§ 2.48 p.m.
§ Order of the Day for the Third Reading read.
§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)
My Lords, I take it that your Lordships will desire to follow the procedure which we have followed in such cases; that is, that we should take the Third Reading formally, then deal with the Amendments, and have any discussion on general points in the Bill on the Motion "That the Bill do now pass". I beg to move that this Bill be now read a third time.
§ Moved, That the Bill be now read 3a.—(The Lord Chancellor.)
§ On Question, Bill read 3a.
§ LORD SILKIN moved to insert as a new Clause 1:
§ Definition of "charitable purpose"
§ ". For the purposes of this Act a charitable purpose is either—
- (i) one which exists for—
- (a) the advancement of religion; or
- (b) the advancement of education, learning, science or research; or
- (c) the prevention or relief of poverty or distress; or
- (d) the promotion and advancement of social welfare, including public recreation and sport;
- (ii) one which otherwise than in paragraph (i) of this section benefits the public generally, whether with or without reference to or limitation within a locality, or within some group or section of the community:
§ Provided that where the beneficiaries of a trust for any of the objects specified in paragraphs (i) and (ii) of this section are identified by the tier of blood relationship the trust will not be one for a charitable purpose; and where the beneficiaries of a trust for any of the objects specified in paragraphs (i) and (ii) of this section are identified by some contractural or similar bond of a continuing character, whether as members of an association or as employees of a limited company or other similar organisation, the trust will be one for a charitable purpose; and provided further that the promotion of public recreation and sport shall not be for a charitable purpose unless it is for the benefit of persons who participate in it without financial remuneration.
§ Provided also that this Act shall not affect the validity of instruments executed before the coming into operation of this Act."
§ The noble Lord said: My Lords, I should like first of all to express my regret that I was not able to move my Amendments on the Report stage, and also my appreciation of the consideration of the noble and learned Viscount and of the House in enabling me to move them this afternoon. Perhaps I can best repay this kindness and consideration by being as short as I possibly can on all these Amendments, and in consideration of that it may be that the noble and learned Viscount will see his way to being equally helpful on these Amendments.
§ The Amendment which I am moving is the much vexed question of providing a definition of "charity". On the Committee stage I gave reasons which, while perhaps not conclusive, at any rate were strong reasons for incorporating a definition of "charity" in a Bill where we are consolidating the law of charity, where we are seeking to revise laws of charity which have been in existence for hundreds of years, and where the only existing definition is one contained in an Act of Parliament of the year 1601. I put forward my idea of what the definition of charity might be and it was based upon certain statements, obiter dicta, in the House of Lords, particularly by Lord Macnaghten, and also upon decisions of the House of Lords on what amounts to charity. Your Lordships would no doubt agree with me that if it were possible to provide a definition of charity in a Charities Bill it would be desirable to do so.
§ In the debate on the Committee stage a number of objections were taken by the noble and learned Viscount himself 966 and by the noble and learned Lord, Lord Cohen, to the actual Amendment which I had put forward. I have endeavoured in the Amendment which is before your Lordships now to deal with most of the objections and see whether I could meet them. One objection that was taken by the noble and learned Viscount was that my Amendment as it stood said nothing about sickness or poverty, and so under paragraph (i) (c) I have included the provision that a charitable purpose is one which exists for "the prevention or relief of poverty or distress". Those words may not cover it, but if that were the only objection of course one could find adequate words.
It was also suggested that by defining the law of charity now it might throw the whole question of what is a charity into doubt: that there is a large body of Case Law upon which charities are acting; charities have been decided to be charities or otherwise on the basis of this Case Law, and it would be wrong to throw that into doubt. I agree, and so I have included a proviso that
this Act shall not affect the validity of instruments executed before the coming into operation of this Act.
Any charity that was accepted as a charity before this came into operation will remain a charity, but in future charity will be dealt with on the basis of this definition.
§ I have no doubt that one can find detailed objection to the drafting. Of course one can. I suppose that if I put down the Ten Commandments for approval some noble Lords, particularly the noble and learned Viscount, Lord Simonds, would find something to comment on and say they were incorrectly drafted. Nevertheless, I hope it will be possible to accept this Amendment, in principle at any rate. I would not press it as being the last word in the way of definition, but if the noble and learned Viscount would see his way to give some encouragement to the idea, it could, of course, be pursued at the next stage in another place. I beg to move.
Before Clause 1 insert the said new clause.—(Lord Silkin.)
My Lords, while I do not want to question the spirit of this Amendment that the noble Lord, Lord Silkin, has advanced, I wonder whether 967 he does not think that the inclusion of the word "Christian" before "religion" might be advisable. There are many religions in the world and some of them are definitely, in our view, anti-Christian, and whether they ought to be considered as charities to be supported in this country or not is a question that I leave to those who have more authority to speak on the subject. But there certainly are many peculiar religions. There is a certain body known as Jehovah's Witnesses, which I think had a peculiar reputation during the last war. There are also, of course, the Mormons. I do not know whether they have any adherents in this country. And there are certain others like that. So I wonder whether possibly the mere addition of the word "Christian" might be advisable.
My Lords, might I oppose very strenuously the suggestion which has been made? I am all in favour of the Christian religion and Christians, but surely your Lordships will agree that people who happen to believe in Mormonism or Buddhism and certainly any other good and established religion can certainly be charitable persons and should not be disbarred. For perhaps similar reasons we should not take exception to paragraph (d), which in theory advances the support of fox hunting although many people might think that that might not be a good thing to do. I think it should be taken on a broad and general position.
§ VISCOUNT SIMONDS
My Lords, it appeared to me that the noble Lord, Lord Silkin, was making a sort of appeal to me. I must say that it is a very interesting day for me, because more years ago than I care to think of I heard a very learned Lord say that a definition of legal charity is impossible. That has been repeated by great lawyers at intervals ever since. Finally it came before the Committee of the noble Lord, Lord Nathan, whom I am very glad to see here to-day, and he, with his Committee, many of whom were experts and having the assistance, no doubt, of other experts, came to precisely the same conclusion: that a definition of legal charity was impossible and that an attempt to do it could cause nothing but confusion. I heartily agree with the noble Lord.
968 But now, my Lords—I make no invidious comparison—the noble Lord, Lord Silkin, has stepped in where angels fear to tread, and the result is this proposed definition of charity. I do not want to be unduly critical, but I venture to think that in almost every line of it there is some hole; in almost every line of it there is some word which will cause confusion in the courts when they have to interpret it. I could take many examples. Let me take one. But before doing so, may I say that I am in grave doubt whether this is meant to codify the law of charity or to alter it and improve it; I do not know which it is meant to be. At any rate, may I refer to one or two things in it which seem to me to cause uttermost confusion? Your Lordships will see that under paragraph (ii) the noble Lords includes any charity whichotherwise than in paragraph (i) of this section benefits the public generally".Who in the world is to say what benefits the public generally? Is it to be subjective? If a testator, however foolish, says, "I benefit the public generally by this gift I make," is that a good charity? Or is the court to decide what benefits the public generally? If so, how is the court to decide? Suppose a gift is for patriotic purposes; is that for the benefit of the public? A gift for the Fabian Society—is that for the benefit of the public? A gift for the Fascists—is that for the benefit of the public? So you can go on. You cannot by these general words really provide a fair and proper definition which will not cause endless confusion.
Then again, to look at these provisos—I do not want to be unduly critical—what does the noble Lord mean when he says:where the beneficiaries of a trust for any of the objects specified in paragraphs (i) and (ii) of this section are identified by some contractual or similar bond of a continuing character …What is a "similar bond?" What is a "continuing character"? Is it perpetual, or does it mean that it is not simply ephemeral? The proviso also says:whether as members of an association or as employees of a limited company"—what sort of association?—or other similar organisation. …Nothing but difficulty would arise out of this Amendment. I hope that the noble 969 Lord will not think that I am unduly critical, but he is only exemplifying what I have said: that it is really impossible to get a satisfactory definition. I do not want to be didactic, but I speak on this matter with some fifty years of experience, and I venture to ask your Lordships not to embark on a definition which will indeed be a bounty to the members of Lincoln's Inn, but otherwise not a public benefit.
