HL Deb 23 June 2000 vol 614 cc561-4

11.6 a.m.

Report received.

The Chairman of Committees (Lord Boston of Faversham)

My Lords, in calling Amendment No. 1, I hope that your Lordships will not think me too far out of order if, in view of today's unusual circumstances and because it is Friday, I were to say to the noble and learned Lord on behalf of the whole House, many happy returns of the day.

Noble Lords

Hear, hear!

Clause 28 [Trustee's entitlement to payment under trust instrument]:

The Lord Chancellor (Lord Irvine of Lairg) moved Amendment No. 1: Page 9, line 37, leave out ("and") and insert ("to").

The noble and learned Lord said: My Lords, in moving this amendment, I shall speak also to Amendment No. 2. I move them in substitution for Amendment No. 16 on the Marshalled List in Committee, which I did not move on that occasion having concluded that it was defective. With your Lordships' permission, I shall deal with the amendments in reverse order.

Clause 28 establishes a trustee's entitlement to remuneration under the terms of a trust instrument in certain circumstances and introduces new rules of construction of express professional charging clauses. It also reverses the common law rule which requires a charging clause to be strictly interpreted against the professional trustee who could previously be remunerated only for work which could not have been done by a lay trustee.

The noble Lord, Lord Phillips of Sudbury, who is unable to be here today because he is abroad, raised with me a proposal that charitable trustees ought to be treated more strictly than other trustees in these circumstances because of the nature of their responsibilities and I was pleased to agree with him. Thus, the amendment will provide that where a charitable trustee who is not a trust corporation fulfils the other requirements which would entitle him to payment under the trust instrument, he must surmount further hurdles in that he may not be a sole trustee and must have the agreement of the majority of the other trustees. The first amendment merely tidies up the drafting to take into account the addition of another subsection.

Before I sit down, perhaps I may put your Lordships on notice of one matter. I fear that I intend to introduce further amendments to Schedule 2 to the Bill at Third Reading. Only the other day, my officials received a letter from the legal office of the Church of England asking that we make certain amendments to take into account the coming into operation of the Cathedrals Measure 1999, which was not in being when the Bill was first published. We shall, of course, seek to do so. I beg to move.

Lord Goodhart

My Lords, I am happy to support the amendments moved by the noble and learned Lord the Lord Chancellor. Furthermore, we are more than likely to support any amendments necessitated by the coming into force of the Cathedrals Measure. My noble friend Lord Phillips of Sudbury, who is in Kosovo today, was concerned about the general principle applying to Amendment No. 2; it is whether trustees can take a majority decision by correspondence between them or can do so only in a meeting at which they are present.

While that is not a matter to be cleared up in this Bill, will the noble and learned Lord consider adding it to the subjects to be referred to the Law Commission for examination?

The Lord Chancellor

My Lords, I shall respond to that question so that the answer is on the record. My officials have written on this point to the noble Lord, Lord Phillips, but as he is out of the country he may not have seen the letter. We have consulted both the Law Commission and the Charity Commission. Neither of them reports any difficulty arising from the fact that some charitable trusts carry out much of their business other than by meeting. No doubt there are charitable trusts whose trust documents specify a particular way of carrying out business and whatever the trust document says will prevail. However, where they do not, trustees in practice have arrived at a pragmatic way of doing their business. I do not believe—and I appreciate that the noble Lord is not making the suggestion—that it is the place of this Bill, without consultation, to insist that this class of decision should be reached in any way other than that in which they generally do business—and do business satisfactorily.

There are two sets of reasons for that. First, action by majority has not caused the Charity Commission any significant difficulty. Neither have the courts been troubled by disputes arising from pragmatic decisions about how the business of particular trusts or classes of trust should carry out any or any particular business.

The second reason is purely practical and turns on the possibility of disenfranchising certain classes of trustee. If, for example, we were to require charitable trusts to take a decision such as the one under discussion here only at meetings, trustees who lived at a considerable distance from the venue for the meeting, or perhaps out of the jurisdiction altogether, might be put to significant expense in terms of time and travel if they wished their views to be taken into account; or they would in effect find that they were unable to carry out their personal duties if literally unable to attend. I am sure that the noble Lord, Lord Goodhart, can think of other problems, too.

Therefore, I am satisfied that the amendment, as now drafted, allows trustees of charitable trusts to make an appropriate decision on remuneration for one of their number, using whatever system of decision-making they generally apply, and that that is the appropriate way to deal with the matter. However, I am certainly willing to consider the reply which the noble Lord, Lord Phillips of Sudbury, will no doubt send me in due course.

Lord Kingsland

My Lords, I wish to associate the Opposition with the views expressed by the noble Lord, Lord Goodhart, with regard to the amendment tabled by the noble Lord, Lord Phillips. In the circumstances, I believe that the noble Lord, Lord Phillips, can be well satisfied with the response of the noble and learned Lord the Lord Chancellor. I also foresee no circumstances in which the Opposition are likely to oppose amendments tabled at Third Reading by the noble and learned Lord the Lord Chancellor as a result of the coming into force of the Cathedrals Measure.

Lord Wilberforce

My Lords, I wish to raise a niggling point which reflects on nothing other than my stupidity in the face of amendments. The first amendment proposed by the noble and learned Lord causes the initial words of Clause 28 to conclude with the words "subsections (2) to (3)". My question is whether the figure "3" applies to the existing subsection (3) or to the new subsection introduced by Amendment No. 2, which I understand may be renumbered "(3)". If that is so, the words "subsections (2) to (3)" may have to read "subsections (2) to (4)". I am sorry to raise this point; it reflects my inability to deal with amendments proposed with brackets.

The Lord Chancellor

My Lords, I shall not opt for either possibility. I rather suspect that renumbering is required, but we shall revert to that.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 2: Page 10, line 5, at end insert— ("( ) Subsection (2) applies to a trustee of a charitable trust who is not a trust corporation only—

  1. (a) if he is not a sole trustee, and
  2. (b) to the extent that a majority of the other trustees have agreed that it should apply to him.").

On Question, amendment agreed to.