[CHANCERY DIVISION]

In re WEST SUSSEX CONSTABULARY'S WIDOWS, CHILDREN

AND BENEVOLENT (1930) FUND TRUSTS

BARNETT v. KETTERINGHAM AND OTHERS

[1968 W. No. 2805]

Trusts - Distribution of Fund - Fund for dependants of subscribers - Revenue also derived from outside sources - Closing of Fund - Whether resulting trust for members - Whether resulting trust for donors - Whether bona vacantia.

Members of the West Sussex Constabulary subscribed to a fund for the purpose of granting allowances to widows and dependants of deceased members. Revenue was also derived from other sources including the proceeds of: (a) entertainments, raffles and sweepstakes; (b) collecting-boxes; (c) donations, including legacies. On January 1, 1968, the constabulary was amalgamated with other police forces. On June 7, 1968, a meeting of members resolved to amend the fund's rules enabling them to wind up the fund and distribute its assets under a scheme prescribed in the resolution.

On a summons by the trustees for the court's approval of the proposed method of dealing with the fund the court ruled that the meeting of June 7, 1968, was abortive for there were no members after December 31, 1967, capable of holding a meeting, amending the rules, or winding up the fund. On the question what in those circumstances was the destination of the fund:-

Held, (1) that the fund could not, on the analogy of the members' club cases, belong to the members themselves since, as the rules stood, only third parties could benefit; that there could not be a resulting trust for members since their money had been put up on a contractual, and not a trust basis; that accordingly, their contributions, apart from any claim members might have in contract arising from frustration or total failure of consideration, were bona vacantia (post, p. 10D-G).

Cunnack v. Edwards [1895] 1 Ch. 489; [1896] 2 Ch. 679, C.A. applied.

In re Printers and Transferrers Amalgamated Trades Protection Society [1899] 2 Ch. 184; In re Lead Co.'s Workmen's Fund Society [1904] 2 Ch. 196 and Tierney v. Tough [1914] 1 I.R. 142 considered.

In re Hobourn Aero Components Ltd.'s Air Raid Distress Fund [1946] Ch. 86; [1945] 2 All E.R. 711 distinguished.

(2) That no resulting trust arose from outside contributions to the fund under class (a) or class (b), since the former had been made on a contractual, not a trust basis and the latter should be regarded as made by donors intending to part out and out with their money; the contributions were bona vacantia in both cases (post, pp. 11E-G, 13E - 14A).

In re Welsh Hospital (Netley) Fund [1921] 1 Ch. 655, and In re Hillier's Trusts [1954] 1 W.L.R. 9; [1953] 2 All E.R. 1547 followed.

In re Ulverston and District New Hospital Building Trusts [1956] Ch. 622; [1956] 3 W.L.R. 559; [1956] 3 All E.R. 164, C.A. considered

Dictum of Harman J. in In re Gillingham Bus Disaster Fund [1958] Ch. 300; [1957] 3 W.L.R. 1069; [1958] 1 All E.R. 37 not followed.

(3) That in the case of class (c), the purpose of the donations was unequivocal and there was accordingly a resulting trust for the donors or their estates (post, p. 16A).

In re Abbott Fund Trusts [1900] 2 Ch. 326 applied.

The following cases are referred to in the judgment:

Abbott Fund Trusts, In re [1900] 2 Ch. 326.

Braithwaite v. Attorney-General [1909] 1 Ch. 510.

Cunnack v. Edwards [1895] 1 Ch. 489; [1896] 2 Ch. 679, C.A.

Gillingham Bus Disaster Fund, In re [1958] Ch. 300; [1957] 3 W.L.R. 1069; [1958] 1 All E.R. 37.

Hillier's Trusts, In re [1954] 1 W.L.R. 9; [1953] 2 All E.R. 1547; [1954] 1 W.L.R. 700; [1954] 2 All E.R. 59, C.A.

Hobourn Aero Components Ltd.'s Air Raid Distress Fund, In re [1946] Ch. 86; [1945] 2 All E.R. 711.

Lead Co.'s Workmen's Fund Society, In re [1904] 2 Ch. 196.

Printers and Transferrers Amalgamated Trades Protection Society, In re [1899] 2 Ch. 184.

St. Andrew's Allotment Association, In re [1969] 1 W.L.R. 229; [1969] 1 All E.R. 147.

Tierney v. Tough [1914] 1 I.R. 142.

Ulverston and District New Hospital Building Trusts, In re [1956] Ch. 622; [1956] 3 W.L.R. 559; [1956] 3 All E.R. 164, C.A.

Welsh Hospital (Netley) Fund, In re [1921] 1 Ch. 655.

The following additional cases were cited in argument:

Brown v. Dale (1878) 9 Ch.D. 78.

Customs and Excise Officers' Mutual Guarantee Fund, In re [1917] 2 Ch. 18.

Feeney and Shannon v. MacManus [1937] I.R. 23.

ADJOURNED SUMMONS.

The West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund had as its object

"the raising of funds by contribution of members, interest on capital, etc., for the purpose of granting allowances:- (a) To the widow of a deceased member (b) To a child ... of a deceased member (c) To the widowed mother ... who at the time of his death was dependent on the deceased member, subject to the discretion of the committee."

