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Seanad Éireann debate -
Wednesday, 24 Jan 1973

Vol. 74 No. 4

Charities Bill, 1971: Committee and Final Stages.

SECTION 1.
Question proposed: "That section 1 stand part of the Bill."

On section 1, I have a very short observation to make. The object of this Bill is to amend the law relating to charities by extending the powers of the Commissioners and amending the Charities Act, 1961. It is appropriate on this section to make an observation with regard to a restriction which was imposed on charities by the provisions of section 32 of the Charities Act, 1961 relative to the investment of charity funds and it is appropriate to suggest, apart from making reference to that section, that the powers of the Commissioners should be extended so that their investment powers may be greater than they are at present. It would, therefore be appropriate for this Bill to amend that section of the Charities Act, 1961. I have no more to say on the matter at this point.

I think the matters which Senator FitzGerald raises in relation to section 32 of the 1961 Act are primarily matters for the Minister for Finance. It is a question of financial policy. As the Senator has not gone into them in detail on this occasion, it is not necessary for me to discuss them in depth.

I understand very well the Minister's position in regard to the matter and I agree with him on the point. It may be appropriate to propose something at a later stage.

The Senator has on the Order Paper of the House a Bill called the Trustee (Authorised Investments) Bill, 1970, which would be the appropriate forum for a discussion on this particular problem.

Question put and agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."

What this legislation is endeavouring to achieve with regard to the incorporation of charity trustees I would welcome as a desirable and modernising provision but I wonder whether the section has gone far enough in providing for the sort of matters which arise with regard to the establishment of incorporated bodies. Quite diffidently, I mention them in general at this stage in the desire to be helpful and with a view to having the Minister consider them between now and the next Stage. This is, after all, designed to have a new parent for a new type of corporate bodies. These corporate bodies will not be subject to the provisions of the Companies Act, the Industrial and Provident Societies code, or the Friendly Societies code, all of which have their own particular manner of regulating these bodies. The regulations will, presumably, be made by the board elaborating each particular scheme.

There are a number of features which are common to the three codes which I have mentioned. One is the provision with regard to the establishment of bodies under these codes. The certificate of the registrar in each case is conclusive as to the establishment of the body. I do not find anything here equivalent to that. There have been experiences under the three codes whereby reliance on that section was found extremely helpful in the matter of the proof of the valid existence of the body corporate itself. I should like if the Minister would consider whether there should not be some manner of issuing a certificate in common form as to the establishment of the particular body corporate which is the charitable trust here to be incorporated. It would cut out the right of anybody to inquire, for example, whether the section had been properly complied with by the charity commissioners in establishing the trust. The validity of the corporation could not in any way be attacked if there was a provision that the certificates of the charity commissioners was to be final and conclusive on this point.

Nobody would have the power to look behind, to question whether there had been an application by trustees, whether they were, in fact, trustees at the time of their application or whether the board had acted in accordance with the requirements of this section. The question of ultra vires does not arise here. These will be statutory bodies. If the persons go beyond their powers they can be brought to book. Their contracts will be obligations on them and enforceable against them. I mention the point for consideration because, as the Minister is aware, the old ultra vires rule has been modified under the Companies Act in so far as companies are affected and it is to be further modified by virtue of the EEC regulation with regard to companies.

It is a very general provision with regard to the contracts of bodies incorporated under other statutes in that their documents can be authenticated without having anything very solemn required to be done to prove that the document in question was the document of the company or society by the certification of the document by the officers of the body corporate in question. This might be considered.

I mention also the question of the service of these bodies corporate. If proceedings are to be brought against an incorporated charitable body how do you serve them? What provision is there for their having an address? If you are having dealings with them how do you find out what that address is? How can you satisfy a court that you have effectively and satisfactorily enforced them?

Another situation arises. That is the question of someone wanting to do a deal before its incorporation. Is advantage to be taken analogous to the new provision in the Companies Act with regard to pre-incorporation contracts? Is that thought to be in any way relevant? I do not think it is. It is worth reminding the House that charitable bodies do engage in trade sometimes. As trading entities they may want to do some commercial exercise before they become incorporated. Perhaps they know a sum of money is to become available. Perhaps the framing of the scheme will take time. Perhaps the capture of the land before the scheme is framed is desirable. It would be desirable to make a provision that somebody could bind that body before it is subsequently incorporated by the charity commissioners' seal. I do not know whether we have provision for charitable companies under the Companies Act. What is the thinking with regard to these? Will these charitable companies continue side by side with the charitable bodies corporate established under this Bill? In the one case they are subject to the requirements of the Companies Act. In the other case they are not.

There are all sorts of EEC requirements with regard to publication of stuff about yourself, on papers, invoices, notes, et cetera. Will these requirements apply? If so, should we not anticipate their requirement if we are enacting a piece of legislation now? We know what they are. I do not know, although I should, if they extend to bodies corporate like these. These are just some general observations on the question of the body corporate to be established by virtue of the scheme under this section.

I should like to ask the Minister a few questions in connection with this matter. Senator Alexis FitzGerald has covered very largely the kind of query I had intended putting to the Minister. I am not sure if the Minister is in a position to answer this query. I should like to hear from the Minister, even if only in broad outline, the type of scheme which is envisaged under section 2 in terms of the structure as regards management, et cetera. I could understand this very easily if it were provided in section 2 that a body corporate established in accordance with this section would be registered in the companies office and would act in accordance with memorandum and articles of association settled by the Commissioners. Most of us would then know what kind of structure was in question. We would know that those appointed to operate and manage the scheme would have to conform with the requirements of the memorandum and articles of association.

As Senator Alexis FitzGerald has pointed out, this does not seem to come anywhere within that category. That being so, I should like the Minister to let us know, if he is in a position to say so, how will the ordinary member of the public know what are the functions on the one hand and the limitations of the functions on the other of the various people who may be appointed to the body corporate. Is there for example, to be a secretary? Is the secretary the person on whom legal proceedings are to be served if it is necessary to take legal proceedings? Is there to be some method by which either an appointed person or an appointed office will be fixed at which proceedings might be served?

The Minister may not find it convenient to answer these questions in detail. I do not wish detailed information but a broad picture in outline of the kind of structure that is envisaged in these bodies. Like Senator FitzGerald I would not in any way be disposed to oppose the general concept which is expressed in this Bill and in particular in section 2 and 3.

It might be helpful to put this in perspective if I were to give the general background to the necessity for the section. The Commissioners have drawn my attention to the inconvenience and expense caused by the necessity of vesting property belonging to a charity in new trustees on the death or retirement of existing trustees. They represented to me that these difficulties would be mitigated if charity trustees could be incorporated. They recommended that provision be made so that the trustees of a charity may on application being made to the Commissioners, be incorporated by means of a scheme vesting the trust property in the body corporate.

At present, on the death or retirement of charity trustees the property of the charity must be vested by a separate instrument in the new trustees.

Senator FitzGerald may have extended a bit far the concept of what is proposed in the incorporation of trustees when he talked about them being a new from of company. In a very restricted sense they are a new form of company inasmuch as they will be an incorporated body. They are not in any sense a new company analogous to a company under the Companies Act, 1963. A company is established by a group of people coming together for the purpose of forming a company.

What is in question here is an existing charity with existing trustees who wish to incorporate themselves for the purpose of avoiding all these difficulties about succession on the deaths and retirement of the various trustees. I do not envisage in the foreseeable future a great many new incorporated bodies of trustees growing up de novo. I would envisage this section when it is enacted being used by existing trustees or groups of trustees for the purpose of avoiding the difficulties and expense they encounter.

