The purpose of this Bill is to amend the Charities Act, 1961, in certain respects, to allow for the incorporation of charity trustees and to make special provision in relation to certain charities that are governed by Acts of Parliament or by Charters. The Bill includes provisions enabling the Commissioners of Charitable Donations and Bequests—referred to in the Bill as the board—to retransfer to the appropriate dioceses a number of charities which were vested in the board under the Charitable Donations and Bequests (Ireland) Act, 1844; enlarging the cy-près jurisdiction of the board; enabling the owner of land out of which a periodical payment is payable to a charity or applicable to charitable purposes to redeem such periodical payment; extending the board's powers in relation to the disposition and the granting of leases of land belonging to a charity; enlarging the powers of the board to appoint new trustees of a charity and to vest the property of the charity in the new trustees; regulating a solicitor's entitlement to costs in respect of business transacted by him on behalf of a charity or the trustees thereof; and reversing the present rule which requires personal representatives to publish advertisements of charitable devises and bequests contained in the wills of deceased persons unless exemption is granted by the board. I wish to add that all these proposals are being made in agreement with the Charity Commissioners.
The Charities Act, 1961, consolidated and amended the statutory provisions, dating back over 100 years, that governed the powers and functions of the Commissioners of Charitable Donations and Bequests. It also made substantial amendments in the general law of charities. The Commissioners have brought to attention certain difficulties that have arisen in the administration of the 1961 Act and in the administration of charities themselves, and they made a number of recommendations for dealing with these difficulties. These recommendations were accepted by the Government. Before getting down to the provisions of the Bill, perhaps I should explain that the legal meaning of "charity" in law 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. Firstly, a gift in perpetuity for a charitable object does not fail, and secondly, property given or donated is not subject to income tax, legacy duty or succession duty.
The Commissioners of Charitable Donations and Bequests are a statutory body originally incorporated in 1844. Their main functions, which are derived from the Charities Act, 1961, are of an administrative character. They have power to advise charity trustees, power to institute legal proceedings and to certify cases to the Attorney General with a view to his instituting such proceedings, power to frame cy-près schemes, power to accept gifts for charitable purposes, and power to dispense with the publication of advertisements of charitable devices and bequests.
The Commissioners have a long and distinguished record of public service. They give their services free and they are unstinting in the time and effort they devote to their very important public functions and duties. The Commissioners are all men of ability who work quietly and unobtrusively, and I should like to avail myself of this opportunity to express appreciation of and gratitude for their valuable work for the community.
I now come to the actual provisions in the Bill. The Commissioners have drawn attention to the inconvenience and expense occasioned by the necessity of vesting property belonging to a charity in new trustees on the death or retirement of existing trustees; and they have represented that these difficulties would be mitigated if charity trustees could be incorporated. They have recommended that provision be made so that the trustees of a charity may, on application made to the board, be incorporated by means of a scheme vesting the trust property in the body corporate. The incorporation of charity trustees was provided for in England in the Charitable Trustees Incorporation Act, 1872, and, in the North, in the Charities Act (Northern Ireland), 1964. Sections 2 and 3 of the Bill propose to allow for incorporation in the State and for the vesting of charity property in the bodies corporate.
The board have power, under section 34 of the Charities Act, 1961, to authorise the trustees of any charity to sell, exchange or surrender a lease of charity land 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 an Act of Parliament or a Charter governing the particular charity. The board have recommended that provision should be made to allow a charitable trust, notwithstanding anything to the contrary in any Act of Parliament 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 are anxious to avail themselves of such a provision. These trusts are the 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 by Charter; and the Iveagh Trust, governed by statute. The Iveagh Trust is an endowment for homeless men and all the other trusts are educational trusts.
Section 4 of the Bill will enable the board to authorise the trustees of these charities to sell, lease or otherwise dispose of their property, and to apply the proceeds for the benefit of the charities. In the case of a charity for the furtherance of education, the proceeds may not be applied by the trustees for any purposes 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 the merger of two or more charities for a common charitable purpose and for the appointment of trustees in the case of a charity the trustees of which are required to be members of a particular religious denomination.
Under section 15 of the Charitable Donations and Bequests (Ireland) Act, 1844, which was repealed in full by the Charities Act, 1961, a number of Catholic churches were vested in the Commissioners of Charitable Donations and Bequests. The board now wish to transfer these churches back to the appropriate dioceses, but they have no power to do so. Section 5 of the Bill enables the board to make the transfers.
