Helena Partnerships Ltd v HM Revenue and Customs & Anor

Helena Partnerships Ltd (“Helena”) is a registered social landlord. It was incorporated in January 2001, but in October 2001 it adopted a new memorandum of association and new articles. Its objects were then the business of providing housing, accommodation, assistance to help house people, and associated facilities and amenities, and any other object that can be carried out by a company registered as a social landlord with the Housing Corporation, for the benefit of the community. It was not to trade for profit. Later, in November 2004, it changed its memorandum and articles of association again. The issue on this appeal is whether, in the period from October 2001 to November 2004, Helena was established for charitable purposes only, so that its funds were applicable for those purposes.

If the answer to that question is that it was not so established, then Helena is liable for £6 million of corporation tax on the rents that it received. I do not need to go into why or how that liability arose, though we were told that the arrangements which gave rise to it also enabled £18 million of VAT to be saved. If the answer is that it was so established, there could be another question, not debated on this appeal, as to whether Helena’s funds were in fact applied for charitable purposes only.

As a result of the change to the memorandum and articles of association in 2004 Helena became registered as a charity, but that has no bearing on the answer to the question before us.

Helena appealed against assessments to tax made by HMRC, first to the First Tier Tribunal, raising not only the point now in issue (and the point about the application of its funds) but also the tax point under which the corporation tax liability was said to arise. Judge Michael Tildesley OBE heard the appeal in October 2009 and dismissed it on 1 February 2010 on both points, making no decision on the application of income point: [2010] UKFTT 71 (TC). He gave permission to appeal on the sole point of Helena’s status as a charity or otherwise. The appeal came before the Upper Tribunal (Mr Justice Warren, President, and Judge Alison McKenna) in February 2011. They dismissed the appeal in April 2011, and they refused permission to appeal. Their judgment has the reference [2011] UKUT 271 (TCC) and is reported at [2011] STC 1307. Lord Neuberger MR granted permission to appeal to Helena. We heard the appeal in January 2012, with the additional benefit of representation of the Attorney-General, as intervener, because of his interest in charity generally.

Helena was represented before us by Mr Christopher McCall Q.C., leading Mr Matthew Smith, and HMRC by Mr William Henderson, all of whom had appeared below. The Attorney-General’s intervention gave us the additional benefit of representation by Mr Peter Crampin Q.C.

The appeal raises issues of charity law of some importance and difficulty, some of which have been the subject of debate for years, notably as to the status and effect of observations of Russell LJ in Incorporated Council of Law Reporting v A-G [1972] Ch 73 (which I will call the ICLR case), and as to the circumstances in which the promotion of objects of general public utility is a charitable purpose. The provision and enhancement of a stock of housing accommodation, available for occupation by tenants, to be carried out for the benefit of the community, is said to be such an object of general public utility, and to be a charitable object for that reason. In the elucidation of these issues we have been addressed by reference to a wide variety of cases and other materials, and I am grateful to Counsel for the help given by their written and oral submissions. It is difficult to imagine an English court today having the assistance of Counsel with more experience in charity law between them than we have had; we had that assistance in full measure.

In July 2002 Helena took a transfer from St Helen’s Metropolitan Borough Council (“the Council”) of a large part of the Council’s housing stock, under the Government’s Large Scale Voluntary Transfer Programme. As from 1 July 2002 it was registered with the Housing Corporation as a social landlord. Under the agreement for the transfer of the housing stock Helena took on various obligations to the Council, including a housing agency agreement, and a nomination rights deed which gave the Council the right to nominate tenants to 75% of vacant properties held by Helena. Helena adopted the Council’s pre-existing housing allocation policy, under which housing need was determined by reference to a points system, with points acting cumulatively as indicators of the eligibility for housing of any given applicant. It is not suggested that this policy of itself restricted the allocation of even that three quarters of Helena’s available housing stock, let alone the remaining quarter, to persons who would qualify as being in need for the purposes of, for example, the category of charitable purpose consisting of the relief of the poor, the elderly and the infirm. It was agreed between the parties that some of the Council’s housing was let to persons who were (in that charitable sense) in need, but some of it was let to persons not in such need. It was also agreed that parts, but nothing like the whole, of the area of the Council, and adjacent areas of North West England, suffered from poor socio-economic conditions. It was agreed, and accepted below, that these facts were admissible in construing Helena’s memorandum and articles of association.

The issue on the appeal turns on the objects of Helena, to which I will come in detail shortly. It was submitted that these should be read in the light of some features of the articles of association. It is convenient to mention the more important of these now.

Helena is a company limited by guarantee not having a share capital. Its members included the Council, together with other persons admitted by the board of directors, who were to be either Tenant Members (defined as any member who held an assured tenancy from and occupied a property belonging to Helena) or Independent Members (someone who is not the Council, a Tenant Member or a “Local Authority Person”, that is to say, a member or employee of the Council or connected with the Council in certain other ways): see article 1 (definitions) and article 5. There was provision for a Tenants’ Forum, a body recognised by the Board as a representative body for all Tenants: article 1.

For General Meetings there was a quorum provision requiring the presence (in person or by proxy) of one Tenant Member, one Independent Member and the Council: article 23. On a poll, the Members present or by proxy were to carry the following percentages of votes cast: one third to the Council, one third to the Tenant Members, apportioned equally between them, and one third to the Independent Members, also so apportioned: article 32. Local Authority Persons other than the Council were to have no vote at such meetings: article 33.

The Board of Directors was to consist (apart from possible co-opted directors) of four Local Authority Directors, appointed by the Council, four who were Tenants and were appointed directors as such (Tenant Directors), and four Independent Directors, who were to be neither Local Authority Directors, Tenant Directors nor Local Authority Persons: article 44. The Tenant Directors were to be appointed and chosen by the Tenants: article 50. Independent Directors were to be chosen by the Members as a whole: article 53.

I have referred in summary to the objects clause of Helena as it stood at the relevant time. It is convenient to set it out here in full:

“4.

The Company’s objects shall be the business of providing:-

4.1

housing;

4.2

accommodation;

4.3

assistance to help house people;

4.4

associated facilities and amenities; and

4.5

any other object that can be carried out by a company registered as a social landlord with the Housing Corporation

for the benefit of the community.

The Company shall not trade for profit.”

Paragraph 4.5 brings in a good deal of additional material, by reference to section 2(2) and (4) of the Housing Act 1996. That section, so far as relevant, was as follows:

“2(1) A body is eligible for registration as a social landlord if it is

(a)

a registered charity which is a housing association,

(b)

a society registered under the Industrial and Provident Societies Act 1965 which satisfies the conditions in subsection (2), or

(c)

a company registered under the Companies Act 1985 which satisfies those conditions.

(2)

The conditions are that the body is non-profit-making and is established for the purpose of, or has among its objects or powers, the provision, construction, improvement or management of—

(a)

houses to be kept available for letting,

(b)

houses for occupation by members of the body, where the rules of the body restrict membership to persons entitled or prospectively entitled (as tenants or otherwise) to occupy a house provided or managed by the body, or

(c)

hostels,

and that any additional purposes or objects are among those specified in subsection (4).

…

(4)

The permissible additional purposes or objects are—

(a)

providing land, amenities or services, or providing, constructing, repairing or improving buildings, for its residents, either exclusively or together with other persons;

(b)

acquiring, or repairing and improving, or creating by the conversion of houses or other property, houses to be disposed of on sale, on lease or on shared ownership terms;

(c)

constructing houses to be disposed of on shared ownership terms;

(d)

managing houses held on leases or other lettings (not being houses within subsection (2)(a) or (b)) or blocks of flats;

(e)

providing services of any description for owners or occupiers of houses in arranging or carrying out works of maintenance, repair or improvement, or encouraging or facilitating the carrying out of such works;

(f)

encouraging and giving advice on the forming of housing associations or providing services for, and giving advice on the running of, such associations and other voluntary organisations concerned with housing, or matters connected with housing.”

As appears from section 2(1)(a), those responsible for arranging that Helena would become a registered social landlord could have set out to make it a housing association and a registered charity. At that time they did not. The fact that they did not, however, is agreed to be irrelevant, as is the fact that it was not a registered charity at the material time. If a body is a registered charity, that is conclusive as to its status as such, except on proceedings for the rectification of the register: Charities Act 1993 section 4(1). If it was a charity it was under an obligation to apply for registration, under section 3(7)(a) of the 1993 Act, but the fact that it was not registered is neutral as to whether it was or was not established for charitable purposes only. Because the issues in this case arise from what happened in the period from 2002 to 2004, the Charities Act 2006 is of no relevance.

Other relevant provisions of the memorandum of association include the following:

It is accepted that the objects set out directly or by reference in the objects clause are all independent of each other, so that, in principle, Helena could pursue any one of them to the exclusion of others. However, the point was made that the provisions of the articles to which I have referred mean that there must be at least some tenants, since otherwise there could not be a validly held meeting either of the members as a whole or of the board of directors. So, there had to be at least some individuals who held premises on an assured tenancy from Helena and occupied the premises. In practice, of course, there would inevitably be many such for a good while, in the ordinary way, since Helena had taken over the Council’s housing stock complete with its existing tenants. Their secure tenancies from the Council became assured tenancies on the change of landlord.

Helena contends that it had a purpose (which the First-Tier Tribunal described as a “foremost” purpose) of managing and providing housing to tenants for the benefit of the metropolitan borough. The Upper Tribunal did not accept this. They observed, at paragraph 24, that the principal activity of Helena was intended to be, and had in fact been, the acquisition of the housing stock from the Council, its refurbishment and its letting to tenants. They then said this:

“24.

… That is not to say, however, that such principal activity is the, or a, “main” object as that word has been used in some of the cases to distinguish between objects which can on the one hand be pursued independently of other objects or powers and, on the other hand, purposes which although sometimes described as objects, cannot be pursued independently but are essentially ancillary purposes more properly referred to as powers.

25.

