Trust - lecture 6

Trust - lecture 6

1. unincorporated trust - group of persons who are bound together under certain rules, dealing with members/individulas they have duties, control of the organisation, members will be able to leave and join therefore there would be rules governing this.

   • trust analysis
     • Re lipinski will trust (1976) - here Elle left his residuary estate and left it on trust for the whole association in hull, in memory of my late wife , to be used solely in the work of constructing for the new building of the association and or improvement to the said buildings, is trust not power, shows mandatory obligation to be used, showing certainty of intention of a trust, justice Oliver not a gift to association as joint tenancy cannot split the money themselves and keep it, this was a gift to th association , is contractual approach , association extent the capital as to use it to construct in memory to his wife, money was under obligation it did not offend the perpetuity rule, perpetuity would apply , it didn't apply because money could eb extended for money for memorial , held that gift was valid if the beneficiaries were acertainable, , association was not a charity
       • a bequest was given to an uncorporated association specifically for the construction of new buildings for the association, trust was upheld through a combination of denley and contractual interpretation , Oliver j stated that the association was free to spend the money as it wished, and that the intended purpose was not binding held in denley that the trust has a specified perpetuity period and the beneficiaries were bound by the purpose , here the members were not bound by the purpose, this case appears to go some way to combining the denley approach with the gift subject to contract interpretation .

2. problems will arise if association is not chaitiable UA Is limited by shares and do not have separate personality

3. How UA takes place

   • Neville Estates v Madden (1962) - sets out three major ways in which organisations can take funds that are left to it 1) gift to members of UA organisation at a particular date as joint tenants , members can sever there shares 2) gift to existing members subject to their contractual rights, there is no severance , no splitting of the share, those members rights will be accrued to other members on death of resignation 3) members of trust , you make your donors, transfers it is held on trust for purpose of the organisation , dealing with trust you need perpetuity period , distribution not possible with trust fail due to perpetuity - courts favour the second approach

4. Gift subject to contractual rules

   • Leahy v AG for South Wales - case concerned a trust for land and in favour of incorporated association , held that uncorpirated association do not have legal personality so are not capable of accepting trust property and in a trust for present and future members the members myst be ascertainable - gift was large property that was held upon trust for nuns , this trust was not charitiable , this UA for private groups of nun lack purpose , court would also look at wording, several acres of land left , therefore intention was to benefit of the orders of the nuns.held was valid problems of per purity is irrelevant as it not a contract but trust have choice to gift to individual or group
   • Gillmour v coats - trust in favour of a group of nuns was not upheld, as it was deemed to not be for public benefit , held a trust for the advancement of religion must be for the public benefit
   • Re grant will trust (1980) - there was trust t another organisation , gift 'benefit for the chertsey headquarters of the chertsey woollen constituency Labour Party'- it is normally a gift to the association rather then individual members testators intention was for purpose of organisation , members will have right to be applied for members of the organisation, gift for the purpose of the association will be that members will distribute It to themselves if that provided under rules or that they can change the rules to enable distribution , rules of the chertsey labour party did not allow members to deal with parties themeseves other than by the rules, rules dealing with labur party did not enable private distribution of members of constituency party , held a gift failed for reasons of perpetuity , as it cannot be distributed was contract rather then trust .
     • a gift over to the local branch of labour party was subject to the control of the party national executive committee held the the immediate gift to present members interpretation is most relevant where the UA name is merely used as a convenient label such as in dining club and also under the 'gift subject to contract' interpretation , assets must be freely available, here this interpretation could not be used as the NEC had control of the local party

5. Subjects to contractual rights and duties of the members

   • re Rechers will trust (1972) - a testator attempted to establish a gift to the anti-vivisection society, which has been replaced with a new society before the will was executed held the the court will consider the donors intention when considering which interpretation to apply, not set up as a charity , case then litigated in relation to this gift

6. Resulting trust analysis

   • resulting trust arises in absence of express declaration where a person holds legal title in cirucmatsnce where they cannot be taken to have full equitable ownership
   • two types of resulting trust : 1) automatic resulting trust 2) presumed resting trust
     • Automatic resulting trust - will arise where the settlor transfers the property to the intended trustee, but the trust has failed for some reason , trutsee holds legal title of the property on trust , equitable ownership is trained by the settlor
     • Presumed resulting trust - arises either form voluntary transfers of legal estates or by contribution to the purchase price, presumed that the person did not intend to make a gift of property or money unless there is clear intention that they did intend , resulting trust arises and transferor or person making contribution retains or takes share in beneficial interest , however in some relationship there is resumption that gift was intended , known as presumption of advancement

