Re Trusts of Hobourn Aero Components Ltd's Air-Raid Distress Fund, Ryan and Others v. Forrest and Others

[1946] ALL ER 501

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(Judgment by: Lord Greene MR)

Re Trusts of Hobourn Aero Components Ltd's Air-Raid Distress Fund
Between: Ryan and Others
And: Forrest and Others

Court:

Judges:
Lord Greene MRMorton LJ
Somervell LJ

Subject References:
trusts
Charities
Charitable purposes
Fund raised by employees of a company to provide grants for contributors in respect of air-raid distress
No means test applied in considering claims
Claims by non-contributors not considered
Gift not for general public purposes nor within "poor relations" cases
Fund not subject to valid charitable trusts

Case References:
Re Compton, Powell v Compton - [1945] 1 All ER 198; [1945] Ch 123; 114 LJCh 99; 172 LT 158
Income Tax Special Purposes Comrs v Pemsel - [1891] AC 531; 8 Digest 241, 1; 61 LJQB 265; 65 LT 621
Re Clark's Trust - (1875), 1 ChD 497; 8 Digest 262, 241; 45 LJCh 194
Spiller v Maude - (1881), 32 ChD 158, n; 8 Digest 262, 245
Pease v Pattinson - (1886), 32 ChD 154; 8 Digest 262, 244; 55 LJCh 617; 54 LT 209
Shaw v Halifax Corpn - [1915] 2 KB 170; 8 Digest 243, 21; 84 LJKB 761; 112 LT 921
Re Forster, Gellatly v Palmer - [1938] 3 All ER 767; [1939] Ch 22; Digest Supp; 108 LJCh 18; 159 LT 613
Hall v Derby Sanitary Authority - (1885), 16 QBD 163; 8 Digest 243, 26; 55 LJMC 21; 54 LT 175
Re Hillier, Dauncey v Finch and A-G - [1944] 1 All ER 480
Re Drummond, Ashworth v Drummond - [1914] 2 Ch 90; 8 Digest 244, 28; 83 LTCh 817; 111 LT 156
Re Grove-Grday, Plowden v Lawrence - [1929] 1 Ch 557; Digest Supp; 98 LJCh 261; 140 LT 659 (varied on appeal); sub nom A-G v Plowden [1931] WN 89
Re Christchurch Inclosure Act - (1888), 38 ChD 520; 8 Digest 289, 658; 57 LJCh 564; 58 LT 827
Goodman v Saltash Corpn - (1882), 7 App Cas 633; 8 Digest 327, 1099; 52 LJQB 193; 48 LT 239

Hearing date: 11, 12 March 1946
Judgment date: 13 March 1946

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Judgment by:
Lord Greene MR

In spite of the very full arguments which have been addressed to us, I am bound to confess that I do not find any real difficulty in this case. The first thing to do, of course, is to appreciate the facts, since all these cases must depend in the first place upon their own particular facts. The company, Hobourn Aero Components Ltd carried on, during the relevant period, a business at Coventry, Market Harborough and Kettering. They had a number of employees, altogether some 1,300, distributed in those three factories. The employees showed admirable habits of self-help and comradeship. They set up at one time a benevolent fund; we are not concerned with that. At a later stage, in the early months of the war, it occurred to them that it would be a good thing to do to provide some amenity for their fellow workmen who had left the company and joined the Forces. They accordingly instituted a collection which was called "a hat collection" and the funds so put up were managed by a committee, originally the same committee as the benevolent fund committee. Out of the proceeds there was paid the cost of parcels, cigarettes, and so forth sent to ex-employees in the Forces, and also payments in cash, or in the shape of savings certificates, either to the men themselves or, in some cases, to their families. In its ultimate development, the assistance so given to serving men was, I think, confined to payments in cash or by way of savings certificates. On 27 August 1940, when the prospect of air raids was beginning to affect people's minds, a decision was taken by the benevolent fund committee. The soldier's parcels fund and the soldiers' leave fund-out of which funds, derived from hat collections, the payments I have mentioned were made-had been kept in one bank account with the benevolent fund. The committee thought this was undesirable and two separate funds with two separate accounts were set up. One was the benevolent fund and the other was called the war emergency fund. The committee resolved that the latter should cover soldiers' parcels, soldiers' leave grants, and grants to employees who were awkwardly placed owing to air raids or other damage.

