Re Denley’s Trust Deed [1969]
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Re Denley’s Trust Deed [1969] 1 Ch 373 is a significant case in English trusts law that addresses the beneficiary principle. It establishes that a trust can be valid as long as the beneficiaries have a direct and tangible interest, enabling them to enforce the trust.
In 1936, the settlor company, HH Martyn & Co Ltd, transferred land to trustees for use as a recreation or sports ground. The primary beneficiaries were the company's employees, and secondary beneficiaries were those allowed by the trustees. The trust deed included a provision that specified the land's transfer to Cheltenham General Hospital under certain conditions.
Goff J held that the trust was valid because it could be construed as ultimately benefiting individuals. He expressed that if the purpose or object trust provides an indirect or intangible benefit that does not give the beneficiaries any standing to enforce the trust, the beneficiary principle may apply to invalidate the trust. However, in this case, the trust deed expressly stated that employees were entitled to use and enjoy the land, addressing the beneficiary principle.
Goff J applied the principle that, generally, if the trust, though expressed as a purpose, is directly or indirectly for the benefit of individuals, it is outside the scope of the beneficiary principle. He cited the importance of beneficiaries having a locus standi to apply to the court to enforce the trust.
Re Denley’s Trust Deed contributes to the understanding of the beneficiary principle. It emphasises that trusts can be valid as long as there are identifiable beneficiaries with a direct and tangible interest. This decision provides flexibility in interpreting trusts that, although expressed as purposes, ultimately benefit individuals and can be enforced by them.
In 1936, the settlor company, HH Martyn & Co Ltd, transferred land to trustees for use as a recreation or sports ground. The primary beneficiaries were the company's employees, and secondary beneficiaries were those allowed by the trustees. The trust deed included a provision that specified the land's transfer to Cheltenham General Hospital under certain conditions.
Goff J held that the trust was valid because it could be construed as ultimately benefiting individuals. He expressed that if the purpose or object trust provides an indirect or intangible benefit that does not give the beneficiaries any standing to enforce the trust, the beneficiary principle may apply to invalidate the trust. However, in this case, the trust deed expressly stated that employees were entitled to use and enjoy the land, addressing the beneficiary principle.
Goff J applied the principle that, generally, if the trust, though expressed as a purpose, is directly or indirectly for the benefit of individuals, it is outside the scope of the beneficiary principle. He cited the importance of beneficiaries having a locus standi to apply to the court to enforce the trust.
Re Denley’s Trust Deed contributes to the understanding of the beneficiary principle. It emphasises that trusts can be valid as long as there are identifiable beneficiaries with a direct and tangible interest. This decision provides flexibility in interpreting trusts that, although expressed as purposes, ultimately benefit individuals and can be enforced by them.
