§ (1) Every mortgage of freehold or leasehold estate to secure an advance by a society shall contain a notice in the prescribed form and in type at least as prominent as the rest of the contents of the mortgage, summarising the effect of the mortgage and the duties and 1177 liabilities of the mortgagor there under, and a copy of the mortgage shall be delivered or sent to the mortgagor within seven days after the execution of the mortgage.
§ (2) In the event of failure to comply with any of the provisions of Sub-section (1) of this Section in relation to any advance no sums shall be recoverable, either by the society or by any other person, in respect of the advance nor shall any rights be exercise-able by virtue of the mortgage except by leave of the court, and where there has been any such failure as aforesaid the provisions of Sub-sections (2) and (3 of Section six of this Act shall apply as if the society had failed to give the notice required by that Section. —[Mr. John Wilmot.]
§ Brought up, and read the First time.
§ 11.52 p.m.
§ Mr. John WilmotI beg to move, "That the Clause be read a Second time."
This new Clause is necessary because of the circumstances surrounding the purchase of a house by means of an advance made by a building society to a small borrower. Hon. Members will appreciate that in the vast majority of cases where resort is made to a building society for an advance the purchase of a house by a working man is the largest financial transaction he has ever entered into in his lifetime. It is, therefore, very important for everybody to understand exactly what it is that he has to meet. It is a fact which I think will be admitted on all sides that as a result of the vast post-war expansion of house buying and building society lending a very large number of those who borrow money from the building societies to buy houses do not really appreciate the nature of the liability which they are undertaking. It is a very common misconception that the liability is limited to the payment of so many shillings a week which the borrower regards as payment in lieu of rent. Many borrowers believe that if adversity should come upon them they will be relieved of their liability by vacating the house and leaving it to the building society. Few of these borrowers realise that they are in fact under an obligation to repay the sum which they have borrowed, that the house is merely security for the performance of that repayment and that, come what may, their whole estates may be attached for the purpose of repaying the sum.
Those who are accustomed to property and business transactions are advised by 1178 a lawyer and know what their undertaking is at the time they do it. But it is the common practice for small borrowers not to be independently advised. The usual slogan "No legal charges" means that the vendors' solicitor acts also for the borrower, but, even so, the deed of mortgage is so complicated and long a document that very few people understand its contents. It is the practice that very few people even have a copy of the mortgage deed. This Clause is designed to deal with that admittedly unsatisfactory situation. It requires that in every case a plain-language endorsement shall be made upon the deed of mortgage setting out so that the borrower may understand exactly what is the total debt, what the rate of interest is, that he is under an obligation to repay that money and under an obligation to repair the property and insure it, and the several obligations he undertakes when he borrows the money and executes the deed. It also requires that a copy of the deed, with this endorsement, be sent to the borrower. I think it would be in the interests of understanding, and would remove a great deal of hardship and difficulty, if this Clause were accepted.
§ 11.57 p.m.
§ Major MilnerI beg to second the Motion.
I submit that the new Clause is in line with all the other procedure in this Bill, which is designed to give notice to the borrower of the circumstances in which he is borrowing, and the fact that an excess advance may be made. The Bill provides in Clauses 7 and 8 that notice of those and other facts should be given to the borrower. The new Clause provides that notice should be given by means of a copy of the mortgage to the borrower of the conditions under which he is borrowing, and it seems to me that this provision is entirely in line with the rest of the provisions of the Bill. It is quite true that many borrowers do not appreciate the contract into which they are entering. In the vast majority of cases it is no fault of the solicitor, whether he is acting independently or for both vendor and purchaser. It is a duty which is performed in the great majority of cases to explain the mortgage deed. There is a wide misconception that the borrower 1179 from the building society is buying in some way and that if hard times come and he cannot keep up the payments, the only liability to which he is subject is to give up the house, whereas, in addition, he is in fact under a personal covenant to repay. If this proposal were carried it would make the position perfectly clear to the borrower.
§ Mr. BellengerI should like to ask whether this copy of the mortgage is to be supplied free of charge to the borrower, or whether he has to pay a fee, because, as my hon. Friend well knows, at the moment he can get a copy of the mortgage deed but he has to pay for it.
§ Major MilnerMy hon. Friend is right. The solicitor acting either for the vendor or the borrower would be willing to supply a copy of the deed if he is paid for it. I have no doubt that it would be possible for a copy of the deed to be included in the charges made by the builder in respect of the charges of the house.
§ 12 m.
§ The Solicitor-GeneralThe objects of the new Clause have been summarised by the hon. Member. They are to provide that there should be given to borrowers a document summarising the facts of the mortgage and the duties and liabilities of the mortgagor, that a copy of the mortgage should be delivered to the mortgagor, and that in the event of failure by the building society to do this some penalties, which I am not able adequately to explain, should attach to the building society. The first observation I have to make in the matter is that this is only a variant of the proposition which was put at great length before the Committee upstairs and in that discussion we had the support of the hon. and gallant Member for South-East Leeds (Major Milner). What, in fact, is sought to be done is to get some kind of simplified mortgage. If you are going to deliver a document, or endorse on an existing document the effect of the mortgage and the duties and liabilities of the mortgagor, you are endorsing on the document exactly what the mortgage does, and if the mortgage is correctly drawn it should contain these things if it contains nothing else. Therefore, you are going to endorse on the 1180 back of a mortgage what is on the face of it, or else you are assuming that the mortgage is drawn so unintelligently that it is of no value to the borrower or anybody else. In the Committee I pointed out that the hon. Member was seeking to do exactly what the Law of Property Act attempted to do, that is to introduce a simplified and standard form of mortgage.
§ Major MilnerIn Committee there was a proposal that there should be a uniform or standard mortgage and to that proposal I could not agree, but this is an entirely different proposal, and what the Solicitor-General is now saying is quite irrelevant to that proposal.
§ The Solicitor-GeneralI am addressing myself exactly to this new Clause and I am not taking advantage of an argument which was relevant in the Committee but is not relevant here. In Committee the hon. Member for Kennington (Mr. Wilmot) had the courage of his convictions. He attempted to do something which the eminent lawyers who drafted the Law of Property Act tried to do without success. He was courageous enough to put on the Paper the kind of statement which he thought ought to be a summary of an existing mortgage, but the moment he attempted to do that he exposed himself to the criticism as to the various ways in which what he was attempting to do did not correspond to the forms of a standard mortgage at all. He has, therefore, abandoned the attempt to provide a stock form, and now casts a similar obligation on the Registrar of Friendly Societies. This summary of the effect of the mortgage and the duties and liabilities is to be a summary in a prescribed form. For the reasons which we went into at great length in Committee, the Registrar of Friendly Societies would be in exactly the same difficulty as the hon. Member when he sought to elaborate a stock form of mortgage. While everybody is sympathetic with the idea of having legal documents as simple as possible a mortgage by its nature is a complicated transaction and those who are skilled in conveyancing reduce it to the simplest elements to which a mortgage can be reduced. To endorse anything on the terms of a mortgage, and call it a summary of the duties and liabilities of the borrower if it in fact does not say what the mortgage does, is misleading, and for that reason would produce a wholly 1181 false sense of security to the person who reads the summary, which, by the nature of things, cannot be a true summary of the transaction. I pointed out then the apparent attractiveness of trying to condense into a few words what is a complicated and difficult legal transaction. I pointed out that very often the side-notes to sections in Acts of Parliament are such an attempt. In this Bill, we have found cases in which the attempt to summarise in side notes what the Clauses say or do has not been very successfully done.
§ Mr. WilmotYou have them still.
§ The Solicitor-GeneralYes, but they are not treated as part of the Bill, and they will not be looked at in order t interpret the Bill, when it becomes an Act, in a court of law. Everybody sympathises with the desire to simplify legal documents, especially in the interests of people who are very often poor and not always as readily able to read complicated documents as Members of Parliament are, but for the reasons I have given, this is not a practicable way of doing what the hon. Member desires to do. Moreover, these mortgages vary very considerably from society to society, from borrower to borrower, and from district to district. Therefore, it would be necessary to prescribe, not one form, but almost as many forms as there are building societies, mortgagors and districts. The true method of dealing with this difficulty of making the borrower understand what he is doing is the method that was pointed out by the hon. and gallant Member for South East Leeds (Major Milner), in his more regenerate days. As he then said, the real safeguard is that the borrower should be advised by a solicitor. The borrower does, in fact, frequently apply to the solicitor for the building society for information as to the meaning of the deed he is signing. I have in my possession a form issued by a very well-known building society, the Abbey Road, in which there is a provision that the terms of the mortgage deed and the guarantee agreement which the borrower is required to execute should be read carefully. One of the provisions states:
The Society's solicitor will explain the operation of any clause of the deed and agreement not clear to the borrower.The only real safeguard is that the 1182 borrower should be advised either by a legal adviser of his own or by a solicitor for the building society, who, as the hon. and gallant Member for South-East Leeds said, would discharge his duty with that sense of responsibility by which all solicitors are animated. Even if they are acting for a building society, they would discharge that duty in the interests of the borrower from the building society. If a borrower signs a mortgage deed without reading it or without demanding an explanation if he does not understand it, it is clear that the condition of mind of a person who is prepared to do that is really incurable, and no words such as the hon. Member wishes to be on the back of the document would help a borrower of that kind. The hon. Member desires to see incorporated a provision that a copy of the mortgage should be sent to the borrower, but on our information, I do not think that is necessary, except in so far as it is ancillary to the provision regarding notice. The mortgagor who pays the expense of preparing the mortgage is entitled to a copy for his own use, and under Section 96 of the Law of Property Act, he is entitled to inspect and make copies of documents of title relating to the mortgaged property. He has both those rights. He has a right if he has paid for the preparation of the mortgage, and independently of that, he has a right by statute. I am told that as a matter of practice no building society, certainly of any repute—none that has come to our notice—would be likely to place any difficulty in the way of reasonable inspection of any document relating to the transaction.
