The Gazette 1974

THE CHARITIES ACT, 1973

By JOSEPH S. MARTIN, Secretary, Commissioners of Charitable Di - prions and Bequests

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

utomatically vest in the charity on the trusts applic-

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

° as to import a power of sale, a power to raise monies,

Power to extend the benefits of the charity to girls as

ell as boys or visa versa. Incidentally our first version

°f the sub-section concerned gave rises to some diffi-

hy, as our definition would have had the effect of

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

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