Gifts to unincorporated associations
University of British Columbia
Master of Laws - LLM
An unincorporated association is a strange phenomenon. As a matter of fact, it undoubtedly exists and engages in as wide a range of transactions as any legal person. As a matter of law, however, it has no existence separate and apart from that of its constituent members. It is consequently incapable of either bearing liabilities or enjoying rights. In particular, it cannot be a donee or legatee in its own right, nor can it be a beneficiary under a trust. Yet gifts, both by way of inter vivos disposition and legacy, and both, directly and on trust, are continually made in favour of unincorporated associations. If the purposes pursued by an unincorporated association are charitable a gift made to it will be valid. If its purposes are not charitable, however, the fate of the gift is uncertain. This thesis examines the current law on non-charitable gifts made to an unincorporated association, concludes that it is in an unsatisfactory state and suggests a legal analysis by reference to which such, gifts can be held to be valid. The courts of the common law jurisdictions of the United Kingdom, Canada, Australia and New Zealand have developed no less- than nine different possible ways of analysing a gift for the purposes of an unincorporated association. None is satisfactory. The gift may be held to be totally ineffective or, if effective, there is no assurance, that the purposes of the association will in fact be carried out. A gift for the purposes of an unincorporated association operates satisfactorily only if it ensures that the donated property is used for those purposes and not for the personal purposes of the members of the association. Prima facie a trust on those terms would achieve this result. However, this is not the case because of a major deficiency in the law of trusts. The current law espouses the so-called 'beneficiary principle' under which no non-charitable trust is valid unless it has human beneficiaries. The result is that it is impossible to make a gift to an unincorporated association by way of a trust to further its purposes. On examination of the 'beneficiary principle', the conclusion is reached that it has no solid foundation in authority. While it is based upon the undoubtedly sound principle that a trust must be subject to enforcement, it represents an extremely restrictive view of the manner in which the need for enforceability can be satisfied. It is argued that a broader viewpoint is both possible and acceptable. The 'beneficiary principle' should be replaced by the 'control principle'. The 'control principle' stands for the proposition that a trust for non-charitable purposes can be adequately controlled by a broad range of individuals, and not only direct beneficiaries. With this principle as its starting point, this thesis propounds the Control Analysis of gifts to unincorporated associations whereby gifts on trust for the purposes of the association are recognised as enforceable by its members and are therefore valid.
Law, Peter A. Allard School of