7. Distribution

   • methods are either contractual or trust , idea where things fail, what is to happen to the asset , what if club does not have funds and members leave and this leads to the failure of the association
     • Trust approach
       • Air Jamaica v Charlton (1999) - concerned pensions fund ,compnay failed, question was what was to happened to pension fund (surplus) , court said fund was to go to the employees to benefit for the benefit , when there was failure of the company , funds resulted to employees, pension employees hold the trust and dealt with courts on the failure of the company , shows operation of resulting trust , fills gap were equitable ownership is for benefit of members, trustee hold resulting trust because of situation
       • re gilligham bus disaster fund (1958) - fund was established for benefit of victims of a bus crash , was to pay for funeral and medical costs , donations came from named and anonymous done of £9,000 , trustee sought direction about what to do with extra , there was a surplus of fund what was to happen to this fund , held that surplus created resulting trust that needed to be retained for small and large contributors , beneficiaries such as contributors cannot be ascertained means that surplus did not go to crown hence trustee needed to find donors, trust was not chairitiale so failed for uncertainty and court not be applied to others, money is held on trust and trust purpose has surplus there is resulting trust for donors because they did not mean to dispose of their interest absolutely , trustee pay surplus in court and court will make inquiry as to the beneficiaries
       • Cunnack v Edwards (1869) - an UA in which all members have died and there was a surplus , no members of such interest they had determined on their death go to other members , until one member will be entitled, no members surplus cannot be held on trust , if no members money went to crown on resulting trust
       • Re west sussex constabulary widows children and benevolent fund (1971) - fund for the widows and tendency of deceased person of West Sussex constabulary , constabulary merged with other police officers, operation of fund came to end, issue was what was to happen to surplus, a person who works for West Sussex could have collectively altered the rule to transfer the surplus amongst themselves , did not do this, judges said that position was governed by trust not by contract therefore determined the position - surplus will be held on trust - WE HAVE RAFFLES FOR DEALING WITH THESE SITUATION , WHAT HAPENES TO THAT IF CANNOT BE CARRIED OUT , PURPOSE MAY NOT BE POSSIBLE

8. Raffles

   • here resulting trust cannot apply beause of problems certain who provided the money , difficult to distribute therefore position is better and regulated by contractual analysis i.e you win the price and then surplus will go to the club - collecting boxes - here regarded as gift you are making a gift when putting money in box ,it is the clubs money
   • Donation and legacies - know who has made large donation , you have donor and know individual , resulting trust is possible , trust regards a worng , it shoudknt be a resulting trust , it should be subject to contractual rules of the organisation , choice between the trust (resulting) not expressly by court or contractual analysis

9. Contract analysis

   • Re bucks constabulary widows and orphans fund (1979) - fund was established as a method of ensuring the security of the widows and children of dead police officers, held on dissolution of an UA that has received contributions which the court on one interpretations considered to be gifts subject to contract , contribution will be split equally between the present members at the time of dissolution - fund set up for bucks and constabulary police, fr widows and dependent on bucks constabulary , voluntary contribution for those who worked for the bucks constabulary , constabulary mergers with another society , what was to happen to surplus , such association was governed by contract with the members, where member ceases to be member through leaving then he loses his entitlement of the fund of distribution , surplus go to widow held that surplus asset belonged to members , entitled to matter of law, applies to law of contract
   • Hanchett stamford (2008) - concerned ownership of the assets of the performing and captive animals defence league which was an UA.court considerd whether the organisation was a charity in light of one of the association purpose being to promote a change in law making it illegal to train and use performing animals, it was not charity , court did not recognise that the explicit recognition of advancement of animal welfare as a cwaritiabek purpose, court had to determine to who the asset of association belonged, contract concluded that present members of the association were beneficiary entitled to assets subject to contractual agreement between them, UA is automatically dissolved when it membership falls below one and last surviving member is entitles the assets of association and they do not vest in the crown