UK Hansard_1803_onwards CQV discussion 4-11-11.pdf

7/23/2019 UK Hansard_1803_onwards CQV discussion 4-11-11.pdf

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UK Hansard- Commons and Lords

Official References to Cestui que use and trusts

As Cestui Que Vie Trusts may be defined as hidden trusts, knowledge of their ubiquitous

existence as the framework of commerce for all modern democracies is largely unknown,

even by most public officials.

However, their existence is impossible to be denied as the following official extracts of

Hansard demonstrate.

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INCOME (PROPERTY) TAX.HL Deb 17 June 1842 vol 64 cc2-89

Lord Brougham was desirous of taking that early opportunity of stating to their Lordships the

views which he still entertained, and which the reflections of the last two months since hebrought the subject before the House, had tended to con. firm, upon this most interesting

and important question, interesting not only to the Government and to the finances of the

country, but to the comfort and well-being of the people; and he was the more anxious to

take that early opportunity of doing so, having the misfortune to differ in some points from

his noble Friend who had so recently addressed the House; for he felt, that he should not do

justice to his noble Friend, or to his own opinion, if he did not at the earliest possible

moment, endeavour to remove the impression which the speech of his noble Friend must have

made upon their Lordships, with respect to those points on which it was his misfortune to

differ from him. It formed no subject of difference, that his noble Friend should have

expressed again on that, as both of them had expressed on 40 other occasionsthe strongestin his noble Friend, the almost invincible, and in his altogether invinciblerepugnance to this

impost. He agreed with his noble Friend, in all his comments upon the inequality of its

tendencyits inability faithfully and effectually to perform its office of abstracting money

from the pockets of the communityabstracting, as it did, unequally, unjustly, and

oppressively, and above all, he agreed with his noble Friend in the opinion he had expressed

of the inquisitorialnecessarily inquisitorial, he admittednature of such an impost; and

there was one inequality which his noble Friend had omitted to consider, which more than all

the rest gave him a repugnance to such a measure; that was its great power for all purposes

not merely like the elephant to which his noble Friend had referred, with a proboscis so

sensitive, that it could pick up a needle, but that it was also equal to the tearing up of a tree,

or the splitting of a rockit was a weapon so powerful, that he could not consent to place it

in the hands of any Government, as a regular and permanent financial resource. It was a

resource to be confined to times of extreme exigency, a resource the employment of which

absolute necessity alone could justify; but as a means of ordinary revenue, it was open to all

the most serious objections, that could be urged against such a weapon. Whether the

Government were one which he distrusted, or whether it were one in which he reposed the

most entire confidence, it should not with his con-sent have in its hands a power which would


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enable it by the mere stroke of a pen at any time, to raise any sum of money it might please

to demand, and to impose any amount of tax which it might consider the people could bear

to increase, merely by the turning of a screw, in this well-contrived engine, 100,000l. or

200,OOOl. to 10,000,000l. or 20,000,000l. or more. He repeated, that this was a powera

temptation to extravagancewhich he would entrust to no Government, except in a case of

overwhelming and absolute necessity. Let their Lordships remember what had occurred inreference to the former property-tax. On Monday, the 18th March, 1816, the property-tax was

destroyed, though to his noble Friend, it was a matter of almost vital importance to enact it

again in any terms, and to any amount, however small, as a permanent or regular branch of

financial resource. They had previously to that memorable vote been told by another 41 noble

Friend of his, the late Secretary for Foreign Affairs, then Secretary at War, that his army

estimates were reduced to the lowest possible amount, and that consistently with the safety

of the State, no further reduction could be madethat they had reached the maximum of

economy, and had brought down the army to its minimum. On the 18th of March, the

property-tax was rejected; and on the 22nd down came his noble Friend and put off his

estimatesand the next week, or the week after, came the new set of estimates, framed in

accordance with the new measure of parliamentary liberality, and the consequently altered

state of the feeling of the Government. And so would it be again, whatever means of

expenditure were at the disposal of the Government, they would spend up to themthe

Government should always be kept on short allowance, and its expenditure would always be

regulated by the strict watch which was maintained over it by Parliament. When, however,

the question washe would not say national bankruptcybut when it was between the

discredit of the countrygoing on with a continuing deficit in the revenue year after yeara

deficit not diminishing but increasing with each year, and that so clearly and so surely, that

the deficit of the year ending in April in each of the two last years, was greater than the

deficit of the year ending in Januarythen it was that Parliament was imperatively called

upon, and was absolutely bound, if it did not desert altogether the duty it owed to thecountry, to exert its power and put an end to a state of things thus going on from bad to

worse, and from worse to worst of alland which, if not stopped in time, must finish with

something which might, without any figure of speech, be called an approach to a state of

national insolvency. In the propriety of devising a remedy, all, he believed, were agreed. His

noble Friend near him had complained that his noble Friend opposite had exhausted himself

in demonstrating a number of propositions which all were prepared to grant him. To be sure

no man would propose to re-enact the salt-tax, or that still worse tax, the tax on printed

cotton goods. The question then being, how they were to meet the deficiency in the public

revenue, and a growing deficiency, amounting, according to one estimate, to 3,000,000l., and

according to the lowest estimate, of 2,500,000l.; and which 2,500,000l., if 42 correct, mustnot be understood as the whole amount of deficiency for the yearfor it must be

remembered that a very large increase of expenditure would be occasioned by the operations

in the east, even if those operations were as successful as the most sanguine of their

Lordships could expectthis deficit having to be met, the question was, whether the plan of

his noble Friend near him, or the Government proposition of an Income-tax, was the fittest to

be adoptedall admitting that an Income-tax was the worst, if the other were possible. His

noble Friend's plan was that of the Government of last year, only varied a little as to the


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sugar duties, which plan was brought forward with a view to commercial legislation, not

revenue, and in all respects except as to the sugar duties, appeared to him and others as

being calculated to produce a great improvement in our commercial code. But a different

view of that plan must be taken when brought forward as a measure of finance alone; for in

that case, however good it might be in other respects, if it would not meet the financial

difficulty it was not sufficient to prevent their having recourse to an Income-tax. He hadalready stated that an Income-tax could be justified only by the most urgent necessity, but if

his noble Friends behind him had always entertained the same uncompromising hostility to an

Income-tax which he entertained to it, and which now induced his noble Friend to prefer any

other tax to it, those noble Friends would have adopted a different course in dealing with the

proposition; for the obvious course in that case would have been, when the Government

proposed their plan, to have resisted it at once, and to have allowed not one single instant to

elapse ere they announced their uncompromising hostility to such a plan. But was that the

course taken by his noble Friends? Did they oppose this measure when it was first brought

forward? By no means: it was brought forward on Friday, the 11th of March; and it was one

whole week before they could make up their minds to oppose it at all. That was a fact; nay,

when it was brought forward a noble Friend of his (Lord J. Russell) avowed, that although

there might be a difference of opinion, and time might be required in order to make up their

minds upon the detail of the Government plan, yet that, as a whole, all parties must clearly

admit that it was a great plan, worthy of the Ministers of a great coun- 43 try. But was the

Income-tax no part of that great plan? Was it no material portionwas it a mere trifle,and a

thing to be passed over without even a word? His noble Friends could not dispute the accuracy

of his quotation; for he could assure them those were the words in which the opposition to

the measure were expressed; and he was never more surprised in his life, for, remembering

the feeling always entertained towards this tax, he at least expected that not one moment

would be lost to cry out against the abuse of it and its details, and to regard it as an

enormity, to be palliated only by the extreme urgency of the necessity, and to endeavour, byall possible means, to reduce its mischief within the smallest possible compass. But the

general approval of the Ministerial plan as a great measure, worthy of the Ministers of a great

empire and nation, was all the resistance that was offered; and not even a protest was made

against the plan until a week had elapsed from the moment of its being proposed. However,

on Monday, the 14th of March, an opportunity was given to his noble Friends to reconsider

their rash admission of the preceding Friday; and he took the liberty of coming to that House,

and in his place moving a set of resolutions upon this whole question. Now it might not be

necessary for his noble Friends to agree to all his resolutions; they might take a totally

different view of the first of them, in which a statement was made of the evils of the tax, and

an assertion that nothing but absolute necessity could justify its imposition; they might differfrom that, and hold that no necessity could justify its imposition; or they might deny another

of the propositions, which averred the existence of that necessity, and state, as his noble

