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6. Charitable Trusts

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Queensland University of Technology

C HARITABLE T RUSTS • Trust for purposes must be charitable: Morice v Bishop of Durham (1805) 32 ER 656; Leahy v Attorney-General for New South Wales (1959) 101 CLR 611 at 620 per Simonds VC; Bacon v Pianta (1966) 114 CLR 634 o Cf. Trust for persons • Enforcement o Trust for persons → beneficiaries enforce o Trust for purposes → where charitable, AG can enforce 1. TRUSTS FOR A CHARITABLE PURPOSE To be a valid charitable trust must: 1. be for a charitable purpose 2. be a sufficient public benefit • rule against perpetuities doesn’t apply for charitable trusts o ← policy that land shouldn’t be tied up in perpetuity doesn’t apply where the land or property is being used in the public benefit 1. Charitable purpose (Beneficiary Principle) Origins • Preamble of Statute of Elizabeth/Charitable Uses Act 1601contains: o Relief of aged, impotent and poor people; o Maintenance of sick and maimed soldier and mariners o Schools of learning, free schools, and scholars in universities; o Repair of bridges, ports, haven, causeways, churches, seabanks and highways; o Education and preferment of orphans o Maintenance for houses of correction; o Marriages of poor maids; o Supportation, aid, and help of young tradesmen, handicraftsmen, and persons decayed, and others for relief or redemption of prisoners or captives, air or ease for poor inhabitants concerning payment of fifteens, setting out of soldiers and other taxes • When a purpose is in the spirit and intendment of the preamble, then that will be valid: Scottish Burial Reform case [1968] (promotion of cremation was extended by analogy from the repair of churches) • Statute of Elizabeth supported in Queensland: s103(1) TA • Extension of ‘charitable purposes’ in the Mortmain Act 1736 (industrial revolution) Four heads of charity— (Commissioners for Special Purposses of Income Tax v Pemsel [1891] AC 531 at 583 per Lord Macnaghten) • Relief of poverty; • Advancement of education; • Advancement of religion; • Other purposes beneficial to the community o Last head is a catch-all, remedies the otherwise unusually narrow scope of Pemsel and Statute of Elizabeth: Bayside General Practice Association Ltd v Commissioner of State Revenue [2006] HCA 43 per Kirby J (doctor’s Andrew Trotter LWB241 Trusts professional association largely funded by federal government  charitable body ← indirect benefit to public by educating doctors) Relief of poverty • the relief of aged, impotent and poor: preamble of Statute of Elizabeth o Trusts for aged and impotent may also fall within the 4 head • Any one of these three will suffice: Le Cras v Perpetual Trustee Co Ltd [1969] 1 AC 514 (purposes of a medical hospital which charged high fees—excluding the poor  valid, as it served the sick) • Whole gift must be an intent to relieve poverty • Poverty: not absolute destitution | “persons who go short in the ordinary acceptation of that term, due regard being had to their status in life and so forth.” Re Coulthurst’s Will Trusts [1951] Ch 661 at 666 per Lord Evershed MR o May be indicated by circumstances, not just the wording: Re Niyazi’s Will Trusts [1978] (‘working class’ hostel—working class not poor—but need to live in hostel means going short  valid) • Poverty includes— o Establishment of a working class hostel: Re Niyazi’s Will Trusts [1978] o Widows and orphans: Attorney-General v Comber (1824);  Orphans whose father fought with the Russian Army against Germany and Japan: Armenian General Benevolent Union v Union Trustee Co of Australia Ltd (1952); o For the purpose of helping educated women and girls to become self-supporting: Re Cental Employment Bureau for Woman and Student’s career association [1942] o A gift of maintenance of blind persons was construed to mean poor blind persons: Re Elliot (1910) • Does not include— o Contribution towards the holiday expenses of work people: Re Drummond [1914] (← could not be described as poor even if on small wages) o Providing knickers for boys in a certain area was not done for poverty: Re Gryon [1930] (← it didn’t matter how rich the parents were) Advancement of education • Irrespective of wealth or poverty of recipients: The Abbey [1951] Ch 728 • Must be the dissemination of knowledge: The Incorporated Council of Law Reporting for England and Wales v Attorney-General [1972] Ch 73 • Can be in particular fields: o Surgery: Royal College of Surgeons of England and Wales v Attorney-General [1952] o Nursing: Royal College of Nursing v St Maylebone Corporation [1958] • Purposes which don’t further education: o Pure research (without publications, etc): Taylor v Taylor (1911) o Sport unconnected to schooling, simply for