CASES Flashcards

Question

*Saunders v Vautier* JUDGMENT

Answer 1

COTTENHAM LC * The rights of the beneficiary were held to supersede the wishes of the settlor as expressed in the trust instrument * “*Where a legacy is directed to accumulate for a certain period, or where the payment is postposed, the legatee, if he has an absolute indefeasible interest in the legacy, is not bound to wait until the expiration of that period, but may require payment the moment he is competent to give a valid discharge*” * Where the beneficiary has an absolute, indefeasible interest in a trust, and is of adult age and of sound mind, then the sole beneficiary may require the trust to be terminated and trustee to transfer the legal estate before the date stipulated in the terms of the trust * Similarly, the absolute consent of all beneficiaries to a. trust enables them to terminate or transfer their beneficial interest under a trust

Answer 2

*_If all of the beneficiaries are of adult age with full legal competence, they may force the trustee to transfer the legal estate to them and thereby terminate the trust._*

Answer 3

* Mr Constance’s marriage broke down, and he moved in with Ms Paul * After a workplace accident he received £950 in damages, and following discussions with a bank manager, paid it into a new joint account * They were unmarried, so the account was just put in Mr Constance’s sole name * He said repeatedly, ‘the money is as much yours as mine’ * They paid in joint bingo winnings too, and they made a £150 withdrawal, which they split * 13 months later, Mr Constance died without a will. Ms Paul claimed the account was hers * Mrs Constance reappeared and claimed they money was hers

Answer 4

SCARMAN LJ * The parties’ words and conduct demonstrated that he wished for the money to be held on trust for Mr Constance and Ms Paul jointly * “*It is right that one could consider the various things that were said and done by [the parties] during their time together against their own background and in in their own circumstances*” * The statement conveyed clearly a declaration that the existing fund was that of the plaintiff BRIDGE LJ * “*It is true he need not use the words ‘I declare myself a trustee,’ but he must do something which is equivalent to it, and use expressions which have that meaning, for, however anxious the court may be to carry out a man’s intention, it is not at liberty to construe words otherwise than according to their proper meaning”*

Answer 5

* it is necessary that a settlor’s “*words and actions … show a clear intention to dispose of property … so that someone else acquires a beneficial interest*”

Answer 6

* Goldcorp Exchange Ltd had a business of holding reserves in coins and ingots for customers wishing to invest in gold * Some gold was held for customers, but the levels varied from time to time * The employees told customers that the company would maintain a separate and sufficient stock of each bullion to meet their demands, but in fact did not * In July 1988, the Bank of New Zealand (to whom Goldcorp Exchange owed money) petitioned for the business to be wound up * It transpired that Goldcorp had not held anywhere near enough money for the members of the public (around 1000 people) who had supposedly bought gold with it, even though in their contracts they were entitled to delivery of the gold if they wished * The company also lacked enough assets to satisfy the debts to the bank * The members of the public argued that the gold that remained in stock was entrusted to them * The bank argued that it did not, because the gold stocks had remained in stock entrusted to them * They argued this because the gold stocks had never been isolated, and that all the gold customers were unsecured creditors and that the bank’s security interest (a floating charge) took priority

Answer 7

LORD MUSTILL * The purchase contract did not transfer title to purchasers because the goods were unascertained * The customers’ purchase contracts did not transfer title because which gold specifically was to be sold was not yet certain * Although Goldcorp’s brochures promised that purchasers would have title to gold held in storage, a trust did not arise when the purchase contract was signed or when G bought the gold * There was not enough gold to satisfy the claims, even though it was promised that the gold would be set aside * “*The remaining stock, having never been separated, is just another asset of the company, like its vehicles and office furniture*” * It would be contrary to public policy and logic to imply a fiduciary duty where all that existed was breach of contract * The collateral promises made in the company's brochures and by its employees did not constitute a declaration of trust by the company in favour of the customers in relation to the company's current stock of bullion of the relevant type so as to immediately transfer title to them in respect of that bullion * Only the customers who could prove their order of bullion was in fact held separately from their general store of bullion would be entitled to enforce a trust against the exchange and consequently be able to take their bullion orders away as secured creditors * The customers who could not demonstrate that their orders had been segregated from the general store of bullion could not demonstrate that they were under a trust because the subject matter of the trust was uncertain