Rule 10 of the rules provided:

"any member who voluntarily terminates his membership shall forfeit all claim against the fund, except in the case of a member transferring to a similar fund of another force, in which instance the contributions paid by the member to the West Sussex Constabulary's ... Fund may be paid into the fund of the force to which the member transfers."

By the Sussex Police (Amalgamation) Order, 1967, S.I. 1967, No. 68, made in pursuance of the Police Act, 1964, the West Sussex Constabulary was amalgamated with other police forces to form a single force known as the Sussex Constabulary with effect from January 1, 1968. Doubts arose as to how the fund should be dealt with, there being no express provision in the rules relating to any winding up although rule 14 gave members a power of amendment at annual meetings. The net assets at December 31, 1967, were about £35,000; income (apart from that on investments) was derived from (a) members' subscriptions, (b) donations including those from football sweepstakes and raffles, (c) police balls, and (d) collecting-boxes.

On June 7, 1968, the annual general meeting of members resolved that the rules of the fund be amended by the addition of a rule providing for the winding up of the fund and for the application of the fund and its income in the purchase of annuities for widows and children receiving benefits at December 31, 1967, and, subject thereto, in the payment of any balance to those who were members of the fund at December 31, 1967, and to the personal representatives of any who had since died in equal shares.

The trustees by this summons asked the court to determine, inter alia: (1) whether they now held the fund and its income on trust to apply it in accordance with the rules as amended at the meeting of June 7, 1968; (2) if not, whether they ought to hold the fund on trust to continue to pay annuities at the same rates to members' widows and children who were receiving annuities before December 31, 1967, and, subject to that, on trust to divide the fund according to their respective contributions between (a) those who were members at December 31, 1967; (b) all past and present members; (c) to repay the contributions of those members transferred to the Sussex Constabulary, holding the balance (if any) on trust for all past and present members according to their respective contributions

or (d) for the Crown as bona vacantia; or (e) whether the fund was held on some other and, if so, what trusts. The trustees further asked for all necessary accounts, directions and inquiries, and for representation orders in respect of five defendants claiming to be beneficially interested in the fund.

E. A. Seeley for the plaintiff trustees. The question is whether the trustees can use the fund in accordance with the resolution of June 7, 1968.

K. J. Farrow for the first defendant, representing members' widows and children receiving annuities as at December 31, 1967. At the time of the meeting there were no members capable of passing the resolution because of the amalgamation order. After amalgamation, there could not have been any serving members of the West Sussex force but members could have continued as members of the fund on the basis of being retired members of the police force. Otherwise, without serving members, the whole basis of the fund must disappear.

H. Hillaby for the second defendant, representing members' widows who died after December 31, 1967, and before June 8, 1968. Although the West Sussex force went out of existence at December 31, 1967, which brought the fund to an end, the contract between the members and the fund for the purpose of the allowances was not destroyed, there being an implied term when the contract was made that the fund would go on and allowances to widows continue.

[Goff J. decided that the meeting of June 7, 1968, was abortive and said the question was what was the destination of the fund in those circumstances.]

K. W. Rubin for the third defendant, representing members who transferred to the Sussex Constabulary on January 1, 1968. Subject to claims against the fund on behalf of widows and children, the fund belongs to those who were members at December 31, 1967. So far as donations have been made for specific purposes there is a resulting trust for donors: In re Gillingham Bus Disaster Fund [1958] Ch. 300. Otherwise, donations are a general gift to the fund.

On the basis that a member of a corporate or quasi-corporate body is entitled to such rights as membership gives him, then in the absence of any express provision in the rules to the contrary, he has a right to the funds of that body equally with the others, that right being co-extensive with his membership: see Brown v. Dale (1878) 9 Ch.D. 78 and In re St. Andrew's Allotment Association [1969] 1 W.L.R. 229. Secondly, where a quasi-corporate body is dissolved, either by resolution of the members or as a result of some catastrophe which brings it to a premature end, then subject to the settlement of outstanding liabilities or obligations, the assets are divisible amongst the members on a dissolution by virtue of their status as members: Brown v. Dale (1878) 9 Ch.D. 78; In re Lead Co.'s Workmen's Fund Society [1904] 2 Ch. 196; In re St. Andrew's Allotment Association [1969] 1 W.L.R. 229; Braithwaite v. Attorney-General [1909] 1 Ch. 510.

The present case is an example of a body coming to a premature end. Therefore, the funds are divisible amongst the members at that time in

equal shares. Concerning contributions to football sweepstakes, the court should infer that they were outright gifts to the fund in the absence of specific evidence that they were made for a particular purpose.

L. Elizabeth Appleby for the fourth defendant, representing members retired before January 1, 1968, but remaining members of the fund. The fund should be distributed to members in proportion to the contributions paid. Failing that, it should be distributed to members equally at the time of dissolution: see the reference to club cases in In re St. Andrew's Allotment Association [1969] 1 W.L.R. 229, 238. If the court should not agree that the fund is divisible among the members either on the first or second basis, then the fund should go as on a resulting trust for them.

