Introduction
This essay critically assesses the claim that the persistent refusal of English law to recognise non-charitable purpose trusts stems more from historical formalism than from principled reasoning. Non-charitable purpose trusts, which aim to benefit purposes rather than specific individuals, have long been deemed invalid under English law, primarily due to the beneficiary principle. This analysis will explore the foundation of this principle, evaluate the competing ‘rights’ and ‘enforcer’ theories, consider the anomalous exceptions to the rule, and scrutinise the landmark decision in Re Denley’s Trust Deed (1969). By examining these elements, the essay will argue that while historical formalism underpins much of the legal stance, there are traces of principled reasoning that complicate this narrative.
The Beneficiary Principle: A Historical Foundation
The beneficiary principle, a cornerstone of trust law, dictates that a valid trust must have identifiable beneficiaries with a vested interest who can enforce the trust (Hudson, 2015). Originating from cases such as Morice v Bishop of Durham (1805), this rule was established to ensure trusts were not left unenforceable or subject to capricious purposes. The principle arguably reflects historical formalism, prioritising rigid legal structures over flexibility. Indeed, the insistence on human beneficiaries can be seen as a relic of a time when trusts were primarily familial arrangements, rather than a reflection of modern societal needs for purpose-driven mechanisms. However, this formalism is not without rationale, as it safeguards against ambiguity and ensures accountability—a point of principled reasoning.
‘Rights’ and ‘Enforcer’ Theories: Competing Perspectives
The debate surrounding non-charitable purpose trusts often pivots on theoretical interpretations of enforcement. The ‘rights’ theory posits that only beneficiaries with direct legal rights can enforce a trust, aligning with the traditional beneficiary principle (Hayton, 2012). This view reinforces historical formalism by adhering to established norms. In contrast, the ‘enforcer’ theory suggests that a designated enforcer, even in the absence of beneficiaries, could ensure a trust’s purpose is fulfilled—an approach adopted in jurisdictions like Jersey (Matthews, 2006). This theory challenges the rigid formalism of English law, advocating for pragmatic solutions. The rejection of the enforcer theory in England, therefore, arguably prioritises historical precedent over innovative, principled adaptation to contemporary needs.
Anomalous Exceptions: Inconsistencies in Application
English law does recognise certain anomalous exceptions to the beneficiary principle, such as trusts for the maintenance of tombs or animals, as seen in cases like Re Dean (1889). These exceptions, though limited, highlight a deviation from strict formalism, suggesting that courts have occasionally prioritised practical or moral considerations over rigid rules (Hudson, 2015). However, the narrow scope of these exceptions and the lack of clear justification for their existence indicate that they are historical quirks rather than evidence of coherent, principled reasoning.
Re Denley’s Trust Deed: A Shift in Perspective?
The decision in Re Denley’s Trust Deed (1969) offers a nuanced perspective on non-charitable purpose trusts. In this case, a trust for the maintenance of a sports ground was upheld, provided it indirectly benefited a class of individuals (the employees of a company). The court’s reasoning suggested that a purpose trust might be valid if it tangentially benefits ascertainable persons who could enforce it (Hayton, 2012). This decision appears to lean towards principled reasoning, prioritising practical outcomes over strict adherence to formalism. However, its limited application and the continued emphasis on identifiable beneficiaries suggest that historical formalism still dominates judicial thinking.
Conclusion
In summary, the refusal of English law to recognise non-charitable purpose trusts is predominantly rooted in historical formalism, as evidenced by the enduring beneficiary principle and the rejection of alternative enforcement mechanisms like the ‘enforcer’ theory. While anomalous exceptions and the decision in Re Denley’s Trust Deed hint at principled reasoning based on practical considerations, these are inconsistently applied and fail to challenge the overarching formalist framework. Therefore, the claim holds substantial merit, though it is not without qualification. The implications of this stance are significant, as it limits the adaptability of trust law to modern societal purposes, potentially necessitating legislative or judicial reform to balance historical norms with contemporary needs.
References
- Hayton, D. (2012) Hayton & Mitchell: Text, Cases and Materials on the Law of Trusts and Equitable Remedies. 14th edn. Sweet & Maxwell.
- Hudson, A. (2015) Equity and Trusts. 8th edn. Routledge.
- Matthews, P. (2006) ‘The new trust: obligations without rights?’, Trusts & Trustees, 12(1), pp. 1-10.
