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Lord Mishcon: My Lords, I hope that the noble and learned Lord will take it for granted that, after the talks and discussions that have taken place, there is no opposition to the amendments. However, there are some points which arise out of them. The noble and learned Lord may feel it convenient to deal with them as I raise them, or he may think that it would be very much more beneficial for them to be dealt with in further discussions between the officials of his department and the Law Society. If I may do so in courtesy, I leave to the noble and learned Lord to decide which course he wants to adopt.

I raise a point first of all on Amendment No. 5. The presumption provided for in this new subsection is in favour of a person--call him A--dealing in good faith with the attorney or the attorneys. Does the noble and

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learned Lord consider that any similar presumption is needed in favour of successors in title to A, perhaps even a stronger one to the extent that the successor should be allowed to assume that A did not know of evidence to displace this presumption? As the noble and learned Lord will know, the presumption of non-revocation in the Powers of Attorney Act 1971 proceeds on that basis.

There is another question that arises upon this amendment. Can the noble and learned Lord the Lord Chancellor confirm the intention to be that A's position is not prejudiced if evidence to the contrary becomes known to him after his dealing has been completed; in other words, that what matters is whether he deals without notice of such evidence? The present amendment, I suggest, is not entirely clear on that point.

The noble and learned Lord understandably grouped in his remarks Amendments Nos. 5 to 8. I have just spoken to Amendment No. 5. I have no comment to make on Amendment No. 6. I say at once that the wording of Amendment No. 7 is so much clearer than the original Clause 9(3) which appeared in the original Bill. In regard to Amendment No. 8, I was troubled about the reasonableness test and to what it applied, and that amendment suitably deals with that point.

The Lord Chancellor: My Lords, I am grateful to the noble Lord, Lord Mishcon, for those comments. I shall look further into the first point that he mentioned. I would assume that this amendment is sufficient to have the result to which he referred in that connection in relation to a successor of A. As regards the second point the noble Lord mentioned, I think it is reasonably plain on this amendment that the relevance, or the time that is relevant, is the time of the dealing, and therefore information that comes to his notice after the dealing has been completed would be quite plain. I think that the clause as drafted meets that point. It is obvious that the intention in relation to the first point is that a successor of A should be protected also. If we have not succeeded in doing that so far, obviously we would wish to consider amplifying that aspect of the matter. I do not believe there is any policy difference between us on that point.

On Question, amendment agreed to.

The Lord Chancellor moved Amendments Nos. 6, 7 and 8:


Page 4, line 19, at end insert ("; and such a power is revoked by the appointment as a trustee of a person other than those by whom it is given (though not by any of those persons dying or otherwise ceasing to be a trustee).").
Page 4, line 20, leave out from ("Where") to end of line 25 and insert ("a beneficiary to whom functions are delegated by a power of attorney under subsection (1) ceases to be a person beneficially entitled to an interest in possession in land subject to the trust--
(a) if the functions are delegated to him alone, the power is revoked,
(b) if the functions are delegated to him and to other beneficiaries to be exercised by them jointly (but not separately), the power is revoked if each of the other beneficiaries ceases to be so entitled (but otherwise functions exercisable in accordance with the power are so exercisable by the remaining beneficiary or beneficiaries), and

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(c) if the functions are delegated to him and to other beneficiaries to be exercised by them separately (or either separately or jointly), the power is revoked in so far as it relates to him.").
Page 4, line 38, leave out ("it was not reasonable for the trustees") and insert ("the trustees did not exercise reasonable care in deciding").

The noble and learned Lord said: I beg to move Amendments Nos. 6 to 8 en bloc.

On Question, amendments agreed to.

Clause 11 [Consultation with beneficiaries]:

The Lord Chancellor moved Amendment No. 9:


Page 5, line 24, leave out from ("in") to ("or") in line 25 and insert ("relation to a trust created by a disposition in so far as provision that it does not apply is made by the disposition,
( ) in relation to a trust created or arising under a will made before the commencement of this Act,").

