HC Deb 14 June 1922 vol 155 cc409-28

  1. (1) Improvements authorised by the Settled Land Act, 1082, shall include the following, nanely:
    1. (i) Residential houses for land or mineral agents, managers, clerks, bailiffs, woodmen, gamekeepers and other persons employed on the settled land, or in connexion with the management or development thereof:
    2. (ii) Any offices, workshops and other buildings of a permanent nature required in connexion with the management or development of the settled land or any part thereof:
    3. (iii) The development of the settled land, or any part thereof as a building estate, and the erection, building, making, and laying out for that purpose of dwelling houses, shops, buildings for religious, educational, literary, scientific, or public purposes, places, market houses, places of amusement and entertain meat, parks, squares, gardens, grounds for recreation, exercise, or games, or other open spaces, roads, streets, paths, sewers, drains, gasworks, electric light or power works, or any other works necessary or proper in connexion with the objects aforesaid:
    4. (iv) Restoration or reconstruction of buildings damaged or destroyed by dry rot:
    5. (v) Structural additions and alterations to buildings reasonably required, whether the buildings are intended to he let or not, or are already let:
    6. Boring for water and other preliminary works in connection therewith:
    7. (vii) Heating, hydraulic or electric power apparatus for buildings, and engines, pumps, lifts, rams, boilers, flues, and other works required or used in connexion therewith:
    8. (viii) Engine houses, engines, gasometers, dynamos, accumulators, cables, pipes, wiring, switchboards, plant and other works required for the installation of electric, gas, or other artificial light, in connexion with any principal mansion house, or other house or buildings; but shall not, include electric lamps, gas fittings, or decorative fittings required in any such house or building:
    9. (ix) Subject to provision for the repayment of the capital money expended being made in manner hereafter provided, steam rollers, traction 410 engine, motor lorries and moveable machinery for farming or other purposes.
  2. (2) Where money is required for the purpose of paying for any improvement authorised by the Acts, or by the settlement, the tenant for life may raise the money so required and the costs of raising the same in the manner provided by Section eleven of the Settled Land Act, 1890 (as amended), ill regard to money thereby authorised to be raised, and the money raised under this Sub-section shall be capital money for the purpose aforesaid and may be paid or applied accordingly.
  3. (3) Capital money arising under the Acts may be applied in or towards payment for any improvement authorised by the Acts or by the settlement, without any scheme for the execution of the improvement being first submitted for approval to, or approved by, the trustees of the settlement or the Court.
  4. (4) Where the capital money to be expended is in the hands of the trustees of the settlement they may apply that money in or towards payment for the whole or any part of any work or operation comprised in the improvement, on
    1. (i) A certificate to he made by a competent engineer or able practical surveyor employed independently of the tenant for life, certifying that the work or operation comprised in the improvement, or some specific part thereof, has been properly executed, and what amount is properly payable in respect thereof, which certificate shall be conclusive ill favour of the trustees as an authority and discharge for any payment made by them in pursuance thereof; or
    2. (ii) An order of the Court directing or authorising the trustees so to apply a. specified portion of the capital money: Provided that in the case of improvements not authorised by the Settled Land Acts, 1882 and 1890, or by the settlement, the trustees shall be entitled, if they shall think fit, before they make any such application of capital money to require that that money, or any part thereof, shall be repaid to them, out of the income of the settled land by not more than fifty half-yearly instalments, the first of such instalments to be paid or to be deemed to have become payable at the expiration of six months from the date when the work or operation, in payment for which the money is to he applied, was completed.
  5. (5) The tenant for life is by this Section authorised to create out of the settled land, or any part thereof, a yearly rentcharge in favour of the trustees of the settlement sufficient in amount to discharge the said half-yearly instalments.
  6. (6) Where the capital money to be expended is in Court, the Court may, if it 411 thinks fit, on a report or certificate of the Minister, or of a competent engineer or able practical surveyor approved by the Court, or on such other evidence as the Court shall think sufficient, make such order and give such directions as it thinks fit for the application of the money, or any part thereof, in or towards payment for the whole or any part of any work or operation comprised in the improvement.
  7. (7) Where the Court authorises capital money to be applied in payment for any improvement or intended improvement not authorised by the Settled Land Acts, 1882 and 1890, or by the settlement the 'Court may, as a condition of making the order, require that the capital money or any part thereof shall be repaid to the trustees of the settlement out of the income of the settled land by a fixed number of periodical, instalments to he paid at the times appointed by the Court, and may require that any incumbrancer of the life estate shall be served with notice of the proceedings.
  8. (8) Where any such Order is made the settled land shall stand charged with the payment to the trustees of the settlement of a yearly rentcharge sufficient in amount to discharge the periodical instalments, and the rentcharge shall accrue from day to day, and be payable at the times appointed for payment of the periodical instalments, and shall have effect as if limited by the settlement prior to the estate of the tenant for life, and the trustees of the settlement shall have all statutory and other powers for recovery thereof.
  9. (9) A rentcharge created by or under this Section shall not be redeemed out of capital money, hut may be overreached in like manner as if the same were limited by the settlement., and shall cease if and when the land affected by the improvement ceases to he settled or is sold or exchanged, hut if part of the land affected remains subject to the settlement the rentcharge shall remain in force in regard to the settled land.
  10. (10) All money received by the trustees of -the settlement in respect of any instalments under this Section shall be held by them as capital money arising from freehold land under the settlement, unless the Court otherwise directs.
  11. (11) Section twenty-six of the Settled Land Act, 1882, is hereby repealed.
  12. (12) The improvements authorised by this Section shall, for the purposes of the universities and College Estates Act, 1898, he deemed to lie inserted in the Third Schedule to that Act.

