I move: "That the Bill be now read a Second Time." This Bill was prepared by my predecessor and piloted by him through all its Stages in the Seanad. To all intents and purposes, therefore, it might be described as an agreed measure.
The Bill provides for the incorporation of charity trustees and makes special provision in relation to charities that are established or regulated by statutes or by charters. It also provides for a number of amendments to the Charities Act, 1961, in order to deal with certain difficulties—brought to attention by the Commissioners of Charitable Donations and Bequests— that have arisen in the administration of the 1961 Act and in the administration of charities themselves. I should mention that all the proposals contained in the Bill are being made in agreement with the charity commissioners.
The Commissioners of Charitable Donations and Bequests, referred to in the Bill as "the Board", are a statutory body who owe their origin to the Charitable Donations and Bequests (Ireland) Act, 1844. The jurisdiction and powers of the board, as set out in the Charities Act, 1961, include power to advise charity trustees as to the administration of trusts, power to sue for the recovery of charitable gifts improperly withheld, power to institute legal proceedings in a charity matter and to certify cases to the Attorney General with a view to his instituting such proceedings, power to accept gifts for charitable purposes, power to frame schemes applying charity property cy-près, and power to appoint new trustees of a charity.
Before dealing with the provisions of the Bill, I should like to explain that the legal meaning of "charity" is not the same as the ordinary meaning. A charity in law may be said broadly to mean a gift of land, property or money for the advancement of religion, the advancement of education, the relief of poverty, or other public purposes such as paintings to the National Gallery or historical objects to the National Museum. A charitable gift has certain advantages over an ordinary gift, namely, a gift in perpetuity for a charitable object does not fail, and property given or donated is not subject to income tax, legacy duty or succession duty.
Sections 2 and 3 of the Bill provide for the incorporation of the trustees of a charity and the vesting of the charity property in the body corporate by means of a scheme framed by the board. This provision is designed to mitigate the inconvenience and expense caused by the necessity of revesting trust funds in new trustees on the death or retirement of the existing trustees. At present, on the death or retirement of charity trustees, the property of the charity must be vested by separate instrument in the new trustees.
Under section 34 of the Charities Act, 1961, the board may authorise charity trustees to make certain dispositions of charity land—namely, to sell it, to exchange it, or to surrender a lease of it—and to invest the proceeds for the benefit of the charity. However, this section does not, in terms, allow the board to exercise their powers where the sale, et cetera, or investment might be in contravention of a statute or a charter establishing or regulating the particular charity. The board are anxious that provision should be made to allow a charitable trust, notwithstanding anything to the contrary in any statute or charter governing the particular trust, to sell, lease, mortgage, charge, exchange or surrender a lease of any of the trust property. At present four charitable trusts wish to avail themselves of such a provision, namely, King's Hospital, governed by charter and by section 113 of the Municipal Corporations (Ireland) Act, 1840, Waterford and Bishop Foy Endowed Schools, governed by statute, Wilson's Hospital, Multyfarnham, governed bv charter and the lveagh Trust, governed by statute.
The lveagh Trust is an endowment for homeless men and all the other trusts are educational trusts. It is proposed in section 4 of the Bill to give the board power to authorise trustees of these charities to sell, lease or otherwise dispose of their property, and to apply the proceeds for the benefit of the charities. There is a special proviso that in the case of educational trusts the proceeds may not be applied by the trustees for any purpose other than such as are, in the opinion of the board, for the furtherance of education.
Section 4 of the Bill also makes special provision for extending to both sexes the benefits of an educational trust; for the merger of two or more charities for a common charitable purpose and, in the case of a charity the trustees of which are required to be members of a particular religious denomination, for the appointment of trustees of another denomination.
Section 5 of the Bill will enable the board to re-transfer to the appropriate dioceses a number of Catholic churches which were vested in the Commissioners of Charitable Donations and Bequests under section 15 of the Charitable Donations and Bequests (Ireland) Act, 1844, which was repealed in full by the Charities Act, 1961. The board are anxious to transfer the churches concerned back to the appropriate dioceses, but they have no power to do so.
The board have brought to attention a problem in relation to disused national schools and teachers' residences held under leases, or at nominal rents, granted under the Leases for Schools (Ireland) Act, 1881. Under section 5 of the Act, certain covenants are implied as if expressly inserted in the lease. These include covenants to the effect that the premises shall not be used for any purposes other than those expressed in the lease and that, if the premises continuously cease for a period of three years to be used for those purposes, the lessor or his successors in title may re-enter. In a number of instances leases contain an additional covenant that the lease shall determine if the premises cease to be used for the purpose for which the land was granted.
