§ (1.) Where an agreement for the purchase of a holding is made after the commencement of this Act, and the Land Commission make an advance for such purchase, the purchaser shall be discharged from all liability to the vendor in respect of any liabilities affecting the holding at the date of the agreement, including all rent 396 and arrears existing between the landlord and the tenant; but if the advance is refused the agreement shall be void, and the tenant shall be liable to pay rent as if the agreement had not been made.
§ (2.) Interest at the rate agreed on, or if no rate is agreed on, at the rate of four per cent. per annum, on the purchase money from the date of the said agreement until the day from which the purchase-annuity begins, shall be payable half-yearly on the first day of May and first day of November by the purchaser, and shall be paid to, and be collected and recoverable by, the Land Commission, in like manner as if it were an instalment of the purchase annuity charged upon the holding, and when received by them shall be paid to the person in receipt of the rent at the date of the agreement or such other person as may prove himself to be entitled thereto, and if the advance is refused, shall be allowed by the landlord to the tenant as a payment on account of rent.
* THE CHAIRMAN OF WAYS AND MEANSI doubt if this Amendment is in order. If the first sub-section were omitted, the second sub-section could not stand alone, as it depends upon the first. The proper course for the hon. Member would be to move to omit the clause.
* THE CHAIRMAN OF WAYS AND MEANSThat will not do, because the remainder of the sub-section will not make sense.
MR. T. M. HEALYThen I will move to omit "Where" in order to insert "In the case of." I do it pro forma, in order to call attention to a personal grievance, because of the way the Government have acted in regard to this clause.
* THE CHAIRMAN OF WAYS AND MEANSIf the hon. and learned Gentleman moves that Amendment he will have to confine himself to the distinction between "Where" and "In the case of." [Laughter.] The hon. Gentleman cannot move to omit a word at the beginning of the clause in order to discuss the clause as a whole. The proper time for discussing the clause as a whole is when the clause as a whole is put.
MR. T. M. HEALYintimated that he would move the first of a series of Amendments which his hon. Friend the Member for Cork had upon the Paper. It was to leave out the word "make" ("the Land Commission make"), and 397 to insert instead thereof the words "have sanctioned." When the Land Purchase Act of 1888 was before the House, the Government accepted from him an Amendment of the most valuable kind for the tenant, requiring that an order should be made by the Land Commission whenever an agreement to purchase was made. At the time when the Amendment was under consideration a member of the Land Commission—he would not mention the name—was sitting under the clock, and there was great tooing and froing between the Treasury Bench and under the clock, for it seemed this gentleman wanted to resist the Amendment on the ground that it would impose a little extra trouble on the Land Commission. The Amendment, however, was accepted, but the influence of the gentleman of the Land Commission was again apparent in the clause. Those gentlemen would like to have slipped through Parliament a provision which, while highly detrimental to the tenant, would excuse them from making an order in every case of an agreement to purchase being arranged between a landlord and a tenant. He, as one of the laziest men in the world, sympathised with anyone who wished to get out of doing anything, but he could not let this pass.
* THE CHAIRMAN OF WAYS AND MEANSOrder, order! The hon. Member is now discussing the clause as a whole which, as I have said, cannot be done. He will have an opportunity of discussing the clause as a whole when the clause as a whole is put.
MR. T. M. HEALYsaid he, of course, submitted to the ruling, but he thought it was no use in making a general protest when the clause was put. What he wanted was to get the clause amended. He asked the Government, therefore, why they proposed to change one of the provisions of the Act of 1888 which was favourable to the tenants?
§ MR. MAURICE HEALYsaid the series of Amendments he had put down—of which this was the first—was intended to restore the law to its existing state.
§ THE ATTORNEY GENERAL FOR IRELANDsaid he would accept the Amendment.
§ Amendment agreed to.
398§ MR. MAURICE HEALY moved to leave out the words "the landlord and the tenant," and to insert instead thereof the words "at such date."
§ Amendment agreed to.
§ MR. MAURICE HEALY moved to leave out the subsequent words from "if" to the end of the clause, and to insert instead thereof the words "from the following day prior to such refusal."
§ Amendment agreed to.
