Hanchett-Stamford v Attorney General & Ors [2008] EWHC 330 (Ch)

[2008] EWHC 330 (Ch)

Case No 7BS30827

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue BRISTOL DISTRICT REGISTRY

The Guildhall Court,

Small Street,

Venue Bristol

Date 27 February 2008

Before

THE HONOURABLE MR JUSTICE LEWISON

Between

KATHLEEN DESMONDE HANCHETT-STAMFORDClaimant

(1) H.M. ATTORNEY-GENERALDefendants

(2) DR. WILLIAM JOHNSTON JORDANIntervener

BARCLAYS BANK TRUST COMPANY LIMITEDIntervener

Mrs. Alison Maclennan (instructed by Shirley May Yard) for Claimant.

Mr. Hugh Sims (instructed by Treasury Solicitors) for First Defendant.

for The Second Defendant did not attend and was not represented.

Mr. Gwilym Harbottle (instructed by Dickinson Dees LLP) for Intervener.

Hearing Hearing dates: 20th February 2008

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

.............................

THE HONOURABLE MR JUSTICE LEWISON

Mr. Justice Lewison:

[1]The Performing and Captive Animals Defence League (“the League”) was founded by Mrs Albert Bradshaw and Mr Ernest Bell in 1914. Between 1914 and 1934 it had an adopted constitution; but that has been lost. During that period its affairs were managed by an executive committee. However, at the annual general meeting in 1934 the members decided to dispense with the executive committee and to appoint a Director of the League with power to appoint an advisory committee. At that time the Director was Captain Edmund T MacMichael. It is by no means clear that the AGM also decided to dispense with the constitution.

[2]The only extant evidence of the objects of the League is a statement in a booklet produced in 1962. That booklet states the aims and objects of the League in the following terms:

“The primary objects of the League are the realisation of its vital policies, and Membership of the League postulates a faithful adherence to them, unless at any time any Member, or would-be Member, wishes to strengthen them (if possible) in which case notice must be given in writing to the Secretary. 1. PERFORMING ANIMALS. – THE PERFORMING ANIMALS (PREVENTION OF CRUELTY) BILL. “To make illegal performances by animals involving cruelty in the “training” etc., with just compensation to the trade”. (The League’s offer of £1,000 to any person who, under its constant supervision, succeeds in training any untrained animal to perform any circus trick on demand, and without cruelty, still remains unclaimed. The League maintains that the trade has, by failing to answer the above nearly thirty-year-old challenge, PUBLICLY ACKNOWLEDGED the impossibility of training any kind of performing animal without cruelty contrary to law. THIS MEANS THAT EVERY PERFORMING ANIMAL SHOW IS IN FACT ILLEGAL.) 2. ANIMAL FILMS. – THE PROTECTION OF ANIMALS (CINEMATOGRAPH BILL), which contains the only feasible and indeed possible policy to make unprofitable the infliction of cruelty in the production of animal films shown on the British screen, whether of foreign manufacture or not.”

[3]The booklet goes on to say:

“IMPORTANT. –Both the above Bills do in actual fact seek to ENFORCE EXISTING LAW, namely the protection of Animals Act, 1911, under which it is already illegal to cruelly Beat, Ill-treat, Torture, Infuriate, Terrify or Cause Unnecessary Suffering to any animal – all of which illegalities are part and parcel of performing animals “training” and the production of Cruel Films; and until these Bills are placed on the Statute Book, the perpetrators of these criminal offences will continue to violate existing law IN THE SECRECY OF THE “TRAINING”

DEN AND THE FILM STUDIO, and without any risk of prosecution by the authorities concerned.”

[4]Among the activities to which the booklet refers are: the prevention of the establishment of municipal zoos; and the prevention of the introduction into the United Kingdom of bullfights and rodeos. It also urges members to protest about television programmes depicting cruelty to animals.

[5]Although it appears that there has never been any attempt to register the League as a charity, the question whether it had charitable status was considered by the Inland Revenue in 1949. In the light of the then recent decision of the House of Lords in National Anti-Vivisection Society v IRC

[1948] AC 31

they decided that the principal objects of the League were to change the law and hence that it did not have charitable status. The League did not appeal against that decision.

