Tuesday, 3 July 1973
Dáil Eireann Debate
Mr. Cooney: The purpose of subsection (2) (a) of section 4 of the Bill is to enable the Charity Commissioners to authorise the application or investment of moneys arising from the sale, mortgage, charge or leasing of the charity property for the benefit of the charity or for such other charitable purpose as the Commissioners shall think proper. In practice,  if the charity funds cannot be applied, et cetera, for the benefit of the charity, the commissioners will only authorise their application for a charitable purpose similar to that of the charity concerned. In the circumstances, the specific restriction in relation to educational trusts is unnecessary for ordinary cases, and it could limit the powers of the commissioners in special cases. The Charity Commissioners are in agreement with the proposed amendment.
Mr. O'Malley: I am glad to agree to these amendments which are in line with what I recommended during the debate on the Committee Stage. They get rid of what I pointed out on that occasion appeared to be an anomaly in regard to educational charities in that the proceeds of the sale of property which was held subject to an educational trust was confined to further educational purposes even though there might not be any educational purposes available. I pointed out the last day that the three other categories of charity were not subject to that limitation. I am very glad that the Minister accepts that now and puts educational charities on the same basis as other charities. The two amendments have the same effect in relation to different types of charity but I would like to point out that there appears to be a printing error in the second amendment inasmuch as the proposal is to delete lines 27 and 32. That should read lines 27 to 32. I do not think it would make sense otherwise.
Mr. O'Malley: I have not anything further to say on it except to say that the sort of case that was referred to here on the previous occasion by Deputy Callanan and, I think, by Deputy Wilson is in fact covered by this. I should like to say to the Minister that I appreciate the fact that he met a reasonable argument in this  very reasonable way. I think it improved the Bill that he did so.
Mr. Cooney: Lest Deputy Callanan is under any misapprehension I want to make it quite clear to him that this amendment does not permit the proceeds of the sale of the school which he has in mind to be spent on other than educational purposes. We cannot change the law. If a charity is for a specific purpose and property belonging to that charity is sold then the proceeds can only be applied for that charitable purpose or as near as may be if the original purpose has failed. It would be quite wrong of Deputy Callanan to go back to his parish priest and tell him that he may spend the proceeds of the sale of that school on repairing the local church. I want him to be clear about this.
“(5) Notwithstanding anything previously contained in this section neither a Court nor the Board shall invest or authorise the investment of charitable funds outside Ireland unless it is satisfied that it is necessary in the interests of the charity to do so.”
This amendment arises out of what I said here the last day and what Deputy Haughey and other Deputies on this side of the House said. On that occasion I did not oppose the Minister's amendment designed to broaden the  category of potential investment of charitable funds by allowing them to be invested outside the country because the Minister told us on that occasion that some charities were meeting with some difficulty in trying to find suitable investments for their funds. I asked if it would be possible for the Minister then to tell us in some more detail what the difficulties were. One difficulty he mentioned was the fact that we did not have a unit trust here. I pointed out to him that we now have such trusts. He also told us the commissioners were aware of instances in which apparently a number of small charities wanted to pool their resources and invest them together and they thought they might do it more beneficially outside. For that reason I was loathe to oppose the Minister's amendment on the last occasion but, at the same time, I had a very considerable reservation about giving the board and the court and, through them, the trustees of charities a sort of blanket power to invest outside this country because, practically all their investment being in this country at the moment, if there was a major swing to investment outside the country that could have a damaging effect to some extent on the economy generally. I tried to meet both points of view as best I could by putting down this amendment which says that “neither a Court nor the Board shall invest or authorise the investment of charitable funds outside Ireland unless it is satisfied that it is necessary in the interest of the charity to do so”.
I want to try to cover the case where there is a genuine need in the interests of the charity to invest outside the country and, at the same time, I want to try to encourage the board, the court and the trustees to keep as much of their funds as possible in the country. For that reason my amendment specifies that the court or the board, as the case may be, will have to be satisfied that it was necessary to make this investment outside of the country. The amendment is reasonable because it allows any charity which genuinely has to invest outside the country to do so and, at the same time, it does not give carte blanche to the court, the commissioners  or the trustees to invest outside the country. This is a reasonable limitation on their powers of investment outside the country.