Sir F. BANBURY

I beg to move to leave out the Clause.

I suppose I shall not have much more success, but I put the. Amendment down in order to obtain a discussion upon the Clause. I quite agree there are parts of it which are good, for instance the first two Sub-sections, to which I have no objection, but the provisions of Subsection (3) are absolutely indefensible. It allows the tenant for life to spend money on all these things. It is turning him into a gigantic speculator and encouraging him and the trustees to enter into all sorts of speculation which any ordinary sensible person who has acquired a little stake in the country would he extremely loth to do. If the tenant for life wants this, why does he not do it out, of the income? Why should he have the income and spend it, perhaps in a foolish kind of way, and then go to some great contractor and ask him to send in an estimate for doing all these enormous things out of the capital? He ought to do it out of the income. My hon. and learned Friend says you want, to encourage building. But you also Want to encourage thrift. You will get many more houses built if you encourage thrift. You are not in this Clause encouraging thrift at all, but you are encouraging the tenant for life to surround himself with all kinds of luxuries at someone else's expense. I sincerely trust my hon. and learned Friend will meet me by omitting some of these Sub-sections.

Sir L. SCOTT

I am sure the House will have appreciated the serious spirit, as they were charmed by the serious voice, in which my right hon. Friend gave the House the benefit of his comments on this Clause. Assuming for the moment that behind his gaiety there is a serious object, I should like to say this. This Clause represents, as a whole, deficiencies which have been found in practice for the last forty years in the Settled Land Act, 1882. It represents really what are the ordinary provisions inserted in well-considered wills and settlements enabling tenants for life to deal with capital moneys for capital purposes on rational lines. The difficulty of legislation of the kind is that in the first Acts which are passed you nearly always find two phenomena: first, overcaution, resulting in the Act not going far enough, and, secondly, the omission of things which would have been dealt with had they been thought of. This Clause, as a whole, fills up gaps and gives powers which the experience of the last 40 years shows are desirable. As regards paragraphs (vii) and (viii), the objects mentioned are not capital expenditure in the full sense of the word, because it is wasting expenditure, and with regard to these I should welcome the Amendment in the name of the right hon. Baronet the Member for the City of London (Sir F. Banbury) and also in the name of the hon. and learned Member for York (Sir J. Butcher) to insert at the beginning of the paragraphs the words which we find in paragraph (ix): Subject to provision for the repayment of the capital money expended being made in the manner hereinafter provided. That is, for the repayment in instalments of the capital expenditure out of income. That is a. reasonable suggestion. In regard to the works mentioned in paragraphs (i) to (vi), they are capital improvements in the ordinary sense of the word, and the expenditure is capital expenditure in the ordinary sense of the expression, and ought to be treated as capital expenditure. Seeing the Amendments on the Paper, I have taken the precaution of consulting some of the leading conveyancers—

Mr. DEPUTY-SPEAKER

I think it would be better to deal with this point when the hon. and learned Member for York moves his Amendment, rather than on the Amendment of the right hon. Baronet.

Sir F. BANBURY

I understand that the Solicitor-General is prepared to accept some Amendments, and I thought he was prepared to accept the omission of paragraph (iii).

Sir L. SCOTT

No, I cannot agree to that.

Sir F. BANBURY

Perhaps it would be more convenient if I withdrew my Amendment in order that my hon. and learned Friend the Member for York may move the omission of paragraph (iii).

