Clause 3. — (Restrictions on Operation of Foregoing Sections.)

– in the House of Commons at 12:00 am on 26th November 1964.

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Photo of Mr Graham Page Mr Graham Page , Crosby 12:00 am, 26th November 1964

I beg to move Amendment No. 39, in page 3, line 37, at the end to insert: (a) a tenancy of premises in respect of which a contract for sale or letting with vacant possession was made prior to 13th November 1964, and in respect of which the vendor or the prospective lessor (as the case may be) had at the time of the contract the right to obtain possession on or before the date fixed for completion of the sale or the commencement of the letting. This Amendment is intended to meet the case where, before the Bill was published, the owner of property has entered into a contract for sale of the property or for letting the property, in either case with vacant possession, relying on the fact that he could get vacant possession under the law at the time he entered into the contract. It may not be that he would get vacant possession at the time he entered into the contract to sell or to let but that, at the time the contract fell to be completed, he had the right to obtain possession.

If the Bill comes into operation, the owner would find that he had contracted to do something which the law now says he cannot do. To that extent, the Bill would be retrospective. One cannot expect the owner of every property to gaze into the crystal and see what the Government intend to do at some future time. In the Amendment I have chosen the date on which the Bill was published. I do not wish to protect the person who has had an opportunity of reading the Bill and has then sold his property with vacant possession when there is a tenant in it. I wish to protect the man who has taken action in reliance on the law as it stood before the Bill was published—in fact, as it stands today, but today he knows that it is going to be altered. Before 13th November he could not have had a clue as to when the Bill might come in, or how it might alter the law.

There are many cases—I have been informed of them in practice, and I have some of them in my office—where a contract of sale has been entered into before anyone knew the contents of the Bill. Those contracts were entered into in reliance on the fact that the tenant was obliged to go. He had been given notice, his tenancy was ending, and he would be obliged to go before the owner had to complete. I think that we ought to avoid retrospective legislation, and specifically in this Bill relieve the hardship which will fall not only on the owner who has contracted to sell in that way, but on the purchaser as well, or the prospective tenant.

I am sure that all those who have had anything to do with the purchase and sale of houses in the last few years knows that this is a chain event. Seldom is there one transaction at a time. There is a whole chain of contracts for sale all being completed at or about the same time, with owners moving from house to house. It may well be that unless we relieve the man who has entered into a contract in that way we shall cause hardship not only to the parties to the contract, but to many others in the chain of events which surrounds that contract.

Photo of Mr James MacColl Mr James MacColl , Widnes

The hon. Gentleman has put his case very persuasively. The difficulty is that the Amendment would take these cases completely out of the Bill. If they are left in the Bill, there is no direction that the court cannot give possession. In other words, it is open to the court to act and to give possession where a contract of that sort has been entered into, and where, in the view of the court, the tenant ought to have gone out because he knew that he was supposed to go out. It is better to leave that end of it to the discretion of the court rather than have the exclusion of this kind of case from the Bill.

I think that in some cases there may be a risk of evasion. It may not always be possible to be sure when the contract was executed. It might be given an earlier date.

Photo of Mr James MacColl Mr James MacColl , Widnes

The hon. Gentleman says "Oh, dear". We are dealing with people who can be extremely ruthless and unscrupulous.

Photo of Mr Graham Page Mr Graham Page , Crosby

We are also dealing with honest genuine people. We do not want to penalise them with the few who may be swindling as the hon. Gentleman suggests.

Photo of Mr James MacColl Mr James MacColl , Widnes

The difficulty is that one has to cast the net wide if one is to be certain of getting in the cases which have to be watched. The courts have to be given facilities to sort out the sheep from the goats. That is the idea of the Bill. The best person to do that is the judge. In my opening remarks many hours ago I said that the idea behind the Bill was to have a wide net to collect people into the Bill for protection, but to allow a good deal of discretion as to what happens to them at the other end. That is the right approach to the problem. It is better to leave it to the court to sort out these matters rather than to exclude them absolutely.

1.30 a.m.

Photo of Mr William Rees-Davies Mr William Rees-Davies , Isle of Thanet

I find that a most profoundly unsatisfactory statement. I realise that it is half-past one in the morning, but it was not the sort of statement that I would have expected from the hon. Gentleman. I hope that he will apply his mind a little more to the issues in the case.

First, this is a clear example of retrospective legislation—the clearest we could possibly have. I have heard it said many times in recent months by the Labour Party—and particularly by the Lord Chancellor in another place—that it intended to support the view that we have supported on these benches, that retrospective legislation of this or any other kind would not be introduced at all. Indeed, in fairness to the Government, in quite a number of instances they have sought recently to uphold that principle.

