LEASEHOLD PROPERTY (TEMPORARY PROVISIONS) BILL

HL Deb 08 May 1951 vol 171 cc740-801

2.39 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly:

[The LORD MERTHYR in the Chair]

Clause 1:

Continuation of expiring long tenancy where tenant in occupation

1. Where a tenancy was granted for a term of years certain, being a term exceeding twenty-one years and expiring on a date (hereinafter referred to as "the date of expiry") falling within the period of two years beginning with the commencement of this Act, and immediately before the date of expiry the tenant or a member of his family is living in the property or a part thereof in right of the tenancy, then subject to the provisions of this Part of this Act the tenancy shall continue after the date of expiry as if it had been granted for a term expiring at the end of the said period of two years but otherwise (save as hereinafter provided) on the terms and subject to the conditions of the tenancy.

VISCOUNT SIMON had given notice of a number of Amendments to the clause, of which the first was to leave out "immediately before" and insert: at all times during the period beginning with the twentieth day of November, nineteen hundred and fifty, and ending with.

The noble Viscount said: May I at once explain that November 20, 1950, is inserted because that is the date on which this Bill became known to the public; and after that date anybody who was so inclined might do his best to take advantage of Clause 1 of the Bill? Clause 1 is the governing clause of Part I of the Bill. I may remind the Committee that it provides, in the case of a building lease granted for a term exceeding twenty-one years, if it has not expired at the date when this Bill commences to operate, that a tenant may derive the considerable advantage of an addition to his lease of two extra years. The two years is only an approximate period, because the length depends on the precise moment when the lease ends, but the tenant may have a substantial addition to the period of his lease, which he will continue to enjoy at the rent originally reserved. In the case of a building lease of considerable length, that original rent may be only a nominal figure as compared with the present value of the house. I am not challenging the proposition in Clause 1 as I have described it. My question is: What are the limits within which this remarkable privilege should be allowed? It is an entirely one-sided privilege, entirely to the advantage of the tenant and against the interests of the landlord. Though the Bill is described as a Bill to protect "occupiers of residential property," the effect of Clause 1, as it now stands, will be that a tenant who has never occupied the residential property at all, who never had the least intention either of residing in it himself or that any member of his family should do so, can nevertheless get the advantage which Clause 1 gives by fulfilling the condition that immediately before the date of the expiry he is residing there. That appears to me to be a very remarkable provision.

Whilst I can understand the case made in support of Part I of the Bill, on the view that a tenant occupying residential property who finds his lease running out has great difficulty in finding other accommodation, I should have thought it was not the intention of the Government to offer this boon to people who would never have done anything to bring themselves within the Bill, had they not learned, after the Bill was introduced, that there was a method by which they could get this advantage. Such a person might have gone to a solicitor and said he had heard there was a Bill being carried through Parliament which would add two years to a lease at the old rent, which might be far less than the rent which would be proper for such premises to-day. He might say to his solicitor, "I should like to take advantage of that. How am I to do it?" The solicitor, examining Clause 1 as it stands, would say, "It is perfectly simple. In your case you have never occupied the property. You have have been the tenant in the lease, but other people have been occupying the property. You never meant to occupy it. But it is simple.

All you have to do is to arrange that it should be true in your case that at the moment the lease expires you are residing there. And it would be well worth while to pay the tenant who is residing there pretty handsomely to let you in, because you will get two more years of the tenancy at the old rent." I can hardly conceive that that was the intention of the Government.

Clause 1, as it stands, would appear to say that the owner of a lease can fulfil this condition by becoming a resident at a particular moment of time, with no requirement that he should have resided there before, or, indeed, should ever reside there afterwards. If that were really the intention of the Government, it would mean giving a man the benefit of this clause, which, I apprehend, is for the purpose of protecting people who are occupiers and who would find great difficulty in finding another house. It may be said—and this observation has been made in another place—that if you do anything like that, and attach the condition that in order to qualify the tenant must have resided at an earlier date, that introduces a purely arbitrary provision; that one date is just as good as another; and that, as this is a temporary Bill, it would be a pity to introduce these complications. I do not admit that my proposal chooses an arbitrary date. By choosing November 20, 1950, I am choosing the date at which people might first have learned that such a Bill was in the course of being introduced. They could never have dreamed of it, had not the Government introduced such a Bill, and it seems to me that it is not correct to describe the date I indicate as an arbitrary date.

I must add another reflection, which may be said to tell against the proposal. It may be said that there may be people who after November 20, 1950, genuinely desired for the first time to reside in a property, or in a portion of a property, which they had been holding under a building lease. Those are cases in which the man will find as much difficulty in getting alternative accommodation as in any other case. That is true. But we have to choose between two alternative difficulties, and all I ask your Lordships to consider is which is the substantial difficulty. It appears to me that the last thing which your Lordships would wish to do is to encourage a purely artificial arrangement, offered openly by the clauses of the Bill to anybody who chooses to take advantage of it, that he can satisfy the conditions of the Bill by arranging to reside just before his lease normally runs out.

There is one other observation that I should like to make. I have used the word "reside," because I am in hopes that the Lord Chancellor and the Government may accept the suggestion to insert in line 12 the word "residing" as a better word than "living." The Lord Chancellor has been good enough to indicate to me that he will be prepared to accept that Amendment, and therefore I need not argue it now. No doubt the test: "Do you reside here?" may in some respects be regarded as a stricter test than simply asking: "Do you live here?" But, with great respect to any-body who takes a different view, I venture with some confidence to assert that it is perfectly possible for a man to say, and to prove to the satisfaction of any court of law, that he resides in property on the day on which he goes in there as a resident, though he never went in before, and stays only for a very short time.

The test, as your Lordships see, is the test of a moment of time. I cannot imagine anything more artificial than to say: "I do not care anything about the real use you have been making of your leasehold. I know you are a man who never had the slightest intention, yourself or your family, of residing in the house at all." The Government's Bill is one which says that that is not in the least necessary; that all you need do is to arrange to start a residence just before your lease expires. The Government say, in effect, "We do not care what you did before, and we do not care what you do after." It may be that if a man resided there for only a few days the courts would be slow to think that he really resided at all. But that is not an impossible thing. For example, for the law which decides who is to be entitled to vote, or the complicated income-tax law—which anybody may be forgiven for not carrying completely in his head—the conception of residence is a thing that does not depend at all upon the length of time which you are there. It is a fact which has to be ascertained at the time indicated. Here, oddly enough, a moment of time is quite sufficient to satisfy all the provisions of the clause. I am sorry to have taken so long in moving this Amendment, but I feel that it is right to realise at the beginning what it is that we are invited to do. However we do it, there will be difficulties in the working of this Bill. At the same time, I feel that the argument I have ventured to advance is one which deserves consideration. I beg to move.

Amendment moved— Page 1, line 11, leave out ("immediately before") and insert ("at all times during the period beginning with the twentieth day of November, nineteen hundred and fifty, and ending with").—(Viscount Simon.)

LORD SILKIN

The noble and learned Viscount has moved this Amendment with all the plausibility and skill which we usually associate with him but, for reasons which I will outline, I venture to ask the Committee to disagree with the Amendment. We start on common ground that the principle of the Bill is accepted, and there is no complaint about the extension of the terms of a lease for a minimum period of two years. The question then is what is the equitable thing to do as between the ground landlord, the lessee, and the assignee—that is, the person who takes over the lease after November 20, 1950. I cannot help thinking that there will be very few cases of this kind. The noble and learned Viscount has postulated a set of circumstances in which a person becomes aware of the existence of the Bill and goes to his solicitor. He would be a venturesome and, I would say, desperate person who would do a thing like that.

VISCOUNT SIMON

Why?

LORD SILKIN

Because he would be advised by his solicitor that the introduction of a Bill is by no means a guarantee that the Bill will become law. If the solicitor were a wise person he would tell his client that this Bill has, amongst other things, to go through your Lordships' House; that the noble and learned Viscount might propose Amendments which would commend themselves to your Lordships, and particularly an Amendment of this kind, which does not go quite so far as the recommendation of the Committee on Leaseholds. The man may even run the risk that the Bill will not go through at all. He will be running a great many risks and, as I say, he would be most desperate for accommodation if he were prepared to pay, as the noble and learned Viscount says, a substantial sum of money in order to get the benefit of a period up to an additional two years. As I have said, I cannot help thinking that there will be very few such cases. But supposing there were such cases. Let us then look at the equity of the matter. So far as the ground land-lord is concerned, he is in no worse position by virtue of this direction than if the original lessee had retained possession of the premises and continued to live or reside there. In such a case the extension for the maximum period of two years would have been available to the original lessee and, so far as the ground landlord is concerned, all that has happened is that there is a new lessee instead of the old one.

VISCOUNT SIMON

I do not wish to interrupt the noble Lord unnecessarily, but I feel that he has somewhat misapprehended my proposal. With great respect, this Amendment has nothing to do with the assignment of the lease. It has to do simply with the condition that the tenant should, at the moment the lease expires, himself reside there.

LORD SILKIN

With great respect, I thought it had, because I understood that the noble and learned Viscount had set forth an imaginary interview with a solicitor in which a person comes along and pays a substantial sum for the "fag-end" of the lease in order that he may enjoy the privilege of securing possession. In those circumstances, I do not see what he is paying a substantial sum of money for. Surely he is paying money in order that he places himself in the shoes of the lessee.

VISCOUNT SIMON

He is lessee. He pays the sum in order to have the opportunity of residing when the lease expires. It is worth a good deal to him, because if he does that he can get two more years at the old rent.

LORD SILKIN

I think I understand what the noble and learned Viscount is putting forward, but I suggest that the man could place himself in that position only by taking an assignment of the existing lease. If that is not so, I should be grateful if the noble Viscount would explain how else he can be put in that position, and what he is paying this sum of money for. It can be only for an assignment of the remainder of the term of the lease. That being so, the ground landlord is placed in no different position, whether it is the original lessee who is residing on the premises or the new person who has paid a considerable sum for the privilege of being regarded as residing there at the material time.

VISCOUNT SIMON

I am very unwilling to interrupt, because no one is more courteous than the noble Lord opposite, but he really has misunderstood my point. Perhaps I was unwise to give an illustration. My point is merely this. The tenant will not get the benefit of Clause 1 unless, at a particular moment of time, he is residing in the premises of which he is the tenant. It may be that, in order to fulfil that qualification, he has to secure that there will be some portion of the premises which he can occupy. If, for example, he has hitherto let a portion of the premises to somebody, not for a term of years but from day to day, all that is necessary is that that particular occupation should come to an end—that the place should be-come vacant—and that he should himself reside there. There is no difficulty in understanding that, and I venture to interpose only because the noble Lord said that he would like me to make my point clear. It does not involve any assigning at all.

LORD SILKIN

With great respect, I thought it did, because Clause 1 says that a person has to be "living in the property or a part thereof in right of the tenancy," That must mean, therefore, either that he is himself the lessee, or that he has acquired the lease from the previous lessee.

VISCOUNT MAUGHAM

Or any other person.

VISCOUNT SIMON

He is the lessee.

LORD SILKIN

But "in right of the tenancy" must mean in right of the lease for a period of twenty-one years or more.

VISCOUNT MAUGHAM

Yes, but the noble Lord suggested that it must be from the tenant or somebody who acquired the right for the tenant. If you take a ninety-nine years' lease, of which there are thousands in London, they are transferred from hand to hand through any number of various owners, and any one of those is holding "in right of the tenancy."

LORD SILKIN

Of course I understand that. All I am saying is that the person whom the noble and learned Viscount wishes to disqualify must, in order to be residing there at all, have acquired the tenancy from a previous holder.

VISCOUNT MAUGHAM

Acquired the right to live there by right of the tenancy.

LORD SILKIN

Yes. What I am saying is that it makes no difference to the owner whether the tenant who was residing there before November 20 is still living there, with the right to a further term, or whether the person who takes it over from the tenant acquires a similar right. The owner is in no sense prejudiced. In any case, the person who was the lessee and who secures a sum of money for the benefit of the tenancy is no longer affected. Therefore, the only person who is affected is the desperate person who has paid a sum of money in order to enable himself to enjoy the benefits of Clause 1. The noble and learned Viscount's Amendment would deprive this person, who has paid this sum of money in good faith, believing that he is going to enjoy the benefits of Clause 1, not only of his residence but also of the benefit of the payment which he has made to the previous lessee. I think that would be grossly inequitable; and as between the equities of the owner and of the person who has paid this sum of money in good faith, there is no reason why he should not say: "Here is a Bill coming along. In spite of the noble and learned Viscount, it may give me an additional tenancy of a year or two. I am prepared to take a chance and pay a sum of money for it." The effect of the Amendment would be that he would lose the benefit of the premium he has paid, as well as losing the opportunity of enjoying the occupation of these premises for a number of years. Frankly, it is a question of balance of equity, and on the whole I feel that the greater hardship would fall on this unfortunate person who has paid his money (and the noble and learned Viscount now threatens he should lose it) than would fall on the owner who must have reconciled himself to the fact that he has to extend his tenancy for a period of up to two years. For those reasons, I would ask the House not to accept this Amendment.

3.0 p.m.

