Re Lipinski [1976] Ch 235

Key point

  • A gift to an unincorporated association with a purpose prescribed is valid if the members are the beneficiaries of the purpose, particularly if they are vested with capital.

Facts

  • The testator had left part of his estate on trust for the Hull Judeans Association (HJA) to build and improve buildings for the benefit of the association.

Issue

  • Was the gift to the HJA, an unincorporated association, a valid gift?

Held (High Court)

Oliver J

  • A gift in the 2nd category in Neville does not fail for perpetuity if the unincorporated association can spend both the capital and income to achieve the specified purpose.
  • Under the 3rd category in Neville, there is a distinction between the case where a purpose is intended for the benefit of beneficiaries, particularly where the beneficiaries have the power to make the capital their own and the case where no beneficiary at all is intended.
  • When the gift specifies a purpose for which the members of the unincorporated are beneficiaries, it should be valid – once the trust is carried out the members as both the trustees and beneficiaries can vest the property in themselves.
  • If this case comes under the 3rd category in Neville, it will not fail on the ground that it is a purpose trust as it is simply a trust for the benefit of the members pursuant to Re Bowes [1896] 1 Ch 507.

Commentary

  • By suggesting that beneficiaries can simply override the purpose of the trust and vest it in themselves, Oliver J is implying that the Denley trust in Re Denley [1969] 1 Ch 373 is really just a as a trust for persons as in Re Bowes [1896] 1 Ch 507.
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Unincorporated association cases
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