§ LORD DOUGLAS OF BARLOCH
My Lords, there is no one to whom we would listen with more respect than to the noble and learned Viscount who has just spoken, and I certainly would not disagree with the criticisms which he has made of the Amendment which my noble friend has put forward. But I wonder whether that entirely disposes of the matter. If it is true that, as matters stand at present, it is impossible to define what is and what is not a charity, it would appear that the law is already in a state of confusion and that something ought to be done about it. In the light of what the noble and learned Viscount has said, the effort of my noble friend Lord Silkin does not appear to provide a solution; but surely the ingenuity of lawyers—especially those who are specialists in this particular subject—could produce a definition of some kind which might reduce the area of uncertainty that exists at present. I am sure that the noble and learned Viscount, Lord Simonds, would agree that there is nothing so desirable in law as to try to achieve certainty, if by any means it can be achieved. After all, codification is not entirely unknown: it was first practised nearly 2,000 years ago, and I should have thought that at the present day it might be possible at any rate to codify the definition of a charity if no more.
§ 3.4 p.m.
§ THE LORD CHANCELLOR
My Lords, I am sure that the whole House is grateful to the noble Lord, Lord Silkin, for posing this question, but after what my noble and learned friend Lord Simonds has said, I do not think that even Lord Silkin himself would say that he had found the answer. There is just one point, of which I reminded your Lordships when we were discussing this matter on the Committee stage—namely, that Lord Silkin has commenced this 970 Amendment with the wordsFor the purposes of this Act.But he would agree with me that it would be an intolerable position to have one definition of charity for the purposes of this Act and the existing definition for the purposes of the Finance Acts and Rating Acts, which affect charities so deeply. What he really wants is a definition of charity for all the purposes of the law.
I am not going into the matter at length, and the examples I take I quote, as my noble and learned friend Lord Simonds did, simply for the purpose of illustrating the difficulties which confront anyone who attempts this honourable but difficult task. I take, for example, research, which the noble Lord, Lord Silkin, includes. It is difficult to imagine all forms of research being charitable in any conception of the word. To put it the other way round, it is easy to imagine forms of research that no one would seriously want to be charitable, and there are others which are in grave doubt. Let me take one of the most famous recent examples. I am sure that many would doubt the value of the research intended to be carried out under the terms of the will of the late George Bernard Shaw, into the time and money likely to be saved by the adoption of an alphabet of 40, instead of 26, symbols, which was held not to be charitable, although the case was settled on appeal. That only shows the beginning of the vista of objects in regard to which I think your Lordships would hesitate before giving the advantages of charity—that is, the ability to exist in perpetuity and freedom from tax.
Take the one which has been mentioned in the debate—the proposal to extend charities to include the promotion of amateur sport. It would certainly make charitable the promotion of fox-hunting, which might appeal to some of your Lordships. But I gather that the intention is that sport should be treated as including games. If cricket clubs and golf clubs are to be made charitable—subject, of course, to their satisfying the requirements of the proviso, which would not be too difficult—where is the matter to stop? If golf, why not whist or bridge? On that aspect, I think that, after very careful consideration, we went quite far enough 971 in the Recreational Charities Act which I placed before your Lordships a year or two ago.
If I may take one or two practical matters which affect a number of very famous charities, the rating of charities is a grave problem at the moment. We have had the Report of the Pritchard Committee, which we shall have to discuss in due course; but that would really be stillborn as to its basic idea, however we are going to adapt it, if this were carried out. My noble and learned friend Lord Simonds has dealt with the point, and in his presence I hesitate to say much about a subject of which he is such a master. But I think that we are apt to be a little misled by the famous speech of Lord Macnaghten in Pemsel's case, to which reference has been made. I think that none of my noble and learned friends will contradict me when I say that that noble Lord was not attempting a definition of charities: he was making a classification, and nothing more. Even that was not original because (I have not checked it, but if I am wrong in my memory I shall be corrected) that classification goes back to an argument of Romilly's in the case of Morice v. The Bishop of Durham about 150 years ago; and so it is not as if we had a definition. We have had a classification which only opens the problem.
On the first proviso, if I may take one other example, it is obviously the intention of the author to reverse decisions in cases with the names of which I will not trouble your Lordships; but in these cases it was held that trusts for the benefit of the employees of commercial concerns could not be charitable, with the possible exception of trusts in relief of poverty. If commercial concerns are going to take the excellent course of having schemes and plans of that kind for the benefit of their own position and for keeping their employees, that is a commendable but commercial venture, and I believe there would be, to say the least, great argument on that point.
I come now to the difficulty which has been succinctly stated by the noble Lord, Lord Douglas of Barloch, a difficulty which has also worried the noble Lord, Lord Silkin. That is: would not almost 972 anything—I would not go so far as to say just "anything" although that is implicit in the argument—be better than the present position? Or, to put it more modestly, is there not in the present position so much uncertainty that this definition would be bound to be some improvement? The nature of our legal system, however, is such that any definition of this kind contained in a Statute must inevitably become overlaid by the reported cases which place authoritative interpretations on the words used. And the only effect of a definition of this kind would be that the courts would have to start working anew in order that, at some time in the future, we may again arrive at a state of nearer-certainty—and I do not put it any higher—than we are in at present. That near-certainty is attributable to the large number of reported cases giving actual, practical examples of every sort and kind, of each kind of limits; and to start anew would be a matter of great difficulty unless we were absolutely certain that a heaven-born definition had sprung into our minds—and that certainly has not happened yet.
As I have said—and I mean this with complete sincerity—the noble Lord has raised an important problem, a problem which is a challenge to everyone who is anxious to improve the law. All that I can promise is consideration of that problem, without (and I must be frank with your Lordships) great hopes of attaining a true solution; but I do promise the noble Lord, Lord Silkin, that it will continue to be studied. I thank him again for having brought it up. I believe that I have said enough—and I have been very brief over the points—to show that we have not yet reached a solution, and therefore I would ask the noble Lord, after the recognition which I have given of the importance of the problem he has raised, not to press his Amendment.
§ LORD SILKIN
My Lords, of course I will not press this Amendment. If I had any doubts as to whether it was satisfactory in its terms, the noble and learned Viscount, Lord Simonds, has entirely removed them; and I am quite satisfied that it will not stand up. But in spite of what has been said, I am not satisfied that a definition is not both desirable and practicable. I believe that if I had, in the old days, given to the 973 noble and learned Viscount, Lord Simonds, a brief instructing him to prepare a definition of "charity", with a nice fat fee, he would have produced one.
§ VISCOUNT SIMONDS
My Lords, I think the noble Lord would have hurled it back at me and asked me to try again.
§ LORD SILKIN
My Lords, I certainly do not accept that it is impossible to find a definition, and I do not believe that the noble and learned Viscount has satisfied the House that it is impossible to do so. Every one of the objections that has been made could be met. I am not going to try again—I shall not have the opportunity. But one could sit down again and, in the light of everything that has been said in this debate, revise the definition; and I believe that in the end one would get to something that would be satisfactory. Probably the best thing, in the stages that are ahead, would be to do what the noble and learned Viscount has proposed—to give the matter serious and objective consideration. If it is impossible then I should be most surprised, but in the meantime I will not take up any further time of the House and I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 5 [Effect of, and claims and objections to, registration]:
§ 3.17 p.m.
LORD SILKIN moved, in subsection (2), after the second "or" to insert:
may within three years from the date when the charity was entered on the register of charities
The noble Lord said: My Lords, this is an Amendment which deals with the question of registration of charities under Clause 5. Subsection (2) provides that:
Any person who is or may be affected by the registration
has the right at any time to object to the registration of the charity, on the ground that it is not a charity. According to the wording of this subsection that is the only ground on which there can be objection to the registration. Yet, as the law stands, a person can object at any time—perhaps years afterwards. A charity may have been registered for 50 years, and a person can suddenly come along and object to registration on the ground that it is not a charity.
In my view, there ought to be a time limit. A person should make up his mind whether or not a particular charity is a charity—although I know that, in the absence of a definition, he is going to have great difficulty in doing so. Under this Amendment a person would have to make up his mind upon that matter within three years. I feel that a charity should not be in peril or in suspense indefinitely or have its raison d'être liable to be challenged at any time, and the purpose of my Amendment is to give a charity some kind of assurance that at the end of a period, whether three years or some other, it should know that it is incapable of being challenged on the ground that it is not a charity. I beg to move.
