Question 1 Wills
A settlor transfers £500,000 to trustees, directing them to apply the income “for the education of the children of employees and former employees of Alpha Manufacturing Ltd and its subsidiary companies.” Alpha Manufacturing Ltd employs approximately 110,000 people across its group.Which of the following best explains whether this is a valid charitable trust?
A. The trust is charitable because 110,000 employees is a sufficiently large number of people to satisfy the public benefit requirement.
B. The trust is charitable because the advancement of education is automatically presumed to be for the public benefit, regardless of how the class of beneficiaries is defined.
C. The trust is not charitable because the beneficiaries are defined by reference to their parents’ employment by a particular employer, meaning they are linked by a personal nexus to a common employer rather than constituting a section of the public.
D. The trust is not charitable because trusts for the education of employees’ children are always classified as private trusts for individuals, irrespective of the size of the class or how it is defined.
E. The trust is charitable because the class is defined objectively (by reference to a verifiable fact — parentage and employment) rather than subjectively, which is the only test for public benefit.
Correct answer: C
Explanation: This scenario mirrors Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297. The House of Lords held that a trust for the education of children of employees of a company (numbering over 110,000) was not charitable, despite the very large class size. Where beneficiaries are defined by reference to a personal relationship to a single individual or corporate body (a “personal nexus”), they do not form a “section of the public,” however numerous.
Why the others are wrong:- A — Numbers don’t cure the defect; the personal nexus, not class size, is decisive.- B — There’s no automatic presumption of public benefit for educational trusts; it must be independently satisfied.- D — Overstates the rule; the defect is the personal nexus in defining the class, not the purpose itself. E — The objective/subjective distinction is relevant to poverty trusts as a possible exception, not the general public benefit test.
Question 2
A testator leaves his residuary estate on trust “to pay pensions to poor employees and former employees of Beta Textiles Ltd,” a company he wholly owned. Beta Textiles has around 800 employees. It is argued the gift is a private trust and fails because the class is defined by reference to a single employer. Which of the following best states the position?
A. The gift fails, because any class defined by reference to a single employer lacks the necessary public element, regardless of the trust’s purpose.
B. The gift is charitable, because the personal nexus rule does not apply with the same rigour to trusts for the relief of poverty, which form a long-recognised exception.
C. The gift fails, because 800 employees is too small a class to be a section of the public.
D. The gift is charitable only if the pensions are means-tested strictly against the statutory poverty line, since “poor” must be given a technical, narrow meaning.
Correct answer: B
Explanation: This reflects Dingle v Turner [1972] AC 601. The House of Lords held that a trust for the relief of poverty among “poor employees” of a company was charitable, even though the beneficiaries were linked by a personal nexus to a single employer. The personal nexus test does not apply with the same rigour to poverty relief trusts, given the long-standing historical treatment of “poor relations” and “poor employees” trusts as charitable.
Why the others are wrong:- A — This is the argument the House of Lords rejected; the personal nexus rule is confined to non-poverty purposes.- C — Class size isn’t the issue for poverty trusts; even small or family-based classes have been upheld.- D — “Poor” in charity law is a flexible, relative concept, not a strict statutory means test.
Question 3
A trustee holds a lease of a market stall on trust for an infant beneficiary. Shortly before expiry, the trustee approaches the landlord to renew the lease for the trust. The landlord refuses to renew to a minor/the trust, saying he will only renew to the trustee personally, as there is no covenant to renew and he doubts an infant’s covenants are enforceable. The trustee, acting honestly and after the landlord’s outright refusal to deal with the trust, takes the renewed lease in his own name.What is the most likely outcome?
A. The trustee may keep the renewed lease for himself, because he acted in good faith and the landlord had genuinely refused to renew to the trust.
B. The trustee holds the renewed lease on constructive trust for the beneficiary, because a trustee in a fiduciary position cannot retain a personal benefit obtained by reason of that position, regardless of good faith or the landlord’s refusal.
C. The trustee must account only for any profit made on sub-letting the stall, but may otherwise keep the lease itself.
D. The renewal is void, since a trustee has no capacity to take a lease in a personal capacity while acting as trustee of the original lease.
Correct answer: B
Explanation: This is the fact pattern of Keech v Sandford (1726) Sel Cas Ch 61, the foundational authority for the strict “no-conflict”/”no-profit” fiduciary rule. Despite the trustee’s honesty and the landlord’s genuine refusal to renew to the trust, the Court of Chancery held he must hold the renewed lease on constructive trust for the infant beneficiary. The rule is prophylactic: it removes any temptation for a fiduciary to use their position for personal advantage, so motive and practical justification are irrelevant once the opportunity arose from the fiduciary role.
Why the others are wrong:- A — Good faith and the landlord’s refusal are exactly the facts the court held to be irrelevant.- C — The remedy isn’t limited to disgorging incidental profits; the whole renewed lease is held on trust.- D — The trustee had capacity to take the lease; the issue is what he must do with it once obtained.
Question 4
Trustees hold property to provide recreational and social facilities for “persons resident in the Borough of Denton who are, or are likely to become, members of the Zion Baptist Chapel.” It is disputed whether this is charitable, on the basis that the class is too narrow.What is the best analysis?
A. The trust is charitable because a geographical restriction (residents of a borough) is always sufficient to satisfy the public benefit requirement under the fourth head of charity.