As I said on both the Second and on the Committee Stages of the Bill, the Irish stock market is far bigger and far stronger and has considerably more variety of potential investment now than it had ten or 20 years ago and the number of cases in which it would be necessary in the interests of a charity to have to go outside the country would be small. I think everybody could be happy with the partial limitation that the board and the court would have to be satisfied. A new freedom is given to the trustees and to the board but that freedom is limited to those cases in which there is a genuine necessity. I would ask the House to accept this amendment as a reasonable effort to meet both sides of the particular argument.
Mr. Esmonde: I appreciate what Deputy O'Malley is getting at but, by virtue of this amendment, he will possibly preclude very good opportunities for charities to invest in new issues which come on the market because, if an application has to be made to the court or the board, the trustees may not be in time to avail of the situation. It is a very common thing for issues to be put on the market on a certain basis and the issues very quickly stand at a premium thereafter. If this amendment were accepted that type of opportunity would be denied to charities. I would also think that the board or the court, by virtue of their responsibility in the matter, would not sanction investment outside the country unless there was no other alternative. They would do it for purely commercial reasons in the interests of the charity and this amendment, therefore, might be unnecessarily underlining directives to the board or the court dealing with the matter. I would imagine that the court and the board would take the advice of those concerned in the charity before passing judgement or issuing directives. The normal principles of patriotism would apply and the home market would be used where  possible. For those reasons I regard the amendment as unnecessary. I agree with the sentiments expressed by Deputy O'Malley but I cannot see the need for the amendment.
Mr. Cooney: I take the point behind Deputy O'Malley's amendment but I regret I cannot accept the amendment. As matters stand, the court and the Charity Commissioners are in duty bound to invest or to authorise the investment of charity funds only where they are satisfied that such investment is necessary and is for the benefit of the charity concerned. The commissioners and the court have a legal obligation. Perhaps it is unfair to say it is a legal obligation, but they have an obligation in the matter of the prudent discharge of their duties and that would ensure that an investment would only be made where they were satisfied that the investment was in the interests of the charity. To suggest that they should get a direction, as laid down in the amendment, would be to do less than justice in acknowledging the service given by the court and the commissioners over a number of years in the administration of charities. All acts in relation to a charity must be done in the interests and for the benefit of the charity. In addition to the protection afforded by the court and the commissioners to the beneficiaries of a charitable trust, the Attorney General has the overriding power to come to the rescue in the unlikely event of a beneficiary thinking his intervention necessary for the protection of the charity. It is, of course, preferable that investment should be made in this country and I have not the slightest doubt that this is where the commissioners and the court will direct investment. All that is being done is restoring the pre-1961 position so that the court or the commissioners will be in a position to take advantage of more advantageous investment outside the country. This is where the amendment is somewhat objectionable because it goes without saying that advantage will only be taken of that situation when it is in the interest of the charity. I do not think it should be spelled out for the commissioners or the court that this is how they should do their duty. They  have been doing their duty for a great number of years in a very satisfactory way.
I shall not decry the merits of the Irish Stock Exchange as an investment medium. It is a small stock exchange and the amount of money which could be put into it by the amalgamated charities to which he referred in the previous stage could have a serious effect on the balance within that stock exchange. It is eminently desirable that the court or commissioners, in the odd situation which might arise, where it would be advantageous to go abroad, should be permitted to go abroad. For the reason that it does less than justice, to the record of the service of the courts and the charity commissioners, this amendment is unnecessary. The courts would not invest in any investment at home or abroad unless it was satisfied that it was in the interest of a charity to do so. I regret I cannot accept this amendment because I consider it unnecessary. Although I sympathise with the motives of Deputy O'Malley in putting it down, it is unnecessary and reflects, perhaps unfairly and unintentionally on the commissioners and the courts.
