NON-CHARITABLE PURPOSE TRUST

Private trust: trust in favour of ascertainable individuals

- Charitable trust: A trust for purposes which are treated in law as
charitable
- Non-charitable purpose trust: where no individual directly benefits.
=) Usually struck down and it is not enforceable by anyone.
=) Question: whether a trust may be validly created for a purpose that is not
recognized under any categories of charitable trusts.
General Rule: Not valid, reason being there are no beneficiaries to enforce
the trust.
 Bowman v Secular Society Ltd
 Can a trust be created for a purpose which is not technically
charitable?
 Leaby v Attorney General for New South Wales illustrated
aht a gift can be made to persons, including corporation, but it
cannotbe made to a purpose or to an object. So, also, a trust
may be created for the benefit of persons as cestui qui trust but
not for the purpose or object unless the purpose or object be
charitable. For a purpose or object cannot sue, but if it is
charitable, the AG can sue to enforce it
 Re Astor’s Settlement Trust, the trustees were instructed to
hold on trust the income for all the issued shares of ‘The
Observer’ to be utilized for purposes which included the
maintenance of good relations between nations, the
preservation of the independence of the newspapers.
 Re Denley Trust Deed, a conveyance of land to trustees, for a
period determined by lived, for the purposes of a recreation or
sports ground primarily for the benefit of such employees of the
company and secondarily for the benefit of such other person
or persons as the trustees may allow.
 Re Grant’s Will Trust, disagreed with Goff J in Re Denley’s
trust deed.
 Re Lipinski’s Will Trusts, a gift by will to an association to be
used solely in the work of constructing the new buildings for the
 association and/or improvement to the said buildings. The
purpose was within the powers of the association and was one
of which the members were beneficiaries.

 A gift would be struck down if it turns out to be administratively

unworkable, even if the ascertainable requirement could be met.
 R v District Auditor, ex p West Yorkshire Metropolitan
County Council, the council purported to establish a
discretionary trust of 400,000 Euro for the benefit of any or all
or some of the inhabitants of the Country of West Yorkshire.
The trustees were also specifically instructed to utilize the funs
in any of the following manner
i. To assist economic development in the county to reduce
unemployment and poverty
ii. To assist bodies concerned with youth and community
problems in the said area
iii. To assist and encourage ethnic and minority groups in the
said area
iv. To inform all interested persons of certain government
proposals to abolish county councils and other proposals
affecting the institution of local government
 Re Chionh Ke Hu, clause 5 of the will provided that ‘I direct my
executors to distribute the remaining 30 shares out of the said
200 shares among such persons professing or practicing the
Buddhist religion and in such proportions as my executors shall
in their absolute discretion think fit.’
EXCEPTIONS
1. Monuments and Graves
 Re Elliot
 Trimmer v Danby, The testator gave 1000 pounds to his
executors and instructed them to ‘lay out and expand the same
to erect a monument to my memory in St Paul’s Cathedral. The
bequest was upheld.

 Re Hooper, A gift of 1000 pounds was left to trustees upon

trust to ‘invest the same and to the extent that they can legally
do so’ in any manner in their discretion for the care and upkeep
of certain family graves and monuments, and a tablet in a
window in a church. Maugham J allowed the gift to stand for a
period of 21 years holding: What needed to be done must be
done expressly according to an arrangement made in the
discretion of the trustees and so far, as they can legally do so.
The trust is valid for a period of 21 years from the testator’s
death so far as regards the three matters which involve the
upkeep of graves or vaults or monuments in the churchyard or
in the cemetery. As regards the tablet that is a good charitable
gift, and therefore, the rule against perpetuities does not apply.

2. Maintenance of Benefit of Animals

 A trust for the maintenance of animals may generally qualify as a
charitable trust but trusts for the maintenance of a specific animal or
animals may be valid purpose trusts.
 Re Dean, The testator directed his trustees to use 750 per
annum for the maintenance of his horses and hounds should
they live so long. It was held that the trust was valid.