Friend had done to-night, that it was not necessary, inasmuch as there were o her means of

providing for the deficit, without having recourse to this tax. They might agree with or

dissent from the other proposition that he brought before their Lordships, stating the

necessity of altering the tax as it had been formerly laid on, and making it more equal upon

various kinds of income. But the propositions were laid on the Table on Monday, and the


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consideration of them put off at the request of one noble Lord and another until the Thursday

following. Time was therefore given to his noble Friends to have at length made up their

minds whether the Income-tax was to be opposed or 44 not; but even on the Thursday, when

the debate was brought forward, and when the statement, of which his noble Friend (Lord

Lansdowne) had spoken in terms of far too great commendation, was made by him to their

Lordships in moving the resolutionseven then his noble Friends had not made up their mindson the subject, for they were not prepared to announce any opposition whatever, and his

resolutions were of course negatived without a division. Now, something happened on that

day, or early the next day, which showed that there was an appearance of some agitation in

the city upon one question connected with the Income-tax. A meeting had been held of bank

proprietors on the subject of terminable annuities, and the very great inequality of this tax

was pointed out as one of the most crying evils, and to which the most serious objections

existednamely, that terminable annuities were taxed to the same amount with perpetual

annuities and other permanent property. That feeling had been expressed in the city, and

even then his noble Friends were not prepared to form their opposition; for if they had been,

excitement would not have been wanting to produce it in that House. Although the agitation

in the city produced no effect here, it was announced the night afterwards in the other

House, that there was an intention to advance an opposition to the measure. But,

notwithstanding all the arguments which his noble Friend had now brought forward, and so

eloquently supported, and the reasons he had given against this tax, he had still avowed his

intention not to throw' any obstacles in the way of the passing of this bill. Therefore, he could

not help thinking that the difference between him and his noble Friend on this subject was

not, in reality, so great as it seemed to be, and that he did not entertain a much greater

aversion to this tax than himself, holding it as he did, in as great abhorrence as it was

possible to hold any measure, provided a possibility existed of avoiding the imposition of it.

Now then they came to the question of the existence of that possibility, and the first thing

proposed by his noble Friend (Lord Lansdowne) was a tax upon bread. 1,700,000l. was to beraised, leaving only a deficit of 800,000l., and to make up that sum every person must think

that a measure of this sort was out of the question. Was there any chance of raising that sum

by the tax proposed by his noble Friend? He would at 45 once declare that he was here at

issue with his noble Friend, for he did not regard the measures of last year as anything like

measures of finance, and it was utterly impossible any one could entertain a contrary opinion

after considering of what they consisted. In the first place, there was a tax of 8s. fixed duly

upon corn. It was said, that 900,000l. would arise from that tax; but how was it to arise?

Provided there was a certain quantity of grain imported in the year, so much duty per quarter

was to be levied upon it, but if there were no grain imported there would be no levy of

money and no duty received. Then what became of the 900,000l.? But he did not want tohave the chance of obtaining revenuenot a ticket as it were in the finance lottery, giving a

beneficial chance of having 800,000l. or 900,000l., or of not having it, according to

circumstances. He did not wish to run the chance of having 900,000l. this year, and 500,000l.

next year, and perhaps 300,000l. another year, and nothing at all the year after. The deficit

in the revenue was not a matter of chance, it was always pressing upon them whether the

seasons were good or bad, and it was to supply that deficit that they were now reduced to

the necessity of finding out a means of taxation not contingent, not accidental, not of the


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hap-hazard kind, which might either be great, or middle-sized, or little, or nothing at all,

according to the circumstances of the year. And what were those circumstances?anything

very steady, anything very much to be relied upon, anything very safely and securely to be

looked forward to by statesmen intrusted with the most delicate, difficult, and important

part of a nation's concerns,the management of her finances, the support of her credit? No,

it was something neither more nor less steady, nor more nor less to be relied upon, than theproverbially steady, fixed, calculable winds, and rain, and storm, and floodsin one word,

the weather of the year in this kingdom. Come a bad season, and they had the importation;

come a moderate season, and they had little or nothing imported; come a good season, and

they had absolutely nothing imported at all; and with all that jeopardy, and the supply failing

when, perhaps, they wanted it most, they were asked to build upon this foundation their

hopes of a permanent, steady, and regular supply of nearly 1,000,000l. sterling. Then there

was another thing to 46 be taken into the account. When there was a bad season here, and

grain and food were dear, corn would, no doubt, be imported, and the 8s. duty be levied, and

thus the revenue supplied; but was there nothing to set-off against that? It was just in a year

of such a sort that the excise was likely to be deficient, because the higher the price of food

the less able were the poor to indulge in those articles which formed the subject of the excise

duties, and accordingly in that year when they had the greatest chance of receiving a supply

to the revenue by the fixed duty on foreign grain imported came the deficit in the supply of

the excise, and they must set-off that deficit against the paltry sum that the impost would

bring of a duty on the importation of foreign corn. When, therefore, there was a chance of

one portion of the revenue being benefitted there was a certainty of a deficit and a greater in

another portion, He and several of his noble Friends had, however, contended that they had

no right to lay on this tax, because it was a tax upon the food of the people, and to all intents

and purposes a bread-taxa poll-tax laid upon the rich and poor equally, for all were equal

consumers of food. Yet they were now called upon to take it and to rely upon it as a

permanent, constant, habitual portion of the revenue. Now he had said, that the measures oflast year, with a view to commercial legislation, appeared to him to be very considerable

improvements. He preferred the fixed duty of 8s. to the former state of the law, and he

thought the sliding-scale would be no improvement upon the fixed duty, but as a measure of

finance he fairly stated his opinion, that he did not think it was originally intended as such.

And in support of that opinion, he would quote the remarkable words of a right hon. Friend of

his,words of which any one might envy the eloquence, and no one could surpass the

candour That the Government of last year brought forward the measure of the Corn-laws

urged by the importunity of their friends and goaded by the taunts of their adversaries. The

words were not hishe did not trench upon that groundtractent fabrilia fabribut they fully

bore out his opinion that the Corn-laws were not brought forward as a measure of finance. Hewould now come to the second proposition as regarded the sugar duties. He cared not

whether they took it as these duties were originally proposednamely, 24s. a cwt., 47 or as

the proposal had been now modified36s. was to be the duty on foreign sugar, reduced from

63s.; there was the same per centage of differential duty. Now precisely the same principle

applied to the sugar duties as to the timber duties when the protecting duty was reduced

from 150 to 100 per cent.namely, by taking off 5s. from the duty on Baltic timber, and

adding 10s. on Canada timber, or rather increasing it from 11s. 6d. to 21s. 6d. He entirely


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differed from the view taken by his noble Friend (Lord Lansdowne) with respect to the sugar

duty, and wished to enter his protest against the opinion his noble Friend had pronounced

before their Lordships, unless his noble Friend confined that opinion to the question of

slavery, and of slavery alone, as contradistinguished from the slave-trade. [Lord Lansdowne

had made the distinction, and stated that he did not allude to the slave-trade but to slavery.]

