Boris Ignachkov Legal Principles and Key Points
- In the case of Neville Estates v Madden 1962 CH 832 2, land was sold subject to the consent of the Charity Commissioner who had refused their consent.
- Key takeaway from this case is that a trust for a religious organisation can create public benefit through the mixing of its members with the public.
Facts of the Case
- Catford Synagogue was established in 1937 and affiliated to the United Synagogue.
- In 1939 Catford launched a building fund appeal and got £440 by 31st December.
- In 1941 a house was bought and conveyed to trustees by deed which recited that the purchase money were the property of the members of the synagogue.
- The lower part was used by the synagogue and the upper, the minister’s residence.
- In 1952 a site consisting of three plots of land was bought for £3250 and was transferred to the trustees of the Catford Synagogue (D), to be held on trust by deed of even date with the transfer which recited that the purchase price of £3250 was the property of the members of the synagogue.
- On the first plot, a disused squash court was converted to a synagogue and a communal hall built nearby.
- The United Synagogue in January of 1959 obtained permission to build and develop two plots by putting up buildings for residential use. By March 1959 the claimants offered to purchase the two plots for £10,000.
- D accepted but in May the Charity Commissioners informed them that their consent was required.
- The contract signed; the commissioners told the trustees that they would sanction the sale at £10,000 subject to the result of publishing the usual notices in the neighbourhood.
- C acquired permission to build flats and garages. As this increased the value of the land, there were offers of more than £10,000.
- Commissioners refused consent to a sale to C for less than £14,300.
- P claimed performance of the contract of sale, contesting that consent was not required as the land was not held on charitable trust and that even if this was the case, it was within the exemption for the commissioner’s jurisdiction contained in s.62 of the Charitable Trusts Act 1853.
Issues in Neville Estates v Madden 1962 CH 832 2
- The issues in this case concerned whether consent needed to be given by the commissioners and if it could be excluded under s.62 of the Charitable Trusts Act 1853.
Held by High Court (Chancery Division)
- Held by the High Court that even though the trust was for the benefit of the members of the synagogue, it was still charitable.
Cross J
- It was held that the £3250 consideration paid for the land did not belong beneficially to the members of Catford Synagogue.
- The donors did not assess that it could be divided between the members for the time being but intended the fund and land bought within to be held in a trust for the synagogue as a quasi-corporate entity.
- This meant the fund and the land were held by the trustees on trust for the purposes of that trust were religious. Making it charitable.
- “When this case was opened Mr. Warren for the defendants submitted that the Charity Commissioners were necessary parties to this action. I rejected this submission. The question whether the commissioners’ consent to a sale was necessary has frequently been decided by the courts on vendor and purchaser summonses in the absence of the commissioners. Mr. Warren argued that this case differed from the ordinary case in that the commissioners had been consulted and had expressed their view that their consent was required. But that cannot, in my judgment, make them necessary parties. No doubt if the court thought that the vendor and the purchaser were acting in collusion and that the case for the sale requiring the commissioners’ consent was not being properly presented, it might, in its discretion, require the commissioners or the Attorney-General to be added. But no such question arises here, where the case has been most fully argued on both sides. The commissioners know what is happening and have not asked to be joined as a party.” Pg848