HC Deb 28 June 1864 vol 176 cc423-6

Bill considered in Committee.

(In the Committee.)

Clauses 1 to 7 agreed to.

Clause 8 (Trustees desirous of purchasing the Trust Estate may apply to the Court for permission).

MAJOR HAMILTON

said, he did not think they ought to pass this clause in silence. It allowed trustees and guardians of wards to acquire the property of these wards themselves, and with the leave of the Court of Session. It might happen that trustees or guardians of wards, in acquiring their property even with the consent of the Court, might do so for a fraudulent reason. He did not mean to insinuate that this would be the case, but he thought that some explanation of the clause was desirable.

SIR EDWARD COLEBROOKE

said, this power was to be granted simply upon an application to the Court. He thought that there ought to be some protection, that it ought to be done in the most public manner, because everything ought to be done to prevent collusion on the part of the persons interested, He quite agreed that this was a very questionable power to be given, and one which ought to be guarded in every way possible.

MR. CAIRD

also objected to the clause, and hoped the Lord Advocate would be able to give them some reason why it was proposed. It did not appear to him that there was any good reason for introducing such a novel principle as that of giving powers to trustees to become themselves purchasers of the trusts which they had been appointed to administer.

THE LORD ADVOCATE

said, that no doubt this power ought to be watchfully exercised. He thought, however, that the cases in which it would be most generally exercised were family trusts, and where the trustees were generally interested in the property. Very often a much greater price could be obtained from a person who was a trustee. Sometimes the only man who cared to purchase was a trustee, and it would be often far the best arrangement which could be made. He believed that a power of this kind could be exercised on application to the Court of Chancery; and it was intended to give the Court of Session the same power. The general rule that no trustee should become the purchaser of a trust had been found to cause great inconvenience and embarrassment in many cases, and he thought there was a general impression that this power ought to be given. As far as he was aware, he thought it would be of great advantage.

MR. CAIRD

said, the question was whether this power might not be used for an improper purpose, and he thought some clauses should be inserted providing that property which it was proposed to deal with in this way should be offered for public sale, so that the public would come in as a check. There might be advantage in giving the power which it was now proposed to give, but it should be so guarded that the trustees should not be able to take any advantage of the trust.

SIR JAMES FERGUSSON

said, that he knew that great jealousy existed with regard to this clause as it originally stood. At that time, there was no provision that the sanction of the Court should be necessary; and he did not think it would have been possible to agree to it as it then stood. The Committee would remember how jealously the Court of Session guarded the rights of wards, and he did not think there was any reason to fear that the Court of Session would not very carefully exercise the right which it was now proposed to intrust to them. Some cases had come within his own knowledge in which it would have been advantageous if trustees could have exercised this power; and, as it would be exercised under the authority of the Court of Session, he thought no fear need be entertained.

MR. BUCHANAN

said, that if he were not misinformed, the practice had been, at judicial sales by the Court of Session, to offer the property by public auction.

THE LORD ADVOCATE

said, the object of the clause was merely to authorize the purchase of property by trustees. It did not interfere with the power of the Court of Session in regard to selling. He had no doubt that in ordinary cases the Court would not consent to a sale except by public auction; but he was quite willing to consider whether the clause could not be amended in any way before the Report came on.

Clause agreed to.

Clause 9 (Court may authorize Trustee to enter into Transactions with the Estate)

SIR JAMES FERGUSSON

said, he thought this clause ought not to be passed even in its amended state. It authorized a trustee to hold an office of profit under the trust. He knew that legal authorities in Scotland of the highest kind—including the late Lord Justice General—entertained decided feelings against such a proceeding. There were decided objections to a professional gentleman being a paid trustee; I and, without any imputation, he did not think that was a position in which they ought to be placed.

COLONEL SYKES

thought it was a dangerous conjunction to have an agent and trustee combined in the same person.

THE LORD ADVOCATE

said, that formerly there was no such rule as that which now existed, and it was a very ordinary thing for the family agent to be made a trustee. It was considered that it would be of great advantage to have his knowledge and experience. Now, however, the family agent could not be appointed a trustee, without surrendering the agency of the trust. That has been found very inconvenient. He agreed that the general rule was a salutary and wholesome one; but there were many cases in which it would be extremely convenient to have the benefit of the knowledge and experience of the family agent as a member of the trust.

MR. FINLAY

suggested that the clause should be postponed till the Report.

THE LORD ADVOCATE

said, that as there seemed to be considerable difference of opinion, he would have no objection to postpone the clause till the Report.

Clause withdrawn.

Clause 10 (Extension of the Powers of Trustees in relation to Investments).

SIR EDWARD COLEBROOKE

said, the clause gave a very considerable exten- sion of the powers of trustees, and enabled them to invest not only in Parliamentary and East India stock, but in the railway debentures of any railway company paying a dividend. He thought it was a question whether such a power should be exercised without the authority of the Court.

MR. BUCHANAN

said, the same objection had occurred to him, but he had been given to understand that the wording of the clause was borrowed from the English Act—the 24 & 25 Vict.

Clause agreed to.

Remaining Clauses agreed to.

Then, on Motion of The Lord Advocate, New Clauses added.

House resumed.

Bill reported; as amended, to be considered on Monday next, and to be printed. [Bill 179.]