Charities Bill [HL]

Session 2010 - 12
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Other Bills before Parliament

Charities Bill [HL]

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
45

(b)
it may (without further notice) proceed with the proposals either
without modifications or with such modifications as it thinks desirable.
(6)
Where the Commission makes an order under this Act to establish a scheme for
the administration of a charity, a copy of the order must be available, for at
least a month after the order is published, for public inspection at all reasonable
5
times—
(a)
at the Commission’s office, and
(b)
if the charity is a local charity, at some convenient place in the area of
the charity.
(7)
Subsection (6)(b) does not apply if the Commission is satisfied that for any
10
reason it is unnecessary for a copy of the scheme to be available locally.
(8)
Any public notice of any proposals which is to be given under this section—
(a)
is to contain such particulars of the proposals, or such directions for
obtaining information about them, as the Commission thinks sufficient
and appropriate, and
15
(b)
is to be given in such manner as the Commission thinks sufficient and
appropriate.
89
Publicity for orders relating to trustees or other individuals
(1)
The Commission may not make any order under this Act to appoint, discharge
or remove a charity trustee or trustee for a charity, other than—
20
(a)
an order relating to the official custodian, or
(b)
an order under section 76(3)(b) (appointment of additional charity
trustees),

unless, before doing so, the Commission has complied with the publicity
requirement in subsection (2).
25

This is subject to any disapplication of that requirement under subsection (4).
(2)
The publicity requirement is that the Commission must give public notice of its
proposals, inviting representations to be made to it within a period specified in
the notice.
(3)
The time when any such notice is given is to be decided by the Commission.
30
(4)
The Commission may determine that the publicity requirement is not to apply
in relation to a particular order if it is satisfied that for any reason compliance
with the requirement is unnecessary.
(5)
Before the Commission makes an order under this Act to remove a person who
is—
35
(a)
a charity trustee or trustee for a charity, or
(b)
an officer, agent or employee of a charity,

without the person’s consent, the Commission must give the person not less
than one month’s notice of its proposals, inviting representations to be made
to it within a period specified in the notice.
40

This does not apply if the person cannot be found or has no known address in
the United Kingdom.
(6)
Where the Commission gives notice of any proposals under this section—
(a)
it must take into account any representations made to it within the
period specified in the notice, and
45

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
46

(b)
it may (without further notice) proceed with the proposals either
without modifications or with such modifications as it thinks desirable.
(7)
Any notice of any proposals which is to be given under this section—
(a)
is to contain such particulars of the proposals, or such directions for
obtaining information about them, as the Commission thinks sufficient
5
and appropriate, and
(b)
(in the case of a public notice) is to be given in such manner as the
Commission thinks sufficient and appropriate.
(8)
Any notice to be given under subsection (5)—
(a)
may be given by post, and
10
(b)
if given by post, may be addressed to the recipient’s last known address
in the United Kingdom.
Property vested in official custodian
90
Entrusting charity property to official custodian, and termination of trust
(1)
The court may by order—
15
(a)
vest in the official custodian any land held by or in trust for a charity,
(b)
authorise or require the persons in whom any such land is vested to
transfer it to the official custodian, or
(c)
appoint any person to transfer any such land to the official custodian.
(2)
But subsection (1) does not apply to any interest in land by way of mortgage or
20
other security.
(3)
Where property is vested in the official custodian in trust for a charity, the
court may make an order discharging the official custodian from the
trusteeship as respects all or any of that property.
(4)
Where—
25
(a)
the official custodian is discharged from the trusteeship of any
property, or
(b)
the trusts on which the official custodian holds any property come to an
end,

the court may make such vesting orders and give such directions as may seem
30
to the court to be necessary or expedient in consequence.
(5)
No person is liable for any loss occasioned by—
(a)
acting in conformity with an order under this section, or
(b)
giving effect to anything done in pursuance of such an order.
(6)
No person is excused from—
35
(a)
acting in conformity with an order under this section, or
(b)
giving effect to anything done in pursuance of such an order,

because the order has been in any respect improperly obtained.
91
Supplementary provisions as to property vested in official custodian
(1)
Subject to the provisions of this Act, where property is vested in the official
40
custodian in trust for a charity, the official custodian—
(a)
must not exercise any powers of management, but

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
47

(b)
as trustee of any property—
(i)
has all the same powers, duties and liabilities,
(ii)
is entitled to the same rights and immunities, and
(iii)
is subject to the control and orders of the court in the same way,

