“4. The Company’s objects shall be the business of providing:- 4.1 housing; 4.2 accommodation; 4.3 assistance to help house people; 4.4 associated facilities and amenities; and 4.5 any other object that can be carried out by a company registered as a social landlord with the Housing Corporation for the benefit of the community. The Company shall not trade for profit.”
“2(1) A body is eligible for registration as a social landlord if it is (a) a registered charity which is a housing association, (b) a society registered under theIndustrial and Provident Societies Act 1965 which satisfies the conditions in subsection (2), or (c) a company registered under theCompanies Act 1985 which satisfies those conditions. (2) The conditions are that the body is non-profit-making and is established for the purpose of, or has among its objects or powers, the provision, construction, improvement or management of— (a) houses to be kept available for letting, (b) houses for occupation by members of the body, where the rules of the body restrict membership to persons entitled or prospectively entitled (as tenants or otherwise) to occupy a house provided or managed by the body, or (c) hostels, and that any additional purposes or objects are among those specified in subsection (4). … (4) The permissible additional purposes or objects are— (a) providing land, amenities or services, or providing, constructing, repairing or improving buildings, for its residents, either exclusively or together with other persons; (b) acquiring, or repairing and improving, or creating by the conversion of houses or other property, houses to be disposed of on sale, on lease or on shared ownership terms; (c) constructing houses to be disposed of on shared ownership terms; (d) managing houses held on leases or other lettings (not being houses within subsection (2)(a) or (b)) or blocks of flats; (e) providing services of any description for owners or occupiers of houses in arranging or carrying out works of maintenance, repair or improvement, or encouraging or facilitating the carrying out of such works; (f) encouraging and giving advice on the forming of housing associations or providing services for, and giving advice on the running of, such associations and other voluntary organisations concerned with housing, or matters connected with housing.”
“24. … That is not to say, however, that such principal activity is the, or a, “main” object as that word has been used in some of the cases to distinguish between objects which can on the one hand be pursued independently of other objects or powers and, on the other hand, purposes which although sometimes described as objects, cannot be pursued independently but are essentially ancillary purposes more properly referred to as powers. 25. It may also be the case (we do not know) that all of HHL’s other activities have in fact been carried out in furtherance of that principal activity. But that is not the point. The point is that HHL could, if it chose to do so, pursue any of the other permissible objects or purposes without reference to its current activities. Thus, by reference to section 2(4)(b) it could acquire a house to be disposed of on sale, by reference to section 2(4)(d) it could manage houses or blocks of flats and by reference to section 2(4)(f), it could give advice about the forming of housing associations or the running of such associations. Of course, in carrying out those activities, HHL must be doing so “for the benefit of the community” within the meaning of Clause 4 of its Memorandum of Association and must not be trading for profit.”
“Whereas Lands, Tenements, Rents, Annuities, Profits, Hereditaments, Goods, Chattels, Money and Stocks of Money, have been heretofore given, limited, appointed and assigned, … some for Relief of aged impotent and poor People, some for Maintenance of sick and maimed Soldiers and Mariners, Schools of Learning, Free Schools, and Scholars in Universities, some for Repair of Bridges, Ports, Havens, Causeways, Churches, Sea-banks and Highways, some for Education and preferment of Orphans, some for or towards Relief, Stock or Maintenance of Houses of Correction, some for Marriages of poor Maids, some for Supportation, Aid and Help of young Tradesmen Handicraftsmen and Persons decayed, and others for relief or redemption of Prisoners or Captives, and for Aid or Ease of any poor Inhabitants concerning Payment of Fifteens, setting out of Soldiers and other Taxes; Which Lands, Tenements, Rents, Annuities, Profits, Hereditaments, Goods, Chattels, Money and Stocks of Money, nevertheless have not been employed according to the charitable Intent of the Givers and Founders thereof, by reason of Frauds Breaches of Trust and Negligence in those that should pay, deliver and employ the same ”
“Here [i.e. in Court] its signification [i.e. that of the word charity] is derived chiefly from the Statute of Elizabeth. Those purposes are considered charitable, which that Statute enumerates, or which by analogies are deemed within its spirit and intendment.”
