
To conclude then, I agree with Lord Cross statement in Dingle v Turner that much
does depend on the purpose of the trust. We have seen how the public benefit
requirement has varied between the different categories. However public benefit is
only half the requirement, for there to be a valid charitable trust the purpose must be a
valid charitable trust. However there is some confusion here and within the statement
of Lord Cross, in that purposes of a trust and the question whether the trust is charity
are closely linked. When deciding whether or not potential beneficiaries of a trust can
be constitutes a section of a public, one must look at the purpose of the trust. It is
purpose that decides whether or nor there is a public benefit, but a purpose also
decides whether a trust is a charity or not.
19
[1951] Ch 622 CA
Graham Moffat, Trust Law , Forth Edition pg 966
21
[1955] AC 572
22
Graham Moffat, Trust Law , Forth Edition pg 974
23
per Viscount Simonds in IRC v Baddely [1955] AC 572
24
[1959] Ch 62
25
Graham Moffat, Trust Law , Forth Edition pg 973
20
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