Sir L. SCOTT

I felt that the Amendments on individual paragraphs of this Clause as a whole had a certain connection one with the other, and I therefore have obtained for the information of the House the views of one or two eminent conveyancers on the Clause as a whole, and I thought it was convenient that I should give that information to the House, in view of the way in which the right hon. Baronet introduced the Debate. If it meets with the approval of the Chair I propose to do that. The first opinion is from Mr. Underhill, senior conveyancing counsel to the Court, who has had very great experience. He writes: As to Clause 65, I am decidedly of opinion that the proposed Amendments"— that is, the omission of paragraph(iii)— would be a misfortune. It seems to me that one of the great objects of this great Bill, and surely a very commendable object is to give tenants for life and trustees, ail such powers as would be inserted in a settlement drafted by an experienced and skilful conveyancer, but which are only too frequently left out by practitioners who are neither one nor the other. I do not hesitate to state, that in all well-drafted settlements of real estate, whether the settlement be by deed or by will, a Clause similar to paragraph (iii) of Sub-clause (1) of Clause 65, is now invariably inserted, unless the contrary is desired by the parties. It has got into the books of precedents, and is, I think, universally recognised as an ordinary power. Only yesterday I had to advise a tenant for life and trustees under an old will that they had no power to develop the estate as a building estate except by granting long building leases which in the locality were not acceptable to builders. Such a position is neither good for the owners of the estate (whether tenants for life or remainder men) or for the public. With regard to paragraphs (vii) and (viii) of Clause 65, Sub-clause (1) I am inclined to agree with the proposed Amendment. These works are not of a permanent nature and should, I think, like the new roof or the like, be gradually paid out of income by the person for the time being in possession. Mr. Benn, a brother of a Member of this House, also one of the conveyancers to the Court, and a very distinguished conveyancer, writes: I understand that objection is being taken in sonic quarters to the provisions of Clause 65, so far as they relate to the expenditure of capital moneys (1) in the development of the settled land as a building estate, (2) in providing heating, hydraulic, and electric power apparatus far buildings, and (3) in providing electric and other lighting installations. I sincerely trust that these objections will not be 'allowed to prevail. The existing Statutory provisions are in ninny respects arbitrary and unreasonable. For example, you can provide a water supply to a mansion, but you cannot supply a lighting installation. Yon can build a golf club house in connection with a building estate, but you cannot build new stables for the mansion. In many other respects the existing provisions are uncertain in their meaning, and constantly give rise to useless legal costs involved in taking opinions of counsel, and ultimately seeking the advice of the Court. All the proposed new provisions are within the general scheme of the existing Acts, namely, to authorise improvements which increase the value of the settled land. They are usually inserted in well-drawn settlements, thus adding to the expense in their preparation. We are all familiar with very numerous cases where the absence of power to provide electric lighting installations out of capital moneys has been found very detrimental to the interests of the settled estates. Mr. Edmund Beaumont, who was President of the Institute of Conveyancers, when they were considering this Bill, writes in a similar strain. This Clause represents the modern, up-to-date practice in view of the needs of the day.

Amendment, by leave, withdrawn.

Sir J. BUTCHER

I beg to move in Sub-section (1), to leave out paragraph (iii).

My reason for moving this Amendment is that I think the House, as competent business men, will agree that the powers proposed in this Clause are really extravagantly great. This Clause proposes to permit capital moneys, that is, moneys which are intended for the benefit of the tenant for life, and the successors afterwards, to be spent in improvements of the sort referred to in this paragraph. It is quite right that capital money should be spent for reasonable improvements, which really increase the value of the settled land, and are for the convenience of the persons who are going to occupy the house. Let me remind the House that this is not a lawyer's question, this is not a question for the conveyancers of Lincoln's Inn, but a question for ordinary laymen, who are competent persons of commonsense, to decide. Is it a reasonable thing to spend capital money on the building of museums, libraries, churches, chapels, cinema picture palaces, and other places of recreation? If one were a millionaire many times over one would probably do many things. In that case I am not sure I should build cinema halls, but I should like to provide cricket grounds, football grounds, tennis grounds, and to provide a model village, and all the rest of it. But that is not the sort of case which we are contemplating here. We are contemplating the spending of money which belongs to people in succession. When you give the power to spend this capital money upon cinema picture palaces, museums, churches and chapels, it is really going beyond anything that is reasonable.