§ Mr. SilkinIs it not a fact that they make a charge of £1?
§ The Solicitor-GeneralThat is not our information. My information is that copies are usually available at a small fee, and, of course, inspection of the documents is permissible by reason of the Law of Property Act. As to the fee, I will, if I can, answer the question before I sit down. The remaining matter is the question of sanctions. A Clause of this kind is valueless without a sanction The hon. Member has inserted a sanction in Sub-section (2). I am not absolutely clear as to what is the effect of that sanction, but, as I understand it, it is too severe. It is modelled on the sanction 1183 proposed in Clause 6 on a society which fails, before the transaction is entered into, to inform the borrower as to the nature of the security. But the object of that Clause is, of course, quite different from the object the hon. Member has in mind. It seems a little harsh to say that if the society were, for example, a day late in sending the required copy of the mortgage to the borrower it would be necessary for the society to make application to the court before it could recover any sums due. I also note that no sums may be recoverable either by the society or by any other person, and it might well be that a sanction of that kind would operate in a direction quite contrary to those the hon. Member intends. With regard to the point about the charge usually made by a building society for inspection of documents, I am at the moment unable to ascertain what the usual charge is. [Interruption] That may be, but I have also my experts.
§ The Solicitor-GeneralThe hon. and learned Gentleman is always so civil. With his usual charming courtesy he puts me in my place, but those who are advising me have at least as great a knowledge of the practice of building societies as he has.
§ The Solicitor-GeneralThe answer may be that my advisers do not guess, where others do.
§ 12.14 a.m.
§ Mr. MarkhamAs a layman it is with considerable diffidence that I intervene in a quarrel between lawyers. I fear I may be charged fees by both sides. As a layman I am in sympathy with the first edition of the Clause moved so moderately by the hon. Member who is a new comer to the House. The average insurance policy is summarised extraordinarily well, and an insurance policy is not less important in many ways than a mortgage. I feel that some effort ought to be made to summarise succinctly a mortgage in terms which the ordinary man in the street can understand. The Solicitor-General has explained, doubtless accurately, that a borrower can, if he likes, get these things explained to him by a 1184 solicitor, but if a solicitor can explain these things in that way, then surely whoever drafts the mortgage can do the same thing. On the other hard, I think Subsection (2) is rather on the verge of the ludicrous, because to say that if a mortgage is not summarised the whole thing is void is ludicrous, and I hope the House will resist the Amendment.
§ 12.16 a.m.
§ Mr. BellengerI admit, as I think my hon. and gallant Friend the Member for South-East Leeds (Major Milner) will admit, the difficulty of summarising legal documents. Nevertheless, in cases of this kind, where a man of comparatively small means is borrowing money on the only security that is possible to him, a building society does take the trouble, in its application forms and the various bits of literature that it issues, to explain as much as possible in advance the way in which the borrower is to proceed before he gets his advance. Why, therefore, is it unreasonable to ask that the building society shall explain after it has lent the money to the borrower what exactly his engagements are under that very complicated legal document which he does not understand and which, with all due respect to the hon. and learned Gentleman, he very seldom reads? I presume the hon. and learned Gentleman and his advisers have seen these complicated mortgage deeds and will quite understand why it is that so many of these humble borrowers, borrowers, that is, in a humble walk of life, do not read them and indeed are given very little time in which to study them in detail before being asked to sign on the dotted line. Why, therefore, should it be thought unreasonable to ask that the building society should give some clear indication of what the borrower's liabilities are?
The society itself has an interest in this matter, because, owing to the fact that borrowers have not thoroughly understood their liabilities, the societies themselves are beginning to suffer, in that the borrowers in certain cases have not attempted to carry out those liabilities. If we are to have that security in real estate, that stake in the country which hon. Members opposite are always advocating as something in which we should interest the mass of the people, then I think we should do all that is possible to encourage borrowers to understand 1185 what their liabilities are. I speak from personal experience when I say that I do not think I have ever asked to see the title deeds of a property without having to pay some fee to the building society's solicitors, and there are numerous other hon. Members of this House who have had experience of this matter, either as solicitors themselves to building societies or in conveyancing, and I think they would bear me out when I say that almost invariably it is the practice of solicitors to building societies to charge for the production of title deeds when they are asked for.
§ Mr. SilvermanInvariably.
§ Mr. BellengerMy hon. Friend says "Invariably," but I qualify that with the word "almost." At any rate, from my experience, I can say that I have always had to pay a fee if I wanted to have the title deeds produced in the circumstances with which we are dealing here. [Interruption.] In effect, the solicitors are almost servants of the building societies. They act for the building society at any rate in the preparation of the mortgage deed. If the fee is paid, it is actually paid to the solicitor of the society, although he is in effect the servant of the society, and I do not think it unreasonable that we should ask that, if the deeds are going to be produced, they should be produced to the borrower without his having to pay any fee either to the society or to the society's solicitors.
§ 12.20 a.m.
§ Mr. PrittI have no complaint to make of the courtesy of the hon. and learned Gentleman opposite, but in reference to this question of what fee is charged, I think he has done himself an injustice. He accuses me of having advisers who guess. As I never said a word as to what fee was charged, however, that particular charge seems to me to be pretty baseless. Some hon. Gentleman on this side, I think it was, said the charge was 28s., but then the hon. and learned Gentleman opposite at once said, "No, it is not." It now, however, appears that someone was guessing when he said the charge was only small, because he had not the remotest idea of what it was, whether small or large, and the whole equipment of his Department at the moment could not inform him on the matter at all.
§ The Solicitor-GeneralI had immediately previously read out from the Abbey Road Society's conditions that copies would be supplied on application to the society's solicitors at a nominal charge. I may be wrong, but I did not think £1 8s. fulfilled the description of a nominal charge. I was taking the case of a fairly well known building society, and so I assumed that 28s. at any rate was not uncommon.
§ Mr. PrittThe hon. and learned Gentleman is wrong in his recollection, be cause he made the statement about the small fee before he read out the document from the Abbey Road Society, and he said that his advisers would inform us in a moment or two what the figure really was. In fact he was guessing, and guessing wrongly, and what the Abbey Road Society does on a printed form is not the same thing as the general practice of building societies. It is only one—
§ Mr. SilkinI made the statement about the charge that is made for an inspection of documents. The hon. and learned Gentleman is referring to copies, which are paid for at so much a folio.
§ Mr. PrittSo I need not say any more about that. With regard to whether I endear myself to my own party, I will thank the hon. and learned Gentleman opposite to mind his own business. With regard to my endearing myself to his party, I hope I never do. Now let me come to the hon. and learned Gentleman's main argument in opposition to this proposed new Clause. I do not want to compare it with any particular part of a slaughtered animal that is sold cheap, but I really never heard such nonsense in all my life. What is the hon. and learned Gentleman's central argument? He begins with the perfectly true proposition that a mortgage has to be stated in a pretty complicated document. He then enunciates that it is utterly impossible to explain that mortgage in simple language in print. Such a defeatist attitude I could understand if it was some Labour Government's Measure, but when he says as a matter of plain common sense that there is nobody in England who can explain a mortgage in much simpler language than the mortgage itself, he is condemning every draftsman who ever drafted a memorandum to make a Bill intelligible to Members of this House, and 1187 he is condemning all the legislation there has ever been in previous complicated Bills providing that a simple statement shall be given to the unhappy victim of the capitalist system who is buying something by contract under the hire purchase or any other system. Having explained that it is impossible to explain it in simple language, he goes on to say that the proper thing is for the man to go to a solicitor and have it explained to him; and that is all coupled with the fact that he does not see the necessity for the man to have a copy of the document that the solicitor is to explain. Then he is surprised that my natural bad manners overcome me for a moment, when I am expected to sit here in public after midnight and listen to nonsense of that description.
§ Sir Edmund FindlayDoes that apply to Scotland?
§ Mr. PrittI am not explaining this Bill, nor Scottish law. I am explaining the Solicitor-General's opposition to this Clause, and the words he used ought to persuade anybody to vote for the clause. Surely nobody can have any doubt that it is a very desirable and a very simple operation to put down in simple language the effect of the mortgage deed and above all to put down in simple language the various points that people very commonly misunderstand, such as the point that they really cannot walk out of the house as they can return a hire-purchase bicycle and ride out of further liability. I really do submit that the explanation of the hon. and learned Gentleman is so poor that the Clause must be accepted.
§ Question put, "That the Clause be read a Second time."
§ The House divided: Ayes, 68; Noes, 157.
