§ Order for Second Reading read.
§ *(12.30.) MR. T. H. BOLTON (St. Pancras, N.)
In moving the Second Reading of this Bill, I may explain that its object is to give additional security to leasehold property. I may remind the House that a lease is a contract granting the occupancy of a property for a definite time on the payment of rent provided that certain covenants and stipulations are performed, and giving the landlord upon non-payment of rent or non-performance of the covenants a right of re-entry and forfeiture of the lease. The right of re-entry is not intended to destroy or to defeat the lease, but is a final resort in case of a persistent and continuous breach of the covenants and the conditions of the lease. The 138 policy of the law has been evinced by decided cases and statutes in which relief has been given against arbitrary and capricious exercise of forfeiture clauses in leases. The law, at first, gave relief in cases of forfeiture for non-payment of rent. The lease prescribes that rent shall be paid at a definite time, and there is a covenant that it shall be paid at that definite time. In the event of non-payment there is an actual breach of covenant and a right of re-entry; but the law provides that the exercise of this right may be restrained, and therefore there is a relief in the event of temporary non-payment of rent. Then relief was given against forfeiture for breach of a covenant to insure. Following that up, an Act of Parliament was passed by Lord Cairns largely extending the relief from forfeiture generally. The section of that Act winch my Bill proposes to amend is the 14th. The Act is the Conveyancing and Law of Property Act of 1881, and the 14th section provides that before an action for re-entry, or forfeiture under the stipulations of a lease shall be commenced the landlord shall give notice requiring the covenants of the lease to be performed, and that where the lessor is proceeding by action or otherwise to enforce the right of re-entry or forfeiture the lessee may apply to the Court for relief, and the Court may grant relief on such terms in regard to costs, expenses, damages, compensation, penalty, or otherwise including the granting of an injunction to restrain any like breach in the future as the Court may think fit. That would have given a Court of Law full power to afford relief in all cases for breach of covenant, where the Court thought that the breach of covenant was not of a character to justify the putting an end to the lease. But, for some reason I have not been able to find out, a limitation was put on this just and extensive power given to the Court. By Sub-section 6 of this Section 14 it is enacted that the section shall not extend to a covenant, or condition against assigning, under-letting, parting with possession, or disposing of the land leased; nor shall it extend to a condition of forfeiture on the bankruptcy of the lessee, or a taking in execution of the lessee's interest; nor in the case of a 139 mining lease shall it affect a covenant or condition allowing the lessor to have access to or inspect the mines, machinery, and workings, or the books and accounts. Consequently, if there is a breach of any of these covenants there is an immediate act of forfeiture which the landlord has an absolute right to take advantage of, and which the lessee has no remedy against, and in which the Courts of Law have no power to give relief. The present Bill proposes to repeal these exceptions and to grant to the Courts of Law full power to give relief in all cases of forfeiture. Section I of the Bill simply incorporates the measure with the Conveyancing Act of 1881, and the Amending Act of 1882. Section 2 repeals the exceptions to which I have referred, and it gives the Court full power to relieve in all cases of forfeiture. In regard to mining leases I would prefer to take the judgment of those who are more specially interested in them. As the House is aware I am a Metropolitan Member, and the leasehold interests with which the Metropolis is concerned are those connected with houses. I believe, however, that there is as strong a case for relief from forfeiture in mining leases as in leases of houses. I cannot imagine a more unreasonable tiling than that a lease should be forfeited for a temporary refusal to allow an inspection of the mine. I can understand that such a penalty might attach to a persistent refusal, but it is monstrously unjust that a temporary or negligent breach of a covenant to allow inspection should involve the forfeiture of the lease. As to the necessity for an alteration of the law with reference to leasehold property in London, I believe that many cases have occurred within the experience of hon. Members of the House which show the necessity for it. I will only, however, refer to the recent case of "Barrow v. Isaacs." In that case Sir Henry Isaacs, the late Lord Mayor of London, was in the possession of large premises in the City, which he held under a lease worth many thousands of pounds. He agreed to let a portion of the premises to some people in the City of equal standing with himself at a substantial rent. He sent instructions to his solicitor to prepare an under lease, but in the absence of the solicitor, a managing clerk conducted the 140 business, and drew up an under lease. It so happened that one of the conditions of the original lease was that no portion of the premises should be underlet without the permission of the landlord; but there was this qualification—that license to underlet should not be refused unreasonably or arbitrarily. In law that qualification amounted to a restriction upon the landlord's arbitrary right, and it was admitted that if the consent of the landlord had been asked for, it could not have been refused. The landlord's consent was not asked for through sheer negligence. The clerk, in fact, had not referred to the original lease. It came to the knowledge of the landlord that Sir Henry Isaacs had granted an under lease without licence, and he commenced an action for breach of covenant. The Court had no power to stay the landlord's action; the landlord put in the covenant and proved the breach, judgment following as a matter of course, and an ejectment was ordered. Sir Henry Isaacs carried the case to the Court of Appeal, but the three Judges who carefully considered the matter came to the conclusion that having regard to the exception in the relief from the Relief from Forfeiture Clause in the Act of 1881, they had no power to grant relief. They also expressed an opinion that neither the common law nor equity jurisdiction enabled them to give relief. Thus, through this want of power to afford relief, a gross act of injustice was inflicted upon Sir Henry Isaacs, who lost a valuable lease worth many thousands of pounds. Then again, in the case of bankruptcy, what can be more monstrous than that a lease which may constitute the bulk of the property of a bankrupt should be forfeited by the mere act of bankruptcy, enabling the landlord, to take an unfair advantage to rob the creditor and confiscate the premises? In regard to the question of execution a man perfectly solvent may have an execution levied upon his premises. He may suffer an execution for a legal purpose and with a view to an appeal; or an execution may be levied accidentally, but there is no relief from the stipulation, which declares that the levy of au execution upon the premises shall entail forfeiture of the lease. Clause 3 of the Bill provides that all 141 leases containing a covenant condition or agreement against assigning, under-letting, or parting with the property without the consent of the landlord shall be deemed to be subject to a proviso that licence or consent shall not be unreasonably withheld, and that no fine or sum of money shall be payable for such licence or consent. The object of a covenant of this nature is to secure that the under-tenant shall be a respectable and responsible man, and not to enable the landlord to extort fines or conditions. There have been cases in which avaricious landlords have enforced their arbitrary powers to the full in order to exact fines and pecuniary penalties. In my professional experience I have known many such cases. In one instance certain premises belonging to a wholesale house, which had been tenantless for some time, were leased for 21 years, and a retail business carried on in them. After a few years' occupancy the tenant put the business in the market for disposal. He agreed to sell it for £1,000, and then asked the assent of the landlord to assign the lease. The landlord refused his consent unless he received £500 or one-half of the premium, with the result that the business was not sold, and the tenant suffered a serious loss. If this Bill had been in operation the landlord could not have arbitrarily and capriciously objected to the re-letting of the premises or have refused his consent. Only this morning I received a letter giving particulars of a case in which a City Company has behaved most unfairly. I refrain from giving the names, but Mr. So-and-So being a tenant of a company, held premises in Hackney. He improved the premises for the purpose of enabling him to carry on the business of a mineral water manufacturer. According to the covenants of his lease he ought to have obtained the consent of his landlord, but as he had omitted to do this before carrying out his improvements he was required to surrender the original lease and enter into a new one with an increase of rent from £35 to £55 a year. The fact that landlords can exercise these arbitrary powers so unfairly is most injurious to leasehold property, and is calculated in many cases to work serious injustice. Indeed, the conditions 142 of a lease of this kind without a qualification renders the lease itself unmarketable and places the tenant entirely at the mercy of his landlord. The object of the present Bill is not to make a good landlord do his duty because under any circumstances he would behave fairly, but to prevent a bad, unfair and avaricious landlord from taking advantage of the covenants of a lease. It is contended that covenants against assigning or underletting are necessary in order to preserve property in which there are valuable pictures and works of art. Surely such premises are not likely to be let except to respectable and responsible tenants; they are not likely to be sub-let to unscrupulous tenants, because the original lessee would always remain liable to the landlord. If the property were injured or works of art destroyed the original lessee would be responsible for the damage done. But if it should be thought that some qualification is necessary in the case of houses furnished with valuable works of art I would submit that that is a matter for the Committee stage of the Bill. So also with regard to what are called the amenities, which may apply to adjoining property belonging to the same owner. It has been ingeniously suggested to me that there might be a landlord with two or throe marriageable daughters in a house possessing a lawn tennis ground; and that it might be very objectionable to find adjoining property belonging to this same landlord under-let to some one with a number of young sons. The suggestion seems somewhat absurd. I do not suppose the young ladies would feel inclined to object, but it serves to show what small and trivial objections can be raised to an important measure of relief. If there is anything whatever connected with the amenities of property to be provided for it is surely a matter to be dealt with in Committee and settled by a special clause. Clause 4 of the Bill gives protection to under lessees. The position of an under lessee—that is a man holding a derivative lease under a superior tenant—is one of a very unsatisfactory character. His position is very clearly defined in the law books. Coote's Landlord and Tenant says that 143 "by forfeiture of the original lease all the under leases will be defeated as much as by effluxion of time." Wood fall tells us that if two houses are comprehended in one lease, and one of them is sub-let the sub-lessee of the one house is liable for any breach of covenant in respect of the other. All of us I daresay have experienced cases of hardship arising where the under-lessee has been put to trouble and expense through no fault of his own, but because of the fault of the superior lessee (his landlord), or of some other sub-lessee. The Court endeavours as far as possible to protect under-lessees, and the Legislature has to a certain extent stepped in. Lot me remind the House of the provisions of the Bankruptcy Law as to disclaimers of deeds containing onerous covenants and conditions. The trustee taking property under lease subject to onerous rent, onerous conditions or covenants, is allowed to disclaim, but if there are any under-lessees or mortgages, or any innocent persons whose interests would be damaged by the disclaimer, then the Law does not allow him to disclaim without going to the Court and getting leave, and giving those who would be injured, notice, and the Court gives those parties the right to come and present their case, and to take upon themselves the burden of supporting the chief lease on which the in under leases or mortgages depend: thus protecting the interests of under-lessees. If that is the Law in Bankruptcy, surely it is reasonable to extend it to cases not coming within the purview of Bankruptcy Law? It is just as great a hardship to the mortgagee or under-lessee or person interested to have his property or interest destroyed because his landlord neglects to perform the duty of the chief lessee, as it is because that landlord becomes bankrupt. In