In this case nobody suggests that a contract of this sort could have been anticipated before the publication of the Bill. My hon. Friend and all those who are associated with him in supporting the Amendment have indicated clearly the date of 13th November as being the date of the contract. Ninety per cent. or more of those contracts will be contracts entered into between solicitors acting on behalf of the landlords on one side and the tenants on the other, in respect of contracts for sale with vacant possession prior to 13th November. They are documents in writing.

The hon. Member was talking as though all these people were a bunch of dishonest blokes. That is completely untrue. I would point out to him that the overwhelming proportion of these contracts will be normal commercial agreements. Is it really suggested by the hon. Member that the Government are legislating purely for the case of those who falsify their documents—because if they do falsify their documents and get them stamped they will in any event be guilty of a criminal offence and would be dealt with entirely separately for that.

If that is so, those who are caught will be amply dealt with for their criminal offence. There might be the odd case, but the hon. Member will surely reconsider the point, recognising that we cannot legislate for the isolated case of the swindler. The Amendment plainly states on the face of it that it deals with the normal contract, entered into commercially by clients and their solicitors in the normal course of business.

I had no intention of speaking to the Amendment, but it seemed to me as plain as a pikestaff that this would be one of those that I would be able to mark with an "A", as having been accepted. I would point out that we began this afternoon with what seemed to be a measure of reasonable understanding. This is not an emergency matter. It is not a matter on which the hon. Member has a tittle of evidence to support his view that many people have entered into some form of fraudulent contract prior to the introduction of the Bill, and in anticipation of it. In those circumstances I venture to suggest that the Government should have second thoughts on this matter.

I support the general idea of this emergency Bill, and I agree with quite a lot of what it stands for, but I think that the arguments put forward by my hon. Friends are clearly sustainable. If the hon. Gentleman assures us that he will permit us to raise the matter again on Report and will undertake to have a word with the Solicitor-General or the Attorney-General, we might be satisfied. The Solicitor-General has now woken up, but is probably not in the House, although I am sure that he can be found somewhere. Neither of the Government Law Officers has been present all day, although both the former Law Officers have been here to talk on these matters. I am convinced that if the hon. Gentleman takes proper legal advice from those who can advise Her Majesty's Government on this matter he will think again about it.

Photo of Mr Norman Cole Mr Norman Cole , Bedfordshire South

I am surprised that the Government are losing their touch—such as it was. I wonder that they did not reply to my hon. Friend the Member for Crosby (Mr. Graham Page) that this is one more matter which has to be put under the umbrella of Clause 2(4,d) dealing with hardship. I make the Government a present of that point in case they did not think of it.

I wonder whether the Parliamentary Secretary realises that he was referring to very respectable solicitors and was suggesting that they would be parties to putting wrong dates on documents. Although it is twenty-five minutes to two o'clock in the morning, we have the responsibility of trying to make the best legislation we can. This may be only a temporary Measure, but we should peruse it properly. In this case there is a large body of honest people who, through their solicitors, have drawn up contracts to sell or let. They are prepared and ready to take the necessary action, in one case to vacate premises and, in the other, to go into them. The Government in trying to protect a great body of people will be causing harm to others. The Government rightly feel that they have a duty to tenants wrongly dispossessed, but they also have a duty to a great body of people who are buying houses quite legitimately and properly.

What is to happen to a man who signs a contract and is ready to move out of his premises into premises where the tenant goes to the court and gets a suspended order for 12 months? What happens to the prospective purchaser who has moved out of his house into temporary lodgings? I do not think the Government can kill one wrong by creating another. I hope that they will look at this matter again.

Photo of Mr James MacColl Mr James MacColl , Widnes

This is not retrospective because the situation with which we are dealing is there at the time the Act comes into operation. The situation is one where someone is occupying premises and someone else is trying to get him out by force.

The Bill is about the methods used to get people out of premises; it is not about a question of legal rights. If a policeman finds someone engaged in throwing furniture out, he cannot ask to see the contract in order to discover whether it is properly stamped and has a date on it. The policeman must deal with the sort of action that is taking place. The whole object of the Bill is to see that that kind of argument is settled by the due process of the law in the courts. It would be very difficult to draft anything which would meet what I agree are difficulties without creating problems for administration.