Answer 8

* If the tangible property is unidentifiable, the trust will fail for uncertainty of subject matter

Answer 9

* Moss was a managing director and son of the founder of Moss Electrical Co. He owned 950 of the 1,000 issued shares * In September 1986 he said that Hunter, the finance director, could have 50 of these shares as part of his employment * He made no statement of trust involving the other 900 shares * The gift of 50 shares was never implemented because of tax concerns, the risk of takeover, and because Moss changed his mind * Hunter brought a case against Moss, claiming his 50 shares

Answer 10

DILLON LJ * The trust was valid because it was necessary for there to be one to enforce the terms of the contract * There was no tangible distinction between the shares, and as such no reason to hold the trust void just because the shares had not been segregated * There was a valid trust * When any 50 of the shares could satisfy the trust, *_an oral declaration will not be void for uncertainty if the shares were indistinguishable from each other_* * The degree of certainty of subject matter required for intangible assets is different to that required of trust of tangible assets * “*As a person can give by will a specified number of shares in a certain company, so equally, in my judgment, he can declare himself a trustee of 50 of his ordinary shares and that is effective to give a beneficial proprietary interest to the beneficiary under a trust*”

Answer 11

* Segregation is not always necessary when the trust concerns intangible, identical property

Answer 12

* OT was a computer and computing accessories retailer * Following losses and the prospect of almost inevitable insolvency proceedings, OT instructed Lloyds to set up 2 separate trust accounts, the suppliers trust account and the customer trust account “*for the payment of customer deposits and payments due to urgent suppliers in order to safeguard such monies in the event of insolvency”* * Shortly after, an administration order was made and the business and the assets were sold to another computer company * In 2002, OT started proceedings under the RSC order 85 seeking a determination as to who were the beneficiaries of the trust accounts

Answer 13

* Whilst the customer trust account was sufficiently certain, the sums held in the supplier trust account were beneficially owned by OT * To create an express trust there had to be certainty of words, subject matter and objects * In relation to the customers, the trust had been declared by OT in respect of the funds comprised in its trust account, notwithstanding any errors in identifying the customers * OT could only have a claim in respect of any surplus in the account over and above the sums in fact paid by or on behalf of customers during the relevant period * In principle, each customer and the amount of their payment could be ascertained * In relation to the suppliers, the requirement for certainty of beneficiaries had not been met * A reference in a board minute to potential beneficiaries being ‘urgent suppliers’ was too vague to define a class of beneficiary * That trust had thus been imperfectly constituted prior to the execution of the deed of trust * The deed of trust itself did not change anything because, whilst the deed defined the beneficiaries by reference to a supplier schedule, such a schedule did not exist at the time, nor did one come into existence whilst OT was still empowered to effect a disposition of its property * To the extent to which OT had not by its declaration of trust effectively created beneficial interests in the fund in favour of the beneficiaries, it followed that OT remained the beneficial owner of the fund. * The trusts alleged to have been created were necessarily express trusts and therefore needed certainty of words, certainty of subject matter, and certainty of objects. * When considering the threefold requirement of certainty, it was necessary to have regard to the underlying motive for the establishment of trusts. * On the evidence as a whole, there was no doubt that the directors had the necessary intention to create a trust, which comprised of money transferred out of the general funds of OT to the respective trust funds. * It was essential to distinguish between the suppliers trust and the customers trust. * As regards the customers trust, the customers were identified by receipts and there was no difficulty about identification of the beneficiaries. * In relation to the suppliers trust, it had never been properly constituted as the requirements for certainty of beneficiaries had not been met. * The sums held in the suppliers trust account were beneficially owned by OT

Answer 14

* A fixed trust for urgent suppliers failed because the concept of ‘urgent suppliers’ is inadequate to establish with certainty the range of potential beneficiary’s

