HC Deb 12 December 1911 vol 32 cc2302-6

(1) Where a payment of any sum on account of Reversion Duty or Undeveloped Land Duty has been made by any person purporting to be the lessor or owner of the land, as the case may be, and that person is subsequently dispossessed by reason of an adverse title being established against him, the payment of the duty made by that person (in this section referred to as the dispossessed owner) shall be treated for all purposes as if it had been a payment made by the rightful lessor or owner, as the case may be.

(2) The dispossessed owner shall be entitled to recover as a debt from the person by whom the adverse title is established (in this section referred to as the reinstated owner) the amount of any sum so paid by him on account of duty, together with interest as provided by this section; and, without prejudice to any other mode of recovery, that amount may be set off against any costs or mesne profits payable by the dispossessed owner to the reinstated owner, and any Court before whom the title of the reinstated owner is established shall order that the amount so far as unsatisfied shall be a charge on the land as from the date on which the title is established in the same manner as if it had been charged by deed upon the land by the owner thereof at that time, and any such order shall take effect, and the benefit thereof may be transferred, in like manner as if it were a mortgage.

(3) The interest payable under this section shall be simple interest at the rate of four per cent. per annum as from the date on which the payment of the sum in respect of which interest is payable has been made, but not more than twelve years' interest shall be so payable; provided that where it is proved to the Court before whom the adverse title is established that proceedings have not been taken for the purpose of establishing the title within six months after the date on which the reinstated owner became aware or could reasonably have become aware, that he had such a title and was in a position to take proceedings for recovery of possession, compound interest at the rate of four per cent. per annum without any limitation shall be payable in lieu of simple interest in respect of any period which has elapsed between that date and the date on which the proceedings for the establishment of the title have been commenced.

(4) In this section any reference to the reinstated owner includes a reference to any predecessor in title of the reinstated owner, and any reference to the dispossessed owner includes a reference to any person who would have been a predecessor in title of the dispossessed owner if the title had been a good title.

In moving this new Clause I would say that its fundamental object is to meet the case where the apparent owner of land has paid the Reversion Duty and the Undeveloped Land Duty. It seems really to be an act of elementary justice. In order to facilitate the passage of the Clause it has been very much cut down. In its earlier appearance it was proposed to apply not only to Reversion and Undeveloped Land, but also to Increment Value Duty. It is not now proposed to apply it to the Increment Value Duty for various reasons with which hon. Members will be familiar. Also, instead of making the repayments a condition for agreement, it proposed to make them a charge on the land. There have been further modifications in order to meet the case of those who may not have been aware of their title, and also to meet the case of the reversionary who may have been aware of the title for some time, but has not been able to come forward and pay the duty.

Mr. C. E. PRICE

I beg to second the Motion.

Mr. McKINNON WOOD

As my hon. Friend has modified this Clause I do not see any objection to it, and I hope the House will agree to it.

Mr. CASSEL

This Clause seems to introduce an entirely new principle into our law. It is absolutely unprecedented for a wrongful owner to be repaid duties which he has paid while he was wrongfully in possession of the property. The very fact that Undeveloped Land Duty has been paid by the wrongful owner does not prove that the rightful owner would have had to pay it. He might have developed the land. The rightful owner on coming into possession does not pay back all the tithes—such as Income Tax or Death Duties—due while the wrongful owner has been in possession. Such a principle has never been heard of in court. It seems to me to be an altogether unsound one, and I certainly hope the Government will give the Clause a little more consideration than they have given it, and that they will deal with it more seriously than the right hon. Gentleman has dealt with it in the speech he delivered. Unless more serious arguments are advanced for adopting it I shall be very much inclined to go to a Division.

Mr. AUSTEN CHAMBERLAIN

I think the suggestion of my hon. Friend is not an unreasonable one. I was very much struck, as were other Members, by what he said. The Clause does introduce an entirely new principle. It proposes to treat a particular subject in quite a different way from other charges to be paid by a person who has been in wrongful possession. If that be true, and seeing we have no Law Officer present to guide us, we should hesitate at one o'clock in the morning to put in a long and complicated Clause of this kind. I suggest to the right hon. Gentleman and to the hon. Gentleman who moved the Clause, that they had really better not press it. They can bring it up, if they still remain of the same opinion, in the Budget Bill of next year.

Mr. DUNDAS WHITE

I should like, if I may, to say a word about a phrase which I venture to think has rather misled Members—the expression "the wrongful owner." The case the Clause has in view is that of the man who has the best title he can get. Then a dormant title turns up—a man who might have asserted his title, but did not. It seems to me very hard in such a case if that man, who has got the best title he could, and who has been acting in perfect good faith, should, in such an event, not only lose the land, but the taxes he has been paying on behalf of the other.

Mr. RIGBY SWIFT

I really do hope that the Government will reconsider the position they have taken up with regard to this Clause. It really does seem to me to be a most extraordinary proposition. Here is a Clause which suggests that, where a person has been in possession of land which he is not entitled to and is dispossessed, he may recover any payments he has made in regard to it from the rightful owner. Not only may he recover the payments he has made but the Clause suggests he shall be entitled to be paid interest for the money he has paid, and not only is he to be paid interest by the person who takes possession but the predecessor in title of that person is involved. Here is a Clause which contains no fewer than four sub-sections, all of them full of matter of the very greatest importance, introducing an entirely new principle into our law. A person who is a trespasser may recover from the rightful owner money which he has been forced by the process of law to pay, and may not only recover the money from the rightful owner, but may obtain interest for the money he has been compelled to pay, because of the improper position he has put himself into. That is a direct encouragement to wrong-doing, to taking land you are not entitled to and holding them as long as you can, knowing perfectly well that any money you pay in taxes, is, under the Bill, invested at the not unattractive rate of 4 per cent. I really hope the right hon. Gentleman will reconsider the position and, at any rate, take the advice of the Law Officers of the Crown.

Mr. PRICE

I am glad the Government has agreed to accept this Clause. I have myself bought land in which the title, strictly speaking, only covered a period of twelve years. That is to say, the predecessor of that person from whom I bought the land showed no right to sell the land beyond that time. It is just possible that, after I got the land, another person might have proved he had a better title than the person from whom I bought it. It would be grossly unfair if, having bought the land in good faith in such circumstances, I were unable to recover the taxes I had paid.

Mr. HAROLD SMITH

The last speaker has put a case which would appeal to the House, but I think he forgets, in so doing, that, in order to protect the case which he has put, he is going, as my learned Friend has said, to open the door to a vast amount of wrongdoing. The Government, I do submit, have treated the House upon this question with little consideration. Here is a Clause not only of enormous length, but of enormous importance, opening up a totally new idea to everyone in this House. What is the position of the Government? The Clause is moved at about one o'clock in the morning——

Mr. McKINNON WOOD

I make an appeal to my hon. Friend behind me. This is a long Clause. I see no objection to it, but many Members do object to it being passed just now. Suppose he brings it up again in time for the Budget.

Mr. DUNDAS WHITE

I shall be glad to do so rather than keep the House at this hour of the night. I shall be glad to withdraw the Clause on the understanding that it will be considered for the next Finance Bill.

Motion and Clause, by leave, withdrawn.

Sir GEORGE YOUNGER

I beg to move that the following new Clause be read a second time:—