§ 11.21 a.m.
§ Mr. Holmes
I beg to move, in page 2, line 42, to leave out from "Sub-section," to the end of line 6, on page 3.
This Amendment must be read in conjunction with a further Amendment which I hope to move later, to insert a new Sub-section. The provision contained in paragraph (b) of Sub-section (4) directing the court not to make a realisation of the capital assets involved, having regard to the interests of the testator's dependants and of the beneficiaries under the will, applies only to cases where the Bill allows maintenance by way of payment out of capital; that is to say, in cases where the value of the testator's estate does not exceed £2,000. An Amendment was moved by my hon. and learned Friend the Member for Ashford (Mr. Spens) in Committee, and subsequently withdrawn, the effect of which was to prevent a court from making an order in any case involving a sale of land or business. It was felt that such an Amendment went too far because such a realisation might sometimes be prudent and desirable. On the other hand, it seemed to be unanimously felt that to compel the realisation of land or business for the sake of an immediate income might be improvident and undesirable, and those who are responsible for the Bill promised my hon. and learned Friend that we would consider the substance of the Amendment before the Report stage. The result is that I am asking the House to allow me to withdraw this portion of the Bill and to insert a new Subsection (6).
I would give an illustration to the House of why it may be undesirable to compel the realisation of an estate. Many businesses bring in a profit of about £1,000 a year, and if they were sold they might realise £2,000 or £3,000. If the 463 proceeds were invested in securities the income might be only £150 a year, whereas the business, if carried on, would bring in £1,000 a year. Let us say that a man has left a business of that sort to his nephew and has thus provided for him. The wife applies to the court for reasonable maintenance. If the court had to order that business to be sold and the result were an income of £150 a year, half that sum for the widow would be £75 a year; whereas if the court were enabled to allow the nephew to carry on the business and provide reasonable maintenance to the widow, she would be able to get £200 or £250 a year. The business would be continued, and everybody would be satisfied. That is the reason why we desire to follow the view of the hon. and learned Member for Ashford, to whom I should like to extend my thanks for having raised this matter in Committee, so that it will not be necessary for the court to order a business in every case to be realised.
§ 11.25 a.m.
§ Mr. Spens
I beg to second the Amendment
I should like to express my thanks to the hon. Member for Harwich (Mr. Holmes) for the consideration he has given to this matter. One of the points that worried some of us very much in Committee was that, while, in the case of any relatives coming within the classes mentioned in Clause 1, a judge who might feel that a prima facie case was made out ought to he able to make some special provision for the applicant, we felt that there are cases where the provision of an allowance for the applicant could only be found by selling a farm or a business or something of that sort, which would inflict on other persons concerned a hardship greater than the relief afforded to the applicant. Therefore, we suggested that it should be laid down in the Bill as a guiding rule to the judges that, when they are providing these allowances for dependent applicants, they should avoid making orders which would involve improvident sales of the only assets of the estate. This, of course, would be an exceptional case, but none the less it is a case which we felt ought to be safeguarded, and by a curious anomaly, owing to the course which the Bill took in Committee, while provision was made that in the exceptional case of an estate 464 of the value of less than £2,000 a capital allowance could be made, there was no similar provision for the much more numerous cases where the allowance was going to be made out of a business. I am grateful to the hon. Member for moving his Amendment, which will probably improve the Bill, and I hope the House will accept it.
§ 11.28 a.m.
§ Lieut.-Colonel Heneage
I desire to associate myself with what my hon. and learned Friend has just said. It may be remembered that in Committee I raised the case of farms and smallholdings. As the Bill was originally drafted, it might have inflicted hardship on the family of a smallholder or farmer if it had to be interpreted in its original form. From the point of view of agriculture, the proposed Amendment will certainly be an improvement on the original wording.
§ Amendment agreed to.
§ 11.29 a.m.
§ Mr. Holmes
I beg to move, in page 3, line 7, to leave out "under this section."