Unfortunately, this admirable spirit of self-help was not accompanied by any real appreciation of how, as a matter of business, this sort of arrangement should be conducted. We have the most exiguous material in the matter of accounts and minutes. There is no minute-and, apparently, none were kept-between 27 August 1940, and 15 January 1944, but we have a document, to which I shall now refer, which really originated the fund with which we now have to deal. It is a circular sent round to all the employees asking their approval of the proposals contained in it and their consent to certain deductions from wages intended to make it possible for those proposals to be carried out. It was sent out in November 1940, ie, some months after the committee meeting to which I have just referred. It is headed "Pattison & Hobourn Air-Raid Distress Fund," and it starts off in this way:

'The purpose of this fund is to help any employee who is in dire distress as the result of enemy action. It does not aim at replacing all losses incurred, but to give a helping hand at a time when you most need it.'

Then it provides how claims should be made and refers to a claims form. It then asks the employees to say whether they approve of electing a special committee consisting of five members of the benevolent fund committee and, if not approved, asking for nominations. It then continues:

'It is to be understood that by this vote you are investing in the committee the necessary powers to deal with all claims and that, subject to Mr. P. L. Hobourn's approval [he was the managing director of the company] their decision on all matters concerned with this fund is final. Further, it is suggested that the Saturday collection be discontinued, and instead a sum of 2d. in the £ per week be deducted from your wage. [The Saturday collection referred to was the hat collection.] Are you in agreement that 2d. in the £ be deducted each week for the Distress Fund for Pattison and Hobourn, Ltd..'

That circular was signed by all the employees with the exception of about seven. Thereafter 2d in the pound was duly deducted from the wages of the assenting employees. It is to be observed that this fund was quite clearly, according to the circular and according to the decision of the committee, administered to the entire exclusion of those employees who had not signed the form. They were not to be entitled to any benefit at all out of the fund.

The committee, which, as I have said, was really an off-shoot of the benevolent fund committee and had control of certain other funds, proceeded to transfer to the Air Raid Distress Fund as set up under that circular the sum of £108 7s 7d, which was the balance remaining from the hat collections.

There were also two contributions of £100 each from Mr P L Hoboutn, the managing director. Those sums, we were told were really paid over before the circular of November was sent out. There were two other sums. Mr Kirk, the officer commanding the Local Defence Volunteers in Coventry, provided £30, and the Local Defence Volunteers subscribed some £36. That made a total of £266 put up by Mr Hobourn, Mr Kirk, and the Local Defence Volunteers. The actual sum deducted from employees' wages and salaries while the fund was in being was £7,856 17s. The fund, therefore, save for a quite small amount, consisted entirely of money put up by the employees themselves.

Looking back for a moment to the terms of the circular, there are one or two observations which fall to be made. First, the circular was the document on the faith of which the employees agreed to the deduction from their wages. So far as the evidence goes, they had no knowledge of the terms of the minute of 27 August 1940, nor is it possible, in my view, to accept Mr Upjohn's suggestion that the employees who subscribed to this fund must be taken to have known and assented to everything that was done. That is an inference which is quite unjustifiable on the evidence. The first thing to notice about the circular is, I think, that the committee were given very wide powers on all matters concerned with the fund. That seems to me to have put them into the position of being able, within the four corners of the objects as stated, to decide what the purposes should be and, in general, how the fund should be administered, and I think it gave them a reasonable discretion in interpreting their charter, viz, the circular.