[6]According to the 1962 booklet the League had two categories of member: life members and annual members. In 1962 there were approximately 250 members. Any excess of income over expenditure was invested. Gifts and legacies were placed directly into the investment fund. Mr and Mrs Hanchett-Stamford joined the League in the mid-1960s as life members. During his lifetime Mr Hanchett-Stamford was active in persuading local authorities not to let land to travelling circuses. He worked with Dr Bill Jordan, the chief vet of the RSPCA, in educating people about how to care for animals. However, towards the end of the 1970s the League became much less active. The number of travelling circuses declined; and the League did less campaigning about zoos. Although there appears to have been a Treasurer of the League, Mr Hanchett-Stamford had effective control over the League’s assets, which continued to accumulate. In the early 1990s it was decided to buy a property. This turned out to be Sid Abbey, West Sid Road, Sidmouth, Devon. Title to the property is registered in the names of Mr Hanchett-Stanford and a Mr Hervey “as Trustees for the Performing and Captive Animals Defence League”. Mr Hervey was also a member of the League. Both of the registered proprietors are dead. The property is the principal wing of a nineteenth century Gothic house. It contains six bedrooms, three reception rooms and the usual offices, together with extensive grounds and a swimming pool. A recent valuation values the property at £675,000. Until her recent removal to a nursing home in Sidmouth, where the court sat to take her evidence, Mrs Hanchett-Stamford lived there. Mrs Hanchett-Stamford says that the property was bought for use as offices and as an investment. In addition to the property at Sid Abbey, the League also owns a portfolio of stocks and shares. This was most recently valued at £1.77 million. When the building was bought there was a small office staff, who dealt with incoming letters and inquiries, often from the press. However, that activity dwindled over the years. The League stopped maintaining membership records in the early 1990s. As he got older Mr Hanchett-Stamford’s activities also dwindled. However, he continued to deal with correspondence and inquiries until his death. Mr Redwood, an accountant who prepared the League’s tax returns from 2003 onwards, discussed the position of the League with Mr Hanchett-Stamford. He advised Mr Hanchett-Stamford that efforts should be made to ensure that the League moved towards winding up. They were no more than discussions, and Mr Redwood made it clear that specialist advice would need to be taken. Mr and Mrs Hanchett-Stamford discussed the matter, and concluded that it would be best if the League’s assets were transferred to an active charity promoting animal welfare. They went through many charities, and eventually agreed that the Born Free Foundation would be a suitable recipient. On Mr Hanchett-Stamford’s instructions Mr Redwood prepared tax returns for the League, which continued to submit them.

[7]Mr Hanchett-Stanford died in January 2006; and Mrs Hanchett-Stanford now wishes to give all the assets of the League to the Born Free Foundation. Whether or not she is legally obliged to do so, she feels morally obliged to do so and to respect her late husband’s wishes. She has no desire to profit personally from the League’s assets. She has issued proceedings seeking the following relief: i) An order that the work and objects of the Performing and Captive Animals Defence League are charitable and ii) An order appointing herself and her solicitor Anne Bevan as trustees of the funds of the League with discretion to select a charity with similar objects to the League to receive those funds.

[8]The Attorney-General was the only named Defendant to the proceedings. However, on 5th February 2008 Dr William Jordan applied to become a party to the proceedings and was joined by Court order of HHJ McCahill on the 15th February 2008 as an additional Defendant. Dr Jordan claimed to be a life member of the League, although he said that he had not had any communication from the League since the 1970s. He came forward in response to a series of advertisements seeking to identify members of the League. Ms Bevan placed advertisements in The London Evening Standard, the Independent, the Guardian, the Manchester Evening News, the Glasgow Herald, the Scotsman, the Western Mail and the Yorkshire Post. In addition she advertised in the London Gazette. All these advertisements were placed in January 2007. She also made other inquiries of firms of solicitors who had been involved in the conveyancing of Sid Abbey and who acted in the administration of Mr Hervey’s estate. Dr Jordan was the only person who came forward; although another organisation, called the Captive Animals Protection Trust, claims that several of its members are or were members or supporters of the League. According to Mrs Hanchett-Stamford, whose evidence I accept, the Captive Animals Protection Trust was a breakaway organisation set up many years ago by former members of the League who fell out with Captain MacMichael. Those that it names (in addition to Dr Jordan) are the Rev Prof Andrew Linzey, Ms Sheila Clayton and Mr Terrence Stringer. They are said to be current or former members of the League. However, none of them (including Dr Jordan) has produced any evidence of membership either past or present; and none of them has made a claim. Mrs Hanchett-Stamford said in evidence that although it was possible that Dr Jordan had become a member of the League, there was no need for him to have joined, because he helped in his capacity as chief vet for the RSPCA. In a letter dated 19 February 2008 and sent to me at the beginning of the trial, Dr Jordan’s solicitor expressly disclaimed any entitlement on Dr Jordan’s part to derive any profit from the League.

[9]I find that before his death in 2006 Mr and Mrs Hanchett-Stamford were the only two living members of the League. Mrs Hanchett-Stamford is the sole surviving member of the League.

[10]It also emerged as a result of the advertisements that a Mr Lancaster, who died in 1955, had left a residuary legacy to the League in remainder to two life interests. The life interests fell in during 2006. Barclays Bank, as trustee of the will, searched for the League. Their searches led them to the Captive Animals Protection Trust, to whom they paid the legacy. The Bank accepts that this was a mistake, but the Captive Animals Protection Trust has refused to return the money. The Bank were joined as a party to these proceedings in order to argue that in the event that the League was or is a charity and a cy-près scheme is ordered, that part of the League’s assets which consists of the claim under Mr Lancaster’s will should be vested in the Captive Animals Protection Trust.

