Clause 2. — (Provisions as to Making of Certain Payments and Withhold- Ing of Payments.)

– in the House of Commons at 12:00 am on 20th October 1953.

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3.45 p.m.

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

I think it would be for the convenience of the Committee if the first two Amendments to this Clause—in page 2, line 34, leave out from "person," to end of line 38, and in page 3, line 2, leave out "or (c)"—and the fifth Amendment—in page 3, line 12, leave out paragraph (b)—were taken together, as well as the three Amendments to Clause 5.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester North West

I beg to move, in page 2, line 34, to leave out from "person," to the end of line 38.

I quite agree, Sir Charles, that it would be for the convenience of the Committee if the Amendments to which you have referred were taken together because to a considerable extent the later Amendments depend on the results of any decision which may be taken in respect of the first Amendment. I think that at this stage, in order that there need not be repetition later in respect of the various Amendments which we propose, it might be advisable for me to deal with this Amendment at somewhat greater length than will be necessary in respect of the other Amendments.

This Measure is very intricate and very technical. It is full of all sorts of legal difficulties, but the subject matter of the Bill itself is not quite as intricate as the terms which have to be used in the Bill in order to bring such a Measure on to the Statute Book. Paragraph (c), which we seek to delete, does not deal with action taken in prosecution of the war effort or in order to gather the fruits of victory. I would point out to the Committee that such action would already have been completed and the property put into the custodian's hands before this paragraph could come into operation at all.

If this paragraph were retained in the Bill, it would have effect only when the custodian erroneously paid away what was already in his hands. I want to ask the Minister who is to reply why the custodian should be protected against the consequences of that payment more than any other person is protected—for example, more than a bank would be protected if it paid out money erroneously.

This is not a matter which is unilateral. I am sorry that when the Parliamentary Secretary replied to some comments I made on Second Reading, he saw fit to regard them as not being very important. I would have him remember that this is a matter of international law. International law is involved, and a unilateral attack on the provisions or the regulations which have been adopted under international law is a very dangerous thing.

When I suggested that the breach of contract or the breach of arrangement which resulted in confiscation without compensation might even be used as a reply to any case which might be made, for example in respect of the Iranian oil, the hon. and learned Gentleman thought fit to ridicule the idea. I hope he has thought a little better about it since then, and I hope he has realised that every single attack which is made upon an international law which deals with the rights of an individual, or a company or a corporation which happens to be a foreign one, might have very serious repercussions elsewhere.

What does this paragraph seek to do? It is intended by the paragraph to prevent an individual from reclaiming moneys which were due and are due to him providing he could and can prove his case legally and legitimately. It is not a question of an enemy alien at all, because an enemy alien in the proper sense of the term would not be affected by this provision. It is intended to deal with an individual who is not an enemy alien in the correct sense of the term—a person who was an allied national, for example; a person who perhaps was a partisan on our side in the course of the war. If he had left certain moneys in this country which the custodian managed to get, that person, even though he were legally entitled to that money and could prove that he was legally entitled to it, would not be in a position to recover it.

4.0 p.m.

There may be some parts of this Bill that are justifiable, but certainly not this particular part. I would point out, for example, that a number of people, owing to persecution by the very States which were enemies, and who would properly be considered as enemy aliens, people who were the last remaining members of large families that had been slaughtered, Jewish people and others, had had to flee from Germany and found themselves in other countries and found themselves unable to claim funds which were left in this country by them or by their relatives. The custodian took those moneys, and today it is intended to make it impossible for those people to recover the moneys to which they are legally entitled.

I see the Attorney-General is here, and I hope that he, with his great grasp of the law, will agree with me that it is a highly undesirable thing to prevent such people as that from being able to recover what is in fact legally their due. In these circumstances I should like to know whether he is aware, or whether his colleagues are aware, that there is no similar act of Parliament or act of a Government, so far as I know anyhow, in any other country.

