(NO. 24.) SECOND READING. (Hansard, 8 March 1888)

§ LORD HERSCHELL
, in moving that the Bill be now read a second time, said, it was introduced at the instance of the Incorporated Law Society, who had devoted much attention to this subject. It was intended to relieve trustees from some of the liabilities to which they were now subject, and to remove disabilities under which they at present laboured. The measure was one of detail, and did not involve any general principle—each provision was to be 535 considered by itself. There could be no doubt that trustees had long suffered under burdens which most of them considered very grievous, and anything that could be justly and properly done to give them relief would have a sound and wholesome effect. In fact, the liability of trustees for acts perfectly innocent in themselves had been pushed to such a point that it was often difficult to get persons to act in that capacity at all. The first provision of this Bill was very simple. This Bill, proceeding on the lines of the Conveyancing Act of 1881, which did not apply to trustees, would enable a trustee to appoint a solicitor to be his agent to receive and give a receipt for money on behalf of the trustee. It often happened in cases when it was desired to effect a sale on satisfactory terms that it became necessary to insert certain restrictions in the conditions of sale, which were known as "depreciatory conditions." But as the law at present stood, trustees could not insert "depreciatory conditions," and an impediment was thus placed in the way of their obtaining as much as they otherwise would if they were ordinary vendors, and often, when it was sought to enforce a particular sale, a person was enabled to get out of his bargain by alleging that the trustees sold under conditions which a trustee could not insert. It had been held that a trustee was not justified in advancing trust money on house property to more than one-half of its value, while on landed property he could advance to the extent of two-thirds of its value. But there did not seem to be any substantial reason for thinking, in these days, that house property was more subject to fluctuation than landed property, and the present restriction placed a difficulty in the way of trustees securing good investments. This Bill proposed to place house property and other landed property on the same footing. At present a trustee could not buy or lend without obtaining a "full title." This Bill proposed to enable a trustee to dispense with a full title, where the title appeared perfectly sound and good without it. It was decided in a particular case that a trustee, in obtaining a valuation of the property upon which he intended lending, was bound to obtain the assistance of a surveyor carrying on his profession in the neigh- 536 bourhood of the property. That was a very inconvenient restriction, and the Bill provided that if a trustee employed a surveyor of skill that was sufficient. Another provision of this Bill enabled a trustee to employ an agent to perform certain work under the trust, even though it was work that the trustee was mentally and physically capable of performing. At present a trustee could not charge anything for his own services, and could not employ any one else for reward to do anything which he was himself capable of doing. The consequence was that he was often put to considerable expense and inconvenience. It did not seem unreasonable that he should be allowed in certain cases to employ an agent. The last provision in the Bill was the most important of all. It enabled a trustee to plead the Statutes of Limitation in certain cases. At present an ordinary defendant was entitled to meet any claim against him by setting up the Statutes of Limitation, unless where fraud was proved. But at present, however innocent the breach of trust on the part of the trustee might have been, no lapse of time barred the right of the cestui que trust. A trustee might have taken the opinion of the most eminent counsel, who might have advised that the trustee was entitled to do certain things; but it might turn out by a decision delivered 50 years after that the trustee was not entitled, and had committed a breach of trust. This Bill provided that a trustee should be entitled to the benefit of the Statutes of Limitation, save where he had been guilty of fraud, and where the money had actually come to his hands. It did not seem reasonable that trustees more than other persons should be liable to stale claims where they had been guilty of no fraud or misconduct. He begged to move the second reading of the Bill.

§ LORD FITZGERALD
said, he thanked the noble and learned Lord, for introducing a Bill dealing with this important subject. Some of its provisions he entirely approved; but others, he thought, touched dangerous ground, and would require very careful consideration. He objected to valuers being substituted for trustees, and also to the clause alterating the law in regard to the 537 Statute of Limitations. He would suggest that the Bill should be referred to a Select Committee.

§ THE LORD CHANCELLOR (Lord HALSBURY)
said, he admitted that there were many provisions of the law relating to trustees that might be improved, and there was no doubt that the law operated harshly in some cases; but it ought to be borne in mind that nobody was compelled to become a trustee, and that a trustee took upon himself the duty of protecting the interests of others. He thought it would be unwise to encourage trustees to think lightly of their position and to entitle them to put forward their own neglect of duty as a shield against liability. If a trustee neglected for a long period to perform the duties which he had voluntarily undertaken, surely he ought not to be permitted to plead his wrongful inaction in order to avoid liability. The Statutes of Limitations, he might point out, were passed not to protect people against the consequences of bygone transactions, but with a view to diminish litigation, and on account of the perishable nature of human evidence. It was thought undesirable that a man should be called on to prove that he had paid a debt six years ago. He did not wish that their Lordships should reject this Bill; but he agreed with the suggestion of the noble and learned Lord who had just spoken that it ought to be referred to a Select Committee, who would be able to examine it minutely and settle its phraseology.

§ LORD HERSCHELL
said, he could not agree that no man need be a trustee against his inclination. The statement was, no doubt, true in a certain sense; but it left out of sight the important consideration of moral necessity. He should not be unwilling to refer the Bill to a Select Committee if its main principles were accepted. He understood, however, that the noble and learned Lord on the Woolsack opposed the important principle that there should be a limit of time, and he therefore thought that the opinion of the House ought to be expressed on the point.

§ THE PRIME MINISTER AND SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of SALISBURY)
said, that laymen did not regard this question precisely in the same way as lawyers. Some of the doctrines of the 538 Lord Chancellor sounded harsh in their ears. For his part, he thought it would be very desirable to have all the legal knowledge they could command upon a subject which so closely affected Members of that House, and that could only be properly obtained by sending the Bill to a Select Committee. The present state of the law as to trustees wrought real hardship. In his experience he had not been impressed with the truth of the Lord Chancellor's axiom that no one need be a trustee against his wish.