It may also be the case (we do not know) that all of HHL’s other activities have in fact been carried out in furtherance of that principal activity. But that is not the point. The point is that HHL could, if it chose to do so, pursue any of the other permissible objects or purposes without reference to its current activities. Thus, by reference to section 2(4)(b) it could acquire a house to be disposed of on sale, by reference to section 2(4)(d) it could manage houses or blocks of flats and by reference to section 2(4)(f), it could give advice about the forming of housing associations or the running of such associations. Of course, in carrying out those activities, HHL must be doing so “for the benefit of the community” within the meaning of Clause 4 of its Memorandum of Association and must not be trading for profit.”

I am content to accept that, while the articles of association remained in their then form, Helena had to have some housing accommodation which it let to occupying tenants on assured tenancies. Therefore it could not abandon its object of providing housing or accommodation. It could, nevertheless, carry out, to any extent that it wished, any of the other objects in clause 4 and any of those brought in by reference to the 1996 Act. For Helena, Mr McCall did not dispute this, save that he said that the ambit of what Helena could do was constrained by the overriding proviso that it must be for the benefit of the community. It could not do things that were only for the benefit of private individuals and not for the community. He argued that it could well be for the benefit of the community to repair and improve, or convert, houses and that there could be circumstances in which it would be for the benefit of the community (as well as for the individual concerned) to provide services for a house-owner by way of maintenance, repair or improvement of the house, or encouraging or facilitating the carrying out of such works.

Thus, whatever debate there had been below as to the proper understanding of the objects of Helena, on this appeal it is common ground that all the objects set out in, or incorporated into, the objects clause in the memorandum of association are separate and independent objects, which can be pursued for their own sake. Helena had to have tenants, since otherwise the provisions of the articles would not be capable of being operated, so it could not discontinue the purposes under which it owns, manages and maintains accommodation let to tenants. However, that does not by itself make the other objects in any way dependent or subsidiary. It does not mean that another object, pursued concurrently, may not be independent and carried on for its own sake. Mr McCall’s submission is that the range of activities which can be undertaken under the objects clause is constrained by the requirement that whatever Helena does must be done for the benefit of the community, and that, on that basis, the operations open to Helena are of a kind which are limited to that which is charitable. In that respect he challenged the conclusion of the Upper Tribunal, and joined issue with HMRC as respondent to the appeal, which supported that conclusion.

More generally, he argued that the availability of a housing stock, especially one in a good condition, is something which is of itself beneficial to the community in the relevant geographical area, and therefore that objects such as those of Helena, concerned with the provision and enhancement of housing, to be available for the benefit of the community, are of general public utility. For HMRC Mr Henderson took issue with that as being sufficient to show that the purpose is charitable, and he also submitted that the operations of Helena cannot be regarded as charitable, even apart from that, because of the substantial scope for benefits to individuals under its objects. The two objections are interrelated.

I will discuss later the effect on the objects, as expressed, of the proviso as to the benefit of the community, and the issue as to the balance between public benefit on the one hand and benefit to individuals (or private benefit as it is often called) on the other hand.

The law as to the purposes that are charitable is notoriously difficult and unsatisfactory, partly because of its historical development. It is strange enough to find that reference needs to be made in the 21^st century, well into the reign of Queen Elizabeth II, to the text of the preamble to a statute passed in the last years of the reign of Queen Elizabeth I, the Statute of Charitable Uses 1601, in order to find what categories of purpose should be regarded as charitable. It is all the more odd to do so when one realises that the 1601 statute was passed in order to reform the procedure for enforcing certain kinds of charitable uses, to the exclusion of others which, accordingly, although charitable were not mentioned in the statute or in the preamble. The most obvious exclusion is religious purposes, other than the repair of churches. As to the context and scope of the Act, see Gareth Jones, History of the Law of Charity 1532 to 1827, CUP 1969, page 22 and following. The list of purposes in the preamble may have a more ancient provenance. As Jones observes at page 25 footnote 2, the language of the preamble is in part remarkably similar to that of a passage in William Langland’s fourteenth century work The Vision of Piers Plowman, which mentions the repair of hospitals, roads and bridges, helping maidens to marry, helping the poor and prisoners, and providing education or training, and other causes reflected in the preamble (Footnote: ¹).

I set out here the major part of the preamble:

“Whereas Lands, Tenements, Rents, Annuities, Profits, Hereditaments, Goods, Chattels, Money and Stocks of Money, have been heretofore given, limited, appointed and assigned, … some for Relief of aged impotent and poor People, some for Maintenance of sick and maimed Soldiers and Mariners, Schools of Learning, Free Schools, and Scholars in Universities, some for Repair of Bridges, Ports, Havens, Causeways, Churches, Sea-banks and Highways, some for Education and preferment of Orphans, some for or towards Relief, Stock or Maintenance of Houses of Correction, some for Marriages of poor Maids, some for Supportation, Aid and Help of young Tradesmen Handicraftsmen and Persons decayed, and others for relief or redemption of Prisoners or Captives, and for Aid or Ease of any poor Inhabitants concerning Payment of Fifteens, setting out of Soldiers and other Taxes; Which Lands, Tenements, Rents, Annuities, Profits, Hereditaments, Goods, Chattels, Money and Stocks of Money, nevertheless have not been employed according to the charitable Intent of the Givers and Founders thereof, by reason of Frauds Breaches of Trust and Negligence in those that should pay, deliver and employ the same ”

The preamble was first used as a guide to the identification of what was or was not a charitable purpose in the case of Morice v Bishop of Durham, which is of seminal importance in this as well as in other contexts as regards the development of the law of trusts: (1804) 9 Ves 399 (Sir William Grant MR) and (1805) 10 Ves 522 (Lord Eldon). I am indebted to Professor Joshua Getzler for advance notice of a fascinating article on the case which is to be published shortly in Landmark Cases in Equity, ed. Charles Mitchell and Paul Mitchell, Hart Publishing (2012) 157-201, prepared with the benefit, among other things, of not only the pleadings in the case but also Lord Eldon’s notes of the arguments addressed to him in the case.

The issue in that case which is relevant for our purposes was whether a gift of residue to be applied “to such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of” was valid as being confined to purposes that were charitable. The decision, at first instance and on appeal, was that objects of benevolence and liberality were not so limited, and that the gift therefore failed.

Sir William Grant stated the significance of the 1601 statute in the following words, which do not seem to have been based on any submissions made to him in the argument as reported, at 9 Ves 405:

“Here [i.e. in Court] its signification [i.e. that of the word charity] is derived chiefly from the Statute of Elizabeth. Those purposes are considered charitable, which that Statute enumerates, or which by analogies are deemed within its spirit and intendment.”

Lord Eldon referred to the preamble to the Statute in the following passage at 10 Ves. 541:

“… where there is a gift to charity, in general, whether it is to be executed by individuals selected by the testator himself or the King as parens patriae is to execute it … it is the duty of such trustees, on the one hand, and of the Crown, upon the other, to apply the money to charity in the sense, which the determinations have affixed to that word in this court, viz. either such charitable purposes as are expressed in the Statute …, or to purposes having analogy to those. I believe the expression “charitable purposes,” as used in this court, has been applied to many acts described in that Statute, and analogous to those, not because they can with propriety be called charitable, but as that denomination is by the Statute given to all the purposes described.”

In the course of argument before Lord Eldon, Mr (later Sir Samuel) Romilly for the next of kin, seeking to uphold the order below, made a submission which is said to be the source of the later judicial formulation of the legal meaning of charity by Lord Macnaghten, to which I shall come shortly. His submission was as follows, at page 532:

“There are four objects, within one of which all charity, to be administered in this Court, must fall: 1^st, relief to the indigent; in various ways: money: provisions: education: medical assistance etc; 2ndly, the advancement of learning; 3rdly the advancement of religion; and 4thly, which is the most difficult, the advancement of objects of general public utility.”

So far as Mr Romilly was concerned, at any rate by way of submission, the fourth category of objects was a good deal less wide than would now be understood, as can be seen from his submission at page 531:

“There are various instances of liberality, that cannot be described as charity: the establishment of a Cabinet of Natural History, Anatomical Exhibitions, Galleries of Pictures, to be open to the public: a legacy to the African Society, for acquiring information in the interior of Africa to contribute to raise the degraded state of society in that part of the world; all these are instances of liberality, but not of charity.”

Despite these doubts, in 1826 a devise to the British Museum was held to be for charitable purposes: Trustees of the British Museum v White (1826) 2 Sim & St 594, though the result was that the devise failed under the Mortmain Act 1736 whereas a legacy of personalty would have been valid. As Professor Getzler explains (in the article mentioned at paragraph [24] above, at page 176) a special ad hoc tax exemption was granted to such a gift under the will of the testator whose residuary estate, having passed to his sister, was at stake, in effect, in Morice.

Mr Romilly’s fourfold classification may well have been the source for what Lord Macnaghten said. What matters, as it seems to me, is what Lord Macnaghten said, not where he got it from. The statement was made in the course of his speech in Commissioners for the Special Purposes of Income Tax v Pemsel [1891] AC 531. The case itself turned on whether, in a taxing statute applying to the whole of the United Kingdom and allowing for deductions from and allowances against the income of land vested in trustees for charitable purposes, the words “charitable purposes” should be understood according to their meaning in English law, or whether they should be given a meaning which was common to the law of England, Scotland and Ireland. The decision of the House of Lords, by a majority of four to two, was in favour of the deduction. Lord Macnaghten, with whom Lord Watson and Lord Morris expressly agreed, held that the strict English meaning applied. (Lord Herschell came to the same conclusion as to the result of the appeal, but not, I think, on the same grounds.) In the course of his speech Lord Macnaghten reviewed what English law was as to the meaning of charity and how it had developed. He referred to the 1601 statute in this passage at page 581:

“The object of that statute was merely to provide new machinery for the reformation of abuses in regard to charities. But by a singular construction it was held to authorize certain gifts to charity which otherwise would have been void. And it contained in the preamble a list of charities so varied and comprehensive that it became the practice of the Court to refer to it as a sort of index or chart. At the same time it has never been forgotten that the “objects there enumerated,” as Lord Chancellor Cranworth observes, “are not to be taken as the only objects of charity but are given as instances”.”