LORD LLEWELLIN

We have all listened with interest to the noble Lord who has just sat down. He started by saying that he had listened to a very plausible speech from my noble and learned friend Lord Simon. Whether the word "plausible" was meant to have a sting in its tail or not, I do not know.

LORD SILKIN

I also used the word "skilful."

LORD LLEWELLIN

Perhaps I may retaliate and say that I have never heard a more plausible, though perhaps not so skilful, speech as that to which we have just listened from the noble Lord, Lord Silkin. He asked: What is the principle behind this Bill? I thought that the principle behind this Bill was that where a man or woman had been living in property for some time—especially where the property was of a class similar to that covered by the Rent Restrictions Acts —and the ground lease came to an end, in these difficult times of obtaining accommodation in this country those bona-fide tenants should not suddenly be thrown out upon the street. With regard to that principle most of us are largely agreed.

As the Bill comes before us, a second principle seems to have crept into it— namely, that where a tenant who never intended living in the property of which he owns the lease goes in on the very last day of the tenancy, he shall have all the rights which we wish to accord to the person who has been living in those premises for some time. Yet another principle which seems to have crept in is that anybody who has done a nice little speculation in the "tag-end" of a lease, and has bought it, having knowledge of what was in this Bill, can then himself go in on the last day—without any requirement that he himself should have been previously the owner of this lease. He can still get the lease at a rent which was fixed, perhaps, ninety years ago, and certainly over twenty years ago. And all this although he bought the lease only at the "tag-end," with the knowledge that this Bill had been introduced. Let us remember that he need not have done that before the day of the introduction of the Bill; he can do it within the last week or the last ten days of the coming into force of this measure. The noble Lord, Lord Silkin, said: "He has paid his money: why should he not be able to get some advantage from it?" It is a curious thing that under a Bill such as this, which alters the contractual relationship between the ground landlord and the proper tenant, an outsider, for speculative reasons, could get in—and that, frankly, is what will happen unless some such Amendment as this is passed.

Normally, Parliament is very careful when it alters the law—for instance, when a new tax is imposed. What happens is that a Budget Resolution is passed in another place within half an hour of the Chancellor of the Exchequer announcing the new Budget proposals. This is done, of course, so that speculative people shall not take advantage of the proposals of the Government. By leaving the date as it stands in this Bill, we are reversing the whole of that procedure: we are allowing speculative people to take advantage of what is the known intention of the Government. I am glad to have my name associated with this Amendment because, unlike the noble Lord, Lord Silkin, I do not like these speculative dealings on the part of people who suddenly come in and try to take advantage of Government proposals such as these. If this Amendment is not accepted, we shall be leaving a loophole which I. for one, do not want to sec. I see no reason at all why we should give the advantage of this Bill to any tenant who has not for a reasonable period himself been living in the house. Nor do I see any reason why we should allow a tenant who has never left the house assign the tenancy at a premium to someone else, because the latter person thinks he can come in and reap the advantage of this two-years' extension. That is not the way Parliament ought to act, and I shall be very surprised if, on second thoughts, the Government do not see that point of view and accept the Amendment. We are trying to protect the genuine tenant and not to give encouragement to the speculative people of whom I have spoken.

VISCOUNT MAUGHAM

This is a difficult Bill to understand, even for a lawyer, and I am not surprised that some doubts have been expressed about its effect. But there are one or two things which, I venture to submit, have not been fully appreciated in the course of this debate. If I am wrong in what I say, I am sure the noble and learned Viscount the Lord Chancellor will point out to me where I am wrong. But at present I do not believe that noble Lords have really appreciated what this clause means. The first thing I want to say is that the person who is getting benefit under Clause 1 of this Bill—assuming it is to apply—has not to do anything at all: it is all done irrespective of his wishes. It is true that there is a clause in the Bill under which he can say that he does not want the provisions of the Bill to operate, but otherwise he may be, so to speak, lying in bed while the original lease is being extended for either two years or something short of that period. Then what happens? The extension need not necessarily go to him at all. What happens is that the original lease, which may have been granted ninety years ago —and certainly at any time over twenty years ago—is extended by a period which will not be more than two years; and it will be just the same as if the lease had been originally granted for the time in question plus the extension. It need not be, therefore, a tenant or the assignee of a tenant who has to be living in the property; this automatic change is made in the event of the tenant or a member of his family living in the property or a part thereof in right of his tenancy.

If I am right so far—and I cannot see that there is any answer to what I have said—this is a point which the Government will do well to reconsider, with a view to seeing whether the Bill as it stands really carries out the objects they have in view. To my mind—and I say it with all deference—it is essential that the Amendment proposed by the noble and learned Viscount, Lord Simon, or some similar Amendment, should be made, so that the change in the character of the lease will take place only in respect of someone who in some way is worthy of it. It is sufficient, the Committee will observe, for a single person who is a member of the family, living in one room in the house, to put forward notice of use, though very likely that person is not in the house at the time. And, of course, the clause, as it stands, obviously covers a person who is a member of the family in the sense of being a descendant or, I suppose, a relative in some way of the original owner. But the curious thing is that the words are "a member of the family"—and there is not the smallest reason to suggest that that is going to exclude servants.

I have taken the trouble to look up this point in the great Oxford English Dictionary. If members of the Committee are interested, they will find from a similar reading that in many cases "family" includes "servants." If members of the Committee look up cases on wills—and I can cite here Theobald or Hawkins—you will see that prima facie "family" includes "servants." As a matter of fact, noble Lords who are classically-minded will be aware that the Latin word "famulus," from which the word "family" derives, also means "servant." There is no doubt that that is the reason why the clause as constructed has a wider meaning. But, apart from that, I humbly submit to the Government that it is absolutely essential, if this clause is to be given the sort of interpretation 'that was intended, that the tenant or the member of his family must be some body who has really a connection with the tenancy by reason of the fact that he has been there a certain amount of time. It may be that six months would be enough. It may be that the clause suggested by my noble and learned friend is the right one. It is a more satisfactory one, I agree. But do not let it be possible for this substantial change in the holdings of a large number of properties in this city and in other towns to depend upon whether a man or a woman, being a member of the family, has been living in one room for a single day. I earnestly support the Amendment which is proposed, and I hope that the Government will alter the clause so as to make it fair and reasonable and so that it is drawn to carry out the intention which I am sure the Government have in mind.

VISCOUNT BUCKMASTER

I should like in the briefest terms to support my noble friends Lord Simon and Lord Llewellin. If I may say so, I think that the noble Lord, Lord Silkin, was not fully alive to the possibility of undesirable people acquiring a right within the terms of this Bill. I gave an example on Second Reading which I will not repeat now as it is rather an extreme case— reductio ad absurdum—but, if he cares to look at that example, he will see how very wide the door is open. I take my stand purely and simply on the words of the noble and learned Viscount the Lord Chancellor when he moved the Second Reading of this Bill. He said that the purpose of this Bill is to protect people: where the house is actually occupied by the owner of the lease or a member of his family. Perhaps I may refer to him sufficiently accurately as an occupying ground lessee. As I understand this clause (and I speak subject to such correction as the noble and learned Viscount can give me) I consider that, as it stands, it goes far beyond the declared and stated purpose of the Government in introducing this Bill. Therefore, I have much pleasure in supporting my noble and learned friend's Amendment.

3.13 p.m.

THE LORD CHANCELLOR

Time was when I came into this House and thought I understood this Bill and this particular clause. But speech has followed speech, and I have now begun to have grave doubts about this clause and the Amendment moved. May I, as plainly as I can, state what I conceive to be the question at issue? Under this Bill (we are dealing with the occupying ground lessee) the test is, quite rightly, described as this: at what time do you look to see whether he is occupying? Under the Bill as it is drawn the time at which you look to see whether he is occupying is expressed to be immediately before the date of expiry. That, I agree, is a moment of time. Under the Amendment there is a kind of qualifying period. It is necessary to look at a period beginning November 20, 1950, and ending with the later date to see whether or not during all that time he has been occupying. I do not complain at all about this Amendment being moved. I concede at once that it is a real point. I also concede at once that, if you are going to have a qualifying period, the qualifying period in this Amendment is the right one. But the question is a test of balance of convenience. Are you or are you not going to have a qualifying period?

We have studied this matter most carefully, and we have quite definitely come to the conclusion that it would be wrong to have a qualifying period. It would be advantageous from some points of view. It would avoid the sort of case which the noble and learned Viscount, Lord Simon, was putting. If I understood him, it was the case of a sub-tenancy. Suppose there were a landlord, a lessee and a sub-tenant, and that the sub-tenant was occupying at the critical time. The lessee might, by paying a sum of money, manage to get rid of the sub-tenant, and, if he did that, he would then, of course, have wiped out the sub-tenancy by himself occupying in right of the tenancy. So he would have the benefit of the two years' extension. That was the case that was put, and I venture to think the discrepancy between the noble and learned Viscount and the noble Lord, Lord Silkin, was this. The noble and learned Viscount was putting that sort of case of a sub-tenant, but the noble Lord, Lord Silkin, was putting the case of an assignee. I think there was some con fusion between the two.

I concede that there is a real point here, and that there might be a hardship. On the other hand, we have to consider the other case. Take the case, where there is a long lease, of a landlord and a lessee. The lessee wants to be abroad or away for a certain period—perhaps he is going to the Argentine to negotiate a meat contract, or even to Paris to negotiate an agenda for a meeting there; or what you will: it may be that perhaps he does not like the weather at this time of the year. Therefore, he says: "I am going to be away for November and December, but I have lived in the house for years, and 1 certainly propose to come back. I will sub-let these premises to somebody for November and December. I intend to come back on January 1."And he does come back on January 1, This man has been in the house for some years. What I ask is this: Why on earth should a man in that position lose the benefit of this Bill? Why should not he get the two years' extension? If the Committee pass this Amendment, it means saying to this man: "You cannot get the extension because you were not in occupation of these premises during all the relevant time," which dates from November 20 onwards. It seems to me that there is no justice in that situation. Frankly, unless somebody can show me that there is some reason behind that, I cannot possibly accept this Amendment.

It seems to me—I can put it quite shortly—that it is unfair. It does not make provision for the case of the perfectly genuine man, the genuine tenant, who has sub-let these premises for some period of time within the noble and learned Viscount's qualifying period. If he has done that, he is automatically out-side the protection of this Bill, and I do not see why he should be. I cannot conceive that he should be. It is not a fanciful case of a man manœuvring himself in. On the other hand, it is inserting an Amendment in this Bill which removes a perfectly bona-fide man from the scope of the Bill, without, so far as I can see, any apparent reason. That being so, we have come to the conclusion that, on balance of convenience and on balance of fairness, it is undesirable to have this qualifying period. I concede, as I have said before, that it is a question of the balance of convenience. I do not suppose this case will arise very often; there I agree entirely with the noble Lord, Lord Silkin. I should think that that would probably be a unique sort of case. Unless somebody can show me that it is right that a tenant who has sublet for a short period of time which happens to fall within this qualifying period should lose all the benefit of this Bill, I must resist this Amendment. If the Committee want to insert it, they must do it by a Division, and must not ask my assent to an Amendment which I honestly feel is unfair to a certain class of people who will be penalised, so far as I can see, for no apparent reason.

VISCOUNT SIMON

I always prefer to agree with the Lord Chancellor, rather than to disagree with him, but I am afraid that I still think his account of the matter is a very one-sided one. I do not understand him to deny that the clause as it stands will give an opportunity for what he called "manœuvring." He cannot, I think, deny that if the Bill is carried in this form there will be a strong temptation for anybody who has a right to the end of such a lease to make use of it merely for the purpose of being entitled to stand as the tenant for another two years at the old rent (it may be four or five pounds a year), and then proceed to sub-let at a greatly increased profit. That I call manœuvring. The principal object of the Amendment is to secure, so far as possible, that there should not be what really amounts to evasion of the basic principle of the clause, and that we should not encourage unmeritorious speculation. My noble friend referred in his speech to the case which he thought ought to be considered, but I did not understand him to deny that the clause, as it stands, does open the door to such things. I quite agree that there are cases in which it may work the other way, and on the whole the question is really which of two things it is right to do.

My noble and learned friend, the Lord Chancellor said just now that he could not conceive how anybody who thought it over could take the view that there ought to be a qualifying period. I would venture to remind him (since I am sure he has read it all), that the Leasehold Committee, when they recommended this particular matter (I agree, as a permanent Bill), unanimously provided, in the words of paragraph 108 of their Final Report: that the privilege should not be conferred on anybody unless he had been in occupation for at least three years. I cannot help thinking that the learned and experienced gentlemen who signed that Report were not proposing anything preposterous. As the Lord Chancellor has just said, you can contemplate the case of a gentleman who is going to the Argentine and who is coming back on January 1. You can, I agree, imagine a case which might be meritorious. But the main point here is this: As it stands, is not the Bill an open invitation to people to indulge in speculation and, in effect, to evade its real purpose? The proposition that anyone is entitled to the benefit of this Bill to protect occupants of residential property merely because he resides in the property for the one day on which the Bill comes into force, seems to me a very doubtful proposition indeed. I quite understand that the noble Viscount does not feel able to accept this Amendment. I regret that very much, because I am not conscious of doing anything except proposing what I think will commend itself to many people as being fair and reasonable; and in those circumstances I am afraid that we must make this alteration in the Bill, if indeed the Committee so decide.

