§ (1) Sub-section (2) of Section one of the Increase of Rent and Mortgage nterest (War Restrictions) Act, 1915, shall not apply to a lease of a dwelling-house for a term of not less than twenty-one years.
§ Sir G. HEWART
I beg to move, in Sub-section (1), to leave out the words "not less than twenty-one years," and to insert instead thereof the words "twenty-one years or upwards."
It will be apparent at once that this is a purely verbal alteration. The object of the Clause as a whole is to take out of the 1072 operation of the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, certain leases for terms of less than twenty-one years. The fact is that as the Clause now stands there is a double negative. All that I propose is to substitute the words "twenty-one years or upwards" for the words "not less than twenty-one years."
§ Mr. BOYTON
The suggestion is not quite as innocent as it appears. It will be remembered that in the original Act a mistake was made. It penalised anyone for endeavouring to obtain a fine or premium in addition to rent for classes of property to which that Act applied. To put that right, in 1916 another Bill was brought in, the Courts (Emergency Powers) (No. 2) Act, 1916. and in Section 2 of that Act the County Court was given authority to grant a lease for a term of twenty-one years or upwards, and if there was any difference of opinion, the Court. provided that both parties appeared and that it was satisfied that the terms of the tenancy were not less satisfactory to the tenants than the terms on which the dwelling-house was let, might make an order accordingly. As I understand it, both the Section in the original Act and the Section in the Act of 1916 are to be repealed. In that case we shall not have recourse to the County Court, and it will be penalising a large number of people, if they have a lease of less than twenty-one years to dispose of, in that they will not be able to go to their tenant and sell it. It not only penalises the owner but the tenant who might presumably buy, and it puts a stop to business. The Solicitor-General is going too far in suggesting that both these Sections should be eliminated. I shall be glad to have some explanation.
§ Sir G. HEWART
I am sorry I did not think it necessary, in moving what appeared and still appears to me to be a mere alteration of phrase, to deal with the subject-matter of the Clause. The matter really is quite simple. "What happened under the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, was that it was provided that a person should notin consideration of the grant, renewal, or continuance of a tenancy of any dwelling-house to which this Act applies require the payment of any fine, premium, or other like sum.By the latter Act that is, the Courts (Emergency Powers) (No. 2) Act, 1916—it 1073 was provided that in the case of a lease of twenty-one years and upwards a person who wished to do that which the earlier Act forbade, might go to the Court and obtain leave to do it. The proposal of Clause 3 of this Bill as a whole is to take those longer leases of twenty-one years and upwards out of the operation of the first Act. Therefore, as they are out of the operation of the first Act, the particular relief given to them by the second Act ceases to be necessary. So far as my Amendment is concerned it does nothing except to state, I hope a little less clumsily, what was stated in the Clause as drafted. All I am proposing to do now is to take out the words "not less than twenty-one years," and to insert the words "twenty one years or upwards.," I cannot for the life of me see that there is any difference of meaning between the two expressions.
§ Amendment agreed to.
§ Mr. ANDERSON
I beg to move, at end of Sub-section (1), to insert the following new Sub-section,
(2)"Where upon any application by any party to a contract the Court is satisfied that owing to any restriction or direction imposed or given by or in pursuance of any Regulation made under any enactment relating to the defence of the realm any term of the contract cannot be enforced without serious hardship, the Court may, after considering 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 the variation of the contract, suspend or annul the contract on such conditions (if any) as the Court may think fit."
The object of these words is to secure the proper enforcement of legislation which we have already passed. We are asking for nothing new at all. When the Increase of Rent and Mortgage Interest (War Restrictions) Act was before the House of Commons on a previous occasion I moved an Amendment in these words, and I was definitely assured that it was quite unnecessary, and that the Bill in itself gave all the power of recovery for which I have been asking. The point is whether a tenant who has been overcharged under this Act has a right to recover illegal payments that the landlord has taken from him. The Act laid it down 1074 that the tenant could not be charged above what he had been paying prior to 25th November, 1915, and the Act says,A person shall not require the payment of any fine, premium, or other sum in addition to the rent, and where any such payment has been made after 25th November, 1915, then the amount shall be recoverable by the tenant by whom it was paid from the landlord, and may, without prejudice to any other method of recovery, be deducted from any rent payable by him to the landlord.In point of fact a considerable number of cases have arisen where tenants have been overcharged by the landlord—that is to say, they have been asked to pay more than the landlord was legally entitled to call upon them to pay. It was assumed that in that case the tenant would have a right to deduct from subsequent weekly payments what he had been illegally charged, and my view is that it was the definite opinion of the Local Government Board that they should so recover. In a great many cases the tenants have actually deducted. They have said, "You were not entitled to charge this. We have paid you our full legal rent. We have paid you every penny that you are entitled to ask, and since you have charged us more we are going to deduct from our subsequent rent the excess that you have charged us." These cases have been taken into County Courts, with varying results. Sometimes the judge has appeared to take a common-sense view and also a legal view of the matter and has declared for the tenant. In other cases he has given his decision on the side of the landlord. One case in particular has come out which has, above everything else, induced us to bring this matter forward. It is the case of Sharp Brothers and Knight a Chant. It was first of all decided for the tenant in the County Court.