Why we should be the first country in the world to introduce legislation which prevents the victims of Nazi persecution, and, indeed, British nationals, from recovering what they are legitimately entitled to, I do not know; and I hope that in these circumstances this particular request of ours contained in this Amendment will be acceptable to the Government, and that they will remove from the Bill a paragraph which is offensive not only to legal principles but to all moral principles.

Photo of Mr Henry Strauss Mr Henry Strauss , Norwich South

I am sorry if anything I said in the Second Reading debate gave the hon. Member for Leicester, North-West (Mr. Janner) the impression that I made light of anything he then said. It is true that I thought he did misunderstand the nature of the problem to a large degree; and I am bound to say that I think that he, with, I am sure, the best intentions, has done so today. He is really repeating in these Amendments what was the main issue of principle on the Second Reading.

This is, of course, an indemnity Bill. It is perfectly true that if no mistake of any sort has been made by anybody, nobody needs an indemnity; but if we have once decided that there shall be an indemnity in a proper case, one has to consider whether this is a proper case. I think that the hon. Member, if he will consider the matter a little more carefully, will see that the case where payment has been made by the competent authority under subsection (1, c) of this Clause may be precisely the case where the authorities did their best to pay to the right person but it is proved that they paid to the wrong one.

I know how much the hon. Member has this cause at heart. He mentioned some of the refugees from oppression on the Continent who arrived here very often during the war. But they may have been the very people to whom the release was in fact made. If there was not to be an indemnity following the war, as there had been following previous wars, the only effect on the authorities would have been that they could never have risked any release in however good faith without the strictest legal proof. Sometimes a great deal of foreign law might have been involved. It would have prevented what the hon. Member himself would have thought to have been a whole series of desirable releases.

Let me remind the hon. Member that in the cases where the custodian has released moneys there have very often been releases not to the original owners but to their Governments on their behalf under money and property agreements concluded between the Government and the various allied Governments. It would be wholly improper, where there has been a perfectly bona fide payment as described in Clause 1, to refuse to apply the indemnity provisions of this Bill.

I would also point out to the hon. Member that the principle of these Amendments would also cover controllers appointed by the Board of Trade to wind up enemy businesses under Section 3 (a) of the Trading with the Enemy Act, and this would lead to complication in cases where the controller, who is always an independent accountant of high standing, had already completed his winding-up and received his discharge from the Board of Trade. I can say this in answer to the hon. Member, and remind him—it may be of some comfort to him—that if the custodian, as in many cases has happened, has handed over the money in question to an administrator for distribution, the owner has already a right of recovery against the administrator under the existing law.

I have dealt with this matter shortly because I think that will be generally the wish of the Committee. While I agree with the hon. Member that of course an indemnity Act has no application unless somebody has at some time exceeded his legal rights, if there ever was a case where indemnity would be rightly given it is in this case which we seek to cover by this Clause. For these reasons, I advise the Committee to reject this Amendment.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester North West

The hon. and learned Gentleman has not given an answer that, in my view, is satisfactory. I do not understand why he is hedging on the matter. He knows that cases were quoted in another place and here at the time of the Second Reading. I do not want to repeat the cases or the explanations. What he overlooks is that by this particular subsection he is depriving, whatever else he may say, the rightful owner—not an enemy alien—of the opportunity of recovering what is rightfully due to him. No matter how many mistakes may be made, we ought not to be in a position to deprive the individual, if he happens to be a British subject, of the right to claim back something which belongs to him.

This is an ungenerous Act, and the peculiar part of it is this. To the same kind of illustration as the hon. and learned Gentleman has given in respect of mistakes which may have been, or have been, made by the authorities themselves, the same answer may or will be made by an individual who has made a mistake, or a bank which has made a mistake, or any corporation which has made a mistake. The fact still remains that they are not in any sense protected in consequence of what happened during the war or at any other time. They have today to face their responsibilities. There is also the human side of it. I ask the hon. and learned Gentleman whether he realises that many of the people concerned are people who can well do with the funds which have been wrongfully taken from them owing to somebody's mistake.

