§ (1) Where upon an application by any party to a contract for the construction of any building or work entered into before the fourth day of August, nineteen hundred and fourteen, the Court is satisfied that, owing to the prevention or restriction of, or the delay in, the supply or delivery of materials, or to the diversion or insufficiency of labour, occasioned by the present War, the contract cannot be enforced according to its terms without serious hardship, the Court may, after considering all the circumstances of the case and the position of all the parties to the contract and any offer which may have been made by any party for a variation of the contract, suspend or annul the contract on such conditions (if any) as the Court may think fit.
§ (2) This Section shall be construed as one with the Courts (Emergency Powers) Act, 1914.
§ Mr. NIELDI beg to move, in Subsection (1), to leave out the words "for the construction of any building or work."
I move this Amendment in order that contracts which have been entered into and which are of equal importance with matters concerning the construction of buildings may receive an equal amount of attention. It is notorious that in the greater world of commerce contracts have been made for the forward delivery of goods, contracts which involve very large sums of money and for which the prices have been fixed on the basis of pre-war conditions. If the Committee were fuller there are many Members who would appreciate at once the point I am trying to make. I will take. for instance, forward contracts for nitrates and forward contracts for sugar, commodities which have a definite market value and many of which are the subject, I am afraid, of a good deal of speculation in time of peace. These contracts have been based on rates for freight which prevailed before the War. Now the rate of freight has gone up enormously, but by reason of the condition of the contracts being for an inclusive price, those prices are now out of 1045 all keeping with the cost of material plus the cost of bringing it over to this country. What is the effect of it? The seller has had to deliver upon the terms of his pre-war prices, and he has had to pay these enormous freights, while the buyer has got the advantage of the freight and can sell on this side, if his cargo survives the voyage, at a price which includes the enormously enhanced freight. Therefore, the buyer puts into his pocket very large sums of money. He has been subject to no risk, because if his goods do not arrive he gets his insurance. There, again, the vendor has had included in his price the cost of the premium which has been very largely inflated by reason of the risk, so that on every aspect of the case the seller is. prejudiced, and the buyer receives on advantage of an inordinate kind, so much so that it is positively unjust and inequitable that he should be allowed to put it into his pocket.
8.0 P.M.
I think the Solicitor-General could be satisfied upon inquiry among the large city commercial communities, notably the London Chamber of Commerce, that in cases of compulsory arbitration arising out of these contracts the Court has had very considerable difficulty in making awards under these forward contracts. I think two of His Majesty's judges sitting, as we call it, at first instance, have pronounced in favour of a reduced sum. The Court of Appeal, I understand, reversed this judgment and held the buyer entitled to participate in the profits which the circumstances in war had brought into his pocket. My object in proposing these words in the Bill is to make the scope of the Bill apply to all kinds of contracts of whatever nature, provided that the judge to whom the matter is referred has power to make such an amendment of the contract as will be just and equitable. It is not putting the buyer in the position of vendor, and it is not suggested that the contract must of necessity be completed upon pre-war terms. What it is proposed to do is to give the Court the right to determine equitably between the various parties to the contract, having regard to the altered conditions produced by the state of war over which neither one party nor the other has had any control. There is one point I should like to mention in relation to these awards. I am told that the awards which have been made in accordance with the provisions of that Act of Parliament have been received with in- 1046 credulity in America, where they should be enforced, and that very considerable friction has arisen in consequence. American opinion has been very strongly, aroused as to the inequitableness of enforcing contracts on terms which would give the buyer all the advantage without suffering any risk of loss. There are large electrical and other industries which are involved in the same way. I do not propose to go into them in detail, but I should like the Solicitor-General to remember that there are other matters to be borne in mind. There are deliveries of finished materials which are required for buildings, although they do not come under strictly building contracts, and if the Clause is left as it is it would not cover that class of case. There are orders necessarily very large indeed for electrical fittings in connection with buildings in course of erection when the War broke out. There are in fact a whole lot of trades which would not come within the purview of this Clause at present in the Bill, within the purview of the words "constructional or building work," but which would be hit just as heavily because they are based on pre-war labour prices and pre-war costs of materials. The whole thing I admit is full of difficulty. But you must in justice provide for other trades. There is a good deal more that might be said on the point, but I am quite sure that the Solicitor-General understands the full range of the observations I have already made, and will realise the very serious danger that threatens the whole British commerce unless some relief is given under these contracts.
§ Mr. PRINGLEIt seems to me that the hon. Gentleman has put a very strong case for this Amendment, and I hope that the learned Solicitor-General will be willing to meet it either by accepting the Amendment, or by suggesting an. alternative course whereby the arguments put before the Committee may be substantially met.
§ The SOLICITOR-GENERAL (Sir Gordon Hewart)I cannot help thinking that my hon. and learned Friend (Mr. Nield) has not entirely appreciated the scope of the Bill. So far as contracts are concerned, the Bill proposes to deal with them in two ways. There are builders' contracts as to which a special kind of relief is to be-given, and there are contracts of whatever nature the performance of which is interfered with by the requirements and regulations of a Government Department. No 1047 doubt some of the contracts in the category to which my hon. and learned Friend has referred will fall within Clause 2, and, in proper cases, relief will be granted under the operation of that Clause. But the proposal which my hon. and learned Friend now submits is of the most comprehensive and far-reaching character. He said, in effect, that Clause 1 ought to be made to apply to all contracts of whatsoever character, and, if I followed him aright, he is seriously suggesting that wherever a man has entered into a contract of whatsoever kind before the War, and after the War finds out that through something attributable to the War it is difficult for him to carry out that contract, he may go to a judge of the High Court, or, I suppose, a County Court judge, and invite him to deal with the matter on terms which he thinks equitable. I can only say that if any such enactment as that were to be made it would be difficult indeed for judges of the High Court or of the County Court to find time for the performance of the duties which would fall upon them.