Shortly after that passage he said this (at pages 581-2):

“I have dwelt for a moment on this point, because it seems to me that there is a disposition to treat the technical meaning of the term “charity” rather as the idiom of a particular Court than as the language of the law of England. And yet of all words in the English language bearing a popular as well as a legal signification I am not sure that there is one which more unmistakeably has a technical meaning in the strictest sense of the term, that is a meaning clear and distinct, peculiar to the law as understood and administered in this country, and not depending upon or coterminous with the popular or vulgar use of the word.”

His reference to the fourfold classification of charity came in the same context; for that reason I will quote that passage (which I identify by italicising it) with the sentence immediately before it, and some of what followed upon it, for the context (pages 583-4):

“How far then, it may be asked, does the popular meaning of the word “charity” correspond with its legal meaning? “Charity” in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads. The trusts last referred to are not the less charitable in the eye of the law, because incidentally they benefit the rich as well as the poor, as indeed, every charity that deserves the name must do either directly or indirectly. It seems to me that a person of education, at any rate, if he were speaking as the Act is speaking with reference to endowed charities, would include in the category educational and religious charities, as well as charities for the relief of the poor. Roughly speaking, I think he would exclude the fourth division. Even there it is difficult to draw the line. A layman would probably be amused if he were told that a gift to the Chancellor of the Exchequer for the benefit of the nation was a charity. Many people, I think, would consider a gift for the support of a lifeboat a charitable gift, though its object is not the advancement of religion, or the advancement of education, or the relief of the poor. And even a layman might take the same favourable view of a gratuitous supply of pure water for the benefit of a crowded neighbourhood. But after all, this is rather an academical discussion. If a gentleman of education, without legal training, were asked what is the meaning of “a trust for charitable purposes,” I think he would most probably reply, “That sounds like a legal phrase. You had better ask a lawyer”.”

That formulation came to be taken as a further guide to the identification of what is or is not a charitable purpose under English law, together with comments on it by judges in the course of later cases. I do not need to refer to more than a few of the subsequent cases, the main landmarks on the way towards the present position.

The first of these is Williams’ Trustees v Inland Revenue Commissioners [1947] AC 447, where the issue concerned the eligibility for the charitable income tax exemption of a trust for promoting Welsh interests in London by various methods including social intercourse. On this occasion the House of Lords was unanimous, Lord Simonds delivering the main speech. I do not need to go into the facts. A passage in his speech on which great reliance is placed in the present case for the respondent is this, at page 455:

“My Lords, there are, I think, two propositions which must ever be borne in mind in any case in which the question is whether a trust is charitable. The first is that it is still the general law that a trust is not charitable and entitled to the privileges which charity confers, unless it is within the spirit and intendment of the preamble to the statute of Elizabeth (43 Eliz. c. 4) , which is expressly preserved by section 13(3) of the Mortmain and Charitable Uses Act, 1888. The second is that the classification of charity in its legal sense into four principal divisions by Lord Macnaghten in Income Tax Commissioners v. Pemsel must always be read subject to the qualification appearing in the judgment of Lindley L.J. in In re Macduff [1896] 2 Ch 451, 466: “Now Sir Samuel Romilly did not mean, and I am certain Lord Macnaghten did not mean, to say that every object of public general utility must necessarily be a charity. Some may be, and some may not be.” This observation has been expanded by Lord Cave L.C. in this House in these words: “Lord Macnaghten did not mean that all trusts for purposes beneficial to the community are charitable, but that there were certain beneficial trusts which fell within that category; and accordingly to argue that because a trust is for a purpose beneficial to the community it is therefore a charitable trust is to turn round his sentence and to give it a different meaning. So here it is not enough to say that the trust in question is for public purposes beneficial to the community or for the public welfare; you must also show it to be a charitable trust.” See Attorney-General v. National Provincial & Union Bank of England [1924] AC 262, 265. But it is just because the purpose of the trust deed in this case is said to be beneficial to the community or a section of the community and for no other reason that its charitable character is asserted. It is not alleged that the trust is (a) for the benefit of the community and (b) beneficial in a way which the law regards as charitable. Therefore, as it seems to me, in its mere statement the claim is imperfect and must fail.”

The next significant case which requires attention and quotation for this purpose is Scottish Burial Reform and Cremation Society Ltd v Glasgow Corporation [1968] AC 138. The question was whether the society, whose object was to encourage and provide facilities for cremation, was eligible for the charitable exemption from rates for its premises. Here too the House of Lords was unanimous, but this time in favour of charity. Lord Reid said that it was not necessary, as it might have been soon after the society’s foundation, to produce evidence so as to show that the object was for the public benefit, and also that, this being so, the public benefit was not subverted because there was or might also be a profit or benefit to individuals involved in the prosecution of the objects: page 146. He went on (146-7):

“But the appellants must also show that the public benefit is of a kind within the spirit and intendment of the Statute of Elizabeth I. The preamble specifies a number of objects which were then recognised as charitable. But in more recent times a wide variety of other objects have come to be recognised as also being charitable. The courts appear to have proceeded first by seeking some analogy between an object mentioned in the preamble and the object with regard to which they had to reach a decision. And then they appear to have gone further and to have been satisfied if they could find an analogy between an object already held to be charitable and the new object claimed to be charitable. And this gradual extension has proceeded so far that there are few modern reported cases where a bequest or donation was made or an institution was being carried on for a clearly specified object which was for the benefit of the public at large and not of individuals, and yet the object was held not to be within the spirit and intendment of the Statute of Elizabeth I. Counsel in the present case were invited to search for any case having even the remotest resemblance to this case in which an object was held to be for the public benefit but yet not to be within that spirit and intendment. But no such case could be found.”

In turn Lord Upjohn said this, at pages 149-150:

“Upon the first point it must be remembered that Lord Macnaghten’s classification was taken from Sir Samuel Romilly’s argument in Morice v. Bishop of Durham 162 years ago when the great majority of the inhabitants of the country were living in conditions which to-day would be regarded as of the utmost squalor. The concept of purposes beneficial to the community might then appear to have the qualities of a class and so perhaps, to a lesser extent, in 1891. This so-called fourth class is incapable of further definition and can today hardly be regarded as more than a portmanteau to receive those objects which enlightened opinion would regard as qualifying for consideration under the second heading.”

As for the relevance of the test by reference to the preamble, he said this at page 151:

“While it may seem almost incredible to anyone not familiar with this branch of the English law that this should still be taken as the test, it is undoubtedly the accepted test, though only in a very wide and broad sense, well illustrated by the observations of Lord Greene M.R. in In re Strakosch [1949] Ch 529, at 537-8” which he then set out at some length.

In sceptical vein, he concluded his speech with this comment:

“My Lords, I conclude by saying that the authorities show that the “spirit and intendment” of the preamble to the Statute of Elizabeth have been stretched almost to breaking point. In the nineteenth and early twentieth centuries this was often due to a desire on the part of the courts to save the intentions of the settlor or testator from failure from some technical rule of law. Now that it is used so frequently to avoid the common man’s liability to rates or taxes, this generous trend of the law may one day require reconsideration.”

Lastly, Lord Wilberforce identified the objects clause of the company as showing that the company was formed for a general and a particular purpose: the general purpose being to promote methods of disposal of the dead which should be inexpensive and sanitary, and the particular purpose, adopted in practice, being to promote the method known as cremation. He then set out to apply the English test of charity to these objects. First, at page 154, he said this about the test in general:

“On this subject, the law of England, though no doubt not very satisfactory and in need of rationalisation, is tolerably clear. The purposes in question, to be charitable, must be shown to be for the benefit of the public, or the community, in a sense or manner within the intendment of the preamble to the statute 43 Eliz. 1, c. 4. The latter requirement does not mean quite what it says; for it is now accepted that what must be regarded is not the wording of the preamble itself, but the effect of decisions given by the courts as to its scope, decisions which have endeavoured to keep the law as to charities moving according as new social needs arise or old ones become obsolete or satisfied. Lord Macnaghten’s grouping of the heads of recognised charity in Pemsel’s case is one that has proved to be of value and there are many problems which it solves. But three things may be said about it, which its author would surely not have denied: first that, since it is a classification of convenience, there may well be purposes which do not fit neatly into one or other of the headings; secondly, that the words used must not be given the force of a statute to be construed; and thirdly, that the law of charity is a moving subject which may well have evolved even since 1891.”

He then proceeded to consider the application of these tests to the provision of facilities for the disposal of human remains in an inexpensive and sanitary manner and, in particular, by cremation. He found analogies with cases about the repair and maintenance of burial grounds associated with a church, or such facilities for members of the Society of Friends, and of a cemetery owned and managed by a local authority. He said that the earlier cases, where there was a connection with a church, were to be seen as “falling on the borderline between trusts for the advancement of religion and trusts otherwise beneficial to the community. One may say either that burial purposes fall within both, or that the categories themselves shade one into the other.” Later in his speech he addressed an argument which had been accepted below that if there was benefit to the public, it was not within the intendment of the preamble. He disposed of this argument at page 156 as follows:

“First, it may be said that the same evolutionary process which has carried charity from the “repair of churches” to the maintenance of burial grounds (i) in a churchyard and (ii) in a cemetery extended from a churchyard should naturally carry it further so as to embrace the company’s objects. Secondly, and more generally, the company’s objects themselves may directly be seen to be within the preamble’s spirit. The group “repair of bridges, ports, havens, causeways, churches, sea banks and highways” has within it the common element of public utility and it is of interest to note that the original label of Lord Macnaghten’s fourth category “other purposes beneficial to the community” affixed by Sir Samuel Romilly in Morice v. Bishop of Durham was “... the advancement of objects of general public utility.” In this context I find it of significance that Parliament in 1902 by the Cremation Act of that year placed cremation, as a public service, on the same footing as burial.

I regard, then, the provision of cremation services as falling naturally, and in their own right, within the spirit of the preamble.”

The next case, which is central to the argument for Helena, is the ICLR case to which I have already referred, in which the Revenue appealed, unsuccessfully, against the decision by Foster J that the Council ought to be registered as a charity. Mr Browne-Wilkinson appeared for the Attorney-General and made submissions from the point of view of charity generally. Just as Mr Romilly’s arguments in Morice v Bishop of Durham have received judicial attention in later cases, so it was submitted to us that we should have regard to a part of Mr Browne-Wilkinson’s argument in the ICLR case. For that reason I will quote the relevant passage, which is at [1972] Ch page 82B-D.