F. M. Ferris for the fifth defendant, representing persons who ceased to be members prior to December 31, 1967. The fund goes as on a resulting trust: see In re Gillingham Bus Disaster Fund [1958] Ch. 300, per Harman J. at p. 310; the doctrine does not rest on any evidence of a state of mind; it is the result of unforeseen events. The present is precisely that kind of case. It was always intended that this should be a continuing fund, but an unforeseen happening - the amalgamation of the force with other police forces - has prevented this intention from being fulfilled. It might be that if the rules of the fund had been revised in the light of this event a trust for members of the fund for the time being could have been created since contributors to the fund make their contributions subject to the power to change the rules. This power has now gone. The general rule might also be displaced if there was an out-and-out gift to the fund which then would become bona vacantia. There can be a distinction between members' contributions and contributions through collecting-boxes but there cannot be a distinction between different classes of members and former members. The two propositions which have been put against the possibility of a resulting trust are by way of exception to the general rule, i.e., that accepted in the Gillingham case.

The authorities can be grouped into (1) membership cases where the surplus is divisible amongst members; (2) bona vacantia cases where the surplus goes to the Crown; and (3) resulting trust cases. The authorities on (1) membership cases are In re Printers and Transferrers Amalgamated Trades Protection Society [1899] 2 Ch. 184; In re Lead Company's Workmen's Fund Society [1904] 2 Ch. 196; Braithwaite v. Attorney-General [1909] 1 Ch. 510; Tierney v. Tough [1914] 1 I.R. 142; Feeney and Shannon v. MacManus [1937] I.R. 23; and In re Customs and Excise Officers' Mutual Guarantee Fund [1917] 2 Ch. 18. The latter case is important because in contrast to the others, the case for former members was argued. In the St. Andrew's Allotment case [1969] 1 W.L.R. 229, the question was who were members. In all these cases benefits were provided for members or for a class of persons who included members.

The authorities on (2), bona vacantia, are Cunnack v. Edwards [1895] 1 Ch. 489 and Braithwaite v. Attorney-General [1909] 1 Ch. 510. The first either depends on its own facts or is a decision on the basis that it was a friendly society. In the second, a resulting trust was negatived for the reasons given at pp. 518, 519. The test for bona vacantia must be as stated by Harman J. in the Gillingham case [1958] Ch. 300, 310.

The authorities on (3), a resulting trust, are In re Hobourn Aero Components Ltd's Air Raid Distress Fund [1946] Ch. 86 and the Gillingham case. In the first, the Crown made no claim as bona vacantia, and counsel for the contributors admitted that persons who had ceased to contribute were entitled to participate. In the Gillingham case, contributions were entirely for third parties. The court is invited to follow the Gillingham case. As against those members of the force who transferred and those who ceased to be members at December 31, 1967, a distinction can be drawn between the friendly society and the club cases.

Dealing with two general points: (1) It is accepted that there can be no claim that money raised through collecting-boxes or otherwise is held on a resulting trust for members, but there can be a resulting trust in respect of a surplus attributable to the members' own contributions: In re Ulverston and District New Hospital Building Trusts [1956] Ch. 622; (2) on the effect of rule 10 of the fund's rules, it might be said that the first part of the rule would exclude members of the force who ceased to be members before December 31, 1967 but they would only be excluded so long as the fund was a going concern; rule 10 is part of the trusts affecting the fund, and while these trusts continue, former members are excluded; but once the express trusts are exhausted the resulting trust remains unaffected by rule 10.

E. A. Seeley for the plaintiff trustees, on behalf of non-ascertained persons. Those who made contributions through collecting-boxes and similar means are entitled to a proportion of the fund. The case is put on the basis of a resulting trust. The fund should be regarded as in two parts - that for members and that for donors. So far as the donor's share is concerned, that should go back to them as on a resulting trust. The question is whether the assets, as in the case of an ordinary association or club, are divisible at the date of dissolution or whether the ordinary principle applies: that where there is a trust which fails to take effect on the happening of an event, they go on a resulting trust. If the second is correct, the subsidiary question is whether there is some contractual or other arrangement which would displace it. As between the club cases and a resulting trust, it depends on whether moneys which were provided were for members' own benefit or whether there was a subsisting trust for the benefit of third parties. The cases on the subject fit very well when considered from this standpoint. On the one side: Cunnack v. Edwards [1895] 1 Ch. 489; Braithwaite v. Attorney-General [1909] 1 Ch. 510. On the other side: the Printers and Transferrers case [1899] 2 Ch. 184; Lead Company case [1904] 2 Ch. 196; Tierney v. Tough [1914] 1 I.R. 142; and St. Andrew's Allotment case [1969] 1 W.L.R. 229. The cases show that where there are benefits for members, the members for the time being can do what they like with the fund but not where there are benefits for third parties.