§ Mr. ANDERSON
I am not quite sure of the place, but I think the Solicitor-General will have the full particulars.
§ Sir G. HEWART
I remember the case perfectly well and I remember the decision of the Divisional Court and of the Court of Appeal, but I do not remember the place at which the case arose.
§ Mr. ANDERSON
The Bill has come on rather unexpectedly owing to the rearrangement of business and consequently I have not furnished myself as fully as I should otherwise have done with the particulars. But the main facts are that the County Court decided for the tenant. Then it was taken to the Divisional Court, which upheld the County Court. It was then carried to the Court of Appeal, which reversed the decision of both the lower Courts and said such deductions on the part of the tenant were illegal. That is a very extraordinary state of affairs, because that is legalising illegal rent, and it seems to me to be really legalising what, in the first instance, was a form of robbery. If that judgment were to be upheld the tenants could not recover what has been illegally taken from them, and the landlord could not in any way be punished for overriding the decision of the law that you yourselves have made. It is exceedingly difficult for working-class tenants to carry a judgment from a County Court to a Divisional Court and to the Court of Appeal. It is absurd to ask working-class people to go in for all these legal expenses in order to find out what the law is. We are asking you to so alter the wording of the Act as to make it absolutely watertight and to place it beyond the shadow of a doubt so that tenants can know exactly what their legal rights are.
§ Mr. WARDLE
I desire to reinforce with all the strength of which I am capable the case which my hon. Friend has put forward. I am rather sorry the Amendment which I put down previously could not have been taken along with this, for they are really part and parcel of the same question, and it covers a very wide field. When this House passed the Restriction of Rents Act it did so for the protection of the tenant, and if this loophole is allowed to continue—for a loophole it undoubtedly is—the poorest class of the community will be the chief sufferers. The history of this class of case is written in words of very grave hardship in the case of many of the poor. The number of letters which have been received in regard to the manner in which they have been treated would, I am sure, shock the House. I have one here. Many of these cases are made all the harder because they apply either to the wives of soldiers who are serving at the front or to the widows of soldiers who have been killed in the War. Here is the case of a woman, the wife of a 1076 soldier, who writes to say that her rent was increased from 7s. to 7s. 6d. a week, the extra sixpence being demanded by the landlord. When she refused to pay he said, "What about the arrears," She said, "There are no arrears. You really owe me something." He turned round and made a sarcastic remark, and said what he would do after the War. It is this threat of what they will do after the War that is hanging over these poor people and giving them trouble, because this Bill comes to an end after the War. Week after week when they refuse to pay the landlord is adding the sum as arrears in the rent book, and putting over their heads the threat of what ho will do to them when the War is over. The case is a little different in regard to this Amendment, but it is only a difference in degree and not in kind. The case is that the landlord is charging more than he is entitled to charge them legally, and that has been one of the great troubles in regard to this Act. Many of the poor people knew nothing about the Act, and they have gone on paying the increased rent for some time, and then they find that they have been robbed by the landlord and try to get the money back; but they have no remedy. There is no penalty in the Bill, and no means of recovering from the landlord if the Solicitor-General will not accept this Amendment. Why should the landlords be in a different position under the law from anyone else? Penalties are provided under the Munitions Act for workmen if they break their agreement and do anything illegal; the same applies to employers. Why should there be no penalty with regard to landlords who act illegally, and why should the landords be able to threaten poor people as they are doing at the present time? I think this House ought not to stand it. These poor people ought to be put in a position under the law to recover what has been illegally taken from them by the landlord.
§ 10.0 P.M.