The actual way in which the fund was administered was this: the committee continued to make grants out of it to serving ex-employees and their families in the shape of £1 a month or savings certificates and there were certain payments they made to men on leave. The question has been raised in the course of the argument as to whether or not that particular application of the moneys subscribed on the faith of this circular was one which on the terms of the circular could be regarded as permissible. I am bound to say that, in my opinion, that was going beyond what the committee was entitled to do and if any employee who had subscribed his money on the faith of this circular had heard of what was being done and had chosen to object, he would have been entitled to do so. I wish, however, to make it quite clear that nobody could suggest on these facts any criticism of the bona fides or the probity of this committee. They thought that was what they were entitled to do and I think it is extremely probable that, if a vote could have been obtained of every subscriber to the fund, every subscriber might very well have said: "We are content that that should be done." But, looking at the circular itself, I find myself unable to say on the true and proper construction of it that that particular application was right. That question is not, I think, one which need be decided for the purposes of the present case for the reason that, if the committee, under the wide powers given to them in the circular, were entitled to include that particular application of the moneys of the fund, they were equally entitled to exclude it from the trusts governing the fund. If the application was a proper one, it can only have been so because the committee were in a position under the circular to define the trusts on which the funds should be held at any particular moment. It is perfectly clear that the commitee, on 15 January 1944, decided to exclude from the objects to which the fund could be applied the grants to ex-employees serving with the Forces. That appears in the minute of 15 January 1944, which was followed up by a circular to men in the Forces. The resolution provides:

'... that the fund be continued solely as an air-raid distress fund to assist employees or ex-employees with the Forces who have suffered the loss of their homes or contents by enemy action.'

That seems to me to be putting the fund back into the position in which it ought to have been throughout. But, even if the inclusion among the objects of grants to serving ex-employees was permissible, thereafter it ceased to be, as the result of that resolution, one of the objects of the fund.

What we have to consider is what were the trusts governing this fund at the time when it ceased to be an effective fund because air raids had ceased and there was no further object to which the moneys could be applied. We have, therefore, to deal with a fund which, at the relevant time, was an air-raid distress fund and nothing else. The purpose of the fund, as described in the circular, was to help any employee who was in dire distress as the result of enemy action. There is some evidence of the way in which the committee decided to administer the fund for that purpose. They interpreted (and I think, having regard to their wide powers, they were entitled to interpret) the reference to "distress" in a wide manner, as appears from the evidence of one Denham in cross-examination:

'Q.

It has no reference to the money which the man had in his pocket-it was simply that, due to enemy activity, he was awkwardly situated?

A.

Yes.

Q.

It was not a question of his being in distress, as we understand it in the ordinary sense of the word?

A.

No.'

There are certain other matters with regard to the administration of the fund which are important. First apart from the possible cases-not more than a few apparently-of families of serving ex-employees who had suffered from air raids, the fund as an air-raid fund was applied and applied only for the benefit of those who had subscribed. Secondly, in the case of employees who had houses in London and had been moved to one of the towns in question for the purpose of work at the factories, it was thought that, as their houses would be let, they would not lose any clothes and their furniture would come under the war damage claim. The consequence was that people in London had very little assistance, but they did have assistance in one respect. They were reimbursed out of the fund two classes of expense:

(i)

the cost of their railway journey to London to see the state of their houses when those houses had suffered some damage from air raids;

(ii)

in the early days they were reimbursed the cost of preparing their claim in respect of war damage.

The next point which I think it is important to bear in mind is that there was no kind of means test applied in the administration of this fund. Many of these employees were earning very high wages and were, no doubt, perfectly able to pay, for instance, the cost of a journey to London or the cost of making out a war damage claim. The question of what money they had was never inquired into and it was in no sense a condition of the application of the moneys of this fund that the recipient should be in a state of poverty or comparative poverty.

There are one or two passages in the evidence of Denham which bear upon this aspect of the matter. First, the judge put this question:

'Before allowing their expenses, [i.e., the expense of coming to London] did you make any inquiry as to whether they could afford to pay their own expenses or not? A.-No; I think we took it generally that they were entitled to their expenses.'

The word "entitled" is, to my mind, rather significant. That was the way in which the committee was administering this fund. If a subscriber incurred an expense, the committee thought that he was entitled to be recouped the money that he paid, whether he could afford it or whether he could not. Then Denham was asked these questions by Mr Christie in cross-examination:

'Q.

In regard to the payments for what is described as air-raid distress, do you know of any case where payment was refused on the ground that a man was in receipt of good wages?

A.

I do not know of any case, no.

Q.

Do you happen to know of your own knowledge, maybe among those people who had payments made to them were men on the higher level of wages?

A.