J. P. Warner for the sixth defendant, the Treasury Solicitor. Subject to the claim against the fund of members' widows and children, the fund is bona vacantia. There can be no other rightful claim. A material factor is the sources from which the fund was derived. The income and expenditure account shows first, members' contributions; secondly, proceeds of

sweepstakes, raffles and police balls; thirdly, collecting-boxes and fourthly, sundry donations and legacies.

There are three groups of persons with claims on the funds those who were members alight December 31, 1967, their claim being based on the analogy of the members' club or mutual benefit society cases; (2) those who were members at any time claiming on the basis of a resulting trust of the property of the fund; (3) other persons who contributed to the fund through sweepstakes, raffles, balls, collecting boxes and sundry donations and legacies who also claim that the fund goes as on a resulting trust. None of these groups has a rightful claim.

Dealing first with group (1), members could have had a claim to the surplus if they had validly changed the rules of the fund before December 31, 1967. This was not done. The present type of case must be distinguished from the case of a members' club or trade union or mutual benefit fund which exists only for the benefit of the members for the time being, where the property belongs to them. There, the principle is that the property on dissolution goes among the members at the time of dissolution. In the present case, the benefit of the fund is intended for the widows and children of members, and not for members themselves. The position of a fund of the present kind is shown by Cunnack v. Edwards [1895] 1 Ch. 489. There is a right to change the rules, but it does not make the members owners of the fund as in the case of a club. The present case is distinguishable from Brown v. Dale (1878) 9 Ch.D. 78 because the members here passed no resolution before December 31, 1967, to divide the fund's surplus among themselves. In re Printers and Transferrers Amalgamated Trades Protection Society [1899] 2 Ch. 184 and In re Lead Co.'s Workmen's Fund Society [1904] 2 Ch. 196 were both cases where the funds were for the exclusive benefit of members for the time being. In Tierney v. Tough [1914] 1 I.R. 142 the fund was primarily for the benefit of members. In re Customs and Excise Officers' Mutual Guarantee Fund [1917] 2 Ch. 18 and In re St. Andrew's Allotment Association [1969] 1 W.L.R. 229 were again cases where the property belonged to the members alone. Therefore, in all the cases where there was a distribution among the members at the time of dissolution, the funds or assets existed for the exclusive benefit of members for the time being, and those cases can be distinguished from Cunnack v. Edwards [1895] 1 Ch. 489 and the present case.

Turning to (2), persons who were members at any time in the fund's existence, claiming on the basis of a resulting trust, their claim cannot be supported either on principle or on authority. Where a person disposes of property on trusts which fail to exhaust the beneficial interest, the beneficial interest, so far as not effectually disposed of, remains in him. This is a principle of equity resting on the presumed intention of the disponor. It does not depend on his actual intention. The presumption arises in equity from the nature of the transaction, and does not arise if it is of such a kind as to negative any real possibility of that intention. Further, the present is not a case of a particular disponor of particular property on a particular trust, but of a fund intended to continue over an indefinite period, and to be fed contributions by a fluctuating class of persons. If it is impossible in such a fund to identify the contributions of any particular

contributor, there cannot be a resulting trust because it is necessary to a trust that the property subject to the trust should be ascertainable. The doctrine of resulting trust has nothing to do with payments made under a contract. The difficulty in the case of some contracts for the creation of a fund - as here - was resolved by the Court of Appeal in Cunnack v. Edwards [1896] 2 Ch. 679. Here, there is no claim in contract at the moment but only a claim as on a resulting trust.

[GOFF J. It may well be that there is a contractual claim.]

If there was a claim on the basis of contract, the Crown would relieve the trustees and itself pay the claim.

Concerning (3) the doctrine of resulting trust cannot apply to contributions through sweepstakes, raffles and balls. The nature of the transaction negatives any possibility of it. So it does in the case of collecting boxes. There has to be a situation which in equity raises the presumption of resulting trust. In re Abbott Fund Trusts [1900] 2 Ch. 326 was the principal authority on which Harman J. relied in In re Gillingham Bus Disaster Fund [1958] Ch. 300. It was not a collecting-box case at all.

Where money is placed in a box for charity, it has to be decided whether to infer a general charitable intention. If there is, the money is applied cy pr�s. Otherwise, it is bona vacantia. The words of P. O. Lawrence J. in In re Welsh Hospital (Netley) Fund [1921] 1 Ch. 655. 660 are relied on. They were echoed by Upjohn J. in In re Hillier's Trusts [1954] 1 W.L.R. 9. The circumstances of the gift must negative any right to a return of what was given. In In re Ulverston and District New Hospital Building Trusts [1956] Ch. 622 there was no conflict between bona vacantia and charity. The decision of the court did not touch the unidentifiable donor. The conclusion must be that collecting boxes cannot give rise to a resulting trust. To hold otherwise would be not only inconsistent with the foundation of the doctrine but also with the principle that equity does nothing in vain. That principle is particularly applicable in cases of equitable remedies. A court of equity will not order a vain inquiry.

So far as concerns sundry donations to the fund, the judgments in In re Hillier's Trusts and In re Ulverston show that where there is a mixed fund, it is necessary, in considering whether there is a resulting trust in the case of identifiable contributions to distinguish between a case where there has been a failure ab initio of the purpose of the fund and a case where the immediate purpose of the fund has been fulfilled, the trustees being left with a surplus. The cases show that a resulting trust is much more easily excluded in the latter than the former case. It is in the end a question of presumed intention.