1189| Division No. 274.] | AYES. | [12.28 a.m. |
| Adamson, Jennie L. (Dartford) | Jagger, J. | Silverman. S. S. |
| Alexander, Rt. Hon. A. V. (H'lsbr.) | John, W. | Simpson, F. B. |
| Ammon, C. G. | Johnston, Rt. Hon. T. | Smith, Ben (Rotherhithe) |
| Anderson, F. (Whitehaven) | Kirby, B. V. | Smith, E. (Stoke) |
| Bellenger, F. J. | Lansbury, Rt. Hon. G. | Smith, T. (Normanton) |
| Benn, Rt. Hon. W. W. | Lawson, J. J. | Sorensen, R. W. |
| Benson, G. | Lee, F. | Stewart, W. J. (H'ght'n-le-Sp'ng) |
| Bevan, A. | Logan, D. G. | Summerskill, Dr. Edith |
| Cove, W. G. | McEntee, V. La T. | Taylor, R. J. (Morpeth) |
| Daggar, G. | MacMillan, M. (Western Isles) | Tinker, J. J. |
| Dalton, H. | Mainwaring, W. H. | Watkins, F. C. |
| Davies, S. O. (Merthyr) | Mathers, G. | Watson, W. McL. |
| Dobbie, W. | Messer, F. | Westwood, J. |
| Dunn, E. (Rother Valley) | Milner, Major J. | Wilkinson, Ellen |
| Ede, J. C. | Oliver, G. H. | Williams, E. J. (Ogmore) |
| Edwards, Sir C. (Bedwellty) | Paling, W. | Williams, T. (Dun Valley) |
| Edwards, N. (Caerphilly) | Parker, J. | Wilmot, John |
| Frankel, D. | Poole, C. C. | Windsor, W. (Hull. C.) |
| Gibson, R. (Greenock) | Pritt, D. N. | Woods, C. a. (Finsbury) |
| Grenfell, D. R. | Ridley, G. | Young, Sir R. (Newton) |
| Hall, J. H. (Whitechapel) | Ritson, J. | |
| Hayday, A. | Robinson, W. A. (St. Helens) | TELLERS FOR THE AYES — |
| Henderson, J. (Ardwick) | Sexton, T. M. | Mr. Adamson and Mr. Groves. |
| Hills, A. (Pontefract) | Silkin, L. | |
| NOES. | ||
| Adams, S. V. T. (Leeds, W.) | Brocklebank, Sir Edmund | Dunglass, Lord |
| Agnew, Lieut.-Comdr. P. G. | Brooke, H. (Lewisham, W.) | Edmondson, Major Sir J. |
| Albery, Sir Irvine | Bullock, Capt. M. | Elliot, Rt. Hon. W. E. |
| Allen, Col. J. Sandeman (B'knhead) | Cartland, J. R. H. | Emery, J. F. |
| Anderson, Sir A. Garrett (C. of Ldn.) | Cary, R. A. | Errington, E. |
| Aske, Sir R. W. | Chapman, A. (Rutherglen) | Erskine-Hill, A. G. |
| Baillie, Sir A. W. M. | Clarke, Colonel R. S. (E. Grinstead) | Evans, D. O. (Cardigan) |
| Baldwin-Webb, Col. J. | Clydesdale, Marquess of | Evans, E. (Univ. of Wales) |
| Balniel, Lord | Cobb, Captain E. C. (Preston) | Everard, Sir William Lindsay |
| Beamish, Rear-Admiral T. P. H. | Colman, N. C. D. | Findlay, Sir E. |
| Beaumont, Hon. R. E. B. (Portsm'h) | Cook, Sir T. R. A. M. (Norfolk, N.) | Fleming, E. L. |
| Beechman, N. A. | Cooke, J. D. (Hammersmith, S.) | Foot, D. M. |
| Beit, Sir A. L. | Craven-Ellis, W. | Fremantle, Sir F. E. |
| Bossom, A. C. | Critchley, A. | Furness, S. N. |
| Boulton, W. W. | Crooke, Sir J. Smedley | Fyfe, D. P. M. |
| Bower, Comdr. R. T. | Crookshank, Capt. Rt. Hon. H. F. C. | Graham, Captain A. C (Wirral) |
| Boyce, H. Leslie | Crossley, A. C. | Granville, E. L. |
| Bracken, B. | Cruddas, Col. B. | Greene, W. P. C. (Worcester) |
| Braithwaite, J. Gurney (Holderness) | De Chair, S. S. | Gridley, Sir A. B. |
| Broadbridge, Sir G. T. | Duggan, H. J. | Grigg, Sir E. W. M. |
| Grimston, R. V. | McEwen, Capt. J. H. F. | Somervell, Rt. Hon. Sir Donald |
| Hambro, A. V. | McKie, J. H. | Southby, Commander Sir A. R. J. |
| Hannah, I. C. | Macmillan, H. (Stockton-on-Tees) | Spears, Brigadier-General E. L. |
| Hannon, Sir P. J. H. | Margesson, Capt. Rt. Hon. H. D. R. | Spens. W. P. |
| Harvey, T. E. (Eng. Univ's.) | Markham, S. F. | Stanley, Rt. Hon. Oliver (W'm'l'd) |
| Heilgers, Captain F. F. A. | Mills, Major J. D. (New Forest) | Strauss, H. G. (Norwich) |
| Hepburn, P. G. T. Buchan- | Mitchell, H. (Brentford and Chiswick) | Strickland, Captain W. F. |
| Herbert, A. P. (Oxford U.) | Morrison, G. A. (Scottish Univ's.) | Stuart, Hon. J. (Moray and Nairn) |
| Holdsworth, H. | Muirhead, Lt.-Col. A. J. | Sueter, Rear-Admiral Sir M. F. |
| Holmes, J. S. | Neven-Spence, Major B. H. H. | Taylor, C. S. (Eastbourne) |
| Horsbrugh, Florence | O'Connor, Sir Terence J. | Thorneycroft, G. E. P. |
| Howitt, Dr. A. B. | Patrick, C. M. | Thornton-Kemsley, C. N. |
| Hudson, Capt. A. U. M. (Hack., N.) | Petherick, M. | Titchfield, Marquess of |
| Hunloke, H. P. | Pickthorn, K. W. M. | Tree, A. R. L. F. |
| Hutchinson, G. C. | Procter, Major H. A. | Tufnell, Lieut.-Commander R. L. |
| James, Wing-Commander A. W. H. | Rankin, Sir R. | Turton, R. H. |
| Jones, Sir H. Haydn (Merioneth) | Reed, A. C. (Exeter) | Wakefield, W. W. |
| Kellett, Major E. O. | Reed, Sir H. S. (Aylesbury) | Walker-Smith, Sir J. |
| Kerr, Colonel C. I. (Montrose) | Ropner, Colonel L. | Ward, Lieut.-Col. Sir A. L. (Hull) |
| Kerr, Sir John Graham (Sco'sh Univs.) | Ross, Major Sir R. D. (Londonderry) | Ward, Irene M. B. (Wallsend) |
| Lamb, Sir J. Q. | Ross Taylor, W. (Woodbridge) | Waterhouse, Captain C. |
| Latham, Sir P. | Rowlands, G. | Webbe, Sir W. Harold |
| Lees-Jones, J. | Royds, Admiral Sir P. M. R. | Wedderburn, H. J. S. |
| Leech, Sir J. W. | Ruggles-Brise, Colonel Sir E. A. | White, H. Graham |
| Leighton, Major B. E. P. | Russell, Sir Alexander | Wickham, Lt.-Col. E. T. R. |
| Lindsay, K. M. | Russell, S. H. M. (Darwen) | Williams, Sir H. G. (Croydon, S.) |
| Llewellin, Colonel J. J. | Salt, E. W. | Willoughby de Eresby, Lord |
| Locker-Lampson, Comdr. O. S. | Samuel, M. R, A. | Wise, A. R. |
| Lucas, Major Sir J. M. | Seely, Sir H. M. | Wright, Wing-Commander J. A. C. |
| Mabane, W. (Huddersfield) | Selley, H. R. | York, C. |
| MacAndrew, Colonel Sir C. G. | Shepperson, Sir E. W. | Young, A. S. L. (Partick) |
| M'Connell, Sir J. | Snadden, W. McN. | |
| Macdonald, Capt. T. (Isle el Wight) | Somerset. T. | TELLERS FOR THE NOES— |
| Captain Dugdale and Mr. Munro. |
Question, "That the words proposed to be left out, to the word 'and,' in line 29, stand part of the Bill," put, and agreed to.
§ CLAUSE 1.—(Additional security in respect of advances made before commencement of Act.)
§ 12.35 a.m.
The Solicitor-GeneralsI beg to move, in page 1, line 11, to leave out "other," and to insert "additional."
§ This is a drafting Amendment to make way for an Amendment which we propose to move later in Clause 15.
§ Amendment agreed to.
§ CLAUSE 2.—(Additional security in respect of advances to members after commencement of Act.)
§ The Solicitor-GeneralI beg to move, in page 2, to leave out lines 21 to 34.
§ This Amendment, which is to leave out the proviso between these lines, is consequential on the matter I referred to in moving the new Clause.
§ Amendment agreed to.
§ 12.36 a.m.
§ The Financial Secretary to the Treasury (Captain Crookshank)I beg to move, in page 2, line 34, at the end, to insert:
(5) For the purpose of those provisions of the Building Societies Acts, 1874 to 1894. Which relate to the borrowing of money by societies incorporated under those. Acts, money deposited with such a society as security for an advance made by the society to a member, or as security for any 1190 guarantee given in respect of such an advance, shall be deemed to be money borrowed by the society.
§ Under the Act of 1874, Section 15, the borrowing powers of building societies are limited and it is laid down that the total amount outstanding on deposit or loan shall not exceed two-thirds of the amount for the time being secured to the society by mortgages from its members. The object of this Amendment is to make it quite clear that the money deposited with the society as an additional security shall be included in the total amount under the Act of 1874.
§ Amendment agreed to.
§ CLAUSE 4.—(Provisions relating to special continuing arrangements.)
§ Captain CrookshankI beg to move, in page 3, line 35, at the end, to insert:
(a) for the references in paragraph (a) thereof to two-thirds of the purchase price therein mentioned there were substituted references to 70 per cent. of that purchase price;
§ This is really a drafting Amendment. This is the result of the alterations we made in the Schedule at the end of the Committee stage.
§ Amendment agreed to.
§ Further Amendment made: In page 4, line 11, leave out "reference," and insert "references."—[Captain Crookshank.]
1191§ 12.38 a.m.