Yes, there would be.

Q.

Some of them earning over £10 per week?

A.

Yes. The committee took the degree of distress that might arise. If a man had no clothes or no cash or no bedding as a result of a raid, they would give him, perhaps, £10 to help him along until he had reasonable comfort again.

Q.

But those men would not be out of work during that period?

A.

No, they were still in our employ.

Q.

And still drawing their wages?

A.

And still drawing their full wages.'

Then there is a reference to the London cases and Denham was asked whether he made payments on account of expenses. He said:

'Yes

their railway fares to London, for instance.

Q.

And the expenses incurred in preparing and making their claim?

A.

I think at the end we restricted it to fares only.

Q.

And they were given that without regard to their financial position?

A.

Yes, quite without regard to that.

Cohen J:

As regards cases of claim in respect of clothes, which you referred to just now, did you inquire whether the man had any savings out of which he could buy new clothes?

A.

No. my Lord.

Mr. Harold Christie:

It was based on what you thought the man had lost?

A.

Yes.

Q.

Rather than on what he had left?

A.

Yes, quite.

Cohen J:

Well, not quite. I gather from your earlier answer it was based on what he had lost and immediately needed, irrespective of whether he could pay for it; is that right?

A.

Yes, my Lord.

It is perfectly clear, therefore, that the element of the relief of poverty did not enter into this scheme at all. There is not a word about it in the circular, nor in the minute, and the committee, in administering the fund, did not make poverty in any sense, or in any way, a condition of making a grant. On the contrary, they made grants to which they thought a man was entitled.

Those are the principal facts in the case. The fund was closed down on 7 September 1944. In September it was decided to stop deductions from wages and it was then decided to close the fund down. The question is as to what should be done with the large surplus remaining. I should, perhaps, say that grants to serving ex-employees constituted by far the greater part of the money expended out of this fund. £2,102 was spent in that way, whereas the air-raid damage relief only amounted to £471. The question we have to decide is whether this Air-Raid Distress Fund was a charitable fund within the legal sense. The Attorney General, with whom is Mr Upjohn, have argued that it is and they admit that their argument involves that the Inland Revenue Commissioners were wrong in refusing to recognise it as a charity and to grant income tax relief. However, that is by the way.

Cohen J held that he was bound by the recent decision of this court in Re Compton to hold that a fund of this kind, limited in its application to employees and, to a small extent, ex-employees of the company, was not a good charity because it lacked the necessary public element; that it was a private charity having regard to the restricted and entirely personal nature of the relationship which bound together the potential beneficiaries. We have had an argument addressed to us to the effect that the observations of this court in Re Compton on the question of a trust for the benefit of employees of a business, which, in Re Compton, we said constituted a purely private and personal trust, were dicta only and were not necessary for the decision. I have listened very attentively to all the arguments which have been put before us and to all the cases which have been cited. I may, perhaps, be allowed to say that nothing which has been said and no authority which has been cited leads me to doubt the correctness of the views which I ventured to express in Re Compton. The present case has a feature which was not present, of course, in Re Compton, which was not a case of employees, but a case of descendants of particular persons. That feature is that the fund now in question was one put up by the potential and contemplated beneficiaries themselves. We are not dealing with a fund put up by outside persons, although, even if we were, on the authority of Re Compton, I should feel constrained to hold that such a fund would not be a good charity. The point, to my mind, which really puts this case beyond reasonable doubt is the fact that a number of employees of this company, actuated by motives of self-help, agreed to a deduction from their wages to constitute a fund to be applied for their own benefit without any question of poverty coming into it. Such an arrangement seems to me to stamp the whole transaction as one having a personal character, money put up by a number of people, not for the general benefit, but for their own individual benefit. I am not concerned for one moment to dispute the proposition that a fund put up for air-raid distress in Coventry generally would be a good charitable gift. I have very little doubt that it would be. But there is all the difference in the world between such a fund and a fund put up by, it may be, a dozen inhabitants of a street, or, it may be, a thousand employees of a firm, to provide for themselves out of moneys subscribed by themselves some kind of immediate relief in case they suffer from an air raid. The Attorney General and Mr Upjohn wish to attribute to the fact that these people were putting up money for their own benefit a very slight importance. To my mind, it is of the greatest importance and is quite conclusive in stamping the character of a private and personal trust upon this fund.