THE LORD CHANCELLOR

May I just add that I did not mean to say that this proposal is preposterous? I do not think it is at all preposterous. But on a balance of convenience, I think it will do more harm than good. It will secure an extension in some bad cases, but it will penalise some good ones.

VISCOUNT MAUGHAM

Perhaps the Committee will allow me to add two sentences or so on this question of the balance of convenience. As the Lord Chancellor has quite fairly said, ultimately this Amendment comes down to that point. Let us consider what the Bill does for the original tenants under leases that come within the clause. It is making them a present. They have not earned a right, or done anything by working or other effort, to be entitled to two years beyond the twenty-one or the ninety years' lease, whichever it may be. The extension is a present given to them by the Government. Now let us see what happens. I will take it that the original tenant makes the lease that the Lord Chancellor suggests he might make, which just covers the material period— that is to say, the period of the date of expiry. But suppose, instead, that the landlord grants a lease for seven years, wishing to get rid of the whole tenancy, because he does not want it any more, and then goes to live in another house. Of course, in such a case neither he nor anybody else will get the present that this Bill is giving them.

Then let us see what happens. What have we got to balance? On the one hand, we have to see that nothing comes to the original tenant who has not, either by his effort or by the efforts of his assignees, preserved the tenancy of somebody who has a claim as a member of the family. On the other hand, we get the man who is genuinely anxious to pre-serve his property, and who takes the step to get a member of his family to occupy the premises for some substantial period, so that he can say that the original tenant, or the person who claims for him, has a right to occupy this property and to have an extended lease, because he is entitled to be there and because he desires to retain the lease in hand while the Government are making up their mind as to how the future Act of Parliament is to be framed. Surely no one can doubt where the balance of convenience lies. On the one hand, the man does not get something which he has never expected to get, because he is no longer occupying the property; and, on the other, he is occupying it by a person who has been there for a period. The moderate period suggested by the noble and learned Viscount's Amendment seems to me at any rate to be preferable to the other, and I am unable to see that there should be any doubt as to the balance of convenience—that it is in favour of the tenancy being continued by somebody who has been a real occupier at the time when the period arrives.

3.29 p.m.

THE MARQUESS OF SALISBURY

I am not going to enter into this controversy, which is extremely legal and technical, and I am not competent to make any effective contribution. I rise to appeal to the Government to give this matter a little more thought. I fully recognise the difficulties of the Lord Chancellor. It is not entirely his decision. He has colleagues who may have strong views, and in any case they have the authority to make those views prevail. But I think it will be agreed that speakers on this side of the Committee have made an effective case; indeed, the Lord Chancellor himself said that it was a balance of considerations on both sides. We feel that to leave the Bill in its present form will open the door to possibilities of speculation, and of evasion of the purposes of the Bill, on a rather large scale. The Lord Chancellor said that if the Amendment were accepted a number of harmless persons would suffer. Having listened to the debate, I am bound to say that I should have thought that that class would be very much smaller than the other. The only cases which the Lord Chancellor adduced were those of Government officials going abroad to take part in protracted negotiations which did not reach any conclusion. No doubt there may be cases of that kind, and there will be other cases; but there will not be large numbers of such people.

THE LORD CHANCELLOR

I gave the example of officials who go abroad merely as an illustration: there are many others which could be given. Take the case of anyone who sub-lets premises for a week—it may be at Christmas—and then goes down to the country to stay with friends. It that occurs within the qualifying period the tenant loses all benefit under the Bill.

THE MARQUESS OF SALISBURY

Even in a case of that kind, I understand that the man has only to find a niece or a nephew, or someone like that, who will occupy the premises for a week and it will be all right.

THE LORD CHANCELLOR

If it is to a friend—yes.

THE MARQUESS OF SALISBURY

I do not think the case made by the Government is a very strong one. Be that as it may, the point is that there is here a balance of considerations. Important considerations have been adduced by the noble and learned Viscount, Lord Simon, and by the noble and learned Viscount, Lord Maugham—two former Lord Chancellors—and also by the noble Lord, Lord Llewdlin. I should have thought that the matter deserved further consideration, and I should like to hear it stated on behalf of the Government that at any rate they would be willing to look at it further, without prejudice, before the Report stage. Of course, if we cannot agree, then on the Report stage we must carry the matter to a Division. But we are not wildly keen on Divisions in this House; indeed, on the whole, we prefer to avoid them if possible. If the Government would give an assurance that they will look at the matter further, I think we on this side of the House should be satisfied. If, on the other hand, they cannot give an assurance of that kind, we shall have to settle the matter by means of a Division.

THE LORD CHANCELLOR

I entirely agree that we do not like settling things by Division in this House if we can do it otherwise. But I think this is one of the cases where it would be better to have a Division. I have gone into this matter, and I have consulted with my colleagues. I realise to the full that there is substance in the Amendment; that there is a case for it. It is really a question of judging where the balance lies. In our view— though we. may be quite wrong—the balance lies against the Amendment. That is the view which those who are helping me with the Bill have formed. In the circumstances, I think it will be better if the words are inserted as the result of a Division. It may well speed up the rest of our proceedings in connection with this Bill if we get a decision on this matter by means of a Division. The noble Marquess will, I am sure, fully understand that I am not meaning to be in the least discourteous to him in saying this.

LORD LLEWELLTN

There is an intermediate course, and that is that the man concerned should have occupied the place for a period of, say, two months between these two dates. Some such compromise as that would overcome the difficulty in such cases as that which the Lord Chancellor has in mind—where a person goes off for a fortnight at Christmas and lets the place to someone else. That would at least make certain that the man had some bona-fide idea of residing in the place.

THE LORD CHANCELLOR

If the Amendment is carried now, that will not

Resolved in the affirmative, and Amendment agreed to accordingly.

LORD LLEWELLIN

This Amendment is consequential on the one we have just made. I beg to move.

Amendment moved— Page 1, line 12, leave out ("is") and insert ("has been").—(Lord Llewellin.)

LORD LLEWELLIN

This Amendment substitutes the word "residing" for "living." So far as I know, "living" means that a person is alive. "Residing" is the more usual word, and is used in the Income Tax Acts and other Statutes. It connotes that a man has his home there. I beg to move.

Amendment moved— Page 1, line 12, leave out ("living") and insert ("residing").—(Lord Llewellin.)

THE LORD CHANCELLOR

I am not sure that the change makes much difference, but if noble Lords think it does we will let them have it.

Preclude either one side or the other from considering what had better be done. I think that if this Amendment is to be put in we had better go to a Division.

On Question, Whether the said new words shall be there inserted?

Their Lordship divided: contents, 42; Not-Contents, 18.

CONTENTS
Cholmondeley, M.	Falmouth, V.	Hampton, L.
Salisbury, M.	Furness, V.	Hawke, L.
	Maugham, V.	Hindlip, L.
Buckinghamshire, E.	Mersey, V.	Llewellin, L.
De La Warr, E.	Simon, V.	Merthyr, L.
Fortescue, E. [Teller.]	Swinton, V.	Milverton, L.
Grey, E.	Templewood, V.	O'Hagan, L.
Haddington, E.		Rea, L.
Macclesfield, E.	Badeley, L.	Rennell, L.
Munster, E.	Balfour of Ichrye, L.	Sandys, L.
Onslow, E.	Carrington, L. [Teller.]	Schuster, L.
Scarbrough, E.	Cherwell, L.	Teviot, L.
	Derwent, L.	Tovey, L.
Buckmaster, V.	Gifford, L.	Tweedsmuir, L.
Camrose, V.	Hacking, L.	Wolverton, L.

NOT-CONTENTS
Jowitt, V. (L. Chancellor.)	Amwell, L.	Lawson, L.
	Burden, L.	Lucas of Chilworth, L.
Addison, V. (L. Privy Seal.)	Crook, L.	Macdonald of Gwaenysgor, L.
	Douglas of Barloch, L.	Marley, L.
Alexander of Hillsborough, V.	Haden-Guest, L. [Teller.]	Morrison, L.
Hall, V.	Hungarton, L.	Pethick-Lawrence, L.
	Kershaw, L. [Teller.]	Silkin, L.

On Question, Amendment agreed to.

3.45 p.m.

VISCOUNT SIMON moved, after the first "in" to insert "a dwelling-house comprised in." The noble and learned Viscount said: I am hopeful that on this matter I shall have the great happiness of finding the noble and learned Viscount the Lord Chancellor agrees with me. Obviously the Bill is meant to deal with residents. Its title shows that that is so and the word "Dwellings" at the top of Part I also shows it. This Amendment provides that a resident should be resident in "a dwelling-house comprised in" a property. I would call your Lordships' attention to the fact that later on we propose a definition of residence, and I am hopeful that, having had some consideration given to it, the definition may be accepted. On Clause 20, we propose to define "dwelling-house" as meaning "a house used as a separate dwelling or a part of a house being a part so used." It would not do to use a definition which would put out of the Bill premises which are partly shop and partly residence. I am hopeful that this definition, which is the result of a good deal of consultation and reflection, may be accepted. I beg to move.

Amendment moved— Page 1, line 12, after ("in") insert ("a dwelling-house comprised in").—(Viscount Simon.)

THE LORD CHANCELLOR

I am happy to accept the noble and learned Viscount's Amendment. We always intended the Bill to apply to residential property, properly so called. We certainly never wanted to bring in the type of case suggested in another place, where a man takes his camp bed to a box in the Albert Hall and says that he is living in the Albert Hall. I think we avoid that by the suggestion put forward by the noble and learned Viscount, and we accept it.

On Question, Amendment agreed to.

VISCOUNT SIMON

This Amendment is consequential. I beg to move.

Amendment moved— Page 1, line 12, leave out from ("property") to ("in") in line 13.—(Viscount Simon.)

On Question, Amendment agreed to.

3.47 p.m.

VISCOUNT SIMON moved to add to the clause: Provided that the tenancy shall not continue after the date of expiry if before the twentieth day of November, nineteen hundred and fifty, any person has for valuable consideration entered into an agreement whereby that person would but for the provisions of this section become entitled immediately after the date of expiry to vacant possession of the property or a part thereof.

The noble and learned Viscount said: I put down this Amendment because I think we ought to spend a short time in considering the difficulty with which it attempts to deal. There is no doubt at all that the Bill as it stands, with the Amendments already made, presents this difficulty: that in a certain sense it operates retrospectively. There will be many cases in which, before ever the Bill was heard of, a perfectly fair and straightforward bargain was made which was designed to give a third person the right to enter into the occupation of the property as soon as a lease expired. I put a case, not at all an extreme one, to show what I mean. I may be looking for a house to live in or may wish to buy a house for a relative and cannot find one. I know that in the course of another six months a particular lease will have run out, whereupon the owner will be entitled under the lease to resume possession, and I bargain with him to buy the reversion in order that I may then secure the house as a residence. Such transactions take place constantly, and they are perfectly proper. In present circumstances, when there is such a short-age of housing accommodation, they are perfectly natural. I have made this bargain and paid my money to the land-lord to buy his interest, so that I shall be entitled to go in and occupy the house. Then this Bill comes along. I have made the bargain assuming that it would remain true that the lease would come to an end in six months, but now the Bill says that it shall not come to an end until two years from the end of the six months. To that extent I have bought something which proceeds to melt. There are other cases, where the bargain is not made with the reversioner but with the tenant. It is inevitable, unless something is done, that many contracts already made will be injuriously affected by the passage of the Bill.

The question that occurs to me, and no doubt occurs to others, is: what ought to be done here? I can understand the argument that in this case a man has paid money to buy something that existed, but Parliament has come along and now it does not exist any more. That is a possible view, although it does seem a hard one. On the other hand, I can understand the view that an effort should be made to secure that where people have made a bona fide bargain of that kind before the Bill was heard of, then the Bill ought not to deprive them of the benefit of that bargain. I wish to say with complete candour to the Committee that I can see considerable difficulty in arguing out the proviso which I have written down. I feel that it will certainly have to be modified by limiting it to a case where the purchase of a reversion had been made with a view to residence; otherwise it would merely be a case of an owner of a reversion selling it to somebody else as an investment—and I do not feel any particular need to interfere with that case. However, I feel it will be a great hardship, if the bargain has been made with a view to getting a residence and the result is that money is paid over and no benefit is secured.

LORD SILKIN

How could you establish that it was with a view to gaining residence?

VISCOUNT SIMON

That is a difficulty. I do not propose to do anything other than raise the matter and ask the Lord Chancellor what his views are. There is behind all this a problem which I should be sorry to invite your Lordships, or anybody else, to consider without mature reflection—namely, the application of what is known to lawyers as the doctrine of frustration. Some years ago I carried a Bill on that subject; I thought that I had disposed of all the problems about frustration for ever, and I was very pleased with myself. But this is entirely new. What is the situation if I have made a contract to buy a reversion on the assumption that a lease will end on a particular day, and then Parliament comes along and says that the lease shall not end for two years? It is not for me to offer a view about that, save under the stress of duty, and I will say no more about it. I do not propose to press the Amendment, but I should like to hear the Lord Chancellor's view on the matter. I feel sure that he will think it is right to raise it, as a number of people in this situation will be concerned to know what is going to happen when this Bill passes.