Mr. Wilson: Would the Minister distinguish between the court and the board as regards the information about investments? If I remember rightly, he said there is no way of knowing how the court invested— that this remained a secret. Is the proportion of investments made by the board and the court roughly 50—50?
Mr. Cooney: I do not know if there are statistics available as to the proportion invested in charitable funds by the court and by the board. I should imagine the greater amount is invested by the board, which are a specialised body.
Mr. O'Malley: I am sorry that the Minister has seen fit not to accept this amendment. The reason he gave were not valid. He suggested that  there is, in his opinion, an unintentional implication that the board or court would not do their job properly. I do not think there is any such implication, intentional or otherwise. As I have said before on more than one occasion in this House and in the Seanad, I am well aware of the excellent work done by the board. This amendment does not in any way reflect on their competence in making investments. It makes investments abroad somewhat less than automatic. The only requirement would be that the court or board should be satisfied that it was necessary to do it. It in no way impairs their freedom because, as the Minister says, it was the normal practice by the board in the period up to 1961 not to invest abroad anyway. The case I made is that there is even less need to invest abroad now and my amendment would not limit their power to invest abroad in suitable cases.
Deputy Esmonde made the point that this amendment would preclude trustees from subscribing to new issues. That is quite wrong because the Deputy is, I think, reading the proposed subsection on its own. It should be the fifth subsection of a new section 32 and the question of the board being satisfied would only arise after an application was made. It is one of these cases where an application would have to be made because the section as amended relates to cases where the powers of the trustees to invest are limited and where they apply to the board or the court for permission to go outside their existing powers.
Therefore, to say that this subsection would delay the taking up of new issues or make it more difficult for trustees to subscribe to new issues is wrong because this proposed subsection would arise only when the trustees had made an application either to the board or the court to widen their powers of investment or allow them to invest in a different type of security to those which they already had.
Deputy Esmonde also made the point that the board could invest outside their jurisdiction only if they have to. That is what the amendment specifies. Therefore, the points made in relation  to the amendment do not invalidate it. The amendment is on all fours with the position stated by the Minister and Deputy Esmonde. Since this amendment would not hamstring the Commissioners or trustees, but would give a desirable guideline which ideally should be included in legislation and was put in specifically in much narrower terms in the 1961 Act, I do not see why it should not be included in this amending Bill. I should like to ask the Minister and the House to reconsider and accept the amendment which I think desirable and can do no harm.
 (2) If it appears to the trustees of any charity comprising land that the doing of any act to which this section applies would be for the benefit of the charity, they may lay before the Board a statement and proposal in relation to the doing of that act, and thereupon—
(a) the Board, if they think that the doing of the act to which the statement and proposal relate (with or without modifications or alterations) would be beneficial to the charity, may make such order for or in relation to the doing of the act and any circumstances connected therewith, as they think fit, though the act is not authorised or permitted by the trust;
(3) If it appears to the Board in respect of any charity comprising land of which they are trustees that the doing of any act to which this section applies would be for the benefit of the charity, they may do that act.
I should like to have amendment Nos. 4, 5 and 6 taken together. These are drafting amendments and provide for a full restatement of sections 37, 43 and 52 of the Charities Act, 1961, incorporating the amendment contained thereto in sections 13, 14 and 16 respectively of this Bill and the repeals contained in paragraphs (b) (c) and (d) of section 17. The purpose of the amendments is to make the law easier for the reader to comprehend and to avoid legislation by reference. The House will recall that on Committee Stage there was a complete restatement of one section and Deputy O'Malley drew my attention to the fact that this principle did not seem to be carried through to other sections. The matter was re-examined and an entire new section has been written in to avoid referring back to other sections to make sense of them.
Mr. O'Malley: I made a point which the Minister has referred to at column 1145 of Volume 266 of the Official Report on Committee Stage. I am grateful to the Minister for accepting it. He has redrafted the sections rather than have the old sections of the 1961 Act read by reference to the amendments here. This makes reading much easier for everyone. This is a practice which might be followed in other Bills and, indeed, in other Departments.