The issues

[11]The issues for decision are as follows: i) Is the League a charity? ii) If it is not, to whom do its assets belong? iii) If it is, what should happen to its assets? iv) Is Mrs Hanchett-Stanford fit to be a trustee of the League?

Is the League a charity?

[12]The League has never been incorporated. It is therefore an unincorporated association. Accordingly, unless its assets are held on charitable trusts, they belong in some sense to its members for the time being. I will need to examine this generalisation more closely in due course. If, on the other hand, its assets are held on charitable trusts then none of the members of the League can have a claim to beneficial ownership of them. Nevertheless, it is convenient, for the purposes of discussion to refer to the assets as “the assets of the League”. It seems to me, therefore, that the first issue I must address is: are the assets of the League held on charitable trusts?The general rule is that in order to achieve charitable status a trust, however philanthropic, must satisfy each of the following three requirements.(1) It must be of a charitable nature, within the spirit and intendment of the preamble to the Charitable Uses Act 1601 as interpreted by the courts and extended by statute.

(2) It must promote a public benefit of a nature recognised by the courts as a public benefit.

(3) The purposes of the trust must be wholly and exclusively charitable.

[13]The key element of any charitable trust is that it exists for the benefit of the public. The benefit to the public may be direct or indirect. It is the indirect benefit to the public which has enabled the law to uphold as charitable trusts for the prevention of cruelty to animals. The Hobbesian view of humanity that underlies this (an innate tendency to cruelty) was explained in Re Wedgewood

[1915] 1 Ch 113

as follows:

“A gift for the benefit and protection of animals tends to promote and encourage kindness towards them, to discourage cruelty, and to ameliorate the condition of the brute creation, and thus to stimulate humane and generous sentiments in man towards the lower animals, and by these means promote feelings of humanity and morality generally, repress brutality, and thus elevate the human race.”

[14]Accordingly a trust that had as its sole object the prevention of cruelty to performing animals would be capable of being a charitable trust. The advancement of animal welfare is now expressly recognised as a charitable purpose by section 2 (2) (k) of the Charities Act 2006. I do not, however, regard this as a significant change in the law.

[15]However, as Mr Sims points out on behalf of the Attorney-General, in principle where the purpose or one of the purposes of a trust is to change the law the courts have refused to recognise the trust as charitable. A number of reasons have been given for this approach. First, it has been said that the courts cannot evaluate whether the advocated change in the law would or would not be for the benefit of the public. Lord Parker of Waddington said in Bowman v. Secular Society Ltd [1917] A.C. 406:

“It is true that a gift to an association formed for their attainment may, if the association be unincorporated, be upheld as an absolute gift to its members, or, if the association be incorporated, as an absolute gift to the corporate body; but a trust for the attainment of political objects has always been held invalid, not because it is illegal, for everyone is at liberty to advocate or promote by any lawful means a change in the law, but because the court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift.”

[16]However, this may be too dogmatic a view. In National Anti-Vivisection Society v. IRC [1948] A.C. 31 the House of Lords did evaluate the competing arguments for and against the abolition of vivisection; and came to the clear conclusion that the benefits to the public in terms of scientific and medical research outweighed the harm caused by the suffering of animals that vivisection necessarily entailed. A second reason that has been given is that law cannot stultify itself by holding that it is for the public benefit that the law itself should be changed; and that each court must decide on the principle that the law is right as it stands. This was the reason put forward by both Lord Wright and Lord Simonds in the National Anti-Vivisection Society case. A third reason is that if the courts sanction as charitable trusts with the purpose of changing the law, they would be trespassing on the role of the legislature, whose constitutional responsibility it is to evaluate the need for such changes. This was one of the reasons given by Slade J in McGovern v A-G

[1982] Ch 321

and by Chadwick LJ in Southwood v A-G (28 June 2000). This last reason seems to me to be the most persuasive. But whatever the rationale, there is no doubt that the principle remains that a trust one of whose purposes is to change the law cannot be charitable.

[17]That is not to say that it is unlawful for a charity to promote or oppose changes in the law, provided that its purposes are exclusively charitable. There is a distinction between the purposes or objects of a charity and the means by which it promotes those purposes or objects. Thus the Charity Commission is able to issue guidance to charities and charity trustees about the extent to which they can engage in campaigning, including campaigns to change the law. However, that guidance still takes as its bedrock the principle that an organisation set up for the purpose of changing the law cannot be a charity.

