The Beneficiary Principle

• What is the Beneficiary Principle in trust law?

  The Beneficiary Principle requires that a trust must have identifiable beneficiaries.
• What are the two fundamental ideas for express trusts?

  1. A trust must be created with someone who can control the trustee’s conscience.
  2. A proprietary right is created for the beneficiary in the trust property.
• Why is it important for a trust to have someone who can control the trustee’s conscience?

  Without this, the trustee can misuse the property without accountability.
• What right is created for the beneficiary in a trust?

  A proprietary right that needs to be exercised against the trustee.
• Why are the two fundamental concepts of express trusts important according to Virgo?

  They are essential for establishing the beneficiary principle in trusts.
• What must be established before determining if the beneficiary principle is satisfied?

  The three certainties must be established.
• What does the beneficiary principle require regarding property held in trust?

  It requires property to be held on trust for identified beneficiaries or objects.
• What exceptions are made regarding the beneficiary principle?

  Exceptions are made for charities.
• What case established the beneficiary principle?

  Morice v Bishop of Durham (1805).
• Why was the trust in Morice v Bishop of Durham deemed void?

  It was void because it lacked identifiable beneficiaries.
• What did the court wonder regarding the trust in Morice v Bishop of Durham?

  The court wondered if it could be a trust due to its beneficiary principle.
• What must every non-charitable trust have according to the court's ruling in Morice v Bishop of Durham?

  Every non-charitable trust must have a definite object.
• Why must a trust be enforceable for the court?

  A trust must be enforceable to ensure that the court can maintain control over it.
• What did Re Wood [1949] state about a gift on trust?

  A gift on trust must have a cestui que trust.
• What did Bowman v Secular Society [1917] state about trusts?

  A trust must be for the benefit of individuals or recognized as charitable.
• What did Re Denley’s [1969] state about trusts?

  A trust must be created for the benefit of persons, not merely for a purpose or object.
• What was the outcome of Re Astor’s Settlement Trusts [1952]?

  The trusts were deemed invalid as they were not charitable.
• What did Roxburgh J state about enforcing the trust?

  There must be someone who can enforce the trust with a correlative equitable right.
• Why is a human beneficiary important according to Roxburgh J?

  A human beneficiary has locus standi to sue the trustee for breaches of trust.
• What did Roxburgh J acknowledge about exceptions to the human beneficiary rule?

  He acknowledged that several exceptions have arisen in the courts over the years.
• What was the second ground for rendering the trust void according to Roxburgh J?

  The second ground was uncertainty regarding the terms of the trust.
• What principle did Roxburgh J conclude his judgment on?

  A court of equity does not recognize a trust it cannot enforce and control.
• What are some reasons for the prohibition of non-charitable purpose trusts (NCPTs)?

  Reasons include excessive delegation of power, perpetuity, and capriciousness.
• Why is excessive delegation of power a concern for NCPTs?

  It could give trustees too much power without accountability.
• What is the perpetuity rule in relation to NCPTs?

  The perpetuity rule prevents property from being controlled indefinitely beyond reasonable time periods.
• What happens if property is deemed inalienable under the perpetuity rule?

  The trust becomes void if property is non-disposable for longer than the perpetuity period.
• What was the outcome of Re St Andrew’s Lawn Tennis Club [2012]?

  The trust was held invalid as a perpetual trust for a non-charitable purpose.
• What is the common law perpetuity period?

  The common law period is determined by an identified life in being plus 21 years.
• What does the Perpetuities & Accumulations Act 2009 state about the perpetuity period?

  The period must be no more than 125 years, even if the trust specifies a different period.
• What does "capriciousness" refer to in the context of NCPTs?

  Capriciousness can void a non-charitable purpose trust due to lack of discernible link.
• How does the court view charitable purposes compared to non-charitable purposes?

  The court begins by assessing if a purpose is charitable, which has different standards than non-charitable purposes.
• What was the outcome of Re Shaw’s Will Trusts [1957]?

  The trust was held void as a non-charitable purpose trust.
• What critique is made regarding the beneficiary principle?

  It is difficult to identify a clear rationale for why non-charitable purpose trusts should be void.
• How do some jurisdictions differ in their approach to the beneficiary principle?

  Some jurisdictions adopt a weaker approach to the beneficiary principle, allowing for more flexibility.
• What does the STAR legislation in the Cayman Islands allow regarding NCPTs?

  It permits non-charitable purpose trusts as long as someone is nominated to act as an enforcer.
• What is the implication of the "enforcer" principle in England & Wales?

  The enforcer principle separates enforcement from equitable title, potentially debasing certainty in trust creation.
• What does D. Hayton suggest about the nature of trusts in the twenty-first century?

  He suggests that trusts may become more flexible obligations that do not necessarily require a beneficiary.