On Section 2 could the Minister tell us for the purpose of information what is the difference between perpetual funds and trust funds? Under the perpetual fund he has trustees and under the other he has trustees also. Why is one called a perpetual fund and the other called a trust fund?
Cork Tramways (Employees' Compensation) Bill, 1933—Money Resolution. - Perpetual Funds (Registration) Bill, 1933—Committee and Final Stage
Section 1 agreed to.
Question proposed: "That Section 2 stand part of the Bill."
The Act is designed to legalise perpetual funds. The decision of the British court is that these perpetual funds are void. These are funds which are in the ownership of trustees for a limited period only. They never at any stage, pass into the hands of absolute owners. They are only for a limited period in the hands of particular trustees, and consequently, they are in conflict with the rule against perpetual trusts.
Has the trustee dropped out after appointment?
The only way these funds can be brought into conformity with the law as it stands would be for them to terminate at the end of a definite period. There are some funds that are in conflict with the law on that particular matter and that are legalised by this Bill. The other provisions of the Bill are designed to secure and safeguard the registration of these funds.
I take it that the British courts decided that these funds were not charitable trusts at all. Perhaps they were of a contributory nature.
I am not sure. There are different kinds of trusts. The purposes of some of them, maybe, would terminate in 30 or 40 years' time.
The Erasmus Smith Trust was not a perpetual trust.
I do not know. But the decision of the court was that when a perpetual trust was in conflict, unless there was some defined date of termination, as I mentioned, which secured compliance with the law, and avoidance of conflict, the rule against perpetual trusts applied.
I think the Minister will find that the court must have held that that was a charitable trust.
The particular funds were superannuation funds, and it was in connection with this that the question of legality arose.
Question—"That Section 2 stand part of the Bill"—put and agreed to.
Section 3 agreed to.
Question proposed: "That Section 4 stand part of the Bill."
This section relates to registration. As the Minister says, the Bill is a highly technical one. I do not know how these superannuation funds are perpetual. I imagine that they are operated largely by firms like Guinness, Jacobs and the Imperial Tobacco Company. We are prescribing a whole set of rules for their future administration. I do not know how far these rules are going to conflict with the administration of those superannuation funds, or whether they are going to make the firms that provide funds of this character liable for any inconvenient sums of money. For instance, there may be arrangements with some of these firms to invest sums of money in their undertakings, and to credit the proceeds of these sums to the registration fund. It may be that the rules we are making in this Bill will seriously conflict with the rules at present obtaining in connection with many of the superannuation funds in this State. Has the Minister had an opportunity of investigating that matter.
We have this practical experience, that most of the important funds are not confined to this State. They are funds that operate outside the State in connection with companies whose activities extend beyond the borders. There are some of them whose business extends to Great Britain: and this legislation has been in operation for the last five years in Great Britain without any difficulty. I am certain there will be no difficulty in bringing the rules here into conformity with the rules of the Schedule.
Will the Minister observe that it is provided in paragraph B of Section 5 of the Schedule—I am raising it now because it comes in under the general question of registration—that a body corporate cannot invest funds in the stock of their own concern unless in the previous ten years it paid a dividend or interest of not less than 3 per cent. on its ordinary stock or shares. On the face of it I do not think that is an unreasonable proposal, but it might create confusion if a large firm was required to find £10,000, £20,000 or £30,000 immediately out of their own company.
The Deputy understands that those responsible for any superannuation funds, if they do not want to avail of this legislation, need not.
Oh, they need not?
No. But if they do not they might find themselves in conflict with the law of perpetuities. It would be open to them to say: "We will avoid conflict with the rules about perpetuities," by some other device. But unless they conform they cannot receive the concessions to which they would be otherwise entitled. The registrar of friendly societies, who is an independent officer, will be responsible for the administration of this Act. He is a man of very wide experience in connection with legislation of this kind, and he has a sort of semi-judicial capacity.
Section 4 agreed to.
Sections 5, 6, 7, 8, 9, 10, 11, 12 and 13 agreed to.
Question proposed: "That Section 14 stand part of the Bill."
Will the Minister examine sub-section (2) and see whether the penalties provided there are sufficient?
I think so. It has been found so in Great Britain. I am anxious this Bill should, as closely as possible, follow the British legislation on the same matter. It is desirable that there should be similar legislation operating in connection with the funds of the same persons in both countries. That is the reason why we have taken the British Bill and followed it.
These proposals are similar.
Sub-section (4) of Section 14 reads:—
It shall be a good defence to any proceedings against any person under sub-section (1) of this section to prove that the default in respect of which such proceedings are brought occurred without the consent or connivance of such persons, and was not facilitated by any neglect on his part.
Does not that mean because of some error that arose through his neglect?
No, I think the Deputy is reading it in a different manner from which it would be ordinarily read that is, that it was not brought about with consent or connivance. It is not a case of a comma. In other words, if neglect is proved it is not a good defence. The words "and was not facilitated by any neglect on his part" are a qualification of the words "occurred without the consent or connivance of such person." In other words, you will have to prove that the absence of consent or connivance was not due to neglect, or occasioned by neglect; if there is neglect proved it is not a good defence, even though there is absence of consent or connivance.
There is no penalty of imprisonment involved—it is only a question of a fine—and, therefore, I do not press the matter. The proposal to make a person liable for default, simply because you alleged neglect against the first party, is something I do not think is desirable, but if there is no penalty of imprisonment, and I do not think there is in this section, it is not a matter of very serious consequence.
Section put and agreed to.
Remaining Sections, Schedule and Title agreed to.
Bill reported without amendment.
Ordered: That the Final Stage be taken now.
Question proposed: "That the Bill be received for final consideration."
It is difficult to see anything in a Bill you are rushing through, but paragraph 13 of the Schedule states that any person who is entitled to benefit under the fund is entitled to ask for a copy of the rules. Would it not be well to insert a proviso that he must make some token payment, say of 3d. or 1d. before he would be entitled to a copy of the rules? If you wanted to kick up a row you could march down every man entitled to benefit under the fund every morning for a week and demand a copy of the rules for each from the secretary.
It does not say it shall not. The rules of the fund must comply with the conditions. In other words, there must be in the rules of a particular fund provision for providing a copy of the rules to persons of the class indicated. It does not follow that there would not be compliance with the conditions in the Schedule if a token payment was imposed.
Are you sure?
That is the interpretation which I would put on it on the face of it. These are minimum conditions, as it were, which comply with the special rules. It is for the registrar to say whether there has been, in fact, compliance with these conditions in respect of the rules of any fund.
Certainly it would be possible for any individual entitled to benefit under the fund to demand a copy of the rules, and if he was refused it on the ground that he did not offer to pay for it, he certainly would have a remedy under the Bill as it stands. It is not a matter of very great consequence, but it is a matter that the Minister might think worth taking into consideration, and inserting a brief amendment to say that they were entitled to a token payment for the rules if they wanted it.
On the face of it, I am not sure that a person entitled to benefit should not be entitled to get the rules on demand, even without payment.
If you limited it to a token payment of 1d., at least it would prevent a frivolous conspiracy being set on foot for the purpose of embarrassing the secretary by asking for stacks of them.
A copy of the rules.
They are entitled to ask for a copy on Monday, Tuesday, Wednesday and Thursday and so on. If you march down 1,000 men to ask for a copy of the rules on each day, and there is a statutory penalty if the secretary does not give a copy, it would not be a bad joke to play on him.
I will look into the point.
Question put and agreed to.
Question—"That the Bill do now pass"—put and agreed to.