The prohibition contained in this Subsection only applies, as the Bill stands at present, in the case of applications made under Clause 1. We feel that the principle contained in the Sub-section should be equally applicable to an application made under Clause 4 of the Bill for a variation of an order made under Clause z or for an order making provision for the maintenance of another dependant of the testator.
§ Amendment agreed to.
§ Further Amendment made: In page 3, line 11, after "is," insert "or are."—[Mr. Holmes.]
§ Mr. Holmes
I beg to move, in page 3, line 12, at the end, to insert:(6) In determining whether, and in what way, and as from what date, provision for maintenance ought to be made by an order, the court shall have regard to the nature of the property representing the testator's net estate and shall not order any such provision to be made as would necessitate a realisation that would be improvident having regard to the interests of the testator's dependants and of the person who, apart from the order, would be entitled to that property.As I have already explained to the House, this is a new Sub-section to take the place of the one which was left out just now.
§ 11.31 a.m.
I beg to move, as an Amendment to the proposed Amendment, in line 3, after "not," to insert "be required by anything in this Act to."
This is a very modest Amendment, and I hope that the promoters of the Bill will be able to see their way to accept it. It seems to me that the new Sub-section which it is now proposed to insert goes rather far in laying down the principle that in all cases the interest of an estate, or of the legatee to whom the estate has been bequeathed by the testator, overrides the interest of the dependent applicant. My Amendment to the proposed Amendment is designed merely to give the court discretion to order realisation of the estate, even if it would be improvident in the interests of the estate or of the original legatee, if the court sees fit to do so. In other words, the object is to give to the court a larger discretion than is given by the original Amendment.
Let me take two cases. Suppose that the case is one where there is a small business, the realisation of which would probably bring in a reduced income, and would not, from a business point of view, be advantageous; but suppose also that the business has been left to a legatee who is relatively well off—a man who, perhaps, has a big business of his own, compared with which this business is quite a small affair—and that the dependant applicant is an elderly widow with only a few more years to live, or a child who will in a few years be able to become self-supporting. In that case, if the business were realised, it would bring in enough money to support the widow or the child for a few years, and that might be the only way of securing a sufficient provision. My Amendment would give the court power to order realisation of the business in such a case. If, on the other hand, however, the court felt that it would be improvident to realise the estate, that the widow or the child was not absolutely dependent upon it and could do without the money, and that it would inflict a serious injustice on the legatee to interfere with the business, the court could use its discretion and refrain from ordering realisation.
The feeling of the House throughout has been that as much discretion as possible should be allowed to the court, and I think that the promoter, in his desire to 466 meet the views expressed in Committee, has gone rather far in this matter by tying the hands of the court and saying that in no case should the estate be realised, however necessary it might be for the benefit of the dependant applicant, in case some hardship should be done to the legatee. My Amendment to the proposed Amendment would leave the court discretion to decide whether it will or will not order realisation, after taking all the circumstances into account.
§ 11.34 a.m.
§ Mr. Spens
I know that the hon. Lady has always been very suspicious of the wording of the proposed Amendment, but I think she really exaggerates its effect. In the first place, it has absolutely nothing to do with income. If there is anything coming in from a business, farm, or anything else, the court has an absolute discretion as to how it will deal with it, and can make any order affecting income that it thinks fit in the circumstances. All that the Amendment relates to is the realisation of the one and only capital asset of the estate. What we want is that there shall be a direction to the Court that when a realisation would be improvident—and only when it would be improvident—the court is not to make such an order. Surely that is not a very serious matter. None the less, we feel that it is a wise thing to have a direction of that sort, because, as I said, it might be that a judge would feel that if the income could provide only £50 a year and the applicant ought to have £100, this Measure implies that he should try to get £100 a year for the applicant. He may say, therefore, "I can get £100 for him if I order a sale of the estate." The court may feel bound to come down on the side of the applicant, rather than on the side of the other parties. This Bill makes a very serious change in the law. Where this can be done without great injustice to other people, by all means do it; but where the only way it can be done is by making a really improvident sale of the estate, we should not go as far as that. The hon. Lady sees more vice in the proposed Sub-section than is there. I hope the Amendment to it will not be accepted.
