Non-Charitable Purpose Trusts - Unincorporated Associations - Property Holding for Unincorporated Associations

8 important questions on Non-Charitable Purpose Trusts - Unincorporated Associations - Property Holding for Unincorporated Associations

Neville Estates Ltd v Madden [1962]

If property appears to be held for charitable purposes, but the association has a rule that, on dissolution, the property will be divided between the members themselves, this will negate the charitable purpose, because this will defeat the application of the doctrine of cy-pres.

Leahy v Attorney General for New South Wales [1959]

The testator left his property to be held on trust for an order of nuns, which was an unincorporated association.

Held: This was not charitable and was not intended to be a private trust for the members of the order, since there were many members of the order who were spread all over the world and the property was only house with 20 rooms that could not have been intended to belong to each nun beneficially.

This was a trust for non-charitable purpose, which was void.

Re Grant's Will Trusts [1980], Vinelott J

This principle applied only to discretionary trusts where the use of the property was at the discretion of the trustees was doubted. There is no reason to confine the principle in this way. Plus, in Re Denley itself, the discretion of the trustees was not that significant.
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Leahy v A-G for New South Wales [1959]

Their interest would be as joint tenants.

Advantages of this analysis of property holding of an UA

The beneficiary principle is satisfied because the members at the time are the beneficiaries and the perpetuity rule will not be infringed because the members are free to dispose of the income and capital.

Perpetuities and Accumulations Act 2009, section 7(2)

The perpetuity period is 125 years, but the trust will remain valid throughout that period to see if it terminates in time.

Re Lipkinski's Will Trusts [1976]

Testator had left part of his residuary estate on trust for an UA to build and improve new buildings.

Held: This was valid trust for the members of the UA, so that the gift accrued to the funds of the UA according to the terms of the contract between the members.

Re Recher's Trusts [1972]

A testamentary gift was made to an anti-vivisection society, which was an UA that has political objectives.

Held: Because of the political objectives, the gift could not be held for charitable purpose. Rather, it was a gift to the members at the time of the testator's death, but subject to the contract between them.

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