Bankruptcy the Court gives this protection, and I ask that it should be extended in the same way to leases out of Bankruptcy. I propose to do this by the following Section:—Where a lessor is proceeding by action or otherwise to enforce a right of re-entry or forfeiture under any covenant, proviso, or stipulation in a lease, the Court may, on application by any person claiming as under-lessee any estate or interest in the property comprised in the lease, or any part thereof, either in the lessor's action (if any) or in any 144 action brought by such person for that purpose, make an order vesting for the whole term of the lease, or any less term, the property comprised in the lease, or any part thereof, in any person entitled as under-lessee to any-estate or interest in such property upon such conditions as to execution of any deed or-other document, payment of rents, costs, expenses, damages, compensation, giving security, or otherwise, as the Court in the circumstances of each case shall think fit.This is entirely on the lines of existing legislation for the protection of under-lessees and mortgagees and other interested persons. I am sure my hon. and learned Friends who will follow me will confirm me when I say that the provisions of the Bankruptcy Act, in reference to the disclaimer of onerous conditions, have been beneficial for the protection of innocent persons; and I ask that this same protection shall be extended to under-lessees generally. I may remind the House that under-lessees are very numerous, especially in London, where there are an enormous number of under leases. They are especially made for the purpose among other things in the suburbs of London of creating improved ground rents. In fact under leases probably comprise quite half of the existing leases affecting London property. Most of the occupation leases in London are under leases; and they depend on the continuance of the chief leases. The provisions of the Bill will enable the under-lessees to be protected to a certain extent, will prevent their leases being forfeited and wiped out of existence without their having an opportunity of representing their condition and circumstances to a Court and getting from the Court relief and protection, provided that can be given without detriment or injury to the chief landlords' rights. The Bill will not enable an under-lessee who has got a beneficial lease to obtain a reduction of rent or more favourable covenants than the chief lease, or to hold his property in defiance of the rights of the landowner, but it will enable the under-lessee to come in and perform the duties of the chief lessee, so that the under lease may be maintained. Looking at the enormous number of under-leases in London this Bill will have a far-reaching effect in giving security to a class of pro- 145 perty in which millions of money are invested, in which tens of thousands of people are interested. The last section of the Bill is of a formal character. A doubt has been suggested in a recent case whether the Act of 1881 and its provisions for relief from forfeiture apply to agreements for leases as well as to leases actually created. For my own part I do not think, if I may presume to say so, that the suggestion that they are not included, rests on very good law, but the suggestion was made by a learned Judge, and has been commented upon, and now that we are dealing with the matter we may just as well sot the doubt at rest, and, therefore, in this clause it is provided that agreements for leases which, for all practical purposes are leases, shall be dealt with in the same way as leases. The last sentence in the clause provides that" under-lessee shall include any person deriving title under or from an under-lessee." The object of this is to let in persons whoso interests depend on the under-lease, such as mortgagees, or any person holding an interest under the under-lessee, in fact, all persons whose interests might be affected by this legislation. I would earnestly press upon the House the great importance of increasing the security in connection with leasehold property in the Metropolis. The Bill extends the Act of 1881, which is generally admitted to have had a beneficial effect. It in no way interferes with the landlord's rights, but it secures the tenant's property. It extends the operation of the Act in a direction it is generally admitted the Act should be extended. The leasehold property in London is enormous in its value. If we take the rental value of London at something like £40,000,000 a year, I venture to say that the leasehold rental and the rental depending on beneficial leases is half of that amount. If the capital value of the property of London in houses and land amounts to something like the amount of the National Debt (some £700,000,000 or £800,000,000), the leasehold property approaches very nearly half of that actual capital value. There are an enormous number of leases, and a large number of under- leases. The great landowners, of course, rely on their 146 freeholds, but the business people of London, the middle classes, the industrial classes who hold occupation leases for their business, the thrifty artizan class are the persons who are the holders of the leasehold property in London. Anything that will give security to this vast property, and this very numerous section of the population, must be of enormous benefit to the community and commends itself on grounds of public policy. This Bill has been submitted to the careful consideration of distinguished lawyers on both sides of the House, to men of the highest position in the profession and in this House, and I am pleased to acknowledge the valuable advice which these distinguished lawyers have been good enough to offer me in the preparation of the measure. I believe the exigencies of their profession at this time constitute the only reason why they are not here to-day in larger force than they now are to speak in support of the Bill. Some of the most experienced solicitors in the profession have had the Bill in draft submitted to them. I have letters from solicitors in large practice dealing with leasehold property strongly approving of the Bill. I could mention many names—Messrs. Lewis, Messrs. Beulton and Sandeman, Mr. Peacock, and others in large practice, who have expressed their approval. With like result the Bill has been before many Building Societies—the Temperance Building Society, the Liberator, the Birkbeck, and others. The Building Societies' Association, composed of Building Societies from all parts of the Kingdom, who send delegates to head quarters, under the chairmanship of the right hon. Baronet the Member for London University (Sir J. Lubbock), had the Bill under consideration, and passed a resolution approving of the object and urging societies in alliance with them to support the Bill. I have letters from the official representatives of the Oddfellows' and Foresters' Societies—those who attend to the Parliamentary business of the various lodges—in support of the Bill. In reference to these lodges of Oddfellows and Foresters, I may mention that instead of investing their lodge funds in Consols or depositing them in savings banks, they are very wisely investing in 147 mortgages and leasehold property for the purpose of offering encouragement to their members to become owners of the houses they live in. I may say fully half the money of these societies is so invested. I may mention another society which, perhaps, may not find so much favour on the other side of the House, the "Leasehold Enfranchisement Association," and others of a political character, who desire to see this reform carried into effect. In fact, I may say that a general consensus of opinion from all interested in leasehold property is in favour of this Bill passing into law. I thank the House for the patient hearing they have given to what, to many, is a very dry subject. The Bill has not a popular title, but it has a good and useful object. I hope the House will consider it is drawn on practical lines; it does not disturb any well considered legislation or legal decision; but it is a Bill which, while it does not interfere with the just rights and interests of landlords, does give a large amount of security, and will confer great benefit upon tenants, and will give additional security to property largely held by the industrial part of the community. It will confer advantages to the thrifty classes and institutions, which, I hope, will always command sympathy in this House; and, therefore, with hope and confidence, I move the Second Reading.
§ Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. T. H. Bolton.)
§ *(1.16.) MR. RENTOUL (Down, E.)
I rise to move that this Bill be read a second time this day six months, and I do so because I myself have known many instances in the past in which this Bill, had it been law, would have worked the greatest hardship, and I think if hon. Gentlemen on both sides of the House will look carefully into this Bill they will have little hesitation in rejecting it. The Bill has been prepared and brought in by four gentlemen, all of them members of the legal profession, and all of them very fit to give a sound opinion on this subject. Therefore, the Bill is clearly not the offspring of any extreme faction, nor is it brought in for any Party 148 purpose whatever. I believe it to be the expression of the deliberate opinion of very capable gentlemen, that the proposed change in the law would be for the public benefit; but I know that there are many gentlemen on both sides of the House who regard this Bill as an exceedingly bad and pernicious one. Now I do not go the length of saying that the law as it at present stands, does not sometimes work hardship, but I do say that the change proposed by this Bill would work a thousand times greater hardship. But let us look at the facts of the case. The Conveyancing and Law of Property Act, 1881, is, as the hon. Gentleman the Member for St. Pancras (Mr. Bolton) has said, universally regarded as a great and comprehensive measure. It is an Act that has been in operation for nearly 10 years, and seems in that time to have needed little or no Amendment; and yet this Bill proposes to repeal that Act in one of its most important and far-reaching particulars. But, well knowing the legal ability of the gentlemen whose names are on the back of this Bill, before venturing to oppose it, I talked the matter over with many members of both branches of the legal profession, and the vast majority of those I spoke to were against the Bill from every point of view, while some held it to be good in part and bad in part, but I did not meet with any lawyer who regarded it as good in its entirety. Now, it has been suggested that if there is good in the Bill, its principle might be accepted, and then it could be modified to any extent in Committee. But it is to the principle of the Bill that I object; for what is its principle? I think that no Gentleman opposite will venture to deny that the principle of this Bill is as follows: namely, that it permits a contract made in the most solemn and binding form known to the law to be deliberately made, and then five minutes afterwards deliberately broken. Nay, more than that, if this Bill passes a contract can be made in the most solemn form by deed under seal, with the deliberate intention of breaking it immediately after it is made. Does anyone deny that the Bill permits this? That is to say if this Bill becomes 149 law, a lessee can take a lease and bind himself by covenant not to underlet, and to suffer forfeiture if he do underlet, and then he can immediately go and underlet—or, to put the matter more strongly, if this Bill becomes law, the promoter of it, the Member for North St. Pancras may let his family residence to me, and by the covenants of the lease he may bind me not to let it to one particular person—say, for example, the Member for Wandsworth (Mr. Kimber), that is to say this supposed lease, by its covenants permits me to sub-let to any solvent tenant, but it makes one solitary exception, namely, the Member for Wands worth, to whom alone, of all men, the lessor objects as a tenant for his house; and yet after entering into a covenant under seal that I will not let to the Member for Wandsworth, I go direct and sublet to him, and because he is a solvent and in every way suitable tenant, the Member for St. Pancras must accept him, and has no relief whatever. Now, let me put the whole case as I understand it. Before the Conveyancing Act of 1881, if a lessee violated any of the covenants of the lease even a very unimportant one which he might have violated unintentionally, his lease was thereby forfeited. If, for example, there was a covenant to repair or to paint at a certain time and if the lessee happened to neglect to do so, his lease was forfeited and there was no relief possible. Now this was evidently a great hardship, and the 14th section of the Conveyancing Act of 1881 enacted that in all such cases the Court could grant relief on equitable terms, that is, on terms of the lessee doing what he ought to have done, and compensating the lessor if he had suffered any loss. Now, the Member for St. Pancras thoroughly approves of that section and so do I, but he objects to one of its subsections, namely, Sub-section 6, which he says is an exception to the relief from forfeiture granted by the section. But the so-called exception is not an exception at all, as we shall see, if we look at the rule as contained in the 14th section, and then at the so-called exception, as contained in the 6th sub-section. Now, what is shortly the rule of law, which is created by the 14th section? It is