Amendment moved— Page 1, line 18, at end insert the said proviso. —(Viscount Simon.)

VISCOUNT MAUGHAM

I should like to add a few words by way of supplement to what my noble and learned friend has said. This point does not apply only when there is a dealing with the lease on the footing of this Bill coming into force. It applies also in the case of a landlord who, quite apart from his position of landlord, imagining that he is going to get the property back, let us say, on June 1 next, enters into a contract— perhaps one extending over many years, involving building by the tenant, and so forth—in which he proposes to deliver the property by some date after June 1— say, July 1. Then this Bill (which will no doubt become an Act) comes into force, and he cannot comply with his contract. The position is then that one has to ask one's self: what if the prolongation effected by the Act involves the landlord in a breach of contract? He cannot carry out the contract, because the lease which existed has been suddenly extended. In addition to the difficulty that he cannot carry out that contract until the later date, we have to consider the position of the landlord having entered into contractual obligations with somebody who is "out in the blue" at the present moment. We do not know who he is, but we have to consider him a little. What is his position? Will he be able to say: "I will execute my obligations subject to the delay which has been imposed upon them"; or can he say: "I will sue you"—and even then I am not sure that the landlord has a complete defence, as he has contracted to do something which he cannot per-form. On the whole, there is a most troublesome question to be settled between the landlord, who has so acted and cannot perform his contract, and the person to whom he has given certain rights. I agree with what my noble friend Lord Simon has said, that it may be that the suggested proviso is not complete; but sooner or later the difficulty will have to be faced.

LORD DOUGLAS OF BARLOCH

I am a little puzzled about this Amendment. Why is it directed to the case where people have entered into contracts —by which I assume is meant contracts which have not yet been executed? What is the difference between that case and the case where a man has purchased a reversion upon a lease, to which this Bill would apply, and has actually paid the full purchase price? He also will be frustrated. If we are going to deal with one case where the contract is not executed, is it equitable to leave out the other case. If we are going to deal with this case, we shall be getting into a field of the greatest possible difficulty. I cannot imagine that this House will begin to pass legislation of a retrospective character to upset conveyances which have already been made and completed.

THE LORD CHANCELLOR

I do not complain at all about this point having been raised, as it is obviously a point of great substance. I do not think it is any good shutting our eyes to the fact that this Bill will undoubtedly cause hardship to some people who have bought reversions. On the other hand, if we try to avoid the possibility of that hardship arising, we shall destroy completely the whole structure of the Bill. I do not believe we can possibly differentiate between those cases where a man has bought a reversion, and it has been completed by a conveyance, and where it simply still rests in a contract. Nor do I believe it is possible to differentiate between those cases where a man has bought a reversion as an investment, and where he has bought it with a view to living in the property himself. It is an old and trite saying of the law that, The devil himself knoweth that the thought of man is not triable. Very often a man would not know what was going to happen, and he might buy a dwelling with a view to living in it if circumstances made it desirable. But here we have this position, and we cannot get away from it: we have, on the one hand, the risk, the hardship, the anomaly —call it what you like—to the landlord or to the person who has bought the reversion; and on the other hand, we have the object of this Bill, which is to protect the tenant. He, too, is in a most difficult position. Speaking by and large, he is in a more difficult position, because after all, it is his home and he has nowhere else to go. The whole object of this Bill is protect the tenant for a short period of time, during which we may think out some permanent legislation in which we shall have to try to hold the scales fairly between the tenant and the landlord.

In the meantime, I admit that this is a drastic scheme which is purely a temporary measure providing for a stand-still. If we were to accept this Amendment, as the noble and learned Viscount indicated there is no limit of time. Anybody who before November 20, 1950, entered into an agreement would have to be protected. Unfortunately, we cannot protect both him and the tenant, and I see no way of doing so. I do not desire to conceal from your Lordships the fact that hardships will be caused in certain cases. On balance, the whole point of this Bill is to protect the occupying ground lessee, and for those reasons I could not accept an Amendment on these lines. The noble Viscount himself indicated that this precise Amendment would not carry out his purpose. I agree with him. I do not think any Amendment would do that, because there is that inherent clash, and we have to decide as between those two cases. The object of this Bill is to protect a tenant, even although that involves, and must involve in certain cases, hardship, either to those who have bought the reversion or to the landlord. I am afraid that that is a hardship which is inevitable, in view of the scheme which we are adopting. Although I am grateful to the noble and learned Viscount for making the point in order that it may be discussed and considered, for the reason I have given I cannot accept the Amendment.

VISCOUNT SIMON

I am grateful to the Lord Chancellor for his reply. I anticipated that he would have to give that answer, but I think the discussion has been useful. I wish to register what the Lord Chancellor twice said: that this present Bill is, of course, purely a temporary measure, and has been introduced with the object of giving protection to the tenant. It means, in fact, the transfer of property from one person to another—one person being the landlord, and the other the tenant. This is a Bill by which that property is transferred without compensation. I hope that that description of the Bill, which is the Lord Chancellor's own description, may be sharply distinguished from another Bill which he says is in the course of being considered, and which I think he described as holding the balance fairly between the tenant and the landlord. It will certainly be a considerable contrast to this present measure. Having made note of those two admissions, I beg leave to withdraw my Amendment.

LORD SILKIN

I wanted to ask the Lord Chancellor whether there is a point to be considered arising out of the case made by the noble and learned Viscount. It is perhaps right that this Amendment should be disposed of in this way, but nevertheless there will arise considerable legal conflict in cases where contracts have been entered into. If there is any doubt as to whether a landlord has an answer to a case of breach of contract, is that not something which ought to be met in this Bill? I do not suppose that the Lord Chancellor can answer that question now, but I would ask him, in the interests of avoiding this litigation, to consider whether something can be provided so that an owner is not rendered liable for breach of contract because of frustration arising out of an Act of Parliament.

VISCOUNT MAUGHAM

I am much obliged to my noble friend opposite for saying that, because it has been in my mind all the time that something ought to be done to protect the landlord who is exposed to litigation by having done something perfectly legal in the circum-stances of his case.

THE LORD CHANCELLOR

I will certainly consider that point, to see whether anything needs to be done. Per-haps noble Lords will put down Amendments in order that we may have discussion to show how our minds are working. That would be of great assistance to me. I have considered the Amendments on the Paper, but I have not considered this matter.

Amendment, by leave, withdrawn.

Clause 1, as amended, agreed to.

4.6 p.m.

Clause 2:

Provision where tenant holding over after expiry of long tenancy

2.—(1) Where a tenancy was granted for a term of years certain, being a term exceeding twenty-one years and expiring on a date (hereinafter referred to as "the date of continuation") before the commencement of this Act, and—

1. (a) immediately before the date of continuation the tenant or a member of his family was living in the property or a part thereof in right of the tenancy, and
2. (b) at all times during the period beginning with the date of continuation and ending with the commencement of this Act there was living in the property or the part thereof in question some person being either the former tenant or a member of the former tenant's family, and

the next following subsection shall have effect.

(2) The tenancy shall be deemed not to have expired on the date of continuation but to have continued until the commencement of this Act, and subject to the provisions of this Part of this Act shall continue thereafter, as if it had been granted for a term expiring at the end of the period of two years beginning with the commencement of this Act but otherwise (save as hereinafter provided) on the terms and subject to the conditions of the tenancy.

LORD TOVEY moved, in subsection (1) after "date of continuation" to insert: after the twenty-first day of November, nineteen hundred and fifty, but

The noble Lord said: I owe your Lordships some slight explanation of how I come to be putting down Amendments on a Bill such as this. I am chairman of trustees responsible for a large lease- hold estate. My interest, of course, is neither personal nor political, but I desire, as best as I can with the advice which is given me, to contribute towards ensuring that the form in which this Bill receives the Royal Assent shall not only protect the good tenant in the manner designed but shall still leave persons like myself adequate powers to administer their trusts both fairly and competently. I should also like to add that, as your Lordships may know, I am a Church Estates Commissioner, but I am not acting or speaking in that capacity to-day.

Dealing with the first Amendment in my name, I am advised that the possible retrospective action of the Bill in its present form is unlimited; and when the matter being deliberated involves contractual rights previously and voluntarily entered into by the parties concerned, it seems to me reasonable that some limit should be placed upon the retrospective effect of the Bill. The sort of cases that I have in mind are where tenants have held over after expiration of lease, and have been very tardy in coming to terms for a new tenancy, even though the terms were carefully contrived to be fair and reasonable. In cases where this consideration has been shown, and the land-lord has forborne to exercise his reasonable rights, the tenant, even though his delay has been unreasonable, will, it seems, be given benefit for his procrastination and the landlord detriment for his consideration and patience. It also seems that the previous tenancy would continue even if the landlord, for example, had obtained against a thoroughly bad tenant an order for possession which had been suspended or which had not been enforced so as to give the tenant the opportunity to find other accommodation, or where the tenant or a member of his family continued in occupation as a trespasser in defiance of the landlord. I therefore submit that the retrospective effect of this Bill should be limited, and I suggest what appears to be a suitable date—that of the publication of this Bill, November 21, 1950. I beg to move.

Amendment moved— Page 2, line 3, at end insert ("after the twenty-first day of November, nineteen hundred and fifty, but").—(Lord Tovey.)

THE LORD CHANCELLOR

The noble and gallant Lord who has just spoken certainly need not apologise for intervening in this debate. It is pleasant to hear him on this intricate and interesting topic. I frankly say to him that I have not had much time to consider the Amendments he has put down, but I will certainly undertake to look at them between now and the Report stage. All I can do at the moment is to give him a first impression. It is only a first impression, and does not prejudge further consideration and, perhaps, discussion with him. The effect of this Amendment is to limit the retrospective effect of the Bill, so that it would benefit only tenants whose leases have expired since the introduction of the Bill. Of the people who have been holding over, there may have been people who have been holding over for years, and there may have been people holding over only for a short time since the introduction of the Bill. I do not know what the respective merits of these holders-over are. I should have been inclined to think that the longer the man had been holding over, the greater was his merit and his right to continue to hold over, because if he has been holding over for a long time the landlord has been quite content that he should hold over. He may have taken steps to deal with the situation after November 20, when this Bill was introduced and the landlord could have got him out.

On the other hand, I do not see that we should prefer the man who has been holding over only since, say, November 23. What I should like the noble and gallant Lord to consider—indeed, I hope we shall both consider it—is whether there is really a point in distinguishing between those two types of holding over. Is it not possible to apprehend that the man who has been holding over for a long time, with the landlord's consent, is not the more meritorious of the two? The last thing I want to do is to penalise the kind and considerate landlord—and I think a very large number of them are kind and considerate. Indeed, if it had not been for that fact, I believe our whole law of landlord and tenant would have been brought up for review a long time ago. I am not in a position to say more at the moment, but I hope the noble Lord will consider what I have said, as I will consider what he has said; and perhaps we can meet before the next stage.

LORD TOVEY

I thank the noble and learned Viscount very much for his remarks, and I gladly accede to his suggestion that this matter should be discussed subsequently. In the circumstances, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

VISCOUNT SIMON moved, in subsection (1) (a), after "continuation," to insert: or in the case of a tenancy expiring on or after the twentieth day of November, nineteen hundred and fifty, at all times during the period beginning with that date and ending with the date of continuation.

The noble and learned Viscount said: In a sense, this Amendment is in line with the Amendment which has been inserted in Clause 1. I should be glad to hear from the noble and learned Viscount the Lord Chancellor what he thinks would be the convenient course to adopt. If there was a case in Clause 1 for altering the rule as to the test of residence —that the person should be resident on the last day of the lease—there is, I think, a stronger case in Clause 2, because the test there is even more artificial. I do not know what the Lord Chancellor thinks of that point, or what he thinks would be the most convenient course to adopt. I beg to move the Amendment.

Amendment moved— Page 2, line 5, after ("continuation") insert the said words.—(Viscount Simon.)

THE LORD CHANCELLOR

I knew that that point was involved in Clause 2. It was one of the reasons why we wanted to retain Clause 2. I do not want, of course, to assent to it, but neither do I wish to raise any argument; and I imagine the Committee will wish to accept this Amendment.

On Question, Amendment agreed to.

VISCOUNT SIMON

I think that every Amendment from Numbers 9 to 17, merely repeats in substance "residing" for "living," or makes certain provisions about dwelling houses. Therefore, I should suppose that the Committee would wish to deal with Amendments Numbers 9 to 17 en bloc. I beg to move Amendment Number 9.

Amendment moved— Page 2, line 6, leave out ("living") and insert ("residing ").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

I beg to move the next Amendment.

Amendment moved— Page 2, line 6, after ("in") insert ("a dwelling-house comprised in").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

I beg to move this Amendment.

Amendment moved— Page 2, line 6, leave out from ("property") to ("in") in line 7.—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

I beg to move the remainder of the Amendments standing in my name.

Amendments moved—

Page 2, line 10, leave out ("living") and insert ("residing").

