It could be argued that the personal nexus rule does not apply in the case of relief of poverty, as was demonstrated in the case of Dingle v Turner. However, it was illustrated above that the trust failed to be a relief of poverty.
IRC v Baddeley established that a trust for persons resident in West Ham and Leyton who were or were likely to become members of the Methodist Church was held non-charitable because the class of potential beneficiaries did not constitute a section of the public as it constitute a class within a class which it is too narrow a group to be a sufficient section of the public. Martin’s bequest is to provide £100,000 for the children of the redundant workers of the car industry, thus this would seem to be too narrow a group to be a sufficient class of beneficiaries. Therefore, Martin Aston’s children could argue that the first bequest is not valid because its purpose is not charitable.
(ii) £50,000 to promote road safety to schoolchildren and to persuade local councils to construct more speed humps in residential areas;
Gifts for the advancement of education are another charitable purpose that was recognised in Income Tax Special Purposes Comrs v Pemsel, provided that the object of the trust is not for the personal advantages of the creator of the trust. Martin’s attempt to give money to be used to teach schoolchildren about road safety would be accepted as a trust for the advancement of education as it would advance the children’s knowledge and instruct them on the topic. The bequest would also fulfil the second criteria to be acceptable to be a trust for a charitable purpose as it will benefit schoolchildren who constitute a sufficient section of the public. However, the funds must also be devoted exclusively to charity. The trust cannot have multiple purposes unless all such purposes are charitable. In this case, Martin is also seeking for the money to be used to persuade council councils to increase construct more speed humps in residential areas. This is not charitable in nature and has a political objective. R v Radio Authority, ex p Bullapproved that a trust will be regarded as political if its direct or principal purpose is to procure an alteration in the decisions of governmental authorities
The Charity Commission’s publication Political Activities and Campaigning by Charities 1999 established that charities can engage in political activity if 'there is a reasonable expectation that the activity concerned will further the stated purpose of the charity. It could be concluded that Martin Aston's aim is to promote road safety by educating schoolchildren which will increases their awareness of the road dangers, whether they were in their residential area or anywhere else, which might reduce road accidents caused by the children on the streets. This would result in the overriding aim of preserving and improving public health and safety. Martin Aston attempt to influence the council policy by increasing the number of speed humps does enhance his overriding charitable purpose as speed humps would clearly result in a reduction of the average speed on the roads in these residential areas which will allow for more chances to avoid many accidents. Thus the attempt to give £50,000 for educating the children and influencing the council would be valid.
(iii) £100,000 to fund research to demonstrate that cars are not a significant cause of global warming;
If research is of no educational value, then it will not be charitable. A trust for research would be charitable if the three elements laid down in Re Besterman’s Will Trusts are met. First, the subject matter of the research must be a useful subject of study. In this case, Martin wishes the money to conduct a research to demonstrate whether cars are a significant cause of global warming. This would be of educational value as it will contribute to a deeper knowledge of an important and useful area of science. Secondly, the knowledge acquired by or through the research must be available to the public. This means that the results of the research must be open to the public and not be kept purely to for the benefit of Martin Aston or 'Pro –Tech’ or used commercially. Lastly, the trust must also be for the benefit of the public or a sufficiently important section of the public. Martin's research apart from its educational benefit might also result in taking more steps further depending on the results the research reveals. To illustrate, if the cars were found to cause global warming seriously, scientists might conduct more researches to reduce the car's effect or even try to create a substitution. This would help improving the environment and advance the education further. In this case it is not clear whether the results of the research would be published. Hence, provided that the research is available to the public it would be held to be valid and be given charitable status.
In 2001 the Charity Commission recognised the ‘conservation of the as a charitable purpose in its own right. 'The advancement of environment protection or improvement' falls within the definition of 'charitable purposes' in The Charities Bill 2004. The results of Martin's research will contribute towards finding a significant cause of global warming which is a critical environmental issue and this could result in trying to improve the environment which would come within The Charities Bill.
