I beg to move, in page 40, line 10, after "1938", to insert: (a).

I think that it might be convenient to discuss with this Amendment, Amendments Nos. 68, 69, 72, 87, 88, 94, 95, and 96.

I do not know whether at this hour the House wishes a long explanation of the purpose of these Amendments. In Scotland the owner of goods let on hire-purchase is required by common law to apply to the court to re-possess the goods even if one-third of the hire-purchase price has not been paid. These Amendments seek to ensure that the adoption for Scotland of Section 11 of the Hire Purchase Act, 1938, shall not prejudice that requirement.

I accept the limited intention behind these Amendments, but it seems to me that Amendment No. 72 goes rather further. I am not clear about the significance of paragraph (b) of that Amendment. It seems to amend certain provisions relating to court procedures. If that is so, it makes the situation extremely difficult. One of the problems is that by previous Amendments we have repealed the 1932 Act with the exception of Sections 6 and 7, which link up with small debt court procedures.

The hon. Gentleman's brief explanation has not satisfied me that the Amendments will achieve what he hopes to achieve. This is all very well in theory, but in practice the situation is rather different from that envisaged in the 1938 Act even as extended to Scotland. Indeed, it is so different from the English custom, from which it is derived, that it has little relevance here.

The small debt court procedures offer great scope to finance companies to bring actions against hirers, if not in the way suggested, then in some other way. In other words, they can attain their objectives even with the protections which are now suggested.

We should have had a more detailed explanation of this extremely complicated part of the Bill. I appreciate, of course, that there are difficulties. It is completely wrong at this time of the day, and in this part of our proceedings—when we have no further opportunity to look at what is being done—that so many Government Amendments, of such significance and complication, should be brought up.

It is not being fair to Scottish Members, and I ask the Under-Secretary whether we could not have a little further explanation of the various Amendments to which he has referred.

I can only say, by way of mitigation, that the hon. Member for Paisley (Mr. J. Robertson) was not in his place when I moved the Amendment and referred to the other related ones. I then asked whether a long explanation was required, and I was greeted more or less with a prayer by the hon. Member for Sheffield, Hillsborough (Mr. Darling) that I should not be unduly long. But for the sake of the record and for the sake of the hon. Member for Paisley, I will expand my previous explanation.

Section 11 of the Hire Purchase Act, 1938, which the Bill applies to Scotland, provides that in a hire-purchase agreement, after one-third of the hire-purchase price has been paid, the owner shall not enforce any right to recover possession of the goods except by application to the court. In the resulting action the court may allow the hirer to keep all the goods on payment of the balance due as directed by the court, or may allow him to keep some of them without further payment, having regard to what he has already paid.

In Scotland, at common law, the owner is required to go to the court if he wishes to repossess goods let on hire-purchase, whether or not one-third of the hire-purchase price has been paid. We nevertheless need Section 11 of the 1938 Act, because we want to confer on the Scottish courts, where one-third of the hire-purchase price has been paid, the very wide powers which are contained in Sections 12 to 14 of the 1938 Act and which follow on applications under Section 11. At the same time, we want to make it clear that the owner is still under obligation to go to the court if he wishes to repossess in a case where one-third of the hire-purchase price has not been paid, and that is the object of these Amendments.

I can assure the hon. Member for Paisley that none of them has anything to do with altering the powers of the courts in any way.

Amendment agreed to.

Further Amendments made: In page 40, line 12, leave out "and" and insert: (b) at the end of subsection (1) there shall be added the words:—Provided that nothing in this subsection, shall be taken to confer on an owner any right to recover, otherwise than by action, possession of any goods let under a hire-purchase agreement where one-third of the hire-purchase price has not been paid or tendered as aforesaid"; and (c).

In line 14, leave out from "1938" to "for" in line 16 and insert: (a) for subsection (1) there shall be substituted the following subsections—(1) The following provisions of this section shall apply, in a case to which the last foregoing section applies, where the owner commences an action to enforce a right to recover possession of any of the goods from the hirer after one-third of the hire-purchase price has been paid or tendered as aforesaid.(1A) After such an action has been commenced the owner shall not take any steps to enforce payment of any sum due under the hire-purchase agreement or under any contract of guarantee relating thereto, except by claiming the said sum in the said action"; and (b).

—[Mr. Stodart.]