Page 2, line 10, leave out from the first ("the") to ("in") in line 11 and insert ("dwelling-house").

Page 2, line 15, leave out ("living") and insert ("residing").

Page 2, line 15, leave out from the first ("the") to the second ("in") and insert ("dwelling-house").

Page 2, line 16, leave out ("living") and insert ("residing").

Page 2, line 32, leave out ("living") and insert ("residing").—(Viscount Simon).

On Question, Amendments agreed to.

Clause 2, as amended, agreed to.

Clauses 3 and 4 agreed to.

Clause 5:

Restrictions on enforcement of covenants

5.—(1) While a tenancy continues by virtue of section one or section two of this Act, or while before the date of expiry the tenant under a tenancy granted for such a term as is mentioned in the said section one, or a member of the tenant's family, is living in the property or part thereof in right of the tenancy, then—

1. (a) the landlord shall not be entitled, by action or otherwise, to enforce any right of forfeiture or re-entry in respect of any failure to comply with a term or condition of the tenancy, or to enforce any right against the tenant to damages in respect of such a failure; and
2. (b) the enforcement by a superior landlord, by action or otherwise, of a right of forfeiture or re-entry in respect of a superior term shall not determine the tenancy:

Provided that nothing in paragraph (a) of this subsection shall affect forfeiture or re-entry for non-payment of rent or for failure to comply with any obligation to insure or keep insured, and that nothing in paragraph (a) or (b) of this subsection shall apply to the enforcement of any right on the ground that the property or part thereof is being, or has since the commencement of this Act been, used for illegal or immoral purposes.

(3) Where any proceedings have been brought after the twenty-first day of November, nineteen hundred and fifty and before the commencement of this Act but have not been finally disposed of before the commencement of this Act, being proceedings which by virtue of subsection (1) of this section could not have been entertained if they had been brought immediately after the commencement of this Act, then— (a) in so far as the proceedings are for enforcement of any right of forfeiture or re-entry such as is specified in paragraph (a) of subsection (1) of this section, they shall be stayed except as respects the making of an order as to costs;

VISCOUNT SIMON

This Amendment follows on the Amendments already accepted. I beg to move.

Amendment moved.— Page 4, line 15, leave out ("living") and insert ("residing in a dwelling-house comprised").—[Viscount Simon.]

On Question, Amendment agreed to.

4.18 p.m.

LORD LLEWELLIN moved, in sub-section (1) (a) to leave out all words from the first "the" to the last word, "and," and to insert: Leasehold Property (Repairs) Act, 1938, shall, irrespective of the rateable value of the property comprised in the tenancy, apply to the tenancy as it applies to a lease of which five years or more of the term remain unexpired;

The noble Lord said: One of my difficulties in this Bill is that in some respects —and this is one—it is not a completely moratorium measure. A moratorium should keep both parties in the same position for a period of years. Normally in these leases there is a covenant to repair. If noble Lords read this Bill they will see that the tenant is exonerated for this period of two years from his covenant to repair. As a concession made in another place, the landlord is allowed under Clause 3, if he has reason to think that the structure is going to be affected by lack of repairs which his tenant ought to do, to go in himself and do them. He cannot charge for them then and there, but only at the end of the two years' period. I think that summarises accurately the provisions of the Bill.

That procedure has three defects from my point of view. First, if you say a tenancy contract has given the landlord the right to go in and do the repairs during this two-year term, it means prejudging (and I am sure that it is not the Government's intention to do so) the fact of the landlord having some permanent right in that house. By allowing him to go in and repair the property you are thereafter precluding people who want some measure of leasehold enfranchisement from trying to get in, because there is a tacit admission that the landlord will be going into the property at the end of the two years. That is one way of looking at this matter—I say that only in passing. What is concerning me more about not keeping the tenant to his covenant to do repairs is that probably no one will do them. It is not likely that the landlord will go in and do them unless he has some certainty that he will be going into the house at the end of the two years. If no repairs are done to many of these houses for a period of two years—Heaven knows what condition some of them may be in to-day!—we may, by this very clause, be creating new slums. I am certain that there is not a member of this House who would want anything of that kind to happen through any action taken here, because we had not been active enough in seeing that this measure went through with the right terms in it.

I gather that it is said (it was said in this House on Second Reading) that the reason for not enforcing this covenant to repair is that a landlord might serve on a tenant notices of dilapidations which were so onerous, and would so bother the tenant, that he would abandon his rights under the lease, or, if the landlord proceeded, the repairs might be so expensive that the tenant might eventually be made a bankrupt, the trustee in bankruptcy might disclaim the lease, and so the landlord would get back into possession by a roundabout way. I do not think that anybody wants to pass an Act (certainly I do not) which will leave a loophole for the landlord to get round what is the clear intention of Parliament. On the other hand, it cannot be said that this is a part of a moratorium, keeping people in the same position, if, before this Bill passes into law, there is a liability on the tenant to do the repairs, and, as soon as it is passed, for the next two years he has no such liability. That cannot be said to be part of a moratorium procedure.

I looked for a "halfway house" whereby the tenant should still have to do the repairs, though the landlord would not be in a position, merely on his own initiative, to turn out a tenant who was in default of that covenant. It so happens that in 1938 there was a slight spate of some unscrupulous people buying the ends of some of these long leases, going in to inspect to see whether the covenant for repairs had been acted up to by the tenant, serving a great schedule of dilapidations, frightening the tenant out, getting possession of the unencumbered freehold themselves and acting in a way which we all deplore. The Government of those days (which I may say, in passing, was an extremely good one, because I happened to be a member of it) passed the Leasehold Property (Repairs) Act of 1938. It is true that that Act was limited to property of a rateable value of under £100, and did not apply to any property the lease of which had less than five years to run. So the Act is not applicable to the kind of case with which we are dealing to-day, unless we modify it to make it so.

My Amendment seeks to keep the covenant to repair, for the reason that I do not want to see slums created, but prevents the landlord from forcefully ejecting a tenant who is in default, because he will have to go to the court. The lessee can issue a counter notice. The landlord cannot do anything without first giving a notice, and under Section 2 of the Leasehold Property (Repairs) Act of 1938, the tenant can issue a counter-notice. Then subsection (3) of Section 1 of the Act says: Where a counter-notice is served by a lessee under this section, then, notwithstanding anything in any enactment or rule of law, no proceedings, by action or otherwise, shall be taken by the lessor for the enforcement of any right of re-entry or forfeiture under any proviso or stipulation in the lease for breach of the covenant or agreement in question "—

I would draw your Lordships' particular attention to that provision, which precludes the forfeiture or the turning out— or for damages for breach thereof, otherwise than with the leave of the court.

If this Act is applied to the two years that we are now discussing, and to houses of all rateable values, there can be no forfeiture without the leave of the court, provided that the tenant has taken the one proper step of putting in a counter-notice. Obviously no court will give leave where the landlord is trying to evade the provisions of this Bill when it is on the Statute Book.

In the second place, damages cannot be awarded for breach of these covenants without the leave of the court. That seems to me to dispose of the further argument that, by suffering a large award of damages, the tenant might be made bankrupt and that subsequently the trustee in bankruptcy would repudiate the lease, as he would be entitled to do if it had an onerous covenant, and so, in an indirect way, the tenant would be driven out of these premises. If that appeared in the proceedings before the court when proceedings were taken under the Leasehold Property (Repairs) Act, 1938, I am certain that no court in the land would award those damages if it was obvious that the case was being brought for that purpose. So, if the Government accept my Amendment, they will be keeping on the existing moratorium and preserving the covenant to repair; they will also be helping to prevent the houses concerned from failing into slum property. At the same time complete security from being turned out, except by leave of the court, will be given to a tenant, whether he forfeits his lease or whether it is a case of an award of damages. So my Amendment does three admirable things: it preserves the existing state of affairs which this Bill is meant to do; it preserves the houses, which we hope will be done; and at the same time it ensures that no unscrupulous landlord can proceed against the tenant, to get behind the provisions of this Bill when it becomes an Act. For those reasons, I beg to move.

Amendment moved— Page 4, line 17, leave out from ("the") to ("and") in line 21 and insert ("Leasehold Property (Repairs) Act, 1938, shall, irrespective of the rateable value of the property comprised in the tenancy, apply to the tenancy as it applies to a lease of which five years or more of the term remain unexpired;").—(Lord Llewellin.)

4.30 p.m.

VISCOUNT BUCKMASTER

I should like to support my noble friend in this Amendment. May I say at the outset that it has never been apparent to me why the lessee should be relieved of all his covenants in the lease with the exception of the three which the noble and learned Viscount enumerated on Second Reading? In particular, I feel it absolutely wrong in the public interest that the tenant should be relieved of his repairing covenants. Not only is it against the common interest at a time of housing shortage that property should be allowed to fall into decay and disrepair, but I suggest that the tenant's position is fully protected under existing legislation. There is the Landlord and Tenant Act of 1927, which limits the damage recoverable to the damage done to the reversion. In addition, I believe that relief could be obtained under the Courts (Emergency Powers) Act, 1943. Further, we have the Act to which my noble friend has referred, the Leasehold Property (Repairs) Act of 1938, which, as the noble and learned Viscount the Lord Chancellor pointed out, does not touch some, at any rate, of the cases which it is intended to cover by the present Bill. My noble friend has so worded his Amendment that that objection is no longer operative, and the Amendment would give to the people the Bill seeks to protect the full benefit of the Leasehold Property (Repairs) Act. Further, this Bill has been described as a standstill measure. If it is to be a standstill measure, it seems not unreasonable that it should be a standstill measure in every respect. I see no argument whatever for saying that it is to be a standstill in one regard and not in another: that it is to be a standstill in regard to the payment of rent, but not in regard to the adherence to the covenants written in the lease. I do not think there is any need for me to pursue this matter after what my noble friend has said, but I strongly commend this Amendment to the Committee.

THE PAYMASTER - GENERAL (LORD MACDONALD OF GWAENYSGOR)

I am never sure of how Daniel felt in the lions' den, but I often think that he could not have felt much more uncomfortable than does a layman dealing with a legal question in the presence of so many legal luminaries. The noble and learned Viscount, Lord Maugham, has said that even a lawyer finds this Bill difficult to follow. If that be the case with a lawyer, the Committee will understand how a layman finds the Bill. I should be very pleased if I could accept this Amendment, for the simple reason that the noble Lord, Lord Llewellin, has covered the ground so well for it and, as always, has not done so badly also in regard to the case against the Amendment. He makes it difficult for us to put the case against the Amendment. However, I do not think that the Government can accept the granting of protection under the 1938 Act as a means of making this a better Bill. I agree that the 1938 Act was necessary. I do not mind giving credit to the Government of that day for one good Act, but I cannot believe it is seriously suggested that that Act, introduced almost as an emergency Act, is the right type of measure necessary to make this a better Bill and to achieve the purposes of this Bill. After all, this Bill has a specific purpose, which has been referred to many times to-day and during the debate on Second Reading. Its purpose is to prolong for two years leases which are due to run out.

The noble Lord who moved the Amendment said it would preserve the existing state of things. Is the noble Lord quite sure of that? Let us deal with these dilapidated houses to which he has referred. To some extent they are dilapidated now, in that there is a degree of dilapidation going on. The landlords, in their wisdom and in their kindness, have not taken any advantage of that position; they have allowed the tenants to stay on. It is suggested that now a new Bill has been introduced, and though the landlords were considerate as regards repairs before the Bill was introduced, they cannot be expected to be so considerate in the future. Why should that be so? Why should this Bill alter the attitude of the landlord to the tenant or lessee? I understand that landlords do not like this Bill. I should be surprised if they did. At the same time, I can hardly believe that because this Bill which they do not like has been introduced, they will take full advantage of their position. I believe that the Amendment made in another place to Clause 6 was a good one. The noble Lord, Lord Llewellin, is afraid, that shims may be created as a result of this Bill. They will be created only because the landlords refuse to take advantage of Clause 6, and surely it is not suggested that will be the case. I am sorry that we cannot accept this Amendment. It will cut right across the purpose of the Bill. Lord Llewellin suggested there would be some nervousness about going into court, but for the reasons I have given we feel that this Amendment so cuts across the Bill that we are unable to accept it.

LORD LLEWELLIN

I must say that I do not regard that as a very satisfactory answer. One of the purposes of this Bill is so to alter the position that the responsibility of keeping these houses in repair is left upon no one, because it will still be the tenant's responsibility to pay the landlord if he goes in meanwhile; so what we are going to do, in my view, is to create a number of slums. The noble Lord talked about existing property being dilapidated. Some of it is, I agree, but we are dealing with all properties which are let for over twenty-one years. They include large blocks of flats in London which are normally the tenants' responsibility to keep in repair. That will not be the case for the next two years. We are not dealing just with the number of houses which the noble Lord has in mind, perhaps in some valley in South Wales, which have been built for ninety-odd, years and are not too good to-day, as one will realise. We see no reason whatever why this Bill should make any difference to the reasonable landlord. He will accept it as an Act of Parliament. He will not try to get round it and try to get his tenant out—I agree with the noble Lord in that respect. But as the Bill relieves the tenant of all responsibility for repairs for the next two years, the responsibility for doing such repairs is left upon no one. The tenant says, "I have been assured that this mea-sure is going to last only for two years. At that time I may be out of this house. Why should I do anything to it?" The landlord, on the other hand, feels that there is a section in the Labour Party who would like leasehold enfranchisement in two years' time—and that might come about if the Labour Party were fortunate enough to keep in office for that period.