this: that the Chancery Division of 150 the High Court has power to relieve a lessee from forfeiture, and save him from ejectment, in regard of any, and every, breach of any covenant, contained in his lease, if he is able and willing to remain in possession of the leasehold premises, and if he can, and will, make good the breach. But what is the so-called exception to this as set forth in Sub-section 6? That sub-section says in effect, that where the lessee is not able, or not willing, to remain in possession of the leasehold premises, and where he has in effect covenanted that in such circumstances he will give back the premises to his lessor, then the Court will not in violation of his covenant assist him to thrust upon his lessor another, and it may be an unknown or a disagreeable tenant. The rule simply says the law will not allow the lessor to eject the lessee for a breach of covenant, which can be remedied, and the parties put in statu quo, and then the 6th sub-section which this Bill tries to repeal, says—Though the law will not allow the lessor to take advantage of the lessee by ejecting him for a breach of covenant, where no real harm has been done, neither will it and the lessee to force a tenant on the lessor when in fact he hag covenanted that he will attempt anything of the kind.Thus the whole section protects the lessee from the effect of his own neglect or wrong, but the 6th sub-section saves the lessor who has been guilty of neither neglect nor wrong from being forced to do that which the lessee covenanted he should never be forced to do. Thus, while the whole section saves the wrongdoer or covenant breaker from the agreed penalty of his own wrong, the 6th subsection prevents that wrong-doer and covenant-breaker from actively taking advantage of his own wrong, in first breaking his covenant by underletting the premises, and then getting the and of the Court to thrust his sub-lessee, the very offspring of that wrong doing, upon a lessor who has been absolutely blameless and extremely prudent and cautious in the whole business, and who has taken every possible precaution to save himself from the very thing the lessee is attempting to do to him. But someone says—cannot a lessee be ejected under Sub-section 6 without the 151 possibility of relief? Now what is this 6th sub-section? If I puss over for the moment the part of it that refers to mining leases, then it deals with three cases—first, it enacts that where a lessee sub-lets or assigns he thereby forfeits his lease, if that lease contains a covenant of forfeiture in case of attempted underletting or assigning; second, if a lessee becomes bankrupt and the lease passes to the assignee in bankruptcy, the lease shall be forfeited and there shall be no relief, provided the lease contains a covenant that it shall be so forfeited in that event; third, that if the leased premises are taken in execution the lease shall thereby be forfeited, provided there is in it a covenant that it shall be forfeited in such an event. Now, observe that in none of these cases does the lessor eject, or seek to eject, the lessee. In each of these cases, the lessee is already ejected or rather has ejected himself. In the first case, he has gone out voluntarily and let the sub-lessee in; in the second case the lessee is out and the assignee in bankruptcy is in; and in the third case, the lessee is out and the execution creditor is in. Consequently, in none of these cases is there any question whatever of ejecting the lessee, for such a thing is not possible; therefore, Sub-section 6 does not say to the lessee—You must permit the lessor to eject you, if you do or suffer certain things; but it says to the lessee—yon have covenanted that a tenant shall not be thrust upon the lessor against his will; you have covenanted that your lessor shall not be forced to accept a tenant selected by you and to whom you have sub-let; neither shall the lessor be forced to accept your assignee in bankruptcy or his nominee, nor shall he be forced to accept your execution creditor or his nominee. Now, Subsection 6, which this Bill is brought forward to repeal, simply says that a lessor who has taken the utmost possible care to keep in his own hands the right to select his tenant, and who has obtained a covenant to that effect, and who probably has accepted a much smaller rent in order to get such a covenant, shall not be forced to accept a tenant, however solvent he may be, unless he approves of that tenant and wishes to accept him; therefore this sub-section was inserted 152 and has been kept in the Conveyancing Act not to give the lessor a right to eject his lessee for any possible breach of covenant, or under any possible circumstances, for that he cannot do, but simply to relieve the lessor from being compelled to take a tenant to whom he objects, on what are to him very real, though they may be sentimental, grounds. But it is said that this Bill does not take away from the lessor the right to object to the proposed sub-lessee if he has reasonable grounds for his objection. It is said, in fact, that the Bill only says the lessor shall not unreasonably object to a proposed tenant. But just as there is the greatest possible difference between "malice in law" and "malice in fact," so there is the greatest possible difference between the meaning which the Court must put on the word "unreasonable" and the meaning which the general public would attach to that word. The words "reasonable" and "unreasonable" could only be held by Court of Law to refer directly or indirectly to the pecuniary question with regard to the proposed tenant. If a lessee offered to the lessor a tenant who was perfectly solvent, and if the lessor admitted the solvency of the proposed tenant, but objected to him simply because he cordially disliked him and detested the idea of having any business relations with him, the objection would be held to be unreasonable, and the lessor would be forced to accept that tenant because the Courts can only look at the pecuniary side of a question and not at the sentimental side. If proof of this is needed, it is only necessary to remind the House that in an action for seduction the action must be founded entirely on pecuniary loss or the loss of service in the case, but not in the least degree on the pain and suffering and disgrace in the affair. Again, in an action for breach of promise of marriage it is the question of pecuniary loss, present or prospective, which the plaintiff has sustained that the Judge tells the jury to look at; and, again, in an action brought by a mother, under Lord Campbell's Act, for the loss of her son, she is not to receive one penny for her bereavement and pain and suffering, but is to recover simply an equivalent in 153 money for the actual money loss she has sustained through the death of that son, and if she has suffered no pecuniary loss she cannot recover a penny. These instances clearly prove that the Courts can only consider the question of a pecuniary loss, and that, therefore, every sentimental objection to a proposed tenant, however strong and real it might be to the mind of the lessor, must be considered an unreasonable objection, and would be considered so if the lessee showed that this was the only tenant he could procure; and, again, even in regard to the solvency of the proposed tenant, or his fitness for the position of tenant, if the lessor objected to him he would be forced to prove the insolvency or the unfitness of that proposed tenant. Now, if it were perfectly immaterial to a lessor who his tenant is, provided his rent is certain to be paid, then there could be no objection whatever to this Bill; but I think I can show very many eases in which the lessor is likely to be far more anxious about the character of the tenant than about the amount of rent to be paid, and I will deal, as the hon. Member for St. Pancras has done, with ordinary leases first and with a mining lease afterwards. I think that I may divide property that is to be leased under three heads: first, dwelling houses; second, business premises; and, third, agricultural land. Now, to begin with, dwelling houses. The instances I shall give to illustrate my argument are every one of them cases with which I came in contact myself, in my practice or otherwise, and the facts of which I know. The first illustration is that of a family residence, a house in which many members of the lessor's family were born, a house every room of which is associated with the most sacred memories of his life. Surely it is not to every man he would let that house. Now, in this case a man let his family residence to a friend on the understanding that it was not to be sub-let, but there was no covenant against sub-letting; and if this Bill passes, there never again can be any such covenant having any binding value. That friend to whom the house was let, sub-let it to a personal enemy of the lessor. That enemy did everything he could in his mode of using it to wound the feelings of the owner of the house 154 But some one says, that is a sentimental grievance, and is more suitable for the Emerald Isle than for an English community. But what is a very common and, much applauded sentiment on English Radical platforms? It is this—Touch it not, a mother sat there;And a sacred thing is the old armchair.And that sentiment, especially when connected with Irish evictions and the tenant's love for his cottage homo always brings down the house. Surely, then, hon. Gentlemen will admit that sentiment in connection with a family residence, however humble that residence may be, is a very real thing, and that no man should be forced to accept as a tenant for that residence any person whomsoever, provided he is solvent, and provided he would be to most persons an unobjectionable tenant. Next take the case of a house in town, which I have purchased, and in which after a few years I intend to live. I let that house to the Member for North St. Pancras, knowing him to be a man of perfectly correct habits and moral life; but he under-lets it to a fast young man, who will, I feel absolutely-certain, very often use that house, and every room in it, for immoral purposes. I could not prove this, and I dare not state it in Court as an objection to that young man, when he is offered as a tenant, but I am convinced it is so. Yet I am forced to accept that man because he is solvent, and because I can prove nothing against him; and he desecrates my house so that I never care to live in it again. Next take the case of a house filled with valuable curiosities and works of art, and I let the house to a man who is interested in such things, and I feel that he will, as a matter of taste, take the greatest possible care of them; but he sub-lets, in spite of my wish to the contrary, to a man who despises such things, and who will carelessly break, or lose, or damage them, and yet they are things for which money could not compensate me—and I must bear this loss and accept pecuniary compensation, although these curiosities were things of which I could have had specific delivery if anyone had agreed to sell them to me; therefore, this Bill strikes at the root of the senti- 155 ment on which the doctrine of specific delivery of chattels is founded, and indeed on which the whole doctrine of specific performance is founded. With regard to my next illustration, I have to complain that the hon. Gentleman the Member for North St. Pancras has not treated me fairly, for he has stolen my illustration of the young ladies playing tennis. He asked me the other night in the Lobby what reasons I had against the Bill, and I gave him the illustration of the tennis ground, and he has used it and tried to laugh it away, and yet it is a real case that happened, and a case of great hardship. A gentleman had a tennis ground on which his daughters spent a great deal of their time. He owned also a neighbouring house, which overlooked the tennis ground. He not this house to an aged couple, who were not likely to spend much of their time at the windows, and whose presence overlooking the tennis ground was entirely unobjectionable. But these people sub-let the house to a family comprising several rather fast young men, who spent much of their time at the window smoking and looking at the tennis ground, and the result was that the tennis ground had to be left unused, although the owner of it would rather have had the house which he let remain vacant than have his tennis ground rendered useless to his family. But now I shall pass to the case of business premises with a business attached, and the first illustration I shall take to show how much depends on the personal character of the tenant, is the case of a druggist's business. A druggist lot his business premises and the trade attached thereto to a good and careful druggist. That man under-let to a druggist of very careless habits, who on several occasions sent out wrong medicine, and by this the business was ruined. A careful druggist then took the premises, and tried to work up the trade, but it was gone for ever, and a lease that was worth ten thousand pounds became not worth ten thousand pence. And all this happened because the owner could not object to the premises being let to the careless druggist, when he could not prove that that druggist was not a suitable man, though he firmly believed it. My only other illustration from business premises is that 156 of a public house. Now, I know a case of a valuable public house let to a good tenant. He under-let to a publican, who was a little of a chemist, and who occasionally adulterated the drinks. This got known, and in a few months the entire trade got transferred to another public