I beg to move, in page 40, line 25, after "Act", to insert: and the words 'and in section 14(1) of the Hire-Purchase Act 1964'". Amendment No. 114, in Schedule 4, page 59, line 24, at end insert: In section 19(1), after the words "this Act", in the third place where they occur, there shall be inserted the words "and in section 14(1) of the Hire-Purchase Act 1964". which we have not yet debated, proposes that a reference to Clause 14(1) of the Bill should be included in Section 19 of the Hire Purchase Act, 1938. Since Clause 14 of the Bill does not apply to Scotland, no reference to it is required in Section 19 of the 1938 Act, as it applies to Scotland. This Amendment therefore excludes, for Scotland these words.

Amendment agreed to.

12.15 a.m.

I beg to move, in page 40, line 28, to leave out from beginning to "which" in line 30 and to insert: 19A.—(1) Subject to the following provisions of this section, where goods have been let under a hire-purchase agreement to which this Act applies and the owner brings or institutes an action to enforce a right to recover possession of any of the goods from the hirer, the action shall be brought or instituted in the sheriff court for the district in which the hirer resides or carries on business or resided or carried on business at the date on which he last made a payment under the hire-purchase agreement.(2) No cause, action or proceeding on or arising out of any hire-purchase agreement to which this Act applies or credit-sale agreement to which this Act applies. Perhaps it might be convenient to discuss Amendment No. 91 together with this Amendment.

Mr. Deputy-Speaker:

If that is the wish of the House.

There are two main provisions of the Bill which deal with the jurisdiction of the Scottish courts in relation to actions arising out of hire-purchase and credit-sale transactions. Section 12 of the Hire-Purchase Act, 1938, provides that where one-third or more of the hire-purchase price has been paid, the owner of the goods, if he wishes to repossess them, must bring an action in the sheriff court for the district of the hirer's residence or place of business. After the action has started, any subsequent money claim relating to the same agreement must be brought in the same action, and therefore in the same court.

Section 19(A) of the 1938 Act says that any action arising out of a hire-purchase or credit-sale agreement which can competently be brought in the sheriff's small debt court must be brought in that court, subject to the sheriff's power to remit to the ordinary roll any action brought in the small debt court.

There are two reasons for making the linked Amendments that we are now considering. The first is this. We have just dealt with a series of Amendments to preserve the common law rule in Scotland whereby repossession of goods held on hire purchase requires an application to the court. Two of these Amendments modified Section 12 of the Hire-Purchase Act, 1938, and, in doing so, took out the words which say that where one-third of the hire-purchase price has been paid an action for repossession must be brought in the sheriff court of the hirer's residence. We want to put those words back.

Secondly, when the new Clause which now appears as Clause 14 of the Bill was adopted in Committee I promised that Scottish provision corresponding to subsection (1) of that Clause would be made on Report. That subsection provides that where the owner brings an action to repossess goods where one-third of the hire-purchase price has not been paid, he must raise that action in the county court of the hirer's residence or place of business. We do not, incidentally, need anything corresponding to subsection (2) of Clause 14, because there is no upper limit to the sheriff's jurisdiction.

What the Amendment does is to combine, as a new subsection (1) of Section 19(A) of the Hire-Purchase Act, 1938, the two provisions which prescribe the court in which actions for repossession are to be brought. If an owner brings an action to enforce a right to recover possession of goods let on hire purchase, whatever portion of the price has been paid, he must bring the action in the sheriff court for the district in which the hirer resides or carries on business or resided or carried on business at the date when he last made a payment under the agreement.

Amendment agreed to.

Further Amendment made: In page 41, line 6, at end insert: 13. In the Schedule to the Act of 1938—

1. (a) in the second paragraph 1, the words from the beginning to "has been paid, then]" shall be omitted; and
2. (b) in the second paragraph 2, after the word "If", in the first place where it occurs there shall be inserted the words "^*[after (here insert an amount calculated in accordance with the provisions of sections 11 and 19 of this Act) has been paid]"; and after the word "court", in the second place where it occurs, there shall be inserted the words "(under powers conferred by the Hire-Purchase (Scotland) Acts 1938 to 1964)".—[Mr. Stodart.]

I beg to move, in page 41, line 27, after "which", to insert: on being signed as mentioned in subsection (2)(a) of this section". Perhaps it might be convenient to discuss with this Amendment, Amendments Nos. 74, 75, 78. 80 and 81.

Mr. Deputy-Speaker:

If that is the wish of the House.

These Amendments are consequential upon an Amendment to Clause 3(4) which we have already discussed. Clause 3(4) empowers the Board of Trade to make regulations as to the space in which the hirer's or buyer's signature is to be inserted in a hire-purchase or credit-sale agreement, the words surrounding that space, and their location and prominence. The effect of the Amendment to Clause 3(4) was to ensure that the Board will have power to make regulations in relation to a document which is not yet a hire-purchase or credit-sale agreement at the time it is signed by the hirer or buyer, but will become such an agreement when it is signed by all the parties.

