Private Purpose Trusts and the Re Denley Trust 50 Years On

Morris, Alec J (2020) Private Purpose Trusts and the Re Denley Trust 50 Years On. Trust Law International, 34 (3). pp. 165-184. ISSN 0962-2624

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Abstract

Within England and Wales, it is well-known that a trust cannot be for a purpose unless it is charitable. Yet this assertion is often caveated by the so-called ‘exceptions’ to the rule; one such exception is that of the Re Denley trust. Though some have advocated that it should never have been permitted, the consensus seems to be that the Re Denley trust is yet another form of permissible non-charitable purpose trust. It has now been five decades since the High Court handed down its controversial judgment in Re Denley and notwithstanding the controversy, the decision remains ‘good law’. Though perhaps tempting, it would be naïve to “[place it] on one side in a pile…marked ‘not to be looked at again’”. And to simply dismiss the case as sui generis would likewise trivialise the decision. Indeed, the case requires revisiting not least because it appears to contravene orthodox trust law principles, but also because the decision has been positively cited and relied upon in recent caselaw. So returning to the decision 50 years later is more than just an historically felicitous foray; it is an opportune moment to reconsider our understanding of the fundamental rules and principles governing this area of the law. It may, consequently, require us to reassess those cases which have taken Re Denley as gospel. This article will set out the law in relation to private purpose trusts within England and Wales, and provide a much-needed, up to date critique on the current state of the law. Concomitantly, it will re-examine Re Denley in light of these considerations to establish to what extent, if any, its ostensible departure from the orthodoxy can be justified. Finally, the article will go on to consider possible recognised, alternate methods which could have been employed in Re Denley to achieve the same ends, thus avoiding the creation of this novel, controversial type of trust.

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