Page 6, line 18, after ("or") insert ("may within three years from the date when the charity was entered on the register of charities").—(Lord Silkin.)
§ THE LORD CHANCELLOR
My Lords, we had a discussion on this Amendment on the Committee stage, and I promised that I would consider it. I have done so, but I am sorry to say that I cannot advise your Lordships to accept it. The register is, of course, supposed to be an accurate register, and it is the duty of the Commissioners to remove from the register something which they do not believe to be a charity. I think your Lordships can safely disregard the effect of frivolous or malicious complaints to the Commissioners. The Commissioners are well accustomed to dealing with them and to disregarding them in proper cases.
But one must face up to the result of accepting this Amendment, which would be to constitute a number and a category of statutory charities which were, ex hypothesi, not charities but had become so through an error continuing for a period of three years; and it would, I think, have two undesirable practical results. If it were to be the law, the Commissioners themselves would be required to have a very searching reconsideration of each case at the end of three years. Moreover, the effect would be that the Inland Revenue or a rating authority, who at present might be disposed not to argue the question of a smaller charity—because if the revenue or the rates were 975 seriously affected later by a big charity, or by a large amount being left to it, they could always protect their rights—would be driven to fight every small charity about which there was a doubt. And although that may appear good logic, it will be a poor day for this country when we act entirely on logic and do not let common sense leave things alone when it is wise.
But on the general point, we are taking a very considerable step in making the register conclusive for all purposes, including Revenue purposes, while the institution is on the register; and I submit that to go further and create what I have called this class of artificial statutory charities would be a mistake. I am sorry that I have not been able to meet the noble Lord on this point—I have considered it—but I may tell him now, to cheer him up, that the unexpected happening which occurred to him in another stage of the Bill may yet happen again; so he need not be weary of well doing—but not on this Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 9 [Exchange of information, etc.]:
§ LORD SILKIN
My Lords, this is a very simple Amendment, and it provides that where documents are open to public inspection the public may ask for copies of them as a matter of right, instead of if the Commissioners think fit. I do not think the point needs much arguing. These are copies that anybody can go and see for himself. If a person wants copies of them, why should not he have them, and why should they be provided only if the Commissioners "see fit" to provide them? I beg to move.
Page 10, line 17, leave out ("may, if they see fit,") and insert ("shall").—(Lord Silkin.)
§ THE LORD CHANCELLOR
My Lords, I have the greatest pleasure in accepting this Amendment, ipsissima verba.
§ On Question, Amendment agreed to.976
§ Clause 13 [Occasions for applying property cy-près]:
LORD SILKIN moved, after subsection (4) to insert:
() Where funds are raised by public appeal or public subscription for a charitable purpose, it shall be presumed that all contributions to such funds have been given with a general intention of benefiting charity unless the donor, at the time of making a contribution, has expressed an intention to benefit that charitable purpose only; and all sums contributed with an expressed intention to benefit that charitable purpose only shall be presumed to have been applied in fulfilment of that charitable purpose in priority to contributions given without limitation.
§ The noble Lord said: My Lords, my average has gone up. This is an Amendment which I put down, not to re-argue but to give the noble and learned Viscount an opportunity of saying what has been the result of the consideration which he promised to give to a similar Amendment which I put down on the Committee stage. I would just remind the House very briefly of what the point was. It was the question of charities which arise from public appeals. In my speech on the Committee stage I mentioned the Gillingham bus case and the disaster in North Devon and so on, and the different ways in which these funds have been dealt with. The common feature of them is that it became unnecessary to use the money that had been publicly collected, and the question arose as to what should be done with the money: should it be returned to the donors—that was a very difficult question because in many cases the funds were provided in shillings and pence; should it go to the Crown, or should it be dealt with by the cy-près doctrine? I admit that it is a very difficult question. I put down in this Amendment what I thought was a solution; but the noble and learned Viscount gave a promise. What he said was that he had great sympathy with the question, that it was a problem, and he would look at it and see what could be done. I have put down this Amendment again in the hope that he may be able to tell the House what the Government are proposing to do on this problem.
Page 13, line 29, at end insert the said subsection.—(Lord Silkin.)
My Lords, I hope that Her Majesty's Government will not 977 accept this Amendment. I gave a reason, which was a very short one and which I will repeat, on the Committee stage. Following the Broughty Ferry lifeboat disaster, the Lord Provost of Dundee started a fund for the relief of the families affected, and the workpeople of the Dundee shipyard behaved very generously indeed. I am speaking only from memory, but I think they each gave a week's wages, or something very good like that, and they did not attach any strings to their gifts. When the fund reached a certain figure there was a certain amount of speculation in Dundee as to whether there would not be too much money, and whether it would not be a good thing to devote part of it to some cognate purpose. The people who had subscribed this money, without any conditions attached, were very indignant. They said they had subscribed the money to help the afflicted families, and they did not think, however much it was, even if it was £1 million, it should be used for any other purpose. I take that as being a fair expression of what I call the sterling honesty of the ordinary common man in the street, the ordinary private citizen. I myself take that as a very sound principle.
There is another question which occurs to me on this Amendment, and that is that when there is one of these national disasters I do not think there is any law that prevents any one of us from making a collection for the victims. Suppose there is more than one centre of collection, and that one has a perfectly good and attractive name—for example, that one collects for Gillingham at the same time as the Mayor of Gillingham collects: that he has a fund and I have a fund. And suppose I collect a lot of money and then find that it is not needed; that it is too much; that all the necessities are being looked after, and that there is no need for it. It seems to me that, under this Amendment, I might use that money for my cats' home or for some other charity in which I am interested. In every case of this kind, especially when subscriptions from the public are involved, it ought to be a matter for the courts. It does not happen often, but when it does I think it is a matter for the courts to decide. I therefore hope that Her Majesty's Government will not accept this Amendment.
§ VISCOUNT SIMONDS
My Lords, I hope the noble and learned Lord, Lord Silkin, will not have too much of a shock when I tell him that I sympathise very much with this Amendment. I do not like it in the least, because it means that the money a man contributes for one purpose may go to another; but it seems to me to be perhaps the best way out of a rather hopeless deadlock. Therefore, although it may be that the words are not exactly apt, I hope that the noble and learned Viscount on the Woolsack will give the matter consideration, and will have a clause introduced in another place substantially on these lines.
§ THE LORD CHANCELLOR
My Lords, I am really before your Lordships to report progress, because I said on Committee stage that I sympathised with the object of the Amendment and that I would report progress before the Bill left your Lordships' House. I should like the noble Lord, Lord Silkin, and my noble and learned friend Lord Simonds to know that there is good will towards the principle of the Amendment, and that the Government hope to introduce a suitable Amendment when the Bill is considered in another place. I might give one or two indications of how our minds are moving; because in doing so I hope that I shall alleviate the fears of my noble friend Lord Saltoun, who has taken such an immense and helpful interest in the Bill.
The first point is that I think it should not be limited to public appeals, because most appeals are carried out both publicly and privately; and the notion of a public appeal is difficult of definition although I think the principles are the same. Secondly, we consider that the matter which most needs attention is the case of money which, under the present law, may become bona vacantia upon the failure of a charitable object, or which may have to be paid into court to await the claim of an owner who will, in practice, never claim it. Another point (and in this I believe my noble friend Lord Saltoun will be interested) is that it is right to bear in mind, if I may give another example, that many appeals are begun by a handsome gift which becomes the nucleus of the fund—that is perhaps looking at it at a different point of time from that taken by my noble friend. 979 We think it quite wrong that such gifts should be expropriated from the charities where there is a total failure of the purpose which they were intended to achieve; and we must take great care to do nothing which would make any such benefactor (and I think the same would apply to the example given by my noble friend) feel that he had been treated unfairly, or that there had been anything in the way of sharp practice.
These are the sort of lines along which we have been thinking. It obviously is a matter calling for great care in drafting if it is not going to give rise to difficulties and uncertainties on construction, but we think it is a sound and useful thing to attempt. As I say, we hope to be able to produce an Amendment in another place; and I am only sorry that, with the many other aspects of the Bill which I have had to consider, it has not been possible to have an Amendment in time for your Lordships' House. I very much hope that we shall be able to produce one in another place.