Answer 15

* Mr Baden settled a trust for the employees, relatives and dependants of his company (Matthew Hall & Co) * It said that the net income of the trust fund should be applied by the trustees ‘in their absolute discretion’ and as they thought fit for the employees, relatives and dependants in grants * The HoL in *McPhail v Doulton* held that the trust would in principle be valid if it could be said with certainty that a hypothetical claimant “*is or is not*” within the class of beneficiaries * The case returned to the lower courts to determine if the trust was enforceable * Brightman J held that the rule in *Re Gulbenkian* applied equally to trusts as to powers * A trust was valid if it could be said with certainty that any given individual was or was nor a member of a class of beneficiaries, and accordingly the clause was valid as a trust

Answer 16

* In order to apply the *Re Gulbenkian* test for a discretionary trust, “*conceptual*” and “*evidential*” were distinct * If a claimant could not bring evidence that they were a beneficiary, they would not be * Because there was no conceptual uncertainty in the words “*dependants*” or “*relatives*”, the clause here is valid

Answer 17

MAGEW LJ * Provided that you can prove that there are a substantial number of people who will fall into the class, you have a conceptually certain class, and therefore it is valid * “*The test is satisfied if, as regards at least a substantial number of objects, it can be said with certainty that they fall within the trust; even though, as regards a substantial number of other persons, if they ever for some fanciful reason fell to be considered, the answer would have to be, not ‘they are outside the trust,’ but ‘it is not proven whether they are in or out’”* * Requiring complete conceptual certainty would amount to a return to the list certainty test STAMP LJ * The trust was valid because the court could always determine who was a dependant and a relative could be restricted to a workable definition of next of kin * The class is conceptually certain if you can say with certainty that any individual is either in or out. If anyone is on the periphery, then there is no certainty and the trust will fail SACHS LJ * The test required only conceptual clarity * “*Once the class of persons to be identified is conceptually certain it then becomes a question of fact to be determined on evidence whether any postulant has on inquiry been proved to be within it: if not so proved, then he is not in it*” * In order to determine whether someone is in / out, the burden is on that person to use evidence to prove that he is within the class. Therefore, any class which people could prove they are in with evidence = conceptually certain

Answer 18

* If a claimant could not bring evidence that they were a beneficiary, they would not be considered one

Answer 19

* The North’s late father was an inventor who was a sole trader until his death. He had entered into a confidentiality agreement with a manufacturer in respect of a drilling device, which became applicable to vacuum cleaners * He later sued the manufacturer for breach of contract and recovered substantial damages * The defendants and respondents to the appeal were all investors in that business * They claimed that the terms on which they had agreed to invest entitled them, in addition to the repayment of their investments and agreed returns, to a share of those damages * The trial judge held that F had created a trust in favour of the respondents over undivided shares in his sole trader business * He further held that the money used to repay a mortgage loan on the property was trust property and the respondents were entitled to maintain a tracing claim for the value of the property * The late Mr North had signed a ‘contract of agreement’ with Mr Wilkinson, but this document had been prepared without the benefit of legal advice * It provided for Mr Wilkinson to have a 5% equity interest in either a holding company or any subsidiary company subsequently formed * It also provided that the ‘*equity position will cover the activities of any company or corporate vehicle, trust, partnership or similar*’ * The other investors relied on letters signed by the late Mr North, which referred to investments and equity positions in ‘the company’

Answer 20

* There was insufficient intention to create a trust of shares in the business as could be found in the documents and discussions on which the respondents relied * The requisite presence of the three certainties (of intention, subject matter and object) when claiming to be the beneficiary of a trust is necessary * A court will be prepared to take on a degree of exploration to satisfy itself of the certainty, but without clear evidence no trust can be found * Proper remedy was damages and not a trust

Answer 21

* No case had been found addressing a trust created by a sole trader of a share in his business * Even if such a trust was possible, it raised significant issues which would have to be addressed by anyone proposing to create such a trust

Answer 22

* The document relied on by the first respondent did not have contractual effect * Critical terms were subject to further agreement * It was not on its face a declaration of a trust * There was no template for a direct proprietary interest in the assets and goodwill of a sole trader business * The intended effect of the document was thus to confer contractual rights * It did not begin to address the issues that would have to be addressed if a trust was intended * There was no reference to the liabilities of the business or how it would be managed if a trust was created, nor to any right to withdraw * In light of those considerations, the language of the document was inapposite to create a trust * There was no clear evidence of the intention to create a trust * There were no words suggesting the creation of a trust, and no consideration given to the issues and difficulties involved in such a trust