[18]Looking at the statement of the League’s objectives there can be little doubt, in my judgment, that at least one of its significant purposes was to change the law. It is true that it asserted that the particular acts of cruelty against which it was campaigning were already illegal as a result of the prevention of Cruelty to Animals Act 1911, but plainly its founders considered that that Act was not enough and that more legislation was needed. It seems probable that the members of the League had a wider conception of cruelty than the law did. The booklet also asserted that it was impossible to train any performing animal without cruelty and it is clear, in my judgment, that the League’s aim was to ban performing animals completely (hence the reference to “just compensation to the trade”). This would undoubtedly represent a change in the law just as much as banning fox-hunting or the farming of mink. In my judgment this has the consequence that at its inception the League was not a charitable organisation. Ms Maclennan, who appeared for Mrs Hanchett-Stamford, did not argue strenuously that the League was charitable at its inception. I think that there were pragmatic reasons behind her stance, but I must apply the law as I perceive it to be.

[19]However, Ms Maclennan submits that even if the objects of the league were not charitable at its inception, they have since become charitable. She puts this argument in two ways: i) The objects of the League have become charitable as a result of changes in the law; alternatively ii) The objects of the League have become charitable, or its assets held on charitable trusts, as a result of the decision of Mr and Mrs Hanchett-Stamford to transfer those assets to the Born Free Foundation.

[20]In support of the first argument she relies on the story of the General Medical Council. The question of the charitable status of the GMC arose in General Medical Council v IRC [1928] All ER Rep 252. The GMC was first established by the Medical Act 1858 and incorporated by the Medical Council Act 1862. Its principal objects were to keep and publish a register of qualified medical practitioners, to exercise oversight over medical studies and examinations and to publish the British Pharmacopaeia. It also had the power to strike off practitioners in certain circumstances. Only registered practitioners were entitled to sue for their fees. The Inland Revenue decided that the GMC had not been established for exclusively charitable purposes and the GMC’s appeal against that decision was dismissed both by Rowlatt J and by the Court of Appeal. The point which decided the case was that the GMC was established principally for the benefit of the medical profession and that any benefit to the public was an incidental and secondary benefit, not least because only a registered practitioner could sue for his fees. However, in 2001 the GMC applied to the Charity Commission for registration as a charity; and this time the application succeeded. The Commission summarised its decision as follows:

“2.2.1 there had been sufficient changes in the relevant legal framework, to the constitution and activities of the GMC and the social and economic context within which the GMC operates, taken together, for them to reconsider the charitable status of the GMC despite the prevailing legal authorities 2.2.2 it was open to them to adopt a purposive construction to the statutory provisions constituting the GMC to ascertain the purpose for which it was established. 2.2.3 the GMC is established for the charitable purpose of the protection, promotion and maintenance of the health and safety of the community by ensuring proper standards in the practice of medicine.”

[21]The Commission considered that there had been no major changes in the law, although they referred to other cases in which it had been held that the regulation of a profession could be charitable. However, the Commission considered that there had been major changes to the GMC’s own powers and functions with the result that the GMC was a body “significantly different to the body constituted under the Medical Act 1858 and to the body considered in the GMC case”. It noted also that the introduction of the NHS had transformed the environment within which medical services were provided (no doubt diminishing the need for most medical practitioners to be able to sue for their fees), and also the general recognition that the regulation of professions was in the public interest. It was these cumulative changes that persuaded the Commission to re-open the question of the charitable status of the GMC.

[22]In the present case Ms Maclennan relies on the passing of the Animal Welfare Act 2006 as amounting to the necessary change. She also points to the explicit recognition of the advancement of animal welfare as a charitable purpose by section 2 (2) (k) of the Charities Act 2006. As to this last point, as I have said, the advancement of animal welfare has long been recognised as a charitable purpose, for the reasons explained in Re Wedgewood. I do not regard this as amounting to any change in the substance of the law. The Animal Welfare Act 2006 does contain provisions which create offences of causing distress to animals; but it does not go so far as to prohibit performing animals. As is clear from its statement of policies in the 1962 booklet, the League believed that it was impossible to train performing animals without cruelty. It seems to me, on such exiguous evidence as I have, that the objectives of the League have not yet been fully attained. In other words, it still appears to be one of the objects of the League to change the law. The Charities Act 2006 has not changed the fundamental principle that if one of the objects or purposes of an organisation is to change the law, it cannot be charitable.

[23]Ms Maclennan also submitted that the public perception of animals and their welfare had changed since the late 1940s. It was plain, she said, that the social climate had changed. Even zoos had become much more akin to educational establishments rather than places where the public could simply go to satisfy its curiosity. The problem with this submission, to my mind was that it was just a submission. There was no evidence upon which it was based, and I do not consider that an alleged social transformation of that kind is one of which the court can take judicial notice. Quite apart from anything else, if the court were to attempt to weigh up the pros and cons of banning performing animals of all kinds or preventing the establishment of municipal zoos, it would be exercising the kind of value judgment which is inappropriate for the judicial process.

[24]I cannot accept the first argument for asserting that the League became charitable.

