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The Lord Chancellor moved Amendment No. 5:


The noble and learned Lord said: By Section 4(2) of the Settled Land Act 1925, the legal estate in settled land is to be held by the tenant for life or the statutory owner. Thus the legal estate can never properly be held by the trustees of the settlement qua trustees and although it seems that there are good reasons why it should be possible for land, held on a trust of land, to be vested in a nominee, there are no obvious reasons why a nominee would be needed in relation to settled land.

This amendment, therefore, will provide that the power to appoint nominees does not apply to settled land. However, it should still be possible for the proceeds of sale of settled land to be vested in a nominee, as this may be advantageous for the purposes of investment. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 6:


    Page 7, line 6, at end insert ("or in relation to any assets vested in the official custodian for charities").

The noble and learned Lord said: In moving Amendment No. 6, I shall speak also to Amendments Nos. 7 and 9. I take them together because they each have the same effect in their respective clauses.

Presently, Clauses 16(3), 17(4)and 18(4) disapply the power to appoint nominees in the case of any trust having a custodian trustee, because the power conferred by the clauses is incompatible with the statutory duties of a custodian trustee under the Public

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Trustee Act 1906. The Charity Commission has made the point that trustees should also be deprived of the powers under Clauses 16 and 17 in relation to property which is for the time being vested in the official custodian for charities. This is because Section 22 of the Charities Act 1993 provides that where property is vested in the official custodian in trust for a charity he shall have the same powers, duties and liabilities as a corporation-appointed custodian trustee under Section 4 of the Public Trustee Act 1906. It would, therefore, be inappropriate for a nominee or custodian to be appointed under the Bill in respect of the relevant property. In addition, where bearer securities are held by the official custodian, there should be no duty to appoint a custodian under Clause 18 of the Bill. I beg to move.

On Question, amendment agreed to.

Clause 16, as amended, agreed to.

3.45 p.m.

Clause 17 [Power to appoint custodians]:

The Lord Chancellor moved Amendment No. 7:


    Page 7, line 14, at end insert ("or in relation to any assets vested in the official custodian for charities").

On Question, amendment agreed to.

Clause 17, as amended, agreed to.

Clause 18 [Investment in bearer securities]:

The Lord Chancellor moved Amendment No. 8:


    Page 7, line 17, after ("instrument") insert ("or any enactment or provision of subordinate legislation").

The noble and learned Lord said: With your Lordships' leave I shall speak also to Amendments 11, 12, 23, 26 and 27, with which Amendment No. 8 is grouped. Each of these six amendments has a similar effect in its respective clause.

The amendment to Clause 18(2) ensures that the exception to the requirement in Clause 18(1) to appoint a custodian of bearer securities applies where there is a legislative provision for the trustees to hold or invest in bearer securities without the need to so appoint, as well as applying where there is such a provision in a trust instrument which applies also where the provision is in legislation.

Clause 21 refers to the requirement to review the appointment of agents, nominees and custodians and the extent of the trustees' liability for such appointments under Clause 22 and 23. The amendment to Clause 21(2) ensures that the duty under Clause 21(1) which applies, as the clause is presently drafted, to appointments made under a power granted by a trust instrument, applies also to powers granted in legislation. The amendment to Clause 21(3) ensures that, where the exception to the application of Clauses 22 and 23 arises from inconsistency with a trust instrument, inconsistency with legislation would attract the same exception.

Clause 30 refers to the remuneration of charitable trustees and the amendment to Clause 30(2) adds to the classes of those who may benefit from orders made by the Secretary of State under Clause 30(1), those

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who have been authorised to exercise functions as agent, nominee or custodian by a trust instrument, those so authorised by legislation. The clause already makes provision for those so authorised by legislation, by the Bill or by the trust instrument.

Clause 31 deals with trustees' expenses, and the amendment will ensure that it will apply to those who derive their powers to act as agents, nominee or custodian from legislation as well as those who derive their power from the Bill or the trust instrument.

Clause 32 deals with remuneration of agents, nominees and custodians, and the amendment has the same effect as does that affecting Clause 31. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 9:


    Page 7, line 21, at end insert ("or in relation to any securities vested in the official custodian for charities").

On Question, amendment agreed to.

Clause 18, as amended, agreed to.

Clause 19 [Persons who may be appointed as nominees or custodians]:

The Lord Chancellor moved Amendment No. 10


    Page 7, line 27, at end insert—


("( ) the person is a body corporate recognised under section 9 of the Administration of Justice Act 1985").

The noble and learned Lord said: This is another amendment for the avoidance of doubt. It should be possible to be appointed as a nominee or custodian under the Bill only if the proposed appointee is in the business of providing nominee or custodianship services. Subsection (2)(b) is included in the draft in order to cater for the possibility that trustees might wish to set up special purpose vehicles in order to act as their nominees.

However, concern was expressed as to whether the clause as drafted was sufficiently wide to enable trustees to utilise the services of solicitors' nominee companies, which are recognised under rules prepared by the Law Society under Section 9 of the Administration of Justice Act 1985. Where such companies in England and Wales are owned by solicitors, they can only function as recognised bodies within the Solicitors' Incorporated Practice Rules. Therefore we believe that solicitors' nominee companies should be suitable for appointment as nominees or custodians under the Bill and that the clause should be wide enough to allow for this. I beg to move.

On Question, amendment agreed to.

Clause 19, as amended, agreed to.

Clause 20 agreed to.

Clause 21 [Application of sections 22 and 23]:

The Lord Chancellor moved Amendments Nos. 11 and 12:


    Page 8, line 28, at end insert ("or by any enactment or any provision of subordinate legislation").


    Page 8, line 32, after ("instrument") insert ("or the enactment or provision of subordinate legislation").

On Question, amendments agreed to.

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Clause 21, as amended, agreed to.

Clauses 22 to 27 agreed to.

Clause 28 [Trustee's entitlement to payment under trust instrument]:

The Lord Chancellor moved Amendment No. 13:


    Page 10, line 8, leave out ("Subsections (2) and") and insert ("Except to the extent (if any) to which the trust instrument makes inconsistent provision, subsections (2) to").

The noble and learned Lord said: I shall speak also to Amendment No. 15, with which it has been grouped. These two amendments are designed to tidy up a small drafting point which might otherwise have led to ambiguity. In effect, Clause 28(1)(c) from the published Bill has been moved to the head of the clause to make it clear that the various parts of Clause 28 should apply unless and to the extent, but only to the extent, that the trust instrument provides to the contrary. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 14:


    Page 10, line 10, at end insert ("to or").

The noble and learned Lord said: I shall also speak to Amendments Nos. 18, 19, 20, 28 and 29, with which Amendment No. 14 is grouped. I propose to take these amendments together as each acts on its clause in a similar way. In each case the amendment contemplates the provision of services by trustees inwards as well as outwards in relation to a trust. Thus, it is possible to imagine, for instance, a group of financial trusts, one of which might be a trust whose function it was to provide services to connected trusts. The trustee would be the person through whom the service was provided "to" the trust.

Clause 28 relates to trustees' entitlements to be paid under the terms of a trust instrument. Clause 29 relates to entitlement to remuneration. Clause 32 relates to the remuneration of agents, nominees and custodians and Clause 33 relates to the application of the clauses I have previously mentioned. In each case, the amendment has the same result. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 15:


    Page 10, line 13, leave out from ("capacity") to end of line 15.

On Question, amendment agreed to.


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