Public Trusts
| Date | 01 July 2006 |
| DOI | http://doi.org/10.1111/j.1468-2230.2006.00598.x |
| Published date | 01 July 2006 |
Public Trusts
John Barratt
n
Public,as di stinct fromcharitable, trusts were authoritativelyrecognised in 1827,when the House
of Lords determined that the permanent basis of equitable jurisdiction protected‘public money’
from unlawful application, on the same basis as charitable funds were protected. These trusts
made the relevant publicfu nctionaries subjectto equitable remedies, but the remedies were dis-
placed from equitablepractice by jurisdictional fusion and by administrativeaudit surcharges. In
the twentieth century they survived unrecognised in the ambiguously phrased ‘local authority
¢duciary duty to ratepayers’. Recently, public trusts have again been implicitly acknowledged,
and the distinctive remedy of personal liability to make good loss arising from misapplication
has been applied. Howeverthe right to litigate is con¢ned to current fund-holders in ful¢lment
of their protective trust duty and to the Attorney General in the general public interest in coun-
tering unlawful appropriations of public money.
INTRODUCTION
The article follows the historical development of public trusts from the pressures
which caused the House of Lords to decide in 1827 ‘that persons in the receipt of
public money should know, that they are liable to account, in a Court of Equity,
as well for the misapplication of,as for withholding, the funds.’
1
The argument is
that, without exception, a trust liability attaches to the empowerment terms of
anyone controllingany public money, thus involving(inter alia) personal liability
to account and to make good any loss arising from misapplication. Given the
absence of clear modern precedents, this proposition may be surprising. As it
emerged from research into the interaction of administrative and judicial govern-
ment, and especially into the origin of the frequently cited, but rarely de¢ned,
‘local authority ¢duciary duty to ratepayers’, it certainly surprised the writer. It is
suggested that the conceptual in£uence of public trusts on public law has been
considerable, and that they still have a practical potential.
PUBLIC TRUSTS IN THE NINETEENTH CENTURY
We ¢rst brie£y explore the background to the authoritative recognitionof public
trusts, underthree heads ^ limitationsof the common law, parliamentary concern
to avoid unnecessary taxation, and Chancery possibilities.We then follow their
recognition and examine their immediate in£uence on public law until legal
n
The writer is grateful to Dr Matthew Conaglen of Trinity Hall, Cambridge, and Prof Michael
Taggart of AucklandUniversity,New Zealand, for helpful advice.
1 n 42 below.
rThe Modern LawReview Limited 2006
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2006) 69(4) MLR 514^542
practice changed under the in£uence of statutory audit surcharges and jurisdic-
tional fusion.
Limitations of the common law
Until the late nineteenth century, signi¢cant local government was provided by
the landed gentry as justices of the peace and special statutory commissioners.
Local government was also provided by informal parochial vestry meetings
which were often secretive, self-perpetuating bodies. Like the boroughs, idiosyn-
cratically empowered by royal charters to the advantage of local commercial
interests, the vestries had the full powers of a legal person. The boroughs were
targetedby the national political parties, anxious tosecure election of their parlia-
mentary candidates.
2
The attempts by the later Stuarts to control the boroughs
gave them, when the Stuarts were overthrown in 1688, substantial practical inde-
pendence from any central authority, including the judges, for almost 150 years.
3
Common law litigation to control borough corporations was almost e ntirelyco n-
¢ned to property rights, the lawfulnes s of bylaws and election s.
Litigation to control local authorities before 1835 was limited. The secretive
decision-making inhibited action by prerogative writ ^ such decisions could not
be anticipated by outsiders who might otherwise have sought prohibition, and
certiorari would be risky if the reasoning which led to the impugned decision
was not known. Public duties enforceable by mandamus were not numerous,
because most statutory empowerment, whether for boroughs or special commis-
sioners,was usually self-promotedi n barely scrutinisedprivate legislation.
4
In any
event litigation had, from the earliest governmental statutes,
5
been discouraged
by a Parliament strongly representative of the local landed gentry decision-
makers. In 1830^32, 500 members of the unreformed Parliament were from the
‘landed interest’.
6
From the end of the seventeenth century, ouster of judicial jur-
isdiction over administrators became even more frequent. Mischievous actions
were deterred: unsuccessful plainti¡s had to pay double or even treble costs,
7
and
even successful plainti¡s could be deprived of costs if the trial Judge considered
2F.Cli¡ord,A Historyof Private BillLegislationVol II (London: Butterworths,1887) 225.
3 S. and B.Webb, StatutoryAuthorities(London: Longmans, Green and Co,1922) 351.
4 F. Spencer, MunicipalOrigins: PrivateBill Procedure1740^1835 (London: Constable & Co,1911)v, 7,
52^62,132.
5 eg Statute of Sewers 1531^32 (23 H VIII c 5), ss11,12; Sewers Act1570 (13 Eli zc 9), s 5. [Regnal
years are given throughoutuntil statute books are adequately indexed.]
6 W.Corn ish and G.Clark, Law and Society inEngland 1750^1950 (London: Sweet & Maxwell,1989)
14.
7 eg Gaols Act 1700 (11& 12 W III c19), s 6;Bridges Act 1701 (1A st 1 c18),s 7; Transport Act1728
(1G II st 2 c 19), s 3; County Rates Act1739(12 G II c 29),s 24; HighwayAct1748(21 G II c 28), s 5;
HighwayAct1773 (13 G III c 78), s 82; County Gaols Act 1784 (24 G III sess 2 c 54), s 24; County
Rates Act1815 (55G III c 51), s 23; PublicWorksLoans Act 1817 (57 G III c 34),s 62; Menai Bridge
Commissioners Act 1821 (1 & 2 G IV c 35), s 25;Turnpike Roads Act 1822 (3 G IVc 126), s 147;
John Barratt
515
rThe Modern LawReview Limited 2006
(2006) 69(4)MLR 514^542
To continue reading
Request your trial