[25]The second argument relies on the decision by Mr and Mrs Hanchett-Stamford that the League’s assets should be given to the Born Free Foundation. The Born Free Foundation is a registered charity devoted to animal welfare. There is no written evidence of this decision. So there is nothing that could satisfy the statutory requirement in section 53 (1) (b) of the Law of Property Act 1925 that a declaration of trust of land must be evidenced in writing. Ms Maclennan accepts this. So there cannot, in my judgment, be any trust of Sid Abbey. In order for a trust to have arisen in relation to the League’s other assets, it would be necessary to find an express declaration of trust or words to the same effect. There is simply no evidence on which such a finding of fact can be based. I do not consider that a mere informal decision to give money to charity can be interpreted as an immediately binding trust of the intended donation. But that is as far as the evidence goes.

[26]Ms Maclennan next suggested that the decision might be treated as an agreement by the sole remaining members of the League that its assets be distributed for charitable purposes, thus changing the objects of the League with the result that they became exclusively charitable. As with any unincorporated association the relations between its members are contractual. It would therefore be necessary to find that Mr and Mrs Hanchett-Stamford entered into a contract with each other. Again, I do not consider that the evidence goes that far. All it amounts to is to discussions between husband and wife about what would be the best destination for the assets held by the League.

[27]I conclude, therefore, that the League was not and never became a charity.

To whom do the assets of the League belong?

[28]Unincorporated associations do not have separate legal personalities. Almost all the myriad legal problems to which they give rise stem from this. In Neville Estates Ltd v Madden

[1962] Ch 832

Cross J held that a gift to an unincorporated association could have one of three effects: i) It may be a gift to members of the association at the relevant date as joint tenants, so that any member could sever his share and claim it whether or not he continues to be a member; ii) it may be a gift to the existing members, not as joint tenants, but subject to their respective contractual rights and liabilities towards one another as members of the association. In such a case the member cannot sever his share, and it will accrue to the other members on the death or resignation of an existing member, even though such members include persons who became members after the gift took effect; iii) the terms or circumstances of the gift or the rules of the association may show that the property in question is not to be at the disposal of the members for the time being, but is to be held in trust for or applied for the purposes of the association as a quasi-corporate body. In that case, the gift will fail unless the association is a charitable body.

[29]The third category does not arise in the present case, because we are dealing with assets that already belong to the League. So there is no question of any gift having failed. In Re Recher’s Will Trusts

[1972] Ch 526

Brightman J adopted this three-fold classification; as did Lawrence Collins J in Hunt v McLaren [] EWHC 2386 (Ch). In Re Recher’s Will TrustsBrightman J also pointed out that it would be absurd to suppose that a donor or testator intended that, as soon as a gift to such an unincorporated association had been made, any member of the association became entitled as of right to demand an aliquot share of the gift. I respectfully agree. In my judgment under normal circumstances a gift to an unincorporated association will fall into the second of Cross J’s categories. It is, in Brightman J’s words “an accretion to the funds which are the subject-matter of the contract which such members have made inter se, and falls to be dealt with in precisely the same way as the funds which the members themselves have subscribed.” He added that in the absence of words which purport to impose a trust:

“the legacy is a gift to the members beneficially, not as joint tenants or as tenants in common so as to entitle each member to an immediate distributive share, but as an accretion to the funds which are the subject-matter of the contract which the members have made inter se.”

[30]In Re Bucks Constabulary Widows’ and Orphans’ Fund Friendly Society (No 2)

[1979] 1 WLR 937

, 941 Walton J characteristically described this as “quite elementary”.

[31]It follows, in my judgment, that the members for the time being of an unincorporated association are beneficially entitled to “its” assets, subject to the contractual arrangements between them. This was also Lawrence Collins J’s conclusion in Hunt v McLaren para 113. It is important to stress that this is a form of beneficial ownership; that is to say that in some sense the property belongs to the members. Megarry & Wade on Real Property (6th ed para 9-095) accuse the courts of having developed “a new form of property holding by unincorporated associations” in order to escape from technical difficulties of the classic models of joint tenancies and tenancies in common. I do not think that the courts have purported to do so, and in view of the proviso to section 4 (1) of the Law of Property Act 1925 it is difficult to see how they lawfully could at least in relation to land. So the “ownership” of assets by an unincorporated association must, somehow, fit into accepted structures of property ownership.

[32]In Re Recher’s Will Trusts Brightman J pointed out:

“Just as the two parties to a bi-partite bargain can vary or terminate their contract by mutual assent, so it must follow that the life members, ordinary members and associate members of the London & Provincial society could, at any moment of time, by unanimous agreement (or by majority vote, if the rules so prescribe), vary or terminate their multi-partite contract. There would be no limit to the type of variation or termination to which all might agree. There is no private trust or trust for charitable purposes or other trust to hinder the process. It follows that if all members agreed, they could decide to wind up the London & Provincial society and divide the net assets among themselves beneficially. No one would have any locus standi to stop them so doing. The contract is the same as any other contract and concerns only those who are parties to it, that is to say, the members of the society.”

