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Lord Mishcon: My Lords, my remarks on the amendments to which the noble and learned Lord has just referred will be very much shorter. I gather from what he said that all those bodies which are vitally interested in the amendments have been consulted. For the purpose of the record, no doubt the noble and learned Lord will confirm that that has been done.

The Earl of Kinnoull: My Lords, as my noble and learned friend was kind enough to mention me at the beginning of his remarks, perhaps before he replies to the noble Lord I may thank him for bringing forward the amendments to clear up certain technical issues affecting a number of old and historic charitable trusts. My noble and learned friend has already said that delicate matters were discussed and formed the subject of meetings between his department and the representatives of the Charities' Property Association as well as the Charity Commission, and indeed the Home Office. I wish to place on record on behalf of the association its thanks to the officials of my noble and learned friend for the courteous and thorough way in which the matter has been handled, and especially for the satisfactory conclusion reached within this most useful Bill.

The Lord Chancellor: My Lords, I am extremely grateful to both noble Lords who have spoken. I can confirm that those affected as the professional body, together with the Charity Commission and the Home Office, have been consulted and that the amendments are the product of that consultation. I am also grateful on behalf of my officials for what my noble friend said about the nature of the consultations. It is exactly what I would have expected of officials in the Lord Chancellor's Department. However, it is very nice to hear it confirmed by others in such a felicitous way. I am most grateful.

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On Question, amendment agreed to.

Clause 2 [Trusts in place of settlements]:

The Lord Chancellor moved Amendment No. 2:

Page 2, line 16, at end insert--
("(4A) No land held on charitable, ecclesiastical or public trusts shall be or be deemed to be settled land after the commencement of this Act, even if it was or was deemed to be settled land before that commencement.").

On Question, amendment agreed to.

Clause 6 [General powers of trustees]:

The Lord Chancellor moved Amendment No. 3:

Page 3, line 5, leave out from ("Where") to second ("the") in line 6 and insert ("in the case of any land subject to a trust of land each of the beneficiaries interested in the land is a person of full age and capacity who is absolutely entitled to the land,").

The noble and learned Lord said: My Lords, before I speak to this technical amendment, I should like to make some comments which concern all of the amendments in my name to which I have not yet spoken. They arise in the main from points made in Committee by the noble Lord, Lord Mishcon, with assistance, it would be fair to say, from the Law Society's representatives. The amendments as they are now before the House follow extended discussions involving the Law Society's representatives, myself, the Law Commission, departmental officials and parliamentary counsel; and I believe there to be general agreement as to the principles which underlie them. In the event that there are still queries as to the wording or precise effect of any of the amendments, I am ready to consider suggestions for revision with a view to arranging, if necessary, for final changes on Third Reading to ensure that the Bill gets everything right as far as that may be possible.

I ought to express here my gratitude to those who took part in the discussions and especially to those who represented the Law Society in such matters, both of whom were extremely technically qualified to discuss the issues. I am most grateful to them for taking the time to do so in the public interest. I am of course also grateful to the Law Commission and to officials in the Lord Chancellor's Department, as well as to parliamentary counsel. Indeed, parliamentary counsel took a great deal of trouble with the technical issues involved in a reasonably short time-scale for such matters. I am most grateful.

As to Amendment No. 3 itself, the noble Lord, Lord Mishcon, stated in Committee his belief that the trustees' power to convey trust land to beneficiaries under Clause 6(2) is to be exercisable where each of the beneficiaries in question is absolutely entitled; that is, on the basis of concurrent interests, as joint tenants or tenants in common. The amendment to Clause 6(2) is intended simply to make it clearer that the noble Lord's belief is entirely correct. The amendment also makes it clear that the power exists where one particular parcel of land is held for beneficiaries absolutely, regardless of whether absolute interests exist in other land or other assets of the trust. I beg to move.

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Lord Mishcon: My Lords, in regard to the introductory remarks made by the noble and learned Lord, perhaps I may tell him how grateful the Law Society is not only to his officials but also to all those others whom he mentioned as having been consulted since the Committee stage. However, I should like to express a very definite sense of the gratitude of the Law Society and its representatives for the way in which the noble and learned Lord himself agreed to participate in discussions in order to resolve certain matters which were of great importance. That courtesy was very much appreciated.