§ LORD SILKIN
My Lords, that is, of course, quite satisfactory, and I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ 3.36 p.m.
LORD SILKIN moved after Clause 36 to insert the following new clause:
§ The noble Lord said: My Lords, this is the Amendment which seeks to deal with trusts which are defective because part of the trust is charitable and part is deemed to be not charitable. The result of that in law is that the whole trust becomes invalid; and, as I said on the Committee stage, the wishes of the testator or person creating the trust are 980 entirely invalidated. The purpose of this Amendment is to secure that, where the charitable part of the gift is the predominant part, then that part of it should be valid, even if the non-charitable part is not valid. I hope that your Lordships will not quarrel with the drafting of this Amendment, because I have not drafted it myself, but, through the kindness of the noble and learned Viscount, have been able to get the help of the Parliamentary draftsman; and I have no doubt at all that the drafting is satisfactory.
§ I hope your Lordships will accept the principle of the Amendment. So far as we possibly can, we ought to try to give expression to the wishes of a donor, and to his intentions. When we last discussed this matter the noble and learned Viscount spoke of interfering with private rights, and I understood him to mean that this was interfering with the private rights of those people whom the testator had intended not to benefit but who did benefit because the will or the trust turned out to be invalid or defective because part of it is charitable and part is not. In those circumstances, the next of kin whom the testator had deliberately decided not to benefit would come in, and would benefit from the will. My Amendment would preclude that from happening, and, admittedly, in that sense, is an interference with private rights; but it is an interference which I am sure your Lordships would not regard as having great merit, assuming that we all desire that the wishes of a testator or donor should be carried out. I therefore put forward this revised clause with confidence, in the hope that your Lordships will see your way clear to accepting it. I beg to move.
After Clause 36 insert the said new clause.—(Lord Silkin.)
My Lords, I want to deal only with one argument that was raised on the Committee stage, and that was the argument of my noble and learned friend Lord Morton of Henryton. Your Lordships will remember that he said in Committee that the point that affected him about this Amendment was that, as the law stood now, a testator who had made a bequest to charity which was bad benefited the people whom he least of all wished to benefit—namely, his next of kin, because they got the legacy or bequest and not the charity. 981 It has been my fortune to deal with a great many legacies in the past five or ten years, and in many cases they did cut out the family. I had to deal with one only this morning, and the cause of it was sheer senility. It was the case of a man who in his old age was being looked after by his family. He had announced his intention of leaving his property to his family; but time went on and, like some other old men, he did not make another will and the whole of his property was left to charity. That, I think, is not a common cause of such a bequest, although it is a serious one.
In my opinion, one of the great causes of people cutting out their families—and they are often poor people who do this—and leaving their property to charity is morphia. People who get cancer and are are under morphia for a long time become quarrelsome and malicious—I have had experience of this, and I know—and often make wills cutting out their family and the people nearest and dearest to them, leaving their money to charity. That is all very well if it is a good bequest, and it is up to the charity to decide how to deal with the matter. But if it is a bad bequest, it can never be a bad thing, I think, for the money, which cannot properly and legally go to charity, to go back to the next of kin. That is the kind of solution which seems normal and quite proper to the ordinary common man like myself.
§ 3.42 p.m.
§ LORD DENNING
My Lords, perhaps I may say a word or two on this Amendment. I believe that what my noble and learned friend Lord Morton of Henryton had in mind were such cases as the Diplock case, where the solicitor or someone made a mistake and put "charitable or benevolent". As a result of that the money had previously been distributed to charities in Sussex; but because that was held to be invalid, the money went to a person in Australia who was the first cousin once removed of the testator, of whom I verily believe the testator had not even heard and certainly did not intend to benefit. It is such cases as that that my noble and learned friend had in mind. The testator wants his money to go to charities of some kind, but instead it goes perhaps to the next of kin of whom he has never heard and knows nothing.
982 The object is to deal with those cases, and cases where even the legal profession make mistakes. I ask your Lordships to consider the difference of "and" and "or". There is a case where money was left for the "promotion of Conservative principles and learning and religion," and because it was "and" each time it was charitable; but if it had been "or", everything would have been bad. All these mistakes have been remedied for before 1952. I am sure that the great weight of well-informed opinion would be that we should allow even lawyers' mistakes to be remedied when they happen in cases like this. Let it be confined to charitable objects properly so called and not to non-charitable ones. I hope that this House will approve the principle of the Amendment.
§ THE EARL OF CRAVEN
My Lords, I rise to support this Amendment on behalf of the Roman Catholics; indeed, I do not think it will be only Roman Catholics, but many of your Lordships here belonging to other bodies and other denominations, who will support it. The noble and learned Lord, Lord Denning, has mentioned the Diplock case, and that to me is part of the mystique of the lawyer. I am not a lawyer, but I have one particular point which I should like to put before my noble and learned friend on the Woolsack. I hope he will consider some way to amend this, if possible, to preserve the right of the person who would become entitled to property if the trust is invalid to waive his right and so allow the trust to be performed without the obligation of getting the scheme legally established. I am sure that all those here who are legally-minded will understand what I am aiming at. It is a long and complicated process if you have to refer to the Royal Commission every time and go through all the legalities. We want to simplify that.
§ THE LORD CHANCELLOR
My Lords, on the Committee stage your Lordships showed considerable interest in this point, and I have given it careful consideration. I ask your Lordships to note that this was not in the original Bill, although of course it may be none the worse for that. It involves an amendment of the Long Title and it makes an important change which will have considerable consequences which I feel it is my duty to put before your Lordships. 983 I mentioned on the Committee stage, as the noble and learned Lord, Lord Silkin, has recalled, that it affected the rights of private persons over property. Your Lordships will realise the dilemma.
Noble Lords who sympathise with this Amendment are, I am sure, feeling at the moment: why not carry out the testator's intention? But it follows that this Amendment—and this is inherent in its principle—will cause a disposition of property for charitable purposes, however ill expressed, to prevail over alternative purposes which are not charitable but may well have been within the intention of the testator. It would also defeat the claims which the residuary legatee or the next of kin may assert to property which a testator has willed away from him to purposes which are in part—and again this is part of the hypothesis of which we are thinking—purposes for which it is impossible to make a valid gift. I do not want to be dogmatic on the matter: it is possible that that view, which is supported by many Members of your Lordships' House of great eminence, is right; but it is certainly something that wants consideration.
I said that it has been the general practice before one interferes with private rights to get the advice of an independent Commission of Inquiry. That cannot be driven too far, because the Government must retain some discretion as to how far it adopts and how far it rejects the recommendations of a Committee of Inquiry, and so must any Legislature such as your Lordships' House. But it is interesting that this very point was referred to an independent Committee of Inquiry, and the Committee, under the noble Lord, Lord Nathan, recommended a validation of trust instruments then in existence which had been acted upon as valid but turned out to be defective as a result of a decision by the courts, but did not consider that there was a case for validating defective instruments which might come into existence in the future. It is true that they were not unanimous on this point, but that simply underlines my point that this is a subject upon which opinion is likely to be divided.
I want to be entirely frank with your Lordships, and I ought not to withhold from the House that two of the Chancery Judges whom I have consulted, and the 984 Chancery Bar Association, have expressed themselves in favour of some change. On the other hand, I believe that other interests may be opposed to it. We have heard from noble Lords, both in Committee and this afternoon, the case for giving effect to a testator's wishes which fail, it is said, because of some technical defect in the wording so that his property goes to some distant relative of whom perhaps he has never heard. But there is more to it than that, both in merits and in law, and before we come to a decision I feel I ought to put some of these considerations on the opposite side.
I said that the Amendment raised points of great importance, and there are three aspects of this matter to which I would recommend the attention of the House. The first is the effect on testamentary power. My noble and learned friend Lord Simonds drew attention to this aspect during the Committee stage, and I want to emphasise to your Lordships again that the remarkable freedom of testamentary power accorded by the English law—a greater freedom than any other system of law with which I am familiar—is subject to one condition, and that, I would suggest, is not an unreasonable one. The condition is that the will must be validly made according to the law. If this condition is not observed, the consequence is that the wishes of the testator are made conditional upon the good will of the persons who will take upon the failure of the gift. That is the point which my noble friend Lord Saltoun had in mind.