B. The trust is charitable because recreational trusts are automatically charitable wherever any section of the public, however defined, may benefit.
C. The trust is not charitable because, in addition to the geographic restriction, the further restriction to (prospective) members of a particular chapel creates a “class within a class,” which fails the public benefit test.
D. The trust is not charitable because trusts to provide recreational facilities can never fall within any of the recognised heads of charity.
Correct answer: C
Explanation: This mirrors IRC v Baddeley [1955] AC 572, where a trust to provide facilities for Methodists (and prospective Methodists) in West Ham and Leyton was held not charitable. The geographic restriction was accepted as reasonable, but the further restriction to members/prospective members of a particular church was held unreasonable, failing the public benefit test — a “class within a class.”
Why the others are wrong:- A — A geographic restriction alone can be fine, but here there was an additional restriction layered on top of it.- B — Recreational purposes must still meet the public benefit test; there’s no automatic charitable status.- D — Recreational trusts can be charitable in the right circumstances, so this overstates the rule.
Question 5
A donor leaves £50,000 on trust for the purposes of an enclosed order of contemplative nuns, who live entirely within their convent, take vows of silence and seclusion, and do not engage in teaching, nursing, or any public-facing work. It is argued the gift is charitable as an advancement of religion, because the nuns’ intercessory prayers benefit the world and their example promotes religious devotion generally.
What is the most likely outcome?
A. The gift is charitable, because any trust for the advancement of religion is presumed to be for the public benefit and the court cannot go behind a genuinely held religious belief.
B. The gift is not charitable, because trusts for the advancement of religion can never extend to enclosed or contemplative religious communities.
C. The gift is not charitable, because the alleged benefits (intercessory prayer, spiritual example) are not susceptible of proof in a manner the court can recognise, and the nuns’ way of life involves no outward or provable interaction with the public.
D. The gift is charitable, because the convent is in principle open to any suitable person who wishes to join, so there is no restriction on the section of the public who may benefit.
Correct answer: C
Explanation: This is Gilmour v Coats [1949] AC 426. The House of Lords held that trusts for the advancement of religion still require a provable public benefit. Arguments that intercessory prayer and the edification of others constituted public benefit were dismissed as too intangible and indirect to meet the legal threshold, given the community was cloistered with no outward-facing activity.
Why the others are wrong:- A — There’s no automatic presumption trumping the need for proof; courts won’t judge religious doctrine, but they can assess whether public benefit is demonstrable.- B — Overstated; the issue is provable benefit, not enclosure as such.- D — Theoretical openness of membership doesn’t answer whether the purpose itself confers a public benefit — a distinct requirement.
Question 6
Arthur is diagnosed with a terminal illness and is told by his doctor that he has only a few weeks to live. Concerned about what will happen to his property, Arthur calls his niece, Emily, to his bedside. He hands her the keys to a locked cabinet containing the title deeds to his holiday cottage and says, “Keep these safe. If I don’t survive this illness, the cottage is yours. If I recover, you must give the keys back to me.” Arthur dies three weeks later without having made a Will dealing with the cottage.Arthur’s executor argues that the cottage should form part of the residuary estate and pass under the intestacy rules, since there was no valid Will or written transfer of the property.
Question: Which of the following best describes the likely outcome?
A. The gift fails because DMC cannot apply to real property (land), so the cottage passes under the intestacy rules.
B. The gift fails because Arthur did not deliver the actual title deeds themselves, only the keys to the cabinet where they were stored.
C. The gift is valid as a donatio mortis causa, as Arthur made the gift in contemplation of death, conditional on death, and delivered dominion over the property to Emily.
D. The gift fails because a DMC requires the donor to be facing an imminent risk of death from a specific peril, such as an accident, not a terminal illness with a longer prognosis.
E. The gift fails because oral statements can never satisfy the requirements of a DMC; some form of written instrument is always required.
Correct answer: C
Explanation:
A donatio mortis causa is a hybrid gift — neither a lifetime gift nor a testamentary one — but capable of transferring property outside the Will/intestacy framework if three requirements are met (as established in cases such as Cain v Moon and refined in Sen v Headley):
1. Contemplation of death— the gift must be made in contemplation of death, though not necessarily imminent or expected death; a terminal illness diagnosis satisfies this even without a specific fatal event in view.
2. Conditional on death — the gift must be intended to take effect only if the donor dies, and be revocable if the donor recovers. Arthur’s words (“if I recover, give the keys back”) clearly show this conditionality.
3. Delivery of dominion — the donor must part with dominion (control) over the subject matter of the gift, or the means of accessing it. Sen v Headley confirmed that DMC can extend to land, and that handing over keys to a box containing title deeds (with no other means of access) is sufficient delivery of dominion, even though the deeds themselves were not physically handed over.
So:
A is wrong — Sen v Headley established DMC can apply to real property.-
B is wrong — delivery of the keys to the only means of access is treated as delivery of dominion.
D is wrong — a terminal illness is sufficient; the “peril” need not be a specific imminent event like an accident (see also Wilkes v Allington, where DMC was upheld despite death arising from an unrelated illness to the one contemplated).-
E is wrong — DMC operates precisely because it’s an exception to the formalities otherwise required for testamentary gifts (WA 1837, s.9) or lifetime transfers of land; no written instrument is required.