These Amendments make similar provision in relation to Scotland. The pair of Amendments in pages 41 and 45 make the main Amendment. The other four Amendments make similar alterations in relation to credit-sale agreements in Section 3(3) of the 1938 Act as it will apply to Scotland.

Amendment agreed to.

Further Amendments made: In page 42, line 4, after "reference", insert "to paragraph (a) or".

In line 5, after "reference", insert: to paragraph (a) or, as the case may be,".

In page 45, line 14, after "which", insert: on being signed as mentioned in subsection (2)(a) of this section".—[Mr. Stodart.]

I beg to move the Amendment in page 46, line 27, to leave out "a" and to insert "the".

With great respect, I think that this is the easiest Amendment I have had to introduce this evening. It corrects an error, which I much regret, in line 26 of page 46. The indefinite article appears where the definite article should be used.

Amendment agreed to.

Further Amendments made: In page 47, line 6, after "reference", insert "to paragraph (a) or".

In line 7, after "reference", insert: to paragraph (a) or, as the case may be.".

In line 19, at end insert: Provided that, if the court is satisfied in any action that a sum less than the amount by which one-half of the hire-purchase price exceeds the total of the sums paid and the sums due in respect of the hire-purchase price immediately before the termination would be equal to the loss sustained by the owner in consequence of the termination of the agreement by the hirer, the court may make an order for the payment of that sum in lieu of that amount.

In line 46, leave out from "is" to "or" in line 2 on page 48 and insert: (apart from any liability which has accrued before the termination) subject to a liability to pay an amount which exceeds whichever is the lesser of the two following amounts, that is to say, the amount first mentioned in section 4(1) of this Act and an amount equal to the loss sustained by the owner in consequence of the termination of the agreement".—[Mr. Stodart.]

I beg to move, in page 48, line 20, to leave out "£20" and to insert "£30".

The Amendment rectifies an omission. When the Bill was in Committee it was decided that the lower limit of value of credit-sale agreements to which certain safeguards apply should be fixed at £30 and not £20 as the Bill originally proposed. In making the resulting string of Amendments we overlooked this one. The context of the Amendment is Section 6 of the Hire-Purchase Act, 1938, which will, as amended, lay upon the seller in a credit-sale agreement, worth more than £30 and not more than. £2,000, a duty to provide the buyer, on request, with certain information as to his current financial obligations under the agreement.

Amendment agreed to.

I beg to move, in page 49, to leave out lines 27 to 30 and to insert: (2) Where the hirer, whether expressly or by implication,—

1. (a) has made known to the owner, or to a servant or agent of the owner, the particular purpose for which the goods are required, or
2. (b) in the course of any antecedent negotiations has made that purpose known to any other person by whom those negotiations were conducted or to a servant or agent of such a person,

The question arises whether the Amendment is required. In Committee we had a discussion on similar lines to this, though perhaps in a different context. I believe that I said on that occasion that the law in Scotland on hire or purchase was that there was an implied stipulation that the goods hired or bought would be fit for their purpose. But it was also I believe the common law of Scotland that the owner would have an opportunity in such a situation, prior to an action being raised, to make any alterations within his power to alter or repair before the contract would be declared void. It seems to me that this was a very useful condition.

A motor car might break down and this, under the common law of Scotland, might be considered to be contrary to the implied stipulation, but the saving grace of the common law was that the agent, or owner through his agent, would have the opportunity of effecting the necessary modifications or repairs to the goods to bring them into a condition which would fit them for their purpose. I may not be explaining this matter very well because I have not had time to have another look at what was then said, but this is my recollection.

12.30 a.m.

What is concerning me is that what we are now trying to do is to bring into the law of Scotland what is really a purely English concept. I am wondering whether we would really be better off—or worse off. This Amendment lays down certain conditions before a stipulation as to fitness can be implied. I do not think that that is very good. I should imagine that the existing situation where any owner of goods either sells or hires them to someone else, and where there is immediately, in that transaction, an implied stipulation, is the desirable position. By this Amendment the hirer has to make known to the owner the particular purpose for which the goods are required. What would be the interpretation of this if it were appealed? Would he have to state exactly how the vehicle was to be used, the place where it was to be used, and so on?

