Commissioners of Inland Revenue v Baddeley and Others (Trustees of the Newtown Trust)

JurisdictionUK Non-devolved
JudgeViscount Simonds,Lord Porter,Lord Reid,Lord Tucker,Lord Somervell of Harrow
Judgment Date17 February 1955
Judgment citation (vLex)[1955] UKHL J0217-1
CourtHouse of Lords
Docket NumberParliamentary Archives, HL/PO/JU/4/3/1024
Date17 February 1955

[1955] UKHL J0217-1

HOUSE OF LORDS

Viscount Simonds

Lord Porter

Lord Reid

Lord Tucker

Lord Somervell of Harrow

Parliamentary Archives, HL/PO/JU/4/3/1024

Commissioners of Inland Revenue
and
Baddeley and Others (Trustees of the Newtown Trust)
Commissioners of Inland Revenue
and
baddeley and others (trustees of the newtown trust) (second appeal)
Viscount Simonds

MY LORDS,

1

These consolidated appeals raise once more a question, which has so often caused doubt and difficulty in the courts of this country, whether certain trusts are charitable in the sense which the law accords to that word. It need cause no surprise, though it may cause regret, that this should be so. For while no comprehensive definition of legal charity has been given either by the Legislature or in judicial utterance, there is no limit to the number and diversity of the ways in which man will seek to benefit his fellow-men. To determine whether the privileges, now considerable, which are accorded to charity in its legal sense, are to be granted or refused in a particular case, is often a matter of great nicety and I think that this House can perform no more useful function in this branch of the law than to discourage a further excess of refinement where already so many line distinctions have been made.

2

In the present appeals the controversy is about the amount of stamp duty payable in respect of two deeds of conveyance, by which trusts were declared of certain property thereby respectively conveyed. If the trusts so declared were charitable the duty is smaller than if they were not charitable. The sums actually at stake are trifling, but the issue is an important one. It was decided in favour of the Appellants, the Commissioners of Inland Revenue, by Mr. Justice Harman but against them by the Court of Appeal. Hence the present appeal.

3

I find it convenient, my Lords, to examine the two deeds separately and take first a deed of conveyance to the Respondents as trustees of certain land at Stratford in the county of Essex of an area of about 680 square yards with a Mission Church, lecture room and store erected on some part thereof. So far as relevant (omitting certain words which admittedly were inserted in error) the trusts of this property were as follows:

"The Trustees shall permit the said property to be appropriated and used by the Leaders for the time being of the Stratford Newtown Methodist Mission under the name of 'the Newtown Trust' (herein-after called 'the Foundation') for the promotion of the religious social and physical well being of persons resident in the County Boroughs of West Ham and Leyton in the County of Essex by the provision of facilities for religious services and instruction and for the social and physical training and recreation of such aforementioned persons who for the time being are in the opinion of such Leaders members or likely to become members of the Methodist Church and of insufficient means otherwise to enjoy the advantages provided by these presents … and by promoting and encouraging all forms of such activities as are calculated to contribute to the health and well-being of such persons Provided always that the Trustees shall not at any time hereafter and so long as the trusts hereby declared shall not have totally failed use or permit the said properly to be used either for physical training or physical recreation or any kind of game on Sundays Christmas Days or Good Fridays or for the sale or consumption of intoxicating drink."

4

This main trust is followed by certain ancillary provisions which cannot, I think, affect the question whether it is a charitable trust. It is at once apparent that the document is not skilfully drawn. It is presumably all the persons resident in the specified boroughs whose religious, social and physical well-being is to be promoted, but this is to be achieved by providing certain facilities for religious services and instruction and for the social and physical training and recreation of "such aforementioned persons", i.e., such residents, as are for the time being "in the opinion of such Leaders members or likely to become members of the Methodist Church and of insufficient means otherwise to enjoy the advantages provided by these presents". This awkward phraseology leaves me in doubt whether the beneficiaries under this trust are to be all the residents in a certain area or only such of the residents as satisfy two conditions, first that they are Methodists or in the opinion of the Leaders potential Methodists, and secondly that they are of limited means. It might even he that upon a true interpretation of the deed some benefits are open to all the residents, others to a more limited class. Fortunately I do not find it necessary to determine this question, for I think that, whatever view may he taken of it this case is governed by the recent decision of this House in ( Williams' Trustees v. C.I.R. [1947] A.C 447).