(iv) £250,000 to provide a gym for the sole and exclusive use of the employees of ‘Pro-Tech’ and their relatives and dependants for a period of 25 years;
Recent case law established that under the fourth head of charity the promotion of sports and recreation is insufficient to constitute a charitable trust unless the prime object of the purpose is to promote efficiency as established in IRC v Glasgow Police Athletic Association. However there is no such relation in Martin's case. Providing the gym as a recreational facility for the employees of ‘Pro-Tech’ and their relatives and dependants will not promote the efficiency of components of the high performance motorcars manufactured by the company in any significant way. Hence, the purpose of the trust is not beneficial in a way which is charitable.
This bequest would also fail the second requirement to be of charitable purpose, which is that it should be available to the public or sufficient section of the public, and not merely a private class of individuals. The bequest would not satisfy section 1 of the Recreational Charities Act 1958 as it is not in the interests of social welfare. This is since, although the gym is for a recreational purpose and it could improve the health of the people using it, those people, the employees of ‘Pro-Tech’ and their relatives and dependants, do not have a need for such facilities by reason of their age, disablement, poverty, economic circumstances etc. Thy gym would not be for the public benefit as the employees and their relatives and dependants do not constitute the public at large.
It will also fail the personal nexus rule. As illustrated in Oppenheim v Tobacco Securities Trust Co Ltd, the group of beneficiaries must be of a reasonable size and not defined as having some sort of personal relationship. The employees of ‘Pro-Tech’ and their relatives and dependants are identified by their personal and contractual relationship. Hence the group is not a section of the public but a private class and the trust is, therefore, not charitable. The exception of the relief of poverty will not apply as it does not seem from the wording of the bequest that the gym is provided for this purpose.
A non-charitable trust would be void unless it will in fact benefit identifiable individuals who posses sufficient locus standi to enforce it. In Re Denley’s Trust Deed the court upheld a gift of land to be maintained and used as a sport field for the employees of the company because although the gift appeared to be for a purpose, it was in fact for the benefit of individuals (employees of the company) because they had the locus standing to enforce the trust and would benefit, directly or indirectly, from the carrying out of the purpose. Hence, Martin’s employees could enforce the private purpose trust under the rule in Re Denley. In addition the principle in Re Denley will not apply if the class of beneficiaries is administratively unworkable. In this case the number of the beneficiaries is 5,000 plus family members and dependants, hence the number of beneficiaries might be more than 12,000 persons. There is no clear case law on the maximum number of beneficiaries. Nevertheless, in this case it could be possible to determine ‘ascertained beneficiaries’. For instance providing all beneficiaries with membership or identity cards when they first apply to register to use the gym and enjoy the benefit of the trust.
However the trust is for 25 years which exceeds the perpetuity period of 21 years. Because this trust was not found to be of a charitable purpose it will not enjoy the privileges enjoyed by the charitable trusts. Hence, Martin's attempt to use £250,000 to provide a gym for the sole and exclusive use of the employees of ‘Pro-Tech’ and their relatives and dependants for a period of 25 years would still be held void for perpetuity. This will invalidate the trust and Martin’s children would claim that this bequest is not enforceable.
Bibliography:
Dingle v Turner [1972] AC 601
Income Tax Special Purposes Comrs v Pemsel [1891] AC 531
IRC v Baddeley [1955] AC 572
IRC v Glasgow Police Athletic Association [1953] AC 380
Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297
R v District Auditor, ex p West Yorkshire Metropolitan County Council [1986] RVR 24
R v Radio Authority, ex p Bull [1998] QB 249
Re Besterman’s Will Trusts (1980) Times, 21 January.
Re Denley’s Trust Deed [1969] a Ch 373
Re Gwyon [1930] 1 Ch 255
Political Activities and Campaigning by Charities 1999 (September 1999)
Recreational Charities Act 1958
The Charities Bill 2004
Income Tax Special Purposes Comrs v Pemsel [1891] AC 531
Political Activities and Campaigning by Charities 1999 (September 1999)
Political Activities and Campaigning by Charities 1999 (September 1999), para 14.
(1980) Times, 21 January.
Recreational Charities Act 1958, section 1 (3)
Recreational Charities Act 1958, section 1 (2)(a)
Recreational Charities Act 1958, section 1 (2)(b)(i)
Recreational Charities Act 1958, section 1 (2)(b)(ii)
Dingle v Turner [1972] AC 601
R v District Auditor, ex p West Yorkshire Metropolitan County Council [1986] RVR 24