The origin of this measure seems to be not entirely understood. It is a measure which did not come into existence in the time of the present Government. It was drafted in the time of the late Government, and it was drafted for the purpose of dealing with three or four definite and specific grievances. One of those grievances was the grievance of the builder who, before the War, had entered into certain contracts, and, after the War, found that, by reason of causes definitely, clearly, and undoubtedly attributable to the War, those contracts could not be performed in the allotted time. That made a strong case, and it was a case to which the Government were not only willing, but anxious to apply a suitable remedy. If we are to go further than that, if we are to apply this procedure to contracts of every kind whatsoever, if by Act of Parliament this House should call upon the judges to take cognisance of any contract of whatever kind made before the War, as to which the person who has made it finds the performance difficult by reason of the War, the effect would be most serious. No doubt the points raised by this Amendment are of a restricted character, but there are consequential Amendments which will follow on this proposal if it be adopted, and the effect would be that there would be no restriction whatever 1048 upon the kind of contract for which relief I would be sought. It might, indeed, be the case that a person who had entered into a contract of marriage might go to the Court and seek relief from it, because, in consequence of circumstances arising from the War, and of difficulties created by the War, he was unable to carry out his promise. I submit that the proper and sensible course is to keep this Clause restricted to the particular class of contract to which it now refers, a class of contract in which a strong case has been made out, and we ought not to destroy its effect by seeking to extend it to every kind of contract whatsoever.
§ Mr. BOYTONI am not sure that the learned Solicitor-General has made the position quite clear. My attention has been called to a new Clause which he has put down and which is of a very wide character. I should have thought that that would have covered breach of promise of marriage cases.
§ Sir G. HEWARTPerhaps I may be allowed to interrupt my hon. Friend, and to explain that the new Clause, as it appears on the Paper, unfortunately omits two very important words. It is intended solely to deal with agreements and covenants in leases.
§ Mr. BOYTONI am obliged to the learned Solicitor-General for his explanation. When I found for the first time this morning he had a long and elaborate new Clause down I was a little astonished. I hardly knew where we were. If, as has been suggested, it is intended by the Amendment to exempt every contract under the sun, whereas the intention of the Government is to confine this matter to building contracts and building constructional contracts—
§ Sir G. HEWARTSo far as the first Clause is concerned.
§ Mr. BOYTONIf that is the clear purpose and meaning of the Clause, I do not think we can su[...]essfully resist the hon. and learned Gentleman's contention.
§ Mr. NIELDWith regard to the hon. and learned Gentleman's suggestions with reference to breaches of promise of marriage, I do not see how they could be affected by the War. Persons, it is true, may have their fortunes reduced by the War, but I cannot suppose that the marriage contract is entered into purely from the point of view of the fortune possessed 1049 by either party. Surely other considerations come in. I would like to remind the hon. and learned Gentleman that the German Federal Council, on 16th December last, passed a resolution authorising the German Chancellor to cancel contracts made with anyone in the Allied Entente countries, and I suppose that would include something short of cancellation, and would allow of the submission of terms which would be acceptable. But I notice that the House is nearly empty, many hon. Members have gone to dinner, and it is hopeless to suppose, even if I pressed this Amendment to a Division, that I could hope to carry it. I have never wasted the time of the House, and I am not going to begin doing so now. I therefore, ask leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. PRINGLEI beg to move, in Subsection (1), after the word "or" ["construction of any building or"], to insert the words "the execution of."
The object of this Amendment is to apply the relief to other contracts besides constructional and building contracts. A number of people are very interested in the position of shipbuilding contracts. These were suspended under the Defence of the Realm Act (No. 2) to enable the Admiralty to use all our shipbuilding resources for the purposes of the Navy. Subsequently the Government came to hold the view that commercial shipbuilding was to a large extent as important as the increase of our various ships of war, and at that time arrangements were made by the Board of Trade with a number of shipbuilders whose contracts had previously been held up and received protection under the Defence of the Realm Act, and the contracts were renewed on various terms which were agreed upon between the builders and the shipowners. Now a new system is being adopted, and many of these revised arrangements are being broken through in order to allow the building of standardised ships of which we have heard so much recently. Those whose agreements have been broken into in this way are naturally anxious to understand what the position is. They recognise that they were protected under the Defence of the Realm Act (No. 2). They wish to know whether the revised arrangements into which they have entered and which are now broken are to continue to be binding on them. They are doubtful if 1050 they receive protection under either Clauses 1 or 2, and in order to ascertain what their position is I move this Amendment.
§ Sir G. HEWARTThe object of this. Amendment is really identical with the object of the Amendment which has been disposed of already. If the words proposed are inserted, it is quite clear that the effect of Clause 1 will not be limited to buildings or building construction, but will be extended so as to apply to any contract under which work of any kind whatsoever has to be executed. In those circumstances, I do not think that I need repeat the objections which I urged against the acceptance of the Amendment of the hon. and learned Member for Ealing. But I gather from what has just been said that the object of this Amendment is also, if not chiefly, to ascertain what is the position of certain shipbuilders under certain shipbuilding agreements. Glad as I always am to respond to appeals, especially to appeals of my hon. and learned Friend, I should have great hesitation in advising as to the position of the shipbuilders to whom he refers unless I had the agreements in question before me. I do not think, with great respect, that this is a matter which can be said to arise upon this Clause. The hon. and learned Member is not proposing to limit his extension of this Clause to the case of shipbuilders, much less to the case of the particular shipbuilders to whom he now refers, and I must respectfully decline the task of advising as to the position of that particular group of shipbuilders in the absence of suitable material on which I could form an opinion.
§ Mr. PRINGLEI think it very important that we should have some opinion from the Government. The Government and the hon. and learned Gentleman are quite aware of the existence of these contracts. He knows that revised arrangements were entered into, and that through the action of the Government these revised arrangements are now broken. Under this Bill relief is provided for one class of people who are affected in a similar way. I am entitled, therefore, to ask the Committee to insert an Amendment which would protect another class who are affected similarly by the action of the Government. I had hoped, therefore, that as these contracts were well known to the Government and my hon. and learned Friend was their legal adviser in the 1051 matter, he would have been able to state whether protection was given, if not under Clause 1, at least under Clause 2. But if the hon. and learned Gentleman is not able to give an opinion, I am afraid that it will be necessary to divide, not so much to. divide in Committee, but to take a Division on the Report stage. The matter is far too important to be disposed of in this cavalier way, when the House is so thin as it is at present. We are dealing here with extremely important interests. The very fact that this Bill has been introduced proves the extreme importance of the matter, and if it is important to give protection in relation to building contracts, it is equally important to give protection for other contracts of a similar kind in which the contractors have been affected in the same way. I had hoped that in the circumstances some opinion or concession could have been announced by the Government, but the fact that we can get so little satisfaction almost suggests reporting Progress so that a better opportunity of full discussion of this important matter should be given.