“In all cases falling within the fourth category the court must find that the activities come within the spirit and intendment of the preamble: see Williams’ Trustees v. Inland Revenue Commissioners. If a specific public service is being provided that is necessarily within the spirit and intendment of the preamble. The purposes must be of a type which would fall within the spirit and intendment, and it is not necessary to find a precise analogy. … Reliance is placed upon the approach of Lord Wilberforce in the Scottish Burial Society’s case. There is no case in which the provision of a non-commercial specific public utility beneficial to the public at large has failed as not falling within the spirit and intendment of the preamble.”

Though I have the greatest respect for Lord Browne-Wilkinson, in particular as to what he had to say about the law of charity, it does seem to me that what is important is not what submission was made to the court, even from a neutral standpoint, but what the court decided. The examination of that is complicated by the fact that the court was not at one: Sachs LJ and Buckley LJ held that the ICLR was established for charitable purposes for the advancement of education, whereas Russell LJ disagreed on that, and held that it was charitable, but under the fourth head, as Foster J had held. I will need to focus on what was said about each point by each member of the court.

Despite his disagreement on the advancement of education, I will start with Russell LJ both because his is the first judgment and because it contains the passages most relied on for Helena. He gave reasons for rejecting the argument that a main purpose of the ICLR was to provide the legal profession with the tools of its trade, and that this, not being a charitable object, was fatal to the claim that it was established for charitable purposes only. In that context he said this, at [1972] Ch page 87:

“It seems to me that if the publication of reliable reports of decisions of the courts is for the benefit of the community and of general public utility in the charitable sense, it is an inevitable and indeed necessary step in the achievement of that benefit that the members of the legal profession are supplied with the tools of their trade. I do not see how the benefit to the public, assuming it to be a charitable object, could otherwise be achieved.”

Having rejected that argument he continued with a passage much of which is important, from [1972] Ch page 87E to page 89C. I will quote it all, and for ease of reference I will assign paragraph numbers to it which are not in the original.

“(1)

I come now to the question whether, if the main purpose of the council is, as I think it is, to further the sound development and administration of the law in this country, and if, as I think it is, that is a purpose beneficial to the community or of general public utility, that purpose is charitable according to the law of England and Wales.

(2)

On this point the law is rooted in the Statute of Elizabeth I, a statute the object of which was the oversight and reform of abuses in the administration of property devoted by donors to purposes which were regarded as worthy of such protection as being charitable. The preamble to the Statute listed certain examples of purposes worthy of such protection. These were from an early stage regarded merely as examples, and have through the centuries been regarded as examples or guideposts for the courts in the differing circumstances of a developing civilisation and economy. Sometimes recourse has been had by the courts to the instances given in the preamble in order to see whether in a given case sufficient analogy may be found with something specifically stated in the preamble, or sufficient analogy with some decided case in which already a previous sufficient analogy has been found. Of this approach perhaps the most obvious example is the provision of crematoria by analogy with the provision of burial grounds by analogy with the upkeep of churchyards by analogy with the repair of churches. On other occasions a decision in favour or against a purpose being charitable has been based in terms upon a more general question whether the purpose is or is not within “the spirit and intendment” of the Statute of Elizabeth I and in particular its preamble. Again (and at an early stage in development) whether the purpose is within “the equity” or within “the mischief” of the Statute. Again whether the purpose is charitable “in the same sense” as purposes within the [purview] (Footnote: ²) of the Statute. I have much sympathy with those who say that these phrases do little of themselves to elucidate any particular problem. “Tell me”, they say, “what you define when you speak of spirit, intendment, equity, mischief, the same sense, and I will tell you whether a purpose is charitable according to law. But you never define. All you do is sometimes to say that a purpose is none of these things. I can understand it when you say that the preservation of sea walls is for the safety of lives and property, and therefore by analogy the voluntary provision of lifeboats and fire brigades are charitable. I can even follow you as far as crematoria. But these other generalities teach me nothing.”

(3)

I say I have much sympathy for such approach: but it seems to me to be unduly and improperly restrictive. The Statute of Elizabeth I was a statute to reform abuses: in such circumstances and in that age the courts of this country were not inclined to be restricted in their implementation of Parliament’s desire for reform to particular examples given by the Statute: and they deliberately kept open their ability to intervene when they thought necessary in cases not specifically mentioned, by applying as the test whether any particular case of abuse of funds or property was within the “mischief” or the “equity” of the Statute.

(4)

For myself I believe that this rather vague and undefined approach is the correct one, with analogy, its handmaid, and that when considering Lord Macnaghten’s fourth category in Pemsel’s case of “other purposes beneficial to the community” (or as phrased by Sir Samuel Romilly (then Mr. Romilly) in argument in Morice v. Bishop of Durham: “objects of general public utility”) the courts, in consistently saying that not all such are necessarily charitable in law, are in substance accepting that if a purpose is shown to be so beneficial or of such utility it is prima facie charitable in law, but have left open a line of retreat based on the equity of the Statute in case they are faced with a purpose (e.g. a political purpose) which could not have been within the contemplation of the Statute even if the then legislators had been endowed with the gift of foresight into the circumstances of later centuries.

(5)

In a case such as the present, in which in my view the object cannot be thought otherwise than beneficial to the community and of general public utility, I believe the proper question to ask is whether there are any grounds for holding it to be outside the equity of the Statute: and I think the answer to that is here in the negative. I have already touched upon its essential importance to our rule of law. If I look at the somewhat random examples in the preamble to the Statute I find in the repair of bridges, havens, causeways, sea banks and highways examples of matters which if not looked after by private enterprise must be a proper function and responsibility of government, which would afford strong ground for a statutory expression by Parliament of anxiety to prevent misappropriation of funds voluntarily dedicated to such matters. It cannot I think be doubted that if there were not a competent and reliable set of reports of judicial decisions, it would be a proper function and responsibility of government to secure their provision for the due administration of the law. It was argued that the specific topics in the preamble that I have mentioned are all concerned with concrete matters, and that so also is the judicially accepted opinion that the provision of a court house is a charitable purpose. But whether the search be for analogy or for the equity of the Statute this seems to me to be too narrow or refined an approach. I cannot accept that the provision, in order to facilitate the proper administration of the law, of the walls and other physical facilities of a court house is a charitable purpose, but that the dissemination by accurate and selective reporting of knowledge of a most important part of the law to be there administered is not.”

Sachs LJ defined the purpose of law reports (and therefore of the ICLR itself) as being “to provide essential material for the study of the law - in the sense of acquiring knowledge of what the law is, how it is developing and how it applies to the enormous range of human activities which it affects”: see page 92B. Having reviewed the submissions on the question whether the ICLR fell within the second head of charity, he said this, at [1972] Ch page 93E:

“Where the purpose of producing a book is to enable a specified subject, and a learned subject at that, to be studied, it is, in my judgment, published for the advancement of education, as this, of course, includes as regards the Statute of Elizabeth I the advancement of learning. That remains its purpose despite the fact that professional men - be they lawyers, doctors or chemists - use the knowledge acquired to earn their living. One must not confuse the results flowing from the achievement of a purpose with the purpose itself, any more than one should have regard to the motives of those who set that purpose in motion.”

Having decided that the council did qualify under the second head of charity, he nevertheless went on to consider whether it would fall within the fourth head if, contrary to his view, it did not otherwise qualify as charitable, on the basis that its object could be regarded as the advancement of the administration of the law. He followed Lord Wilberforce’s more general test, that described in the passage starting “Secondly” in the quotation which I have set out at paragraph [41] above, rather than the route by way of analogies. He said this at [1972] Ch page 94G:

“On the other hand, the wider test - advancement of purposes beneficial to the community or objects of general public utility - has an admirable breadth and flexibility which enables it to be reasonably applied from generation to generation to meet changing circumstances: it has thus such patent advantages that for my part I appreciate the wisdom of the legislature in refraining from providing a detailed definition of charitable purposes in the Act of 1960 and preferring to allow the existing law to be applied.”

Applying this test, he concluded, first, that the advancement of the administration of the law is beneficial to the community, and then that it was beneficial to the whole community, or to a sufficiently large section of it. Then he said this, at [1972] Ch page 95E:

“Adopting the test propounded by Russell L.J., I next turn to consider whether there is any reason for excluding these benefits from the range of those that are capable of being classified as charitable, and can find no such reason.”

On that basis he concluded that, if he were wrong to hold that the purposes of the ICLR fell within the second head of charity, they were still charitable because they would then come within the fourth head: see [1972] Ch page 95G.

Buckley LJ in turn reviewed the arguments of each party. He noted an argument for the ICLR to the effect that its publications “constitute a general public purpose or, to use Sir Samuel Romilly’s language in argument in Morice v. Bishop of Durham an object of general public utility, and that this falls within the spirit of the preamble”: [1972] Ch page 100G. Noting Foster J’s decision that the ICLR was charitable not under the second but under the fourth head of charity, he said this at [1972] Ch page 102B:

“In a number of cases learned societies have been held to be charitable. Sometimes the case has been classified under Lord Macnaghten’s fourth head, sometimes under the second. It does not really matter under which head such a case is placed, but for my own part I prefer to treat the present case as falling within the class of purposes for the advancement of education rather than within the final class of other purposes for the benefit of the community. For the present purpose the second head should be regarded as extending to the improvement of a useful branch of human knowledge and its public dissemination.”

He went on to explain, by reference to some other decided instances, why he considered that the ICLR did fall within that category. At [1972] Ch page 103 he summarised his conclusion on this point, and went on to deal with the argument that the council also provided non-charitable benefits for lawyers:

“The council was established for the purpose of recording in a reliably accurate manner the development and application of judge-made law and of disseminating the knowledge of that law, its development and judicial application, in a way which is essential to the study of the law. The primary object of the council is, I think, confined to this purpose exclusively and is charitable. … The fact that the council’s publications can be regarded as a necessary part of a practising lawyer’s equipment does not prevent the council from being established exclusively for charitable purposes. The practising lawyer and the judge must both be lifelong students in that field of scholarship for the study of which The Law Reports provide essential material and a necessary service. The benefit which the council confers upon members of the legal profession in making accurate reports available is that it facilitates the study and ascertainment of the law. It also helps the lawyer to earn his livelihood, but that is incidental to or consequential on the primary scholastic function of advancing and disseminating knowledge of the law, and does not detract from the exclusively charitable character of the council’s objects.”