The noble and learned Lord said: My Lords, in moving Amendment No. 9 I wish to speak also to Amendments Nos. 10 to 12. These together change the transitional provisions in Clause 11, and it therefore seems appropriate for me, with your Lordships' leave, to speak to them all together.

At present, the trustees' duty to consult under Clause 11 will not apply to an existing express trust of land unless the settlor provides by deed within a year of commencement of the Act that it is to apply, but nothing is said about cases where the trust is created by a pre-commencement will but the testator dies after commencement. Since a will speaks from death, this would mean that such will trusts would not be treated as existing express trusts and so the burden would be on the testator as from commencement of the Act to consider whether to take steps to exclude this duty to consult. This could lead to cases where the testator assumed when making his will that the trustees would not have to consult but the trustees are nevertheless put under that duty because the testator for one reason or another did not revisit his will after he made it.

Amendment No. 9 accordingly provides for any trust created or arising under a will made before commencement of the Act to be treated as an existing express trust. The words "created or arising under", which are based on the precedent of paragraph 6 of Schedule 3 to the Family Law Reform Act 1969, are intended to cover not only will trusts proper but also trusts which may be created by assents by the personal representatives to beneficiaries under the will.

Amendment No. 11 removes the time limit within which a settlor of an existing express trust may opt to bring it within the provisions of this clause, the Law Society believing the limit to serve no useful purpose. That was one of the matters that we discussed at the meeting to which the noble Lord, Lord Mishcon, kindly referred. Consequential on that change, Amendment No. 12 deletes subsection (4) which defines the terms "transitional period" and


    "existing express trust of land",
and Amendment No. 10 replaces the term,


    "existing express trust of land",

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where it occurs earlier in the clause with the precise wording describing such a trust, doing away with the need for a definition. I beg to move.

Lord Mishcon: My Lords, in the same spirit that I spoke on the previous amendment I put to the noble and learned Lord on the Woolsack two points arising out of Amendment No. 9. This amendment, as he rightly says, protects trusts arising under the will of a testator who dies after the Act comes into force, if the will was made before commencement. Can the noble and learned Lord confirm that if a trust of land is created by an assent--when, as he well knows, the executors vest the land in themselves or others as trustees--that would not make the new provisions apply if the will predates the commencement of the Act; in other words, that it is the time of creation of the beneficial trust which determines whether it counts as an old trust or a new one? That is my first point.

The same point would seem to arise where additional land becomes comprised in an existing old trust after the Act comes into force, whether through a further gift by the settlor or through a purchase by the trustees. Which regime does the noble and learned Lord consider should apply to that situation, and is it clear that this result flows from the wording of the Bill? I said when posing these points, which do not go to principle but to clarification, that it may well be that the noble and learned Lord would prefer to take note of them and not deal with them now. However, I repeat that I leave that entirely to him.

The Lord Chancellor: My Lords, I shall say how I see the matter, subject to correction. I think that Amendment No. 9 will have the effect that the trust will be regarded as coming into existence for the purposes of these provisions at the time that the noble Lord, Lord Mishcon, stated. The words "created or arising under" refer back to the time at which the original expression of the trust was made, and the fact that there are later assents will not derogate from that.

So far as concerns new land, one might consider new land not to make a new trust. In other words, the fact that you have added land to an existing trust might not make a new trust. I can see an argument also for the view that the trust is defined by reference to the disposition--that is to say, the directions as to what is to happen--and to the subject matter, namely a specific piece of land, and, therefore, that the other option is possible under the provisions as drafted. It may be that we should consider this point. It is one of interest that I would wish to look at further to see whether we should expressly deal with the situation where the subject matter of the trust is enlarged. I can see an argument that until that other piece of land is affected by the trust, even though the trust provisions are the same affecting a different and earlier piece of land, there is no trust in existence in respect of that second piece of land.

With that rather hesitant response at this stage, I hope that the noble Lord will allow me to consider the matter

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further. It may well be that we should consider an amendment at Third Reading to deal with the second point.

On Question, amendment agreed to.

7.30 p.m.

The Lord Chancellor moved Amendments Nos. 10 to 12:


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