The board, under section 29 (2) and 29 (4) of the Charities Act, 1961, may frame schemes for the application cy-prés of the property comprised in a charitable gift where, inter alia, the charitable gift does not exceed £5,000 in value. If the value of the gift exceeds £5,000, the charity has to bear the cost of having a cy-prés scheme framed by the High Court. The Commissioners have represented that, having regard to the continuing decline in the value of money and the increase in High Court legal costs, the figure of £5,000 should be increased substantially. The figure was originally £300 under the Charitable Donations and Bequests Act (Ireland), 1871; it was increased to £2,000 under an amending Act of 1955; and it was further increased to £5,000 in the 1961 Act. Section 6 of the Bill proposes to increase the limit to £25,000 —the figure that has been agreed with the board.
Application cy-prés 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-prés for the repair and upkeep of that church. The expression cy-prés comes from the Norman French and, although its exact original meaning is doubtful, it has now, by professional usage, come to mean “as near” (as possible).
The occasions for applying property cy-prés were considerably extended and the cy-prés doctrine itself significantly liberalised by sections 47 and 48 of the Charities Act, 1961. The English Charity Commissioners have no pecuniary limit to the exercise of their cy-prés powers. In Northern Ireland the Newark Committee (1959) recommended that the pecuniary limits should be removed and that power be given to make schemes in all cases. This recommendation was not accepted and the pecuniary limit in the North was set at £5,000 in the Charities Act (Northern Ireland), 1964. I should mention that the exercise of the cyprés jurisdiction constitutes one of the most important functions of the Charity Commissioners.
At present the Commissioners may, under section 29 (4) of the Charities Act, 1961, revoke a scheme that has been framed by order of the High Court for the application of a charitable gift and frame a new scheme for the application cy-prés of that property. The board have no power to revoke part only of a scheme or to amend it. They have pointed out that instances arise in which it would be much less troublesome and far more convenient to revoke the court scheme partially or to amend it. Section 6 of the Bill extends the board's power under section 29 (4) to include power to revoke a court scheme in part or to amend it.
Section 34 of the Charities Act, 1961, enables the board to authorise the trustees of any charity comprising land to make a disposition of the land. The section also enables the board to make a disposition of land where they themselves are the trustees of a charity comprising land. Under the section a disposition of land is defined as, and is confined to, selling it, exchanging it for other land, or surrendering a lease of it. In the opinion of the board, their powers under the 1961 Act 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. The power to mortgage charity land is, under section 37 of the Charities Act, 1961, at present confined to purposes connected with improvements to the land, for example, erection of new buildings, repair of existing buildings and so on. The board consider that there should be a general power to mortgage charity land where that would be advantageous to the charity. However, they have represented that the present requirements prescribed in section 37 (4) of the 1961 Act in regard to the payment of the principal money by annual instalments and the redemption and reconveyance of the mortgaged land within a period of not more than 30 years are unduly restrictive inasmuch as the board may not vary the conditions in any particular case. They have recommended that the law be amended so that mortgages may be in such form as they shall approve. The board's proposals in regard to the disposition of land and in regard to mortgages are reasonable and provision is made in section 7 of the Bill for the implementation of the proposals.
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. They are anxious that they should be given power to authorise the trustees of a charity to make a disposition of charity property at less than market value if the property sold is to be used for a public charitable purpose. This is reasonable, and an appropriate provision is contained in section 7 of the Bill to allow one charity to benefit another by disposing of some of its property for a small consideration.
Section 35 (1) of the Charities Act, 1961, gives the board power, on an application to them by the trustees of a charity, to authorise the sale to the owner of land of a periodical payment payable out of the land for the benefit of a charity or applicable to charitable purposes. These periodical payments are somewhat analogous to ground rents, the owner of the land being in much the same position as a lessee or tenant. The Landlord and Tenant (Ground Rents) Act, 1967, confers the right on lessees and tenants to buy out ground rents and acquire the full fee simple of their property. Furthermore, the board have power under section 36 (1) of the Charities Act, 1961, to authorise the purchase by a charity of a periodical payment payable by the charity out of land owned by the charity. Section 8 of the Bill empowers the board, on an application to them by the owner of land out of which a periodical payment is payable to a charity or applicable to charitable purposes, to authorise such owner to redeem the periodical payment. The section also enables the board to act in cases where there are no trustees of the charity or the trustees are unknown.
Under section 37 of the Charities Act, 1961, the board may 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, the board may themselves grant such leases. 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 that, in any event, as far as the board is aware, no leases of the nature mentioned have ever been granted. They have asked that the provisions of the section should be extended to any letting of land belonging to a charity. The Government are satisfied that the board's request should be granted and section 9 of the Bill provides accordingly. The new power of the board will, of course, be subject to the existing condition in section 37 of the 1961 Act that the board are satisfied that the letting will be beneficial to the charity.
