Conservative Central Office v Burrell [1982] 1 WLR 522

Facts

• The Conservative Central Office held funds that had been collected from party members and supporters.
• Mr. Burrell, the plaintiff, argued that these funds were held on trust for party members, creating fiduciary duties for the party leadership.
• The Conservative Central Office maintained the funds were governed by agreement and not held on trust.
• The case required analysis of the property rights of political organizations, unincorporated group structures, and the relevant rules of trust law.
• The court reviewed the party's constitution, rules of membership, and financial practices to consider the nature of the fund arrangements.

Issues

1. Whether the funds held by the Conservative Central Office were held on trust for its members, or constituted property managed under agreement.
2. Whether the requirements of intention, subject matter, and objects—essential elements for creation of a trust—were satisfied in the case.
3. What legal rules govern the property and financial management of unincorporated political groups.

Decision

• The court concluded there was no clear intention to create a trust in the management of the Conservative Party funds.
• It was held that the funds were administered pursuant to agreement between the party and its members, not under a trust.
• Absence of trust was demonstrated by the lack of declaration or conduct indicating trust intention and by the party’s practical treatment of funds as its own property.
• The party was found to have full control over the funds, unconstrained by fiduciary obligations characteristic of trusts.

Legal Principles

• A trust requires clear intention, identifiable subject matter, and certain objects.
• Intention to create a trust must be explicit or can be inferred unambiguously from conduct or circumstances.
• Unincorporated associations cannot themselves possess legal title to assets and property is typically held by trustees or committee members.
• The legal distinction between contractual agreements (governed by party terms) and trusts (imposing fiduciary duties) governs property arrangements in such contexts.
• Clarity and precision in constitutional and financial documentation are essential to determine legal relationships and avoid disputes.

Conclusion

The Court of Appeal clarified that funds held by a political party’s central office are ordinarily governed by contractual agreements rather than trust law, absent a clear intention to create a trust. This decision provides guidance for unincorporated associations and highlights the need for precise legal classification in managing property rights within political organizations.