The Gazette 1974

THE CHARITIES ACT, 1973 By JOSEPH S. MARTIN, Secretary, Commissioners of Charitable Di - prions and Bequests

a Vesting Order freeing charity property from the operation of onerous covenants in Leases where the person entitled to the Lessor's interest is unknown or cannot be found. Public notice of any proceeding under this Section must also be given. The circumstances which gave rise to the Section are interesting. Due to the closure of schools all over the County the question of selling the vacated premises arose. In the majority of cases, these Schools were built on land granted by a Local Landowner in exercise of the power conferred on him under the Leases for Schools (Ireland) Act, 1881. All these Leases had implied covenants under Section 5 of the Act, the most important being the right of re- entry if the premises should cease to be used as a School. Before giving their consent to an Application to sell a school subject to such Lease, the Commissioners insist in getting a waiver of the Covenant, whether terpressed or implied, from the Successor-in-Title to the Lessor. In not a few cases, this proved to be an im- possibility in practice, hence the new Section. But the Section also provides for relief in the case of other Leases containing onerous Covenants where the same circumstances apply. For instance in the case of a Lease containing a Covenant restricting the user of the property to a particular purpose, for exatnple as a burial place for a particular sect, and for no other purpose. At least two months public notice of an Order under this Section must be given. Section 7 enables the Board to direct that the costs and expenses of proceedings under Sections 2 to 6 shall be paid out of the Charity property. Section 8 extends the Board's Cy-pres jurisdiction from £5,000 to £25,000. Although the circumstances in which the Cy-pres Doctrine can be applied are set out in Section 47 of the 1961 Act, it should be noted that before the Doctrine can be invoked, a general charitable intent must be shown in the instrument under which the Trust was created. If the charitable gift exceeds £25,000 a cy-pres scheme must be framed by the High Court. < ^ Sections 9 and 10 are financial Sections (Section 9 [3]) in particular removes the restrictions on the Board's power to authorise investment of Charity funds placed on them by Section 32 of the 1961, Act, which in general confined investment to Irish Equities. Under Section 9(3) there is complete discretion as to which investments can be chosen. Section 33 of the 1961 Act is re-enacted in new form. Section 11 : Is of high importance to legal practi- tioners. The side note reads "power of Board to autho- rise or make sale, exchange certain other disposition and or mortgages of charity land". Sub-Section 2 should be particularly noted. It provides that a sale betwéen one Charity and another whereby a public benefit re- sults, the Board can sanction the sale notwithstanding t hat the consideration money does not represent the full market value of the property. In all other cases the Board deem themselves obliged under the Act to ensure that the purchase money does represent the full current market value of the property. Having regard to soaring land prices, a ^ale between two Charities would be out of the question, were it not for the provisions of the Sub-Section. This Section is a substitution for 23

In general four considerations gave rise to the Charities Act, 1973. They were, firstly, the need to provide an inexpensive procedure for the amendment of old Sta- tutes and Charters governing Charities. (No doubt some of you have heard of the legal difficulties that the Covernors of Kings Hospital encountered when they endeavoured to sell the school at Blackhall Place.) Secondly, the imperative necessity of raising the Com- missioners' Cy-pres Jurisdiction to bring it into line with current money values. Thirdly, to improve some other provisions of the 1961 Act, and fourthly, to intro- duce some much needed innovations to facilitate the administration of Charity property. The manner in which these objectives have been achieved will now be described. Let us consider the Sections of this Act separately. Section 1 is the interpretation Section. It stipulates that the 1961 Act is the principal Act. Sections 2 and 3 give the Board power to frame Schemes incorporating Charity Trustees. Similar pro- visions are contained in the Northern Ireland Charities Act, 1964. The provisions are a most useful adjunct to Solicitors, for it enables Trustees to become an incor- porated body under a Scheme which will set out the terms of the Trust, and will provide effective machinery lor the vesting of the charity property in the corporate entity. The virtues are apparent—cheapness, clear de- finition of the objects and the imprimatur—so to speak, of the Commissioners as to the charitable nature of the Trust. Another consideration is, that the American Courts and Probate Offices do not favour payment of charitable bequests being made to foreign charities, unless the charity in question is incorporated. In some previous cases of this nature, the Commissioners came t o the rescue of the Irish Charity concerned by accepting the bequest on its behalf and by giving the American Courts a receipt for the payment under Section 41 of the 1961 Act, which authorises the Board to give an effectual receipt of payments for charitable purposes, where no person is available or competent to do so. Gn the framing of a scheme, the trust property will a utomatically vest in the charity on the trusts applic- a ble, subject to any prior rights and liabilities. Section 4 enables the Board to frame Schemes altering 0 r amending Statutes or Charters regulating charities s ° as to import a power of sale, a power to raise monies, Power to extend the benefits of the charity to girls as w ell as boys or visa versa. Incidentally our first version °f the sub-section concerned gave rises to some diffi- Cu hy, as our definition would have had the effect of Cf eating a third sex. The Scheme can also provide for merger of Charities and for the appointment of Trustees of a religious persuasion other than that specified in the Act or Charter, if so requested by the Irustees. Before a Scheme of this nature can be made, Public notice must be given of the proposal to do so. This would enable the Law Society to sell the King's Hospital with the sanction of the Board. Section 5 enables the Board to hand over to the appropriate authority some Churches originally vested them under S. 15 of the 1844 Act. Section 6 : Is of some importance to the legal pro- fession. The Section confers on the Board power to make