house, and all efforts by the lessor to bring it back proved unavailing, and a valuable property was thus entirely lost—a property which many might wish to cease to exist, but still a property at present protected by the law. Now, the third and last kind of property which I shall speak of is land for farming—and in this case the rent is not the important question at all. Everything depends on the character and agricultural skill of the tenant; so much so that I have known a case whore two men, both equally and completely solvent, desired to rent the same farm. One offered £2 an acre, the other offered £3 an acre, and the owner accepted the man who offered the £2. Everyone knows that in agriculture it is impossible to bind the tenant by any conceivable stipulations to farm property. You may bind him to a certain rotation of crops, or to put on a certain amount of manure, and he may do all this and yet may destroy the land. Now, suppose I owned a farm in Essex, and I let it to the hon. Member for the Maldon Division—who I know is an experienced farmer—and he sub-lets it to a Scotch farmer, to a man who has been a farmer for many years in Scotland, how can I tell whether that man has been a good farmer or not, and how can I tell whether he can farm the Essex land properly, though he may have been ever so successful in Scotland? Yet on these facts I should be obliged to accept that tenant or prove his unfitness, which very probably I could not do, though he might be entirely unfit to farm the land without destroying it; therefore I think with regard to land for farming it would be a gross injustice to allow the lessee to select the tenant, when everything depends upon the skill and character of the tenant, and when the lessor has a covenant that the land shall not be sub-let. But now I come to the case of a mining lease. There is in it a covenant that the lessor may enter at any time and inspect the books, accounts, and weighing-machines, and also the mine 157 itself. All this is absolutely necessary, for the rent is perhaps fixed according to the quantity of mineral which is taken, and it is only by frequent inspection of the books and weighing-machines that the lessor can estimate the rent. Again, the lessee, by working through barriers, may in a few days destroy the mine entirely. It is, therefore, of the highest importance that the lessor should be allowed to inspect the mine. The lessee has covenanted to allow him so to do, and the lessee refuses, not by mistake or accident—for from such cases there is at present ample relief—but the lessee wilfully refuses to allow inspection. What right has he a fortnight after, when the lessor is enforcing his right of re-entry and forfeiture of the lease, to come and say, "I'll let you inspect now?" I have now dealt, I think, pretty fully with what I call the first part of this Bill. The second part is contained in Section 4, which seeks to protect sub-lessees. Now, in so far as that section extends to sub-lessees, the relief which is already extended to lessees by the 14th section of the Conveyancing Act, there can be no objection to it; but if the 4th section of this Bill seeks to extend to sub-lessees what the previous two sections seek to extend to lessees, then, of course, it is equally objectionable. The hon. Gentleman the Member for North St. Pancras, in the concluding part of his speech, read letters from leading solicitors in favour of this Bill. Had I known that he would have considered such things as either arguments or evidence in this discussion, I could have produced dozens of letters from solicitors of eminence equal to any in England. He also gave weight to the fact that Building Societies are in favour of this Bill. Now, I am a Director of one very important Building Society, and I am counsel to some other Building Societies, and I do not see what need they have for a Relief Act, nor what they have to do with this matter. Indeed, the bare fact that they are so eagerly in favour of the Bill must necessary suggest some interested motive. The hon. Gentleman next said that the Oddfellows were in favour of the Bill. Now I am an Oddfellow myself, and I do not see what that body has to do with the matter at all. But 158 the hon. Gentleman referred to the case of" Barrow v. Isaacs "as a case of hardship at which this Bill aims; but this Bill does not touch "Barrow v. Isaacs" at all. In that case the lessee had the absolute right to under-let. He had, however, to ask the consent of the lessor, but it was admitted that by the terms of the agreement that consent could not be withheld. Through the negligence of the clerk of the lawyer employed by Sir Henry Isaacs, the consent was not asked for, and the premises were let without it, and thereupon the lease was forfeited, and there was no redress. All that is very hard; but how often does it happen that valuable property is lost, or actions lost, through the carelessness of a clerk, or a solicitor, or a barrister, as the case may be? For example, a piece of evidence is not forthcoming when it ought to have been, or is not used when it ought to have been, and so the case is lost, and there is no relief possible; or a sentence or name is omitted negligently from a will, and a valuable property is lost, and there is no remedy. Cases like these, and cases like "Barrow v. Isaacs," will happen, and no Statute can meet them, and no Statute ought to try to meet them, because, in trying to do so, we only succeed in inflicting hardship on the many, and very possibly fail to relieve the few on whose behalf we attempt exceptional legislation. Or, take the case of a shopkeeper who sells a considerable quantity of goods to a customer, and through reluctance to sue or other reasons he waits till the six years have nearly expired within which he can sue for payment. He resolves to wait till the latest moment, and in the last day the solicitor's clerk neglects to issue the writ, or thinks that it can be served next day, and through this carelessness or ignorance the whole money, however much it may be, is lost entirely. Now "Barrow v. Isaacs "need not be considered, because it is a case of negligence, and also it is a case which this Bill does not touch; therefore, for all these and other reasons I oppose this Bill, because it is one of the greatest blows that has ever been struck at the law of contract, seeing that it deliberately sets aside the most solemn form of contract known to the law, namely, a covenant contained in a 159 deed under seal, and forces a man to enter into a contract with a person whom he has never seen before or a person who may be objectionable to him from every point of view. As the law stands, there is no possibility in any case of a lessor ejecting a tenant or forfeiting his lease for any possible breach of covenant, provided the lessee wishes to remain in possession, or is able to remain in possession, and will make good the broach. The proposed Bill will not, therefore, give any relief to any lessee who will remain in his tenancy, which relief he does not possess at present; but this Bill seeks to take away the only protection which a lessor has to defend himself from having to enter into business relations with a man to whom he has strong personal objections, when he has tried by every means known to the law to protect himself from being forced into such a position.
§ Amendment proposed, to leave out the word "now," and at the end of the Question, to add the words "upon this day six months."—(Mr. Rentoul.)
§ Question proposed, "That the word 'now' stand part of the Question."
§ *(1.52.) MR. SYDNEY GEDGE (Stockport)
I rise to second the Amendment. The hon. Member opposite (Mr. T. H. Bolton) was equally eloquent upon the enormous value of the property which has grown up in London and elsewhere under the existing laws, and upon the enormous benefits which this bantling of his is to confer on that class of property. It seems to me that if leasehold property is exposed to such great dangers that this Bill is necessary to remove them, it is a very remarkable thing that so much of it should have grown up. There may be some hard oases, but I would remind the House of the old proverb, "Hard cases make bad law." The principle of the existing law I think I may take from the hon. Member himself. He said very properly that forfeiture or re-entry is a means to an end—a security for the performance of a covenant. I understand my hon. Friend (Mr. T. H. Bolton) to admit that forfeiture ought to remain as a 160 final resort in case of the continued broach of a covenant. Equity for a great many years has gone on the principle that forfeiture or re-entry is the final resort in cases of continued broach of a covenant or in cases in which it is impossible to put the landlord in as good a position as he would have been in if it had not been broken, or to compensate him adequately for its breach. If there has been non-payment of rent, and the arrears of rent and interest are paid, the landlord is put in as good a position as if the rent had been paid punctually.
§ *MR. SYDNEY GEDGE
I think the Court of Equity had given relief in such cases before any Statute was made. In regard to insurance, the Act of 22 & 23 Vict. enabled the Court of Equity to give relief provided an insurance was in force; but the relief could be given once only. In other cases relief can be given by forcing the tenant to pay damages. In this Bill you do not carry that principle further, but reverse it. You are going to give the tenant relief for a continued breach of covenant, and to leave the landlord altogether powerless. It must be remembered that a consideration has been directly given for the covenant in all these cases. The tenant who takes a lease, subject to no covenant at all, is always willing to pay a higher rent than if the lease is burdened with covenants. My hon. Friend (Mr. Rentoul) just now gave a case in which a man because of his personal character was able to obtain a lease at £ I an acre less than it would have been granted to a rival candidate. Would it be fair and equitable that under these circumstances the lessee should be at liberty to sell to the objectionable tenant the very lease he had obtained because of his own personal character? I think that would be neither equity nor justice. The Act we are proposing to amend was the outcome of a very full and long inquiry and consultation with the leading members of both branches of the legal profession. It was brought in in 1880 when there was not time to pass it. It was again introduced in 1881 under the 161 authority of Lord Cairns and Lord Selborne, and after having passed the Lords subsequently to being considered by a very strong Select Committee, came down to this House and was accepted as a full and fair measure of relief. Why should you now, without any greater case of hardship being shown, change the law in a manner which would so much injure the rights of property. It seems to me that this Bill affects all leases or contracts of whatever nature or kind, and that it imports into them an entirely new principle and new clauses. Under the Bill, if passed, all leases whether of 99 years, or lesser terms, will be subjected to the principle it embodies. It establishes rights such as no mortal has ever dreamt of or looked for. I can only hope that in order to carry out old principles, and not to act contrary to the principles of law and equity, the House will reject this Bill. (2.2.)
§ *(2. 20.) MR. G. OSBORNE MORGAN (Denbighshire, E.)
The hon. Gentleman (Mr. Rentoul) who moved the rejection of this Bill stated that he had not been able to meet with a single member of either branch of the legal profession who approved of the measure in its intirety. But the same thing might be said of pretty nearly every Bill which is brought in for the purpose of dealing with a difficult legal problem such as that with which this measure is intended to solve. Without committing myself by saying I approve of every word in the Bill, I may say that, in my opinion, there is nothing in it that could not be fairly dealt with on due examination in Committee, so that anything at all objectionable might be removed. I hope, therefore, the House will assent to its Second Reading. It seems to me that the vice of the arguments advanced against the Bill lies in this: that the hon. Members for East Down (Mr. Rentoul) and for Stockport (Mr. Gedge) both ignored the fact that this measure is an extension—and I think a legitimate and reasonable extension—of a principle that has been acted upon over and over again both by the Courts of Equity and the Legislature. Anyone familiar with the English Common Law must know that under it the position of the lessee is 162 about the most precarious that can well be imagined. It shows, in point of fact, as has been more than once observed, that the law relating to real property was made by and for landlords and not tenants. If we refer to the old text books—to Blackstone and other writers—it will be seen that this is the case. But, step by step, the Courts of Equity, which have done so much to mitigate the severity and hardship of the old Common Law, as, for instance, in the case of husband and wife, and other similar cases, have invented the doctrine of relief for the lessee. This doctrine, however, was confined to throe cases—fraud, mistake, and accident. There was the Statute of George IV., which provided a certain amount of relief at law in case of non-payment of rent. But the first, actual legislative enactment extending the jurisdiction of the Courts of Equity in cases of forfeiture was the Real Property Act of 1859, which was introduced by a Lord Chancellor who was a Tory after the heart