§ Miss WilkinsonI beg to move, in page 4, line 17, at the end, to add:
(5) Where the Minister has approved any corporate body by an order made under this Section, a society shall not have power, at any time after the expiration of five years from the date of such order and so long as the order remains unrevoked, to make any advance upon the security of any newly-built dwelling-house not being a certified building.(6) For the purposes of the last foregoing Sub-section a dwelling-house shall be deemed to be newly-built if it has not been erected for more than twelve months before the date of application to a society for an advance upon the security of the dwelling-house.We attach considerable importance to this Amendment. It is most regrettable that this important piece of legislation should be taken at this late hour because we have many constituents who are concerned with the provisions of this Clause. This Clause is an elaborate arrangement—as I consider, it is window-dressing—but it is one to which the Minister attaches such great importance that he regards it as a substitute for good building, reasonable materials and workmanship, provision for which we have consistently tried to get inserted in the Bill. The purpose of this Amendment is that when the Registration Council is set up it shall be used and that it shall in fact, in so far as the provisions of the Clause make it possible, be some real protection to the person who is buying the house. Therefore, we feel that, given a reasonable time for the Registration Council to come into operation and for the arrangements to be made, that after that reasonable time has elapsed building societies shall have it laid upon them that they shall not lend money except on a house which has been certified under the arrangements made under Clause 4.That is the purpose of this Amendment. We had hoped that three years might be sufficient time. It was laid down in the Committee stage that three years might not be sufficient time to get the Registration Council in working order but we think five years is a very reasonable time and that by then it should have become so much a general custom that people should not buy a house which is not certified under this scheme that it is not unreasonable to say that building societies should not lend money, so far as dwelling houses are concerned, except with regard 1192 to houses which are certified. Now that the Minister has had time to reconsider the matter I hope he will be willing to accept this very reasonable Amendment, which carries with it the definition of the word "dwelling house." We are not suggesting that this should come into operation, obviously, where old houses are purchased whose defects might be known, but that it should be concerned with newly built houses. It is possible to argue whether a particular house might be within the definition or not but we think that on the whole this definition of a newly built house is reasonable. If the Minister is serious in his scheme I do not see how he can argue that, after a lapse of five years, certification should not in fact be made compulsory.
§ 12.42 a.m.
§ The Minister of Health (Mr. Elliot)I recognise the importance which the hon. Lady attaches to the system we are now trying to introduce, of certifying houses, which, I think, gained general acceptance upstairs as a helpful advance towards the object we have in mind, namely, to ensure as far as possible that the evils of jerry-building should be dealt with. It was suggested upstairs that a time limit should be laid down in the Bill, beyond which time the builders of houses would have to operate the new system. But I suggested a line of advance which commended itself, I believe, more to the general sense of the Committee, and that was that I undertook to have an inquiry into the working of this scheme long before the five years and before the three years period that was suggested. I put it to the House that that realty is a more hopeful line of advance than this which merely lays down five years, which is a very long time. I would go further with the hon. Lady if I might. She desires to see that something is done. She asked me to be more precise as to the nature of the inquiry and the scope of it. I think that if I can give certain further details now it might enable her not to press her Amendment.
What I suggest the House is anxious to know is, will it be merely an official departmental inquiry by officials and will the report be available to the public as a whole, or will it be a report on which the Minister would act but without the 1193 House being able to examine it to find out whether in their view the matter had been Satisfactorily dealt with? If I gave the House the assurance that what I have in mind is an inquiry by persons of knowledge and standing, who are not officials of my Department, and, secondly, that the inquiry would report to me but that the report would be published, I think I have met the hon. Lady in the matter. If I give that assurance I suggest that it is not necessary for her to press the Amendment, because I do feel that something happening five years hence concerning a scheme which is not yet in operation is not as satisfactory as an inquiry the report of which the House will have in their hands.
§ Miss WilkinsonIn view of the Minister's statement and the lateness of the hour, and in view of the fact that the right hon. Gentleman has gone some way to meet us with regard to an inquiry and publicity, we shall be prepared not to press the Amendment.
§ Amendment, by leave, withdrawn.
§ CLAUSE 6.—[Notice to be given where security is taken from third parties.)
§ 12.45 a.m.
§ The Solicitor-GeneralI beg to move, in page 5, line 14, to leave out from "form," to "no," in line 16, and to insert:
(a) stating, if the said estate is taken by the society as security for the advance, the maximum amount which the society would consider proper to advance upon the security of that estate if no other security were taken by the society for the advance, and the amount, if any, by which the advance exceeds the said maximum amount: and(b)containing such particulars as may be prescribed relating to any security for the advance which is taken or is to be taken from any person other than the member.I am afraid I must trespass on the patience of the House with regard to this Amendment, because although its meaning and intention will be familiar to those who went through the long Committee stage upstairs it may not be so clear to other hon. Members. I think I am not really transgressing the bounds of order if I call the House's attention to Clause 11 of the Bill, which explains the Amendment I am moving. When we were in Committee on this Bill an Amendment was moved by an hon. Member which re- 1194 sulted in Sub-section (2) being inserted in Clause 11. Clause 11 is a Clause dealing with the duties which directors of building societies owe to their societies, and it provides, that directors must, in discharge of their duties, employ an approved competent person to assess the value of the security. Into that Clause was inserted, against the Government's will—we were defeated—and notwithstanding the warnings thrown out, the Amendment of an hon. Member opposite dealing with the requirement that notice should be given to the borrower stating the state of repair of the property and so on. After that defeat I made it plain to the Committee that the Clause as a whole would have to be reconsidered in the light of the Amendment that had been carried, but to try to meet the wishes of the Committee I moved into Clause 11 what is now Subsection (5), and the provisions of this Sub-section were that a society should, at the request of a member or person to whom an advance has been made, and on payment of a fee give to that person, in short, particulars of any additional security and the amount at which the estate was assessed by the competent person.In putting that forward I told the Committee that it would be necessary, before the Bill came to the House, to reconsider the whole structure of the Bill in the light of the Amendment which had been passed. The Amendment I then inserted was criticised by hon. Members from both sides, including the hon. Lady for Jarrow (Miss Wilkinson) for example, on the ground that it did not give the borrower any assistance until it was too late. It was criticised by the building societies on the ground that this was a valuation which was taken by the building societies for their own purposes and was in a Clause which imposed obligations on directors towards members, and that it was inappropriate that the borrower should see something which was confidential between a director and his society.
After consideration and after the warning that was given in the Committee we have come to the conclusion that there was substance in both those criticisms. Therefore, we propose at a later stage when we reach Clause 11 to ask the House to delete Sub-sections (2) and (5), 1195 and, instead, to insert in Clause 6, where it will be effective, the main part of the benefit that was secured to the borrower in the case of the Amendment in Clause 11. If the Amendment that I am now moving be accepted, the result will be that the society will have to tell the borrower clearly the maximum amount which it would be considered proper to have advanced on the security of the house if there had been no question of additional security. It will have to tell him also the amount of the advance by reason of the security forthcoming. As to the form in which the additional particulars should be given, it is not an easy matter to prescribe exactly what should be given by the society. But I would remind the House that this never has been a party Bill, and we are anxious to have the cooperation of everyone and shall be grateful to receive representations from hon. Ladies and hon. Gentlemen opposite as to what they think will be helpful to borrowers. I do not think I can give an assurance that will be more welcome to hon. Ladies and hon. Gentlemen opposite than that. The reason I am moving this Amendment is to do what we were compelled to do in the wrong place in Clause 11 and when we reach Clause 11 I shall ask the House to reverse the decision of the Committee. We are giving the borrower the kind of remedy asked for from the other side of the House.
§ 12.53 a.m.
§ Miss WilkinsonThe Solicitor-General has charmingly wriggled out of the difficulty in which the Government were placed when they were defeated on this matter, and I congratulate him on the skilful way in which he has done it. In fact, he has given the impression of having given us a great concession. What, of course, the Minister realises perfectly well is that he has whittled down the effect of the Amendment moved by one of his hon. Friends and carried against the Government by the Committee, and I suppose that because the right hon. Gentleman has the majority behind him that will therefore be accepted. It will be accepted by that side of the House and not by this side. Under his contention it gets the building society out of a situation which emphatically they do not want of giving the borrower a copy of 1196 the records on which the advance was made. The building societies resisted that and the Government resisted it. The Government were defeated and now they have come with this particular arrangement which gives the building societies what they wanted and goes a small way to what we wanted, but I do not want it to be suggested that we agree with the compromise. We shall be forced to accept it because the Government have the majority behind it.
§ Amendment agreed to.
§ 12.55 a.m.
§ The Solicitor-GeneralI beg to move, in page 5, line 34, to leave out "five," and to insert "six."
The purpose of this Amendment and the next one is to increase the county court jurisdiction from £500 to £600. It was represented in the Committee upstairs that if the jurisdiction of the county court were extended to this amount it would cover the vast majority of cases and the hon. and gallant Member for South-East Leeds (Major Milner) himself suggested that £600 would be a satisfactory figure. I think it was also suggested by the hon. Member for the English Universities. Although that is a departure from the figure adopted in the county courts, I think that in this case we can make an Amendment of this kind.
§ 12.56 a.m.
§ Miss WilkinsonWe shall not move the Amendments which we have put down in relation to this matter, but we say that if you are going to alter the figure five at all there is no particular reason why you should stop at the figure six. There was a reason for putting down an Amendment that the figure should be eight, and that was that £800 was the figure inserted in the previous Housing Act. The desire which we had on this side of the House was to have the figure of £1,000 inserted, because we felt, as the Solicitor-General knows, that then you would have all small-priced houses coming before the county courts for decision. We still feel that it would have been better to have the figure of £800 but if you were increasing the figure at all you had better do it in accordance with practice. As £600 has been moved, we are not prepared to oppose it.
§ Amendment agreed to.
1197§ Further Amendment made: In page 5, line 39, leave out "five" and insert "six."—[The Solicitor-General.]
§ CLAUSE 7.—(Notice to be given by vendors of property in certain cases.)
§ Amendment made: In page 6, line 13, leave out "and in such manner." —[The Solicitor-General.]
§ Clause 8.—(Provisions relating to certain warranties and representations.)
§ 12.58 a.m.
§ Miss WilkinsonI beg to move, in page 6, line 26, to leave out from "reasonable," to the end of the Subsection.
Here, I think, it is necessary to explain to the House exactly why we are moving this Amendment, although in the circumstances we cannot press it to a Division. We do so because right throughout we have argued that the purchaser should get a warranty that the house which he is buying is of reasonable construction, of good workmanlike materials and in conformity with the Building Societies Act. We argue that the building societies should give that warranty because, in effect, the building societies and builders to-day are so interlocked that it is quite reasonable that the building society should assume that responsibility, and because in the circumstances of the case in which there is so much jerry-building the builder is so often a man who clears out from his responsibility.
