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The Lord Chancellor had given notice of his intention to move Amendment No. 16:



("(2A) Subsection (2) applies to a trustee of a charitable trust who is not a trust corporation only—
(a) if he is not a sole trustee, and
(b) to the extent that each other trustee has agreed that it should apply to him.").

The noble and learned Lord said: I make a change and do not move the amendment. The amendment appears to be defective to the extent that it applies more stringent rules of conduct to charitable trustees than apply in the remainder of trust law. That was an unintended consequence of attempting to arrive at a suitable amendment following discussions with the

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noble Lord, Lord Phillips of Sudbury, and with the Charity Commission. Good as well as evil comes out of discussions with the noble Lord, but mea culpa, I shall provide noble Lords with what I expect to be the right amendment at Report stage.

[Amendment No. 16 not moved.]

The Lord Chancellor moved Amendment No. 17:


    Page 10, line 32, at end insert—


("and the services he provides to or on behalf of the trust fall within that description.").

The noble and learned Lord said: The amendment clarifies the purpose of this clause of the Bill. The clause makes provision for the payment of trustees under the terms of the trust's instruments, among other things, if they are acting in a professional capacity. Clause 28(4) defines what is a professional capacity for this purpose and that definition is in terms of the provision of types of services. The amendment makes it clear that the trustee will be entitled to remuneration only for the provision of services which are of the type described. I beg to move.

Lord Phillips of Sudbury: I express gratitude to the noble and learned Lord the Lord Chancellor for this and other amendments to Clause 28. I understood the noble and learned Lord the Lord Chancellor to say that Amendment No. 16, which he did not move, will be brought back when reviewed. I believe that I am correct in saying that.

The Lord Chancellor: Having failed in the first instance, I shall endeavour to bring back an amendment at Report stage which will command your Lordships' assent because it gets the matter right.

On Question, amendment agreed to.

Clause 28, as amended, agreed to.

Clause 29 [Remuneration of certain trustees]:

The Lord Chancellor moved Amendments Nos. 18 to 20:


    Page 10, line 40, after ("provides") insert ("to or").


    Page 11, line 4, after ("provides") insert ("to or").


    Page 11, line 8, after ("services") insert ("to or").

On Question, amendments agreed to.

The Lord Chancellor moved Amendment No. 21:


    Page 11, line 8, at end insert ("and for the purposes of subsection (1) includes, in relation to the provision of services by a trustee who is an authorised institution under the Banking Act 1987 and provides the services in that capacity, the institution's reasonable charges for the provision of such services").

The noble and learned Lord said: If a bank providing trust services as a trust corporation within the Trustee Act 1925 also provides banking services, it will need express authority to charge for doing so, as otherwise there would be a technical breach of trust. Without that authority, the bank would have to use a competitor to provide the banking services, which would be a little odd. Of course, where a bank is appointed as a trustee in the trust instrument, that authority will be provided. Otherwise, this amendment now makes it clear that a trust corporation which is a recognised provider of banking services may make any

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reasonable charges for the provision of such services in the course of, or incidental to, the performance of its functions as a trustee. I beg to move.

Lord Phillips of Sudbury: I hesitate to raise what is a technical drafting point but hope that it will be helpful. The subsection to be amended by Amendment No. 21, starts,"'Reasonable remuneration' means". The amendment reads,


    "and for the purposes of subsection (1) includes".

It could read,


    "reasonable remuneration for the purposes of subsection (1) includes, in relation to"

and so on.

It is not a question to which I could reasonably expect the Lord Chancellor to respond today, but I want to raise with him the question whether the word "includes" is meant to be different from the word "means" as used at the start of the subsection. If so, what is the difference intended to be? I am sure that it is an issue to be discussed outside this room, but it seems to me a germane point.

The Lord Chancellor: I shall write to the noble Lord with regard to his question whether the word "includes" implies a broader extension than the word "means".

On Question, amendment agreed to.

Clause 29, as amended, agreed to.

4 p.m.

Clause 30 [Remuneration of trustees of charitable trusts]:

The Lord Chancellor moved Amendment No. 22:


    Page 11, line 21, at end insert ("who are trust corporations or act in a professional capacity").

The noble and learned Lord said: This amendment has been made at the suggestion of the Delegated Powers and Deregulation Committee. It was concerned that the clause as published seemed not to restrict the remuneration of charitable trustees, should it become possible in due course, to trust corporations and those acting in a professional capacity, in line with the policy in Clause 29.

It was thought that the clause as drafted restricted the application of the remuneration of charitable trustees to corporations and professionals, but the committee saw an ambiguity and I was content for the amendment to be made to make the restriction fair. I beg to move.

Lord Goodhart: As a member of the Delegated Powers and Deregulation Committee, I welcome the agreement of the noble and learned Lord to amend the clause in this way.

On Question, amendment agreed to.

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The Lord Chancellor moved Amendment No. 23:


    Page 11, line 24, after ("or") insert ("any other enactment or any provision of subordinate legislation, or by").

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 24:


    Page 11, line 32, leave out from ("instrument") to end of line 33 and insert (", but no such instrument shall be made unless a draft of it has been laid before Parliament and approved by a resolution of each House of Parliament").

The noble and learned Lord said: This amendment arose from discussions with the noble Lord, Lord Phillips of Sudbury, who was concerned that as significant a proposal as to allow the remuneration of charitable trustees should have the widest possible public airing. He was of the view that we should allow Clause 30 to remain in the Bill, rather than take it out and have to wait for a future legislative opportunity should opinion in due course be behind such a move. I agree with him, and the appropriate method of dealing in future with so significant a potential change should be by the affirmative resolution process. This amendment achieves that. I beg to move.

Lord Phillips of Sudbury: I am grateful for the noble and learned Lord's acceptance of that point.

On Question, amendment agreed to.

Clause 30, as amended, agreed to.

Clause 31 [Trustees' expenses]:

The Lord Chancellor moved Amendment No. 25:


    Page 11, line 34, leave out subsection (1) and insert—


("(1) A trustee—
(a) is entitled to be reimbursed from the trust funds, or
(b) may pay out of the trust funds,
expenses properly incurred by him when acting on behalf of the trust.").

The noble and learned Lord said: This amendment tidies up the drafting of Clause 31 and makes provision for a trustee to be reimbursed or paid directly from the trust's funds expenses properly incurred by him when acting on behalf of the trust. It also adds the provision to pay out of the funds and makes it clear that such transactions apply only to expenses incurred personally. I believe that meets the point raised by the noble Lord, Lord Goodhart, at Second Reading. On that basis, I beg to move.

Lord Goodhart: I am again grateful to the noble and learned Lord the Lord Chancellor. This point was originally brought to my attention by a colleague at the Chancery Bar, Mr Lynton Tucker. It seemed to me that there was something in the point he raised, and I am very grateful to the noble and learned Lord for having taken it on board.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 26:


    Page 11, line 37, after ("or") insert ("any other enactment or any provision of subordinate legislation, or by").

On Question, amendment agreed to.

Clause 31, as amended, agreed to.

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Clause 32 [Remuneration and expenses of agents, nominees and custodians]:


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