There would be no analogy between what is proposed in section 2 and what Senator FitzGerald refers to as "charitable companies in the existing sense." I take it he means companies which are incorporated as limited liability companies without the use of the word "limited" by licence of the Minister for Industry and Commerce. The two concepts are quite different.

So far as control over these incorporated trustees is concerned, the control which will be exercised in relation to them will be exercised by the Commissioners. It will be a much more stringent control than would be the control exercised over the ordinary company, whether trading or non-trading by, for example, the registrar of companies. The scheme will have to be framed by the Commissioners and they will be very careful to ensure that the scheme is complied with by the incorporated trustees. The obligation on the Commissioners to ensure this would be as great in relation to incorporated trustees as it would in relation to ordinary trustees existing at present.

The original scheme will be deposited in the Commissioners' office and will be open to inspection. The Commissioners' secretary will perform in relation to these incorporated trustees much the same functions as the registrar of companies would in relation to an ordinary limited liability company.

So far as evidence of incorporation is concerned, this would be obtained from the Commissioners' office and would have to be available there as the actual incorporation would be carried out by the Commissioners framing under their seal a scheme establishing the trustees as a body corporate. Proof of the incorporation of charity trustees under the section in a court would consist of the production of a certified copy of the Commissioners' original scheme under their seal. It would be possible, if it was not already known to a potential litigant, to find the registered office of the corporate body from the secretary to the Commissioners at the Commissioners' office.

I am advised that while this and the following section are silent in relation to particular aspects of the administration of these incorporated bodies the scheme will set out a good deal of the regulations in a way somewhat analogous to a memorandum and part of it will deal with the activities of the trustees. The ordinary law relating to companies would relate in default of a specific provision being made elsewhere.

The type of incorporation proposed in sections 2 and 3 is similar to the provision for incorporation of trustees in the Charities Act, 1964, in Northern Ireland. We do not apologise for having copied this Act as their 1964 Act is copied fairly heavily from our 1961 Act. This has been one of the more fruitful sources of co-operation between the North and ourselves in the past.

In case Senators might regard this as a novel idea to incorporate charity trustees, there has been provision for such incorporation in England under the Charitable Trustees Incorporation Act, 1872. That did not apply to this country but it is clearly to the benefit of charities that it should apply now because charities are unnecessarily put to the expense of appointing new trustees on the death or retirement of existing ones. This is obviously an expense which should be avoided where possible in the public interest.

The Minister was referring to the fact that the Commissioners would obviously be more particular as regards the administration of the trust when drafting the scheme than if there was no scheme there. Notwithstanding subsection (2) of section 2 which sets out the various provisions which a scheme may contain, am I not right in thinking that because of subsection (3) that it is not going to be within the competence of the Commissioners in settling the scheme to do anything which could in any way restrict the corporate trustee in anything in connection with the administration of the scheme because subsection (3) as drafted is, to my mind, an extraordinarily wide subsection? Subsection (3) is giving powers direct to the corporate trustee once established. It is not giving powers to the Commissioners but directly to the body corporate which is the corporate trustee of which we are talking. It provides that:

A body corporate established by a scheme under this section shall have a common seal ....

Obviously, there is no objection to that. It goes on to say:

and power to do any act or thing (including holding land) necessary for the administration of the trusts...

By virtue of this subsection the Commissioners may find themselves a bit hamstrung in endeavouring to have a scheme carried out in a way in which they think it should be carried out because once the body corporate is established they will, by virtue of this measure, have all powers which are necessary for the administration of the scheme.

The Senator should bear in mind that all that is intended is the incorporation of existing charity trustees and that at the moment the Commissioners have a wide power of control over existing unincorporated trustees. No greater powers will be given to trustees on their incorporation and the control of the Commissioners will not be lessened by the incorporation of the charity trustees.

At the moment if the Commissioners could stop unincorporated trustees doing X or Y, after the passage of this Bill the Commissioners will be able equally to stop incorporated trustees doing X or Y if they see fit. The Commissioners have overall control of all charities and they have power to inquire into a scheme and if they feel that while a certain thing was done intra vires but that it was inappropriate or not in the best interest of the charity they have power to take steps to rectify it.

My main point in reply to Senator O'Higgins is that the control of the Commissioners will not be lessened by the incorporation of the trustees.

I do not want to hold up the House on this except to say that I should like the Minister to consider a debate on this section. While I am in favour of what is proposed to be done here, we should not be content with the fact that it is being done in a particular way in Northern Ireland or Britain or anywhere else if we can better it here. I could see difficulties arising from some of the matters which I mentioned before and I do not see any point in repeating myself because they are on the record of the House.

When the Minister was replying he spoke about the secretary being the registrar and deeds being available for inspection but there is no provision for the appointment of a registrar nor is there any provision for these being available for inspection. In particular cases there may be objections to that. The Minister tells me, in which matter he would seem to be entirely correct as a matter of law, that if the act of a scheme were silent in particular matters then the general law with regard to companies will fill the gap. We should try to find out the effect of the general law of companies filling the gap, if there are gaps, and whether we should fill the gaps ourselves to exclude the general application in a particular direction for this particular type of body corporate of that general law in particular cases. I should like to give more consideration to this section.

The Senator will appreciate that, if trustees or the Commissioners wish to exclude the general law in relation to any specific item, they are perfectly empowered to do so by including a provision in their scheme that would keep that out, in the same way as you can exclude some parts of the Companies Act operating by so providing in your Memorandum and Articles, not all——

In the Articles you can.

——yes—some provisions in the Act which would operate in default of any provision to the contrary in the Article.

Question put and agreed to.
Business suspended at 6 p.m. and resumed at 7.30 p.m.
SECTION 3.

There are some amendments on section 3, and as No. 1 and No. 2 are related, by agreement of the House they may be taken together.

Government amendment No. 1:
In subsection (3) (a), page 3, lines 26 and 27, to delete "in the books of any bank or was" and substitute "or".

These are drafting amendments the purpose of which is to achieve consistency between the terms of section 3 (3) (a) and section 10 (f). Both these provisions have similar objects, namely, the transfer of charity property standing or registered in the books of any bank, corporation or company or entered in any statutory register into the name of the body corporate in the case of section 3 (3) (a), and into the names of the new trustees in the other case, section 10 (f).

These amendments are acceptable to me.

Amendment agreed to.
Government amendment No. 2:
In subsection (3) (a), page 3, line 28, to delete "on" and substitute "in".
Amendment agreed to.

Amendments Nos. 3, 4 and 5 are cognate; therefore, with the permission of the House, the three may be taken together.

Government amendment No. 3:
In subsection (3) (b), page 3, line 36, to delete "are" in both places where it occurs and substitute "were".

These are merely drafting amendments and it is considered that the use of the past tense is more appropriate than the use of the present tense in these instances.

Amendment agreed to.
Government amendment No. 4:
In subsection (3) (b), page 3, line 37, to delete "are" and substitute "were".
Amendment agreed to.
Government amendment No. 5:
In subsection (3) (d), page 3, line 51, to delete "is" and substitute "was".
Amendment agreed to.
Question proposed: "That section 3, as amended, stand part of the Bill."

I have not got very much to say about this section, but I have a couple of points which should be considered and dealt with by the Minister. The first and most important point arises on subsection (3), paragraph (d) which provides that:

in every action, prosecution or other legal proceeding in respect of the property of such charity or arising on or in connection with the administration of the trusts aforesaid which is pending immediately before the operative date and to which the trustees aforesaid are a party, the body corporate established by the scheme shall be substituted as a party in place of such trustees and the proceedings shall continue accordingly.

