HL Deb 10 July 1989 vol 510 cc87-8WA
Lord Denning

asked Her Majesty's Government:

Following their answer of 19th June (H.L. Deb. col. 120), whether the "arrangement" referred to in paragraph 76 of the Report of the Charity Commissioners for 1988 was carried out by the exercise by the Charity Commissioners of their powers under Section 29 of the Charities Act 1960 "for making sale orders only", and not by the Secretary of State for Education under his authority for "making an order under Section 2 of the Education Act 1973"; and whether the Charity Commissioners, when making such sale orders, accompanined them with indications of the way in which the proceeds of sale should be disposed of, or left it to the unguided determination of the trustees.

The Minister of State, Home Office (Earl Ferrers)

The arrangement referred to in paragraph 76 of the Charity Commissioners' Report for 1988 was carried out in two stages; first, by the commissioners exercising their powers under Section 29 of the Charities Act 1960 to make an order authorising the sale; and, secondly, by the Secretary of State for Education and Science exercising his powers under Section 2 of the Education Act 1973 to make an order making new provision for the proceeds of sale.

Such a sale order made by the commissioners gave no directions for the disposal of the proceeds for sale because the responsibility for making new provision for the proceeds rests with the Secretary of State. Trustees who asked the commissioners what should happen to the proceeds of sale pending the making of an order by the Secretary of State were advised that it was their duty to invest the proceeds and, depending on the amount, any interest accrued.

Lord Denning

asked Her Majesty's Government:

Following the Answer of the Earl Ferrers on 19th June (col. 116), whether they regard the misapplication of trust funds or property by charity trustees in breach of trust to be an "unlawful act"; and whether, if this is done upon the advice of the Charity Commissioners under Section 24 of the Charities Act 1960 (such advice being erroneous owing to want of care), it is open to the beneficiaries and those injuriously affected by the misapplication to bring proceedings against the Charity Commissioners or the trustees to seek redress.

Earl Ferrers

Her Majesty's Government accept that a misapplication of trust funds by charity trustees in breach of trust would constitute an unlawful act within the context of the earlier reply. As to the possibility of action against the Charity Commissioners or the trustees, I would refer the noble and learned Lord to the second and third paragraphs of my Answer to the other question from him today.