§ Mr. NIELDIn reply to the Solicitor-General, may I point out that there is a great deal of difference between my proposal just now and this proposal, because, while I agree that I cast my net very wide indeed, so as to include, as I intended it should include, all these other contracts, this narrows it very considerably? It does seem to me that there is a large quantity of work other than building work which might very well be included in this Clause for which the demand for relief is equally strong as it is in respect of these building contracts. If the argument is that the judges would not have time to do the work, then my reply is that it is perfectly easy to set up tribunals of a sufficiently impartial character, whether commercial tribunals or whatever they may be, to investigate cases of this kind and to refer them to the judge for disposal. That would very considerably narrow down the duty of the judges. We ought not to allow hardships which arise to continue merely on the plea that it would impose on the judges more than their share of work to get through.
§ Amendment negatived.
§ Sir G. HEWARTI beg to move, in Sub-section (1) after the word "work" 1052 ["building or work entered"], to insert the words "or for the supply of any material for any building or work."
I move this Amendment, in the absence of the hon. Member for West Newington (Mr. Gilbert), because it seems to me, on consideration of this proposal, that the effect of it will commend itself to members of the Committee. The Clause as it stands gives relief to the building contractor under a contract for the construction of any building or work; but it would be said that the sub-contractor who had undertaken to supply the material was not included in this measure. It seems to us that where the head contractor may obtain relief of this kind, he should not also be in a position to hold his subcontractor bound. Therefore, for that reason, among other reasons, I hope the Committee will be disposed to accept this Amendment that I move, and which Stands in the name of the hon. Member for Newington.
§ Amendment agreed to.
§ Mr. PETOI beg to move, in Sub-section (1), to leave out the words "fourth day of August, nineteen hundred and fourteen"["before the fourth day of August, nineteen hundred and fourteen, the Court"], and to insert instead thereof the words "seventeenth day of July, nineteen hundred and sixteen."
My hon. and learned Friend the Solicitor-General, in giving a general description of the original Bill just now, referred to it as if it had originated from the time of the late Government. As a matter of fact, it was in July of last year that the special hardships which are inherent to building contracts for buildings and other works were brought to the attention of the present Home Secretary. At that time what the building trade concentrated their minds upon was merely the fact that in the course of the prolongation of the War circumstances of various kinds had arisen which rendered it very difficult, in some cases almost impossible, to carry out their contracts. so they sought relief. Shortly after that the Munitions Department issued a prohibition against all building work exceeding a sum of £500, and practically put a stop to the carrying on of these building contracts. That applied, of course, not to contracts entered into before the commencement of the War, on the 4th August. 1914, but any contract at all. What the building trade maintains is that they have 1053 sought relief from the execution of contracts on account of the circumstances arising out of the War. On the date 4th August, 1914, so far as the building trade was concerned, they thought nothing would happen, and everybody was encouraged to go on with their business as usual. The builders entered into fresh contracts, if they liked, and everybody was encouraged to do so because it was encouraging the employment of labour. That policy dropped through and passed away. I think the proper date to put in is not the date of the commencement of the War, the 4th August, 1914, but the date when those building contracts were interfered with, necessarily, of course, by the action of the Government, and the most appropriate day for this measure is the date when the Government prohibited the execution of building work of any magnitude at all. That was on the 17th July, 1916.
The Bill as drafted would not meet very many of the hardest cases. I will give the Committee one of the hardest cases, and only one, that of a contract entered into by Liverpool contractors on the 22nd February, 1915, under which there are penalties for non-completion—which is the ordinary form of contract—and in which there is a force majeure clause. Notwithstanding this, their clients, a cold storage company, claimed from them £2,000 in penalties in respect of works many months overdue. The firm go on to point out, in their communication, that it was perfectly impossible for them to execute this contract up to time, because it included very heavy steel work, amounting to over £3,000, and about the time they were expecting to get the steel and the work would have been done the Government practically commandeered all the steel of the country, and it was only after the expiration of six months that they got any of the steel. Consequently, on this transaction, entered into on the 22nd February, 1915, they have claims now pending against them which will be enforced under the Bill as drafted in a Court of law for no less than £2,000, penalties for delay in circumstances over which they had no control at all. I do not wish to detain the Committee a moment more than is absolutely necessary, but I do ask the Solicitor-General to deal with this Amendment as he dealt with the last one. The intention of the Bill is to give relief to this particular trade, and, incidentally, to stop the terrible cost of litigation such as has already taken place in some instances, 1054 particularly that by the Metropolitan Water Board. I want this Clause to cover all the contracts to which it ought to be applied. I am advised that there are very few contracts existing now which were entered into before 4th August, 1914. There are a great many contracts which were entered into in the months following that—in the early days of the War—which ought to be included in this Bill. For these reasons I move the Amendment.
§ Mr. BOYTONI desire to support the Amendment proposed by the hon. Member for Devizes. It is interesting to note that this is a legacy to the Solicitor-General from his predecessor. I had no idea that it was on the shelves of the Home Office, and thought that it was occasioned by the fact that the Ministry of Munitions set up a building permit committee, and said that after the 17th day of July, 1916, no building work beyond £500 was to be undertaken without special permit The result of that Order created some consternation in the building trade throughout the length and breadth of the land, and various deputations attended on the Minister of Munitions, and, as the result of those deputations and the difficulty in which he found himself, the Minister of Munitions set up a small Advisory Committee, as is very customary at the present time. I speak with some knowledge of the matter, because I was a member of that Committee, and a Sub-Committee made a recommendation to the Minister of Munitions to this effect, that they felt that considerable hardship was inevitably inflicted on the building trade by the demands necessary to meet the Government requirements for both material and labour, and the Committee recommended that cases of this kind should be dealt with by legislation or otherwise, suspending the operation of contracts arising out of contractual relations, either wholly or partly, so long as the Order is in force. We went on to point out the very serious hardship which occurred by the suspension of building operations, and builders were involved in considerable loss by the withholding of retention money and by the detention of the whole of their plant and also by the wastage of and damage to material. The recommendation I have read is a very strong one and when I saw the Bill I thought it was the outcome of that recommendation, but it is satisfactory to know that the hardship that had already been inflicted prior to July, 1916, had been observed by the Solicitor-General 1055 of that date and that the then Government proposed to bring in some legislation. No doubt the deputations and the setting up of the Sub-Advisory Committee had the effect of continuing the good intentions of the hon. and learned Gentleman's predecessor. I hope that, as a result of what has been said by the hon. Member for Devizes and the strength of the extract from the Report, that the Solicitor-General will grant this concession. It would be only fair seeing that difficulties occurred from the commencement of the War, and emphasised by the fact that since July last no building of any importance can be undertaken, and bearing in mind the contractual relations of the various builders and contractors.