“… where there is a gift to charity, in general, whether it is to be executed by individuals selected by the testator himself or the King as parens patriae is to execute it … it is the duty of such trustees, on the one hand, and of the Crown, upon the other, to apply the money to charity in the sense, which the determinations have affixed to that word in this court, viz. either such charitable purposes as are expressed in the Statute …, or to purposes having analogy to those. I believe the expression “charitable purposes,” as used in this court, has been applied to many acts described in that Statute, and analogous to those, not because they can with propriety be called charitable, but as that denomination is by the Statute given to all the purposes described.”
“There are four objects, within one of which all charity, to be administered in this Court, must fall: 1st, relief to the indigent; in various ways: money: provisions: education: medical assistance etc; 2ndly, the advancement of learning; 3rdly the advancement of religion; and 4thly, which is the most difficult, the advancement of objects of general public utility.”
“There are various instances of liberality, that cannot be described as charity: the establishment of a Cabinet of Natural History, Anatomical Exhibitions, Galleries of Pictures, to be open to the public: a legacy to the African Society, for acquiring information in the interior of Africa to contribute to raise the degraded state of society in that part of the world; all these are instances of liberality, but not of charity.”
“The object of that statute was merely to provide new machinery for the reformation of abuses in regard to charities. But by a singular construction it was held to authorize certain gifts to charity which otherwise would have been void. And it contained in the preamble a list of charities so varied and comprehensive that it became the practice of the Court to refer to it as a sort of index or chart. At the same time it has never been forgotten that the “objects there enumerated,” as Lord Chancellor Cranworth observes, “are not to be taken as the only objects of charity but are given as instances”.”
“I have dwelt for a moment on this point, because it seems to me that there is a disposition to treat the technical meaning of the term “charity” rather as the idiom of a particular Court than as the language of the law of England. And yet of all words in the English language bearing a popular as well as a legal signification I am not sure that there is one which more unmistakeably has a technical meaning in the strictest sense of the term, that is a meaning clear and distinct, peculiar to the law as understood and administered in this country, and not depending upon or coterminous with the popular or vulgar use of the word.”
“How far then, it may be asked, does the popular meaning of the word “charity” correspond with its legal meaning? “Charity” in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads. The trusts last referred to are not the less charitable in the eye of the law, because incidentally they benefit the rich as well as the poor, as indeed, every charity that deserves the name must do either directly or indirectly. It seems to me that a person of education, at any rate, if he were speaking as the Act is speaking with reference to endowed charities, would include in the category educational and religious charities, as well as charities for the relief of the poor. Roughly speaking, I think he would exclude the fourth division. Even there it is difficult to draw the line. A layman would probably be amused if he were told that a gift to the Chancellor of the Exchequer for the benefit of the nation was a charity. Many people, I think, would consider a gift for the support of a lifeboat a charitable gift, though its object is not the advancement of religion, or the advancement of education, or the relief of the poor. And even a layman might take the same favourable view of a gratuitous supply of pure water for the benefit of a crowded neighbourhood. But after all, this is rather an academical discussion. If a gentleman of education, without legal training, were asked what is the meaning of “a trust for charitable purposes,”
“My Lords, there are, I think, two propositions which must ever be borne in mind in any case in which the question is whether a trust is charitable. The first is that it is still the general law that a trust is not charitable and entitled to the privileges which charity confers, unless it is within the spirit and intendment of the preamble to the statute of Elizabeth (43 Eliz. c. 4) , which is expressly preserved by section 13(3) of the Mortmain and Charitable Uses Act, 1888. The second is that the classification of charity in its legal sense into four principal divisions by Lord Macnaghten in Income Tax Commissioners v. Pemsel must always be read subject to the qualification appearing in the judgment of Lindley L.J. in In re Macduff[1896] 2 Ch 451 , 466: “Now Sir Samuel Romilly did not mean, and I am certain Lord Macnaghten did not mean, to say that every object of public general utility must necessarily be a charity. Some may be, and some may not be.”
