Lord Simmonds, Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, 306)
‘A group of persons may be numerous but, if the nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes’
The English society has a long history with charitable trusts, the oldest of the charitable trusts being the King’s School at Canterbury that was established in BCE 597. Currently, myriad charities are considered to be placed at the heart of the United Kingdom’s society with at least £11 billion in various donations being awarded between the year 2011 and 2012, and just about 25 charity status applications being made to the Charity Commission daily. In the 2013/1014 fiscal year, it is believed that the Commission in question received approximately 6,661 applications for novel charities in both Wales and England; this was a 6% increase compared to the previous year. It is imperative to note that generally, charitable trusts are inclined to have a number of merits over other various forms of express trust; this usually includes the exemption from significant formalities such as the rule against perpetuity as well as certainty of object[1].
With regards to the aforementioned, the subject matter of this particular case study is charitable trust, whose sole purpose is the development of education. Additionally, it ought to be noted that the Charities Act of 1601 currently falls under the Charities Act of 2012. This particular write up will therefore delve much deeper into the statement ‘A group of persons may be numerous but, if the nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes’, and carefully elucidate on the public benefits that are within the ambit of Charity Law.
Discussion
According to the, “Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, 306)”, case, the question that arose was whether a given trust is of a private or public nature ought to be measured as in the case of the trusts that are created by reference to a certain occupation. It ought to be noted that a trust that is meant for the purpose of educating the children of an individual’s employees would be considered as being private and therefore all the pertaining circumstances would require to be measured, viz a viz, the magnitude of the sum that is settled upon between the employer and respective employees, the number of employees, as well as the nature of the desired undertaking[2].Trustees were thus directed to apply certain salary in accommodating ‘the education of children of former employees as well as current employees’ of a British limited organization or any of its allied or auxiliary organizations . The quantity of qualified employees was more than 110,000 and as a result, a charitable status was guaranteed claimed[3]. With this in mind, it is of utmost importance to note that the two prerequisites that were laid down by Lord Simonds were inclined to create the necessary authority for subsequent cases. The two requirements were that the quality which recognizes them from different individuals from the network, so they frame a section of it for themselves, and it ought to be a quality which does not rely upon their relationship to a specific individual and subsequently, that the conceivable recipients must not be numerically irrelevant[4].
This particular case therefore, aims at highlighting the initial obligation that even if the group of individuals may be abundant, if the said nexus between them is that of a personal association to a single propositus or to a number of propositi, then it means that they are neither a section of the community nor are they the community for charitable reasons[5].Where the recipients of charity are characterized by reference to an individual nexus, the trust, as an issue of law, cannot be magnanimous. This was facilitated in order to maintain a strategic distance from the issue of organizations or individuals, for instance, the Tobacco Securities Trust Company Limited which endeavored to mask a trust as a beneficent trust so as to increase their financial benefits and support certain individuals, viz, employees[6]. Notably, Oppenheim maintained that the aim of the said trust was of considerable significance, especially in being able to determine whether the trust in question was indeed charitable or not.
However, the decisions in cases such as Oppenheim, that pursue and set current points of reference demand that not only should a reason be within the spirit of the preamble, but also that some semblance of public merit should dependably be available, in spite of the fact that they perceive that the proportion of public benefit fluctuates with the motivation behind the trust[7]. The Charities Act of 2011 thus gives a rundown of explicit purposes which are charitable and therefore, raises the development of education as an applicable reason, similar to the circumstance for this situation, nonetheless, it would solely be considered as charitable if that class could be viewed as a “part of the community”[8].
In spite of the fact that the gathering of individuals demonstrated in Oppenheim was considerably numerous, the nexus between them was work by specific employers, thus this class could not be considered as a “part of the community”[9]. It is imperative to note that the litigant ought to satisfy the court that the classes of employees that are appropriately defined are in reality not to be considered as a private class but rather as a part of the general public. In this particular case, the appealing party depended on the impersonal connection between the employers and the employees; however, whenever, by a considerable shift of works approach, the organization may make an individual relationship[10]. With regards to the appellant party’s argument, that would ultimately make a trust charitable for a year even though it was not charitable in the previous year.