I think that, in the circumstances, the answer which the hon. and learned Gentleman has given is not a satisfactory one, and I hope that between now and the Report stage he will think again about this point, and see whether he cannot do something which will at least go some way towards meeting that for which we are asking.

Photo of Mr William Hall Mr William Hall , Colne Valley

I have listened very carefully to what has been said, and I agree with the hon. and learned Gentleman that obviously if this is a Bill to indemnify certain people it must live up to its title and what is contained in the Bill and indemnify those who have at some time legitimately made mistakes.

My hon. Friend the Member for Leicester, North-West (Mr. Janner) drew attention on the Second Reading to the fact that there are very hard cases of individuals who have suffered loss through moneys being paid over to interests which should not have so claimed, and that being so, may I add my appeal to that made by my hon. Friend and ask the Government to look at this matter again in order to see whether some different wording could be inserted to help those people who have suffered loss because of mistakes legitimately made during the war and after it.

Photo of Mr Henry Strauss Mr Henry Strauss , Norwich South

The right hon. Gentleman has put his case with such moderation and courtesy that I should certainly say, "Yes" to his proposal if I did not think that it might mislead him. The fact is that this matter has received the closest and most detailed examination by the Board of Trade, the Law Departments and by everyone concerned, including those in another place, and I really should be misleading the Committee if I suggested that we could improve upon the Clause in any essential way.

As for the cases quoted by the hon. Member for Leicester, North-West, I hope that he will recollect what I ventured to say in reply in the Second Reading debate, that I think that he did give—I know in perfectly good faith—a misleading impression of the general position.

Amendment negatived.

4.15 p.m.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester North West

I beg to move in page 3, line 6, to leave out from "(a)," to first "to," line 9, and to insert: it shall be the duty of that authority to pay the amount thereof.

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

I think it would be for the convenience of the Committee if this Amendment was considered with the Amendment in page 3, line 11, at the end, to insert: and the said amount shall be recoverable from the competent authority as if it were the person mentioned in the said paragraph (a), notwithstanding the provisions of subsection (1) of this section.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester North West

I imagine, Sir Charles, that these two Amendments will not be easy to follow by the average Member, but I shall try to make clear what our point of view is with regard to them.

In my view, the effect of Clause 2 is that if, for example, the bank pays to a competent authority, there is, first, a release to the bank and, secondly, no right of recovery from the competent authority. Thirdly, if the competent authority has paid over to a third party there may be no right of recovery against the third party, and, therefore, the innocent owner is left without a legal remedy.

Let me give an example. Perhaps the examples that were given before are useful, and, if I may say so with respect, I am sure that the hon. and learned Gentleman opposite will appreciate that I cannot accept what he said with regard to my previous examples or, indeed, as I assume that he included them in his remarks, the examples given in another place and by my hon. and learned Friend the Member for Leicester. North-East (Sir L. Ungoed-Thomas)

I would point out, for example, that a Pole who escaped to fight with the Polish forces here, or even a British subject fighting with the British forces would have no right of recovery. It is perhaps right that the bank should be released, but it is quite wrong that the innocent owner should have no right of recovery from the competent authority. That is our view.

If the innocent owner had had property other than money handed over to the competent authority, then under Clause 3, subsections 4 and 5. he would have the right to recover from the custodian the property or its proceeds in the custodian's possession. It is very difficult to recover the property and damages from the person to whom the custodian has handed over, otherwise than on a sale. It is argued that no rights should be given to the innocent owner—I assume that is the argument of the Government—against the custodian or persons to whom the custodian handed over the property if it happened to be money.

First of all, that money is recoverable at law if it is identifiable, and the Bill takes away the right to recovery. Secondly, indemnity in itself—and the hon. and learned Gentleman has referred to the question of indemnity—is an interference with the law taking away the right which the owner would have had where the payment was unauthorised. If we took away this right we could make it conditional that the money paid over to the custodian should be recovered as a matter of right.

