Inland Revenue Commissioners v Baddeley

A trust is charitable only if every purpose and use authorised by its terms is legally charitable. A benevolent object does not suffice where broad expressions such as promoting social, physical or moral well-being permit non-charitable recreation or social activity.

Relief of poverty requires the satisfaction of a need, necessity or quasi-necessity. It does not extend merely to providing healthy amusement for persons unable to afford it. Nor does an activity become educational merely because experience may loosely be described as educative.

A trust within the fourth class of charity must possess the necessary public character and fall within the spirit and intendment of the preamble to the statute of charitable uses.

Two conveyances placed a mission church and related premises at Stratford, and a playing field at Ilford, in trust for residents of West Ham and Leyton. The facilities were principally intended for persons who were Methodists, or likely to become Methodists, and lacked sufficient means to obtain the stated advantages elsewhere. The deeds authorised activities promoting religious or moral, social and physical well-being.

Harman J held that the trusts were not charitable. The Court of Appeal reversed that decision. The Commissioners appealed to the House of Lords.

The central questions were whether the broadly expressed purposes were exclusively charitable and, if so, whether the restricted class of beneficiaries supplied the public element required for charity.

1. Appeals allowed by a majority. Viscount Simonds, Lord Porter, Lord Tucker and Lord Somervell of Harrow held that neither deed created an exclusively charitable trust. Lord Reid dissented and would have dismissed the appeals.
2. Per Viscount Simonds, the decisive inquiry was whether the entire range of facilities and activities permitted by each deed was charitable. A trust fails if its language authorises any non-charitable use, because the court cannot execute it exclusively as a charity. The comprehensive references to social, physical and moral or religious well-being permitted the operation of an ordinary community or social centre. Such an object could be worthy and benevolent without constituting a legal charity.
3. Viscount Simonds treated Williams' Trustees v Inland Revenue Commissioners [1947] AC 447 as governing. Farley v Westminster Bank Ltd [1939] AC 430 and Dunne v Byrne [1912] AC 407 likewise showed that general language fails when it permits applications beyond purposes recognised as charitable. Lord Tucker and Lord Somervell reached substantially the same conclusion because “social well-being” was too vague and could encompass ordinary social and recreational amenities.
4. The trusts could not be sustained as relief of poverty. Per Viscount Simonds, with Lord Reid and Lord Tucker agreeing on this issue, poverty does not require destitution, but relief must address some need, necessity or quasi-necessity. The provision of healthy amusement or ordinary club amenities does not meet that requirement. Nor, per Viscount Simonds and Lord Tucker, were the trusts educational merely because their activities might be educative in a loose sense.
5. Viscount Simonds further considered that a fourth-class trust for persons selected within a locality by adherence to a particular creed lacked general public utility. Lord Somervell also regarded purpose and beneficiary class as interdependent. This was not a ratio commanding a majority: Lord Porter and Lord Tucker expressly reserved the question, while Lord Reid concluded that Methodists constituted a sufficient section of the community.
6. Lord Reid considered that the playing-field purposes were charitable recreation and education, and that recreation in the mission hall was ancillary to its religious and educational purposes. The majority nevertheless restored Harman J's conclusion. The Commissioners were to pay all parties’ costs under their undertaking.

1. House of Lords: By a majority of four to one, allowed the Commissioners’ consolidated appeals and restored the conclusion that both trusts were non-charitable.
2. Court of Appeal: Reversed Harman J and held the trusts charitable; citation not stated in the judgment.
3. High Court: Harman J decided in favour of the Commissioners and held that the trusts were not charitable; citation not stated in the judgment.