What your Lordships must consider is whether or not that is an unreasonable penalty to impose. The effect of this Amendment will necessarily be that the discipline imposed by the present law will be removed, and the Amendment will place a premium upon incompetent and uninformed will making. It is not, after all, as if the existing law were difficult to understand; it is an elementary principle of our law that it will not tolerate a trust that it is in nobody's power or interest to enforce. The courts will not tolerate what one might call a "masterless man", a trustee who is in a position to put the money into his own pocket because there is nobody with a sufficient interest under the gift to be able to come to the court and complain that the trust is not being performed. 985 Those of your Lordships who are bred to the law will find that principle expounded at length in the opening pages of most students' textbooks. I want your Lordships now to look at the effect on executors.
§ LORD SILKIN
My Lords, before the noble and learned Viscount leaves that point, I wish he could explain more clearly how this Amendment would be putting a premium on incompetent draftsmen or lawyers. Surely, as this Amendment stands a part of the gift would become invalid—that part which is not valid would not be a charity and, therefore, they would have no encouragement.
§ THE LORD CHANCELLOR
My Lords, the noble Lord's hypothesis is that somebody makes a will and, in making his will, constitutes an imperfect trust, to use a term of art. That is, he has signed a document which has been put before him on which he has been fully advised. Ex hypothesi, it must have been badly advised, because he has been advised to constitute a trust in perpetuity for a purpose which is not charitable and, therefore, which will not carry such a trust. The effect is that one is going to validate part of his wishes and not the whole of his wishes. That also falls from the hypothesis, because his wishes have been to benefit a wider field. The whole of the money will go to the charity, and what has been bad advice will be given some legal effect. We are dealing with the future. In the Trusts Validation Act we were dealing with the past. We looked backwards and corrected what people had done up to a decision. Now we are going to look forward and abstain from—if I may put it in a more moderate form, because I do not think what I said is any the less true—demanding that good advice shall have been given and a proper effective trust created as the condition of giving effect to it. That is what I meant, and I want your Lordships to look at it from the effect on executors. It is all very well to look at the testator, but it is right and, at any rate, it is my duty as Lord Chancellor, to put before your Lordships the difficulty in which executors may be.
The Amendment will substitute a new rule which would have the effect of 986 placing the responsibility for knowing the law exclusively upon the testator's executors. As my noble and learned friend Lord Denning stated on the Committee stage, the relevant rule in its starkest form is that no man may plead ignorance of the law as his excuse. Under this Amendment, if the money is applied according to the terms of the will and not for charitable purposes only—I hope I am taking your Lordships with me—the executors will be liable at the suit of the Attorney General to replace out of their own pockets every penny which is applied for a non-charitable purpose.
It may be said (I want to deal with the point fairly) that that position is no worse than at present; their ignorance of the principle I have mentioned cost the Diplock executors dear. This is true, and it cannot be regarded as a happy position. I ask your Lordships to consider long before you aid testators at such a cost and give free rein to the number of cases in which that unhappy predicament is likely to arise in practice. This Amendment is tantamount to saying, "Let testators say what they like; let them sail as close to the outer limits of legal charity as they please, and those who come after them shall have the duty, at their peril, of setting all to rights."
I ask the House seriously to consider whether it is in the interests of anybody that, to use my old phrase, this premium should be placed upon the slack and incompetent drafting of philanthropic gifts. Since the persons who would be entitled upon a failure of the gift will have no interest in the matter, they will not trouble themselves to inquire whether a gift is exclusively charitable or not, and in consequence the risk of the money being applied according to the tenor of the gift—that is, to non-charitable purposes—will be increased. They will not wait to go for a scheme. There will be nobody who could ultimately contest the matter. The tendency is to say, "Let's apply it", and they will apply it to the non-charitable purposes. The executors may even be tempted, out of loyalty to their testator, to implement his gift according to its terms in the hope and expectation that the matter will never come to the ears of the Attorney General, whose duty it would be to bring proceedings.
987 I have tried to give this Amendment consideration. I asked my right honourable and learned friend the Attorney-General for his views, and it seemed to him that in a great many cases the trustees of a trust containing a charitable element will have to take counsel's opinion on the question whether paragraph (c) of the clause applies, and that counsel will frequently advise an application to the court. He thought your Lordships ought to have that in mind.
I now ask your Lordships to look at the third point, and that is the effect on trusts of imperfect obligation. If a testator makes a philanthropic gift which cannot be enforced in the courts and is therefore invalid, it is none the less open to the executors to give effect to that bequest, if the residuary legatees or next of kin sufficiently respect the wishes of the testator to permit that to be done. The effect of the Amendment will be that such a gift cannot in any circumstances be implemented according to its terms. I am now approaching the difficulty which my noble friend Lord Craven had in mind, and, if I may say so with the utmost respect, it is one which particularly affects the Church for which he was speaking. I was glad that he said he was speaking only in principle, with I think this particular difficulty in mind.
It is true that the Amendment has sought to limit this to cases where there appears a predominant intention to benefit charity. Where the Amendment takes effect, however, the whole of the money comprised in the bequest will have to be applied not according to the terms of the bequest but for charitable purposes only. This is a result which the executors and the persons interested in default will be powerless to avert. Let me take a case which I am sure my noble friend Lord Craven had in mind. It is not uncommon for members of his Church to leave a bequest either to the bishop or to the parish priest. It might well be that the purposes for which it was left included, or certainly included, it may be entirely, non-charitable purposes; but let me take one where they included them, because that is nearest to the problem we are discussing. It might be that they included, for example, a contemplative Order, which has been held to be non-charitable. It might be 988 that it was for parish purposes, part of which were charitable and part of which were not. Or it might be a specific gift to someone who worked in the parish although that person was not poor or being educated or coming within the charitable grounds.
What your Lordships have to consider is that at the present moment in many cases, as the noble Lord, Lord Saltoun, said, those who would take if the gift failed would say, "All right; go ahead", and the testator's intentions would be followed. Under this Amendment—and, believe me, this is not criticism of the drafting; I am not criticising the drafting; I am dealing with the principle—it would have to be limited to the charitable purposes. You would have to rule out the contemplative Order; probably you would have to rule out some of the parish work and the other example which I gave. That is something we have to consider, because in many cases I am told that the residuary legatee or the next of kin do not try to stand in the way, and it is really a matter which one has to balance.
I am sorry to have spoken so long, but I have felt it my duty as Lord Chancellor to point out to your Lordships a number of aspects of this problem upon which, in my respectful submission, we should be well advised to ponder further before agreeing to enact this clause. Personally, I have considerable sympathy with the intentions of the movers; I think everyone must have, because they are so full with one side of the problem, and that is trying to get nearer to the testator's intentions. I know the layman's strongly held feeling that lawyers are inclined to use technical defects in an excessive way. But, for all that, my advice to your Lordships is not to put this clause into the Bill this afternoon.
I hope that I have made clear, perhaps at too great length, that I have given the matter, with the help of my advisers, very deep consideration. I have been engaged on this Bill. I do not think that opinion, and particularly professional opinion, has yet had time to clarify. I have not had the opportunity so far of consulting the Law Society, who speak for the solicitors' profession. Nor have I really got the views of the Church for which my noble friend Lord Craven speaks; he has given a general view, but 989 I think he had anticipated almost the very point which I have developed in my speech; he would not feel himself able to accept this Amendment unless it dealt with that point in some way. I have not myself been able to ascertain so far the views of other Churches on the matter.
I put it to your Lordships in this way: that it is the tradition and, in my view, the pride of your Lordships' House that in general you are not ready to allow ill-digested legislation containing an immediate answer to a very difficult problem to be rushed, and therefore I should ask your Lordships not to accept this clause this afternoon. We will consider the point again. I am not at all sure that this point in itself should not be re-studied by another independent body. It has been considered on a number of other points by Lord Nathan's Committee; but your Lordships are being asked to go against the view of that Committee. Therefore there is something to be said for its being reconsidered. But I think there is everything to be said for postponing a decision, so that both Parliament and other bodies may have a chance of considering the matter before the change is made. I apologise to your Lordships for taking so much time, but your Lordships were obviously interested in the point when it arose in Committee, and I hope that I have shown your Lordships that I at any rate have given it full consideration.