The Lord Chancellor: My Lords, I am most grateful.

On Question, amendment agreed to.

Clause 8 [Exclusion and restriction of powers]:

The Lord Chancellor moved Amendment No. 4:

Page 4, line 10, at end insert--
("( ) Subsection (1) does not apply in the case of charitable, ecclesiastical or public trusts.").

On Question, amendment agreed to.

7.15 p.m.

Clause 9 [Delegation by trustees]:

The Lord Chancellor moved Amendment No. 5:

Page 4, line 17, at end insert--
("( ) Where trustees purport to delegate to a person by a power of attorney under subsection (1) functions relating to any land and another person in good faith deals with him in relation to the land, he shall (in the absence of evidence to the contrary) be presumed in favour of that other person to have been a person to whom the functions could be delegated.").

The noble and learned Lord said: My Lords, Amendments Nos. 5 to 8 are all concerned with aspects of the trustees' power of delegation in Clause 9 and, with your Lordships' leave, I believe that it would be appropriate for me to speak to them all together.

Clause 9 enables trustees of land to delegate their functions as trustees to a beneficiary or beneficiaries beneficially entitled to an interest in possession in that land. Delegation is by way of power of attorney, which must be given by all of the trustees jointly and accordingly may be revoked by any one of them. Amendment No. 5 carries through an additional element of protection for third parties from Section 29 of the Law of Property Act 1925, which Clause 9 supersedes. A person dealing with a beneficiary-delegate is entitled to assume that the delegate is a person who qualifies to have the function or functions in question delegated to him, unless there is evidence to the contrary, so that he is protected in the event of a mistaken delegation. In the event of revocation of the power, of course, the protection of Section 5 of the Powers of Attorney Act 1971 will be available.

Amendment No. 6 seeks to clarify the position where there is a change in the line-up of trustees. It is intended that the power of attorney effecting a delegation should not be revoked automatically where one of those who jointly gave it ceases to be a trustee because, as the noble Lord, Lord Mishcon, said in Committee, there is no reason in such circumstances to suppose that the

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continuing trustees will necessarily wish the power to terminate at that time. However, the position is different where a new trustee is appointed. In that case, the power is revoked by the new appointment and the new and continuing trustees must grant a renewed power at or after the time when the appointment takes effect.

Amendment No. 7 seeks to clarify the position where functions have been delegated to a beneficiary or beneficiaries and the beneficiary in question or one of them ceases to be entitled to the interest in the land which qualifies him to have such functions delegated to him. In the case of a single delegate, the power delegating the functions to him is automatically revoked. Matters are more difficult where functions were delegated to a number of beneficiaries either jointly, or jointly and severally. In the former case, the power delegating the functions is not automatically to be revoked if one of the joint delegates ceases to have the qualifying interest, so that the remaining joint delegates can continue, together, to exercise the delegated functions, unless of course the trustees take the view that this is inappropriate and revoke the power themselves. In the latter case, the power in effect terminates pro tanto, so that it is revoked in so far as it relates to the beneficiary who ceases to have the requisite interest but remains effective in respect of the remaining delegates.

Finally, Amendment No. 8 is intended to clarify the standard of care to be observed by trustees in deciding whether to delegate any of their functions in this way. I accept the force of the argument that the noble Lord, Lord Mishcon, put forward in Committee that the question of whether it is reasonable for the trustees to delegate could offer the possibility of confusion because something may be argued to be a reasonable thing to do, even though done without regard to the possible consequences.

The amendment is intended to require the trustees to observe the precautions of a reasonably prudent person in deciding whether to delegate those particular functions to that beneficiary or beneficiaries in the particular circumstances of the trust. That is in line with the well-settled test in Speight v. Gaunt. I beg to move Amendment No. 5. With your Lordships' leave, I hope later to move Amendments Nos. 6 to 8 together en bloc.

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