Answer 23

* Although an intention to create a trust does not require the use of the word trust or similar language, there must be “a clear declaration of trust and that means there must be clear evidence from what is said or done of an intention to create a trust” [Paul v Constance]

Answer 24

* Land was transferred to D on the understanding that it would be held on trust for the Comtesse de la Rochefoucauld, however, this was never actually put into writing * D mortgaged the property * The Comtesse sought a declaration that the defendant held the property on trust. D argued that the trust was not enforceable due to lack of writing

Answer 25

LINDLEY LJ * Equity will not allow a statute to be an instrument of fraud * “*It is a fraud on the part of the person to whom the land is conveyed as a trustee, and who knows it is conveyed, to deny the trust and claim the land himself*” * To deny the existence of the trust would amount to a fraud on the Comtesse, thus, the trust could be evidenced by oral evidence * R’s appeal was allowed and B was required to pay the costs of the hearing

Answer 26

* Equity will not allow a statute to be an instrument of fraud, and so the trust can be evinced by oral evidence if there is no written evidence

Answer 27

* Tony Vandervell was a wealthy manufacturer who wanted to donate to the Royal College of Surgeons to establish a chair of pharmacology * He also wanted to avoid paying tax on the donation * At the time, stamp duty was applied to outright donations and taxes applied to any income through dividends on company shares, but since the RCS was a charity it was not liable to pay tax on income * Vandervell orally instructed his trust company to transfer 100,000 shares in Vandervell Products to the RCS, with an option for the trustees to purchase the shares back for £5000 * He then instructed the company to declare a dividend on the shares * In 1960, Inland Revenue made a claim for tax on the transfer * IRC argued that Vandervell retained an equitable interest in the shares: they were still his as even though the shares were possessed by the College he had the option to buy them back * They also argued that his oral instruction to the trust company was not capable of transferring the equitable interest, because it did not comply with the formality requirements specified in s53(1c) LPA – this section requires signed writing to evidence the existence of a disposition. So, he should be liable to pay tax on the value of those shares

Answer 28

* s53(1c) LPA was not applicable to situations where a beneficiary directs his trustees (by way of his *Saunders v Vautier* right to do so) to transfer full legal and equitable ownership to someone else * The case is a proposition that an oral declaration to a bare trustee. to transfer the trust property to a third party absolutely for his own benefit is a valid disposition * Vandervell had not successfully divested himself of ownership (legal and equitable) in his shares, since the Trust Company had an option to purchase the shares back from the RCS * If the settlor does not divest themselves adequately, a resulting trust would operate * The option to purchase a substantial fraction of the company for only £5000 was extremely valuable, and so Vandervell was liable to pay surtax on the option

Answer 29

* “*If the beneficial interest was in A and he fails to give it away effectively to another or others or on charitable trusts it must remain in him*” per Lord Upjohn

Answer 30

* [Tony Vandervell](https://en.wikipedia.org/wiki/Tony_Vandervell), a wealthy racing car manufacturer, was attempting to make a donation to the [Royal College of Surgeons](https://en.wikipedia.org/wiki/Royal_College_of_Surgeons) to establish a chair in his name. Since large donations were taxed at the time, he granted the College a number of shares in his company, and paid dividends on those shares, which the College (being a charity), would receive tax-free. However, this scheme was defeated in the case [*Vandervell v Inland Revenue Commissioners*](https://en.wikipedia.org/wiki/Vandervell_v_Inland_Revenue_Commissioners) * Vandervell therefore had the shares repurchased by a trust company set up to manage his children's inheritance, through an option that had been granted during the setup of the original tax-avoidance scheme. * As such, the trust company considered themselves as holding the purchased shares on trust for the children, and Vandervell proceeded to pay dividends on the shares with the intention of benefiting his children. * However, the tax authority continued to view the shares as being Vandervell's personal property, and charged him taxes on the dividends paid. * So Vandervell signed a document explicitly transferring any remaining rights in the shares to the trust company. * Two years later Vandervell died, but the tax authority continued to seek payment of taxes on all dividends paid before he signed the document. Furthermore, on the same basis, Vandervell's own [executors](https://en.wikipedia.org/wiki/Executor) made a claim to recover the dividends themselves from the trust company

