Previous Section Back to Table of Contents Lords Hansard Home Page


The Lord Chancellor moved Amendment No. 18:


Page 10, leave out line 34 and insert--
("(c) the beneficiaries are of full age and capacity and are absolutely entitled to the property subject to the trust.").

The noble and learned Lord said: I spoke to this amendment with Amendment No. 12. I beg to move.

On Question, amendment agreed to.

Lord Mishcon had given notice of his intention to move Amendment No. 19:


Page 11, line 1, after ("(4)") insert ("and sections 22(3) and 22(5)").

The noble Lord said: This amendment is really consequential, despite being separate, to my Amendments Nos. 21 and 22. In the circumstances I believe that it is appropriate for me not to speak to the amendment now but to wait until Amendments Nos. 21 and 22 are reached.

[Amendment No. 19 not moved.]

Clause 21, as amended, agreed to.

Clause 22 [Appointments: supplementary]:

The Lord Chancellor moved Amendment No. 20:


Page 11, line 14, at end insert--
("(2A) A notice under section 19 shall be taken to have been given to a person by having been left at, or sent by registered post to, his last known place of residence or business in the United Kingdom; and sections 17 and 18 of the Law of Property (Miscellaneous Provisions) Act 1994 (provisions about notices where intended recipient is dead) apply to the giving of such a notice as they apply to the service of a notice affecting land.
(2B) A direction under section 20 or 21 shall be taken to have been given to a person by having been left or sent as specified in subsection (2A) unless he proves that he did not receive it.").

25 Mar 1996 : Column 1551

The noble and learned Lord said: Amendment No. 20 is the first of a series of amendments which deal with points concerning the practical operation of the provisions of Part II of the Bill. With the leave of the Committee, I believe it appropriate to speak to that group of amendments together; namely, Amendments Nos. 20, 23 and 25.

Amendment No. 20 makes provision as to the service of the notice which the trustees must give the beneficiaries under Clause 19 so that they have the opportunity to direct appointment of a trustee of their choice, and of the beneficiaries' direction to the trustees under Clause 20 or 21.

The trustees' notice may be given by leaving it at, or sending it by registered post to, each beneficiary's last known place of residence or business, and advantage is taken of the provisions of the Law of Property (Miscellaneous Provisions) Act 1994 so that service is not invalidated where a beneficiary has died but the trustees are not aware of the death. In the case of the beneficiaries' direction, leaving or posting the direction is not conclusive, but rather, in line with Section 196 of the Law of Property Act 1925 and similar provisions, raises a rebuttable presumption of proper service. This difference is justified by the fact that in one case the donor of the notice is under a duty to give it, and in the other that the recipient of the direction is under a duty to act on it.

Amendments Nos. 23 and 25, taken together, make provision to similar effect as is now made in respect of Clause 11. They ensure that Part II will not apply if the disposition creating the trust indicates a contrary intention, and that it does not apply to existing trusts unless steps to ensure that it applies are taken by the set law within a year of the commencement of the Act. Therefore, wherever Part II would be inappropriate, even though the trust would qualify, it will be possible to ensure that it does not apply. I beg to move.

Lord Mishcon: The remarks I ventured to make as regards Clause 19 are pertinent to this amendment and to other amendments which the noble and learned Lord mentioned.

On Question, amendment agreed to.

Lord Mishcon moved Amendment No. 21:


Page 11, line 19, at end insert ("or in contravention of the restrictions imposed by the Trustee Act 1925 on the number of trustees").

The noble Lord said: This amendment is merely intended to make clear that the restrictions imposed by the Trustee Act 1925 on the number of trustees are to apply and will not be overridden by the provisions of the Bill. The provision of Clause 20(4) and Clause 21(3), as originally drafted, could otherwise be argued to produce an exception to the normal rules in that regard. I respectfully refer that to the noble and learned Lord to see whether, on consideration, he agrees with the amendment. I beg to move.

