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Lord Meston: My Lords, after that tour de force I wish only to reinforce the first point made by the noble Lord, Lord Mishcon; namely, that it should be clear in the new clause whether the reference to the person nominated by the instrument is intended to be a reference to someone who is both still alive and still competent.

The Lord Chancellor: My Lords, that point, reinforced by the noble Lord, Lord Meston, made by the noble Lord, Lord Mishcon, was certainly addressed by parliamentary counsel. I know that for a fact as I was involved to some extent.

The point is that the verb is in the present tense: there "is" no person nominated. Accordingly, that falls to be tested at the time when this section is under construction. Therefore, the policy, as both noble Lords said, based on the advice that I have so far, is that when a person who was nominated is dead before the application of this section is in question, there "is" no person nominated if that person has already died. If the words had been "has been nominated", the situation would be different.

I am in a position to deal in some way with most of the other matters raised. However, I am not sure that it would be particularly useful to do so in detail now for the reason stated by the noble Lord, Lord Mishcon.

Perhaps I should just state the intentions and leave aside the arguments. So far as subsection (3) of the new clause dealt with in Amendment No. 16 is concerned, the intention is certainly that the arrangement should be such as to be effective when the retirement is effective. Secondly, the intention is also that the retiring trustee shall not have to comply in all ways with the direction to retire until he is protected; that is to say, he requires to make a deed.

The opening words of subsection (4) are intended simply to cover circumstances in which the beneficiaries exercise their powers. Counsel has specifically indicated a willingness to revisit the wording if there is doubt about it.

To refer again to Amendment No. 16, the intention in regard to retraction of a direction is that once unanimity is broken and a beneficiary makes that clear in writing, the direction falls. We shall see whether more needs to be done to ensure that both (a) and (b) are covered, but that is certainly the intention.

Turning to Amendments Nos. 29 and 30, I certainly have no objection to examining whether will trusts and inter vivos trusts shall be covered differently or in the same way. I will take that matter up with the draftsman to seek his further advice.

In relation to Amendment No. 32, it was not the intention that the settlor should be able to opt in and out. It was intended, because it is simple, that a settlor should

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be able to stop a direction in its tracks. If there is real objection to that, we shall be happy to look again at the clause. I rather took it from the remarks of the noble Lord, Lord Mishcon, that he wished the matter to be reasonably clear. I believe the intention we have is probably an intention in common. The only question is whether the wording effectively arrives at that or effectively declares that intention.

I shall certainly consider all these matters in the light of what has been said. If further amendments are required, I hope to put them forward in good time for Third Reading.

On Question, amendment agreed to.

Clause 20 [Appointment of trustee at instance of beneficiaries]:

The Lord Chancellor moved Amendment No. 16:


Leave out Clause 20 and insert the following new Clause--

Appointment and retirement of trustee at instance of beneficiaries

(".--(1) This section applies in the case of a trust where--
(a) there is no person nominated for the purpose of appointing new trustees by the instrument, if any, creating the trust, and
(b) the beneficiaries under the trust are of full age and capacity and (taken together) are absolutely entitled to the property subject to the trust.
(2) The beneficiaries may give a direction or directions of either or both of the following descriptions--
(a) a written direction to a trustee or trustees to retire from the trust, and
(b) a written direction to the trustees or trustee for the time being to appoint by writing to be a trustee or trustees the person or persons specified in the direction.
(3) Where a trustee has been given a direction under subsection (2)(a), as soon as there has been made to him an offer of reasonable arrangements for the protection of any rights of his in connection with the trust, he shall by deed declare that he has been given such a direction; and if his co-trustees by deed consent to his being discharged from the trust and to the vesting in them alone of the trust property--
(a) he shall be deemed to have retired from the trust and shall be discharged from the trust, and
(b) he and the continuing trustees shall do anything necessary to vest the trust property in them alone.
(4) In circumstances in which either section 36(1) of the Trustee Act 1925 applies or a direction is or has been given under subsection (2)(a), a direction under subsection (2)(b) shall be given to the surviving or continuing trustees or trustee or the personal representative of the last surviving or continuing trustee.
(5) This section has effect subject to the restrictions imposed by the Trustee Act 1925 on the number of trustees.").

The noble and learned Lord said: My Lords, I spoke to Amendments Nos. 16 to 32 with Amendment No. 15; to Amendments Nos. 33 and 34 with Amendment No. 1; to Amendment No. 35 with Amendment No. 15; to Amendments Nos. 36 and 37 with Amendment No. 1; and Amendment No. 38 with Amendment No. 15. With the leave of the House, I therefore propose to move Amendments Nos. 16 to 38 inclusive en bloc.

On Question, amendment agreed to.

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Clause 21 [Appointment of substitute for incapable trustee]:

The Lord Chancellor moved Amendments Nos. 17 to 19:


Page 10, line 27, leave out ("are of full age and capacity and") and insert ("under the trust are of full age and capacity and (taken together)").
Page 10, line 36, leave out from ("appoint") to first ("the") in line 39 and insert ("by writing").
Page 10, line 41, leave out subsection (4).

On Question, amendments agreed to.

Clause 22 [Appointments: supplementary]:

The Lord Chancellor moved Amendments Nos. 20 to 32:


Page 11, line 1, leave out (" 20") and insert ("(Appointment and retirement of trustee at instance of beneficiaries)").
Page 11, line 6, at end insert--
("and is not by writing withdrawn by any of them before being complied with.").
Page 11, line 8, after ("appointment") insert ("or retirement").
Page 11, line 9, leave out subsections (3) and (4).
Page 11, line 17, at end insert--
("( ) Subsection (7) of section 36 of the Trustee Act 1925 (powers of trustees appointed under that section) applies to a trustee appointed under section (Appointment and retirement of trustee at instance of beneficiaries) or 21 as if he were appointed under that section.").
Page 11, line 18, leave out (" 20") and insert ("(Appointment and retirement of trustee at instance of beneficiaries)").
Page 11, line 23, leave out subsection (6).
Page 11, line 26, leave out ("This Part does") and insert ("Sections (Appointment and retirement of trustee at instance of beneficiaries) and 21 do").
Page 11, line 27, leave out ("it does") and insert ("they do").
Page 11, line 27, at end insert (", or
( ) in relation to a trust created or arising under a will made before the commencement of this Act.").
Page 11, leave out lines 28 to 30 and insert--
("(8) Sections (Appointment and retirement of trustee at instance of beneficiaries) and 21 do not apply in relation to a trust created before the commencement of this Act in so far as provision to the effect that they do not apply is made by a deed executed-").
Page 11, line 36, leave out subsection (9).
Page 11, line 41, at end insert--
("( ) Where a deed is executed for the purposes of subsection (8)--
(a) it does not affect anything done before its execution to comply with a direction under section (Appointment and retirement of trustee at instance of beneficiaries) or 21, but
(b) nothing shall be done after its execution to comply with such a direction.").

On Question, amendments agreed to.

Clause 26 [Minor and consequential amendments and repeals]:

The Lord Chancellor moved Amendment No. 33:


Page 12, line 27, at end insert--
("( ) Neither section 2(4A) nor the repeal by this Act of section 29 of the Settled Land Act 1925 applies in relation to the deed of settlement set out in the Schedule to the Chequers Estate Act 1917 or the trust instrument set out in the Schedule to the Chevening Estate Act 1959.").

On Question, amendment agreed to.

22 Apr 1996 : Column 971

Schedule 1 [Provisions consequential on section 2]:


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