It was suggested that that aspect of the matter should be disregarded because no individual was entitled as of right to any payment out of the fund. I cannot appreciate that argument. If a number of individuals put up a fund for their own mutual benefit, there are clearly two ways of doing it. They can either actuarially or in some other way decide that each subscriber shall be entitled in certain events to definite payments, or-especially when the object of the fund is something of the present kind-they may say: "Rather than have a cast-iron scheme laying down the grant that a subscriber is to be entitled to, we will leave it to the discretion of a committee in whom we have confidence, to decide how to apply the fund." Such an arrangement has all the benefits of elasticity and it seems to me that the attempt to base a distinction between such an arrangement and a more actuarially based arrangement, such as one finds in pension funds and so forth, entirely fails. Once the payments to ex-employees are out of the way (and I have given reasons why, in my opinion, in view of what has happened and the resolution of the committee, we are not concerned with them) it is admitted that the Air-Raid Distress Fund was mainly intended, as it was mainly applied, for the benefit of subscribers and subscribers only. Those employees who had refused to sign were, of course, excluded from the benefits of the fund. The only respect in which non-subscribers got any benefit at all was in the case of families of serving ex-employees (who may very well have been subscribers in their time before they joined the services) who had had their homes injured by air raids. What the extent of that application was I do not know, nor am I concerned to inquire whether or not the committee, in deciding to include such persons in the benefits of the fund, were acting within the scope of their charter. I would assume that they were entitled to make grants out of the fund to those persons. But it is quite clear that the paramount and principal object of this fund was to benefit subscribers and nobody else. That seems to me to stamp it with the character of a private arrangement, a private trust.

One other matter to which reference was made, though not very much reliance was placed upon it, was the fact that Mr Hobourn, Mr Kirk and the Local Defence Volunteers had sent cheques to the fund. There again, I cannot attribute any importance to that fact on the facts of the present case. It formed a very small proportion of the funds that were received. It was not the result of some sort of public appeal; it was simply that a few persons who were interested (one of them being the managing director of the company and interested, naturally, in the welfare and contentment of his employees) sent subscriptions to the fund. It seems to me quite impossible, because of that circumstance, to attribute to the fund a different character. It was, in its essence, primarily and to the largest proportion of its receipts a fund put up by individuals for themselves and nobody else. The mere circumstance that somebody augmented the fund with a cheque cannot alter that position.

I must not be taken to be suggesting, for one moment, that the mere fact that the benefits of a fund are confined to members or subscribers would be sufficient of itself to exclude a fund from the category of charity. It all depends on the facts of each individual case. For instance, to explain what I mean, if a number of charitably-minded individuals in a parish got up a subscription for the purpose of providing a parish nurse for inhabitants unable to pay for nursing, the fund so subscribed would not be any the less a charitable fund because no person in the parish could obtain the services of the nurse unless he or she became a member of the association and paid, let me say, half a crown a year, or whatever it is villagers do pay in such circumstances. That would not turn what was in essence a charity into something which was not a charity. It is all a question, in these cases, of the real paramount and governing nature of the transaction. In the case I put, the elements which are present in the present case would, of course, not be present, because the paramount and primary purpose of this is, in my view, self-help and nothing else.

That leads me to the next branch of the argument, which was to this effect. It was said, and said quite truly, that in cases falling under the fourth of Lord MacNaghten's classes [in Pemsel's case] of which this is said to be one, the relief of poverty is not necessary. Of course it is not. The relief of poverty comes under a separate head, and under the fourth class many trusts are included although they may benefit both rich and poor. It is then said-and I am prepared to accept it as correct-that the relief of air-raid distress would be in itself a good charitable object. That, of course, does not decide the question because the question here is not whether a particular object in the abstract is a good charitable object, but whether the purposes of this fund were a good charitable object, not from the point of view of the type of misfortune at which it was aimed, but from the point of view of the beneficiaries-whether the fund, on the facts of this case, was a purely personal or private affair (a private fund for private benefit), or had the necessary element of publicity.