“Lord Macnaghten did not mean that all trusts for purposes beneficial to the community are charitable, but that there were certain beneficial trusts which fell within that category; and accordingly to argue that because a trust is for a purpose beneficial to the community it is therefore a charitable trust is to turn round his sentence and to give it a different meaning. So here it is not enough to say that the trust in question is for public purposes beneficial to the community or for the public welfare; you must also show it to be a charitable trust.”
“But the appellants must also show that the public benefit is of a kind within the spirit and intendment of the Statute of Elizabeth I. The preamble specifies a number of objects which were then recognised as charitable. But in more recent times a wide variety of other objects have come to be recognised as also being charitable. The courts appear to have proceeded first by seeking some analogy between an object mentioned in the preamble and the object with regard to which they had to reach a decision. And then they appear to have gone further and to have been satisfied if they could find an analogy between an object already held to be charitable and the new object claimed to be charitable. And this gradual extension has proceeded so far that there are few modern reported cases where a bequest or donation was made or an institution was being carried on for a clearly specified object which was for the benefit of the public at large and not of individuals, and yet the object was held not to be within the spirit and intendment of the Statute of Elizabeth I. Counsel in the present case were invited to search for any case having even the remotest resemblance to this case in which an object was held to be for the public benefit but yet not to be within that spirit and intendment. But no such case could be found.”
“Upon the first point it must be remembered that Lord Macnaghten’s classification was taken from Sir Samuel Romilly’s argument in Morice v. Bishop of Durham 162 years ago when the great majority of the inhabitants of the country were living in conditions which to-day would be regarded as of the utmost squalor. The concept of purposes beneficial to the community might then appear to have the qualities of a class and so perhaps, to a lesser extent, in 1891. This so-called fourth class is incapable of further definition and can today hardly be regarded as more than a portmanteau to receive those objects which enlightened opinion would regard as qualifying for consideration under the second heading.”
“My Lords, I conclude by saying that the authorities show that the “spirit and intendment” of the preamble to the Statute of Elizabeth have been stretched almost to breaking point. In the nineteenth and early twentieth centuries this was often due to a desire on the part of the courts to save the intentions of the settlor or testator from failure from some technical rule of law. Now that it is used so frequently to avoid the common man’s liability to rates or taxes, this generous trend of the law may one day require reconsideration.”
“On this subject, the law of England, though no doubt not very satisfactory and in need of rationalisation, is tolerably clear. The purposes in question, to be charitable, must be shown to be for the benefit of the public, or the community, in a sense or manner within the intendment of the preamble to the statute 43 Eliz. 1, c. 4. The latter requirement does not mean quite what it says; for it is now accepted that what must be regarded is not the wording of the preamble itself, but the effect of decisions given by the courts as to its scope, decisions which have endeavoured to keep the law as to charities moving according as new social needs arise or old ones become obsolete or satisfied. Lord Macnaghten’s grouping of the heads of recognised charity in Pemsel’s case is one that has proved to be of value and there are many problems which it solves. But three things may be said about it, which its author would surely not have denied: first that, since it is a classification of convenience, there may well be purposes which do not fit neatly into one or other of the headings; secondly, that the words used must not be given the force of a statute to be construed; and thirdly, that the law of charity is a moving subject which may well have evolved even since 1891.”
“First, it may be said that the same evolutionary process which has carried charity from the “repair of churches” to the maintenance of burial grounds (i) in a churchyard and (ii) in a cemetery extended from a churchyard should naturally carry it further so as to embrace the company’s objects. Secondly, and more generally, the company’s objects themselves may directly be seen to be within the preamble’s spirit. The group “repair of bridges, ports, havens, causeways, churches, sea banks and highways” has within it the common element of public utility and it is of interest to note that the original label of Lord Macnaghten’s fourth category “other purposes beneficial to the community” affixed by Sir Samuel Romilly in Morice v. Bishop of Durham was “... the advancement of objects of general public utility.”
“It seems to me that if the publication of reliable reports of decisions of the courts is for the benefit of the community and of general public utility in the charitable sense, it is an inevitable and indeed necessary step in the achievement of that benefit that the members of the legal profession are supplied with the tools of their trade. I do not see how the benefit to the public, assuming it to be a charitable object, could otherwise be achieved.”