§ 4.11 p.m.
§ VISCOUNT SIMONDS
My Lords, I hope I shall not be straining your Lordships' indulgence unduly if I ask to be allowed to say a few words on this subject. It is indeed a very important principle that is at stake, though not of paramount importance except in this case, because I believe that there are not a great many cases in which the proposed clause, if passed, would be applicable. After all, there are not so many cases where wills of this kind are made. Therefore, I suppose one ought not to be prepared to go to the stake for it one way or the other. But it raises an important principle, because what this Amendment proposes is that a will solemnly made by the testator, expressing his wishes, shall, at any rate in part, be torn up. That is something quite new in our law.
There is no doubt what the testator means. He says that he gives his 990 property to his trustees or executors for such charitable or benevolent purposes or objects as they shall think fit. What does this clause propose? It proposes that you shall cut out all the benevolent objects, and that you shall cut out what the executors or trustees wish. Your Lordships' attention has not been called to the last words of this proposed clause, thatthe trust shall have effect as a valid trust for such charitable purposes as may be determined by a scheme legally established.Not only is there cut out that part of the testator's intention and declared wish that his property shall go either to charitable or benevolent objects, but his executors and trustees are not to have a choice at all: the destination is to be settled by a scheme to be made by the Charity Commissioners or by the court. Whether they choose to adopt what the trustees or executors think and wish is anybody's guess. Therefore, on every aspect you are defeating the intention of the testator.
I object altogether in principle to the alteration of a man's will, solemnly made, and I object to it not less if it is intended that charity shall benefit by that alteration. No man is opposed—I am not opposed—to any benevolence or charity that any man may choose to indulge in. But I am impressed by this fact—I have seen it too often, and I think my noble friend Lord Silkin must have often seen it too: that charity by will is an apology for lack of charity in life; and too often you will find (I am sure the noble Lord has found it), not such a case as Diplock, where a distant next of kin fortuitously comes in for a benefit that he does not deserve, but the defeat of the legitimate hopes of the immediate next of kin of the testator by his disposing of his property for charitable purposes.
May I for a moment indulge in a personal reminiscence? I remember, when I was a very young man at the Bar, one case that came before me. A testator, an old man, who had lived for some fifty years in perfect amity with his wife, made his will. By his will he left to his widow, who had no private means of her own, an annuity of £20. To add insult to injury, he added to that annuity of £20 the gift of a palette. The rest of his property he left to charity. How one would have welcomed his making a 991 foolish mistake and giving his property to such charitable or benevolent purposes as his trustees should think fit! Unfortunately, he did not—it all went to charity. I am open to this criticism: that under the Family Inheritances Act, which was passed since the day that I am speaking of, the law does make provision, though ungenerous provision, for the widow and young children of a man who dies without making ample provision for them. But do not let us be misled by such a case as Diplock, to which my noble and learned friend Lord Denning more or less accurately referred. That is one aspect of the matter. The other aspect is the case I am putting. I respectfully suggest to the House that it would be a great pity to embark upon an alteration of a man s solemnly declared will and testament because charity may thereby benefit. Therefore, upon principle I object altogether, as I understood did the noble and learned Viscount on the Woolsack, to the principle of this Amendment.
But now I come to the words of the Amendment—and here let me say at once that I know the words are the work of a Parliamentary draftsman, for whose work I have great admiration. But not even a Parliamentary draftsman, not even the best of Parliamentary draftsman, can make good sense of a suggestion of this kind. I ask your Lordships to forgive me in order just to look at the words of the proposed new clause. I need not trouble with paragraphs (a) and (b), but I would call attention to paragraph (c). The clause says:Where …(c) the terms of the trust and the circumstances of the gift are such as to show a predominant intention to promote charitable purposes …and so on. How do you show a "predominant intention"? What language, what terms, will show a "predominant intention" to benefit charity? Let me go back to the example that I gave upon the other Amendment upon which I spoke. Suppose the words were, "for such patriotic purposes as my trustees or executors shall think fit"? I pose the question: is there a predominant charitable intention there or not? Your Lordships may answer, "Yes" or you may answer, "No"; and I believe that 992 if I took a vote the result might be about equal. What, then, would be the result of accepting this Amendment?—simply to cause confusion. As I say, I do not in any way criticise the draftsman; I think he was set an impossible task.
May I refer for one moment to what the noble Lord, Lord Silkin, said, either in Committee or on Second Reading. It is true that in some States of Australia, in Victoria and in New South Wales, and also in the Dominion of New Zealand, legislation comparable to this has been passed—not, indeed, in these words; but Lord Silkin referred to them as an example that we should follow. I do not think that the noble Lord can have been aware of the amount of judicial discussion and litigation that has arisen upon just such provisions as these. Therefore, apart altogether from the principle, I suggest that the wording should again be carefully thought over. I endorse what the noble and learned Viscount on the Woolsack has said: that this Amendment should not be pressed to a Division to-day, but that further consideration should be given to it. What would be the result of further consideration, I do not know. But I do, with great respect, deplore a clause which imposes upon the court (because that it what it comes to: the executors in the first place, and the court in the second place) the responsibility of saying what is the "predominant intention" in the words that have been used.
I am going to forestall criticism. Those words—"predominant intention"—occurred in a judgment of one for whom I have a boundless admiration—I believe the greatest judicial mind in the Commonwealth: Sir Owen Dixon, Chief Justice of Australia. He used those words in an advice which Her Majesty's Judicial Committee gave to Her Majesty in an appeal from New South Wales. At the same time the caution was uttered that their Lordships could not attempt to define the meaning and scope of the words "predominant intention". But those words are embodied in this Amendment, and once again I respectfully submit that they will cause confusion.
I would ask, therefore, that this Amendment should not be pressed to a Division but that time should be given for further consideration. It is such an 993 important matter that it ought not to be resolved by bandying words across the House. It is a matter for the consideration of an expert Committee, and if it is to be pursued further that is the course I venture to think should be taken.
§ LORD SILKIN
My Lords, of course I will not press this Amendment to a Division. The noble and learned Viscount has promised that it will receive further consideration and I should just like to be clear in what form that will be. If it were a matter of setting up another Committee, I would strongly oppose that. If, as I believe the noble and learned Viscount indicated, it is a matter of discussing it with bodies like the Churches, the Law Society, the Bar Council and other organisations of that kind, in the course of the passage of this Bill through another place, I am all in favour of it. On that understanding, for which I should be grateful, but not on the understanding that it is going to be pushed round for further inquiries, I should be glad to withdraw my Amendment. There is only one other point I wish to make in answer to the noble and learned Viscount. I thought he was saying that the purpose of this Amendment was to tear up the wishes of the testator—
§ VISCOUNT SIMONDS
My Lords, may I explain? Where the testator wished his executors to give to such charitable or benevolent purposes as they thought fit, the result, if the Amendment were accepted, would be that a scheme would be made by the court or the Charity Commissioners, who may or may not pay any attention to the wishes and choice of the executors; and therefore the testator's intention is wholly destroyed.
§ LORD SILKIN
My Lords, this arises only in a case where otherwise the whole of the will would be invalidated. In the normal case, where a testator leaves his money to charity, no question arises. This Amendment is designed to deal with the difficult case where a testator leaves his money partly to charity and partly to something which turns out not to be a charity: and in such case the effect is that even the charitable part is disregarded and the whole will is invalidated. The whole purpose of this Amendment is to prevent the wishes of the testator from being torn up, and is just the contrary of what is suggested.
994 The noble and learned Viscount has quite rightly drawn attention to the position where a scheme is legally established, and that is a point which could be met and dealt with in some other way. That is what is to happen as regards that part of the bequest which is held not to be a charity. What we definitely want is that that part which definitely is a charity should not be invalidated. As to the rest, we can discuss how that should be dealt with—and this Amendment is one of the suggestions made for that purpose. I hope that it was not in the mind of the noble and learned Viscount to pass this matter off by setting up further Committees. We have had a Committee. They were divided but the majority of them took certain action. They recognised that something had to be done about this matter but they validated bequests up to 1952. We want to continue that. But I do not think we shall get any further assistance from another Committee. If, however, the noble and learned Viscount is prepared to deal with the matter in the way he has indicated, by having consultations and discussions with those bodies who are in a position to offer wise counsel, I am perfectly willing to withdraw my Amendment.
