§ The Solicitor-General
I beg to move, in page 14, line 18, at the end to insert:(c) not being special-range property, accrues to the trustee, after such division as aforesaid, as owner or former owner of special-range property comprised in the fund".
§ Mr. Speaker
I imagine that it would be convenient to discuss with this Amendment that in page 14, line 18, at the end to insert:(c) being property which, in respect of any holding of special-range property, is or has at any time been acquired pursuant to the powers conferred by subsection (4) of section ten of the Trustee Act, 1925".standing in the name of the hon. Member for Crosby (Mr. Graham Page).
§ The Solicitor-General
The object of this Amendment, and of what is the consequential Amendment in page 14, line 22, is to clarify the position in regard to the treatment of bonus issues which derive from special-range property. I think that all I need say at this stage is that the solution we have propounded is in line with the decision which the Committee took on Clause 2 (3).
We therefore prefer it to the alternative solution suggested by my hon. Friend the Member for Crosby (Mr. Graham Page), which runs counter to that decision. In particular, his Amendment would include preferential rights under Section 10 (4) of the 1925 Act, which gives the investor the right to get in ahead of the stags, and that is pure investment and in no sense a bonus issue.
§ Mr. Hale
The last thing I intended to do was to oppose the Bill, but having sat here from eleven o'clock this morning until three minutes to four to deal with a matter of great importance, in which counsel's opinion has been taken and in which the investors' interests are greatly concerned, I cannot facilitate the passage of the Bill any further today.
The provisions of Section 10 (4) of the Trustee Act, 1925, were intended to provide, and, as far as I know, do provide, an additional power to trustees who are already exercising the investment of the trust fund under the special powers provided by the will, or any other special dispensation, to take advantage of any allotment of shares by way of bonus, or in the increase of rights by way of bonus which accrues to people holding shares in that way.
In other words, if the trustees, not people who have invested in equity securities but under the normal powers provided by a carefully-drawn will, exercise the right to retain securities held by the testator, the object of Section 10 (4) was to give them their right to participate as shareholders in any of those particular benefits that the company, in the course of its development—in the course of an expansion scheme or the like—should give to those shareholders.
Section 10 (4) of the 1925 Act has always been regarded as implementing that right, so that, when the trustees, first acting under the special power under the will, retain the shares, they are under no special obligation if the Bill is passed—they are acting under a special power—and when the trustees exercise these special options that may accrue to them in respect of one or more classes of shares under Section 10 (4) they, again, come under no special inhibitions in relation to this Act.
If they are retaining the estate as it was, if they have added accretions to it as they came, they have, at that moment, no special obligation under the Act to vary their investments or account for them, but the moment they do something that is covered by the provisions of Section 3 (3)—
§ It being Four o'clock, the debate stood adjourned.
§ Debate to be resumed upon Monday next.