Nov. 27. GOFF J. I have already decided that the meeting of June 7, 1968, was abortive and that there were not at any time after December 31, 1967, any members of the fund capable of holding a meeting, amending the rules, or winding up the fund. I now have to determine what is its destination in those circumstances.

First, it was submitted that the fund belongs exclusively and in equal shares to all those persons now living who were members on December 31,

1967, and the personal representatives of all the then members since deceased, to all of whom I will refer collectively as "the surviving members." That argument is based on the analogy of the members' club cases, and the decisions in In re Printers and Transferrers Amalgamated Trades Protection Society [1899] 2 Ch. 184, In re Lead Company's Workmen's Fund Society [1904] 2 Ch. 196 and the Irish case of Tierney v. Tough [1914] 1 I.R. 142. The ratio decidendi of the first two of those cases was that there was a resulting trust, but that would not give the whole fund to the surviving members, unless rule 10 of the fund's rules could somehow be made to carry to them the contributions of the former members despite the failure of the purposes of the fund (as was pointed out by O'Connor M.R. in Tierney v. Tough, at p. 155), and unless indeed the moneys raised from outside sources also could somehow be made to accrue to the surviving members. I agree with Ungoed-Thomas J. that the ratio decidendi of Tierney v. Tough [1914] 1 I.R. 142 is to be preferred: see In re St. Andrew's Allotment Association [1969] 1 W.L.R. 229, 238.

This brings one back to the principle of the members' clubs, and I cannot accept that as applicable for three reasons: First, it simply does not look like it; this was nothing but a pensions or dependent relatives fund not at all akin to a club; secondly, in all the cases where the surviving members have taken, with the sole exception of Tierney v. Tough, the club society or organisation existed for the benefit of the members for the time being exclusively, whereas in the present case, as in Cunnack v. Edwards [1896] 2 Ch. 679, only third parties could benefit. Moreover, in Tierney v. Tough the exception was minimal and discretionary and can, I think, fairly be disregarded. Finally, this very argument was advanced and rejected by Chitty J. in Cunnack v. Edwards at first instance [1895] 1 Ch. 489, 496, and was abandoned on the hearing of the appeal. That judgment also disposes of the further argument that the surviving members of the fund had power to amend the rules under rule 14 and could therefore have reduced the fund into possession, and so ought to be treated as the owners of it or the persons for whose benefit it existed at the crucial moment. They had the power but they did not exercise it, and it is now too late.

Then it was argued that there is a resulting trust, with several possible consequences. If this be the right view there must be a primary division of the fund into three parts, one representing contributions from former members, another contributions from the surviving members, and the third moneys raised from outside sources. The surviving members then take the second, and possibly by virtue of rule 10, the first also. That rule is as follows:

"Any member who voluntarily terminates his membership shall forfeit all claim against the fund, except in the case of a member transferring to a similar fund of another force, in which instance the contributions paid by the member to the West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund may be paid into the fund of the force to which the member transfers."

Alternatively, the first part may belong to the past members on the footing that rule 10 is operative so long only as the fund is a going concern, or

may be bona vacantia. The third is distributable in whole or in part between those who provided the money, or again is bona vacantia.

In my judgment the doctrine of resulting trust is clearly inapplicable to the contributions of both classes. Those persons who remained members until their deaths are in any event excluded because they have had all they contracted for, either because their widows and dependants have received or are in receipt of the prescribed benefits, or because they did not have a widow or dependants. In my view that is inherent in all the speeches in the Court of Appeal in Cunnack v. Edwards [1896] 2 Ch. 679. Further, whatever the effect of the fund's rule 10 may be upon the contributions of those members who left prematurely, they and the surviving members alike are also in my judgment unable to claim under a resulting trust because they put up their money on a contractual basis and not one of trust: see per Harman J. in In re Gillingham Bus Disaster Fund [1958] Ch. 300, 314. The only case which has given me difficulty on this aspect of the matter is In re Hobourn Aero Components Ltd.'s Air Raid Distress Fund [1946] Ch. 86, where in somewhat similar circumstances it was held there was a resulting trust. The argument postulated, I think, the distinction between contract and trust but in another connection, namely, whether the fund was charitable: see pp. 89 and 90. There was in that case a resolution to wind up but that was not, at all events as expressed, the ratio decidendi: see per Cohen J. at p. 97, but, as Cohen J. observed, there was no argument for bona vacantia. Moreover, no rules or regulations were ever made and although in fact £1 per month was paid or saved for each member serving with the forces, there were no prescribed contractual benefits. In my judgment that case is therefore distinguishable.