§ Sir F. BANBURYI think Clause 2 is designed to meet the objection raised by the hon. Gentleman (Mr. Boyton). He pointed out, truly and correctly, that considerable hardship arises where a builder has entered into a contract and is prevented from carrying out that contract by Regulations made by the Government, but that is met by Clause 2, which I think the hon. Member cannot have read.
§ Mr. BOYTONI did.
§ Sir F. BANBURYI think that is mended by Clause 2.
§ Mr. BOYTONdissented.
§ Sir F. BANBURYI understand from the Solicitor-General that is so. In the Amendment my hon. Friend goes very much further. The Amendment says that where after the War a man has entered into a contract with his eyes open—I quite agree before the War is a different matter—and where the Government have not by any legislation interfered with his carrying out of that contract it is to be voided because, apparently, it is not to the pecuniary advantage or is to the pecuniary loss of the person who entered into it. I sincerely trust that the Government will not accept the Amendment, because that would be an end to every contract. The argument that because a man has made a bad contract it should be voided is quite an impossible one.
§ Sir S. COLLINSI hope the Solicitor-General will accept the Amendment. I suppose builders almost as much as any other class in the country have suffered very much indeed during the War. A few have been fortunate in munitions and Government work, but the great mass of 1056 the builders have been almost at a standstill. Their plant and offices are lying idle, and many of them have had to shut up. I hope consideration will be given to this worthy and deserving class who have done so much to beautify London and our other large towns throughout the Empire. It is very little to ask, and I hope the concession will be granted.
§ Mr. NIELDI think the right hon. Baronet the Member for the City (Sir F. Banbury) did not do himself justice, because his observations were really not justified by the proposal. It is not every contract or even every building contract—
§ Sir F. BANBURYIt only applies to building.
§ Sir F. BANBURYNo.
§ Mr. NIELDIt is only to those contracts where the judge holds it would be inequitable to enforce the terms. The trouble which has arisen and which makes the Amendment so necessary has arisen wholly and solely by reason of the attitude assumed by the late Government and the late Prime Minister in his speech at Newcastle distinctly inviting the trading community to go on as they were going or, in other words, using a paraphrase of the familiar expression "Business as usual." The result of that was that men entered into contracts in the full belief that the normal condition of things would prevail. I cannot imagine that gigantic contracts were entered into. I have in mind a case where the gravest hardship arose in connection with a Metropolitan Water Board contract. It was for the erection of their offices at Riverhead and which would have been completed long ago, but for the interposition of restrictions upon building material. The unfortunate contractor there could neither go forward nor back and was called upon to make good the contract against the weather. He has had to spend considerable sums of money, and he cannot get a farthing of that by reason of the law as it at present stands. It is in a hard case that the judge would have power to give relief. It is not as if we were asking for a general tearing up of contracts. We base the case for this Amendment on the ground that the Government urged the community to go on as if nothing had happened, and, in fact, practically to go into ordinary contracts. The Ministry of Munitions actively interfered and 1057 peremptorily forbid the delivery of goods, except upon providing certificates which they themselves controlled, and I think justice can only be adequately met by putting in a date to cover that.
§ Mr. G. THORNEI desire to endorse what has been said in support of the Amendment. It is not as if this Clause proposed to destroy contracts. It is only to give power to the Court, and the Amendment will simply enlarge that power. It seems to me that that enlargement is vitally necessary in the interests of the persons concerned. The provision is that the Court may, after considering the whole circumstances of the case and the position of the parties to the contract take action. This Amendment gives the Court the chance of showing fairness to those men who have been very hard hit.
§ Sir C. CORYThe discussion that has taken place assumes that this only applies to building. Has it not a much wider meaning than building only, and does it not apply to all contracts? The Clause says,
Where, upon an application by any party to a contract for the construction of any building or work entered into—I take it that a contract for "any work" would include all contracts, and not be confined to building contracts merely, and I think we shall be entering on to very dangerous ground if we include in the Bill all contracts entered into during the War by men with their eyes open.
§ Mr. PETOI should like the Solicitor-General to answer one point raised by the right hon. Member for the City of London (Sir F. Banbury). He said the cases I have mentioned of contracts entered into since 4th August, 1914, were met by Clause 2.
§ Sir F. BANBURYI did not say that, but I said that where the Government have come in and stopped people carrying out their contracts by saying "You must not do more than a certain amount without the sanction of the Government," that is met by Clause 2.
§ Mr. PETOI do not think that is so. It extends the scope of Clause 1 of the Defence of the Realm (Amendment) (No. 2) Act, 1915, which says that
necessity is a good defence to any action or proceedings taken against that person in respect of the non-fulfilment of the contract so far as it is due to that interference.1058 That presupposes that there is an action brought against the builder in this case to make him complete his contract, and that he has then a defence which he can set up, but that is a very small part of the hardship we want to remove. There are all sorts of other circumstances than an action brought for specific performance of contract. There are hardships arising out of matters such as retention money, protection of buildings, and all such matters as that. All those things, if we have Clause 1 extended in the manner in which I propose, will be dealt with under that Clause, and the Court will be given power to take these things into consideration and to give the relief which is justified in each case.