as a corporation appointed custodian trustee under section 4 of the
5
Public Trustee Act 1906.
(2)
Subsection (1) does not confer on the official custodian a power to charge fees.
(3)
Subject to subsection (4), where any land is vested in the official custodian in
trust for a charity, the charity trustees may, in the name and on behalf of the
official custodian, execute and do all assurances and things which they could
10
properly execute or do in their own name and on their own behalf if the land
were vested in them.
(4)
If any land is so vested in the official custodian by virtue of an order under
section 76(3)(c), the power conferred on the charity trustees by subsection (3) is
not exercisable by them in relation to any transaction affecting the land, unless
15
the transaction is authorised by order of the court or of the Commission.
(5)
Where any land is vested in the official custodian in trust for a charity—
(a)
the charity trustees have the same power to make obligations entered
into by them binding on the land as if it were vested in them, and
(b)
any covenant, agreement or condition which is enforceable by or
20
against the official custodian because the land is vested in the official
custodian is enforceable by or against the charity trustees as if the land
were vested in them.
(6)
In relation to a corporate charity, subsections (3) to (5) apply with the
substitution of references to the charity for references to the charity trustees.
25
(7)
Subsections (3) to (5) do not authorise any charity trustees or charity to impose
any personal liability on the official custodian.
(8)
Where the official custodian is entitled as trustee for a charity to the custody of
securities or documents of title relating to the trust property, the official
custodian may permit them to be in the possession or under the control of the
30
charity trustees without incurring any liability by doing so.
Official custodian and Reverter of Sites Act 1987
92
Divestment of official custodian where 1987 Act due to operate
(1)
Subsection (2) applies where—
(a)
any land is vested in the official custodian in trust for a charity, and
35
(b)
it appears to the Commission that section 1 of the 1987 Act (right of
reverter replaced by trust) will, or is likely to, operate in relation to the
land at a particular time or in particular circumstances.
(2)
The jurisdiction which, under section 69, is exercisable by the Commission for
the purpose of discharging a trustee for a charity may, at any time before
40
section 1 of the 1987 Act operates in relation to the land, be exercised by the
Commission of its own motion for the purpose of—
(a)
making an order discharging the official custodian from the trusteeship
of the land, and

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
48

(b)
making such vesting orders and giving such directions as appear to the
Commission to be necessary or expedient in consequence.
(3)
In this section and sections 93 to 95—
(a)
“the 1987 Act” means the Reverter of Sites Act 1987, and
(b)
any reference to section 1 of the 1987 Act operating in relation to any
5
land is a reference to a trust arising in relation to the land under that
section.
93
Divestment of official custodian where 1987 Act has operated
(1)
Subsection (2) applies where—
(a)
section 1 of the 1987 Act has operated in relation to any land which,
10
immediately before the time when that section so operated, was vested
in the official custodian in trust for a charity, and
(b)
the land remains vested in the official custodian but on the trust arising
under that section.
(2)
The court or the Commission (of its own motion) may—
15
(a)
make an order discharging the official custodian from the trusteeship
of the land, and
(b)
(subject to sections 94 and 95) make such vesting orders and give such
directions as appear to it to be necessary or expedient in consequence.
94
Vesting of land in relevant charity trustees following divestment
20
(1)
Subsection (2) applies where an order discharging the official custodian from
the trusteeship of any land—
(a)
is made by—
(i)
the court under section 90(3), or
(ii)
the Commission under section 69,
25

on the ground that section 1 of the 1987 Act will, or is likely to, operate
in relation to the land, or
(b)
is made by the court or the Commission under section 93.
(2)
The persons in whom the land is to be vested on the discharge of the official
custodian are the relevant charity trustees, unless the court or (as the case may
30
be) the Commission is satisfied that it would be appropriate for it to be vested
in some other persons.
(3)
In subsection (2) “the relevant charity trustees” means—
(a)
in relation to an order made as mentioned in subsection (1)(a), the
charity trustees of the charity in trust for which the land is vested in the
35
official custodian immediately before the time when the order takes
effect, or
(b)
in relation to an order made under section 93, the charity trustees of the
charity in trust for which the land was vested in the official custodian
immediately before the time when section 1 of the 1987 Act operated in
40
relation to the land.
95
Supplementary provisions in connection with 1987 Act
(1)
Subsection (2) applies where—

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
49

(a)
section 1 of the 1987 Act has operated in relation to any such land as is
mentioned in section 93(1)(a), and
(b)
the land remains vested in the official custodian as mentioned in
section 93(1)(b).
(2)
Subject to subsection (3)—
5
(a)
all the powers, duties and liabilities that would, apart from this section,
be those of the official custodian as trustee of the land are instead to be
those of the charity trustees of the charity concerned, and
(b)
those trustees may, in the name and on behalf of the official custodian,
execute and do all assurances and things which they could properly
10
execute or do in their own name and on their own behalf if the land
were vested in them.
(3)
Subsection (2) is not to be treated as requiring or authorising those trustees to
sell the land at a time when it remains vested in the official custodian.
(4)
Where—
15
(a)
the official custodian has been discharged from the trusteeship of any
land by an order under section 93, and
(b)
the land has, in accordance with section 94, been vested in the charity
trustees concerned or (as the case may be) in any persons other than
those trustees,
20

the land is to be held by those trustees, or (as the case may be) by those persons,
as trustees on the terms of the trust arising under section 1 of the 1987 Act.
(5)
The official custodian is not liable to any person in respect of any loss or
misapplication of any land vested in the official custodian in accordance with
section 1 of the 1987 Act unless it is occasioned by or through any wilful neglect
25
or default of—
(a)
the official custodian, or
(b)
any person acting for the official custodian.
(6)
But the Consolidated Fund is liable to make good to any person any sums for
which the official custodian may be liable because of any such neglect or
30
default.
Establishment of common investment or deposit funds
96
Power to make common investment schemes
(1)
The court or the Commission may by order make and bring into effect schemes
for the establishment of common investment funds under trusts which
35
provide—
(a)
for property transferred to the fund by or on behalf of a charity
participating in the scheme to be invested under the control of trustees
appointed to manage the fund, and
(b)
for the participating charities to be entitled (subject to the provisions of
40
the scheme) to the capital and income of the fund in shares determined
by reference to the amount or value of the property transferred to it by
or on behalf of each of them and to the value of the fund at the time of
the transfers.
(2)
In this section and sections 97 to 99 “common investment scheme” means a
45
scheme under subsection (1).