“objects of general public utility”) the courts, in consistently saying that not all such are necessarily charitable in law, are in substance accepting that if a purpose is shown to be so beneficial or of such utility it is prima facie charitable in law, but have left open a line of retreat based on the equity of the Statute in case they are faced with a purpose (e.g. a political purpose) which could not have been within the contemplation of the Statute even if the then legislators had been endowed with the gift of foresight into the circumstances of later centuries. (5) In a case such as the present, in which in my view the object cannot be thought otherwise than beneficial to the community and of general public utility, I believe the proper question to ask is whether there are any grounds for holding it to be outside the equity of the Statute: and I think the answer to that is here in the negative. I have already touched upon its essential importance to our rule of law. If I look at the somewhat random examples in the preamble to the Statute I find in the repair of bridges, havens, causeways, sea banks and highways examples of matters which if not looked after by private enterprise must be a proper function and responsibility of government, which would afford strong ground for a statutory expression by Parliament of anxiety to prevent misappropriation of funds voluntarily dedicated to such matters. It cannot I think be doubted that if there were not a competent and reliable set of reports of judicial decisions, it would be a proper function and responsibility of government to secure their provision for the due administration of the law. It was argued that the specific topics in the preamble that I have mentioned are all concerned with concrete matters, and that so also is the judicially accepted opinion that the provision of a court house is a charitable purpose. But whether the search be for analogy or for the equity of the Statute this seems to me to be too narrow or refined an approach. I cannot accept that the provision, in order to facilitate the proper administration of the law, of the walls and other physical facilities of a court house is a charitable purpose, but that the dissemination by accurate and selective reporting of knowledge of a most important part of the law to be there administered is not.”
“Where the purpose of producing a book is to enable a specified subject, and a learned subject at that, to be studied, it is, in my judgment, published for the advancement of education, as this, of course, includes as regards the Statute of Elizabeth I the advancement of learning. That remains its purpose despite the fact that professional men - be they lawyers, doctors or chemists - use the knowledge acquired to earn their living. One must not confuse the results flowing from the achievement of a purpose with the purpose itself, any more than one should have regard to the motives of those who set that purpose in motion.”
“On the other hand, the wider test - advancement of purposes beneficial to the community or objects of general public utility - has an admirable breadth and flexibility which enables it to be reasonably applied from generation to generation to meet changing circumstances: it has thus such patent advantages that for my part I appreciate the wisdom of the legislature in refraining from providing a detailed definition of charitable purposes in the Act of 1960 and preferring to allow the existing law to be applied.”
“Adopting the test propounded by Russell L.J., I next turn to consider whether there is any reason for excluding these benefits from the range of those that are capable of being classified as charitable, and can find no such reason.”
“In a number of cases learned societies have been held to be charitable. Sometimes the case has been classified under Lord Macnaghten’s fourth head, sometimes under the second. It does not really matter under which head such a case is placed, but for my own part I prefer to treat the present case as falling within the class of purposes for the advancement of education rather than within the final class of other purposes for the benefit of the community. For the present purpose the second head should be regarded as extending to the improvement of a useful branch of human knowledge and its public dissemination.”
“The council was established for the purpose of recording in a reliably accurate manner the development and application of judge-made law and of disseminating the knowledge of that law, its development and judicial application, in a way which is essential to the study of the law. The primary object of the council is, I think, confined to this purpose exclusively and is charitable. … The fact that the council’s publications can be regarded as a necessary part of a practising lawyer’s equipment does not prevent the council from being established exclusively for charitable purposes. The practising lawyer and the judge must both be lifelong students in that field of scholarship for the study of which The Law Reports provide essential material and a necessary service. The benefit which the council confers upon members of the legal profession in making accurate reports available is that it facilitates the study and ascertainment of the law. It also helps the lawyer to earn his livelihood, but that is incidental to or consequential on the primary scholastic function of advancing and disseminating knowledge of the law, and does not detract from the exclusively charitable character of the council’s objects.”
