Boris Ignachkov Legal principles and points:
- In Neville Estates v Madden [1962] the High Court established that gifts to the members of an unincorporated association fell within three categories. It also established therefore what would happen if the organisation was charitable, for example: if the organisation is charitable and the gift is given for the association’s purposes, then it is prima facie a gift for charitable purposes.
Facts of the case:
- Catford Synagogue owned a piece of land. When it sold that piece of land, the C sought a declaration that they were entitled to the proceeds of this sale.
Issues in Neville Estates v Madden [1962]
- The principal issue in this case was whether the C was entitled to the proceeds of this sale, and therefore whether he had an equitable interest in the land.
The High Court held:
- The consideration paid for the land did not belong beneficially to the members of Catford Synagogue for the donors did not envisage that it could be divided between the members for the time being, but intended the fund and land bought with it to be held in trust for the synagogue as a quasi-corporate entity, so that the fund and the land were held by the trustees for the purposes of the synagogue.
- The court identified three categories of valid non-charitable purpose gifts, and members’ rights which may accrue as a result:
- A gift to members at the relevant date as joint tenants, each having a right to sever a share;
- A gift subject to the contractual rights and liabilities of the members towards each other. There would be no right to sever a share and a member’s interest will on his death or resignation accrue to the remaining members;
- A gift to present or future members will fail unless it is expressly within the perpetuity period.
Cross J:
- [852] “in my judgment the purposes of the trust with which I am concerned are religious purposes”
- [854] “Generally speaking, no doubt, an association which is sup ported by its members for the purposes of providing benefits for themselves will not be a charity. But I do not think that this principle can apply with full force in the case of trusts for religious purposes. As Lord Simonds pointed out, the law of charity has been built up not logically but empirically, and there is a political background peculiar to religious trusts which may well have influenced the development of the law with regard to them. In my judgment, this trust with which I am concerned in this case is a charitable trust”.
- [861] “The result of my conclusions on this part of the case may be stated as follows: Even if I assume in favour of the plaintiffs that proceeds of entertainments or bazaars are donations, and that the charity was partly maintained by the Post Office Savings Bank interest as soon as it began to be received, the plaintiffs have still failed to establish that the whole of the purchase price for the land contracted to be sold was exempt from the jurisdiction of the Charity Commissioners, since some part—probably a substantial part—of the donations to the building fund were made at a time when the charity was not a mixed charity.”
