The High Court has ruled that a trust holding shares in the company behind three Killarney golf courses is not charitable. Mr Justice Charleton delivered the judgment on 17 February 2009 in proceedings brought by the National Tourism Development Authority against seven trustees.
The trust was created to hold the authority’s shares in Killarney Golf Club Limited. The company owns or controls the golf-course facilities, while the Killarney Golf and Fishing Club runs the courses under its rules. The courses are Killeen, Mahoney’s Point and Lackabane.
The trust deed required the trustees to use their best endeavours to maintain the facilities for members and visiting golfers. It also directed dividends or proceeds towards improving the club, restricted disposal of the shares, and provided for them to revert to the authority if the company was dissolved. The judgment describes the deed as a 1987 draft that had been acted on as operative.
The defendants argued that the trust benefited the community by attracting tourists and overnight visitors to Killarney, supporting the local economy and preserving land from suburban development. The judge accepted that the courses had drawn visitors and that the arrangement had preserved some countryside. He also noted that profits were reinvested in the facilities.
But the court found that those benefits did not make the trust charitable. It treated the trust’s object as providing sport and recreation through an ordinary golf club, whose benefits were available to members and visitors able to pay substantial fees. The judgment said that tourism had not been recognised as a charitable purpose in itself and that sporting purposes were not generally charitable under the authorities considered.
The court concluded that the trust was not charitable. The judgment addresses charitable status; it does not record an order dissolving the trust or setting out a replacement arrangement. It says the interested parties would need to reorder their affairs if the trust was not charitable.