pleasure of audience: IRC v McMullen  EXCEPT where made for recreational facilities: s103(2) Trust Act Trusts for the Advancement of Religion • ← ‘the repaid of churches’: Statute of Elizabeth preamble Andrew Trotter LWB241 Trusts o extended this to include the advancement of religion generally • Religion = (Church of the New Faith v Commissioner of Payroll Tax (1983) (scientology  included in religion)) o Belief in supernatural being, thing or principle; o Code of conduct to give effect to a belief • Advancement of: o Cannot be for closed groups that do not contribute publicly: Leahy v Attorney- General (NSW) (1959) (Catholic nuns—working in private, no public contribution  not charitable || saved by Conveyancing Act NSW provisions) o Mere prayer is not enough: Gilmour v Coates [1949] (contemplative prayer orders = no public activities  not advancing religion → not charitable) • Includes— o Building and maintenance of houses of worship and incidental buildings: Re Tyne [1970]; o Creation and maintenance of churchyards, graveyards and tombs associated with churches: Re Vaughan (1886) o Gifts for the maintenance and erection of individual tombs, where they are part of the church – to satisfy the public benefit; o Purchase and maintenance of church ornaments: Re King [1923] (eg chancel, spire, clock or stained glass window) o Provision and payment of clergy, and assistance in training or missionaries o Public masses for the dead: Nelan v Downes (1917) o Gifts to religious orders where works of public charity such as teaching and nursing are performed  NOT to those which are closed and undertake no works for the public: Gilmour v Coates; Leahy v Attorney-General (1959) Other purposes beneficial to the community Must be both public benefit within the spirit and intendment of the preamble: Royal National Agricultural and Industrial Association v Chester (1974) (breeding and training of homing pigeons  not of public benefit → not charitable) • Includes gifts for— o Public works or repairing bridges, public halls and amenities, including playing fields and parks: Brisbane City Council Attorney-General for Queensland; ex rel Scurr (1978) o Relief of sick—  Gifts to hospitals will be valid: Re Smith’s Will Trust [1962]  Other forms of distress, including National Lifeboat Institution: Re Clark [1923];  Benefit of aboriginies: Re Mathew [1951]  Government funded doctor’s professional association: Bayside General Practice Association Ltd v Commissioner of State Revenue [2006] o Armed services, including settlement of returned soldiers: Verge v Somerville [1924] o Cremation: Scottish Burial Reform and Cremation Society v Glasgow City Corporation o Encouraging gardening: Re Pleasants (1923) o Law reporting: The Incorporated Council of Law Reporting Case Andrew Trotter LWB241 Trusts o Vegetarianism: Re Latter (1905) • Not charitable— o Specific animals  although protection of group of animals through an organisation like the RSPCA would be ok o Political purposes: Bacon v Pianta (Communist Party) McGovern (Amnesty International) Re Astor’s Settlement [1952] (improvement of understanding between nations; promotion of newspapers  political ← changing how people thought) o reform of the law: Re Shaw (phonetic alphabet); Re Collier  ← not a matter for the courts & difficult to tell in advance whether reform will be beneficial  Distinction between law reform & noncontroversial efforts to influence government policy: Aidwatch v CoT o Creating a refuge for animals to live in in their natural state because assumed the animals would prey on each other without human intervention: Re Grove Grady  May be decided differently today Statutory Extensions • Recreation or leisuretime facilities in the interests of social welfare are a charitable purpose if intended to improve condition of life of— (s103(2) TA) o Persons who need them due to youth, age, infirmity or disablement, poverty or social and economic reasons: s103(3)(b)(i) TA; or o All the public or to all men or all women: s103(3)(b)(ii) TA • Provision of child care: s4(1) Extension of Charitable Purposes Act • Open and non-discriminatory self-help groups: s5(1)(a) o Must have open membership: s5(2)(a); o Must focus on a particular disadvantage: s5(2)(b)(i), or a need not arising out of a disadvantage: s5(2)(b)(ii) • Contemplative religious orders: s5(1)(b) 2. Public benefit • Must benefit the public or section of the public: Thompson v Federal Commissioner of Taxation • In public benefit— o Courts often find benefit in education and poverty heads of charity o Very large groups even if defined by named entity (employer): Oppenheim v Tobacco Securities Trust Co [1951] (for education of children of present or past employees of a company—class of over 100,000 
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