§ THE LORD CHANCELLOR
My Lords, if your Lordships will give me leave to speak again, may I put it in this way. These consultations, what I might call "short-term consultations", will have to take place. It is not for me to prophesy what will happen in another place, but I think it is extremely unlikely that the Bill will go through another place without this point being discussed. Therefore it will be necessary to consider the matters I have mentioned, on the short term. I should not like to rule out the possibility of a Committee, because, frankly, I do not know what may come in. But I do not think the noble Lord need fear that the matter will be shelved in that way, because it is as certain as one ever can be about the future of a Bill that this matter will be raised and discussed in another place, and we must be prepared for that. If it should turn out that the more discussion there was, the more difficult the position became, then I should not like to be rash enough to promise your Lordships that the possibility of a Committee would be ruled out, But 995 we will certainly make short-term inquiries in order to be able to deal with the matter when the Bill conies to another place.
§ Amendment, by leave, withdrawn.
§ An Amendment (Privilege) made.
§ THE LORD CHANCELLOR
My Lords, I beg to move that this Bill do now pass. I believe that it will be for the general convenience of the House if I limit my remarks on this Motion to expressing my most sincere thanks to your Lordships for the assistance I have had from all quarters of the House while the Bill has been going through your Lordships' House. Then, after these few words, if your Lordships will allow me I shall be most happy, in my speech in reply, to deal with any points that are raised in the debate. I hope your Lordships will not think I am treating the House with any discourtesy in doing that. I beg to move.
§ Moved, that the Bill do now pass.—(The Lord Chancellor.)
§ 4.28 p.m.
§ LORD SILKIN
My Lords, I do not rise for the purpose of raising any additional points on this Bill, for I believe that I have raised all those which I thought it was proper I should raise. I rise only for the purpose of expressing my own appreciation of the way in which this Bill has been dealt with, both in Committee and in the House. We have had full and, on the whole, good-tempered and reasonable discussions; and I believe that the Bill is to-day a better Bill than it was. I am quite certain that our discussions, even where they have not been finalised, will be of very great value to those who have to consider the Bill in another place. It may be that one of the most valid functions of this House is to have just this kind of discussion, without necessarily coming to conclusions. On a great many of the most important issues of the Bill we have not reached conclusions, but I think we have cleared our minds. We have heard both sides of the question, and I think we have facilitated the task of another place in arriving at a proper 996 conclusion. So I hope that, without any self-conceit, one may say that this House has done a good job in the passage of this Bill here.
§ 4.30 p.m.
My Lords, this Bill leaves this House, I think, better than it arrived, and our thanks are due, I believe, primarily to my noble and learned friend on the Woolsack for his wisdom and understanding and, I need hardly add, his patience. There are still two points which are of interest to me and which I regard as still in a formative stage. The first is the composition of the register; and the second is who shall be allowed to sell land without the intervention of the Charity Commissioners. Both points are bound up, to my mind, with the future of the Charity Commission. Some increase in its size is inevitable, but we must try to keep it to the minimum. The record of the Conservative Government of decreasing the size of Government Departments is a good one, and we do not want to spoil it; and it would be very easy to spoil it over this particular matter.
The enormous register, if it were coupled with rigid rules over land dealing and power over an almost unlimited field to call for submission of accounts, could, with or without Parkinson's Law, lead to the creation of a very large Department. We do not want the Charity Commissioners to be "Big Brethren"; we want them to be "Trouble-shooters". I continue to have grave doubts about the purpose of the register. If it is designed to prevent small charities from getting lost, and it is really worthwhile setting up a Government Department to prevent that happening, is it really wise to omit the charities that are most likely to get lost, which are the small ones that are already exempted under the Bill? If it is designed to help testators and beneficiaries on a national scale, then clearly the exemption limit is much too low to produce a register which is at all wieldy in its size; while if it is designed to do the work which the Inland Revenue are doing at the moment, I do not think that is to be recommended.
For these reasons I moved an Amendment in Committee seeking to increase the exemption limit, and if I had chosen to take the matter to a Division I think 997 several noble Lords would have followed me—noble Lords whose judgment is greatly respected in this House. But I do not think it right to divide the House on a Bill of this nature which is in its formative stage. I have the greatest confidence that all these points will be considered in another place by my right honourable friend the Home Secretary, in whose wisdom and judgment I have always had the greatest possible confidence. For the more flexible approach to the control of dealing in property, we are greatly indebted to my noble and learned friend on the Woolsack. The Church of England has particular reason to be grateful to him. Nevertheless, I think that Clause 28 needs further thought. If we are to increase the burden on the Charity Commissioners in some directions we should do our utmost to relieve them in others, and I should hope that the officials advising the Home Secretary will search their hearts to see where they can get rid of burden where-ever it seems that the burden fulfils no very great or useful purpose.
We have already seen that the Government are prepared to except some religious bodies, and it looks as if they will do the same for some nationwide collecting charities. I believe that there are more cases than these—for instance, the following, in which I must declare an interest, because in both cases I am a member. The diocesan boards of finance are very responsible bodies, with much expert professional advice. They are free to win or lose thousands of pounds in the gilt-edged market; yet if they want to sell a curate's house they have to obtain the consent of the Charity Commissioners. It hardly makes sense. Then the Church of England Pensions Board is a statutory body, responsible to the Church Assembly, and in some respects subject to the direction of the Church Commission. Here again it would seem quite unnecessary for this body to be supervised in any of its property dealings by the Charity Commissioners. In addition to these two bodies, of course, there must be many more of a similar nature. I hope that it will be possible to take bodies such as these right out of the Bill, and thus to relieve the burden on the Charity Commissioners.
The Charity Commissioners may argue—and it is always possible to argue by 998 picking one's case and showing one side of it—that the only system which produces the best return to charity on property dealings is that under the auspices of the Charity Commission. But, my Lords, they have no copyright of such a scheme: anybody can adopt exactly the same methods if they believe that is the best way of doing things. Apart from the bodies I have mentioned, where there seems an almost overwhelming case for total exclusion, there will be others where the Home Secretary may be a little doubtful. I wonder whether it would help him, in the case of such bodies, if he would consider giving them provisional release; in other words, they could be exempted by regulation, say for five years, or perhaps seven years, and at the end of that period come back for renewal. If there had been any allegations of bad trusteeship or inefficient working during that time it would be open to the Commissioners to refuse an extension. I believe, my Lords, that we are gradually whittling away the bad parts of the Bill and that, after another place has dealt with it, a very useful measure will eventually emerge and find its place in the Statute Book. I again thank the noble and learned Viscount on the Woolsack for his inestimable patience in the matter.
§ 4.38 p.m.
My Lords, I am afraid that I want to raise one point which has not been raised. I apologise for having been unable to draft an Amendment and have it considered for the appropriate part of the Bill. In a sentence, before the Bill is passed I want to make a plea to my noble and learned friend the Lord Chancellor and ask whether he will satisfy himself that the Bill gives sufficient discretion to the courts to vary a trust, particularly where the founder is living. I am prompted to make this request because I have been concerned recently with a particular case. To illustrate my point, perhaps I could say that this is a case where the founder desired to make provision for housing the aged and, in view of his age and state of health, he was most anxious for a deed to be drawn with the minimum of delay, and he was afraid that otherwise the estate would disappear in estate duty.
Fortunately the founder has survived, and he and all the trustees, after further 999 thought, now want to make a variation of the trust, solely with a view to benefiting from all the provisions which Parliament, in its wisdom, has made for the encouragement and assistance of certain charitable bodies. But that is not so at all. When we consult counsel as to how we should fare under this Bill, the answer is that we should probably be able to get certain points, but not others. One wonders what public advantage there is in limiting the court on the question of allowing a man who is using his own money, to vary a trust in a direction which Parliament entirely approved and which apparently would not affect anybody else's interest. At present, as I see it, if counsel is right, we shall be forced to operate inferior schemes for a considerable time, at any rate.