I hope I may be forgiven for referring to Clause 4, which we have not yet reached, because the Clauses are mixed up with each other and one has to refer to others to show where this Clause is affected by the provisions of the others. According to Clause 4, page 5, line 16, money wrongly paid to the custodian is repaid to the rightful owner as a matter of discretion. In Clause 2 (2, a) the Bill gives that person a legal right to the interest on the repaid money. All that we ask is that there should similarly be a legal right to repayment of the capital.

It has been said that it is the practice of the Board of Trade to direct the custodian to release moneys wrongly paid to him. In our view this should not be just a matter of ex gratia discretion; it should be a matter of right and not one to be determined by the Civil Service. We should only give indemnity if we provide for payment as a matter of right.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

The hon. Member for Leicester, North-West (Mr. Janner) knows that some of my hon. Friends and I support some of his misgivings and did so during the Second Reading debate. I believe he is on stronger ground with this Amendment than he was with the previous Amendment. Clearly, in an indemnity Bill one gives an indemnity to the persons or officials who, through no fault of their own, may have done the wrong thing in a moment of stress. No one would quarrel with that. That is a different question from whether or not the public purse—not the official concerned, but the public purse—should to some extend stand behind the mistake and not allow an innocent party to suffer.

I should like to have some information from the Parliamentary Secretary. Am I correct in believing that Clause 2 (2) really authorises the competent authority to make ex gratia payments? That matter was under discussion during the Second Reading and I urged that there should be that authority in the body of the Bill. Is it the view of my hon. and learned Friend and the Government that the subsection has sufficient Parliamentary authority, assuming that the Bill soon receives the Royal Assent, here and now for the Treasury to make ex gratia payments without further legislation being necessary? If so, it certainly influences my view of the Bill very considerably. I could see no reason at the time of the Second Reading why the President of the Board of Trade should add a rider to his promise relating to ex gratia payments on the ground that it could only be done if and when Parliament gave its approval, because it would mean a payment out of public funds.

I understand the subsection to say that, even when the money or property has gone to the wrong hands through understandable mistakes, there is nothing to prevent the authority from recompensing in some way the right hands. I read it quickly and may have it wrong, but I should like to know if that is so. If it is not so, I should like to know whether there is anything in the Bill which authorises the giving of ex gratia payments. If not, it ought to be put in.

What is happening here is that in so far as property or money which has been paid away wrongly cannot in the event be traced by the innocent hands, the innocent party has no redress. Of course, if it remains in the hands of the custodian or administrator, then by the next Clause the innocent party has a right of redress. Even if it has gone on to other hands and he can trace it, he has a right of redress against those hands, but if it has gone abroad or disappeared in some way, then the proposal of these two Clauses is that he has no redress at all against the public authority which was the source of the error and the source of his damage.

That being so, we really ought to see that there is power at least, if not duty, in the Bill for the public authority to compensate that wholly innocent person. I should like to see that in the Bill before we part with it, and I hope, although I do not believe, that it is in this subsection.

Photo of Mr Henry Strauss Mr Henry Strauss , Norwich South

I am grateful to the two hon. Gentlemen who have put succintly the points with which they desire me to deal. In making their points, they have necessarily mentioned Clause 3.

The real reason for the differences between dealing with money and dealing with property was the legal difference which I tried to explain in my Second Reading speech. There is a great difference in law between physical property and what lawyers—we who are taking part in the present debate are all lawyers—call a chose in action. The example which I gave on Second Reading was that if there was any debt by a bank and the money was paid by the bank to the custodian, if the money was wrongly paid, the bank remained liable for the debt.

