Factual and Procedural Background
The Charity, registered under the Charities Act 2011, was established following a deposit of approximately £500,000 in cash and securities with Company A in November 1927, formalised by a deed executed on 9 January 1928. The identity of the benefactor has remained private. This claim was initiated by HM Attorney General seeking directions on the court's jurisdiction to alter the trusts in the Deed under its administrative or cy-près jurisdiction. The Defendant, Company B, is the current trustee.
The claim was issued in May 2018, with directions given in January 2019 for a hearing by a High Court Judge. A disposal hearing was scheduled for November 2019 but was vacated to hear an application by the Applicant, a relative of the benefactor, seeking joinder and representation of a class of persons with similar interests. The Applicant's joinder application was opposed by HM Attorney General but not by Company B. The hearing of the application took place in December 2019, with judgment reserved, and the disposal hearing rescheduled for October 2020.
Legal Issues Presented
- Whether the court has jurisdiction to make a scheme altering the trusts contained in the Deed under its administrative jurisdiction concerning charities or under the cy-près jurisdiction.
- Whether the Applicant should be joined as a party to the claim and appointed to represent a class of persons with a similar interest.
- The interpretation and application of section 9(1) of the Superannuation and Other Trusts (Validation) Act 1927 in relation to the validity and effect of the Charity's trust directions.
- Whether the trust was void ab initio due to failure of the original gift and whether the fund or part of it belongs to the benefactor's residuary estate.
- The appropriateness of a prospective costs order in relation to the Applicant's involvement.
Arguments of the Parties
Applicant's Arguments
- The Applicant, as a relative of the benefactor, seeks joinder to file evidence on whether the purpose of the trust was practicable or likely to become so, and whether the benefactor had a general charitable intention.
- The Applicant contends the trust was void from the outset and that the fund or part of it belongs to the benefactor's residuary estate.
- The Applicant relies on a statutory interpretation of section 9(1) of the 1927 Act, arguing it should not immunise the Charity from all rules of law that might cause the gift to fail or be recoverable.
- The Applicant seeks a representation order for persons entitled to share in the benefactor's residuary estate but not for other donors.
- The Applicant applied for a prospective costs order to cover litigation costs.
HM Attorney General's Arguments
- Opposed the Applicant's joinder application, submitting that the Applicant must demonstrate an arguable case with some prospect of success, but contended the Applicant's case is bound to fail.
- Relied on the plain wording of section 9(1) of the 1927 Act, arguing it validates all directions in the instrument and bars claims like those the Applicant wishes to advance.
- Emphasised that statutory interpretation requires focus on the text, cautioning against ignoring the plain meaning of Parliament's words.
- Submitted the Applicant failed to propose a coherent alternative interpretation of section 9(1).
- Argued against the prospective costs order, noting the litigation falls outside categories where such orders are appropriate and that the Applicant is not impecunious.
Company B's Arguments
- Did not oppose the Applicant's joinder application.
- Supported HM Attorney General's interpretation of section 9(1) as "unanswerable."
- Did not support the prospective costs order sought by the Applicant.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| In Re Pablo Star Limited [2017] EWCA Civ 1768 |
Interpretation of "in dispute" broadly to include 'in issue'; public policy on joinder of parties and Overriding Objective of CPR Part 1. |
The court adopted the wider interpretation of "in dispute" and emphasized desirability of joinder to resolve all matters and bind all interested parties. |
| Hughes v Colin Richards & Co [2004] EWCA Civ 266 |
Standard for joinder requiring only that the issue is not bound to fail. |
The court applied a lower threshold test for joinder, requiring an arguable case rather than a real prospect of success. |
| Williams v Central Bank of Nigeria [2014] UKSC 10 |
Statutory interpretation focuses on the meaning of the words used in the statute; context and mischief do not license ignoring plain meaning. |
The court relied on this principle to emphasize the importance of the text of section 9(1) of the 1927 Act. |
| Wharton and another v Masterman and others [1895] AC 186 |
Application of Saunders v Vautier principle to charity trusts with accumulation directions. |
Referenced as authority on the ability of charities to call for income and capital despite accumulation directions. |
| McDonald v Horn [1995] 1 All ER 961 |
Principle that prospective costs orders should only be made if trial judge would inevitably order costs out of the fund. |
The court applied this principle to refuse the Applicant's request for a prospective costs order. |
| Re Buckton [1907] 2 Ch 406 |
Classification of costs orders in trust litigation into categories based on the nature of the application and parties involved. |
The court analyzed the claim's fit within Buckton categories to assess appropriateness of prospective costs order. |
| Singapore Airlines Ltd v Buck Consultants Ltd [2011] EWCA Civ 1542 |
Recognition that Buckton categories are not closed and costs awards involve wide discretion. |
The court acknowledged flexibility in applying Buckton categories to the circumstances of this case. |
| In re Wilson [1913] Ch 314 |
Consideration of paramount charitable intention in trust construction. |
Referenced regarding the question of whether the Deed shows a paramount charitable intention. |
Court's Reasoning and Analysis
The court first considered the principles governing joinder under CPR 19.2(2), emphasizing the desirability of resolving all matters involving parties with interests connected to the dispute to avoid multiplicity of proceedings. The court applied a lower threshold for joinder, requiring an arguable case with some prospect of success rather than a real prospect.
On the substantive legal issues, the court analysed the creation and terms of the Charity and the Deed, including the statutory context of the 1927 Act, particularly section 9(1). The court noted that section 9(1) validates directions in the instrument concerning holding property on trust, accumulation of income, and transfer of property to the National Debt Commissioners, and bars claims to require transfer otherwise.
The Applicant's interpretation sought to limit the protection of section 9(1) to accumulation only, arguing the provision should not immunise the Charity from challenges that might cause the gift to fail. The court acknowledged the Applicant’s submissions as carefully crafted but found the Attorney General's textual construction more compelling, emphasizing the primacy of the statutory text and existing legal principles.
Despite significant difficulties facing the Applicant, the court found the Applicant had crossed the merits threshold for joinder, having some prospect of success. The court also considered whether the Applicant could establish the absence of a paramount charitable intention and initial impossibility or impracticability of the gift’s purpose, finding some prospect of success on these points as well.
The court addressed the question of representation, limiting the Applicant's representative class to persons entitled to the benefactor’s residuary estate due to differing circumstances of other donors.
Regarding costs, the court applied established principles from Re Buckton and related authorities, concluding that the claim falls outside categories where prospective costs orders are appropriate. The court found no reason to restrict the discretion of the trial judge and dismissed the Applicant’s application for a prospective costs order.
Finally, the court declined to make an order protecting the benefactor’s identity, noting the public interest in donor anonymity but balancing it against the passage of time and the benefactor’s death many years prior.
Holding and Implications
The court granted the Applicant’s application to be joined as a party and appointed him to represent persons entitled to share in the residuary estate of the benefactor.
The court dismissed the Applicant’s request for a prospective costs order.
The decision allows the Applicant to participate in the claim, file evidence, and present submissions on the validity of the trust and related issues, ensuring the court benefits from fuller argument on the potential failure of the original gift.
No new precedent was set beyond the application of existing joinder and costs principles. The court’s refusal to protect the benefactor’s identity reflects a balancing exercise specific to the circumstances of this case and does not establish a general rule.