What if the proceedings are against the trustees for damages, breach of trust or are of a criminal nature for their embezzlement of the funds? If a scheme is framed the Charity Commissioners are not, although a most excellent body of men, all-knowing, and around about the time of the establishment of the scheme a proceedings started against the trustees for damages or some other legal proceeding is taken against them. This would seem to be mandatory to substitute the body corporate for the trustees as defendants in these proceedings. I cannot think that this is intended and I do not think it is going to be an answer to say to me that, of course, if there is any kind of situation like that existing there never will be a scheme framed. We have to think of the situation where the proceeding is started unknown to the Charity Commissioners at a point of time, in fact, immediately preceding the framing of the scheme and the incorporation of the body corporate, and where the charity trustees who are in breach of trust, responsible and liable, being brought to book by the proceedings, are getting discharged by this statute and in substitute for them the body corporate is being established.

The second point is really ancillary to that and arises on the same subsection (b), that is, where the debts and liabilities are by this statute transferred from the trustees to the body corporate. I would have thought that I might have seen in this some release of liability of the trustees if the liabilities are being transferred. This provides— at least as I read it, and I would be glad of any other view on it—for the release of the trustees, such as they would be entitled to get if they are parting with property which is their protection against that liability which is being transferred by virtue of the scheme established under the statute. My first point is the more important one.

As I understand it, under section 3 (d), if an action was in progress against the trustees the action would be continued against the incorporated trustees. If an action was being taken against an individual trustee or trustees in his or their personal capacity, presumably that action would continue against the individual trustee or trustees. If there was a prosecution in train—which is probably remote enough so far as charity trustees in this country are concerned—against a trustee, presumably that prosecution would continue against the trustee. If there was a prosecution against the trustees as a body, the corporate body of trustees would be substituted as defendant. The reality of the matter is that if there were any such disputed or litigious points pending in regard to any particular set of trustees, the House could be quite sure that the Commissioners would not frame a scheme under section 2 in relation to them until that problem was cleared up.

I really got the answer that I told the Minister would not satisfy me. It is not satisfactory to be told that there would not be a scheme framed if, in fact, there were any proceedings pending because if there is a prosecution for a crime— I have been in situations where I have clutched at straws and have done things with an awareness of my rights—or if there is a claim for damages, out go the people responsible and in come the body corporate, if they can take advantage of this section. There is no provision that I can see whereby the Charity Commissioners can preserve the rights of the objects of the charity against people who have, by virtue of the adoption of the scheme, been retired from the trust. If the Minister can tell me that there is some preservation of right against them and show me where it is, that is the end of that point.

The Senator will appreciate that if, for example, there is a prosecution—we all agree that it is a very remote contingency——

The possibility is assumed in the subsection.

It is. If there was a prosecution, the trustees as a body would not be prosecuted because it would be inappropriate to bring such a prosecution anyway, even if there was no question of incorporation. Each individual trustee would be separately prosecuted for whatever offence was alleged against him and, therefore, the incorporation of the trustees as a body would not affect any such prosecution. It would not be sufficient in criminal law to try to prosecute trustees C and D because trustees A and B had done something which they should not have done. You would have to prove our old friend, mens rea, against A, B, C and D and, therefore, the incorporation of the trustees would not have any bearing on the actual prosecution.

I think it could arise. Suppose it was a prosecution for conspiracy against the trustees. That might be slightly different from the position the Minister is envisaging. I want to clarify two other small points in connection with this section. The first relates to the beginning of subsection (1) which provides, in effect, that on the making of a scheme any property shall automatically be vested in the body corporate without the necessity of any further transfer or deed of assurance. What is intended by the provision in section 2 (2) (b) "requiring or entitling any person to produce, execute or hand over any document or to do any other act or thing necessary to secure the vesting of the property belonging to the charity in accordance with the scheme" is quite unnecessary having regard to the terms of section 3 (1) because under section 3 there is an automatic vesting—it is not necessary for anyone to do anything—going to take place.

My second point goes back to a point that Senator Alexis FitzGerald made earlier. There should be some type of certificate of title or other document issued by the Commissioners as evidence which could be put with the title documents in order to show that the body corporate is now the legal owner under this Act. Suppose, in the course of exercising the administration of the trust, freehold or leasehold property of the trust was being sold, the solicitor investigating title for the purchaser will require to be able to put his finger on something definite which will show that the vesting, under subsection (3), has taken place. I believe that there is no question of stamp duty arising here because there will not be any deed or any house, so that there will not be anything to attract stamp duty. Even if there was a question of stamp duty presumably it would be purely nominal as from one trustee to another.

The last point I would like the Minister to clarify is in connection with subsection (2) which deals with registered lands. Briefly, the provision here is in respect of registered land, and the Land Registry, when a scheme is being made, will register the body corporate in the appropriate register contained under the Act as owner of the land within the meaning of the Act. I should like to clarify that what is intended here is that in whatever ownership the registered land was vested, say, the outgoing trustees, that ownership, and no more or no less, will be the ownership for which the body corporate is registered. For example, there would not be any question that, where there is limited ownership automatically becoming absolute ownership by virtue of this, anything in the nature of burdens, equities or anything of that kind affecting the previous ownership would still continue to affect the ownership under this.

That would be correct as, I am advised, ownership within the meaning of that Act, which are the words used in subsection (2) of section 3, would be the type of ownership vested before the framing of the scheme incorporating the trustees. In other words, if the charity trustees before their incorporation were registered as limited owners or, alternatively, they were registered as the absolute owners, the incorporated trustees would be correspondingly registered. For example, if the original trustees before incorporation were subject to equities, then clearly their incorporated trustees could not acquire an absolute title.

As far as stamp duty is concerned, I do not think it would arise because there would not be a deed, but even if the certified copy of the sealed scheme was asked to be stamped the maximum could be 50p, which is the stamp duty on the appointment of new trustees; Land Registry fees would be payable, and I think that was the point of the reference to the payment of the appropriate fee in subsection (2) in so far as evidence is concerned of the establishment of the incorporated trustees or of their incorporation. The evidence which the subsection envisages to be produced to the Registrar of Titles is a copy of the scheme, under the seal of the board. Once the registration is completed by the Registrar of Titles, the necessity for the document would no longer arise because the register would be conclusive as far as the ownership as registered on it is concerned. Assuming it was unregistered land, the appropriate document to be produced would be that referred to here, that is, a copy of the scheme under the seal of the board.

So far as section 2 (2) (b) is concerned "the other act" referred to there would envisage, for example, the payment of Land Registry fees and the making of a formal application to the Registrar of Titles on what used to be called Form 15, but is probably under another number now, asking him to register under the documents provided. I think I have covered all the points that were raised.

Except the point about prosecution for conspiracy.

If there is a prosecution for conspiracy that prosecution is against each of the persons indicted separately. It is not a question of indicting two or more jointly: each of them is indicted separately; each is separately a defendant. For example, it does not necessarily follow that if one such defendant were convicted of conspiracy that all the others must be convicted. It would be possible to have one alone convicted. Therefore, my view would be that any pre-existing prosecution, whether it was for conspiracy or otherwise, would survive against the defendant after the making of an incorporation scheme under section 2.

I am sure the Minister would agree that if there is some doubt about the prosecution and about the survival of the rights against trustees who are in breach, should there not be an expressed saver.

Secondly—and I am sure the Minister would consider what we have said on this—I would have liked to see a provision which I do not find here. In the normal way, when a person withdraws from a trust he secures a release from the people coming in, so that he is clear of all liability. Here the trustees' property is taken from them, but I do not find anything which releases the previous trustees from liability, even if a new target is open to the creditors of the trust, being the new body corporate.

The third point—which is genuinely and frankly an ignorant question— arises on subsection (2). I was brought up on the general theory that you spent your life in regard to title trying to keep trusts off the title. If you had trusts of any kind, you did everything you could to make sure that possible purchasers would not get notice of the existence of trusts, and therefore they would not be involved in asking questions about whether you did all you should have done under the trust.

