Charities Bill [HL]

moved Amendment No. 64:"Page 47, line 29, at end insert ““; or" (d)   any contractual or other obligation undertaken by the transferring charity, or owed to it, which is subject to a guarantee of its performance by a third party unless such consent has been obtained before the date on which the transfer would take place.”” The noble Lord said: The noble Lord, Lord Phillips, talked about Clause 75D(3). This amendment is concerned with that subsection and takes us a little further down the same sorts of issues that he raised. Clause 75D contains provisions in subsection (2) for   the automatic transfer of property in certain circumstances that excludes certain classes of property from such transfers, as we have just been discussing. The Law Society has brought to our attention its concern that the provisions do not include a further category of property where the automatic transfer which would otherwise apply could result in damage to the charity. That is the case of any contractual arrangement, the performance of which is guaranteed by a third party, whether the benefit or the burden of the arrangement is owned by the charity. In many cases that would be damaging to the receiving charity because, at the very least, it would be exposed to uncertainty about possible court proceedings for breach. There could well be unnecessary expense incurred in trying to settle the position. The transfer of the obligation to a third party without the consent of the guarantor to the change would render the guarantee void and useless. This could have ramifications in the sense that it could render the contract itself void if the contract also required there to be a guarantor. If the guarantee was of a lease, for instance, it could have the effects described above. There are also arguments about whether, in circumstances where the obligation guaranteed is owed by the charity to a third party, such a provision could be said to deprive the third party of property rights in the form of the guarantee, and that it would thus offend against the ECHR. We therefore propose that there should be this further category added to the kinds of property excluded from the automatic transfer of property in Clause 75D(3). I beg to move.