[33]It follows therefore that in the case of a society with two or more members, the members could, by agreement, divide the society’s assets between them.

[34]In Bucks ConstabularyWalton J elaborated on the ownership of assets as follows:

“Before I turn to a consideration of the authorities, it is I think pertinent to observe that all unincorporated societies rest in contract to this extent, but there is an implied contract between all of the members inter se governed by the rules of the society. In default of any rule to the contrary -- and it will seldom, if ever, be that there is such a rule -- when a member ceases to be a member of the association he ipso facto ceases to have any interest in its funds. … As membership always ceases on death, past members or the estates of deceased members therefore have no interest in the assets. Further, unless expressly so provided by the rules, unincorporated societies are not really tontine societies intended to provide benefits for the longest liver of the members. Therefore, although it is difficult to say in any given case precisely when a society becomes moribund, it is quite clear that if a society is reduced to a single member neither he, nor still less his personal representatives on his behalf, can say he is or was the society and therefore entitled solely to its fund. It may be that it will be sufficient for the society's continued existence if there are two members, but if there is only one the society as such must cease to exist. There is no association, since one can hardly associate with oneself or enjoy one's own society. And so indeed the assets have become ownerless.”

[35]Walton J then considered the authorities and emphasised that the case before him was one concerning a registered friendly society, governed by legislation, rather than a simple unincorporated association. It was on that ground that he distinguished the case of Re West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund Trusts

[1971] Ch. 1

in which Goff J had held that assets subscribed to a fund had become bona vacantia. In the result Walton J held that because there were members of the fund still living at the date of dissolution, the friendly society’s funds should be distributed to them equally.

[36]There is, I think, no difficulty in accepting Walton J’s ultimate conclusion. Nor is there any difficulty in accepting that the member’s rights are contractual rather than equitable. Nor is there any difficulty in accepting that on a member’s death he ceases to have any interest in the assets of the unincorporated association. Accretion on death is inherent in the beneficial interest in any asset being held by joint tenants in equity; and is no doubt reinforced by contractual restrictions such as the rules of an association. It therefore follows that the estate of a deceased member can have no claim to the assets. In Neville Estates Cross J applied the same principle to cessation of membership through resignation. This must be a facet of the contractual relations between members. Walton J also said that if there is only one member of an unincorporated association, it must cease to exist. That, too, must I think, be right both for the reasons that Walton J gave; and also because if the members’ rights are based in contract, a contract must cease to bind once there is no other party who can enforce it.

[37]However, what I find more difficult to accept is that a member who has a beneficial interest in an asset, albeit subject to contractual restrictions, can have that beneficial interest divested from him on the death of another member. It leads to the conclusion that if there are two members of an association which has assets of, say £2 million, they can by agreement divide those assets between them and pocket £1 million each, but one of them dies before they have divided the assets, the whole pot goes to the Crown as bona vacantia. Since Walton J was not dealing with a case in which there was only one surviving member, his observations were obiter. Nor did he explain his reasoning on this question beyond the extract from his judgment that I have quoted.

[38]I must, I think, look a little more carefully at the authorities that are said to have this effect. In Cunnack v Edwards

[1895] 1 Ch 498

and (on appeal)

[1896] 2 Ch 679

a society was established to raise a fund, by the subscriptions, fines, and forfeitures of its members, to provide annuities for the widows of its deceased members. There was also a category of honorary members. In 1848 Mr became an ordinary member, and remained a member until his death in 1878, when he died a widower. He was the last surviving ordinary member. It appeared that all the other members had predeceased him, except Sir . Vyvyan, an honorary member, and it was believed the only honorary member of the society. On joining the society he had signed a declaration that his object in joining the society was not that any widow of his should claim any benefit from it (to which he relinquished his right), but merely for the encouragement of the society. Sir . Vyvyan died in 1879. The last annuitant had also died. Thus at the date when the matter came before the court there were no surviving members of the society and all the widows’ pensions had been paid. The question was: what was to happen to the surplus funds. The two original claimants were the personal representatives of Mr Edwards and the Crown. The personal representatives of Sir R Vyvyan made no claim. The Crown argued that the surplus was either held on charitable trusts and ought to be applied cy-près; or that the surplus was bona vacantia. Chitty J held that the fund was not a charitable fund, and stood over the question of bona vacantia, giving leave to add as a party a representative of deceased members of the society generally. The argument for the Crown was:

“This society was nothing more than a club, in which the members had no transmissible interest... Whatever the members, or even the surviving member, might have done while alive, when they died their interest in the assets of the club died with them. The earlier deceased members have had all the benefit they bargained for when they joined - their widows have received their annuities. When Edwards was alive he and Sir R. Vyvyan might have dissolved the society in the statutory way and voted themselves the funds; but they did not do so. As a fact, Sir R. Vyvyan was the surviving member, and his representatives disclaim all beneficial interest; still he had just as much right to this fund as Edwards.” (Emphasis added)

[39]Thus the argument for the Crown turned on the fact that at the date of the proceedings there were no surviving members, but it did not exclude the possibility that if there had been a surviving member that surviving member could have claimed the assets. Chitty J dealt with the claim of the personal representatives of Mr Edwards as follows:

“The claim of the representative of the last surviving member may be disposed of in a few words. The society was not a tontine society, and there is no ground for saying that the fund belonged in equity to the last survivor. There is nothing in the rules, or in any principle of equity, applicable to the case on which this claim can be rested. It was said that the last surviving member might have held a meeting under sect. 26 of the statute of George IV., and voted the funds to himself. To this proposition, extravagant as it is, it is sufficient answer to say that the last survivor never attempted to do anything of the kind.”