If I looked at a register in the Land Register and I saw three people who are trustees, I imagine I should not get any notice from the three names appearing on the registration that there was a trust, charitable or otherwise, affecting these lands. Is it possible that by virtue of the operation of subsection (2) any purchaser now will get notice that there is a charitable trust by virtue of the fact that this sealed copy has been noticed by the registrar and that a new charitable body corporate is the owner of the property, that a purchaser must ask all sorts of questions about the establishment of the body corporate and the power of the body corporate to do this, that and the other thing? I had a fourth point but unfortunately it has escaped me.

Is there a probability that there would be an inhibition registered either now or under this Act in relation to a trust? I am not an expert on land registry but I think the ordinary procedure where the registry would be aware of a trust would be that an inhibition would be registered on the folio prohibiting acts without notice to the beneficial owner.

Normally these sort of trusts are such that a purchaser knows perfectly well he is buying from trustees. However, as I understand the Registration of Title Act, he is not obliged to inquire into whether or not the trustees have dealt properly with the trust as long as he is satisfied that in selling to him they are not ultra vires their own power. I think that that suffices.

I accept Senator FitzGerald's point that he is put on more specific notice now that it is a trust, but I do not think he is under any obligation to make inquiries if he is a bona fide purchaser for value without actual— the opposite to constructive—notice. As far as I know, that is sufficient, and he will not be taken to have constructive notice of whatever difficulties exist in relation to the trust. The normal sort of trust that one meets with fairly frequently is a sort of diocesan trust where the three trustees would be, say, the bishop and two parish priests of the diocese. When you buy from the bishop and two parish priests you know that it is a trust of some kind, but you are not obliged to go behind the register. I do not think your position would be improved by this: you are put on more express notice that it is a trust, but your obligation to inquire into the workings of it, as far as I understand it, is not increased.

I think the Minister will be aware of the train of thought which we are pursuing in this matter, with a view to removing any possible impediments to dispositions of property within these charities which might unwittingly be created by the desirable scheme proposed to us.

A final point. There is provision for a copy under seal of the board binding on the Land Registry. Does this not strongly suggest that there is need for an expressed provision in at least one case? If there is need for an expressed provision as to how he is to be convinced of the existence and validity of the appropriateness of this scheme, there may be others in a like position —purchasers, courts and so on. Referring to what I said on the section, this question of conclusiveness of a sealed scheme is a matter which could profitably be introduced for the protection of trustees in their suits and dealings with property. Any thing which will stop people going beyond that point will be found worthwhile for the administration of the trust. That is all I have to say on the matter.

Senator FitzGerald has expressed very well the point I was trying to make to the Minister on this question. In subsection (2) of section 3 we are dealing with satisfying a Government official. It is provided that, in order to satisfy a State official, a particular procedure is laid down that the scheme under the seal must be produced. It is equally important for the convenience of the administration of the trust that some simple method such as that should be furnished as conclusive evidence when dealing with people who will not be mere civil servants but may have had a hand in drafting the legislation and should know all there is to know. When we are dealing with a solicitor for a purchaser to whom trust property is being sold in accordance with the administration of the trust, in that situation also some simple method of giving conclusive evidence should be written into the Act.

I might be able to assist the Senators to some extent in regard to this particular problem by referring them to subsection (9) of section 43 of the 1961 Act, where there——

Níl sé agam.

——is precisely a similar provision; where potentially, at least, all the difficulties which the Senators have referred to could have arisen but have not done so. It is a very frequent occurrence that, where trustees are registered in these circumstances on a Land Registry folio, there is an inhibition precluding dealings without notice to the Commissioners.

I agree with the Minister but he is limiting his remarks to registered land. The trust property need not necessarily consist of registered land. I dealt recently, for example, with a purchase from the Representative Church Body of property in Galway. There I was furnished with a certified copy of the vesting order which had been made. I was quite happy to accept that form. Take, for example, a purchase of property from the Adelaide Hospital or some other chartered body, any solicitor investigating the title for the purchaser will require a certified copy of the charter. That will show—in one case it may actually show the title to the property—requirements as regards sealing and so on.

It would not do any harm to the Bill if the Minister looked at this matter again. It is entirely in ease of the scheme which might be drafted under the powers given by this Bill. It is in ease of the Commissioners and the trustees that something of this kind should be done.

Of course the subsection to which the Minister refers only provides for the appointment of a new trustee. It does not affect the transfer of the property in the same sense in which this section does. It is a different situation. Perhaps the same point deserves to be made on that subsection.

Under subsection (8) of section 43 of the 1961 Act the appointment of a body corporate as sole trustee is envisaged and to that extent it is a similar sort of situation as the one we are discussing at the moment. I am told that the number of cases dealt with under subsection (9) of section 43 of the 1961 Act during the past 11 years exceeds 300 and no problem has arisen. Furthermore, I should like to make it clear to Senator O'Higgins that a copy of the scheme under these two sections will be available to any member of the public, apart from a solicitor for the purchaser who would be wise to read it anyway, from the Commissioners' office.

Agreed. All I want the Minister to do is to provide that that will be conclusive evidence.

Conclusive evidence of the vesting?

Yes, the existence of the vesting.

The scheme as such possibly would not be conclusive evidence of the vesting. The making of the scheme under the seal of the board would be conclusive evidence of that. I have no objection to a provision on those lines if it makes it any clearer. However, it is clear from the words of subsection (1) of section 2 where it says that the board may frame under their seal a scheme establishing the trustees as the body corporate.

In subsection (2) of section 3 it is required as proof in the Land Registry. There will be, in relation to Land Registry property, production of a copy under the seal of the board of the scheme. I suggest that production of a copy of the scheme under the seal of the board should be conclusive evidence for everyone.

I agree it would be and I would anticipate that the normal requirement of a purchaser would be that such a copy of the scheme would be produced. In the normal way it would be a requisition of the solicitor for the purchaser that he would get such a certified copy of the scheme under the seal of the board. It would be essential as evidence of what is in the scheme. I have no objection, in principle, to providing specifically for it but I wonder is it necessary to do so when one bears in mind that the original conveyance to the charity trustees would be requisitioned before a solicitor for a purchaser from those trustees, whether incorporated or not, would close the sale. It is self-evident that the solicitor for the trustees, after incorporation, on a sale, would provide a certified copy. The solicitor for the purchaser could reasonably refuse to close the sale if he did not have it.

I appreciate what the Minister says and it makes sense to me as a practising solicitor. I agree that solicitors acting for purchasers would make this a requirement and act in that way. It is possible that once their requisition in connection with the matter is complied with they would be satisfied. In all professions and at all times we come across the occasional person who may be difficult.

The unwilling purchaser.

The unwilling purchaser is an example. You may also come across the situation where the purchaser is dependent on a loan from some financiers in order to complete. While the purchaser's solicitor may be satisfied additional requirements might be put up by the solicitors for the financing body. They control the purse strings. The purchasing solicitor has to get their requirements complied with.

I may be wrong but it does seem that the probability is that if a scheme is made the Commissioners are going to spell out in that scheme, by schedule or some other way, the property that is involved. They are going to spell out that on the sealing of this scheme the property schedule will automatically vest, by virtue of this scheme, in the body corporate.

There does not seem to be an obligation on the Commissioners to act in that way. If they make a scheme without listing the property that is to be affected it is open to them to do that. I do not think they would do it. Or someone might make a slip. Nevertheless, under section 3 once the scheme is made the property vests in the body corporate automatically. If the Minister goes the inch further and provides that the production of the scheme, whether or not it contains the list of the property, must be accepted as conclusive evidence it would iron out difficulties which might, but probably will not arise.