The Solicitor-General has justified this Clause by reading letters from eminent conveyancers. I am not in the least degree desirous of minimising the value of the opinion of eminent conveyancers, but I say that this is not a question for lawyers at all. This is a question for business men, for the owner of an estate, for the ordinary layman, and I ask, is it reasonable to give power to spend money in that way? The Solicitor-General says that you find this sort of Clause in all well-drawn settlements. I do not draw settlements now, but I did in former days, and I never put in any such Clause as this. Perhaps I was not enlightened enough. Certainly, the, people who instructed me never dreamed of asking me to insert a Clause in the settlement, which might dissipate the whole of the estate, and enable an ambitious or large-minded tenant for life to improve the property out of existence. That is not the object for which you put in these conditions in Acts of Parliament. In connection with very large estates, with an income of £50,000 or £100,000 a year, perhaps it would be desirable to have a Clause of this kind inserted in the settlement: but we are legislating not for properties worth £100,000 a year, but for the average settled properties in the country. How many settled properties in this country do we know where the tenant for life ought to have the power to build all the things I have referred to, at a cost of perhaps tens of thousands of pounds?

The solicitors of Lincoln's Inn who have to deal with large properties may insert very wide powers in the settlement, but this is not the sort of power that ought to be inserted in the settlement of property of the normal kind. It is not the sort of power which an Act of Parliament ought to give to a tenant for life in regard to normal or average settled property. This provision goes beyond the limits of reason. If you put this Clause into the Bill a tenant for life, if he is a man of large ideas, acting with trustees may, if they are men of perhaps easily influenced minds, be able to put these wide powers into operation without any check by the Court, or any check from the remainder man, who may be out of the country and may not know anything of what is going on. Therefore, you leave it in the power of the tenant for life, with the assistance of his trustees, to really squander the whole estate. It is perfectly easy to put this Clause into settlements of a proper kind, and that is where it ought to find itself, and not in an Act of Parliament.

The Solicitor-General says that it is necessary to have electric light and gas. Granted; but in paragraphs (vii) and (viii) we find powers to set up electric light and gas. Why do you want the power twice over? Learned and eminent conveyancers from Lincoln's Inn would not put these things in twice over, and yet we are told that they are in every settlement. In paragraph (iii) you have provision for "gas works, electric light and power works," and you have the same thing over again in paragraphs (vii) and (viii). There is danger in that. In regard to paragraphs (vii) and (viii) the Solicitor-Genera] says that the money ought to be spent in providing gas and electric light and things of that sort, and he admits that the money so spent ought to be repaid by instalments. There is no such provision in paragraph (iii). Therefore you have the ridiculous result in the Bill as drawn that if you provide electric light and gas works under paragraph (iii) you can apply the capital without any provision for repayment, but if they were put up under paragraphs (vii) and (viii) then, according to the Amendment which the Solicitor-General has indicated he will accept, you would have to provide for the repayment of the capital. If the Solicitor-General will not cut out the whole of paragraph (iii) he will have to have some Amendment to make it read in consonance with paragraphs (vii) and (viii). This paragraph reads like an advertisement for Port Sunlight. It is probably a very accurate description of the improvements down there. Everyone is not Lever. Everyone has not £20,000,000.

Mr. SUGDEN

A great deal more.

Sir J. BUTCHER

Let us say £20,000,000 to begin with. Everyone has not £20,000,000 at his back to indulge in this sort of expense.

Sir F. BANBURY

They are all peers.

Sir J. BUTCHER

These multi-millionaires can indulge in this most desirable thing. They can get it put into their settlement. In the case of a comparatively poor man, owner of a country estate, it is a most reprehensible thing to invite him and his trustees, without any check, to indulge in expenditure which he cannot afford and which may have the effect of ruining the family estate.

Sir F. BANBURY

I am pleased to second the Amendment. I agree with a great deal of what the hon. and learned Member for York (Sir J. Butcher) has said. It has been pointed out to me that all these powers only apply where any particular scheme has been instituted, and these particular powers are necessary to that scheme. No doubt that to a certain extent does minimise some, of the objections which have been raised by the hon. and learned Member for York. Under this paragraph practically two-thirds of the value of the estate may be borrowed to invest in building operations. If these buildings operations turn out unsuccessful the whole estate is gone. Surely that is not what is intended. I understand that there may be one or two eases where a town has developed, and an estate is surrounded by buildings, and it may be necessary to allow that particular part to be converted to other uses. Surely that can be done without this Clause. The tenant for life, I understand, has now the power to sell. Therefore, if I am right, and I think I am, I do not see any reason for this particular paragraph. My hon. and learned Friend says that it may be necessary for very large estates. I think that he is right. Why should we legislate entirely for large estates? We have got to legislate here for a vast number of people who by thrift, hard work, or any other legitimate means, have secured a certain sum of money or estate which they desire to preserve to their descendants. Why should they run risks of this kind?? It is true that the Solicitor-General has read out certain letters from eminent people, members of the Bar, who say that in their opinion this sort of thing is right.

