Posted by: RM | May 29, 2009

Purpose Trusts

There are many examples of purpose trusts in English Law, despite our best efforts to deny that we entertain such things. We all recognise that there are a limited number of anomalous categories of purpose trust whose existence is irrefutable but attributed to some human weakness and sentiment. These trusts are often referred to as trusts of imperfect obligation and include trusts for, inter alia, the upkeep of graves and the maintenance of horses and hounds.

We recognise the Re Denley type trust which has tenuous links to human beneficiaries and has thus been saved from falling foul of the beneficiary principle. Also, we have entertained the Quistclose Trust which is a further example of a trust for a purpose which is not concerned with human beneficiaries. In this latter context, however, justification for the existence of such a trust has been sought by its proponents by construing it as an orthodox example of a resulting trust. However, the recent High Court judgment in Cooper v PRG Powerhouse & Others recognises the Quistclose Trust for what it really is; a purpose trust. It’s too late now. The door is ajar.


Responses

  1. Dear RM

    Thanks for your bog it is always very interresting to read your analysis on legal issues.
    i am currently doing a piece on Purpose trusts in the uk. the piece is meant to be a dialogue for and against purpose trusts in the uk and i am wondering whether you could direct me in annecdotes about the issue to spice up my piece.
    any information on the issue is welcome.

    thanks in advance

    regards

  2. “Purpose trusts” has the capacity to be an enormous topic! If you are looking at the general arguments for and against the recognition of purpose trusts in the English jurisdiction then you need look no further than the case law which gives credence to the beneficiary principle in order to find support for the idea that we should not be susceptible to the introduction of purpose trusts generally. If you want to look at the case for allowing purpose trusts you might well consider whether or not we have got them already (arguably we have so many exceptions to the beneficiary principle already that the argument for resisting the purpose trust is no longer sustainable – a tenuous argument, however, in my view). I don’t know that I can be of very much assistance in respect of such a general enquiry – I would suggest looking at some of the more “substantial” texts on the topic and then use the references therein to search for further, more specialist material (ie footnote references) – Snell and Lewin would be good starting points I suspect. An electronic database search would probably also throw up plenty more to be going on with. Forgive me if I am teaching “grandma to suck eggs” – I don’t know the nature of your project (ie whether it is simply an essay or intended for publication). Good luck…

    RM


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