I may be splitting hairs, and I may be drawing too wide a picture. Nevertheless, the questions arise. At the moment, under Scottish law, according to my understanding of it, the questions would not arise, and both the hirer and the owner would be adequately protected. Indeed, the owner would have a rather better protection than that which is provided in this Amendment. I do not object to this Amendment provided that it does not in any way alter the existing Scottish Common Law in regard to implied stipulations where a hiring or a sale has taken place.

May I just reassure the hon. Gentleman? I well remember the discussion we had in Committee on this and the doubts which the hon. Gentleman expressed. If I recollect rightly, he quoted Gloag on the Scottish law. I undertook then to examine whether or not his fears had any ground. I can assure him that I have gone into the matter with considerable care, and I can assure him that we are doing nothing by these Amendments to interfere in any way with the established practice of Scottish law.

Amendment agreed to.

Further Amendments made: In page 50, line 38, at end insert: Provided that nothing in this subsection shall be taken to confer on an owner any right to recover, otherwise than by action, possession of any goods let under a hire-purchase agreement where one-third of the hire-purchase price has not been paid or tendered as aforesaid.

In page 51, leave out lines 4 to 15, and insert: 12.—(1) The following provisions of this section shall apply, in a case to which the last foregoing section applies, where the owner commences an action to enforce a right to recover possession of any of the goods from the hirer after one-third of the hire-purchase price has been paid or tendered as aforesaid.(1A) After such an action has been commenced the owner shall not take any steps to enforce payment of any sum due under the hire-purchase agreement, or under any contract of guarantee relating thereto, except by claiming the said sum in the said action.—[Mr. D. Price.]

I beg to move, in page 54, line 24, to leave out "comprising those goods" and to insert: relating to the whole or any part of those goods (with or without other goods)". It may be convenient to the House to take the next following Amendment, and that to page 59, line 15, together, because they all deal with the same point.

Mr. Deputy-Speaker:

If the House pleases.

The third of these Amendments is in Schedule 4, page 59, line 15, at the end to insert: In section 15, for the words "comprising those goods" here shall be substituted the words "relating to the whole or any part of those goods (with or without other goods)", and for the words "as from the commencement thereof" there shall be substituted the words "as if in section 11(1) of this Act the words from 'and one-third' to 'any guarantor', and in section 12(1) of this Act the words 'after one-third of the hire-purchase price has been paid or tendered as aforesaid', were omitted". That Amendment makes two small changes to Section 15 of the 1938 Act. First, it makes clear that, in order to qualify for the protection of Sections 11 and 12, as extended by Section 15, a further hire-purchase agreement relating to goods which have already been subject to one agreement between the same parties under which one-third of the price has been paid need not comprise the whole of the goods in the earlier agreement and may comprise other goods as well. This, in layman's language, deals with the situation in relation to what are known as "add to" agreements.

Section 15 states that the protection of Sections 11 and 12 of the Act shall apply in relation to such a further agreement as from the commencement thereof. What is intended is that it is not necessary for one-third of the hire-purchase price on the further agreement to have been paid before this protection operates, and I am advised that it is desirable to clarify the position as this Amendment does, to cover the case of "add to" agreements.

Amendments Nos. 89 and 90 make the consequential Amendments in Part III of Schedule 2, which sets out the 1938 Act as it applies to Scotland.

Amendment agreed to.

Further Amendments made: In page 54, line 26, leave out "from the commencement thereof" and insert: if in section 11(1) of this Act the words from ' and one-third ' to ' any guarantor ' and in section 12(1) of this Act the words 'after one-third of the hire-purchase price has been paid or tendered as aforesaid ', were omitted".

In page 55, line 1, leave out from beginning to "which" in line 2 and insert: 19A.—(1) Subject to the following provisions of this section, where goods have been let under a hire-purchase agreement to which this Act applies and the owner brings or institutes an action to enforce a right to recover possession of any of the goods from the hirer, the action shall be brought or instituted in the sheriff court for the district in which the hirer resides or carries on business or resided or carried on business at the date on which he last made a payment under the hire-purchase agreement(2) No cause, action or proceeding on or arising out of any hire-purchase agreement to which this Act applies or credit-sale agreement to which this Act applies.

In page 56, line 45, after "Act", insert: apart from the proviso to subsection (1) of section 4".

In line 45, at end insert: unless the court determines that a smaller sum would be equal to the owner's loss".

In page 57, leave out lines 10 and 11.

In line 15, after "If", insert: ^* [after (here insert an amount calculated in accordance with the provisions of sections 11 and 19 of this Act) has been paid]",

In line 16, after first "court", insert: (under powers conferred by the Hire-Purchase (Scotland) Acts 1938 to 1964)".—[Mr. D. Price.]