Sir L. SCOTT

They have used this in practice.

Sir F. BANBURY

Yes in the settlement which they have drawn. No one has a greater respect for the Bar than I have in their own sphere, and that is not investing money. I have had some experience of investing money, and I have had some experience of very eminent people, barristers, who have come to me and have asked my opinions about investing their money. On more than one occasion they have said to me, "We lawyers do not know anything about the investment of money. Though I have made a very large sum at the Bar, I have invested it so badly that I have lost a great part of it, and I would like to know what you would recommend." In those circumstances I do not see any use in the Solicitor-General reading out opinions from barristers about investments. They do not know anything about them. They are, I think, very bad advisers on that particular point. Therefore I do not think that the letters from these gentlemen have anything to do with the question whether or not we should give these enormous powers to the tenant for life. As I understand, under the Clause which has just been passed, the tenant for life can advance money to builders for the purpose of building. If that is so, why do you want this also? It is said that he can only advance two-thirds, and in all probability there will be a great deal of that two-thirds left if the speculative builder fails, but this paragraph enables him to run the whole of the risk himself. Surely, he ought to be content with the Clause, just passed. I hope that my hon. and learned Friend will go to a Division, and he will have at least one man in the Lobby, because it is not right for the Government to refuse to accept all these Amendments on a complicated Bill of this sort. This Amendment is a reasonable one and should be accepted.

Sir L. SCOTT

The right hon. Baronet has been good enough to express his views as to the competence of barristers to advise on matters of investment and I do not propose to dissent. I would merely observe that the barristers who have written these very interesting letters, which I have read to the House, were not advising the House or anybody else as to what they should invest in. They were merely informing the House that those who, like my right hon. Friend the Member for the City of London, are extremely competent to advise others how to invest their money, should be given power, if they think right, to invest their money in settled estates, as indicated in this Clause.

Sir J. BUTCHER

Not their money.

Sir L. SCOTT

The money of the settled estates. And we are entitled to assume that a man of business, exercising these powers, will act as a man of business. The Mover of this Amendment spoke as if the Clause put on the tenant for life the obligation to do these things. All this Clause does is to give power to a sane man to do these things if he thinks it right for the development of the estate, under all the safeguards that the law provides. I only read those letters for this specific reason. During the last ten or fiffteen years it has become customary and usual and proper for men of business in settling their estate, either by will or settlement, to insert these very powers contained in paragraph (iii), not because they desire to exercise the powers themselves, but because they think that the man coming after them ought to have those powers. All the Bill does is to give those powers to be used in precisely the way that competent men of business have been constantly using them during the last ten or fifteen years. These letters may have convinced the House or they may not, but I did not read these letters in order that I might quote these men as guides in business investments. I agree with my right hon. Friend that that is not their job. In those circumstances there is a primâ facie case for this paragraph. Add to that this. There are undoubtedly more settled estates in the ownership of the Members of the other House than is the case in this. The other House have considered this particular Clause with extreme care, with the advantage of a great body of expert opinion advising them about it, and the Law Saciety and various other advisers who have considered this Clause have all agreed that it is a. desirable Clause.

6.0 P. M.

Sir J. BUTCHER

I am not terrified by what the learned Solicitor-General says about the views of the House of Lords. We are legislating here for ordinary men, among others owners of small settled estates, and he must not throw the House of Lords at my head. We are here considering questions and deciding them according to our qualifications and capacity, and I cannot allow the opinion of anyone who sits at the other side of the Lobby, upon a subject upon which I am competent in my own way, to overrule the opinion which my reasoned convictions lead me to adopt, and I am sure that no other Member of the House would accept the views which are thrown out from some other quarters on a subject upon which he is capable of forming an opinion himself. So let us get rid of these extraneous arguments and consider the thing on its merits. The Solicitor-General tells us that these things are generally put into the settlement. That is the very reason why we do not want them here. When there is a case for them they ought to be put into a settlement, but when they are totally inappropriate to the character of the property they ought not to be put into a settlement. The learned Solicitor-General says that because these provisions are suitable for large estates, they ought to be made applicable to all estates by Act of Parliament.

Sir L. SCOTT

I did not say that.