Furthermore, it is not necessarily sought to define private and public trusts in this particular association, however, it cannot be a proper definition of a public trust to choose this particular attribute of employment by a specific person. With regards to Oppenheim there was no communicated inclination and subsequently it was anything but an open trust and in this manner not a legitimate charitable trust, for the class demonstrated is just a gathering of private individuals[11]. Notably, had the trust been so communicated as to accommodate the training of people who are engaged with the tobacco business in a given town or district, it would have been a decent charitable outlook. It is likewise imperative to note that te lawful definition of charitable purposes was initially set down in the prelude to the Statute of charitable Uses of 1601[12]. Notably, , s3(1)(m) CA 2011 preserves some other reason perceived as charitable under the existing law, whilst at the same time ensuring the advancement of charitable purposes by similarity; this therefore, enables charitable law to keep on developing because of various changes in the public eye and open demeanors; along these lines reflecting the intentions as well as spirits behind the preamble to the Statute of Charitable Uses(1601)and also with Macnaghten’s fourth heading, trusts for purposes of being gainful to the community.
The case in question implicated a wife and husband who executed settlement where the respondents in question, were the trustees who were held upon particular trusts in the course of the guarantors lives as well as the survivors. Before breaking down the importance of the Oppenheim case, it is essential to think about the previous instance of Re Compton. This case authorized the prerequisite to decide if the regular attributes that is shared by various individuals is, or is not, for example, to make them a part of the general community[13]. An “individual nexus” test, which is frequently alluded to as the ‘Compton test’ , held that there was a necessity that the candidate exhibit that there is no close to home nexus between the settler and the class of recipients, but instead that there is an adequate open advantage. In reference to organizations, for example, the Tobacco Securities Trust Co. Ltd, this was to keep them from giving incidental advantages with the case it is beneficent and increasing monetary benefits.
The Compton test having been a central factor for the Lords in the Oppenheim case is still currently quite relevant. However, there has been some help for the view that if there is an inclination made by the giver for determined people, in setting up the trust for the general population or a vast segment of the general population, the blessing is adequate in fulfilling the component test[14]. As was held in Re Koettgen [1954], that the magnanimous character of the essential trust for the headway of training being of an adequately open nature, paying little heed to the deceased benefactor’s communicating their basic wish that, in choosing recipients, the trustee should offer inclination to the workers of a specific organization and individuals from their families[15]. It was held that it was at the phase when the essential class of qualified people was determined that the topic of the general population nature of the trust emerged to be chosen. Questions have been raised, in any case, regarding whether this choice is reliable with the standards set out in Oppenheim.
Lord Simonds also addressed the issue for the situation being the individual nexus of the givers and the conceivable recipients. He expresses that despite the fact that the recipients are various ‘the trouble emerges concerning their normal and recognizing quality. That quality is being offspring of representatives of one or other of a gathering of companies.’[16]. Master Normand concurred with Lord Simonds looking into the issue, that the trust must be useful to the network or to an area of the network generally was not a beneficent trust. This was chosen with alternate Lords arriving at a similar resolution. Ruler Macdermott, be that as it may, concurred the issue was whether the trust was of an open sort, or whether it was a trust to profit private people. He trusted that if the class of potential recipients in an instructive trust is considerable, and not ‘clearly private in nature’, until the opposite shows up, that the trust is to support the network and in this way this trust ought to be discovered magnanimous[17]. He contended that he doesn’t trust that the Compton test can be ‘for the most part relevant and convincing’[18]. In any case lion’s share of the court observed the trust to be non-magnanimous because of the way that it was not of an open sort, however the area of general society was various, the association with the benefactor and recipients was close to home and following going before cases, such trusts cannot be found as being charitable.
Conclusion
As discussed above, the statement that was provided with regards to Charitable Law insists on the verity that the nexus or relationship that exists between the employer and employee is considerably critical, especially when it comes to founding a charitable trust. We have also observed that indeed, the Oppenheim case will continue to be utilized as a point of reference in myriad future cases, however, it is also critical to note that re Compton test, which is a test carried out for public benefit, may be carried out in order for all intents and purposes to prove the basis of a charitable trust.
Bibliographies
Chevalier-Watts J, ‘The public benefit requirement in charity law: the mystery of the balancing act’ (8 October 2014) 21(4) Trusts and Trustees 371–388, 375.
Chevalier-Watts J, ‘The public benefit requirement in charity law: the mystery of the balancing act’ (8 October 2014) 21(4) Trusts and Trustees 371–388, 380.