Answer 31

* If a transaction fails to make an effective disposition of any interest it does nothing. This is so at law and in equity, and has nothing to do with resulting trusts * There must be at least some expression of that intention before it can effect any result. “*To yearn is not to transfer*” * Before any doctrine of resulting trust can come into play, there must be at least some effective transaction which transfers or creates some interest in property * Where trustees hold property in trust for A, and it is they who, at A’s discretion, make the transfer to B, similar principles apply even though on the face of the transaction the transferor appears to be the trustees and not A * If the transfer to B is on trust, B will hold any beneficial interest that has not been effectually disposed of on an automatic resulting trust for the true transferor, A * If the transfer to B is not on trust, there will be a rebuttable presumption that B holds on a resulting trust for A

Answer 32

* Where A effectually transfers to B (or creates in his favour) any interest in any property, whether legal or equitable, a resulting trust for A may arise in two distinct classes of case * **Presumed resulting trust**: where the transfer to B is not made on any trust * If it appears from the transfer that B is intended to hold on certain trusts, that will be decisive * It if appears that B is intended to take beneficially, that will be decisive * Presumption à *_where the property has been carried to B, and from the absence of consideration and any presumption of advancement B is presumed not only to hold the entire interest on trust, but also hold the beneficial interest for A absolutely_* * The presumption establishes that B is to take on trust and also what that trust is * **Automatic resulting trust**: where the transfer to B is made on trusts which leave some or all of the beneficial interest undisposed of * B automatically holds on a resulting trust for A to the extent that the beneficial interest has not been carried to him or others * The resulting trust does not depend on any intentions or presumptions but is the automatic consequence of A’s failure to dispose of what is vested in him. Since the transfer is on trust, the resulting trust does not establish the trust but merely carries back to A the beneficial interest that has not been disposed of

Answer 33

There are two categories of resulting trust * **Automatic**: will arise where the settlor transfers property to the intended trustee but the trust has failed for some reason. The trust holds the legal title of the property on trust * The beneficial or equitable ownership is retained by the settlor * **Presumed**: arise either from voluntary transfer of the legal estate or by contribution to the purchase price. * In these situations, it is presumed that the person did not intend to make a gift of property or money unless there is a clear intention that they did so intent. In these situations, the resulting trust arises and the transferor or person making the contribution retains or takes a share in the beneficial interest However, in some relationships there is a counter presumption that the gift was intended – **presumption of advancement**

Answer 34

* The donor wanted to transfer shares to his wife and the company secretary * He executed documents in the proper form, transferring his shares to his wife and the company secretary on trust * The transfers were lodged for registration, but before it was complete the donor passed away * The defence argued that as the donor intended the gift to operate as a transfer of shares, the *Milroy v Lord* principle required that the court had to give effect to that intention, and prevent equity from treating them as declarations of trust

Answer 35

LORD EVERSHED MR * Distinguished *Milroy v Lord* on the basis that in that case, Thomas Medley could have done more to ensure that the transfer was completed because he did not merely need to leave Lord with a power of attorney to register the share transfer * Here, Mr Rose had done everything in his power that he needed to do to make the transfer effective, thus an equitable interest had passed to the donees even before the registration * The stress on giving effect to the intention of the donor in *Milroy v Lord* was too broad. The donor’s intention is important, but even if a document acts as a transfer, **a trust can still arise to give effect to the transfer**

Answer 36

* Equitable title in the shares had been transferred as soon as the transferor had completed all of the formalities which the transferor was required to complete. * Equity will intervene and remedy a donor and donee who have done everything within their own power necessary to transfer the gift, even if acts to be performed by third parties have not yet been completed

Answer 37

* Choithram Pagarani was lying on his deathbed sought to declare a trust over his property * The settlor’s intention was that he would be one of nine trustees over that property * However, the dead man failed to transfer legal title in the property to all nine trustees and, as a consequence, under the ordinary law of trusts the trust would not have been validly constituted.