Accordingly, in my judgment all the contributions of both classes are bona vacantia, but I must make a reservation with respect to possible contractual rights. In Cunnack v. Edwards [1895] 1 Ch. 489 and Braithwaite v. Attorney-General [1909] 1 Ch. 510 all the members had received, or provision had been made for, all the contractual benefits. Here the matter has been cut short. Those persons who died whilst still in membership cannot, I conceive, have any rights because in their case the contract has been fully worked out, and on a contractual basis I would think that members who retired would be precluded from making any claim by rule 10, although that is perhaps more arguable. The surviving members, on the other hand, may well have a right in contract on the ground of frustration or total failure of consideration, and that right may embrace contributions made by past members, though I do not see how it could apply to moneys raised from outside sources. I have not, however, heard any argument based on contract and therefore the declarations I propose to make will be subject to the reservation which I will later formulate. This will not prevent those parts of the fund which are bona vacantia from being paid over to the Crown as it has offered to give a full indemnity to the trustees.

I must now turn to the moneys raised from outside sources. Counsel for the Treasury Solicitor made an overriding general submission that there cannot be a resulting trust of any of the outside moneys because in the circumstances it is impossible to identify the trust property; no doubt something could be achieved by complicated accounting, but this,

he submitted, would not be identification but notional reconstruction. I cannot accept that argument. In my judgment, in a case like the present, equity will cut the Gordian knot by simply dividing the ultimate surplus in proportion to the sources from which it has arisen. Chitty J. in Cunnack v. Edwards at first instance [1895] 1 Ch. 489, particularly at pp. 497 and 498, was prepared to order an inquiry, notwithstanding the difficulty that it involved, going back over many years, and despite the fact that the early records were not available; but that was a difficulty of ascertaining the original contributions, not of working out surpluses or interest calculations year by year. Similarly it was not suggested that any such operation ought to be carried out, or that the necessity for it prevented the doctrine of resulting trust being applied in the In re Printers and Transferrers case [1899] 2 Ch. 184. Yet in both those cases, although the matter was not further complicated by outside contributions, the problem of interest on invested funds, and of contributions and expenditure made at different times, must have presented itself. Again, in the Printers case, fines and forfeitures were ignored: see pp. 189 and 190. There may be cases of tolerable simplicity where the court will be more refined, but in general, where a fund has been raised from mixed sources, interest has been earned over the years and income - and possibly capital - expenditure has been made indiscriminately out of the fund as an entirety, and then the venture comes to an end prematurely or otherwise, the court will not find itself baffled but will cut the Gordian knot as I have said.

Then counsel divided the outside moneys into three categories, first, the proceeds of entertainments, raffles and sweepstakes; secondly, the proceeds of collecting-boxes; and, thirdly, donations, including legacies if any, and he took particular objections to each.

I agree that there cannot be any resulting trust with respect to the first category. I am not certain whether Harman J. in In re Gillingham Bus Disaster Fund [1958] Ch. 300 meant to decide otherwise. In stating the facts at p. 304 he referred to "street collections and so forth." In the further argument at p. 309 there is mention of whist drives and concerts but the judge himself did not speak of anything other than gifts. If, however, he did, I must respectfully decline to follow his judgment in that regard, for whatever may be the true position with regard to collecting-boxes, it appears to me to be impossible to apply the doctrine of resulting trust to the proceeds of entertainments and sweepstakes and such-like money-raising operations for two reasons: first, the relationship is one of contract and not of trust, the purchaser of a ticket may have the motive of aiding the cause or he may not; he may purchase a ticket merely because he wishes to attend the particular entertainment or to try for the prize, but whichever it be, he pays his money as the price of what is offered and what he receives; secondly, there is in such cases no direct contribution to the fund at all; it is only the profit, if any, which is ultimately received and there may even be none.

In any event, the first category cannot be any more susceptible to the doctrine than the second to which I now turn. Here one starts with the well-known dictum of P. O. Lawrence J. in In re Welsh Hospital (Netley) Fund [1921] 1 Ch. 655, 660 where he said:

"So far as regards the contributors to entertainments, street collections etc., I have no hesitation in holding that they must be taken to have parted with their money out-and-out. It is inconceivable that any person paying for a concert ticket or placing a coin in a collecting-box presented to him in the street should have intended that any part of the money so contributed should be returned to him when the immediate object for which the concert was given or the collection made had come to an end. To draw such an inference would be absurd on the face of it."

This was adopted by Upjohn J., in In re Hillier's Trusts [1954] 1 W.L.R. 9 where the point was actually decided. He said, at pp. 21, 22:

"Then there remain the funds raised through whist drives and the like where it is impossible to trace the donors. With regard to that class I respectfully agree with the observations of P. O. Lawrence J. that it is inconceivable that any person paying for a concert ticket or placing a coin in a collecting-box that was presented to him, should have intended that any part of the money so contributed should be returned to him if there was a surplus when the immediate object for which the concert was given, or the collection was made, had been achieved. That must, I think, be so even where the object was never achieved, for the simple reason that the circumstances in which the money was given, negative the idea that the donor ever intended that he should receive any of that money back. That, however, in my judgment, does not conclude the matter. The donor has no further interest in the money because he has given it out-and-out; but where there is an initial failure of the charitable purpose, it seems to be an open matter as to whether the true result is that there is a general charitable intention, or the gifts become bona vacantia. That question has not been argued before me and indeed the Crown has not been joined with regard to it. It may be that the Crown will not desire to argue the point but I do not desire to prejudge that question in any way. All that I can do is to declare that the original donors of that class no longer have any interest in the money subscribed or contributed by them or the investments now representing the same."