[40]In the result Chitty J held that the surplus was held on a resulting trust for its contributors. The case then went to the Court of Appeal. On appeal Mr Edwards’ personal representatives abandoned his claim and the contest was between the deceased members generally on the one hand, and the Crown on the other. Counsel for the Crown repeated the same arguments that he had advanced before Chitty J, which included the passage I have emphasised. The Court of Appeal held that when each subscriber paid money to the society his entire beneficial interest in the money was exhausted. Lord Halsbury said:

“There never was and there never could be any interest remaining in the contributor other than the right that his wife, if she survived him, should become entitled to a widow's portion thus provided. This was the final and exhaustive destination of all the sums contributed to the common fund. Under these circumstances, I am at a loss to see what room there is for the contention that there is any resulting trust.”

[41]AL Smith LJ said:

“As the member paid his money to the society, so he divested himself of all interest in this money for ever, with this one reservation, that if the member left a widow she was to be provided for during her widowhood. Except as to this he abandoned and gave up the money for ever.”

[42]Accordingly the case turned on the circumstances in which the money was paid to the society. Thus the entirety of the bargain was that the money was to be used to pay widows’ pensions, and not to return any part of the money to the contributor. On the facts, there were no surviving members of the association when the case came to court, so that the question before me did not arise; and the successful argument for the Crown admitted of the possibility that a single surviving member could during his lifetime claim the assets of the friendly society. In addition as Walton J pointed out in Bucks Constabulary, the case concerned a friendly society and the legislation then in force required the rules to state all the uses applicable to the assets of the society, and they stated none in favour of members. I do not consider that this case is authority for the proposition that the sole surviving member of an unincorporated association, while still alive, cannot lay claim to its assets. Moreover although it was no doubt true, as Chitty J held, and as Walton J emphasised, that the society was not a tontine society in the sense that it was not its intention to provide benefits for the ultimate survivor, any case in which property is held on a joint tenancy in equity produces a tontine effect, even if that is not its purpose.

[43]In Tierney v Tough [1914] 1 I.R. 142 the Court of Appeal in Ireland considered the case of an unincorporated association. O’Connor MR said:

“The conclusion which I have arrived at in the present case is, that the fund belongs to the existing members, and I think that the true reason is to be found in the fact that the accumulated fund is the property of the society, which is composed of individual members. The society is only the aggregation of those individuals, and the property of the former is the property of the latter. This is not a case in which all the members have disappeared, and their claims have been satisfied, or never arose, as in Cunnack v. Edwards [1896] 2 Ch. 679 . There are here existing members with unsatisfied claims against the fund. As I said before, and I think this cannot be controverted, if the existing members, with the assent of their committee and their trustee, agreed, to divide the fund among themselves, there is no person qualified to call them to account for so doing. The fund is a private one. On the authorities it is clear that there is no charitable trust attaching to it, and I think I have shown that the fund cannot be regarded as bona vacantia. The Attorney-General then has no claim.” (Emphasis added)

[44]Walton J found this reasoning “wholly convincing”. But if the property of the association is the property of its individual members, there does not appear to be any explanation of why that should cease to be the case if the membership falls below two. As O’Connor MR pointed out Cunnack v. Edwards was a case in which all the members had either disappeared, or their claims had been satisfied. So the principle in that case does not (or does not necessarily) apply to a case in which not all the members have disappeared.

[45]In Abbatt v. Treasury Solicitor [1969] 1 W.L.R. 561 Pennycuick J considered the nature of property “owned” by an unincorporated association. He said:

“It is an implied term of the contract of membership of a members' club that an individual member is precluded from obtaining the realisation and distribution of the club property so long as the club functions. But once the club ceases to function the reason for this disappears and the right of the existing members must, I think, crystallise once and for all.”

[46]This rationale for the fetter on a member’s right to claim his share was not, I think, affected by the reversal of this decision on the facts. In the Court of Appeal

[1969] 1 WLR 1565

Lord Denning MR said:

“In 1954 the property rights of the individual members were simply these: they had no separate rights so long as the club continued to be a going concern. The property had to be managed and applied for the benefit of the members as a whole. The individual members would only have any realisable rights in the property if and when the club was dissolved. Then they would have a beneficial equitable joint interest in the property, so that upon dissolution it was to be sold and divided equally between them.”