§ Sir G. HEWARTThere are two questions which appear to be raised. One, which it may be convenient to deal with first, was raised by the hon. Baronet the Member for West Cornwall (Sir C. Cory), who referred to the words in the second line of Clause 1:"The construction of any building or work." If I followed his observations, what he was contending was that the words "or work" are sufficiently wide to make the contracts referred to include contracts of any kind whatsoever. With great respect, I do not think that that is the true construction of the Clause. I think the words "or work" must of necessity be read in close association with the word which has gone before, and the words "the construction of any building or work" mean the construction of any building, or work which is ejusdem generis with the construction of any building, and therefore I do not think he need seriously apprehend the kind of mischief which he mentions. With regard to the other question, which is the main question raised in the course of the discussion, I think it is a little important that the Committee should see clearly what it is that is proposed by the Amendment, and what it is that is proposed by the Clause as it now stands. The question for the Government in Clause 1 of this Bill was the question of giving relief in proper cases to persons who had entered into contracts of a particular kind. Those persons were builders, and I am sure that we all agree with what fell from my hon. Friend the Member for Kennington (Sir S. Collins) that the builders are a worthy and deserving class. But within what limits and subject to what conditions is relief to be given to that worthy and deserving class?
1059 A line must obviously be drawn some where, and the policy which is observed in Clause 1 of the Bill is to draw the line at the outbreak of the War, so that a clear contrast is pointed between the man who before the War entered into a building contract and finds after the War, by reason of circumstances arising out of the War, that he cannot without great hard ship perform his contract in the stipulated time, and, on the other hand, the man who after the war entered into a contract and experienced it may be a similar kind of hardship. Now let us see what is the consequence which would follow if the Amendment which has been supported by so many members of the Committee were to be adopted. The date which it is proposed to substitute by the Amendment for the date of the commencement of the War is the 17th July, 1916, and, as I understand, that date is chosen because at that time, in consequence of an Order made by the Minister of Munitions, under the provisions of Regulation S.E, I think, of the Defence of the Realm Act Regulations, it was positively prohibited to a builder that he should without licence proceed with the construction of at any rate a certain kind of building. Why, Sir, if that date were to be substituted, the effect would be this—and I am not sure that it is not the real intention of the Mover of the Amendment that this should be the effect—that for a whole period of two years from the 4th day of August, 1914, up to the 17th day of July, 1916, a building contractor should have had the opportunity of entering into a building contract with notice of the War, and notice which was a notice of one kind in the autumn of 1914, of another kind in the spring of 1915, and of another kind at each successive period as the two years went on; and having entered into that contract with his eyes open, or I should hope partly open, and having stood to gain whatever benefit he might hope to gain from that contract, may now turn round and say, "Notwithstanding that I entered into this contract, it may be two years after the War had begun, nevertheless, because the difficulties I have experienced are due to the War, I claim the right to go to the Court."
§ Sir S. COLLINSAnd the thing has got worse as time went on.
§ Sir G. HEWARTI am told that the thing has got worse as time goes on. 1060 May I suggest to my hon. Friend opposite that it may have been among the calculations or speculations of the builder that prices would get better? I submit, however, with all earnestness, that if once we depart from the clear and obvious line of demarcation which is suggested by the date of the outbreak of War, we venture upon a sea which has no shore. An alternative date, 16th July, 1916, is suggested. I rather gather I am right in my conjecture that that date was selected because it was upon that date that the actual prohibition was made against building.
§ Sir G. HEWARTI am obliged to my hon. Friend—
§ Sir S. COLLINSMay I remind the learned Solicitor-General that by order of the Government builders are not able to carry out their contracts? Everything is at a standstill. Their plant is rusting, and everything is going to ruin.
§ Sir G. HEWARTBe it so. Therefore the argument comes to this: that the period during which a building contractor entered into a contract which, nevertheless, he may now come to the Court to suspend or to annul, must be the whole period from the beginning of the War up to the time when building was actually prohibited! These are the true dimensions of the extension which are suggested by this Amendment. I submit that it is impracticable, and that the line which has been chosen, and chosen after careful deliberation for this Clause—that is to say, the line which is between the pre-war contract and the post-war contract- is the true line of division. I trust the Committee will see the reasonableness of that course, and the difficulties and dangers which would arise from the proposed alternative and later date.
§ Mr. NIELDThe Solicitor-General has not quite answered my point. That refers to the date of the Government's prohibition of building. The action was only in obedience to what was said in the highest possible quarter from one who might be supposed to kno[...] how things stood. That Newcastle speech will require a lot of explaining if we are to accept the suggestion that these [...]ntracts were entered into with open ey[...] should like to raise one question b[...] I sit down. The Solicitor-General [...]hat the operation of Section 2 in this [...] is limited also in 1061 point of date to contracts entered into previous to the commencement of the War. Does that apply in general to any contracts the performance of which have been interfered with by Government Order?
§ Sir G. HEWARTMy hon. Friend behind me has really asked me two questions, and I will say a word upon each of them. In regard to his first point the invitations that were offered to the public, I have a recollection of some of them—I am not sure that I remember the particular invitation to which he refers—that business should be carried on as usual, notwithstanding the War. I cannot help thinking that it is a very strong proposition to put forward, that the true date should follow the invitations of that time, and that all contracts made after such invitations should have something like an indemnity. One thing, however, is certain, that if the true inference is to relieve whatever followed that invitation and acceptance the thing cannot possibly be limited to builders. Under Clause 1 of this Bill a similar relief must be given to every person who can say that in consequence of the invitation to proceed with business as usual he, or she, after the War, entered into a contract of some kind, whatever kind, which has now become—shall I say—inconvenient ! In regard to the second point, I am not sure that it arises upon this Clause. The Second Clause refers to interference with contracts. There contracts are not limited to builders. It is interference to contracts of any kind "by Regulation, requirement, or restriction by a Government Department." I should have thought that the question there was not what was the date on which the contract was made, but was the contract, whenever made, in fact interfered with by requirement, Regulation, or restriction of a Government Department?
§ 9.0 P.M.
§ Mr. BOYTONI am very sorry I am not -endowed with the ability, legal knowledge, and subtlety of the learned Gentleman in charge of this Bill. I can only look at the measure from a business point of view. You are going to give protection to people who before the War entered into business contracts at the prices then prevailing, at low rates of wages—lower than has since prevailed—and low cost of material. You are going to extend to them the privilege of getting out of contracts. You did not shut down the builder at the time the War broke out. 1062 You did not say to the builder on 15th August: "You shall not build." You wait until 17th July, 1916, before you finally shut him down. In these nineteen months work has gone on. It was not wrong. It was not a crime on the part of the builder to undertake contracts. Builders went on building so far as they could. They had difficulties to meet in respect of the scarcity of labour, and the growing cost and shortness of material. In framing their contracts I do not suppose they thought for a moment of the difficulty and trouble into which they were letting themselves. When they had got their buildings up to one or two stories—and if you go round London you will see this spectacle—they were told they must not go any further. These buildings may be lying for the next two years, during which time their retention money is at stake; their bills of exchange are falling due to their material merchants. Their capital has been sunk, their mortgage interest is running on, and you are not going to give them any redress or assistance. For the life of me, as a business man—I have not the legal mind, and I am glad I have not!—but from the business point of view I consider it is a crying disgrace that any Government Department should not give these men relief.