Sir J. BUTCHER

I understand that that was the argument by which it was sought to support this Clause. My argument is that when they are appropriate to the estate they are in the settlement, and when not appropriate they are not in the settlement. These powers to build churches and chapels, cinemas, museums and libraries, and so on, are not suitable to be put into the settlement of every estate by Act of Parliament.

Sir L. SCOTT

May I ask my hon. and learned Friend a question? If he had the power to build such a cinema would he exercise that power?

Sir J. BUTCHER

If I were in that position, I think I would be able to exercise the powers given me by Act of Parliament in a reasonable way; but I am not at all sure that every tenant for life is fully competent to do what this Act of Parliament enables him to do. Some tenants for life are persons of much larger views than I am, and attach more importance to cinemas and museums, and there may be many tenants for life who would think that that was a very appropriate way of spending money which is not their own. I say they ought not to be allowed to do it except with their own money. I would prevent people who are not wholly wise from using the powers. I would urge the Solicitor-General not to put temptation in the way of those who might not be very competent to resist it—powers which it would be most dangerous for them to exercise.

Amendment negatived.

Sir J. BUTCHER

I beg to move, in Sub-section (1, iii), to leave out the words "gasworks, electric light or power works."

There is already a provision in Subsections (1, vii) and (1, viii) for electric power. In the former it is specifically mentioned. We do not want electric power mentioned twice. Then there is gas lighting. You have it in Sub-section (1, viii), which says that improvements are to include engine houses, engines, gasometers,…plant, and other works required for the instalment of electric, gas, or other artificial light…

Sir F. BANBURY

I beg to second the Amendment.

Sir L. SCOTT

I think the point of my hon. and learned Friend is founded upon a misapprehension of the precise effect of the wording of these paragraphs. Paragraph (iii) of Sub-section (1) deals with a development of a building estate. Paragraph (viii) deals with engine houses and gasometers and electric lighting apparatus. There are the words in connexion with any principal mansion house or other house or buildings. The draftsman of the Clause thought it desirable to separate what were regarded as works in paragraph (iii) from ancillary engines and plant and apparatus for a building or a house. That is why they are repeated. In line 34 you have the words Gasworks, electric light or power works or any other works. In the other paragraph it is engine houses and accumulators and other works required in connexion with any principal mansion house.

Sir J. BUTCHER

The point is too subtle for me to understand. If the learned Solicitor-General is satisfied that he is right, I shall not, press the Amendment.

Amendment, by leave, withdrawn.

Amendment made: At the beginning of Sub-section (1, vii) insert the words Subject to provision for the repayment of the capital money expended being made in manner hereinafter provided."—[Sir J. Butcher.]

At the beginning of Sub-section (1, viii) insert the words Subject to provisions for the repayment of the capital money expended being made in manner hereinafter provided."—[Sir J. Butcher.]

Sir J. BUTCHER

I beg to move to leave out Sub-section (3).

By the Settled Land Act, 1882, it is provided that when certain improvements were proposed for the expenditure of capital money the tenant for life had to produce a scheme, showing in general detail what he proposed to do, and he submitted that scheme to the trustees or the Court, and if the trustees or the Court approved the scheme, the capital moneys could be expended on it. The words in the Act of 1882 were very carefully thought out at the time. Section 26 provides that where the tenant for life was desirous that capital money arising under the Act should he applied for improvements authorised by the Act, he might submit for the approval of the trustees of the settlement or to the Court, as the case might require, a scheme for the execution of the improvements. When the scheme was approved by the trustee or the Court the money could be spent. That is a very valuable provision, because it enabled the trustees or the Court to know at what the tenant for life was driving. He had to state in general terms what he wanted to do. He had to get an estimate of the expenditure, and then the trustees or the Court were in a position to judge whether or not it was wise expenditure. Sub-section (3) of this Bill dispenses with the scheme altogether. If ever there was a case where it was important that the scheme authorised by the Act of 1882 should be adhered to, it is the present case, because you have already sanctioned a large number of very novel and dangerous means of expenditure. I urge that it would be extremely unwise to dispense with what was thought in 1882 to he an absolutely necessary provision for the protection of the estate.

Sir F. BANBURY

I beg to second the Amendment.

