Purpose trusts (Trusts for Imperfect obligation)

The most important idea which is behind the theory of purpose trust is that a
trust which is created for the private purpose is deemed illegitimate and also
void in the eyes of the courts. There must be certainty of object and a person to
whom the court can give the remedy of particular performance, as stated by Sir
William Grant in the case of Morrice versus Bishop of Durham. This claim is
based on the precedent set in Morrice vs Bishop of Durham. Lord Parker ruled
in Bowman vs Secular Security that a beneficiary must get some kind of benefit
from a trust for it to be valid. Since it would have no method of controlling or
monitoring the trust's assets, a court is unlikely to establish one if it has no
say in how they are utilized. When a trust is created for some other purpose
than charity and it fails, a new trust is usually created that is more
advantageous to the original settlor.
Astor's settlement lawsuit established a general norm, although there are
exceptions to this rule, and as a result, some private purpose trusts can be
recognized as valid by the law. There are three instances where a trust that is
not founded to benefit charity may be legitimate. The animal welfare charity
stands out as the first and most obvious exception. Trusts created only for the
purpose of maintaining certain animals are considered private purpose trusts,
however donations made for this reason are considered to be of philanthropic
interest. Pettingall v. Pettingall is a court case about a will in which the
executor bequeathed money to the testator's black horse so that she would be
better off. As the executor was just following out the intentions of the deceased,
the court found that the gift did not go against the testator's will. The court
elaborated on this concept when it upheld a trust in the case of Re Thompson
whose stated goal was to promote fox hunting.

A trust established for a reason other than charity is also valid when it is used
to fund a public monument. This general norm can be overridden, however, if
the trustee has explicitly stated a desire for the trust to be carried out. The
creation of a memorial or monument in the name of a trust is often not
recognized as lawful by the law. The seminal case for this sort of situation is
Mussett v. Bingle. Even if the only intended use of a gift is to cover the costs of
maintaining a cemetery site, the gift may still be valid; nonetheless, the donor
is responsible for ensuring that the funds are utilized solely for that reason
during the perpetual period. This was shown in the case of mussett, where the
gift was found to be null and invalid since its duration did not fall within the
perpetual term.
As for the third and last caveat, it may be seen in the case of Bourne v. Keane,
when the court decided that a gift for masses was seen to be real. A court ruled
that a donation of mass offerings was lawful in this case. This is known as the
"bourne principle," and it only applies to private masses and not public
masses, which are viewed as charitable contributions.
The maximum perpetuity period for the three exceptions is the life in being
plus twenty-one years; nonetheless, the likelihood of a trust lasting longer than
the perpetuity term is low. Keep in mind that these exceptions exist only
because of the fallibility of people; as a result, the likelihood that they will be
increased in the future is quite low (Lord Harman).
If the aforementioned trusts are able to meet the requirements for a charity to
be considered legal, then they may qualify as public purpose trusts. In the case
of Re Rose, the charitable trust's attempts to create a trust for the welfare of
cats went off without a hitch. Similarly, in Lord Mountbatten, the court ruled
that the trust into which support payments were to be sent was charitable, and
in another instance of Re Douglas, a donation that was for a shelter for several
abandoned dogs was declared to be charitable.
The Denley operating mode
The Denley test is used by courts to determine whether a trust or gift is created
for the purpose of achieving a lawful purpose, or if it is simply meant to benefit
persons who lack the mental capacity to enforce the conditions of the trust or
gift. The workers of the company were supposed to be the principal
beneficiaries of the property given to the trustee in the trust deed involving Re
Denley so that it might be used as a sports ground. It was made clear that the
trustee might grant access to the secondary benefit to anybody they saw
proper. According to Goff J., a trust is not generally in breach of the beneficiary
principle if its purpose is to be for the benefit of an individual or individuals in
any way, shape, or form other than directly or indirectly.
The three key causes that lead to the failure of private purpose trusts are the
lack of ambiguity, the absence of a beneficiary, and the application of the
perpetual rule. A trust cannot be enforced by a court if there is any doubt
about any of the three certitudes. For instance, the court will not be able to
enforce the trust if the provisions are ambiguous. Even if the trust itself may
have collapsed due to a lack of ambiguity and beneficiary, the settlement with
Astor Trusts might be utilized as authority for this notion. Another case that
exemplifies this principle in its own special way is Re Endacott.
The lack of a beneficiary is the second fatal flaw of private purpose trusts, and
once again, the Astor family can be used as an example. The lack of a
designated recipient for the trust's proceeds was a major factor in its failure. In
the event that the trustee fails to carry out their duties, the beneficiary must be
physically present for the trust to be enforced in court. The value of recipients
of aid is underlined here. Without a designated beneficiary, a private-use trust
cannot be enforced, but the Attorney General will act on behalf of the Crown to
enforce a public-use trust. If a trust created for personal reasons is found to be
invalid, the assets will be transferred to a new trust and held for the benefit of
the settlor. Bishop of Durham v. Morrice. [Case].
The only other exception to the rule of perpetuity is the lack of a beneficiary.
Future property must be transferred into the owner's name within 125 years,
under this legislation. On the other hand, skeptics argue that even if a trust is
set up for one purpose, there will always be another party entitled to the trust's
assets if the original intent of the trust is not fulfilled. The reason for this is
because the affected party will need to have sufficient interest in the property
available to him at the time of the hearing in order to demonstrate in court that
the property was utilized unlawfully.
The introduction of legislative procedures that might aid in the enforcement of
purpose trusts is another option. There have been prior implementations of
systems with similar goals. The Cayman Islands, for instance, established the
Cayman Island Special Trusts Law in 1997. If the person who enforced the
trust did not have a beneficial interest in the property, he was nonetheless
entitled to the same proprietary remedies under the law.
It has been argued that there are innumerable instances in which property
does not have an owner in equity, therefore the assumption that there must
always be some beneficiary with an equitable interest and that equitable
ownership should not hang in the air is false. For example, until one of
Sandra's grandkids is born, the trust Sandra set up for their benefit will not
have any beneficiaries who are entitled to equitable ownership. Using the same
rationale that is already applicable to known anomalous categories may be one
way to counter the claim that the trust will collapse if it is not restricted to the
everlasting period. According to this line of thinking, the trust is doomed if its
duration is not limited to eternity. It may be argued that, with a few extremely
rare and specific exceptions, English law today forbids the establishment of
purpose trusts that are not charitable.

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