Does the hon. and learned Gentleman not realise that, under 467 my Amendment, the court will still be able to do all he wants it to do? It merely leaves it open to the court, in a case where the defendant applicant needs the money very badly and the residuary legatee does not, to say that human right must come before business considerations.
§ Mr. Spens
There is a difference in principle between my view and that of the hon. Lady. I want something in the Bill to prevent the court making an improvident sale in any circumstances, and to prevent the only asset, the estate, being realised because something comes along that is not provided by the Bill.
§ 11.40 a.m.
§ Sir J. Withers
On consideration, I really think the Clause gives sufficient latitude to the court. I think it is only reasonable that the court should not be compelled to allow the estate to be realised if it is improvident to do so. It is very difficult when the hon. Lady has got her mind set on a thing to persuade her.
The whole point of my Amendment is that the court shall not be compelled to do one thing or the other, but shall be left free to decide whether to realise or not, whereas the object of the hon. and learned Gentleman is that the court shall take a strict business view. I think my Amendment would have the effect that the hon. and learned Gentleman says he desires.
§ Sir J. Withers
May I finish what I want to say? I am just as keen as the hon. Lady to see that no hardship is caused, and, looking at it from the purely legal point of view, I am satisfied that this will be all right.
§ 11.42 a.m.
§ The Attorney-General
The point of the hon. Lady's Amendment is, in fact, to give the court power to make an improvident realisation.
§ The Attorney-General
As my hon. and learned Friend the Member for Ashford (Mr. Spens) said, he desired—and I think there is a great deal to be said for it—to have a clear direction in the Bill. I think that the effect of this Amendment is very much smaller than the hon. Lady 468 perhaps realises. We are dealing with an asset which it would be improvident to realise. It can only be improvident to realise an asset in cases where, if you do not, it will bring in more money year by year than if you do realise it and invest the proceeds. Therefore, in such a case the estate will produce income, and probably more than you could get by realising and investing. The court has full power to make an order with regard to the money that the estate will produce. It seems to me, on the whole, right that the court should be told quite clearly that in taking steps to provide for those not provided for they are not, except in certain exceptional circumstances, to realise the estate where that will be improvident. I think all sections of opinion did their best upstairs to meet each other's difficulties and to provide alternative words which seemed to be sensible compromises. I think the scope of the Amendment is very small, and in the circumstances I urge the hon. Lady not to press it.
§ 11.44 a.m.
§ Mr. Macquisten
I have never viewed this Bill with misapprehension. In fact, it is amazing to me that the law has been allowed to stand as it has in England for centuries, because we in Scotland have had for some centuries a law that a man's estate should be divided into three parts, with one of which he could do what he liked, while another went to the widow and another to the children. The widow would get one-third of the rents of the estate as her share. The idea of forcing the estate, after the testator's death, to cash out is ridiculous, and the hon. Lady has admitted that it is unbusinesslike. Are we going to press forward an unbusinesslike arrangement? If the estate is yielding a satisfactory income it would be very wrong, and it would be unfair, in ratio to the dislike of the legatee, to say that surely, there is an income there, and a substantial proportion of that income, to the applicant, would be undoubtedly greater than contemplated, and the realisation of the capital assets would be to the advantage of all parties concerned.
§ 11.45 a.m.
§ Mr. Pethick-Lawrence
I confess that when the hon. Lady the Member for the English Universities (Miss Rathbone) first put forward her Amendment to the 469 Amendment I was somewhat in favour of it, but I waited to hear what the Attorney-General had to say, and, provided that there is not some misunderstanding, I am inclined to think that he has met and dealt with her case. I should like to ask what precise interpretation the court will place upon the word "improvident." You may have a testator leaving a piece of property invested in a sort of speculative undertaking, and there may be a provision in the Bill which enables the executor and trustee to retain that somewhat speculative property and not force him to turn it into a trustee security. An executor who was merely concerned with the interest of the widow would be very unwise to leave a piece of property in a speculative undertaking, and would probably find it desirable to change it into a trustee security. For the purposes of the widow, that would be the right thing to do. It is much more important that the widow should receive a certain income, say, £150 a year than a speculative income of £300 a year. If the legatee to whom the testator left his money be a person of great wealth, it may suit him very much better to have a legacy which works out at, say, £300 with a great measure of probability than to have a fixed income of a much smaller amount.
