HC Deb 29 May 1916 vol 82 cc2527-32

Order for Second Reading, read.

Motion made, and Question proposed, "That the Bill be now read a second time."

The SOLICITOR - GENERAL (Sir George Cave)

The object of this Bill is to deal with certain difficulties which have arisen in working the Courts Emergency Powers Act, and this Amendment Bill only raises four points. The first is this: The existing Act deals with mortgages, and provides that they shall not be foreclosed except with the leave of the Court. It has been established that although mortgagees cannot foreclose they can take preparatory proceedings for foreclosure, take all the accounts, and incur great expense, and that imposes great hardship upon the mortgagor, and is of no use to the mortgagee. We propose that foreclosing shall include taking proceedings for foreclosure. The second point deals with the exemption of mortgagees in possession. That exemption was generally thought to apply only to a mortgagee in possession of land, and on that footing an arrangement was made with the Stock Exchange; but it has since been held to include mortgagees of stock. We must keep faith with the Stock Exchange, and we propose here to limit the exemption to mortgagees of land. With regard to the third point, the House will remember that under the Increase of Rent Act recently passed there is a provision that no premium shall be paid upon the granting of a lease. That has been found to work very unsatisfactorily. In a recent case where the owner of small houses had sold to the sitting tenants a long lease of the houses at a low rent and at a premium, very much to the advantage of the tenants themselves, it was decided by the Court that that was prevented by the existing Statute. Therefore we propose in cases where the Court is satisfied that that kind of arrangement is for the benefit of the tenant the Court may pass such a grant of a lease at a premium.

The fourth point is that the Treasury are very unwilling to see so much money spent in building at the present time. The result is that in some cases a man cannot prevent the acquisition of rights for light by his neighbour. That is rather hard for the man who, in the public interest, refrains from building. Therefore we propose to enact that the Court may extend the period of twenty years for the abolition of light for a period to be fixed under this Act, so that a man may refrain from building without finding himself subject to an action for right of light. Those are the four points of pressing importance. They are all practical points which have arisen in practice, and have to be dealt with in some way. I shall be glad to deal with other points in Committee, and I hope the House will give a Second Reading to this Bill.


Would it be possible to introduce into this amending Bill a provision applying to loans to public bodies the same principle as this Bill establishes with reference to private loans? The Solicitor-General will realise that it would be extremely inconvenient for public bodies to have loans called in or interest increased during the War. I am aware that a good many of the loans to public bodies are Government loans, and therefore the difficulty would not occur, but there are a good many private loans, and it would be extremely inconvenient for public bodies, consequent on the War and on the appeal which is very generally and properly made to public bodies to avoid expense to pay off these loans, and to renew them outside would mean a very considerable increase of interest. I would ask the Government to consider the point. It would be extremely undesirable that public bodies should be embarrassed by the calling in of money. We know, as a result of the pressure of the War and financial pressure, that there is already a curtailment on expenditure of roads and in sanitary matters. It would be unfortunate if in their endeavour to maintain a fair amount of efficiency, and to do so with economy, they were to be embarrassed by the calling in of the loans. I would ask the Solicitor-General to consider whether it would be possible in Committee to have a proviso or Clause extending the application of this amending Bill to loans advanced to public bodies.

Sir J. D. REES

I want to express satisfaction with the provisions of this Bill, and particularly with that extending to the winding up of companies the principle—an exceedingly necessary principle—which has previously existed in regard to individuals and to which nobody is likely to raise any objection or with which they are likely to express any dissatisfaction. I am concerned, however, with the memorandum explaining the objects and reasons of the Bill, placed in front of the Bill, a practice which obtains in legislative bodies elsewhere, but which is too often neglected by the legislative drafts of this body, which is commonly called "The Mother of Parliaments." I sincerely hope that the practice will become more general. Members who may have an interest in a Bill may not even recognise it in the mere drafting, but, if this practice were followed, they would be able to see exactly what was the necessity for the Bill before the House and what the Bill proposed to effect.


I know the right hon. Gentleman introduced a Bill before dealing with the question of mortgages and that it was abandoned, but I should like to know if the present amending Bill gives a banker power to sell stocks or shares deposited with him by way of security or loan without leave of the Court. This legislation is done entirely by reference, and it is wholly different from the Bill introduced before.


I desire to congratulate the Government on introducing this Bill. My only surprise is that it was not brought in a long time ago. It is very much needed in commercial and financial circles, and I hope that it will receive a Second Reading. The point just raised by my hon. and learned Friend (Mr. Rawlinson), I believe, is perfectly clearly set out in Section 1. As I understand the Bill, it does not give a bank the opportunity or the right to sell securities that have been deposited with them as security without the sanction of the Court. I do not believe that there is any bank in London to-day which is desirous of selling securities under conditions of which the Court would not approve. I welcome this addition to the Act, and I hope sincerely that the Second Reading will be passed without any objection whatever.


I am very glad the House has given the Bill such a friendly reception. There are really only two points to deal with. One was brought forward by the hon. Member for Tavistock (Sir J. Spear), who asked that the Bill should be made to apply to loans by private persons to public bodies. I think it very unlikely that public bodies would desire to postpone payment of loans, but if the hon. Member will examine the existing Act he will find that it covers cases of that kind. It prevents the execution of judgments and the realisation of securities without the leave of the Court. If those public bodies which he has in mind have any doubt they can, if they so desire, make any suggestion in Committee. With regard to the point raised by my hon. and learned Friend (Mr. Rawlinson), it is true that a Bill was introduced last year to deal with it. Some kind of arrangement was arrived at between the Stock Exchange and the bankers of the City of London, but I had indication from many quarters of the House that they were not satisfied with a Bill limited in accordance with that arrangement, and it was thought inadvisable to proceed with the Bill. But the Stock Exchange are satisfied with this Bill as it stands. I have had communications from bankers in the City, and with possibly some small change in Committee their views will be met.


Have they the power to sell without the leave of Court?


They have power to sell without leave of the Court so far as they are mortgagees in possession. I quite agree that the exemption of mortgagees in possession does give bankers very considerable powers of dealing with their securities, and that must be remedied by limitations in the Bill to which they will not, I imagine, object.

Question put, and agreed to.

Bill read a second time, and committed to a Committee of the Whole House for To-morrow.—[Mr. Rea.]