It seems to me necessary that we should not abandon every chance of preserving the body of the estate. Speaking as a layman it seems to me that this Clause does away with all the safeguards which my hon. and learned Friend the Solicitor-General only a few moments ago told me existed. He endeavoured to allay my apprehensions by saying, "You need not be nervous about money being advanced for building houses, and so on, because the trustees cannot do it except in certain circumstances." I am not sure I was at all re-assured by what the Solicitor-General said, but now we come to this provision, which, as I understand it, takes away the whole of the safeguards said by my hon. and learned Friend to exist. I do not know whether or not he will say that this does not apply to the estate as a whole but only to a portion of it, where portion is sold and the money which comes in from that sale has to he re, invested. Even if that be so, it does away with the safeguards which formerly existed against foolish investments. If it does away with the safeguards against the investment of the money without the trustee being able to investigate the circumstances, then what safeguards are left? I sincerely trust, unless there is a really sound explanation for this proposal, that it will not be accepted.

General Sir IVOR PHILIPPS

The word "Acts" is constantly referred to in this and other portions of the Bill. I should like the Solicitor-General to tell ca what. Acts are meant.

Mr. D. HERBERT

The Settled Land Acts.

Sir I. PHILIPPS

It does not say so.

Sir L. SCOTT

In Clause 71, Subsection (2), it is stated that The Settled Land Acts, 1882 to 1922, are referred to as 'the Acts'. With regard to the Amendment which has been moved, the Sub-section in question has been introduced into this Bill because the system of schemes under Section 26 of the Settled Land Act of 1882 has been found, in practice, to cause such very great expense as to be practically prohibitive. The result is that the schemes have not been a real safeguard, and, as a matter of fact, in every well-drawn settlement to-day there is a Clause saying that the submission of a scheme to the trustees, as mentioned in Section 26 of the Act of 1882, shall not be required. It is simply following the lesson of experience that this Sub-section has been inserted. In the Settled Land Act of 1890 a temporary provision was inserted dealing with the subject and providing for sanction by the Court in connection with money which had been expended without a scheme. But in practice it has been found better to dispense with the scheme altogether.

Sir J. BUTCHER

Why?

Sir L. SCOTT

Because of the expense involved, which in practice has been found to be unnecessary. The Seconder of the Amendment asked what safeguards are left. If the House will turn to Subsection (4) of Clause 65, it will be found that it is there provided: Where the capital money to be expended is in the hands of the trustees of the settlement they may apply that money in or towards payment for the whole or any part of any work or operation comprised in the improvement, on—

  1. (i) A certificate to be made by a competent engineer or able practical surveyor employed independently of the tenant for life, certifying that the work or operation comprised in the improvement, or some specific part thereof, has been properly executed, and what amount is properly payable in respect thereof… or
  2. (ii) An order of the Court directing or authorising the trustees so to apply a specified portion of the capital money."
Then there is this provision: Provided that in the case of improvements not authorised by the Settled Land Acts, 1882 and 1890, or by the settlement, the trustees shall be entitled, if they shall think fit, before they make any such application of capital money to require that that money, or any part thereof, shall be repaid to them, out of the income of the settled land by not more than fifty half-yearly instalments. The right hon. Baronet the Member for the City of London (Sir F. Banbury) will see that according to the proviso at the end of that Sub-section it is competent for the trustees, if they think fit, to require repayment over a period of 25 years. There is first the proviso in regard to the certificate by an engineer or surveyor, then the proviso with regard to an order of the Court, and finally the proviso in regard to improvements authorised by either this Act or any Act subsequent to it, that they may require repayment in the way I have mentioned.

Sir F. BANBURY

I am not sure that Sub-section (4) does not contradict Subsection (3) which says, that "capital money arising under the Act" may be applied in certain ways. Sub-section (4) on the other hand says "where the capital money to be expended is in the hands of the trustees." Is not all capital money in the hands of the trustees?

Sir L. SCOTT

In most cases.

Sir F. BANBURY

Then what is the use of Sub-section (3)?

Sir L. SCOTT

Sub-section (3) in terms provides for getting rid of the necessity of submitting schemes to the trustees. The provisions of Section 26 of the Act of 1882 require that a great number of elaborate provisions shall be complied with. That Section provides that where the tenant for life is desirous that capital money shall be applied in or towards payment for improvements, he may submit for approval to the trustees of the settlement or the Court, as the case may require, a scheme for the execution of the improvements showing the proposed expenditure thereon. Where the capital money is in the hands of the trustees, then, if the scheme is approved by them, the trustees may apply that money in or towards the payment of the whole or part on, first, a certificate from the Land Commissioners—that is, now, the Ministry of Agriculture—or a certificate that the work or alteration has been properly executed and that the amount is properly payable; secondly, the certificate of a competent engineer or surveyor; or, thirdly, an order of the Court, and so on. There are a number of elaborate provisions, compliance with which means the spending of a great deal of money on architects, quantity surveyors, consulting engineers and so forth, an expense which in practice is found to be unnecessary. The right hon. Baronet will not expect me to answer questions as if I myself were a tenant for life exercising all these various powers every day in the week. I have no personal experience in the matter; I merely speak from consultation with those who do know, and I give the House to the best of my ability the information I have been able to collect. The result of it is that in practice it is found that the system of schemes under the Act of 1882 is cumbrous and is not a real safeguard, and if we pass Sub-section (3), this, with the safeguards of Sub-clause 4, provides substantial protection as far as is necessary and at the same time gives an opportunity for reasonable development.

