Dingle v Turner

A trust for the relief of poverty may be charitable although its beneficiaries are linked by employment, membership or family relationship. In the poverty field, such a personal nexus does not prevent the beneficiaries from possessing the necessary public character.

The distinction is between a trust whose purpose is the relief of poverty among a described class and a private gift to particular poor persons, for which poverty merely supplies the donor’s motive. A perpetual fund for poor employees may therefore constitute a valid charitable trust. The personal-nexus rule applicable to an educational trust does not govern trusts for the relief of poverty.

A testator directed that a substantial fund should provide pensions for poor employees of E. Dingle & Company Ltd who had reached 60, or who were at least 45 and unable to earn a living because of physical or mental infirmity. Any income which could not be used for those employees was to benefit the aged poor of a Plymouth parish.

The trustees sought directions in the Chancery Division. Megarry J held that the employees’ trust was charitable, following Gibson v South American Stores (Gath & Chaves) Ltd [1950] Ch 177. He granted a certificate permitting a direct appeal under section 12 of the Administration of Justice Act 1969.

The central issue was whether a trust confined to poor employees lacked the public character required of a legal charity because eligibility depended upon a personal nexus of common employment.

1. Appeal dismissed unanimously. Lord Cross of Chelsea delivered the leading speech. Viscount Dilhorne, Lord MacDermott, Lord Hodson and Lord Simon of Glaisdale agreed that the employees’ pension trust was a valid charitable trust for the relief of poverty.

2. Per Lord Cross, even assuming that the personal-nexus principle approved in Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297 ordinarily applies throughout charity law, it does not apply to trusts for the relief of poverty. The established poor-relations cases could not sensibly be retained while poor-members and poor-employees trusts were rejected. The latter were a natural development of the former, and distinguishing between those forms of poverty trust would be illogical.

3. Per Lord Cross, the governing distinction in the poverty field was that drawn in Re Scarisbrick [1951] Ch 622. The court must construe the disposition to determine whether its purpose is the relief of poverty among a described class, or whether it is a private gift to particular poor persons for which their poverty is merely the donor’s motive. The present perpetual fund belonged to the former category. It remained essential that benefits should be confined to persons who could fairly be regarded as poor according to current standards.

4. Lord Cross regarded the expression “section of the public” as one of degree whose application may depend upon the trust’s purpose. He questioned the adequacy of a rigid distinction between personal and impersonal relationships. Those wider observations were unnecessary to the result. Lord MacDermott welcomed the discussion of that expression, and the other Law Lords accepted the dispositive reasoning.

5. Lord Cross also considered that fiscal privileges could bear upon whether a purpose should be charitable. That reasoning did not command a majority: Viscount Dilhorne, Lord MacDermott and Lord Hodson expressly doubted its relevance to the primary question of charitable status.

6. The appeal was dismissed. The costs of all parties were ordered to be paid out of the fund.

1. House of Lords: The appeal was dismissed unanimously. The trust was upheld as a valid charitable trust for the relief of poverty, and all parties’ costs were ordered to be paid from the fund.

2. Chancery Division: Megarry J held on 2 April 1971 that the trust was charitable, following Gibson v South American Stores (Gath & Chaves) Ltd [1950] Ch 177. He issued a certificate under section 12 of the Administration of Justice Act 1969, enabling an application for a direct appeal to the House of Lords.