It was for these reasons that he concluded, at [1972] Ch page 104C, that the ICLR was established exclusively for charitable purposes. He expressed doubts about whether that conclusion could properly be based on the view, held by the judge, that the council’s purpose was that of enabling judge-made law to be properly developed and administered by the courts, assuming that to be a charitable purpose in itself. Finally, he said this:

“Russell L.J. in the judgment which he has just delivered, has preferred to base himself upon a wider ground, as I understand it, that the publication of accurate reports of judicial decisions is beneficial to the community not merely by assisting the administration and development of the law in the courts but by making the law known, or at least accessible, to all members of the community, including professional lawyers whose advice on legal matters other members of the community are likely to seek, thus making a sound knowledge and understanding of the law more available to all. I agree that on this basis also the council is to be regarded as a body established for charitable purposes and, indeed, for exclusively charitable purposes as falling under Lord Macnaghten’s fourth head. Such an activity is clearly properly described as of general public utility and as beneficial to the community. In the absence of any ground for holding that such an activity is not within the spirit of the preamble to the Statute of Elizabeth I, and I think that there is no such ground, it should be held to be charitable.”

The status and effect of what Russell LJ said at the beginning of the paragraph to which I have given the number (5) in the passage quoted at paragraph [45] above featured significantly in the debate before us. I shall come to it before long. Before I do so, I need to refer to one more recent decision on the point.

In Inland Revenue Commissioners v McMullen [1979] 1 W.L.R. 130 the Court of Appeal held that a trust set up by the Football Association was not charitable whether as being for the advancement of education, or in the fourth head of charity, or under the Recreational Charities Act 1958. The trustees appealed successfully to the House of Lords: see [1981] AC 1. The trust was held to be charitable within the second head of charity, and nothing was said about the other bases on which the case had been argued below: see [1981] AC at 11B. In the Court of Appeal Stamp LJ referred at [1979] 1 W.L.R. page 136F to it having been “the decision of the majority of this court in [the ICLR case] that objects of general utility or for purposes beneficial to the community are prima facie charitable”. Orr LJ agreed expressly with Stamp LJ’s reasons: page 138F.

If the decision of the Court of Appeal had not been subject to an appeal, that statement might have been part of the ratio decidendi. However, since it was appealed, and since the decision of the House of Lords went on a different basis, what the Court of Appeal said cannot be regarded as part of the ratio of the case: see R (Al-Mehdawi) v Secretary of State for the Home Department as decided in the Court of Appeal, reported at [1990] 1 AC 876, in particular at 883B-C in the judgment of Taylor LJ. The House of Lords in that case did not accept Taylor LJ’s invitation to consider the stare decisis aspect: see [1990] 1 AC at 883H for the invitation and 894B for its rejection. Thus, the Court of Appeal’s decision on that point (as distinct from the substantive issue in the case) was the last word in those proceedings on that subject. Accordingly, on that point, as it seems to me, we are bound by what the Court of Appeal said in Al-Mehdawi. That means that we are not bound by what the Court of Appeal said in McMullen about the ICLR case.

There have been other comments about Russell LJ’s formulation in cases since 1971, but none is of more than persuasive force. In Re South Place Ethical Society [1980] 1 W.L.R. 1565 at 1574-5 Dillon J referred to Russell LJ as having taken the view that the court could hold that there are purposes “so beneficial or of such utility” to the community that they ought prima facie to be accepted as charitable, but he observed that this approach was difficult to adopt in view of Lord Simonds’ comments in Williams’ Trustees. In Attorney-General of the Cayman Islands v Wahr-Hansen [2001] 1 AC 75, Lord Browne-Wilkinson considered an argument on the part of the Attorney-General which relied on the passage in question from Russell LJ’s judgment as manifesting a “presumption in favour of a beneficial purpose being charitable”. Lord Browne-Wilkinson held that this argument had no application to the issue which arose in that case, but he did say, before dismissing it as irrelevant, that “in the judgment of their Lordships, Russell LJ’s approach has much to commend it in deciding whether or not a purpose specified by the donor falls within the spirit and intendment of the Preamble to the Statute of Elizabeth I”.

Sachs and Buckley LJJ both held that the ICLR was established for charitable purposes only, being for the advancement of education. Russell LJ dissented on that point. Sachs LJ considered, in the alternative, whether it would otherwise have qualified under the fourth head. It seems to me clear that what he said on this point was not a second and additional reason for coming to the same conclusion, but a contingent conclusion, only arising if he was wrong on his primary conclusion: see what he said at [1972] Ch 94D (“Despite the above conclusion”) and at 95G (“Accordingly if, contrary to my view, the purposes of the council do not fall within the second division”).

Buckley LJ in his final paragraph, quoted at paragraph [52] above, referred to Russell LJ as upholding the claim to charitable status under the fourth head on the basis of a wider understanding of the relevant purpose than Foster J had adopted. Buckley LJ had expressed doubts as to Foster J’s proposition. He did not discuss whether Russell LJ’s wider understanding of the purpose was correct. His words were “I agree that on this basis also the council is to be regarded as” established for exclusively charitable purposes. Despite the brevity of Buckley LJ’s treatment of this aspect of the case, it seems to me that, because of the words “on this basis also” and “is to be regarded”, and above all because he used the word “is”, rather than (for example) “would be”, this must be read as amounting to an alternative ground of decision for Buckley LJ, not merely a contingent conclusion on a hypothetical basis. That being so, the case is binding authority for both propositions: as to the advancement of education by virtue of the judgments of Sachs and Buckley LJJ, and as to the fourth head because of what Russell LJ said, agreed to by Buckley LJ in his final paragraph.

As to the fourth head of charity, Russell LJ’s discussion, set out in the passage quoted at paragraph [45] above, does not look as if it was intended to depart from the traditional approach and analysis. At the paragraph which I have numbered (2) he referred to the preamble and described the way in which it had been used or applied by direct or indirect analogy, as well as the criticism that this approach had engendered. In the paragraph which I have numbered (4) he reaffirmed the traditional approach, despite its being vague and undefined. What is said to be new in his own approach is the analysis that if a purpose is shown to be beneficial to the community or of general public utility, then “it is prima facie charitable in law”, but subject to a “line of retreat” based on the preamble for purposes which could not have been regarded as even notionally within the contemplation of the statute. Applying that approach to a purpose which he had already said, at the paragraph which I have numbered (1), to be a purpose beneficial to the community or of general public utility, he posed the question whether there were any grounds for holding that it was outside the equity of the statute, and he found there to be none.

It was not open to the Court of Appeal in that case to depart from the decision of the House of Lords in Williams’ Trustees, nor did they profess to do so in their decision. In particular Russell LJ reaffirmed the conventional approach as being correct, despite (or because of) its lack of definition and of hard criteria. He did not suggest that it was not necessary to decide that a particular purpose was within the spirit and intendment of the preamble, his phrase “the equity of the statute” being, I take it, just an alternative for Sir William Grant’s original phrase.

The Upper Tribunal were able to reconcile the two decisions in paragraphs 57 to 63 of their judgment. They said that Russell LJ had not suggested a different approach to the identification of what was or was not within the spirit and intendment of the preamble as a general proposition. Indeed he reaffirmed the traditional way of looking at that question. His “proper question to ask” was posed in that context, was to be used in relation to a purpose which had already been found to be beneficial to the community and of general public utility, and did not purport to result in a different outcome from that which Lord Simonds would have reached.

I agree with this analysis. In seeking permission to appeal Helena put forward the stark proposition in its skeleton argument that the effect of the decision in the ICLR case was that to provide a specified public service was necessarily within the spirit and intendment of the preamble and therefore charitable, at any rate unless there is good reason to the contrary. I would reject that submission. I do not consider that Russell LJ held that, in all cases where the issue is whether a purpose is charitable as coming within the fourth head of charity, the court should first ask whether the purpose is of general public utility or beneficial to the community and that, if it is, then it should be upheld as charitable unless there is a good reason not to do so.

It is not sufficient to assert, or even for the relevant constituent document to stipulate, that the activities or operations of the body in question are to be undertaken for the benefit of the community. More is required. The purpose or purposes must be of the right kind, falling within the spirit and intendment of the preamble, directly or by analogy.

In addition, any benefit afforded to individuals by the body from carrying out its purposes must be subsidiary to the benefit to the public. Whether a statement that the purposes are to be carried out for the benefit of the public, or the community, by itself excludes the possibility of non-subsidiary benefit to individuals as well is a different question, to which I will return later.

It is hardly necessary to add, but nevertheless I will make the point, that this is an area in which it is particularly necessary to avoid construing the words of judges over the years as if they were statutory provisions. I will not take up Mr McCall’s suggestion that in Sir William Grant’s phrase it is possible and appropriate to distinguish what is meant by the spirit of the preamble or the statute on the one hand from what is meant by their intendment on the other hand. Equally, it cannot be of significance for the decision of a later case that Russell LJ used the phrase “a purpose beneficial to the community or of general public utility” in the paragraph numbered (1) quoted at paragraph [45] above, and again in the paragraph numbered (4), but that by the following paragraph he spoke of the object as being thought “beneficial to the community and of general public utility”. Although Lord Macnaghten spoke of “trusts for other purposes beneficial to the community not falling under any of the preceding heads”, I share with Buckley LJ the view (which he expressed in relation to learned societies) that it should not normally matter under which of the four heads a particular purpose is classified: see [1972] Ch 102 (and see also Lord Wilberforce in the Scottish Burial Society case, at the end of the passage quoted at paragraph [40] above). There is not necessarily a hard and fast division between one and another. However, in practice it is only in relation to the general, and rather miscellaneous, fourth head that it is necessary to have regard to the spirit and intendment of the preamble, or of the statute, as Sir William Grant put it, so there is a difference, at least in the process of analysis, between identifying a purpose as charitable within that aspect of the classification, on the one hand, and doing so within one of the first three categories, on the other.