§ Sir S. COLLINSMay I invite the learned Solicitor-General to try to be practical—to put away his legal mind a little and deal in common-sense. The hon. and learned Gentleman spoke just now of giving indemnities. I know a large and powerful trade in this country. I am not going to enlarge upon it, but simply to say that those in it destroy far more than they build up. They are going to take care to have an indemnity. I trust the hon. and learned Gentleman will consider our case sympathetically, and do something to relieve the builders. Their buildings, as my hon. Friend opposite has said, have been standing. They will have a great deal to do. A great deal of the work will have to be gone over again. Much of it will have deteriorated, and have to be pulled down, and replaced. I do ask that the hon. and learned Gentleman will give this extension; will just put himself in the place of the builder, and forget, for the moment, that he is a lawyer.
§ Question put, "That the words proposed to be left out stand part of the Clause."
| The Committee divided: Ayes, 115; Noes, 16. | ||
| Division No. 23.] | AYES. | [9.5 p.m. |
| Archdale, Lieut. E. M. | Greenwood, Sir G. G. (Peterborough) | Ormsby-Gore, Hon. William |
| Baldwin, Stanley | Gretton, John | Parker, James (Halifax) |
| Banbury, Rt. Hon. Sir F. G. | Griffith, Rt. Hon. Ellis Jones | Pollock, Ernest Murray |
| Barnes, Rt. Hon. George N. | Gulland, Rt. Hon. John William | Pratt, J. W. |
| Barnett, Captain R. W. | Haddock, George Bahr | Prothere, Rt. Hon. Rowland Edmund |
| Bathurst, Capt. Charles (Wilts, Wilton) | Hall, D. B. (Isle of Wight) | Pryce-Jones, Colonel E. |
| Benn, Arthur Shirley (Plymouth) | Hamilton, C. G. C. (Ches., Altrincham) | Rea, Walter Russell (Scarborough) |
| Bentinck, Lord H. Cavendish- | Hardy, Rt. Hon. Laurence | Rees, G. C. (Carnarvonshire, Arf[...]n) |
| Boscawen, Sir Arthur S. T. Griffith- | Harmsworth, Cecil (Luton, Beds) | Roberts, George H. (Norwich) |
| Brace, Rt. Hon. William | Harmsworth, R. L. (Calthness-shire) | Robinson, Sidney |
| Bridgeman, William Clive | Harris, Percy A. (Leicester, S.) | Roch, Walter F. (Pembroke) |
| Bryce, J. Annan | Haslam, Lewis | Rowlands, James |
| Bull, Sir William James | Hewart, Sir Gordon | Rutherford, Sir J. (Darwen) |
| Carnegie, Lieut.-Col. Douglas G. | Hewins, William Albert Samuel | Rutherford, Watson (L'pool, W. Derby) |
| Cave, Rt. Hon. Sir George | Hickman, Colonel Thomas E. | Samuels, Arthur W. |
| Cawley, Rt. Hon. Sir Frederick | Hills, John Waller | Samuel, Samuel (Wandsworth) |
| Chaloner, Colonel R. G. W. | Hodge, Rt. Hon. John | Shaw, Hon. A. |
| Cempton-Rickett, Rt. Hon. Sir J. | Holt, Richard Durning | Shortt, Edward |
| Cooper, Sir Richard Ashmole | Hope, James Fitzalan (Sheffield) | Smith, Harold (Warrington) |
| Cory, Sir Clifford John (St. Ives) | Hughes, Spencer Leigh | Smith, Sir Swire (Kelghley, Yorks) |
| Cory, James H. (Cardiff) | Illingworth, Rt. Hon. Albert H. | Spicer, Rt. Hon. Sir Albert |
| Courthope, George Loyd | Jacobsen, Thomas Owen | Strauss, Edward A. (Southwark, West) |
| Craig, Ernest (Cheshire, Crewe) | Jardine, Ernest (Somerset, East) | Tryon, Captain George Clement |
| Craig, Col. James (Down, E.) | Jones, Edgar (Merthyr Tydvil) | Turton, Edmund Russborough |
| Craik, Sir Henry | Jones, J. Towyn (Carmarthen, East) | Walker, Colonel William Hall |
| Currie, George W. | Jones, William S. Glyn- (Stepney) | Wardle, George J. |
| Davies, Timothy (Lincs., Louth) | Kenyon, Barnet | Wason, John Cathcart (Orkney) |
| Denman, Hon. Richard Douglas | Larmor, Sir J. | Watson, John Bertrand |
| Denniss, E. R. B. | Layland-Barrett, Sir F. | Whiteley, Herbert J. |
| Dougherty, Rt. Hon. Sir J. B. | Levy, Sir Maurice | Williams, Col. Sir R. (Dorset, W.) |
| Duke, Rt. Hon. Henry Edward | Lewis, Rt. Hon. John Herbert | Wilson, Rt. Hon. J. W. (Worcs., N.) |
| Duncan, C. (Barrow-in-Furness) | Lloyd, George Butler (Shrewsbury) | Wood, John (Stalybridge) |
| Fall, Arthur | Locker-Lampson, G. (Salisbury) | Wood, Rt. Hon. T. McKinnon (Glasgow) |
| [...]erens, Rt. Hon. Thomas Robinson | MacCaw, William J. MacGeagh | Yeo, Alfred William |
| Fletcher, John Samuel | McNeill, Ronald (Kent, St. Augustine's) | Young, William (Perth, East) |
| Galbraith, Samuel | Morison, Thomas B. (Inverness) | Yoxall, Sir James Henry |
| Gibbs, Col. George Abraham | Munro, Rt. Hon. Robert | |
| Goddard, Rt. Hon. Sir Daniel Ford | Neville, Reginald J. N. | TELLERS FOR THE AYES.— |
| Goldstone, Frank | Nicholson, Sir Charles N. (Doncaster) | Lord Edmund Talbot and Mr. Beck |
| Colliding, Sir Edward Alfred |
| NOES. | ||
| Agg-Gardner, Sir James Tynte | MacVeagh, Jeremiah | Tickler, T. G. |
| Boland, John Pius | Martin, Joseph | Toulmin, Sir George |
| Collins, Sir Stephen (Lambeth) | Nield, Herbert | Wing, Thomas Edward |
| Flavin, Michael Joseph | Nolan, Joseph | |
| Jones, H. Haydn (Merioneth) | O'Brien, Patrick (Kilkenny) | TELLERS FOR THE NOES.—Mr |
| King, Joseph | Outhwaite, R. L. | Peto and Mr. Boyton. |
| Lambert, Richard (Wilts, Cricklade) | Radford, Sir George Heyncs |
§ Mr. PETOI beg to move, in Sub-section (1), after the word "to" ["owing to the prevention or restriction of"], to insert the words "circumstances occasioned by the present war, including."