What would be the position of the court in a case of that kind? If the Attorney-General can say that the court would not call a realisation of an investment in trustee security in the case I have given an improvident realisation, then I think that I and my hon. Friends would be prepared to support his view. If such a realisation would be regarded by the court as an improvident realisation and would leave the widow with the chance of getting £150 a year, or whatever amount it may be, out of speculative property, there would be a great deal to be said for the proposal of the hon. Lady. Perhaps the Attorney-General will favour me by giving some indication of what the court will regard as an improvident realisation?
§ 11.48 a.m.
§ The Attorney-General
I can speak again only by leave of the House. The House will appreciate the difficulty of giving any very concise definition of what the court would regard as improvident realisation when the circumstances in which these kind of cases may come before the court may be of infinite variety. 470 I think that the case which the right hon. Gentleman has in mind can only arise when there is in the estate not specifically bequeathed, possibly in residue, certain shares or securities of the kind which he has in mind. The court being faced with the duty of providing maintenance for some five or six dependants, obviously, has to consider the available resources. I believe that there will be no doubt at all that this Clause will not in any way prevent it ordering the realisation of a somewhat speculative security in order to invest the proceeds in something to bring in a more considerable income. Investments in ordinary Stock Exchange securities are fairly frequent, and the price of a speculative security represents the market price, and nobody can say that it is improvident to realise a speculative security. The word "improvident" in my view—and I think that it is the right one—is directing the mind of the court to quite a different thing from that of the realisation of securities; to something like a farm, or a small shop, where there is a certain amount of stock-in-trade and the shop will, as far as one can see, continue to function. It that is a realisation which is not improvident, I do not think that there is anything in the words which will preclude the court from saying that the property should be realised in order that the proceeds might be invested into something more secure.
§ Amendment to the proposed Amendment negatived.
§ Proposed words there inserted in the Bill.
§ 11.51 a.m.
§ Mr. Ammon
I beg to move, in page 3, line 36, at the end, to insert:(9) An application under Sub-section (1) of this Section may be made by a local authority in any case where the authority has become responsible under any enactment for the maintenance of or the provision of relief, assistance, or treatment for the person on whose behalf the application is proposed to be made.I owe an apology for not having had a word with the hon. Members who put their names to the preceding Amendment on the Order Paper which has not been moved, because my Amendment is intended to cover precisely the same point, except that the Amendment which they put down was not sufficiently wide in its scope. That Amendment would have had regard to what are strictly Poor Law 471 authorities, but since Parliament has imposed a number of other duties upon local authorities such as are included under the Lunacy and Mental Treatment Act in connection with hospitals, and the Blind Persons Act, my Amendment seeks to provide that, where it has been decided that a person is to come into property, the local authorities shall be entitled to make application for any amount that might be considered reasonable to meet the cost to which they had been put for the maintenance of any such person.
§ 11.53 a.m.
§ The Attorney-General
I was in a certain difficulty both with regard to this Amendment and the previous Amendment which had been put upon the Paper as to the exact scope it was intended to cover. As the Bill is drafted, application can be made, by or on behalf of poor persons, that will cover, of course, guardians, and, I think, a lunatics committee, and there are other cases which can be designated. It would not, I think, cover clearly a local authority who happened under the Poor Law provisions to have charge of, or be supporting, dependants who, they believed, had a right of application under the Bill. I was not quite sure whether these Amendments were intended simply to mean that the local authority could make an application by putting the matter on record and making themselves responsible for costs, and so on, the order of the court directing the money to be paid to the applicants, or whether it was intended that, in any cases to which the Section applies, the court was to order the money to be paid to the local authority.