Photo of Mr Norman Cole Mr Norman Cole , Bedfordshire South

Can the hon. Gentleman visualise a case in which a person is intending to go into the premises and all has been settled? The premises are the subject of a contract which has been engrossed and is waiting for completion and then he finds that through family difficulty he has to decide that the problem should be transferred to the owner. They go to the court and there is no question of violence or withdrawing services. They can get a suspension for at least six months, which is enough to invalidate the contract.

Photo of Mr Graham Page Mr Graham Page , Crosby

I do not understand the argument that this is not retrospective. Suppose that on 1st November a man has entered into contract to sell his property with vacant possession. On 13th November the Bill tells him that it is not a contract to sell with vacant possession, but that it is a contract to sell with a tenant in it. Is that not retrospective?

This distinguishes it entirely from all the other cases which are included in subsection (4). The other cases are consideration of hardship, whether the tenant has been looking for other premises, and so on. This case of the vendor and purchaser, of the landlord and the prospective tenant, who have contracted to sell or let with vacant possession, is distinct from the other cases.

I ask the hon. Gentleman to consider this matter from the simple practical point of view of things which happen every day. This is not a case of big business transactions or anything like that. This is the case of the ordinary person selling the house in which he is living or a person buying from somebody else a house in which there is a tenant—

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

What principle is it which leads the hon. Gentleman to think that the interests of the vendor and purchaser, in the case that he is putting forward, should have priority over the interests of the tenant?

Photo of Mr Graham Page Mr Graham Page , Crosby

The vendor and purchaser have entered into this contract without the knowledge that the Government are going to bring forward a Bill of this sort. This is altering a contract which has already been entered into. I said earlier that I wished the Minister without Port-folio had been on the Government Front Bench, because he at least could have answered the legal points that we were discussing. As the third Law Officer, I should have thought that he ought to have been here. We certainly ought to have had him here during the consideration of this Amendment. He has been a practising solicitor and he would have known what this meant to clients in his office. He would have known that this is a thoroughly practical point involving ordinary people who ought not to be deprived of their rights in this way.

Photo of Mr Gordon Oakes Mr Gordon Oakes , Bolton West

If I may refer to the remarks of the hon. Member for Crosby (Mr. Graham Page), his argument would be attractive if there were a large number of cases of the kind which he has described. But surely the vast majority of genuine prospective purchasers who are doing a deal through a solicitor's office would not enter into a contract in the circumstances in which there was a tenant—

Photo of Mr Gordon Oakes Mr Gordon Oakes , Bolton West

If they did enter a contract in the way in which the hon. Member suggested, they would be as bad as the landlord who was trying to evict the tenant. To cater for the very few cases that may be involved, it opens the floodgates, because it could well happen that a company would sell to one of its directors a fraudulent contract bearing a date that had been inserted later, a document that had not gone through a solicitor's office but which was purported to have been made before the commencement of the Act. We must remember that we may have to deal with unscrupulous people.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

We have had a long debate and the Liberal Party has indicated that it is very much in favour of the general principle behind the Bill.

I am somewhat troubled by this matter, however, and I feel that there is a good deal of sense in the argument that we have heard from this side of the Committee, particularly on the question of a contract that has been entered into, let us say, shortly before the introduction of the Bill. We have heard a lot about the scoundrels who are some of the worst landlords, and I accept that in many cases there are very bad landlords and that this Bill will do a great deal to curb their activities.

But not only are landlords guilty of this kind of thing. There are occasions when the tenant can be equally unscrupulous. Surely this lays the path open for an unscrupulous tenant to take advantage of the Bill, and, finding himself in a position when perhaps he had intended to give up possession previously, to realise that he can have this extra protection which he was not entitled to before and did not expect.

That is why I feel that this is retrospective, and that is why I feel the argument from this side of the Committee has been correct.

1.45 a.m.

Photo of Mr Ivor Richard Mr Ivor Richard , Barons Court

Of course, this is not retrospective in the sense in which the term is being used by the other side. All that the Bill seeks to do is to stop a landlord evicting a tenant by force. It gives the tenant the right to stay in the premises until the landlord goes to court and gets an order. In answer to the hon. Member for Crosby (Mr. Graham Page), if one has a perfectly scrupulous agreement between honest parties before 13th November for the sale of property in which vacant possession is supposed to be given on 25th December, whether the Bill is in existence or not the prospective purchaser is in the position of having to take some action to get possession of that property.

All that the Bill is intended to say and all it does say is that on 26th December the landlord is not to be entitled to walk into the premises and pitch the tenant and his furniture out into the street, but he has to go to the county court and get an order. All this talk of retrospective legislation and the right of prospective purchasers and vendors is complete nonsense.

