Purpose Trusts Notes

• 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;

1. The Beneficiary Principle.

• 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.

2. Rule Against Inalienability.

• 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.

3. Purposes may be Capricious.

   • The purpose of a trust may be erratic and you would not want to give the authority of law to these.

   • M’Craigs Trustees v. Kirk-Session of UFCL- here you had a brother and sister and wanted 11statutes of family members to be erected after their lifetimes.

• 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...

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