It is no doubt a serious thing if mistakes are made in drawing up these trust deeds. The noble and learned Viscount referred to this matter, and I heard my noble and learned friend Lord Denning make a plea for even lawyers to be excused for making certain mistakes; but I really find it a very difficult matter to draw up these trust deeds so as to make the most effective use of money in this Welfare State. In the matter of housing, apart from the technical difficulties, one is up against the position that Parliament has laid an obligation on statutory authorities to supply all the accommodation needs of the aged, whether it be hospital beds or homes or other such places. If performance had kept up with theory, there would not be any need for charity at all; but, as we all know, performance has not matched theory, although much has been done and much is being done.
For the same reason—because of this gap—Parliament has deliberately encouraged the work of the voluntary bodies; but there is no exact line of demarcation between the work done by statutory bodies and the work done by voluntary bodies. That means that if you do not make an effective scheme you must have quite an amount of consultation to find out not only what the local authority are doing but what they are likely to do, and that all takes a good deal of time. So it seems to me that the founder of a trust to-day has to decide whether to draw up a trust deed in the widest possible terms, giving a 1000 great deal of discretion to his trustees (which sometimes founders object to doing), or to have a long period of investigation and consultation before attempting to draw up a trust deed at all—and that, certainly in this case, occasionally has risks.
The other possibility is that Parliament might make it a little easier for a founder to vary his trust, with the consent of the courts. Is that a great deal to ask if this is a joint attack by local authorities and by charitable bodies on a social evil? I must say that, as a layman, I am impressed by the difference of approach on the two sides. In the case of a Parliamentary Bill, a Minister accounts to this House, and thereafter it is the commonest thing in the world to find him submitting scores, perhaps, of Amendments—and after the Bill is passed he may well introduce an amending Bill. It seems to me, by Lords, that if in the case of Ministers the principle of second thoughts is considered right, proper and sensible, when you come to founders of trusts—who are, after all, dealing with their own money—the position should be the same.
I said I would try to draft an Amendment, but I have failed; and perhaps it is not surprising that a layman should fail, because I am told by legal friends that charity is one of the most complex and recondite branches of the law. All I can do, therefore, is to put this point to my noble and learned friend, who has had a long experience, not only of the law but of administration as well. If he thinks that there is any substance in it, I hope that perhaps he may convey his views to his right honourable friend the Home Secretary, so that something may be done about it in another place. I hope that that may be possible, because I feel that if you want to encourage, as apparently the Government do, the co-operation of a charity with the work of statutory bodies in tackling this problem, it might be made a little easier than it is at the moment for a founder to produce a really effective scheme.
§ 4.45 p.m.
§ LORD DENNING
My Lords, may I say a word in support of what my noble friend Lord Gage has said? In regard to private trusts, we have recently had the Variation of Trusts Act, which has enabled the court to give consent to 1001 variations of trust—for instance, when consent was needed on behalf of children under age, or of unborn children—so as to enable schemes to be made for the avoidance of death duties. In regard to founders of charities while they are still living, when perhaps a mistake has been made in the formulation of the trust, or the trust may not meet the needs after five or ten years, why should there not be something similar—a power to vary the trust, in conformity with the founder's intentions, subject always to the sanction of the court? I would suggest that it is a matter, not for determination to-day, but for consideration in the course of the proceedings on this Bill.
§ 4.47 p.m.
My Lords, I should like to thank the noble and learned Viscount on the Woolsack very sincerely, both on my own behalf and, far more, on behalf of those great bodies with which I have had the honour and pleasure of consulting, for the way in which he met me on what I frankly acknowledge were very difficult questions in connection with this Bill. I cannot express too warmly my thanks on that account. On the rest of what I have to say, I shall be very short, and I will not delay your Lordships long.
On Report stage it became clear that there is a frank difference of opinion between myself and Her Majesty's Government about this Bill. I do not think—and I know that many people who are interested in charity agree with me, because I have consulted them—that this Bill will encourage the formation of small charities, at any rate. I will say why. Clause 13 was not very much discussed when the Bill went through this House, and I am told (and I believe it to be true) that it only embodies existing law. But when the existing law is put in such clear terms into an Act, it eventually gets known to people. And my experience, small as it is, leads me to believe that people who are founding a charity are, perhaps quite unaccountably, nervous that funds which they are bestowing on charity may be diverted from the purpose they had in mind at the time. I know that there are safeguards in this Bill on that subject, but I rather wish that Clause 13, if it does embody the existing law, could have been omitted.
1002 The other preoccupation that I have is about the small charities which now exist, and which will in future have to deal very much more than they have done in the past with the reconstituted and extremely powerful Charity Commissioners. It is always a disadvantage when you are dealing with a Government Department and not a court of law, because in dealing with a Government Department you have to prove yourself innocent—at least, that has been my experience; and sometimes it is not easy. That is why I put down an Amendment on the last stage which would enable exasperated trustees to do what the fisherman once did in the old days on a burn in Scotland where he had been fishing all day, trying fly after fly without success. Eventually he flung his flybook into the stream and said, "Choose for yourself." I felt that charity trustees ought, in the last resort, to be able to take that line with the Charity Commissioners, because, after all, they are doing their work for nothing.
The real point, however, is Clause 28. Clause 28 is the most maddening and exasperating of the whole lot, and I believe that if the Government could see their way to sweeping that away altogether the amount lost to charity would be very small, and the result would be to invigorate the management of charities to a degree that is hardly possible for me to describe. Even between the last stage of this Bill and this afternoon I have come across another case where the procedure under Clause 28 (1) has proved absolutely maddeningly frustrating to a very important and responsible trustee. Therefore I do ask the Government to think again about Clause 28 and about the position of trustees who may be so frustrated and exasperated. I feel that they deserve some consideration.
§ 4.53 p.m.
§ THE LORD CHANCELLOR
My Lords, I have only three things to do, and the first is to thank noble Lords who have spoken for the kind terms they have used regarding myself. As the noble Lord, Lord Silkin, indicated, this is the sort of Bill in which your Lordships' House can play a great part, and we have had the most careful consideration, which I do not think has been a minute too long, of the various points raised. We have not only improved the 1003 Bill, in my view, but have shown the problems quite clearly and in a way which will prove helpful.
I should like to say a word or two with regard to what my noble friend Lord Hawke has said. I am not going to deal with his general arguments, but in regard to the interesting point he raised about the Church of England Clergy Pensions Board, I should like him to consider this fact. By the terms of Section 60 of the Clergy Pensions Measure, 1948, the pensions authority and its funds are exempted from the jurisdiction of the Charity Commissioners under the Charitable Trusts Acts, except as regards funds established under Sections 42 and 43 of the Measure—which relate to the establishment of augmentation funds consisting of testamentary or other gifts to the pensions authority—which may be subject to any conditions imposed by the testators and donors. I think that is an important point. My noble friend will remember what I may call the Exeter case. It is a matter which I should like him, and those for whom he has spoken so ably, to consider. It is a difficult matter for us in that what he asks in this regard is that we should override a Church Assembly Measure.
My noble friend Lord Gage has raised a most important point, on which he has had the support of my noble and learned friend Lord Denning. I say at once that I should like to give it consideration, and I shall certainly comply with his request to convey to my right honourable friend the Home Secretary his views and the importance that he attaches to them. It is always a difficult matter as to how far one should go when money has been given to trustees and the beneficiaries under the trust have certain rights in that way to reorganising (if I may put it neutrally) these rights. What interested me was that my noble friend's speech was full of what I hope is the real purpose of this Bill; that is, to find the best method of co-operation between those who set up voluntary trusts and seek to put them into practice and Government agencies and local authorities in carrying out their statutory duties. That is what we are seeking to do, and therefore a suggestion like that made by my noble friend is entitled to the most careful consideration, which I promise him it will receive.
1004 As I said earlier, my noble friend Lord Saltoun has been of the utmost help in these proceedings. I will not fight old battles over again, but I will certainly ask my right honourable friend to bear in mind my noble friend's troubles on Clauses 13 and 28. I am sure the House will accept that our desire in this Bill is to improve the working of charities, and it is because it has been so improved by its passage in this House that I thank your Lordships again and ask your Lordships now to allow it to pass.
§ On Question, Bill passed, and sent to the Commons.