Would there not be a possibility then of creating further difficulties? If the scheme was made as a result of a breach of trust and the production of the scheme would be conclusive evidence of ownership it would create a very unsatisfactory situation. Notwithstanding the breach of trust there would be a conclusive vesting in the incorporated trustees.

The vesting takes place under the Act anyhow.

It takes place by the Commissioners making a scheme. The Commissioners might be induced improperly to make a scheme. The type of scheme in use in Northern Ireland includes a schedule which sets out all the property. That is the most satisfactory way. In so far as the Senator refers to the difficulty which an unwilling purchaser or a purchaser's solicitor might have in relation to one of these documents, I would point out that he is in a much better position in purchasing from incorporated trustees than he would be in purchasing from a private individual because he can go to the Commissioner's office and for the appropriate fee get a certified copy of the scheme which will be to a great extent his root of title. He can get the main document of title without any reference to the vendor's solicitor if that type of difficulty is being encountered. I have no objection to an amendment something on the lines suggested by the Senator but I am not satisfied that it is necessary. If you provide specifically for such conclusiveness you could defeat your own purpose and let a defaulting or fraudulent trustee away with something which would not happen otherwise. Trustees, whether incorporated under section 2 or unincorporated, are not in the same position as ordinary vendors. They are subject at all times to very close supervision by the Commissioners. That is the real protection for the beneficiaries and purchasers.

The Minister has put some thoughts in my mind which make me urge him to have another look at this whole thing. The Minister is quite right in adverting to the danger of the possibility, for example, that the Commissioners might be induced by fraud to make a scheme. The Minister asks what would be the situation if that arises. Once the scheme is made the vesting takes place under section 3. That is crystal clear. If a situation arises where the Commissioners have been induced to make a scheme by the fraud of the trustees I should imagine that as soon as that is discovered the reaction of the Commissioners will be to exercise their powers under subsection (2) (ii) (b) to amend by a subsequent scheme, et cetera. If in the meanwhile the sale has taken place what is the position (a) of the trustees, and (b) of the purchaser?

I should imagine that so far as the purchaser is concerned once the establishment of the scheme has been proved his title will be good. In that set of circumstances the Commissioners are helpless even if the original scheme was made on false premises or induced by fraud. If a sale has taken place no amendment of the scheme by them should in any event impair the title of the bona fide purchaser who purchased in good faith on the basis of the original scheme having been made. Once the Minister adverts to the danger of anything like that happening he should also consider whether or not it is necessary to write into this Bill somewhere the fact that in circumstances such as that the title of a bona fide purchaser for value will not be affected.

What the Minister and Senator O'Higgins have said—and I do not know whether I agree with either, both or neither of them—emphasises for me the extreme importance of having a provision to the effect of the one I argued for on section 2, that there will be a single piece of paper which will not disclose to outsiders anything more than the simple fact that this body corporate exists and which is signed by somebody authorised under the statute to do so. Then it will not be possible for anyone affected subsequently by actions authorised under the performance and administration of that body corporate to raise questions as to whether it was fraudulently procured or otherwise. This is the reason why this section can be found in all the general Acts dealing with the regulation of bodies corporate.

In the case of an ordinary trading company a point arose in regard to the signature by a minor of one of the two subscribers to the memorandum and articles of association where it was successfully attacked. Then the Bill was introduced which made that kind of attack ever afterwards impossible because the section of the statute stated "that is it". This particular point about the validity of the existence of the body corporate cannot be raised.

The Minister has spoken about the rights of anybody to pay his 1s. to the Charity Commissioners and get inspection. This is an important point. I do not see anything here giving the right to anybody to obtain these copies. Secondly, I am not sure it is desirable they should get them. Is a charitable trust to be put in a worse position than a private company under the law as it exists at present with regard to the publication of its affairs? Is a charitable trust which seeks to get the benefit of body corporate status under these sections to be in the position that anybody can discover what property or liabilities they have and all the internal affairs of that body corporate?

It is legitimate that an outsider should find out whether this body corporate is properly incorporated but no more than that unless it is deliberate policy to make public the affairs. If it is the general position that a charity is obviously of a public nature and the affairs of which can be made public, there is nothing retrograde in that continuing for a body corporate. If a private charity for a public purpose is entitled to have its affairs kept free or if a man decides to give half of his estate for a public purpose he may not want it to be known; and if there is not some proposition or law about which I do not know, why then should this be made public through body corporate status?

I am advised that anyone who shows a bona fide interest in a charity will be given a copy of a document relating to that charity on payment of the prescribed fee. A purchaser has a potential interest and can obtain a copy.

Is it intended where property is concerned that the scheme would set out in some form the property held by the trust?

It is intended that it would be set out in a schedule.

Question put and agreed to.
SECTION 4.
Government amendment No. 6:
In subsection (2) (c), page 4, lines 27 and 28, to delete "to persons of the other sex or to both sexes of persons" and substitute ", either solely or partly, as may be specified in the scheme, to persons of the other sex".

This is a drafting amendment the purpose of which is to express more clearly the intention of section 4 (2) (c), namely, to enable a boys' school to become a girls' school, or vice versa, or either a boys' or a girls' school to become a co-educational school.

Amendment agreed to.
Government amendment No. 7.
In subsection (2) (e), page 4, line 44, to delete "persons who are not members of that denomination" and substitute "such number of persons as may be specified in the scheme, being persons who are not members of that denomination,".
Amendment agreed to.
Question proposed: "That section 4, as amended, stand part of the Bill."

This is provision which enables trustees to effect an agreement for the trustees of other charities whereby the charities must come under common control and apply their use for the benefit of a common charitable purpose. There is a restriction on that providing that property which is vested in trustees for the benefit of a charity for the furtherance of education cannot be used for the benefit of a charitable purpose which is not for the furtherance of education.

The statute should entitle a donor or a creator of a charity to provide to the contrary and expressly exclude that his charity should be amalgamated with another. Some years ago I discussed this matter with someone who was establishing a charity and who asked me the question which is before the House. "Is it possible that anybody can bring together this with any other like charity?" I investigated the law relative to the matter and so provided in the instrument creating that charity that that could not, according to then existing law, be effected.

There ought to be a saver for the person who does not wish to have any other purpose allied to the one he had in mind to achieve. There is a question of principle in the amalgamation of charities. If an extremely bigoted Protestant or Catholic leaves his property for bigoted purposes it is a monstrous reversal of all his intentions if, notwithstanding his explicit desire with regard to his accumulations or properties, the Commissioners can approve the application of that property to purposes different from those he had in mind.

There may be a lot of knowledge on the matter with regard to particular religious denominations. Does this mean that, if you leave your money to further Christian purposes, it can be married to Mahommedan purposes? What is a religious denomination in this sense? Despite what we have done recently in the constitutional referendum there should be some clear-minded view as to what we mean when we talk about a religious denomination. I imagine that lying behind this is a burst of ecumenical enthusiasm—a tremendous feeling that if the Methodists want to get together with the Presbyterians, the Presbyterians with the Anglicans, and the Anglicans with the Roman Catholics, nothing should stand in their way. I should like to know the background thinking with regard to this section.

In his Second Reading speech the Minister told us a good deal about the Bill. It was much too helpful for a Second Reading speech because it helped me to understand the Bill, and if I had not understood the Bill it might be more comfortable for the Minister. The Minister did not say too much about the background thinking on this Bill.

Subsection (2) (d) states—

with the approval of the Board, to make and carry into effect an agreement with the trustees of one or more other charities...

Why could the trustees of one charity not agree with the trustees of another charity to bring their two charities together? What does the word "agreement" mean? Is there any power to do this? Is it not a mere tentative proposal which may possibly have legal effect if a scheme emerges from it? Is "agreement" the appropriate word here?