If a right of action were given against the custodian, it would be a right of action wholly novel in law and, in the Government's submission, not suitable for inclusion in an indemnity Bill. I then went on to point out to the House, as I now point out to the Committee, that the difference is merely a technical one since there is no intention whatever for the custodian not to pay out the money where he still has it and where his receipt of it was due to a mistake either of law or of fact.

The hon. Member for Leicester, North-West (Mr. Janner) did not say how novel that right would be but asked why it should not be given even if it were a wholly novel right. I will give him a number of reasons why it should not be given. In the first place, it would give a right of recovery in a case where, though the money was wrongly paid to a custodian at the time it was paid, the person to whom it was due subsequently became an enemy. Again, there is the case where the person against whom recovery would be sought would be a controller appointed by the Board of Trade to wind up a business who might have completed the winding up and had his discharge.

There is a further point which I wish to put to the hon. Member for Leicester, North-West, and also to the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. Ungoed-Thomas), who has just entered the Chamber, for I know that he will appreciate at once the point which arises under his Amendment. While the words: … to or for the benefit of any person to or for whose benefit the amount or part could lawfully have been paid apart from this section … are quite apt in order to cover any person to whom the custodian should have discretion to make repayment, they would not be apt to describe the person who would have a legal right to sue.

More than one person might claim to fall within that description.

As the hon. and learned Gentleman will agree, I am dealing more with the form of his Amendment than the substance, but he will appreciate the point. I would also point out to him and others, that if the custodian, as very often happens, has handed the money over to an administrator of enemy property for distribution the owner already has a right of recovery under the existing law against the administrator.

4.30 p.m.

I now turn, if I may, to the point raised by my hon. Friend the Member for Darwen (Mr. Fletcher-Cook). Let me tell him at once that the passage on ex gratia payments read by my right hon. Friend in moving the Second Reading has nothing whatever to do with this subsection. The ex gratia payments to which he referred do not come within the Bill at all. They are for cases of possible hardship which, in the light of experience, may be found to exist. The ex gratia payments are given with the consent of the Treasury, and they have formally to appear in a Vote which is passed by this House. That is the authority.

What this subsection does is to enable the competent authority, who holds money which may have been paid to him under a mistake of law or of fact, to pay out the money in every proper case. And it is certainly intended to use that power. The one thing that is not given is the statutory right to sue, and I have explained that the reason for that is that it would be a wholly novel right. I can assure the hon. and learned Gentleman for Leicester, North-East that if he tries his great skill in drafting he will find it extremely difficult to draft such a right that would be as satisfactory as a discretionary power to be used in all proper cases of mistake.

This Clause is quite suitable and apt. The sole reason for this difference between this Clause and the next is not a difference of intention as to how we should deal with people whose money or property has been wrongly taken, but the very great difference in law between physical property and a chose in action. With that explanation I hope that hon. Members will be satisfied, and I advise the Committee to reject the Amendment.

Photo of Mr Barnett Janner Mr Barnett Janner , Leicester North West

I am sorry that the hon. and learned Gentleman is not prepared to use the ingenuity of the draftsmen to enable him to carry those intentions into full and proper effect. As I understand the position now, he admits that there should be a right on the part of the individual and not merely a right on the part of the authorities to decide whether an individual or a corporation should receive this money. I cannot see any difficulty. We have done our best in the Amendment we have put forward to meet the case, and in view of the fact that the hon. and learned Gentleman intends precisely to do what we are asking him to do I cannot see why he should not incorporate it in some way or another in the Clause itself.

I am sure that the learned Attorney-General would agree with me on this, because I am quite positive that if he thinks the same as his hon. and learned Friend about the intention, he will be able to find a way of dealing with it between now and the Report stage to enable the right to be given. That is our intention. It is no good leaving it to the Civil Service to do what we are anxious about. I think this right should be given and should be exercisable by the person who has been injured. We hope, in those circumstances, that, even if this Amendment is defeated at this stage, there will still be second thoughts between now and the Report stage.

Amendment negatived.

Clause ordered to stand part of the Bill.