“Russell L.J. in the judgment which he has just delivered, has preferred to base himself upon a wider ground, as I understand it, that the publication of accurate reports of judicial decisions is beneficial to the community not merely by assisting the administration and development of the law in the courts but by making the law known, or at least accessible, to all members of the community, including professional lawyers whose advice on legal matters other members of the community are likely to seek, thus making a sound knowledge and understanding of the law more available to all. I agree that on this basis also the council is to be regarded as a body established for charitable purposes and, indeed, for exclusively charitable purposes as falling under Lord Macnaghten’s fourth head. Such an activity is clearly properly described as of general public utility and as beneficial to the community. In the absence of any ground for holding that such an activity is not within the spirit of the preamble to the Statute of Elizabeth I, and I think that there is no such ground, it should be held to be charitable.”
“So far as theNurses Act 1957 guides us, the council was created to provide a register and roll of nurses and impose rules to secure that they were properly qualified for admission. The Act expressly states in section 3(2)(b) as one of its aims, to secure a uniform standard of qualification in all parts of the United Kingdom. I have no doubt the Act was of public benefit, as one must assume most legislation to be. But the question is: Was what the council was created to do and does charitable? I cannot hold that it was.”
“The third objection was that the schemes were for the benefit of private individuals and not for a charitable class. I cannot accept that. The schemes are for the benefit of a charitable class, that is to say the aged having certain needs requiring relief therefrom. The fact that, once the association and the trust have selected individuals to benefit from the housing, those individuals are identified private individuals does not seem to me to make the purpose in providing the housing a non-charitable one any more than a trust for the relief of poverty ceases to be a charitable purpose when individual poor recipients of bounty are selected.”
“Given the very wide range of potential charitable purposes, it is obvious that some charities have purposes which have the primary effect of conferring direct benefits on certain individuals, while other charities have purposes which confer benefits on the public, whether individually or collectively, much more indirectly. An educational charity such as a school is a clear example of the first class of charity, while a charity for the advancement of animal welfare is a clear example of the second class. A trust for maintaining a bridge is somewhere in between: it is of direct benefit to those who use it but of indirect benefit to the relevant community. Mr Pearce has put forward a terminology which we have found helpful in illuminating the subject and we adopt it in this judgment. It distinguishes the following three types of benefit. (a) Direct benefits: benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons as recipients of the main service which the charity provides. (b) Indirect benefits: benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons otherwise than as recipients of the main service which the charity provides. (c) Wider benefits: benefits other than direct and indirect benefits which are received by the community at large from the activities of the charity.”
“Somewhat different considerations arise if the form, which the purporting charity takes, is something of general utility which is, nevertheless, made available not to the whole public but only to a selected body of the public — an important class of the public it may be. For example, a bridge which is available for all the public may undoubtedly be a charity and it is indifferent how many people use it. But confine its use to a selected number of persons, however numerous and important: it is then clearly not a charity. It is not of general public utility, for it does not serve the public purpose which its nature qualifies it to serve.”
“3(1) The company is established to promote and provide vocational education and training and re-training of the public and to promote industry, commerce and enterprise of all forms for the benefit of the public in and around Oldham and in the furtherance of these objects and for these purposes (but without prejudice to the generality of the foregoing) to: (a) Examine the local labour market and assess key skill needs, prospects for increasing local employment and the adequacy of existing training opportunities; (b) Devise, implement and monitor local training and work experience programmes for young people, unemployed people and adults requiring new knowledge skills and technical training; (c) Develop, secure and provide training and other support services and advice to and for new and small local businesses.”
“Under the unamended objects clause, the second main object, namely promoting trade, commerce and enterprise, and the ancillary object, of providing support services and advice to and for new businesses, on any fair reading must extend to enabling Oldham TEC to promote the interests of individuals engaged in trade, commerce or enterprise and provide benefits and services to them. Paragraph 4.2 of the statement of agreed facts shows that Oldham TEC in the form of the provision of enterprise services does exactly this. Such efforts on the part of Oldham TEC may be intended to make the recipients more profitable and thereby, or otherwise, to improve employment prospects in Oldham. But the existence of these objects, in so far as they confer freedom to provide such private benefits, regardless of the motive or the likely beneficial consequences for employment must disqualify Oldham TEC from having charitable status. The benefits to the community conferred by such activities are too remote.”