He was certain that he and his noble Friend could not entertain different opinions on thatsubject, but he thought the admission entirely disposed of the argument with regard to the

sugar duties. They were now to reduce the duty on our own colonial sugar to 20s., and on

foreign colonial sugar the duty was to be reduced from 63s. to 30s., taking off 33s.; and it

was expected, that the protecting duty being no longer 162 per cent., but SO per cent., a

large amount of foreign colonial sugar would be imported into this country. Now, he should

show to the satisfaction of his noble Friend and the House that the refusal to equalize the.

sugar duties was not made to protect the colonies, but to afford protection to the African

negroes against the African slave-trade. It was mighty well and easy to talk of commodities,

and of importations, and of duties, and of lowering the foreign duty, and of keeping our

colonial sugar at the same rate, and by a differential duty increasing the amount imported,

and of adding to the comforts of the people, and giving them what before was not within

their reachall these were fine smooth phrases; but if the House looked beneath the

surfaceif they paused, and asked the meaning of all this, and what lurked beneath these

expressions depicting the smiling aspect of increased produce, and larger consumption of the

whole people, they would find that it was meant that some 20,000 or 30,000 or it might he

40,000 unhappy Africans were to be instantly taken from Africa, and sent forward through all

the horrors of the middle passage to culti- 48 vate Cuba and the Brazils. That was the

meaning of this plan of finance. It was not a remote or a contingent, but the absolute and

inevitable result of a change of duty. This was no question of preference of slave-grown sugar

over free-grown sugar. If it was he should agree with what his noble Friend had stated to their

Lordships. He might lament, but he could not help other nations cultivating their fields byslave labour. But those who knew anything of West-Indian affairs must be aware that there

was a wide difference in the condition of the unhappy cultivator of sugar and that of the

producer, even of coffee and cotton, much more of corn. The slave-trade was no institution

it was not to be ranked with any institutions of any country. It violated the laws of nature as

well as nations, and instigated one nation against the other. If the duty was lowered, and our

ports opened, the demand for Cuba and Brazilian labour would cause, as a matter of

necessity, negroes to any amount to be poured into those colonies and that kingdom for the

purpose of supplying the demand which we should thus occasion. He held it to be an

inevitable consequence, that the instant the duty on sugar was lowered, 40,000 or 50,000

negroes would be taken from Africa to endure all the horrors of the middle passage and behurried away to the West-Indian colonies. Every additional hogshead meant and caused an

addition to the slave-trade. On a former occasion, he stated his objections to the present bill,

and if he should not be exhausting their Lordships, he would repeat a few of them; although

he was afraid, that under the existing system, any attempt to make any alterations in the bill

in that House would be hopeless. If their Lordships would look carefully into the arrangements

of the bill, they would be convinced, that there were matters involved, which although it

might be vain to think of altering in that House, might not only be advantageously altered,


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but must be, to allow the measure to work. There were portions of the bill relating to the

levying of the tax, which he was satisfied, when their Lordships had calmly applied their

minds to them, would be found to require alteration. But that House could not alter themit

was too lateand there was no alternative between adopting the bill as it stood in this

respect, or throwing it out. This fact showed how expedient it was that the House should

have come to some 49 understanding on these matters, as he had formerly moved, and that itshould be suggested to the other House to relax in their exercise of that high privilege which

they claimed in all their proceedings relating to money. He would now name one or two of his

objections. The first part of the bill, and the foundation of the whole measure, provided for

the appointment of commissionersthose who were called commissioners for general

purposeswho had in the first instance to work the measure, though certainly, as the bill

stood, in a way most unintelligible. But he begged to assure his noble Friend, that in his

observations he did not wish to act invidiously towards the authors or framers of the bill. His

observations would have reference to a more general and a higher principle, one which was

essential to the fit performance of the legislative functions of the two Houses. Now, the land-

tax commissioners were to meet, and to set down in writing the names of such of the

commissioners appointed as should be qualified to act as required by the bill, and to set down

the names of those persons chosen to act. Any seven of the whole numbernot less than

seven, and in no case less than three of the persons set down in orderwere required to take

upon themselves the execution of the act. Now, let it be observed, that if on any exigency a

mandamus was to be issued, or indictment preferred against a commissioner refusing to act,

how was he, amongst three, or seven, or thirty-four, to know that it was against him that

they were directed? And how was the name of the person to be ascertained? Again, if a

person were absent, there was no notice provided, and the clerk was not called upon to

deliver any. So that being absent from the meeting, he was to have no notice from the clerk,

and yet was liable to be moved against by mandamus, and indicted for failing to take on

himself the duties. It went on Provided always, that where seven persons qualified to actas herein required shall be chosen to act for any district, no other person shall interfere as a

commissioner. What if there were only three? The 6th clause was, And be it enacted, that in

case there shall not be a sufficient number of commissioners chosen." They might be

chosen to act as commissioners, and it was not said by whom they 50 were to be chosen. Then

came the 8th section, and the requisition was still more stringent. It was, It shall be lawful

for the commissioners appointed to execute the said Land-tax Act, being respectively

qualified as directed, and they and every one of them, not in any case exceeding the number

of seven, are hereby strictly enjoined and required to take on themselves forthwith the

execution of this act;" or notice of such neglect and want of appointment was to be given

to their clerk, with no provision that the clerk was to give them notice. So that they werestrictly enjoined to find that they were any persons not less than seven; and they were

strictly enjoined to act upon a notice, which they were not to receive themselves, but which

another person, who was not to communicate it to them, was alone to receive. As to courts of

justice, the 30th clause provided, that the Lord High Chancellor, the judges, and the principal

officer, or officers of each court, or public department of office, civil, judicial, criminal, or

ecclesiastical, should respectively have authority to appoint commissioners. How was that to

be executed? Was it the Chancellor, or Chief Justice, or the Chief Justice and one of the


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masters, or the Chancellor and Chief Justice, and principal officer or officers? So that if they

happened to be sitting the clerk of the rules might come and say, "Why don't you admit me to

your council; I have as good a right to appoint as any of you." The commissioners were treated

as if they would decline acting, but no effectual provision was made for that event. It was

assumed, that nobody would like to execute the powers of this act, whereas he thought there

would be found too great a disposition to execute some of its powers. Without its beingspecified where they were to meet, a provision was made by which any two or more of the

commissioners for general or special purposes, or any other commissioners, were to be

enabled to execute all instruments, to do all acts, and execute every power. Any two

commissioners might act. There was no provision who were the persons to be present. What

was the consequence? He went and he claimed an exemption of two; they refused to give it.

He went to another twoany two might execute the I powerand they signed a certificate

which was binding on the commissioners 51 for special purposes; they were to issue a warrant

which was binding on the receiver-general of the taxes, and he was to honour the warrant

and pay the money according to the certificate. Therefore, having been refused exemption by

the general body of the commissioners, any two of the commissioners was entitled, by the

191st section, to give the exemption. The last circumstance to which he wished to call their

attention (he had passed over many), related to persons in the situation of trustees, agents,

guardians of infants, committees of lunatics. They were all, by the 44th clause, entitled to

deduct from the means of the infant, cestui que trust, principal in the care of agent, or

lunatic, coming into their hands, whatever sums they had been assessed at, and they were

indemnified. But then came the 61st, 165th, and other sections, by force of which, if a person

had not been so assessed as to enable him to deduct, he was to be entitled, after the

expiration of a year, to obtain a certificate, and to be repaid the money which he should have

advanced. The guardian of the infant, or committee of the lunatic, might go and claim at the

expiration of the year: they received the warrant and certificate of the commissioner; they

went with the warrant of the special commissioner to the receiver of taxes, the receiver wasbound to pay them the money, and there was not one title of requisition calling on them to

account for the money to the estate for which they were guardian or trustee. If they put the

interest into their own pocket, they had absolute and complete indemnity whatever sums

they had been allowed. The 166th section was worth attending to with this view. It was,

Whoever shall fraudulently be guilty of any fraud or contrivance in making any such claim, or

obtaining any such exemption, or whoever shall fraudulently conceal 'or' (not 'and') untruly

declare any income. Not fraudulently, not falsely, but untruly, in optim fide, believing it to

be so, Shall be fined 20l. and pay the duty chargeable, making 35,l. That was if he was the

principal; but how was the accessory to be dealt with? He who aided or abetted in this untrue

declaration was fined 50l. The same observation as to the division of the bill into two parts,which he had already made, applied to the only other matter to which he would call their

attention, viz.those parts of 52 the bill relating to oaths. There was schedule F, containing

five forms of oaths, to be taken by various functionaries and officers. Of late years great

improvement had been made in bills which had passed through their Lordships' House, by

reducing the number of oaths as far as possible, and substituting declarations for oaths,

wherever it could effectually and safely be done. He had no doubt that if this bill could have

been divided, that schedule would have been entirely changed; that oaths would have been


