Dáil Éireann debate -
Friday, 21 Mar 1958

Vol. 166 No. 6

Trustee (Authorised Investments) Bill, 1957—Committee and Final Stages.

SECTION 1.

Mr. Sweetman

I move amendment No. 1:—

To delete paragraph (j).

The purpose of this amendment is to ensure that trustees should not be enabled permanently, unless specifically authorised by the settlement, to leave trust funds on deposit. I understand it was always the view that deposit was a suitable place for temporarily leaving trust funds, but I never heard a case made before that deposit was suitable as a permanent investment. In that respect, I should like to know what caused the Minister to change, not his personal mind but the mind of the corporate Minister for Finance, so to speak, and insert this clause (j) in Section 1. I might add that, of course, amendments Nos. 1 and 2 are correlated and hang together. The draft Bill that was available to the Minister when he entered office did not have this provision in it. Deposit in the draft Bill was most specifically to be pending investment and, in fact, the first three lines of my amendment No. 2 are taken practically word for word from Section 3 of the draft Bill I left behind. I know that that draft Bill was circulated to interested bodies and I should like to hear what reasons these bodies submitted before the change or what reasons the Minister himself had for the change.

Dr. Ryan

As the Deputy has explained, in the draft Bill circulated to these various bodies which we consulted in relation to this measure, the words "pending investment" were left out. Now the words "pending investment" are in.

Mr. Sweetman

No. It is the other way round; the words "pending investment" were in and now they are left out.

Dr. Ryan

I am sorry; that is the position. When the draft Bill was circulated, various bodies—the Central Bank, the Dublin Stock Exchange, the Public Trustee, the Incorporated Law Society and the Irish Banks Standing Committee—offered the criticism that the words "pending investment" should not remain in the Bill. Roughly, the reason they gave was that, in the first place, it might happen, for instance, that a trustee facing, let us say, falling prices in securities, and not knowing where he stood exactly, or what would be an advisable investment to make, might prefer to hold on for a while and leave the money on deposit, until the market should settle down. It was considered from the legal point of view that he might be held to contravene the draft Bill as it stood, if he held out too long waiting for the market to settle.

The limiting words in the draft Bill were an innovation. In the legislation prior to this Bill, the words "pending investment" were not included. The position is that for many years the trustee had an option, as it were, to leave money on-deposit for a reasonable period, if, for any reason, he wanted to see how the market would go. That was the principal reason. He had the discretion to wait. These various bodies I have mentioned pointed out that things had run smoothly and satisfactorily and they thought that that restriction would be a mistake in present circumstances. They were, I think, unanimous in advising that these words, "pending investment" should not be inserted in the new Bill. They were therefore left out really for the purpose of giving more discretion.

Mr. Sweetman

Could the Minister tell the House how the law stands, and under what section, at the moment, in this respect? Is it one of the sections of the Trustee Act of 1893?

Dr. Ryan

For many years the trustee could put money on deposit with the Bank of Ireland. The central Bank Act extended that provision to the Associated Banks.

Mr. Sweetman

Did the Central Bank Act extend it to the Post Office Savings Bank and the Trustee Savings Bank?

Dr. Ryan

No, only to the joint stock banks, I believe.

Mr. Sweetman

We are, therefore, extending it further in this section?

Dr. Ryan

Yes.

Amendment, by leave, withdrawn.

Section agreed to.

SECTION 2.

Amendment No. 2 not moved.

Dr. Ryan

I move amendment No. 2a:—

In sub-section (3), page 3, line 39, to delete "Society," and substitute "Society of Ireland,".

This amendment is merely a drafting amendment. When we put in the "Incorporated Law Society", we did not realise that the proper title was the "Incorporated Law Society of Ireland". We are now putting in an amendment to that effect.

Mr. Sweetman

They make enough representations to have their title sufficiently familiar to all concerned.

Dr. Ryan

It should be.

Amendment agreed to.

Section 2, as amended, agreed to.

SECTION 3.

Mr. Sweetman

The amendment the Minister has tabled, No. 4, meets my amendment, I think. I am not absolutely certain it does and I do not think the Minister will be able to answer me now. I think he may have to take legal advice, unless somebody else has already raised the point with him. Is it quite clear that amendment No. 4 covers the permission for the court to sanction, where it is desirable, the turning of a business belonging to a ward of court into a private company or private business?

Dr. Ryan

It does cover that.

Mr. Sweetman

Is that quite clear?

Dr. Ryan

Yes.

Mr. Sweetman

Then, I am perfectly satisfied.

Amendment No. 3 not moved.

Dr. Ryan

I move amendment No. 4:—

To add to the section the following sub-section:—

(3) This section shall not affect the jurisdiction of any court to direct or permit money under its control or subject to its order to be used for the benefit of any person entitled thereto or having an interest therein—

(a) in making payments in connection with the acquisition, use or management of any land or business, or any share in any business, or

(b) in subscribing for securities offered on advantageous terms to holders of the same kind of securities.

Amendment agreed to.

Section 3, as amended, agreed to.

SECTION 4.

Mr. Sweetman

I move amendment No. 5:—

In sub-section (1) to delete paragraph (a).

The Minister is aware that representations were made that it is undesirable that this discretion should be there and that the Minister should come down definitely on one side or the other in relation to the manner in which premiums against investment drawings will be made. Quite frankly, I am not desperately enamoured of the case made and I merely put down the amendment, not because of any great belief in it, but for the purpose of getting from the Minister an explanation as to what the various representative bodies feel on the matter. If all the representative bodies have the same view, then I am satisfied. If there is a clash, I think the clash ought to be ventilated.

Dr. Ryan

I believe the Incorporated Law Society did not agree.

Mr. Sweetman

I beg the Minister's pardon—the Incorporated Law Society of Ireland.

Dr. Ryan

They do not agree with the provision as it stands. They thought that discretion should not be left to the trustee. The other bodies concerned all agree with the discretion being given. I had to take account of this conflict of views, and make up my own mind, as it were, and I think, on the whole, the discretion should be given. It may be difficult at times for a trustee to meet the premium out of capital. The amount on hand may make it difficult. Also, to be just both to the life tenant, and to the remainder man, the trustee may consider it fairer in some cases to pay the premium out of income. For that reason, I think the discretion should be given. The amounts involved will be very small. Furthermore, the insurance will be taken out only when bonds are purchased above the par value. It is unlikely that that will happen for some time.

Mr. Sweetman

I would not agree to that at all. The effect of yesterday's decision elsewhere will put 6 per cent. bonds over par.

Dr. Ryan

But they are not redeemable.

Mr. Sweetman

There is a 6 per cent. Land Bond Issue. The Minister signed the Order creating it himself.

Dr. Ryan

It is doubtful if they are very often purchased by these people. On the whole, I think we should give them discretion.

Mr. Sweetman

It is a very small point not worth arguing.

Amendment, by leave, withdrawn.

Amendment No. 6 not moved.

Section 4 agreed to.

Sections 5 to 7, inclusive, agreed to.

Schedule agreed to.

Title agreed to.

Bill reported with amendments, received for final consideration and passed.