There are now some 500 national schools and some 200 teachers' residences held under leases granted under the 1881 Act which are no longer required for the purposes for which the leases were granted. More than 100 applications have been made to the board with a view to the sale of the property in question. However, in a large number of cases it has proved impossible to ascertain the successors in title to the original grantors. In other cases, where the identity of the successors in title has been ascertained, it has not been possible to trace their whereabouts. In all such cases the board have ruled that they have no power to sanction the sale of the property until a waiver of the covenants has been executed by the person entitled to the freehold.
A similar problem has arisen in connection with a plot of ground at Ballinacurra, Limerick, which was leased to the Society of Friends— the Quakers—for use as a cemetery. The lease contained a covenant to the effect that, if the plot should cease to be so used or. be used for any other purpose, it should be held upon trust for the benefit of the heirs, executors and assigns of the lessor. The Society now wish to use part of the plot to build a meeting house, but they feel that this covenant in the lease prevents them from doing so. Extensive efforts have been made to trace the heir of the original grantor but without success.
Section 6 of the Bill will enable the board to vest the properties concerned in trustees upon charitable trusts, freed and discharged from the restrictive covenants. However, in the case of a lease made pursuant to the Leases for Schools (Ireland) Act, 1881, the land shall not be vested in trust for any purposes other than educational purposes. On the vesting of the property, land comprised in leases made pursuant to the 1881 Act may be sold with the consent of the board and the proceeds applied for such educational purposes as the board may specify. In the case of the plot of ground in Ballinacurra, Limerick, belonging to the Society of Friends, the Society will be free to build a meeting house on it if they so desire.
Section 7 of the Bill enlarges substantially the cy-près jurisdiction of the board under section 29 of the Charities Act, 1961. Application cy-près arises where the charitable objects for which property is given cannot be achieved because, for instance, the mode of achievement is unlawful or impractical. To take a simple example, if a person leaves money for the building of a church in a particular district and, if on his death such a church has already been built, the money will be applied cy-près for the repair and upkeep of that church. The expression cy-près comes from the French and although there is some doubt as to its exact original meaning it has now, by professional usage, come to mean ' as near' or `as possible'. The idea is to apply the charitable gift as closely as possible to the original intention of the donor or testator, where those intentions cannot otherwise be carried out. At present the board's powers to frame schemes applying property cy-près are limited to cases where the property comprised in the charitable gift does not exceed £5,000 in value. In cases of more than that amount the charity has to bear the cost of having a cy-près scheme framed by the High Court. Having regard to the continuing decline in the value of money and the increase in legal costs, it is proposed to increase the present limit from £5,000 to £25,000—a figure which has been agreed with the board. The figure was originally £300 under the Charitable Donations and Bequests Act (Ireland), 1871; it was increased to £2,000 in 1955 and was increased further to £5,000 in 1961. Section 7 of the Bill also extends the board's power under section 29 (4) of the 1961 Act to include a power to revoke a court scheme for the application of a charitable gift in part or to amend it.
As I have mentioned already, section 34 of the Charities Act, 1961, enables the board to authorise charity trustees to make certain dispositions of charity land. The board consider that this section is unduly restrictive and they are anxious that their powers under the section should be extended to cover dispositions of land by (1) surrendering a tenancy of it, (2) accepting a surrender of a lease or tenancy of it, or (3) mortgaging or charging it. At present the power to mortgage charity land under the 1961 Act—section 37 —is confined to purposes connected with improvements to the land, for example, erection of new buildings, repair of existing buildings, et cetera. The board are of the opinion that there should be a general power to mortgage charity land where that would be advantageous to the charity. The board's proposals in regard to the disposition of land and in regard to mortgages are reasonable and it is proposed to give effect to them in section 8 of the Bill.
Under section 34 of the Charities Act, 1961. the board may authorise dispositions of charity land only where they are satisfied that the dispositions would be advantageous to the charities concerned. In practice, the board act on the basis that this section requires that property be sold at full market value. The board consider that they should be given power to authorise the trustees of a charity to make a disposition of charity property at less than full market value if the property is to be used for a public charitable purpose. Section 8 of the Bill proposes to give the board the power sought by them.
Section 35 (1) of the Charities Act. 1961, provides that, in the case of land out of which a periodical payment is payable for the benefit of a charity or applicable to charitable purposes, the board may, on an application to them by the trustees of the charity concerned, authorise the sale of the periodical payment to the owner. It is proposed, in section 9 of the Bill, to give the owner of such land a corresponding right to apply to the board for authority to redeem the periodical payment.