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
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(3)
The court or the Commission may make a common investment scheme on the
application of any two or more charities.
97
Bodies which may participate in common investment schemes
(1)
A common investment scheme—
(a)
may be made in terms admitting any charity to participate, or
5
(b)
may restrict the right to participate in any manner.
(2)
A common investment scheme may provide for appropriate bodies to be
admitted to participate in the scheme (in addition to the participating charities)
to such extent as the trustees appointed to manage the fund may determine.
(3)
In this section “appropriate body” means—
10
(a)
a Scottish recognised body, or
(b)
a Northern Ireland charity,

and, in the application of the relevant provisions in relation to a scheme which
contains provisions authorised by subsection (2), “charity” includes an
appropriate body.
15
(4)
The relevant provisions are—
(a)
section 96(1) (power to make common investment schemes),
(b)
section 98 (provisions which may be included in common investment
schemes),
(c)
section 99(1) (provisions relating to rights of participating charity etc.),
20
and
(d)
(in relation only to a Northern Ireland charity) section 99(2) (power to
participate in common investment schemes).
98
Provisions which may be included in common investment schemes
(1)
A common investment scheme may make provision for, and for all matters
25
connected with, the establishment, investment, management and winding up
of the common investment fund, and may in particular include provision—
(a)
for remunerating persons appointed trustees to hold or manage the
fund or any part of it, with or without provision authorising a person
to receive the remuneration even though the person is also a charity
30
trustee of or trustee for a participating charity;
(b)
for restricting the size of the fund, and for regulating as to time, amount
or otherwise the right to transfer property to or withdraw it from the
fund, and for enabling sums to be advanced out of the fund by way of
loan to a participating charity pending the withdrawal of property
35
from the fund by the charity;
(c)
for enabling income to be withheld from distribution with a view to
avoiding fluctuations in the amounts distributed, and generally for
regulating distributions of income;
(d)
for enabling money to be borrowed temporarily for the purpose of
40
meeting payments to be made out of the funds;
(e)
for enabling questions arising under the scheme as to the right of a
charity to participate, or as to the rights of participating charities, or as
to any other matter, to be conclusively determined by the decision of
the trustees managing the fund or in any other manner;
45

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
51

(f)
for regulating the accounts and information to be supplied to
participating charities.
(2)
A common investment scheme, in addition to the provision for property to be
transferred to the fund on the basis that the charity is to be entitled to a share
in the capital and income of the fund, may include provision for enabling sums
5
to be deposited by or on behalf of a charity on the basis that (subject to the
provisions of the scheme) the charity is to be entitled—
(a)
to repayment of the sums deposited, and
(b)
to interest on them at a rate determined by or under the scheme.
(3)
Where a scheme makes any such provision it must also provide for excluding
10
from the amount of capital and income to be shared between charities
participating otherwise than by way of deposit such amounts (not exceeding
the amounts properly attributable to the making of deposits) as are from time
to time reasonably required in respect of the liabilities of the fund—
(a)
for the repayment of deposits, and
15
(b)
for the interest on deposits,

including amounts required by way of reserve.
99
Further provisions relating to common investment schemes and funds
(1)
Except in so far as a common investment scheme provides to the contrary—
(a)
the rights under it of a participating charity are not capable of being
20
assigned or charged;
(b)
a trustee or other person concerned in the management of the common
investment fund is not required or entitled to take account of any trust
or other equity affecting a participating charity or its property or rights.
(2)
The powers of investment of every charity include power to participate in
25
common investment schemes unless the power is excluded by a provision
specifically referring to common investment schemes in the trusts of the
charity.
(3)
A common investment fund is to be treated for all purposes as being a charity.
(4)
Subsection (3) applies not only to common investment funds established under
30
section 96, but also to any similar fund established for the exclusive benefit of
charities by or under any enactment relating to any particular charities or class
of charities.
100
Power to make common deposit schemes
(1)
The court or the Commission may by order make and bring into effect schemes
35
for the establishment of common deposit funds under trusts which provide—
(a)
for sums to be deposited by or on behalf of a charity participating in the
scheme and invested under the control of trustees appointed to manage
the fund, and
(b)
for any such charity to be entitled (subject to the provisions of the
40
scheme) to repayment of any sums so deposited and to interest on them
at a rate determined under the scheme.
(2)
In this section and sections 101 to 103 “common deposit scheme” means a
scheme under subsection (1).