Under Clause 6, as we know, the landlord has the right to go in and do the repairs, but he would be doing that without knowing that at the end of the two years the house would be his. So in this case we are not continuing the existing state of affairs, which, as I understand it, is the purpose of the Bill. We are altering it by saying that no longer will the tenant have to keep his house in repair. I understand that the reason for altering it is that it is said that the landlord might try to go behind this Act and get the tenants out. My Amendment lays down merely that the landlord cannot do that —and he cannot even get an award of damages for repairs without leave of the court. He certainly cannot get forfeiture or anything else. Not only is the 1938 Act a good Act—and I am glad that the noble Lord agrees that it is—but it is an Act which is just as applicable to leases of the sort with which we are dealing now as it was to leases which were under review in 1938. It was effective in 1938 and I believe that it would be effective to-day. I should be sorry to have to think that we have to put it to the discredit of the present Government that, even in a little matter like this, they are not building houses but are allowing more slums to be created. But that will be the effect. In order that I shall not have to say that about the Government I ask them to take second thoughts on this matter. No one could honestly say that my Amendment would inflict any injustice whatever on the tenant, because he would have the complete protection of the courts. If the Government do not accept my Amendment now, I shall have to think again as to whether I shall not put it down at another stage of the Bill.

On Question, Amendment negatived.

LORD MACDONALD OF GWAENYSGOR

This is purely a drafting Amendment. I beg to move.

Amendment moved— Page 4, line 20, leave out from ("to") to ("damages") in line 21, and insert ("bring any action against the tenant for").—(Lord Macdonald of Gwaenysgor.)

On Question, Amendment agreed to.

4.44 p.m.

VISCOUNT SIMON moved, in the proviso to subsection (1) after "rent" to insert "or rates." The noble and learned Viscount said: This Amendment has been altered since the Marshalled List was printed, and it now reads: Page 4, line 26, after ("rent") insert ("or rates").

The scheme of Clause 5 as it now stands, as your Lordships will appreciate, is that of the covenants binding the tenant in the lease some are retained, and others at any rate suspended. The object of this Amendment is to secure that not only the covenant to pay the rent but the covenant to pay rates shall remain in full force. Of course, it does not follow that every failure to pay promptly leads to forfeiture or reentry. There are provisions which Law Lords will understand, to "temper the wind" to the man who is unpunctual in payment. But that, in principle, the convenant to pay rates stands in the same position as the covenant to pay rent, I should have thought would hardly be denied. Whether anything more should be added, as was suggested in the original form of the Amendment, is another matter which might be further considered. At any rate, I now move to insert after the word "rent" the words "or rates."

Amendment moved— Page 4, line 26, after ("rent") insert ("or rates").—(Viscount Simon.)

LORD MACDONALD OF GWAENYSGOR

We accept this Amendment.

On Question, Amendment agreed to.

VISCOUNT SIMON moved, in the proviso to subsection (1), after "insured" to insert: or not to do anything to avoid the landlord's insurance policy or to increase the premium thereon.

The noble and learned Viscount said: I think I must move this Amendment. Of course, we do not want by way of exception to introduce all the covenants which were in the lease. Some of them are suspended. But consider what is quite a common covenant in leases of the sort with which we are dealing. The tenant covenants not to do anything to avoid the landlord's insurance policy or to increase the premium thereon. That is a perfectly-proper stipulation, and one would have thought there was no reason to alter it because the tenant is gaining the advantage of an additional period which may amount to two years over and beyond the period for which he was granted a tenancy by the lease. If the landlord takes out the policy, the insurance company will commonly stipulate that certain things shall not be done if that policy is to remain valid.

It is, for example, not infrequently stipulated that you shall not store dangerous or inflammable things in the house, and that you shall continue to preserve those conditions which make the risk against fire a normal one. It seems extraordinary that one of the covenants by which a tenant is not to be bound during the additional period of tenancy which the Bill confers upon him is one by a breach of which the landlord may find—possibly, even without his knowledge—that the insurance policy upon which he is relying is invalid. It may happen that the house will be burnt down and the insurance company will then be entitled to say: "We are not going to pay, because you did not secure, according to the stipulations of the policy, that the risks in the premises were not increased." I do not for a moment suggest that an insurance company makes a point of that sort unless there is something seriously wrong, but they do take the point and they are quite entitled to do so. In the ordinary way a landlord protects himself by the covenant into which the tenant enters that the tenant will not do anything which will jeopardise or make invalid the insurance policy for which the landlord has paid a premium. Another method is sometimes to have a stipulation that the tenant shall do nothing to increase the premium which the landlord has to pay. That, I think, is plainly a matter of fair bargaining. I suggest it would be right to include that among the covenants that ought to remain valid and in force during the additional period.

Amendment moved— Page 4, line 27, after ("insured") insert ("or not to do anything to avoid the landlord's insurance policy or to increase the premium thereon").—(Viscount Simon.)

LORD MACDONALD OF GWAENYSGOR

This is a case where I will not venture to address the House without giving close attention to my notes, although I do not like to make a speech from notes. In most of the cases the noble and learned Viscount mentioned the Amendment would not operate, because the general practice in ground leases is for the lessee to covenant to insure the property and not for the ground landlord to insure the property himself. In the cases where the Amendment would operate, because the ground landlord has himself insured the property. the Amendment would go much too far and would open the door to oppression and abuse. Insurance policies in respect of property are commonly drawn in very stringent terms and often give the assurer the right to avoid the policy or require payment of an increased premium in a variety of circumstances. That fact was underlined by the noble and learned Viscount. The practice of drafting insurance policies in this way is acceptable, as your Lordships know, only because it is well known and understood that the insurance companies will not stand upon the strict letter of their rights but will enforce them only in proper cases. This practice of forbearance on the part of the insurance companies, however, would be of no assistance to the tenant if this Amendment were carried: and I cannot believe that the noble and learned Viscount intended that.

A mere technical breach of covenant on the part of the tenant which, on a strict and literal construction of the insurance policy, would entitle the insurance company to avoid the policy or charge an increased premium, would be sufficient, under this Amendment, to enable the landlord to claim a forfeiture. The Amendment does not even require that the breach of covenant by the tenant actually should have resulted in the avoidance of the policy or the charging of an increased premium. Under the terms of the Amendment it is sufficient that the breach of covenant should be such as would entitle the insurance company to avoid the policy or charge an increased premium if they were minded to do so. There are all sorts of circumstances in which a mere technical breach of covenant by the tenant would enable the landlord to point to the strict wording of the insurance policy and claim that by reason of the breach the insurer would be entitled to avoid the policy, though everybody knows that no insurance company would avoid the policy under their normal practice. It may be argued, against this, as it has been argued, that the courts would not enforce forfeiture in such a case. But this cannot be relied upon in the face of the wording of the Amendment, and few tenants would be advised to resist an action for forfeiture when their only defence would be to bring evidence before the court, at heavy expense, as to what the practice of insurance companies is, and to hope that the court would be led by that evidence to put a narrow construction on the wording of the clause as amended. That is the end of my "piece" and I do not think I can improve on it by continuing.

LORD LLEWELLIN

I am sure the noble Lord would have improved on it if he had explained his position to us in his own words. I have never heard more nonsense read out than the noble Lord has just read. At the opening of that lovely brief, it was said that one can always rely on the insurance companies, and, at the end, that we cannot rely on the courts. I cannot think who on earth wrote that silly nonsense. I beg the noble Lord to give us his own speech next time. The effect of the Amendment we propose is simply this. In the Bill, if a tenant fails to comply with an obligation to insure or keep insured, the lease can be forfeited. But if the landlord does the insuring and not the tenant, and the tenant does something to invalidate the landlord's insurance, then nothing can be done, unless my noble and learned friend's Amendment is accepted. The court is not going to enforce a forfeiture if there is some tiny technical breach of the insurance policy. The court is much less likely to do that than an insurance company.

The violence of the language used in the noble Lord's brief made me feel this was an Amendment we ought to press. I did not feel strongly about it until I heard the noble Lord's reply, but when I heard such an overrated case against the Amendment, I began to feel a little stubborn about it. All this could have been dealt with by my Amendment which the noble Lord turned down a little time ago; then there would have been no question of forfeiture. Under the Bill as it stands at present, we are saying to a tenant that although he knows he is doing something to invalidate his landlord's fire policy, the landlord cannot prevent him from doing it. Most tenants will not do anything of the sort, but perhaps a few houses might be burned down because of this clause—per-haps too few to trouble about them, and it is not worth while insisting upon this Amendment! But, again, I would beg the noble Lord to explain matters to us in his own words.

VISCOUNT MAUGHAM

I would suggest to the noble Lord, Lord Llewellin, who has treated this matter with so much humour, that perhaps the main objection pointed out in the brief was to the words "to avoid the landlord's insurance policy." It might be said that the matter was a trifle, but that trifle might be capable of avoiding the policy. I would suggest that the objections might be re-moved if, instead of the word "avoid" in the Amendment, we used the words: "endangering the validity of" the landlord's insurance policy. It cannot be right to let the validity of a policy of insurance be destroyed. The words I suggest mean what the Amendment means, but they overcome some of the arguments in the brief which the noble Lord opposite read to us.

LORD DOUGLAS OF BARLOCH

I do not think the suggestion which has been made would make the matter any simpler than it was before. May I suggest that this point is of comparatively small importance? I have no doubt that in the books of precedents there can be found leases which contain words such as those in the noble and learned Viscount's Amendment, but in practice, in my experience, they are rarely seen. Therefore, that kind of case is not likely to arise.

On Question, Amendment negatived.

5.0 p.m.

VISCOUNT SIMON moved, in the proviso to subsection (1), after "insured" to insert: or with any term or condition of the tenancy' relating to the user by the tenant of the property or a part thereof.

The noble and learned Viscount said: Whatever may be thought of the importance of the last Amendment, I do not think that anyone will doubt that this Amendment is of considerable importance—and I shall expect the noble Lord, Lord Douglas, to agree with me. He will know that it is an exceedingly common stipulation in the lease of a private house that the tenant shall not use the house for other than the ordinary purposes of a private house. Indeed, I suppose it often happens that, in a row of houses in a residential portion of London, every lease will contain such a provision. What is it that I suggest by this Amendment? It is that a tenant who gains the advantage of this additional two years ought to be bound for the final two years by the promise which he made to use his private residence as a private residence. He may turn it into a shop; he may put advertisements over his front door; he may announce in the front window what articles are to be sold within; he may turn it to any use that he pleases, in complete defiance of his promise. In that way, not only may it be to the disadvantage of the landlord, but it is likely to be a considerable annoyance to his immediate neighbours. Some of your Lordships may know that there are cases in which a man complains of a breach of contract between a tenant and a landlord, although he is neither tenant nor landlord, because he has become an occupier of property under a scheme which entitles him to assume that not only his own house but the other houses in the row will be used as private residences.

I do not wish to exaggerate—and I do not read from any brief that has been prepared for me by anybody—but I venture respectfully to suggest that, unless we insert this proviso covering the additional period of two years, a tenant who enjoys the advantage of this part of the Act, though he has promised and covenanted that he will use his house only as a private dwelling house, may use it for any of the purposes I have mentioned; and in that way he is not only disregarding his promise but may conceivably do a considerable injury. I should have thought that some provision of this sort was reasonable. I do not wish in any way to ask for more than is reasonable, but it appears to me that that kind of case is not an imaginary case, and it is one, surely, in respect of which a landlord, whatever one may think of landlords, is entitled to insist that he shall not find the promise which his tenant has made to him disregarded merely because this Bill gives the tenant two more years' tenancy than he thought he had a right to. I beg to move.

Amendment moved— Page 4, line 27, after (" insured") insert (" or with any term or condition of the tenancy relating to the user by the tenant of the property or a part thereof").—(Viscount Simon.)

THE LORD CHANCELLOR

I can-not pretend, nor do I, that there is not substance in this Amendment. On the other hand, I feel that, since we have made the provisions we have about the failure to carry out the repairing covenant, if we swallow that we are really swallowing the camel and straining at the gnat when we come to this one. This is really a comparatively small matter compared to that.

LORD LLEWELLIN

We have not quite swallowed the camel yet. We have only reserved our right to swallow it.

