The claim concerned two adjacent plots of land on Station Road, Hollingwood near Chesterfield, Derbyshire (Plot 1 and Plot 2, collectively the land). At some point before 1986 a Mr Mills, Mr Hartshorne and Mr Unwin had formed a club for railway workers (the association). Plot 1 was purchased by the three in 1986, the conveyance describing them as the trustees of the association and that they took the plot on trust for the association. In 1990 the same three purchased Plot 2. The conveyance again stated they were purchasing as trustees of an association, but the name of that association was different from that given for the purchase of Plot 1.
In 1996-97 there was an attempt to reconstitute the club (or clubs) as a charity. A deed was executed (the association deed) and an application made to the Charity Commission. The application was rejected and the matter was not pursued further. Mr Hartshorne died in 2000 and Mr Unwin in 2007, leaving Mr Mills the sole surviving trustee. In 2009, in circumstances which were unclear, Mr Mills and the first to third defendants executed a TR1 transferring Plot 2 into their joint names to be held on trust in accordance with the association deed. Mr Mills then died in 2017. The association had ceased to function and dissolved around March 2013 with no membership fees paid after that date.
It seemed clear that both plots were held on trust and the claim was made for directions for the administration of the trust. None of the defendants were willing to take an active role.
- 1) Despite the differences in names as between the two conveyances, it was sufficiently clear that both plots were held under the same trust. There was no reason why the same trustees would have held adjacent plots under different trusts.
- 2) The association deed did not satisfy the requirements of s1(2)(b) of the Recreational Charities Act 1958. In particular the association deed clearly restricted the benefits of the club to members. The facilities the association provided were not provided to the public at large as required by s1(2)(b). Although eligibility for membership was restricted to residents, residents were not entitled to use the facilities unless they were admitted as members. It was not possible to have a charitable private members’ club.
- 3) The failure of the association deed to constitute a charity did not have the effect of relegating the association to the antecedent trust. The members of the association were entitled to the use and enjoyment of the association’s premises including the land. They were capable of enforcing the trust as beneficiaries. In re Denley’s Trust Deed applied.
- 4) There was nothing in the association deed to address what should happen if the association were wound up. The members could vary the rules of the association to provide that the assets be divided between its members and perpetuity was not therefore an obstacle to the trust.
- 5) In all the circumstances the only reasonable inference was that the association had been dissolved. There was no reason to depart from the consensus of former members that this was in March 2013.
- 6) The land should be sold as there was no benefit to anyone in it being retained. The net proceeds of sale were to be divided equally between those who were members as at March 2013 or their estates.
- 7) Members as at the date of dissolution included family members, a defined category of membership under the association deed.
- 8) The issues of the Plot 2 trustees being ordered to account for any dealings and/or any issue of excusing liability for breach of trust were adjourned to give the first to third defendants an opportunity to participate in the proceedings.
- 9) The claim sat somewhere between classes 1) and 2) in Re Buckton. The costs of the claim should be paid out of the trust property as trust expenses prior to any distribution.