This was approved by Denning L.J. in the Court of Appeal [1954] 1 W.L.R. 700 although it is true he went on to say that the law makes a presumption of charity. I quote from p. 714:

"Let me first state the law as I understand it in regard to money collected for a specific charity by means of a church collection, a flag day, a whist drive, a dance, or some such activity. When a man gives money on such an occasion, he gives it, I think, beyond recall. He parts with his money out-and-out."

It was also approved by Romer L.J., at p. 719:

"It is further urged that the brochure revealed that funds would be raised by such means as the organisation of special efforts among sports clubs, dramatic societies, and so forth, and that persons who responded to such efforts would in no circumstances expect to recover

what they gave. This, of course, is perfectly true, but I find it difficult to see how it really affects the matter."

And then he continues with something else which is material later on:

"If a man contributes £5,000 towards the promotion of some particular purpose, his intention of getting back his money if the purpose fails is not lessened, I should have thought, by the knowledge that the organisers are also approaching the general public for coins through the medium, for example, of collecting-boxes in the street."

In In re Ulverston and District New Hospital Building Trusts [1956] Ch. 622, 633 Jenkins L.J. threw out a suggestion that there might be a distinction in the case of a person who could prove that he put a specified sum in a collecting-box, and, in the Gillingham case [1958] Ch. 300 Harman J. after noting this, decided that there was a resulting trust with respect to the proceeds of collections. He said at p. 314:

"In my judgment the Crown has failed to show that this case should not follow the ordinary rule merely because there was a number of donors who, I will assume, are unascertainable. I see no reason myself to suppose that the small giver who is anonymous has any wider intention than the large giver who can be named. They all give for the one object. If they can be found by enquiry the resulting trust can be executed in their favour. If they cannot I do not see how the money could then, with all respect to Jenkins L.J., change its destination and become bona vacantia. It will be merely money held upon a trust for which no beneficiary can be found. Such cases are common and where it is known that there are beneficiaries the fact that they cannot be ascertained does not entitle the Crown to come in and claim. The trustees must pay the money into court like any other trustee who cannot find his beneficiary. I conclude, therefore, that there must be an enquiry for the subscribers to this fund."

It will be observed that Harman J. considered that In re Welsh Hospital (Netley) Fund [1921] 1 Ch. 655; In re Hillier's Trusts [1954] 1 W.L.R. 9 and In re Ulverston and District New Hospital Building Trusts [1956] Ch. 622 did not help him greatly because they were charity cases. It is true that they were, and, as will presently appear, that is in my view very significant in relation to the third category, but I do not think it was a valid objection with respect to the second, and for my part I cannot reconcile the decision of Upjohn J. in In re Hillier's Trusts with that of Harman J. in the Gillingham case [1958] Ch. 300. As I see it, therefore, I have to choose between them. On the one hand it may be said that Harman J. had the advantage, which Upjohn J. had not, of considering the suggestion made by Jenkins L.J. On the other hand that suggestion with all respect, seems to me somewhat fanciful and unreal. I agree that all who put their money into collecting-boxes should be taken to have the same intention, but why should they not all be regarded as intending to part with their money out and out absolutely in all circumstances? I observe that P. O. Lawrence J. in In re Welsh Hospital [1921] Ch. 655, 661, used very strong words. He said any other view was inconceivable and absurd

on the face of it. That commends itself to my humble judgment, and I therefore prefer and follow the judgment of Upjohn J. in In re Hillier's Trusts. This does not appear to me to transgress the principle which Harman J. laid down in the Gillingham case where he said, at p. 310:

"This doctrine does not, in my judgment, rest on any evidence of the state of mind of the settler, for in the vast majority of cases no doubt he does not expect to see his money back; he has created a trust which so far as he can see will absorb the whole of it. The resulting trust arises where that expectation is for some unforeseen reason cheated of fruition, and is an inference of law based on after-knowledge of the event."

I accept that fully but I also accept the submission of counsel for the Treasury Solicitor that equity will not impute an intention which it considers would be absurd on the face of it.

That brings me to the third category [donations, including legacies]. Here counsel says that the cases of In re Hillier's Trusts and In re Ulverston show that there is a distinction to be drawn between initial failure, where apart from expenses the fund is intact, and subsequent failure or surplus to requirements, when identity is lost, and I agree they do. Then he says that in the latter type of case at least the court must or should attribute to specific donors the same intention of parting with their money irrevocably as it imputes to those who place their money in collecting-boxes. He founds himself in particular on a passage in the judgment of Evershed M.R. in In re Hillier's Trusts [1954] 1 W.L.R. 700, 713, which is as follows:

