• In the case of Re Denley [1969] 1 Ch. 373, it was held that a purpose trust that is directly or indirectly for the benefit of an individual or individuals can be legally valid provided the individuals in question are ascertainable at any time (and the trust is not otherwise invalid for uncertainty).

Facts of the Case

  • D wrote up a trust deed that conveyed land to C as the trustees who would hold the premises on the trust declared.
  • The trust stipulated that the land was to be maintained for use as a sports ground primarily for the benefit of the employees of D and secondarily for the benefit of such other persons as the trustees may allow to use the land.
  • The trust deed stipulated that if, at any time, the number of employees subscribing shall be less than 75% of the total number of employees at the same time, or if D went into liquidation or the land was no longer required, then C would convey the land to the General Hospital.

Issues

  • Was the trust invalid for going against the rule against perpetual trusts that served non-charitable purposes?
  • Was the trust sufficiently certain even though the beneficiaries were a group of individuals subject to change?
  • Can a forfeiture clause be valid even if it cannot be easily determined whether the clause has come into effect?

Held by the Chancery Division

  • That the trust was sufficiently certain-the beneficiaries, though subject to change, could be ascertained at any time.
  • The forfeiture clause was valid-The conveyance of land to the Hospital was a gift, and as such did not invalidate the perpetuity rule.

Goff J.

  • There can be purpose trusts where the benefiting individuals are so indirect or intangible or which [the trust] is framed to not give those individuals legal standing to apply to the court to enforce the trust. The beneficiary principle would apply to invalidate the trust regardless of other concerns of uncertainty or perpetuity. However, the current trust does not represent one of those cases.
  • “In my judgement the beneficiary principle of Re Astor’s Settlement Trusts, which was approved in Re Endacott…is confined to purpose or object trusts which are abstract or impersonal. The objection is not that the trust is for a purpose or object per se, but that there is no beneficiary…” [383B].
  • The trust in the present case is limited in point of time to avoid any infringement of the rules against perpetuities, and therefore will be valid unless it is voided for uncertainty. Since it is private rather than charitable, and therefore the beneficiaries must be ascertainable at any time.
  • The reference to ‘any other persons’ represents a valid power of the trustees in operating the trust for the benefit of employees. As such, the only beneficiaries that need to be identified are the employees.

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