§ Mr. BOYTONOn a point of Order. I have another Amendment, which is quite different from the previous one, namely, to leave out the words "fourth day of August, nineteen hundred and fourteen," and insert "seventeenth day of July, nineteen hundred and sixteen, and on any occasion of damage to property by enemy raids."
§ The DEPUTY-CHAIRMAN (Mr. Maclean)That depends upon whether the words "fourth day of August, nineteen hundred and fourteen," remain in the Bill, and the Committee has just decided that they shall, so that that is disposed of.
§ Mr. PETOThe alteration which my Amendment would make to the Bill is only a small one, but I do not like limiting the powers of the Court in advance exclusively to questions arising out of insufficiency of labour and materials. I have already been informed by builders and contractors, who naturally take a great interest in this Bill, that if it is confined strictly to delay in the supply or delivery of material or the diversion or insufficiency of labour, that will not cover all the circumstances which arise owing to the War. and which prevent the proper execution of their contracts. There are all kinds of circumstances connected with contracts which have very little or nothing to do with either labour or material. There is the class of contracts dealing with the retention of money, and protection of buildings and matters of that kind, which it is impossible to fulfil without great hardships.
§ Sir G. HEWARTI must resist this Amendment, because I think the representatives of the builders in this House are asking for a little too much. The position under Clause 1 is this: The Court may suspend or annul contracts of a certain character if the contractors can show that
Owing to the prevention or restriction of, or the delay in, the supply or delivery of materials, or to the diversion or insufficiency of labour occasioned by the present War the contract cannot be enforced according to its terms without serious hardship.I gather that the difficulties fall under the head of materials, or labour, and that these constitute the main difficulties, but my hon. Friend is not satisfied with the enumeration of the grounds of relief, and he would cast the net as wide as possible, and include everything by inserting the words "circumstances occasioned by the present War," whatsoever they may be, But there must be some limit in a matter of this character, and if the builders can obtain relief where they can show that their difficulties have arisen through circumstances connected with materials or with the supply of labour, I think that is sufficient.
§ Mr. PETOThose words would not have met or prevented the action which came before the House of Lords against the Metropolitan Water Board.
§ Sir G. HEWARTI have a lively recollection of that case, and unless my memory plays me false, it was decided adversely to the contractor, and that decision was affirmed by the Court of Appeal. Since then, I believe, the House of Lords has reversed the decision, and therefore my hon. Friend cannot got much assistance from that case.
§ Amendment negatived.
§ Sir G. HEWARTI beg to move, in Subsection (1), to leave out the word "to" ["or to diversion or insufficiency of labour."]
I move the omission of this word for reasons which are perfectly obvious. If that word remains doubts would arise as to the meaning of subsequent words, and the omission of this word will make it clear what the operation of the subsequent words is.
§ Amendment agreed to.
1066§ Mr. NIELDI beg to move, in Subsection (1), to leave out the word "may"["the Court may, after considering all the circumstances"], and to insert instead thereof the word "shall."
I think it is very desirable that this Clause should be made more mandatory by the insertion of the word "shall."
§ Sir G. HEWARTMy hon. and learned Friend has the gift of asking us to do a very large thing as if it were something very small. The scheme of this Clause is obviously to give the Court the power, if it thinks fit, of suspending or annulling, as the case may be, but my hon. and learned Friend proposes that the Court may not only do that, but shall be required to do it in every case, and that takes away from the Court the discretion which is the very essence of this matter.
§ Amendment negatived.
§ Mr. PETOI beg to move, after the word "contract" ["suspend or annul the contract on such conditions"], to insert the words "or vary or rescind any of the provisions of the contract."
This is the last of the three Amendments to which the whole of the building trade attach great importance. The learned Solicitor-General has not given way on either of the other Amendments proposed on behalf of the builders, but I hope he will meet us in this case. The Bill provides that the Court may suspend or annul the contract. Broadly speaking, the builders do not ask for power of the Court to suspend the contracts, because in most cases the War has done that, and the builders do not want any further suspension. We should rather like some provision to enable us to go on with the contract, but to annul a contract is not the proper power to give to the Courts. Many of these cases of hardship do not necessarily involve a complete annulling of a contract. Take the individual clauses in a contract which cannot be carried out, or which are affected. There certainly ought to be a power in the Court to vary or rescind any of the provisions of the contract, as well as power to suspend or annul. I will give one case as an illustration. It is that of a contract which is one of a few that is still alive, and which is under the words we have already passed affected by this Bill. It is a contract which was entered into with the Belfast Corporation in 1913. It is for out-fall sewage works, and about one-tenth 1067 of the work has already been completed. The position of the unfortunate contractor is that his plant is on the job depreciating very rapidly, and he cannot get any money from the corporation, or any settlement; they simply regard the contract as suspended during the War, and they intend to call upon the contractor to finish the work after the War. All the plant is wasting away, and they can get no relief of any sort or kind. The Solicitor-General says that in order to relieve contractors he is going to give power to the Court to suspend or annul the contract. This contractor does not want his contract annulled, but he does want the Court to have power to prevent the clauses of the contract operating unfairly and with undue advantage to the wealthy corporation for whom the work was being carried out. Therefore I think the Solicitor-General should consider that point if he wants to do anything to make this a live Bill to give any relief at all, even in the limited number of cases to which he has allowed it to apply. To do this he should certainly give the Court the discretionary power of varying or rescinding individual clauses, as well as the power of annulling or suspending contracts.