§ *MR. SERJEANT HEMPHILL (Tyrone, N.) moved to leave out the word "four" and to insert the word "three." The object of the Amendment was to reduce from four per cent. to three per cent. the rate of interest payable by the tenant in the interval between the agreement to purchase and the completion of the sale. It seemed unreasonable that the tenants should be obliged to pay a higher rate of interest than the current rate of the market. Of course the Amendment would only operate in the absence of an express agreement in the contract as to the rate of interest.
§ MR. GERALD BALFOURsaid he could not agree to the Amendment. In the first place, during the interval the tenant would be paving less than afterwards he would have to pay by way of annuity; and over and above that objection it was clear that to insert 3 per cent. in an Act of Parliament as the normal rate of interest would practically stereotype the rate afterwards. When the landlord had to pay interest on a mortgage of his estate of 4 or 5 per cent., it seemed unreasonable that the tenant should only be paying 3 per cent. The effect would be to discourage sale by the landlord.
MR. T. M. HEALYsuggested to his right hon. and learned Friend that he would be on firmer ground if he proposed 3⅛ per cent., that having been laid down by the Lord Chief Baron as the legal rate of interest. Moreover, that was the rate which the Conservative Government of 1888 agreed to in connection with the Act of that year. If they examined the Commons' reasons for disagreeing with the Lords' Amendments at that time, it would be found that one reason given was that 3⅛ per cent. had 399 been made the subject of legal decision. Was this House now to go back on what it did eight or nine years ago? To do so would be to give the House of Lords a dangerous pull.
§ * MR. SERJEANT HEMPHILLaccepted the suggestion of his hon. and learned Friend, and, the Amendment having been withdrawn, he moved to insert 3⅛ per cent.
§ * THE ATTORNEY GENERAL FOR IRELANDdenied that the Lord Chief Baron had decided that 3⅛ per cent. was the legal interest in such cases. The decision in question was based on the circumstances of the particular case, and it was expressly recorded that in other similar cases the ordinary Court rate of interest of 4 per cent. had been allowed.
§ * MR. SERJEANT HEMPHILLpointed out that the Court rate of interest was fixed more than half a century ago, when the state of the money market was very different to what it was now. The Court of Chancery was very Conservative, and, unless the Legislature interfered, it would stand by its old rate. Now, Parliament was creating a new code.
MR. GERALD BALEOURsaid it really appeared to him to be unreasonable, when they were endeavouring to facilitate sale as far as possible, to ask the landlord to be content with 3⅛ per cent. instead of 5 per cent. upon his capital. If they did that, he would of course, pro tanto, be disinclined to sell. Every difficulty they threw in the landlord's way was a difficulty in the way of sale and purchase as between landlord and tenant. Considering what they had done in the Bill to shorten the period between the date of the agreement and the advance of the purchase money, it was unreasonable of the right hon. and learned Member to insist on this Amendment. The actual gain to the tenant would be small, and the effect upon the landlord as regards inclination to sell, might be considerable.
§ MR. MAURICE HEALYsaid that in a recent case in England Lord Justice Kay stated that 4 per cent. was an antiquated doctrine, and that in considering the Court rate of interest, the Court of Chancery would have regard to what money was worth in the market. Besides, if the landlord was in such a posi- 400 tion that he could get 4 per cent. from the tenant as long as the purchase was hanging on, it would obviously be to his interest to let the purchase negotiations drag on interminably. The rate of interest was always dependent upon whether the security was a risky one or not, and in this particular case the security was perfect. The landlord was in the same position as if his money was guaranteed by the State; he ran no risk whatever.
§ * THE ATTORNEY GENERAL FOR IRELANDsaid that the case quoted by the hon. Member was that of a particular individual who was ordered to bring money into Court. Most of the landlords in Ireland were incumbered, and the interest on incumbrances ran at 4, 4½ and possibly 5 per cent. In the interval between the time when the agreement was made and the money advanced, those landlords would be obliged to pay interest to their incumbrancers, and if the Committee obliged them to pay interest at the rate provided by the incumbrances, and at the same time prevent them from recovering from the tenant more than 4 per cent., they would be losers.
