HC Deb 24 July 1936 vol 315 cc1010-1

In proceedings taken against any person for the enforcement of a personal liability to pay any sum imposed by this Act on that person as being the owner of land, if he proves that the ownership of the land was vested in him in the capacity of a trustee or personal representative, and that his rights of indemnity are, otherwise than by reason of negligence or default on his part, insufficient to provide for his reimbursement in respect of that liability, the court may give such directions for the limitation or release of that liability as the court thinks just and equitable.

1.26 p.m.


I beg to move, "That this House doth agree with the Lords in the said Amendment."

It would be possible without the Clause for trustees to come under the disability of a personal liability where they themselves could not be held responsible for negligence or default. In order to prevent such a serious consequence, the Clause has been put in. It would be a very serious matter for trustees to find themselves, without any fault of their own, under a personal liability to pay an amount on behalf of their beneficiary.


I am not quite clear about the hon. Gentleman's explanation. Is this in accordance with the present law? Do I understand him to say that a trustee who commits some act, perhaps in all innocence, will be absolved by this Clause from any personal liability? How is that going to be proved? Must it be taken to the courts for a decision before the trustee can get exemption under the Clause?


No new principle is involved. Under the general rules of equity a trustee has the clearest possible right to recover from the trust estate and also from his beneficiary, but it has been recognised that it would be a very serious injustice if a trustee were to be made personally liable for any sum which he would be unable to recover as trustee. For that reason this express provision is made. It is not importing any new principle into the law.


I have looked into this Clause very carefully and I can assure my hon. Friend that it is designed exclusively to safeguard a trustee who may find himself in very difficult circumstances.