With regard to these amendments, I am not entirely satisfied that notices of the proposed amendments should not be given in accordance with subsections (5) or (6). Perhaps I will withdraw that point. Having made that observation I realise that the amendments in mind are of a formal or minor nature.

The Senator raised the point that a testator or a donor may not wish to see the charity which he has established merged with another charity and that he should have the right not to have it so merged. There is something to be said for that, but I want to make it clear that this Bill does not change the law on that point. I would refer the Senator to section 47 of the 1961 Act which sets out the occasions for applying property cy-pres. It states that—

where the original purposes, in whole or in part—(ii) cannot be carried out, or cannot be carried out according to the directions given and to the spirit of the gift;

Subject to subsection (2) the original purposes of the gift may be altered to allow the property given or part of it to be applied cy-pres. We have that situation frequently in this country, particularly in relation to gifts to some of the more obscure Protestant denominations where the numbers of beneficiaries or potential beneficiaries have so diminished that the objects of the charity have in effect failed in their original form or in accordance with the original expressed wishes and spirit of the gift of the testator. It was recognised in the 1961 Act that it would be wrong to allow charitable funds to be lost to potential charities where there were similar sorts of charities which would welcome those funds.

Section 4 is an extension of a concept of cy-pres in section 47 of the 1961 Act. I do not understand Senator Alexis FitzGerald's difficulty in relation to subsection (2) (d) of this section where the trustees agree. Of course, the trustees can agree and the Commissioners would not undertake any scheme or tentative scheme under section 4 unless all the trustees of both charities were in agreement. The only limitation proposed on the board's powers is that educational trusts would have to be kept separate from other charitable non-educational trusts. That is because one can draw a clear distinction between them and other types of trusts and the benefit of education is a separate and very particular type of charity. It might be felt that one would not be applying things cy-pres if an educational trust were given away to some non-educational purpose.

This section, as I understand it, has nothing to do with cy-pres. There is a section in this Bill which deals with cy-pres. This does not deal with the situation of cypres which the Minister said is dealt with by section 47 of the 1961 Act which defines the circumstances in which the original purposes of a charity may be altered and spells out that, as one of these circumstances, where the original purposes have not been fulfilled or cannot be carried out, or cannot be carried out according to the directions given in the spirit of the gift, section 47 would take care of it. This is a situation where it is not cypres, where the original purposes can be carried out in accordance with the directions given and the spirit of the gift achieved, and yet notwithstanding the fact that a cy-pres situation does not arise that this section is going to allow an amalgamation of charities. I am concerned to have the principle of this situation discussed and light thrown on it and satisfaction expressed with regard to it.

Somebody enlightened enough to think up his own situation well in advance should be entitled to provide that this section shall not apply to his charity. That is the particular point I am concerned to make. We should think a bit more about the whole principle of this.

If the Senator reads what I said, he will find that I did not say that these dealt with matters cypres. I said that they were similar to it and in many ways were an extension of that underlying doctrine. I agree that, strictly speaking, it is not cy-pres. Often the easiest way of explaining some of these problems is to give a concrete example—I do not want to cause any difficulty to any particular charity, several of which make no secret of the fact that they are under difficulties at the moment in relation to the sort of matters that are dealt with in this section. The principal trusts involved are the King's Hospital in Dublin, the Waterford and Bishop Foy Endowed Schools, Wilson's Hospital, Multyfarnham, and the Iveagh Trust.

The case which is particularly provided for in subparagraphs (d) and (e) is the Waterford and Bishop Foy Endowed Schools, who wish to amalgamate with the Newtown School, Waterford. There is an obligation on the governors of the Waterford and Bishop Foy Endowed Schools, under the Waterford and Bishop Foy Endowed Schools Act, 1902, that they should be Protestant. There is an obligation on the governors of Newtown School, Waterford, that they should be Quakers. Apparently Quakers are not regarded as Protestants. Both these schools are very keen that they should amalgamate. In these two subsections we are endeavouring to give them legal power to do that. I need not go into the difficulties encountered by the King's Hospital, which are well known to all solicitors. The Iveagh Trust have some difficult problems too. I just cannot say that I am familiar offhand with the problems of Wilson's Hospital, but I understand they are somewhat analogous.

Question put and agreed to.
SECTION 5.
Question proposed: "That section 5 stand part of the Bill."

Is the land vested in the board? Perhaps the Minister would help me to understand section 5. The Minister referred to it on the Second Reading. Is this the section which deals with the transfer back to the dioceses of Catholic churches which were vested in the commissioners?

That is right. Under section 15 of the Charitable Donations Bequests (Ireland) Act, 1844, a number of Catholic churches were vested in the Commissioners at that time. The section was repealed by the Charities Act, 1961, and the churches were left vested in the Commissioners. The Commissioners now want to transfer these back to the appropriate dioceses but they have no power to do it. A request has come to them from the Bishop of Elphin—I take it that is the Roman Catholic Bishop of Elphin—to have a church in Elphin, County Roscommon, re-transferred to the diocese of Elphin. There are three other churches affected by it, at Gallen, County Offaly, Doon, County Limerick, and Abbeyside, County Waterford. It will enable the appropriate transfers to be made. It is presumably accepted that the beneficial ownership existed in the proposed transferees in any event.

I certainly am not objecting to this, but the wording of the section seems to be a bit puzzling. Unless the explanation which the Minister has given was available to a person reading section 5, I do not think the person reading it would have the slightest notion what this was about. One would get the impression from section 5 that it would be open to anyone to apply to the Commissioners to have vested in him or her any land which is vested in the board under section 15 of the 1844 Act. The Minister has explained it quite adequately. I would feel, nowever, that it might be better if this section had been drafted in such a way as to make the position clearer to the people reading the Bill.

It refers to section 15 of the 1844 Act. If you read that it specifies the very limited class of properties to which it applies.

I fully agree with that but it is the wording in the first line of this section:

whereupon the application of any person.

I would prefer if it were "any person concerned" or something of that sort.

Question put and agreed to.
NEW SECTION.
Government amendment No. 8:
In page 6, before section 6, to insert the following new section:
(1) Where on an application made by a person having an interest in relation to land comprised either in a lease made pursuant to the Leases for Schools (Ireland) Act, 1881, or in any other lease made for a charitable purpose, the Board is satisfied that—
(a) the person entitled to the lessor's interest in such lease is unknown or cannot be found, and
(b) the applicant has taken all reasonable steps to ascertain the identity or whereabouts of such person,
subject to subsection (3), the Board may, if they think fit, make an order under this section.
(2) An order under this section shall be under the seal of the Board and shall vest in the person or persons specified in the order the land comprised in the lease to which the application relates both for such estate or interest and—
(a) in the case of a lease made pursuant to the Leases for Schools (Ireland) Act, 1881, in trust for such educational purposes as may be so specified,
(b) in any other case, in trust for such charitable purposes as may be so specified,
together with, or freed and discharged from, such rights or liabilities connected with the land as may be so specified.
(3) An order under this section shall not be made until the expiration of two months after public notice of the proposal to make it has been given in such manner as the Board consider most effectual for ensuring publicity thereof and for bringing the proposal to the attention of persons interested.

Some time ago the Commissioners brought to my notice a problem in relation to disused national schools and teachers' residences held under leases, at nominal rents, granted under the Leases for Schools (Ireland) Act, 1881. Under section 5 of that Act, certain covenants are implied as if expressly inserted in the lease. These included covenants to the effect that the premises should not be used for any purposes other than those expressed in the lease, and that if the premises continuously ceased for a period of three years to be used for these 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.

The Commissioners estimate that 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. Over 100 applications have been made to the Commissioners 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.

