MESSRS, HOARE TRUSTEES BILL. [H.L.] (Hansard, 28 April 1926)

§ LORD OLIVIER

My Lords, I had written to the Lord Chairman a question with regard to this Bill, and as I was prevented from being here when your Lordships' proceedings opened yesterday, the Lord Chairman, with that courtesy and consideration with which your Lordships are familiar, postponed the Bill till I should have had an opportunity of speaking to him. In the circumstances I think I should tell your Lordships what the points are upon which I desired information. They are, I think, of some public interest, and suggested themselves to me after I had read the Bill. The Bill was introduced in the first instance without any explanation, and I did not read the Bill until after the Second Reading had been passed.

The Bill arises out of a Regulation made by the Lord Chancellor restricting the character of a company which may act as trustees and executors. The Lord Chancellor, with the concurrence of the Treasury, made the following Rule to carry into effect the objects of the Public Trustee Act, 1906:— (1) Any corporation constituted under the law of the United Kingdom or of any part thereof, and having a place of business there and empowered by its constitution to undertake trust business, and being either

(a) a company incorporated by special Act or Royal Charter, or
(b) a company having a share capital for the time being issued of not less than £250,000, of which not less than £100,000 shall have been paid up in cash,

994 shall be entitled to act as a trustee. The purpose of that Rule was, I believe, the protection of unbusinesslike persons who might be disposed to put their money into the hands of irresponsible companies. Incidentally, it has the effect of tending to put more business into the hands of the Public Trustee. That is a purpose with which I entirely agree.

Moreover, it has the effect of putting more business into the hands of some of those gigantic corporations whose increasing control over our national affairs is already engaging the interest of the Labour Party, and may in the near future become of greater political interest than it is at the present time. That being so, I wish to ask how it was, when this safeguarding Rule was passed by the Lord Chancellor, certain corporations such as this bank, efficiently carrying on the business of trustees and executors, were put under the necessity of appearing by Private Bill before your Lordships. It certainly must impose upon them a certain amount of trouble and expense and I apprehend that there may be a good many corporations in that position. Is it not possible to deal with such corporations by special exemptions, or is it necessary for all those corporations to go through the trouble and expense of promoting a Private Bill in this House? I explained the position to the Lord Chairman and he said that the matter had been fully considered. It was a matter that raised some anxiety in my mind and in the minds of other persons and I hope that the learned Lord Chancellor will explain to us how it is that this Rule excluding persons from carrying on the work they are perfectly well qualified to carry on was passed in such an onerous and comprehensive form.

§ THE LORD CHANCELLOR (VISCOUNT CAVE)

My Lords, I am very glad to answer the point that has been raised by the noble Lord. The law casts upon me the obligation of defining by rule the companies or corporations which can act as trust corporations under the Trustee Act. In these conditions I thought it right to protect beneficiaries by confining that privilege of acting as trust corporations to corporations which had a 995 substantial fund behind them, so that if anything went wrong the beneficiaries would have some one substantial to whom to look in case of default or misfeasance. That is the object of the definition that the noble Lord has read. The persons who are promoting this Bill did not come within that definition. They have found it convenient, for business purposes, to put their trusts into the name of this subsidiary body which is called the Hoare Trustees. I believe they are right in thinking that, having Hoare's Bank behind them as guarantors and sole shareholders, they are perfectly well able to meet any calls upon them, but in order to make their legal position clear they have brought in this Bill which will enable them to act as trustees.

I do not think there are many similar cases. Since this Bill was brought in I have heard of one, and there may, perhaps, be others. I am considering whether it is possible, by some alteration in the Rule, without taking away any of the security of the beneficiaries, to bring companies precisely of this character and of the character to which the noble Lord refers within the Rule, in which case they would not have to bring in a special Bill to regularise them. So far as this Bill is concerned your Lordships need not have any hesitation in allowing it to pass.