The Lord Chancellor: The advice I have from parliamentary counsel at present is that the provisions of Part II of the Bill, as presently drafted, cannot

25 Mar 1996 : Column 1552

properly be said to override the general restrictions on the number of trustees since those restrictions are set out on the face of the power which the trustees are directed by the beneficiaries to exercise in Section 36 of the Trustee Act 1925. One sees these expressly in Section 36(1) just before paragraph (a) and again clearly set out in the concluding words of subsection (6). However, I am happy to reconsider the objection to that advice before Report stage. In the meantime it is my advice that the amendment is not necessary.

Lord Mishcon: I listened carefully to what the noble and learned Lord said. He was kind enough to say that he will look at the amendment in the intervening period before Report stage. In those circumstances I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mishcon had given notice of his intention to move Amendment No. 22:


Page 11, line 20, leave out subsection (4).

The noble Lord said: I believe that this amendment too is covered by my observations on Clause 19. In the circumstances I do not move the amendment.

[Amendment No. 22 not moved.]

The Lord Chancellor moved Amendment No. 23:


Page 11, line 22, at end insert--
("( ) This Part does not apply in relation to a trust created by a disposition in so far as provision that it does not apply is made by the disposition.").

The noble and learned Lord said: I spoke to this amendment with Amendment No. 20. I beg to move.

On Question, amendment agreed to.

Lord Mishcon moved Amendment No. 24:


Page 11, line 23, leave out subsection (5) and insert--
("(5) No appointment pursuant to a direction under section 20 or 21 shall prejudice any proper lien or other rights of any person in relation to property subject to the trust or interests under the trust nor, if to do so would prejudice any such lien or rights of his, shall any person to whom a direction to retire is given under section 20(2)(b) be obliged to comply with it until reasonable arrangements have been made for the preservation of his lien or otherwise for the protection of his rights.").

The noble Lord said: I venture to suggest that this is rather an important amendment. Its purpose is to protect the proper rights of existing trustees who may have taxation liabilities in connection with the trust fund or who may quite properly have incurred contractual liabilities to third parties in dealing with the trust property. The point is even stronger, I suggest, if the direction is to appoint non-resident trustees, which action would trigger a capital gains tax disposal of the entire trust fund. The amendment makes it clear that they retain any proper lien and are not bound to join in complying with the beneficiary's direction until they are reasonably protected. That could be relevant where trust investments are held in a nominee name such that as soon as a trustee retires the trust assets, to which

25 Mar 1996 : Column 1553

otherwise he might have legitimate recourse to satisfy his liabilities, are entirely outside his control. I beg to move.

The Deputy Chairman of Committees: I must advise the Committee that if Amendment No. 24 is agreed to, I cannot call Amendment No. 25 on the pre-emption rule.

The Lord Chancellor: The object of Amendment No. 24 is desirable in principle. Our doubt is about whether it is necessary in all the circumstances of Part II. However, as we are to reconsider Part II in any event, I shall reconsider this amendment also.

Lord Mishcon: Not only because of what the noble and learned Lord has said, but also because of what the Chairman has said--or have I to say "Chair"?

Baroness Trumpington: Never!

Lord Mishcon: I am so glad not to have to say that. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Lord Chancellor moved Amendment No. 25:


Page 11, line 23, leave out from ("Part") to end of line 24 and insert ("does not apply in relation to an existing express trust unless provision to the effect that it is to apply is made by a deed executed during the transitional period--
(a) in a case in which the trust was created by one person and he is of full capacity, by that person, or
(b) in a case in which the trust was created by more than one person, by such of the persons who created the trust as are alive and of full capacity.
( ) In subsection (5)--
(a) "an existing express trust" means a trust created before the commencement of this Act by a disposition, and
(b) "the transitional period" means the period of one year beginning with the commencement of this Act.
( ) A deed executed for the purposes of subsection (5) is irrevocable.").

The noble and learned Lord said: I have already spoken to this with Amendment No. 20. I beg to move.


Next Section Back to Table of Contents Lords Hansard Home Page