Under section 37 of the Charities Act, 1961, the board have power to authorise the trustees of a charity comprising land to grant certain leases of the land and, where the board are the trustees of a charity comprising land, to grant such leases themselves. The section restricts the letting of land to lettings "on building, repairing, improving or other leases, or on leases for working any mine". The board have represented that this restriction is obsolete and they have asked that the provisions of the section should be extended to any letting of land belonging to a charity. Section 10 of the Bill provides accordingly.
The board have power under section 43 of the Charities Act, 1961, to appoint new trustees of a charity and to vest the property of the charity in the new trustees. However, this power is confined to charity property comprising land. It is proposed under section II of the Bill to extend the power of the board to allow for the vesting of any property. Section II of the Bill also revises the periods of notice which the board are required to give of (a) their intention to make an order appointing new trustees of a charity and (b) the actual making of such orders. The periods at present prescribed have been found to be unrealistic. Provision is also being made to allow the court discretion to extend the time for appeal against the making of an order of the board. This is normal practice.
Section 12 of the Bill provides that where the board order the bill of costs claimed by a solicitor on account of business transacted by him on behalf of a charity to be taxed and ascertained by a taxing master, the solicitor concerned will not be entitled to any costs other than those so taxed and ascertained. The board have represented that at present there is no means of ensuring that a solicitor will comply with the board's order and that he will receive no more than the taxed costs.
The last section of the Bill to which I would like to refer is section 13. This section reverses the present rule —contained in section 52 of the Charities Act, 1961—requiring personal representatives to publish advertisements of charitable devises and bequests contained in wills of deceased persons unless exemption is granted by the board under section 20 of the Act. In practice, the board, on receipt of evidence of payment, grant exemptions in all cases where the aggregate value of the devise or bequest does not exceed £2,500.
The board have recommended that there should be a general exemption from publication of advertisements except where the board require notice to be published. I might add that this has been the position in Northern Ireland since 1964. There is no requirement for publication in England, Wales or Scotland. Section 13 of the Bill provides that the board may require evidence to be produced, within certain time limits, by personal representatives to show that property comprised in a charitable devise or bequest has been transferred to the charity specified or that the trustees are aware of the devise or bequest. Alternatively, the board may require the personal representatives to publish advertisements of the charitable devise or bequest and to produce evidence of such publication.
I believe that the provisions of section 13 of the Bill will be welcomed by charities, particularly the smaller charities for whom the change will mean a substantial saving. The change will also result in a significant reduction in the work of the board's offices.
The Bill before you is of a specialised character and I trust that I have been successful in elucidating its various provisions. I also hope that the explanatory memorandum that has been circulated will be helpful to Deputies in examining the Bill.
I should like to mention that, if the Bill passes Second Stage, I intend to introduce on Committee Stage some amendments to the Bill now before you. These amendments, which are mostly of a drafting nature, arise out of comments and suggestions made by Senators during Committee Stage in the Seanad and subsequently by the Charity Commissioners. The only amendment that calls for special mention at this stage relates to the investment of charity funds. Under the existing law, unless there is a free power of investment, charity trustees must invest their funds in a limited range of Irish securities specified in section 32 of the Charities Act, 1961. This restriction has been found to be burdensome to charities in the inflationary times we have been living in of late, and it is proposed that they be allowed to invest in a wider range of securities, including non-Irish securities.
Prior to 1961 the High Court had a wide inherent jurisdiction over charities. However, section 32 of the Charities Act, 1961, took away from the High Court the inherent power in charity cases to vary investments, including the power to permit investment in non-Irish securities. The Government consider that section 32 of the 1961 Act should be amended to restore to the High Court the power that it had prior to 1961 to authorise changes in investments of charity funds. They also propose that the Charity Commissioners should be given powers similar to those of the court in the case of charity funds. A consequential amendment of section 33 of the 1961 Act will also be necessary. I need hardly say that the court and the board will exercise their discretion carefully in choosing the investments that will be authorised. A point worth noting with regard to this amendment is that our membership of the EEC may mean that we may soon have to lift restriclions of this kind on investments under the provisions of the Rome Treaty allowing for free movement of capital. Moreover, beneficiaries of full age may alter an ordinary trust in any way they like and irrespective of any restriction in the law as to the investment of trustee funds.
Before concluding, I should like to express to the Commissioners of Charitable Donations and Bequests my appreciation of the very valuable work they do. They are an unpaid body who devote a considerable amount of their time to what are very important functions in the life of the community. We are all very much in their debt.
I trust that the Bill will meet with the approval of the House.
