According to the beneficiary principle, a gift on trust must have an ascertainable beneficiary in whose favour the court can decree performance.(1) Cases such as Re Astor(2) and Re Endacott (3) reaffirm the court's disinclination to validate purpose trusts that lack ascertainable beneficiaries capable of enforcing the trusts. But in Re Denley, Goff J thought that the Astor/Endacottt principles invalidated only abstract or impersonal trusts.(4) This essay aims at examining the requirements of the Denley-style trust with special reference to the rights or interests of the beneficiaries. Although Denley-style beneficiaries lack full beneficial interests, they are factual and ascertainable beneficiaries who have locus standi to sue. Therefore, they can satisfy the requirement of the beneficiary principle.
In Leahy v AG for New South Wales,(5) the abstract purposes of the order of nuns which would benefit meant none of the nuns would have been entitled to take any property away personally. Viscount Simonds thought that it failed as a private trust on the ground that, though the individual members had an interest in enforcing the trust, they were not granted a full beneficial interest.(6)
One of the key elements of full beneficial interest is proprietary right of the beneficiaries in the trust. This right has been emphasized by many scholars.(7) Taking a wide perspective, this right 'could as easily be right against the trustees to control their use of the property.'(8) Full beneficial interests also enable the beneficiaries to terminate the trust, or to frustrate the wishes of the settlor, on the basis of Saunders v Vautier.(9) Obviously, the objects of a Denley-style purpose trust have a lesser interest. In Denley, the employees might not be able to invoke this doctrine because the beneficiary interest was suspended. (10)
Unlike Leahy, Denley was not invalidated by the issue of equitable ownership. Though the employees in Denley did not have full beneficial interest, they were sufficiently ascertainable and the class of other persons was a valid power from which every member did not need to be identified. Any failure to meet the ascertainable test will make the trust invalid. Another question is whether the carrying out of the purpose benefits the ascertainable group. Goff J emphasized that the employees did benefit. He also warned that if the benefits were not so direct or tangible, the beneficiary principle would invalidate the trust.(11) Since the employees were ascertainable and factual beneficiaries, they had locus standi to sue. The court could enforce it either negatively by restraining any improper disposition or use of the land or positively by ordering the trustees to allow the employees to use the land for recreation.(12) Re Denley was applied in different circumstances by Oliver J in Re Lipinski. (13)
Despite having different views on the precise scope of the beneficiary principle (in Leahy, Denley and Lipinski), the courts agree that the foundation of the principle is anchored on the bedrock of enforceability. Whether the beneficiaries could terminate the trust was not regarded as material. Finally, the Denley-style trust is subject to the rule against inalienability and the Perpetuities and Accumulation Act 1964 will not apply. (14)

The End

Notes
1 Morice v Bishop of Durham (1804) 9 Ves 405.
2 Re Astor [1952] Ch 534.
3 Re Endacott [1960] Ch 232
4 Re Denley's Trust Deed [1969] 1 Ch 373.
5 Leahy v Attorney-General for New South Wales [1959] AC 457.
6 S. Wilson, Todd & Wilson's Textbook on Trusts (Oxford: OUP, 7th Edition, 2003),p. 116.
7 A. Hudson, Equity and Trusts (London: Cavendish Publishing, 2nd Edition, 2005),p. 54; M. Pawlowski, 'Private Purpose Trusts- A Reform Proposal,' in The Conveyancer and Property Lawyer, 2007, p. 444.
8 Hudson, supra, p.54.
9 Saunders v Vautier (1841) Cr &Ph 240.
10 R. Pearce & J. Stevens, The Law of Trusts and Equitable Obligations (Oxford: OUP, 4th Edition, 2006), p. 384.
11 Re Denley [1969] 1 Ch 373 at 383.
12 Re Denley [1969] 1 Ch 373 at 388.
13 Re Lipinski [1976] Ch 235.
14 P. Todd, Textbook on Trusts (London: Blackstone Press, Ltd., 4th Edition, 1999),p. 131.