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struck out, and declarations substituted. Last of all, the examination of persons on oaths

which was provided for in the 124th section, and all that exacerbation of the mischief, and all

that was odious and intolerable, might have been left out. He particularly alluded to the

125th section, That it should be lawful for the commissioners to summon any person whom

they might think likely to be able to give them evidence respecting the assessment to be

made, to appear before them and to be examined respecting the assessment made on anyother person. Neighbours, friends, relativesall but one excepted class, viz., agents or

confidential trusteesmight be called before the commissioners and examined into their

whole circumstances and mode of living. The conclusion was lame and impotent, for by

paying 20l a man might avoid all examination. Some persons would rather undergo the

examination than pay the penalty. He made no doubt that some persons in every

neighbourhood would be found too ready to lend themselves to the inquiries of the

commissioners, and to give all the information which they had, or thought they had,

respecting the affairs of their neighbours. But solicitors might be examined as to the amount

of money they had paid to counsel. Correspondents of merchants might be examined as to all

that passed between them and their mercantile correspondents. Consignees of merchants in

the same way might be examined as to the most delicate affairs of their consigners;

tradesmen, as to the affairs of their customers; customers, as to their expenditure,

payments, when they paid their last accounts, how much money was due, how much debt

there was of A B in the books of C D. There was no confidential trust between a customer and

a tradesman, therefore these parties were not protected. A banker was not a trustee; he was

merely in the nature 53 of a shopkeeper who kept a shop, and the banker might be called

before the commissioners and examined touching the nature of the account; the son might be

examined as to the father, the father as to the son; and all this the commissioners not only

might, but were somewhat in duly bound to undertake as often as there was any doubt on

their minds respecting the accuracy or fulness of the disclosures. Now, having the opinion

which he had already expressed of the absolute and unavoidable necessity of this measurebeing quite aware that pass it mustfor what purpose did he urge these observations? Not in

the light of hopelessly objecting to the measure, not to prevail upon their Lordships to do

that which it would be hopeless, even if he felt that there was not a necessity for passing it,

to prevail upon them in this stage to doviz., reject it; but for the purpose of again

reminding this House of the consequences of the rule being so rigorously adhered to which

excluded the revision and correction in this House of the most important legislative acts that

came up from the other House of Parliament He said that it was no self laudation in this

House, or in a Member of this House, to assert, which he most confidently did, that in this

House, by its constitution, by the manner in which its business was transacted, by the manner

in which it was composed, having within its walls not only the statesmen who adorned thiscountry, and who had so long and so eminently served it, not only men of all other

professionsif he might speak of a statesman as carrying on a professionbut the sages of the

law as well as statesmenthe judges who presided in the tribunals of the country, who were

best versed in its lawsthe House itself being a high judicial body as well as a branch of

Parliamentthat in a place of an aspect like this all the arrangements of the bill could be

more accurately, more safely, more fruitfully sifted and corrected by their Lordships than by

the other House, And what precious advantage was thrown away, what great risk of error was


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incurred, what constant pitfalls were laid by the other House of Parliament to surround and

beset its own steps in legislation, by insisting on their Lordships' positive and absolute

exclusion from all share in perfecting by correction the most important measures. He had no

more doubt, than that he was now addressing their Lordships, that if these and other clauses,

54 to which he had taken leave to direct their attention, had been embodied in a separate

bill, or if they had been suffered to enter into an examination of those which they had notthe power of examining, the result would have been very different although he could not say

that it would have had the effect of making this measure much better or much more

palatable; for when he looked at the mass he Was disposed to agree with his noble Friend's

character of it, who shrunk back with honor at its huge bulkat the hideous aspect of its

arrangementsat the odious nature of its details, to which he might add its darkness and

obscurity, in all the particulars to which he had directed their attention. Monstrum

horrendum, informe, ingens, cui lumen ademptum. They would, however, have purged the

measure of some of its defectsthey would have cleared it of its obvious errors, and made it

more certain to raise the revenue required. If passed in its present form it would not be

sanctionedit would not long be tolerated by the people of this country.

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THE TRUSTEES RELIEF BILL.HC Deb 15 July 1847 vol 94 cc336-7 336

Upon the Order of the Day for the Third Reading of the Trustees Relief Bill,

MR. STUART said, he had serious objections to this Bill, though he did not mean to divide the

House upon the question. According to the present law, a legacy of money in trust for the

benefit of an infant could not be summarily placed in the Court of Chancery; but by this Bill,a trustee of 500,000l, if he thought the money might be laid out beneficially in land, could

summarily put the whole trust fund in Chancery, and the trustee would be acquitted of all

obliga- 337 tion to account. This might be done by a majority of the trustees against the wish

of others, and of the cestui que trust, and the infant might be mulcted of his benefit through

a depreciation of the property in which the fund had been invested. The attention of the

House had not been sufficiently called to this part of the Bill. It was going a monstrous way to

say that any part of any sum of money might, without the consent of the parties beneficially

interested, be suddenly thrown into Chancery, to be got out again as it could. If the Bill had

been brought in at an early period of the Session, it could have been more attentively

considered; but he had discharged his duty in calling attention to what he considered an

insurmountable objection to this Bill. His suggestion was, that the Bill should proceed no

further this Session.

Bill read a third time and passed.

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SECOND READING.

HL Deb 28 July 1857 vol 147 cc547-53

LORD ST. LEONARDS said, he did not rise to oppose this Bill; on the contrary, he approved agreat portion of it, and gave it his hearty concurrence; but he very much lamented that it

should have been found necessary to make trustees the subject of such highly penal

provisions in case of their misapplication of trust funds. No doubt if a trustee, not meaning to

act dishonestly, but having the control of trust money, was induced by some tempting

speculation to invest that money and so lost it, the beneficial owner suffered grievous wrong.

If, however, he (Lord St. Leonards) were asked who upon the whole had suffered most

persons entitled to trust money by the acts of their trustees, or trustees by misapprehension

and neglect through being pursued by the beneficial owners and compelled to make good the

losses to the estate, he should be inclined to say that greater hardship was sustained by

trustees in the honest discharge of their duties than was occasioned to beneficiaries by the

acts of dishonest trustees. He could not but regret that it had been proposed to inflict so

serious a punishment as penal servitude upon defaulting trustees, because he believed that

under 550 such a law it would be very difficult indeed, and almost impossible, to find any

man who would consent to become a trustee. The Bill did not distinctly define who should be

considered a trustee under it, if it should become law. There was much of the Bill which he

approved. It was a great improvement on the Bill which was at first submitted to Parliament

on this subject. The more he looked at it the stronger became his conviction that no honest

trustee would be much endangered by its becoming law, but trustees in general would

apprehend great danger from it. There had been many instances in which men of perfect

honour had invested money belonging to those for whom they were trustees for their own

benefit in speculations of different sorts. Nobody could defend that. If there was a profitthose trustees put it into their own pockets, but if there was a loss it fell upon those for

whom they were trustees. Nevertheless, the courts in this country had been accustomed to

deal leniently with such cases, when it was clear that there was no intention to defraud. It

would be necessary to take care in defining what persons came within the Act as trustees; he

thought the interpretation clause, to which his noble and learned Friend had referred, did not

meet the difficulty. Their Lordships were aware that he had laid on the table a Bill to relieve

trustees who acted honestly, though erroneously, from the liabilities to which they were at

present exposed. He had already explained the nature of that Bill, which he hoped might pass

into law, because he felt confident that unless the Legislature relieved trustees from liability

in respect of innocent breaches of trust, men would refuse to act as trustees. Their Lordshipsshould bear in mind what was the relationship between a trustee and his cestui que trust. It

had always been of a confidential nature. That confidence might have been abused, but

surely those trustees who had, without any fraudulent intent, and in mere ignorance,

committed a breach of trust, ought to be protected against penal consequences. Latterly,

owing to the difficulty of obtaining private trustees, the office of trustee and executor had

become a mere trade, and the late South Sea Company had proposed to establish themselves

a limited liability company for the purpose of performing for a certain profit the office of


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trustee and executor; their Bill had, however, partly owing to his own exertions, been

defeated; but companies of that sort 551 must thereafter be resorted to unless the

Legislature took care how they dealt with trustees who had no intention to defraud. He

understood that some parties were availing themselves of the Limited Liability Act to

establish such a company. He (Lord St. Leonards) entirely objected to the principle of such a

company. Hitherto the office of trustee had been filled without the trustee receiving a singleshilling of remuneration for his labour. If heavy responsibilities were now to be imposed by

the law upon trustees, the Legislature ought to enact that trustees should be legally entitled

to remuneration. But how were they to estimate the labour of trustees? If trustees were to be

expected to sacrifice their time and risk their property gratuitously, the law ought not to deal

harshly with them. He concurred with his noble and learned Friend on the woolsack in

thinking that that part of the Bill which enacted that a prosecution against a trustee should

require the sanction of one of the Judges ought to be amended, because if a man were sent

to trial upon the recommendation of a Judge, his case would be thereby prejudged, and he

would be sent, as it were, with a halter round his neck.