The Minister for Transport and Power, who dealt with this matter for me on the Second Stage, mentioned that it was proposed to deal with this problem by introducing an amendment on this Stage, in agreement with the Minister for Education. In the meantime the Commissioners have requested that the proposed amendment should be expanded somewhat to cover other leases for charitable purposes.

A case in point is that of a plot of ground at Ballinacurra in the city of Limerick which was leased to the Society of Friends, otherwise known as 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 purposes, it would 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 it.

To go through the subsections of the proposed section, subsection (1) enables the Commissioners, where the successor in title et cetera to the grantor of a lease under the Leases for Schools (Ireland) Act, 1881, or of any other lease for charitable purposes is unknown or cannot be found, to make an order appointing trustees of the land comprised in the lease and vesting the land in the trustees. The remaining subsections are self-explanatory. The Minister for Education has indicated that he is in agreement with the terms of this amendment and supports it.

Obviously, one does not desire to obstruct the proper utilisation of any estate in Ireland or any property here for the benefit of people, but is it not important that when making an amendment we make it in such a fashion that it cannot, in any circumstances, be challenged? Take a phrase which appears in subsection (2):

...an order under this section shall vest in the person or persons specified in the order the land

and again,

...freed and discharged from, such rights or liabilities...

Is not that, in fact, to confiscate?

Must there not be some provision analogous to the provision in the Mineral Developments Act, 1940? Under that Act exactly the same problem exists in regard to persons who cannot be traced and yet who may have an interest in the minerals on a property. That matter is being considered at the moment. At least that Act did design a scheme which has worked for 32 years whereby the minerals could be utilised without getting title from the people who owned them because they could not be found, the procedures under the 1931 Act not being found adequate to deal with the situation. There is in that Act a provision for compensation for persons who come along and can prove that they were entitled afterwards to the mineral rights involved. There could be mineral rights in the Quaker cemetery. There could be mineral rights in any of the properties referred to here, but they are in their own special position.

There could be valuable property involved here. Should there not be some theoretical structure under which compensation could be got by affected persons, if this is to stand up to the constitutional test with regard to private property? Is this a delimitation, or a regulation under the Constitution? I am not sure that it is without some provision for some compensation in this situation. After all, the lessor here did give a title which provided that it would come back to him and he could do nothing about bringing it back to him until there was a degree of non-user specified, if I understand the Minister correctly, in the lease itself. It cannot be argued against him that he has failed to act. He can only claim his right when there is a non-user specified in the lease. Only then can he start his re-entry process. His rights are alive and if they are to be taken from him there should be some fund constituted against which he can claim compensation if the Minister wants this section to stand.

The whole point of the section is to deal with people who are not available and cannot be found. The short answer to what Senator Alexis FitzGerald has raised is that there is nobody to compensate. Subsection (3) states that the order may not be made until the expiration of at least two months after public notice is given, which indicates that the Commissioners and, presumably, the charity involved will make every effort to try to find somebody to whom this notice can be given. Another important thing to remember is that what, in effect, is being taken away is an implied benefit for the lessor under an implied covenant under section 5 of the 1881 Act. It is not even an expressed covenant; it is implied by that section, and it is a covenant of continuous user as a school.

The Act envisages long leases being given at nominal rents and since this is only an implied covenant no lessor, or successor in title of a lessor, would, under these circumstances, regard himself as having a compensatory interest in the property. The fact is that there are 500 such premises and there are orders pending in regard to 100 of them and neither the Commissioners nor the beneficiaries have been able to find anyone.

It is also worth bearing in mind that the only rights which are barred by this proposed new section are the rights of re-entry. Under the 1881 Act, I am advised, the average quantity of land demised was one rood, statute measure.

I have made my point and the Minister will value it according to his judgment.

On the last point the Minister made, the Minister said that all that was being given to the applicant was the interest freed from the particular requirement under the 1881 Act. Am I right in that? It seems to me that he is getting the lessor's interest and that that is the purpose of this section. I see the argument very clearly in favour of this. Any practising solicitor, particularly since the Ground Rents Act, 1967, came into being, knows the difficulties which one frequently experiences in tracing back title under leasehold interests.

I can certainly appreciate the problem when the Minister refers to 500 schools where the present owner of the lessor's interest is unknown. It seems that the section is endeavouring to treat the position fairly by the provision in subsection (3) regarding the giving of notice in such a way that will ensure the maximum publicity. But am I not right in thinking that, assuming everything is complied with, that what is being done here is that the lessor's interest, that is, the interest of the person who cannot be traced, will be vested in the applicant?

Does the section refer not merely to cases where covenants are implied under the Act of 1881? Again I am putting this in the nature of a query to the Minister. Am I not right in thinking that the section will apply regardless of how the lease arose, once it is a lease which——

Any other lease made for charitable purposes.

Yes, or any other lease made for a charitable purpose. It is not confined purely to the leases for Schools (Ireland) Act, 1881.

The final point to which I want to draw the Minister's attention is that this proposed section starts in the way I would have recommended to the Minister that the last section should have started. The last section was: "where on the application of any person." This starts in the way I should have recommended that one should have started: "Where on an application made by a person having an interest." It is better that it should read this way.

So far as the 1881 leases are concerned, the order under subsection (2) (a), as it would be made, must be in trust for such educational purposes as may be so specified. In other words, it must be for some further educational purpose; in any other case, in trust for such charitable purposes as may be so specified. "Together with or freed and discharged from, such rights and liabilities connected with the land as may be so specified." That does not mean that the whole freehold would be vested in the lessee or in his successors in title. There is no confiscation of the freehold.

It may not have been vested in the lessor.

It may not. To put it in another way, it does not mean that the lessor's full estate is vested in the lessee. It simply means that the property is vested, discharged from such rights and liabilities connected with the land as may be so specified.

The estate survives.

Yes. The Commissioners advise me—and I know it is the wrong thing to say in the House, because it does not bind the Commissioners if the terms used in the section are wider than that—that the only thing which they would specify that the land should be freed and discharged from would be the right of re-entry. It would possibly be unfair to ask Senators to accept that unless it is spelled out. I can only pass it on for what it is worth. However, I have no doubt that the Commissioners, who are a long-serving body of men, not subject to change like the tide, are absolutely certain to honour their intentions in this regard. They tend to be succeeded by men who are equally conservative and equally honourable. I have no doubt that we can rest fairly assured for the future in that respect.

I do not want to prolong this and I am not arguing with the Minister. Is this not for the purpose of enabling the schools, or teachers' residences, as the case may be, to be sold? I got the picture—rightly or wrongly—that in various places throughout the country there are disused schools and disused teachers' residences which would be found desirable to sell, and where the intention may be to sell to private individuals, possibly for use as holiday homes. If I am right in that—possibly I am not—I cannot understand why they are to be sold subject to requirements which will require the buildings to be used either for educational purposes or for charitable purposes.

I am told that in the event of a sale the trusts attach to the purchase money.

That may be the answer.

Let us know if there is a good one going.

Can one use the purchase money for carrying on as a school?

I suppose the Commissioners have to pay it into some educational fund.

Amendment agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."

I shall not waste the time of the House by repeating what the Minister said on Second Reading. However, I welcome very much the entire development which is in this section, including the provision for verification of the scheme in part or otherwise amendment.

I do not usually look for ministerial orders in this House, but I should like to raise the question again, as I did on Second Reading, as to whether one might not in these gravely inflationary times have some provision whereby there could be a ministerial order here for increasing the cy-prés jurisdiction even beyond the £25,000 which is specified in this. I raise this particularly in the context of the fact that there is no limit in Great Britain, and that it was recommended there should be no limit in Northern Ireland, although there is a limit of, I think, £5,000. I wonder if the Minister would see merit in that? I do not see any point in coming back here in five or six years time to look for an extension of that figure from £25,000 to £50,000. The power of jurisdiction is admirable and, personally, I would argue for an unlimited jurisdiction.

