Cuppage & Ors v Lawson & Ors

A trust for a working men’s club may be construed as implicitly limited to persons in poverty or necessitous circumstances where the trust instrument and its origins support that reading. A power requiring trustees to hold property upon trusts tending to the welfare of the working population may create a charitable trust whose terms remain to be defined, rather than a mere power leaving a resulting trust. The Charitable Trusts (Validation) Act 1954 validates an imperfect trust provision where the property could consistently be applied exclusively for charitable purposes. Recreational facilities may also qualify under the Recreational Charities Act 1958 where they improve conditions of life for persons needing them because of poverty or social and economic circumstances. A power to terminate the charitable trusts for the original contributors was void for perpetuity.

The present trustees sought directions concerning the beneficial entitlement to the proceeds of sale of premises formerly occupied by the East Grinstead Working Men’s or Social Club. The club had closed and the premises had been sold for development. The competing claims were between the estates of the original contributors, represented by the second defendant, and charity, represented by the Attorney General. The members of the club accepted that they had no beneficial entitlement.

The central issues were the construction and validity of clauses 3, 7 and 9 of the 1907 declaration of trust, including whether the trusts were charitable, whether they were saved by the Charitable Trusts (Validation) Act 1954 or the Recreational Charities Act 1958, and whether a resulting trust arose for the original contributors.

1. Construction of the trust. Clause 3, read in the context of clause 7 and the origins of the club, was capable of importing an implied limitation to persons of limited means or in necessitous circumstances. The expression “working men’s club” could not be divorced from the trust’s stated concern with the welfare of the working population and the historical aim of providing inexpensive recreation and assistance to less well-off workmen.

2. The trustees’ powers under clauses 4 and 5 were sufficiently wide to permit rules limiting membership to persons in needy circumstances. They did not extend to making women full members, since the instrument and the evidence indicated that membership was intended to be restricted to men.

3. Clause 7 created a charitable trust, not merely a power. The word “may” in the phrase “may from time to time declare” referred to the possibility of declarations on more than one occasion and did not qualify the preceding obligation that the trustees should thenceforth hold the trust property upon the relevant trusts. The property was therefore applicable to charity before the precise trusts were declared.

4. Without statutory intervention, clauses 3 and 7 would not have been valid charitable trusts. Applying the approach in Ulrich v Treasury Solicitor [2005] EWHC 67 (Ch), reported at [2006] 1 WLR 33, the provisions satisfied section 1 of the Charitable Trusts (Validation) Act 1954. No legitimate complaint would arise if the property were applied exclusively for the charitable relief of poverty among the relevant class. Clauses 3 and 7 were accordingly valid charitable gifts.

5. It was unnecessary to decide the alternative statutory argument. Nevertheless, the court would have held that section 1 of the Recreational Charities Act 1958 was satisfied because the facilities were intended to improve conditions of life and were needed by reason of poverty or social and economic circumstances. The exclusion of women did not matter because section 1(2)(b)(i) was sufficient.

6. The court expressed reservations about the Charity Commissioners’ view concerning bar facilities. Provision of subsidised drink in moderation could constitute recreational or leisure-time facilities, although the observation that the position might differ where alcohol was supplied to encourage excessive consumption was expressly obiter.

7. Clause 9, allowing the trustees to determine the trusts and hold the property for the original contributors, was void for perpetuity. The claim for a resulting trust therefore failed. The proceeds were held upon the valid charitable trusts.

First-instance decision. No prior appellate decision is stated in the judgment.