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THE INCOME TAX.RESOLUTION.HC Deb 23 April 1863 vol 170 cc614-

51

THE CHANCELLOR OF THE EXCHEQUER said, the hon. Gentleman would excuse him if he

made no reply to the last observation. As to the amount to be derived from the abolition of

the exemption, he estimated it at about 100,000 a year. There would be ample

opportunities of discussing the question on the clauses of the Bill.

MR. AYRTON said, he understood that these charities were nothing more than trusts, for the

benefit of persons among whom the funds were distributed. In ordinary cases the trusteespaid the income tax, and the cestui que trusts, if their incomes were less than 100, had the

amount returned to them. As he understood, that would still be done. In the 648 case of

railway companies the directors deducted the income tax from the dividends, and any

shareholder whose total income was less than 100, obtained a return of the amount so

deducted. Charities, like railway companies, were corporations, and their aggregate revenue


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did not affect individual exemptions. If that were so, the proposition to tax charities came to

nothing, and would add nothing to the revenue.

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SECOND READING.HC Deb 15 February 1872 vol 209 cc470-515 470

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."(Mr. W. E.

Forster.)

THE ATTORNEY GENERAL FOR IRELAND (Mr. DOWSE) said, that the hon. and gallant Gentleman

who had just spoken had given the House his views with great vigour and with great

eloquence, and he had advanced some strong reasons in favour of the recent Irish elections.

He had, however, to deal more particularly with the two preceding speeches, which putforward very succinctly the arguments against the Ballot. He was glad that the question had

been discussed without any reference to first principles and without any allusion to "the social

contract," or "the rights of man." They were content to take things as they found them. He

should start with the proposition that the House of Commons governed this great Empire. He

did not wish to detract from the position of the House of Lords, or from that of any other

power in the realm; but it was an undoubted fact that all great questions were discussed and

determined in that House, and Members who were elected to serve in that House should be

elected by the 481 freely recorded votes of a free electoral body. The question was, how to

enable the electors to record their votes freely, and it was the opinion of the Government, as

also his own, that the Ballot was the only machinery adequate for the purpose. Cicero called

the Ballotand it was not a bad definitionvindex tacita libertatis. The hon. Member for

Northumberland (Mr. Liddell) who was not usually pedantic, had said that the Ballot did not

mean secret voting, which, of course, strictly speaking, it did not; but it was idle to quarrel

about words when the meaning was unmistakeable. A Bill for establishing the Ballot, in the

popular sense of the term, was before the House, and he hoped that when it was sent up to

the other House, with the approval of a large majority of the representatives of the people, it

would be received with a little more courtesy than it had met with on a previous occasion.

The Ballot was, in fact, the only adequate remedy for the evils of which they were

complaining. They had been told that it was antagonistic to the habits and repugnant to the

character of the people. That was only another way of expressing that which they had been in

the habit of hearing in former timesnamely, that the Ballot was un-English. It was notEnglish because it was not the law in England; but if the present Bill passed, it would in ten

years be as eminently English as any institution we had, just as many things which at first

were stigmatised as un-Constitutional had become Constitutional when passed into law. The

House had already affirmed the principle of this Bill by large majorities, and no one would

venture to say that that House was not the representative of the people of England. If what

was wanted could be brought about by other means, he should be no advocate for the Ballot;


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but the existing evil must be remedied, and it could not be repugnant to the feelings and

character of the people to secure to them the free exercise of the franchise. He was glad that

nothing had been said about the trustee argumenta point on which great stress was formerly

laid. In his opinion, there was nothing in such an argument. If the voter was a trustee for

himself, secrecy was no great matter, and if for his co-voters, they might be supposed to

divide the responsibility between them; while if he was a trustee for people not to be trusted482 with the suffrage, they clearly had no right to control him. In the Court of Chancery, a

cestui-que trust could force the trustee to do certain things, provided they were within the

scheme of the trust. It was admitted that the non-electors had no right to dictate to the

elector for whom he should vote, and for them to know how he voted was no security that he

performed his trust, since they could not know what was passing within his mind nor the

motives which actuated his conduct. When first brought in contact with electioneering

matters, he saw a trustee walking to the poll between a file of soldiers and police, with a

large mob of cestui-que trusts ready to break his head; and he (the Attorney General for

Ireland) observed to a friend who was with him on the occasion"There is a man charged with

the responsibility of discharging a solemn trust, and he has to be guarded by a band of

soldiers from the cestui-que trusts, who are seeking by threats and intimidation to prevent

him from voting at all." That illustration convinced him of the fallacy of the trustee

argument. The hon. and gallant Member for West Sussex (Colonel Barttelot) had twitted

certain hon. and right hon. Gentlemen with having changed their opinions upon this question.

Now, were the mummy-pits of Hansard explored, it might doubtless be found that some

Members had changed their opinions since 30 years ago; but a man who had not changed an

opinion on any subject during 30 years had no opinion worth changing at all. Hon. Gentlemen

opposite, moreover, should remember the cries raised on the difference between a 7 rating

and a 7 rental; that the country was in danger, that the Monarchy was imperilled, and that

the Pope was about to make a voyage of discovery to these shores. These prophets of evil,

their vision clarified by the spectacles of office, plunged the country within nine months intohousehold suffrage, so that they should be the last persons to taunt others with inconsistency.

He agreed, too, with the American writer Emerson, that consistency was the bugbear of little

minds, and that if a man was satisfied of the truth of an opinion he had formed he was bound

to enforce it when a fitting opportunity offered. If hon. and right hon. Gentlemen were

satisfied that they had good reason for changing their 483 opinions, and that the time had

come for the change, they should not be twitted with inconsistency. He would unhesitatingly

say perish consistency, if consistency were to be an obstacle in the path of such reforms as

that now called for. As to bribery, which it was said would not be prevented by the Ballot, he

thought the Ballot would have a considerable effect in that direction, though he did not

expect any legislation to put down bribery altogether. If the law was in advance of publicsentiment and public morals, it would only have a partial operation; but he looked forward to

a time, which he believed would be accelerated by this Bill, when it would be deemed as

unjust and immoral for an English gentleman to bribe as it is now for him to tell an untruth,

or to commit any other mean action. In a mercantile community men would not be so willing

to pay for a vote, whether before or after an election, if they had no certainty of receiving

that vote. Ingenious systems of bribery, such as that practised at the Dublin election of 1868,

would certainly be put an end to by the Ballot. Moreover, the state of the poll would not be


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known while the election was going on. The political thermometer on the polling-day of a

contested election began at zero, and gradually rose to fever heat; and in small

constituencies, where 60 or 70 men turned the election on either side, the effect of the

announcement at 3 o'clock that one was five ahead, and ten remained to be polled, might

easily be imagined. He wondered what the value of those ten men would be. Such men looked

forward with the greatest interest to party quarrels and disputes in Parliament, in the hope ofa Ministerial crisis and a General Election; and so strong was this feeling, that in a borough in

the West of Ireland the chairman whose duty it was to revise the list was appealed to by one

voter in the name of all the Saints not to strike his name off, because if he did his bread

would be gone. Much good had been effected by changing the venue of Election Petitions, and

still further good would be done by the passage of this Bill. It would be very efficacious with

regard to intimidation and undue influencenot the intimidation which could be dealt with on

