Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297

A settlement provided for the education of children of employees and former employees of British American Tobacco and its subsidiaries. The potential class was numerically large, comprising the children of more than 110,000 employees. The trustees claimed that the trust was charitable as an advancement of education. The revenue authorities disputed that classification because eligibility depended on each child's relationship to an employee of a particular commercial group. The case reached the House of Lords on whether a large class can constitute a sufficient section of the public when all members qualify through a personal link with a common employer.

Did the educational trust satisfy the public benefit requirement when its potential beneficiaries were numerous but were defined by their parents' employment by a particular company or group?

By a majority, the House of Lords held that the trust was not charitable. Lord Simonds accepted that the advancement of education is a charitable purpose, but found that the required public character was absent. The beneficiaries were connected by a personal nexus: each qualified through a parent's contractual relationship with the same employer. The large number of employees did not convert that private class into a section of the public. The relevant distinction was qualitative rather than simply numerical. Lord MacDermott dissented, considering the class sufficiently extensive and the employment link insufficient to defeat public benefit. The majority's personal nexus approach applies particularly to education and other non-poverty trusts.

A trust for education or another non-poverty purpose does not satisfy public benefit merely because many people may benefit. A class defined by a personal nexus, such as employment by a named employer, is ordinarily private rather than a section of the public.

Oppenheim provides the classic personal nexus test and demonstrates that size alone does not establish public benefit. The poverty exception is important: trusts for poor employees or poor relations may be charitable despite a personal connection, as later authority recognises. The Charities Act 2011 preserves a general public benefit requirement and removes any presumption that a purpose is beneficial, but it does not replace the need to analyse whether beneficiaries form an adequate public class. IRC v Baddeley offers a useful comparison involving a geographically and socially restricted group.