It was argued that in some cases to which we were referred an association which had all the characteristics on its face of a private association for individual benefit had been regarded as a charity because it was directed to the relief of proverty; in other words, they were cases which suggested or, in some instances perhaps, decided that you may have a fund which is prima facie of a private and individual nature but which is saved by the fact that it is for the relief of poverty. Then the argument goes on "Why poverty alone? Why not include in such cases such an object of relief as air-raid distress?" It is said that the fact that this is air-raid distress makes it possible to predicate of its objects that they were not purely personal but had a public element sufficient to give them the character of charity. In my opinion, that is really a confusion of thought. the object is one thing; the people to benefit from that object are another. It is certainly not the law, as I understand the authorities, that, when you find that the persons to benefit are a private group of individuals, that circumstance can be discounted, or the effect of it destroyed, merely by introducing some object which, if it was for the benefit of a sufficiently public class of beneficiaries, would be a good charitable purpose within Lord MacNaghten's fourth class in Pemsel's case.

It is necessary to refer to some of those cases. First, I will read a passage from Tudor on Charities, 5th Edn, p 18:

'Friendly and other mutual benefit societies established to provide allowances for members in sickness or old age, or pensions for their widows, are not charitable, unless poverty is an essential qualification for the receipt of relief, for the object of such a society, except where it involves the relief of poverty, is not one contemplated by the Statute of Elizabeth. And if the objects of the society are not such as to constitute it charitable the fact that it receives donations and subscriptions cannot alter its character.'

A number of authorities are referred to in support of these propositions. We have been referred to practically all of them and it seems to me that they amply bear out the propositions stated in the text. This particular association may properly, I think, be described as a mutual benefit society, which cannot be charitable unless poverty is an essential qualification. In the Compton case, I referred to what are commonly known as the poor relations cases, in which, in the case of a class of potential beneficiaries of a strictly private and personal nature, it had been held in past days that a charitable character was, nevertheless, attributable to the trust if it was a trust for the relief of poverty. The cases mentioned in connection with this passage in Tudor on Charities were not quoted to the court on that occasion, and if I have any criticism of the decision in Re Compton it is that, in referring to the poor relations cases as in a category by themselves, I might have added a reference to the other cases mentioned in Tudor on Charities as falling into the same category. But no authority has been cited to us which would justify the proposition that what is prima facie a personal or private trust can be saved except on the ground that its purpose is the relief of poverty.

What I have said will perhaps be made clearer by reference to one or two of the authorities which were cited. First, there is Re Clark's Trust. That was a case of a friendly society which was held not to be a good charitable institution on the ground that it was a private charity, ie, a charity not recognised as a charity by law. I can get no help out of that decision except that Hall V-C, calls attention to this in connection with the rules of the society (1 ChD 497, at p 500):

'Poverty of the member at the time of his sickness or lameness, or in his old age, was not required to entitle him to an allowance. It appears to me that the society was not a charitable institution.'

Then comes a decision of Jessel MR in Spiller v Maude. That case really brings out exactly the point which I mentioned a moment ago. There there was a society which had every mark of a purely personal association with no public element in it at all. It was:

'... called the York Theatrical Fund Society ... instituted in York by the voluntary association and subscriptions of the members of the York company of actors and actresses.'

Under the rules no person save a member of the company was entitled to any benefit at all. The objects were the funeral expenses of a contributor dying in indigent circumstances, the relief of orphan children of contributors, the supply of medical advice and medicines to sick contributors unable to pay, and granting annuities to contributors on becoming incapacitated either by age, accident, or other infirmity, from exercising the duties of his or her profession as an actor or actress and not possessing an independent income of more than £50 per annum. It was a case which seems to me in every respect prima facie to lack any element of publicity and which could not in any sense be described as being for the benefit of a section of the public. It is true that the funds of the society were augmented by subscriptions from non-members, but the important thing about the case is the way in which Jessel MR dealt with it. He went through the rules and came to the conclusion:

'... that the whole fund was charitable, but that the particular charity had failed. He thought that poverty was clearly an ingredient in the qualification of members who were to receive the benefits of the society.'