Thus, for the appeal to succeed, Helena’s purposes must be found to be within the spirit and intendment of the preamble, directly or by analogy, but the statement that its purposes are to be carried out for the benefit of the community is not sufficient for this purpose.

Mr McCall advanced another argument based on what Russell LJ said later in the paragraph which I have numbered (5) in the quotation set out at paragraph [45] above, in particular his reference to “matters which if not looked after by private enterprise must be a proper function and responsibility of government”, and the presumption that Parliament would be anxious to prevent misappropriation of funds voluntarily dedicated to such matters. He argued that social housing was a paradigm example of such a matter, citing the statutory framework for the responsibilities of local housing authorities in general and the history of the Government’s Large Scale Voluntary Transfer Programme in particular to support this contention.

The fact that Parliament has provided for, or even prescribed, something to be done which is, in a general sense, for the public benefit does not show that to undertake it is a charitable purpose. That is clear from the failure of the claim of the General Nursing Council to rating relief. That case is relevant both to this point and to an alternative argument as to whether the promotion of social welfare is in itself charitable.

The case reached the House of Lords and is reported as General Nursing Council for England and Wales v St Marylebone Borough Council [1959] AC 540. The GNC sought relief from rates under a provision extending to organisations not conducted for profit and whose main objects were charitable or were otherwise concerned with the advancement of religion, education or social welfare. It claimed this relief as being charitable or, if not, then as being concerned with social welfare. The House of Lords held that it did not qualify for relief either as charitable or (by a majority of three to two) on the basis of the advancement of social welfare. Mr Henderson submitted that this showed that promoting social welfare is not necessarily charitable. That must be so, in terms of the legislation at issue in that case, since the statute shows the two to be alternatives. I do not think that we can derive any very useful analogy or conclusion from that in terms of the general law of charity.

However, the case does show that it is not sufficient to show that the body in question undertakes functions which are provided for by an Act of Parliament. Lord Keith of Avonholm said this, [1959] AC at page 561:

“So far as the Nurses Act 1957 guides us, the council was created to provide a register and roll of nurses and impose rules to secure that they were properly qualified for admission. The Act expressly states in section 3(2)(b) as one of its aims, to secure a uniform standard of qualification in all parts of the United Kingdom. I have no doubt the Act was of public benefit, as one must assume most legislation to be. But the question is: Was what the council was created to do and does charitable? I cannot hold that it was.”

If this function had not been performed by the GNC it might have been necessary or desirable for the Government to undertake it. The fact that the GNC thereby bore the burden of expenditure which might otherwise have had to have been incurred by the Government was not sufficient to make it charitable. Accordingly it cannot be enough, in order to show that a purpose is charitable, that it would devote expenditure to an object which would otherwise be a proper function and responsibility of government. Those responsibilities and functions are so varied and diverse today that I cannot accept Russell LJ’s observation as a touchstone for deciding whether a purpose is or is not within the spirit and intendment of the preamble. Some proper functions of government are within the scope of the preamble, as listed and by way of analogy to those listed, but others are not. There is no alternative to proceeding, whether directly or by analogy, from the content of the preamble.

Another basic requirement is that the pursuit of Helena’s objects must be for the public benefit, and that any element of benefit to individuals must be subordinate (or ancillary, incidental, subservient - a variety of words can be used to the same effect) to the benefit to the public.

There was some debate below as to quite what the community referred to in Helena’s objects is, but I do not consider that anything turns on that for the purposes of the appeal. Nor do I see any issue arising as to whether the relevant community is a section of the public for the purposes of this aspect of charity law.

The real issue is as to the balance between public benefit and benefit to individuals arising from the undertaking of all or any of Helena’s objects. This type of issue has arisen in numerous previous cases, of which we were shown several. The argument was about whether or not the benefits afforded to individuals (often referred to as private benefits) were subordinate to the public benefit, so that the latter was to be seen as the real object of the relevant body.

Most charitable purposes provide particular benefits to individuals, whether to the poor person in need of support, the student in need of education, or the patient in need of treatment, to take a few obvious examples. That is the way in which the public benefit is provided. So, in Joseph Rowntree Memorial Trust Housing Association Ltd v A-G., Peter Gibson J said this ([1983] Ch 159, at 176):

“The third objection was that the schemes were for the benefit of private individuals and not for a charitable class. I cannot accept that. The schemes are for the benefit of a charitable class, that is to say the aged having certain needs requiring relief therefrom. The fact that, once the association and the trust have selected individuals to benefit from the housing, those individuals are identified private individuals does not seem to me to make the purpose in providing the housing a non-charitable one any more than a trust for the relief of poverty ceases to be a charitable purpose when individual poor recipients of bounty are selected.”

Leaving aside the anomalous case of “poor relations” and “poor employees” trusts, public benefit is a prerequisite of charity, but the provision of particular benefits to particular individuals is justified as a way of providing benefits to the public by virtue of, first, the availability of the provision and, secondly, the selection of those who are to benefit on an objective basis which does not depend on any private or particular nexus of the beneficiary with the trust, the founder, the other beneficiaries or any given individual (c.f. Re Compton [1945] Ch 123, Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297, Lord Normand at 309). So, in the case of Helena, the identification of those who were to occupy its accommodation would be decided (in many cases) according to the allocation policy previously used by the Council. This would not be limited to those in particular need, but there would be objective criteria of selection involving no private or personal element.

We were shown another decision of the Upper Tribunal in which the distinction between public and private benefit was discussed, namely R (Independent Schools Council) v Charity Commission [2011] UKUT 421 (TCC) reported at [2012] 2 WLR 100. At paragraph 37 the Upper Tribunal (Mr Justice Warren, President, presiding) said this:

“Given the very wide range of potential charitable purposes, it is obvious that some charities have purposes which have the primary effect of conferring direct benefits on certain individuals, while other charities have purposes which confer benefits on the public, whether individually or collectively, much more indirectly. An educational charity such as a school is a clear example of the first class of charity, while a charity for the advancement of animal welfare is a clear example of the second class. A trust for maintaining a bridge is somewhere in between: it is of direct benefit to those who use it but of indirect benefit to the relevant community. Mr Pearce has put forward a terminology which we have found helpful in illuminating the subject and we adopt it in this judgment. It distinguishes the following three types of benefit. (a) Direct benefits: benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons as recipients of the main service which the charity provides. (b) Indirect benefits: benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons otherwise than as recipients of the main service which the charity provides. (c) Wider benefits: benefits other than direct and indirect benefits which are received by the community at large from the activities of the charity.”

I find those comments helpful. Without attempting to lay down any rigid distinctions, there are charities which provide direct benefits to individuals, whether by way (for example) of the relief of the poor, the elderly or the infirm, education of students at schools or universities, or medical treatment in hospitals. These are the charities that provide direct benefits, according to the classification in the passage just quoted. They are justified as being for the public benefit on the basis that it is desirable that there should be such provision for those in particular need or, in the case of education, that it is a good thing that the population should receive education. There are other charities which provide less, or nothing, in the way of identifiable benefits to individuals, where the benefit is either entirely general (animal welfare, as instanced above, which is justified as promoting the moral improvement of the public generally) - these are cases of wider benefit as classified above - or the benefit is general although some individuals may obtain more benefit than others, such as bridges, sea-walls or fire brigades, again only by way of example - these provide indirect benefits as classified above. In the case of the first category of charities, it is seen as for the public benefit that the direct benefit to individuals should be available for, and provided to, those in need. In the latter cases, which include various examples of public works, the carrying out of the works is seen as for the public benefit, because of the public or general need, and the indirect benefit to individuals is incidental to that of the public, because of the nature of the operations in question and the way in which their benefits are experienced.

In relation to the latter category of purposes, in Inland Revenue Commissioners v Baddeley [1955] AC 572, Lord Simonds distinguished between “a form of relief extended to the whole community yet, by its very nature, advantageous only to the few, and a form of relief accorded to a selected few out of a larger number equally willing and able to take advantage of it”. He went on to say this at page 592:

“Somewhat different considerations arise if the form, which the purporting charity takes, is something of general utility which is, nevertheless, made available not to the whole public but only to a selected body of the public — an important class of the public it may be. For example, a bridge which is available for all the public may undoubtedly be a charity and it is indifferent how many people use it. But confine its use to a selected number of persons, however numerous and important: it is then clearly not a charity. It is not of general public utility, for it does not serve the public purpose which its nature qualifies it to serve.”

The issue with which he was there concerned was one which does not arise in the present case, namely that of confining the benefits to a class of people who do not constitute either the public or a relevant section of the public. The population of the metropolitan borough of St Helen’s would be a sufficient section of the public. However, I quote the passage for his instancing a bridge available for use by the public generally, even if in fact used by few.

In any given case, whether any benefit obtained by an individual as a result of the carrying out of the objects of the body in question is subordinate to public benefit will depend on the nature of the objects, the terms of the constituent document, and the nature of the benefits accruing from the carrying out of the objects.

The balance between public and individual benefit divided the House of Lords in Inland Revenue Commissioners v City of Glasgow Police Athletic Association [1953] AC 380, the majority finding against charitable status. The association’s objects were stated to be to encourage and promote all forms of athletic sports and general pastimes among its members, who were limited to officers and former officers of the City of Glasgow police force. It was argued that the association had a main or dominant objective (though unstated) of maintaining an efficient police force, and encouraging recruitment. The majority of the House of Lords held that, even if this was an objective of the association (which some of them doubted), the benefit of the members as individuals was an object, and was not merely incidental or subsidiary to the public object. It was essential, the recreation of the members being an end in itself: per Lord Normand [1953] AC at 396. It was the main object of the association, as a result of the successful pursuit of which the public advantage would ensue: see Lord Morton at [1953] AC at 400 and Lord Reid at 402.