THE LORD CHANCELLOR

It may or may not ultimately find its resting place. What are we seeking to do here? Observe the heading to Clause 5. It is: Restrictions on enforcement of covenants. Then there comes the proviso saying what breaches are not to be protected. We have so far, nonpayment of rent, non-payment of rates, and failure to comply with any obligation to ensure or keep insured. Now we are asked to put in, or failure to comply with any term or condition of the tenancy relating to the user by the tenant of the property or a part thereof. That relates to anything, not only during the extended period, but anything that has gone before which has been winked at or disregarded as being something trivial. Is that quite right? I have no doubt that in these days, if you are dealing with a long lease, you will find there are hosts of these breaches of covenants. I can give one common illustration of the ordinary covenant to use the premises as a single dwelling-house only. You will find that they have been sub-let and divided up; you will find that tenants of these small properties are frequently carrying on some small businesses—it may be that the tenant is an insurance agent, and he brings back his papers and policies to work on at home in the evening. Those are things of a trivial nature which have been disregarded in the past, but they can all be dragged up. It is true, of course, that you cannot have a forfeiture without the approval of the court. I, too, think that the courts are more amenable to reason even than insurance companies. But it is a fact that it is not pleasant for a tenant who is, or may be, quite a small man to find himself confronted with threat to take him to court to meet a claim for breach of contract, and a forfeiture.

The danger I feel about the Amendment is this. I have said many times that, in the past, landlords have been very reasonable about these things. But some landlords may, not unnaturally, resent the further two years being forced upon them, and they may look around for means to see whether they can evade, or get rid of, this statutory injustice, as they will deem it. They may take advantage of all sorts of small technical breaches which they would never have thought of, or acted upon, before. They may say: "We will bring a claim for forfeiture." Threatened with such a claim, the tenant, who may not realise how reasonable the courts are, and finding himself confronted with the possibility of paying a substantial bill of costs at the end, may decide to get out. That is the danger, and I think it is a real one.

There is one other consideration which I should like to point out to the noble and learned Viscount. Where there is a flagrant and important breach—where, for instance, nothing is done until these two years, and then there is this extension of two years and the man, in the most blatant way, opens up a shop in premises that he covenanted to keep as a private house, and which he has heretofore kept as a private house—the courts are open and it is possible for the landlord, without difficulty, to obtain an injunction. It seems to me that that is an important consideration.

VISCOUNT MAUGHAM

Can he get an injunction?

THE LORD CHANCELLOR

Yes. I am advised, and I think it is right, that a landlord could get an injunction if anybody were to commit a breach. I can give a particular illustration I have in mind. Somebody might say: "Now that the two years period is on, I am in a happy position and can do what I like to the property. I will therefore open up a shop or some public premises or something of that sort."

VISCOUNT MAUGHAM

If we make sure that an injunction can be obtained, possibly the Amendment will not be pressed.

THE LORD CHANCELLOR

It is on that basis that I am addressing the Committee. I believe that to be right. I do not assert that I am right in these matters, but if the noble and learned Viscount tells me I am wrong I certainly think I am wrong. Perhaps he will look at the wording.

VISCOUNT MAUGHAM

I should like the Lord Chancellor to look at it.

THE LORD CHANCELLOR

I have looked at it, and discussed it with my advisers; and that is the advice I have received. It is on that basis that I am resisting this Amendment, and I think an injunction would be a way of preventing gross breaches of covenant. With regard to the small and technical breaches, it would be very undesirable that we should point to this Amendment as a fingerpost to the road for a landlord who wants to get out of the obligations which the Legislature has thrust upon him. If the noble and learned Viscount will withdraw his Amendment now, I will certainly look at the matter before the Report stage, and see whether I am right about the injunction point. If I am wrong, I shall certainly tell your Lordships, but I suggest that if I am right we have a strong case for resisting this Amendment.

VISCOUNT SIMON

I am much obliged to the Lord Chancellor, and I think that his suggestion is reasonable. Both sides want to do what is reasonable. I think there is a slight tendency on one side to defend the more difficult parts of the Bill by dwelling upon an extreme instance. Frankly, I think we ought to look at the ordinary, straightforward example, and not imagine extreme instances of a farfetched objection because an insurance agent adds up his accounts before he goes to bed. If it be the case that an injunction can be obtained, perhaps the Lord Chancellor will put that in the Bill so that the point is made quite clear. I think that might go some way to meet the point. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD MACDONALD OF GWAENYSGOR

This Amendment is consequential upon an earlier Amendment. I beg to move.

Amendment moved— Page 4, line 29, after ("right") insert ("or the bringing of any action").—(Lord Macdonald of Gwaenysgor.)

On Question, Amendment agreed to.

LORD MACDONALD OF GWAENYSGOR

This is a drafting Amendment. I beg to move.

Amendment moved— Page 4, line 47, leave out from (" re-entry ") to ("they") in line 1 on page 5.—(Lord Macdonald of Gwaenysgor.)

On Question, Amendment agreed to.

LORD MACDONALD OF GWAENYSGOR

This Amendment is consequential on a previous Amendment. I beg to move.

Amendment moved— Page 5, line 4, leave out from beginning to ("no") in line 5—(Lord Macdonald of Gwaenysgor.)

On Question, Amendment agreed to.

LORD MACDONALD OF GWAENYSGOR

This is a drafting Amendment. There is one slight alteration to the Amendment as printed in the Marshalled List. The last words "or set-off" should be deleted. I beg to move.

Amendment moved—

Page 5, line 16, at end insert— ("() The reference in paragraph (a) of subsection (1) of this section to the bringing of an action against the tenant for damages in respect of a failure to comply with a term or condition of the tenancy shall be construed as including a reference to the bringing of an action for the recovery from the tenant of expenditure incurred by or recovered from the landlord in consequence of such a failure on the part of the tenant, and the reference in paragraph (b) of subsection (3) of this section to a judgment or order for the payment of damages shall be construed accordingly. () References in this section to the bringing of an action include references to the setting up in any proceedings of a claim by way of counterclaim.")—(Lord Macdonald of Gwaenysgor.)

LORD LLEWELLIN

I am obliged to the noble Lord. I drew attention to the fact that I did not like the words "or set-off." Now that they are withdrawn, there is no objection to this Amendment.

On Question, Amendment agreed to.

Clause 5, as amended, agreed to.

Clause 6 [Power of landlord to carry out essential repairs]:

THE LORD CHANCELLOR

This is a drafting Amendment. I beg to move.

Amendment moved—

Page 5, line 45, leave out from beginning to ("shall") in line 4 on page 6 and insert— (" () The last foregoing subsection shall have effect subject to the provisions of the last foregoing section; but nothing in subsection (2) of this section or in the last foreging subsection ").—(The Lord Chancellor.)

On Question, Amendment agreed to.

VISCOUNT SIMON had given notice to move to delete subsection (4). The noble and learned Viscount said: I must have put this Amendment down, or it would not appear in the Marshalled List. On looking at it, however, I do not know why I did. Therefore, without prejudice to any action I may take on the Report stage, I shall not move the Amendment now.

Clause 6, as amended, agreed to.

Clause 7 agreed to.

Clause 8 [Application of Part I to tenancies and sub-tenancies held on trust]:

THE LORD CHANCELLOR

This is a drafting Amendment. I beg to move.

Amendment moved—

Page 8, line 12, leave out subsection (4) and insert— ("() In section three of this Act the expression "assignment" does not include a disposition under which no beneficial interest passes; but the reference in that section to the tenant shall, in relation to a tenancy so vested or held as aforesaid, include a reference to a person beneficially interested as aforesaid.")—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

Clauses 9 to 11 agreed to.

Clause 12:

Power of court to grant new tenancies of shops

12.—(1) Subject to the provisions of this section, on an application under this Part of this Act duly made the court may, if in all the circumstances of the case it appears reasonable so to do, order that there shall be granted to the tenant a tenancy for such period, at such rent and on such terms and conditions as the court in all the circumstances thinks reasonable, and thereafter the parties shall be deemed to have entered into a lease of the shop, premises or part of premises (as the case may be) creating such a tenancy:

VISCOUNT SIMON moved in subsection (1) to leave out "such" where that word occurs the second time, and insert "a fair market." The noble and learned Viscount said: I move this Amendment merely to call attention to the fact that we have now passed into Part II of the Bill, which deals with shops. On the whole, I think it is a Part which evokes less criticism. It is to be observed, however, that under this clause, when the shop occupier gets an extension of the tenancy of his shop, the rent is not the rent previously paid, as it is in Part I, but is such rent as the county court in all the circumstances thinks reasonable. It appeared to some of us that that left the county court very much at large to decide what the rent should be. I think that criticism appealed to others on the Second Reading, and I believe the noble Lord, Lord Silkin, was inclined to take that view. I do not wish to take up a final position about the matter, but I should be prepared, having indicated the point—unless others wish to persist—to say that I would not press the words "a fair market" at this stage.

The reason which has prevailed with me since I put the Amendment down is as follows. I can quite see that, in fixing the figure of rent, the tribunal may think it would be right to take into account what I may call the scarcity element. I do not know whether it would be right to do so or not, but I can quite understand that they may think so. If I were to move the insertion of the words "a fair market rental," as a later Amendment defines it, then I imagine the scarcity element, as tending to increase the market rental, would undoubtedly be brought in. My own feeling, therefore, is that it would be better not to lay down in this clause exactly how the county court judges should arrive at the figure. I hope that, later on, however, when we come to Clause 15, concerning appeals, we shall not exclude the idea of cases cited by the county court judge going to appeal. Cases may arise when it will be desirable, and when the judge will think it desirable, for the Court of Appeal judges to consider the matter. Unless other noble Lords take a different view, I should myself be prepared, having given this explanation, to withdraw this Amendment. I move.

Amendment moved— Page 11, line 14, leave out the second ("such") and insert ("a fair market").— (Viscount Simon.)

THE LORD CHANCELLOR

I am sure the whole House is grateful to the noble and learned Viscount, as I am, for the help he is giving us. This is a very difficult matter, and in another place everyone, on all sides, was most anxious to avoid what the noble and learned Viscount has called "scarcity value" being taken into consideration. There were other phrases used as well, such as "freak offers" and "special values." I think, and I believe the noble and learned Viscount agrees, that we do not want the county court judges to fix a figure entirely on the basis of scarcity value. I think that "special value" was used to include such things as being near a bus stop, and considerations of that sort. "Freak offers" may come from multiple stores, keen to eliminate competition and prepared to pay a large price. They, equally, should be left out. But these are all matters which would be much better left to the wisdom and discretion of that excellent body, the county court judges. I feel that the more we try to define the matter and take it out of their discretion, the more harm we are likely to do. My present impression is the same as that of the noble and learned Viscount: that it is undesirable to do other than leave the question of fair market rental to the county court judge, to do the best he can.

Perhaps I may add that in this respect we should be following the precedent set in Scotland. The machinery there has worked well, because in comparatively few cases have the parties had to go to court. The very fact that they can go to court has nearly always led landlord and tenant to put their heads together and agree on something satisfactory to both. In the vast majority of cases there has been agreement. As I say, that, no doubt, springs from the fact that there is the right to go to court. We have had this excellent working in Scotland, and I think it would be wise and practical if we were to follow a similar course here.

LORD LLEWELLIN

I think the Lord Chancellor is right. I rise now only to refer to his remark that agreement has been reached in many cases by reason of the fact that people can still go to court. This applies very much to what I have been saying about repairs. I do not wish to press the matter: I am content to leave it at that.

LORD SILKIN

I regret it is not possible to do a little more than we are now proposing to do. I agree very much with the noble and learned Viscount, Lord Simon, that it is not altogether satisfactory to leave the matter to the judge without giving him any lead at all concerning the kind of rent he is to fix. As we are proposing to leave the matter now, it is possible for the judge to include scarcity value. I imagine that a judge, having been given his terms of reference to fix a rent, would fix it at the rent prevailing in the neighbourhood, which would be the market rate. It may be that we have not yet got the right Amendment. Those of us who are interested in this matter want to avoid litigation so far as possible; I think there is a great danger of increasing litigation if no one has any idea of what will come from an application to the court. I suggest that those of us who are interested might perhaps meet again and raise the matter further at a later stage.

VISCOUNT SIMON

I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Clauses 13 and 14 agreed to.

Clause 15:

Appeals

15. No appeal shall be brought from any determination or order of the court under this Part of this Act.

5.27 p.m.

VISCOUNT SIMON had given notice to move and add to the clause "except with the leave of the Court of Appeal." The noble and learned Viscount said: I beg to move this Amendment in this form: Page 13, line 38, at end insert ("except with the leave of the Court ").

If we were to decide that an appeal could take place, either with the leave of the court or the Court of Appeal, what would hap-pen? A county court judge might be asked to give leave to appeal. If he said "No," in some cases the party that wanted to appeal would go to the Court of Appeal and try to get leave from them. He could not start such an application until the county court judge had refused. If we limit it to appeals which take place with the leave of the county court judge, we shall secure what we want. The noble and learned Viscount the Lord Chancellor paid a well-merited compliment to the county court bench—a distinguished and sensible body of people—and I should be content with appeal with leave of the county court. I beg to move.

Amendment moved— Page 13, line 38, at end insert ("except with the leave of the Court").—(Viscount Simon.)

THE LORD CHANCELLOR

Again, I am very grateful to the noble and learned Viscount. There is no doubt that the county court judges have a very difficult task to perform. I think that very often they would be only too glad to have their reasoning examined by the Court of Appeal. The building of a system of jurisprudence which is com- mon to all the courts is desirable. Other-wise, there is a risk of different practices in different courts. It is quite wrong to think that judges who have, as I say, a difficult task to perform would resent or dislike an appeal being taken. A judge is only too glad if there is a court above which can review the matter and see whether he has done right.