Photo of Mr Graham Page Mr Graham Page , Crosby

Surely the Bill encourages this tenant to stay on after 25th December. The Bill is not, as I understand it, to drive people to the courts, but to tell people what their rights are, and the Bill tells the tenant he has a right to 12 months after 25th December.

Photo of Mr Ivor Richard Mr Ivor Richard , Barons Court

This does not give the tenant a right, but merely restricts the present rights which the landlord has under the law.

Amendment negatived.

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

The next Amendment selected is Amendment No. 40 with which it is proposed to take Amendment No. 41.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I do not think that it would be right at this hour of the night to trouble the Committee with Amendment No. 40, which raises, as the Committee knows, issues of very great importance. I therefore do not propose now to move it, but I hope to have an opportunity of discussing the point raised on it at a later stage of the Bill.

Photo of Mr Ian MacArthur Mr Ian MacArthur , Perth and East Perthshire

I beg to move Amendment No. 43, in page 3, line 42, at end insert: or a tenancy of premises in Scotland the net annual value for rating of which exceeds that sum".

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

With this Amendment it is proposed to take Amendment 44.

Photo of Mr Ian MacArthur Mr Ian MacArthur , Perth and East Perthshire

The Bill applies to tenancies with the upper limit governed by the County Court Act, 1959, which stands at present at £400, but there is no upper limit in the Sheriff Court in Scotland, as the Explanatory and Financial Memorandum to the Bill makes clear, so that in Scotland the Bill, as it stands, applies to all tenancies. There does not seem to me to be any good reason for this distinction and the Amendment brings the application of the Bill to Scotland in line with its application to England. Earlier, the Minister of State for Scotland has been in agreeable and acceptable mood. I hope that that spirit continues. It should do so because the Amendment strives for Scottish legislative clarity and purity.

Photo of Mr Eustace Willis Mr Eustace Willis , Edinburgh East

On this occasion, I cannot be quite so affable to the hon. Member. He suggested that the Amendment made for the purity of our Scottish law. By the Amendment the hon. Member is bringing Scottish law into line with English law for no reason at all and in doing so changing the position in Scotland. The limit fixed in Clause 3(1,a) is a limit fixed in accordance with the properties over which county courts have jurisdiction in England, but there is no limit in Scotland for properties over which the sheriff courts have jurisdiction. It therefore seems appropriate to us to keep the position in Scotland as it is.

The number of properties that would he affected by the Amendment is practically nil. A survey conducted over three-quarters of Scotland showed that there were only four houses which would be covered by this provision. I will not say which they are. Another objection to the Amendment is that it would fix a limit by reference to an English Act of 1951, a limit which would practically have no meaning. This would lead to confusion among lawyers, tenants and landlords to no purpose at all. We do not think it wise to create unnecessary confusion to serve no useful purpose. We cannot accept the Amendment for these reasons.

Amendment negatived.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

I beg to move Amendment No. 49, in page 3, line 44, after "1939" to insert: or Part I of the Landlord and Tenant Act 1954".

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

It is proposed also to take Amendment No. 50 with this Amendment.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

The Amendment raises a rather narrow technical point and I need not keep the Committee a long time on it. It relates to long tenancies. As the Clause stands, it would exempt only those long tenancies which are not at a low rent, but Part I of the Landlord and Tenant Act, 1954 now applies, by virtue it is true of subsequent legislation, to all long tenancies whatever the rent, whether at a low rent or not. Therefore, I think that the exemption can properly be widened in the way my Amendment proposes.

Photo of Mr James MacColl Mr James MacColl , Widnes

I am grateful to my hon. and learned Friend. The Amendment improves the drafting and I am glad to accept it.

Amendment agreed to.

Further Amendment made: In page 4, line 1, leave out from "thereof" to end of line 2.—[Mr. A. J. Irvine.]

Question proposed, That the Clause, as amended, stand part of the Bill.

Photo of Mr Graham Page Mr Graham Page , Crosby

There is just one question which I should like to ask the Parliamentary Secretary on this Clause. In subsection (1, a) which deals with net annual value, there appear the words "for the time being". What is meant by those words? It is a matter of concern to those who have to choose in the matter of jurisdiction at the time of commencement of court proceedings. Does it mean that if one brings on one of these cases before the county court and the net annual value changes while the case is proceeding, and goes above £400, then it ceases to be within the jurisdiction of the county court?

Photo of Mr James MacColl Mr James MacColl , Widnes

I appreciate the point made by the hon. Member and would like to tell him that I will give it very careful attention. I think that the answer is that it is the net annual value at the time and the state of the law at that time.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 4 ordered to stand part of the Bill.