One more recent case has a particular relevance to the present because it is (so far as I am aware) the only case in which objects have been held not to be charitable on the ground that the benefit to individuals is too substantial, although the definition of the objects required them to be pursued for the benefit of the public. This is Inland Revenue Commissioners v Oldham Training and Enterprise Council [1996] STC 1218. There the issue was whether Oldham TEC was established for exclusively charitable purposes, as the Special Commissioners had held. The Revenue appealed and, as was clear, the TEC did not oppose the appeal, having come to the conclusion that it was not in its best interests that it should be held to be a charity. Nevertheless it instructed Counsel (myself, as it happens) to present the available arguments in opposition to the appeal.

Oldham TEC had changed its objects during the relevant period, but not in a way that made a substantive difference. It is therefore possible to take either version as representative. This is the original version:

“3(1) The company is established to promote and provide vocational education and training and re-training of the public and to promote industry, commerce and enterprise of all forms for the benefit of the public in and around Oldham and in the furtherance of these objects and for these purposes (but without prejudice to the generality of the foregoing) to: (a) Examine the local labour market and assess key skill needs, prospects for increasing local employment and the adequacy of existing training opportunities; (b) Devise, implement and monitor local training and work experience programmes for young people, unemployed people and adults requiring new knowledge skills and technical training; (c) Develop, secure and provide training and other support services and advice to and for new and small local businesses.”

The Special Commissioners and Lightman J both agreed that this contained two main objects and three subsidiary objects, that the first main object, promoting and providing vocational education and training and re-training, was in itself charitable, and that the first two subsidiary objects were ancillary to the first main object, and did not detract from its charitable nature. The issue arose in relation to the second main object, namely “to promote industry, commerce and enterprise of all forms for the benefit of the public in and around Oldham”, read in the light of the third subsidiary object.

Lightman J directed himself as to the law at [1996] STC 1234a to d. No exception is taken to this part of his judgment. Turning to the particular objects he observed that they show indicia of charity, in that it was an altruistic organisation, prohibiting benefits to its members and being set up to assist others, with emphasis on the overall objective of benefit to the public, or the community, in and around Oldham. One of its objects was charitable in itself. He posed the question as being whether the other object was to be read as subject to an implied limitation “so far as charitable”, and sought to answer it only by reference to the terms of the memorandum of association, except as regards evidence of whether an object, identified by the normal processes of construction, is charitable in its nature. His conclusion was expressed as follows at [1996] STC 1235b to d:

“Under the unamended objects clause, the second main object, namely promoting trade, commerce and enterprise, and the ancillary object, of providing support services and advice to and for new businesses, on any fair reading must extend to enabling Oldham TEC to promote the interests of individuals engaged in trade, commerce or enterprise and provide benefits and services to them. Paragraph 4.2 of the statement of agreed facts shows that Oldham TEC in the form of the provision of enterprise services does exactly this. Such efforts on the part of Oldham TEC may be intended to make the recipients more profitable and thereby, or otherwise, to improve employment prospects in Oldham. But the existence of these objects, in so far as they confer freedom to provide such private benefits, regardless of the motive or the likely beneficial consequences for employment must disqualify Oldham TEC from having charitable status. The benefits to the community conferred by such activities are too remote.”

Thus the judge held that, although the object in question stipulated that the promotion of trade, commerce and enterprise was to be for the benefit of the public (or, in the amended version, the community), nevertheless the private benefits which were or could be conferred by the pursuit of this object were not merely incidental or subsidiary to the public benefit, and that for this reason the purpose was not charitable.

The Upper Tribunal considered the Oldham TEC case, and said that they did not need to rely on it but that it supported their conclusion: see paragraphs 82 to 84. Mr McCall sought to distinguish the case in his submissions to us, on the basis that there was an express dedication to a purpose, namely the making of grants to individual businesses, which showed that individuals were to benefit as such and that a consequential benefit to the community would suffice to satisfy the requirement in the objects clause, which he said was the converse of the present case, where the benefit to the community is expressly required to be the aim, with individual benefit being only consequential. If read in any other way he submitted that the decision was wrong, because the individual benefits should be regarded as merely incidental to the main purpose, itself charitable.

For the Attorney-General, Mr Crampin criticised Lightman J’s reasoning, whether or not the actual decision was correct. He argued that the subsidiary objects were in truth no more than powers exercisable in furtherance of the main objects, and that the judge was therefore wrong to speak of the body conferring private benefits “regardless” of the likely beneficial consequences for employment. It could only confer such benefits if it would be for the benefit of the community, so that the private benefits would be no more than a means to an end, part of the process by which benefit to the community would be achieved.

In turn Mr Henderson, for HMRC, submitted that Lightman J’s decision is no more than another example of finding that the direct private benefit outweighed the indirect benefit to the community, and that it did not involve any misreading of the relevant objects clause. He also argued that, when Lightman J used the phrase “regardless of the motive (etc.)”, he meant that even if the benefits were provided with the motive of benefiting the community, the public benefit would be too remote, that is to say it would be subsidiary to the dominant private benefit. In his oral submissions he developed this point, and argued that Oldham TEC could not fall within the fourth head of charity because of the element of private benefit for a class who were not in need, in terms of the first two heads of charity, and were not a section of the public for the purposes of the fourth head.

It is not necessary for us to decide whether Lightman J’s decision was correct or not. So far as his words “these objects, in so far as they confer freedom to provide such private benefits, regardless of the motive” are concerned, I find it difficult to accept Mr Henderson’s reading. It looks to me as if the judge was speaking of an ability to confer private benefits without having regard to public benefit. On that basis I can see force in Mr Crampin’s criticism of the judge’s reasoning. Nevertheless the judge’s conclusion may have been correct on one of a number of possible bases. One is that, even if the object was for the benefit of the community, it was not an object within the spirit and intendment of the preamble, for all that the preamble refers to the support of young tradesmen and handicraftsmen. The objects were not limited to the young or to those starting out in business. It is common ground (in the light of Williams’ Trustees) that it is not sufficient for the object to be for the benefit of the community, and I find it difficult to see why it should make a difference that it is expressed to be so. Another might be that the direct beneficiaries could not constitute a section of the public for the purposes of the fourth head, as Mr Henderson argued, though for my part I am not much impressed with that theory. A third would be that the element of benefit to individuals was too substantial so that, despite the terms of the objects clause in stipulating that the second object be undertaken for the benefit of the public or the community, nevertheless the individual benefits outweighed the benefit to the community, or at any rate were not subordinate to it. At all events, although it is a decision that the use of the phrase “for the benefit of the community” in the definition of the object does not ensure that benefits to individuals are to be ignored or to be found to be subsidiary to the intended public benefit, first it is not binding on us, secondly it is different because of the different nature of the benefits afforded, and thirdly either the decision or at any rate some of the reasoning may be wrong.

As to whether the use of words such as “for the benefit of the community” in the objects clause should be taken as excluding any non-subordinate individual benefit, it does not seem to me that it is possible to be dogmatic about that. Any given case in which the phrase is used must be considered on its own facts and merits. If it were clear that the individual benefits to be provided were too significant to be regarded as subordinate, or of a kind outside the spirit and intendment of the preamble, the use of a phrase of this kind could not override the conclusion to be drawn from the facts. On the other hand if the position were less clear, or ambivalent, the use of such a phrase might be effective to eliminate any doubt in favour of overriding public benefit.

If those concerned to set up the City of Glasgow Police Athletic Association had had this point in mind, and had wished to ensure, so far as they could, that it was a charitable body, they could have included a statement of an overriding objective of public benefit, by way of improving the fitness, and therefore the efficiency and effectiveness of the police force, with possible additional benefits for recruitment. That would certainly have been relevant. However it would also have been necessary to examine how the rules provided for the association to operate, from which it might have been apparent that the primary benefit was in fact the recreation of members. It does not seem to me that the drafting could be conclusive of itself, though it would obviously be relevant and could be a decisive factor. Whether it was right for Lightman J to find that benefits to individuals overrode the statement as to the benefit of the public is not a question we have to resolve. In my judgment he was justified in not taking the statement as to public benefit as conclusive. In any event, we have to decide the present case on its own facts and on the basis of the principles long established and binding on us from the cases which I have discussed earlier in this judgment, regardless (if I may safely use that word) of the soundness or otherwise of the decision and the reasoning in the Oldham TEC case.

Mr McCall’s submission is that the provision, maintenance and management of a stock of housing, and in particular one which is of good quality, available for occupation by tenants, is in itself of general public utility, and beneficial to the relevant community. In general terms that is not a very controversial proposition. It would be likely to be a good thing locally that such accommodation should be available for those who may need it. That is consistent with the position under the Housing Act 1985 (as it was at the relevant time) whereby local housing authorities were under a duty to consider housing conditions in their district and the needs of the district with respect to the provision of further housing accommodation (section 8) and had powers to provide housing accommodation and to repair or improve housing so provided (section 9), and, in connection with such housing, also to supply furniture, fittings and conveniences (section 10) and welfare services (section 11), and to provide shops, recreation grounds, streets, roads and open spaces (sections 12 and 13). Despite a number of passing observations to the effect that municipal corporations hold their property for public charitable purposes (see Lord Cottenham in A-G. v Aspinall (1837) 2 My & Cr 613 at 618, followed by Farwell J (Sir George Farwell) in A-G. v De Winton [1906] 2 Ch 106, at 115) it cannot be supposed that a local housing authority holds any housing accommodation which it owns under such powers upon charitable trusts.

Such decided cases as there have been about the provision of housing as a charitable purpose have proceeded on the basis that it is charitable if, but not unless, it is provided by way of the relief of need, whether due to poverty, to old age or to other relevant circumstances. In Re James [1932] 2 Ch 25 Farwell J (Sir Christopher Farwell, son of Sir George) held that a legacy for the setting up and operation of a home of rest for the sisters of a religious community was a valid charitable bequest, on the basis that it was to be provided for persons in need of such a facility or amenity. In this he followed a decision of Kekewich J, Re Estlin (1903) 72 LJ Ch 687, where the home of rest was to be provided for lady teachers. By contrast, in Re Sanders [1954] Ch 265 Harman J held that a legacy to provide dwellings for the working classes and their families resident in the area of Pembroke Dock or within a radius of five miles, with preference for dockworkers and their families, was not a charitable bequest, the class not being limited to those who in terms of the law of charity were poor. In Joseph Rowntree Memorial Trust Housing Association Ltd v A-G. [1983] Ch 159, already mentioned, the proposed provision was held by Peter Gibson J to be charitable because it met needs attributable to old age. None of this supports the idea that the provision of housing is charitable within the fourth head of charity, but the cases are not authority as such against that proposition.