VISCOUNT SIMON

Which can praise his decision.

THE LORD CHANCELLOR

Which can praise or strike out his decision. I think this is a good Amendment. I am grateful to the noble and learned Viscount for moving it, and I have much pleasure in accepting it.

On Question, Amendment agreed to.

Clause 15, as amended, agreed to.

Clauses 16 and 17 agreed to.

5.30 p.m.

VISCOUNT BUCKMASTER moved, after Clause 17, to insert the following new clause: () For the purposes of Estate Duty and Legacy Duty payable in respect of the death of any person who died before the commencement of this Act, the value of any property to which or to part of which this Act applies shall be calculated on the assumption that at the date of such death this Act had been enacted and any claim for such duty shall be adjusted accordingly whether or not the duty has been paid.

The noble Viscount said: I suspect, from the look of happiness which has spread over the face of the noble and learned Viscount the Lord Chancellor, that he will not give this Amendment the felicitous description which he gave to the one preceding it. Let me say at once that I have no knowledge whatever whether there are many cases involved in the principle which underlies this Amendment. I have not heard of any, nor have I discovered any. I move this Amendment merely as a plain principle of justice. It will be apparent to your Lord-ships what it seeks to do. It is this. Where someone has died and part of the estate is in the shape of ground leases, and those ground leases have been valued on the basis of possession, or the expiry of that possession, there may be the accrual of the extra value of a large scheme of development. But after they have been valued on that basis, there comes this Bill, which arbitrarily and retrospectively extends those ground leases and thereby materially diminishes their value. The noble and learned Viscount will tell me, rightly, that this kind of thing has happened before. But I cannot see why it should happen again.

May I put this further point? Let us, for one moment, forget this Bill altogether and take the simple case of a man who dies and whose estate is nicely balanced between one scale of duty and another. The position, quite irrespective of this Bill, may well be that the final asset to be sold is a piece of land or a house, and the amount realised may make no difference to him. A case came to my notice some time ago where it made no difference at all to the man whether he got £10,000 or £2,000, because if he received the larger sum he automatically passed into the larger scale of duty. It may be that under this Bill, his estate being artificially valued on what I am sure the noble and learned Viscount would agree is a false basis, a man may not only pay too much duty but may even pass into a higher scale of duty than that which he ought to pay. I ask the noble and learned Viscount whether, if he is minded to reject this Amendment, the principle of what I believe is known as marginal relief can be allowed to operate, so that in a case of this border-line situation, the drastic alteration in value can be taken into account. I beg to move.

Amendment moved— After Clause 17 insert the said new clause. —(Viscount Buckmaster.)

THE LORD CHANCELLOR

Really, the noble Viscount is being very naughty: he smiles when he moves his Amendment. Here in this House we are dealing with matters of taxation, and it is obviously a matter about which we had better be very careful. What the noble Viscount has said—and he has said it in a very charming way—is recorded, and, while it will not be used in evidence against him, it will no doubt be considered most anxiously by the Chancellor of the Exchequer if he is minded to alter the whole basis upon which estate duty is levied at the present time. We never have done this. We never, I think, should do this. It proceeds on an illogical basis. When you value an estate as an estate for the purpose of estate duty, you value it notionally at the moment of death. One asks this question: What is this estate worth at this time? If, thereafter, legislation comes along which adversely affects the value of the estate, so that a week after the man's death the property turns out to be worth much less than it was at the time of his death, it has been known to us all for very many years that it is just too bad; but nothing can be done about it. If the man died after this Bill had received the Royal Assent, then, of course, if he were possessed of these reversions, the amount of his estate would be depressed. If, on the other hand, this Bill had not become law when he died, the question is: What is the value of his reversion at the moment of his death? I take it that that might be somewhat affected by the prospect of the Bill becoming law. It must be looked at at the moment of his death and it would be quite wrong to do it otherwise. Were that not so, consider where we should land ourselves. There would be no finality at all about the matter. We should have to make our estate duty affidavit and varying affidavits, varying every week or month, according to what the position was.

Be it observed that, if you are going to diminish the value of the landlord's estate for the purpose of estate duty, by parity of reasoning you must increase the value of the tenant's estate if he has a valuable property. Already, I think we have a large number of highly intelligent and gifted people who are performing the great function of seeing what estate duty or other duties we should have to pay. If we were to pass this legislation, their number would indeed be legion. They would have to check, revise and reconsider all the various estimates which they had previously made. No—the noble Viscount's suggestions have been made and will, I have no doubt, receive from the authorities who are dealing with these matters the attention which they deserve. But I say that in this House we had better not trespass upon this domain, which is not ours and about which we have a somewhat inadequate knowledge. Here, I think I can rest myself on precedent. For many years past we have done all sorts of things affecting the value of property, but never yet have any Government accepted any such Amendment as this. I observe the noble Lord, Lord Llewellin, sitting there, but I am a little doubtful whether hitherto anyone has been bold enough to suggest that such an Amendment should be passed. It may be that the noble Lord, Lord Llewellin, did so when we considered the Town and Country Planning Act, although I have no recollection of it—I gather he rather thinks he did. Anyhow, I am quite certain that the Government did not accept it. It would be a bad example if we were to accept it in this case.

VISCOUNT BUCKMASTER

I say at once that in a matter of this kind naturally your Lordships would wish me to accept the ruling of the noble and learned Viscount. At the same time, I know that he will not mind my saying that I do not retract what I have said, and that I have no objection whatever to my proposal being closely and carefully studied in another place—or, indeed, in any place —because there is nothing which is fundamentally unreasonable or unsound in it. The only other point I should like to make is this. If I understood the noble and learned Viscount aright, he had in his mind the fact that estates often depreciate after the date of death—which I agree is true. A man may hold a large block of shares from some industry which may suffer adversity, and the estate may be seriously diminished in value. There has been a case in which a very large estate was ultimately unable to find the money necessary for the duty, owing to the marked and rapid depreciation in the securities which were held. I do not want to labour the point. I say that that was not my point. That was a depreciation due to the chances of commerce. This is a depreciation in value due to a deliberate act of the Government, and out of which the Government make a profit. Having made that plain and, I am afraid, without any repentance, I am gladly guided by the noble and learned Viscount. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clauses 18 and 19 agreed to.

Clause 20 [Interpretation]:

VISCOUNT SIMON

I made a reference earlier to this Amendment. I beg to move it in its revised form.

Amendment moved— Page 15, line 2, at end insert ("' dwelling-house' means a house or a part of a house being a house or a part normally used as a dwelling ").—(Viscount Simon.)

THE LORD CHANCELLOR

I accept the Amendment in that form.

On Question, Amendment agreed to.

On Question, Whether Clause 20, as amended, shall stand part of the Bill?

LORD GIFFORD

Before we leave this clause may I crave the indulgence of the Committee to ask the Lord Chancellor whether he can say anything about a matter which was discussed in another place—namely, the question of the definition of a retail trade or business in so far as it refers to the inclusion in the Bill of restaurants? At the present time the unlicensed restaurant is included in the Bill, but not the licensed restaurant. An Amendment was put down in another place, and the Solicitor-General gave an undertaking that the matter would be further considered consistently with the purposes of the Bill, to find words which would bring in licensed restaurants. It does seem anomalous that where two restaurants are performing more or less the same services, one licensed and the other not, one is included in the Bill and the other is not. I know that there are certain difficulties with regard to licensed premises, but there is a clear-cut distinction in the Finance Act, 1910, which separates a public house from a restaurant. This states that the receipts from alcoholic drinks should not be more than three-fifths of the total. I wonder whether the Lord Chancellor can tell us if anything has been done to meet the point, or whether an Amendment may be put down at a later stage.

THE LORD CHANCELLOR

Yes, an Amendment may certainly be put down at a later stage. Not having had notice of this point I should prefer not to deal with it to-day. I will certainly take the opportunity of looking at it between now and the Report stage.

LORD LLEWELLIN

On this matter, one has always to bear in mind that the real distinction between licensed and unlicensed premises is that, in many cases, the owners of licensed premises are wisely left to be able to turn the tenant out if there is any possibility of a breach of the licensing laws. Prima facie that is the real distinction, and not that to which the noble Lord has referred.

Clause 20, as amended, agreed to.

Clause 21 [Short title and extent]:

5.44 p.m.

VISCOUNT SIMON moved, after subsection (1) to insert: (2) This Act shall come into operation on the twenty-fifth day of June, nineteen hundred and fifty-one.

The noble and learned Viscount said: I think this is the last effective Amendment on the Marshalled List, and we have kept the best to the last. I hope very much that this Amendment will be accepted. It is necessary briefly to remind the Committee of how the matter will stand as the Bill is now drawn, and what is the nature of the alteration which this Amendment would make. As the Bill is now drawn the commencement of the Act (a phrase which is used in a number of places), is the date at which the Royal Assent happens to be given. The well-established law is that that has the effect of operating an Act of Parliament from the moment of the Royal Assent, unless, as is constantly the case, the Act itself provides for some other date. For example, if we were passing changes in the criminal law it would mean that once the Act became law people would be liable for some crime to which previously they had not been liable. Obviously one cannot make that sort of change dependent upon the date of the Royal Assent. The prospective criminal would not be watching while the Royal Assent was given, and would not know at what moment he passed from legality to illegality. There are all kinds of Acts in which it is right to fix the date of the commencement not as the date of the Royal Assent but at some date which is mentioned in the Bill. My proposal is, that we should mention a date in this Bill, and the date I suggest is Midsummer Day.

There are two strong reasons why I think we should do something of the kind. First, if the Committee have examined this Bill in detail (and, indeed, it needs a good deal of examination) they will realise that under Part I of the Bill all the extensions of the leases which operate will extend to the same day. In one case it will be an addition of two years, and in another it will be less than two years. But in so far as Clauses 1 or 2 of the Bill have any effect, the result will be that the leases will all be extended to some day which, if it is measured by reference to the Royal Assent, may of course be any day in the calendar during this Session of Parliament. I do not doubt that the object of the Government will be to get this Bill on the Statute Book as soon as they conveniently can; and while we have made what I hope will be regarded by your Lordships as some useful changes, still the Bill is going to become law, and I hope that it will become law in time for my Amendment to be suitable. If something happens which causes a postponement, it would still be possible, even at the very last stage in another place or in this House, to substitute Michaelmas Day or whatever day is desired. But it is surely right that we should have a definite day fixed in the Bill. I have spoken at some length on this point because it was never raised at all in the Commons, and I think it is a pretty good point.

Secondly, I think it is desirable to do what we can to reduce doubt and to re-move speculation. If it is laid down that Part I of the Bill is to come into force on the day when the Royal Assent is given, that at once raises in a great many minds the question "I wonder whether my lease will or will not get this benefit." Supposing my lease is one that is coming to an end at Midsummer Day, my desire would be that the Royal Assent should be given by midsummer. On the other hand, if my lease were not coming to an end until September or October, I should want to have the Royal Assent later, in order that I might get the advantage under Clause 1 of an additional two years. It is most undesirable that cases of doubt should arise, and there is no need for it. It may lead to people taking out policies of insurance to cover the risk of their particular lease not benefiting. It would certainly arouse a good deal of discussion with lawyers which, though I am quite willing to see it encouraged in proper cases, I think is not in the least necessary in a case like this. It would solve the whole thing at once to say that the Bill will come into force on a certain day. I beg to move.

Amendment moved—

Page 15, line 43, at end insert (" () This Act shall come into operation on the twenty-fifth day of June, nineteen hundred and fifty-one.")—(Viscount Simon.)

THE LORD CHANCELLOR

I think the noble and learned Viscount has made out his case here. I think the Amendment as printed is dated June 25. The noble and learned Viscount moved it, of course, as though it were June 24.

VISCOUNT SIMON

I am sure the Lord Chancellor will appreciate why I put it down in this way. I was afraid that somebody might argue that a period of two years would not have elapsed at Midsummer Day, but certainly would have elapsed on some other day.

THE LORD CHANCELLOR

I think the 24th is right. If the noble and learned Viscount will agree to putting his Amendment in that form, then we shall be able to accept it. I must give notice of one point however. It seems to me that when the next stage of the Bill is reached I may have to move a consequential Amendment, because there will be some shop tenancies which come to an end at the end of the March quarter—that is to say, they end, I suppose, a fraction of a second before midnight on June 23–24. I do not think that we should wish to exclude those tenancies from the benefit of the Bill. Therefore I feel that at the Report stage I shall probably have to put down an Amendment to deal with that point. Subject to that, I will accept the Amendment with the date of June 24. I think it is a good idea and that it will be a great advantage to have this fixed date. The Bill, if it runs the full two years, will come to an end at a convenient date, having regard to the fact that a large number of tenancies automatically expire at that time.

VISCOUNT SIMON

Thank you very much. I will withdraw my original Amendment and move it in the altered form.

Amendment, by leave, withdrawn.

Amendment moved—

Page 15, line 43, at end insert— ("() This Act shall come into operation on the twenty-fourth day of June, nineteen hundred and fifty-one.")—(Viscount Simon.)

On Question, Amendment agreed to.

Remaining clause, as amended, agreed to.

Schedules agreed to.

House resumed.