of the hon. Member for Stockport—Lord St. Leonards. His Act gave relief only in cases of forfeiture by reason of failure to insure, and the law remained for 20 or 22 years in that condition. Then came the Act of 1881, which this Bill seeks to amend, and it proposes to extend that Act very largely. I may say that every word in the arguments of the hon. Members who moved and seconded the rejection of the Bill would apply with equal force to the Act of 1881. We know that Lord Cairns's Act of 1881 carried the principle it embodied to a great extent, dealing with all cases except those where there had been a broach of covenant on assignment, whore there had been forfeiture by reason of bankruptcy, and where there had been refusal of access to books in cases of mines. But this turned upon the condition that the judgment of the Court of Equity was favourable to the applicant. Yet these considerations the objectors to the Bill entirely ignore. Of course, the same principle would be still applicable in case of forfeiture to which the Bill applies. Anyone who refers to the 2nd sub-section of Section 14 of the Act of 1881 will see that the Legislature takes care of the interests of the lessor, and it shows clearly that the hon. 163 Member for East Down is wrong when he says that the burden of proof would be upon the lessor. The sub-section carefully guards the interests of the lessor. I am sure the hon. and learned Member will not say that the Court of Equity is even in these days likely to look with too much indulgence on the conduct of the lessee. There are two cases which show the view the Court takes of its duty under this sub-section. One is the case of "Bond v. Freeke," in which it was alleged that the tenant had committed a breach of the covenant to repair. The landlord declared the lease forfeited. The lessee brought an action in the Chancery Division, and the Court set aside the forfeiture on the lessee executing the repairs and paying the costs of the proceedings. In the second case the Court refused to grant relief where the lessee, after notice served upon him, omitted to reewn. These two cases show the principle on which the Courts act. The hon. Member for St. Pancras left that part of his Bill which relates to mining leases to those Members who understand them. I know a little about mining leases, and I cannot conceive anything more hard than that a lessee who has invested £50,000 in the development of a mine should, through the mistake of a clerk or under-viewer, who has, perhaps, an exaggerated notion of his rights, be liable to lose his interest. It may be said that lessors are generally reasonable, and so they are; but as my hon. Friend has pointed out, laws are made for unreasonable persons. The hon. and learned Member for Stockport (Mr. Gedge) reminds us that hard cases make bad law, and that may be so; but the converse holds good too, and bad law makes hard cases. It is not difficult to find many cases of injustice which this Bill would remedy. The 3rd clause merely carries out the principle established by the Act of 1881. Let me again remind the House that lessors have a perfect protection in the Court; the burden of proof is on the lessee, who must satisfy the Court that his circumstances are such as entitle him to have his claim granted. The clause provides that the licence or consent "shall not be unreasonably withheld," and we know that the word "unreasonably" has 164 received a judicial construction. After all, you must remember that this protection is only that which the Court of Chancery takes care to insert in all leases which are drawn up and executed under its sanction; the Bill only makes that universal which is the practice of the Chancery Division. Of course, it is quite possible to imagine cases of some hardship, though I am bound to say that the case which the hon. Member for East Down put is an unlikely one to arise. For some reason or other the lessor objects to a particular person, but I think we cannot attach weight to a mere "Dr. Fell" antipathy. The lessor cannot complain very much, so long as the lessee pays his rent and fulfils the conditions of the lease; and, if he is a reasonable man, he ought to be happy to have a solvent man in occupation. Let me give an illustration on the other side. Suppose I have a house under a stringent covenant that I shall not assign or under-let, and supposing that from health or any other reason I have to go abroad during the recess—supposing even I want to go to Australia, a better way of employing one's leisure, perhaps, than making speeches all over the country. In such a case it is perfectly competent for my landlord to object without any reason, though I prove to him that the man to whom I wish to assign my interest in the house is a perfectly solvent and respectable man. He may be a most desirable lessee in every respect, but I go to the lessor, and he says" No; I object to the assignment unless you pay me such a sum of money." Well, it seems to me that the law, as it stands, really puts into the hands of the lessor a power which we know has been exercised of extorting money from the lessee, giving no advantage in return. It is altogether an unsatisfactory state of things, and I cannot help thinking that this 3rd clause will be a valuable relief to a very large number of persons. The hon. Member for Stockport says if leasehold pro-party is so peculiarly subject to disadvantages of this kind, how is it that so much money is invested in this way? Well, simply because a man cannot invest his money in household property in any other way. It is absolutely impossible to buy freeholds in London. It is the 165 only way in which a working man with a little capital can possess the house he lives in. I again urge upon the House the fact that this 3rd clause has the safeguard that the consent of the lessor shall not be "unreasonably" withheld. Everything turns upon that word which has received a judicial construction; and I am bound to say a Court of Equity will not be too indulgent on the side of the lessee, and we may take it that any real ground of objection—I will not say any flimsy ground, I will not say the objection of the windows of a house overlooking a lawn tennis ground, as mentioned by my hon. Friend—but any special ground would be considered by the Court. Then, again, as to the 4th clause, is it not unjustifiable that a man should suffer from the consequences of the acts of another over whom he has not the slightest control? As my hon. Friend has pointed out, protection against these consequences is given in the Bankruptcy Law. Why should that protection not extend to other cases? Clause 5 provides that agreements for leases shall stand in the same position as leases. This is perfectly reasonable, and, as a matter of fact, I have little doubt that in the eyes of a Court of Equity they would occupy that position. So far as I can judge every clause of the Bill is fairly drawn, and the Court will take care to hold an even hand, not allowing the lessor to be prejudiced by wanton acts of the lessee, or vice versâ. I think the discretion of the Court may be trusted, and that the operation of the Bill would be of great advantage to the enormous interests bound up with the leasehold property of the country.
§ (2.40.) MR. COOKE (Newington, W.)
The Act of 1881 was prepared by one of the ablest lawyers of the day; it was referred to a Select Committee, upon which sat many well-known lawyers, and Sub-section 6 of Section 14, and the subjects connected with it, were no doubt thoroughly discussed by that Committee, and that Committee came to the conclusion to leave the sub-section as it stands ill the Act—I presume because they thought that the persons contracting on this particular subject were able to make good contracts for themselves and 166 know what they were about. Hon. Gentlemen opposite—especially the right hon. and learned Gentleman who has just spoken—whenever any question arises between landlord and tenant, between lessor and lessee, seem to think that most of the members of the landlord class should be in Newgate and the tenants in Earlswood.
§ *MR. G. OSBORNE MORGAN
I may remind the hon. Gentleman that I said the majority of landowners were reasonable men.
§ MR. COOKE
Yes, the right hon. Gentleman allowed there were exceptions. I had not the advantage of hearing the whole of his speech, and so I will not attempt to reply to it. What I have to say applies chiefly to agricultural leases, for with these I am best acquainted. In the present day it is not an unlikely thing for a tenant farmer, where a farm is in good condition, to take that farm, and in a limited number of years he runs it out; and if this Bill were to become law he would be able to under-let the farm against the will of the landlord—or if not against the will of the landlord, at any rate he would go to the Court to determine the question whether the man proposed to be put in was solvent or not. But that is not the tribunal to determine whether a man is a fitting-tenant to farm the land. An instance came under my observation a few months ago. I had a farm to let in good condition—I farmed it myself—and I had many applications. Among the applicants was a gentleman extremely anxious to take the farm. I was not certain about his position, nor is it easy to ascertain a man's position. When you go to a man's banker the banker will say, "If he wants accommodation then I know a man's condition; but if he does not want it, I do not know his circumstances." Well, it happened that this gentleman did not take the farm. He took a farm about a couple of miles off, and in four months became a bankrupt. Upon my farm he, perhaps, would have lasted a little longer, for my farm was in the better condition. Now, if this Bill were law, that tenant might have run out the farm and sub-let, and I should have had no relief whatever. The one 167 part of the Bill to which I assent is the 5th clause. I think it is desirable that agreements for leases should have the same validity as leases. But anyone with practical knowledge of the dealings between landlord and tenant in agricultural districts will, I am sure, agree in this: that the Bill will put power into the hands of needy men, of whom, am sorry to say, there are many looking out for farms, to get possession of a farm in this indirect manner, and the property of the landlord will become greatly deteriorated. A landlord may have objections, though unable to submit them in absolute form. Of course, in agricultural tenancies there is no question of disposing of the land or property without the leave of the landlord, but certainly it does seem a very "strong order" to give a lessee in any case the power of disposing of the land of the landlord. It is not unreasonable for a landlord to withhold his consent, the tenant having originally covenanted not so to dispose of it.
§ *MR. T. H. BOLTON
The hon. Member will observe that I have followed the lines of the Act of 1881 and the language used there.
§ MR COOKE
Yes, the Act is there dealing with exceptions. I rest my strong opposition to the Bill chiefly on the ground of agricultural tenancies, for I am convinced from experience, not only on my own property, but as having had the management of a large property, that the Bill contains a power it would be extremely disastrous to place in the hands of tenants at this juncture.
§ *(2.44.) MR. MORTON (Peterborough)
We know that owing to the mere caprice of landlords cases of hardship do frequently occur, and I may mention a case such as is not uncommon in London. I am sure the Attorney General will be glad to hear that this comes to me from a respectable firm of solicitors who are good Conservatives, and therefore not likely to exaggerate the facts from political bias. The case I speak of relates to property in the Strand. D took a lease for 12 years, the original landlord being the Commissioners of Woods and Forests, and a few months back he desired to let 168 the property, and he found a tenant willing to take it on condition that he was allowed to put in a new shop front. This did not seem a difficult matter to get over. The proposed tenant contemplated spending £600 on the improvement of the property. But D had to deal with three intermediate lessees—A, B, and C. He went to the Woods and Forests, and they consented at once if he would pay their surveyor's fee of a guinea. This was a very reasonable and moderate demand from the freeholders. Then D pro-proceeded with his negotiations with A, B, and C. A and B said they would give their consent to the transfer, and accept the new tenant on condition that their lawyer's and surveyor's foes were paid. But C mot the request with a demand for £.50 premium, and £3 expenses, his lawyer's and surveyor's foes, and without these payments refused his consent. Now we have been told about the injustice of thrusting a tenant on a landlord; but this was not a case of that kind, for the lessor was willing to accept the tenant, but required the payment of a sum amounting in all to £137 7s., and the under lessee was put to an expense including loss of rent while negotiations were going on of £198 7s. I do not know if the Bill would quite meet a case of that kind; but, if not, an Amendment would be prepared with that object. Surely it is reasonable that a business man under such circumstances should have a right of assignment without being subjected to such a heavy penalty. I trust the Bill will be read a second time. I do not think the House should refuse to entertain this reasonable proposition. As a matter of fact, the majority of landlords in London are reasonable, else we should have had an alteration of the law insisted upon before now.