Mr. O'Malley: I should like to get the Minister's formal assurance that in the redrafting of these sections as they now appear in these amendments there is no change in the law that would have been made on Committee Stage or elsewhere, that the position is, in fact, the same as it was at the last stage, except that these are restated in full.
(i) an order under the seal of the Board appointing a new trustee or new trustees of the charity either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee, and
(ii) an order under the seal of the Board which shall operate to vest, but subject where necessary to transfer in the books of any bank, corporation or company, the property of the charity in the persons who on the appointment are the trustees, and in so far as the property is comprised of land it shall be so vested for such estate as the Board may direct, and the order shall have the same effect as if the persons who before the appointment were the trustees (if any) had duly executed all proper conveyances of the land for such estate as the Board direct, or if there is no such person, or no such person of full capacity, then as if such person had existed and been of full capacity and had duly executed all proper conveyances of the land for such estate as the Board direct.
(2) Every trustee of a charity appointed under this section shall, as well before as after the property of the charity becomes by law vested in him, have the same powers, authorities and discretions, and may in all respects act as if he had been originally appointed a trustee by the instrument (if any) creating the trust.
(3) The Board may order the costs and expenses of and incidental to any application or order under this section to be paid or raised out of the property of the charity or the income thereof or to be borne and paid in such manner and by such persons as the Board may consider just.
(5) (a) Any person having an interest may, within twenty-one days after the day on which public notice of the making of an order under this section is given by the Board, appeal to the High Court against the making of the order. In case the High Court is satisfied, in the circumstances of a particular case, that it is reasonable to do so, it may extend the time for bringing an appeal under this subsection. On any appeal under this subsection the Court may make such order confirming, annulling or varying the order under this section and such order as to costs as it thinks fit, but in the case the High Court annuls or varies an order under this section which has become operative, the annulment or variation shall be without prejudice to the validity of anything previously done thereunder.
(c) An order under this section shall, if no appeal is brought against it within the period of twenty-one days mentioned in paragraph (a) of this subsection, become operative at the end of that period, and an order against  which an appeal is so brought shall become operative—
(6) An order under this section shall not operate further or otherwise as a discharge to any former or continuing trustee than an appointment of new trustees under any power for that purpose contained in any instrument would have operated.
(8) Where a body corporate is appointed by order under this section to be, or a body corporate appointed under this section becomes, sole trustee of a charitable trust the terms of which provide for or require the appointment of more than one trustee, then during such time as the body corporate holds the office of trustee of the trust—
(9) Where any land of which the ownership is registered under the Registration of Title Act, 1964, becomes vested, by order under this section, in any person or persons, the registering authority under that Act shall, upon production of a copy under the seal of the Board of the order and upon payment of the appropriate fee, register that person or those persons in the appropriate register maintained under that Act as owner (within the meaning of that Act) of the land.
(10) Where an order is made by  the Board under this section, all property transferred by the order which immediately before the date of the order was standing or registered in the books of any bank, corporation or company or was entered in any register kept in pursuance of any enactment shall, upon production of a copy under the seal of the Board of the order, be transferred into the names of the persons appointed trustees by the order.
52. —(1) Whenever there is contained in any will a charitable devise or bequest, the Board may, in their discretion, require the person (in this section referred to as the personal representative) to whom probate of the will or administration with the will annexed is granted within six months after the grant of probate or administration or within two months after the date on which the Board makes the requirement, whichever period expires later,
(b) to publish such particulars of the devise or bequest as  the Board may specify and in such manner as the Board may require, and within one month after such particulars are published to deliver at the office of the Board, or forward to them by post, such evidence of publication as the Board may require.
(2) If a personal representative fails to comply with a requirement made by the Board under subsection (1), he shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding—
Mr. Cooney: Perhaps I should state at this stage that, with the approval of the House there is a small change being made in the order of the sections of the Bill. If Deputies will look at the copy as amended in Committee, they will see that the amendment to section 29 appears after the amendment to sections 32  and 33. It is proposed to re-order the sections so that what is now section 10 will become section 8. The reason for this is to have the sections in numerical sequence. There is nothing else involved.
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