MR. T. M. HEALYcalled the attention of the Government to an Amendment of Lord Fitzgerald, when the Bill of 1888 came from the Lords, where it was provided that the rate of interest should be calculated at 4 per cent. He quoted from "Hansard" to show that the present First Lord of the Treasury, then Chief Secretary, moved that this provision should be omitted when the Lords' Amendments came to be considered. But now, eight years afterwards, after a bargain had been made fixing the interest at 3⅛ per cent., and after the value of money had fallen practically 1 per cent., the Government proposed to raise the rate of legal interest to a higher rate than they insisted on in 1888.
§ MR. GERALD BALFOURsaid he was not aware of the passage to which the hon. and learned Member had referred. He thought, however, that a compromise might be come to. If the hon. Member would withdraw his Amendment, he would move to omit the words "or if no rate is agreed on, at the rate of 4 per cent. per annum," the 401 effect of which would be to leave the rate of interest to be determined by agreement.
§ Amendment, by leave, withdrawn.
§ MR. GERALD BALFOUR moved to omit the words, "or if no rate is agreed on, at the rate of 4 per cent. per annum."
§ Amendment agreed to.
§ *SIR. J. COLOMB moved, in Sub-section (2), after the words "purchase money from," to insert the words "the gale day preceding." The object was to make the payment of interest on the purchase money run from the gale day and avoid brokers' periods.
§ MR. MAURICE HEALYsaid that this was a proposal which changed the law of the tenant's letting. According to the hon. Member's Amendment, the tenant might have to pay interest on the purchase money five or six months before any purchase money was agreed upon.
§ * SIR. J. COLOMBdenied that this was so, because the landlord at that date would be entitled to his rent, and the rate of interest chargeable was less than that rent, and therefore to the benefit of the tenant.
§ MR. MAURICE HEALYsaid that the landlord and the tenant made a bargain and agreed what the amount of the purchase money was to be. An agreement was then made as to arrears, and the effect of the two agreements was to clear the tenant up to the date of the purchase agreement. The hon. Member now proposed that the tenant should not be cleared up to the date of the purchase money, but that the interest of the purchase money might go back five or six months.
§ Amendment, by leave, withdrawn.
§ MR. MAURICE HEALY moved, in Sub-section (2), after the words "advance is refused shall," to insert the words "unless the agreement otherwise provides." This and the next Amendment could be illustrated by a reference to a question which the Chief Secretary was asked the previous day. The right hon. Gentleman was asked about a Kerry estate, on which, two or three years ago, the tenants had entered into land purchase agreement to buy their 402 holdings at a certain price. All arrears had been wiped out, and further, they agreed as from the date of the agreement to pay interest on the purchase money in lieu of rent. But the agreement now broke down, not from a default of the tenants, but through some defect of the landlord's title. The whole agreement was wiped out, and the tenants were liable now for the arrears of rent as if there had been no purchase agreement made. If the purchase agreement broke down, the tenants must go back to their rents. When a landlord and tenant had come to a purchase agreement, wiping out arrears, the breakdown of the agreement ought not to throw the tenant back to his original position. He did not propose that this Amendment of the law should operate in cases where the parties expressly agreed that it should not. The provision was not to be compulsory.
§ Amendment agreed to.
§ MR. MAURICE HEALY moved in Sub-section (2) to omit the words "on account of rent," and to insert instead thereof the words "in discharge of the rent up to the date covered by the same."
§ THE ATTORNEY GENERAL FOR IRELANDcontended that the clause as it stood would not operate unjustly. If a landlord and tenant chose to make arrangemenents in their agreement as to what was to happen if the purchase went off, their respective rights and liabilities would, of course, be regulated by those arrangements; but, in the absence of such special arrangements, if a landlord and a tenant agreed—the one to sell and the other to buy—and the agreement went off, the effect must be to remit the parties to the position which they occupied before the agreement was entered into. The proposal of the hon. Member, if carried, would be likely to deter landlords from making agreements for sale.
MR. T. M. HEALYprotested against the change in the law which the Government sought to introduce by this clause. The clause of the Act of 1888 ought to be left as it stood. This proposed change showed the vicious enmity felt by certain land officials in Ireland against the tenantry. Those officials were 403 opposed to provisions that were fair to the tenant.
§ Amendment, by leave, withdrawn.
§ Clause 29, as amended, ordered to stand part of the Bill.
§ Clause 30,—