Philippe & Ors v Cameron & Ors

A trust for non-charitable purposes is invalid unless the trust property vests absolutely in ascertainable persons within the perpetuity period. A trust does not become valid merely because it includes administrative powers or an immediate trust for sale. Where a trust instrument permits both charitable and non-charitable applications, the Charitable Trusts (Validation) Act 1954 applies only if the statutory conditions are satisfied, including the protection of legitimate interests arising from the invalidity. On failure of the express trust, the court must determine the beneficial ownership from the parties’ actual contributions and intentions. A resulting trust may arise in favour of the principal contributor. Trustees who acted honestly and reasonably may obtain relief under section 61 of the Trustee Act 1925.

The trustees of land occupied by a lawn tennis club sought the court’s guidance in a dispute between the club and the trustees of a church charity. The land had been acquired using contributions from the club, its members and others, but was held by trustees under a 1938 trust deed. The deed provided for use of the land by persons associated with the church and for sale proceeds to be applied to purposes connected with the church.

The club argued that the land was not subject to the deed, that the deed was invalid, and that the land was held for the club’s members. The church contended that the deed was valid or had been validated by the 1954 Act, or that an implied trust arose in its favour. The central issues were the effect of the 1948 acquisition, the validity of the trust deed, the application of the 1954 Act, and the identity of the resulting beneficiary.

1. The trust deed applied to the freehold. The 1948 agreement was construed, in the light of the surrounding circumstances and its express reference to the lease, as a variation of the purchase option. The freehold was therefore acquired subject to the trusts declared by the deed (para 44).
2. The trust deed was invalid. It attempted to create a perpetual trust for the non-charitable purpose of enabling club members to play tennis. The provisions concerning sale, letting and application of income did not cure that defect. In particular, the purposes in clause 8(c) and clause 8(e) were not confined to charitable purposes. A gift for purposes which are partly charitable and partly non-charitable fails (Hunter v Attorney-General [1899] AC 309; paras 45-51).
3. The Charitable Trusts (Validation) Act 1954 did not validate the deed. Section 2(2) was construed as excluding cases where the imperfect trust provision had already been recognised as invalid and the invalidity acted upon. The deed was primarily intended to benefit the club. Restricting it to charitable purposes for the benefit of the church would deprive the club of its intended and actual benefit. The statutory validation therefore did not apply (paras 52-55).
4. No trust arose in favour of the church or the club members. An implied trust on different terms could not arise when the express trust failed. Applying the categories identified in Neville Estates Ltd v Madden [1962] Ch 832, the gifts were not gifts to members individually or subject to their contractual rights. The club’s rules prevented division of the land or its proceeds and required church consent for amendment. The gifts were consequently for the purposes of a non-charitable association and failed (paras 56-62).
5. The land was held on resulting trust for Mr Tweddle’s estate. Mr Tweddle had made the largest contribution by selling at an undervalue and waiving rent. The other contributions were made on the basis of his contribution. The land therefore did not pass to the Crown as bona vacantia. The trustees were entitled to relief under section 61 of the Trustee Act 1925, having acted honestly and reasonably (paras 63-68).

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