Petition, such as the intimidation of large mobs, whose employers could be 484 traced, but

that which worked unseen. He referred to the intimidation exercised by landlords on tenants,

a form of which existed in England and Scotland, as well as in Ireland, by employers on the

employed, by customers on shopkeepers. He had known instances of intimidation by a

shopkeeper on a customer, by a lawyer on a client, by a doctor on a patient, and on a patient

by a doctor. He had known half a congregation leave their parson and set up another place of

worship on account of his vote, thus depriving him of a considerable part of his income. It was

important to guard against the intimidation exercised by one class on another, and also on

that exercised by men in a particular class against their fellows. The proceedings of the

International Society, and of trades unions, ought to be considered, and the suffrage having

been conferred on the massesa privilege alleged to have been unasked for, and, perhaps,

not desiredParliament was bound to protect them in its exercise. The intimidation supposed

to be exercised by the Nationalists in Ireland had been referred to, and the hon. Member for

Northumberland (Mr. Liddell) had cited the Kerry and Galway elections as proofs that the Irish

people had no difficulty at present in expressing their opinions. This, however, was assumingthat the results of those elections really expressed their opinions. He was not going to say

they did not, and he should be very careful on this point, for, having regard to the recent

date of the elections and to certain contingencies, it would not be fair for him to offer an

opinion. The hon. and gallant Member for West Sussex had asked whether the Ballot would

have altered those elections, evidently assuming that it would not; but if he himself had a

lurking opinion to the contrary, who could say which opinion was correct? The only way would

be to make trial of the Ballot, and see how the next elections went. He admitted to the full

the advantages which had been conferred on Ireland by the Church Act and Land Act, but

sufficient time had not passed for the fruition of the advantages they conferred; but he

believed the Ballot was required in Ireland by the Irish people in order that they might befree to exercise a free franchise. [Mr. NEWDEGATE asked why Ireland was not in the Bill?]

Ireland 485 was in the Bill. He hoped he understood the hon. Member. He was ready to

answer any question of the hon. Gentleman; but there was what lawyers called a condition

precedent, and that was that he understood him. At the last Meath election an hon.

Gentleman (Mr. Martin), who boasted of his return as evidencing the desire of the people for

Home Rule, polled only 1,040 votes, his opponent, Mr. Plunket, receiving 684, and 2,503

electors not voting at all; whereas, in 1868, Mr. Corbally polled more votes than Mr. Martin


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and Mr. Plunket put together. This seemed to show that the electors would not vote when

they found an overwhelming power overawe them; but were they secured from landlord

coercion on the one hand, and from intimidation on the other, they would exercise the

franchise, and even if the result were the return of 60 or 80 Home Rulers this would be better

than dissatisfaction, and, perhaps, insurrection. Though he should regret their return, some

advantage might flow from itthey would mix with English and Scotch Members; they wouldsee that there was no disinclination to listen to the voice of Ireland; they would see how

business was conducted, and how conscientious opinions were formed on both sides of the

House; and he believed that were Home Rule brought to the touchstone of discussion,

Parliament would be benefited by their presence. He did not think a result of the Bill would

be to bring those men into the House. He hoped it would not, for he firmly believed that the

welfare and salvation of Ireland depended upon the Imperial connection. He believed this was

a good measure for England, Scotland, and Ireland. They were all open to criticisms as well as

the Bill. The time had now come for the passing of this measure; this was plain from what had

been said that night, for if the allusion that the work last Session was done by foreign

workmen applied to hon. Members below the gangway, it implied that the workers on the

Front Opposition wished not to impede the passing of the measure. It was said that it was

easy to criticize, and there was high authority for saying that critics were men who had failed

in literature and art; but this, of course, he was bound to say, did not apply to politicians.

Destruction was easy, but construction was difficult, and he agreed 486 with the words

quoted by Lord Coke"Blessed be not the complaining tongue, but the amending hand." That

had been the principle of those who had brought forward this Billnamely, a conscientious

desire to reform the Constitution, not by introducing violent changes, but by giving to voters

the power of freely exercising the power of voting which had been conferred upon them. He

thought the result would be to strengthen the Constitution and to strengthen the Monarchy,

to which we owed all the liberty we now enjoyed, and he hoped the time would never come

when there would be in this country any institution like the Commune of Paris or theTammany Ring of New York. If the House secured the well-being and happiness of the people,

if they enabled voters to come forward and record freely their opinion on public affairs, they

would increase their claims to be considered the representatives of the people of England.

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COMMITTEE. [Progress 3rd July.]HC Deb 04 July 1873 vol 216 cc1787-

805 1787

Bill considered in Committee.

(In the Committee.)

Clause 18 (Power to transfer jurisdiction of Judicial Committee by Order in Council).


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THE SOLICITOR GENERAL proposed an Amendment whereby the proposed alterations of the

law would not be confined to the High Court of Justice and Court of Appeal respectively, but

would be extended to all England, stating that if it was thought necessary words could be

introduced, on the recommitment of the Bill, applying it to Ireland.

DR. BALL, in opposing the Amendment, called the attention of the Committee to the stateof the jurisdiction of the Admiralty Courts of England and Ireland, and in pointing out how

differently it operated, said it was a strange thing that in two countries, separated only by a

sail of four hours, vi Holyhead, the lines of administration of the law relating to Admiralty

jurisdiction, in matters of collisions between foreign vessels, were not governed by the same

rules. In illustration of that, he mentioned a case of collision in the Pacific Ocean between a

Swedish and an American vessel. One of those vessels arrived in Cork, which gave jurisdiction

to the Irish Court of Admiralty. The Court pronounced its decision, after having heard the

arguments of counsel, awarding damages; but had the ship arrived in an English port instead

of an Irish one, the English Court of Admiralty would have divided the damages, in its

decision, between the litigating 1798 parties. Should the proposition of the hon. and learned

Gentleman the Solicitor General be adopted, he hoped steps would be taken on the nextstage of the Bill to extend its operation to Ireland, so that the administration of the law

should be the same in the two countries.

Amendment agreed to.

MR. MATTHEWS moved, in page 14, line 34, to leave out sub-section 2, providing that no

claim of a cestui que trust against his trustee for any property held on an express trust shall

be held to be barred by any Statute of Limitations. The sub-section imperfectly stated the

doctrine of the Court of Equity, and it spoiled it in stating it.

THE SOLICITOR GENERAL said, the sub-section made no alteration in the law. The words,which were not his, had been very carefully considered, and were designed merely to express

the law as it stood.

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SUPPLYNAVY ESTIMATES.HC Deb 28 June 1880 vol 253 cc975-1080

SIR H. DRUMMOND WOLFF said, he was sorry the hon. Gentleman opposite (Mr. E. J. Reed)

had referred to the Reports of departments, as he did not think himself that the question of

Greenwich Hospital was exhausted. The right hon. Gentleman the Secretary of State for War

(Mr. Childers) really could never wish them, in any way, to rely on the bargain of which hespoke. The right hon. Gentleman asked them to take that speech as a standard to apply to

the compromise that had been effected. But the speech to which he (Sir H. Drummond Wolff)

referred seemed to have been delivered several years ago, and which nobody, so far as he

was aware, recollected, and which did not appear to have been reported. He would call their

attention to the fact that since that time the right hon. Gentleman had not only been in

Opposition, but had also been in other departments of the Service; and it appeared to him

rather unreasonable to refer to that to explain the reasons why seamen and marines were


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deprived of a fair revenue for that valuable property. The question was, in fact, greater than

many hon. Members supposed. They had, in fact, the Lords of the Admiralty acting in two

capacitiesas trustees for the aged seamen and marines on the one hand, and as Lords of the

Admiralty on the other. They took the money of their cestui que trustent and put it into the

pockets of the Admiralty. 100 a-year was clearly an inadequate rent: the buildings were

assessed at from 4,000 to 5,000 a-year, and they were asked to say they considered 100sufficient rent. He thought that was unworthy of the Admiralty, acting in their capacity of

Lords of the Admiralty, to make a profit out of that property. He sin- 997 cerely trusted that

the hon. and learned Member for Chatham (Mr. Gorst) would bring that matter up in a

forcible manner next year, and in such time as to have ample opportunity for discussing it, so

that it should not be hurried over as it was that night, in order that the rights of seamen and

marines might be less curtailed than they were at present with reference to that subject.