Sir F. BANBURY

Let us suppose that I am a tenant for life and that my hon. and learned Friend is the trustee. I go to him with a proposal to invest certain capital money which is lying uninvested, and I do not submit a. scheme. I simply ask him to let me have the money to be invested in the improvement of the estate. He, as trustee, says to me, "Very well, I will do that provided you give me a certificate from a competent engineer or surveyor." Is that as far as this provision goes?

Sir L. SCOTT

Or an order of the Court.

Sir F. BANBURY

Are we to understand that the word "may" in Subsection (4)—"the trustees of the settlement may apply that money"—means "may," or does it mean "shall"? My point is this: Supposing the trustee says, "No, I know what you are going to do. I do not ask you to submit a, scheme, but I do not think it advisable in the interest of the estate to do it, and I shall not give my consent." What happens then?

Sir L. SCOTT

There are, as I have pointed out, the conditions as to the certificate or the order of the Court. Then there is the proviso in regard to improvements not covered by the earlier Settled Land Acts. Furthermore, the trustees have the ordinary power to go to the Court if a. difference arises between the tenant for life and the trustees of the settlement respecting the exercise of any of the powers of the Act or any matter relating thereto, and on that the Court may give such direction as it thinks fit.

Sir J. BUTCHER

That is quite true, but that is not a real safeguard. The real danger arises where the trustees are more or less under the influence of the tenant for life. As I have pointed out on previous occasions, where that is so there is really no protection unless you preserve the scheme laid clown by the Act of 1882 or something like it. The right hon. Baronet the Member for the City of London asked what safeguards are left if we abolish this scheme? That is a very clear question, and, in reply to it the Solicitor-General, in the first place, pointed to the provision with regard to the certificate by a surveyor. May I ask the attention of the House to this fact? This would be a certificate that the work has been done. It would not be a certificate that the work was necessary or that it was for the advantage of the estate or conducive to the development of the estate. The tenant for life may spend money on the exceedingly wide series of improvements which are now permitted, and, when we ask what safeguard there is and what guarantee there is that these are really for the benefit of the estate, the answer is that there will be a certificate from the surveyor that the work has been properly done. What is the other safeguard to which the learned Solicitor-General referred? It is a hypothetical one. He referred to the provision that the trustees might, if they thought fit, demand that the capital money spent on these improvements should be repaid by instalments, but I submit that that is no safeguard whatever, because the case which we are supposing, and the case where you do want a safeguard, is where the tenant for life and the trustees are acting together. The tenant for life naturally does not want capital money repaid by instalments. He wants to get as much out of the estate as he can, and he goes to the trustees and says, "Look here, let me point out what an excellent improvement this is There is no occasion to repay by instalments." The trustees assent, as they can do Where is the safeguard? It has gone, so that the only other alleged safeguard which the Solicitor-General pointed to is non-existent. Therefore, we come back to this, that the only real safeguard as to the improvement being a reasonable and proper one is that contained in the Act of 1882, which you are now abolishing by this Sub-section (3).

Sir L. SCOTT

That is not the only or the real protection.

Sir J. BUTCHER

The hon. and learned Member was asked what were the protections, and he gave two illustrations of protection, both of which I have examined, and both of which, I venture to say, turn out to be nugatory. If there be any other protection, I shall be glad to know of it.

Sir L. SCOTT

The tenant for life cannot spend any capital money without arranging beforehand with the trustees. If he does not, they will refuse to pay and tell him to go to the Court.

Sir J. BUTCHER

That is exactly my point. The dangers we have to meet are where the tenant for life has got the trustees more or less under his influence, and it is in order to provide for dangers of that sort that the Act of 1882 originally said there must be a scheme. Inasmuch as this scheme, which this Bill proposes to abolish, is one of the only protections left, I think the Solicitor-General ought to agree to eliminate Sub-section (3).

Amendment negatived.