The Amendment is concerned with the case of a poor person who is being supported by a local authority. Under this Measure a person in poor circumstances whether being supported by the Poor Law authority or not could make an application as a poor person. That right would apply generally, and not only to those who have to be looked after by the Poor Law authorities. When one considers the case in which a poor person is actually receiving Poor Law assistance or is in an institution of some kind the local authority would consider whether that person had a good claim under the Act and, if so, the Poor Law authority could make representations on behalf of that poor 472 person to the Poor Persons' Committee, suggesting that it was a proper case for them to consider, and that if they thought the applicant had a good case they should take it up. Obviously, representations received from a local authority by a Poor Persons' Committee in circumstances of that kind would receive every possible attention. A poor person receiving Poor Law assistance would be really in the same position as a person not receiving Poor Law assistance; indeed such a person might be in a better position to this extent that the local authority, 'apart from the humanitarian motives which would no doubt move them would have a financial motive in seeing that an application is made and that it succeeds, because if the poor person obtained an order under the Act it would be to the advantage of the Poor Law authority in question, inasmuch as they would no longer have to bear the cost of the support.
I appreciate the purpose of the Amendment, and I hope that what I have said may have gone some way to cause the mover of it to realise that there are, and there will be, means of enabling these cases to be met and applications to be made by or on behalf or poor persons. I should have thought that it would be better to leave the matter as it stands, but if we find as a result of experience that there is a sufficient number of cases, and that our existing procedure does not satisfactorily deal with them, then it may be that the matter ought to be considered in the light of the effect on local government as to whether steps should he taken to amend the law in order to give the necessary powers for dealing with the situation. So far as this Bill is concerned there will, no doubt, be poor persons affected by it, but there is no doubt that such persons will have their cases properly considered by the Poor Persons' Committee, and if they have a claim it will be attended to. Perhaps in these circumstances the hon. Member will see his way not to press the Amendment.
§ 12 n.
§ Mr. Ammon
The Attorney-General will realise that this Amendment has been put down on the suggestion of the legal advisers of the London County Council. I am assured that it would be an advantage to make this provision in the Bill. If an authority took initial steps with re- 473 spect to a poor person in these circumstances, it would not be making a claim for the money but would simply afterwards seek in the ordinary way to get whatever allowance could be paid towards the maintenance of the poor person in question. The Amendment could not injure the Bill but might strengthen it, and before the Attorney-General turns it down I hope that he will give an assurance that between now and proceedings in another place he will consider the matter with a view to seeing whether some steps might be taken on these lines.
§ 12.1 p.m.
§ Mr. George Griffiths
I am somewhat in doubt as to what the Attorney-General really means. Does he mean that if a poor person has received over a number of years, say, £150, because the husband may have been out of sight, that the local authority are to have power to make application to get back all that money, because, say, £6,000 or £7,000 is going to come to that person? In such a case the local authority should have the right to get back everything that they have expended in the case. I thought that that was what the London County Council meant by the Amendment. I looked across the House in the expectation that the hon. Member for South Croydon (Mr. H. G. Williams) would have been supporting this Amendment up to the hilt, because he is always crying out about local rates, but he is not present. If the Amendment means that the local authority should have the right to get back the money that they have paid, then I think it ought to be inserted in the Bill. If a local authority has found money in the past or will be finding money in the future for the wife or any dependants —there are cases where the amount found has been not merely £150, but £500 or £600—the local authority ought to be able to recoup themselves for what they have expended, when it turns out that the husband has gone away, but there is some money at the end of it.
§ 12.3 p.m.
§ The Attorney-General
I will certainly give the assurance asked for by the hon. Member for North Camberwell (Mr. Ammon) and will look into the matter. I still think that, on the whole, what I said is right, but that will not prejudice me and others concerned from considering the matter in the light of the ex- 474 planations that we have had, as to whether or not it is a good idea to put the Amendment into the Bill. If the hon. Member will accept that assurance, perhaps he will not press the Amendment.
§ Amendment, by leave, withdrawn.