Joint Committee on Statutory Instruments Forty-Eighth Report



APPENDIX I

First Memorandum by the Scottish Office

MORAY HOUSE INSTITUTE OF EDUCATION (CLOSURE) (SCOTLAND) ORDER 1998 (S.I. 1998/1644)

This Memorandum is submitted to the Joint Committee on Statutory Instruments in response to their letter of 21 October 1998 in which they asked for an explanation of the following point arising in connection with the above statutory instrument.

    Article 4(2), in vesting property in the transferee university, displaces any contrary "obligation" and any "condition" contained in an "obligation". Explain how this is consistent with section 47(3)'s preservation of any trust or condition to which the property was subject before its transfer.

Article 4(1) of the Order provides for the transfer to, and vesting in, the governing body of the University of Edinburgh all property, rights, liabilities and obligations to which immediately before 1 August 1998 the governing body of Moray House Institute of Education was entitled or subject. Such provision is required as a consequence of the Institute being closed and its governing body wound up in terms of Article 3. Article 4(2) of the Order provides that such transfer will occur notwithstanding any provisions of an enactment, rule of law or obligation which would prevent such transfer occurring. Without the provisions of Article 4(2), a provision prohibiting transfer of property, rights, liabilities or obligations could prevent transfer to the governing body of the University occurring. Since the Institute and its governing body cease to exist, however, it is clear that provision has to be made for the transfer of property, rights, liabilities and obligations.

The Department considers that the provisions of Article 4(2) are not inconsistent with the provisions of section 47(3) of the Further and Higher Education (Scotland) Act 1992. This subsection provides that any property transferred will remain subject to any trust or condition to which it was subject immediately before such transfer. This subsection does not prevent transfer of property by virtue of an Order made under subsection (1). Instead it provides that if such transfer occurs, the transferee will hold the property subject to any trust or condition to which it was subject immediately before transfer. Therefore, in the present case, any condition which prohibited the transfer of property by the governing body of Moray House Institute of Education would not, by virtue of Article 4(2), prevent transfer of that property to the governing body of the University of Edinburgh. However, by virtue of section 47(3), the governing body of the University of Edinburgh would receive the property subject to the same condition, which would prevent transfer to third parties.

23rd October 1998


Second Memorandum by the Scottish Office

MORAY HOUSE INSTITUTE OF EDUCATION (CLOSURE) (SCOTLAND) ORDER 1998 (S.I. 1998/1664)

This Memorandum is submitted to the Joint Committee on Statutory Instruments in response to their letter of 4 November 1998 in which they asked for an explanation of the following point arising in connection with the above Statutory Instrument.

    The Department state in the first paragraph of their Memorandum of 23 October that "Without the provision of Article 4(2), a provision prohibiting transfer of property, rights, liabilities or obligations could prevent transfer to the governing body of the University occurring". Section 47(3), however, states that "Any property transferred by virtue of an Order under subsection (1) above shall remain subject to any trust or condition . . . to which it was subject immediately before such transfer". Does the Department not agree that subsection (3) acknowledges that property subject to a trust or condition is nevertheless effectively transferred by an Order under subsection (1) which purports to "transfer and vest" specified property (see subsection (2)(a))? Does the Department further agree that, if the answer to the above question is Yes, Article 4(2) is unnecessary? If the Department does not agree, will they elaborate their reasons?

The Department consider that the intention of section 47 is clearly that the Secretary of State should be able to make an effective transfer of property, notwithstanding restrictions on transfer in the title deeds or elsewhere. Subsection (3) does tend to support this view, although it should be noted that trusts or conditions referred to there could deal with many matters, and are not confined to trusts or conditions restricting transfer of property.

On this view Article 4(1) of the Order effectively transfers the property, and Article 4(2) is not strictly necessary, but it does serve the purpose of making the intention absolutely clear, and discouraging anyone from seeking to challenge the transfer on this ground.

Article 4(2) is based on the precedent of section 16(6) of the Further and Higher Education (Scotland) Act 1992, in relation to the general transfer of property from education authorities to further education colleges under that section. It was thought apt to follow this precedent in other transfers under the Act. The Department note, however, that provisions for transfer of property in other statutes generally do not contain such provision, and are no less effective for that.

The Department accordingly accept that Article 4(2) is not absolutely necessary. Its inclusion is, however, consistent not only with section 16(6) but also with previous orders made under section 47, and arguably clarifies for conveyancers that the statutory transfer prevails. Its inclusion in this instrument thus seems defensible.

9th November 1998


 
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