Answer 38

LORD BROWNE-WILKINSON * The fairness required by equity meant the fact that the trust property was vested in one trustee (Mr Pagarani) at the time of the gift was sufficient to make the conveyance to the trust valid * Question à on the basis that Mr Pagarani intended to make an immediate absolute gift “to the Foundation,” but had not vested the gifted property in all the trustees of the Foundation, *_are the trusts of the Foundation trust deed enforceable against the despots and the shares, or was it a case where there has been an imperfect gift which cannot be enforced against Mr Pagarani’s estate whatever his intentions might have been?_*

Answer 39

* Where the trust property was vested in one of a body of trustees, he is bound by the trust and must give effect to it by transferring it into the name of all trustees

Answer 40

* Mrs Ada Crampton wanted to transfer her 400 shares in a company called Crampton Bros. (Coopers) Ltd to her nephew, Harold. * She asked Mr Pennington, who represented the company’s [auditors](https://en.wikipedia.org/wiki/Auditor), to prepare a share transfer form. * She filled it in and gave it back to Mr Pennington. Mr Pennington put it on the auditors’ files but never gave it on to the company for the registration of shares in Harold’s name to be completed. * Ada died. The other people who stood to inherit, (including Philip Waine) argued that unlike [*Re Rose*](https://en.wikipedia.org/wiki/Re_Rose), Ada had not done all she could have, because she had not handed the completed transfer form to Harold or the company. * Harold contended that the shares were held on trust for him, so that the transfer must be completed.

Answer 41

ARDEN LJ * It would have been unconscionable for Ada to change her mind and go back on the transfer * She had given the transfer form to Pennington so that he could do the registration. She had told Harold about the gift. No further action on his part was necessary * Harold had agreed to be a company director, for which a shareholding was needed CLARKE LJ * Equitable title could transfer without registration * Completion of forms and delivery company was enough in *Re Rose*, but it should be recognised that delivery to the company was not a further essential step * It was enough that the transfer was intended to have immediate effect

Answer 42

* The NAVS campaigned for the total suppression of vivisection, but that would have required a change of the law to achieve this purpose * The purpose clearly fell within s3(1) (advancing animal welfare), but whether or not it satisfied the ‘public benefit’ requirement was in question

Answer 43

* The loss of medical progress (a detriment) that would otherwise be achieved through animal testing was more than the benefit (banning animal testing would promote kindness among humans) * The detriment far outweighed the benefit – the purpose was on balance detrimental so could not satisfy the benefit aspect of the public benefit test * Because the main object of the society was to secure the repeal of the Cruelty to Animals Act 1876 and the substitution of a new act prohibiting vivisection altogether, the object is politic * Because of this, the society is not established for “charitable purposes only” within the meaning of the Income Tax Act 1918

Answer 44

* Where the main object of a society is to obtain an alteration of the law, such an object cannot be charitable, even if the society’s purposes might otherwise be regarded as charitable

Answer 45

* The court was required to determine an application for judicial review by the claimant council (ISC) in relation to guidance issued by the Commission on the public benefit requirement contained in s2+3 Charities Act * It was also required to determine a reference by the AG regarding the operation of charity law in relation to independent schools * The Commission had a duty under the Act to issue guidance regarding its objective of promoting awareness and understanding of the operation of the public benefit requirement * The guidance focused on the need for an identifiable benefit that is for the public or a section of the public * Charity trustees were to have regard to the guidance when exercising their powers and duties * The ISC considered the Commission’s guidance to be erroneous and over-prescriptive and claimed that it should not remove the function of the school trustees in determining how the purpose of a charity should be furthered * It sought an order quashing the parts of the guidance which provided that (where benefit was to a section of the public) the opportunity to benefit was not to be restricted by ability to pay fees