§ *(2.42.) MR. KIMBER (Wandsworth)
It is due to the House, as my name is on the back of the Bill, that I should state the reasons for the faith that is in me. I did not take part in the drafting of the Bill, but I put my name upon it reserving full right to criticise its provisions on the Second Reading. There are suffcient grounds for giving the Bill 169 a Second Reading and having the subject threshed out. A number of hon. Members have expended a good deal of energy and rhetoric to prove how dangerous it must be if certain things should be allowed which, in fact, the Bill does not allow. For instance, in his cogent, closely-reasoned speech the hon. Member for East Down proved conclusively, and I perfectly agree with his argument, that it would not be right, and would be a bad precedent to allow one of two parties to the contract in which the lessee agrees that he shall have no power to assign to break that condition and let to a person objectionable to the landlord. But the Bill does not give the power to do that. The Bill enables the Court to give relief in certain cases. Now let us refer to what the Act of 1881 did. It established two principles; one was this: that whenever a forfeiture for breach of covenant in a lease is intended by the lessor he should at least give fair notice and a locus penitentiœ to the lessee' for making good the breach, if capable of remedy. That is equity between man and man. No man should be guilty of the sharp practice of taking advantage of a technical line in a contract against good faith. In the Isaacs case we know the lease was lost by inadvertence, oversight, or negligence. The Act of 1881 gives the lessee the opportunity of making reparation before forfeiture. A man who has committed a breach of contract knowingly or not is to have notice from the lessor, and the Court can give relief where the tiling is capable of remedy. The second principle of the Act is that while in every case notice shall be given, the Court has power, not to cancel the contract or to introduce new terms, but to say on what terms, if any, the lessee should be pardoned for his fault, and only" if capable of remedy." Mark the words. And the Court is expressly authorised by the Act to refuse relief. Now, this Bill brings under the Act of 1881 certain cases of breach of contract which were excluded from that Act. It does not deprive the lessor of anything; it simply says that the lessor shall not take advantage of the breach of contract and enforce the right of forfeiture or re-entry without giving the lessee notice, and op- 170 portunity to make good the damage where it can be made good. When such a breach has been committed the Courts may take into consideration whether the lessor has adopted the reasonable precaution of giving notice to the lessee or not. They may grant or refuse relief. There is no power given to cancel the covenant; the covenant is to continue. It is expressly said that the Court may grant an injunction against any future breach. The ingenuity of the hon. Member for East Down has been exerted very successfully to show that it would be very improper for a covenant against assignment and under leasing to be cancelled. We agree it would be very inequitable, but that is not the question raised by this Bill. I imagine the principles on which we should go are these that arbitrary forfeitures for accidental mistakes and even for intentional mistakes, if they can be remedied, may be remedied. If the breach committed is not capable of remedy the Court cannot give relief. You cannot force a Court of Equity to give relief to a man who has committed a breach of his covenant which is incapable of remedy. In the second place, I think relief should be allowed to be given in cases of breaches which are involuntary on the part of the lessee. These involuntary breaches may, I think, be reduced to three in number. There is bankruptcy, which I suppose we may assume is an involuntary act. If a man who becomes bankrupt has a lease which is of value it seems to me highly immoral that any value remaining in the lease should not go to the unfortunate creditors. Of course, a lease of a bankrupt would only be vested in his assignees on the assignees undertaking that the covenants of the lease would be fully performed. In the case of bankruptcy it seems absolutely improper that an asset of the bankrupt should be allowed to be forfeited to the landlord. If a lease had any value there would be plenty of people ready to come forward not only to give a price for it, but to give a price for it on the terms of performing the conditions of the lease. Of course, if the lease has no value the question will not arise; the assignees would not take it. Secondly, let us take the case of an execution against a man's goods. I think one 171 hon. Gentleman contended that an execution might notal ways be of an involuntary character as regards the person on whom it was put. If it was put in by collusion the Act would not apply at all; but suppose the case of a bonâ fide execution and of the execution creditor seizing the lease. If the lease has value, that value is saleable, and ought to belong to the execution creditor. Then take the case of decease. A lease to A B with a restriction against assignment would not, of course, prevent the lease devolving on the lessee's executors or administrators. If a man dies, those executors or administrators may be compelled in a variety of ways known to lawyers and others to realise and administer the estate; and it seems to me that if there is a lease of any value, a man's executors and administrators ought to have power to realise the value of that lease. The testator may have put a great deal of value upon it, and I cannot see why his estate should not get the benefit of what he has done. On these grounds, I think, there is a case for the Bill. I think that Courts ought to be enabled to administer equity outside the technical lines they are at present bound by. As an advocate of entire and absolute freedom of contract I would not allow any restriction upon men's freedom to make such contracts as they please, so long as they do not hurt their other fellow-creatures. I would not allow any terms which are adverse to that freedom to be imported into a lease against their will. For example, I would not allow the contract to be altered by the insertion even of a proviso that the consent should not be withheld except on reasonable grounds. The word "reasonable" is of the most elastic character, and I do not think that any other word in the language has given rise to so much litigation. I think I was justified in putting my name upon the Bill, for, while I maintain the importance of preserving the inviolable freedom of contract in all transactions of life, subject to the qualification I mentioned, at the same time I am of opinion that our jurisprudence should be so regulated that inadvertence and mistakes should be allowed to be remedied, and that the person coming under misfortune or for- 172 feiture should have that locus penitentiœ which every human being ought to give to every other human being.
§ *(3.15.) MR. LAWSON (St. Pancras, W.)
I hope the House will note that only one Metropolitan Member has at present ventured to oppose this Bill, the hon. Member for Newington (Mr. Cooke). The hon. Gentleman made what the colonists call a cross-eyed speech; he was thinking, not of constituents, but of that farm in his own county about which he gave us such interesting details. But so far as his agricultural leases are concerned, he may make himself quite easy, as the Court has power to grant or refuse the application. I am bound to say I have not been able to understand or interpret the cheers with which the Attorney General has been encouraging the opponents of the Bill. They have made attacks on the Bill of 1881, and they have declaimed about interference with freedom of contract, although they know well enough that Lord Cairns in that Statute interfered every bit as much with existing contracts as the hon. Member for St. Pancras does in his Bill. Those who have gone into the leasehold question of London know how vast are the interests at stake and how they are placed in jeopardy by the restrictions made in the Act of 1881. In many of the outskirts of London the leasehold exceeds the freehold interest. The doctrines of equity, as explained by Chief Justice Storey, to the effect that the test should be either "due performance or the damage really incurred," are sufficiently wide to cover any such proposal; but, unfortunately, the rules of the Courts have become crystallised in a groove. It seems to me there is no more valuable part of this Bill than the 3rd clause, which provides that licence and consent shall not be unreasonably withheld from a breach of covenant and that no fine shall be paid in respect of such licence and consent. Evidence has been given before the Town Holdings Committee to show that in some cases covenants have been deliberately used, not for the purpose of safeguarding the amenities of a neighbourhood, but in order to extort in- 173 creases of rent. The Town Clerk of Southport showed that in that town a surprising amount had been accumulated in the shape of fines for breaches of covenant. There are estates in London where the agent goes so far as to charge a consulting fee before any of the lessees can obtain an interview with him. That is the case on one great estate, whilst there was evidence that on many another estate fines were levied for consent to the smallest breach of covenant, and it would seem that the covenants had been made purposely onerous, in order to enable these fines to be levied. I hope the House will realise how desirable it is to give greater security to those who have put all their earnings into leasehold property, and that it will give this Bill a Second Reading. I do not suppose that my hon. Friend will object to Amendments being introduced if the Attorney General thinks it, necessary. The principle of the Bill, however, is just and reasonable, and I think the measure will be of infinite value to the occupiers and lessees of London.
§ (3.23.) MR. J. R. KELLY (Camberwell, N.)
I desire to say a few words in explanation of the vote I intend to give in favour of the Second Reading of the Bill. I think if the measure had been made to apply only to urban leaseholds, and not to mining leases, it might have secured much more general support. But I trust the Bill will go to a Committee, and that it will there be amended, if necessary. There is no force in the objection that has been taken that the Bill is retrospective, because the Act of 1881 was retrospective, and this is only an Amendment of that Act. I do not propose to deal with the sentimental considerations which the hon. and learned Member for East Down (Mr. Rentoul) has put before the House. I think the subject is far too important for us to be led astray by any consideration as to the private tastes and conveniences of the few persons who live in the suburbs. I was a little surprised to hear that the most solemn contract a man enters into in the whole course of his life is a contract for the lease of a house. I confess I have myself entered into others which I consider to be still more 174 solemn. All this Bill seeks to do is to enable the Court to protect a man against the default of another person. We give in the case of bankruptcy some of the relief which this Bill would give, and that which is done in the case of bankruptcy ought to be done in a great many cases outside bankruptcy. We admit that the majority of landowners are reasonable, and would not take advantage of the default of the first lessee. But we ask this House to protect the poor man against the grasping and avaricious landlord, reminding the House at the same time that in so doing we shall not affect the rights of the just landlord in any way whatever. It has been pointed out that all the House is asked to do is to sanction the principle of granting ample security to those who are interested in leasehold property. These cases are the cases of tens of thousands of people in our large towns, and, above ail, in the Metropolis. The Bill asks that no man shall be ejected from his premises and have his property sacrificed because some person, over whose acts he has no control, has committed some breach of a contract with the landlord. As to the 4th clause I do not see how the landlord can complain if a lessee who has to leave the neighbourhood hands over his house to a person who is equally solvent with himself. I am almost astonished at the arguments that the parties to these leases are upon terms of equality when they are made. I would ask the House to consider what is the condition of the people who make these leases. It is a question whether it is not only fair to say that in this all the advantages are on one side, the obligations on the other. If people were free to choose in London between the conditions offered, and were able to select for a place of business that which was most suitable, if there was liberty of choice in the Metropolis in connection with leases, probably there would be little need for this Bill, or even for a leasehold enfranchisement measure. But if there is one city more than another in the country which is tied down under this miserable leasehold system it is London; and I trust that the House will allow the Bill to be read a second time, agricultural and mining leases being excluded at a later stage.
§ *(3.31.) MR. W. PRITCHARD MORGAN (Merthyr Tydvil)
I desire to say a word from a mining point of view. Sub-section 6 of Section 14 of the Act of 1881 excludes, or rather prevents, relief being given in two cases: in the case of bankruptcy of the lessee, and in event of goods being taken in execution. As to the latter, I think the House has had full information; but in the other case, in reference to mining leases, I desire to mention a fact to the House. I had taken a mining lease and desired to have an extension, and I further desired to have a clause in the lease preventing the landlord from withholding consent to the assignment to a responsible person. For that I had to pay to the landlord on this mining lease, and simply to get a clause providing that he should not unreasonably withhold his consent, £100. Then there is the forfeiture of the mining lease in consequence of the refusal to permit inspection of the books or of the mine, and this is a provision most injurious in its character to the mining interest. In order to avoid being placed in the position of having their leases forfeited on the caprice of the landlord some mine owners are compelled to enter into contracts of the most injurious character to themselves. It may be that at some particular moment the lessee's manager may have refused to allow the landlord or a person in his employ to inspect the mine or books, and the lessee has to submit to most injurious conditions. Personally, I had, in one instance, to raise a dead rent of a mine from £200 a year and royalty on the product to £750 in order to avoid the forfeiture to which I should have been liable in consequence of refusal on the part of the manager to allow inspection. No possible injury could result to a lessor of a mine if a measure of the kind before the House were passed into law. He would be sufficiently protected, while the lessee would have relief from possible forfeiture as the result of carelessness or mistake on the part of a manager. For this reason I support the Bill.
§ *(3.35.) MR. TOMLINSON (Preston)
I have found some difficulty in making 176 out what really is the principle underlying the Bill. The hon. Member for North St. Pancras has brought this forward as a proposal of enormous importance which is to cover him with glory and make everybody happy all round. My hon. Friend on my right (Mr. Kimber) only assents to the Second Reading on the striking out of a provision upon which the hon. Member for St. Pancras places the greatest possible reliance. I have endeavoured, as the Debate has proceeded, to discover the principle of the Bill. Amid much talk about this, the only attempt at a definition has been given by my hon. Friend the Member for Camberwell (Mr. Kelly), and I understand generally from him that the principle of the Bill is to give as far as possible absolute security to leasehold interests. Well, if we are to give absolute security to leasehold interests we must have before us a very different proposal to this to which my hon. Friend only finds himself able to give a very qualified support. It seemed to me that the hon. Member for West St. Pancras supported the Bill because he wished to have something done which is not in the Bill at all. He treated it as designed to give fixity of tenure to urban leaseholders, and regarded it as of importance, dealing chiefly with urban property principally in the neighbourhood of London. But I think for the carrying out of the ideas indicated by him a very different Bill to this would be required. The real question is, whether the House should alter the leading principle of the Act of 1881, which was to deal fairly between landlord and tenant without endangering the property of the former, while giving as much relief as can be afforded to the tenant? It does not seem to be necessary for those who do not see their way to support a Bill of which its promoters take so equivocal a view to affirm that the Conveyancing Act of 1881, known as Lord Cairns's Act, laid down its lines with absolute exactitude; but I am prepared to say that whether it be desirable or not to make slight relaxations of that law the grievances which have been pointed out in connection with its application are not of sufficient consequence to induce the House to disturb that settle- 177 ment. I think it is a good settlement, and without further experience of its working it is better not to disturb it. Hardly any oases of grievance have been brought to the notice of the House. It was suggested some time ago that I ought to be relied on to support the Bill on account of its reference to mining leases, I having had experience of the difficulties attending mining tenancies, but it is partly because I do not see anything fair in the proposals of the Bill for the relaxation of the law as between the lessor and lessee in mining leases that I am prepared to oppose the Bill. It is said that a lease may be subject to forfeiture from a broach of covenant to allow the lessor or his agent to enter the mine or inspect the books; but I should be sorry to have anything to do with a mine which would not bear inspection, and I am disposed to look upon the provision allowing inspection as a valuable engine for keeping a mine in good working order. It is most important to the lessor that he should have this means of access. Anything like injustice in the provisions of Clause 14 of the Act of 1881, to which this Bill would be applicable, I think we may dismiss as not worth notice. I do not know that it is necessary to labour the point, for, as I understand the hon. Member, he is really ready to give up this part of the Bill.