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SECOND READING.HL Deb 26 July 1887 vol 318 cc1-8 1

Order of the Day for the Second Reading, read.

LORD HERSCHELL said, there could be no doubt that the position of a trustee was one of very

considerable risk. Latterly that risk had narrowed down to the general honesty of those who

were conducting the legal affairs of the country. In individual eases now and then the risk had

become felt, and had involved the most lamentable consequences. It was a risk from which no

trustee could absolutely free himself; for it was impossible for any trustee to give that

personal attention to every detail, every action, which alone could insure his complete

security. On the other hand, it was very difficult to refuse a trusteeship, though many would

gladly do so. There was scarcely any trustee who knew whether any property which he

believed to be his own was really so, or whether it was liable to; meet the defalcations of

those who managed the trust. This measure would, to some extent, meet a much-felt want,

and, if its provisions were carefully considered, might be of public service. He had always

looked forward to the time when they might see the creation of an official trustee with

absolute security for the cestuis que trustent; and he did not think such a measure as this

would stand in the way of such a proposal. He trusted the noble and learned Lord would not

carry the Bill beyond a second reading that Session.

LORD BRAMWELL remarked that, though not so well acquainted with the Law of Trust as he

was, or ought to be, with the Common Law of England, it would not be amiss that he shouldexpress his goodwill towards this Bill. One advantage that the Bill possessed was that it was

entirely voluntary in its application, no one being bound to employ these Companies as

trustees. He Believed that at present trust funds were more often wasted by improper

investment, under pressure from the cestuis qua trustent, for the purpose of obtaining higher

interest, than from actual dishonesty. That danger would be avoided if the Companies were

trustees, as no pressure could be brought to bear to 8 tempt them to invest in dangerous

securities. He sincerely hoped the Bill would pass into law.


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(NO. 24.) SECOND READING.HL Deb 08 March 1888 vol 323 cc534-8

LORD HERSCHELL , in moving that the Bill be now read a second time, said, it was introducedat the instance of the Incorporated Law Society, who had devoted much attention to this

subject. It was intended to relieve trustees from some of the liabilities to which they were

now subject, and to remove disabilities under which they at present laboured. The measure

was one of detail, and did not involve any general principleeach provision was to be 535

considered by itself. There could be no doubt that trustees had long suffered under burdens

which most of them considered very grievous, and anything that could be justly and properly

done to give them relief would have a sound and wholesome effect. In fact, the liability of

trustees for acts perfectly innocent in themselves had been pushed to such a point that it was

often difficult to get persons to act in that capacity at all. The first provision of this Bill was

very simple. This Bill, proceeding on the lines of the Conveyancing Act of 1881, which did notapply to trustees, would enable a trustee to appoint a solicitor to be his agent to receive and

give a receipt for money on behalf of the trustee. It often happened in cases when it was

desired to effect a sale on satisfactory terms that it became necessary to insert certain

restrictions in the conditions of sale, which were known as "depreciatory conditions." But as

the law at present stood, trustees could not insert "depreciatory conditions," and an

impediment was thus placed in the way of their obtaining as much as they otherwise would if

they were ordinary vendors, and often, when it was sought to enforce a particular sale, a

person was enabled to get out of his bargain by alleging that the trustees sold under

conditions which a trustee could not insert. It had been held that a trustee was not justified

in advancing trust money on house property to more than one-half of its value, while on

landed property he could advance to the extent of two-thirds of its value. But there did not

seem to be any substantial reason for thinking, in these days, that house property was more

subject to fluctuation than landed property, and the present restriction placed a difficulty in

the way of trustees securing good investments. This Bill proposed to place house property and

other landed property on the same footing. At present a trustee could not buy or lend without

obtaining a "full title." This Bill proposed to enable a trustee to dispense with a full title,

where the title appeared perfectly sound and good without it. It was decided in a particular

case that a trustee, in obtaining a valuation of the property upon which he intended lending,

was bound to obtain the assistance of a surveyor carrying on his profession in the neigh- 536

bourhood of the property. That was a very inconvenient restriction, and the Bill provided that

if a trustee employed a surveyor of skill that was sufficient. Another provision of this Billenabled a trustee to employ an agent to perform certain work under the trust, even though it

was work that the trustee was mentally and physically capable of performing. At present a

trustee could not charge anything for his own services, and could not employ any one else for

reward to do anything which he was himself capable of doing. The consequence was that he

was often put to considerable expense and inconvenience. It did not seem unreasonable that

he should be allowed in certain cases to employ an agent. The last provision in the Bill was


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the most important of all. It enabled a trustee to plead the Statutes of Limitation in certain

cases. At present an ordinary defendant was entitled to meet any claim against him by setting

up the Statutes of Limitation, unless where fraud was proved. But at present, however

innocent the breach of trust on the part of the trustee might have been, no lapse of time

barred the right of the cestui que trust. A trustee might have taken the opinion of the most

eminent counsel, who might have advised that the trustee was entitled to do certain things;but it might turn out by a decision delivered 50 years after that the trustee was not entitled,

and had committed a breach of trust. This Bill provided that a trustee should be entitled to

the benefit of the Statutes of Limitation, save where he had been guilty of fraud, and where

the money had actually come to his hands. It did not seem reasonable that trustees more than

other persons should be liable to stale claims where they had been guilty of no fraud or

misconduct. He begged to move the second reading of the Bill.

COLONIAL SECURITIESINVESTMENT OF TRUST FUNDS.HC Deb 11 December 1888 vol 331

cc1757-8 1757

MR. ANDERSON (Elgin and Nairn) asked Mr. Chancellor of the Exchequer, Whether the

Government have received communications from various Colonial Governments, urging them

to consent to a provision permitting Trust Funds to be invested in certain Colonial securities;

and, whether the Government intend to accede to the wishes of the Colonies on this point?

1758

THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square) , in

reply, said, representations had been made to the Government by various Colonial

Governments on the subject; but he considered it was not so much a question for the Colonial

Governments as one to be determined by the interest and safety of the cestui que trust. He

would, however, see the Agents General of the Colonies in the course of the week on the

subject.

MR. ANDERSON said, all he desired was to get the clause introduced which had been struck

out in the House of Lords.

MR. GOSCHEN said, he was not prepared to assent to the re-insertion of the clause in

question.

*******************************************************************

SECOND READING.HC Deb 03 April 1889 vol 334 cc1481-511 1481

Order for Second Reading read.