"In my judgment, there is no good answer to the summary of his argument which Mr. Cross put before us, which was to this effect: It is sought to find a common intention, limited to a single and specific object, among all givers of a particular category; the particular category put forward is that of donors who, in response to the brochure, made use of document 1 to specify the Slough Hospital; but whatever might be the interpretation properly put upon these documents, as it were, in vacuo, the fact is that the category selected not only included persons who subscribed after the passing of the Act, but also consisted of persons who must be taken to have been aware of the pre-brochure contributions, and aware also of the fact that their gifts would be intermingled with those of others who would not in any circumstances expect, or be entitled to claim, a return of their money; and, therefore, no such intention can be found common to donors of a particular category differentiating them from the rest of the contributors on whose part no claim for any return could be substantiated. More briefly, but, in my judgment, no less correctly, the matter was thus put by Mr. Buckley in reply when he said that where there are many sources of contribution to a charitable fund, then all contributions should, in the absence of special circumstances, be taken to contribute on terms common to all; and the only such terms possible in the present case deny any right to a return of their money to all contributors."

On this part of his case, however, the argument appears to break down because those were charity cases, and the question was whether the gifts were made for a particular purpose or with a general charitable intention, which, of course, does not arise where the purpose is not charitable. Moreover - and this in my judgment is crucial - the actual purpose was equivocal and it was made abundantly clear that the fact that the gifts were going to be combined with the proceeds of collecting-boxes and entertainments was material only because of that very fact. Had the purpose of the donation been unambiguous it could not have been affected by such mixture. The passage on which counsel relied and which I have cited from the judgment of Evershed M.R. in In re Hillier's Trusts [1954] 1 W.L.R. 700, 713 must be read in the light of what Evershed M.R. had already said on p. 712, and in any case one has his own explanation in In re Ulverston [1956] Ch. 622 where he said, at p. 642:

"The language which I used, and which Jenkins L.J. has quoted in his judgment (and particularly my acceptance of the arguments of Mr. Cross and Mr. Buckley), should be read in the context of the supposition which I was making, that is, that the language of the brochure being equivocal, it was legitimate to assist its construction and effect by the inference to be drawn from the stated circumstance that contributions were being sought at the same time both from persons responding to the brochure appeal by using the form supplied and from persons whom Jenkins L.J. has called anonymous donors. I did not intend for myself to lay it down (and I do not think it would be right so to do), that the fact of anonymous donations being made and sought contemporaneously would control in favour of a general charitable intention gifts made by name in response to an appeal which, according to its natural and proper interpretation, was an appeal for a single and particular purpose."

In addition, Jenkins L.J. said, at p. 634:

"But it is at the third and final step in his argument that I wholly part company with the Attorney-General. Speaking for myself, I entirely fail to see why the imputation of a general charitable intention to anonymous contributors (if rightly made), should afford any ground for imputing a general charitable intention to subscribers who give their names,"

and a little later:

"Prima facie, the subscriber who gives his name intends to subscribe for the particular and exclusive purpose for which his subscription has been solicited and none other, and there will be a resulting trust in his favour if that purpose fails. Even if a general charitable intention is rightly to be attributed to the anonymous contributors to collection-boxes, neither the fact that they have chosen to contribute in that way, nor the named subscriber's knowledge that anonymous contributions have been made in that way, seems to me to have any bearing on the intention of the named subscriber."

There is also the passage to which I have already drawn attention in the

judgment of Romer L.J. in In re Hillier's Trusts [1954] 1 W.L.R. 700, 719.

Therefore, where, as in the present case, the object was neither equivocal nor charitable, I can see no justification for infecting the third category with the weaknesses of the first and second, and I cannot distinguish this part of the case from In re Abbott Fund Trusts [1900] 2 Ch. 326.

I will hear counsel on the form of order and in any case will direct a minute to be signed a id circulated, but in general I direct two inquiries: (1) What donations of specific amounts other than through collecting-boxes but including legacies were at any time given to the fund and by whom, and whether any living donors have since died and, if so, who are their personal representatives, and who are the personal representatives of any testators by whom such legacies were bequeathed; (2) What is the total amount of (a) the contributions made by the members since the inception of the fund, (b) the proceeds of entertainments, sweepstakes, collections and any similar money-raising activities, and (c) such donations including legacies. I then direct the total net assets after payment of costs to be divided between these three portions pro rata.

And I make the following declarations: First, that the portion attributable to donations and legacies is held on a resulting trust for the donors or their estates and the estates of the respective testators; secondly, that the remainder of the fund is bona vacantia.

These declarations are, however, without prejudice to (1) Any claim which may be made in contract by any person or the personal representatives of any person who was at any time a member, and (2) Any right or claim of the trustees to be indemnified against any such claim out of the whole fund including the portion attributable to donations and legacies.

Finally there will, of course, be general liberty to apply.

Argument was then addressed to the court concerning possible contractual rights, claims which might be made under them, and, in the event of no such claims being made, distribution of the surplus after advertisement. Goff J. decided that, if necessary, this question could be brought up again under the "Liberty to apply," and then disposed of. He made representation orders in respect of the second, third, fourth and fifth defendants claiming to be beneficially interested in the fund.

Solicitors: Sharpe, Pritchard & Co., for G. C. Godber, Chichester; Treasury Solicitor.

K. N. B.