R v District Auditor (No 3) Audit District of West Yorkshire MCC [1986]
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In R v District Auditor No 3 Audit District of West Yorkshire MCC, ex parte West Yorkshire MCC [1986] RVR 24, the West Yorkshire Metropolitan County Council sought to establish a discretionary trust with a fund of £400,000. The purpose of this trust was to benefit the inhabitants of the county of West Yorkshire. The trust was discretionary in nature, intending to provide benefits to any or all or some of the inhabitants within the specified geographical area.
However, the judgment rendered by Taylor J concluded that the trust was invalid. The grounds for this invalidity were not rooted in capriciousness but, rather, in administrative unworkability. Taylor J pointed out that the distribution of such relatively small amounts to a potentially vast and undefined class of beneficiaries, namely the inhabitants of the county, would be impractical. Moreover, the court deemed it too difficult and costly to enforce such a distribution effectively.
Taylor J emphasised the sheer impracticality of managing a trust with as many as 2 ½ million potential beneficiaries. The judge concluded that the class of beneficiaries was far too large, rendering the trust administratively unworkable. Importantly, Taylor J referred to the third case mentioned by Lord Wilberforce, suggesting that this particular trust fell into the category of trusts that are so extensive and unmanageable that they become administratively unworkable.
In summary, the court's decision rested on the impracticality of distributing the trust fund to an exceedingly large and undefined class of beneficiaries, making the trust administratively unworkable and, consequently, invalid.
However, the judgment rendered by Taylor J concluded that the trust was invalid. The grounds for this invalidity were not rooted in capriciousness but, rather, in administrative unworkability. Taylor J pointed out that the distribution of such relatively small amounts to a potentially vast and undefined class of beneficiaries, namely the inhabitants of the county, would be impractical. Moreover, the court deemed it too difficult and costly to enforce such a distribution effectively.
Taylor J emphasised the sheer impracticality of managing a trust with as many as 2 ½ million potential beneficiaries. The judge concluded that the class of beneficiaries was far too large, rendering the trust administratively unworkable. Importantly, Taylor J referred to the third case mentioned by Lord Wilberforce, suggesting that this particular trust fell into the category of trusts that are so extensive and unmanageable that they become administratively unworkable.
In summary, the court's decision rested on the impracticality of distributing the trust fund to an exceedingly large and undefined class of beneficiaries, making the trust administratively unworkable and, consequently, invalid.