If I came in with a Bill seeking to enlarge or alter the jurisdiction of the District and Circuit Courts by ministerial order, I think the Senator would object—probably legitimately.

As we are to some extent taking away jurisdiction from the court, it is probably right that Parliament should have the opportunity of commenting on the degree of jurisdiction given to the lesser body.

Is the Minister taking away the jurisdiction?

No. That is a bad phrase. We are not taking it away but we are extending the jurisdiction of the Commissioners. Of course, the court has a concurrent jurisdiction. I would say that £25,000 would cover nearly all or a great many of the small charities in this country. It is five times the existing figure and I think it should keep us going for a while.

Question put and agreed to.
SECTION 7.
Government amendment No. 9:
In page 7, line 28, to delete "subsection" and substitute "section".

In regard to the amendment, the word "section" is considered more appropriate in this context than the word "subsection".

Amendment agreed to.
Question proposed: "That section 7, as amended, stand part of the Bill."

I had some doubt about this on Second Reading but I am reasonably satisfied that a good purpose was achieved by this section. Subsection (2) reads:

Where an application is made to the Board by the trustees of any charity comprising land representing that a specified disposition of the land for the benefit of a specified charitable purpose other than a purpose of the charity of which they are Trustees, being a disposition the consideration for which is not the market value...

I wonder whether there should not be provision for a prohibition in the instrument creating the trust. I attach little importance to the point. We are, in effect, permitting a gift by one charity to another. Should one not go on and include in the definition of "disposition" a gift? What is wrong with one charity making a gift to another?

There is nothing. But they must get the consent of the Commissioners.

Here there is merely provision for sale at an undervalue. There is no provision for gift in the definition of "disposition."

What line is that?

"Disposition" as defined in subsection (6) and subsection (2) provides for a disposition at a less than market value. There is no provision for a clear, outright gift. I am not arguing for this. I am merely asking whether it is being considered.

Apparently the Commissioners do not approve of charities giving away their property for nothing.

They give it away at an undervalue.

No, they do not approve of that either. Since they seek to prevent its disposition at an undervalue a fortiori they seek to prevent its being given away for nothing.

Even if it operates for the benefit of the country.

The thing to do in that sort of situation would be for the charities to merge or to seek the application of the property cy-prés under section 47 of the 1961 Act.

I am not going to press against the wisdom of the Commissioners if they are against it.

Question put and agreed to.
SECTION 8.
Question proposed: "That section 8 stand part of the Bill."

I have the greatest difficulty about section 8. In section 35 of the principal Act it is provided that words which appear in (a) are to be substituted for paragraph (b) of subsection (1). That I understand without difficulty. As I understand it, the existing paragraph (b) in section 35, being thus substituted for, thereby disappears. Right?

We have made it disappear, by paragraph (a) of this section 8. Having made it disappear, in (b) we proceed to amend what we have disappeared. This seems frightfully like taking the Christmas tree out into the garden, hurling it over the neighbour's fence and then putting all the crackers on top.

This apparent difficulty was already brought to the attention of the draftsman. He insists that the way he has it is the correct way. It may be that the Senator is confused by the second (b) in this section. That does not relate to the new (b) which is put in by (a).

It relates to the old (b).

No. The old (b) is gone and there is a new (b) put in by (a) here. The (b) here does not relate to (b) of section 35. The second (b), that is the substitution of "proposed sale or redemption" does not relate to 35 (1) (b).

To what does it relate?

It is general amendment to section 35.

Subsection (1) of section 35, which I have patiently read and which consists——

It goes on a long way on the next page.

I have another kind of document. It is the same thing. It consists of two paragraphs (a) and (b); (a) does not contain any words such as "proposed sale" and "applicants". To discover "proposed sale" and "applicants" we must look at (b) of subsection (1) which is gone under paragraph (a) of section 8.

I have it now. Perhaps the Senator would read beyond (a) and (b) to the words beginning "the Board may if they think fit..."

I am at section 35 (1) of the 1961 Act. If you go on beyond (a) and (b) to the new paragraph at the end of subparagraph (b).

It is gone. It is part of (b).

This is the way mine is printed. Mine seems to be printed from a misleading text book.

We will forgive the Senator.

Could we have a look at the Act? "the Board may", does that start a new sentence?

It does not but it is neither (a) nor (b). The word "where" at the very start covers (a) and (b) because the word "and" is at the end of subparagraph (a). Having fulfilled those conditions, it goes on and says "the Board may if they think fit enquire into..."

Question put and agreed to.
SECTION 9.
Question proposed: "That section 9 stand part of the Bill."

This is to give unlimited letting power, is that all?

Yes. The Commissioners represented that this restriction on letting was obsolete. They have asked that the provisions of section 37 be extended to any letting of land which belongs to a charity.

Question put and agreed to.
SECTION 10.
Government amendment No. 10.
In paragraph (f), page 9, line 4, before "in" to insert "or registered".

This is a drafting amendment the purpose of which is to achieve consistency between the terms of section 10 (f) and section 3 (3) (a). Both these provisions have similar objects, namely, the transfer of charity property, standing or registered in the books of any bank, corporation or company or entered in any statutory register into the names of the new trustees in one case and into the name of the body corporate in the other.

Amendment agreed to.
Section 10, as amended, agreed to.
SECTION 11.
Question proposed: "That section 11 stand part of the Bill."

Were there characters who were properly and lawfully under their charitable trusts getting more costs out of the trusts than were being taxed? How do you do that?

What happened apparently was they were getting their costs taxed and collecting that amount as certified by the Taxing Master and then sending a solicitor and client bill on top of it.

The solicitor's own client?

It is to stop that happening that I have inserted this provision. In other cases they were not taxing at all and the Commissioners were keen to have this done.

The board have power to order the taxation of costs?

Yes, but there is some difficulty. They cannot enforce it. They can ask for the costs to be taxed but they cannot enforce it. This would give them power to enforce it.

I am not contradicting the Minister because I do not know enough about it. Section 44 of the Act of 1961 states:

The Board may order the bill of cost claimed by a solicitor on account of business to be taxed and ascertained.

I should have thought that gave very definite powers to the board to order taxation.

No. They can make the order but I am advised that the solicitor is not obliged to comply with it. Even if he does he can come again.

Question put and agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill."

What is this section?

This section, which amends section 52 of the Charities Act, 1961, reverses the present rule 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 the powers conferred on them by section 20 of that Act. It turns the thing around.

It is very good.

It is very sensible.

Question put and agreed to.
Sections 13 and 14 agreed to.
Title agreed to.
Bill reported with amendments.

No. We have raised many questions. Next week.

There were no amendments put down on the Committee Stage. I know that does not absolutely preclude it but——

It is not fair of the Senator to press me on that. I am not an obstructionist but Senator O'Higgins and I have made some points which should be considered.

Next week.

I am not certain that we will be sitting this day week.

In fairness to the Minister I believe he was agreeing on the assumption that we would be sitting next week.

Yes. I took it for granted that the House would sit next week but I now gather that that is not so.

It is doubtful if the House will sit next week. There is no other business available for us.

There is no matter of controversy involved in the Bill. I had hoped to get it through as it has been before the House for some time. Unfortunately, some of the powers contained in the Bill are very urgently needed.

We are anxious to facilitate the Minister.

A number of charities are badly held up.

The only problems I have relate to sections 2 and 3.

Could I reverse the usual order and say that I will consider them in the Dáil?

All right.

Bill received for final consideration and passed.

The Seanad adjourned at 9.30 p.m. until 10.30 a.m. on Thursday, 25th January, 1973.

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