Commissioners of Inland Revenue v McMullen

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE ORR,LORD JUSTICE BRIDGE
Judgment Date18 Oct 1978
Judgment citation (vLex)[1978] EWCA Civ J1018-3
Docket Number1975 F No. 732

[1978] EWCA Civ J1018-3

In The Supreme Court of Judicature

Court of Appeal

(Civil Division)

On Appeal from The High Court of Justice

Chancery Division

Group A

(Mr. Justice Walton)

Before:

Lord Justice Stamp

(not present when judgment delivered)

Lord Justice Orr

and

Lord Justice Bridge

1975 F No. 732

In The Master of the Trusts of a Deed dated the 30th October 1972 and made between (1) The Football Association Limited of the one part and (2) Sir Andrew Stephen, Professor Sir Harold Thompson and Leonard Thomas Shipman of the other part

and

In The Matter of the Charities Act 1960

Between:
Commissioners of Inland Revenue
Plaintiffs (Respondents)
and
(1) Arthur Derek Mcmullen
Defendant (Appellant)
(2) Professor Sir Harold Thompson
Defendant (Appellant)
(3) Leonard Thomas Shipman
Defendant (Appellant)
(4) Her Majesty's Attorney-General
Defendant (Respondent)

MR. ANDREW MORRITT Q.C. and MR. SPENCER MAURICE (instructed by Messrs. Chethams, Solicitors, London W1A 4WR) appeared on behalf of the First, Second and Third Defendants (Appellants).

MR. D.K. RATTEE Q.C. (instructed by The Solicitor of Inland Revenue, London WC2R 1LB) appeared on behalf of the Plaintiffs (Respondents).

MR. J.F. MUMMERY (instructed by The Treasury Solicitor, London SW1H 9NH) appeared on behalf of the Fourth Defendant (Respondent).

1

LORD JUSTICE STAMP ( read in his absence by Lord Justice Orr): This is an appeal from an order of Mr. Justice Walton made on 13th July 1977 whereby he allowed an appeal by the Commissioners of Inland Revenue against a decision of the Charity Commissioners to register a trust known as the Football Association Youth Trust as a charity pursuant to section 4 of the Charities Act 1960.

2

The case in the court below is fully reported in (1978) 1 Weekly Law Reports, 664, and I need not set out the facts. The relevant parts of the trust deed - for I do not think in the end that anything turns on the construction of the recitals - are contained in clause 3 of the deed which is in the following terms: "The objects of the Trust are (a) to organise or provide or assist in the organisation and provision of facilities which will enable and encourage pupils of Schools and Universities in any part of the United Kingdom to play Association Football or other games or sports and thereby to assist in ensuring that due attention is given to the physical education and development of such pupils as well as to the development and occupation of their minds and with a view to further this object (i) to provide or assist in the provision of Association Football or games or sports equipment of every kind for the use of such pupils as aforesaid (ii) to provide or assist in the provision of courses lectures demonstrations and coaching for pupils of Schools and Universities in any part of the United Kingdom and for teachers who organise or supervise playing and coaching of Association Football or other games or sports at such Schools and Universities as aforesaid (iii) to promote provide or assist in the promotion and provision of training colleges for the purpose of training teachers in the coaching of Association Football or other games or sports at such Schools andUniversities as aforesaid (iv) to lay out manage equip and maintain or assist in the laying out management equipment and maintenance of playing fields or appropriate indoor facilities or accommodation (whether vested in the Trustees or not) to be used for the teaching and playing of Association Football or other sports or games by such pupils as aforesaid (b) to organise or provide or assist in the organisation or provision of facilities for physical recreation in the interests of social welfare in any part of the United Kingdom (with the object of improving the conditions of life for the boys and girls for whom the same are provided) for boys and girls who are under the age of twenty-one years and who by reason of their youth or social and economic circumstances have need of such facilities."

