CLAUSE 12.—(Application to Scotland.) (Hansard, 15 May 1933)

The LORD ADVOCATE (Mr. Craigie Altchison)
I beg to move, in page 12, line 6, to leave out the word "seven" and insert instead thereof the word "eight."

The LORD ADVOCATE
I beg to move, in page 12, line 16, at the end, to insert the words: (g) In determining for the purposes of the First Schedule to this Act whether any rent lawfully due from a tenant has or has not been paid in any case where the rent is payable in advance, any sums paid by the tenant in satisfaction of a decree or decrees for rent and expenses shall, if the action in which any such decree was obtained, was raised before the expiry of the period in respect of which the rent sued for was due, be imputed wholly to rent and not to expenses; (h) Where the landlord of a dwelling-house to which the principal Acts apply and of which the rent is payable in advance raises any proceedings for recovery of rent or for removing or ejection before the expiry of the period for which the rent sued for or, in respect of the non-payment of which removing or ejection is craved, is payable, the court shall not award any expenses to the landlord unless it considers it reasonable to do so after consideration of the whole circumstances of the case, including any offer made by the tenant prior to the bringing of the proceedings, to pay the rent by instalments. In Committee the hon. Member for Dumbarton Burghs (Mr. Kirkwood) raised the question of forehand rent in Scotland, which is a system which has prevailed there in recent years. Hon. Members who spoke on the matter pointed out, quite truly, the great hardships which were in many cases associated with the system, and I undertook on behalf of the Government to give consideration to the matter and to endeavour to put something on the Paper which might go some way in the 150 direction of mitigating any hardships there might be. The result is the Amendment now on the Order Paper. Let me explain in a few words its effect. The effect of the present system is this. Suppose an action is brought by a landlord for rent against a tenant and he obtains judgment for rent and expenses. Then the tenant makes a payment on account of the judgment. Under the system which prevails now the landlord can take that payment on account and put it against expenses. If the Amendment is accepted we are altering that so that in future any payment made by a tenant under a judgment for rent and expenses must be put by the landlord against rent and not against expenses.
The important practical consequence of that is that you prevent the accumulation of arrears of rent. By providing that these payments must be put against rent and not against expenses you are preventing what is now happening—an accumulation of arrears of rent by the tenant, with the result that a tenant never clears his rent at all. We think that is all wrong. Accordingly, we propose to alter it by paragraph (g) of the Amendment. The House will understand that this Amendment is only to the application Clause of the Bill to Scotland, but it is to be related to the First Schedule to the Bill, which provides that the court shall have power to make an order for recovery of possession in certain circumstances. If you require that payments made by a tenant are not to go to satisfaction of expenses, but only to payments of rent, you are helping the tenant materially to get rid of arrears and are giving him a distinct and just advantage.
The intention of paragraph (A) of the Amendment is this: At the present time under the system of forehand rent, which means rent payable at the beginning of a term before possession is had by the tenant, a landlord may often bring action for payment of rent, if the tenant defaults, on the very first day or the second day of the term, or within a week of the beginning of the term. In many cases that results in very great hardship. From inquiries we know that in many cases tenants are able to pay during the currency of the term if they get time. They may be able to pay by instalments, but are quite unable to pay the full rent at the beginning of the term. Accordingly 151 we provide that where an action is brought for forehand rent before the term in respect of which the rent is payable has expired, the court shall not award any expenses to the landlord, unless it considers it reasonable to do so after consideration of the whole circumstances of the case, including any offer made by the tenant, prior to the bringing of the proceedings, to pay the rent by instalments. That means that if the landlord brings an action for payment of forehand rent before the tenant has enjoyed possession, the landlord is not to get his expenses unless the court expressly declares that in all the circumstances, including any offer made by the tenant, it is reasonable that the landlord should get those expenses. I cannot help thinking that that will be a very salutary check upon actions which should not be brought. In the City of Glasgow last year there were no fewer than 13,000 actions for payment of rent, and the great Majority of those actions were for payment of forehand rent. I cannot believe for a moment that all those actions were justified. Accordingly I hope that this Amendment will be accepted without a division. Forehand rent in Scotland is a comparative innovation. It is extremely doubtful if it should ever have been sanctioned by the law. Unfortunately it has been sanctioned for a period of years. We now propose this Amendment in order to afford tenants some measure of protection.

§ Mr. NEIL MACLEAN
While thanking the Lord Advocate for the efforts which he has made to meet the view put forward in the original Amendment on this subject I should like him to clear up one or two points. It is true that the first paragraph of the Amendment will help considerably in preventing tenants from being summoned oftener than is justified. A custom has grown up of the owner or factor taking some of the instalments paid in these cases as instalments towards the legal costs of the action, which means that the arrears run up considerably higher than they ought to go. If the costs of the action are to be left over until the instalments actually meet the arrears for which the tenant is summoned, it will assist in mitigating some of the evils which arise in sheriff courts in Glasgow where so many of these actions are being heard. The second paragraph 152 may meet the point which we have tried to bring before the House. The deterrent which the Lord Advocate suggests seems quite a good deterrent if it. operates in the way he anticipates. I do not think there is a factor, or house-owner, or estate agent in Scotland likely to bring an action against a tenant who has fallen slightly behind with his payments towards advance rent, if he realises that when he brings that tenant into court there is a considerable element of chance as to whether he will be able to get expenses or not.
A tenant in Scotland may be under an advance rent of £1 6s. per month. He may go for a day or two without paying that sum and find himself summoned. The court then awards expenses ranging from 6s. 8d. to 13s. 4d., and that amount is added to the £1 6s. rent against the tenant, although he may have occupied the house for only six days or so of the period for which he is being asked to pay. That hardship has grown up in recent years, and it will have to be stopped sooner or later. I hope that this paragraph is going to stop it. As the Lord Advocate has said, in the Glasgow courts alone last year we have had 13,000 actions for arrears of rent, many of which were for airears or supposed arrears of rent in advance which is called forehand rent. That shows the position which we have reached in Scotland in this respect. If we take an average of 6s. 8d. expenses in each of these 13,000 cases, this proposal will mean a saving to the tenants of between £2,000 and £3,000 during the next year. That money will remain in their pockets instead of going into the pockets of house factors or lawyers for legal expenses. I would like the Lord Advocate to say how this provision is calculated to operate while the month for which the rent in advance is claimed is still running. Will the amount sued for be looked upon as arrears while the month is running or will it not be regarded as arrears until the month has expired and will it then be added to any other arrears into which the tenant may have fallen?

§ Mr. KIRKWOOD
May I ask the Lord Advocate one question? Will this provision which he has made avoid the factor being given the power to sue the 153 tenant for rent in advance? 1s rent in advance still to be considered as arrears?

The LORD ADVOCATE
There is nothing in the Clause to prevent the landlord bringing an action for rent payable in advance—forehand rent. Of course, if he is not going to get his expenses, he is very unlikely to do so, because it would mean he is out of pocket through taking action. As regards the point raised by the other hon. Member, the position is that anything a landlord may recover under his decree for rent and expenses must go against rent, and not against expenses. The result is there will be no accumulation of arrears of rent.