HC Deb 01 September 1939 vol 351 cc155-9

" To confer on courts certain powers in relation to remedies in respect of the non-payment of money and the non-performance of obligations (including powers in relation to bankruptcy and winding-up proceedings), and to make provision for purposes connected with the matters aforesaid,"

presented, pursuant to the Order of the House this day, by the Attorney-General; and ordered to be printed. [Bill 229.]

7.42 p.m.

The Solicitor-General (Sir Terence O'Connor)

I beg to move, "That the Bill be now read a Second time."

This Bill really comprehends in one Bill a series of measures which were brought into operation during the last War. The aim of the Bill is to make less onerous the burdens which may come upon His Majesty's subjects on account of obligations which they have incurred or on account of rights which other people have against them, which exists in time of peace. It is for lightening these burdens, subject to certain exceptions, that the Bill is introduced. The general scheme of the Bill is that in the main in a series of cases where people have rights against others they should not be permitted to proceed against them except with the leave of the court. Clause 1 deals with cases where there has been a judgment, where somebody's right has crystallised in a judgment by a compe- tent court. In those cases there shall be, after the passing of the Bill, no power to enforce the judgment where that judgment is based in the main on a judgment for the recovery of a sum of money. Exceptions are recognised in the proviso, and the exceptions mainly are cases of recovery of damages for tort or where somebody has got a judgment for a sum of money for the loss, say, of a leg. Those are exceptions which will still be enforceable after the Bill is passed, and other exceptions are cases in which no sum of money is recoverable otherwise than in respect of costs; any matter of bastardy or affiliation orders, and cases of fines and penalties are outside the scope of the Bill.

In Sub-section (2) the Bill deals with a* class of right which people are able to enforce without obtaining a judgment. A scheme of inhibiting methods of self-help appears in paragraphs (a) and (b), subject to the proviso under Sub-section (2). This Sub-section (2) prevents people from availing themselves of remedies, such as distress, or the appointment of a receiver, or re-entry on land, which they can invoke without previously obtaining the judgment of the courts. Included in these provisions is one which prevents a company from being wound up merely because it has not complied with a notice served upon it requiring it to pay its debts. The provisos there will apply to the power of sale of a mortgagee in possession either of land or property— those are (a) and (b) —and (c), a somewhat anomalous saving as it may appear at first sight to some hon. Members, as it did to me, for pawnbrokers, the saving of a right which was saved during the whole course of the last War. The real reason is because, if it were not so, no pawnbroker for the period of the war would be able to dispose of his stock. He would be inhibited by the general provisions of the Bill from getting rid of it. Paragraph (d) is a saving in a case where there has been a receiver appointed as the result of an application to the court.

Sub-section (3) makes it impossible to enforce the judgment of the court whenever given, either before or after the Act, for the recovery of possession of premises on the ground of non-payment of rent, except of course with the leave of the court. In all these cases the remedy can be applied only with the leave of the court. Therefore the most important Sub-section in the Bill is Subsection (4) of Clause 1, which sets out the circumstances to which the court must look before it grants leave and, broadly speaking, the criterion that the court will apply is whether non-satisfaction of the obligation which exists is due directly or indirectly to war. Sub-section (1) (5) enables the court to stay bankruptcy or winding-up proceedings. Sub-section (6) enables Orders in Council to be made to deal with the exceptional kind of case of warehousemen, docks, railway companies and so on which have statutory powers to deal with goods that are left with them. I suppose even in the course of a major war there will be people who will leave their portmanteaus at Charing Cross Railway Station for a long period and forget to recover them, and there does not seem any particular reason why a railway company should not after a reasonable time have power to sell the goods. His Majesty may, therefore, by Order in Council deal with that special kind of case. The remainder of the Bill deals with the interpretation and there is a Clause applying it to Scotland and to Northern Ireland subject to certain modifications.

7.49 p.m.