We moved various Amendments in Committee in order to try to ensure that, but all of them were decisively defeated by the Government. Therefore, there is no other place in which we can get in an Amendment in order to give some kind of warranty to the purchaser, but we realise that this Clause is so inconceivably badly drawn we have already pointed it out to the Government that it really does not mean anything at all and does not in fact, in spite of the little side note, really give anyone a warranty. All it is concerned with is to provide a Clause by which the building society should make it clear that, whatever else is happening, at least they are giving no one a warranty. Of course, if we leave out these last five lines we do not get a warranty; all we get is the fact that the price is reasonable, which is an almost impossible thing to do. We realise that difficulty but we 1198 would just like, as the House is passing this Bill through its final stage, to make on the Floor of the House—as we have not been able to do since the Second Reading—our protest that when this Bill is through, it is a building societies protection Bill which simply gives cover for collateral security and the taking of collateral security when the guarantee has been doubted.
I wish to make it perfectly clear to the public, which imagines that it is going to get some sort of warranty as the result of this Bill, that the Government are not doing that at all. All this does is to give this registration procedure, which may or may not in fact turn out to be an improvement in the present situation; the Minister himself is doubtful about it. He does not know whether it is going to work or whether anybody will work it at all, and all he can offer us is that at the end of a year he will have a look at it and see how it is going on. That is what the public is to get as a result of all that has taken place and the scandals which have been shown up both in the courts and the newspapers as regards jerry-building. It would not be right, and the Opposition would not be doing its duty, unless it registered some protest at the fact that there is actually no warranty whatsoever to the purchaser who now gets his house through a building society. It is in order to make that clear that we move this Amendment.
§ 1.3 a.m.
§ Mr. BellengerI beg to second the Amendment.
It seems strange that the first part of this Clause appears to throw it on the society to give some sort of warranty, and then leaves them a way out by which they need not give that warranty if they first of all state in writing that they do not wish to give any warranty whatever. The building societies have a duty to their depositors as well as to those who mortgage property to them, and it seems to me that if a building is sufficient security and sufficiently well-built for the societies to lend moneys placed on deposit with them by their shareholders, it is only reasonable to ask the societies, or to call upon them, to give some warranty to the mortgagor as it is implied they should give to their depositors who place money with them.
§ 1.4 a.m.
§ Mr. WilmotThis is a matter of very great substance, and I think it is very regrettable that the Government and the building societies should have resisted this attempt to cure the evil which really has given rise to this Bill. A building society is not a society of moneylenders; its statutory purpose is to assist people to buy houses, mainly for their own occupation, and one would have thought it would have been the first to do everything possible to see to it that these houses were houses of good quality which were worth the money being paid. It is very regrettable that this opportunity has been allowed to pass without that being done.
§ 1.5 a.m.
§ Captain CrookshankIt would not be courteous if I were not to say one word in reply to the hon. Lady. Those of us who were on the Committee know she has felt very passionately about this and that she has lost no opportunity to try to get some warranty put into the Bill. Unfortunately, as sometimes happens to gallant fighters, she has lost. But what the Clause does is to make it quite abundantly clear that no one shall be misled on this point. It does safeguard the borrower against being misled as, in the words which it is proposed should be left out, it requires it to be stated very clearly that there is no warranty. I would ask the House to note that, as a matter of fact, since hon. Members last saw the Bill, Clause 4 has been inserted, which does open out a great possibility for improvements in building to give a safeguard against jerry building, and when the hon. Lady comes to consider the Bill I hope she will put that in the scale in favour of what we propose. We note that she has made her protest and there, perhaps, we had better leave it.
§ 1.6 a.m.
§ Mr. SilkinI do not think the House ought to be under any misapprehension as a result of what is being done that nobody is going to be misled. If the House looks at the Bill carefully, it will be seen that although the society has to inform the proposed borrower before he enters into any contract to repay, that they are not giving any warranty, it may nevertheless be too late as far as that proposed borrower is concerned, because by that time he may have bought his house or entered into a contract to buy the house, 1200 relying on an advance from the building society. Once he has entered into the contract he is entirely in the hands of the building society and it is too late at that stage, when he has already committed himself to buy the house, to be told that the building society is giving no warranty. Therefore, I think the House should not be misled into the idea that the borrower himself is not going to be misled by this Clause.
§ 1.7 a.m.
§ The Solicitor-GeneralI beg to move, in page 6, line 29, to leave out "and in such manner"
This Amendment and the next five Amendments are really drafting in character, the only one of any substance being that in page 6, line 41, to leave out "be guilty of an offence and", and to insert:
he shall, unless he satisfies the court that he had reasonable grounds for believing the representation to be true, be.Perhaps I may take the six Amendments together. The Amendment in line 41, to which I have referred, is to give effect to a point which was raised in Committee. The Sub-section, as the House will see, imposes penalties on persons who having a financial interest in the disposition of freehold or leasehold land, say anything which implies that a building society, by agreeing to make an advance, has given a warranty as to security. It was pointed out in the Committee stage that in some cases it might be that the building society would, in fact, be giving a warranty and it was asked why a penalty should be imposed on a person for saying something that was obviously true. To meet that point we have put in the proviso that such a person shall only be guilty of an offence if he had not reasonable ground for believing his statement was true.I ought to say one further word about this Sub-section, because I undertook to re-examine it in the light of the Committee stage discussion. There were a good many representations as to the position of a builder's foreman and simple people of that character who might inadvertently make some representation about what the building society would say which trans- 1201 gressed the Sub-section. I am afraid that having examined this point, we feel we must leave the Sub-section as it is. The position is that if a person who is in the service of a builder makes a statement of that kind on his own authority, then he is himself liable as he ought not to make a statement of that kind. If, on the other hand, he makes a statement as agent for his principal, he ought not to be liable. That is the reason why we move these Amendments.
§ Major MilnerI want to say one word in relation to the last Amendment but one. The alteration which the Government have moved is, obviously, a desirable one. In view of what has been said, the alterations are not only desirable but essential, and we welcome them.
§ Amendment agreed to.
§ Further Amendments made:
§ In page 6, line 32, at the beginning, insert "If."
§ In line 35, leave out "who."
§ In line 40, leave out "shall," and insert "then."
§
In line 41, leave out "be guilty of an offence and," and insert:
he, shall, unless he satisfies the court that he had reasonable grounds for believing the representations to be true, be.
§ In line 42, leave out "thereof." —[The Solicitor-General.]
§ CLAUSE 10. —(Restriction on payment of commissions, etc.)
§ 1.12 a.m.
§ The Solicitor-GeneralI beg to move, in page 7, line 14, to leave out from "lawful" to the end of line 24, and to insert:
(a) for a person having a financial interest in the disposition of any freehold or leasehold estate, or any servant of such a person, to receive or agree to receive any commission or gift from a society or from any officer, servant or agent of a society, in consideration of the introduction of mortgage business to the society in connection with the disposition of the estate, or in consideration of a promise to introduce such business to the society, or(b) for a society, or any officer, servant or agent of a society, to offer or give or agree to give any commission or gift to any person known to the society, officer, servant or agent as the case may be, to have a financial interest in the disposition of any freehold or leasehold estate, or to be a servant of a person having such an interest, for any such consideration as is mentioned in the foregoing paragraph.1202(2) For the purposes of this Section a person who is employed, otherwise than in pursuance of a contract of service, in connection with the disposition of any freehold or leasehold estate by a person who has a financial interest in the said disposition shall be treated, so far as relates to the disposition of that estate, as a servant of the person having the said interest unless he carries on, independently of that person, the business of a solicitor, estate agent, surveyor, or auctioneer.(3) Where a society has a financial interest in the disposition of any freehold or leasehold estate, nothing in this Section shall prohibit—This is a formidable looking Amendment, but really it is a re-drafting of the Clause in the light of the prolonged discussions which took place on the very definite question of agency and the receipt of commission. The object of the Amendment is to give effect to the promise which I then made. Its primary object is to prevent a vendor of the property and a society to pay in respect of the consideration of the purchaser. We are finding an increasing tendency for persons to gain on that account. We are dealing with a matter which is very largely capable of abuse. It would not "have been introduced merely to prohibit the payment of commission by a society, and then you might have to make provision for an agency with a fee from both sides. There was also the case of the perfectly honest and straightforward estate agency who happened to be the agency for the building society, and also by reason of the fact that he was the only estate agent responsible for the disposal of the property. In the re-drafting we have drawn a distinction between the solicitor, the 1203 estate agent and the auctioneer. We are drawing a distinction between them and that kind of person who is described as a builder's tout whom every one wants to see exorcised from this particular Clause. The House will recognise that there is a real distinction between people in a professional capacity and the tout who does no more than seek to draw a commission from both sides and performs no useful service to either. It should be noted, of course, that notwithstanding anything in the Clause the Prevention of Corruption Act remains clearly untouched.
- (a)the society or any officer, servant or agent of the society, from offering or giving or agreeing to give, in relation to the disposition of that estate, any commission or gift to a servant of the society (not being a person who, to the knowledge of the society, officer, servant or agent as the case may be either himself has a financial interest in the disposition of the estate or is, in addition to being a servant of the society, also the servant of any person other than the society who has such an interest) for any such consideration as is mentioned in Sub-section (1) of this Section", or
- (b)a servant of the society not being a person who himself has a financial interest in the disposition of the estate or who is, in addition to being a servant of the society, also the servant of any person other than the society who has such an interest) from receiving or agreeing to receive, in relation to the disposition of that estate, any com mission or gift from the society or from any officer, servant or agent of the society for any such consideration as aforesaid."
§ Question, "That the words proposed to be left out stand part of the Bill," put, and negatived.
