Re Resch's Will Trusts [1969] 1 AC 514

Facts

• The will of Mr. Resch established a trust to benefit a private hospital.
• The hospital charged fees for its medical services, raising questions about its eligibility as a charitable institution.
• The trustees sought a court declaration that the trust was charitable.
• The Privy Council was required to determine whether the trust satisfied the requirements for charitable status, especially regarding the provision of a public benefit.

Issues

1. Whether a trust for the benefit of a private hospital that charges fees can qualify as a charitable trust.
2. Whether the hospital’s operations provided a sufficient public benefit to meet the legal requirement for charitable status.
3. How to distinguish between private and public benefit in the context of trusts for healthcare institutions.

Decision

• The Privy Council held that a private hospital trust could be charitable if it provided a sufficient public benefit, even though fees were charged.
• The requirement that a charitable institution’s services be free was explicitly rejected; instead, the focus is on the breadth of public benefit and accessibility of services.
• The hospital’s non-profit nature and reinvestment of surplus into service improvement were considered indications of charitable purpose.
• The charging of reasonable fees did not negate charitable status provided a wide section of the public could benefit.

Legal Principles

• A charitable trust must both fall within a recognized charitable purpose and provide a public benefit.
• The public benefit requirement does not mean services must be free; accessibility and community impact are more important.
• Charitable status depends on whether the trust’s purpose serves the public good, not merely the general public as beneficiaries.
• The distinction between private and public benefit rests on whether the trust’s impact extends to the broader community.
• Practical application of these principles means private hospitals may be charitable if their operations serve the public benefit through accessible healthcare and the reinvestment of surplus.

Conclusion

Re Resch’s Will Trusts [1969] 1 AC 514 clarified that private hospitals can qualify as charitable trusts if they deliver a sufficient public benefit, despite charging fees. This decision established an enduring precedent for the public benefit requirement in charitable trust law and has continued to influence the status of private healthcare institutions.