§ *MR. T. H. BOLTON
No, I said that I, being a Metropolitan Member, left the Representatives of mining interests to express their opinion.
§ *MR. TOMLINSON
With reference to assignment, I think it is generally the fault of the lessee if he does not see that the covenant is properly limited; and I do not like to contemplate a state of things under which the lessee and the lessor in mining contracts would not be free to make their own bargains for themselves. Seeing, therefore, that the promoters of the Bill are so little agreed as to the form which it should assume, and as it tends to disturb a settlement of the question which, on the whole, has worked well, I oppose the Second Reading.
§ *(3.45.) SIR HORACE DAVEY
I will not prolong to any extent what I think 178 has been a useful Debate, and which has brought out very strongly the nature of the grievances the Bill proposes to remedy, and the risks and liabilities under which leaseholders hold property upon which large sums of money have been expended. The hon. Member who has just spoken says he has experienced some difficulty in understanding the principle of the Bill, but I think the hon. Member's mind must be in the attitude of trying how not to find out the principle. Nothing can be more clear than that it is an exteusion of the very wholesome and useful provisions of the Conveyancing Acts of 1881 with regard to the power of Courts of Equity to relieve from forfeiture. The principle upon which the Act of Lord Cairns rests has been explained. Provisos for re-entry for breach of covenants are intended to be, and ought to be, treated as merely security for the performance of covenants. The Courts ought not to allow the lessor to re-enter and deprive the lessee of the property in a case where the breach of covenant, whether accidental or not, may be remedied or compensated for. That is the principle of those sections of Lord Cairns's Act to which reference has been made, and I venture to say that it is a principle which not only commends itself to the sense of justice of every man who considers the subject, but it is a principle to be found in every system of jurisprudence, including those founded on Roman Law—except our own. It is quite true that Courts of Equity did not relieve from breaches of covenants in former days, and that is to be regretted; but Lord Cairns's Act enables them to do so with few exceptions. Then it may be asked, why should the provisions of Lord Cairns's Act be extended? When that Act was passed, it was the first attempt of legislation to introduce into jurisprudence a general power of Courts of Equity to relieve from forfeiture in leases. It was perfectly right, and in accordance with the cautious way in which this House legislates, that we should at first apply this principle to certain cases about which there could be no reasonable question. I believe I was a Member of the Committee upon the Bill, though I forget all about the circum- 179 stances; but I can perfectly understand why it was that there were limitations to a principle introduced in a general way, though not for the first time into equity jurisprudence, that those responsible for the Bill thought it prudent not to extend the principle to every case. But now the country has had some 10 years' experience of the Act, and we have found it to work perfectly well; and therefore it is sought to extend its operation to those cases which were at first excluded. It is said that there are no grievances, but every one who has had any practical experience in dealing with leasehold property in London could cite cases where the power to eject for breach of covenant has been used in an oppressive manner for obtaining rights to which the lessor is not entitled, or where the withholding consent to a proposal to under-let has been made the means of extorting a fine or premium. That being so, I think there is a grievance. I am prepared to maintain that the object of a covenant not to under-let is to secure for the lessor a solvent, responsible person as lessee; and to my mind it is shocking that where a lessee, by inadvertence, has without consent made an assignment to a person about whose solvency and perfect respectability there can be no question, and where, therefore, the lessor has not sustained a farthing of damage—and if he brought an action on the covenant he could not recover a farthing damage—it is shocking that the lessor should be entitled to turn the lessee out of his property and confiscate all that has been spent on the property. This, I think, is an unfair state of the law, and upon that ground I hope the House will give the Bill a Second Reading. Some hon. Members who have spoken in opposition to the Bill seem not to have fully mastered, first, the object of Lord Cairns's Act and the object of this Bill. They have spoken under the impression that this Bill proposes to abolish covenant altogether. That is not so. It is only proposed to give the Court of Equity the power, where it is equitable and right to exercise it, to relieve a lessee from the consequences of breach of covenant. In any case where it is inexpedient, or where the lessor has suffered detriment which cannot be compensated for or remedied, the cove- 180 nant will remain. It has been said, but I repeat it, that the Court will not interfere to alter the terms of the covenant; but where it can be shown that the interests of the lessor have suffered detriment, then the Committee may award damages, but the covenant will remain. I have not been through the clauses, and cannot say how far they command approval in every respect. It is urged as an illustration against the Bill that nothing could be more right and proper than that the landlord should have access to a mine. Granted; but suppose that the lessee's manager, through ignorance or stupid obstinacy, refuse" access to the landlord's agent, is it not monstrous that the lessor should, under those circumstances, be able to eject the lessee? Is that not a case in which the Court may fairly adjudge compensation for default in fulfilment of covenant? The Court will have ample power to do justice between the parties. No doubt some Amendments may be introduced in Committee with advantage; but the principle of the Bill is right, and therefore I shall vote for the Second Reading.
§ (3.58.) THE ATTORNEY GENERAL (Sir R. WEBSTER,) Isle of Wight
I was anxious to hear the views of the hon. and learned Member for Stockton; I wondered whether my hon. and learned Friend would support the Bill on all the grounds which have been advanced for its Second Reading; and I am a little surprised to find my hon. and learned Friend had gone so far as he has, though I admit he has reserved freedom to qualify some of the proposals in the Bill we are now asked to read a second time. But I am here to oppose the Bill as we have it before us—not a Bill such as this might be made to be, but the Bill as it is. Members who have spoken have said they would be prepared to support the Bill limited to houses in London or to urban property, but that is not the Bill introduced. This is a Bill, as the hon. Member for St. Pancras frankly acknowledged in introducing it, which proposes to deal with leasehold property wherever situated in town or country, and I address myself to the proposals in the Bill. I was anxious to know whether my hon and learned Friend (Sir Horace Davey) 181 would endorse some of the strange views put forward in the course of the Debate by supporters of the Bill with reference to the Act of 1881. My hon. and learned Friend was, I think, a little at fault when he implied that Lord Cairns's Act was the first dealing with these questions. Two principles underlay the Act of 1881, one of them being that if the landlord could be compensated, there was no reason why the lessee should not be relieved. Under Clause 14 of the Act, the lessor was to give notice to the lessee, specifying the particular breach, and requiring the lessee to remedy it. I would point out that where the lessee has assigned there is no need for a breach. I am not going to put extravagant cases, though I may remark that no one has attempted to answer in detail the well-reasoned speech of the hon. Member for East Down (Mr. Rentoul). Let us take this case: a person purchases two houses, semi-detached, occupies one himself and lets the other to a particular tenant for £100, when from a stranger he might have got £150. If the tenant then wishes to assign his house to another person in the teeth of a restriction against assignment surely he ought not to be relieved. According to the hon. and learned Member for Stockton (Sir H. Davey), he ought to be relieved if the assignee is a solvent person. From that I dissent altogether. The lessor, having let the house for £100 instead of £150 in consideration of the character of his tenant, ought to be given the full benefit of the covenant against assignment. If that benefit be taken from him, the tenant may assign the house to a less desirable tenant for £150 a year, and thus pocket £50 in consequence of his breach of covenant. The landlord is entitled to say that the houses are only divided by thin walls, that it is of great importance to him that he should have a quiet tenant with whom he can really live on friendly terms, and that for this reason he has accepted £100 instead of £150. What equity would there be in letting the lessee break his covenant in order to put the extra £50 in his pocket? The promoters of the Bill propose that, under such circumstances, the Court shall have no material whereby they can decline to allow the assignment to take place. I want to know why we are not to 182 deal with the case of land. Take the case of a man who has leased a farm. What justification is there for saying that the only thing to be regarded is the solvency of the man who is to be the assignee? Then I want to know what my hon. and learned Friend will say about bankruptcy. Here is actually a proposal that, although a tenant may be bankrupt, and a landlord may be saddled with all the inconveniencies of a bankrupt tenant, there is to be no relief. Only one argument has been adduced in the whole course of this Debate in regard to that. That was the argument that any profit which existed in the leasehold interest ought to go to the creditors of the bankrupt, and not to the landlord. But these are not the considerations which ought to affect the minds of Members of this House in dealing with this matter. In a contract between landlord and tenant there are personal relations involved, and it is proper and reasonable that, in a case of bankruptcy, the landlord should not have to deal either with a bankrupt tenant or with a tenant who will be put in by a forced sale. Then as to covenants providing for the inspection of mines, and plans and books relating thereto, these ought certainly to be enforceable for the protection of the landlord, who otherwise would have no control whatever over his own property which a lessee might be treating unfairly. I quite approve of the enforcement of a covenant which will act as a penalty or punishment against lessees who are unwise enough to decline to recognise the right of inspection which owners of mines and minerals should certainly have. I should take no objection to this part of the Bill; but, as to the 4th clause, what does it mean? It means that a sub-lessee shall, practically, have power to substitute himself, in certain circumstances, for the lessee. It is so worded that an under-lessee of a part may even have a claim to the whole. Probably that is a slip in the drafting.
§ *MR. T. H. BOLTON
There may be only one rent. It may be necessary to acquire or maintain the chief lease in order to support the under lease. In this respect we follow the precedent of the Bankruptcy Act.