[47]The thread that runs through all these cases is that the property of an unincorporated association is the property of its members, but that they are contractually precluded from severing their share except in accordance with the rules of the association; and that, on its dissolution, those who are members at the time are entitled to the assets free from any such contractual restrictions. It is true that this is not a joint tenancy according to the classical model; but since any collective ownership of property must be a species of joint tenancy or tenancy in common this kind of collective ownership must, in my judgment, be a sub-species of joint tenancy, albeit taking effect subject to any contractual restrictions applicable as between members. In some cases (such as Cunnack v Edwards) those contractual restrictions may be such as to exclude any possibility of a future claim. In others they may not. The cases are united in saying that on a dissolution the members of a dissolved association have a beneficial interest in its assets, and Lord Denning goes as far as to say that it is a “beneficial equitable joint tenancy”. I cannot see why the legal principle should be any different if the reason for the dissolution is the permanent cessation of the association’s activities or the fall in its membership to below two. The same principle ought also to hold if the contractual restrictions are abrogated or varied by agreement of the members. I do not find in the authorities considered by Walton J anything that binds me to hold that where there is one identifiable and living member of an unincorporated association that has ceased to exist, the assets formerly held by or for that association pass to the Crown as bona vacantia. In addition, article 1 of Protocol 1 of the European Convention on Human Rights and Fundamental Freedoms guarantees the peaceful enjoyment of possessions. It says that:

“No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law…”

[48]On the face of it for one of two members of an unincorporated association to be deprived of his share in the assets of the association by reason of the death of the other of them, and without any compensation, appears to be a breach of this article. It is also difficult to see what public interest is served by the appropriation by the state of that member’s share in the association’s assets. This, in my judgment, provides another reason why the conclusion that a sole surviving member of an unincorporated association, while still alive, cannot claim its assets is unacceptable.

[49]I therefore respectfully decline to follow Walton J’s obiter dictum that a sole surviving member of an unincorporated association cannot claim the assets of the association, and that they vest in the Crown as bona vacantia. I might add that the Attorney-General suggested in argument, without arguing in favour of one outcome, that there were three possible outcomes: first, that the last surviving member is entitled to the assets; secondly, that the assets are held jointly between the last surviving member and the estate of the member whose death caused the dissolution; thirdly, that the assets were ownerless or bona vacantia. For the reasons I have given, I conclude the first outcome is correct and I reject the second and third.

[50]Ms Maclennan did suggest that the League might have spontaneously dissolved before Mr Hanchett-Stamford’s death. However, although his activities on the League’s behalf had dwindled before his death they did not stop completely. In my judgment the League did not dissolve spontaneously before his death. I consider that the League ceased to exist upon his death in January 2006, when its membership fell below two. Since Mrs Hanchett-Stamford is the sole surviving member of the League, she is, in my judgment, entitled to its assets. She is therefore entitled to be registered as proprietor of Sid Abbey and as shareholder of the shares now held in the League’s name. Her entitlement is free from any restrictions imposed by the rules of the League, which must have ceased to bind on the death of her husband. It follows that she is free, if she so chooses, to give all the former assets of the League to the Born Free Foundation.

The payment to the Captive Animals Protection Trust

[51]Since I have decided that the League was not and did not become a charity, it follows that I have no power to direct what should happen to its assets. The rights of Barclays Bank against the Captive Animals Protection Trust must therefore depend on private law principles. Since the Trust is not before the court, the less I say about them the better.

Mrs Hanchett-Stamford’s fitness

[52]Since I have concluded that Mrs Hanchett-Stamford is entitled to the assets of the League without restriction, the question of her fitness to act as a trustee does not strictly arise. However, in case I am wrong, I will record my conclusions briefly. The occasion which caused Mrs Hanchett-Stamford’s removal to the nursing home was her suffering a stroke which deprived her of her power of speech and of her mobility. She has now regained her power of speech, and indeed gave her evidence clearly and articulately, although she has not (yet) regained her mobility. She had a good grasp of past events, and understood the questions that were put to her. She will shortly move out of the nursing home into a bungalow that she owns. Although she will, no doubt, need support, there is no suggestion that she is in need of constant medical attention. Ms Bevan, her solicitor, said that she had been impressed with Mrs Hanchett-Stamford’s grasp of the implications of these proceedings and said that, with advice, Mrs Hanchett-Stamford would make a capable co-trustee. I have no reason to disagree. Had I concluded that there were charitable funds in want of a trustee, I would have appointed Mrs Hanchett-Stamford and Ms Bevan as co-trustees.

Result

[53]I refuse the declaration sought in the first head of claim. I have no power to appoint trustees, so I refuse to make the order sought in the second head of claim. However, having regard to the conclusions I have reached, I am prepared to make the appropriate declarations to give effect to my decision. If these cannot be agreed, they can be debated when this judgment is handed down.