3

I confess I have found great difficulty in attaching any precise or clear meaning to the phrase "physical education and development of such pupils …" where those words appear in clause 3 (a) of the trust deed. Mr. Justice Walton took the view that the settlor or draftsman wrongly assumed that the "organisation and provision of facilities which will enable and encourage pupils … to play Association Football …" would automatically assist in ensuring that due Attention is given to physical education and development. In my view, however, the proper approach to the construction of paragraph (a) is to construe "physical education and development", which I find an elusive phrase, as connoting something which the playing of association football will assist in ensuring.

4

Mr. Morritt on behalf of the trustees of the deed, arguing that the trust fell to be regarded as an educational trust, was indeed, I think, disposed to accept this latter view. He submittedthat the trustees in deciding what facilities to provide were bound to consider whether a contemplated facility would or would not assist in ensuring that due attention was given to the physical education and development of the pupils, and that the trust had a single object consisting of the physical education and development of the pupils. Paragraph (a) must be read as a whole and clearly I think it is not any games and sports for which facilities may be provided consistently with the terms of the trust deed but only those of a physical character. But in relation to association football the settlor has made it clear that, for the purposes of the trust, facilities which do enable and encourage pupils to play that game are to be regarded as "thereby" assisting in ensuring that due attention is given to their physical education and development.

5

A game of association football is a game of association football, as well (or as ill) calculated to assist in ensuring that due attention is given to the physical education and development of the 22 pupil players whether it is played at Wembley before an audience numbering many thousands, at a school as a house match, or on one of many pitches in one of the parks. So far as regards the effect on the players, one game of association football is so like another that it is quite impossible for the trustees to say in relation to association football that some facilities do and some do not assist in ensuring that due attention is given to the physical education and development of the pupils. In relation to other games and sports, however, the trustees are in my judgment constrained to have regard to the phrase "the physical education and development" so that facilities for the playing of a sedentary game indoors would not be authorised. Thus the words "physicaleducation and development" cannot be rejected as mere surplus age or as showing a failure to appreciate that association football does not assist in ensuring that result, but must be construed as indicating something which a young man acquires when playing such games as association football. And whatever that something may mean it has in my judgment nothing whatever to do with education in the sense in which that word is used in relation to the law of charities.

6

Sub-clauses (ii) to (iv) inclusive of sub-paragraph (a) of clause 3 fortify me in my conclusion that the object of the trust is the "physical education and development of pupils of schools and universities" in the sense that the playing of association football has that result and so promotes that object. Each of the facilities described in those sub-paragraphs appears to be calculated to promote skill in the playing of association football and other games or sports, thus, so it is assumed, furthering the physical education and development of those who play them.

7

I would summarise my judgment on this part of the case by saying that as a matter of construction the expression "physical education and development" where it appears in paragraph (a) connotes something which a young man or boy must expect to obtain by playing the game of association football and that a trust to promote the physical education and development when the words are construed in that sense is not a trust for the promotion of "education" in any ordinary sense of that term, or in the sense that that word is used in the law of charity.

8

I must emphasise that Mr. Morritt did not contend that on the true construction of the deed the games and sports for which facilities are to be. provided are to be enjoyed as part of thecurriculum of a school or university. It follows that the reasoning by which Mr. Justice Eve concluded in re Mariette that the gift there, which was to an institution which was a school, and so itself clearly an educational charity, for a purpose of the school was itself a charitable gift, although the particular purpose for which the gift was made was the erection of fives courts. London Hospital Medical College v. Inland Revenue Commissioners, (1976) 1 Weekly Law Reports, 613, is similarly distinguishable, You do not however convert what would not otherwise qualify as a charitable gift into a charitable gift by limiting the object of the trust to those persons who are pupils of, or, if you will, are being educated at, a school or university.

9

I turn to consider the submission that the trust is charitable as falling within the fourth class of charitable purposes defined in Income Tax Special Purposes Commissioners v. Pemsel, (1891) Appeal Cases, 331, as a trust beneficial to the community within the spirit and intendment of the preamble to 43 Eliz. Cap 4.

10

As Lord Wilberforce remarked in the Privy Council in the recent case of Brisbane City Council v. Attorney-General, (1978) 3 Weekly Law Reports, 301 at page 305, the lack of precision of the latter words has to be made good by reference to decided authorities which, as has been said, are...

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