Orders of the Day — COURTS (EMERGENCY POWERS) AMENDMENT BILL [Lords]

– in the House of Commons on 29th September 1942.

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Order for Second Reading read.

Photo of Mr Donald Somervell Mr Donald Somervell , Crewe

I beg to move, "That the Bill be now read a Second time."

It is, I think, unnecessary to detail the main policy and provisions embodied in the Courts (Emergency Powers) Act and the amendments which have been made to it from time to time. This Bill deals with two short, narrow, technical and wholly uncontroversial points. In the original Act the persons entitled to the benefit of its provisions were described in general words as the persons liable to pay the debt or perform the obligation which was sought to be enforced. Three cases have come before the courts in which it has been held, and has become clear, that those general words do not cover persons who should be covered under the general policy of the Act. The first arose under a mortgage transaction. A man borrows money on mortgage and builds a house with it. He subsequently sells the house subject to the mortgage. Although the person to whom he sells it is in the house and is the person who will be turned out if proceedings are taken, and although he will be liable to indentify his vendor if the vendor is called upon under a personal covenant, he will not usually have made himself personally liable to the mortgagee to make the payments, and it was therefore held that the general words intended to cover all cases did not cover him. Another case is where, say, a father mortgages property to secure a debt not of his own but of his son or his wife. He does not come within these words. The third case is when the property vests in the trustee in bankruptcy. He is not, as trustee, liable to perform the obligation, though it might be right that the property should have the protection of the Act.

We therefore propose to introduce general words empowering the courts to protect anyone who may have an interest in the property which clearly should entitle him to protection. It is a little difficult to be certain how these cases will arise, and we do not want to bring about a situation in which costs would be increased by the creditor having to serve notice on a variety of persons who might be interested, and therefore under Sub-section (2), having laid down the general principle, we provide for rules to be made so that the matter can be kept within the proper compass, and it is possible that some further case might arise which has not been provided for. I think the principle is plain and clear. The general words used do not cover certain special circumstances which should be within the Act, and we propose to remedy the matter by Clause 1. There is a purely drafting Amendment down to make it quite clear that that dovetails in with the Mortgages (Emergency Provisions) Act, 1940. This matter has now become rather a jigsaw puzzle, as anyone who has had to deal with these cases will realise, and we hope, when this Bill is passed, to consolidate all these complicated provisions.

The second point is a small improvement designed to save costs. Under the original Act, if a mortgagee desired to exercise the remedy of foreclosure, he had to get leave before he started, but, if he simply required to get possession of the mortgaged property, he could start proceedings for possession without leave. He got his judgment for possession—there was generally no answer—and it was only at that stage that the question arose, "Is this a case where the occupier of the mortgaged property ought to have protection under the Act?" That really meant in many cases that unnecessary steps had to be taken and as a result costs accumulated. These provisions which are somewhat complicated, if one tries to follow them in the verbal Amendments, fitting into the original Courts (Emergency Powers) Acts and Liabilities (War-time Adjustment) Act simply effect this—that if the mortgagee wants to get possession, he has to get leave before he begins so that at that stage, instead of at the time when he has got his judgment, the question of whether there is any Courts (Emergency Powers) Act defence to the exercise of his rights can be investigated. That is really the whole sum and substance of this Bill. It makes two obviously desirable amendments in the scheme and I hope that, if and when it becomes law, we shall be able to consolidate this code into one Act.

Photo of Mr James Milner Mr James Milner , Leeds South East

The right hon. and learned Gentleman has explained the provisions of the Bill with his usual lucidity, and I think this is one of those occasions on which one can heartily and fully congratulate the Government on the step which they are taking. The matters dealt with in the Bill are not, perhaps, of great general importance, but they are of importance to the persons concerned, and it is noteworthy that the Government have taken cognisance of recent decisions and in this Bill propose to alter the law so as to meet difficulties which have arisen. This is, I think, a remarkable instance of the flexibility and speed with which this sort of thing can be done where it is obvious that in the original Act of Parliament certain defects or omissions due to nobody's fault have been shown by experience to exist. The Government are to be congratulated on keeping in touch with the trend of decisions and on promptly bringing legislation before the House in order to remedy faults or omissions which have been disclosed.

Clause 1 of the Bill would appear to be extremely wide, in that it proposes that the appropriate court may treat any person appearing to the court to be affected, as if he were the person liable to pay the mortgage money, etc. Those are extremely wide words which do not, as far as my knowledge goes, appear in any similar Act of Parliament. I note, however, that in Sub-section (2) there are limiting factors and apparently in the last resort the court may decide on the persons who are to be made parties to the application. If that Sub-section did, not appear in the Bill, I should have regarded the words of the first Sub-section as being very wide indeed.

The second object of the Bill would appear to be a very proper one and one on which we lawyers can agree. It is the saving of costs. At present, as the Attorney-General has explained, when action is taken for recovery of possession by a mortgagee, considerable costs may be incurred before the court has to decide on the propriety, having regard to the Courts (Emergency Powers) Acts, of giving the necessary protection. As I understand it, the Bill assimilates the procedure under that form of action with the procedure followed in the case of an action for foreclosure, and provides that the leave of the court has to be given, in the first instance, before substantial costs have been incurred. It appears to me, as I hope it will appear to the House, that we may very properly pass this Bill through all its stages as we have been asked to do by the Lord Privy Seal, and I congratulate the Government on having brought it before the House. I am sure hon. Members will agree that it is very desirable that these Acts of Parliament, dealing as they do with matters principally arising during the war and of considerable importance to all those affected, should be put into such a form, as far as possible, that the man in the street will be able to understand and follow them. At present it is extremely difficult even for a lawyer, having regard to the numerous Acts of Parliament which exist, and the aumcrous amendments of the law which have been made, to find out the precise state of the law relating to some of these matters to-day. If, therefore, these statutory enactments can be consolidated so much the better and I hope that such consolidations may take place, not only in regard to this matter, but in regard to many others, such as the Rents Acts, which are extremely difficult to follow and understand in their present form.

Question put, and agreed to.

Bill read a Second time.

Bill Committed to a Committee of the Whole House.—[Mr. Young.]

Bill immediately considered in Committee.

[Sir DENNIS HERBERT in the Chair.]