§ Sir G. HEWART
I hope it is not necessary for me to say that I am entirely in sympathy with the object of this Amendment. Let us see how the law now stands. The Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, provided, among other things, that in the case of the dwelling-houses to which it applied it should be impossible for the landlord to recover rent in excess of the standard rent. Since the Act has been law, subject, of course, to the limit of 1077 time stated in the Act, it has been impossible for a landlord by any legal process to recover rent beyond the standard rent. The grievance to which reference is made, and the grievance that was dealt with in the case mentioned by my hon. Friend (Mr. Anderson) arose upon somewhat different matters. It is one thing for a landlord to be unable legally to recover excess rent; and it is another thing for a tenant who through error has paid an excess of rent to recover it back from the landlord. That is so for the very simple reason that where money is paid in ignorance of law as distinguished from the case where it is paid in ignorance of fact, it is not recoverable. If I follow the proposal which has been put forward by my hon. Friends, what they say is that the Act of Parliament as it stands is not complete. It is not enough, they say, to provide that the landlord shall not be able to recover an excess rent, but the poor people who live in the kind of dwelling-house to which this Act applies do not read Acts of Parliament, and perhaps they would not appreciate them if they did, therefore the remedy does not go far enough, unless it provides that the landlord must not require, and if he requires with success, shall have to repay the excess rent. With that object I am completely in sympathy. I am not making, and I am not suggesting the slightest observation upon the decision of the Court of Appeal in the case to which reference has been made. That case, as I have now ascertained, arose in Birmingham. The learned judge of the County Court in Birmingham decided the matter in favour of the tenant. His decision was upheld by the Divisional Court, but it was reversed by the Court of Appeal. It was reversed, and if I may say so, rightly reversed, by the Court of Appeal upon two grounds (1) that the Act was not retrospective, and that the limits of time were exceeded in that case, and (2) because the money had been paid not in mistake' of fact but in mistake of law and therefore was not recoverable. I cannot help thinking that the grievance to which my hon. Friend has referred is a grievance which ought to be dealt with and should foe dealt with fairly by legislation but I am not quite sure that the words which he proposes are well contrived to bring 1078 about the end which he desires. The Amendment which he proposes is that words shall be added as follows:Nor shall any person for the consideration aforesaid require the payment of any rent in respect of any dwelling-house to which the Act applies greater than, the standard rent.What that Amendment does under a different form of words is precisely what is done already by Section I of the existing Act, which provides, in terms, that the increase shall be irrecoverable. I gather from the speech of my hon. Friend that his desire goes far beyond the words-of the Amendment. The point is not that the landlord shall not be able to recover—that is provided for already—tout that if he requires, and requires with success, and the tenant pays it in error and in ignorance of the law, the tenant may then recover it back, or he may get it by way of set off against subsequent demands for rent. I shall be happy in the interval which may elapse between now and the Report stage to consider whether it is not possible to find a concise form of words which will give effect to what appears to mo to be a perfectly legitimate demand.
§ Mr. ANDERSON
I should like to thank the Solicitor-General for having met us in an exceedingly fair and reasonable way, and I shall expect between now and the Report stage that some words will be brought forward better than ours to carry out the intention which we seem to have in common.
§ Mr. BOOTH
I am sure we are all indebted to the Solicitor-General for the promise he. has given. But I would like-to point out that this is not merely a tenant's question. I do not wish to lessen the case put forward by my hon. Friends; I would rather emphasise it. But I want it to be borne in mind that there are good landlords as well as bad landlords. The great bulk of the landlords of this country, I venture to say, did at once comply with the law, and they feel it very hard that they should be stigmatised as a class because of the action of a few bad landlords.
§ Mr. YEO
I, too, thank the hon. and learned Gentleman for the promise he has given with regard to the Clause of my hon. Friend. There is one effect which this question is having to which I would like to draw attention. When people want to go into another house, one of the things they have to do is to produce their rent-book, and when a bad landlord has-entered up supposed arrears in the book 1079 it has the effect of preventing many of these people from being accepted as ten-ants, because landlords will not take tenants whose rent-book shows assumed arrears, although, in fact, they never existed. I think that, in considering this Clause, the Solicitor-General might also consider the possibility of preventing landlords being allowed to put these entries into the books, and thus making it difficult for tenants to remove to other houses, a difficulty which is causing a good deal of trouble and heartburning among many people. I hope he will give this point favourable consideration.
§ Mr. ANDERSON
On the strength of the assurance we have had, I beg to ask leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ Clause, as amended, ordered to stand part of the Bill.