It is perfectly clear that he regarded poverty as the thing that saved it. I must confess, speaking for myself, that seems to me to be a very extreme decision, because the whole arrangement was of a personal nature. However, it was saved by the fact of poverty, but there is no suggestion in any of the cases put before us that such a body can be preserved as having a charitable purpose unless the relief of poverty is its object.

In Pease v Pattinson, a decision of Bacon V-C, the headnote is incorrect when it states that the friendly society in question was a charity. Bacon V-C, decided no such thing. On the contrary, his decision quite clearly implies the contrary, because in directing that the fund with which he had to deal should be handed over for administration to that particular body, he directed that it should be kept separate and earmarked for a particular charitable purpose and he rejected an argument that the body could take it as part of its own funds as being itself a charity. The decision, moreover, is of no assistance whatever to the argument.

I do not propose to go through all the cases that were cited. I might refer, perhaps, to Shaw v Halifax Corpn, but that, again, really does not help us. It was a case which turned on the meaning of the phrase "public charity," within Towns Improvement Clauses Act, 1847. Then reliance was placed on Re Forster, Gellatly v Palmer, decided by Bennett J. It is a decision which, I must confess, I have great difficulty in understanding. The judge found it possible there to hold that a fund for the relief of infirm, sick and aged Roman Catholic priests in a particular diocese was for the advancement of religion and, therefore, good, although the benefits from the fund were confined to members. He did not deal with it as a case for the relief of poverty, which it clearly was not, but he laid stress on the fact that the funds were mainly derived from donations from non-members. It may very well be that the decision could be justified on the principle I suggested a moment ago that, if you find a number of charitable persons setting up a fund for the benefit of a particular class, the fact that members of that class are required to join the fund and pay small subscriptions does not prevent it from being charitable. It may be possibly supported on that ground, but it is not a decision from which, with all respect, I find any help in the present case.

I shall only refer to two more cases. Hall v Derby Sanitary Authority was a trust for railway servants. It was said that if a trust for railway servants could be a good charity, why could not a trust for railway servants in the employment of a particular railway company be a good charity? The reason, I think, is that in the one case it would be for railway servants in general and in the other case it would be for employees of a particular company, a fact which would limit the potential beneficiaries to a class ascertained on a purely personal basis. Moreover, the fund would benefit the particular railway company. Re Hillier, before Vaisey J the other case to which I wish to refer is, I think, of assistance, because it brings out what I think is the underlying fallacy of the appellant's argument. The testatrix left legacies for the sick and wounded. No question could arise as to the class being limited to a purely private circle. It was obviously for sick and wounded at large and, therefore, had every qualification of a public nature which could be required. Therefore, the question we are dealing with did not arise in that case. It was quoted to us in order to establish the proposition that such a trust could be good although it was not for the relief of poverty. It seems to me, with all respect to the argument, that that is pushing at an open door. Of course, cases which come under the fourth head of Lord MacNaghten in Pemsel's case do not require poverty as an element to make them good charities. All that Re Hillier decided was that the object there was a good charitable object and the question of whether the public element was present in it did not arise.

The importance of poverty, in my opinion, is that it is a necessary object where the class of trust with which you are dealing is one which, prima facie, on its face is a scheme for the purely personal benefit of individuals. It may be possible on the authorities, as I have said, to get a trust of that kind into the category of charity, provided it is for the relief of poverty on its true construction. It is no argument to say that, because in Re Hillier poverty was not regarded as essential, therefore, it is not to be regarded as essential in such a case as this. The two cases are quite different, owing to the fact that in the present case everything about this arrangement points, and points only, to a purely personal scheme for the individual benefit of subscribers, with a certain latitude left to the committee (assuming that they had got that latitude) to let in families of serving ex-employees whose houses were injured by air-raids.

Cohen J decided the case on the basis of Re Compton. I have no criticism to make of his decision in that respect, but I do call attention to the fact, which he does not mention, that the private character of this trust is, to my mind, made clear beyond the possibility of doubt by the fact that the paramount purpose of the subscription was to provide benefit for the subscribers and for nobody else. If there were indeed any doubt about the matter at all, that seems to me, on the facts of the present case, to exclude the fund from the class of charitable trusts.