Mr McCall submitted that the court could proceed by analogy from the various types of public works mentioned in the preamble, all of which are examples of works of general public utility: the repair of bridges, ports, havens, causeways, churches, sea-banks and highways. All of these, he argued, provide benefits to the public generally in a given area, though also providing particular benefits, for example for those living or using premises nearest to the shore where the threat of flood may be averted by a well maintained sea-bank.

Examples of other purposes which have been held (by the court or by the Charity Commissioners) to be charitable by analogy with these instances include the provision of pure water for the inhabitants of a town, of street lighting in a town, of a court house, workhouse, cemetery or crematorium, and of libraries, museums, public halls, reading rooms and an observatory, all open to public access, and the provision of a fire brigade and of lifeboats, as well as urban and rural regeneration.

In Kendall v Granger (1842) 5 Beav. 300 a bequest which allowed for funds to be applied to works of general utility was held by Lord Langdale MR to go beyond what was exclusively charitable, but that was not in a context which suggested that the works would be of public utility, and I do not derive assistance from that case in the present context.

An obvious difference between facilities such as those mentioned in the preamble itself and those accepted by way of analogy, as mentioned in paragraph [97] above, on the one hand, and housing accommodation on the other is the direct benefit of the latter to the particular individual or family living in the accommodation in question for the time being. Mr McCall submitted that this should not be an objection to regarding the purpose as being of general public utility. He argued that it was not different in principle from the acceptance of other public works as charitable despite the fact that they provide particular benefits for some individuals whereas other people may enjoy little or no benefit from such a facility. As discussed above, the works in question are held to be charitable on the basis that it is good for the community that there should be such facilities, even though only some members of the public may ever wish or need to use them. Equally, the availability of a suitable housing stock available for rent is good for the community, he contended, not just for those who happen to occupy particular houses or flats at a given time.

In terms of the classification of benefits put forward in the Independent Schools Council case (see paragraph [77] above) Mr McCall argued that the provision of a stock of suitable housing which is available for rent, although of direct benefit to those who occupy the accommodation from time to time, is primarily of wider benefit to the relevant community at large as an asset, facility or resource. He likened the advantage to the tenants for the time being of the accommodation to the benefit afforded by a sea-wall or a fire brigade to those who live in or use areas which might become flooded but for the sea defences, or who suffer a fire at premises which they own or occupy, or in which they happen to be at the wrong time.

In order to reach a conclusion on this issue I must turn to the particular case, and therefore to the actual objects of Helena as they were at the relevant time.

Helena’s objects of providing housing, accommodation, assistance to house people and associated facilities and amenities are self-explanatory and can readily be understood as being potentially for the public benefit. The incorporation of things that can be done under section 2(2) of the Housing Act 1996 (leaving aside section 2(4) for the moment) does not seem to me to extend this by much. Paragraph (a) refers to houses to be kept available for letting, which would be within the objects clause in any event; paragraph (b) does not apply, and paragraph (c) referring to hostels may well be within the scope of “accommodation” in clause 4.

The additional activities under section 2(4) are more significant. The subsection is set out at paragraph [13] above. Paragraph (a) may not add much to the express provisions of clause 4. Paragraph (b), however, in its contemplation of the acquisition of houses to be disposed of on sale goes away from the idea of a housing stock being provided and maintained which is to be available for occupation by tenants. Shared ownership arrangements, mentioned in paragraph (c), also go beyond this, even though, under a shared ownership scheme, the housing association may retain a significant ownership interest in the property for what could be a substantial period. Paragraph (d) is not limited to managing property owned by a housing association or other altruistic body. Paragraph (e) includes the provision of services to owners as well as occupiers of houses. Mr McCall accepted that it was not easy (though he did not concede it to be impossible) to envisage circumstances in which it would be for the public benefit to provide such services to a private property owning individual, as could be done under this paragraph. At least one of his examples was of a case where the benefit to the property owner would be incidental to work being done to immediately adjacent property owned by the housing association, which could probably be justified under a power to do things incidental to carrying out the main objects, rather than as something which needed to be justified independently in itself. As such it does not seem to me that it proves anything useful as to the scope of the relevant object, which, it is common ground, is independently valid. Paragraph (f) extends to providing services to housing associations and other voluntary organisations connected with housing. Such bodies are not necessarily charitable, so this assistance need not be of a charitable nature. Even a non-charitable housing association, conducted on a not-for-profit basis, may be thought to be a good thing, in the interests of or for the benefit of the community. However, that would not confine operations pursuant to paragraph (f) to that which is exclusively and necessarily charitable.

It is not surprising to find that these objects are not, on their face, limited to activities consistent only with charitable status, because these provisions are not relevant to a housing association which is a registered charity: see section 2(1), which requires satisfaction of the conditions imposed by subsection (2) only on the part of bodies which are not registered charities. Mr McCall submitted that the scope of these additional objects was limited, as regards the operations of Helena, by the overriding requirement of benefit to the community. He argued that some of them simply could not be undertaken consistently with that requirement, or could only be carried out in a severely limited way, which would exclude any private benefit that was not merely incidental to the public benefit. Since the objects clause was designed to incorporate these additional objects, although subject to the proviso as to benefit for the community, it does not seem to me right to construe the clause in such a way that some of them are simply excluded by the proviso as being incompatible with it. Compatibility can be achieved if the execution of an object which appears to be primarily for individual benefit has to be regarded as, and justified as being, in some way also for the benefit of the community, even if that benefit is not the predominant factor as compared with benefit to an individual. Helena would have to have tenants, and therefore it could not discontinue its object of providing, maintaining and managing accommodation for occupation by tenants. However, that would not prevent it from undertaking and pursuing, independently and for their own sake, other activities pursuant to other objects which are not related to the accommodation held and provided for its tenants. The Upper Tribunal held that this was the case at their paragraph 80. I agree.

That is one reason why, as it seems to me, the objects clause of Helena is not one which confines the application of Helena’s property to purposes which are exclusively charitable. Furthermore, even if the objects which permit the application of resources of Helena to matters not related to accommodation for tenants are to be limited in some more substantial way by the phrase “for the benefit of the community”, it does not follow that these wider objects are within the spirit and intendment of the preamble. Helping a non-charitable housing association under section 2(4)(f) would be a good example of something which could be for the benefit of the community but would not be charitable.

Alternatively, approaching the case without regard to the additional objects brought in by reference to section 2(4), it seems to me that Helena could not satisfy the requirements of charity. There are two reasons for this, which are separate but related.

First, I do not consider that the provision of housing accommodation, otherwise than for those in some relevant charitable need, is a purpose within the spirit and intendment of the preamble, either directly or by analogy with any other purpose which has been so recognised. The preamble does, of course, include a list of works of general public utility, which I have set out at paragraph [96] above. These are all works of a kind which provide a general benefit to the relevant community, albeit that, as I accept, some individuals will benefit more than others from any given example of such works. The rest of the examples of charity listed in the preamble are aimed at the relief of individual need of one kind or another. I do not regard the provision of housing as being analogous with, or within the same spirit as, the list of public works, so as to be charitable in itself. Given the substantial element of direct benefit for those individuals who occupy the relevant accommodation from time to time, it seems to me that the provision of housing or other accommodation is much more akin to the items listed in the preamble other than the examples of public works, but that, to qualify as analogous to those, it would require to be restricted to the relief of need. We were not shown any other case relevant by way of analogy. I therefore limit myself to the spirit and intendment of the preamble, read directly, and I conclude that the provision of housing without regard to a relevant charitable need is not in itself charitable.

An alternative way to the same conclusion is that, even accepting that there is an element, and a necessary element, of benefit to the community in the pursuit of Helena’s objects, there is also a substantial element of benefit to individuals, which cannot be regarded as only subordinate to the achievement of the benefit to the community. In its nature, the benefit afforded by the provision of housing to the person who is thereby housed is of an altogether different order, as it seems to me, to the benefit afforded by the construction or maintenance of a road, a bridge or a sea-wall, or the maintenance of a fire brigade or a lifeboat service. The former provides direct benefits to the occupants of the accommodation which far outweigh the degree of indirect benefit that other members of the community may derive from the existence of the housing stock. Accepting that it may be a good thing that a substantial housing stock in good condition should exist in the area of a community which is available for occupation by tenants, and that therefore a benefit to the community can be seen to be generated by the operations of a body such as Helena, I cannot accept that the private benefit which arises to those who occupy the accommodation is merely incidental or subsidiary to the public benefit afforded by the existence of the housing stock. It is a benefit for its own sake, not incompatible with benefit to the community, but not subordinate to it.

Of course some charitable operations under the fourth head confer significant benefits on individuals. Hospitals provide one example, for the benefit of those who by reason of illness, accidental injury or otherwise, need medical treatment, if that is properly to be seen as within the fourth head rather than the first. I do not underestimate the importance of such benefits for the individual concerned. But it seems to me that the provision of housing accommodation for an individual or a family affords a benefit to that or those individuals of a kind which is quite different in its nature and importance from, for example, that of appropriate treatment in hospital. It is not by chance that the significance of housing to the person housed is recognised by the terms of article 8 of the European Convention on Human Rights. That seems to me to confirm my view that the provision of accommodation by way of housing confers an especially significant benefit on the person or persons so housed, and that this goes far beyond the degree of benefit that individuals may obtain from charitable operations which are justified as being within the fourth head of charity on the basis of general public utility.

Despite Mr McCall’s arguments, therefore, I conclude that the provision of housing accommodation is, and can only be, a charitable purpose if it is justified as charitable in respect of the direct benefit provided. It can only be so justified if it is provided in order to meet a relevant need of the class eligible to occupy it. It cannot qualify as being within Lord Macnaghten’s fourth category of charitable purposes.

I therefore come to the same conclusion as did the Upper Tribunal, for two separate reasons.

Accordingly, I would dismiss this appeal.

I agree.

I also agree.