Section 43 of the Charities Act, 1961, gives the board power to appoint new trustees of a charity and to vest the property of the charity in the new trustees. However, the board's power is confined to charity property comprising land. There is no reason why this should be so and, it is proposed under section 10 of the Bill to extend the power of the boards to allow for the vesting of any property.
Section 43 (4) of the 1961 Act obliges the board (a) to give not less than one month's public notice of their intention to make an order appointing new trustees of a charity and (b) to give public notice of the making of such order on the day immediately following the date of the making. The purpose of the notices is to enable interested persons to lodge objections with the board to the making of an order or, in the case of an order made, to appeal to the High Court against the making of the order. The board have made over 190 orders and in only two cases have they received objections. No appeal has been taken against the making of any order. The board consider that a period of one month's notice of intention to make an order is too long and involves unnecessary delay in making the order. Moreover, it is extremely difficult in practice to comply with the requirement to give notice of the making of an order on the day immediately following the date on which it is made. Paragraph (b) of section 10 of the Bill reduces the period of one month to 14 days and paragraph (c) of the section gives the board ten days in which to publish notice of the making of an order.
Under section 43 (5) of the 1961 Act, any person having an interest may, within 21 days of the date of the making of an order appointing new trustees, appeal to the High Court against the making of the order. It is not proposed to alter the period of 21 days but it is proposed to allow it to run from the date of the notice of the making of the order. It is normal practice to allow the court discretion to extend the time for appeal and provision is being made accordingly in paragraph (d) of section 10 of the Bill.
The board have power under section 44 of the Charities Act, 1961, to 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 board have represented that the section is not fully effective because there is no means of ensuring that a solicitor will comply with the board's order and he will receive no more than the taxed costs. The board have suggested that the section should be amended to provide that, where the board orders a bill of costs 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. Section 11 of the Bill provides accordingly.
Section 52 of the Charities Act, 1961, imposes on personal representatives the duty to publish advertisements of charitable devises and bequests contained in wills of deceased persons, unless exemption is granted by the board under the powers conferred on them by section 20 of the Act. The board have discretion under section 20 to exempt any person from the obligation imposed on him under section 52 either wholly or to such extent and on such terms as they think fit. The board, in arriving at their decision, must have regard to the amount of the charitable devise or bequest or other special circumstances. In practice, on receipt of evidence of payment, exemption is granted in all cases where the aggregate value of the devise or bequest does not exceed £2,500.
The board feel that the rule which requires notice of devises and bequests to be published, unless the board grants exemption, should be reversed to give a general exemption from publication of notices except where the board require notice to be published. In Northern Ireland, this has been the position since 1964 under section 4 of the Charities Act (Northern Ireland), 1964, which implemented the recommendation in the Charity Committee Report (1959) that the rule be reversed. There is no requirement for publication in England, Wales, or Scotland. If the rule in the 1961 Act were reversed, there would be a considerable saving to charities as well as a significant reduction in the work in the board's office. At present, the staff have to deal with about 1,200 applications for exemption annually. A reminder of the duty to publish the notice has to be issued from the office to solicitors or personal representatives where notice is not published and exemption has not been applied for. In all the circumstances, it seems clear that the statutory rule relating to publication of notice of devises and bequests contained in wills should, as the board recommended, be reversed. Section 12 of the Bill provides accordingly. The board will, under the section, be able, as an alternative to publication, to require the personal representatives to produce evidence to show that the property comprised in a charitable devise or bequest has been transferred to the charity specified in the will or that the trustees of the charity are aware of the devise or bequest.
This Bill makes valuable changes in our system of administration of charities. The law of charities is of a rather specialised character and, for that reason, a Charities Bill requires more detailed elucidation than would otherwise be necessary. I trust that the explanatory memorandum that has been circulated will be of some assistance to Senators in making their way through the various provisions in the Bill.
Before I conclude, I should like to mention that the board have drawn to attention a problem in relation to disused national schools and teachers' residences held under leases granted under the Leases for Schools (Ireland) Act, 1881. There are some 500 such schools and some 200 teachers' residences that the board are anxious to have sold. In a large number of cases it has proved impossible to ascertain the successors in title to the original grantors or to trace the whereabouts of the successors. The legal difficulties involved have necessitated detailed investigation and it is only now that an amendment of the law has been finalised in consultation with the commissioners. It is hoped to introduce this amendment on the Committee Stage in agreement with the Minister for Education. There may also be some other amendments as a result of suggestions that have been made by the commissioners on further examination of the text of the Bill.