§ Question proposed, "That the proposed words be there inserted in the Bill."
§ 1.16 a.m.
§ Mr. WilmotI beg to move, as an Amendment to the proposed Amendment, in line 17, to leave out from "interest," to the end of line 18.
The hon. and learned Gentleman has explained the purpose of his Amendment, which is to make it unlawful for commission to be paid to the same person by the vendor who is selling the house and the building society which is proposing to make an advance upon it. The purpose of the Amendment to the Amendment is to apply that also to persons carrying on business as solicitors, estate agents, surveyors and auctioneers. I want to put it to the hon. and learned Gentleman that a builder's tout may still be a builder's tout, a though he calls himself an estate agent, and, in fact, the exception which is made in this Amendment invites the same undesirable form of high pressure salesmanship by a person who might happen to call himself an estate agent, an auctioneer or by some other title. I think it is most undesirable, having regard to the widespread abuse which has come to our notice, that anybody should be in a position to have commission from both parties. We have had in mind a Clause which was passed dealing with a certain kind of building society and a certain kind of jerry-building which has given rise to this Bill. It is most undesirable that the practice should continue, and I would suggest to the hon. and learned Gentleman that he should accept the Amendment which I am moving.
§ 1.20 a.m.
§ Mr. BellengerI beg to second the Amendment.
I would point out to the hon. and learned Gentleman that, as he probably knows, by paying £2, anybody can take out a house agent's licence. Perhaps my hon. Friend who has moved the Amendment to the Amendment is not aware that it is £10 for anybody who wants to be an auctioneer. There is no test as to qualification as to what is, in my submission, a valuable profession and one which should be only in the hands of those fully qualified to carry on the profession. There is no doubt that in the past certain people calling themselves auctioneers and house agents, after paying the appropriate fee have, in collusion with building societies, engaged in practices which are not always desirable from the point of view of the house purchaser. As my hon. Friend has explained, this Amendment is designed to ensure that this practice which has prevailed in the past shall cease. We ask the Government, therefore, to accept the Amendment.
§ 1.21 a.m.
§ The Solicitor-GeneralThis, I think, would represent a direct negative of what the Sub-section seeks to do. The whole structure of the Clause, as re-modelled, is to exclude from the operation of the Clause agencies of the kind of a solicitor, estate agent and auctioneer Quite frankly, the impression I derived from the discussion in Committee was that there was a great deal of favour on all sides of the Committee for doing that, and it was recognised that there was a real distinction between the professional man and the ordinary builder's tout. I gathered that there was a general desire —to which, I admit, the hon. Gentleman was an exception all the way through—to exclude from the prohibition of the Clause both solicitors and estate agents.
There is an ordinary kind of transaction, which, I am told, is very common, where, for example, the vendor employs a local estate agent and the purchaser not infrequently comes along to the agent and asks him to put him in touch with a building society who will make an advance. The estate agent commonly does so and looks to the building society for some quite small fee for his service in the matter. In such a case nobody 1205 is hurt. I agree that there are possibilities of evil in a situation of that kind if the person is an irresponsible person, but if he is a person who, as here, is carrying on independently the business of estate agent in the neighbourhood, that transaction is not really very susceptible to abuse. I agree that there is no statutory definition of what is an estate agent, as there is in the case of a solicitor, and that the qualifications seem to be more limited than in the case of an auctioneer. Nevertheless, you have to draw a line somewhere..
§ Mr. WilmotYou have drawn it in the wrong place.
§ The Solicitor-GeneralThat may be the hon. Member's view, but I do not think that on the previous occasion he carried the Committee with him, and I hope that he will not carry the House with him. As I have said, you have to draw a line somewhere, and we thought that a fair way was this: First of all you include a servant of the persons having the financial interest, and you say that people shall be treated as servants even though they have no contract of service, except in the cases where they carry on an independent business of solicitor, auctioneer, or estate agent. We think that that is a fair compromise, and I hope that the hon. Member will not press his Amendment.
§ 1.24 a.m.
§ Major MilnerI am bound to say that I agree with the learned Solicitor-General. I always understood that a distinction should be drawn between the builder's tout who has drawn commission and the legitimate professional man carrying on his legitimate avocation quite independently. It appears to me that the Clause does entirely what was intended by the Committee, and I think that my hon. Friend's Amendment is misconceived, except in one respect. That respect is that I also would like to see some statutory definition or description of an estate agent, surveyor and auctioneer, and indeed, of an accountant. I imagine that my hon. Friend the Member for Bassetlaw (Mr. Bellenger) will have drawn up accounts for two parties whose interests were quite conflicting, whereas that is not necessarily the case where professional men are concerned. I would certainly welcome any Clause in the Bill, 1206 an interpretation Clause, defining an estate agent, an auctioneer and a surveyor, and giving their qualifications for carrying on their profession. It is conceivable that some individual, by paying £2, may call himself an estate agent or an auctioneer or a surveyor, though in the latter case higher fees have to be paid. With that exception I agree with the learned Solicitor-General, who has gone a long way in trying to meet the wishes of the Committee.
§ 1.27 a.m.
§ Miss WilkinsonBoth of my hon. Friends are really in agreement as to what we should get done. The only question is how it should be done. The difficulty about my hon. and gallant Friend the Member for South-East Leeds (Major Milner) is that he is such a thoroughly bona fide solicitor that he does not understand that there are some solicitors who have not got his high standard of professional honour. I want to make it clear that in moving this Amendment the general fear we had was that unless these particular words were taken out the purpose which the learned Solicitor-General had in view would be defeated. The Solicitor-General will remember that in Committee cases were brought to his notice of solicitors even solicitors in well-known firms of solicitors who, though apparently independent and having their own plates on the door and all that kind of thing—I think the Eagle Star was-given as a case in point—when a person went into a different door of the offices, of the society he was in fact going into the offices of the solicitor of the society. He said that that was really an extremely undesirable practice. It would be very difficult to argue that this particular firm of solicitors was not carrying on business independently of the society because a certain amount of their business was not with the society, although perhaps as much as nine-tenths or even 99 per cent. might be.
Even taking the most difficult case—that of the qualified solicitor—you could have the extremely undesirable practice of the purchaser actually getting advice from the firm of solicitors which was tied up to the vendor. Really that is not desirable. I think it comes within the sphere of legitimate business when it comes to a fully qualified professional man. Even in that case we do not con- 1207 sider it desirable. When we come to the estate agent, the Solicitor-General has admitted this is really not desirable, because it does away with the whole purpose of his Clause. I think we have heard too much about the builder's foreman who is supposed to greet the prospective client and make statements which apparently, are going to be accepted by the purchaser. I do not think the builder's foreman is any trouble at all. He is not our difficulty. The person we are really out to deal with is the estate agent who, for the payment of £2 and the cost of a plate, a pair of spats and a good suit, is apparently fully qualified to advise both sides. The Committee sat for eight or nine days. I now appeal to the House as an independent jury: do you think it is desirable that estate agents should be in
§ a position to act for both sides? You really get scandals of a sort that the best people in the profession do themselves definitely not want. I suggest this should be left out of the Clause and we shall then get to what the Solicitor-General wants. We are really helping him. In fact the Solicitor-General has been induced to put this in, and we come from the Opposition side and save him from certain people who, I think, have not at heart the real interests of this Clause. I hope he will accept our Amendment because we shall have to carry it to a Division if he does not.
§ Question put, "That the words proposed to be left out stand part of the proposed Amendment."
§ The House divided: Ayes, 127; Noes, 52.