Answer 46

WARREN J * The nature of the purpose itself had to be such as to be a benefit to the community * The provision of mainstream education in these schools was for the public benefit * Those who might benefit from the carrying out of the purpose had to be sufficiently numerous and identified in such a manner as to constitute a section of the public [*Oppenheim v Tobacco Securities Trust*] * It is not for the Charity Commission to set levels of compliance to set requirements, rather, the trustees need to ask themselves how they are engaging the public benefit RATIO * *_A charitable organisation which excluded poor people remains a charity: it must make some provision for the poor to pass the **de minimis** hurdle and to provide more than a token benefit_*

Answer 47

* The HDT appealed against a refusal of the Commission to register as a charity * HDT was established to support people whose human rights were violated by the criminalisation of private, adult, consensual homosexual conduct * It helped them to litigate in domestic and international courts to uphold human rights and constitutional law * The Commission did not believe that HDT was established for solely charitable purposes, and that it was politically motivated to change the law of foreign states * The tribunal was required to reconsider the commission’s decision and determine the company’s eligibility for charity registration

Answer 48

* It was held that campaigning for the better treatment of LGBTQ people in countries they are being oppressed was not achieving a political purpose because those countries already prohibited these particular practices * “*The Trust* *is not concerned with procuring the reversal of lawful government policies and decisions. It is concerned only with reversing decisions and policies which are unlawful by virtue of binding, justiciable, superior constitutional law or applicable human rights law*” JUDGE ALISON MCKENNA * An institution has a charitable purpose if its objects fall within any of the categories listed in s3(1) of the Act and if its purpose was for the public benefit * The company’s purposes were: * To promote and protect human rights … throughout the world * To promote “the sound administration of the law” * The purposes were not unclear nor ambiguous but were sufficiently particularised * The company’s support and litigation were merely a means of promoting and protecting human rights * The protection of human rights is a desirable purpose and falls within s3(1) * It is for the public benefit for the human rights standards recognised by the international community to be promoted and protected * There was no legal authority to support the view that the conduct of strategic litigation was a means of advancing the sound administration of the law, but also none to say that it was not

Answer 49

* The company was concerned with the promotion of human rights by establishing whether particular laws were valid through a process of constitutional interpretation, they were not intending to change the law

Answer 50

* Mr Endacott wrote in his will that he would give his son some houses and a factory, a nd the rest to a council “*for the purpose of providing some useful memorial to myself*” unless his wife was still alive, in which case the interest should be paid to her

Answer 51

RATIO * Outside of trusts for animals, graves, and saying private masses, *_no trusts can be made for purposes that are non-charitable_* LORD EVERSHED MR * The trust was invalid because it would a purpose trust going beyond the fixed list that had been previously exempt * The scope of the exceptional cases should not be extended * “*No principle perhaps has greater sanction or authority behind it than the general proposition that a trust by English law, not being a charitable trust, in order to be effective, must have ascertained or ascertainable beneficiaries*”

Answer 52

* The claimant and the first defendant were husband and wife and had been joint freehold owners of a property * They executed a transfer of title to the property to the claimant for no consideration. * The claimant then executed a deed of settlement, setting the house on terms of the deed and appointed himself and his wife as trustees of the settlement * He then executed a transfer of title in the property to himself and his wife as trustees of the settlement * The settlement and transfers had unintended tax consequences following a change in the law * In the trial at first instance, the court held that the parties had been unaware of the tax consequences and that the equitable rules in *Pitt v Holt* applied

Answer 53

MORGAN J * The position of the parties acting together was no different from the position of a sole legal and beneficial owner settling their property on themselves and their family * It was a unilateral transaction and all the beneficiaries were volunteers, thus the equitable rules applied to the claim to set aside the transaction * H and W had made a mistake when they entered into the transfer and the settlement * They were ignorant of the budget announcement, and that ignorance was not ‘mere ignorance’ which would not give rise to a relevant mistake because the ignorance led to a false belief or assumption that the creation of the settlement did not involve a chargeable transfer so that inheritance tax would be payable as a result * They would not have entered into the transactions if this mistake was not made * The mistake did not involve them running a risk about liability to pay inheritance tax by reason of the creation of the settlement; the parties believed that there was to be no question of a charge to tax by reason of the creation of a settlement * The fact that the mistake was a mistake about tax was irrelevant

Answer 54

* A mistake is a mistake, it does not change because the mistake was about tax

CASES Flashcards

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