§ Sir G. HEWARTI am sure the members of the Committee appreciate the kind of criticism to which this Clause is being subjected. I am not in the least complaining; I only want to understand it. First of all, it is said that the Clause ought to apply to a great many contracts to, which it does not apply. Then it is said that it ought to apply to contracts of quite a different nature. And, thirdly, it is said that it ought to apply upon grounds other than the grounds which are enumerated. Now it is said that the Court ought to be able to give a different kind of relief from that which this Bill proposes. In order to see the reasonableness of this suggestion, may I be permitted to call attention to that which the Bill does enable the Court to do. It is provided in the cases to which the Clause applies that the Court may, after considering all the circumstances of the case, the position of all the parties to the contract, and any offer which may have been made by any party for a variation of the contract, suspend or annul the contract on such conditions, if any, as the Court may think fit. In other words, one of the matters contemplated by this Clause is that before the applica- 1068 tion to the Court there may have been a suggestion on the part of one of the parties for a variation of the contract, and what my hon. Friend proposes is that where the parties upon the question of varying the contract have failed to agree, one of them may go to the Court and may ask the Court not merely to suspend or put an end to the contract, but to make a new contract to vary or rescind any provision of the contract. What does that mean? It means that the Court is to be entitled, in such a case and after such a failure as is here suggested, to make a new contract.
I do not for a moment attempt to put the case so high as to say that this Clause is a complete remedy for every grievance-—of course, it is not-but I do submit that it goes to the utmost limit of what may practically and reasonably be done in order to meet the grievance. If my hon. Friend will consider the words of this Clause, it will be apparent to him that a very large discretion is given to the Court. The Court may take into consideration the several matters Which are enumerated here, and it may then suspend or annul the contract on such conditions, if any, as the Court may think fit. I submit that is ample discretion, and that it would be in the last degree mischievous, find, where not mischievous, impracticable, to invite or to empower the Court to make a new contract between the parties in such circumstances. One can imagine a case in which the person who had the obligations to perform might contend, "It is not that I cannot perform the contract. It is not that I am not ready to perform the contract now. It is not that I cannot complete the contract within the time stipulated. But look at the prices. I ask you to revise the schedule of prices." The defendant in the action says, "Certainly not" My hon. Friend says that in those circumstances it is right and proper that the Court should take upon itself the irksome and very often impracticable task of saying what the prices should be.
§ Mr. POLLOCKI think the Clause does want these words, "or vary any of the provisions of the contract." The Solicitor-General has made his point quite clear. We are, first of all. giving a power to the Court which it may under certain circumstances use. It is to have a discretion. It is not to be compelled to use it, but it is to have the power, and, if in its discretion it thinks it right, it is to use it. Supposing 1069 an offer for a variation of the contract has been previously made and the Court thinks it a perfectly fair one and that it ought to have been accepted, is it, then, only to have the power to say it will suspend or annul the contract? It is quite true that the Clause says, "on such conditions as the Court may think fit"; but it would be rather forcing the Court to say," I will suspend or I will annul the contract, but the condition I impose is that you must really in effect accept the variation which has been put forward and which ought to be available. "If one of the things which the Court is to consider is a reasonable offer to vary a contract in a particular case, I should have thought that it would have been very useful if the Court instead of going to the full length of annulling or suspending the contract had the intermediate power between those two very important and rather powerful expedients of saying, "I will vary the contract in accordance with the reasonable offer that has been made." The Solicitor-General has pointed out that this is not a power which the Court will use or will be compelled to use unless it is right and proper, but I feel a certain difficulty in parting from this Clause without giving the Court an intermediate weapon between complete suspension or complete annulment. I think it ought to have something lighter than those two very heavy remedies, and that it ought to have the power to vary. The Court need not use the power, but it would be unfortunate if the Solicitor-General did not accept the words "or vary."
§ Mr. NIELDI desire to echo the words which have fallen from my hon. and learned Friend opposite (Mr. Pollock), and, in doing so, I should like to address myself to an observation of the Solicitor-General, which I do not think be meant. After referring to the scope of the Amendment, he reviewed other types of Amendment in such a way as to give the impression that he thought there was some intention to obstruct the progress of the Bill.
§ Sir G. HEWARTNo.
§ Mr. NIELDI am glad to hear my hon. and learned Friend say, "No," because this is a very important measure and at any rate should receive reasonable discussion. I would ask the Solicitor-General 1070 between now and the Report stage to consider the necessity for giving this extra power to the Court. Surely, as the last speaker said, the Court must consider what has taken place between the parties in their endeavour to come to a settlement, and it ought to have the power, if it thinks it reasonable, to do something other than merely annul the contract. What is more iniquitous than that a man should insist upon getting a building of greater value at the expense of the unfortunate man who has entered into a contract with him by demanding that in so far as the contract has been partly performed at enhanced prices for labour and material it shall only be paid for at the scheduled prices in the contract? In times such as these, which are so exceptional—none of us living have ever known the like or will ever know them again—there should be a generous interpretation on the part of the Court, and, in order that there may be that generous interpretation, there ought to be the widest possible power. It is a discretionary power, which will only be exercised when a good case is made out. I would ask the Solicitor-General, between now and the Report stage, to make some effort to make some effort to accept these words.
§ Sir S. COLLINSI trust that the Solicitor-General will listen to and think over what his two hon. and learned Friends have just said. I speak as an ordinary man, not as a lawyer. I hope that the hon. and learned Gentleman is not closing up his mind and heart like adamant. Surely he does not come down with this Bill and think he is going to carry it through like the laws of the Medes and Persians, without any alteration. We only make little alterations. We all admire the hon. and learned Gentleman for the very high position he holds and the clear way in which he has stated his case, and, so far, won to-day, but if he will meet us in this very little and modest request to give this wider and discretionary power, I do not think he will regret it. At any rate, if my poor efforts are unavailing, will he listen to his two hon. and learned Friends and give way on this Amendment?
§ Amendment negatived.
§ Clause, as amended, ordered to stand part of the Bill.