#17123 - Purpose Trusts - Irish Trusts

These forms of trusts are trusts for a particular purpose as opposed to those trusts for individuals and the courts have tended to find great difficulty in grappling with the whole concept of a purpose trust.

The general rule that a trust for a purpose will fail unless it can be proved that it is a charitable one of for the public benefit, meaning the benefit goes to human individuals.

These trusts are more widely known as “trusts of imperfect obligation” due to the fact that “there are no beneficiaries to act as watchdogs to ensure the trust obligations are complied with” – (Philip Burke- City Colleges).

These forms of trusts can be inherently vague and lacking in definition, so it is difficult for the courts to grapple with them.

There are three objections to purposes trusts;

Morice v. Bishop of Durham: Lord Grant “There must be someone in whose favour the court can decree performance. Again, reiterating the need for a human beneficiary.

This is the rule that property cannot be tied up for longer than the perpetuity period. Meaning the length of a life in being at the creation of the trust plus 21 years.

So here the court struck down this purpose trust on the basis it was erratic, and simply not a good way to have property used.

Brown v. Burdett-trust to board up a house for 20 years with good long nails and a nothing but a clock to be left inside, again this was an absolutely useless trust.

It is important to contrast these cases with the case of Re Astor’s Settlement Trusts [1952], where the trust for the maintenance of good understanding between nations and the preservation of independence and integrity of newspapers, basically, for the freedom of the press was a sensible purpose however, could not be recognised as a charitable trust, as it breached the beneficiary principle.

• This case also failed on the basis as the objects to be held on a purpose trust lacked clarity or definition.

Re Gibbons (1917); More lenient approach here where the estate of the testator was to be disposed of “to my best spiritual advantages, as conscience and sense of duty may direct”, this purpose trust was upheld notwithstanding the certain absence of human individuals.

• Biehler notes, “the rationale employed by Barton J. in reaching his decision is far from clear and it could be said to fall within the category of ‘troublesome anomalous and abberant case’s’ which Harman LJ suggested in Re Endacott should not be added to”

Re Delenys Trust Deed; Case challenged the rule against purpose trusts. Here the trust concerned a sports ground for the use of a particular companies employees. Thus, the particular employees could hold a beneficial interest and complain if the trust wasn’t being used in that way.

• On foot of this the trust was upheld.

R v. District Auditor: trust for various activities which would benefit the people of Yorkshire.

• Failed under the grounds of certainty of objects,...