 Pettingall v Pettingall, The disposition in this case was £50

per year for the maintenance of the testator’s favourite black
mare, which the executor of his estate had promised to honour.
The court held that there was a trust because the residuary
legatee could enforce the trust.
  - (legatee: a person who receives a legacy).
3. Miscellaneous
 Re Thompson

4. Unincorporated Associations
 An unincoporated association is not a legal person, hence cannot
own property or be the subject of legal rights and obligations.
 Leaby v AG of New South Wales, three essential
characteristics of an unincorporated association:
i. There must be members of the association
ii. There must be contract binding the members inter se
iii. There must, by a matter of history, have seen a moment
in time when a number of persons combines or banded
together to form the association.

 Neville Estates Ltd v Madden, a gift to an unincoporated

association may have three possible intepretations
i. As a gift to the individual members of the associations at
the date of gift for their own benefit as joint tenants or
tenants in common, so that they could at once, if they
pleased, agree to divide it amongst themselves, each
putting his share into his own pocket.
ii. As a gift to the existing members of the association
beneficially, but on the basis that the subject matter of the
gift is given as an accretion to the funds of the association
and falls to be dealt with in accordance with the rules of
the association by which the members are contractually
bound inter se.
iii. As a gift to be held on trust for enjoyment of the
association or its members from time to time.

 As a gift to the individual members of the association at the date of

gift for their own benefit as joint tenants or tenants in common so
 that they could at once, if they pleased, agree to divide it amongst
themselves, each putting his share into his own pocket.
i. After severance, each individual members can clain an aliquot
share.
ii. Whether or not he continues to be a member of the association
iii. Irrespective of the wishes of the other members
 Leaby v AG of New South Wales, the prudent conveyancer
provides that a receipt by the treasurer or other proper officer of
the recipient society for a legacy to the society shall be a
sufficient discharge to executors. If it were not so, the executors
could only get a valid discharge by obtaining a receipt from
every member.

 As a gift to the existing member of the association beneficially, but on

the basis that the subject matter of the gift is given as an accretion to
the funds of the association and falls to be dealt with in accordant
with the rules of the association by which the members are
contractually bound inter se
i. Although beneficially entitled, an individual member cannot
claim to be paid out his share.

 Re Recher’s Will Trust, a testratix left a portion of her residuary

estate to a non-charitable unincorporated association which, on
the construction of her will, was taken to refer to the London
and Provincial Anti Vivisention Society. By the date of the will,
that society was no longer in existence for it had amalgamated
with the National Anti- Vivisection Society. The issue before the
court was whether the gift could go to the National Society.

 Re Grant’s Wils Trust, a trust was created for the purposes of

Chertsey Labour Party Headquarters but the effective control of
the material aspects of it came under the control of the National
Executive Committee. The local association thus did not
possess the power to distribute the funds.
  Re Lipinski’s Will Trust, the donor left half of his residuary
estate to the Hull Judeans (Maccabi) Association to be used
solely in the work of constructing and improving the
association’s building with certain conditions attached to it. One
of the issues was whether the members were or were not
beneficially entitled to the gift since the donor had specified the
purpose of the gift.

 As a gift to be held on trust for the enjoyment of the association or its

members from time to time.

 Leaby v AG of New South Wales, the testator left Elmslea, a

sheep station of 730 acres of land, on trust for ‘such order of
nuns of the Catholic Church or the Chirstian Brothers as my
executors and trustees shall select’. The gift was not charitable
in law, and the issue was whether it could stand as a valid gift
to the present members.

5. Unincoporated Association in Malaysia

 Lee Tak Suan Anor v Tunku Dato Seri Shahabudin bin Tunku
Besar Burhanuddin Ors.
 Kheamhuat Holdings Sdn Bhd v The Indian Association,
Penang