Oppenheim v Tobacco Securities Trust Co Ltd: HL 13 Dec 1950

Trustees were directed to apply certain income in providing for ‘the education of children of employees or former employees’ of a British limited company or any of its subsidiary or allied companies. The number of eligible employees was over 110,000. Charitable status was claimed.
Held: The trust was not charitable. The nexus, that of being employment by particular employers, did not satisfy the test of public benefit to establish the trust as a charitable trust.
Lord Simonds said: ‘The question is whether that class of persons can be regarded as such a ‘section of the community’ as to satisfy the test of public benefit. These words ‘section of the community’ have no special sanctity, but they conveniently indicate first, that the possible (I emphasize the word ‘possible’) beneficiaries must not be numerically negligible, and secondly, that the quality which distinguishes them from other members of the community, so that they form by themselves a section of it, must be a quality which does not depend on their relationship to a particular individual. It is for this reason that a trust for the education of members of a family or, as in In re Compton [1945] Ch 123, of a number of families cannot be regarded as charitable. A group of persons may be numerous but, if the nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes.’
He remarked that whilst the law of charity is pervaded with illogicalities: ‘It must not, I think, be forgotten that charitable institutions enjoy rare and increasing privileges, and that the claim to come within that privileged class should be clearly established.’

Lord Simonds, Lord Normand, Lord Oaksey, Lord Morton of Henryton, Lord MacDermott
[1951] AC 297 HL(E), [1950] UKHL 2, [1951] 1 All ER 31
England and Wales
CitedVerge v Somerville PC 1924
On an appeal from New South Wales, The Board considered the validity of a gift ‘to the trustees’ of the Repatriation Fund or other similar fund for the benefit of New South Wales returned soldiers’.
Held: Trusts for education and religion do . .

Cited by:
CriticisedDingle v Turner and Others HL 16-Feb-1972
Gift to Specified person not Charitable
The testator left part of his property on charitable trusts for the relief of the poverty of ‘the poor employees’ of a company. The appellant argued that it was not a charitable gift, and that the gift failed.
Held: The purpose will not be . .
CitedInland Revenue Commissioners v Glasgow Police Athletic Association HL 9-Mar-1953
The House was asked whether the taxpayer association was established for ‘Charitable purposes only’ so as to benefit from tax exemptions. The association promoted sporting activities among members of the Glasgow police.
Held: Though the . .
CitedHelena Partnerships Ltd v HM Revenue and Customs CA 9-May-2012
The company had undertaken substantial building works and sought associated tax relief. The court was asked whether, following a change in the company’s memorandum and articles of association, the company, a registered social landlord, remained a . .

Lists of cited by and citing cases may be incomplete.


Leading Case

Updated: 09 November 2021; Ref: scu.181284