§ SIR R. WEBSTER
Then this is of the essence of the Bill, and is not a slip in the drafting. It makes my objection to the 4th clause all the better founded, because it proposes to give the under lessee the right of putting himself in as the tenant of the whole property, although previously he may only have had the tenancy or occupation of one small room. That seems to me a very startling proposal, and one which, as I have seen no cases given in support of it, it is impossible to justify on principle. The hon. Member for St. Pancras has, to a great extent, relied upon the case of "Barrow v. Isaacs." I would point out to the hon. Member that that case was tried 10 years ago, and so far as I am aware there have been no similar cases since. I would point out, also, that that case was, as it were, a mere accident, and that it would never have arisen but for the gross negligence of a solicitor's clerk. There was no remedy, the landlord being unwise enough to stand on his legal rights rather than take a generous view of a pure legal technicality. If this Bill has been brought in consequence of that case, it is really a Bill designed to relieve persons from the consequences of the negligence of their solicitors. In the case of "Barrow v. Isaacs," the learned Judge, it should be remembered, pointed out that even if there had been a discretionary power in the hands of the Judge, the case was not one in which the Court of Chancery could have intervened. That opinion may have been well founded or illfounded, but at any rate it shows that the case of "Barrow v. Isaacs "is no justification for this Bill. The hon. Member for Wandsworth, whose name is on the back of the Bill, told us he was not the father of the Bill, and he did not seem inclined to be its godfather. He practically made a speech against the Bill, for he said the state of things was such that you could not restore the landlord to his original position, and that there ought to be no remedy under the Bill.
§ SIR R. WEBSTER
The cases with which this Bill deals are cases in which the landlord could not be put back in the same position. If the hon. Member had read the Bill and mastered its contents, he would have seen that his vote ought to have been against it, just as his speech was against it. There are two cases which are of importance. In the first place, if the lessee has signed away the property, it is impossible to put the lessor back into the same position if it is to be assumed that the assignment will stand. The other case is one of bankruptcy. How the lessor is to come back in the same position if the lessee he has chosen becomes bankrupt I cannot imagine. I think the Bill has been framed with reference to cases in which no doubt there may be grievances, but it does not afford any proper remedy for those grievances. In all probability it would, if passed, create far greater evils than now exist, and would not redress the evils for which gentlemen on the other side desire to provide a remedy. It is not because I am disinclined or adverse to dealing with these evils, but because it seems to me that the Bill overlooks altogether the principle of the Act of 1881, and that to amend it in Committee would lead to hopeless confusion, that I cannot recommend the House to agree to the Motion for the Second Reading.
§ *(4.17.) SIR H. JAMES (Bury, Lancashire)
I am not going to follow the Attorney General into a history of the Act of 1881. I would invite the House to approach this question as a matter of business, and to see whether they cannot put the law, when there is a grievance—as the Attorney General admits there is—on a better and surer foundation. We start with this principle—"That the law abhors a forfeiture," and every lawyer knows that in many cases of forfeiture the punishment is not a real measure of the injury. If this forfeiture is unjust, let us consider what is the remedy. I submit that this Bill offers a right remedy for a wrong punishment of forfeiture. 185 The hon. and learned Gentleman the Attorney General has enforced his objection to the Bill, I will not say under a wrong apprehension of what the measure is, but he has presented the Bill in a wrong aspect to the House. The hon. and learned Gentleman has assumed that if there be a covenant entered into between the lessor and the lessee, and the lessee breaks it, the lessor will have no remedy. But that is a wrong reading of the Bill. What is proposed by this Bill is that if there is a covenant broken—if, for instance, the lessee assigns without consent—that shall be primâ facie a case of forfeiture. The law will remain as it is; but if the lessee then goes to a Court, and asks it as a Court of Equity to consider every circumstance of the case in order to see whether the lessor has really received any injury, the Court of Equity may grant relief, having taken into consideration all the circumstances of the case. That view the Attorney General has entirely ignored. If he has not ignored it he has not given effect to that position. The Attorney General has given a very proper instance of a lessor who, having no use personally of a house, says to a friend, "I will give you the use of the house at a rent of 100 a year instead of £150, which it is worth," and the lessee afterwards sublets it at £150 a year. The hon. and learned Gentleman asks whether in such a case the lessor is to forfeit his right. But this proceeding on the part of the lessee, which the Attorney General says would be a great hardship, would be urged with great force in a Court of Equity and would defeat any possible chance of relief to the lessee.
§ SIR R. WEBSTER
It has been contended by several speakers that the Court should have regard to the solvency of the tenant and nothing else.
§ *SIR H. JAMES
I am not answerable for what other Members have said; but that argument does not represent the contents of the Bill. As I have intimated, the Attorney General has ignored the fact that if there were such a state of things no Court of Equity would grant relief. If the lessor and lessee say, "We enter into a contract under these conditions, the house shall 186 be let to you (the lessee) personally, because I (the lessee) do not want it to go to a stranger, and I will not even give you permission to under-let." If such were the contract, I do not think any Court of Equity would give the lessee relief if he sub-let. The clause assumes that there is to be consent to the re-letting. The question is this: if there is a possibility of re-letting ought the consent of the lessor to be withheld at the mere arbitrary will of one party to the contract, and ought that party to be allowed arbitrarily to say, "I will not allow you, the lessor, to sub-let because the name of the proposed tenant is Smith or Brown, or he is of this shade of politics or that?" Take the case of a man who holds laud under an ordinary lease. He may be reduced in circumstances and unable from that, or some other cause, to cultivate the land. Would it be a reasonable thing if he desires to sub-let to someone who can cultivate the land to support the landlord if he said to the lessee, "I know you cannot cultivate the land, but I will not allow you to sub-let?" Surely that would be most unreasonable. In the case of "Barrow v. Isaacs" the Attorney General said it was an accident, but an accident' according to law, which allowed the lessor to, insist on those views which he was unwise enough to carry out. But why should it be unwise on the part of the lessor to seek to carry out the law? I think the unwisdom is on the part of those who would retain the law which enables a man to do that which is unwise. You say the lessor exacted his pound of flesh; but you are maintaining his right to exact his pound of flesh. With regard to the question of mining leases—which I will not go into—the books and property, no doubt, must be inspected by the lessor for his own protection; but it seems to me a great hardship to permit a forfeiture merely because some overlooker, through ignorance it may be, refuses to allow an inspection. A person must come with clean hands into Court; if he is unreasonable, unfair, or contumacious, the Court will not grant relief. I would make an appeal to hon. Gentlemen opposite. There is no reason to be conservative in this matter. The best way to conserve what ought to be conserved 187 in our Statute Book is to be just—giving relief where it ought to be given.
§ (4.27.) MR. JAMES STUART
rose in his place, and claimed to move, "That the Question be now put;" but Mr. SPEAKER withheld his assent, and declined then to put that Question.
§ Debate resumed.
§ *COLONEL HUGHES (Woolwich)
I am acquainted with a case—that of the White Swan public house at Deptford—in which the leaseholder desired to sell his lease to a man who was a perfectly proper person to succeed him, but the freeholder objected to the transfer unless he were paid a fine of £100. The fine would not make the proposed tenant either better or worse, and it therefore appeared to me a great injustice. I have no doubt that is not a solitary case. Doubtless landlords frequently take advantage of their position and exact terms before giving consent to a transfer, which consent it seems to me ought to be given without any money consideration whatever. The proper way for a landlord who owns a house adjoining the one he lives in to protect himself is to let on an annual tenancy. I have a house which overlooks my own, and, in order to secure that I shall be free from annoyance, I let it on a monthly tenancy, and while the tenant is perfectly friendly of course the arrangement works quite smoothly, but should the disposition of the tenant change I shall have a right to turn him out at very short notice. It is in consequence of the law relating to covenants in leases being enforced with such rigour that landlords and the law have become obnoxious. Even good landlords suffer in reputation through the evil deeds done by others who exact the strict letter of the law. I have no doubt improvement might be made in some of the clauses of the Bill. It must be borne in mind that although the original lessee may sub-let or assign, he is always liable to the rent, and at the end of the lease to return the property in proper repair and according to covenant. The landlord has, in fact, a greater security rather than a less one if the lease has been assigned or sub-let. For all these reasons I think the Second Reading might be fairly 188 passed. The Bill will remedy points of injustice which have come within my own experience.
§ (4.30.) MR. C. W. GRAY (Essex, Maldon)
I am not going to encroach unduly upon the time of the House, but I should like to say a word or two from the point of view of the agricultural tenants. I have never understood that the agricultural tenants as a class have asked for a Bill of this kind, or have asked for powers as to subletting. It would be unwise, in my judgment, to make a sweeping change in the law affecting landlord and tenant until that change has been asked for by the tenants of the country. If the Bill passes in its present form, it will lead to a great deal of litigation. Is it not a fact that during the last 12 years of severe agricultural depression the, class, of farmers who have been enabled to tide over that disastrous period have been the tenants on large estates, and whose forefathers have occupied the same farms? I am quite sure that the tenant farmers on those large estates would not wish to have a change of this kind as between themselves and their landlords. Over and over again the landlords of those large estates have chosen their tenants because they knew the capabilities of those men, because they believed in them, because they were the sons of previous tenants, and possessed a practical knowledge of how to conduct farming operations in the best way in which they could be carried on. Many a large landlord during those 12 years of agricultural distress has let his farms at a rate below what he might have obtained for them in the open market, because he valued those qualities of his tenants. If you gave the tenant power to sub-let, the landlord would have no interest in the capability of the tenant to whom he granted the lease of a farm. How is it possible for any Judge or legal authority, whether of the Superior or Inferior Courts to decide that the man who had been accepted as the sub-tenant is capable of thoroughly carrying on the business of any particular farm? I will give legal authority of high standing credit for knowing a great deal, but I 189 cannot admit that a Judge in London or anywhere else is the man to give me an authoritative opinion as to whether A, B, or C would be the right man to farm my land. For these reasons I hope this Bill will not be read a second time.
§ (3.35.) SIR W. HARCOURT (Derby)
I had no intention of taking part in this Debate, and would not have risen but that I think the hon. Member who has last spoken is under a misapprehension as to the scope and operation of the Bill. It is admitted that if by the operation of this Bill an incompetent tenant were to be forced on the landlord in place of a tenant whom he could trust, there would be an end to it. Under this Bill the authority has power to grant relief.
§ SIR W. HARCOURT
I want to point out to the hon. Member exactly what would happen. The onus of proof rests on the man who departs from the covenant; and unless he makes out a case of real hardship in not being permitted to do a certain thing, of course the Court would not grant his application. The Court would, in the first instance, presume in favour of the terms of the covenant. A man might come to the Court and say, "I want to put A in my place." The landlord might say, "No; I disapprove of A, and I will not have him." Does anybody think for one moment that the Court of Equity would interfere in such circumstances? On the other hand, there might arise certain exceptional circumstances of hardship, which this Bill provides for—where a tenant, for example, had died, and the lease had descended to his widow. She might have found some one able and willing to conduct the farm, and it would be a hardship if an assignment were refused to her by a perverse landlord. It would be a proper thing for the Court to consider whether or not a hardship was imposed on the tenant in such a case. No such state of circumstances as has been referred to by the hon. Member could arise under the Bill, and the hon. Member is evidently going to vote 190 against it under an entire misapprehension.
§ (4.40.) The House divided:—Ayes 159; Noes 141.—(Div. List, No. 72.)
§ Main Question put, and agreed to.
§ Bill read a second time, and committed for to-morrow.