5

Before, however, I examine that case and certain other cases which must. I think, guide your Lordships' decision. I must first dispose of two contentions which were urged, the one by the Respondents and the other by the Attorney General, against the appeals.

6

By the Respondents it was contended that the trusts of the deed could be supported as valid charitable trusts on the ground that they came within the first head of Lord Macnaghten's classification in Inland Revenue Commissioners v. Pemsel [1891] A.C. 531. viz., that they were for the relief of poverty. This contention was, in my opinion, rightly rejected both by Mr. Justice Harman and the Court of Appeal. I do not question that there may be a good charity for the relief of persons who are not in grinding need or utter destitution: see In re de Carteret [1933] Ch. 103. But I agree with Mr. Justice Harman, and am content to adopt his words, that relief connotes need of some sort, either need for a home or for the means to provide for some necessity or quasi-necessity, and not merely an amusement however healthy.

7

The Attorney-General, appearing as amicus curiae, urged that the validity of the trust could be sustained on the ground that, regarded as a whole, it was an educational charity. This contention had not previously been put forward and your Lordships have not the advantage of knowing the views upon it of the learned Judge and the Court of Appeal. The short answer appears to me to be that, regarded as a whole, the sum of the activities permissible under the deed can only be regarded as educational in the sort of loose sense in which all experience may be said to be educative, and that, if such activities are examined one by one, it would be impossible to regard many of them as in even the loosest sense educational.

8

If then this trust is charitable, it can only be because it falls within the fourth class in Lord Macnaghten's classification; that is, it must be a trust of general public utility and must be within the spirit and intendment of the preamble to the Statute 43 Elizabeth cap. 4. And this is what the Court of Appeal has held it to be.

9

My Lords, with great respect to the singularly acute and refined argument of Lord Justice Jenkins, who delivered the leading judgment in the Court of Appeal. I must doubt whether anything is gained by discussing whether the trust should be regarded as prescribing three separate and distinct objects, namely (a) the promotion of religious well-being, (b) the promotion of social well-being, and (c) the promotion of physical well-being or as having as its goal a state of complete well-being with three several aspects, religious, social and physical. Let it be assumed that, in the words of the learned Lord Justice, the object of the trust is the religious, social and physical improvement of the persons resident in the two boroughs: and let it be further assumed that this is the end desired for each of such persons, making such reservation as may be necessary for the fact that facilities for social and physical training are to be reserved for a limited class of those persons. Yet in the end the question is for what purposes may the trust property be used without trespassing beyond the language of the deed? I find that it may be used for promoting and encouraging all forms of such activities, i.e. the provision of facilities for (inter alia) social and physical training and recreation, "as are calculated to contribute to the health and well-being of such persons". My Lords, I do not think it would be possible to use language more comprehensive and more vague. I must dissent from the suggestion that a narrow meaning must be ascribed to the word "social": on the contrary, I find in its use confirmation of the impression that the whole provision makes upon me. that its purpose is to establish what is well enough called a community centre in which social intercourse and discreet festivity may go hand in hand with religious observance and instruction. No one will gainsay that this is a worthy object of benevolence, but it is another question whether it is a legal charity, and it appears to me that authority which is binding on your Lordships puts it beyond doubt that it is not. Here we are not concerned to consider whether a particular use to which the trust property may be put is a charitable use: that is a question upon which different minds might well come to different conclusions. On the contrary, we must ask whether the whole range of prescribed facilities or activities (call them what you will) is such as to permit uses which are not charitable: if it is, it is not such a trust as the Court can execute, and it must fail.

10

My Lords, I repeat that in this admittedly difficult branch of the law nothing is to be gained by adding refinement to refinement, and I am satisfied that in the light of several decisions of this House, in which comparable general words have been held not...

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