1209| Division No. 275.] | AYES. | [1.34 a |
| Adam., S. V. T. (Leeds, W.) | Findlay, Sir E. | Petherick, M |
| Agnew, Lieut.-Comdr. P. G. | Fool, D. M. | Procter, Major H. A. |
| Allen, Col. J. Sandeman (B'knhead) | Fremantle, Sir F. E. | Rankin, Sir R. |
| Anderson, Sir A. Garrett (C. of Ldn.) | Fyfe, D. P. M. | Reed, A. C. (Exeter) |
| Aske, Sir R. W. | Graham, Captain A. C. (Wirral) | Reed, Sir H. S. (Aylesbury) |
| Baillie, Sir A. W. M. | Granville, E. L. | Ropner, Colonel L. |
| Baldwin-Webb, Col. J. | Greene, W. P. C. (Worcester) | Ross, Major Sir R. D. (Londonderry) |
| Balniel, Lord | Grimston, R. V. | Royds, Admiral Sir P. M. R. |
| Beamish, Rear-Admiral T. P. H. | Hannah, I. C. | Russell, Sir Alexander |
| Beaumont, Hon. R. E. B. (Portsm'h) | Hannon, Sir P. J. H. | Salt, E. W. |
| Beechman, N. A. | Heilgers, Captain F. F. A. | Seely, Sir H. M. |
| Bait, Sir A. L. | Hepburn, P. G. T. Buchan- | Selley, H, R. |
| Bossom, A. C. | Holdsworth, H. | Silkin, L. |
| Boulton, W. W. | Holmes, J. S. | Snadden, W. McN. |
| Bower, Comdr. R. T. | Horsbrugh, Florence | Somerset, T. |
| Boyce. H. Leslie | Howitt, Dr. A. B. | Southby, Commander Sir A. R. J. |
| Braithwaite, J. Gurney (Holderness) | Hunloke, H. P. | Strauss, H. G. (Norwich) |
| Broadbridge, Sir G. T. | Hutchinson, G. C. | Strickland, Captain W. F. |
| Brocklebank, Sir Edmund | James, Wing-Commander A. W. H. | Stuart, Hon. J. (Moray and Nairn) |
| Brooke, H. (Lewisham, W.) | Jones, Sir H. Haydn (Merioneth) | Taylor, C. S. (Eastbourne) |
| Bullock, Capt. M. | Kellett, Major E. O. | Thorneycroft, G. E. P, |
| Cartland, J. R. H. | Kerr, Colonel C. I. (Montrose) | Thornton-Kemsley, C. N. |
| Cary, R. A. | Kerr, Sir John Graham (Sco'sh Univs.) | Titchfield, Marquess of |
| Chapman, A. (Rutherglen) | Latham, Sir P. | Tree, A. R. L. F. |
| Clarke, Colonel R. S. (E. Grinstead) | Leech, Sir J. W. | Tufnell, Lieut.-Commander R. L. |
| Cobb, Captain E. C. (Preston) | Llewellin, Colonel J. J. | Wakefield, W. W. |
| Colman, N. C. D. | Locker-Lampson, Comdr. O. S. | Walker-Smith, Sir J. |
| Cook, Sir T. R, A. M. (Norfolk, N.) | Lucas, Major Sir J, M. | Ward, Lieut.-Col. Sir A. L. (Hall) |
| Cooke, J. D. (Hammersmith, S.) | Mabane, W. (Huddersfield) | Ward, Irene M. B. (Wallsend) |
| Craven-Ellis, W. | MacAndrew, Colonel Sir C. G- | Waterhouse, Captain C. |
| Critchley, A. | M'Connell, Sir J. | Webbe, Sir W. Harold |
| Crookshank, Capt. Rt. Hon. H. F. C. | McEwen, Capt. J. H. F. | Wedderburn, H. J. S. |
| Crossley, A. C. | McKie, J. H. | Wickham, Lt.-Col. E. T. R. |
| Cruddas, Col. B. | Macmillan, H. (Stockton-on-Tees) | Williams, Sir H. G. (Croydon, S.) |
| De Chair, S. S. | Margesson, Capt. Rt. Hon. H. D. R. | Willoughby de Eresby, Lord |
| Dugdale, Captain T. L. | Markham, S. F. | Wise, A. R. |
| Dunglass, Lord | Mills, Major J. D. (New Forest) | Wright, Wing-Commander J. A. C. |
| Elliot, Rt. Hon. W. E. | Milner, Major J. | York, C. |
| Emery, J, F. | Mitchell, H. (Brentford and Chiswick) | Young, A. S. L. (Partick) |
| Errington, E. | Muirhead, Lt.-Col. A. J. | |
| Erskine-Hill, A. G. | Munro, P. | TELLERS FOR THE AYES. |
| Evans, D. O. (Cardigan) | Neven-Spence, Major B. H. H. | |
| Evans, E. (Univ. el Wales) | O'Connor, Sir Terence J. | Major Sir James Edmondson and |
| Everard, Sir William Lindsay | Palmer, G. E. H. | Mr. Furness. |
| NOES. | ||
| Adamson, Jennie L. (Dartford) | Benn, Rt. Hon. W. W. | Davies, S. O. (Merthyr) |
| Alexander, Rt. Hon. A. V. (H'lsbr.) | Benson, G. | Dobbie, W. |
| Ammon, C. G. | Daggar, G. | Dunn, E. (Rother Valley) |
| Bellenger, F. J. | Dalton, H. | Ede, J. C. |
| Edwards, Sir C. (Bedwellty) | MacMillan, M.(Western Isles) | Sorensen, R. W. |
| Edwards, N. (Caerphilly) | Messer, F. | Stewart, W. J. (H'ght'n-le-Sp'ng) |
| Fletcher, Lt.-Comdr. R. T. H. | Oliver, G. H. | Taylor, R. J. (Morpeth) |
| Frankel, D. | Paling, W. | Tinker, J. J. |
| Gibson, R. (Greenock) | Parker, J. | Watkins, F. C. |
| Grenfell, D. R | Poole, C. C. | Watson, W. McL. |
| Hall, J. H. (Whitechapel) | Pritt, D. N. | Westwood, J. |
| Harvey, T. E. (Eng. Univ's.) | Ridley, G. | Wilkinson, Ellen |
| Henderson, J. (Ardwick) | Ritson, J. | Wilmot, John |
| Hills, A. (Pontefract) | Robinson, W. A. (St. Helens) | Windsor, W. (Hull, C.) |
| Jagger, J. | Sexton, T. M. | Woods, G. S. (Finsbury) |
| Kirby, B. V. | Simpson, F. B. | Young, Sir R. (Newton) |
| Logan, D. G. | Smith, Ben (Rotherhithe) | |
| McEntee, V. La T. | Smith, E. (Stoke) | TELLERS FOR THE NOES.— |
| Mr. Mathers and Mr. Adamson. |
§ Proposed words there inserted in the Bill.
§ Further Amendments made: In page 7, line 25, leave out from "who," to "the," in line 26, and insert "contravenes."
§ In line 31, leave out Sub-section (3)—[The Solicitor-General.]
§ CLAUSE II.—[Valuation of security for advances.]
§ 1.41 a.m.
§ Miss WilkinsonI beg to move, in page 8, line 2, at the end, to insert:
Provided that where the security to be so taken comprises any freehold or leasehold estate the adequacy of the security shall be assessed by an able practical surveyor or valuer not being a person instructed or employed, in relation to that estate, by or on behalf of any person having a financial interest in the disposition of the estate.In moving this Amendment I want to make sure that certain practices which are not desirable should not continue. The building surveyors should be independent surveyors. We are anxious that there should not be cases of surveyors acting in such a way that while acting for the vendor on the sale of a house and receiving a commission he is also acting for purchasers through building societies in making a survey. We feel that where an estate agent has the transaction entirely in his own hands the result by reason of his making the survey is likely to be to the detriment of the purchaser. From that point of view there is every reason for having it stated, as is proposed in the Amendment, that there shall be:an able practical surveyor or valuer not being a person instructed or employed in relation to that estate, by or on behalf of any
§ person having a financial interest in the disposition of the estate."
§ The principle is quite clear, and I hope the Solicitor-General will be able to accept it.
§ 1.44 a.m.
§ Mr. BellengerI beg to second the Amendment.
What we are trying to do is to raise the standard of the valuers who are to undertake the valuation of the property which it is 'desired to mortgage. In the case of many building societies they do employ an independent surveyor to value property. We want all building societies to be bound to adopt that procedure.
§ 1.45 a.m.
§ Captain CrookshankThe first part of this Clause lays down that the duty of a director is to include that of satisfying himself that the arrangements for assessing the adequacy of the security, and so on, are such that it will be assessed by a competent person experienced in the matters relevant to the determination of the security. To that the hon. Lady the Member for Jarrow (Miss Wilkinson) wants to add a proviso. We think the words already in the Bill are adequate to meet the case which she has in mind. It may be desirable to raise the standard of qualifications of a valuer as of anyone in this House but I rather doubt whether a Clause in this Bill is the proper place to do it. We have in mind the principle of what the hon. Lady has stated and I ask the House not to-accept the Amendment.
§ Question put, "That those words be-there inserted in the Bill."
§ The House divided: Ayes, 48; Noes, 116.
1211| Division No. 276.] | AYES. | [1.46 a.m. |
| Adamson, Jennie L. (Dartford) | Benn, Rt. Hon. W. W. | Dobbie, W. |
| Alexander, Rt. Hon. A. V. (H'lsbr.) | Benson, G. | Dunn, E. (Rother Valley) |
| Ammon, C. G. | Dalton, H. | Ede, J. C. |
| Bellenger, F. J. | Davies. O. (Merthyr) | Edwards, Sir C. (Bedwelty) |
| Fletcher, Lt.-Comdr. R. T. H. | Messer, F. | Stewart, W. J. (H'ght'n-le-Sp'ng) |
| Frankel, D. | Milner, Major J. | Tinker, J. J. |
| Gibson, R. (Greenock) | Paling, W. | Watkins, F. C. |
| Grenfell, D. R. | Poole, C. C. | Watson, W. McL. |
| Hall, J. H. (Whitechapel) | Pritt, D. N. | Westwood, J. |
| Harvey, T. E. (Eng. Univ's.) | Ridley, G. | Wilkinson, Ellen |
| Henderson, J. (Ardwick) | Robinson, W. A. (St. Helens) | Wilmot, John |
| Hills, A. (Pontefract) | Sexton. T. M. | Windsor, W. (Hull, C.) |
| Jagger, J. | Silkin, L. | Woods, G. S. (Finsbury) |
| Kirby, B. V. | Simpson, F. B. | Young, Sir R. (Newton) |
| Logan, D. G. | Smith, Ben (Rotherhithe) | |
| McEntee, V. La T. | Smith, E. (Stoke) | TELLERS FOR THE AYES.— |
| MacMillan, M. (Western Isles) | Sorensen, H. W. | Mr. Mathers and Mr. Adamson. |
| NOES. | ||
| Adams, S. V. T. (Leeds, W.) | Foot, D. M. | Procter, Major H. A. |
| Agnew, Lieut.-Comdr. P. G. | Fremantle, Sir F. E. | Rankin, Sir R. |
| Allen, Col. J. Sandeman (B'knhead) | Fyfe, D. P. M. | Reed, A. C. (Exeter) |
| Anderson, Sir A. Garrett (C. of Ldn.) | Graham, Captain A. C. (Wirral) | Reed, Sir H. S. (Aylesbury) |
| Aske, Sir R. W. | Granville, E. L. | Ropner, Colonel L. |
| Baillie, Sir A. W. M. | Greene, W. P. C. (Worcester) | Ross, Major Sir R. D. (Londonderry) |
| Baldwin-Webb, Col. J. | Grimston, R. V. | Royds, Admiral Sir P. M. R. |
| Balniel, Lord | Hannah, I. C. | Russell, Sir Alexander |
| Beamish, Rear-Admiral T. P. H. | Heilgers, Captain F. F. A. | Seely, Sir H. M. |
| Beaumont, Hon. R, E. B. (Portsm'h) | Hepburn, P. G. T. Buchan- | Selley, H. R. |
| Beechman, N. A. | Holdsworth, H. | Snadden, W. McN. |
| Belt, Sir A. L. | Holmes, J. S. | Somerset, T. |
| Bossom, A. C. | Horsbrugh, Florence | Southby, Commander Sir A. R. J. |
| Boulton, W. W. | Howitt, Or. A. B. | Strauss, H. G. (Norwich) |
| Bower, Comdr. R. T. | Hunloke, H. P. | Strickland, Captain W. F. |
| Boyce, H. Leslie | Hutchinson, G. C. | Stuart, Hon. J. (Moray and Nairn) |
| Braithwaite, J. Gurney (Holderness) | James, Wins-Commander A. W. H. | Taylor, C. S. (Eastbourne) |
