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

[1946] ALL ER 501

---

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

Court:

Judges: Lord Greene MR
Morton 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

---

After the outbreak of the war, the employees of a company made voluntary contributions towards a war emergency fund for providing parcels and leave grants for ex-employees in the Forces and also, from August 1940, grants for employees in respect of air-raid damage. By a circular sent out in November 1940, in place of the former voluntary contributions to the war emergency fund, all employees of the company were asked to contribute 2d in the £ a week from their wages towards the Air-Raid Distress Fund, the object of which, it was stated, was to help any employee "in dire distress as the result of enemy action." By the terms of the circular, the fund was to be administered by a committee whose decision on all matters connected with the fund was to be final. All the employees, excepting about seven, signed the circular and became subscribers to the fund. A very small proportion of the fund was subscribed by certain other people interested in the employees of the company. The fund was at first used for certain payments to ex-employees with the Forces as well as for grants in respect of air-raid distress, but in January 1944, the committee resolved to discontinue grants to ex-employees with the Forces and to continue the fund solely as an air-raid distress fund for employees or ex-employees with the Forces. Only claims from subscribers to the fund were considered and no means test was applied in the administration of the fund; help was given to subscribers awkwardly situated as a result of air-raids whether they were in financial distress or not. In September 1944, the fund was closed down and the question to be determined was what was to be done with the surplus moneys. It was contended by the Attorney General that the fund was subject to a valid charitable trust because the relief of air-raid distress was a good charitable object within the fourth head of Lord MacNaghten's definition in Pemsel's case (2) and, therefore, since the purposes of the fund were of a public character, it was immaterial that the relief of poverty was not a necessary object:-

Held-

(i)

Although the fund was for the relief of air-raid distress, its purposes were of a personal, and not of a public, character, because it was merely for the benefit of the employees of a particular company who were themselves, for the main part, the subscribers to the fund, and, moreover, the benefits were confined to such of the employees as had subscribed to the fund.

(ii)

since

(a)

the trusts of the fund were of a private nature and

(b)

poverty was not a necessary qualification in the recipients of benefit from the fund,

the fund was not subject to a valid charitable trust.

Re Compton applied.

Decision of Cohen J ( [1945] 2 All ER 711 ) affirmed.

Notes

The Court of Appeal affirm the court below, holding that the decision of Cohen J, which applied the principle of Re Compton, was correct. It is clear that a fund for the relief of air-raid distress is a good charitable gift, within the fourth class in Pemsel's case, but the fund considered in this case, being limited to the employees of a particular firm, lacks the element of publicity necessary to make it a good charitable gift. Lord Greene regards the fact that the potential beneficiaries themselves subscribed the money as of the greatest importance, and conclusive in stamping the character of a private and personal trust upon the fund. The element of poverty was absent, which, as Lord Greene says, is a necessary object when the class of trust is one which, prima facie, is for the personal benefit of individuals.

As to Associations for Benefit of Members, see Halsbury, Hailsham Edn, Vol 4, pp 130, 131, para 172; and for Cases, see Digest, Vol 8, pp 261-263, Nos 240-252.

Appeal

Appeal by the defendant HM Attorney General from an order of Cohen J dated 7 November 1945, and reported ( [1945] 2 All ER 711 ), where the facts are fully set out.

Appeal dismissed. Party and party costs to be paid by the appellant; the difference between the respondents' party and party costs and solicitor and client costs to be paid out of the fund. Leave to appeal to the House of Lords granted on terms that the appellant should not seek to upset the orders as to costs made hitherto and should not oppose an order to pay the respondents' costs on appeal to the House of Lords as between solicitor and client in any event.