Commons Select Committee (6 June 2013) http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-administration-select-committee/news/charities-report accessed 1 February, 2019.
Gilour v. Coats [1949] AC 426, 449 (Lord Simonds); inland Revenue Commissioners v. Baddeley [1955] AC 572, 615 (Lord Somervell); Neville Estates v. Madden [1962] Ch 823, 853 (Cross J).
Holt A, ‘Sector pleased with Upper Tribunal’s decision on private schools’, Charity Times (2011) http://www.charitytimes.com/ct/Upper_Tribunal_private_schools_public_benefit.php accessed 1 February, 2019
Lord Simmonds, Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, 306).
Poor does not have to mean destitute, but might cover those of modest means (Re Coulthurst [1951] Ch 661).
Public Administration Select Committee, The role of the Charity Commission and ‘public benefit’: Post-legislative scrutiny of the Charities Act 2006 (6 June 2013, London Stationery Office) para. 66.
R (Independent Schools Council) v Charity Commission [2012] Ch 214 at [88]
R (Independent Schools Council) v Charity Commission [2012] Ch 214 at [96]
Re. Compton [1945] Ch 213; Re. Drummond [1914] 2 Ch 90; Re. Mills (n.d) 27 SASR 200.
See Attorney General v Charity Commission (The Poverty Reference) [2012] WTLR 977 at [34] and [64]. Also Dingle v Turner [1972] AC 609 at 624 per Cross LJ.
See Public Administration Select Committee, The role of the Charity Commission and ‘public benefit’: Post-legislative scrutiny of the Charities Act 2006 (6 June 2013, London Stationery Office)
See Re Hetherington (Deceased) [1990] Ch 1 and Neville Estates v. Madden [1962] Ch 823.
Verge v. Summerville [1924] AC 469 at 499 (Lord Wrenbury).
[1] Re. Compton [1945] Ch 213; Re. Drummond [1914] 2 Ch 90; Re. Mills (n.d) 27 SASR 200.
[2] Lord Simmonds, Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, 306).
[3] Gilour v. Coats [1949] AC 426, 449 (Lord Simonds); inland Revenue Commissioners v. Baddeley [1955] AC 572, 615 (Lord Somervell); Neville Estates v. Madden [1962] Ch 823, 853 (Cross J).
[4] Verge v. Summerville [1924] AC 469 at 499 (Lord Wrenbury).
[5] See Re Hetherington (Deceased) [1990] Ch 1 and Neville Estates v. Madden [1962] Ch 823.
[6] See Attorney General v Charity Commission (The Poverty Reference) [2012] WTLR 977 at [34] and [64]. Also Dingle v Turner [1972] AC 609 at 624 per Cross LJ.
[7] Public Administration Select Committee, The role of the Charity Commission and ‘public benefit’: Post-legislative scrutiny of the Charities Act 2006 (6 June 2013, London Stationery Office) para. 66.
[8] See Public Administration Select Committee, The role of the Charity Commission and ‘public benefit’: Post-legislative scrutiny of the Charities Act 2006 (6 June 2013, London Stationery Office)
[9] Commons Select Committee (6 June 2013) http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-administration-select-committee/news/charities-report accessed 1 February, 2019.
[10] R (Independent Schools Council) v Charity Commission [2012] Ch 214 at [88]
[11] R (Independent Schools Council) v Charity Commission [2012] Ch 214 at [96]
[12] Poor does not have to mean destitute, but might cover those of modest means (Re Coulthurst [1951] Ch 661).
[13] Holt A, ‘Sector pleased with Upper Tribunal’s decision on private schools’, Charity Times (2011) http://www.charitytimes.com/ct/Upper_Tribunal_private_schools_public_benefit.php accessed 1 February, 2019
[14] Chevalier-Watts J, ‘The public benefit requirement in charity law: the mystery of the balancing act’ (8 October 2014) 21(4) Trusts and Trustees 371–388, 375.
[15] Chevalier-Watts J, ‘The public benefit requirement in charity law: the mystery of the balancing act’ (8 October 2014) 21(4) Trusts and Trustees 371–388, 375.
[16] Re. Compton [1945] Ch 213; Re. Drummond [1914] 2 Ch 90; Re. Mills (n.d) 27 SASR 200.
[17] Lord Simmonds, Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, 306).
[18] See Re Hetherington (Deceased) [1990] Ch 1 and Neville Estates v. Madden [1962] Ch 823.