*MR. COZENS-HARDY (Norfolk, N.) It is a remarkable fact that until the year 1859 there was

absolutely no Statute which dealt with the subject of Trust Investments, and Lord Eldon

pointed out, a good many years ago, that it was necessary for trustees to follow, as they best


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could, what was the rule of the Court of Chancery. It was not until this century that trustees

were authorized to invest in mortgages, and in 1859 Lord St. Leonards introduced a Bill, by

which the power of trustees was extended to Bank Stock and East India Stock. Further

legislation followed in 1860, and in 1867 an Act authorized trustees to invest in any Stock the

interest of which was guaranteed by Parliament. In 1871 Parliament decided that investments

might be made in Stock issued by the Metropolitan Board of Works, and in 1882 there was afurther intervention by Parliament in the Settled Land Act, which authorized trustees to

invest capital in what I may call, speaking generally, first class Railway Debenture Stock. In

1884 the late Lord Advocate brought in a Bill, which applied only to Scotland, but which gave

a wide power of investment to all Trust Funds in Scotland. There has been an enormous

increase in the amount of 1482 Trust Funds, and no one but the Chancellor of the Exchequer

can have any correct idea of the rapidity with which these funds are increasing. I believe they

are increasing at the rate of millions a year, and side by side with that fact, the old-fashioned

Trust Investments have diminished, or become undesirable. Government securities, happily,

have been to a considerable extent paid off, and, quite apart from that fact, they have been

largely taken up by the Court of Chancery and the Savings Banks authorities, who hold Consols

to a very considerable amount. As to mortgages, they are not as much favoured as they were,

on account of the great depression of landed property. Legislation is required in order to

make the law of England and Ireland uniform; in the next place, to make it more simple, and,

thirdly, in order that trustees may be allowed a wider range of investment than they have

now. There is no doubt that the fall in the value of money has worked with extreme hardship

in a great number of cases. Funds have been set apart in the belief that the interest produced

from them would be an adequate provision for a widow or a child; but in many instances the

investments are now unsatisfactory, and it is not unreasonable that Parliament should give a

wider range and a wider choice. This is, no doubt, what the creator of the Trust would

himself have done, could he have foreseen the events which are now happening. In its main

features the Bill does not come before the House without some authority. Last Session theHouse of Lords passed some clauses in the Trustee Bill which agree with some of the

provisions of the measure, and Lord Salisbury, on the Third Reading, stated that it was

desirable to pass the clauses which gave to 1483 trustees an increased power of investment,

and that he should be sorry if the Bill were rejected. It came then before the Standing

Committee, by whom it was passed, without an adverse opinion being expressed against it.

The present measure deals with Trust Investments very much on the lines of the Bill of last

year. It consolidates all the existing law, repeals all the old enactments, and puts them in one

section under separate heads; it enlarges the list of securities so as to include first-class

Debenture Stock authorized by Parliament and the annuities granted by the Indian

Government; it also authorizes the inscribed stock of Corporations and County Councils; and itdeals with the rights and duties of trustees in the matter of the purchase above par of Stocks

which are redeemable at par. It is in every way important that some law should be laid down

to govern the action of trustees in these matters. At least they are entitled to know what

their position is, and they should not be left to the risk of having a Court of Law declare that

they have exercised their discretion in a wrong way. There are two securities that are not

included in the Billthe Colonial and the Irish Tramway Securities. Colonial Securities raise a

question of great interest and importance, but it is a question which, if necessary, can be


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raised in Committee and there dealt with. Personally, I did not feel myself at liberty to

introduce it into the Bill. The same remark applies to the Irish Tramways Stock. It is a

question in which many of the Members for Ireland take a deep interest; but it is a small

question in amount, and can easily be dealt with in Committee. There is one other matter. I

may be asked how I propose to deal with old Trusts and with Trusts where there is an express

limitation as to the nature of the investment. It is not proposed by the Bill to override anyexpress provision in the Trust, but unless there is an express provision the trustees are to

have power to invest the trust money in accordance with the provisions of the Bill. I do not

suggest that it is a perfect measure. It is a measure that will require, and, if it is read a

second time, will doubtless receive considerable discussion; but I trust I have satisfied the

House that it is a matter which is 1484 ripe for legislation, and that it is a matter with which

the House of Commons ought to deal. I ask the House, in moving that the Bill be read a

second time, to recognize in it, at least, an honest attempt to grapple with a difficult

question.

Motion made, and Question proposed, "That the Bill be now read a second time."(Mr.

Cozens-Hardy.)

MR. A. O'CONNOR (Donegal, E.) I do not for a moment pretend to argue that there is no

need for some Bill relating to the Irish law of investments. Not long ago Mr. Justice Kay

declared his conviction, derived from long experience, that there was great need for a radical

reform of the law in regard to Trusts. The hon. and learned Gentleman who has moved the

Second Beading of the Bill sees very clearly the necessity for some kind of amending Act in

regard to one part of the question, but he only touches a very small portion of one side of it;

and he admits that, even with regard to that small portion, he has left out a not

inconsiderable part. He suggests that the Bill may be amended in Committee in the direction

of the enlargement of the powers which it proposes to confer; but, while taking care of the

trustee, the hon. and learned Member loses sight altogether of the beneficiary. These Trust

Funds are increasing every year. There are many millions of property in the hands of trustees

in regard to which the people for whose benefit the Trusts were executed and for whose

benefit the trustees have accepted the duties of trustees have practically no information or

control. To bring in a Bill to amend the law relating to Trusts, to enlarge the power of

trustees, to extend their discretion, and to minimize their responsibility, and at the same

time to leave unprotected the interests of those who are to benefit by the Trusts, certainly

seems to me to be a patchwork and niggling way of dealing with the question. The Bill has

evidently been drafted by someone skilled in the drafting of Bills, but it is equally apparent

that it has been drafted hastily; and I fear that, if we read it a second time and take it to a

Committee, the only result will be a considerable waste of time. It will either be rejected, orit will be so imperfectly amended that it 1485 will do more harm than good. The measure of

the hon. and learned Gentleman is imperfect and ill-digested; and it is undesirable that it

should be allowed to stand in the way of other important questions which urgently demand

the consideration of Parliament. The second Act of Lord St. Leonards practically gave

everything the Bill of the hon. and learned Member desires to effect, because the 11th

section provides that trustees having power to invest in Government or Parliamentary


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securities may invest in any other securities in which funds under the control of the Court of

Chancery may be invested. From time to time the powers of trustees in this respect have

been considerably enlarged, and last year the hon. and learned Gentleman brought in a Bill

upon the lines of the present measure. That was a remarkable Bill. It protected trustees who

had committed a breach of trust at the instance of the beneficiary of the trust, oven if she

was a married woman, and it further gave trustees the benefit of the Statute of Limitations.One would think that ought to have satisfied the hon. and learned Gentleman. But he comes

again this year in the same way as last, and he brings in this Bill, which, as I said before, is

fragmentary. Even putting aside the question with which he has undertaken to deal, he

mentions in the Schedule a number of different Acts dealing with Trust Funds, but he does

not say a word about a number of other Acts. Now, in dealing with Colonial Stocks or Irish

Tramways, why, if he includes all these Acts I have mentioned, does he not include 34 & 35 of

Victoria, chap. 27? If this was a Consolidating Bill there would be something to say for it; but

were this Bill passed, the whole of our law would be distributed over a number of different

volumes, and would require consolidation just as much as ever. There is another Act, four

years later than the one I mentioned, by which trustees who are authorized to invest in the

Debenture Stock of any railway or any other company may invest in Debenture Stock named

under the Actthat was, the Local Loans Act of 1875giving a further enlargement of the

powers of trustees. There was there, of course, the same limitation that the hon. Member

says he wishes to put in this Bill 1486 namely, that the investment should not be made if

there is a contrary intention expressed in the deed of trust. That goes as a matter of course;

you find that in every case. Again, in 1880, there was an Act further enabling trustees to

invest in bonds or debentures of Indian railways, or in securities of the United Kingdom. Why

does the Bill of the hon. and learned Gentleman not propose to deal with those Acts, and

others which I have not had time to note down? He is dealing in an unequal and fragmentary

sort of fashion with a matter which, if dealt with at all, ought to be dealt with in a large and

comprehensive manner, after full consideration of the circumstances of the case. Then,again, with regard to the hasty drafting. There is a Definition Clause put in the first section,

and in it we have such terms "as the purchase of freehold ground rents or fee farm rents or

rents reserved on leases for lives renewable for ever." These are securities which the hon. and

learned Gentleman desires trustees always to be empowered to possess. If freehold ground

rents are to be recognized as proper investments, why not improved ground rents? Then,

again, with regard to leases for lives renewable for ever. This is a kind of holding, or interest,

which exists very much more extensively in Ireland than in this country, but the hon. and

learned Gentleman seems to treat them, in the case of Ireland, as fee farm rents. Only three

weeks ago this House decided that it would not read a Bill a second time because it purported

to deal with one class of prisoners, while another class of prisoners was not dealt with. Byparity of reasoning, inasmuch as this Bill deals only with certain interests, while there are left

out other interests more important and more numerous, I do think the House ought not to

c

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