Mr. Lees-Smith

A number of my friends who have professional qualifications on these topics have given a hasty glance at the Bill and we do not propose to take any exception to it. I do not myself find it very easy to follow this kind of question, but I gather that it deals with obligations which one may have entered into and which one could normally discharge, but which in an emergency one ought not to be called upon to discharge, and we are going to be given protection. That is what I gather from the lessons that I have been taking. It occurs to me that these exceptions seem rather a miscellaneous lot. I should like to know whether they are based on any principle or are in fact due to a number of exceptions the necessity of which was realised as the result of the experience of the War between 1914 and 1918. If that is the case, it will appear to me a very good explanation.

7.50 p.m.

Mr. Dingle Foot

Like the right hon. Gentleman, we take no exception to the Bill, but there is one point that I should like to bring to the attention of the Solici- tor-General. He referred in particular to Sub-section (4) on page 3, as being the criterion which the court would endeavour to apply. It seemed to me, on looking hastily at the Clause, that the words are rather unduly narrow, because it seems that, if the court is going to exercise its discretion in favour of the debtor and relieve him from the immediate obligation to pay his rent or whatever it may be, the court must be satisfied that he is unable immediately to satisfy the debt by reason of circumstances directly or indirectly attributable to a war in which His Majesty may be engaged. Does not the word "unable" rather fetter the discretion of the court more than it needs to be fettered? One can imagine circumstances in which it would be fairly possible for the debtor to satisfy the debt by giving up everything he had, so that it would not be possible to say that he-was unable to satisfy the debt, yet it would be a matter of extreme hardship to have to pay then and there. It might add to the effectiveness of the Bill if slightly wider language were used in this Sub-section.

7.53 P.m.

Major Milner

In general the House must of necessity approve the Bill, which confers something in the nature of a conditional moratorium in connection with certain transactions, but there is one matter as to which I am in some little doubt. Whilst certain remedies are only exercisable by the leave of the court, I am not quite clear that the ordinary procedure of suing for rent in default is dealt with. If I make default in payment of rent can I be sued and made to pay without being able to plead the extenuating circumstances which in other cases I should have the advantage of? I am aware that that is permissible in the case of recovery of the possession of land, but is it equally applicable to the ordinary case of suing for rent in default, where the tenant ought to have similar protection to what is given to other debtors.

7.54 p.m.

The Solicitor-General

In that case it is either suing for the recovery of a sum of money, and therefore prevented without the leave of the court under Subsection (1), or it is a company with a claim for possession of land, it is true that the landlord could proceed to the extent of getting judgment, but he could not get any further than that. He could not recover his land without the leave of the court, so that you get the same conclusion in either case, that the court has to apply the test of whether the inability to comply with the demand for rent is due to circumstances directly or indirectly attributable to the war.

Major Milner

It is not permissible to apply for the protection of the Act apparently until after judgment has been obtained and execution threatened.

The Solicitor-General

I think that is right if the claim is one for possession, but I do not think the hon. and Gallant Gentleman is right as regards the other claim. Supposing there is a claim after the Act for rent alone, then, as he says, it is at the stage at which you come to execution that the Act operates. There must be hundreds of cases where no one would wish to see people who could perfectly well carry out their obligations relieved merely because there happened to be an emergency. This brings me to the second point of the hon. Member for Dundee (Mr. Foot). These words stood the test of the last Great War and they proved themselves sufficiently wide to enable the courts to exercise a really wide and unfettered discretion. If looked at through a microscope, it may be that the words '' unable immediately '' merit some of the criticism which the hon. and learned Gentleman directed to them, but when they are read in conjunction with the remaining words of the Sub-section "directly or indirectly attributable" he will see that they are very wide indeed. The hon. Gentleman knows as well as I do how desirable it is not to submit a fresh set of words to the test of the Law Courts when an existing set has already proved satisfactory.

Lastly, the right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) asked with regard to the exceptions. I agree that they are a curious looking assortment, but these, too, survived the last War and they were operated without any great difficulty and they raised no objection. We have simply endeavoured, as far as we could, to codify the law.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time; considered in Committee, and reported, without Amendment; read the Third time, and passed.