| Broadbridge, Sir G. T. | Jones, Sir H. Haydn (Merioneth) | Thorneycroft, G. E. P. |
| Brocklebank, Sir Edmund | Kellett, Major E. O. | Thornton-Kemsley, C. N. |
| Brooke, H. (Lewisham, W.) | Kerr, Colonel C. I. (Montrose) | Titchfield, Marquess Of |
| Bullock, Capt. M. | Kerr, Sir John Graham (Sco'sh Univs.) | Tree, A. R. L. F. |
| Cartland, J. R. H. | Latham, Sir P. | Tufnell, Lieut.-Commander R. L. |
| Cary, R. A. | Llewellin, Colonel J. J. | Wakefield, W. W. |
| Chapman, A. (Rutherglen) | Locker-Lampion, Comdr. 0. S. | Walker-Smith, Sir J. |
| Clarke, Colonel R. s. (E Grinstead) | Lucas, Major Sir J. M. | Ward, Lieut-Col. Sir A. L. (Hull) |
| Cobb, Captain E. C. (Preston) | Mabane, W. (Huddersfield) | Ward, Irene M. B. (Wallsend) |
| Colman, N. C. D. | MacAndrew, Colonel Sir C. G. | Waterhouse, Captain C. |
| Craven-Ellis, W. | M'Connell, Sir J. | Webbe, Sir W. Harold |
| Critchley, A. | McEwen, Capt. J. H. F. | Wedderburn, H. J. S. |
| Crookshank, Capt. Rt. Hon. H. F. C. | McKie, J. H. | Wickham, Lt.-Col. E. T. R. |
| De Chair, S. S. | Macmillan, H. (Stockton-on-Tees) | Williams, Sir H. G. (Croydon, S.) |
| Edmondson, Major Sir J. | Margesson, Capt. Rt. Hon. H. D. R. | Willoughby de Eresby, Lord |
| Elliot, Rt. Hon. W. E. | Mills, Major J. D. (New Forest) | Wise, A. R. |
| Emery, J. F. | Mitchell, H. (Brentford and Chiswick) | Wright, Wing-Commander J. A. C. |
| Errington, E. | Muirhead, Lt.-Col. A. J. | York, C. |
| Erskine-Hill, A. G. | Munro, P. | Young, A. S. L. (Partick) |
| Evans, D, o. (Cardigan) | Neven-Spence, Major B. H. H. | |
| Evans, E. (Univ. of Wales) | O'Connor, Sir Terence J. | TELLERS FOR THE NOES. — |
| Everard, Sir William Lindsay | Palmer, G. E. H. | Captain Dugdale and Mr. Furness. |
| Findlay, Sir E. | Petherick, M. |
Bill read the Third time, and passed.
§ 1.54 a.m.
§ Captain CrookshankI beg to move, in page 8, line 3, to leave out Sub-section (2).
§ This is consequential on what was explained on Clause 6.
§ Amendment agreed to.
§ Further Amendment made: In page 9, line 1, leave out Sub-section (5)ߞ [Captain Crookshank.]
§ CLAUSE 12.—(Notices and returns relating to sales and transfers.)
§ 1.55 a.m.
§ Miss WilkinsonI beg to move, in page 9, line 18. after "notice" to insert:
stating the price at which, and the name and address of the person to whom, the estate has been sold and.1212 This, and the next Amendment—in page 9, line 18, after "such" insert "other"—are very reasonable Amendments—so particularly reasonable and so thoroughly modest that the Minister can very well accept them. All it means is that when sending notice to the mortgagor that a property has been sold, such notice shall state the price at which, and the name and address of the person to whom, the estate has been sold, and such other particulars as may be prescribed. As matters stand at present, those things may be put in but we want to make sure that these details—just the minimum particulars—shall be put in and that the man whose house has been sold up shall at least know what the price is and the man who has bought it. I do not think the Minister can possibly object to that.
§ 1.56 a.m.
§ The Solicitor-GeneralI am not very anxious to accept this Amendment if I can help it, but I am prepared to do so if the course that I am going to suggest does not commend itself to the House as a better one. I have already intimated that the Government would be very happy to consult with hon. Members opposite as to the form in which these notices should take and I am equally prepared to do that as regards this case. I cannot conceive of any registrar ever prescribing notices which do not give the name and address, but I do think that on the whole it is not a very desirable thing to put in one kind of particular in the Act of Parliament itself. It throws some little doubt on how much else you must put in, especially as we have the contents of Sub-section (4) which says:
nothing in this Section affects the operation of any rule of law relating to the duty of a mortgagee to account to a mortgagor.I would not like to see any doubt thrown on that rule by putting in words which select out of an area of things one particular detail. If the suggestion I have made commends itself to the House, we will consult with hon. Members opposite as to what should be done.
§ Miss WilkinsonI am ready to accept that offer from the learned Solicitor-General. We are very anxious that at least the minimum particulars should be given. I know the difficulty and in view of the Minister's assurance, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ CLAUSE 14.—(Legal proceedings.)
§ Amendment made: In page 11, line 12, leave out "any provision of Sub-sections (4) or (5)" and insert "the provisions of Sub-section (3)."—[Captain Crook-shank.]
§ CLAUSE 15.—(Interpretation.)
§ 1.58 a.m.
§ Captain CrookshankI beg to move, in page 12, line 39, to leave out "registered under" and insert:
which is a registered society for the purposes of.This Amendment ensures that policies issued by a friendly society under the Act of 1896 are covered by the Section.
§ Amendment agreed to.
§ Further Amendment made: In page 13, line 17, after "six" insert "seven."—[Captain Crookshank.]
§ Captain CrookshankI beg to move, in page 13, line 23, at the end, to insert:
(2) References in this Act to additional security—
- (a) in relation to an advance made before the commencement of this Act upon the security of freehold, copyhold or leasehold estate by a society incorporated under the Building Societies Acts, 1874 to 1894, shall be construed solely as references to any security for the advance other than a mortgage, whether legal or equitable, of freehold, copyhold or leasehold estate, whether the mortgage was effected by the person to whom the advance was made or by any other person,
- (b) in relation to an advance made after the commencement of this Act upon the security of freehold or leasehold estate by such a society as aforesaid, shall be construed solely as references to any security for the advance other than a mortgage, whether legal or equitable, of freehold or leasehold estate, whether the mortgage be effected by the person to whom the advance is made or by any other person.
- (c) in relation to an advance made before the commencement of this Act upon the security of freehold, copyhold or leasehold estate by any such unincorporated society as is mentioned in Section seven of the Building Societies Act, 1874, shall be construed solely as references to any security for the advance other than such security by way of mortgage of freehold, copyhold or leasehold estate as the society was authorised to take into account in determining the amount of the advance by virtue of the Act of the sixth and seventh years of the reign of William the Fourth, Chapter thirty-two, intituled An Act for the Regulation of Benefit Building Societies, and
- (d) in relation to an advance made after the commencement of this Act upon the security of freehold or leasehold estate by such an unincorporated society as aforesaid, shall be construed solely as references to any security for the advance other than such security by way of mortgage of freehold or leasehold estate as the society is authorised to take into account in determining the amount of the advance by virtue of the Act aforesaid."
§ This Amendment to the definition Clause provides that "additional security" refers to any security other than that which a society is already, under existing legislation, authorised to take into account in determining the amount of the advance. I do not think there is any real doubt about it, but in some quarters it has been suggested that Section 13 of the Act of 1874 does not 1215 make it entirely clear as to whether under the existing provisions of the law legal and equitable mortgages may be taken for this purpose. It is to remove all doubts arising under the Section as to it doubts arising under the Section as to this matter before and after the corn-incorporated societies and the few which are still unincorporated—a type of society which is pretty well obsolete now.
§ Amendment agreed to.
§ 2.0 a.m.
The Under-Secretary of State for Scotland (Mr. Wedderburn)I beg to move, in page 14, line 25, leave out from "Scotland" to the end of line 28, and insert:
(a) for any reference to the Minister of Health there shall be substituted a reference to the Secretary of State;(b for Sub-section (3) of Section six of this Act the following Sub-section shall be substituted—(3) In this Section the expression "court" means the Court of Session or the sheriff court.The first paragraph of this Amendment is made necessary by the insertion in the Bill of Clause 4 in Committee and the second paragraph (b) enables an application under the Clause to be made either to the Court of Session or to the Sheriff Court irrespective of whether the amount advanced was £500 or any other figure.
§ Amendment agreed to.
1216§ CLAUSE 17. —(Short title, citation, construction and extent.)
§ 2.2 a.m.
§ Captain CrookshankI beg to move, in page 14, line 42, leave out "October" and insert "November"
This is the date of the coming into operation of the Act. As it now stands it is October, but on further consideration we have decided to make it November, as all the documents required can hardly be done by that time.
§ Amendment agreed to.
§ SCHEDULE. —(Part II—Requirements applicable to certain continuing arrangements.)
§ Amendments made:
§ In page 16, line 19, leave out "the."
§ In line 20, leave out "aforesaid" and insert "of the said purchase price." —[Captain Crookshank.]
§ The remaining Orders were read, and postponed.
§ It being after half-past Eleven of the Clock upon Monday evening, Mr. Deputy-Speaker adjourned the House, without Question put, pursuant to the Standing Order.
§ Adjourned at Four Minutes after Two o'Clock